STOCK MARKET WATCH, Monday 16 May

[ozymandius]

Monday May 16, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 250 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 148 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 211 DAYS
DAYS SINCE ENRON COLLAPSE = 1268
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54


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




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90

AT THE CLOSING BELL ON May 13, 2005

Dow... 10,140.12 -49.36 (-0.48%)
Nasdaq... 1,976.78 +12.90 (+0.66%)
S&P 500... 1,154.05 -5.31 (-0.46%)
10-Yr Bond... 4.12% -0.06 (-1.51%)
Gold future... 420.70 -1.50 (-0.36%)

GOLD, EURO, YEN, Dollars and Loonie




PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[Mojorabbit]

1. Great toon!

[RawMaterials]

2. Morning UIA ,Ozy,, and everyone

Great toon, Still have not figured out why Our Train systems could not or did not develop like Europe's. Actually I know most of the reasons why but its still frustrating.

[UpInArms]

12. Morning RM and everyone

IIRC there was something about the major auto and tire companies having something to do with the defunding of the rails back in the 30s :shrug:

Methinks the markets are going to get very interesting as more reports conflict with the reality on the ground.

:hi:

[converted_democrat]

28. Good morning UIA!!!!!!!!

Methinks the markets are going to get very interesting as more reports conflict with the reality on the ground.
--------------------------------------------------
I enjoy watching the market these days, it's better than the soaps. Sooo much more interesting, and talk about drama!!!!!

[UpInArms]

32. What shall we name this program?

"As the Stomach Turns"?

Morning converted_democrat :hi:

Have a :donut: and enjoy the show!

[54anickel]

35. "The Edge of Blight - The W years"

blight - Something that impairs growth, withers hopes and ambitions, or impedes progress and prosperity.

[converted_democrat]

37. Ha!!!!! That fits to a T!!!!!!

[RawMaterials]

29. Your Right UIA,

They got together to form a nonprofit and bought up the rails in the city, then ran them into the ground.... they did much more but thats the 1000 foot over view.

[ozymandius]

21. Good morning!

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

Good to see so many people here so early this morning. I head on the radio how the Nikkei index lost a large amount of value. What portends these results for the U.S. markets?

[54anickel]

3. Cash as King Again?

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=43018

Risk is becoming a nasty four letter word. Stocks are down for the year, junk bond holders are lightening up as credit spreads widen, and it’s likely that GM and Ford won’t be the only big issuers to see credit downgrades now that the credit cycle has turned. Hedge Funds are also struggling to see positive returns, commodities are well off their highs, and even gold and silver stock investors have recently been taken to the cleaners. Virtually every investor in almost every asset class, who has placed bets, has suddenly discovered that they are actually a losing speculator.

So, is anything offering a positive return these days? Have we all forgotten about plain old cash? Short-term interest rates are raised every six weeks – the Federal Reserve has raised the yield on cash eight times in a row! Moreover, with inflation in the CPI well entrenched at over 3 percent a year, there is more tightening to do. Indeed, unless there is a real market crash or the economy looks like it is dead in the water, the Gods and the odds favor the yield on cash rising. Each time interest rates are raised, the yield curve flattens more like a pancake taking all of the easy profit out of the carry trade. The markets are getting nervous, stock prices are up and down like a yoyo, and volatility is back.

With over 40 percent of profits at S&P 500 companies tied to financing activities, rising interest rates can deflate this profit balloon. With the yield on cash increasing, price volatility in the stock and bond markets favor the down side of the market.

So who’s making money these days? My wife is! I gave up trying to persuade her to buy racy investments like physical gold and silver; they’re too volatile for her. She simply wanted an investment that was safe and would give her a return on her money, even if it barely kept up with inflation. So, over the last few years she has purchased I-Bonds which are sold directly by the United States Treasury www.savingsbonds.gov.

(I-Bonds pay a fixed interest rate plus the CPI and taxes on the interest are only due when the bonds are cashed in. There is no fee involved and you can only buy $30,000 a year.) Last week, my wife showed me her investment returns since 2001 when she first began buying I-Bonds. I was quite impressed.

more...

[UpInArms]

4. daily dollar watch

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

Last trade 86.33 Change +0.23 (+0.27%)

Will The TIC Data Make The Dollar Tick Higher?

http://www.dailyfx.com/index.php?option=com_content&task=view&id=1075&Itemid=39

US Dollar

Dollar bulls have been charging full steam ahead thanks to this week’s exceptionally strong economic data. Even in the face of today’s weaker reports, there have yet to be any signs that their conviction may be wavering. In this morning’s Daily Market Brief, we talked about how important the 1.25 level is for the EURUSD. Whether the dollar can hold onto its gains next week and attempt to test the 1.25 level (which isn’t really that far away) still remains up in the air. We are expecting the all-important Treasury International Capital Flow (TIC) report as well as the consumer and producer price indexes. In January and February we saw exceptionally strong foreign purchases of dollar denominated assets. This month’s report holds lesser significance (unless of course there is a huge surprise) given the sharp contraction in the US trade balance. This time around, the $55 billion trade balance will not be as difficult to fund, especially since inflows have averaged $88 billion over the past 2 months. Economists are predicting foreign demand to subside marginally with foreign inflow falling by $14.5 billion to $70 billion in March. In February, Japan and China upped their purchases of US Treasuries after being net sellers in January. As always, with such heated talk of possible Chinese revaluation, we will be paying particular attention to the strength and direction of Japan and China’s appetite for US Treasuries. In regards to inflation, core prices will be even more important to the Fed than in recent months now that oil prices are at their lowest level in three months. In terms of today’s economic data, business inventories fell short of expectations in March, import prices slowed less than expected last month while consumer confidence, as measured by the University of Michigan Sentiment Survey deteriorated in May.

Euro

The Euro has now weakened to six-month lows against the US dollar. Softer French consumer price acceleration on top of yesterday’s weaker German numbers provided euro bears with yet another reason to remain bearish on the single currency. Renewed talk of Russia repaying $15 billion to the Paris Club has failed to lend support to the euro. With the threat of recession hanging over Italy and the Netherlands, there is little hope that Europe will be bailing itself out anytime soon. The economic calendar for the Eurozone next week is relatively light with a few inflation numbers from Germany, Italy as well as the region as a whole. France will also be reporting their preliminary GDP report. With consumer spending contracting for two consecutive months in the first quarter, growth in the Eurozone’s second largest country will be lackluster at best.

<snip>

Japanese Yen

Broad dollar strength has sent the greenback soaring to one-month highs against the Japanese Yen. The whirlwind of speculation surrounding Chinese revaluation over the past few weeks has calmed down somewhat with China’s central bank Governor Zhou Xiachuan rejecting any speculation that the Chinese would time a revaluation announcement with the expansion in the domestic foreign exchange market beginning May 18th. The Governor flat out said that the media reports on the expected appreciation of the Renminbi on May 18th are completely unsubstantiated. His comments come after a report in the People’s Daily Newspaper suggested that the country’s currency would be revalued next week. In fact, some economists from the major investment banks put the timing of intervention as early as sometime over the next month. Whether this is true or not remains to be seen, but revaluation is inevitable and when it does occur, USDJPY will be first to react.

...more...

Dollar's on a roll - let's see what it goes.

Have a Great Day Marketeers!

[UpInArms]

20. Dollar unmoved by deteriorating NY manufacturing news

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38488.3648003009-835432510&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) - The dollar was little moved early Monday by news that manufacturing activity in the New York area deteriorated sharply for the second straight month in May. The New York Fed's Empire State Manufacturing index fell to -11.1 in May from a revised 2.0 in April. This was the first negative, and lowest, reading since April 2003. Readings below zero indicate contraction. The dollar last week overall registered strong gains, benefitting from multiple factors, including strong national economic reports, speculation that hedge funds may be liquidating dollar-short positions, and adverse news for other currencies. In recent trades the euro stood at $1.2615, contrasting little with $1.2616 before the news. The dollar stood at 107.51 yen, up from 107.42 yen beforehand.

[UpInArms]

51. Dollar weakens slightly after TICS

But losses are minor thanks to recent strong data

http://www.marketwatch.com/news/story.asp?guid=%7B91C1B212%2D0729%2D44B3%2D8E66%2DA3D091EF5415%7D&siteid=mktw

NEW YORK (MarketWatch) -- The dollar registered limited losses Monday morning, after news that New York manufacturing suffered an unexpected and sharp deterioration in May and that foreign capital inflows into the United States slowed a full 46% in March.

In recent trades, the euro traded up 0.2% at $1.2639. The dollar fell 0.06% to 107.25 yen.

Although the U.S. currency was under pressure, the impact of the two pieces of dollar-negative news was minor, according to Michael Woolfolk, senior currency strategist at The Bank of New York.

A number of pieces of strong national economic data largely offset the weak New York data, while monthly foreign capital tallies tend to be volatile and a single month's results usually aren't seen as comprising a firm trend, according to Woolfolk.

The dollar overall remains supported by recent healthy economic reports, including robust jobs creation and retail sales numbers, and an unexpected contraction in the nation's trade deficit, the analyst said.

...more...

"Robust jobs creation" :rofl: "Trusting" those cooked books based on birth/death is STUPID! :banghead:

[UpInArms]

115. a peek at the buck

Last trade 86.08 Change -0.02 (-0.02%)

Settle 86.10 Settle Time 23:36

Open 86.26 Previous Close 86.10

High 86.39 Low 86.07

Last tick: 2005-05-16 14:40:12 ET
30-min delayed quote.

[RawMaterials]

5. Pension funding problems grow

WASHINGTON — Ray Brice, 62, of San Rafael, Calif., expected to cruise along after retiring as a United Airlines pilot two years ago with a $12,000-a-month pension. Not any more.

Last week's federal court ruling allowing United to terminate its drastically underfunded pension plan and pile $6.6 billion of liabilities onto a small federal agency, means his monthly check could be cut about 80%, to about $2,000.

Brice's situation is stark, but no longer unusual.

The United pension default — the largest in U.S. history — comes atop a string of bankruptcies and retirement plan meltdowns in the steel, retail and other industries in the past several years that have directly affected the retirement security of millions of Americans and prompted millions more to worry whether they're next.

snip..

The PBGC, funded through corporate premiums, has moved from about a $10 billion surplus in the late 1990s to a $23 billion deficit in its single-employer insurance program. The agency had $39 billion in assets and $62 billion in long-term liabilities. At the same time, the PBGC estimates underfunding in the pension system has reached a record $450 billion, with auto, airline and retail industries at most risk.

"We have sufficient liquidity to pay benefits at the pace we're paying them now for several years, but we clearly do not have the ability over the long run to honor all the obligations we've taken on," Belt says.

The situation can be resolved three ways, he says: more money from corporate premiums; an eventual taxpayer bailout; or reduced pension benefits.

snip..

Stein and some others say the PBGC numbers on underfunding might be overstated. But Belt says an improving economy won't fix problems in outdated laws.

"The current rules are demonstrably broken. If they worked, you wouldn't have a company being able to terminate its pension plan that is $10 billion underfunded; you wouldn't have participants losing $3 billion of benefits," Belt says of the United situation.

While the United decision has drawn attention to the issue, problems have been mounting for years. Bethlehem Steel in 2002 terminated a plan that was only 45% funded, for example, leaving the PBGC liable for about $3.7 billion in payments — and 95,000 workers and retirees.

A takeover by the PBGC, which doesn't insure 401(k) plans, means workers are guaranteed payments, but possibly not the full amount they had earned. For pension plans ending in 2005, the maximum PBGC payment is $45,613 annually, for workers retiring at age 65. (See story, below.)

Larry Arnold, 56, of Hamburg, N.Y., figures the PBGC's Bethlehem takeover cost him about $750 a month. Arnold had set up his retirement so he and wife Ann Marie, 54, would have all they needed to be comfortable — first with his steel company pension, then her pension from Verizon and finally, when he turned 60, a pension from his service in the Naval Reserve.

"We had this set up where the dominoes were going to fall," he says. "And they pull the first domino before I get a chance to use it, my full pension."

In the United case, pilots are in a difficult position because they are required by law to leave the cockpit by age 60. Yet, those who retire at that age can only get a maximum payout of $2,471 a month from the PBGC on pension plans it assumes this year, about two-thirds of what they would receive if they could work until 65.

"There's a lot of anger, dread, hopelessness," says Richard Bouska, 70, of Livermore, Calif., president of the Retired United Pilots Association, who retired from the airline 10 years ago. "We feel abused, betrayed, all those things."

http://www.usatoday.com/money/perfi/retirement/2005-05-15-pension-cover_x.htm

[UpInArms]

6. Not true 'nice guys finish last': Greenspan

http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20050516/RGREENSPAN16/TPBusiness/International

WASHINGTON -- U.S. Federal Reserve Board chairman Alan Greenspan yesterday gave business school graduates a taste of the sharp-elbowed workplace ahead: They will have to compete with him for a job.

"I have more in common with you graduates than people might think," he said in the commencement address to the University of Pennsylvania's Wharton School in Philadelphia.

"After all, before long, after my term at the Federal Reserve comes to an end, I too will be looking for a job."

His tip to the graduates: "It is decidedly not true that 'nice guys finish last.' "

...more...

ummm... right :eyes:

wish this thing would slither back to its hole :grr:

[54anickel]

30. Wonder if he'll end up eatin' them words on SOX?

snip>

"I am surprised that the Sarbanes-Oxley Act, so rapidly developed and enacted, has functioned as well as it has," said Mr. Greenspan, who traditionally opposes government regulation of business.

Hmmmm, has it functioned as well as he alludes to? How many publicly traded corporations have returned to private equity since this was passed anyway? Not that those that have were ALL crooked, but a robber worth his salt is always one step ahead of the cops.

If you go back and read his dribble on SOX from 2003, it sounds a lot like the old "don't know you're in a bubble until it pops". SOX just magically fixed all those corporate woes (pay no mind to AIG).

Reading on with hind-sight into what he had to say about derivatives in the same speech makes me shudder. SOX fixed everything, and derivatives are your friend. :eyes: :grr:

http://www.federalreserve.gov/boarddocs/speeches/2003/20030508/default.htm

snip>

Thus, corporate officers, especially chief executive officers, have increasingly shouldered the responsibility for guiding businesses in what one hopes they perceive to be the best interests of shareholders. Not all CEOs have appropriately discharged their responsibilities and lived up to the trust placed in them, as the events that led to the passage of the Sarbanes-Oxley Act demonstrated. In too many instances, some CEOs, under pressure to meet elevated short-term expectations for earnings, employed accounting devices for the sole purpose of obscuring adverse results.

A change in behavior, however, may already be in train. The sharp decline in stock and bond prices after the collapse of Enron and WorldCom has chastened many of those responsible for questionable business practices. Corporate reputation is emerging out of the ashes of the debacle as a significant economic value. I hope that we will return to the earlier practices of firms competing for the reputation of having the most conservative and transparent set of books.

:eyes: Has chastened them to what, exactly Mr. Greenspin?

It is hard to overstate the importance of reputation in a market economy. To be sure, a market economy requires a structure of formal rules--a law of contracts, bankruptcy statutes, a code of shareholder rights--to name but a few. But rules cannot substitute for character. In virtually all transactions, whether with customers or with colleagues, we rely on the word of those with whom we do business. If we could not do so, goods and services could not be exchanged efficiently. Even when followed to the letter, rules guide only a small number of the day-to-day decisions required of corporate management. The rest are governed by whatever personal code of values corporate managers bring to the table.

Uh-huh, exactly!

snip to the scary rosy picture he has on derivatives>

Trust still plays a crucial role in one of the most rapidly growing segments of our financial system--the over-the-counter (OTC) derivatives market. This market has played an important and successful role in the management of risk at financial institutions, a major element of their corporate governance. I do not say that the success of the OTC derivatives market in creating greater financial flexibility is due solely to the prevalence of private reputation rather than public regulation. Still, the success to date clearly could not have been achieved were it not for counterparties’ substantial freedom from regulatory constraints on the terms of OTC contracts. This freedom allows derivatives counterparties to craft contracts that transfer risks in the most effective way to those most willing and financially capable of absorbing them.

Benefits of Derivatives
Although the benefits and costs of derivatives remain the subject of spirited debate, the performance of the economy and the financial system in recent years suggests that those benefits have materially exceeded the costs. Over the past several years, the U.S. economy has proven remarkably resilient in the face of a series of severe shocks--the collapse of equity values, terrorist attacks, and geopolitical turmoil. To be sure, economic growth has been subpar for some time, but we seem to have experienced a significantly milder downturn than the long history of business cycles and the severity of the shocks to the economy would have led us to expect.

Although no single factor can account for this resilience, one striking feature that differentiates this cycle from earlier ones is the continued vitality of most U.S. banks and nonbank financial institutions. In past cycles, economic downturns often produced credit losses that were so severe that the capacity of those institutions to intermediate financial flows was impaired. As a consequence, recessions were prolonged and deepened. This time, the economic downturn has not significantly eroded the capital of most financial intermediaries, and the terms and availability of credit have not tightened to such an extent as to be significant factors in deepening the contraction or impeding the recovery.

Oh yeah, I'm waiting for this derivatives BS to come home to roost next.

more...

[UpInArms]

31. oh 54anickel, you always make me laugh!

:rofl:

Trust still plays a crucial role

:rofl::rofl::rofl::rofl::rofl:

"Trust"?

:rofl:

That's only for those that chose to unplug their brains. :hi:

[54anickel]

39. Mornin' UIA. Pretty easy to do when the topic is the comedic Greenspin

Federal Reserve.

Today's reports aren't too pretty. Wonder if they'll be sending in the clowns.






Oops, sorry, wrong clown!!!

[54anickel]

50. The Topic De Jour: (Hedge funds)

Entry at the end of the Credit Bubble Bulletin - but it's an interesting read again all the way down.

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

May 12 – Breakingviews.com (Mike Monnelly): “Put hedge funds and derivatives together and you get an explosion. That, at least, has been the fear ever since Long-Term Capital Management nearly blew up spectacularly in 1998. The turmoil in the credit derivatives market in the past few days following the junking of General Motors is seemingly validating the prophets of doom. Not only have hedge funds and investment banks suddenly racked up large losses in a complex credit derivatives trade. Confidence in the underlying credit market has been undermined and contagion effects are spreading into adjacent markets. If investors now redeem money from hedge funds, forcing them into further selling, this shake-out could get much worse. The complex trade, known to the cognoscenti as a ‘correlation trade’, had become the darling of the hedge fund and investment banking communities. So much so that there are now fears that lots of players could get burnt if everybody heads for the exit simultaneously. Equally, there is no solidarity among hedge funds. Some are already positioning themselves to make money out of their colleagues’ distress.”

Hedge funds have become the topic de jour. Is there another LTCM out there waiting to implode? Such notions are generally dismissed out of hand. Conventional thinking has it that individual funds and their lenders have implemented controls on the amount of leverage used, as well as employing sophisticated safeguards and risk management systems. Certainly, there is great confidence all the way to the top of the Federal Reserve that today’s major money center banks and Wall Street firms are keenly focused on risk management and have the most sophisticated risk monitoring systems ever available. There is a perception that great strides have been made since LTCM. The financial system is resilient; the economy is resilient; bullishness is resilient; the markets indicate otherwise.

I have no insight as to individual fund leveraging or vulnerability. However, from a systemic risk point of view we can make some important inferences. Investment (not positions) in hedge funds has almost tripled since LTCM, with total global derivative positions outstanding up a similar amount. The leveraged speculating community became the marginal buyer/price setter in most markets, surely including equities, corporate debt, MBS, CDS, and junk. And there are aspects of hedge fund investing that encourage atypical risk-taking and aggressive trading across markets. I would argue that the key issue is not individual fund vulnerability – although there are surely many funds suffering these days. The most important issue is systemic fragility.

I relentlessly write about market speculative blow-offs. The dynamics involved are as fascinating as they are nebulous and analytically challenging. But from our study of market history we do appreciate that it takes years (decades?) for major systemic bubbles to flourish and to create the backdrop for the final climax of excess. Such spectacular market developments require a protracted inflationary period to engender market psychology susceptible to a (aberrational) manic convulsion. It takes, as well, years for the financial system infrastructure to expand and evolve to the point of being capable of furnishing the necessary onslaught of finance, both for leveraged speculation and spending throughout the real economy. And, importantly, it takes survival through a series of mini (appearing that way only in hindsight) bursting bubbles, downturns and “close calls.” Bubbles that permeate the entire Credit system are uncommon, and can only be nurtured by repeated intervention and safeguarding by the monetary authorities (“moral hazard”).

While I have no way of knowing if there is another LTCM-like hedge fund collapse that risks markets “seizing up,” I do understand very clearly that the LTCM and other system bailouts by the Fed have played a seminal role in nurturing today’s precarious Credit Bubble Blow-off. When we these days analyze and ponder the heightened stress enveloping the leveraged speculator community, it is most important to think in terms of the ramifications for speculative dynamics – more specifically its influence on Credit system blow off dynamics. Are we witnessing a bout of speculator tumult at The Fringe that will be resolved over time, or is this a much more serious breach at The Core that will mark the beginning of the end?

more...

[UpInArms]

34. speaking of SOX: Accounting board issues guidance for audit reporting

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38488.3922617824-835434089&siteID=mktw&scid=0&doctype=806&


WASHINGTON (MarketWatch) -- Auditors of public companies should undertake several new steps to make their reports more effective and cost-efficient, the Public Company Accounting Oversight Board said Monday. Firms should tailor their audit plans to individual clients instead of using standardized checklists, should integrate "internal control" reports with audits of financial statements and identify what accounts are relevant to internal controls. The internal control reports are required by the Sarbanes-Oxley law, which was passed in 2002 in the wake of corporate scandals.

[UpInArms]

7. Conflicts Seen for Advisors to Pension Plans

http://www.latimes.com/business/investing/la-fi-retire16may16,1,5635257.story?coll=la-headlines-business-invest

NEW YORK — A yearlong investigation by the Securities and Exchange Commission has found that many pension and 401(k) consultants receive large hidden payments from the investment firms they recommend to retirement-plan clients, according to people familiar with the matter.

The SEC, in a report to be released as early as today, is expected to say that the pension and 401(k) consulting industry is beset by widespread conflicts of interest that often are not properly disclosed to clients.

Pension and 401(k) administrators rely on consultants to help them pick money managers and specific investments for the millions of workers in their plans. The consultants supposedly sift through investment strategies and track records to identify the most capable managers.

But the SEC found that many consultants don't reveal that their advice may be influenced by their extensive business ties to the investment firms, according to the sources.

For example, some consultants hold investment conferences that money managers pay large fees to attend. Consultants also sell various research, technology and data services to the investment firms.

...more...

[UpInArms]

69. SEC details pension-consultant conflicts

Report turns up undisclosed conflicts on interest

http://www.marketwatch.com/news/story.asp?guid=%7B1F40B66B-B0E7-4344-B109-4050E6D933E6%7D&siteid=google

BOSTON (MarketWatch) -- The Securities and Exchange Commission released Monday a report on wide-ranging conflicts of interest among pension-fund consultants.

The SEC study focuses on undisclosed agreements between consulting firms and money managers that may affect consultants' recommendations to retirement plans.

<snip>

The agency released the report "to alert the pension consultant community to these findings" and urged pension consultants to "take a hard look at their disclosure and make improvements."

...more...

To "alert the pension consultant community to these findings"? How about ALERTING the investment community - err... I am investors or consumers? :argh:

[UpInArms]

8. Worker pension system showing signs of collapse

http://www.dailystar.com/dailystar/dailystar/75295.php

The nation's private pension system is fraying and at risk of unraveling altogether.

The reason: More than three-quarters of the nation's traditional private pension plans don't have enough assets to cover benefits already promised to their past and current workers.

And the Pension Benefit Guaranty Corp., the government insurer that guarantees workers some protections if companies go under, is facing a deficit of almost $30 billion.

Add to that the threat of more bankruptcies in old-line industries, from manufacturers to the so-called legacy carriers like United Airlines - which last week won approval to default on its pension obligations to 120,000 workers - and experts predict millions more retirees may find themselves with less than they were promised.

...more...

[54anickel]

9. Low Tide (Roach)

http://www.morganstanley.com/GEFdata/digests/20050513-fri.html#anchor0

It was bound to happen. Cycles of fear and greed are as old as financial markets themselves. When asset prices go to excess, we always hear the same refrain, “This time it’s different.” That was the spin on tulips in the 17th century, equities in the summer of 1987, the Nikkei in 1989, fixed income markets in 1993, and, of course, Nasdaq in 2000. Chastened by the inevitable post-bubble carnage, speculators, regulators, and policy makers always promise, “Never again.” Yet memories are short, and as day follows night, so do cycles of greed and fear — and the proverbial next time. Such is the case with the wrenching unwinding that is now occurring in a broad array of so-called structured credit products. The possibility of contagion to other spread markets — namely, high-yield and emerging-market debt, as well as investment-grade corporates — cannot be ruled out. In my view, that could well open up a serious fault line in America’s asset-dependent economy.

I’ll leave it to the experts to walk you through the intricacies of the latest alphabet game on Wall Street — the CBO, CLO, and CSO. The latest incarnation is the synthetic CDO, or collateralized debt obligation — a “tranched” portfolio of credit default swaps (CDS) — that are, in themselves, credit derivatives. Suffice it to say, these so-called structured credit products have become the latest rage in investor circles. Based on numbers from our in-house rocket scientists, it appears that global CDO issuance totaled $800 billion over the 2001-04 period, the equivalent of 30% of new issuance of investment-grade corporates over the same period. This is but one example of the all-too-frequent breakthroughs in financial engineering that leave old-timers like me feeling totally out of it — not just ostracized on the trading floor but also at social gatherings. Always in search of self-improvement, I picked up a copy of Morgan Stanley’s latest page-turner — a 332-page tome published in April 2005, entitled Structured Credit Insights: Instruments, Valuation, and Strategies. I have to confess I couldn’t even understand the introductory chapter, which started out with a pithy quote from Albert Einstein: “Everything should be made as simple as possible, but not simpler.”

Yet even the “new-new” gets tested every once in a while. Sparked by downgrades in the auto sector, credit markets have come under siege in recent days. For example, the spread on the Dow-Jones Trac-X investment-grade 5-year credit default swap ?? a representative gauge of liquid, high-quality spreads — which widened from an uber-low 38 basis points in mid-March to 55 bp two weeks ago, stands at 70 bp today. This follows a more modest back-up in other spread markets that has occurred over the past few weeks. However, apart from the carnage in structured credit products, the recent widening of spreads has been relatively limited when compared with the dramatic compression that occurred over the preceding two years. Spreads on emerging-market debt, for example, remain tighter than at any point since late 1997 — just before the Asian financial crisis. Moreover, the 130 bp back-up in high-yield spreads has retraced only a small portion of the roughly 750 bp narrowing that occurred over the previous two and a half years. Similarly, the widening of spreads on investment-grade corporates has unwound only about 15% of the compression that has occurred since late 2002. In all of these cases — but especially for emerging-market debt — spreads remain well below their 10-year averages.

This underscores what I believe is a gathering sense of systemic risk in world financial markets: Despite the back-up in structured credit markets, most of the riskiest segments of fixed income markets are still priced for a minimum of risk — an especially worrisome condition in a monetary tightening cycle. My concern is that the recent sell-off in credit products may be a warning shot of considerably more pressure to come in a much broader array of fixed income markets. For an income-short, asset-dependent US economy and for a US-centric global economy, such risks cannot be taken lightly.

snip>

As an aside, I must confess I have no patience with a central bank that attempts to define away the problem by reinventing real interest rate metrics. The so-called core PCE “chain-type” price index that the Fed prefers to use in this vein is an obscure statistical gauge — very different from the more popular indexes (i.e., the headline CPI) that shape public perceptions of overall trends on the price front. While it may suit the Fed’s purposes to rely on such an esoteric proxy of inflationary expectations, this effort is very much at odds with what Irving Fisher envisioned when he came up with the idea (see his 1930 treatise, The Theory of Interest). The Fisher construct stressed a broadly accepted perception of expected inflation. The trick comes in measuring this construct. Believing we live in an “autoregressive” world and lacking in such forward-looking gauges, economists have relied on backward-looking measures to approximate future inflation. Interestingly enough, the latest University of Michigan survey-based data on inflationary expectations put the year-ahead CPI inflation rate at 3.3% — actually a bit above that implied by the headline CPI. On this basis, as well, real short-term interest rates are basically zero — despite what the Fed may tell you.

more...

[UpInArms]

10. AIG to force out senior executives - WSJ

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=8500246&src=rss/businessNews

NEW YORK (Reuters) - American International Group Inc. (AIG.N: Quote, Profile, Research) , under pressure from regulators probing the insurance giant's accounting practices, plans to force out several senior executives, the Wall Street Journal reported on Monday.

AIG will force six or more senior executives to leave the company in the next two weeks as the probes reach beyond ousted chief executive Maurice "Hank" Greenberg and fired chief financial officer Howard Smith, the newspaper reported, citing people familiar with the matter.

Current CEO Martin Sullivan and finance chief Steven Bensinger have not been implicated in improper accounting and will not be leaving, the report said.

But a top AIG executive, Joseph Umansky, has agreed to cooperate with the New York attorney general in hopes of receiving immunity from criminal prosecution or of facing lesser charges, people familiar with the matter told the Journal.

On Saturday the New York Times reported, citing people briefed on the investigation, that Umansky had struck a deal with the attorney general to cooperate in exchange for immunity.

...more...

[UpInArms]

43. AIG agrees to pay directors legal costs

http://www.marketwatch.com/news/story.asp?guid=%7B86BFCE19%2D82CB%2D4D1F%2DA341%2D090C9922325A%7D&siteid=mktw

NEW YORK (MarketWatch) - American International Group agreed to pay the legal costs of its board of directors, according to a regulatory filing made Monday.

The agreement comes amid several regulatory probes of the insurance company. It also comes as the company plans to force out six or more executives as part of a probe into accounting issues. See full story.

Directors included in the agreement are M. Bernard Aidinoff, Pei-yuan Chia, Marshall A. Cohen, William S. Cohen, Martin S. Feldstein, Ellen V. Futter, Stephen L. Hammerman, Carla A. Hills, Frank J. Hoenemeyer, Richard C. Holbrooke, George L. Miles, Jr., Morris W. Offit, and Frank G. Zarb.

...more...

Must be nice to be a big shady guy :eyes:

[UpInArms]

96. AIG reassures on CEO, CFO status

But blue chip may oust other execs, report says

http://www.marketwatch.com/news/story.asp?guid=%7B766C672F%2D9596%2D4167%2DB93D%2DCD3FB52AF69A%7D&siteid=mktw

NEW YORK (MarketWatch) -- American International Group sought to reassure investors Monday about the positions of its current chief executive and chief financial officer after a newspaper reported that the giant insurer plans to oust at least six additional senior executives.

AIG (AIG: news, chart, profile) has drawn up a tentative list of as many as eight who could be forced out in the next two weeks, The Wall Street Journal reported, citing people familiar with the situation. See Wall Street Journal story.

By forcing out more executives, AIG wants to clear up any more unpleasantness ahead of its self-imposed May 31 deadline to file the company 2004 annual report, the paper added.

The tenure of Martin Sullivan, who replaced Maurice "Hank" Greenberg as AIG's CEO in March, and Steven Bensinger, the company's new CFO, is not in doubt, said AIG spokesman Chris Winans.

...more...

[UpInArms]

11. Today's Report:

May 16	8:30 AM	NY Empire State Index	May	-	15.0	11.0	3.1	-

[UpInArms]

14. ALERT REPORT: Empire State Report CRATERS!

8:30am 05/16/05 U.S. MAY EMPIRE STATE EMPLOYMENT INDEX 0.2 VS 8.5 APRIL

8:30am 05/16/05 U.S. MAY EMPIRE STATE INDEX BELOW CONSENSUS 10.7

8:30am 05/16/05 U.S. MAY EMPIRE STATE WEAKEST SINCE APRIL 2003

8:30am 05/16/05 U.S. MAY EMPIRE STATE INDEX -11.1 VS 2.0 IN APRIL

[UpInArms]

15. Factory activity declines in New York (understatement of the year)

http://www.marketwatch.com/news/story.asp?guid=%7BB071251F%2D7B2A%2D42B5%2D8E36%2DDD0EA34F480F%7D&siteid=mktw

WASHINGTON (MarketWatch) -- Manufacturing activity in the New York area deteriorated sharply for the second straight month in May, the New York Federal Reserve Bank said Monday.

The bank's Empire State Manufacturing index fell to -11.1 in May from a revised 2.0 in April. This was the first negative, and lowest, reading since April 2003.

Readings below zero indicate contraction.

The drop was unexpected. Economists were forecasting the index to rebound to about 10.7 in May from the initial estimate in April of 3.1.

The new orders index dropped to -7.1 from 1.2 in April.

Unfilled orders fell to -17.3 from -8.2.

Shipments rose to 0.8 from -1.0.

The employment index fell to 0.2 in May from 8.5 in April. This is the lowest reading since September 2003.

...more...

WHAT FREAKIN' ROCK DO THESE ECONOMISTS LIVE UNDER?!?!?!

:banghead:

[UpInArms]

17. NY Fed econ index slips in May to show contraction

http://today.reuters.com/investing/FinanceArticle.aspx?type=bondsNews&storyID=URI:urn:newsml:reuters.com:20050516:MTFH73477_2005-05-16_12-39-42_NAT001586:1

NEW YORK, May 16 (Reuters) - - Growth at New York state factories turned negative in May as the New York Federal Reserve Bank's "Empire State" index slipped to a two-year low for the second consecutive month.

The May index defied forecasts for an increase and instead slipped to -11.11 -- below the zero threshold that delineates growth from contraction in the survey. The New York Fed also revised the April figure downward to 2.03 from 3.12 last month.

The median forecast in a Reuters survey of economists last week had pegged the number at 10.5.

...very short blurb...

Defied forecasts? How dare it! :shakeshead:

[ozymandius]

19. pre-open blather - my how those numbers have shifted!

8:33AM: S&P futures vs fair value: +0.8. Nasdaq futures vs fair value: -2.5.

Futures trade pulls back following weaker than expected economic data, now suggesting a mixed open for the indices... May NY Empire State Manufacturing Index checked in at a disappointing -11.1, well below forecasts of 11.0 and versus a revised prior read of 2.0

8:00AM: S&P futures vs fair value: +1.9. Nasdaq futures vs fair value: +0.5.

Futures market versus fair value suggesting a steady open for the cash market as investors await a widely anticipated rebound in regional manufacturing activity, when the NY Empire State Index (consensus 11.0) is released at 8:30 ET... Contributing to an improved sentiment have been falling oil prices (near $48/bbl) and M&A activity - UPS has agreed to buy Overnite Corp. (OVNT) for $1.25 bln while reports suggest plans to raise $400 mln to merge US Airways with America West

[UpInArms]

22. Ozy, did you notice

anywhere about that Nasdaq screw-up last Friday?

Somehow, I really doubt that it maintained that "gain". :shrug:

[ozymandius]

27. I read about that here.

There was a brief mention at Yahoo with the closing phrase "technicians are working to correct..." The story claimed that heavily traded stocks were not affected by the glitch. Then nothing else came over the wire.

[spotbird]

45. How is it that these economists

don't have a simple calculator. When household with an income of even 80k has expenses from everything from eggs to energy increase dramatically, with no corresponding increase in income, that home's widget consumption will decline. It is as if because the economists are doing well with price increases they think the rest of the world isn't feeling the pinch.

Maybe they think that the claim that inflation is under control makes it so. Um, someone needs to let them know that the con only works on the market makers, the serfs eventually have to limit spending.

[UpInArms]

24. filling in the blanks (note last month's revision)

May 16	8:30 AM	NY Empire State Index	May	-11.1	15.0	11.0	2.0	3.1

[54anickel]

76. Oh my - there will be lots of reports this week - Just checked my

in-box. Awww, and I won't have much time to watch all the fun this week. Will there be more surprised economists?



Monday, May 16, 2005

8:30 AM ET. May Empire State Mfg Index (expected +10.0; previous
+3.1)

9:00 AM ET. March Treasury International Capital Flows (previous
$84.5B)

10:00 AM ET. USDA Grain Export Inspections Report

1:00 PM ET. May NAHB Housing Market Index (previous 67)

Tuesday, May 17, 2005

7:45 AM ET. May 14 ICSC Store Sales Index (previous +0.7%)

8:30 AM ET. April PPI (expected +0.4%; previous +0.7%)

8:30 AM ET. April PPI, ex-food and energy (expected +0.2%; previous
+0.1%)

8:30 AM ET. April Housing Starts (expected +8.9%; previous -17.6%)

8:55 AM ET. May 14 Redbook Retail Sales Index (previous +2.5%)

9:15 AM ET. April Industrial Production (expected +0.2%; previous
+0.3%)

9:15 AM ET. April Capacity Utilization (expected 79.4%; previous
79.4%)

5:00 PM ET. May 14 ABC/Washington Post Consumer Confidence
Index (previous -16)

Wednesday, May 18, 2005

7:00 AM ET. May 14 MBA Refinancing Index (previous +9.8%)

8:30 AM ET. April CPI (expected +0.4%; previous +0.6%)

8:30 AM ET. April CPI, ex-food and energy (expected +0.2%; previous
+0.4%)

Thursday, May 19, 2005

8:30 AM ET. May 14 Initial Jobless Claims (expected -10K; previous
+4K)

10:00 AM ET. April Chicago Fed National Activity Index (previous
+0.11)

10:00 AM ET. April 30 DJ-BTM Business Barometer (previous +0.4%)

10:00 AM ET. April Conf. Board Leading Econ Indicators (expected
+0.2%; previous -0.4%)

12:00 PM ET. May Philadelphia Fed Business Index (expected +19.0;
previous +25.3)

Friday, May 20, 2005

N/A No major economic indicators scheduled

[UpInArms]

13. A.G. Edwards CEO Bagby's bonus rises 24%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38488.3524634607-835431838&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- Robert L. Bagby, chairman and chief executive of A.G. Edwards Inc. (AGE) was granted a $1.08 million bonus in fiscal 2005, up 24% from the previous year, the St. Louis-based brokerage said in a regulatory filing late Friday. Bagby was paid $494,000 in salary and $132,600 in other compensation. He received restricted stock valued at $308,840. Shares of A.G. Edwards fell 35 cents to close at $39.18 on Friday.

[UpInArms]

54. Nvidia approves plan to raise CEO's cash compensation

http://www.marketwatch.com/news/story.asp?guid=%7B6EDAA2EF%2D8C58%2D4CA9%2DB1CD%2D1038316CB775%7D

WASHINGTON (MarketWatch) -- Nvidia Corp. (NVDA) disclosed Monday that its board approved the fiscal 2006 variable compensation plan, which is designed to increase the cash compensation of its chief executive and senior officers if certain pre-set corporate and individual targets are achieved during the year.

Under the plan, variable cash compensation will be paid to senior officers if the company achieves pre-set company targets and individuals achieve their personal goals, which were determined by the compensation committee for the CEO and by the executive officers for senior management during the first quarter.

According to a document filed with the Securities and Exchange Commission, 50% of a participant's potential variable cash compensation will be allocated to the achievement of corporate objectives and 50% will be allocated to the achievement of individual objectives.

Nvidia's performance criteria for each participant will be based on the company's net income or gross margin objectives as set by the compensation committee based on recommendations by the CEO and executive officers, or on other company performance goals to be determined by the committee.

...more...

Look out for the chefs in the kitchen :eyes:

[UpInArms]

16. Treasury prices rise after weak NY manufacturing survey

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38488.3602124769-835432372&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) - Treasury prices shot higher, pushing yields down, early Monday after news that in May manufacturing deteriorated sharply for a second straight month in New York. The New York Federal Reserve Bank's Empire State Manufacturing index fell to -11.1 in May from a revised 2.0 in April. The reading marked the first negative, and lowest, reading since April 2003. Readings below zero indicate contraction. The news touched off safe-haven interest in Treasurys, pushing the yield on the 10-year note down to 4.124%, down from 4.125% before the news.

[ozymandius]

18. Good morning everyone. Here's the WrapUp.

WrapUp by Tim W. Wood

THE DOW REPORT
Commodity Boom or Bust

It’s been a while since I talked about commodities, and given the price action seen this week, I thought that we would revisit this subject today. In early December 2004 it looked as if the commodity boom was over. At that time many of the technical pieces had fallen in place indicating a major top had occurred. But, there happened to have been one last gasp into the parabolic advance that ended in March.

But what about now? Is the commodity boom really over? Has the recent decline really been another buying opportunity? Why have gold stocks been hit so hard? Why is the dollar rallying? Why is oil falling? Isn’t this an inflationary environment? Why did Warren Buffet loose $300 million shorting the dollar? What is going on here?

On April 15, 2005 I introduced to you my Trend and Cycle Turn Indicators. In that wrap up I explained the rules and how I used these indicators as an aid in my cycles work. I also explained that these indicators were designed to help simplify the cycles work. The really neat thing about these indicators is that they can be used on a long, intermediate and short term horizon. This helps to define the Primary, Secondary and shorter-term trends. These indicators can also be used on relative strength charts in order to tell me when one index or commodity will out- or under-perform another on a particular time horizon. In an effort to answer a few of the questions I presented above, I will show you a few of these charts along with these indicators, and explain their meaning. We will not look at all of the time horizons because that is outside of the scope of this commentary and would require far too many charts and complicate the matter.

-cut-

I will tell you that odds greatly support the notion that the commodity boom is over, at least for now. If the commodity boom is still on, then these indicators will turn up. This indicator and the ratio charts do not care what popular sentiment is saying. They do not care that Warren Buffet has been short the dollar. These indicators do not care what the price estimates on oil, copper, silver, gold or gold stocks have been. They do not care what the fundamentals are in China, the US or with GM and Exxon. No, these indicators have no emotion because they are based on price, and price is ultimately all that counts. I know that when I talk cycles many people find the concept hard to grasp. Therefore, I have been working with this and a variety of other indicators that are all tied to the various cycles in an effort to make my cycles work much easier to understand. All one has to do is look at the direction of the indicator. It’s either up or down at each of the various levels and when following these indicators on the different time intervals, (daily, weekly and monthly) we will not find ourselves on the wrong side of the market.

more...

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

[UpInArms]

23. STMicroelectronics plans further restructuring

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38488.3647983102-835432505&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- STMicrolectronics (STM) said Monday it would undertake additional restructructuring efforts to recover profitability including the cumulative reduction of its work force outside of Asia to a total of 3,000 people by mid-2006. The semiconductor company estimates charges of between $100 million and $130 million related to the restructuring. The reorganization includes some previously announced ongoing actions as well as further restructuring and streamlining measures, according to the company, which expects additional savings of $90 million annually upon completion of the plan. Trading in the shares were halted in Paris. Ahead of the announcement the stock had been up 1.6%.

Outside of Asia? Wonder where that might be :eyes:

[UpInArms]

25. pre-opening ino blather

The June NASDAQ 100 was slightly higher overnight as it consolidates above this year's broken downtrend line crossing near 1466.90. Stochastics and the RSI are overbought and have turned neutral hinting that a short-term top might be in or is near. Multiple closes above this year's downtrend line crossing near 1466.90 are needed to confirm that a trend change has taken place and would then open the door for a possible test of the 38% retracement level of this year's decline crossing at 1494.46 later this spring. Closes below the 20-day moving average crossing at 1443.55 would signal that the short covering rally off April's low has come to an end. The June NASDAQ 100 was down 1.00 pts. at 1473 as of 5:56 AM ET. Overnight action sets the stage for a steady to lower opening by the NASDAQ composite index later this morning.

The June S&P 500 index was steady to slightly higher overnight as it consolidates below the 20-day moving average crossing at 1161.58. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below last Friday's low crossing at 1147.20 would open the door for a possible test of April's low crossing at 1135.90 later this spring. If June renews the rally off April's low, the 50% retracement level of the March-April decline crossing at 1185 is the next upside target. The June S&P 500 Index was up 0.40 pts. at 1157.10 as of 5:58 AM ET. Overnight action sets the stage for a steady to higher opening when the day session begins later this morning.

[UpInArms]

26. ALERT REPORT #2: U.S. capital inflows slow in March

http://www.marketwatch.com/news/story.asp?guid=%7B42DA7578%2D84BD%2D4053%2DBE49%2DA3E144C63167%7D&siteid=mktw

WASHINGTON (MarketWatch) - Foreign demand for U.S. securities slowed sharply in March, the Treasury Department said Monday.

Net capital inflows fell to $45.7 billion in March from $84.1 billion in February as foreign central banks became net sellers of U.S. assets for the first time in nearly two years.

Chinese holdings of U.S. Treasurys dropped for the first time in just over a year. Japanese holdings fell for the second time in the past three months, while investors in the Caribbean banking centers increased their holdings by 31%.

In March, net foreign purchases of domestic securities fell to $60.1 billion from $98.1 billion in February. U.S. net sales of foreign securities, meanwhile, were nearly unchanged at $14.4 billion.

Foreign central banks sold $14.4 billion in U.S. securities on net, the first net sales since August 2003, after purchasing $18.7 billion in February. Foreign central bank purchases have supported the U.S. current account deficit over the past two years.

Foreign central banks sold $15.0 billion in Treasurys in March after buying $11.3 billion in February. It's the first net sales of Treasurys by the official foreign sources since August 2003.

...more...

9:00am 05/16/05 U.S. MARCH CAPITAL INFLOWS SLOWEST SINCE AUG. 2003

9:00am 05/16/05 U.S. MARCH INTERNATIONAL CAPITAL INFLOWS SLOW TO $45.7B

[54anickel]

33. Oh my! They are selling our fish-wrap? I can't wait to see how this

gets spun into "good news".

[spotbird]

46. Is this the beginning?

Has the boy noticed the emperor has no clothes?

I wonder what physiological impact the Bolton nomination will have on the international markets. The US is screaming that they don't give a damn about the rest of the world, maybe the rest of the world will scream back that the feeling is mutual.

[54anickel]

47. What to expect/watch for in the TICS?

http://www.forexnews.com/NA/default.asp

snip>

What to expect/watch for in the TICS?

The report is especially important as it states the extent to which the US is able to cover its trade deficit by net foreign purchases of US stocks and bonds. In recent months, monthly net foreign flows have comfortably “covered” the US trade imbalance at about a 1.3 times the monthly trade imbalance. Although we expect net capital flows to have fallen by 17% drop to $70 billion, the figure stands well above the March trade deficit of $54 billion, which should cause no obstacle to the dollar’s rally.

Upon closer inspection, markets will be following the extent to which foreign official (central bank) purchases were behind the inflows into US Treasuries, after these purchases have given way retreated to private purchases (primarily hedge funds) in the last 2 months. We should also scrutinize net foreign purchases of US stocks as these have dropped by more than half in February, posting the 8th monthly decrease in the past 12 months.

Our forecasts of a decline rests partly on a decline in foreign non-official (hedge funds) purchases of US treasuries following the sell-off in US Treasuries in March. Private foreign purchases of treasuries made up 76% of the increase in total net foreign purchases of US Treasuries in February after taking 94% of the total increase in January. We deem this as a negative because purchases from hedge funds a have proven to be largely volatile and unreliable. Thus, the question is especially raised for the March data when US treasury yields hit 4.50% on Fed inflationary concerns.

more...

[54anickel]

132. Foreign Central Banks Dump Treasuries

Notice this didn't get a lot of play in the MSM or blather today? :shrug:

http://www.forexnews.com/AI/default.asp?f=A20050516A.mgn

Net foreign capital flows into the US assets dropped 46% to $45.7 billion in March, reaching its lowest level since October 2003. Capital flows fell below the March trade deficit of $54 billion, the first short fall since October 2004.

POSITIVES

Although foreign officials (central banks) were net sellers of US treasuries, private sources, continued allocated increased their net Treasury purchases by 36% to $42.8 billion. Private sources continued to show strong interest in US Treasuries for the third straight month.

NEGATIVES

Foreign purchases of US Treasuries fell 34%, net purchases of Agency bonds fell 53%, while net purchases of corporate bonds and corporate stocks dropped 28% and 77%.

Net foreign purchases of US stocks dropped 77% to $1.7 billion, the lowest level since May 2004 when foreigners were net sellers.

Japanese holdings of US treasuries (see chart below) fell 0.1% to $679.5 billion, posting the 5th monthly drop over the last 7 months, a pattern not seen since 2001. Also, Chinese holdings of US Treasuries slipped 0.6% to $223.5 billion, posting the first drop since February 2004. We have long brought attention to the dissipating rate of Japanese purchases of US Treasuries in light of the negative dollar outlook vis-à-vis the yen. It can be argued that foreign central banks made some Treasury sales to capitalize on the dollar’s rise in March. While the retreat in Chinese holdings may be an aberration, the drop in Japanese holdings of Treasuries proves to be part of an unfolding trend.



The chart above also shows that institutions registered in the Caribbean (primarily offshore hedge funds) increased their holdings of Treasuries by 31% to a record $137 billion. This is consistent with the 36% increase in non-official purchases of Treasuries to $42.8 billion.

more...

[UpInArms]

36. 9:33 Fie Fi Fo Fum - I smell the Pixie Dust come

Dow 10,151.13 +11.01 (+0.11%)
Nasdaq 1,975.04 -1.74 (-0.09%)
S&P 500 1,154.93 +0.88 (+0.08%)
10-Yr Bond 4.115 -0.06 (-0.15%)

NYSE Volume 22,272,000
Nasdaq Volume 40,974,000

[ozymandius]

41. shaking pixie dust

9:46
Dow 10,184.61 +44.49 (+0.44%)
Nasdaq 1,982.20 +5.42 (+0.27%)
S&P 500 1,158.29 +4.24 (+0.37%)
10-Yr Bond 4.113 -0.08 (-0.19%)

NYSE Volume 111,842,000
Nasdaq Volume 124,276,00

Note: the markets do not have a true direction during the first half hour of trading. Traders are still caffeine-buzzed.

[UpInArms]

42. Ozy, did the 9:40 blather come straight from Karl's desk?

:rofl:

Pay no attention to today's reports - look to Friday's (so that we can have time to tweak those!)

[ozymandius]

48. Hardy Har Har!

the outlook for the sector remains positive

when pigs dance at the Bolshoi and I am the Queen of Atlantis. I wonder what evidence is used to back up this drivel.

[UpInArms]

38. Hey buddy, can you spare a billion bucks?

http://www.projo.com/business/content/projo_20050516_16dimart.2029ff2.html

(free registration or try www.bugmenot.com)

We've devolved into a nation of panhandlers.

Today, the government reports on the success of our assumed trade in the month of March.

I refer, of course, to the monthly Treasury International Capital, or "TIC" data, that will be released this morning. In plainer English, the TIC data tally purchases by foreigners of all forms of U.S. securities -- Treasurys, agencies, stocks, etc.

We know from last Wednesday's data on the March trade deficit that we only needed to borrow $55 billion from foreigners to keep the country's books in balance.

That drop in the debt bucket will be a breeze if January and February foreign demand for U.S. securities are any indication of foreigners' appetites in March. In the first two months of the year, the trade deficit widened by $120 billion. That's where you get the $2 billion in daily required inflows that's quoted everywhere.

<snip>

Granted, a disturbing percentage flowed out from hedge funds based in the Caribbean -- so-called hot money -- straight into the volatile U.S. stock market.

...more...

[54anickel]

44. PIRATES OF THE CARIBBEAN (from March)

http://www.financialsense.com/fsu/editorials/kirby/2005/0318.html

snip>

doing so, one might choose to notice how America’s traditional financiers have actually reduced their holdings of US debt obligations but our new best friends, the Pirates of the Caribbean have dramatically stood in for the debt fatigued Asians in accumulating a walloping 23 billion in additional US debt in the latest reporting month . Go figure, ehh, who would have ever thought that pirates could or would ever be so charitable?

Upon further examination of the red line in the table above depicting the Caribbean banking centre and their holdings of US securities; what stands out above all else is that this line, unlike any other jurisdiction in the world, looks contrived, lacks continuity and its erratic fluctuations give the appearance that this line is being used as a “plug”. Actually, the term ‘skullduggery’ comes to mind. It should be remembered that other jurisdictions in the world are home to hedge funds also, yet none of them exhibit such wild fluctuations in their monthly reporting. Strange, ehh?

You see folks, it’s officialdom and their Wall Street shills themselves that would have us believe that Caribbean based hedge funds have actually ‘picked up the slack’ so to speak , and anted up this enormous amount of investment capital to float the American government’s profligacy pontoon boat. They also tell us that there is a shortage of “long term” paper in the market and this has been the primary cause for long term rates remaining so stubbornly low. Upon further examination of the detailed TIC data supplied, compliments of the good folks at the Treasury, here:

http://www.treas.gov/press/releases/js2314.htm

We find that, indeed , foreigners have been seemingly snapping up securities – massively favoring the long end of the curve versus the short end. This is evidenced by this quote on the U.S. Treasury’s web site :

Net Long-Term Securities Flows

“Net foreign purchases of both domestic and foreign long-term securities from U.S. residents were $91.5 billion in January compared with $60.7 billion in December. “

With such being the case, here is a somewhat simplistic but I would argue accurate depiction as to what has happened to these friendly and extremely generous Caribbean based hedge funds in the past month and a half:

more....

[UpInArms]

40. 9:44 EST joyful markets and blather

Dow 10,185.05 +44.93 (+0.44%)
Nasdaq 1,982.20 +5.42 (+0.27%)
S&P 500 1,158.76 +4.71 (+0.41%)
10-Yr Bond 4.113 -0.08 (-0.19%)

NYSE Volume 111,842,000
Nasdaq Volume 124,276,000

9:40AM: Market opens in lackluster fashion, as investors digest an unexpected decline in regional manufacturing data... The May NY Empire Index fell sharply to -11.1 (consensus 11.0) - the lowest level since April 2003 - versus a downward revision to April's figure of 3.1 (to 2.0), indeed disconcerting data as two years of growth have come to an end...

However, since too much is often read into these individual monthly surveys and the outlook for the sector remains positive, the knee-jerk reaction in pre-market trading has been somewhat short-lived, as investors turn their focus to similar upcoming May surveys - like Friday's Philadelphia Fed and the Chicago PMI (May 31) - to get a better understanding as to whether this morning's NY data represents an underlying trend...

[UpInArms]

49. 10:07 EST numbers and blather

Dow 10,176.85 +36.73 (+0.36%)
Nasdaq 1,979.27 +2.49 (+0.13%)
S&P 500 1,157.97 +3.92 (+0.34%)
10-Yr Bond 4.117 -0.04 (-0.10%)

NYSE Volume 236,440,000
Nasdaq Volume 241,219,000

10:00AM: Major indices improve their stance as the bulk of sector leadership is now positive... Arguably oversold conditions in Financial (+0.8%), which fell roughly 1.5% last week, has renewed buying interest in the influential sector... Health Care (+0.3%) has shown relative strength, amid positive drug-trial data over the weekend at the ASCO conference, while Transportation has surged amid United Parcel Service's (UPS 72.80 +0.65) $1.25 bln for Overnite Corp. (OVNT 42.45 +12.87)...

The Energy sector (-0.7%), however, has extended last week's declines amid falling oil prices ($48.02/bbl ($0.65) while Technology has also been under pressure, as modest gains in software and networking have not been enough to offset losses in hardware... NYSE Adv/Dec 1446/958, Nasdaq Adv/Dec 1382/1023

[UpInArms]

56. 10:40 EST numbers and drivel

Dow 10,188.60 +48.48 (+0.48%)
Nasdaq 1,979.94 +3.16 (+0.16%)
S&P 500 1,158.48 +4.43 (+0.38%)
10-Yr Bond 4.125 +0.04 (+0.10%)

NYSE Volume 408,030,000
Nasdaq Volume 374,864,000

10:30AM: Market continues to strengthen, getting a boost from some notable blue chips... Pacing the way on the Dow has been Home Depot (HD 37.17 +0.88), which has surged 2.4% ahead of its Q1 report tomorrow morning... Even though rival Lowe's (LOW 54.80 +1.94) missed analysts' Q1 expectations by $0.02 earlier, the retailer's report has contained some positive data points, as poor weather conditions have been blamed for the quarterly miss and demographic & housing trends remain extremely strong...

Upbeat comments from Goldman Sachs, noting that concerns about an inventory overage have been resolved, have also helped offset Lowe's headline disappointment and subsequently provided a floor of buying support for Home Depot...NYSE Adv/Dec 1809/996, Nasdaq Adv/Dec 1550/1143

[ausiedownunderground]

52. Looks like those "Caribbean" fundsters are taking up more of the slack!

As Chinese central bankers get more and more nervous, and Japanese central bankers remember WW2 repatriations, the central Bankers from the Cayman Islands and the Bahamas grow in confidence! WOW, the US government is being bought out by the "Reggae" boys! Thats pretty "COOOOOL"!

[Roland99]

55. Just who are these Caribbean fundsters anyway?

[UpInArms]

57. here's what's in the snews today re: hedge funds

Citigroup hires former GIC exec for hedge fund
Citigroup announces opening of hedge fund platform in Singapore.

http://www.hedgefundsworld.com/tmpl/Article.aspx?ID=21574

Citigroup Opens Hedge Fund Platform in Singapore Albert Ee named President of Tribeca Global Management Asia

Singapore, 16 May 2005 - Tribeca Global Management, the hedge fund offering of Citigroup Alternative Investments, today announced the opening of its multi-strategy hedge fund platform in Singapore, where the flagship hedge fund's Asia operations will be headquartered.

Albert Ee, formerly of Government of Singapore Investment Corporation (GIC), has been appointed President of Tribeca Global Management Asia.

"The hedge fund industry is at a turning point," said Tanya Styblo Beder, CEO of Tribeca Global Management. "The growth of institutional participation is rapidly outpacing individual participation - leading to the need for a long-run, institutional platform.

The new Asia trading platform will allow Tribeca Investments to meet these needs," Ms. Beder added.

Commenting on the set up of Tribeca in Singapore, Mr. Ee said, "The hedge fund industry in Singapore is reaching a critical mass. Coupled with the growth in private banking activities, Singapore will be a truly exciting place for funds management."

...more...

Hedge funds win right to sell direct to public
Soaring demand forces FSA to follow Europe in lifting ban

http://www.hedgefundsworld.com/tmpl/Article.aspx?ID=21577

Managers of hedge funds are expected to be allowed to market their products directly to retail investors following a change in regulations being discussed by the Financial Services Authority.

The FSA ruled out such a move two years ago but, since then, countries including France, Germany, Italy and Spain have allowed direct marketing of some forms of hedge-fund product. The FSA is now expected to follow suit, although it is expected to seek the views of the industry and investment experts on what should be permitted. A consultation paper is expected to be issued next month, at the same time as a discussion paper concerning the impact of hedge funds on the financial markets.

Demand for hedge-fund products has soared in recent years, although still mainly from wealthy individuals. However, a number of new funds have been launched recently by companies such as Close Brothers, HSBC and Matrix that are aimed a bit lower down the wealth scale. Some of these - including HSBC Republic's Absolute range of trusts - are quoted on the stock market and can be bought by private individuals through a stockbroker.

Returns from hedge funds have been falling sharply - in the year to the end of April, the industry as a whole fell by 1.75 per cent, according to figures from Hennessee Group, and there have been suggestions that the increase in the number of hedge-fund managers means future returns are likely to be lower than in the past.

Last week there were rumours of big losses among hedge funds following the downgrading of the debt of Ford and General Motors, and suggestions that these losses had pushed some funds close to collapse.

...more...

Here's a link to http://www.hedgefundsworld.com/tmpl/main.aspx

[Roland99]

58. Citigroup, eh? Where Wolfowitz and Pakistani PM Aziz worked.

[ozymandius]

63. hedge fund warning from across the big pond

City hedge funds head for domino collapse

BAD investments by some of the biggest hedge funds in London have triggered unprecedented losses, record demands for money back and talk of a death spiral weighing heavily on stocks and bonds.

GLG, a hedge fund started in 1995 by a group of former Goldman Sachs bankers, has in recent weeks had demands for more than $500m (£270m) from investors wanting to pull out of its $4 billion market-neutral fund.

The predicament of GLG, the biggest group in Europe, with $13 billion under management, highlights the stress being felt at many hedge funds in Europe and America after four months of deteriorating results.

-cut-

May has also started rockily. Some hedge funds were wrongfooted when Standard & Poor’s downgraded General Motors and Ford bonds to junk levels, and US investor Kirk Kerkorian used the opportunity to buy shares. Bond prices fell and share prices rose, the opposite of what fund managers thought would happen.

more...

http://www.timesonline.co.uk/article/0,,2095-1612390,00.html

[54anickel]

64. Trouble in paradise? Europeans in the Caribbean centres

http://www.funds-europe.com/p_Headline.cfm?id=493

snip>

So should we just wave a fond farewell to the Caribbean or are there still reasons for Europeans to administer there? And which is the best Caribbean location to domicile your fund? In the old days, offshore was a more simple business. Retail money went to the likes of highly regulated Luxembourg, and more exotic vehicles were based further afield. But with the growth of Dublin and hedge funds, the question arose as to where to domicile your money and where to administer it.

The answer for most European hedge funds was to base the money manager in London, have the administration next door in Dublin and domicile, or incorporate, your fund in Cayman.

It takes only days to incorporate a hedge fund in the Cayman Islands compared with several months in Dublin. But for administration purposes Dublin provides a friendly regulatory environment within easy reach of London, with the bottomless pit of skilled workers an economy that is offshore in name only can deliver.
Bermuda and Cayman, however, pride themselves on their administrative markets.

The majority of money in Caribbean funds today is hedged. Before hedge funds, the British Virgin Islands (BVI) was probably the most popular domicile. But in 1993 Cayman enacted the Mutual Funds Law which, says Heck, “was aimed at mutual funds and not just any company”.

This, and the fact that Cayman, unlike Bermuda, let in overseas banks, put it in pole position to take advantage of the mutual fund boom and the growth of more adventurous ways of running money.
The Cayman Islands says it is now domicile to 60% of the world’s hedge funds. Since hedge funds normally outsource administration, this has precipitated a sizeable administrative sector.

snip to the feeding frenzy>

Bermuda also has “a very good infrastructure”. The island’s administrative sector has seen “tremendous change” in the last two years, says Stapley, citing the presence there of Citco, the world’s largest hedge fund administrator, the buy-out of local player Hemsiphere by US giant Bysis, Citigroup’s acquisition of Forum Financial Group, Bank of New York’s purchase of Bermuda-based International Fund Administration and HSBC’s take-over of the Bank of Bermuda.

snip>

Cayman is currently fighting moves by the UK to force it to accept the European Union’s savings tax directive which sets uniform standards on the exchange of bank information. It fears it will lose business to countries that have, for some reason, been excluded from the directive, such as Bermuda and those, like Switzerland, which are being permitted to delay implementation, not to mention those outside the EU and its dependencies.

more...

[UpInArms]

75. in the snews today: CSFB Tremont Hedge Fund (tracks 400 hedge funds)

CSFB Tremont Hedge Fund Index fell 1% in April

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38488.4940218982-835438856&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- The CSFB Tremont Hedge Fund Index fell 1.04% in April as concerns about U.S. economic growth hit several strategies. The index, which tracks the performance of more than 400 hedge funds, is down 0.11% for the first 4 months of 2005. Convertible bond arbitrage funds lost an average 3.13% in April as managers continued to liquidate positions, Oliver Schupp, president of Credit Suisse First Boston (CSR) Tremont Index LLC and senior member of the CSFB Hedge Fund Investments group, said. That left convertible funds down 5.76% so far this year. Managed futures hedge funds lost 3.45% in April, leaving the strategy down 8.25% on average this year.

11:40am 05/16/05 CSFB TREMONT HEDGE FUND INDEX FELL 1% IN APRIL

[UpInArms]

113. Hedge fund has little exposure to structured credit market (soothing noise

Highbridge reassures investors
Hedge fund has little exposure to structured credit market

http://www.marketwatch.com/news/story.asp?guid=%7B79481956%2D3CF6%2D4B36%2D97D5%2D531CB67A14DE%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) -- Highbridge Capital Management is telling investors that it hasn't suffered big losses, scotching speculation that the $7 billion hedge fund firm was among managers affected by recent credit market convulsions.

Highbridge Capital Corp., the firm's flagship fund, was up 0.41% for the month through May 9, the firm said in a letter to investors that was obtained by MarketWatch on Monday.

Speculation swirled last week that a couple of hedge funds were facing trouble after Standard & Poor's credit-rating downgrades of General Motors Corp. (GM: news, chart, profile) and Ford Motor Co. (F: news, chart, profile) triggered unexpected volatility in structured credit markets. See full story.

Collateralized-debt obligations, CDOs, are a major part of these markets. The products are combinations of corporate debt that are re-sold in different tranches carrying varying levels of risk and yield. Because GM and Ford are such big issuers of debt, they're often included in these structures.

Some hedge funds use so-called correlation trades when investing in CDOs. They often buy one tranche of a CDO and sell another slice because they expect the related pieces to move in a similar way, creating a hedge against big losses.

"Recent volatility in the structured credit markets is apparently related to the unwinding of an unprofitable 'CDO tranche correlation trade' by one or more parties," Highbridge founders Glenn Dubin and Henry Swieca, wrote in a May 10 letter to their investors.

...more...

[54anickel]

53. Wages Begin to Outpace Inflation as U.S. Labor Market Tightens

Bwahahaha - did Greenspin write this? It's fairly common knowledge that wage-inflation is the only type of inflation that the Fed really cares about. This reads like a planted article to get the markets thinking the Fed will move interest rates higher and faster to me. :shrug: A lot of questions come to mind when I read this POS.


http://www.bloomberg.com/apps/news?pid=10000103&sid=a2xDEv5IS4t8&refer=us

May 16 (Bloomberg) -- Swift Transportation Co., the third- biggest U.S. trucking company, raised experienced drivers' pay in March by 14 percent, more than four times the 3.1 percent U.S. inflation rate, to attract qualified employees amid growing competition for skilled labor.

Are we talking independent owner-operators here? Of course they will demand an increase since their fuel expenses keep rising. Oh lookie here - they've increased the per-diem pay...

http://www.swifttrans.com/Swift_Per_Diem_Communication.pdf
Swift is pleased to announce a new benefit for all mileage-based company drivers. Per diem is a compensation strategy that increases your net (after tax) take home pay. The IRS allows transportation companies like Swift to treat a portion of your compensation as reimbursement for meals and incidental expenses you incur each day (i.e. per diem). The plan is very simple – Swift reduces your taxable mileage rate by 10 cents and pays you a non-taxable per diem amount of 8.5 cents per mile. By reducing your taxable compensation, you actually make more money after tax.


snip>

Wages soon may begin to outpace inflation in other U.S. industries as well. The labor market has tightened to the point that employers will feel pressure to boost their pay scales, says Douglas Lee, chief economist at Economics From Washington Inc., a Potomac, Maryland, economic consulting firm.

That will keep the Federal Reserve vigilant for signs that wage growth is rekindling inflation, says Mickey Levy, chief U.S. economist at Bank of America Corp. in New York. The Fed on May 3 raised its overnight lending rate by a quarter percentage-point to 3 percent to ward off mounting inflation.

``The Fed has a heightened sensitivity to signs of bottlenecks in production, and accelerating compensation and unit labor costs are symptoms of rising production costs and core inflation pressures,'' Levy says.

The signs are increasing. The U.S. unemployment rate stands at 5.2 percent, down from a June 2003 peak of 6.3 percent. Employers created 274,000 jobs in April, while the average number of hours worked jumped by 0.9 percent. Average hourly earnings grew 0.3 percent in March and April -- the first back-to-back increases of that size since last summer -- bringing wages 2.7 percent above year-ago levels. Employers report difficulty finding workers in higher-skilled occupations such as nursing and machinery operation. :eyes:

snip>

Not that wage costs are about to spiral out of control. David Rosenberg, chief U.S. economist at Merrill Lynch & Co. in New York, says much of the first-quarter acceleration in compensation per hour reflects workers shifting to higher-paying jobs. The Labor Department's employment cost index, a more stable measure, shows wage pressures actually ``are easing, not building,'' Rosenberg said in a note to clients.

Fed Chairman Alan Greenspan said May 5 that ``forces worldwide'' are continuing to keep inflation low. Among these are globalization and innovation, he has said previously.

Ebbing of Inflation

Economists including Bruce Kasman of J.P. Morgan Securities Inc. in New York say not all gains in workers' purchasing power will stem from rising compensation: Some will reflect an ebbing of inflation. The surge in commodity prices that helped stoke inflation in 2004 has largely abated, oil prices have leveled off and productivity growth is slowing, he says. ``Real wages will accelerate, but they'll do so mainly because headline inflation will slow down,'' Kasman says.

more....

So, "What's it all about, Al-l-l-l-an, is it just for the moment you driv...el"

[UpInArms]

59. Freddie Mac to issue $4B, 3-yr reference notes security

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38488.44296375-835436625&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- Freddie Mac (FRE) on Monday said it plans to issue a new $4 billion, three-year reference notes security due on June 15, 2008. The issue will bring the total of reference notes securties issued by the company so far in 2005 to $13 billion. This issue will be priced on Wednesday and will settle the following day. Freddie Mac said it will apply to have the security listed on the Luxembourg Stock Exchange.

[54anickel]

60. Workers' unhealthy habits could cost them

http://www.freep.com/money/business/obese16e_20050516.htm

Smoke, eat, sit on the sofa. You'll probably keep your job, but you're likely to pay more for your health insurance.

snip>

Most businesses have rejected a Michigan company's controversial solution to simply fire all of its smokers early this year. But the idea of requiring employees to change their unhealthy habits -- or pay more for their insurance -- is gaining favor.

At some companies, such as Northwestern Mutual Life Insurance Co. and Navistar International Corp., smokers pay more for health and life insurance. At others, workers who participate in healthy-living programs get discounts.

At Jackson-based manufacturer Orbitform, for example, workers can have their health insurance premiums cut in half if they take a health-risk appraisal and agree to meet with a health coach twice a year on company time to work on monitoring and improving their health.

"They can chose not to take" the appraisal, "but then they pay 100% of their health care benefit," Orbitform President Mike Shirkey said. "There's no one telling you you have to do this. ... We have 100% participation."


Helen Darling, president of the National Business Group on Health in Washington, D.C., expects the majority of U.S. companies to go the way of Orbitform in the next five years and encourage people to live healthier lives by offering incentives that include paying more of their health-insurance premiums.

more...

What next, lifestyles? Skydive, drive a motorcycle, race car, have a tendency to speed, commute more than 50 miles a day, have any genetic pre-dispositions to health problems, I'm sure the insurance actuaries can come up with a pretty damned long list.

I'm a smoker, tried to quit several times, so I'm a bit biased on this one. Yes, I think it's unfair for the cost of my bad habit to be spread to society, yet smoking cessation programs are not covered either, and let's not even get into the responsibilities of the profitable tobacco industry here.

Think I need a :smoke:

[MARALE]

62. Did you hear about the new vaccine?

Just heard about it this weekend. It is a shot that inhibits the nicotine in your system. Lasts 6 months. Sounds like this may work for many people. I am an x-smoker, would love to have one with you, but I know where that leads. I can do it virtually though.

:smoke: :smoke: :smoke: :smoke: :smoke: :smoke: :smoke: :smoke:

[54anickel]

66. Haven't heard about that one, might be worth "a shot". I've managed

to cut down a bit after getting laid off. I had a very stressful job...Come to think about it, since loosing that POS job and deciding to leave corporate America behind for good, I no longer need to take blood pressure medications.

Hmmmm, so what was my previous employer's role in my high blood pressure anyway? :evilgrin:

[ozymandius]

61. 11:02 numbers; up-is-down drivel forthcoming

Dow 10,200.35 +60.23 (+0.59%)
Nasdaq 1,984.18 +7.40 (+0.37%)
S&P 500 1,160.16 +6.11 (+0.53%)
10-Yr Bond 41.15 -0.06 (-0.15%)
NYSE Volume 513,369,000
Nasdaq Volume 458,021,000

[ozymandius]

65. drivel

11:00AM: Stocks continue to trade at improved levels as oil prices continue to slide... An ongoing sell-off in crude oil futures ($47.90/bbl -$0.77), which have added to last week's 4.5% drubbing, have helped remove some of the underlying nervousness that has lead to an increased risk premium on stocks... Falling oil prices, still under pressure amid rising inventories and waning demand, could also help support consumer spending in the months ahead... NYSE Adv/Dec 1889/1011, Nasdaq Adv/Dec 1748/1065

Nevermind that this statistical trend turns on a dime when oil prices head higher - as they will.

Edit: Does this refer to the inventory report from the Energy Department or the the inventory report from the API? These are two very different reports: like night and day.

[UpInArms]

67. reminded me of

[54anickel]

68. Fund could boost local housing stock

Money would help developers build for mid-income buyers

http://www.signonsandiego.com/news/business/20050515-9999-1n15housing.html

A $90 million investment fund from private and public sources will help developers build homes for middle-income workers throughout San Diego County in the single largest infusion of money targeted at the region's pressing housing needs.

The investment pool will be used to leverage more than $500 million worth of housing and commercial development in the county. It is expected to generate enough money to build as many as 2,000 rental and for-sale homes within older, urban communities over the next five years.

By providing easy access to capital, the fund will be a big boost to smaller builders who specialize in middle-income, urban housing and often struggle to find money for their projects.

The San Diego region scored a major coup when it recently secured a $60 million commitment from the California Public Employees Retirement System, the nation's largest public pension fund. Creators of the development fund say they are confident they can raise the remaining $30 million from banks and insurance companies willing to invest in work force housing projects for moderate-income workers.

more.....

Why do I get the feeling that this program will be abused and not benefit it's target? :shrug:

[ozymandius]

70. update

11:34
Dow 10,196.28 +56.16 (+0.55%)
Nasdaq 1,982.84 +6.06 (+0.31%)
S&P 500 1,159.56 +5.51 (+0.48%)
10-Yr Bond 41.15 -0.06 (-0.15%)

NYSE Volume 648,638,000
Nasdaq Volume 548,884,00

[54anickel]

71. China assails U.S. textile quotas

http://www.iht.com/articles/2005/05/15/business/textiles.php

China responded angrily on Sunday to the new limits that the United States placed on its clothing exports, and manufacturers here called for tit-for-tat restrictions.

The reactions followed the announcement on Friday by the U.S. Department of Commerce that it would impose new quotas on Chinese-made garments.

In addition, the European Commission, under pressure from national capitals, is considering similar action.

The U.S. quotas, which would limit increases in Chinese imports of the affected garments to 7.5 percent a year, were a "betrayal of the fundamental spirit of trade liberalization espoused by the WTO" and would "seriously damage the confidence of Chinese businesses and people in the international trade environment since China joined WTO," Chong Quan, a spokesman for the Commerce Ministry in China, said in response to Washington's decision, referring to the World Trade Organization.

"The Chinese government reserves the right to adopt further measures under the WTO framework," Chong added, in a statement that was published in the country's state-run press on Sunday.

more...

[54anickel]

73. China premier says will not bow to outside pressure on exchange rate

Do you think we've pissed off our lender yet?

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1116237933-c84d0f08-16323

BEIJING (AFX) - China's Premier Wen Jiabao said the country will not bow to outside pressure on the exchange rate for its currency, Xinhua news agency reported

"We will follow market economy principles but we will never bow to outside pressure," Wen said in a meeting with a US trade delegation

"Yuan exchange rate reform is an issue concerning China's sovereignty," the premier said

"Any outside pressure or speculative moves that turn this economic issue into a political one will not help solve the (exchange rate) problem," Wen said

[54anickel]

87. The Yuan Revaluation – Further impacts on the U.S.$ (Gold buggy)

snip>

Hong Kong Financial Secretary, Mr Henry Tang said this week, “"The question now is not if (China will revalue the Yuan) but when. Our speculation is that it will move to a basket system. The contents or propositions of the basket system of course will not be known." He commented on the timing of any revaluation, “China might revalue its currency at a time when it was least expected.”

Hong Kong operates a “Currency Board” system. Under the currency board system, a country pegs its currency to an anchor currency, and can only issue domestic currency if the currency is backed by the value of its currency reserves. Countries operating a currency board system forego their independence in setting monetary policy as they can only increase the money supply if there are sufficient reserves in the anchor currency. Tang said that as Chinese companies from the mainland had a lot of activities in Hong Kong, many foreign investors and fund managers saw Hong Kong as a proxy hedge for the Chinese currency. Hence, he said that whenever there were rumours of Yuan's revaluation, Hong Kong would see an influx of money to buy Hong Kong dollar assets like shares that are denominated in the Hong Kong dollar and traded on the Hong Kong Stock Exchange, but is a Chinese national company. So you buy the HK $, you buy into China.

But why is this a significant piece of news for us? With such a strong currency the possibility of the Yuan trading internationally would attract Central Banks. The very economic strength of the country will ensure the Yuan will continue to revalue in the years to come. So it will be a desirable reserve asset for any nation. The current extent of international trade it already has ensures its exchangeability in the future both short and long. As China is an importing developing country as well as an exporting country and is growing by the year to a main global player, the days when its prices are always in the U.S. $ are shortening.

One of the greatest fears the U.S. $ has is that oil producing nations will price oil in Euros or in any other currency. This would immediately put the U.S. $ on the back foot and force its issuers to be more responsible regarding its Balance of Payments.

If it became easy for the nations to move away from the $ through the foreign exchanges, the U.S. $ would have to suffer the consequences of its profligacy through the gradual pullback in the capital investments into the States, as Greenspan said, the nations …”would lose their appetite” for the U.S. $. Could the revaluation of the Yuan be the trail-blazer for international pricing of goods to move away from the U.S. $ to a basket of currencies?

snip>

Oil Prices, priced in a basket of currencies?

more....

[54anickel]

88. Heh-heh - reminds me of this lil diddy I posted a while ago

A tisket, a tasket,
World reserve's gonna be a basket.
We had the world held by a string,
On the way to war, Shrub dropped it.

He dropped it, He dropped it.
On the way to war Shrub dropped it.

"The deficit's a minor thing"
That kinda talk's what caused it.

What caused it? What caused it?
Repukes will demand, "What caused it?"

Your vote that backed his empiring,
Your stupidity is what caused it.


We are sooooooooo screwed

I see zones.
I see currency zones,
And the fiat buck's bones
Amongst them lovely zones.

[UpInArms]

72. Russian Businessman Found Guilty of Fraud, Tax Evasion

http://www.voanews.com/english/2005-05-16-voa12.cfm

A judge in Moscow has found the former director of Yukos Oil company guilty of various charges including fraud and tax evasion. Mikhail Khodorkovsky could receive up to 10 years in prison in a trial that critics say has called into question Russia's commitment to the rule of law and democratic change.

The judge found Khodorkovsky and his business partner guilty of four out of seven charges against them.

The charges stem from what the court found was the illegal way they used various schemes to amass a huge amount of money with which the 41-year-old former director got control of Yukos, once Russia's largest oil company.

Khodorkovsky is one of several "oligarchs" who became billionaires overnight in the chaotic years in the mid-1990's after the collapse of the Soviet Union.

Part of his defense was to argue that nothing he or his colleagues did was illegal at the time. Many of the other oligarchs now live in exile outside Russia.

<snip>

Most analysts say he angered the Kremlin when he openly funded opposition political parties and sought foreign investment to build a private oil pipeline, something that has always been controlled by the state.

...more...

[UpInArms]

74. Brocade accounting probed, shares fall ($52 Million in cooked books)

http://www.reuters.com/audi/newsArticle.jhtml?type=technologyNews&storyID=8504066

NEW YORK (Reuters) - Data storage equipment maker Brocade Communications Systems Inc. on Monday said it overstated its earnings from 2001 through 2004 by as much as $52 million due to improper accounting of its stock option expenses and said it was the target of a government probe.

The San Jose, California, company, whose shares fell as much as 4 percent in early trade, said it is cooperating with a joint investigation of its stock option practice by the U.S. Justice Department and the Securities and Exchange Commission.

The restatements include as much as $3.2 million stock option expenses in 2003 and 2004 on top of a restatement announced in January that wiped out a combined $41 million of net income for the two years. The company had originally reported a combined net loss of $137.5 million for the two years.

<snip>

The restatements come on top of a difficult market for data storage. The company said earlier this month that its second-quarter sales would fall short of estimates hurt by weakness in its March sales.

...more...

[54anickel]

77. Heh-heh, Hey Al - what was it you were saying about how great SOX

has been working? :evilgrin:

[ozymandius]

78. update and blather

11:55
Dow 10,196.65 +56.53 (+0.56%)
Nasdaq 1,983.53 +6.75 (+0.34%)
S&P 500 1,159.56 +5.51 (+0.48%)
10-Yr Bond 41.15 -0.06 (-0.15%)
NYSE Volume 721,135,000
Nasdaq Volume 596,047,000

11:30AM: Buyers remain in control of the action as a bullish bias remains intact... As reflected in the A/D line, advancers on the NYSE hold a 2 to 1 advantage over decliners while advancing issues on the Nasdaq outpace declining issues by a 17 to 11 margin... The ratio of up to down volume also reflects a similarly positive tone at both the Big Board and the Composite... While the Dow and S&P have shown resilience above initial resistance levels of 10165 and 1157, respectively, the Nasdaq has so far failed to break through key resistance around the 1988 mark...NYSE Adv/Dec 1982/971, Nasdaq Adv/Dec 1728/1135

[54anickel]

79. Vultures smell drop in hot Florida condo market

http://news.yahoo.com/s/nm/life_condos_dc&printer=1

The vultures are circling the construction cranes and unfinished concrete-and-glass towers of Miami's white-hot condo craze.

A handful of real estate entrepreneurs are forming "vulture capital" funds to pounce on what they call an inevitable downturn in an exploding south Florida real estate market fueled by foreign buyers searching for safe havens and aging baby boomers looking to downsize and move closer to the coast.

Analysts have long predicted a slowdown in the blazing U.S. real estate market, where stock investors scorched by the Internet bubble of 2000 poured money into rental properties and second homes.

snip>

Jack McCabe, chief executive of McCabe Research and Consulting of Deerfield Beach, Florida, said he has formed an "opportunity fund" that is nearly "eight figures" to take advantage of a swoon he sees coming next year as a result of a bulge in the south Florida condo pipeline.

"We're seeing people taking equity loans, people emptying their savings accounts. The really giddy are maxing out their credit cards to get in on this gold rush," he said. "We think a lot of people are not going to be able to close."

more...

[ozymandius]

85. Grouch Marx said it best about Florida.

Hammer: You can have any kind of a home you want. You can even get stucco. Oh, how you can get stucco.

[54anickel]

92. HA! I had to look up which movie that was from.....

http://www.clown-ministry.com/Resources/marx-brothers/the-cocoanuts-marx.html

The Cocoanuts!!!!


While searching, I came across this article -

North: The Marginal Home Buyer

http://www.federalobserver.com/archive.php?aid=9688

snip>

In manias, a few people buy in at the top. They buy an asset that will fall like a stone from astronomical levels. People who would not normally have been willing to roll the dice on such a high-risk venture buy in and gratefully sign the mortgage papers. Normally, no lender would have loaned to them. But the mania affects lenders, too. Both participants make a once-in-a-lifetime contract. Both will pay a heavy price when the mania ends. It is a once-in-a-lifetime opportunity to lose money.

This is true of all housing manias. We see these manias from time to time. The sign that the end is near is when people line up to bid, auction fashion, on properties that, five years earlier, would have been on the market for six months. The mania is revealed by the presence of above-asking-price prices. People bid frantically against each other to buy a property that they would not have considered buying two years before, or even a year earlier.

There are never many of these people. At the top or the bottom of any asset market's big move, there are few participants. Every mania ends when the last remaining group of potential buyers is finally unable to afford to buy. Then the market turns down.

The people who were the last ones to buy are left holding the bag. They committed themselves to huge monthly payments. They bought in at no money down or close to it. A month later, they are owners of a depreciating asset that may be worth 20% less after the sales commission than the day they bought it. But they owe full sticker price to the mortgage company.

more....

[UpInArms]

80. Commentary: What's Spooking the Street

http://msnbc.msn.com/id/7873020/

The market has been waffling all year due to familiar worried -- spiking oil prices, rising interest rates, and less-than-stellar corporate earnings growth. Finally, the past few weeks have brought encouraging news on all those fronts. Oil prices have fallen to $48 a barrel from early April's spike to $58. The 10-year Treasury yield slipped to 4.12%, the lowest level since February, and corporate earnings for the first quarter came in stronger than expected -- 16% higher than a year ago, according to BusinessWeek's corporate scoreboard.

Yet, just when it seems stocks might be poised to rally, a new crop of risks -- rumors of imploding hedge funds, alarmed bond investors, political sparring over nuclear weaponry, even a domestic terrorism scare from an errant plane over Washington, D.C. -- has rattled traders. The Dow Jones industrial average fell 205 points, or 2%, in the week ended May 13, to close at 10,140. For the year the index is down 6%.

Many strategists expect more uneasiness in the coming weeks, as the prospect of further Federal Reserve rate hikes in the face of slowing consumer and corporate spending provides an unappetizing backdrop for buying stocks. "There are a number of potential blow-ups out there," says Barry Ritholtz, chief market strategist at Maxim Group. "When you look at risk vs. reward, it is just not an advantageous ratio right now."

THE HEDGE-FUND FACTOR. The most serious of the new risks rattling investors is that hedge funds, derivatives, and debt could prove a combustible mixture for the global financial system. In the second week of May, rumors surfaced that some big hedge funds were tanking as complex trades based on the securities of General Motors (GM) and Ford (F) went awry. As the implosion of hedge fund Long Term Capital in 1998 showed, the demise of a major player in that lightly regulated, highly leveraged investment arena can lead to significant losses at the global banks that lend them money.

"Borrowing has a tendency to make mistakes very expensive," says Peter Cohan, an author and investment strategist in Marlborough, Mass. "Today there is more leverage in hedge funds and a similar lack of information about what they are doing." If a problem is intensifying, "We won't know until it is too late."

...more...

[UpInArms]

81. Commentary: It's not the hedge funds, it's the Fed

http://moneycentral.msn.com/content/P116563.asp

Growing hedge-fund woes result from the Fed pouring too much cheap money into the economy. Also: United Airlines' pension default proves again that, in Corporate America, no one's word is worth much.

In light of last week's troubling hedge-fund headlines, I'd like to weigh in on the subject, beginning with the following point: Most "hedge" funds do no hedging at all. They're nothing more than leveraged investment partnerships, bearing no relation to the original concept as started by A.W. Jones more than 55 years ago.

Grounds for hedge heartache
In any case, with so-called hedge funds numbering 8,000, plus or minus, you can be sure of a couple things:
There aren't that many smart operators.

Many of the people running those funds will have stretched too far to try to make the returns they've insinuated.
The amount of deleveraging that may be taking place is not quantifiable or knowable at this moment in time, but deleveraging is a decidedly bearish occurrence for financial markets. It would explain the undertow that's been at work lately. And it might also explain why the current "no-news-period rally" -- the interval between quarterly earnings reports when, in the absence of bad news, bullish fantasy often reigns supreme -- has been as lame as it's been.

In short, there is a lot of smoke and, in all likelihood, some fire. Folks can anticipate no shortage of stories, both true and apocryphal, about problems created by hedge funds.

There are just too many stories about convertible-debt arbitrage problems, carry-trade angst, widening credit-default-swap spreads, etc. for some form of that not to be occurring. In addition, there are stories of brokerage firms raising margin requirements for various hedge funds.

...more...

[54anickel]

84. GACK!!!! That makes the next post (82) even more scary...eom

[54anickel]

99. Greenspan's Catch 22

http://www.ameinfo.com/59970.html

If the Fed engages one more time in 'printing money' the decline of the US dollar will lead to soaring import prices, accelerating consumer price inflation and higher interest rates. Hardly a favorable environment for the highly priced and highly leveraged US stock and real estate markets!

snip>

But more importantly the 'newest economy' is characterized by seemingly endless bubbles, courtesy of the man who has done more to destroy the value of paper money than any one else in the 200 year history of capitalism: Mr. Alan Greenspan.

The destruction of paper money as a store of value - the most important quality paper money should have - occurs only in one way and that is through increasing the quantity of paper money at a higher rate than real GDP growth.

At times this excessive money supply growth will lead to real wages rising strongly, such as in the 1960s, or to commodity and consumer prices soaring, such as in the 1970s. But, excessive money supply growth can also lead to the most dangerous form of inflation and this is asset inflation, which at times will boost equity prices to lofty levels (Kuwait in 1980, Japan in 1989, Taiwan in 1990, NASDAQ in 2000, etc) and on other occasions boost the value of real estate into cuckoo-land (Tokyo in 1990, Hong Kong in 1997, and now in the Anglo Saxon countries).

The reason asset inflation is so dangerous is that central bankers - usually unemployable in any other capacity - not even as waiters - only pay attention to consumer price inflation. Therefore, when consumer prices do not rise much, for example because of international competition (as is now the case), they print money like water.

So, with the entry of China and India into the global economy we had low consumer price increases around the world - although higher than the statisticians in the US are under political pressure computing, calculating and doctoring - and this led Mr. Greenspan to create, after he fueled the NASDAQ investment mania with easy money, another gigantic bubble: the housing bubble!

more...

[54anickel]

82. Deflation (Ewwwwww!)

http://321energy.com/editorials/russell/russell051605.html

May 13, 2005 -- Question -- If deflation is almost impossible, since the Fed can neutralize any deflation simply by increasing the money base, why is the Fed so worried about deflation -- or, as the Fed puts it, "insufficient inflation"?

Answer -- If there's a credit collapse, it seems to me that the situation could change very quickly and soon get out of hand -- in which case we'd have deflation.

Look, we don't have to get into the theory of why deflation can or cannot occur. I go by what I see in the markets and in chart action. The fact is that the stock market has been deflating all year. Now the stock market has been joined by oil, commodity prices, copper, steel, aluminum, gold, Goldman Sachs Natural Resources Index, materials in general. I don't know what you want to call it, but I call it some kind or variety of deflation.

snip>

In the meantime, the hottest item around is the US dollar. Why is the dollar at a high for the year? Good question, and I haven't read about or seen the definitive answer yet. Of course, the market answer is "more buyers than sellers," but how does that help us?

snip>

Now I'm wondering if what we're seeing is a sudden demand for dollars. I'm wondering if what we're seeing is a short squeeze against the dollar brought on by hints of deflation. Remember, in deflation dollars become scarcer -- and in deflation debt becomes a dirty word.

more...

[UpInArms]

86. Ewwwwww! is right

http://www.howestreet.com/story.php?ArticleId=1210

excerpt:

1.A flattening yield curve will force the Fed to stop or slow its rate hikes. The market knows this will be dollar negative. Long bond yields continue to drop, perhaps anticipating recession, deflation, and future rate cuts.

<snip>

3.In anticipation of an imminent revaluation of China’s currency, which is expected to drive the U.S. dollar lower, the U.S. Treasury may be artificially supporting or managing this recent rise in the dollar. Why? To ensure that when the dollar falls, it does so from a much higher level so that it won't take out the decades-low support level of 80. So what? I can only imagine that "never-break" level is closely tied to trillions of dollar derivative contracts that are now at risk of imploding on a breach of that support.

So, fundamentally speaking, where is the U.S. dollar headed next? My guess is a reversal lower as early as next week to eventually retest the 80 support level. Why lower now? Because the market constantly looks forward and this is what it sees.

<snip>

3.Despite recent government reports, the concept of a stronger U.S. economy may be an illusion. The market anticipates weaker corporate earnings and is even starting to question the credibility of favorable U.S. data being reported. For example, mega-retailer Walmart reported disappointing first quarter results that contradict U.S. reports of strong retail sales. Reports of better than expected job growth significantly aided by a “plug” from the BLS birth/death business model fail to stand up to scrutiny. And Commerce Department reports of a "narrowing" trade deficit can't distract from record debt and trade imbalances again this year.

...more...

I think I will go to my corner and quietly upchuck :hide:

[UpInArms]

83. 12:08 numbers and blather

Dow 10,203.01 +62.89 (+0.62%)
Nasdaq 1,984.63 +7.85 (+0.40%)
S&P 500 1,160.23 +6.18 (+0.54%)
10-Yr Bond 4.115 -0.06 (-0.15%)

NYSE Volume 769,420,000
Nasdaq Volume 630,587,000

12:00PM: Market holds onto the bulk of today's gains midday as falling oil prices and M&A activity help offset the bearish implications of the NY Empire index... Crude oil prices, under pressure again amid rising supplies and slowing demand growth in the U.S. and China, have helped improve overall sentiment following declines of 2.0% and 1.5%, for the Dow and S&P, respectively, last week...

United Parcel Service's (UPS 72.80 +0.65) proposed $1.25 bln for Overnite Corp. (OVNT 42.45 +12.87) and reports that US Airways and America West may announce a merger this week have also helped investors digest a disappointing read on regional manufacturing with a grain of salt... May NY Empire Index fell sharply to -11.1 (consensus 11.0) - the lowest level since April 2003 - versus a downward revision to April's figure of 3.1 (to 2.0)... However, since too much is often read into these monthly surveys and the outlook for the region remains positive, the data have been overshadowed by a number of upside catalysts, as seven out of ten economic sectors trade in positive territory...

Arguably oversold conditions coupled with the planned dismissal of six or more American International Group (AIG 52.78 +0.73) executives have helped the influential Financial sector (+1.1%) pace the way higher... Health Care (+0.7%) has also been strong, getting a boost from positive drug-trial data out of the ASCO conference and a reprieve on Medicare benefits for nursing-homes, while Industrials has benefited from UPS' acquisition-related news...

[UpInArms]

89. GM CEO: Asia Pacific important fart of business plan

(the typo in the headline was too appropriate not to post :rofl: )

http://www.marketwatch.com/news/story.asp?guid=%7B4F5C8743%2D61BA%2D47AC%2DBA0D%2D519F2DE20B6A%7D

NEW YORK (MarketWatch) -- General Motors Corp. (GM) Chairman and Chief Executive Rick Wagoner sees "unprecedented new opportunities" in Asia Pacific and said the company has made the region an important part of its business plan.

"Asia Pacific has many of the world's highest-growth economies and vehicle markets," Wagoner said in a press release Monday. "Over the next decade, its growth is expected to outpace that of the rest of the world."

Wagoner, who will discuss the future of the auto industry in the Asia Pacific region during the Fortune Global Forum Monday, said GM has made investments in plants, brands and products in China and other Asia Pacific countries.

"By leveraging GM's global resources at the local level, these new investments will make GM an even stronger competitor across the region, strengthening our worldwide industry leadership position," Wagoner said in the release.

GM does business in about 15 Asia Pacific markets, operating more than a dozen manufacturing plants and four manufacturing centers in the region. In the first four months of 2005, GM had a regional market share of 5.3% on sales of 322,296 vehicles.

In China, GM operates seven joint ventures with SAIC and two wholly-owned enterprises. GM's market share surpassed 10% in the first four months of 2005 on sales of 190,676 vehicles.

...more...

[54anickel]

93. Oooooh that smell. Can't you smell that smell........

Ooooh that smell
The smell of death surrounds you
(Lynyrd Skynyrd)

So, when do they announce the plans to start importing the vehicles made for the Asia markets back to the US and close up shop here?

[ozymandius]

90. SEC details pension-consultant conflicts

Report turns up undisclosed conflicts on interest

BOSTON (MarketWatch) -- The Securities and Exchange Commission released a report Monday on wide-ranging conflicts of interest among pension-fund consultants and said its enforcement division will investigate some of the companies.

The report focuses on undisclosed agreements between consulting firms and money managers that may affect consultants' recommendations to retirement plans.

Many retirement funds use consulting firms to build recommended mutual-fund lists, for example. The SEC did not name any particular firms in the review but summarized broad findings on common industry practices.

The regulator found that more than half of consultants provided products and services to both pension-plan clients and money managers. According to the report, compensation received by some consultants from money managers made up "a significant part of their annual income."

more...

http://www.marketwatch.com/news/story.asp?guid=%7B1F40B66B-B0E7-4344-B109-4050E6D933E6%7D&siteid=google

Read more about how consultants are steering clients to specific money managers for a kickback. Isn't this how a private SS account would be managed?

[UpInArms]

91. and the "fund managers" will be singing

in the street when they get their grubby mitts on the social security funds:

- I got it!
- Well, what is it?
- A penny, a nickel...
- You got hold yo' horses and let me get the dough off!
A dime!

We're in the money,
We're in the money;
We've got a lot of what it takes to get along!
We're in the money,
The sky is sunny;
Old Man Depression, you are through,
You done us wrong!

We never see a headline
'Bout breadline, today,
And when we see the landlord,
We can look that guy right in the eye .

We're in the money
Come on, my honey
Let's spend it, lend it,
Send it rolling around!

All:
We're in the money,
We're in the money;
We've got a lot of what it takes to get along!
We're in the money,
The sky is sunny;
Old Man Depression, you are through,
You done us wrong!

We never see a headline
'Bout breadline, today,
And when we see the landlord,
We can look that guy right in the eye.
Look that guy right in the eye-
Look that guy right in the eye-

We're in the money
Come on, my honey
Let's spend it, lend it, send it-
Let's spend it, lend it, send it
Rolling, rolling-
Rolling around!

Additional Verse
Gone are my blues,
And gone are my tears;
I've got good news
To shout in your ears.
The silver dollar has returned to the fold,
With silver you can turn your dreams to gold.

[54anickel]

95. And Merikans will happily change the anthem to

Some people say a man is made outa mud
A poor man's made outa muscle 'n blood...
Muscle an' blood an' skin an' bone
A mind that's weak and a back that's strong

You load sixteen tons an' whaddya get?
Another day older an' deeper in debt
Saint Peter doncha call me 'cause I can't go
I owe my soul to the company sto'

Cuz what's good for the corporation is what's good for me!

[UpInArms]

94. 1:06 EST numbers and blather

Dow 10,196.73 +56.61 (+0.56%)
Nasdaq 1,985.19 +8.41 (+0.43%)
S&P 500 1,160.09 +6.04 (+0.52%)
10-Yr Bond 4.110 -0.11 (-0.27%)

NYSE Volume 954,878,000
Nasdaq Volume 765,505,000

1:00PM: More of the same as buying remains widespread across most areas... The dollar, however, has taken a bit of a breather after surging to a seven-month high against the euro last week after traders received further evidence that the U.S. economic "soft patch" may have been overblown while expansion in Europe continues to weaken... While the dollar climbed to its strongest level against the euro (1.2581) since Oct 21 in overnight trading, some recent profit-taking has stalled much follow-through...NYSE Adv/Dec 1998/1150, Nasdaq Adv/Dec 1659/1326

12:30PM: Little changed since the last update as the major averages continue to vacillate in roughly the same ranges... One group that continues to climb, however, has been Homebuilding (HGX +1.6%) after the most recent data from the Mortgage Bankers purchase applications index showed a record high in the May 6 week, as it topped the old Jan '04 peak by 5%... Perhaps more notably, the Spring data could rival the 21-year high seen in Feb. housing starts and the record level of March new home sales as the boom continues to echo louder...

Tomorrow morning, April Housing Starts (consensus 2000K) and Building Permits (consensus 2043K) will be released at 8:30 ET... NYSE Adv/Dec 2006/1092, Nasdaq Adv/Dec 1703/1270

[UpInArms]

97. Ex-Bayer AG exec pleads guilty to chemical price-fixing

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38488.5545289583-835441683&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- Former Bayer AG (BAY) executive Wolfgang Koch agreed to plead guilty, serve jail time and pay a fine for his role in an international conspiracy to fix the price of rubber chemicals, the Justice Department announced Monday. Koch will assist the government in its ongoing rubber chemicals investigation in addition to paying a $50,000 fine and serving a four-month prison term. Koch was charged with fixing prices of rubber chemicals in the U.S. and elsewhere from January 1999 until December 2001.

I'm so much better now! All the crook have been taken out of the boardrooms and away from the cookie jar! :sarcasm:

[54anickel]

98. Asia's dollar affair

http://www.atimes.com/atimes/Asian_Economy/GE17Dk01.html

International currency markets remain on edge, worried about the future trajectory of the US dollar and its impact on other major currencies and economies. This concern is compounded by apprehension over what is on the minds of Asian central bankers, who collectively held a combined $2.3 trillion in US dollar reserves at the end of last year.

Announcements by the Bank of Korea and Japanese Prime Minister earlier this year conveying their intention to diversify reserves away from the US dollar rang alarm bells in world financial markets. In recent weeks, however, this anxiety has declined as the dollar has begun to strengthen, and Treasury Department data reveal that foreign investors bought $91.5 billion in Treasury notes, corporate bonds, stocks and other financial assets in January - a nearly 50% increase over December.

The trend to moderate dollar holdings should not be surprising in any case, given that a move toward greater central bank currency diversification is inevitable over the longer term. Brazil, Russia, India, China and other emerging economies are expected to grow far more rapidly than the United States in coming decades. Therefore, the US share of global GDP, and the relative importance of its economy, should decline over time. Furthermore, Japan, another mature economy, is likely to show less dependence and correlation to the US moving forward. This is due to increasing demand from Asia as well as ongoing restructuring and the gradual awakening of the Japanese consumer.

While the possibility of a systemic shock cannot be dismissed, it is unlikely this will be due to an abrupt decline in Asian US dollar holdings. The shift toward diversification is not likely to be as fast or traumatic as many forecasters indicate. For one thing, at the present time, it is unclear whether any alternative currencies have sufficient depth and liquidity to absorb inflows of such magnitude. In addition, any rapid move by Asian central banks to diversify from the dollar would serve only to strengthen their respective currencies against the dollar. Their export competitiveness would decline as a result - as would the value of large amounts of US Treasury Agency securities already in their portfolios, when translated back into the domestic currency in question. As of last December, Japan alone held almost $712, China $194 and Korea $69 billion.

Even if one were to believe that Asian economies could withstand the significant financial ramifications of an overt move away from the US dollar, it is doubtful they would move to do so. The alliances that bind the US to playing a vital security role in that part of the world are becoming increasingly important - at a time when we are seeing increasing signs that the delicate balance that has kept the region relatively tranquil for several decades is starting to come undone.

more...

[UpInArms]

100. 1:58 EST numbers (faeries with gladular problems?)

Dow 10,231.15 +91.03 (+0.90%)
Nasdaq 1,987.86 +11.08 (+0.56%)
S&P 500 1,163.30 +9.25 (+0.80%)
10-Yr Bond 4.117 -0.04 (-0.10%)

NYSE Volume 1,152,037,000
Nasdaq Volume 897,463,000

1:30PM: Range-bound trading persists as the major indices continue to trade sideways... Meanwhile, biotech and drug stocks have been in focus all day as investors sift through several drug trial updates from the American Society of Clinical Oncology (ASCO) conference... Shares of Celgene Corp. (CELG 39.86 +2.86) have surged after it released long-awaited Phase II data showing that Revlimid has strong activity while Eli Lilly (LLY 59.47 +0.71) has climbed after saying that new data shows clinical effectiveness of its Gemzar-based combination therapy for advanced breast cancer...

Even GlaxoSmithKline (GSK 49.58 +0.07), which was under pressure all morning after saying it would delay a regulatory filing for its breast cancer treatment Lapatinib, has since inched into positive territory...NYSE Adv/Dec 2026/1147, Nasdaq Adv/Dec 1647/1351

[UpInArms]

103. updating blather

2:00PM: Buyers show some resolve, lifting the major averages to new session highs... After consolidating near key technical levels, renewed buying interest has recently helped the blue chip indices erase roughly half of last week's losses... However, with volume running below averages as well as the pace of the last few sessions at both the NYSE and the Nasdaq - as neither exchange has yet to reach 1.0 bln shares - there has been little conviction behind today's rebound... NYSE Adv/Dec 2060/1136, Nasdaq Adv/Dec 1713/1318

seems to be a "technical bounce" :eyes:

[MARALE]

121. Wow!

She has been lifting the weights lately! She must have had some big bags of dust for today!

[54anickel]

101. Supreme Court Strikes Down Ban on Interstate Wine Sales

http://www.consumeraffairs.com/news04/2005/scotus_wine.html

Wine lovers may be rejoicing, but those concerned with underage drinking will be in mourning. The Supreme Court has struck down state laws that ban interstate wine shipments -- in effect legalizing the sale of wine over the Internet in states that permit direct sales of wine.

By a 5-4 vote, the high court overturned New York and Michigan laws that made it illegal to buy wine from out-of-state vineyards, saying the statutes were discriminatory and anticompetitive.


The 21st Amendment ended Prohibition in 1933 and granted states authority to regulate alcohol sales. Twenty-four states subsequently passed laws requiring that wine from out-of-state vineyards be sold through licensed wholesalers within the state, thus allowing state governments to collect millions in alcohol taxes.

Although most consumer advocates are expected to applaud the court's action -- since it is expected to provide a better variety at lower cost -- those concerned with underage drinking may be alarmed since, like cigarettes, wine can be easily purchased by minors from sites that require little or not proof of age.

more...

[UpInArms]

102. Morgan Stanley loses Perelman case - Coleman sold to Sunbeam 1998

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38488.5822608565-835442772&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

SAN FRANCISCO (MarketWatch) -- Morgan Stanley (MWD) on Monday lost its legal fight against financier Ronald Perelman, Dow Jones reported. The unanimous verdict of the nine jurors in Florida district court found that Perelman relied on representations made by the investment bank when he sold his camping-gear company Coleman Inc. to Morgan Stanley's client, Sunbeam Corp. in 1998, according to Dow Jones. The jurors reportedly awarded Perelman $604.3 million in compensatory damages. Perelman is also claiming punitive damages, Dow Jones noted, which could cost the investment bank more than $2.5 billion.

Anyone else remember "Chainsaw Al"?

[UpInArms]

105. Morgan Stanley's whiny response to their lies (doesn't want to pay $2.5B)

2:18pm 05/16/05 MORGAN STANLEY: PUNITIVE DAMAGES WOULD BE INAPPROPRIATE

2:19pm 05/16/05 MORGAN: PUNITIVE DAMAGES WOULD BE LEGALLY DEFICIENT

2:17pm 05/16/05 MORGAN STANLEY IS CONFIDENT DECISION WILL BE REVERSED

2:17pm 05/16/05 MORGAN STANLEY TO APPEAL VERDICT IN PERELMAN CASE

[54anickel]

106. Suffering a brain fart here UIA, or perhaps just another senior moment

This isn't ringing a bell. Do you have something handy before I bother searching? (I'm also lazy today)

[UpInArms]

107. Judge Rules Morgan Stanley Helped Defraud Financier Perelman

http://www.tuservidor.net/article349-Judge-Rules-Morgan-Stanley-Helped-Defraud-Financier-Perelman.html

Angered by the defendant's failure to produce discovery documents, a judge in Florida granted partial summary judgment Wednesday in favor of financier Ronald Perelman in his multibillion-dollar lawsuit against Morgan Stanley & Co. Palm Beach County Circuit Judge Elizabeth T. Maass found that Morgan Stanley helped Sunbeam Corp. falsely inflate its finances as the company sought to buy camping equipment maker Coleman Co. from Perelman. The lawsuit claims that the financial services giant aided Sunbeam management in fraudulently inflating the price of the company's stock. A jury now must determine damages.

<snip>

Perelman's suit is one of many sparked by the stormy two-year tenure of ex-Sunbeam chief Al Dunlap, who was later fired. Perelman alleged 'a massive fraud' perpetrated against Coleman Holdings, a company controlled by Perelman that owned 82 percent of the Coleman Co. Coleman was purchased by Delray Beach-based Sunbeam during Dunlap's tenure as chief executive. On Wednesday, Maass held that Sunbeam made the purchase with stock that had a fraudulently inflated market price. Morgan Stanley denied that it had any knowledge of fraudulently inflated Sunbeam share prices. Dunlap, of Boca Raton, also was sued by investors in the company who bought stock during his time as head of the firm and by the U.S. Securities and Exchange Commission. Dunlap was fired by Sunbeam in June 1998, shortly before Sunbeam restated its financial results and filed for Chapter 11 bankruptcy. The company claimed that it was overwhelmed by $2.6 million in debt inherited from Dunlap. Perelman had contended that prior to the company's collapse, Morgan Stanley had identified Coleman as a key acquisition target and had persuaded Perelman to sell his shares in Coleman to Sunbeam for 14.1 million shares of Sunbeam stock. At the time, the Sunbeam shares had a market value of $600 million. The suit alleged that Morgan Stanley continued to maintain that Sunbeam was in solid financial health until Sunbeam's directors launched an internal investigation that led to Dunlap's firing, a restatement of the company's finances, and its Chapter 11 bankruptcy. Perelman calculated his losses in the deal at $485 million and also asked for a punitive award in excess of $1.5 billion. The suit alleged Morgan Stanley made $10.8 million on Sunbeam's acquisition of Coleman in March 1998, and another $22.5 million for underwriting a debenture offering in connection with the fraud.

more background on "Chainsaw Al"

http://slate.msn.com/id/1830/

excerpt:

A holy terror of a CEO, Dunlap has emerged as the mascot of a new kind of capitalism. Dunlapism begins and ends at Wall Street. Its sole credo is: "How can we make our stock worth more?" Nothing that is valued by less steely businessmen--loyalty to workers, responsibility to the community, relationships with suppliers, generosity in corporate philanthropy--matters to Dunlap. Business ethics professors tout "stakeholder capitalism." Dunlap sneers at the phrase. Dunlapism is the perfect religion for the Mutual Fund Age. As the AMA discovered, everyone who deals with Dunlap loses--except his stockholders.

Other executives share his creed, but none matches Dunlap's methods. In the past two decades, the 60-year-old executive has run nine companies in the United States, Australia, and England. He served as right-hand man/enforcer for both Australian media magnate Kerry Packer and recently deceased British billionaire Sir James Goldsmith. In the process, he has earned a reputation as the most merciless turnaround artist in the world. To wit: As CEO of struggling cup manufacturer Lily Tulip Corp. in the '80s, Dunlap fired most of the senior managers, sold the corporate jet, closed the headquarters and two factories, dumped half the headquarters staff, and laid off a bunch of other workers. The stock price rose from $1.77 to $18.55 in his two-and-a-half-year tenure. At Scott Paper--his pre-Sunbeam tour of duty--he fired 11,000 employees (including half the managers and 20 percent of the company's hourly workers), eliminated the corporation's $3-million philanthropy budget, slashed R&D spending, and closed factories. Scott's market value stood at about $3 billion when Dunlap arrived in mid-1994. In late 1995, he sold Scott to Kimberly-Clark for $9.4 billion, pocketing $100 million for himself--a modest payoff, he says, for the $6 billion in increased shareholder value.

Dunlapping continues at Sunbeam, a stagnant consumer-products company. Dunlap has fired 3,000 of 12,000 workers since taking over in July 1996; sold off subsidiaries employing another 3,000; eliminated corporate charity; and shuttered 18 of 26 factories. The payoff: Sunbeam's stock has climbed from $12 to $44 in barely a year.

What distinguishes Dunlap from his colleagues is that he takes pride in his toughness, expressing only cursory regret for having cashiered thousands of his workers. When Newsweek ran a cover story about corporate layoffs, Dunlap contributed a gleeful column about how wonderful such firings are for stockholders. Then he savaged AT&T CEO Robert Allen publicly for not sacking enough people. He posed as Rambo on the cover of USA Today. And he titled his 1996 best seller Mean Business: How I Save Bad Companies and Make Good Companies Great. (In it, he likens himself to Michael Jordan and Bruce Springsteen, fellow "superstars.")

It's easy to hate Dunlap for the wrong reason, which is that he is a brutal, heartless, arrogant bastard. According to Business Week, Dunlap skipped the funerals of both his parents, failed to support (or even pay attention to) the child from his first marriage, and refused to help pay for his niece's cancer treatments. But to criticize Dunlap for his cruelty is akin to scolding a lion for killing an antelope. Dunlap lacks conscience? Well, so does the market. If Wall Street were a CEO, it would skip its parents' funerals, too. And there is logic to Dunlap's cruelty. Struggling companies do need to shed workers in order to recover. Dumping 35 percent of your employees, as Dunlap did at Scott, may save the jobs of the other 65 percent. Stockholder profits should not necessarily be squandered on the CEO's favorite charity.

...more...

[54anickel]

109. Well, this Dunlap character sounds like the perfect hero for the

right-wing nuts! Reads like the comments defending Bolton. :eyes:

[KoKo]

124. He was known as "Chain Saw Al" during the roaring late 90's!

I read the snip from the article quickly and didn't see that his old "nickname" on CNBC was mentioned. :D Shows to me how they cover for the crooks these Bush days.

So in the 90's he's called "Chain Saw" but in today's Media Black out he's just known as Dunlap who was ruthless...but one has to be ruthles to cut jobs in the struggling companies he took over according to the writer of the article. SHEESH!

[54anickel]

104. Lenders warned of home equity risks

http://www.marketwatch.com/news/story.asp?guid=%7B72ED92DB-3B8A-4422-8799-F0679FB5A454%7D&siteid=google

WASHINGTON (MarketWatch) - U.S. banking regulators warned lenders Monday that the explosion in home equity loans in the past few years may have put both borrowers and lenders at risk as interest rates rise.

While delinquencies have been low, "financial institutions may not be fully recognizing the risk embedded in these portfolios," the regulators said Monday in their guidance to lenders. Read the guidance.

The agencies warned that repayment on the loans "is subject to increased risk if interest rates rise and home values decline." Such loans are backed by the owners'equity in their homes.

"In many cases, institutions' credit risk management practices for home equity lending have not kept pace with the product's rapid growth and easing of underwriting standards," the agencies said.

snip>

The regulators issuing the guidance include the Federal Reserve, the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the National Credit Union Administration.

more....

[54anickel]

108. US should help China improve energy efficiency-Bush

Didn't I just read that China is looking into alternative energy somewhere today? Looks like Shrub wants to butt in for a piece of the action.

http://abcnews.go.com/US/wireStory?id=761711

snip>

"It's in our economic interest and our national interest to help countries like India and China become more efficient users of oil," Bush said in a speech while visiting a biodiesel production plant in rural Virginia.

snip>

Bush said at the G-8 meeting of the world's richest nations in July he will ask the group to help developing countries find "practical ways to use clean energy technologies" and be more efficient in energy use.

China's thirst for crude oil far outstripped expectations in 2004, contributing to tight global supplies. Although China's oil demand growth slowed in the first quarter of 2005, some analysts said on Sunday that its April crude oil imports soared by 23 percent to an all-time monthly high of 12.25 million tonnes.

"We must be better conservers. We must produce and refine more crude oil here in America. We must help countries like India and China reduce their demand for crude oil," Bush said. "And we've got to develop new fuels like biodiesel and ethanol as alternatives to diesel and gasoline.

more...

[54anickel]

110. More Bushit

http://abcnews.go.com/Politics/wireStory?id=761503

snip>

"Our dependence on foreign oil is like a foreign tax on the American dream, and that tax is growing every year," Bush said at the Virginia BioDiesel Refinery about 140 miles south of Washington.

snip>

Bush urged Congress to enact energy legislation that he says addresses both supply and conservation issues in a bid to make the United States less dependent on foreign nations, particularly those in the volatile Middle East, for its energy needs.

Bush has attempted to set an August deadline for Congress to get a bill to his desk. The House has approved a plan with many elements that Bush wants, though he opposes the billions in tax breaks and subsidies to energy companies that it contains. The Senate has yet to act on alternative legislation.

Bush's plan would open an Alaska wildlife refuge to oil drilling as part of its attempt to address supply problems.

Good grief, we'll have to be on pie-hole alert all week!

Monday's appearance was one of three this week...

[UpInArms]

111. I look forward to my puke-o-meter

soaring off the charts.

:puke:

[54anickel]

123. Heh-heh, look what google found

http://www.mahablog.com/id24.html

[UpInArms]

112. Crude closes lower but above $48 (down 6 pennies!)

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38488.6264684259-835444739&siteID=mktw&scid=0&doctype=806&

DALLAS (MarketWatch) -- June crude came off a session low of $47.60 to close at $48.61 a barrel, down 6 cents, Monday on the New York Mercantile Exchange. "We're certainly hearing much less talk about how bullish a lack of OPEC spare capacity is, now that the nearby contracts have sunk beneath the $50 psychological benchmark, formerly proposed as a floor," said Tim Evans, senior energy analyst at IFR Markets, in a note to clients.

:woohoo: We're saved! :sarcasm:

[UpInArms]

114. More Delphi execs depart amid probe

http://www.marketwatch.com/news/story.asp?guid=%7B122DA9C9%2DE0F2%2D4226%2DA723%2D971967A994DF%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) -- Delphi Corp. gave back much of last week's bounce, shedding more than 7% Monday after the ailing auto parts maker said more managers and executives would step down in the wake of its ongoing accounting investigation.

In early afternoon trading, shares of Delphi (DPH: news, chart, profile) had lost 29 cents at $3.51 after adding 12% in the wake of the company's earnings release Friday. See full story.

In a filing with the Securities and Exchange Commission, the Troy, Mich.-based company said that "certain lower and middle level executives" from the finance division will resign.

Earlier this year, Chairman and CEO J.T. Battenberg III announced plans to retire, and shortly thereafter, CFO Alan Dawes and Chief Accountant Paul Free left the company.

The executive shake-up began shortly before Delphi said its audit investigation revealed the company overstated cash flow from operations by $200 million in 2000, and overstated pretax income in by $61 million in 2001.

Delphi also told federal regulators in the filing that it's meeting with investors to discuss plans to restructure its loan and obtain about $2.5 billion to $3 billion in financing.

...more...

More of the crook gone (since there's only one and he/she mysteriously appears at various corporations).

Complete reassurance of the ethics of corporate accounting procedures and their auditor and their CEOs and their COOs and their Boards, etc. :sarcasm:

[Roland99]

116. How much does GM own of Delphi?

[UpInArms]

118. seems GM "spun-off" Delphi in 1999

http://www.gm.com/company/investor_information/stock_perf/hist_info/delphi_spinoff/index.html

GENERAL MOTORS TO COMPLETE ITS SEPARATION OF DELPHI AUTOMOTIVE SYSTEMS IN A TAX-FREE SPIN-OFF

For Release: Monday, April 12, 1999 4:00 p.m. EDT

DETROIT and TROY, Mich. — General Motors Corporation (NYSE: GM) and Delphi Automotive Systems Corporation (NYSE: DPH) jointly announced today that the GM Board of Directors has approved the complete separation of Delphi from GM by means of a tax-free spin-off. As a result of the board's action, 80.1 percent of the ownership of Delphi, 452.6 million shares of Delphi common stock now owned by GM, will be distributed to owners of GM $1-2/3 par value common stock.

In addition, the GM Board has indicated that it intends to maintain the current $0.50 quarterly dividend on GM $1-2/3 common stock subsequent to the separation of Delphi from GM. "By maintaining our current dividend — even though Delphi's earnings will no longer contribute to GM's earnings — GM will effectively be increasing the dividend yield and payout ratio to GM shareholders," said GM Chairman and Chief Executive Officer John F. Smith, Jr. "This reflects the confidence that GM's board and management have in the series of strategic initiatives that GM has undertaken, and our future earnings capacity."

The spin-off will result in Delphi becoming a fully independent company on May 28, 1999. One hundred million shares of Delphi common stock were sold by Delphi in an initial public offering completed in February 1999.

"Delphi's complete separation from GM through the spin-off provides Delphi the opportunity to achieve the full benefits of an independent company," said J.T. Battenberg III, chairman, chief executive officer and president of Delphi.

...more...

[UpInArms]

117. 3:17 EST numbers and blather (YEEHAW!)

Dow 10,237.96 +97.84 (+0.96%)
Nasdaq 1,989.81 +13.03 (+0.66%)
S&P 500 1,164.22 +10.17 (+0.88%)
10-Yr Bond 4.121 0.00 (0.00%)

NYSE Volume 1,476,208,000
Nasdaq Volume 1,126,023,000

3:00PM: Stocks continue to hold their own and sport noticeable gains for the day... However, while lower oil prices have been cited by so many as the primary reason for today's rebound, the fact that crude oil futures have recently closed down just $0.02 at $48.65/bbl arguably suggests there is much more to the story... Another if not more plausible reason has been talk that stocks, especially blue chips, have reached excellent valuations, as the price/earnings multiple on operating earnings for the S&P 500 has plunged from 20.2 to 16.8 over the past six months... NYSE Adv/Dec 2148/1077, Nasdaq Adv/Dec 1672/1376

2:30PM: Indices back off their best levels, but blue chips continue to outpace their Nasdaq counterparts... On the Dow, Home Depot (HD 37.21 +0.92) continues to pace the way higher following some positive data points in rival Lowe's Cos' Q1 report... Reports that AIG (AIG 52.70 +0.65) plans to force out several senior executives in coming weeks have given the insurer a boost while AXP, BA, C, GE, HPQ, IBM and UTX have been just a few other components posting gains of more than 1.0%...

Of the six components losing ground, Exxon Mobil (XOM 53.11 -0.59) has hit a 3 1/2 month low amid falling oil prices while Alcoa (AA 26.51 -0.19) has also been weak, hitting a two-year low, after Smith Barney trimmed their FY05 earnings estimates... Meanwhile, a downgrade on General Motors (GM 30.89 -0.09) to Neutral-Weight at Prudential has pressured shares of the auto maker...NYSE Adv/Dec 2119/1096, Nasdaq Adv/Dec 1712/1338

[54anickel]

119. We're all gonna be RICH, I tell ya!!!!!...Blue chips are on sale now!!!

Another if not more plausible reason has been talk that stocks, especially blue chips, have reached excellent valuations...

They're so cute when they talk like that. B-)

[RawMaterials]

127. Your Right at P/E's of 20 thats really cheep /not /nm

[UpInArms]

120. 3:49 EST numbers and blather

Dow 10,246.99 +106.87 (+1.05%)
Nasdaq 1,992.92 +16.14 (+0.82%)
S&P 500 1,165.25 +11.20 (+0.97%)
10-Yr Bond 4.125 +0.04 (+0.10%)

NYSE Volume 1,683,950,000
Nasdaq Volume 1,285,318,000

3:30PM: Market showing no signs of slowing going into the close, as the indices appear poised to close near session highs... Even though earnings season has winded down to a crawl compared to the slew of reports hitting the wires daily just a couple of weeks ago, tomorrow will provide investors with reports from two Dow components - Home Depot (HD 37.27 +0.98) and Hewlett-Packard (HPQ 21.02 +0.40)...

But perhaps having a much larger influence on the overall market tomorrow will be the latest read on inflation, when the Labor Dept. releases April PPI (consensus +0.4%) and core-PPI (consensus +0.2%) at 8:30 ET... NYSE Adv/Dec 2203/1051, Nasdaq Adv/Dec 1765/1344

gotta run - see you all tomorrow :hi:

[ozymandius]

122. Bye UIA!

Gotta run too. Just thought I would poke my head in here after being called away for the past few hours.

Thanks in advance to you folks who will turn out the lights and lock the door.

Ozy :hi:

[54anickel]

125. NBC: Praying for Ratings

http://biz.yahoo.com/fool/050516/111626144910.html

These are trying times for General Electric's (NYSE: GE - News) NBC television unit. Once the envy of Viacom's (NYSE: VIA - News) CBS, Fox Entertainment's (NYSE: FOX - News) Fox, and Disney's (NYSE: DIS - News) ABC, NBC has fallen to fourth place in the ratings wars. NBC's lowly status puts it in a difficult predicament as the network presents its fall lineup to advertisers this week in hopes of convincing them to pay top dollar for much of the commercial time in the coming year's prime-time programming.

As its ratings have suffered over the past year, NBC has tried new tactics to grab viewers. One area that seems to have received particular emphasis is religious-themed programming. The most obvious example is NBC's new limited-run drama Revelations, which deals with the apocalypse. However, other NBC shows have also joined the trend. The network's news magazine Dateline has dedicated large segments to such stories as "Secrets Behind The Da Vinci Code," which examined Dan Brown's popular novel, and "Dancing with the Devil," which dealt with exorcisms. Law & Order, meanwhile, recently aired an episode in which the accused was a virtuous born-again Christian.

NBC's push in the religious arena has had mixed success. The first episode of Revelations had a very strong showing, with 15.6 million viewers. Lately, however, interest has waned -- and the show's most recent episode captured just 8.4 million viewers. The lessons for NBC are far from clear. On the one hand, NBC may be on to something. As Revelations' initial success suggests, many appear to be interested in shows that have a religious angle. On the other hand, too much religious programming could turn off some of the network's more secular-minded viewers, while sensationalizing religious issues may alienate the pious.

more...

[RawMaterials]

126. Closing Numbers and Blather

Dow 10252.29 +112.17 (+1.11%)
Nasdaq 1994.43 +17.65 (+0.89%)
S&P 500 1165.69 +11.64 (+1.01%)
10-Yr Bond 4.125% +0.04

NYSE Volume 1,831,958,000
Nasdaq Volume 1,389,894,000



Close: The market erased roughly half of last week's losses, as arguably oversold conditions, falling oil prices, M&A activity and strong sector leadership helped counter a weaker than expected read on regional manufacturing... While falling oil prices helped remove some of the underlying nervousness that had lead to an increased risk premium on stocks, the fact that the P/E multiple on operating earnings for the S&P 500 has plunged from 20.2 to 16.8 over the past six months provided a floor of broad-based buying that helped close nine out of ten economic sectors in positive territory...

Crude oil futures ($48.61/bbl -$0.06) were under pressure all day after OPEC said it could boost production capacity by the end of 2005 and indicated a commitment to see oil prices decline further... Meanwhile, May NY Empire Index fell sharply to -11.1 (consensus 11.0) - the lowest level since April 2003 - versus a downward revision to April's figure of 3.1 (to 2.0), renewing concerns about slowing economic growth...

However, since too much is often read into these monthly surveys and the outlook for the region remains positive, the data were overshadowed by a number of upside catalysts and spirited leadership from a number of blue chip industry groups... Pacing the way higher was Financial (+1.7%), as investors found bargains in everything from to Banks (+1.8%) to Brokerage (+1.5%)... Insurance (+2.6%) also got a boost amid reports that American International Group (AIG 52.74 +0.69) plans to force out several senior executives in coming weeks...

Health Care (+1.1%) also surged as investors sifted through several positive drug-trial updates (i.e. CELG +4.4%, PFE +1.3% and LLY +1.2%) stemming from the ASCO conference and in the wake of more favorable funding rules for nursing homes (i.e. HCR +11.1%) proposed by Medicare... Technology (+0.8%) was strong across the board, as analyst upgrades on Adobe Systems (ADBE 59.99 +1.89) and Advanced Micro Devices (AMD 15.66 +0.18) provided a boost to Software (+0.9%) and Semiconductor (+0.7%), respectively... Industrials (+1.4%) was also strong, benefiting from United Parcel Service's (UPS 73.15 +1.00) proposed $1.25 bln for Overnite Corp. (OVNT 42.51 +12.93) while Airline (+2.5%) got a boost amid reports that US Airways and America West Holdings (AWA 4.43 +0.34) may announce a merger later this week...

Consumer Discretionary (+1.2%) was also strong, as some positive data points and reaffirmed Q2 and FY05 guidance in Lowe's Cos.' (LOW 55.64 +2.78) Q1 report offset the fact that earnings of $0.74 fell shy of forecasts, due primarily to poor weather conditions, and paved the way for Home Depot (HD 37.30 +1.01) shares to surge ahead of its report tomorrow... Even the Materials and Utilities sectors posted modest gains after being under pressure most of the day amid more hedge fund-induced position unwinding in commodities...

Energy (-0.6%), however, extended last week's 5.9% drubbing as oil prices closed below $49/bbl... After staging an impressive risk-aversion rally last week, Treasurys showed some follow-through buying interest following the disconcerting NY Empire Index data; but some consolidation ahead of tomorrow's influential PPI data eventually closed the benchmark 10-year note down 1 tick to yield 4.11%... DJTA +2.3, DJUA +0.1, DOT +1.0, Nasdaq 100 +0.7, Russell 2000 +1.5, SOX +0.7, S&P Midcap 400 +1.3, XOI -0.5, NYSE Adv/Dec 2290/976, Nasdaq Adv/Dec 1860/1255

[54anickel]

128. US Treasuries flat ahead of key inflation reports

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8506197

NEW YORK, May 16 (Reuters) - U.S. Treasury debt prices were steady on Monday as looming inflation data that could have major repercussions for bonds discouraged investors from placing large bets.

A stark pullback in New York State manufacturing kick-started an early rally, but the market ran out of steam after traders failed to break key technical levels.

Pervasive fears about the hedge fund industry also prevented any decline, with rumors continuing to swirl that some major players may have lost big with the recent declines in U.S. automakers' stocks and bonds.

"There are some fears about inflation but people are even more concerned about what's happening in the corporate credit market," said Gerald Lucas, chief Treasury and agency strategist at Banc of America Securities.

Bulls appeared to be testing three-month lows on benchmark 10-year notes (US10YT=RR: Quote, Profile, Research) , with little success so far in the session. Yields were stuck at 4.13 percent, flat from Friday but still above a trough of 4.10 percent hit last week.

Some investors identified 4.08 percent and 3.98 percent as the next two yield thresholds that bulls would attempt to break.

more conundrum talk....

[loudsue]

129. But...but...I just got here!!

Hi all! What an exciting day at the casino, ey? I've been preoccupied with other stuff today, so I missed all the excitement! Glad to see you guys kept watch!

Thanks for all your "links and thinks" about the state of the market!

:yourock: You guys are the BEST! :loveya:


:kick:

[54anickel]

131. Hey LoudSue! Sorry you're late for today's party, but I'm thinking

they'll be plenty of entertainment this week what with all the reports due out and BeelzeBush making a couple more appearances this week.

Hope you can catch the rest of the show this week. :popcorn:

[Lori Price CLG]

130. Thanks, kick!! n/t

[54anickel]

133. Ew, Missed this one last week - Stock Trading Ban for Fannie Mae Employees

http://www.cfo.com/article.cfm/3955702?f=search

The mortgage giant blacked out trading so employees don't accidentally trade illegally on material, non-public information while Fannie Mae works on its multibillion-dollar restatement.

Stephen Taub, CFO.com
May 06, 2005

Fannie Mae's 5,000 employees were told they cannot buy or sell their company's shares for the foreseeable future, according to the Washington Post, citing an E-mail sent by to employees. The paper said that spokesman Charles V. Greener confirmed the message's authenticity and said Fannie Mae took the step because it "felt it was the prudent course of action." He provided no further comment.

The embattled mortgage giant, which is mired in an accounting scandal, is in the process of crafting a multibillion-dollar restatement and dealing with several federal investigations.

Fannie Mae told its rank and file that it blacked out trading in the stock so that the employees don't accidentally trade illegally on material, non-public information, reported the Post. The newspaper added that according to the e-mail, the reason for the trading ban is Fannie Mae's "inability to make public filings with the Securities and Exchange Commission, the increasing number of employees supporting our restatement effort, and the continuing progress of internal and external reviews and investigations."

According to the Post, the E-mail also instructed recipients to "cancel any outstanding instructions you have given your broker to purchase or sell shares in the future" and set forth restrictions for exercising stock options.

more...

[UpInArms]

134. I don't think they can do that - they have to give 30 days notice

according to SOX

http://www.ngelaw.com/resource/9_02_Quarterly_Review/2.asp

excerpt:

Blackout Periods Under 401(k) Plans

Blackout periods are routinely used by retirement plans to facilitate the orderly change of service providers. During a blackout period, plan participants cannot change their investment options or receive distributions, withdrawals or loans.

Blackout periods gained notoriety last year due to the unfortunate timing of a change in recordkeepers for the Enron 401(k) plan. The Enron 401(k) plan, as is common with many public company retirement plans, offered Enron stock as one of the investment options. Enron stock was a popular investment choice, accounting for about 60% of the assets in Enron's 401(k) plan on January 1, 2001. To facilitate a change in its recordkeeper, the plan administrator announced a blackout period to begin October 26, 2001 and to end November 13, 2001. On October 16, 2001, 10 days before the blackout period began, Enron announced a third quarter loss and the price of Enron stock dropped to approximately 42% of its January 2001 level. On the day the blackout period began, Enron stock was trading at $15.40 and in just two weeks dropped to $8.93. In the litigation that has ensued, Enron 401(k) participants have alleged that the notice regarding the blackout period was inadequate and not distributed to all participants.

The Sarbanes-Oxley Act responds to the complaints raised by Enron participants by requiring at least 30 days advance notice to participants of a blackout period under individual account plans, such as 401(k) and profit sharing plans. The notice requirement is effective January 26, 2003. "Blackout period" is defined as any period for which any ability of plan participants to direct investments or to obtain loans or distributions from the plan is suspended, limited or restricted for more than three consecutive business days. The notice must include the following: (1) the reasons for the blackout period; (2) the investments and other rights affected; (3) the expected beginning date and length of the blackout; (4) a statement that the participant or beneficiary should evaluate the appropriateness of their current investment decisions in light of their inability to direct or diversify assets credited to their accounts during the blackout period; and (5) such other matters which the Department of Labor may require. The Secretary of Labor is directed to issue a form of notice no later than January 1, 2003.

If there is a change in the beginning date or length of the blackout period, the plan administrator must provide notice to participants of the change as soon as reasonably possible. There are a few very limited exceptions to the 30-day advance notice requirement.

The Sarbanes-Oxley Act authorizes the Department of Labor to assess a civil penalty for failure to comply with the blackout notice requirement. The penalty is up to $100 for each participant and beneficiary who is not notified of the blackout multiplied by the number of days that the blackout notice is not provided. Thus, a five-day failure for a plan with 5,000 participants could result in a $2.5 million penalty.

[54anickel]

135. Well, this could get pretty interesting then. Different circumstances,

but hey, what was that Greenspin said about rules and trust worthiness again? Well, rules are rules.

5,000 workers, possibly wanting to jump ship on info that the GSEs can't disclose to the public without creating panic. So, do they protect the markets or uphold SOX? Decisions, decisions.....

Pass the popcorn :popcorn:

[UpInArms]

136. this may be their get out of hell free card

If there is a change in the beginning date or length of the blackout period, the plan administrator must provide notice to participants of the change as soon as reasonably possible. There are a few very limited exceptions to the 30-day advance notice requirement.

:popcorn:

[54anickel]

137. Heh-heh, I'm thinkin' these are some extenuating circumstances that

might just qualify for that very limited exceptions to the 30-day advance notice requirement

Hey, check out the last entry on this page titled "The Bubble Popped"

http://www.dangerousmedia.com/showcase.html#

[54anickel]

138. Looks like Freddie got to do it in 2003?

Mortgage company Freddie Mac imposed a similar stock-trading ban on its employees in January 2003 after it announced that it would delay filing its financials and expected to restate results, according to the Post, citing a Freddie spokeswoman. Freddie Mac briefly lifted the trading ban late that year for selected employees who were not involved in putting together the restatement.