STOCK MARKET WATCH, Tuesday October 31

[ozymandius]

Tuesday October 31, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 811 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2134 DAYS
WHERE'S OSAMA BIN-LADEN? 1840 DAYS
DAYS SINCE ENRON COLLAPSE = 1801
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 6
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54


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




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

AT THE CLOSING BELL ON October 30, 2006

Dow... 12,086.50 UNCH (UNCH)
Nasdaq... 2,363.77 +13.15 (+0.56%)
S&P 500... 1,377.93 +0.59 (+0.04%)
Gold future... 607.40 +6.40 (+1.05%)
30-Year Bond 4.79% -0.01 (-0.21%)
10-Yr Bond... 4.67% -0.00 (-0.04%)






GOLD, EURO, YEN, Loonie and Silver


PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Rob Kirby

INFLATION FOR THE NATION?

We all know that the price of crude oil has receded from its highs of roughly 78 bucks a barrel to today’s roughly 60.00. As a consumer myself, I can attest to the fact that even in Canada, we’ve seen the price of gasoline at the pump go from a lofty 1.05 per liter all the way down to about the .80 per liter mark.

Most folks who heat with natural gas have watched prices recede from 15.00 to 4.00 – only to see it rebound to 7.50 where it is at the time of writing.

If you’ve been paying attention, you’ve likely read or heard that Goldman Sachs altered the make-up of their much watched and followed Goldman Sachs Commodity Index . The effects this “timely” adjustment had on gasoline prices had been covered in this space before.

The purpose today is not to “carp” about the timing or possible political motivations of these aforementioned price breaks. Instead, I thought it would make some sense for everyone to stop and consider whether or not these lower prices are going to hold.

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

[ozymandius]

2. Today's reports

8:30 AM Employment Cost Index Q3
Briefing Forecast 0.8%
Market Expects 0.9%
Prior 0.9%

10:00 AM Chicago PMI Oct
Briefing Forecast 58.0
Market Expects 58.0
Prior 62.1

10:00 AM Consumer Confidence Oct
Briefing Forecast 109.5
Market Expects 107.8
Prior 104.5

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

[UpInArms]

8. 8:30 report

U.S. Q3 employment cost index biggest gain in 2 years (8:30 AM ET, Oct 31, 2006 - 8 minutes ago)

U.S. Q3 private-sector employment costs up 0.9% (8:30 AM ET, Oct 31, 2006 - 8 minutes ago)

U.S. employment costs up 3.3% in past year (8:30 AM ET, Oct 31, 2006 - 8 minutes ago)

U.S. Q3 wages rise 0.9%, benefits up 1.1% (8:30 AM ET, Oct 31, 2006 - 8 minutes ago)

U.S. Q3 employment cost index up 1% vs. 0.9% expected (8:30 AM ET, Oct 31, 2006 - 8 minutes ago)

Employment costs up 1% in third quarter, most in two years

http://www.marketwatch.com/News/Story/Story.aspx?siteid=mktw&guid=%7B80B9FC9D-FF69-4FAE-ADDA-3179FAA7B257%7D

WASHINGTON (MarketWatch) - The cost of keeping an employee on the payroll rose 1% in the third quarter, the biggest increase since 2004 and a signal that the tight labor market could be fueling inflation, the Labor Department said Tuesday. In the past year, employment costs are up 3.3%. It's the first time compensation costs have risen faster than inflation in two years. Inflation measured 2.1% in the 12 months ending in September. Economists were expecting employment costs to rise 0.9% in the June-through-September period. The costs of wages and salaries increased 0.9% in the third quarter, identical to the second-quarter gain. The cost of providing benefits, such as retirement, health insurance and vacations, rose 1.1% in the quarter.

[54anickel]

13. Wages, Benefits Up at 2-Year Best Pace

http://biz.yahoo.com/ap/061031/employment_costs.html?.v=10

WASHINGTON (AP) -- Wages and benefits paid to American workers rose in the July-September period at the fastest pace in more than two years.

The Labor Department reported that its Employment Cost Index was up 1 percent in the third quarter, compared to a 0.9 percent rise in the April-June period. It was the biggest quarterly increase since a similar 1 percent rise in the second quarter of 2004.

The increase, which was above the 0.9 percent rise that economists had been expecting, was led by a big jump in the cost of employee benefits such as health insurance and pensions.

For the third quarter, benefit costs rose by 1.1 percent, up from a 0.8 percent gain in the second quarter. Wages and salaries were up 0.9 percent, matching the increase in the second quarter.

Officials at the Federal Reserve are watching closely to see whether wage pressures are beginning to accelerate, a development that would give workers' more money in their paychecks but could fuel unwanted inflation.

more...

Sheesh, I hate the way they spin this stuff. Look how much better off you are! You're costing us some big money here! Notice where it's going - the pockets of health insurance and pension providers, not the workers. Oh, but that increased pension cost is to benefit the working class. Phfft! That cost is because they were caught with their hands in the pension cookie jar. They're having to put in what they've owed all along.
BASTARDS!!!!

[AnneD]

24. They won't be happy...

until we are all dancing in the brick mud pits (What are you complaining about, you have job security and food to eat-ok, so you don't get health care, we give you an easy job and if you recover, you can get the old job back).

[Hugin]

49. Question... Are these wages and salaries based on the mean or the median?

I haven't heard of too many raises in the median lately.

[54anickel]

18. Consumer confidence dips in October

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BAD67BB8B%2DCE2D%2D42AF%2D86D6%2D0386D248D1A0%7D&siteid=yhoo&dist=

WASHINGTON (MarketWatch) -- U.S. consumer confidence dipped unexpectedly in October on growing pessimism about the job market and the economy, the Conference Board said Tuesday.

The private research group said its consumer confidence index declined marginally to 105.4 in October from a revised 105.9 in September.

Economists were expecting an increase to about 107.9 from the previously reported 104.5. See Economic Calendar.
The surprising dip fed a modest rally in the bond market. The yield on the benchmark 10-year note fell to 4.63%. Stocks dipped into negative territory for the session. See full story.

The market was also shaken by a surprisingly soft reading in the Chicago purchasing managers' index for October. It fell to 53.5% from 62.1%, the lowest level since August 2005. See full story.

The consumer confidence index suggests "a moderate pace of economic growth and more of the same for the first few months of 2007, said Lynn Franco, head of the Conference Board's consumer research center. Read the full release.

more...

[ozymandius]

3. Oil prices flat; investors eye OPEC cuts

SINGAPORE - Oil prices were flat Tuesday after plunging the previous day as traders looked to U.S. supply data due out later this week that is expected to show rising inventories of crude.

Traders were also doubtful about OPEC's ability to implement its plan to cut 1.2 million barrels a day in production — or that it would make a significant difference in oil prices.

"We know that huge amounts of oil are available, so I don't think these cuts will have a huge impact," said Testu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.

-cut-

Last week, oil prices surged by $2 a barrel after Energy Department data showed a large decline in U.S. crude-oil inventories. But some analysts believe the market overreacted to the data by failing to account for the impact of a brief shutdown of the Louisiana Offshore Oil Port, through which 10 percent of all U.S. oil imports flow.

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

[ozymandius]

4. U.S. drops royalty claims against Chevron: NYTimes

Why is this not a surprise?

NEW YORK (Reuters) - The U.S. Interior Department has dropped claims that the Chevron Corp. (NYSE:CVX - news) underpaid the government for natural gas produced in the Gulf of Mexico, the New York Times reported on Tuesday.

The decision could have far-reaching impacts, allowing energy companies to avoid paying hundreds of millions of dollars in royalties, the Times reported.

http://news.yahoo.com/s/nm/20061031/bs_nm/energy_chevron_dc_1

[ozymandius]

5. OPEC says British climate change report "unfounded"

MOSCOW (Reuters) - A hard-hitting report on climate change published by the British government on Monday has no basis in science or economics, OPEC's Secretary-General Mohammed Barkindo said on Tuesday.

The report written by former World Bank chief economist Nicholas Stern said that failure to tackle climate change could push world temperatures up by 5 degrees Celsius (9 Fahrenheit) over the next century, causing severe floods and harsh droughts and uprooting many as 200 million people.

The study recommended taking action now to offset the far greater cost of dealing with climate change later.

-cut-

Barkindo said it was misguided but he did not elaborate on possible solutions to the problem.

http://news.yahoo.com/s/nm/20061031/wl_nm/environment_stern_opec_dc_2

[ozymandius]

6. Oil firms drill for deepwater profits

With global demand for oil showing no sign of abating, the industry is going to ever greater lengths to secure supplies.

Tall as a nine-storey building and as long as two tennis courts, the anchor handling vessel is the work horse of the offshore oil industry.

-cut-

Deepwater oil rigs used by the industry can be as tall as a skyscraper, and house hundreds of crew members, who arrive and leave by helicopter or on other vessels.

For now, oil producers can't get enough of these rigs, which cost hundreds of millions of dollars and take as long as four years to build.

http://news.bbc.co.uk/2/hi/business/6092094.stm

[54anickel]

15. Crude falls as North Korea worry eases (Huh?)

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BA88022FE%2DC52D%2D4E23%2DA074%2D6FF4A4EA1529%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo

NEW YORK (MarketWatch) -- Crude-oil futures fell to a 16-month low early Tuesday after North Korea agreed to rejoin six-nation nuclear disarmament talks, easing concerns about security in the Asia-Pacific region.

snip>

The contract lost almost 4% of its value on Monday on reduced worry about the risk of a terrorist attack on Persian Gulf oil facilities and doubts that key oil producers will fully follow through with a pledge to cut production.

Early Tuesday, North Korea was back in the headlines with news that it has agreed to rejoin nuclear talks with China, the U.S., Japan, Russia and South Korea. A statement on the Chinese Foreign Ministry's Web site said talks that broke off a year ago will resume shortly.

Pyongyang pulled out of the talks last year in protest at U.S. financial sanctions against it. Last month, North Korea caused a stir by testing a nuclear weapon, leading the United Nations to impose further trade and arms sanctions.

North Korea is not an oil producer but the worry had created a safe-haven bid for commodities.

Edward Meir, analyst at Man Financial, said the U.S. macroeconomic picture is the big "elephant in the room" for the oil market currently, "and left to grow, could single-handedly sink many of the commodity bull markets that are still in place (and despite the recent corrections that have set in)."

more...

[AnneD]

7. Morning Marketeers.....

:donut: and lurkers. Ozy, the cartoon today is excellent. I was just looking at a photo of Cheney yesterday and the angle of the shot, his tux, and his smirk all he needed was a cigarette holder and he would be the perfect Penguin. Then I started thinking about the other Bush staffers and their Halloween costumes. Rummy would be Mr Magoo, Condi could carry off a CatWoman costume, Bush well I could decide between Howdy Doodity or Alfred E Newman but I am leaning toward the puppet. Pickles is stating to creep me out because she is looking like Norma Desmond off of Sunset Blvd.

Ozy-what is that avatar?

Happy Hunting and watch out for the bears.

[UpInArms]

11. mornin' AnneD!

here I am - about to bolt again - but wanted to give you a :donut: and a :hug:

I think it will just get weirder and weirder until election day - and then ... watch out for those bears!

catch ya later :hi:

[AnneD]

12. UIA...

:donut: and :hug: to you too...I think you need to watch out for the bulls out there in God's country. Have a good one.

[Hugin]

33. Morning AnneD!

:hangover:

Have I mentioned I appreciate the coffee you bring every morning?

:D

[skids]

35. Here's something to hang on your office wall...

This has been kicking around for a while.

[Hugin]

36. That's great!

The similarities are striking.

[AnneD]

41. Thanks...

I don't recall see it. Good Batman theme. I think of Rummy as Magoo because he couldn't see the facts if they were under his nose and he get mad about stuff. And Bush...well you know some one has their hand up his butt moving HIS mouth.

[ozymandius]

50. Hi Anne.

That avatar is the Green Man. Bountiful blessings to you and all this Halloween eve.

Ozy :hi:

[AnneD]

55. I suspected

but wasn't sure. It's a druid thang I guess.

[ozymandius]

57. Yep. Druid.

That's me.

www.adf.org

[AnneD]

62. Hubby is Indian...

and grew up in a Hindu tradition. I grew up in a Christian household but have studied Sufism, Buddhism, Judaism, Hinduism, and a smidgen of the Earth centered religions. I find myself taking the best of each. When we decided to marry, it was a real spiritual quandary for me. We decided to marry during the winter break. I chose to get married on the Winter Solstice and it was perfect. I dressed Indian bridal red (but with a holly, ivy and mistletoe head garland) and he dressed Western and the decoration theme was Winter Solstice. I have some Wicca friends that helped decorate and Indian teens did the henna hand painting. It sounds crazy but it mixed very well and to this day we still get comments on how beautiful it was. And hubby can't forget the date!

[ozymandius]

63. Thus explaining why you're so damn cool.

When my wife and I married we decided on an old-fashioned Celtic hand fasting. She was exploring the Canaanite pantheon of gods and goddesses and Kaballah at the time. My grounding was in Wicca but I gravitated toward Buddhism and Druidry. We've always been pagan respectively unique. When we happened upon a Druid grove we knew that we'd found our home.

Your wedding description sounds extravagant with the colors and all of those involved. Seems to me that your husband would easily remember the date even if it weren't at the solstice.

[AnneD]

68. Ozy....

We were traveling in France before we were married. At the train station, he ask me to watch our things while he went to buy our tickets. I watched him go through the long line. He was walking back to me and he got this strange look on his face. I couldn't read his face yet. He handed me the ticket envelope and said 'Wait here' and he went back in line. He wouldn't tell me until later but he was so use to traveling by himself that he bought ONE train ticket.:rofl: On our wedding night, he was half asleep and told me he awoke trying to take what he thought was his sitar pick off his fingers. He had trouble pulling it off until the moonlight caught the gleam of his wedding ring. Yes, I told him I ordered it snug because I wanted him to remember that he was married.:spray:

I thought the solstice would be easy to remember. Actually I am grateful he remembers he is married and where we live.

Cool thing about the grove too. As a child-I always knew trees talked-mom thought I was crazy. We had an oak tree in our front yard. It was a perfectly beautiful tree and I loved it very much as I had watched if grow from a sapling to be over 15+ feet. One day, we had a nasty storm blow through. I was in my house and I heard the most sickening sound (a cry groan and a crack). My beloved oak had been snapped and twisted at the base. The most amazing thing was that of all the places it could fall-it fell in the only spot that harmed neither homes, cars, or families. My neighbors looked at me strangly when I told them that the tree protected us to the end. Even the tree trimmer was amazed that no one suffered any damage. I tell you they know. Have a good evening.

[Ghost Dog]

66. Nice image. Thanks very much AnneD.

Cool indeed. :hug:

[AnneD]

71. Hey Ghost Dog...

Hope you are having pleasant travels. Miss you and your insight.

[UpInArms]

9. daily dollar watch

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

Last trade 85.78 Change +0.20 (+0.23%)

Carry Versus Growth Will be the US Dollars Next Battle

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/Carry_Versus_Growth_Will_be_1162247886450.html

US Dollar – The market has been very quiet today but traders should not lose sight of the fact that last week marked a major turning point for the US dollar. After slowly strengthening since the month of August, the uninteresting changes that the Fed made to their FOMC statement last Wednesday led to extremely interesting price action in the currency market. The US dollar saw its longest stretch of weakness since July and for the most part, the weakness continued into the new week. Although the greenback rebounded against the Euro and Canadian dollar, it extended its sell-off against the rest of the majors. This morning’s US data was hardly helpful as weaker growth in spending was offset by stronger growth in income. The problem is that economic growth is at risk while the inflation outlook is unclear. Even though core consumer prices increased strongly in the month September, core PCE and the price index in the third quarter GDP report fell short of expectations. Even today’s annualized PCE deflator increased less than expected despite a revision to last month’s core PCE month over month number. The Federal Reserve is on hold at the moment and not likely to move until next year at the earliest. This means that going forward, it will be a matter of carry versus growth. The US’ 5.25 percent interest rates are still very attractive, which could bring carry trades back into style, but if US data indicates that growth is taking a major turn for the worse, the market’s projections for a rate hike may become too much for the US dollar to handle. Meanwhile despite today’s quiet price action, this is a big week in the currency market with the G7 countries releasing a tremendous amount of data. In the US tomorrow, we are expecting consumer confidence along with the Chicago PMI report. Given the weakness in industrial production, Philly Fed and ISM, the Chicago PMI report is expected to drop and even if it manages to rise, the strength will probably be shrugged off as other data suggests weakness in the manufacturing sector nationwide. The Conference board’s consumer confidence reading however is predicted to be strong after last Friday’s rise in the UMich consumer confidence survey.

...more...

Tomorrow's Economic Releases: US Confidence to Improve Despite Bearish Housing Data

http://www.dailyfx.com/story/calendar/key_events/Tomorrow_s_Eoonomic_Releases__US_Confidence1162253188175.html

US Employment Cost (3Q) (12:30 GMT; 08:30 EDT)

Consensus: 0.9%

Previous: 0.9%

Outlook: Growth in US labor costs for the third quarter is expected to hold its 0.9 percent pace. Expenses related to salary and other forms of compensation are predicted to have continued to grow through the three months despite a moderation in non-farm payrolls. In September, a modest 51,000 hires were added to the nation’s payrolls, a far cry from the 300,000-plus seen earlier. However, while this trend suggested a downturn in the labor market was underway, earnings continued to outperform. For the same month, average hourly earnings growth matched a five-year high 4.0 percent. Furthermore, the final revision of the wage trend indicator for the third quarter may also offer the support for a strong employment cost report. According to the Bureau of National Affairs gauge, plans to increase private industry wages grew 1.0 percent from the same period a year ago, matching the pace reported in the second quarter. This suggests that current wage growth has not yet hit levels that are deemed unsustainable. While the NFP report due later this week will likely overshadow the earlier released employment cost indicator, the latter may prove more relevant for the Fed and for the economy’s health in the months ahead. Should job growth continue to print at levels deemed necessary to sustain growth, economists and policy-makers will turn to earnings to determine whether incomes will drive spending in the months ahead.

Previous: The Labor Department’s Employment Cost Index grew 0.9 percent in the three months through June, matching the fastest pace of growth since the second quarter of 2004. The faster than expected pace came from a consistent increase in benefits and wages and salaries. Benefit costs, excluding bonus, severance, healthcare and paid vacations, rose 0.8 percent over the period. This was the fastest pace of growth since the first quarter. For comparison, wages and salary costs rose 0.9 percent, the biggest jump in three years. The acceleration in incomes reflected the competition in the US labor market, as employers vie for the fewer skilled workers in the economy by using greater compensation packets. During the three-month span, the jobless rate contracted to a five-year low 4.6 percent of the available labor pool; which in turn pressured average hourly wage growth to its own five-year high 3.9 percent.

US Consumer Confidence (OCT)

Consensus: 108.0

Previous: 104.5

Outlook: Analysts predict that US consumer confidence improved through the month of October, as falling gas prices and improving employment boosted sentiment in the world’s largest economy. Questions remain, however, as to whether lower energy prices will outweigh the recently bearish results in the US housing market. Given that real estate expansion has made sizeable contributions to American disposable incomes, analysts wonder whether a subsequent housing contraction will effectively spell the end to strong consumer spending growth. Indeed, with retail sales 0.4 percent lower through the month of September, some claim that such a decline in demand has already come to fruition. Regardless, we shall monitor tomorrow’s report for clearer indication of the all-important trend in consumer sentiment.

Previous: US consumer confidence gained more than expected through the month of September, as sharp drops in gasoline prices improved sentiment. This report was seemingly contradictory with same-month data that showed a 0.4 percent drop in national retail sales—leading many to question whether improved confidence would be enough to buoy spending. Likewise significant, economists expressed concerns that lower house prices would put a dent in overall demand. We will subsequently monitor October consumer confidence results and later retail sales data for indication of future domestic expenditure growth.

...more...

[54anickel]

16. America and the Dollar Illusion

http://www.spiegel.de/international/0,1518,440054,00.html

snip>

Of course, those playing this game know that, in the long term, currencies can't be stronger than the national economies from which they derive. Consumption without production, imports without exports, growth on credit -- these are all things that can't last in this world. Ken Rogoff, the former chief economist of the International Monetary Fund (IMF) and a man who thinks as clearly as he speaks brashly, recently criticized US economic policy even as he seemed to be praising it: Rogoff said the current boom in the United States is "the best economic recovery money can buy."

But if things have become that obvious, why aren't investors recoiling in fear? Why do foreigners, US presidents of all stripes and even Federal Reserve presidents known for their seriousness allow themselves to get involved in such a risky game, when the risk is that of destroying everything? Why aren't those mechanisms of market regulation functioning that are supposed to represent the advantage of the capitalist system over planned economies?

The answer is terrifyingly simple: Everyone knows how dangerous the game is, but continuing to play it strikes them as less dangerous than quitting. After all, what's to be gained from overreacting? Investors allowed themselves to get caught in the dollar trap years ago, and there's no easy way out. If they start taking their dollar bills and government bonds to the market themselves, they would lose money -- either gradually or all at once. They would like to avoid both scenarios, at least for a time. A president who does no more than recognize the situation as an important issue may lose his position as public discontent looks for a vent. Though the governors of the Federal Reserve Bank are under the strongest obligation to tell the truth, they have let the right moment for effective intervention slip by.

Waiting for the signal

Alan Greenspan, the legendary former chairman of the US Federal Reserve, did much to feed the dollar illusion. Whenever skepticism increased, he raised the key interest rate. Any rise in the key interest rate also serves as a sort of risk premium for those who took their chances by investing in the dollar. When doubts about the sustainability of US economic growth were heard, Greenspan set out to dispel them immediately. For a man better known for his mumbling and preference to keep people in the dark about the financial world, he spoke with remarkable precision. "Overall, the household sector seems to be in good shape," he said in October of 2004. If the global financial market's managers worship Greenspan, then it's at least partly because he's given their dream a lease on life of several more years.

His successor has no other option but to do the same thing. He knows that every piece of advice issued by someone in his position will have consequences. If he issues a warning about the skewed state of the economy, the warning itself instantly becomes a self-fulfilling prophecy. Even if he chooses a subtle formulation, the financial market will perfectly understand what he's saying. Everyone is waiting for the sign that the trend has reversed. No one is hoping for that sign, but no one can afford to miss it either.

At this point, a legitimate objection could be formulated: namely, that financial markets don't normally obey politicians. So why aren't the markets correcting themselves in this instance as they normally do? Who or what is preventing investors from behaving differently towards the dollar than they behaved towards New Economy stocks?

more...

[Ghost Dog]

65. Hmm. Did somebody say "precarious", or what?

Watch out, you-all dollar-pegged currencies. (Gold up over the (falling) $600 line, I see, BTW).

[54anickel]

70. Hi GD. How go the travels? Good to see you're still able to check in.

Yes, precarious indeed. It's always interesting to watch the game play out though. I thought for sure the buck was on it's last leg 2 years ago. The Fed and other Central Bankers are damned good at this game, but they've got to be running out of moves.

[54anickel]

17. Buck falling down a cliff at 10:00 am

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

Last trade 85.27 Change -0.31 (-0.36%)

Settle Time 15:00 Open 85.64

Previous Close 85.58 High 85.87

Low 85.26 2006-10-31 10:32:42, 30 min delay

[54anickel]

29. UAE considers cut in dollar reserves

http://news.yahoo.com/s/ft/20061030/bs_ft/fto103020061724012882

The United Arab Emirates, the second-largest Arab economy, signalled on Monday that it might cut its holdings of dollars by almost half, highlighting a recent trend of reserve diversification away from the US currency.

Sultan bin Nasser al-Suwaidi, the governor of the central bank of the United Arab Emirates, told a meeting of central bankers from Gulf states in Abu Dhabi that the bank wanted eventually to lower the dollar's share of its foreign currency reserves to a range of 50-90 per cent. Currently the UAE holds 98 per cent of its $25bn foreign exchange reserves in dollars and 2 per cent in euros.

"It is our investment policy to diversify," said Mr al-Suwaidi. "We are still waiting for the appropriate time."

Mr al-Suwaidi said that the central bank was still planning to convert as much as8 per cent of its dollar holdings into euros - a scheme it first proposed in March amid fears that the US currency was set to depreciate.

Mr al-Suwaidi added that the UAE was considering taking holdings in sterling and yen.

more...

[UpInArms]

10. UBS profit drops 22%; trading income falters

http://www.marketwatch.com/news/story/story.aspx?siteid=mktw&guid=%7B2D973225-DD7A-4C9B-8E4B-F24EE69087B8%7D

LONDON (MarketWatch) -- UBS reported a 21% drop in third-quarter net profit Tuesday, falling short of expectations as the Swiss financial-services giant's investment-banking arm was hurt by weak capital markets early in the quarter and by a wrong bet on interest rates.

The company (UBS : 62.19, -0.66, -1.1% ) (CH:001203203: news, chart, profile) reported a net profit of 2.20 billion
Swiss francs ($1.76 billion), down from 2.77 billion Swiss francs a year ago. Net profit was down 30.1% from the second quarter.

Analysts had been expecting a net profit of about 2.59 billion francs, according to a consensus forecast compiled by the bank.

Kian Abouhossein, analyst at J.P. Morgan, described the UBS results as "a painful miss."

In a note to clients, Abouhossein said the main disappointment came from the investment-banking division, where pretax profit from continuing operations fell 22% to 1.08 billion francs, due to lower trading revenues in equities, fixed income, rates and currencies.

...more...

[54anickel]

14. 10:36 numbers and yada - looks like the charts in the OP aren't in sync today

Dow 12,074.89 DOWN 11.61 (0.10%)
Nasdaq 2,366.64 UP 2.87 (0.12%)
S&P 500 1,377.40 DOWN 0.53 (0.04%)
10-yr Bond 4.6340% DOWN 0.0390
30-yr Bond 4.7440% DOWN 0.0420
NYSE Volume 629,832,000
Nasdaq Volume 491,880,000

10:30 am : Market spikes lower within the last 30 minutes after investors digest today's last batch of economic data. With growth concerns being the market's pre-occupation of late, as evidenced by an unexpected decline in consumer confidence, the Chicago PMI falling to its lowest level (54.1%) in October since August 2005, especially after climbing to its strongest level in more than a year a month earlier, has also taken some steam out of early buying efforts. Bonds, however, are embracing the data since more evidence of an economic slowdown, coupled with the manufacturing report's closely-watched prices paid component falling to 62.5% from 69.8% easing inflation concerns, play into the belief among bond traders that a Fed rate cut is still in the cards. The 10-yr note is now up 11 ticks to yield 4.62%.DJ30 -27.94 NASDAQ -0.34 SP500 -2.14 NASDAQ Dec/Adv/Vol 1424/1207/394 mln NYSE Dec/Adv/Vol 1435/1454/250 mln

10:00 am : Indices are off their opening highs but six out of 10 sectors remain positive. Technology is again pacing the way to the upside as Cisco Systems (CSCO 24.23 +0.33) surges 1.4% after it was added to Goldman Sachs' Conviction Buy List. More upbeat analyst commentary has Yahoo! (YHOO 26.63 +0.68) adding 2.6% to yesterday's 2.4% gain while Apple Computer (AAPL 81.47 +1.05) is up 1.3% amid confirmation its newest iPod shuffle will be available by Friday. Financials is also providing some notable leadership as the PHLX / KBW Bank Sector Index flirts with new all-time highs after PNC Financial Services (PNC 69.65 +1.12) topped expectations on record Q3 earnings. DJ30 +9.12 NASDAQ +7.82 SP500 +1.23 NASDAQ Dec/Adv/Vol 1154/1281/170 mln NYSE Dec/Adv/Vol 937/1619/64 mln

09:40 am : After posting its largest one-day decline (-3.9%) in more than a year yesterday, oil prices slipping another 1.0% are helping to lift stocks at the open as lower energy prices offer investors some relief, especially since the sustainability of a three-month stock rally remains in question. Sure, earnings reports continue to check in ahead of expectations (e.g. PG, ADM, BIIB, BJS, HLT, MET, MRO and VLO); but there's some growing concern that another strong quarter of double-digit profit growth has already been priced into stocks. Crude for December delivery is now back below $58/bbl ahead of an expected rebound in crude supplies tomorrow and easing tensions with Nigeria.DJ30 +22.53 NASDAQ +9.88 SP500 +2.65 NASDAQ Vol 98 mln NYSE Vol 44 mln

09:15 am : S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: +2.0.

09:00 am : S&P futures vs fair value: +1.8. Nasdaq futures vs fair value: +2.5. Early indications continue to hold onto a modestly positive bias. Aside from more upside earnings news providing a floor of support for stocks, the Nasdaq is getting an additional boost from notable ratings changes and an index update. Cisco Systems (CSCO) is up more than 1.0% in pre-market action after Goldman Sachs added CSCO to their Conviction Buy List. Yahoo! (YHOO) has been added to AmTech's Focus List while Celgene (CELG) is surging 6%amid confirmation it will be added to the S&P 500.

08:32 am : S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: +1.0. Futures versus fair value continue to suggest a slightly higher open for the cash market. Marathon Oil (MRO) has been the biggest name to most recently beat estimates, handily topping Wall Street expectations. Separately, the Q3 Employment Cost Index rose 1.0%, close to the expected rise of 0.9%; but the market remains more focused on Friday's October jobs report, to get a better read on labor conditions, as well as today's Chicago PMI and Consumer Confidence reports. Both will be released around 10:00 ET.

08:00 am : S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: +1.0. The bulk of earnings reports continue to top expectations (e.g. PG, ADM, BIIB, MAS, and MET), oil prices are down again and there's even some M&A activity making headlines. Be that as it may, futures indications are struggling to stay in positive territory. With a batch of influential economic data out this week, there isn't a whole lot of conviction on the part of buyers this morning since stocks running virtually uncontested since bottoming out in July leave the door open for some profit taking.

[54anickel]

19. The Fallacy of Global Decoupling (Roach)

http://www.morganstanley.com/GEFdata/digests/20061030-mon.html#anchor0

Surely, there must be more to a $46 trillion global economy than the American consumer and the Chinese producer. Not only is that the current verdict of financial markets, but it is consistent with the sentiment I have been picking up from a broad cross-section of our clients -- business executives, investors, and senior government officials -- as I travel the world this fall. While they concede the possibility that these two engines of global growth may, indeed, slow in 2007, there is a general belief that other economies are now perfectly capable of filling the void. Hope springs eternal that such a global decoupling would allow an increasingly vibrant global economy to keep growing while barely skipping a beat. My advice: Don’t count on it.

Given the dominant role that the US consumer has played in driving the demand side of the world economy and the equally important role played by the Chinese producer in shaping the supply side, decoupling won’t be easy. By our calculations, China and the US collectively have accounted for an average of 43% of PPP-based global GDP growth over the 2001-06 period -- well in excess of their combined 35% share of world output. Globalization makes decoupling from such a concentrated growth dynamic especially difficult, as ever-powerful cross-border linkages have become increasingly important in tethering the rest of the world to these dominant engines of growth. Decoupling requires economies to cut the cord and develop new sources of growth. In my view, for an economy to be classified as a “decoupler” it must satisfy three conditions: First, it must have self-sustaining domestic demand -- especially private consumption. Second, it needs to have a diversified export mix -- both in terms of products and destinations. And third, it must have policy autonomy -- the ability to establish independent settings for monetary, fiscal, and even currency policies.

The global decoupling thesis can be drawn into serious question on all three counts. That’s especially the case with respect to the lack of support from domestic demand outside the US. It is important to make the distinction between the two major components of private domestic demand -- consumption and fixed investment. What concerns me the most in this regard is underlying weakness in private consumption outside the US. Investment strength isn’t likely to provide an enduring offset. Inasmuch as business capital spending is basically a “derived demand” -- largely dependent on expectations of the capacity requirements of future growth in consumer-driven end-market demand -- consumption support is absolutely critical for an economy to prosper on its own.

Therein lies the problem: Real consumption growth in the world’s second and third largest economies -- Japan and Germany -- remains stuck in a sluggish 1.5% zone. Nor has the rest of Europe fared any better, with overall Euro-zone consumption on an anemic 1.3% growth trajectory over the past five years. Moreover, contrary to popular perception that heralds the birth of the young and vibrant Asian consumer (see the cover story in the 21 October issue of The Economist, “America Drops, Asia Shops”), private consumption has actually been a drag on economic activity in this key region of the world. That shows up most clearly in declining consumption shares of Asian GDP -- the best way to measure the growth impetus of any sector. By IMF estimates, consumption shares in all of emerging Asia fell from around 70% of GDP in 1970 to less than 50% in 2005. In particular, China’s private consumption share fell to a record low of 38% of GDP in 2005 and most likely has fallen further in 2006. Nor is Japan an exception to Asia’s anti-consumer mindset; the consumption share of Japanese GDP fell from 58% in early 2002 to 56% in mid-2006. The message here is inescapable: Euphoria over the emergence of the Asian consumer is premature, at best; this region’s growth story is still very much dominated by surging exports and fixed investment.

more...

[54anickel]

20. Economists sharply divided on where economy goes from here

Check out the sunshine club

http://www.usatoday.com/money/economy/2006-10-30-econ-usat_x.htm

snip>

But others are more optimistic.

"This is another one of those long expansions," says David Wyss, chief economist for Standard & Poor's in New York. He says with inflation relatively benign, the Federal Reserve will be able to keep interest rates at historically low levels. That will help support the economy, he says.

Recessions becoming more rare

The previous expansion lasted from March 1991 to March 2001 and was followed by one of the mildest recessions in history. An expansion of 120 months was not just the longest ever, it far exceeded the average duration of expansions since World War II. The average length of expansions in the postwar period is 57 months, according to the National Bureau of Economic Research, a private group that is the nation's arbiter of business cycles.

So at five years, this expansion is already above average.

"Very rarely are we in recession nowadays," says Scott Anderson, senior economist at Wells Fargo in Minneapolis.

He attributes that to the switch from a manufacturing-based economy to a service-based economy. Manufacturing is subject to more volatility, Anderson argues.

"We can remain in this expansion for another five or six years," Anderson says.

more...

[AnneD]

42. Oh brother

"Very rarely are we in recession nowadays," says Scott Anderson, senior economist at Wells Fargo in Minneapolis. :rolf::rofl::rofl: Has this guy gone through puberty yet?:spray:

Other, more sane highlights from the same article.

<snip>
The change in mortgage payments, combined with a lack of saving, will make it too hard for consumers to keep up their spending habits, Adams says. Consumer spending accounts for more than two-thirds of all U.S. economic activity.

"The last recession was a business-led recession because of the over-investment in technology in the '90s and getting ready for Y2K. ... With that exception, recessions are caused when consumers cut back on spending," says Adams, who says colleagues are calling her the Duchess of Doom.

Consumers are showing little optimism about the economy. In a USA TODAY/Gallup survey of 1,002 adults conducted Oct. 20-22, 44% rated the economy as "good" or "excellent," while 33% said the economy was "fair," and 22% said it was "poor." One percent did not register an opinion.

"I am not very positive about the economy. I think it's average at best," says Joel Libava, president of Franchise Selection Specialists in Cleveland. He doubts the economy will make it another five years without recession, particularly given his Midwestern vantage point, where companies are closing factories and laying off workers.

Let me see :think: if 55% of the economy was fair to poor (vs 44 that said good and excellent- noticed how they grouped the numbers)and consumer spending is 2/3rds of our economy, how long before Scott Anderson has to find another job? This guy has so much sunshine up his butt he must fart lightening bolts.:spray:

[OrangeCountyDemocrat]

46. Doom & Gloom

With that exception, recessions are caused when consumers cut back on spending," says Adams, who says colleagues are calling her the Duchess of Doom.


Nobody likes a Pessimist. Hang her until she chokes!!

[Ghost Dog]

67. Offer me some really useful, good QUALITY, and maybe I'll buy it.

But I refuse to consume mindless crap.

No TV.

[54anickel]

21. Candidates Are Ignoring $1.35 Trillion Minimum Tax `Time Bomb'

http://www.bloomberg.com/apps/news?pid=20601103&sid=aM585kGeDclg&refer=us

Oct. 31 (Bloomberg) -- Congressional candidates this fall are furiously debating Iraq, Medicare and extending tax cuts. Most are staying quiet about an imminent legislative challenge: how to stop a tax increase that will hit more than 20 million households next year, some with incomes as low as $50,000.

Unless Congress acts, the alternative minimum tax will gradually impose $1.35 trillion in additional taxes over the next 10 years. Yet only six candidates in the 28 most-competitive House and Senate races across the country even mention it on their campaign Web sites.

Most candidates are avoiding the subject because the cost of stopping the tax increase would obstruct key elements of their agendas, such as the expansion of prescription-drug benefits for the elderly planned by Democrats, or Republicans' plan to make permanent President George W. Bush's 2001 and 2003 tax cuts.

``It's a ticking time bomb,'' said former Senator John Breaux, a Louisiana Democrat who was vice chairman last year of a presidential panel that recommended abolishing the minimum tax. ``No one wants to recognize it. No one wants to pay for it.''

In many of this year's most closely contested races, discussion on the AMT is absent. In Pennsylvania, for example, incumbent Republican Senator Rick Santorum calls for making Bush's tax cuts permanent, while his Democratic challenger, State Treasurer Bob Casey, vows to ``fight for middle-class families.'' Neither addresses the AMT.

more...

[54anickel]

26. I've got a John Prine tune chorus stuck in my head today - Hello in there, Hello.

Must have to do with the election cycle. People mesmerized by the hope and chance of bringing about real change. I dunno, maybe I'm just feeling especially down today, but I'm thinking it's just changing ponies for the next race heat. Probably from watching that video I posted yesterday. Just seems TPTB keep us pre-occupied with all kinds of other "stuff". So long as we stay away from their crap game.

Don't get me wrong, I want the Dems to win and I think it will make a difference on the periphery. I'd really like to see Dimson and his ilk held accountable - but I don't think that's going to be allowed to happen. Investigations would run too deep and too close to the real players. Too risky, and too much of a threat to the mechanics and facade of this free Nation.

Elections - the members of the winning party are pacified for a bit, the losers defeated, disenfranchised and disembarked for a bit. The population is lured into submission once again. Their belief in freedom and democracy is restored, as is the complacency about their true, hidden servitude to TPTB.

Gotta run and get some chores done around here.

[54anickel]

48. Follow up to yesterday's video

http://video.google.com/videoplay?docid=-3254488777215293198

[OrangeCountyDemocrat]

43. I'm A CPA & This Is Big

Every year I see more and more situations where the AMT applies, sometimes in the most ordinary appearing of situations. Last year was the worst by far.

I expect that when I do 2006 returns, Lots of people will be affected.

[cosmicdot]

59. the article may have been moved -- link here

Candidates Ignore $1.35 Trillion Minimum Tax `Bomb' (Update1)

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ajJYxC6TAiBE

[54anickel]

64. Thanks Cosmicdot - I hate when that happens. Glad you could find it. n/t

[OrangeCountyDemocrat]

22. CNBC Has Interview Upcoming With 2007 Recession Prediction

The guy being interviewed in the next segment will say the economy is precarious, and will be in full blown Recession by '07.

[OrangeCountyDemocrat]

23. Roubini - Housing Recession Now, Norquist - Everything Is GREAT! nt

[OrangeCountyDemocrat]

25. Polar Opposites

It's amazing how they put these 2 guys on, and they're like the exact opposite. And the guy on the right is basically a repub shill...Grover Norquist.

I believe Roubini. All indicators point towards a recession within the next 2 quarters. Housing market is in a recession as we speak, and as he also says, will get worse. He says prices are down 10%, and going lower.

I thought they were going to shoot him for being so pessimistic, because they don't do that stuff on CNBC much.

[54anickel]

27. I'm surprised they had Roubini on there. Wonder if they're afraid that

people are beginning to wise up and removing the rose colored glasses. I'm sure when they decided to have him on they thought old Grover could rip Roubini apart. Try to put the minds at ease of those who might have started to share his concerns. Bits of truth are making it into the media, gotta try and nip that in the bud. Didn't see the segment, but I doubt Norquist came off as very credible against Roubini.

Lies stand quite well on their own...different story when confronted face-to-face with the truth. I doubt CNBC is going to try that tactic again anytime soon.

[OrangeCountyDemocrat]

30. I Didn't Pay Much Attention To Grover

When he was on, I got my stuff ready for work, did some chores. I really only listened to what Roubini had to say.

What's hysterical is that Grover smiled a lot. When they introduced Roubini and mentioned his sentiment, on the split screen they showed Grover crack a smile, like he thought it was funny how pessimistic Roubini was.

Mr. Roubini, and forgive me I didn't know how to spell his first name, Never smiled. He had this somber tone, like "We're Screwed, What's There To Smile About?"

[Hugin]

32. Why isn't Grover in jail yet?

I thought he and his close buddies... Abramoff and Delay were headed that way?

[54anickel]

38. Here's a link to Roubini's latest blog entry

Another Recession "Canary in the Mine": Wal-Mart Sales Flat in Spite of Lower Oil Prices

http://www.rgemonitor.com/blog/roubini/154712/

One of the latest variants of the optimists' soft-landing view is that the weakness in economic growth in Q3 was driven by the spike in oil prices during the summer. Now that oil prices are 25% down relative to the summer peak, the extra income in the pocket of consumers will be spent driving a rebound of consumption and growth in Q4 and 2007. So, now "low" oil prices will come to rescue the US consumer.

It is too bad that this fairy tale has a very week base of support. This weekend Wal-Mart reported on its same store sales for October so far; and guess what: they are as bad as they were in December 2000 at the very outset of the last US recession. As reported by Market Watch:

Despite an upbeat forecast for October, Wal-Mart Stores Inc. notched the slowest gain in same-store sales in years, the retail giant reported Saturday. Walmart said sales at established U.S. stores rose an estimated 0.5%, far off the 2-to-4% gain the company originally forecast for October. On Oct. 23, company executives pared back their rosy outlook, saying that October same-store sales would be closer to September's figure of 1.3%. The 0.5% same-store sales figure for October is the weakest since the 0.3% rise posted in December 2000, according to the Wall Street Journal. Wal-Mart executives blamed the weak October figure on weakness in sales of women's apparel, as well as disruption to sales from remodeling efforts at almost half of its U.S. stores. The retailer will announce official sales figures for each of its divisions on Thursday.

A 0.5% year-on-year sales growth means a negative real growth rate of sales of about 3% given the level of US inflation. So, Wal-Mart sales are collapsing in real terms and in nominal terms they are growing as slowly as they did at the beginning of the 2001 recession, an ominous sign as Wal-Mart sales are a clear leading indicator of economic activity. So, why arent Wal-Mart customers rushing to buy at Wal-Mart now that gasoline prices are way down relative to the summer? The non-sense argument - that lower oil that is only back to the very high levels it had before the summer spike will rescue the US consumer - is now faltering. With housing being in a total meltdown (the other nonsense of a housing market "bottoming out" has absolutely no base either) and the effects of the Fed tightening in the pipeline, you have a consumer buffeted by mediocre real wage growth (most of the alleged increase in incomes is that of the very rich who get the bonuses and stock option, not the median worker who is squeezed), slumping employment growth (51K jobs in September), negative savings, high debt ratios, falling housing wealth, rising debt servicing ratios. So, the argument that still high (but lower than summer peak) gasoline prices will rescue the US consumer is proving to be a myth.

more...

[Hugin]

40. The high Credit Card balances generated by high oil prices...

are still in the consumer's account. Where they will remain for foreseeable future.

Unlike the Bush Administration... Deficit spending is a no-no in the middle class mind.

[AnneD]

44. A good read...

I think it is depressingly accurate, but a good read. He has the RE pattern down. Most of you that are regulars have heard me talk about how bad the RE market and the S&L scandels hit Houston in the 80's, but the thing that worries me the most is that we did not have home equity loans then that we have now. It is a recipe for disaster. this is not the soft landing, it is the calm before the storm. The middle class is about to get reamed.

[OrangeCountyDemocrat]

47. The Fun Is Just Beginning....

Well, not much fun for the people late to the party. But those who are prepared and able to withstand the disaster, will be glad they saw it coming. Kind of like the people who had flood insurance in NO, and left 72 hours pre-Katrina.

I won't go into the various examples of those who would be in trouble, because everyone here knows them. I still wonder if any of these MORONS, who get paid far more than me, and FAR MORE than they're worth, whether any of them see this coming?

In this day of videotape, I sincerely hope there is some record of them, so they can be drawn and quartered once this all begins to play out in full effect.

[AnneD]

51. OCD...

I wonder that too. I have a friend that makes a little more than I. Has a home but recently took some equity out to help pay for college (out of state). Making car payments. Has 10-15K on credit cards. Still has a young kid at home. She didn't teach summer school this year and has been suffering. Her car was parked in the driveway cause gas was too much.

Now, I couldn't work like I wanted because I has a knee injury this summer but was able to pay for theraphy out of pocket...my beat up car is paid for. I didn't like the gas costs but I could buy it. My rent is 1/4th of her house note and I am paying off my debts (paid off one more this summer and was able to put daughter in SAT prep course).

Now I lost custody of my daughter (a long court battle-teen wanted to be with party dad who lives at home with his Mom :eyes: ). I have to pay almost 1/2 of my check in support, insurance and court ordered music lessons (I got screwed). In essence I am doing all this with less than one half of the money she has. And despite all of this-I have more money in my savings and certainly more in my retirement accounts than my friend. I carry a lower debt burden and in 19 months my income will double (no support). No matter how bad things get in the economy-I can live on half of what I make AND I will be DEBT FREE. I will begin saving for a house (there should be good deals by then). I have a skill and will not have to worry about job loss and my retirement will be squared away. I have no idea what my friend plans to do, but she will be strapped with debt for some time to come and GOD help her if there is a down turn in the economy. She is not prepared.

[OrangeCountyDemocrat]

52. To Clarify My Statement...

When I was talking about the MORONS who should be drawn & quartered, I did not mean to imply I was referring to the people caught up in the trap which was set.

Rather, I'm talking about these YAHOO'S on TV, who make lots of money, and supposedly have these wonderful reputations, who claim day in and day out, that nothing is wrong, and use the term "soft landing," until they turn blue in the face.

These are the ones who should be hung in short order. However, the gullible ones, who believed the LIES, many of whom are probably repub devotees with less than 3 brain cells....those people will pay the price when the collapse really gets going.

[AnneD]

54. OCD....

I didn't take offense but I worry about my friend and others that make good money and buy into the 'economy is good' rah rah and aren't prepared. I have tried to talk to her in a non threatening way (she knows my financial /divorce problems) and tell her what I have been doing to help, but she is a tad hard headed. Those are also folks in a trap that don't know it yet.

[OrangeCountyDemocrat]

56. Even Feeling Comfortable Does Not Make Diff.

I just took my car in because of a Check Engine light. 24 hours later, I have a credit card charge for $2,000, and there goes my cushion for I had built up over the last couple of months.

I'd hate to think what my situation would be if I were unable to make the payment next month, and had to start paying credit card interest again.

[AnneD]

60. Imagine

not having a cushion, Orange. Some folks are in that shape already. I have an emergency fund but I don't have a 6 mos living expenses saved. The emergency fund I keep at all times. After I pay my debts-the emergency fund gets funded to 6 mos of expenses. Right now I carry disability and have accumulated sick leave etc so that would carry me in all but layoffs. With a layoff I would have unemployment which would cover me and they would pay me my leave time. I know too many that don't even have that.

[54anickel]

28. Cerberus's Snow Says `Lighter' Hand Is Best for Funds (Update1)

http://www.bloomberg.com/apps/news?pid=20601103&sid=attG7tqpR8Bs&refer=us

Oct. 31 (Bloomberg) -- John Snow, the former U.S. Treasury secretary named chairman of Cerberus Capital Management LP this month, said investors, not policy makers, are the best regulators of hedge funds.

Snow, who left President George W. Bush's administration in June after 3 1/2 years, said he came to favor a ``lighter'' touch for hedge funds because the industry, which oversees $1.3 trillion in assets, was too big for the government to monitor effectively.

``The real policing of these pools of capital are the investors,'' Snow said yesterday in his first interview since joining New York-based Cerberus. Any government promise to increase scrutiny would create ``a real risk of moral hazard that implies, `Don't worry. Now the government is watching over you and there aren't any problems.'''

The comments clash with demands from lawmakers including Senate Finance Committee Chairman Charles Grassley to regulate hedge funds after the collapse last month of Amaranth Advisors LLC, the Greenwich, Connecticut-based firm that lost $6.6 billion betting on energy prices. The Securities and Exchange Commission is also studying potential insider trading by hedge funds.

more...

Gee, he was all for closer scrutiny of hedge funds before he started working for one. :eyes:

[cosmicdot]

61. extra: Cerebus, Dan Quayle, and Congressman Jerry Lewis

so, Snow decided to bed down with Cerebus ...

Cerberus Capital Management, a New York investment company, is another defense contractor that has benefited from Rep. Lewis’ earmarks. On July 7, 2003, Cerberus hosted a fundraiser for Rep. Lewis, raising $110,000 for the Congressman’s Future Leaders PAC. The next day, the House passed a defense spending bill, sponsored by Rep. Lewis, that secured $160 million for a Navy project critical to Cerberus. A few weeks after the vote, former Vice President Dan Quayle and several others associated with Cerberus donated $12,500 to Rep. Lewis’ Future Leaders PAC, for a combined monthly contribution of $133,000 by Cerberus and its associates. Future Leaders PAC collected a total of $522,725 in 2003, one-fourth of which was connected to Cerberus.

http://www.beyonddelay.org/files/Lewis.pdf

Rep. Lewis is also under investigation because of his ties to the same contractors who had ties to former Rep. Randy “Duke” Cunningham (R-CA).

Rep. Jerry Lewis (R-CA) is a 14th-term member of Congress, representing California’s 41st congressional district. Rep. Lewis has been a member of the House Appropriations Committee since 1980, and has served as chairman of the full committee since 2005. Rep. Lewis also served as chairman of the Defense Appropriations Subcommittee from 1999 to 2005.

Rep. Lewis’ ethics issues stem primarily from misuse of his position on the powerful Appropriations Committee to steer hundreds of millions of dollars in earmarks to family, friends, former employees, and corporations in exchange for contributions to his campaign committee and political action committee, Future Leaders PAC. Rep. Lewis is currently under federal investigation by the Department of Justice.

[54anickel]

31. The NAFTA Superhighway

http://www.house.gov/paul/tst/tst2006/tst103006.htm

snip>

Governor Perry is a supporter of the superhighway project, and Congress has provided small amounts of money to study the proposal. Since this money was just one item in an enormous transportation appropriations bill, however, most members of Congress were not aware of it.

The proposed highway is part of a broader plan advanced by a quasi-government organization called the “Security and Prosperity Partnership of North America,” or SPP.

The SPP was first launched in 2005 by the heads of state of Canada, Mexico, and the United States at a summit in Waco.

The SPP was not created by a treaty between the nations involved, nor was Congress involved in any way. Instead, the SPP is an unholy alliance of foreign consortiums and officials from several governments. One principal player is a Spanish construction company, which plans to build the highway and operate it as a toll road. But don’t be fooled: the superhighway proposal is not the result of free market demand, but rather an extension of government-managed trade schemes like NAFTA that benefit politically-connected interests.

The real issue is national sovereignty. Once again, decisions that affect millions of Americans are not being made by those Americans themselves, or even by their elected representatives in Congress. Instead, a handful of elites use their government connections to bypass national legislatures and ignore our Constitution-- which expressly grants Congress the sole authority to regulate international trade.

The ultimate goal is not simply a superhighway, but an integrated North American Union--complete with a currency, a cross-national bureaucracy, and virtually borderless travel within the Union. Like the European Union, a North American Union would represent another step toward the abolition of national sovereignty altogether.

more...

[AnneD]

45. The farmers out here

think it will be the biggest land grab since they opened up the Oklahoma Territory to settlers. Farmers are not voting for Perry but sadly we have 3 candidates. Hope they come to their senses and vote for Bell.

[54anickel]

34. Re-Defining the Standard of Value (Hussman)

http://www.hussmanfunds.com/wmc/wmc061030.htm

While the fanfare accompanying each marginal new high in the market gives the impression that stocks are making important gains, the issue for a long-term investor must always be whether such gains are likely to be retained over the full market cycle.

Investors are eager to overlook the fact that stocks have lagged risk-free Treasury bill returns over the past 8 years, and are instead focused on the gains achieved during the current bull market. Yet even over the most recent 2.8 years since early 2004, the major indices have outperformed Treasury bills by only about 5% annually.

Now, 5% annually, retained over the full market cycle, is a respectable margin over risk-free rates. But here the 5% margin has applied to a bull-market-only portion of this cycle, where bull-market-only gains have historically outpaced T-bill yields by upward of 20% annualized, on average. Worse, with stocks strenuously overbought and trading at rich multiples on record profit margins, there's a very slim potential for investors to retain that 5% margin they've earned above T-bill yields during the past few years.

Think about it this way. Suppose that the market achieves a 15% total return over the coming year, finally followed in the next year by a shallow one-year correction of just 16%. The combination of that mild “cycle completing” decline, along with the passage of time, would still be enough to put T-bills ahead of stocks not only for the period since early 2004, but for what would then be a full decade since 1998. The only advantage over T-bill yields that this bull market has a reasonable shot of retaining is the gain that occurred between late 2002 and early 2004 (even that portion would largely vanish in anything but a mild "cycle completing" bear market).

It's tempting to think that the reasonableness of a defensive stance here depends on whether the market will make further new highs in the near term. But that ignores the fact that the only way to retain further gains here – without giving them back during the completion of this market cycle – is to exit at even higher prices. And the trouble is that if investors accept risk here, despite an overvalued, overbought and overbullish investment environment, they can't use any of those conditions as exit criteria. A move to overvaluation won't get them out, because the market is already overvalued.

more...

[54anickel]

37. OT - China Changes Death Penalty Law

Meanwhile my home state is voting on a referendum to return the death penalty. Anyone else see the irony here? :eyes:

http://www.nytimes.com/aponline/world/AP-China-Death-Penalty.html?hp&ex=1162357200&en=ca6a2194cbbda538&ei=5094&partner=homepage

BEIJING (AP) -- China's legislature on Tuesday barred all but the nation's highest court from approving death sentences, a move that state media called the country's biggest change to capital punishment in more than 20 years.

China is believed to account for most of the world's court-ordered executions, putting to death hundreds of people a year for crimes ranging from murder to such nonviolent offenses as tax evasion. Human rights groups have been protesting what they call miscarriages of justice and the extensive, arbitrary use of capital punishment.

The change, which will take effect on Jan. 1, 2007, ''is believed to be the most important reform of capital punishment in China in more than two decades,'' the official Xinhua News Agency said.

The Supreme People's Court announced last year it would start reviewing death sentences, ending a 23-year-old practice of allowing provincial courts to have final review. In June, state media said the court had begun hiring dozens of judges for the task.

Complaints have been rife in recent years that lower-level courts were mishandling death penalty cases.

''It's great news. This is a big step forward for China's legal system and human rights,'' said Li Heping, a prominent Chinese activist lawyer. ''I think the purpose of allowing the Supreme Court to make the final decision is so that China can control the total number of death penalties and create an atmosphere of humanitarianism.''

mroe...

[54anickel]

39. 12:50 update and then I really do have to run

Dow 12,046.71 - 39.79 (0.33%)
Nasdaq 2,360.20 - 3.57 (0.15%)
S&P 500 1,373.94 - 3.99 (0.29%)
10-yr Bond 4.6140% - 0.0590
30-yr Bond 4.7330% - 0.0530
NYSE Volume 1,399,705,000
Nasdaq Volume 1,063,463,000

12:30 pm : The blue chip averages are extending their reach to the downside as traders begin to work their way through the New York lunch hour. On the Dow, 19 of 30 components are now trading lower, paced by a downgrade-induced 2.6% decline in shares of Verizon Communications (VZ 36.68 -0.97). Pfizer (PFE 26.51 -0.69) is down 2.5% after a cholesterol drug study showed an increase in blood pressure. As a reminder, Pfizer is the sixth most heavily-weighted constituent on the S&P 500. DJ30 -29.70 NASDAQ +1.97 SP500 -2.86 NASDAQ Dec/Adv/Vol 1697/1221/940 mln NYSE Dec/Adv/Vol 1641/1476/712 mln

12:00 pm : The indices are trading in split fashion midday as investors weigh more solid earnings news, falling oil prices, and lower interest rates against mixed economic data and concerns that stocks are overbought at current levels.

Even though the bulk of today's earnings reports were again better than expected, investors having already priced in another strong quarter of double-digit profit growth has left little room for error. To wit, Dow component Procter & Gamble (PG 63.40 -0.41) was today's headliner and, for the 14th straight quarter, it topped analysts' expectations. However, guidance that was basically in line with forecasts has left investors wanting more, especially after the stock hit a new 52-week high heading into its Q1 report.

Also questioning the sustainability of a three-month stock rally and leaving investors looking lethargic today have been some mixed economic reports. With growth concerns being the market's pre-occupation of late, as evidenced by an unexpected decline in consumer confidence, the Chicago PMI falling to its lowest level (54.1%) in October since August 2005 has stalled some of the market's early momentum. Fortunately for rate-sensitive Financials stocks, bonds have taken notice and accordingly pushed yields across the yield curve to session lows. However, as one of only three sectors trading higher, the absence of more convincing leadership leaves the major averages struggling to find much direction.

As evidenced by the Nasdaq being the only major index in positive territory at the moment, strength across Technology has kept blue chips losses minimal. To wit, Cisco Systems (CSCO 24.25 +0.35) is surging 1.5% after it was added to Goldman Sachs' Conviction Buy List while IBM (IBM 92.22 +0.72) is up after its board authorized $4 bln in additional funds for its stock buyback program.

Meanwhile, after posting its largest one-day decline (-3.9%) in more than a year yesterday, oil prices slipping another 1.8% and below $58/bbl bode well for consumers; but the commodity's sell-off is also removing some notable support from the Energy sector. Crude for December delivery is now at $57.30/bbl ahead of an expected rebound in crude supplies tomorrow. DJ30 -14.41 NASDAQ +3.89 SP500 -1.72 NASDAQ Dec/Adv/Vol 1458/1404/832 mln NYSE Dec/Adv/Vol 1473/1612/624 mln

11:30 am : The blue chip indices are still clinging to a small gain while the Nasdaq, not surprisingly, outpaces the majors to the upside. Not only does the Nasdaq have more room to move, as the Dow and S&P 500 are up 12.8% and 10.4%, respectively, on the year compared to the tech-heavy Composite's year-to-date advance of 7.2%, but October is typically a strong month for investors to scoop up beaten-down tech stocks. Technology strength aside, the index's biggest gainer is actually a biotech stock -- Sirna Therapeutics (RNAI 12.65 +6.20), which is up nearly 100% amid reports that Merck (MRK 45.41 -0.23) is acquiring it for $1.1 bln. DJ30 +2.16 NASDAQ +7.58 SP500 +0.48 NASDAQ Dec/Adv/Vol 1396/1396/702 mln NYSE Dec/Adv/Vol 1408/1634/520 mln

11:00 am : The major averages bounce off recent lows but only enough to inch back above the flat line. In fact, the lack of conviction on the part of buyers is reflected in the fact that six out of 10 sectors are now negative. Tech is still providing the bulk of support, most recently getting some assistance from IBM (IBM 92.43 +0.93) after its board authorized $4 bln in additional funds for its stock buyback program. A turnaround in the profit engine that is Energy, after Valero Energy (VLO 52.72 +0.58) posted record Q3 earnings, lends some additional leadership. Oil prices paring their losses within the hour and climbing back above $58/bbl, though, has been another reason behind Energy's rebound and the previous pullback in equities since the commodity's stronger downturn earlier acted as a big catalyst for buyers.DJ30 +6.08 NASDAQ +8.25 SP500 +1.06 NASDAQ Dec/Adv/Vol 1438/1300/562 mln NYSE Dec/Adv/Vol 1462/1514/400 mln

10:30 am : Market spikes lower within the last 30 minutes after investors digest today's last batch of economic data. With growth concerns being the market's pre-occupation of late, as evidenced by an unexpected decline in consumer confidence, the Chicago PMI falling to its lowest level (54.1%) in October since August 2005, especially after climbing to its strongest level in more than a year a month earlier, has also taken some steam out of early buying efforts. Bonds, however, are embracing the data since more evidence of an economic slowdown, coupled with the manufacturing report's closely-watched prices paid component falling to 62.5% from 69.8% easing inflation concerns, play into the belief among bond traders that a Fed rate cut is still in the cards. The 10-yr note is now up 11 ticks to yield 4.62%.DJ30 -27.94 NASDAQ -0.34 SP500 -2.14 NASDAQ Dec/Adv/Vol 1424/1207/394 mln NYSE Dec/Adv/Vol 1435/1454/250 mln

[54anickel]

53. November 2006: beginning of the phase of impact of the global systemic crisis

http://www.leap2020.eu/GEAB-N-8-is-available-November-2006-beginning-of-the-phase-of-impact-of-the-global-systemic-crisis_a184.html

Last May, in the Global Europe Anticipation Bulletin N°5, LEAP/E2020 had detailed the four phases of the global systemic crisis, indicating that the phase known as of acceleration would start in June and would be spread out over a period of a maximum six months at which stage, the explosive phase of the crisis, the “impact phase”, would start.

Following these last months developments and the central part played by the United States in the current global system, LEAP/E2020 announces in its October edition of GEAB (GlobalEurope Anticipation Bulletin N°8) that the phase of impact will begin in November 2006 and that this phase's catalyst will be the mid-term elections of the United States Congress (1) which is the cross point of the main fracture lines of the current global system.

The phase of acceleration consisted of the generalized realization that the global system that we have been familiar with for several decades is changing radically and permanently as the following, now largely recognized, trends for the whole planet illustrate (2): aggravation of the nuclear crises with North Korea and Iran, general lack of power of the United States on all major crises of these last months, including the Israeli-Palestinian conflict (3), civil war in Iraq and American stagnation up until at least 2010 (4), growing feeling of the defeat of the West to progress in Afghanistan (5), collapse of the United States real estate market (6), increasing volatility of the “hedge funds” system (7), starting recession of the US economy (8), aggravation of trade deficits and American payments (9), on-going weakening of the Dollar (10), increasing debt of American households (11).

The phase of impact which succeeds the phase of acceleration constitutes a period when a series of brutal crises starts affecting by contamination the total system. This explosive phase of the crisis, which will last six months to one year, will affect directly and very strongly financial players and markets, the owners of investment schemes with fixed incomes in dollars, pension's funds and the strategic relations between the United States on the one side, and Europe and Asia on the other.

According to our analyses, its impact will be much stronger in the financial sector than our forecasts of the first half of 2006 suggested, because the mobilization of this sector in the United States (together with its communication relays) in order to preserve the control of the Republican Party in the American Congress, led to “euphorise” the American public opinion and the immense majority of the players in this sector, enabling the leaders of this party to claim a good economic assessment (the only campaign topic at their disposal since summer 2006) (12). The using of this side of the global system for electoral ends thus prevented the majority of the players from correctly anticipating the ruptures to come and as such will considerably increase the explosive potential of the impact phase in this sector, since the operators will be caught “on the wrong foot”.

more....:tinfoilhat: :shrug: I think Mogambo mentioned this report last week.

[Ghost Dog]

69. "Euphoric" impact. Oh yes. Remember this. n/t

[ozymandius]

58. This is how the story ends.

Dow 12,080.73 Down 5.77 (0.05%)
Nasdaq 2,366.71 Up 2.94 (0.12%)
S&P 500 1,377.94 Up 0.01 (0.00%)
10-Yr Bond 4.606% Down 0.067
NYSE Volume 2,693,922,000
Nasdaq Volume 1,981,191,000

Good to see the blather machine is fixed.

4:20 pm : After consolidating one of the best month's of market gains in almost a year, the underlying bullish tone responsible for lifting stocks since mid-July returned late in the day. To wit, the Dow, S&P 500 and Nasdaq rose 3.4%, 3.1% and 4.8%, respectively, in October. Tuesday's overall action, though, showed signs of fatigue on the part of buyers who, with two-thirds of the S&P 500 having already reported quarterly results, are beginning to shift their focus to economic data.

While Friday's employment report remains the biggest potential market mover this week, today's batch of soft economic data fueling some uncertainty about the pace of economic growth was eventually too much to overcome.

Just after the market opened, investors already dealing with an unexpected decline in October Consumer Confidence received the latest update on the health of regional manufacturing activity. Unfortunately for the bulls and to the delight of those questioning whether the Fed can in fact engineer a successful soft landing, the Chicago PMI fell to its lowest level (54.1%) in October since August 2005. After climbing to its strongest level in more than a year a month earlier, the disappointment took some steam out of early buying efforts.

Bonds, though, took notice and accordingly pushed yields across the curve to session lows. However, not even the yield on the 10-year note slipping to its lowest level (4.60%) in more than three weeks was enough to lend support to the rate-sensitive Financials sector. In fact, the absence of influential sector leadership posed the biggest problem for the bulls.

Technology provided some support again, but with October historically providing opportunities for bargain hunters to pick up beaten-down tech stocks, the sector's continued upward momentum wasn't all that surprising.

What was unforeseen was a more than 2.5% swing in the price of oil that closed the commodity slightly higher on the day and back above $58/bbl. While short covering in oil renewed some leadership in Energy, the turnaround in crude took an added toll on the likes of retail and transportation stocks already reeling from concerns about the economy slowing too much.

Not even defensive-oriented consumer staples stocks caught a break despite a better than expected Q1 report from Procter & Gamble (PG 63.38 -0.43). While beating expectations for the 14th straight quarter, guidance that was basically in line with forecasts left investors wanting more, especially after the Dow component hit a new 52-week high heading into its report. DJ30 -5.77 NASDAQ +2.94 SP500 +0.01 NASDAQ Dec/Adv/Vol 1593/1463/1.96 bln NYSE Dec/Adv/Vol 1634/1633/1.58 bln