STOCK MARKET WATCH, Friday 29 July

BOOM 41.25…GOOG 296.80 …SINA 27.29 …CAKE 35.70 …RIMM 70.01… BOOM 41.25…
“A Snapshot of Loved Stocks”

This article’s title depicts the market ticker during a typical Nasdaq rally. Divorced from any traditional means of valuing businesses or stocks, today’s stock market is advancing pretty much on emotion and apparent good news. It seems as if some stocks are advancing on the basis of not much more than a compelling four digit ticker symbol. While it is a technician’s market, it is more accurately a speculators market too. The biggest market gains are being made on the companies that can put forth the best sounding and most optimistic news releases. In most cases the news depicts actual good business conditions in the present and predicted near term future while the emotionally optimistic market is projecting these favorable conditions far out into the future. These time horizons are well beyond the projections released by company managements who are usually silent on the quantitative long term prospects of their companies.

Yet history has shown that such optimistic long term sales and profit growth projected by the stock market rarely if ever, come to pass. For now this is no matter; yet it is important to realize that markets practically always overshoot prices to the upside. It is with this in mind that I would like to examine the technical charts of a cross section of loved stocks that have well overshot their valuation mark based on a bevy of good news, and are probably due for a significant fall when long term business realities become more apparent. It is difficult to determine exactly when this will happen though. Yet although there may still be some more life in the bull, in most cases, the risk of owning these stocks greatly outweighs the reward of any future gains that may still be gleaned.

-cut-

Today’s Market

The stock market rally continued as all of the indices were up on relatively high volume. It is notable that of the major indices, the Wilshire 5000, a mix of practically all stocks in the US market, was up 2.32 percent. The next closest winner of the US indices tracked by Yahoo was the S&P small cap index which was up a comparatively paltry 1.33 percent, and the Dow Transportation Index up only 1.27 percent. The best sector was the homebuilders which were up over 3% based on more good news and a bond market rally. As I pointed out before the most spectacular action in the homebuilders has probably not yet been seen as they enter their final parabolic run suggested by a breaking of their uptrend line of higher-highs. Oh, and the spectacular action will also come on the downside too.

-cut-

Oil continued its rally and now seems comfortable at $60/per barrel, yet there has been a short term complete decoupling between the stock market and the price of oil. Yet if oil were to correct, it would appear to be a good excuse as any for the stock market rally to continue. more...

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

Institutional investors will pay attention to the big money -or large cap stocks- and how the energy bill would benefit them. Small cap stocks typically fly under the radar of institutional investors. Mind you, since the definition of small cap changes depending on which brokerage house you ask - some, but very few, would garner any attention. Typically if a company's capitalization is less than $2billion the company is considered "in the rough" and a very risky investment.

This boondoggle of an energy bill aims to benefit the largest of large cap companies. There is mention of alternative energy such as hydrogen cell development in this bill. The catch: hydrogen cell technology based on petroleum extracation technology.

The big energy companies already have workshops dedicated to this process. Either they developed them themselves; or they poached the technology from smaller companies; or they bought up these vanguard technologies and their parent companies' R&D.

So I seel little benefit at face value. Of course, your own research may show otherwise. Much lies beneath the surface among emerging companies that could take advantage of this energy bill concocted by it glaringly obvious beneficiaries.

... even alternative technologies, what little there is of it in that bill of corruption.

For example, Enron bought out a smaller company to start a wind energy division. GE bought the division at fire sale prices out of Enron's bankruptcy. But, GE has been sitting on it, claiming the technology needed further development.

They've actually been sitting on it until they were guaranteed of government subsidies, which this bill will do. The big guys have seen to it that they're the ones to whom the pork in this bill will trot.

SAN FRANCISCO (AP) -- The stakes will be higher than usual Friday morning when Chevron Corp. discloses its second-quarter earnings -- the results could deliver a pivotal blow in the company's politically charged battle to buy Unocal Corp.

The financial report for the three months ended in June will carry added punch because it's likely to influence the price of Chevron's stock, which is being used to pay for 60 percent of the company's Unocal bid.

If Chevron's quarterly profit is impressive enough to boost the company's stock price, then the Unocal offer becomes worth more than its value of $17.3 billion, or $64.02 per share, based on Thursday's trading on the New York Stock Exchange.

As Chevron's bid becomes more valuable, it becomes more difficult for China's government-owned CNOOC Ltd. to overcome the prickly political opposition to its rival bid and persuade Unocal shareholders to accept its higher all-cash offer of $18.1 billion, or $67 per share.

more...

http://biz.yahoo.com/ap/050729/chevron_unocal.html?.v=4

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

Last trade 89.48 Change +0.14 (+0.16%)

Tomorrow’s Economic Release Alerts: Will Traders Be Offered A Valid Reason To Fade U.S. Data?

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2525&Itemid=39

US Annualized GDP (2Q A) (12:30 GMT, 8:30AM EDT)
Consensus: 3.5%
Previous: 3.8%

Outlook: Economists are expecting annualized growth of 3.5 percent in the second quarter, down from 3.8 percent in first quarter. Broken down into components, recent evidence would show that personal consumption probably remained strong. Retail and food services sales grew at almost double the rate achieved in first quarter. This is offset by a smaller gain in durables excluding transportation. In services, the ISM revealed that growth was marginally higher in the second quarter with an average index number of 60.8 compared to 60.7. Looking at business investment, orders for nondefense capital goods excluding aircraft have posted healthy gains compared to losses in the first quarter. Working against this is an increase in inventory buildup seen in the quarter. The external economy was probably a boost to GDP this quarter as the trade balance improved after worsening in first quarter. The price index gathered from GDP data is expected to have also dropped to 2.6 percent from 2.9 percent. This goes along nicely with recent PPI and CPI data, which along with Fed comments, have supported a notion of contained inflation pressures. Overall, economic expansion seems to have enjoyed a good quarter. Even if tomorrow’s number seems low, keep in mind that it is the advanced estimate and there is still the possibility of upwards revisions, which was the case in first quarter.

Previous: The final release of first quarter GDP was revised up another time to 3.8 percent. This was the 8th straight quarter that the annualized growth rate was above 3 percent and confirmed that higher oil prices failed to reel in economic expansion in the US. Consumer spending held to 3.6 percent growth rate that was previous estimated. Rising gas prices seem to have been taken in stride in light of concurrent improvements in the labor market. On the business side, fixed investment was revised up to 4.1 percent from 3.5 percent while inventory growth was revised down. A good part of the spending was on new equipment and software which saw annualized growth of 6.1 percent. This combined with rising costs on the production side pushed the GDP price index up to 2.9 percent from 2.3 percent in the fourth quarter of 2004. Evidently, the economy benefited from the fact that borrowing rates stayed relatively low in spite of rate hikes seen in the benchmark rate. The report definitely made way for more increases from the Fed in the coming months.

US Personal Consumption (2Q A) (12:30 GMT, 8:30AM EDT)
Consensus: 3.5%
Previous: 3.6%

Outlook: The personal consumption component of the upcoming GDP release is expected to show a slight decrease in growth to 3.5 percent from 3.6 percent in first quarter. This is fairly well supported by the monthly data for second quarter. Total sales of retailers and food services grew at an annualized pace of nearly 11 percent after having achieved only about 6 percent between first quarter and fourth quarter of last year. This is offset by the 3.3 percent annualized expansion in orders of durable goods excluding transportation compared to 10.5 percent in first quarter. Tempering this are automobile orders that increased by an annualized pace greater than 6 percent after a rather hefty decline. Despite rising energy prices, spending probably stayed buoyant this quarter due to the unemployment rate dropping to four-year lows in the quarter and consumer confidence improving over the quarter while eventually moving to a three-year high in June as measured by the Conference Board.

...more...

Mixed Messages Out of China Sends the Dollar Tumbling

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2518&Itemid=39

Just like yesterday, the dollar has sold off against the Euro. Another round of stronger data out of the US failed to lend the dollar any support. Jobless claims increased a less than expected 5k, while more help wanted ads appeared in newspapers during the month of June than in May. At this point, the data sets up for another sizeable triple digit increase in non-farm payrolls next week. Today’s move though seems to be driven primarily by positive Eurozone data, oil prices rallying back above $60 a barrel, more mixed messages out of China as well as speculation that tomorrow’s GDP number could be bad. Although we have been seeing a lot of good data recently, a $40 billion inventory correction is expected to slow GDP growth from 3.8% in the past 2 quarters to 3.4% in the second quarter. Typically the GDP report is not as market moving as many of the other releases because the components of the report are known in advance. Tomorrow’s report however also comes with annual revisions to the last three year’s worth of data, which means that it can be far more market moving this time around. At this point, a break above 1.2250 would be needed before we can call a bottom in the EURUSD. The cards are continuing to be stack up in the EURUSD’s favor. The contradicting messages that China is sending out to the market only further confirms our belief there will be more appreciation in the Renminbi. It was only 2 days ago that China released a statement one of the government’s websites saying that just because they revalued the currency does not mean that there are more moves in the pipeline. Last night though PBOC Deputy Governor Wu Xiaoling said that the market is "an important basis" for setting the exchange rate. Traders took this to mean that China may be laying the groundwork for a Yuan float. Although the talk is pretty far fetched and would not be something that could come for many years down the line, it does give a reflection of the government’s bias, which is for the RMB to continue to rise. Ms. Wu said that it is important to listen to the market when setting the exchange rate and added that preparations are being made to launch FX derivatives. For the time being, all of the latest comments from China spells more potential downside for the dollar and upside for currencies such as the Euro and Japanese Yen. Yet we wouldn’t be surprised to see China come out once again tomorrow to "clarify" and temper the market’s addiction with analyzing their every word.

...more...

(edited because I hit "post" too soon)

Last trade 89.29 Change -0.05 (-0.06%)

Settle 89.34 Settle Time 23:35

Open 89.39 Previous Close 89.34

High 89.66 Low 89.25

Last tick: 2005-07-29 08:52:30 ET
30-min delayed quote.

8:30am 07/29/05 U.S. 1Q GDP UNREVISED AT 3.8%

8:30am 07/29/05 U.S. Q2 EMPLOYMENT COST INDEX UP 0.7% VS. 0.8% EXPECTED

8:30am 07/29/05 U.S. GDP REVISIONS SHOW WEAKER IT INVESTMENT 2002-04

8:30am 07/29/05 U.S. 2002-04 CORE INFLATION REVISED TO 1.7% VS.1.4%

8:30am 07/29/05 U.S. 2002-04 GDP REVISED LOWER TO 2.8% VS. 3.1%

8:30am 07/29/05 U.S. 2Q INVENTORIES SUBTRACT 2.3% FROM GDP

8:30am 07/29/05 U.S. 2Q BUSINESS INVESTMENT UP 9%

8:30am 07/29/05 U.S. 2Q CONSUMER SPENDING UP 3.3%

8:30am 07/29/05 U.S. 2Q CORE PCE PRICE INDEX UP 1.8%

8:30am 07/29/05 U.S. 2Q FINAL SALES UP 5.8%

8:30am 07/29/05 U.S. 2Q REAL GDP UP 3.4% AS EXPECTED

Let's see:

1975: Nixon/Ford - REPUBLICANS

1982: RayGun - REPUBLICAN

2001: BUSH II - REPUBLICAN

REPUBLICANS ARE BAD FOR THE ECONOMY!!!

Greenspin's monetary tightening policy. Guess that's what happens when you cook the books to make everything rosy for sooooo long. Need to let just a wee-bit of reality into the picture to prolong the game. I'd be willing to bet these numbers are still off since they are based on the same cooked books.

The Fed has raised short-term interest rates nine times since June 2004 in a bid to head off inflation pressure and is expected to hike borrowing costs further before the end of the year. However, some critics have said the interest-rate increases were becoming less warranted, since inflation appeared well-contained.

The Bureau of Economic Research, which compiles the GDP data, said annual average growth was just 2.8 percent from 2002 through 2004, with all three years revised to show a slower expansion.

Growth in 2004 was 4.2 percent, rather than 4.4 percent, 2003 growth was 2.7 percent not 3.0 percent and 2002 growth was 1.6 percent rather than 1.9 percent.

2002 - 2004, when we kept hearing "just around the corner", "on the cusp", blah, blah, blah.

Meanwhile, isn't it great to know that people are saving 1.8 pennies instead of 1.3 pennies of each dollar of disposal income. :eyes:

9:51am 07/29/05 UMICH JULY CONSUMER SENTIMENT 96.5 VS. 96.3: REPORTS

Huh? where did the 96.3 number come from?

it was 96.5 and this was supposed to be the revision

so did they "revise" it back to 96.3 and now they are attempting to show that it "improved" to 96.5?

:wtf:

UMich survey shows steady consumer sentiment in July

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38562.4157748843-839326812&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- U.S. consumer sentiment held steady in late July, according to media reports Friday of proprietary research at the University of Michigan. The UMich consumer sentiment index rose to 96.5 in late July from 96.0 in June, reports said. It was at 96.5 in early July as well. Economists were expecting the final July index to fade to 96.3, according to a MarketWatch survey. The current conditions index rose to 113.5 from 113.2 in June, while the expectations index improved to 88.5 in late July from 85 in June.

We are Happy Dammit!

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38562.4284606829-839328516&siteID=mktw&scid=0&doctype=806&

CHICAGO (MarketWatch) -- Business in and around Chicago expanded more than expected in July, the latest report from the National Association of Purchasing Management - Chicago showed on Friday. The Chicago Purchasing Managers index increased to 63.5% this month, topping the 55.1% expected in a MarketWatch survey. Readings above 50% mean more businesses are reporting steady or improving conditions than are reporting worsening conditions.

Whee!

http://www.bloomberg.com/apps/news?pid=10000103&sid=aEnzyujhy12A&refer=us

July 29 (Bloomberg) -- U.S. Treasuries fell, heading for their biggest monthly drop since November, after a government report showed the economy grew 3.4 percent last quarter.

The Commerce Department's gross domestic product data may bolster speculation the Federal Reserve isn't about to slow the pace of interest-rate increases. Fed Chairman Alan Greenspan last week said the U.S. economy was on ``firm footing.''

Any data showing growth is fast enough to spur inflation ``could be disturbing to Treasuries,'' Christopher Sullivan, chief investment officer at the United Nations Federal Credit Union in New York, with $2 billion in assets, said before the report. ``The GDP report will be a relatively important indicator.''

snip>

``The bond market really only cares about GDP to the extent it impacts Fed policy,'' William Prophet, an interest rate strategist at Stamford, Connecticut-based UBS Securities LLC, said before the report. ``As long as the Fed keeps tightening, short-term rates have no choice but to go up. 10-year rates will probably go up but there's no guarantee.''

The government also said labor costs in the second quarter climbed at a rate that was less than the average of the past five years. Slower inflation helps preserve the fixed-income payments on bonds.

more...

http://www.bloomberg.com/apps/news?pid=10000103&sid=ayjgMENboD7I&refer=us

July 29 (Bloomberg) -- Crude oil rose to its highest in more than two weeks, surpassing $60 a barrel in New York, after an explosion at BP Plc's Texas City, Texas, refinery heightened concern processing plants may struggle to meet rising fuel demand.

BP today said the fire resulting from yesterday's blast at the refinery, the third largest in the U.S., was extinguished and total output from the site was little changed. The company as a precaution shut down two similar units, which reduce the sulfur content of fuel oil, a spokesman for London-based BP said.

The incident is a reminder that ``the global refining system is starting to break down,'' said Deborah White, an economist at Societe Generale SA in Paris. Plants ``have been pushed very hard in the past two years. The oil-products market is going to be very tight this winter,'' when demand peaks.

Crude oil for September jumped as much as 56 cents, or 0.9 percent, to $60.50 a barrel on the New York Mercantile Exchange, the highest since July 13. It was up 41 cents at 12:09 p.m. London time, less than $2 from the record of $62.10 a barrel reached on July 7. Prices have doubled in the past two years after averaging less than $19 from 1995 through 1999.

``The market is very nervous because any outage can cause so many problems,'' said Bruce Evers, an oil analyst at Investec Securities in London. ``The concern is that if you've got very tight supplies, there's a question of whether the system can produce enough to meet demand.''

more...

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_mukherjee&sid=aAs3kfEUPvek

snip>

``The notion that the 2 percent revaluation is only an initial adjustment and that the central bank will further adjust the rate in the foreseeable future is wrong,'' the People's Bank of China said in a July 26 statement.

Ordinarily, such a blunt statement would spook speculators.

Yet, traders continue to bet heavily against the central bank, expecting the yuan to be 6.5 percent dearer in one year than its previously pegged rate of about 8.3 to the dollar.

If China is unable to make headway with straight talk, India is finding it hard to win the day through obfuscation.

The Reserve Bank of India caught the market on the wrong foot when it kept interest rates unchanged this week. Traders had anticipated a quarter-point rise. The central bank itself had fueled that expectation by tightening policy in April.

snip>

Autonomy

To achieve their monetary goals, policy makers of China and India, the world's two fastest-growing major economies, must acquire credibility. That requires central bankers in these countries to be seen to be working independently of their political masters' agendas.

Ya mean like Greenspin? :eyes:

more...

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-07-29T130107Z_01_NAT001720_RTRIDST_0_ECONOMY-NEWYORK.XML

excerpt:

However, the manufacturing sub-index eased to 21.6 from
June's 23.2. A reading below 50 means that manufacturing
activity is shrinking.

The six-month economic outlook index fell to 50.0 from 62.5
in June, while current conditions, a weighted average of
readings on manufacturing and services, gained to 61.7 from
42.8 in June.

...the rest of the article seems to tout bedpan changers...

on 2nd half expectations?

Mentor Graphics lowers financial view for second half

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38562.3841736921-839322492&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Mentor Graphics (MENT) Friday lowered its outlook for fiscal 2005, citing weak bookings in the second quarter. The Wilsonville, Ore., maker of semiconductor design products now expects between breakeven results and a loss of 5 cents a share on a pro forma basis for the third quarter with revenue ranging from $160 million to $165 million. For the fourth quarter, it sees pro forman earnings of 50 cents a share on revenue of about $221 million. Wall Street's current consensus estimates was for earnings of 11 cents a share in the September quarter. For fiscal 2006, Mentor sees pro forma earnings growth of 25% to 50 cents a share on revenue of about $755 million. The stock closed Thursday at $10.22, down 2.4%.

Perhaps the cheerleading section should be looking a little harder at everything but the freaking "energy" part of the market.

I smell a fleecing coming up.

:hi:

The question on many investors' minds, however, was how high the markets can go, and whether the economy over the second half of the year will support those higher share prices.


They couldn't have been pondering that question too hard as they bid the indices up again.

Yep, the wool is beginning to look a bit shaggy. Let's hope it's just a fleecing and not a skinning.

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-29T131239Z_01_N29685654_RTRIDST_0_MARKETS-STOCKS-UPDATE-3.XML

excerpt:

S&P 500 futures fell 1 point, below fair value, a mathematical formula that evaluates their pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures were down 7 points, while Nasdaq 100 slipped 2.5 points.

The U.S. economy grew at a 3.4 percent annual rate in the second quarter, the government reported, just slightly below the first quarter's 3.8 percent rate.

The first snapshot of second-quarter GDP matched Wall Street economists' expectations. The figure will be revised twice in coming months as more data on the economy's performance arrive.

"This is a bit of a disappointment," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. "We've seen the market move up the last two days ahead of this number. We were expecting in our minds that we would be able to beat this number, at least better than 3.5 percent."

The University of Michigan's final reading for July consumer sentiment, expected to rise to 96.5, is scheduled for release at 9:45 a.m. (1345 GMT)

...more...

Dow 10,696.16 -9.39 (-0.09%)
Nasdaq 2,195.93 -2.51 (-0.11%)
S&P 500 1,242.55 -1.17 (-0.09%)
10-Yr Bond 4.230 +0.34 (+0.81%)

NYSE Volume 61,848,000
Nasdaq Volume 88,106,000

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38562.3998512269-839324602&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) - U.S. stocks had a mixed opening Friday, following an adverse initial market reaction to news that gross domestic product grew at a 3.4% pace in the second quarter. Some economists had set predictions that second-quarter GDP would rise by as much as 4%. The Dow Jones Industrial Average ($INDU) was down 3.18 points at 10,702, the S&P 500 (SPX) up 6.93 points at 1,243 and and the Nasdaq composite ($COMPX) was down 0.16 at 2,198.

Mixed??? Looks like their all down (markets, treasuries, buck) to me.

Expecting 4% GDP??? Those cheerleaders need to put the kool-aid away!

9:45am 07/29/05 SNOW SAYS CHINA CURRENCY REVALUATION GOOD FOR ECONOMY

9:45am 07/29/05 SNOW SEES CONTINUING ECONOMIC STRENGTH THROUGHOUT 2005

9:45am 07/29/05 SNOW SAYS U.S. ECONOMY ON GOOD PATH

and his tricks are old, tired and worn out :puke:

I imagine Bush giving Snowjob his classy salute whenever the fool's back is turned.

anyone not part of his base. Well, back atcha a$$hole!





The Outstanding Public Debt as of 29 Jul 2005 at 07:33:46 PM GMT is:


The estimated population of the United States is 296,637,424
so each citizen's share of this debt is $26,549.23.

http://www.cfo.com/article.cfm/4241158/c_4241354?f=homex_todayinfinance

The General Accountability Office has issued a follow-up report to the Securities and Exchange Commission detailing 18 suggestions the GAO believes would repair "material" weaknesses in the SEC's financial internal controls.

On Wednesday the GAO made recommendations covering the commission's internal controls over disgorgements and penalties for those who violate securities laws. It also proposed improvements in the SEC's controls over financial-statement preparation and reporting.

The GAO report asserts the SEC didn't perform procedures to reasonably assure the completeness and reliability of financial information about disgorgements and penalties in its case-tracking system. Further, there's an amplified risk of incomplete or inaccurate data because of inefficient communication among various SEC divisions and offices.

During their review, the GAO officials witnessed a case in which the SEC's enforcement division entered disgorgements into the system, but the finance staff responsible for the accounting entries didn't have the documentation needed to make the entries into the general ledger.

more...

Doesn't matter we have Fox, errr I mean Cox heading up the SEC now. He'll keep good track of the "gorging". :eyes:

9:54
Dow 10,701.02 -4.53 (-0.04%)
Nasdaq 2,198.30 -0.14 (-0.01%)
S&P 500 1,243.61 -0.11 (-0.01%)
10-Yr Bond 42.25 +0.29 (+0.69%)
NYSE Volume 167,210,000
Nasdaq Volume 191,122,000

9:40AM: Stocks open with little fanfare as investors weigh varied views about Q2 GDP data against another deluge of strong earnings reports... Earlier, investors got an advance read on Q2 GDP that showed the economy grew 3.4% between April and June, slightly below expectations of 3.5% but above long-term trends of 3.1% and consistent with expectations of 3.5% (or greater) GDP growth in the second half of the year... It appears market participants were expecting an even larger number...

Also encouraging has been the GDP price deflator, which checked in at a less than expected 2.4% annual rate, suggesting a favorable read on inflation... Separately, a revision to July Michigan sentiment (consensus 96.5) will be out momentarily while July Chicago PMI (consensus 55.0) will be released at 10:00 ET - economic data that could set a more definitive tone to trading...

I'd say it's found some: down.

10:21
Dow 10,692.26 -13.29 (-0.12%)
Nasdaq 2,195.79 -2.65 (-0.12%)
S&P 500 1,241.65 -2.07 (-0.17%)
10-Yr Bond 42.50 +0.54 (+1.29%)
NYSE Volume 327,464,000
Nasdaq Volume 341,212,000

10:00AM: Market still struggles to find direction as the bulk of sector leadership remains mixed... Industrials have been weak, led by consolidation in shares of Caterpillar (CAT 53.95 -0.50), which hit an all-time high yesterday... Technology has also traded lower after Symantec's (SYMC 22.28 -1.51) Q1 revenues came in less than expected... Utilities, however, have shown relative strength, as strong earnings from AEP, CEG and GAS offset a Q2 disappointment from DTE and PGL, while Materials has traded higher, benefiting from analyst upgrades on MON, DD and WY... DJTA +0.1, DJUA +0.5, DOT +0.1, SOX +0.2, XOI +0.5, NYSE Adv/Dec 1202/1265, Nasdaq Adv/Dec 1330/1107

http://seattletimes.nwsource.com/html/businesstechnology/2002408381_loansurvey29.html

U.S. banks, faced with rising mortgage competition as home sales advance, eased lending standards for the first time in 11 years, the Office of the Comptroller of the Currency said.

"We see an increase in the easing of underwriting for both real-estate and commercial products," said Barbara Grunkemeyer, the agency's deputy comptroller for credit risk. "The banks can take on a little more risk because their portfolios are in good condition."

snip>

The regulator, which oversees nationally chartered banks, surveyed the largest 71 institutions, including Bank of America, Wells Fargo and Citigroup, whose $2.9 trillion of loans represent 90 percent of outstanding national bank loans.

snip>

The healthy economy has made it more likely that companies will seek out other forms of financing besides bank loans. That, in turn, forced banks to lower their standards to lure more customers.

more...

Dow 10,695.52 -10.03 (-0.09%)
Nasdaq 2,196.21 -2.23 (-0.10%)
S&P 500 1,241.84 -1.88 (-0.15%)
10-Yr Bond 4.252 +0.56 (+1.33%)

NYSE Volume 332,947,000
Nasdaq Volume 346,005,000

10:00AM: Market still struggles to find direction as the bulk of sector leadership remains mixed... Industrials have been weak, led by consolidation in shares of Caterpillar (CAT 53.95 -0.50), which hit an all-time high yesterday... Technology has also traded lower after Symantec's (SYMC 22.28 -1.51) Q1 revenues came in less than expected... Utilities, however, have shown relative strength, as strong earnings from AEP, CEG and GAS offset a Q2 disappointment from DTE and PGL, while Materials has traded higher, benefiting from analyst upgrades on MON, DD and WY... DJTA +0.1, DJUA +0.5, DOT +0.1, SOX +0.2, XOI +0.5, NYSE Adv/Dec 1202/1265, Nasdaq Adv/Dec 1330/1107

9:40AM: Stocks open with little fanfare as investors weigh varied views about Q2 GDP data against another deluge of strong earnings reports... Earlier, investors got an advance read on Q2 GDP that showed the economy grew 3.4% between April and June, slightly below expectations of 3.5% but above long-term trends of 3.1% and consistent with expectations of 3.5% (or greater) GDP growth in the second half of the year... It appears market participants were expecting an even larger number...

Also encouraging has been the GDP price deflator, which checked in at a less than expected 2.4% annual rate, suggesting a favorable read on inflation... Separately, a revision to July Michigan sentiment (consensus 96.5) will be out momentarily while July Chicago PMI (consensus 55.0) will be released at 10:00 ET - economic data that could set a more definitive tone to trading...

Gotta run for a while - hopefully will check in later!

:hi:

http://www.usatoday.com/money/industries/banking/2005-07-28-card-usat_x.htm

snip>

Paying another creditor's bill late or having too much debt can also jack up the penalty rate. That rate, which is usually variable, now averages 24.23%, up from 21.91% a year ago, according to Consumer Action. Nearly half of issuers surveyed by the advocacy group base their rate increases partly on how consumers handle their other credit accounts.

Don't have a variable-rate credit card? You still may face an increase, because some issuers are switching fixed-rate cards to variable rates. Discover and MBNA, which is in the process of merging with Bank of America, are among the major issuers who have done that in the past year.

"Fixed rate means that it's fixed until credit card issuers decide to change it, and they can do that with as little as 15 days' notice," says Greg McBride, a senior financial analyst at Bankrate.com.

snip>

About 103 million Americans carried balances, averaging about $9,312, on their cards at the end of last year, says CardWeb.com, a credit card research firm.

snip>

Searching for better deals, even with the same issuer, can make sense in a competitive market. Switching to another credit card "has grown a lot in popularity in this rising-rate environment," says Curtis Arnold, founder of CardRatings.com, a site that reviews credit cards. But, he warns, getting a new card will sometimes hurt your credit rating.

http://www.gold-eagle.com/editorials_05/schiff072805.html

snip>

The reality is that it is not the yuan that needs a peg, but the dollar. It makes no economic sense for a nation to restrain the appreciation of its own currency. A rising currency means increased purchasing power, lower interest rates, and a rising standard of living. It is the market's way of rewarding a nation for its enhanced productivity. China's refusal to partake makes no sense whatsoever. Offering these fruits to Americans instead makes even less sense. My guess is that despite its claims to the contrary, China finally understands this reality, and has adopted a "strong yuan policy." However, unlike America's farcical "strong dollar policy," China's policy actually has teeth.

Contrary to government and Wall Street rhetoric, an appreciating yuan is not good news for America, or its financial markets. Maintaining the peg forced China to extend enormous subsidies to both American consumers and borrowers. Now that the peg/crutch is gone, the subsidies soon will be as well. In the global auction for scare resources and consumer goods, Americans will eventually be out-bid by increasingly wealthier Chinese.

Some have incorrectly argued that a rising yuan will make American exports more competitive in China, and therefore benefit our economy. Such a simplistic analysis is flawed, as its proponents fail to comprehend the basics of international trade. The only reason our exports become more competitive is that we will be selling them for fewer yuan. In other words, we will now be forced to pay the Chinese more yuan to purchase their products, but in return receive less yuan for the products we sell them. The bottom line is, paying more and getting less is a bad deal for Americans.

In addition, within minutes of China's announcement, Malaysia revealed that it too had abandoned its dollar peg in favor of China's basket strategy. In fact, China's announcement basically gives all Asian central banks the green light to sell their dollars as well. The ultimate implications for Asians and Americans are enormous. For Asia, it means greater purchasing power, higher real incomes, and rising standards of living. Asian citizens, particularly the Chinese, will no longer have their own purchasing power suppressed by their governments and transferred to Americans. They will finally be able to enjoy the fruits of their own labor, savings, and productivity.

For Americans, the opposite will be true. This change will result in reduced purchasing power, lower real incomes, and a falling standard of living. The Chinese will no longer be subsidizing American consumers and borrowers with low import prices and interest rates. Without these supports, consumer prices and interest rates will rise, credit and the economy will contract, stock and real estate prices will fall, service sector jobs will be lost, the federal budget deficit will worsen, and the dollar's decline will accelerate.

more...

http://www.kitco.com/weekly/paulvaneeden/jul292005.html

As I expected, the token revaluation of the renminbi has had no material impact on any markets thus far. Nevertheless, China and the renminbi remain key to the future of the US economy. In the meantime, the US economy is chugging along nicely with many stock indices making new highs this week on the back of better-than-expected corporate earnings.

Strong corporate earnings are making the case that the economy is on solid footing, according to the Wall Street Journal. For some time now I have been making the case that the economy is not on solid footing based on the automotive sector. Americans love cars and they are not afraid to go into debt to buy newer and more expensive cars. So when the auto industry suffers it tells me that consumers are tapped out.

snip>

Were we not still riding on the tail end of one of the largest economic expansions in history it might almost be tempting to buy the downtrodden automotive stocks. Had we been in the trough of a business cycle I would certainly have looked at it seriously. But we are at the top of a mega-cycle that was created during the Nineties, and that has not yet been corrected.

During the Nineties there was a lot of talk about the wealth effect and its impact on stock speculation. While the rhetoric has died down, the wealth effect has not diminished. Both the real estate market and the stock market are still rife with speculation. The major stock market indices (excluding NASDAQ) are almost at their all time highs again and I have commented in the past on real estate speculation.

Every business cycle expansion is followed by a contraction during which assets change ownership and excessive speculation is eliminated. We have not gone through that yet and, until we do, a lot of risk remains in the stock, bond, commodity and real estate markets.

more...

Even when so many companies show heavier "adjusted" losses, and the economy keeps getting ranked lower, and the average Joe Blow sees that the economy stinks....

they keep talking about how the economy has "grown". I think they mean "groan".

:kick::kick::kick:

Dow 10,666.22 -39.33 (-0.37%)
Nasdaq 2,187.09 -11.35 (-0.52%)
S&P 500 1,238.09 -5.63 (-0.45%)
10-Yr Bond 4.259% +0.06
NYSE Volume 820,802,000
Nasdaq Volume 789,548,000

12:00PM : Market continues to weaken midday as widespread consolidation, sparked by a surging bond yields and rising oil prices, overshadows encouraging economic data and another deluge of strong earnings reports, leaving virtually every sector underwater... Before the bell, as yet another batch of better than expected earnings provided further evidence of double-digit EPS growth in Q2, investors sifted through a report that showed the economy grew more than 3.0% for the ninth consecutive quarter...
However, while an advance read on Q2 GDP checked in at 3.4%, above long-term trends of 3.1% and consistent with forecasts of about 3.5% GDP growth for the remainder of 2005, economists had been forecasting slightly stronger expansion of at least 3.5%... Upon further analysis of the GDP report, especially within the bond community, GDP less inventories rang in an even stronger 5.8% - news that heightened concerns of further rate hikes, sending Treasurys lower and subsequently lifting benchmark yields on the 10-year note (-17/32) through the psychological 4.25%...

Adding insult to injury for bonds has been an unexpected jump in July Chicago PMI index to 63.5, well above forecasts of 55.0 and June's figure of 53.6... With regard to sector strength and weakness, the interest-rate sensitive Financial sector has been the most influential leader to the downside, as a 2.4% surge in shares of MetLife (MET 49.23 +1.17), which was upgraded to Buy from Hold at Smith Barney after handily beating analysts' Q2 forecasts by $0.25 last night, has been overpowered by concerns of rising borrowing costs... Also under pressure from rising rates has been Homebuilding (-1.5%), which, along with weakness in retail and autos, has weighed on Consumer Discretionary...

Technology has been weak across the board, with a 1.1% selloff in Software - following lower than expected Q1 revenues from Symantec (SYMC 21.79 -2.00) - acting as a catalyst behind widespread consolidation... The Industrials sector has also traded lower, as profit-taking in Caterpillar (CAT 53.51 -0.94), on the heels of hitting an all-time high, has overshadowed reports of a $6 bln contract for 50 Boeing (BA 66.72 +0.72) jets from China...

Despite oil prices ($60.80/bbl +$0.86) trading at two-week highs, amid reports of an explosion at a BP refinery, as well as strong reports from CVX UCL, BHI and APC, Energy has also been weak... Utilities, however, has been a bright spot this morning, even in the face of surging interest rates... The sector has taken advantage of strong earnings from AEP, CEG and GAS, which have offset Q2 disappointments from DTE and PGL... Separately, investors also got a final read on consumer sentiment, which rose 0.5% from June but was unchanged from the preliminary 96.5 read; however, the report has been overshadowed by the GDP and Chicago PMI reports...DJTA -0.4, DJUA +0.2, DOT -0.7, Nasdaq 100 -0.7, Russell 2000 -0.4, SOX -0.4, S&P Midcap 400 -0.4, XOI -0.1, NYSE Adv/Dec 1339/1727, Nasdaq Adv/Dec 1229/1617

11:30AM : More of the same for the major averages as broad-based weakness continues to pressure equities... While this morning's Q2 GDP and July Chicago PMI data have hammered the bond market, as fed funds futures now factor in about a 25% chance that the Fed Funds rate could now hit 4.25% by year end, one report has had little impact on either stocks or bonds... Earlier, investors also got a final read on July consumer sentiment, which rose 0.5% from June but showed no revision from the preliminary read of 96.5...NYSE Adv/Dec 1355/1644, Nasdaq Adv/Dec 1304/1475

11:00AM : Equities continue to languish near their lowest levels of the morning as oil prices continue to trade near session highs... Crude oil futures have been climbing all morning ($60.60/bbl +$0.66), hitting their highest levels in two weeks, after an explosion at a BP Texas refinery exacerbated ongoing concerns about existing capacity already being insufficient to meet oil demand... NYSE Adv/Dec 1421/1507, Nasdaq Adv/Dec 1286/1428

10:30AM : Major indices spike higher following a stronger than expected read on regional manufacturing activity, but almost as quickly reverse course in sympathy with surging bond yields... At the top of the hour, July Chicago PMI index jumped to 63.5, well above forecasts of 55.0 and June's figure of 53.6, consistent with the upturn seen in actual factory and durable goods orders and providing an early read on national manufacturing conditions...

However, the positive data has hit the Treasury market, knocking the 10-year note down 20 ticks and lifting benchmark yields above the psychological level of 4.25%... NYSE Adv/Dec 1604/1199, Nasdaq Adv/Dec 1370/1221

Last trade 89.34 Change 0.00 (0.00%)

Settle 89.34 Settle Time 23:35

Open 89.39 Previous Close 89.34

High 89.66 Low 89.15

Dow 10,675.30 -30.25 (-0.28%)
Nasdaq 2,188.56 -9.88 (-0.45%)
S&P 500 1,238.87 -4.85 (-0.39%)
10-Yr Bond 4.254% +0.06
NYSE Volume 985,040,000
Nasdaq Volume 928,008,000

1:00PM: Little changed since the last update as the major averages continue to vacillate in roughly the same ranges... Worth noting, however, is that even with virtually every sector currently under pressure, today's losses have yet to erase an overall week of gains, leaving room for the S&P, which is at a four-year high, to post its fourth straight weekly gain... On the last trading day of the month, the Dow, S&P and Nasdaq are still up an encouraging 3.7%, 3.8% and 6.0%, respectively, in July...NYSE Adv/Dec 1259/1859, Nasdaq Adv/Dec 1231/1676

12:30PM: Broader market action leaves little to be desired, as buying interest remains scarce across the board... Airline stocks (XAL +0.6%), however, have followed Delta Air Lines' (DAL 2.88 +0.03) lead to the upside, even in the face of a 1.4% surge in oil prices... DAL shares have rebounded after plummeting as much as 26% two days ago amid renewed bankruptcy concerns... Trading higher in sympathy have been AMR (+0.7%), NWAC (+2.0%) and JBLU (+0.45)... NYSE Adv/Dec 1283/1830, Nasdaq Adv/Dec 1215/1662

1:46
Dow 10,671.56 -33.99 (-0.32%)
Nasdaq 2,186.75 -11.69 (-0.53%)
S&P 500 1,238.02 -5.70 (-0.46%)
10-Yr Bond 42.78 +0.82 (+1.95%)
NYSE Volume 1,067,677,000
Nasdaq Volume 997,913,000

1:30PM: Range-bound trading persists in stocks as sellers remain in control of the action... The Materials sector, however, has recently inched into positive territory... But even with expected Q2 EPS growth of about 24% - second only to an expected 37% EPS growth from Energy - the Materials sector provides little in the way of overall market leadership since it accounts for less than 3.0% of the total weighting on the S&P 500...NYSE Adv/Dec 1252/1898, Nasdaq Adv/Dec 1227/1711

http://biz.yahoo.com/special/live05.html

This is from the Midwest section (since that's where I am)

Living well in the middle of America takes far more than a middling income.

In the third installment of our four-part series on what an affluent lifestyle costs across the United States, we looked to the Midwest, from North Dakota to Kansas, and as far east as Ohio. Again, we're not tracking the costs of living an over-the-top lifestyle, with a ski chalet in Gstaad, a personal masseuse on call 24-hours a day, and hot and cold running helicopters.

But we're also decidedly not looking at what the average American family needs to earn. (According to the U.S. census, the three-year average household median income from 2001 to 2003 was $43,527.) Instead, we've estimated how much it would cost to have the kind of lifestyle that many aspire to, with a large house in an upscale neighborhood, a nice country home, very comfortable vacations, private schools and a couple of luxury cars.

Of course, one can still live quite well without all of these amenities and luxuries. One does not necessarily need to have two luxurious cars, a vacation home or a trip to Paris. Instead, choosing less expensive vehicles, foregoing a second home and traveling more economically--or skipping Paris altogether--can bring down one's annual costs considerably.

But if you are determined not to deny your children a private school education or yourself the pleasure of driving a BMW 3 Series, how much does a family of four need to earn to live the good life in the Midwest? By our estimates, less than in the Northeast and the South, though not as little as we would have expected, even in very small cities such as Fargo, N.D., and Sioux Falls, S.D.

more...

http://www.gold-eagle.com/editorials_05/kasriel072605.html

Don't fight the Fed. That's true for investors as well as economic forecasters. I think that, in the current environment, a fed funds rate in the range of 3-1/4% to 3-1/2% is sufficient to moderate real economic growth to the FOMC's "central tendency" of 3-1/2% and to cap consumer inflation, as measured by the PCE price index excluding food and energy, also at the Fed's central tendency of 1-3/4% to 2%. But Alan Greenspan doesn't think so, as evidenced by the following excerpt from his testimony to Congress this past week: "In our view, realizing this outcome will require the Federal Reserve to continue to remove monetary accommodation." The market has interpreted this to mean that the FOMC will continue to march the fed funds rate higher, probably to 4% before the end of the year. Like Lola, whatever Alan Greenspan wants, Alan Greenspan gets - at least in terms of the fed funds rate.

But if Greenspan insists on pushing the fed funds rate up to 4% by yearend, he might not get what he wants in terms of real GDP growth this year, and especially not next year. (The FOMC's central-tendency real GDP growth forecast for 2006 is 3-1/4% to 3-1/2%.) Why? Because, as was discussed in our July U.S. Economic and Interest Rate Outlook (www.northerntrust.com/library/econ_research/outlook/us/us0705.pdf), I believe that Fed policy currently is already considerably less accommodative than it was a year ago when the FOMC commenced raising the fed funds rate. To push the fed funds rate to 4% by yearend would likely move Fed policy to the restrictive side of neutral, which would manifest itself in below-potential real economic growth in 2006 - perhaps considerably below.

Why do I think monetary policy is less accommodative than does the FOMC? Because I concentrate on the behavior of the real M2 money supply and the spread between the Treasury 10-year security and the fed funds rate as indicators of monetary policy whereas the FOMC relies more on the inflation-adjusted level of the fed funds rate. As I have said repeatedly, the Conference Board also implicitly uses the real M2 money supply and the spread as indicators of monetary policy inasmuch as these two variables are among the 10 components included in the conference Board's index of Leading Economic Indicators (LEI). The inflation-adjusted, or real, fed funds rate is conspicuous by its absence from the LEI components. The Conference Board has no theoretical axe to grind. If the real fed funds rate did a better job of foreshadowing the behavior of economic growth than these other two policy-related variables, I am confident that it would be included among the LEI components. Asha Bangalore discussed the changes in the methodology used to calculate the LEI in her daily economic commentary on July 21 (www.northerntrust.com/library/econ_research/daily/us/dd072105.pdf). Chart 1 is taken from Asha's commentary. It shows that over the past 45 years that there has been a very good relationship between growth trend changes in the LEI and real GDP. As Asha pointed out in her commentary, the year-over-year percent change in the LEI peaked in the Q1:2004 at 9.0% and has steadily decelerated to 2.2% in Q2:2005. If the FOMC continues to raise the fed funds rate, I forecast that the yield spread will narrow more, possibly inverting by yearend, and real M2 growth will continue to weaken. For the record, Chart 2 shows the behavior of these two policy indicators in recent years up through June. In the event, I also forecast that growth in the LEI will continue to weaken, June's LEI strength notwithstanding.

With regard to the FOMC's implicit disregard for money supply growth, perhaps it ought to actually look at the research produced by its staff. Back in 2003, two Fed Board staff economists wrote an International Finance Discussion Paper entitled "Putting 'M' Back in Monetary Policy" (www.federalreserve.gov/pubs/ifdp/2003/761/ifdp761r.pdf). Two interesting quotes from the paper are: (1) "The empirical facts point to the conclusion that money provides information important to identifying monetary policy - information that is not contained in the Federal funds rate" and (2) "The evidence appears to contradict the prevalent monetary transmission mechanism in which the real interest is the sole channel by which policy affects real quantities and inflation".

more...

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_mysak&sid=aZcVtWTcE5l8

A new accounting requirement is going to force U.S. state and local governments to figure out how much they are spending on ``Other Post-Employment Benefits'' and list it in their comprehensive annual financial statements.

Those ``other costs'' are the health-related benefits, things like medical care and prescription drugs, that some municipalities provide to retired employees in addition to their pensions.

Such costs are now covered on a pay-as-you-go basis. Beginning after Dec. 15, 2006, those costs are going to have to be tallied up in the same way as pension benefits.

This may be a good thing for taxpayers. Some states and localities might be so horrified by their generosity that they will rein in those benefits and stop making promises that are expensive to keep.

This will be a good thing for bond underwriters. Some municipalities will sell bonds to cover their unfunded other post- employment benefit obligations, just as they have for their unfunded pension liabilities.

more...

building

Dow 10,658.92 -46.63 (-0.44%)
Nasdaq 2,186.37 -12.07 (-0.55%)
S&P 500 1,236.37 -7.35 (-0.59%)
10-Yr Bond 4.286% +0.09
NYSE Volume 1,385,474,000
Nasdaq Volume 1,278,670,000

3:00PM: Recent rebound seems to have stalled, as the indices retrace earlier lows... Even though the Technology sector - the largest contributor behind the Nasdaq turning in the strongest performance in each of the last four weeks - has pared its losses, the absence of leadership from influential sectors like Financial, Health Care, Industrials and Consumer Discretionary continues to weigh on the proceedings... NYSE Adv/Dec 1392/1825, Nasdaq Adv/Dec 1348/1633
2:30PM: Stocks continue to trade at improved levels but market internals still indicate a negative tone to trading... Decliners outpace advancers on the NYSE by an 18 to 13 margin while declining issues hold a 16 to 13 edge over advancing issues... A nearly 2-to-1 ratio of down to up volume, however, suggests an even more bearish bias at the Big Board and Composite...

While the Dow, S&P and Nasdaq continue to trade above initial support levels, renewed buying interest amid a typically light volume summer Friday may not be enough to push the major averages through initial resistance levels of 10730, 1247 and 2200, respectively...NYSE Adv/Dec 1352/1851, Nasdaq Adv/Dec 1329/1658

3:48
Dow 10,647.20 -58.35 (-0.55%)
Nasdaq 2,186.07 -12.37 (-0.56%)
S&P 500 1,234.86 -8.86 (-0.71%)
10-Yr Bond 42.86 +0.90 (+2.14%)
NYSE Volume 1,570,358,000
Nasdaq Volume 1,421,175,000

3:30PM: Sellers show some resolve, sending the major averages to their worst levels of the session... In contrast to late-day buying activity over the last couple of days, which has helped lift stocks going into the close, renewed consolidation efforts appear to have removed what little optimism may have remained... Limited participation, as volume has tapered off and the NYSE has barely seen 1.0 bln shares exchange hands, however, has provided little conviction behind the recent pullback...NYSE Adv/Dec 1307/1932, Nasdaq Adv/Dec 1290/1723

http://biz.yahoo.com/ap/050729/economy.html?.v=15

WASHINGTON (AP) -- The economy is holding up well despite high energy prices. Economic activity expanded at an energetic 3.4 percent clip in the second quarter as consumers and businesses showed they were still in the mood to spend.

The latest snapshot, released by the Commerce Department on Friday, offered fresh evidence that the economy had recuperated after a brief slip in the early spring and possesses good momentum heading into the second half of the year.

The increase in gross domestic product in the April-to-June quarter followed a 3.8 percent growth rate in the first three months of 2005. It marked the ninth straight quarter that the economy has logged growth topping 3 percent -- a performance that economists view as especially encouraging.

"The economy is rolling along like a freight train. High energy prices are less of a drag than what many people had feared," said Ken Mayland, president of ClearView Economics.

more...:eyes:

Like a freight train? Mr. Mayland must spend quite a bit of time sipping cocktails at his local shopping mall brass-and-fern bar.

Dow 10,640.91 -64.64 (-0.60%)
Nasdaq 2,184.83 -13.61 (-0.62%)
S&P 500 1,234.18 -9.54 (-0.77%)
10-Yr Bond 42.86 +0.90 (+2.14%)
NYSE Volume 1,789,588,000
Nasdaq Volume 1,599,832,000

Close: Stocks closed lower across the board, as fears of further rate hikes following positive economic data and rising oil prices eclipsed another batch of better than expected earnings... Sure, stocks finished the month on a very strong note, as the Dow, S&P and Nasdaq closed up 3.4%, 3.5% and 5.8%, respectively, in July, but concerns that recent gains may already be factoring in prospects for the economy and corporate profit growth also weighed on the proceedings, as all ten economic sectors closed lower...

Before the market opened, 11 of the 12 S&P constituents posting quarterly results beat analysts' expectations, providing a floor of support for equities and further proof that Q2 earnings should reach double-digit growth for the ninth consecutive quarter... To that end, investors also digested a report that showed the economy grew more than 3.0% for the ninth straight quarter... An advance read on Q2 GDP came in at 3.4%, slightly below forecasts of 3.5%, but above long-term trends of 3.1% and consistent with forecasts of about 3.5% GDP growth for the second half of the year...

However, once bond traders looked deeper into the report and discovered that if not for a temporary swing in inventories, Q2 GDP would have checked in at a robust 5.8%, the Treasury market plunged... Then, as if bonds couldn't go much lower, more positive economic data heightened fears of further Fed tightening, lifting benchmark yields on the 10-year note (-22/32) to their highest levels since mid April (4.28%)... The July Chicago PMI index unexpected jumped in July to 63.5, well above forecasts of 55.0 and June's figure of 53.6, adding fuel to the selling frenzy in Treasurys...

Believe it or not, he made it to YaHoo Biz! I usually have to search deep into the bowels of the internet to find the skinny on Greenspin. :evilgrin:


http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x17085

Has Greenspan Committed Fraud? The Dr. Ravi Batra Interview
http://biz.yahoo.com/tm/050728/12791.html?.v=1

Editor's Note:
The following is an interview done by Dave Goodboy in conjunction with RealWorldTrading.com.

Brice

This is Dave Goodboy, executive producer of Real World Trading. Today, I am pleased to be joined by New York Times best selling author and highly controversial economist Dr. Ravi Batra. Dr. Batra is Professor of Economics at Southern Methodist University and has recently authored, Greenspan's Fraud. This book exposes the many myths that surround the Chairman of the Federal Reserve and provides Dr. Batra's unique solution to the issues that plague the US economy. As I stated earlier, Dr. Batra is highly controversial and a true outside-of-the-box thinker. Be prepared to have your long-held beliefs challenged in this interview. Let's get started!

more...