STOCK MARKET WATCH, Wednesday 11May

XAU Intermediate Term Analysis, Part II

This is a follow-up report to the one we issued on 3-29-05 (see archives).

At that time, we expressed the belief that gold/gold stocks would bottom out sometime between late April and early June, and we added:

If the XAU remains in a bull market, it ought not to violate support at 84 on a weekly basis. We would allow for an intra-day move to as low as 81. However, two consecutive weekly closes below 84, or even worse below 81, accompanied by gold closing below $400 for two consecutive weeks would call the bull market assumption into serious question.

-cut-

So, cyclically speaking, the window of opportunity is open from a chartist's point of view. We have got a formation with a historically bullish resolution, and from a fundamental point of view, gold stocks are becoming relatively cheap compared to the metal. Things are definitely falling in place, but it is far from certain that the ultimate outcome will favor the bullish side. We like to see "homogeneity;" we are not happy with the under-performance exhibited by the stocks themselves. We want to see the stocks beginning to out-perform the metal relatively soon. We are skeptics by nature; we do not buy the idea that somehow it is a "good thing" that the XAU is trading as if gold was at 390, although it is holding at 430. Maybe it is a bad thing and it means that gold will eventually break down. Moreover, if somehow the XAU closed below the 81-78 zone, it will set a downside target of 72.

more...

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

I am just not very good at understanding some of this foreign currency stuff.

Could someone please explain?

If the yuan is reevaluated, as is being talked about, doesn't that mean that China's exports will cost more?

So doesn't that mean that everything made in China and sold in this country will go up in price?

Since so much manufacturing is now done in China, how could that possibly help the U.S. economy?

This looks like a situation of 'beware what you wish for, you might get it' ... Couldn't this tip our economy into recession?

the theory is that a yuan re-evaluation will help our debt and deficits - but there is no real evidence that it will do anything of the sort.

More smoke and mirrors from the inept and corrupt imho :hi:

http://www.thestandard.com.hk/stdn/std/China/GE10Ad01.html

snip>

While a rise in the yuan may lead to an increase in the exports of some US-made products, it may also lead to higher interest rates, leaner stock portfolios, more expensive shopping trips, weaker hiring prospects and lower profits at companies such as General Motors, Wal-Mart Stores, Dell and Coca-Cola.

``Politicians are playing with fire,'' said Ronald McKinnon, an economics professor at Stanford University in California.

Nouriel Roubini, a former adviser to treasury secretary Robert Rubin, said the United States' reliance on China to plug record US budget deficits means lawmakers risk ``biting that hand that feeds'' the economy.

snip>

Roubini said if China acts before the United States begins narrowing its US$412 billion budget deficit, yields on the benchmark 10-year Treasury note may surge 200 basis points.

Samuelson, who won the Nobel Prize for economics in 1970, said the dollar may also suffer a ``run on it.''

snip>

The US Commerce Department said in a confidential report to Congress this year a revalued yuan will be more of a boon to other Asian nations than to the United States

more...

the stock market was better under Bush. He still voted for him after I pointed out the truth. Brainwashing and stupidity is pervasive.

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

Last trade 84.41 Change -0.04 (-0.05%)

Yuan Revaluation?

http://www.dailyfx.com/index.php?option=com_content&task=view&id=1027&Itemid=39

Listless trading in European session was jolted by the news story on Bloomberg that China was ready to increase the yuan/dollar band from current 26bp peg to 126bp in one months time and up to 603bp in a year from now. USD/JPY immediately plummeted below 105 while EUR/USD shot up to 1.2915. There was only one problem.No Chinese official would confirm the story, China’s Central Bank said that it had not heard of the report and Japanese Finance Minister Sadakazu Tanigaki said that he was not aware of any plans to revalue the Chinese currency. So how real is the story? UBS research noted that “The Bloomberg report is based on what appears to be a mistranslation on the People's Daily's English-language web site, as the 1m and 1y bands given correspond closely to the NDF rates.”

While the markets may have jumped the gun, it is becoming more apparent each day that Chinese are considering some type of FX policy change both to stave off the rising protectionist sentiment in the US and to control inflation back home. It is very doubtful that China would make a dramatic move to a free float but a controlled loosening of the band, which would release some of the political pressure on Beijing without seriously impacting China’s vital export sector, is quickly becoming a plausible scenario.

...more...

Spot on 'toon, Ozy!

Have a Great Day Marketeers!

http://www.reuters.com/financeNewsArticle.jhtml?type=economicNews&storyID=8454233§ion=investing

The following is a text of the announcement, as originally published at the Web site: http://english.peopledaily.com.cn/200505/11/eng20050511_184538

As next week will see a periodic meeting to be held between the US financial minister and the official of the People's Bank of China the appreciation of the people's currency as wished for by the international financial market will be announced to revaluate or expand the margins of its exchange rate and the estimation of the revaluation will be going from 1.26 to 6.03 percent in a span of one month and one year after the meeting of the two parties.

With regard to this, Ren Zhigang, President of HK Monetary Authority, expressed on May 6 by saying, if the people's currency saw a big revaluation it would exert a great impact on the economy in Hong Kong.

He warned that the influx of a large amount of hot money into Hong Kong due to the expectation of its appreciation has already incurred a rise of local rent and according to the estimation it is liable to hoist the inflation in Hong Kong up to 2.5 percent by the 4th quarter of the year, indicating a pressure increase brought about by inflation in Hong Kong in the later half of the year.

...more...

this text has been removed from the web and China is denying the message - I find it very odd that there would be this much information regarding the change in that it would take some major initiative for a report of such detail could be fabricated. :shrug:

reading this post I'm more suspicious. There have been too many "false starts" lately.

IHMO, China is testing the waters to see which currencies move in which direction and by how much. Just a guess, but I still think they are looking to revaluate to a basket of some sort rather than just change the margin of the buck peg.

Right now they are "browsing the aisles" before placing their final selections in the "shopping basket". I could be way off on this one, I've misplaced my magic 8 ball. Only time will tell. :shrug: :popcorn:

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8457923

WASHINGTON, May 11 (Reuters) - U.S. Treasury officials have no plans to visit China next week, a Treasury Department spokesman said on Wednesday, denying media reports of talks.

"The report in media reports is inaccurate," Treasury Spokesman Tony Fratto said, referring to a People's Daily newspaper report of a meeting next week between the "U.S. financial minister" and a Chinese central bank official.

The misunderstanding appeared to stem from a wrong translation in the People's Daily, China's top newspaper, that also predicted a revaluation in the Chinese yuan next week.

<snip>

Officials from the People's Bank of China were in Washington on May 9 for discussions that included foreign exchange.

...more...

That meeting is not scheduled for next week, we had it last week! :rofl:

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_pesek&sid=alrCR7FTBtOE

It's the first commandment of watching economic policy makers. Yet China, a place with a knack for testing the rules of economics, is breaking it. In the case of Asia's No. 2 economy, it's equally important to follow what's said as what's done.

That said, here's what Li Yong, China's deputy finance minister, had to say last week to currency traders pressuring China to let the yuan rise: ``I urge them not to do such speculation -- they need patience.''

For anyone looking for a sign that China won't alter its 8.3 peg to the dollar anytime soon, Li's comments in Istanbul could be it.

Currency markets are a world of winks, nods and secret handshakes. Key policy makers rarely, if ever, say exactly what's on their mind. Yet Li's comments are a reminder that any chance China might re-peg the yuan at a higher level is being dashed by the very people hoping for it: Traders and leaders of governments in the U.S., Japan and Europe.

snip>

The dollar peg is the second Great Wall of China. The first one was built in the third century B.C. to keep out invaders. The second one, the currency, was put up a decade ago to keep out speculators and protect the economy. Moving it will be a major undertaking that's as much about politics as economics.

more...

http://news.ft.com/cms/s/e3f64272-c13d-11d9-943f-00000e2511c8.html

China on Tuesday moved to limit the upward pressure that growing capital inflows have put on the renminbi by announcing new curbs on offshore borrowings by local and foreign banks.


The State Administration of Foreign Exchange, which sets the rules for money flowing in and out of the country, said foreign banks would have their short-term borrowings offshore capped at $34.8bn in 2005.


Offshore borrowings by Chinese banks would be set at $24.5bn, according to a statement on the administration's website. The government first imposed curbs on offshore borrowings in the middle of last year after what it saw as an alarming increase in foreign money flowing into the country.

Overseas lenders have been using foreign currency to fund their books in China because it is much cheaper to borrow offshore. But many banks have also been positioning themselves for a revaluation of the renminbi, which currently trades in a narrow band pegged to the dollar.

China has committed itself to ending the renminbi's dollar peg to move towards a more flexible exchange rate regime, a decision traders believe could come in weeks or months.

more...

Rogue Wave Coming To US Shores?

http://wallstreetexaminer.com/index.php?itemid=864

Today's report indicating an abrupt fall in UK retail chain store sales may be a warning sign that the 'rogue wave' - the convergance of the energy crisis, housing bubble, and the explosion of the current account deficit - may be about to hit US shores.

The first sign of this may be an unexpected drop in total US retail sales (below expectations of a 0.6% gain), in the report to be issued Thursday. Inflation adjusted, after tax disposable personal income went negative in April, and that consequences of that should show up quickly.

On the other hand, we should see a record trade deficit of $64 billion for the month of March - in the report to be released Wednesday. To maintain its standard of living, the US has indirectly called upon all foreigners to contribute more to the US in the form of bigger trade deficits. The subsidy is paid for by the increased financing of the current account by foreigners, especially foreign central banks.

Poole upbeat on U.S. growth, inflation

http://www.marketwatch.com/news/story.asp?guid=%7B28329C25%2DDEE6%2D4E55%2DBA9A%2DEFE331E7FC6A%7D&siteid=mktw

WASHINGTON (MarketWatch) -- The U.S. economy remains on a path of solid growth and stable prices, a Federal Reserve official said.

In remarks prepared for delivery in St. Louis Wednesday, William Poole, president of the St. Louis Federal Reserve Bank, said he tentatively expects the Fed to continue its regimen of "measured" interest rate hikes.

The Federal Open Market Committee has increased overnight borrowing rates by a quarter percentage point at eight straight meetings, hiking the federal funds rate from four-decade low of 1% a year ago to 3% now. Poole is a nonvoting member of the FOMC this year.

Poole's remarks were released on the St. Louis Fed website: See speech on Web site.

Poole said the most remarkable surprise in the economy in the last year is the lack of major surprises. Even the oil price shock hasn't been that shocking.

...more...

10:10pm 05/10/05 FED'S POOLE OPTIMISTIC ON U.S. GROWTH, INFLATION

10:10pm 05/10/05 FED'S POOLE: INFLATION RISKS UP, BUT NOT YET A CONCERN

10:10pm 05/10/05 FED'S POOLE: APRIL PAYROLLS SHOW ECONOMY IMPROVED DRAMA

10:10pm 05/10/05 FED'S POOLE SEES FIRMER TONE IN LATEST U.S. DATA

10:10pm 05/10/05 FED'S POOLE: ENERGY SHOULD NOT BE AN INFLATIONARY FORCE

10:10pm 05/10/05 FED'S POOLE TENTATIVELY EXPECTS 'MEASURED' RATE HIKES

10:29pm 05/10/05 HOENIG: FED MUST 'STAY THE COURSE' OF MEASURED RATES

10:28pm 05/10/05 FED'S HOENIG SAYS SLOWDOWN WILL BE TEMPORARY

10:07pm 05/10/05 FED'S HOENIG SEES INFLATION LEVELING OFF

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8448497

DALLAS, May 10 (Reuters) - An apparent soft spot in U.S. growth may have been influenced by technical factors making March data look especially weak, Dallas Federal Reserve President Richard Fisher said on Tuesday, but in fact the economy is pulling ahead well.

"The March numbers may have been a little bit distorted by the timing of Good Friday (a US public holiday)," he told reporters following his debut speech since starting in the top job at the Dallas Fed last month.

"We're doing pretty well...the economy is in a sweet spot," he said. "Businesses continue to spend. Productivity is doing well and I think the economy is proceeding ahead."

U.S. growth slowed to 3.1 percent in the first quarter of the year but economists think that the unusually early Easter break may have contributed to a string of weak March data readings that have caused worry about an economic soft spot.

Fisher also acknowledged that price pressures were apparent amid rising energy costs.

...more...

A "sweet spot"?

:wtf:

(thanks to 54anickel for this one - from yesterday's SMW Late Night Edition)

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8448878

WASHINGTON, May 10 (Reuters) - The omission of a reassurance about the long-term inflation outlook in last week's Federal Reserve policy statement was just a mistake, Kansas City Fed President Thomas Hoenig said on Tuesday.

"It just was a doggone mistake and well, oops. I don't know what else to say," Hoenig said, speaking to an audience at an event hosted by the Kansas City Fed at its Denver branch.

On Tuesday last week, financial markets went on a wild ride when the statement issued after the Federal Open Market Committee meeting left out a stock assurance that longer-term inflation expectations were well-contained.

snip>

Hoenig repeated that the omission was just a mistake by a staff member and did not mean anything significant. He described the staffer concerned as "devastated."

:rofl: these jokers should quit their dayjobs - their comedic relief rules!

during the night shift. Comedy Cafes rarely schedule afternoon matinee shows.

Maybe the little blood-suckers at the Fed are reverting back to their natural nocturnal habits.

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38483.4274695023-835246646&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- A bill introduced in the House of Representatives empowering the Secretary of the Treasury to determine a common U.S. position about Basel II bank capital requirements would hurt U.S. regulators' ability to negotiate with their foreign counterparts, Federal Reserve Governor Susan Bies told a congressional panel in written testimony Wednesday. The U.S. recently delayed implementation of the agreement, which was originally scheduled for mid-2005. Bies told a House Financial Services subcommittee she hopes regulators will release a new proposed Basel II rule "in the fall."

OMG! Limits! We don't need no stinking limits!

"Pez Heads."

:rofl:

:rofl:

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8459266

ST. LOUIS, May 11 (Reuters) - The Federal Reserve must keep its eye on rising U.S. inflation risks and will act to quell them if necessary, a top Fed official said on Wednesday, adding that there is no reason now for "deep concern."

"I'm not relaxed about inflation," St. Louis Federal Reserve Bank President William Poole told reporters after a speech to a business group. "But I don't think there's reason for ... concern, deep concern or worry."

In his speech, a text of which was released on the St. Louis Fed Web site on Tuesday, Poole said the Fed's best guess is that the central bank can lift rates gradually.

<snip>

In his speech, Poole said he was optimistic on the inflation outlook, despite minor upside risks. He also downplayed worries about economic softness, saying recent economic data have had a "firmer tone."

...more...

Inflation is not a problem so long as you don't eat or go anywhere or need anything or live on a fixed income :eyes:

http://www.reuters.com/printerFriendlyPopup.jhtml?type=bondsNews&storyID=8444290

LONDON, May 10 (Reuters) - Hedge funds have been building up stakes on the European debt of the U.S. auto firm General Motors (GM.N: Quote, Profile, Research) over the past six months, risking losses in a highly volatile situation, fund managers and bankers said.

These risks came to the fore on Tuesday with talk of massive losses on debt instruments called CDOs (collateralised debt obligations), hugely popular among hedge funds. The talk was sparked by last week's downgrade by ratings agency Standard and Poor's of debt issued by automakers General Motors and Ford.

snip>

PROFIT STRATEGIES

Hedge funds invest in CDO's to get a better return than in the regular bond market because they offer higher interest rates. Ford and GM debt have been included in a lot of CDO structures because they trade at wider spreads than similarly rated credits.

Hedge funds also use so-called arbitrage bets, where they bet on several outcomes to increase the chance of being right. And the different arbitrage positions they have taken in GM has highlighted the unpredictability of the situation.

For example, one popular GM deal has been to sell the parent company's bonds -- betting on a fall -- and buy the debt of GMAC, the financing arm -- betting on a rise -- because the fortunes of these entities are expected to diverge.

Analysts are increasingly expecting GMAC to get a better rating than its parent company.

more...

http://news.ft.com/cms/s/32df4884-c1a2-11d9-943f-00000e2511c8.html

General Motors is exploring ways to separate its own battered credit rating from that of General Motors Acceptance Corporation, its financially healthy financing arm.

The carmaker said in a filing with the Securities and Exchange Commission on Tuesday that the decision by Standard & Poor's to downgrade its debt rating to junk status increased "the level of risk" to the company's long-term funding strategy "as well as the importance of successfully executing its plans for improvement of operating results".

http://www.thestreet.com/_tscana/comment/nickgodt/10222758.html

It was supposed to be one of those quiet days for the market, with no economic news on the agenda and Cisco's (CSCO:Nasdaq - news - research) earnings slated for after the close of trading (the networking giant posted results that slightly exceeded expectations). Traders expected at worst a bit of profit-taking from recent gains. But there was no such thing as uncertainty regarding the health of the financial system caught up with the broader market.

Speculation that hedge-fund group QVT Financial LP endured heavy losses by simultaneously taking a long position on GM's bonds and a short position on the automaker's stock first hit Deutsche Bank (DB:NYSE ADR - news - research), which reportedly brokered the trades. In spite of QVT's denial -- and a similar one by GLG Partners -- Deutsche Bank fell 3.3% while negative sentiment gripped financial issues and pretty much spread to all sectors. The Amex Broker/Dealer Index fell 1.9% and declining stocks outpaced advancers by more than 2 to 1 in both Big Board and Nasdaq trading.

snip>

The Conundrum, Continued
As investors fled equities and corporate bonds, the Treasury market was once again the beneficiary of flight-to-safety flows. Credit spreads may be widening, but it's only because the GM story keeps weighing heavily on corporate bonds. While short-term Treasuries have been rising in anticipation of the Fed hiking rates to 3.75% by year-end, long-term Treasuries have not been doing their part.

snip>

Absent any outside factors, if the yield of the 10-year fails to rise substantially by year-end while the fed funds rate approaches 4%, the yield curve would invert, which would signal a likely recession for 2006. But of course, there are outside factors.

snip>

As the U.S. economy increasingly becomes service-based, many have dismissed the old saying that "What's good for GM is good for America." But what's bad for GM may nevertheless be bad for the rest of the U.S. economy.

more...

Take another little piece of my heart now, baby.
Break another little piece of my heart, darling, yeah, yeah, yeah, yeah.
Have another little piece of my heart, baby, baby, baby,
You know you got it, if it makes you feel good.

May 11	8:30 AM	Trade Balance	Mar	-	-$61.2B	-$62.0B	-$61.0B	-	
May 11	2:00 PM	Treasury Budget	Apr	-	$60.0B	$58.0B	$17.6B	-

We also will have the DOE and API Oil Inventory reports.

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38483.3558530324-835241896&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (MarketWatch) - The U.S. trade deficit narrowed unexpectedly in March on a surge of exports of capital and consumer goods and farm products, the Commerce Department said Wednesday. The deficit narrowed by 9.2% in March to $55.0 billion. This is the lowest level of the trade deficit since last September and the largest monthly decline since Dec. 2001. The narrowing of the trade gap was unexpected. The consensus forecast of Wall Street economists was for the deficit to widen to $61.2 billion. The trade gap in February was revised down to $60.6 billion compared with the initial estimate of $61 billion.

8:30am 05/11/05 U.S. MARCH TRADE GAP NARROWS 9.2% TO $55 BILLION

(edited to add link and blurb)

for the $5 billion drop. I'm just speechless.


They'll revise when noone is paying attention.

Last days of Rome indeed...

shipment and exchange of monies.

I would think that when they find the "accounting error" in the dark, they will quietly adjust the figure. :eyes:

Hmmmm, is this really a good thing considering our "economy" is based on consumerism? Seems the consumer is slowing down, and the most recent reports did not show capital expenditures increasing to take over the burden. More "distortion"? :shrug:

http://www.forexnews.com/AI/default.asp?f=A20050511A.mgn

The US trade deficit fell 9% in March to $54.9 billion from a revised $60.6 billion (previous $61.0 billion) in February. Imports fell 2.5% to $157.2 bln, registering their biggest percentage monthly decrease since December 2001, while exports rose 1.51% to $102.2 bln after having remained stagnant in the preceding 2 months.


Imports tumble despite rising oil imports

Most interestingly is that the 2.5% drop in US imports occurred despite a 4% rise in petroleum imports and a 23% jump in crude oil imports. Yet, it’s worth mentioning that the volume of crude imports did pull lower.

The drop in the US bilateral trade deficit with China was instrumental in the overall decline of the March trade gap. After tumbling 9% in February, the US trade gap with China fell 7% to $12.9 billion as exports jumped 7% while imports fell 4%. Nonetheless, compared to a year ago, the trade deficit with China has risen 19% as Imports pushed up 19% while exports rose 9%.

snip>

The 2.5% decrease in US imports does look like an aberration especially since it is the highest increase since December 2001. Considering that US import and export growth has averaged a monthly increase of 1.0% and 0.8% between January 2003 and February 2005 respectively, there is a high likelihood of seeing a pickup in imports for capital goods, especially with oil imports

snip>

More yuan talk

The rhetorical reverberations from Beijing regarding the possible revaluation of its currency are beginning to follow a familiar pattern. Today’s report showing the People's Daily newspaper’s story on a yuan appreciation has been inappropriately translated is the latest in a series of misquotes and clarifications at a time when US politicians have stepped up pressure on China to revalue its currency. We have seen that 2 weeks ago how officials from the People’s Bank of China and the State Administration of Foreign Exchange were “reported “ to have hinted to an impending revaluation just days after President Bush urged China to revalue and 2 days after Fed Chairman Greenspan said a revaluation was important and inevitable.

Thus, it is clear that Chinese officials aim at 2 things: 1) test currency markets’ reaction for revaluation calls; 2) showing the US that it is neither ignoring its calls nor willing to be pressured.

more...

10:30am 05/11/05 DOE: U.S. GASOLINE SUPPLIES UP 200,000 BARRELS

10:31am 05/11/05 DOE: DISTILLATE INVENTORIES UP 1.7 MILLION BARRELS

10:30am 05/11/05 DOE: U.S. CRUDE SUPPLIES UP 2.7 MILLION BARRELS

10:39am 05/11/05 API: DISTILLATE SUPPLIES UP 2.2 MILLION BARRELS

10:39am 05/11/05 API: CRUDE SUPPLIES DOWN 6.1 MILLION BARRELS

10:39am 05/11/05 API: GASOLINE SUPPLIES UP 84,000 BARRELS

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38483.5834684722-835255739&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- The U.S. government posted a federal budget surplus of $57.7 billion in April, compared with a $17.6 billion surplus a year ago, the Treasury Department said Wednesday. April traditionally shows strong surpluses as the government collects receipts ahead of the April 15 tax deadline. The Congressional Budget Office had estimated a surplus of $60 billion earlier this month. Receipts rose 26.1% from a year ago, while outlays rose 8.6% from a year ago. For the first seven months of the fiscal year, the government has run a deficit of $236.9 billion, down 16.5% from the deficit of $283.8 in the same period a year ago.

2:00pm 05/11/05 U.S. POSTS BUDGET SURPLUS OF $57.7 BILLION IN APRIL

KBR Gets $72 Million in Bonuses for Iraq Work

http://www.washingtonpost.com/wp-dyn/content/article/2005/05/10/AR2005051001692.html

The Army said yesterday it has awarded an additional $72 million in bonuses to Halliburton Co. subsidiary Kellogg Brown & Root Inc. on logistics support of the war in Iraq, grading the company's performance "very good" or "excellent."

Halliburton's work in Iraq has been controversial because an early contract to rebuild oil fields was awarded without competition and because auditors had challenged its billings on some work. Vice President Cheney was Halliburton's chief executive from 1995 to 2000.

The bonuses announced yesterday were for a contract known as LOGCAP, which KBR won in competitive bidding, to support the military in the Middle East and South Asia. Its value mushroomed after the wars in Afghanistan and Iraq. KBR's services include construction and food and laundry service.

<snip>

The two sides reached an agreement on about $10 billion of that work in April. At the same time, they agreed to settle a dispute over billings for meals served to troops. Halliburton said then that the Army would pay the company $1.18 billion while keeping $55.1 million of the $200 million that had been withheld because of the dispute. They also agreed to switch the supply of meals to a fixed-price contract that would not be eligible for bonuses.

...more...

:argh:

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38483.3441200694-835240983&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK ( MarketWatch) -- The New York Stock Exchange said Wednesday it has disciplined 2 member firms and 6 individuals for violating exchange rules and securities laws. The firms include Prudential Equity Group LLC, which was fined $350,000, and Brill Securities, a former member firm, which was fined $70,000. Penalties for the individuals ranged from being barred from trading for periods ranging from 2.5 months to life.

8:10am 05/11/05 NYSE DISCIPLINES TWO FIMS, 6 INDIVIDUALS

8:10am 05/11/05 NYSE FINES PRUDENTIAL EQUITY $350,000

8:10am 05/11/05 NYSE FINES BRILL SECURITIES $70,000

8:10am 05/11/05 NYSE SAYS FIRMS, INDIVIDUALS VIOLATED EXCHANGE RULES

1:07pm 05/11/05 U.S 5-YEAR AUCTION INDIRECT BIDDERS WIN 34%

(below the magic number of 38%)

1:05pm 05/11/05 TREASURY 5-YEAR AUCTION BID-TO-COVER RATIO 2.47

1:05pm 05/11/05 U.S. TREASURY AUCTIONS $15B IN 5-YEAR NOTES AT 3.89%

Real wages in the US are falling at their fastest rate in 14 years, according to data surveyed by the Financial Times by the Economic Policy Institute.

Inflation rose 3.1 per cent in the year to March but salaries climbed just 2.4 per cent, according to the Employment Cost Index. In the final three months of 2004, real wages fell by 0.9 per cent.

The last time salaries fell this steeply was at the start of 1991, when real wages declined by 1.1 per cent.

snip..

Even after last month's bumper gain in employment, there are 22,000 fewer private sector jobs than when the recession began in March 2001, a 0.02 per cent fall. At the same point in the recovery from the recession of the early 1990s, private sector employment was up 4.7 per cent.

“There is still little evidence that workers are gaining much traction in their negotiations,” said Paul Ashworth, US analyst at Capital Economics, the consultancy. “If this does not pick up, it raises the prospect of a sharper slowdown in consumer spending than we have been expecting.”

Economists are divided over the best source for measuring pay increases in the US, since the government releases three main measures. A gauge of average hourly earnings is released with the employment report. This rose by 0.3 per cent in both March and April and 0.1 per cent in February. Even with a slight rise in the hours employees are working, from 33.7 to 33.9, this suggests wages are struggling to keep pace with inflation. The gauge covers non-supervisory workers, about 80 per cent of the workforce.


http://news.ft.com/cms/s/f269a8f4-c173-11d9-943f-00000e2511c8.html

Greenscum... We can use it to replace our pensions, wages, health insurance and to wrap fish in. :nuke:

briefing.com

9:00AM: S&P futures vs fair value: +1.3. Nasdaq futures vs fair value: +5.0. Still shaping up to be a modestly higher open for the cash market, as futures indications hold steady above fair value... Since there was even less fundamental news behind yesterday's broad-based decline than there were market-moving data behind Monday's more modest advance, arguably oversold conditions - coupled with strong earnings from CSCO, FD, reaffirmed FY05 guidance from UPS and an improved trade deficit - have provided a floor of early buying support for stocks

8:33AM: S&P futures vs fair value: +1.0. Nasdaq futures vs fair value: +3.5. The Mar. Trade Deficit has narrowed to $55.0 bln, below expectations of $62.0 bln and February's record $61.0 bln figure... As a result, futures trade gets a modest boost, still suggesting a slightly higher open for the indices, while the dollar has rallied and bonds have slipped, as the 10-yr note is now off 5 ticks yielding 4.22%

8:00AM: S&P futures vs fair value: +0.7. Nasdaq futures vs fair value: +4.0. Futures market versus fair value suggesting a slightly higher open for the cash market amid a reassuring report from Cisco Systems (CSCO) and falling oil prices ahead of economic data... Last night, Cisco beat forecasts by a penny and guided Q4 revenues of $6.45-6.6 bln (consensus $6.47bln) while crude oil futures falling to $51.55/bbl (-$0.52) ahead of weekly inventories data have also contributed to an improved sentiment following yesterday's drubbing...

ino.com

The June NASDAQ 100 was lower overnight due to light profit taking as it consolidates some of this week's rally but remains poised to test this year's downtrend line crossing near 1474.45. However; stochastics and the RSI are overbought and are turning neutral hinting that a short-term top might be in or is near. Closes below the 10-day moving average crossing at 1441.85 would signal that the short covering rally off April's low has come to an end. The June NASDAQ 100 was down 5.50 pts. at 1458 as of 5:43 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 higher overnight due to short covering and is working on a possible inside day as it consolidates above the 10-day moving average crossing at 1166.59. Stochastics and the RSI are overbought and are turning bearish signaling that a short-term top might be in or is near. If June extends this month's rally, the 50% retracement level of the March-April decline crossing at 1185 is the next upside target. Closes below the 10-day moving average crossing at 1166.59 would signal that the short covering rally off April's low has come to an end. The June S&P 500 Index was up 2.50 pts. at 1168.70 as of 5:45 AM ET. Overnight action sets the stage for a steady to higher opening when the day session begins later this morning.

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38483.3870509259-835243928&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Dow Jones & Co. (DJ) said April advertising linage at The Wall Street Journal fell 4.6% from year-earlier levels, as a 7.4% decline in technology and a 27% drop in financial ad linage offset an 8.4% increase in classified. General advertising was flat. Linage at the Journal's Europe edition decreased 8.8%, while linage at the Asian Wall Street Journal rose 5.2%. National advertising pages at Barron's fell 14%. The stock closed Tuesday up 57 cents at $34.65. Dow Jones is the owner of MarketWatch, the publisher of this report.

hmmm... advertising in the pro-business paper during the pro-business mal-administration down? what's a person to :think: ?

March trade figures could put Q1 GDP near 4%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38483.3928276157-835244207&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- The unexpected decline in the U.S. trade deficit in March should lead to a large upward revision to first-quarter gross domestic product estimates, economists said Wednesday. "Our best guess is that the March trade surprise is worth around 0.8 or 0.9 percentage points for GDP," said Steve Stanley, chief economst for RBS Greenwich Capital. Including an offsetting downward revision in inventory growth, GDP could be revised to 3.7% or 3.8% on May 26 from 3.1% earlier, Stanley said. Ian Shepherdson, chief U.S. economist for High Frequency Economics, said the trade surprise is worth just under 1 percentage point to first-quarter GDP.

Warning: Surprised Economists Around the Corner

Housing stays hot while the Fed keeps raising rates ... no contradiction here

http://money.cnn.com/2005/05/11/commentary/column_hays/hays/

The latest sprinkling of comments from some Federal Reserve officials are reinforcing the notion that interest rates will keep rising. At the same time Mortgage Bankers Association reports big jump in mortgage applications last week.

While it might seem contradictory -- rising rates and a still-hot housing market - it's not.

Last night in a speech St. Louis Fed president Bill Poole said he would not be surprised if economists raised their third quarter economic growth forecasts after Friday's strong jobs report. Meanwhile -installed Dallas Fed president Richard Fisher said the Fed was not "frazzled" yes, that's a technical monetary policy term) by the first quarter soft patch in the economy. And Kansas City Fed prez Tom Hoenig reportedly said yesterday that at 3 percent the Fed's key short-term rate is still "accommodative" -- that's Fedspeak for too low and too stimulative so it has to be raised more.

...more...

Confusing? Ah, well, not if one understands how to cook on all the burners :eyes:

Many companies have switched their traditional defined benefit plan to a cash balance or hybrid plan. IBM employees sued over the switch to cash balance and won. IBM's loss is described in this article:

http://www.mercurynews.com/mld/mercurynews/business/642...

Take a look at the following document that appears on the Republican Policy Committee website:
http://rpc.senate.gov/_files/Apr2505RetIncomeSecMW.pdf

The conclusion of the document states that the legal status of hybrid-plan conversions --- both new and existing ones -- should be clarified by Congress.

See:
======
In the end, Congress must clarify the status of hybrid-pension plans as soon as possible to
remove the threat to the retirement-income security of millions of participants affected by the
current legal uncertainty. Moreover, Congress should make such clarification apply to all hybrid
plans – new and existing ones. A prospective solution only prolongs the uncertainty for more
than 7 million participants of existing hybrid plans.
Conclusion
With Social Security reform as a national priority, Congress has an important opportunity
to take a broader view. By addressing the issue of retirement-income security for Americans,
Congress can provide comprehensive solutions, including steps to enable employers to
strengthen and expand the private-pension system in this country.
The absence of clear legal standards concerning hybrid-pension plans places the
retirement income of millions of Americans at a greater risk. Left unresolved, the likely upshot
will be an acceleration of companies eliminating their defined-benefit pensions, not to mention
the collateral effect it will have on the PBGC – fewer defined-benefit plans contributing to the
agency’s insurance fund, which already faces financial strains.48 To avoid these outcomes and
help Americans secure their retirement income, Congress should act this year to address the
myriad pension issues facing the nation, including the legal status of hybrid-pension plans.
=========

I think this is a smoking gun that declares the intent of the Republican Party. The document was written by the Republican Policy Committee. This committee is responsible for the formulation and implementation of policy. This document seems to be a clear formulation of a policy to legalize not only cash balance plans but ALL hybrid plans. The policy is retroactive -- it would apply to plans already in effect. I am not an attorney, but I would guess such legislation, if enacted, could have a bearing on any lawsuits that have already been filed.

Are the Republicans are gearing up to pass legislation to make all of these lawsuits go away? The document says that Congress should clarify the "legal status of hybrid-pension plans".

I think this document is definitely newsworthy.

12:57pm 05/11/05 IAM: 94% OF UNION MEMBERS AUTHORIZE UNITED AIR STRIKE

Dow 10,281.19 +0.08 (+0.00%)
Nasdaq 1,965.66 +2.89 (+0.15%)
S&P 500 1,166.78 +0.56 (+0.05%)
10-Yr Bond 4.194 -0.28 (-0.66%)

NYSE Volume 73,975,000
Nasdaq Volume 113,706,000

Dow 10,265.60 -15.51 (-0.15%)
Nasdaq 1,961.02 -1.75 (-0.09%)
S&P 500 1,165.07 -1.15 (-0.10%)
10-Yr Bond 4.192 -0.30 (-0.71%)

NYSE Volume 179,569,000
Nasdaq Volume 226,530,000

blather writers speechless?

what happened to the cheerleaders opening "pop" this am?

too many conflicting factors? GDP improves because of fewer sales (trade deficit), higher NFP numbers don't seem to jive with reality, traders now promising to "put investors first" (who was on "first" before that?).

better call in the faeries!

editing at 10:09:

Dow 10,255.34 -25.77 (-0.25%)
Nasdaq 1,959.77 -3.00 (-0.15%)
S&P 500 1,164.77 -1.45 (-0.12%)
10-Yr Bond 4.193 -0.29 (-0.69%)

NYSE Volume 227,378,000
Nasdaq Volume 276,308,000

10:00AM: Major indices slip below the flat line, as the bulk of sector leadership remains mixed... Energy has paced the way lower, as oil prices continue to slide ahead of the EIA's weekly oil report at 10:30 ET - crude oil inventories (consensus +1.25 mln), gasoline supplies (consensus +900K) and distillates (consensus +275K)... Weakness in the Drug space has weighed on Health Care while a rebound in the dollar has added pressure to Materials stocks... The Industrials sector, however, has traded higher, led by strong gains in Transportation following reaffirmed FY05 guidance from UPS...

Technology has posted a modest gain, as strength in Networking - aided by CSCO's strong report - has offset weakness in Hardware while a rebound in Brokerage has helped Financial...NYSE Adv/Dec 1525/1023, Nasdaq Adv/Dec 1299/999

9:40AM: Stocks open an upbeat note, getting a lift from an unexpected 9.2% decline in the U.S. trade deficit... Earlier, the Commerce Dept. reported that U.S. imports surpassed exports by $55 bln, well below economists' expectations of $62 bln and a revised record of $60.6 bln in February... Since exports increased to $102.2 bln (from $100.7 bln), as a weaker dollar made U.S. goods more competitive, and imports decreased to $157.2 bln (from $161.2 bln), evidence that Q1 GDP probably grew faster than the 3.1% previously estimated could compel economists to raise their Q2 GDP forecasts...

Meanwhile, the dollar has also gotten a boost, shrugging off earlier weakness stemming from an erroneous report in an online Chinese newspaper about the pending revaluation of the Chinese yuan...

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38483.4035749769-835245056&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Chubb Corp. (CB) on Tuesday said it received a subpoena from the U.S. Attorney for the Southern District of New York as part of an investigation into finite risk insurance. The company said in a regulatory filing that Chubb has "not been singled out" in the probe and that it involves several insurers. Regulators believe some companies have used the insurance to manipulate earnings. Shares of Chubb fell 1.1% to $81.68.

More fraud and chicanery in the insurance industry? Color me not surprised.

Why, I do believe they are!


Hmmm....

better get that filibuster provision squashed quick, say the WH minions!

I am new here, but I have lurked for a LONG time. I respect and enjoy your posts. May I share my humble opinion with you? The real fight over the filibuster has nothing to do with these 7 judges that they are currently screaming about. They are trying the clear the way so when Rehnquist leaves they will then be able the install a Supreme Court Justice with only 51 votes instead of 60. They could care less about the 7 judges they are "fighting" for. They just want to make it easier to put their Supreme Court pick in.--I think- ;-)

oh, you are quite right - this is a battle for all the marbles - but it never hurts to be able to pave over every inch in the march for the complete control of this country.

So glad that you have joined us here in SMW - sometimes I think I'm alone here in my echo chamber :D - but I know that there are lurkers and sporadic posters - along with those that realize that it's okay to come on in - the water's fine :)

:hi:

and here's a morning repast for all of those out there

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

The Democratic Underground site is soooo important, I honestly don't think you guys know how much so..........
My name is Stacy and I am a recovering Republican. I started coming here to see what the "opposition" was up to almost 2 years ago. Now, I am a changed person. I even changed my voter registration about 6 months ago. I am a card carrying Democrat now, and I will never look back. I grew up in a conservative household and honestly didn't know any better, but after I was exposed to this site, and it's wonderful people, I saw that there was another way. The Democratic Underground can change the world. It changed me. People are waking up. I did, and I'm PISSED.:mad:

A huge Thank you from a hardcore DUer!

:grouphug:

Welcome home converted_democrat!

Has anyone else in your family listened to your thoughts about the state of the country?

Both of my parents are waking up. My father is a business owner and the economy is beginning to take it's toll. Energy, health care, and privacy are their major concerns. The big problem seems to be that the media refuses to cover anything of importance, and people seem to think that if it's not on T.V. it must not be important. That is the hardest barrier to get through.
My dad made a stunning remark the other day though that almost knocked me out. First of all you have to know a little bit about him. He's republican and he goes to church every Sunday. He thinks that the Republican leadership (Delay, Frist, and the PNAC) are purposely trying to inflame the parties differences so we don't see the real issues at hand. Everyone has some common problems here...Energy, health care, privacy, and freedom. They have to make the right hate the left by making them believe that we want to take their religion from them so they don't look at the real issues. If the "right" woke up and looked at the "real" issues they would be pissed, just like you and me. Almost every law passed by this congress has helped only a small percentage of the country, the wealthy. If the right realized how they are truly being used they would befriend the left and we would have the "gun nuts" and the "brains" on the same team trying to accomplish a common goal, and run these monters out on a rail. (I hate to make sweeping generalizations, but kind of have to for effect.)
The powers that be can't have that. They cannot unite us, because if they did we would become friendly and realize who is "really" screwing us.

What's the Matter with Kansas? How Conservatives Won the Heart of America
by Thomas Frank

http://www.amazon.com/exec/obidos/tg/detail/-/0805073396/104-2340736-5504725?v=glance

The largely blue collar citizens of Kansas can be counted upon to be a "red" state in any election, voting solidly Republican and possessing a deep animosity toward the left. This, according to author Thomas Frank, is a pretty self-defeating phenomenon, given that the policies of the Republican Party benefit the wealthy and powerful at the great expense of the average worker. According to Frank, the conservative establishment has tricked Kansans, playing up the emotional touchstones of conservatism and perpetuating a sense of a vast liberal empire out to crush traditional values while barely ever discussing the Republicans' actual economic policies and what they mean to the working class. Thus the pro-life Kansas factory worker who listens to Rush Limbaugh will repeatedly vote for the party that is less likely to protect his safety, less likely to protect his job, and less likely to benefit him economically. To much of America, Kansas is an abstract, "where Dorothy wants to return. Where Superman grew up." But Frank, a native Kansan, separates reality from myth in What's the Matter with Kansas and tells the state's socio-political history from its early days as a hotbed of leftist activism to a state so entrenched in conservatism that the only political division remaining is between the moderate and more-extreme right wings of the same party. Frank, the founding editor of The Baffler and a contributor to Harper's and The Nation, knows the state and its people. He even includes his own history as a young conservative idealist turned disenchanted college Republican, and his first-hand experience, combined with a sharp wit and thorough reasoning, makes his book more credible than the elites of either the left and right who claim to understand Kansas. --John Moe

Review

"Drunk on tax cuts, favors for corporations and above all else, their undying lust for the culture wars most of us lost interest in years ago, conservatives have driven Middle America into a ditch, Mr. Frank argues in this brilliant book. His examination of how the right has prolonged the battles over pop culture, abortion and religion (and meanwhile accrued great power and financial gain) will not single-handedly eject President Bush from the White House—but it does contain the kind of nuanced ideas that should be talking points for the Kerry campaign . . . Mr. Frank's willingness to scold his own side; his irreverence and his facility with language; his ability to make the connections that other writers fail to make—all of this puts What's the Matter with Kansas? in a different league from most of the political books that have come out in recent years. Even better, its understanding of the methodology that has given Republicans the Presidency and control of both houses of Congress makes it a road map for upending the G.O.P. Here's hoping somebody slips a copy to John Kerry."—Kevin Canfield, The New York Observer

"When I read Thomas Frank, I hear a faint bugle in the background. It's the cavalry-to-the-rescue call: There you are, surrounded by Republicans—outmanned, outgunned, and damn near out of both ammunition and humor—when up shows Thomas Frank. A heartland populist, Frank is hilariously funny on what makes us red-staters different from blue-staters (not), and he actually knows evangelical Christians, antiabortion activists, gun-nuts, and Bubbas. I promise y'all, this is the only way to understand why so many Americans have decided to vote against their own economic and political interests. And Frank explores the subject with scholarship, understanding, passion, and—thank you, Mark Twain—such tart humor."—Molly Ivins

"This is the true story of how conservatives punk'd a nation. Tom Frank has stripped the right-wing hustle to its core: It is bread and circuses—only without bread. Written like poem, every line in its perfect place, What's the Matter with Kansas? is the best new book I've read in years, on any subject."—Rick Perlstein, author of Before the Storm: Barry Goldwater and the Unmaking of American Consensus

"A wise reporter and a splendid wit; Tom Frank understands the grassroots Right as well as anyone in America. He is the second coming of H. L. Mencken—but with much better politics."—Michael Kazin, author of The Populist Persuasion: An American History

"What's the Matter with Kansas? is the most insightful analysis of American right-wing pseudopopulism to come along in the last decade. As for Kansas: However far it's drifted into delusion, you've got to love a state that could produce someone as wickedly funny, compassionate, and non-stop brilliant as Tom Frank."—Barbara Enhrenreich, author of Nickel and Dimed

...more...

I used to be more middle of the road between conservative and progressive before coming here. I found that liberals were not like I thought and they hold the same values that I do. I think that the Republicans would realise the changes their party has made if they were exposed to the truth. The party is not for smaller government and all the other things I used to respect from that platform. I am so glad you are enjoying this thread, so many people watch this and learn from UIA, Ozy, RawM, and 54anickel and many others that post here.
Here's a hug.

:pals:

Your testimonial is worthy of its own thread - perhaps of its own forum. We could call it the "Recovery Room". Kudos to you and your family who have woken up and smelled the coffee. :donut:

I just had to jump in here while taking a lunch break. Your willingness to dissent is a beauty to behold and laud.

I feel so disconnected to the SMW since work has ratcheted up over the past week. We are putting the shine on a new exhibit that has (thankfully) and open-ended start date. The staff here at the museum is chugging along to get the show open asap.

I'm off to check out some news items and post anything that you folks might find interesting.

later,

Ozy :hi:

Glad that you're checking in on us - miss you being here - but understand.

With summer coming, I fear my time here will take a hit :( but will do my best to try to hit the highlights.

Thanks so much for getting us started every morning - more important than you can know :hug:

UIA, I had NO IDEA you felt this way!! You're absolutely NOT alone!!

Those of us in the Market Watch fan club...me, for instance, sometimes just come in and turn on the computer ONLY to come to this thread, like on days when I'm too busy to read my fave sites and post!!

This is THE essential thread!

:grouphug: I'm sure I'm not alone in my admiration and appreciation for all of the Marketeers here! You guys are simply THE BEST! :grouphug:

:loveya: You've gotta know this! :loveya:

:kick::kick::kick:

it was said (typed) with a smile - just try to shut me up :rofl:

Am always grateful to Ozy and all the other "regular" Marketeers that they don't put me on "ignore" :)

:grouphug: to all those who come here each day - caring enough to watch what happens (mostly behind the scenes) in our country with our dollars and sense.

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38483.4632890509-835248832&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- PartnerRe Ltd. (PRE) said Wednesday that it is increasing its stock repurchase plan by 3.5 million shares to 5 million shares.

I wonder what this little repurchase plan is trying to obscure?

http://www.marketwatch.com/news/story.asp?guid=%7B1AB2CE74%2DB7A7%2D41DE%2DAF42%2D52DC27052481%7D&siteid=mktw

BOSTON (MarketWatch) -- Most investors and consumers had no idea back in 2001 just how they would be affected by the U.S. Treasury's decision to stop issuing new 30-year bonds.

Now that the government has announced that it is considering a reversal of that four-year-old decision, the same people are in the dark again.

In truth, the end of the long bond affected individuals more than most would have suspected, and a change now would have an equally big impact.

Last week, the Treasury announced that Uncle Sam might start selling long bonds again, something it has not done since October 2001. A decision will be announced in early August, but insiders and observers believe it's a done deal, and that the first auction of new 30-year bonds will be next February. The expectation is that the government will have two auctions per year, with somewhere in the neighborhood of $10 billion to $15 billion to put into play at each sale.

<snip>

As a taxpayer, the return of the long bond is not good news.

...more...

With the debt limit now at $9 TRILLION, this can only be summed up with one word - disaster.

:argh:

Dow 10,222.52 -58.59 (-0.57%)
Nasdaq 1,951.47 -11.30 (-0.58%)
S&P 500 1,161.28 -4.94 (-0.42%)
10-Yr Bond 4.168 -0.54 (-1.28%)

NYSE Volume 477,136,000
Nasdaq Volume 523,751,000

Richard Daughty, the angriest guy in economics

--Not much happened last week that you could put a finger on, as then perhaps you could understand why I am in such a foul mood. I dunno why. I just am. And then I remember that I am The Mogambo, bearing the crushing weight of the world on my brawny Mogambo shoulders (BMS). There is no other way to feel.

Debt problems worsened, of course, but only to the usual degree of the average monthly increases in that particular bad news category (BNC), such as outstanding consumer credit increasing $5.5 billion in March, which means that the consumer's debt load is rising at an annual rate of somewhere between 3% to 4.5% or so, and is already at $2.12 trillion, which is a tidy $15,193 per every freaking worker in this whole freaking country (140 million of them) who has a damn job. And the interest rate is rising on that debt, or is getting ready to rise, because interest rates are rising. And if lenders DON'T start raising their interest rates on credit balances, then their own bottom line (which is where profits would be found, if any) will suffer, and then somebody's cushy executive job will be on the line, since they did not produce results that "benefit the shareholders", and then they get laid off, and then after awhile they start coming around here and wanting me to pay them back the money I borrowed from them five years ago. And then that bums me out. And then THEY get bummed out when I laugh in their faces at the very thought of me even having any money, and if I DID have any money I certainly wouldn't give it to him, as I had him in my crosshairs from the moment he turned the corner.

Maybe it was that foreign custody holdings at the Fed increased by $8.1 billion last week, which is, again, towards the top of its range, and is worrying to me, mostly because I am the worrying type. And I worry because I believe that the Austrian Business Cycle Theory school of economics is correct, and Mises and Rothbard were very explicit about what happens when a government has acted as irresponsible as ours, and especially when you have a central bank that has actually eclipsed Congress in pushing the envelope of the bizarre, hewing, as they are, to some lunatic economic theory that can be conveniently modeled on computers, which means that things are permanently linked, and which is why their dumb-ass theory starts out with the proposition that lowering interest rates always causes an increase in economic activity which is, on its face, such a stupid statement that you marvel that educated adults would say something so damned insane, especially when Japan is the living proof that it is NOT true, because they are limping along at interest rates that are almost literally zero, and have been for almost fifteen freaking years in a row (how do you say "Nice job of investing there, morons!" in Japanese? Answer: Mogambo him say Hahahahaha!"), and it is only an export surplus that is keeping them alive. For fifteen years bond holders make nothing, and shareholders make ditto.

That things are heading for doom was even at the meeting of the Berkshire Hathaway people in Omaha, which produced this memorable quote from Buffett's sidekick, Munger, who said "The present era has no comparable referent in the past history of capitalism. We have a higher percentage of the intelligentsia engaged in buying and selling pieces of paper and promoting trading activity than in any past era. A lot of what I see now reminds me of Sodom and Gomorrah. You get activity feeding on itself, envy and imitation. It has happened in the past that there came bad consequences."

So there are lots of people who are cognizant of the facts. Big deal. But now, the moment you have been waiting for! Now comes the reward for those who have not already stopped reading and said hurtful things like "This is really stupid! What kind of idiot reads this Mogambo crap?" which, although it is true, hurts my feelings nonetheless.

(more)

http://worldnewstrust.org/modules/AMS/article.php?storyid=691

:thumbsup:

Hahahahaha!.........I look forward to reading him every week. Keeps me laughing and not crying....


-Mojavekid

where he says he's "under the bridge watching the people driving..driving..driving..." It was his column about the gas prices and other things.

Some of his quotes and imagery just get in my head and spin around for days after I read him.....:D He expresses the crazyness of these time so well even if he's a little OTT and a libertarian.

I'll maybe tackle this tonight, but of course then I'll have nightmares!
:crazy:

Who was on first before today? and who will be on first tomorrow?

:rofl:

Price war over fund fees
Fidelity cuts management charge on target-date funds

http://www.marketwatch.com/news/story.asp?guid=%7B24A7E316%2D6D07%2D4300%2D8661%2D26AE27AF1453%7D&siteid=mktw

BOSTON (MarketWatch) -- In its latest move to reduce mutual-fund fees, Fidelity Investments has cut expenses on its retirement funds that invest in other in-house portfolios.

The Boston-based fund giant has dropped the 0.08% management fee on all ten of its Fidelity Freedom funds, a company spokeswoman said Wednesday.

The Freedom lineup consists of so-called target-date funds that automatically manage stock and bond fund allocations, and scale back risk as the investor approaches retirement.

For example, the Fidelity Freedom 2040 fund (FFFFX: news, chart, profile) , designed for younger workers who plan to retire between 2038 and 2042, currently has a relatively aggressive 87% of assets invested in Fidelity stock funds, and the remaining 13% in bonds. Over time the fund will sell the riskier stock funds and increase its stake in safer bond portfolios.

...more...

OMG - "Freedom Fund"???? Could this have a more partisan buzzword attached? Pretty soon the thought police will come and get you if you don't invest in the "Freedom Fund"? Gack!

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=43015

There are always many roads forward. Several paths await those ready and able to read terrain and adjust, just one awaits the full-speed-ahead crowd. This course offers enviable cruising speed, a sense of real accomplishment and much ground covered. It ends badly with a thunderous whack. Noise and impact come from the hard constraint. If you permit me an automotive metaphor, you save money and time by ignoring the silly flashing lights and occasional acrid smell from under the hood. You may even win a short race by saving all that pit time. However, your car will eventually do to you what you have failed to do for the car. The massive and widening domestic and international imbalances that define the present US economy suggest we have chosen full speed ahead. We have failed the soft constraint- self restraint- and now face impact. Asset inflation, redistribution and debt don’t forever substitute for balanced growth.



More than I could assure you that we are about to hit that wall, I now feel confident that we have failed the soft constraint and are destined to be limited by its meaner cousin. In regard to the budget deficit, the trade deficit, consumer debt/spending and foreign borrowing we have so long ignored the soft constraint that it is fading out as an option. We have decided to borrow until they refuse, spend beyond our means and bet the house, literally! These are the warning lights on the smoking dash. The Fed, Whitehouse, Congress and many investors respond with lead foot caution.



Asset Inflation

I will be mercifully brief as these issues are more than adequately covered across The Prudent Bear’s pages. An equity market bubble followed by bond, commodity, housing, derivative, structured note inflations paper over a lot of rot. All of this is presided over by an ever less credible and ever more accommodative Fed. The Chairman has decided to spike the punch bowl at the speculators ball with reassurance and easy terms instead of removing it.



Redistribution

Consumption expenditure in the US only rises. The restraints of savings, income and manageable debt are not longer in operation. Anemic gains in wages and salaries are not an issue between wasting nothing on savings and borrowing more. The savings rate for 2005 is running at approximately 0.5%. Distortions from the December 2004 Microsoft dividend mean that the BEA reported Q12005 change in disposable personal income is -$180 billion. Yes, that’s correct.<1> This anomaly aside, the increases in incomes, particularly from wages and salaries, have not kept up with indebtedness. The Federal Reserve remains upbeat as total consumer debt has only risen by $123 billion in Q12005. According to research from the Center on Budget and Policy Priorities, our most recent recovery has a very strange and alarming characteristic. Across this “recovery” wage and salary gains have accounted for just 23% of real income growth. Over the average of the last 7 Post WWII recoveries the average was 49%.<2> Not to worry, the soft constraint no longer binds. The elimination of savings and further borrowing will allow us to cruise.

more...

Dow 10,186.09 -95.02 (-0.92%)
Nasdaq 1,943.96 -18.81 (-0.96%)
S&P 500 1,159.19 -7.03 (-0.60%)
10-Yr Bond 4.176 -0.46 (-1.09%)

NYSE Volume 763,857,000
Nasdaq Volume 798,925,000

12:00PM: Major indices continue to languish near session lows midday as lingering economic concerns overshadow improved trade balance data and a strong report from Cisco... It appears investors still remain hesitant to step into a market in which ongoing risk concerns - due largely to the recent downgrade on General Motors (GM 30.91 -0.62) credit rating to junk status - outweigh rewards...

Meanwhile, the Mar. trade deficit narrowed to $55.0 bln, well below economists' expectations of $62 bln and a revised record of $60.6 bln in February, which will probably compel economists to raise their Q2 GDP forecasts... Tech bellwether Cisco Systems (CSCO 18.28 +0.07) has also beaten forecasts by a penny and issued reassuring Q4 revenue guidance of $6.45-6.6 bln (consensus $6.47bln)... But neither has been able to dilute an overall sense of nervousness that has left all ten economic sectors trading in negative territory... Technology has been weak across the board, with the largest declines coming from the Hardware group as the launch of Yahoo's (YHOO 33.86 -0.20) competing online music service has weighed heavily on shares of Apple Computer (AAPL 33.53 -2.89)...

Financial, Health Care and Consumer Discretionary have also been influential leaders to the downside while falling oil prices have weighed on the Energy sector... Crude oil futures ($51.55/bbl -$0.52) have been under pressure all morning, but a much less than an expected 187K barrel rise in gasoline inventories (consensus 900K) has prevented oil futures from slipping much further... The Industrials sector has also traded lower, but losses have been minimized by strong gains from United Parcel Service (UPS 73.40 +1.77) after it reaffirmed FY05 guidance.

That is not a "languish"!

Dow 10,230.50 -50.61 (-0.49%)
Nasdaq 1,951.96 -10.81 (-0.55%)
S&P 500 1,161.87 -4.35 (-0.37%)
10-Yr Bond 4.174 -0.48 (-1.14%)

NYSE Volume 835,413,000
Nasdaq Volume 874,253,000

TERRA! TERRA! TERRA!

12:10pm 05/11/05 U.S. MILITARY JETS SCRAMBLE OVER WASHINGTON

12:09pm 05/11/05 WHITE HOUSE BEING EVACUATED

12:08pm 05/11/05 U.S. CAPITOL BEING EVACUATED

All-clear given at White House, Capitol

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38483.5142660185-835251821&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- The White House and U.S. Capitol building were briefly evacuated Wednesday after a small unidentified airplane intruded on the capital's no-fly zone. Police officials gave an all-clear at both locations and said it was safe to return.

OMG! Another cloud crossed into the radar! Evacuate!

sheesh!

Dow 10,227.32 -53.79 (-0.52%)
Nasdaq 1,951.37 -11.40 (-0.58%)
S&P 500 1,162.34 -3.88 (-0.33%)
10-Yr Bond 4.167 -0.55 (-1.30%)

NYSE Volume 890,279,000
Nasdaq Volume 914,903,000

12:30PM: Market spikes lower amid news that the White House and Capitol building are being evacuated... While reports around the top of the hour indicated that the FAA was tracking an unidentified airplane flying in restricted airspace, news that the Secret Service has now given an "all clear" signal to re-enter the buildings has lifted the indices back to previous lows... NYSE Adv/Dec 1080/2041, Nasdaq Adv/Dec 908/1969

http://www.marketwatch.com/news/story.asp?guid=%7B0183FD32%2D0829%2D4401%2DA16F%2DC22311DD1797%7D&siteid=mktw

LOS ANGELES (MarketWatch) - Microsoft Corp. on Wednesday laid out plans to launch its MSN China Web portal later this spring in a move it expects will give advertisers more opportunities to tap the country's vast and growing Internet audience.

Microsoft (MSFT: news, chart, profile) said it formed a joint venture with Shanghai Alliance Investment Ltd. to launch the new portal. The venture, called Shanghai MSN Network Communications Co., will deliver MSN's products and services throughout the world's most populous country and has already received the green light from the Chinese government.

"The rapid growth in Internet adoption and mobile device usage in China, along with the exceptional energy and talent of its people, make this one of the most important new markets for MSN," said David Cole, MSN senior vice president.

The world's largest software company also said it formed a pact with Chinese mobile software and services firm TSSX to deliver MSN mobile services both in China and globally. The deal marks Redmond, Wash., Microsoft's first arrangement with a China-based company for mobile Internet services.

...more...

Wonder when Billie will sue China for his operating system being pirateered? (see GM and the Chery)

:rofl:

Dow 10,257.98 -23.13 (-0.22%)
Nasdaq 1,957.17 -5.60 (-0.29%)
S&P 500 1,165.28 -0.94 (-0.08%)
10-Yr Bond 4.182 -0.40 (-0.95%)

NYSE Volume 983,145,000
Nasdaq Volume 991,255,000

1:00PM: Little changed since the last update as a bearish bias remains intact... Decliners on the NYSE hold a 3 to 2 advantage over advancers while declining issues on the Nasdaq hold a 9 to 5 edge over advancing issues... A more than 2 to 1 ratio of down to up volumes on both the Big Board and the Composite, however, reflects an even more negative tone... Adding to today's struggles have been the indices' (i.e. Dow, S&P and Nasdaq) inability to find initial support near key technical levels of 10250, 1163 and 1952, respectively, as total volume also remains lighter than usual... NYSE Adv/Dec 1246/1890, Nasdaq Adv/Dec 1000/1898

12:30PM: Market spikes lower amid news that the White House and Capitol building are being evacuated... While reports around the top of the hour indicated that the FAA was tracking an unidentified airplane flying in restricted airspace, news that the Secret Service has now given an "all clear" signal to re-enter the buildings has lifted the indices back to previous lows... NYSE Adv/Dec 1080/2041, Nasdaq Adv/Dec 908/1969

are we being distracted from today?

Now Everybody Is Paying for Everything With Home Equity
http://www.washingtonpost.com/wp-dyn/content/article/2005/05/07/AR2005050700198.html

Gabe Klein, a 34-year-old regional vice president for Zipcar Inc. car-sharing service, is getting a lot out of his Columbia Heights row house, including cash. By refinancing the Northwest Washington property twice in the past three years, Klein has been able to take nearly $300,000 in cash out of his growing equity and plow it back into renovation projects. Those improvements have helped lift the house's appraised value to $800,000 last year -- three times what Klein paid for it three years ago with just a $10,000 down payment.

Klein still has money to burn, too, if he so desires. The last time he refinanced, he took $80,000 out of the transaction to pay for renovations and was given a $100,000 line of credit. Though Klein said he didn't really need the money, he might use it to buy an investment property. The value Klein's house has generated -- more than he has made from working in the past three years -- is changing his view of the future.

"I'm thinking I need to buy a house a year for the next 10 years and then retire," he said.

Klein is like millions of Americans whose attitudes about homeownership have been transformed by the unprecedented growth in property values and the ability to tap that value today. It used to be that a mortgage was more or less forever. Rising equity, in turn, was considered the untouchable foundation of a retirement nest egg.

But the old psychological barriers to tapping home equity have crumbled in the past 10 years, and now, especially for younger homeowners, home equity is viewed a bit like found money. A whole generation of homeowners is able to live in a way their parents never dreamed of back when homes appreciated a percent or two a year and cashing out equity meant robbing from your retirement.

more...

Twenty years ago, cashing out equity in a primary residence was difficult without sale, and at sale your gains were subject to taxation (except for the one-time over age 55 exclusion.) When the gains rule was relaxed in the '90s, it created an incentive in hot markets to sell every few years because the first $250,000 in gains (500K if married) is tax free in most cases. There are serial house sellers in some hot markets who play this game. Buy, sell after three years, pocket the gain, repeat. Beats the stock market.

The "tapping" equity phenomenon was aided and abetted by the mortgage industry because they make more money off of higher liens. At my re-fi I was offered an equity line ample enough to buy a second home. I said no thanks. Why? Because my home equity IS the only retirement nest egg that I can control. Employers have been gutting pensions for years, 401Ks are
tied to the whims of the market, and our current administration is working on getting rid of that pesky Social Security obligation.

http://blogcritics.org/archives/2005/05/11/090035.php

Is this one more casualty of 9/11? The court's ruling that United Airlines is legally allowed to default on its pension plans is a devastating blow to those who were counting on that money as a nestegg, and as it would happen, a devastating blow to Guaranty Corporation, the federal agency that guarantees the plan.
The ruling releases United, a unit of the UAL Corporation, from $3.2 billion in pension obligations over the next five years. The federal agency that guarantees pensions, the Pension Benefit Guaranty Corporation, will assume responsibility for the plans, which cover about 134,000 people.

Some retirees could see sharply lower pension payments as a result; others will see little change in benefits, depending on a variety of factors. Some retirees at US Airways, which has terminated its plans, have seen benefits drop by as much as 50 percent.

What does all this mean?

Well it could mean a jumping of the ship for other struggling airlines, like Delta. As they continue to tread water, many have been waiting to see what United does before making their next move. Most of the major airlines (like much of the consumer transportation sector) have been struggling to make ends meet since 2000. Dealt a particularly vicious blow with the 9/11 terrorist attacks, these industry giants have been swaying in the wind like a Goliath Tower of Pisa. And it seems the gravitational pull of government protection is too much to bear.

...more...

Likelihood of Delta bankruptcy grows with losses

http://www.chicagotribune.com/business/chi-0505110025may11,1,7805367.story?coll=chi-business-hed&ctrack=1&cset=true

ATLANTA -- Shares of Delta Air Lines Inc. tumbled Tuesday after the nation's third-largest carrier warned it will record a substantial loss for the rest of the year and will need to file for bankruptcy if its cash reserves fall too low, or lenders seek immediate payment of its debts.

Delta said in a Securities and Exchange Commission filing that it continues to face significant challenges because of historically high fuel prices and low ticket fares.

"Accordingly, we believe that we will record a substantial net loss for the nine months ending Dec. 31, and that our cash flows from operations will not be sufficient to meet all of our liquidity needs for that period," the filing said.

Delta shares lost 33 cents Tuesday, or 10 percent, closing at $2.97.

The filing "underscores the fact that it's unlikely that the company can restructure without a Chapter 11 filing," said analyst Helane Becker of Benchmark Co. in New York.

...more...

Congress approves $15 billion airline bailout

http://cnnstudentnews.cnn.com/2001/fyi/news/09/24/airline.bailout/

September 24, 2001

WASHINGTON (CNN) -- In the wake of last week's terrorist attacks involving hijacked airplanes, Congress has passed a measure for a $15 billion financial aid package to help the crippled airline industry and set up a government compensation fund for victims to help deter lawsuits.

The House approved the measure September 21, 356 to 54. The Senate passed the package earlier in the day, 96 to 1.

The White House response was quick with press secretary Ari Fleischer saying in a statement: "A safe, viable and effective commercial air travel system is important to America's economy and to our way of life."

"The president commends the Congress for its quick bipartisan passage of the Air Transportation Safety and System Stabilization Act.

"This legislation will help ensure the safety and stability of the nation's vital commercial airline system."

...more...

Missing the Obvious?

http://www.securityinfowatch.com/article/article.jsp?siteSection=387&id=1011

excerpt:

Vice President Gore made his announcement to "Begin implementation of full bag-passenger match" on September 5, 1996. In the following days he was besieged by U.S. airline industry representatives urging the Clinton Administration to back-away from the intent to require a full-bag match.10 The U.S. airlines claimed that they could not do a full-bag match and still maintain their on-time operations at their large domestic U.S. hub and spoke airports. The U.S. airlines' primary focus was on their on-time departures that affected their financial well being -- not security which cost them money. "Suddenly the Vice President was an advocate of partial bag match,11 a less expensive system that used computer profiles to identify the luggage of suspicious passengers who did not board the plane."12 Shortly afterwards Vice President Gore sent a letter to the Air Transport Association13 stating:

"I want to make it very clear that it is not the intent of this Administration or of the Commission to create a hardship for the air transportation industry"14

"The day after Vice President Gore wrote his letter, the airlines started to contribute heavily to Democratic Party committees, such as the Democratic National Committee, which acts as an arm of the presidential campaign during election years. In the election's closing weeks, the airlines gave the Democratic Party $585,000 -- which was more than twice what the airlines gave Democrats in a preceding 10-week period."15 Top airlines also reportedly contributed over $6.58 million in soft money to Republican and Democrat issues from 1997 through 2000.16

As stated elsewhere17 U.S. airlines have had an overwhelming influence on the FAA's failure to develop and implement stringent security measures to protect U.S. aviation. To the degree that the airlines have been successful in thwarting the development and implementation of these security measures they have been their own worst enemies. Trans World Airline's demise can be attributed in part to the successful penetration of host country and TWA's own security measures in the Eastern Mediterranean in the 1970s and 1980s. Likewise Pan American Airways demise, which was already in serious financial trouble, was assured after the loss of PAA 103. Are we going to see the loss of another major U.S. airline as a result of a combination of factors, one of which was the failure to carry-out appropriate security measure on Sept. 11, 2001?

...more...

At this moment in time, nothing would please me more than every airline company that lobbied against better security should have every one of their planes parked in the desert for perpetuity.

They have fleeced every citizen and their employees for many years. They deserve no favors and should die ignominious deaths. :rant:

Airlines pile on pension obligations, autos may be next

http://www.marketwatch.com/news/story.asp?guid=%7B8A71BBB5-67AB-4483-A0C8-E18CB7381E8E%7D&siteid=google

WASHINGTON (MarketWatch) - As the U.S. airline industry defaults on billions of dollars in pension obligations, the federal agency charged with guaranteeing the retirement funds of millions of U.S. workers is growing closer to facing its own financial crunch.

While the federal government has stepped in to help major domestic airlines deal with dramatically underfunded pension liabilities, it may find itself financially unable to aid other struggling sectors, such as the U.S. auto industry, seeking to relieve themselves of similar burdens.

<snip>

The Pension Benefits Guarantee Corp., the government agency created in 1975 to bail out domestic companies that default on pension obligations, will pick up the tab for United Airlines' pension plans. The PBGC is funded through an employer premium, essentially a tax on employers that fund defined-pension benefit plans. Read more about PBGC.

PBGC maintains that U.S. pension plans are underfunded by more than $450 billion, with companies in financial trouble liable for nearly $100 billion of this amount. The $100 billion estimate, however, does not assume defaults by U.S. auto makers.

...more...

:argh:

of upcoming issues. No one in the working class will be able to afford to retire.
This makes the baby-boomer retirement crisis a non-issue.
That pending shortage of workers they were worried about- no problem, there'll be a glut of workers.
That pesky US high standard of living that makes it tough for corporations to complete with those is some of the developing nations - solved as the US working class compete for ANY job to put food on the table. Welcome back the company store!

Some people say a man is made outta' mud
A poor man's made outta' muscle and blood
Muscle and blood and skin and bones
A mind that's a-weak and a back that's strong

You load sixteen tons, what do you get?
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store

I was born one mornin' when the sun didn't shine
I picked up my shovel and I walked to the mine
I loaded sixteen tons of number 9 coal
And the store boss said "Well, a-bless my soul"

You load sixteen tons, what do you get?
Another day older and deeper in debt
Saint Peter, don't you call me 'cause I can't go
I owe my soul to the company store

I was born one mornin', it was drizzlin' rain
Fightin' and trouble are my middle name
I was raised in the canebrake by an ol' mama lion
Cain't no-a high-toned woman make me walk the line

You load sixteen tons, what do you get?
Another day older and deeper in debt
Saint Peter, don't you call me 'cause I can't go
I owe my soul to the company store

If you see me comin', better step aside
A lotta men didn't, a lotta men died
One fist of iron, the other of steel
If the right one don't a-get you, then the left one will

You load sixteen tons, what do you get?
Another day older and deeper in debt
Saint Peter, don't you call me 'cause I can't go
I owe my soul to the company store.

Dow 10,291.24 +10.13 (+0.10%)
Nasdaq 1,965.10 +2.33 (+0.12%)
S&P 500 1,169.76 +3.54 (+0.30%)
10-Yr Bond 4.182 -0.40 (-0.95%)

NYSE Volume 1,188,158,000
Nasdaq Volume 1,176,369,000

2:00PM: Equities still on the defensive as the recent recovery effort seems to have stalled... Meanwhile, Treasurys have experienced some modest profit-taking following recent results from today's $15 bln 5-year note auction, as the 10-year note (+2/32) now yields 4.19%... While indirect bidder participation (foreign central banks) of 34% was a bit disappointing, it was nothing like the dismal 28.2% recorded in the April auction that rattled both stocks and bonds...NYSE Adv/Dec 1420/1777, Nasdaq Adv/Dec 1142/1822

1:30PM: Market pares much of its losses, as oil prices plummet to new lows... Now that crude oil futures have fallen 3.0% to $50.50/bbl (-$1.57) and are threatening to fall below the psychological $50/bbl mark, buyers have finally returned from the sidelines... As a result, the Financial, Industrials and Consumer Staples sectors have all turned positive while losses have been minimized in Technology as the Software and Networking groups have crossed into positive territory... Separately, the Treasury Dept. is scheduled to release its Federal Budget (consensus $58.0 bln) at the top of the hour... NYSE Adv/Dec 1453/1725, Nasdaq Adv/Dec 1187/1760

They have been using it a lot lately!

Who, in their right mind, is investing in this stock market???

Am I just CRAZY, or is this country, and the purchasing power of the people in REALLY BIG TROUBLE??

If I'm just crazy, please break it to me nice, mmkay?

:kick:

http://www.zwire.com/site/news.cfm?BRD=2256&dept_id=457707&newsid=14507127&PAG=461&rfi=9

My point here is simple: The health of our economy is tenuous at best. Previously we discussed recent legislature which basically protects banks from the potential tidal wave of bankruptcies, a by-product of generous lending and "cheap" money.

Goodbye cheap money

Current conditions suggest the credit boom is in for a credit crunch, which many analysts expect to collapse sometime in 2006 taking the economy, the stock market and, yes, even real estate, down with it. Recent activity suggests that the stock market is starting to anticipate this scenario as increasingly likely.

Remember, this "credit bubble" has helped prop up the stock market since early 2001. Thank you, Fed Chairman, aka "Mr. Bubbles." Now, not only are we not moving away from "easy money," various key indicators suggest that dependence on credit has actually gotten significantly worse. Real trouble could be right around the corner.

snip>

Continuing this thought, what do you think will happen to those banks that have lent money based on newly found skyrocketing home values? What happens to the bank's earnings when they are forced to repossess homes after the values have slid well below the "all-time highs" of recent months? That's a loss that even the new bankruptcy legislation can't protect them from.

snip>

Finally, recently a respected Wall Street analyst perhaps said it best: "When the history books get written, the corporate crooks of the '90s will certainly have lasting notoriety ­ and deservedly so. But the villain of our era will most certainly be the man who created and sustained the biggest bubble the U.S. economy has ever had to deal with, Fed Chairman Alan Greenspan."

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=114&topic_id=15120&mesg_id=15763&page=

Period of extreme market stress

We are obviously in a period of extreme market stress. By market I don't mean just the stock market but all financial markets. Crashes are extremely rare events and not predictable and I am not predicting some sort of crash or major dislocation. What I am saying is that the conditions as I sense them now suggest that the chances of one of those rare events are higher than normal.

The practical usefullness of this information is intended to be zero.

If such a thing were to occur Bush would I think lose it. I don't think he could handle it. Of course any president in the same boat would be crucifed but Bush is I think uniquely unqualified to handle the pressure.

I am not hopeing for a crash. I think there will be trouble enough going forward in the economy and then by extension in the political world and of course in many peoples personal worlds.

The hallmark of any serious bearish economic trend going forward will be s sudden shift in the 'reality'. In a sort of Emperors Clothes sort of way. What was accepted yesterday as the conventional wisdom would suddenly tomorrow be understood to be illuison, or a lie.

He goes on to say...

Credit is everything

with a link to a webpage with a really scary chart showing how addicted to debt easy money we have become.

that is one frightening picture

:scared:

OMG! :nuke:

Dow 10,292.20 +11.09 (+0.11%)
Nasdaq 1,968.50 +5.73 (+0.29%)
S&P 500 1,169.30 +3.08 (+0.26%)
10-Yr Bond 4.202 -0.20 (-0.47%)

NYSE Volume 1,462,925,000
Nasdaq Volume 1,453,844,000

3:00PM: Indices are off their highs but hold onto the bulk of this afternoon's gains amid spirited leadership from a number of blue chips... Pacing the way higher on the Dow have been United Technologies (UTX 103.47 +1.53) and Caterpillar (CAT 90.61 +0.96), as U.S. exports rose to record levels in March... Meanwhile, Walt Disney (DIS 27.21 +0.26) has maintained a respectable gain as investors sift through its recently released Q1 earnings report...

General Motors (GM 30.95 -0.58), however, has paced the way lower after S&P cut its credit rating on debt securities backed in part by GM and Ford bonds...NYSE Adv/Dec 1721/1483, Nasdaq Adv/Dec 1436/1568

2:30PM: Buyers show some resolve and lift the indices out of the doldrums, as eight out of ten economic sectors now trade in positive territory... Providing the bulk of the momentum behind the recent turnaround has been strong leadership in Financial, which accounts for more than 20% of the S&P... Influential sector leaders enjoying gains in excess of 1.0% include: WB +1.3%, FNM +1.4%, MER +1.1%, GS +1.5%, AOC +1.1%, BSC +1.2% and SCH +2.2%...NYSE Adv/Dec 1610/1601, Nasdaq Adv/Dec 1410/1555

am beginning to think they are faeries - they're wing-ed monkeys in disguise

I wonder if the flip side to this might be analysts getting preferential treatment (or more) for providing us with rose colored glasses as well. Hmmmmm....

I think we are seeing the Pravdazation of the financial news (the numbers are the same, just massaged or late entered to fit the moment.

http://www.businessweek.com/ap/financialnews/D8A14SAO0.htm?campaign_id=apn_home_down

MAY. 11 2:25 P.M. ET Richard Scrushy's lawyers compared him to Michael Jordan and Bill Gates on Wednesday as they tried to show the fired CEO was worth the millions he made while building HealthSouth Corp. into an industry leader -- despite the huge fraud he is accused of leading.

Under questioning from defense attorney Art Leach, defense expert Wayne Guay said Scrushy was due multimillion-dollar compensation packages even after HealthSouth stock prices tanked in the late 1990s, just like Jordan was still valuable on the backside of his NBA career.

Guay also testified that as HealthSouth's primary founder, there wasn't anything wrong with Scrushy selling stock and exercising options in the rehabilitation chain -- the same way Gates makes "hundreds of millions" annually from stock in Microsoft Corp.

<snip>

Prosecutors allege Scrushy made millions illegally by directing a scheme overstating HealthSouth earnings by $2.7 billion over seven years starting in 1996.

...more...

Wow! I didn't know that Michael Jordan and Bill Gates were so slimy!

shower with a good disinfectant soap after reading this. If I were either one I'd be checking into a slander/defamation lawsuit against Scrushy's lawyers! Ewwwwwww.

I would use some of this



and then some of this

Dow 10300.25 +19.14 (+0.19%)
Nasdaq 1971.55 +8.78 (+0.45%)
S&P 500 1171.11 +4.89 (+0.42%)
10-Yr Bond 4.202% -0.20

NYSE Volume 1,765,570,000
Nasdaq Volume 1,708,392,000



Close: The market recovered nicely following yesterday's drubbing, as a sell-off in oil coupled with improved trade balance data and a strong report from Cisco helped shrug off economic uncertainty related in part to credit risk concerns...

While stocks plummeted yesterday amid speculation that many hedge funds may have experienced liquidity problems related to the volatility in General Motor's (GM 31.00 -0.53) shares and bonds, reports that S&P cut its credit rating on collateralized debt securities backed in part by GM and Ford bonds underpinned an overall sense of nervousness that left the market more risk averse throughout most of the session... But a late-day decline (-3.1%) in crude oil futures ($50.45/bbl -$1.62), under pressure after the IEA said weakening economic growth and higher fuel costs slowed oil demand growth in Q1 of this year and following mixed oil inventories, provided the support buyers needed to step back into the market...

While crude oil supplies rose 2.7 mln barrels (consensus +1.25 mln) - 13th increase in 14 weeks - and distillates rose 1.7 mln barrels (consensus +275K), a much less than an expected 187K barrel rise in gasoline inventories (consensus 900K) prevented oil futures from slipping much further intra-day... Meanwhile, the Mar. trade deficit narrowed to $55.0 bln, well below economists' expectations of $62 bln and a revised record of $60.6 bln in February - evidence that Q1 GDP probably grew faster than the 3.1% previously estimated, compelling economists to likely raise their Q2 GDP forecasts...

Also providing a floor of support was tech bellwether Cisco Systems (CSCO 18.54 +0.33), which beat forecasts by a penny and issued reassuring Q4 revenue guidance of $6.45-6.6 bln (consensus $6.47bln) that showed business spending on equipment is not slowing... Nine out of ten economic sectors closed in positive territory while the Materials sector shrugged off a stronger dollar late in the day to close unchanged... The greenback rallied around the surprise decline in the deficit and erased overnight losses related to an erroneous report in an online Chinese newspaper about the pending revaluation of the Chinese yuan... Pacing the way higher was the Industrials amid strong gains from United Parcel Service (UPS 73.40 +1.77) after it reaffirmed FY05 guidance and after U.S. exports rose to record levels in March...

Technology was also strong across the board, as even Hardware eked out a modest gain... The space was weak most of the day as a sell-off in Apple Computer (AAPL 33.53 -2.89), amid the launch of Yahoo's (YHOO 33.86 -0.20) competing online music service, weighed heavily on the group... A turnaround in Financial - which accounts for more than 20% of the S&P 500 - also helped to spearhead a renewed wave of buying interest across every sector, benefiting from more talks about consolidation in the online brokerage space...

Treasurys, however, despite catching a flight to quality bid amid the sell-off in equities closed unchanged, with yields on the benchmark 10-year note holding steady at 4.20%... Separately, the April Treasury Budget checked in at $57.7 bln, relatively in line with expectations of $58.0 bln... However, even though the market usually only pays attention to April's data - as April is the most important month for tax inflows to the Treasury - the data went relatively unnoticed ahead of tomorrow's more important retail sales data... NYSE Adv/Dec 1822/1459, Nasdaq Adv/Dec 1492/1550


Nice to see it up above 10300 i guess thats good consider the airplane and the grenade

It's a miracle! :eyes:

Checking in late today. It's been crazy today. I had to give the 'growth and development' class to my fifth graders...who needs cafeine and sugar when you get to start your day off talking about penises and vaginas:spray:
Welcome converted dem and other lurkers. My fav myth about liberals is the implied one that we don't have any money sense and throw away money on social programs. I am a social liberal and fiscal conservative. I'd rather put my money at the front of a problem than behind it (I am a cheap skate, and this is the cheapest way to solve a problem).
I am just so astounded at the news and stats that are on the business page. Things just aren't adding up.
And UAL being allowed to write of their pension responsibility is a bad omen as it is the tip of the ice berg. But the REALLY sad news is that if UAL goes into bankruptcy, the workers that built the co. are at the back of the creditors line. And with * and co trying to get their mitts on Social Security----these poor people will be in the same boat as the Enron employees.
I get on my knees and thank God I have defined benefits and work for the State, but my heart goes out. I have had to start over before too. 'I see a bad moon rising'.

I was hoping your battery was holding up :hi:

Lets hope the "State" doesn't go bankrupt then you defined benefits are just is the same place as all the rest of us. Sorry if i sound pessimistic, but look at the debt levels its just unreal.

Raw Materials, I am still setting money aside to fund my retirement. I have to take blood pressure meds before I look at the National Debt. Oh, we found the adapter so I'm good now UIA.

http://www.marketwatch.com/news/story.asp?guid=%7BC3B168B2%2D4DE9%2D4721%2D9AF9%2D8E66843638FF%7D&siteid=mktw

...

In addition, women are overwhelmingly reliant on Social Security disability and survivor benefits. Social Security accounts for 52% of the income of unmarried women over 65, compared to 38% of unmarried male senior citizens.

The Democratic women said their gender would suffer under a partially privatized Social Security program that would require considerable investment savvy to maintain a livable guaranteed benefit.

The Bush administration is "taking advantage of vast financial illiteracy in this country," said Rep. Gwen Moore, D-Wis. "Language like 'progressive indexing' serves to confuse and befuddle many people."

Bush elaborated on his progressive indexing proposal last month, indicating he would like to see a law that protects full benefits for workers earning $20,000 or less a year. Benefit cuts for middle- and upper-income workers would rise along with their earnings and could top 70% of the current promised Social Security benefit.

...

There is a website that this article refers to:
http://www.womenandsocialsecurity.org/

worth a look!