STOCK MARKET WATCH, Monday 30 January

The Ozymandius family will be making one of our rare visits to Los Angeles. We will leave on Tuesday morning, 7 February and return on Monday evening, 13 February. So I am asking for someone or a number of people to start the thread for me on the above dates.

Please respond here or PM me if you are interested. I can e-mail you the stock code sheet.

Thank you,

Ozy :hi:

THE DOW REPORT
The New Non-Confirmation and a Closer Look at the Transports

According to Dow theory, the good news was that the Secondary Trend had turned positive with the early January rally, which carried the Industrials up above both the March and the November highs. The bad news then came on Friday the 20th. The price action on that one day dealt a hard blow to the early January positive developments. As a result of that decline, we now have another shorter-term Secondary non-confirmation in place. This non-confirmation is illustrated in green on the chart below and occurred as a result of the Transports moving above their December highs, with the Industrials lagging. Not only are the Industrials lagging, but they have also moved below their December lows. As I read it, the December lows currently must be considered the last Secondary low point and as I warned last week, violation of that low is not good news. Now, the challenge for the Industrials is to better the recent January high. If this occurs it will heal the current non-confirmation and we would then label the January low as the last Secondary low point rather than the December low, and that of course would be great news for the market. Until such time, we must remember that Robert Rhea used to say, “When the averages disagree, they are shouting be careful.” So, until this new Secondary non-confirmation is healed, the caution flag is out.

Last week I reported on several of the Transportation sectors and this week I want to follow up because of new developments. I have plotted the Dow Jones Transportation Average in the upper window of the chart below and the Dow Jones Rail Average in the lower window. This week, the Rails have exploded and are now in perfect sync with the Transports as both averages pushed above their December highs this week. Thus far, this is very good price action.

-cut-

With the Dow Jones Transportation Average moving to new recovery highs and the Industrials lagging, yes of course, we have another Dow theory non-confirmation of Secondary degree forming. But, the real point to this exercise was to follow up on a closer look within the overall Transportation sector to see if there are any cracks appearing. The answer is yes, there are with the Marine Transporters being the weakest, followed by the iffy Air Freighters and then the Truckers, with the Rails being very, very strong. If the Transports were to top out here, then it would likely leave this Secondary non-confirmation intact, which could in turn be marking a turning point for the averages. So, I want to keep an eye on all of this. If the weak sectors continue to weaken and if the Rails begin to slow down, then this will perhaps give us some insight, ahead of time, as to the seriousness of the current Dow theory Secondary non-confirmation that is now in the making.

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

Tokyo stocks open higher following U.S. shares' gains, yen's fall
(Kyodo) _ Stocks opened sharply higher on the Tokyo Stock Exchange on Monday following gains on Wall Street on Friday and the yen's fall against the U.S. dollar. In the first 15 minutes of trading, the 225-issue Nikkei Stock Average rose 204.20 points, or 1.24 percent, to 16,664.88. The broader Tokyo Stock Price Index of all First Section issues was up 21.92 points, or 1.30 percent, to 1,712.24. The Second Section also advanced.

Tokyo stocks staged a strong start with gains in a wide range of issues, notably insurance, warehousing, steel and bank sectors. Export-oriented high-tech and automaker issues also drew buying after the dollar exceeded the 117 yen line for the first time in about three weeks on Friday in New York on reports of unexpectedly solid sales of new homes in the United States.

Buy orders placed before the opening by foreign brokerages topped sell orders for the fourth straight trading day, and by a large volume, according to brokers. more...

Nikkei rises 1 pct to above 16,600, Sony gains
Sun Jan 29, 2006 07:09 PM ET
TOKYO, Jan 30 (Reuters) - Japan's Nikkei share average rose 1 percent on Monday, clearing 16,600 for the first time since September 2000 as Sony Corp. (6758.T: Quote, Profile, Research) and other exporters gained after rises in U.S. stocks. Economic data released before the opening also underlined optimism about the Japanese economy. Industrial production rose 1.4 percent in December from a month earlier, just short of a median market forecast for a 1.9 percent rise.

The Nikkei average was up 1.13 percent or 185.51 points at 16,646.19 as of 0004 GMT. The broader TOPIX index was up 1.03 percent at 1,707.65. /more...

Foreign brokers place net buy Japan stock orders
Sun Jan 29, 2006 06:42 PM ET
TOKYO, Jan 30 (Reuters) - Orders for Japanese stocks placed through 12 foreign securities houses before the start of trading on Monday showed an intention to buy a net 31.5 million shares, market sources said.

There were buy orders for 73.7 million shares and sell orders for 42.2 million shares, the sources said.

http://asia.news.yahoo.com/060129/kyodo/d8felc9g0.html
(Kyodo) _ Japan's industrial production rose an unadjusted 1.3 percent in 2005 from the previous year, the Ministry of Economy, Trade and Industry said Monday.

The index of output at mines and factories stood at 101.5 against the base of 100 for 2000, METI said in a preliminary report.

The index of industrial shipments grew 1.4 percent to 103.8 and that of industrial inventories increased 5.7 percent to 92.9.

In December, the output index gained a seasonally adjusted 1.4 percent to 105.0 from the previous month.

The index of shipments expanded 1.1 percent to 107.7 and that of inventories climbed 0.3 percent to 94.6, the ministry said.

JGB 2-year yield hits November high on Nikkei rise
TOKYO, Jan 30 (Reuters) - The yield on the two-year cash Japanese government bond (JGB) climbed to its highest level in nearly two months on Monday as the Nikkei share average edged up to a fresh five-year high. Bonds came under slight selling pressure, pushing the key 10-year yield to a one-month high, as dealers took a cue from rising domestic stock prices while bracing for a week of major events and data in both Japan and the United States.

Ahead of an auction of 10-year JGBs by Japan's Ministry of Finance on Thursday, dealers expect the Federal Reserve to raise U.S. interest rates by 25 basis points to 4.5 percent when it holds its last policy meeting chaired by Alan Greenspan on Tuesday... "Investors aren't even buying on dips despite the rise in yields to these levels," said Tetsuya Miura, bond strategist at Shinko Securities. "The market is waiting for the Fed meeting and the 10-year auction to determine its next move."

Stock prices have been a driver of day-to-day movements in bond prices, with the Nikkei's gains of nearly 1,200 points in the past five sessions and the share average's rally of 3.6 percent on Friday pushing bond futures prices to one-month lows. But despite overall stocks gains -- the Nikkei climbed around 40 percent in 2005 -- the 10-year JGB yield has been confined to a 1.4 percent-1.6 percent range since autumn, and some analysts saw this as a sign that prices may have room to gain. "The JGB market is surprisingly resilient in view of the scale of the Nikkei rise, suggesting that there is potential investor demand," said Takafumi Yamawaki, a fixed-income strategist at Morgan Stanley.
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March futures (0#2JGB:: Quote, Profile, Research) ended the afternoon session down 0.15 point at 136.89 after dropping nearly half a point to as low as 136.84 on Friday. The yield on the two-year cash bond (0#JPTSY=JBTC: Quote, Profile, Research) rose 1.5 basis points to 0.305 percent, its highest since early November. The 10-year yield rose by the same amount to 1.555 percent, a one-month high. The five-year yield also rose 1.5 basis points to 0.895 percent, also hovering near a one-month peak.

/more...

Nikkei ends above 16,500, steel and shippers up
TOKYO, Jan 30 (Reuters) - The Nikkei average rose 0.55 percent to close above 16,500 for the first time in more than 5 years on Monday as JFE Holdings Inc. (5411.T: Quote, Profile, Research) and other steel stocks rose on speculation of an industry shakeup.

A rise in Japan's industrial output for a fifth month lifted the overall market and shipping firms advanced on a news report of increased investment, but the recent rapid gains also made investors cautious to push prices higher, curbing further advances in the market. Data on Monday showing Japan's industrial production rose 1.4 percent in December from a month earlier. That was slightly below forecasts, but T & D Asset Management chief economist Takashi Kamiya said it provided evidence that production was expanding. "What is characteristics about Japan's economic data these days is that all data is showing improvement," he said. "Basically any Japanese stocks can be bought. Strong output is having a ripple effect on other things such as wages and consumption," Kamiya added.

The Nikkei added 90.55 points to end at 16,551.23, its highest close since September 2000. The Nikkei rose for a fifth session, a rally that has seen it gain nearly 1,200 points.

The broader TOPIX index was up 0.83 percent at 1,704.28, booking its highest close since April 2000.

Steel stocks shone. Analysts said a $23 billion hostile bid by Mittal Steel (ISPA.AS: Quote, Profile, Research) , the world's biggest steel maker, for main rival Arcelor (CELR.PA: Quote, Profile, Research) raised speculation of more consolidation ahead... JFE Holdings, the world's fourth-biggest steel maker, jumped 6.7 percent to 4,300 yen while Nippon Steel Corp. (5401.T: Quote, Profile, Research) , the world's third-biggest steel maker, rose 0.5 percent to 431 yen, extending gains into a fifth session.
...
Shipping stocks gained after business daily Nihon Keizai reported on Sunday that Nippon Yusen KK (9101.T: Quote, Profile, Research) , Mitsui OSK Lines Ltd. (9104.T: Quote, Profile, Research) and Kawasaki Kisen Kaisha Ltd. (9107.T: Quote, Profile, Research) plan to invest a total of 160 billion yen ($1.37 billion) by 2008 to double the number of mid-sized and large tankers they operate. Nippon Yusen added 2.7 percent to 883 yen, Mitsui OSK gained 2.7 percent 1,094 yen and Kawasaki Kisen rose 1.5 percent to 755 yen.

Advantest Corp. (6857.T: Quote, Profile, Research) gained after Credit Suisse in a report on Friday raised its rating on the chip equipment maker to "outperform" from "neutral" and boosted its price target to 17,250 yen from 9,210 yen. Advantest ended up 1.4 percent at 14,200 yen, after earlier hitting 14,740 yen, the highest since May 2001. DRAM chip maker Elpida Memory Inc. (6665.T: Quote, Profile, Research) climbed 3.9 percent to 5,020 yen.

In the banking sector, Japan's top three banks shed gains after hitting lifetime highs. Data on Friday had shown Japan's consumer prices rose in December for the second straight month, reinforcing views that the Bank of Japan will end its ultra-easy monetary policy in a few months.
...
Trade volume rose to its highest level since Jan. 18, with 3.02 billion shares changing hands on the Toyko exchange's first section. Advancers outnumbered decliners by a ratio of more than 2 to 1. /more...

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh27080_2006-01-30_06-59-31_ire025218_newsmlLONDON, Jan 30 (Reuters) - European stocks looked set to start flat on Monday with a rise in Asian shares offset by oil climbing above $68 a barrel on continued supply security worries in Iran and Nigeria.

The dollar stayed just below a three-week high against the yen with attention on an expected U.S. interest rate hike on Tuesday and any signs how soon the Fed's monetary tightening campaign will end.

Global steel stocks are poised to continue their surge after Arcelor (CELR.PA: Quote, Profile, Research) rejected Mittal's (ISPA.AS: Quote, Profile, Research) hostile $23 billion bid, with both sides preparing to win support from shareholders in a public relations clash in Paris later on Monday.

Sales figures from France's Sanofi-Aventis (SASY.PA: Quote, Profile, Research) and Vivendi Universal (EAUG.PA: Quote, Profile, Research) alongside quarterly figures from Italian car maker Fiat (FIA.MI: Quote, Profile, Research) top the corporate agenda while U.S. core PCE for December is the major economic release.
...

* Spread betters in London are calling the FTSE 100 , CAC 40 , and DAX indexes between 5 points down and 5 points higher.
...

* NYMEX crude oil futures climbed half a percent to above $68 a barrel, shrugging off a likely rollover in OPEC production to concentrate on concerns over Iran and Nigeria. Double click on to read the latest oil market report.
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* Gold recovered on a wave of speculative buying, up $2.9 to $563 an ounce.
...

COMPANY NEWS

ARCELOR (CELR.PA: Quote, Profile, Research) , MITTAL STEEL (ISPA.AS: Quote, Profile, Research) The steelmaker said on Sunday that its board has unanimously rejected the hostile bid made by Mittal Steel (ISPA.AS: Quote, Profile, Research) . It also said it recommended Arcelor shareholders not to tender their shares to Mittal. Luxembourg's government also said it is concerned about the implications for jobs of the hostile bid and French Finance Minister Thierry Breton said he would ask Mittal Steel chief Lakshmi Mittal for details of his company's hostile bid for Arcelor at a meeting on Monday.

SALZGITTER (SZGG.DE: Quote, Profile, Research) Mittal Steel attempted to take over Germany's second-largest steelmaker Salzgitter last year, the Financial Times Deutschland reported on Sunday.

GLAXOSMITHKLINE (GSK.L: Quote, Profile, Research) , SERONO (SEO.VX: Quote, Profile, Research) The firm has restarted talks to buy Europe's biggest biotech company Serono SA for a lower price, after an auction for up to $15 billion failed to find buyers, people familiar with the situation said on Sunday.

SANOFI-AVENTIS (SASY.PA: Quote, Profile, Research) The French drug maker reported 4.8 percent higher sales in the fourth quarter, bolstered by demand for vaccines and its blood thinners and raised its earnings growth forecast for the year. Sanofi now expects adjusted earnings per share growth of "close to" 25 percent, instead of at least 20 percent.

FIAT (FIA.MI: Quote, Profile, Research) The car maker could just scrape a profit in the fourth quarter as its new Punto model drives sales, putting the group in a strong position for 2006 and favouring a return to debt markets, analysts say. A Reuters poll of 10 analysts showed the average of expectations was for a trading profit at the unit of 8.5 million euros in the fourth quarter of 2005 on revenues of 5.786 billion euros.

VIVENDI UNIVERSAL (EAUG.PA: Quote, Profile, Research) The French telecoms and media group posted on Monday a 7 percent rise in fourth-quarter sales, driven by its mobile unit which helped compensate for weaker music revenues.

SIEMENS (SIEGn.DE: Quote, Profile, Research) The German engineering conglomerate Siemens is in talks to sell its information technology unit SBS to U.S. rival Computer Science Corporation (CSC.N: Quote, Profile, Research) , German newspaper Euro am Sonntag reported.

SAP (SAPG.DE: Quote, Profile, Research) The German software maker plans to significantly expand development capacities in China and eastern Europe as a result of increasing costs in India, its chief executive was quoted as saying in a newspaper.

EURONEXT (ENXT.PA: Quote, Profile, Research) , DEUTSCHE BORSE(DB1Gn.DE: Quote, Profile, Research) , LSE (LSE.L: Quote, Profile, Research) Paris-based exchange Euronext (ENXT.PA: Quote, Profile, Research) is considering returning cash to shareholders instead of merging on unfavourable terms with rival Deutsche Boerse (DB1Gn.DE: Quote, Profile, Research) or a costly acquisition of the London Stock Exchange (LSE.L: Quote, Profile, Research) , sources familiar with the situation said on Friday. Meanwhile, New York Stock Exchange Chief Executive John Thain declined to comment on Saturday on speculation he was interested in a merger with the London Stock Exchange (LSE.L: Quote, Profile, Research) .

BAYER (BAYG.DE: Quote, Profile, Research) Three large German heart clinics want to either avoid using Bayer drug Trasylol completely or confine its use only to patients with a high risk of blood loss, German magazine Der Spiegel said on Saturday.

ADIDAS (ADSG.DE: Quote, Profile, Research) The German sporting goods firm expects sales at its soccer unit to significantly exceed 1 billion euros in 2006, a spokesman said on Friday.

TOMTOM (TOM2.AS: Quote, Profile, Research) , RODAMCO EUROPE (RDMB.AS: Quote, Profile, Research) Dutch navigation systems company TomTom and property group Rodamco Europe will be added to the Amsterdam blue-chip index AEX , pan-European bourse operator Euronext said late on Friday. The changes in the annual reshuffle will be effective from March 2.

HMV (HMV.L: Quote, Profile, Research) Private equity firm Permira is set to make a takeover approach for British music and bookseller HMV (HMV.L: Quote, Profile, Research) for around 800 million pounds as early as this week, the Sunday Times newspaper reported.

/more...

Swiss SMI up 0.13% at CHF 7789.40 09:28:39 CET
Xetra Dax 30 opens down 0.3% at 5,628.6 in Frankfurt 08:06 GMT
CAC 40 opens down 0.2% at 4,946.5 in Paris 08:04 GMT
FTSE 100 opens up 0.1% at 5,790.3 in London 08:04 GMT

European stocks dip on oil, rate worries
LONDON, Jan 30 (Reuters) - European shares slipped from 4-1/2 year highs on Monday with oil climbing above $68 a barrel sapping sentiment while weaker music and games sales hit shares in France's Vivendi Universal (EAUG.PA: Quote, Profile, Research) .

Traders were also jittery ahead of an expected U.S. interest rate rise on Tuesday, with markets looking for any hints as to when the Federal Reserve's monetary tightening campaign will end.
...
By 0820 GMT, the FTSEurofirst 300 index of top European shares was 0.22 percent weaker at 1,316.78, having closed 1.2 percent higher at 1,319.67 on Friday, its highest since August 2001. /more...

European stocks lower as Arcelor rejects Mittal
European shares opened lower on Monday, with mixed performances from steelmakers after Paris-listed Arcelor rejected the £18.6bn hostile takeover approach from the UK’s Mittal Steel. In early trade, the FTSE Eurofirst 300 fell 0.1 per cent to 1,317.76, while Frankfurt’s Xetra Dax fell 0.3 per cent to 5,629.41. In Paris, the CAC-40 shed 0.2 per cent to 4,944.74, and London’s FTSE 100 gained 0.1 per cent to 5,789.4. Strong performances from stocks in Asia on Monday, and on Wall Street on Friday looked likely to help underpin European indices close to the 53-month highs hit at the end of last week. Arcelor, the Luxembourg-based steelmaker which rose 28 per cent on Friday after Mittal’s hostile approach, added a further 1.7 per cent to €29.05 on Monday following its rejection of the bid as investors anticipated a sweetened offer.

UK blue chips open flat, miners and oils in demand
LONDON,, Jan 30 (Reuters) - Leading UK shares opened weaker on Monday, although mining shares and oils pushed ahead on strong raw materials costs, while retailer HMV (HMV.L: Quote, Profile, Research) bounced on bid speculation.

Copper's rise to within sight of last Friday's record high and aluminium targetting a 17-1/2 year peak boosted the miners, with Rio Tinto (RIO.L: Quote, Profile, Research) , Antofagasta (ANTO.L: Quote, Profile, Research) and BHP Billiton (BLT.L: Quote, Profile, Research) all up by around 1.5 percent.

Mid-cap music retailer HMV shot up 15.5 percent after a report in the Sunday Times newspaper that private equity firm Permira was set to make a takeover approach of 800 million pounds.

Oils saw BP (BP.L: Quote, Profile, Research) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research) add around 1 percent each, buoyed by a rise in the crude price to above $68 a barrel which outweighed a downgrade in BP by Dutch bank ING to "hold" from "buy". ING also cut Royal Dutch to "sell" from "hold".

By 0831 GMT the FTSE 100 index was down 1.2 points at 5,785.6, barely making a scratch in last week's gain of over 100 points, although traders warned the rising oil price will tell. /more...

London's leading shares were little changed in opening trade on Monday consolidating around the fresh 4½ year highs established last week.

The FTSE 100 opened down 0.1 per cent at 5,782.1, with downward pressure coming from the banking sector after its strong run toward the end of 2005 left it open to further profit taking. Rising crude prices helped oil majors provide support. The mid-cap FTSE 250 was 0.5 per cent lower at 9,163.4.

more...

Swiss SMI up 0.25% at CHF 7798.99 13:13:31 CET
Xetra Dax 30 flat at 5,648.79 in Frankfurt 12:50
CAC 40 down 0.3% at 4,940.89 in Paris 12:23 GMT
FTSE 100 flat at 5,787.5 in mid-session trade in London 12:00 GMT

ING cuts Royal Dutch Shell rating to 'sell' from 'hold' 11:52 GMT
ING cuts BP rating to 'hold' from 'buy' 11:51 GMT

FTSE dragged lower mid-session by weak banks
Takeover talk in the retail sector after a bid for HMV, the music retailer, provided the main talking point in the London market in morning trade on Monday. The FTSE 100 was down 2.2 points or 0.1 per cent at 5,785.4 by midday, with downward pressure coming from the banking sector after its strong run toward the end of 2005 left it open to further profit taking. Rising crude prices helped oil majors provide support. The mid-cap FTSE 250 was 0.5 per cent lower at 9,163.4.

European stocks pare gains; steel, oil shares gain
LONDON, Jan 30 (Reuters) - European shares hovered just shy of 4-1/2 year highs on Monday, with a shake-up in the steel sector dominating for a second straight session, and as investors digested the latest batch of corporate earnings.
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By 1145 GMT, the FTSEurofirst 300 index of top European shares was 0.1 percent weaker at 1,318.41, after touching a fresh 4-1/2 year high at 1,320.90.

"Sentiment is too bullish, people are running behind stocks in a speculative way. There's a lot of M&A activity, Arcelor is still playing out, and people are looking for the next target," said Philippe Gijsels, senior equity strategist at Fortis Bank. "It's a very dangerous environment, momentum can last for quite some time, but there is quite a lot of speculation in the market," said the Brussels-based strategist. /more...

http://today.reuters.co.uk/Investing/MarketReportArticle.aspx?type=londonMktRpt&storyID=URI:urn:newsml:reuters.com:20060130:MTFH32523_2006-01-30_11-42-17_SIL042192:1
Mon Jan 30, 2006 11:43 AM GMT
LONDON, Jan 30 (Reuters) - Britain's leading share index briefly touched a 4-1/2 year high on Monday before straying into negative territory, but oil shares rose as crude topped $68, and speculative buying emerged in the retail and telecoms sectors.

Telecoms company Cable & Wireless (CW.L: Quote, Profile, Research), in the past linked to talk of interest from France Telecom and Telecom Italia, gained 3.1 percent after a report that an Icelandic investor was building a stake.

The Daily Telegraph said Thor Bjorgolfsson, Iceland's richest man, has been buying C&W shares, although he has yet to hold more than the 3 percent that would require him to declare his stake. C&W declined to comment.

Britain's mergers-and-acquisitions wave rolled on with midcap music retailer HMV (HMV.L: Quote, Profile, Research) jumping 15.2 percent as it said it had received a bid approach. The shares surged on talk that private equity firm Permira was interested, while people familiar with the matter said Permira had hired Merrill Lynch to advise on a deal.

By 1114 GMT the FTSE 100 index <.FTSE> was down 0.9 points to 5,785.9, after a fleeting stop at 5,796.1, its highest reading since June 2001. Oil shares provided 15 points of upside with BP (BP.L: Quote, Profile, Research) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research) gaining 2 and 1 percent on the rising crude price, despite downgrades by Dutch bank ING.
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The Midcap 250 index <.FTMC> initially touched a new peak of 9,215.9 but settled back to be 29.8 points down at 9,178.1, dented by a 41 percent dive in iSoft (IOT.L: Quote, Profile, Research) after the healthcare software developer said annual profits would fall, hit by a software delivery delay.

Copper's rise to within sight of last Friday's record high and aluminium targeting a 17-1/2 year peak boosted some of the miners, with Rio Tinto (RIO.L: Quote, Profile, Research) and Antofagasta (ANTO.L: Quote, Profile, Research) both up around 1 percent.

Trading volume in midcap steelmaker Corus (CS.L: Quote, Profile, Research) was a brisk 37 million although the shares slipped 0.7 percent, giving back a bit of Friday's 16 percent gain scored as Mittal Steel made an unsolicited 18.6 billion euro bid for rival Arcelor (CELR.PA: Quote, Profile, Research), which Arcelor rejected over the weekend.

Retailer Woolworth (WLW.L: Quote, Profile, Research) gained 4.1 percent, boosted by the M&A talk surrounding HMV, with traders mentioning talk that bookseller WH Smith (SMWH.L: Quote, Profile, Research) might be interested in Woolworth, whose products range from sweets to garden furniture. more...

Fiat Auto trading profit beats forecasts
TURIN (Reuters) - Fiat Auto reported a higher-than-expected trading profit in the fourth quarter of 2005 as sales kicked in for its new Punto model. In a statement issued on Monday, Fiat said its key Fiat Auto unit had a quarterly trading profit of 21 million euros (14 million pounds) compared with a year-ago loss of 156 million adjusted to International Accounting Standards and with an average analyst forecast of 8.5 million.

Chief Executive Sergio Marchionne has been trimming costs and striking alliances with other carmakers such as Ford Motor Co to pull the Auto unit back to profit. The new Punto model made its debut in September, and Fiat aims to sell 360,000 units this year but will face tougher competition when rivals such as Peugeot and Opel launch their own city car models.

Taking advantage of the turnaround, Fiat said it planned to issue a seven-year bond with size and price dependent on market conditions. Last week, Marchionne said the firm would not need a bond in the first half of 2006. Group net industrial debt -- the headline debt figure under the new accounting rules -- dropped to 3.219 billion euros by end-December from 9.447 billion at the end of 2004. "At a first glance, the debt figure looks under control, and that's positive," a trader said.

Auto revenues for the fourth quarter rose to 5.562 billion euros from 5.398 billion in the year-ago period. Fiat said group trading profit in the quarter was 361 million euros, compared with a loss of 125 million euros a year ago and beating the forecast of 276 million. Fiat said in its statement it confirmed its 2006 targets, which are for positive operating cash flow, trading profit of between 1.6 billion and 1.8 billion euros and net income of about 700 million euros.

It said market demand was expected to be "essentially flat".

/more...

Fiat punta in 2006 a quota mercato Italia a 30% - Marchionne
TORINO, 30 gennaio (Reuters) - Fiat (FIA.MI: Quote, Profile, Research) ha come obiettivo per il 2006 una quota di mercato in Italia pari al 30% e in Europa al 7,2%.

/more (italiano)...

Fiat Auto (Milan Stock Exchange:FIA.MI) currently €8.20, +0.61%

Swiss SMI up 0.13% at CHF 7789.32 17:31:47 CET
Xetra Dax 30 closes up 0.2% at 5,660.03 in Frankfurt 16:42 GMT
CAC 40 closes down 0.4% at 4,936.79 in Paris 16:43 GMT
FTSE 100 closes down 0.1% at 5,779.8 in London 16:44 GMT
FTSE 250 closes down 0.4% at 9,169.6 in London 16:42 GMT
FTSE Eurofirst 300 down 0.1% at 1,318.95 in closing exchanges in London 16:41 GMT

European bourses relatively flat in closing trade
European stock markets put in mixed performances on Monday as focus shifted from the balance between falling banks and rising oil stocks to steelmaker Arcelor after it rejected Mittal Steel’s bid. The FTSE Eurofirst was down 0.1 per cent at 1,318.95 in closing exchanges, while the Xetra Dax in Frankfurt added 0.2 per cent to close at 5,660.03. The CAC 40 in Paris lost 0.4 per cent to 4,936.79 and in London the FTSE 100 index fell 0.1 per cent to 5,779.8.

FTSE falls as banks hit by profit-taking
London equities were lower in closing trade on Monday as strength in the oil and gas sector gave way to weaker banks and a slow start on Wall Street. The FTSE 100 was down 7 points or 0.1 per cent at 5,779.8 by the close of trade, with downward pressure coming from the banking sector after its strong run toward the end of 2005 left it open to further profit taking. The mid-cap FTSE 250 was 0.4 per cent lower at 9,169.6.

(nb. One is/becomes aware, of course, of just how adamantly the UK seeks to maintain the perceived separateness of itself in relation to the rest of Europe/the EU. And vice-versa, I reckon.)

Jan 30 8:30 AM Personal Income Dec
Briefing Forecast 0.5%
Market Expects 0.4%
Prior 0.3%

Jan 30 8:30 AM Personal Spending Dec
Briefing Forecast 0.7%
Market Expects 0.8%
Prior 0.3%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38747.3546901273-858810450&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (MarketWatch) - U.S. consumer spending revived at the end of the year, rising 0.9% in December on spending on durable goods, the Commerce Department estimated Monday. Personal incomes increased 0.4% in December. Real disposable incomes also increased 0.4%. The figures were roughly in line with expectations. Meanwhile, inflationary pressures eased. The core personal consumption expenditure price index - the Federal Reserve's preferred inflation gauge - rose 0.1% in December after 0.2% gains the previous four months. The headline PCE was unchanged in December. In the past 12 months, the core PCE price index has increased 1.9%, just inside the Fed's comfort zone of 1% to 2%.

8:30am 01/30/06 U.S. NOV. CONSUMER SPENDING REVISED TO 0.5% VS. 0.3%

8:30am 01/30/06 U.S. NOV. INCOMES REVISED TO 0.4% GAIN VS. 0.3%

8:30am 01/30/06 U.S. CORE PCE PRICE INDEX UP 1.9% YEAR-OVER-YEAR

8:30am 01/30/06 U.S. DEC. PERSONAL SAVINGS RATE NEGATIVE 0.7%

8:30am 01/30/06 U.S. DEC. REAL DISPOSABLE INCOMES RISE 0.4%

8:30am 01/30/06 U.S. DEC. CORE PCE PRICE INDEX RISES 0.1%

8:30am 01/30/06 U.S. DEC. CONSUMER SPENDING RISES 0.9%

8:30am 01/30/06 U.S. DEC. PERSONAL INCOMES RISE 0.4%

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aS59_jMS7fQM&refer=home

Jan. 30 (Bloomberg) -- U.S. personal spending increased more than expected in December as incomes grew, a government report showed, suggesting a pickup in demand at the end of 2005 that may help boost first-quarter growth.

The 0.9 percent increase in purchases, the most in five months, followed a 0.5 percent November gain that was larger than previously reported, the Commerce Department said today in Washington. The report's price gauge tied to spending patterns and excluding food and energy, the Federal Reserve's preferred measure for tracking inflation, rose 0.1 percent in December and was up 1.9 percent for all of 2005.

Car sales and holiday shopping helped lift consumer spending last month, after an October slump that held fourth-quarter economic growth to the slowest since 2002. Economists expect rising incomes to carry demand into this year. Federal Reserve policy makers will raise interest rates tomorrow to keep growth from stoking inflation, according to a forecast by economists.

``With this kind of income growth, the consumer has room to run,'' said Drew Matus, a senior economist at Lehman Brothers Inc. in New York. ``This tells us we don't need to worry about the first quarter.''

Incomes rose 0.4 percent for a second month and were up 5.4 percent for the year, compared with 5.9 percent in 2004.

snip>

Because the rise in spending was greater than the increase in incomes, the savings rate fell to minus 0.7 percent from minus 0.2 percent.

more...

http://biz.yahoo.com/ap/060130/economy.html?.v=5

Savings Rate Hits Lowest Level Since 1933 As Consumers Use Money to Finance Big-Ticket Purchases

WASHINGTON (AP) -- Americans' personal savings rate dipped into negative territory in 2005, something that hasn't happened since the Great Depression. Consumers depleted their savings to finance the purchases of cars and other big-ticket items.

The Commerce Department reported Monday that the savings rate fell into negative territory at minus 0.5 percent, meaning that Americans not only spent all of their after-tax income last year but had to dip into previous savings or increase borrowing.

The savings rate has been negative for an entire year only twice before -- in 1932 and 1933 -- two years when the country was struggling to cope with the Great Depression, a time of massive business failures and job layoffs.

With employment growth strong now, analysts said that different factors are at play. Americans feel they can spend more, given that the value of their homes, the biggest asset for most families, has been rising sharply in recent years. :eyes:

more...


I dunno...I think that sub-title is putting 2 and 2 together and coming up with 7. I don't see how you can extract that conclusion from a bunch of reports and then try to apply it to such a widely defined group called "Consumers". Who's doing all this consuming, is it only people going into hock for "frivolous stuff"? I sort of doubt that. What's that top 1% doing with all of their new gained wealth anyway, aren't they making some of those big-ticket purchases? Next it will be the fault of lack of education again. Yep, those middle class folks weren't bright enough to figure out eating your house wasn't a smart thing to do. :eyes:

3:00pm 01/30/06 WARSHAWSKY: NEGATIVE SAVINGS NO REASON TO BE PESSIMISTIC

3:00pm 01/30/06 WARSHAWSKY: 1Q GROWTH SLOWDOWN TO 1.1% ONLY TEMPORARY

3:00pm 01/30/06 TREASURY'S WARSHAWSKY: U.S. ECONOMY 'ON FIRM FOOTING'

3:00pm 01/30/06 U.S. EXPECTS TO PAY DOWN $30 BILLION IN DEBT IN 3Q

3:00pm 01/30/06 U.S. EXPECTS TO BORROW RECORD $188 BILLION IN 2Q

about for the last 4-5 years. Oh yeah, right on the cusp, turning the corner, capital expenditures will be picking up soon, wasn't that the point of the Jobs Destruction Act?

Others, however, say expanding employment and higher levels of business spending should offer support to the economy.

"Further gains in employment combined with better levels for consumer confidence overall are setting the stage for very solid consumption gains in the first quarter of 2006," ...

from my bra.....

http://www.cbsnews.com/stories/2006/01/27/business/main1244471.shtml

(CBS/AP) The economy grew at only a 1.1 percent annual rate in the fourth quarter of last year, the slowest pace in three years, amid belt-tightening by consumers facing spiraling energy costs.

Even with the feeble showing from October through December, the economy registered respectable overall growth of 3.5 percent for all of 2005, a year when business expansion was undermined by devastating Gulf Coast hurricanes.

The Commerce Department report, released Friday offered the latest figures on gross domestic product, the best measure of the country's economic standing.

The 1.1 percent growth rate in the fourth quarter marked a considerable loss of momentum from the third quarter's brisk 4.1 percent pace. The fourth-quarter's performance was even weaker than many analysts were forecasting. Before the release of the report, they were predicting the GDP to clock in at a 2.8 percent pace.

The 1.1 percent growth rate was the smallest gain since the final quarter of 2002, when the economy expanded at just a 0.2 percent rate.

The White House acknowledged the economy's fourth-quarter slowdown was bigger than expected.

...more...

But, Hey! Those OIL COMPANIES are RAKING IT IN!

LONDON (Reuters) - Oil prices steadied near $68 a barrel on Monday as investors balanced geopolitical risks with expectations for OPEC to keep output near a 25-year high.

-cut-

OPEC's meeting in Vienna on Tuesday is being overshadowed this week by talks on
Iran.

Senior U.S. and European Union officials are to gather in London on Monday in an effort to convince Russia and China to back tough diplomatic action they hope will prevent Tehran from continuing with its nuclear activity.

-cut-

Saudi Oil Minister Ali al-Naimi said he saw no reason to cut production at the meeting or at any time this year. However, the oil minister of price hawk Venezuela said OPEC should be prepared to trim output, possibly on Tuesday.

more...

(BBC) Four foreign oil workers held hostage in Nigeria for nearly three weeks have been freed. A spokesman for the southern Bayelsa state said the American, Briton, Bulgarian and Honduran were alive and well and with the state governor. A British official has confirmed that the four have been released, reports the AFP news agency.

The four were seized in the Niger Delta region in an armed raid by militants demanding more control over resources.
...
The group, however, denied that the release meant they were softening their goal "to destroy the oil export capability of the Nigerian government". "We will shortly carry out significant attacks aimed at ensuring our February target of a 30% of Nigeria's export capacity," they said in an e-mail to Reuters news agency.

/more...

(FT) A frantic round of diplomacy is taking place in London and Brussels on Monday ahead of a crunch meeting on plans to deal with Iran’s nuclear ambitions.

The EU, which is leading western diplomatic efforts, is now likely to offer Iran one "last chance" by delaying a substantive Security Council discussion of the file to March. It had originally hoped to secure a decisive referral as early as next week.

The Iranian envoy is likely to reiterate an appeal, made by Manouchehr Mottaki, Iran’s foreign minister on Sunday, for a postponement of an emergency International Atomic Energy Agency meeting scheduled for Thursday. Mr Vaeedi’s mission comes after Angela Merkel, the German chancellor, warned on Sunday night that Iran posed a threat to the entire democratic world.
...

Hamid-Reza Asefi, Iran’s foreign ministry spokesman, said on Sunday that Iran wanted to “continue talks about the Russian plan”, referring to Moscow’s proposal for Tehran to enrich all its uranium in Russia as a means of allaying international concerns over Iran diverting nuclear fuel into a weapons programme.

Tehran has to date insisted it would want to maintain some pilot enrichment activity in Iran.

Crude prices were lower on Monday as concerns about threats to exports from Nigeria as well as Iran continued, but Opec oil ministers reassured markets on supply ahead of the cartel’s meeting this week.

By mid-morning in London Brent crude for March delivery was 25 cents lower at $65.99 a barrel, while December Nymex West Texas Intermediate fell 15 cents to $67.61 a barrel.

/more...

By FT reporters Published: January 29 2006 22:00 | Last updated: January 30 2006 15:21

A frantic round of diplomacy is taking place in London and Brussels on Monday ahead of a crunch meeting on plans to deal with Iran’s nuclear ambitions.

In the first leg of talks, Javad Vaeedi, deputy secretary of Iran’s Supreme National Security Council, met diplomats from France, Germany and Britain in Brussels.

As the talks ended, a British diplomat said that Iran had failed to offer any major new proposal. “We didn’t hear anything new that we hadn’t heard already,” John Sawers said. “We will pass on the information to our foreign ministers. They will make the final decision on whether the matter will go to the UN Security Council. ”

French foreign minister, Philippe Douste-Blazy, called for Security Council action after the talks reached a dead end.

He said: “The negotiating process has reached an impasse and the involvement of the Security Council is needed to ensure that the requests - many times repeated - of the agency are respected.”

Despite the British and French reaction, Mr Vaeedi appeared more upbeat. “As far as we are concerned, it has been a positive outcome, “ he said, raising the prospect of further meetings.
...
The EU had hoped to slow down the process in the hope of winning support from Russia and China and is now likely to offer Iran one "last chance" by delaying a substantive Security Council discussion of the file to March. It had originally hoped to secure a decisive referral as early as next week.

The Iranian envoy was likely to have reiterated an appeal, made by Manouchehr Mottaki, Iran’s foreign minister on Sunday, for a postponement of an emergency International Atomic Energy Agency meeting scheduled for Thursday. Mr Vaeedi’s mission comes after Angela Merkel, the German chancellor, warned on Sunday night that Iran posed a threat to the entire democratic world.

/more...

10:04am 01/30/06 MARCH CRUDE FALLS 21C TO $67.55/BRL IN EARLY NY TRADING

10:04am 01/30/06 MARCH NATURAL GAS CLIMBS 23.3C, OR 2.7%, TO $8.74/MLN BTUS

12:44pm 01/30/06 MARCH CRUDE CLIMBS TO $68.10/BRL, UP 34C, AFTER $67.25 LOW

12:44pm 01/30/06 MARCH NATURAL GAS JUMPS 57.3C, OR 6.7%, AT $9.08/MLN BTUS

DU LBN: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2074093

Jan. 30 (Bloomberg) -- OPEC must consider cutting production in the second quarter because the oil market looks ``over supplied,'' Venezuela's Energy Minister said, putting him at odds with officials including Saudi Arabia's Ali al-Naimi.

Global supply will outweigh demand by 2 million barrels a day in the period, Rafael Ramirez told reporters today in Vienna, where members of the Organization of Petroleum Exporting Countries meet to decide on output rates. OPEC shouldn't reduce production at tomorrow's gathering, al-Naimi said yesterday.

OPEC is pumping almost as much as it can to fill a widening gap between production from non-OPEC countries, which stagnated last year, and rising demand. Political concerns, such as tensions over Iran's nuclear research program, are adding to the price of oil, which last week rose as high as $69.20 a barrel in New York, the highest in more than four months.

``We have to be ready to cut,'' Ramirez said. ``If the U.S. insists on putting pressure on Iran, the price will be maintained.''

/more...

2:28pm 01/30/06 MARCH CRUDE CLIMBS 49C TO $68.25/BRL NEAR THE SESSION'S END

2:28pm 01/30/06 MARCH NATURAL GAS JUMPS 10% TO $9.36/MLN BTUS

3:07pm 01/30/06 MARCH NATURAL GAS MARKS HIGHEST CLOSE IN ALMOST 3 WEEKS

3:07pm 01/30/06 MARCH NATURAL GAS ENDS AT $9.389/MLN BTUS, UP 10.4%

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh14628_2006-01-29_11-44-18_l28381184_newsml
DAVOS, Jan 29 (Reuters) - While the sun appears to shine on the world's economy, influential voices at the Davos summit warned its leaders to make essential repairs now in case of storms ahead.
...
A slight cooling in U.S. growth, a gradual pickup in Europe and Japan, and China's tweak to its currency regime were hailed as signs that a smooth rebalancing, from a world economy flying solo on the U.S. growth engine, is already underway. There was a nagging undercurrent that good times can't keep on rolling. But no one was quite sure what would go wrong.

"There is a dangerous degree of complacency, and out of that comes a surprise that does the most damage to the global economy," said Stephen Roach, chief economist of Morgan Stanley. He suspects the weak link is the over-stretched U.S. consumer, mortgaged to the hilt in a booming housing market. As the U.S. Federal Reserve keeps jacking up interest rates, consumers could slam the brakes on and tip things out of kilter.

Influential hedge fund manager George Soros agreed. "As the housing boom cools off, there will be a shortfall in demand (which will) affect the global economy," he said. Soros linked this to incoming Fed Chairman Ben Bernanke, saying the Fed was bound to tighten too much. "Their last rise will turn out to be too much. I think he will have to do it."
...
Some economists worry that if the U.S. economy slumps, then China -- the second engine of the global growth churning out masses of cheap goods and funnelling its excess savings into the U.S. markets to finance the $800 billion U.S. deficit -- could slow too much. A simultaneous slowdown in the United States and China could have a major impact.
...
Energy security is the other looming risk economists cited. "The demand shock from India and China could turn into a supply shock because the reserve situation is so tight. Plus the geopolitical risks," said Laura Tyson, dean of the London Business School and former White House economic adviser. Crude oil demand has been rising 8-9 percent a year since 2004. Prices last year hit a record above $70 a barrel. Energy experts at Davos estimated oil output could only be cranked up by another 2-3 percent at most, given current refinery capacity. So if demand keeps soaring, or if a terrorist attack on oil facilities cuts capacity, a global energy crunch could set in.
...
Given these risks, economists and policymakers said the best thing to do is to patch up the holes in the way the global economy works so that it is in healthy shape.

First on the list is to raise the U.S. savings rate as the American growth machine slows down, so the U.S. is less reliant on foreign capital to finance its spendthrift ways. Currently, the U.S. sucks in 70 percent of excess global savings, something that European Central Bank President Jean-Claude Trichet called abnormal. Indian Finance Minister Palaniappan Chidambaram said it robbed poor countries of capital they needed to improve their standards of living at home.

Second on the list is more flexibility in the Chinese yuan currency regime. China promises to do this over time as it gradually switches its growth model from factory for the world to domestic demand. That pledge was renewed by China's central bank governor Zhou Xiaochuan speaking at Davos.

Third on the list is faster growth in Japan and Europe, which recent data show is already happening.

The fact that none of these problems -- together called global imbalances -- have blown up yet surprised economists. But Larry Summers, head of Harvard University and former U.S. Treasury Secretary, was not convinced that the danger of major economic disruptions had passed. Correcting the U.S. current account deficit, for instance, would wipe out about 4.5-5 percent of U.S GDP, or 1.5 percent of world GDP, he said. He compared the situation to waiting for a bus that never comes. Eventually it comes when people least expect it. "The situation in the next couple of years will be a complex one and will require rather more policy coordination than we have seen," Summers said.

/more...

http://asia.news.yahoo.com/060129/4/2ex02.html
DAVOS, Jan 30 Asia Pulse - India has mooted a Free Trade Pact between Asean and six countries including Japan, China, Korea, Australia and New Zealand aiming at a common economic community in East Asia.

"We need a common economic community in East Asia. The core will be Asean. We are now proposing Asean + 3 plus India, Australia and New Zealand. A formal proposal has been put forward by our Prime Minister," Finance Minister P Chidambaram told a meeting with Asian leaders and ADB president H Kuroda here at the World Economic Forum.

India had already signed and ratified the South Asian Free Trade Agreement (Safta) and signed a Comprehensive Economic Cooperation Agreement with Singapore, he said. India would soon sign a CECA with Asean soon.
...
To a query on whether India could sign a FTA with China, Chidambaram said "it is not inconcievable. Trade with China is growing very fast. Some time in future there could be a FTA with China", he said.

There was also a need to develop an Asian Bond Market, where Asian nations could invest a significant portion of their burgeoning forex reserves. There was also a need to set up a Asian Monetary Fund, he said. "We will engage in dialogue (for all these initiatives)," he added.

/more...

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_pesek&sid=acdQ2p_Fe8yc

Jan. 30 (Bloomberg) -- If you want to shock an audience of businesspeople, make this argument: Twenty years from now, India's rise will be more impressive than China's.

Talk about making social blunder in a crowded room. The conventional wisdom is that efficient and rigidly controlled China will leave unsteady, plodding India in the dust. That certainly was the buzz at last week's World Economic Forum in Davos, Switzerland.

snip>

India or China?

It's scenes like these that have economists such as Stephen Roach at Morgan Stanley saying, ``India is on the cusp of something big.'' As a share of gross domestic product, its burgeoning consumer sector is outpacing China, Europe and Japan. Economists are also noticing that India's economy is looking less like those in East Asia and more like those in the West.

True, even the most superficial look at Asia's second- and fourth-biggest economies -- China and India, respectively -- argues in China's favor. Its world-class infrastructure, glistening skyscrapers, massive supply of cheap labor and ability to direct huge resources anywhere they're needed make it the world's version of a limber hare.

India is Asia's tortoise, plodding along as China races off with a leading chunk of the world's direct foreign investment. Its infrastructure is an embarrassment, its bureaucracy a major economic headwind and its crushing poverty a reminder of challenges facing the world's second-most populous nation.

Ground-Up India

Here, the Aesop fable about the tortoise and the hare may offer some insight. In it, the hare, the clear favorite in the race, shoots ahead only to lose steam before the finish line. The less athletic, but steadily progressing tortoise wins in the end.

For all its warts, India boasts a level of ground-up entrepreneurship China's top-down model can't match. It's created world-class, globally competitive companies and a real stock market, unlike the financial casinos that pass for equity bourses in China. India also has a liquid bond market and its banking system isn't bogged down by bad loans.

more...

I increasingly get a sense of great depth and solidity in the subcontinent, and of considerable fragility - indeed, risky revolutionary processes - at work in China.

Which is not to say that there aren't signs of significant corruption all over the region...

:donut: I have been thinking about the meeting in Davos...esp as they are discussing economic matters. There is a real disconnect between Wall St and Main St. I think this disconnect (and human greed) is responsible for the poor policies that spew forth. As I pondered this matter, I had an epiphany. I have been to Switzerland, though not to Davos in particular. I did not see an ugly or poor spot (not counting the hostel shower facility). In an effort to bring economist and the working Joe together, I would like to offer to hold the next summit at my brother homestead (my 1 bedroom apt is a tad too small). He has plenty of room. He has several trailers on his property and with enough notice, he can have them available AND have a few more added. He even has a school bus that he can retro fit for a media center. He raises a few head of cattle for subsistance because the prices he can get are almost NEVER what it costs to raise them. He will be able to provide a really good barbque. His wife is a great cook and has several freezers full of food (she clips coupons and will pass the savings on to the attendees). The closest town, Decatur has a WalMart. They are close to Denton Texas so there are many activities. They have Dairy Queens and a couple of Braum's Ice Cream stores. But the best thing of all, there are plenty of cattle and all these desperate farmer/rancher's will be happy to sell the economist and reporters all the bull shit they need, should they run out.
Happy Hunting and watch out for the bears...

What a great idea!

Why do these "leaders" not really walk the walk - they just talk and talk.

They are disconnected from the reality of the average person and perpetuate the myth of that "great" global economy.

I have my moments. I have come to the conclusion that these 'leader' don't WANT to walk the walk because it is not in their own self interest. So they get to go to a nice city in Switzerland on the publics dime and pontificate to media that are there on a company expense account. I don't need to adjust the antennae to get the picture.

Reminds me of a couple of paragraphs that I cut from the piece above:

"Gloomy warnings of a looming dollar crash and world recession to correct the massive U.S. current account deficit were almost absent from this year's gathering of the rich and powerful.

"Fur coats were back in fashion and limousines rolled on the snowy streets of the mountain resort."

(Although I have to say, according to a Spanish reporter on the scene, Davos is not really one of the most luxurious ski resorts in Switzerland: The elite get into the only two "good" hotels in town while others have to 'bunk up' and 'muck in' in hostal-type accomodation - even though they may be paying €25,000 for the privilege! Such is supply and demand.)

NEW YORK - One and done.

That's been Wall Street's mantra over the past few weeks as it anticipates the
Federal Reserve's latest interest rate hike, expected Tuesday. One more hike, and the central bank is done. But the effect on stocks after this decision could be less exciting than many expect.

While stocks have been volatile this month, much of the past week's gains were fueled not only by strong earnings, but also by investors' belief in the one-and-done theory. And there's strong evidence that Wall Street's interest rate prognosticators could be right.

The economy is definitely slowing — fourth-quarter gross domestic product rose just 1.1 percent in the fourth quarter, very slow by most standards. Job growth has likewise lagged in recent months, and high energy prices still weigh on consumers.

more...

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=50935

Caution!

The following rumor about the next change in interest rates has no basis in fact, but is only the result of the Optimist’s imagination. Please do not make any trading decisions based on this questionable rumor! OK. Now that I’ve dutifully warned all to ignore everything I am going to say in this commentary, I can feel free to start a rumor about the next change in interest rates. My total lack of any factual basis for this rumor is only a minor distraction to keep in mind as I tell you what could happen to interest rates and related markets after the Fed meets next week.

And you thought you have problems . . .

Incoming Fed chairman Bernanke has three immediate problems. First, all the usual suspects (energy, precious metals, base metals, housing bubbles, etc.) have advanced to multi decade highs in clear evidence of escalating U.S. and worldwide inflation. Second, a new Fed Chairman who may be best known for his exploits as a helicopter pilot and his skills at greasing the wheels of the electronic equivalent of a printing press will not get much free respect from the markets. He will need to show action before he can simply talk the markets into following his direction. Third, the mid term Congressional elections are less than 11 months away. One could expect the Administration to pull out all the stops for their favored candidates, and an obviously deepening recession in the fall would not be politically correct timing.

The old song and dance is boring

So, what could our new Fed Chairman do to quickly step past those problems? Either cutting interest rates, or holding them steady now, would only make all three problems worse. They would add fuel to the fire which is already causing inflation sensitive investments to boil over. That action would be seen as solid evidence that the Fed is not concerned about the evidence of increasing inflation, and would embolden the bulls to push the market prices ever higher. If Paul Volcker was a hawk on inflation, and Alan Greenspan waffled around near the dove end of the spectrum, then the first impression of a Fed chairman who dropped interest rates or held them steady now would be somewhere between a dove and beyond that toward wimp. Some people like to start at the bottom so they will have abundant room to move up, but I don’t think our new Fed Chairman is a member of that low expectations club. Finally, passively accepting increasing evidence of higher inflation now could cause a serious timing problem later if the Fed becomes forced to drive up interest rates in the months before the Congressional elections. Simply notching rates up another boring quarter of a point would do little to improve any of the negatives listed above, and would give the impression that Bernanke is almost invisible under Greenspan’s shadow.

snip>

Good timing

Popping rates higher by a half percent or more now will also solve the timing problems related to the next Congressional election. An immediate sharp drop in consumer confidence, matched by similar drops in stocks, energy, and metals, will quickly have the news media talking only about the coming recession or worse. By their next meeting, the Fed will be able to announce that the risks are evenly balanced by inflation and deflation, so they can hold rates steady. As an exercise for the students, compare and contrast the results from raising a boring quarter point now and another quarter point at the next meeting, versus a bold half point increase now and no increase at the next meeting. The following Fed meetings will show the timing value of a sharp increase in rates now. By then, the media will talk about little more than the dreaded deflation toward which our economy is surely falling, and the Fed will be able to cut rates by a half point at each of the next few meetings to protect us from the dastardly deflation fate which would otherwise crush our economy (despite the contrary evidence offered by energy and metals prices which will be setting new record highs). Those sharp rate cuts over the spring and summer, combined with the ever increasing M3 money supply which will no longer be published, will have our economy running at full speed again by late fall, and will push stock prices to record highs. Coincidentally, that will put voters in a good mood by November.

more...

http://www.delawareonline.com/apps/pbcs.dll/article?AID=/20060129/BUSINESS/601290316/1003

WASHINGTON -- Beverly Wilmore is bracing for the tuition bills about to start rolling in after her 19-year-old daughter starts at Towson (Md.) University this week. But she's not too worried -- she figures she and her husband can borrow against their four-bedroom Gaithersburg, Md., home, which has appreciated from $250,000 when they bought it in 2000 to about $400,000 now.

<snip>

Still, his legacy will be judged not just by his record at the Fed, but also by the economy he bequeaths. And when he leaves office Tuesday, Greenspan leaves a nation awash in debt -- record household debt and a record trade gap.

<snip>

Greenspan and his Fed colleagues agree that part of the growth in household debt and the trade gap is the side effect of policies that helped steady the U.S. economy after the stock bubble burst in 2000. The Fed's low interest rates encouraged consumers to borrow and spend on houses, autos and other goods, spurring economic growth for several years when businesses were cutting jobs and reluctant to invest. And consumers spent much of their borrowed money on imports, causing the trade deficit to swell. But in the view of central bank policymakers, the alternative would have been worse -- a longer and more painful downturn.

<snip>

•U.S. household debt hit a record $11.4 trillion in last year's third quarter, which ended Sept. 30, after shooting up at the fastest rate since 1985, according to Fed data.

•U.S. households spent a record 13.75 percent of their after-tax, or disposable, income on servicing their debts in the third quarter, the Fed reported.

•The trade deficit for last year is estimated to have swollen to another record high, above $700 billion, increasing America's indebtedness to foreigners.

...more...

Timeline for Greenspan's Fed Tenure

excerpt:

Jan. 3, 2001: The Fed unexpectedly cuts interest rates in-between meetings by one-half of a percentage point. It is the start of an aggressive series of moves to bolster the economy in the wake of the market decline and a sharp drop in business investment.

Jan. 25, 2001: Greenspan testifies to a congressional committee that huge projected budget surpluses -- which in the end do not happen -- provide room to cut taxes. The comments help the current president win approval for $1.3 trillion in tax cuts.

March 2001: A recession begins, ending the longest expansion in U.S. history.

Sept. 11, 2001: Greenspan is returning from a conference in Europe when his plane is diverted from American airspace because of the terrorist attacks. Fed Vice Chairman Roger Ferguson releases a statement saying the Fed stood ready to provide loans to banks in financial distress.

November 2001: The recession ends but job losses mount as businesses strive to be more competitive with smaller work forces.

...more...

http://www.321gold.com/editorials/bonner/bonner013006.html

The Daily Reckoning PRESENTS: This coming Tuesday, January 31 will see Greenspan pass the torch to Ben Bernanke as the head of the Federal Reserve. Let's take a quick look at the job Helicopter Ben will be taking over...

"Alan Greenspan is the greatest economist of our time... probably the best central banker of all time."

Thus saith a French economist this morning interviewed on a radio talk show this morning. Your editor, also a guest on the show, was asked to respond. What follows is not what he said (because when he is called upon to speak in public he tends to hem and haw like a teenager asking for a date.) But this is what we intended to say:

"Yes, we agree. Alan Greenspan is probably the best central banker that ever lived... in the sense that Butch Cassidy was a great bank robber or Mrs. Purdy ran a great bordello. What is great about him is that he really understood central banking and appreciated it; the way a swindler admires a really good flimflam."

"What you have to remember," we began, gravely, "is that a central bank cannot work miracles. It cannot turn water into wine. It cannot make the blind see, nor heal the sick. When we speak of the central bank 'creating prosperity,' for example, we are either exaggerating or outright lying. The lilies at central bank toil not, neither do they spin. They plant not. They harvest not. They manufacture not. They invent not. 'Not' is what they do best... except when it comes to the nation's stock of money. There they put their shoulders to it.

"But what can they do? They are typically thought to control the quality of money. This, of course, is what they are supposed to do. And in Europe, more or less, that is what Jean-Claude Trichet does. But central banking in Europe is a slightly different métier from central banking in the United States. Bill Clinton jokingly wished he could create an Alan Greenspan Inc. and sell it on the NYSE. So high had Greenspan's stock flown, Clinton knew he'd get rich on options and warrants. Who would suggest such a thing for Trichet? Who even knows his name or would recognize him in a lap-dance bar? The man labors in relative obscurity... if not absolute and perpetual darkness.

more...

DAVOS, Switzerland (AFP) - New York Stock Exchange chief executive John Thain says his company, whose shares will soon begin trading on the NYSE, intends to play a leading role in the consolidation of global stock markets, especially in Europe.

Once the NYSE has completed its acquisition of Archipelago, an electronic exchange that will focus on attracting listings of smaller companies, Thain said he would be ready to pursue deals later this year.

"We will be well positioned to participate in the consolidation that I think is going to take place, both in the US and globally, particularly I think in Europe," he told reporters Friday on the sidelines of the World Economic Forum in Davos.

more...

NEW YORK (Reuters) - Mattel Inc. (NYSE:MAT - news), the largest U.S. toy maker, on Monday reported lower quarterly profits after lower Barbie sales offset gains in its Fisher-Price and American Girl brands.

Mattel reported fourth-quarter earnings of $279.2 million, compared with $284.3 million in the year-ago period. Earnings per share were 69 cents, compared with 68 cents a year earlier.

very short blurb

Looks like the fundie "dollcot" on American Girl Dolls was a bust.
I'd have bought one of these this year if my daughters were still little...

TOKYO - Brisk sales of digital cameras and the strong dollar lifted Canon's net profit 34 percent in the fourth quarter and to record annual earnings for a sixth straight year.

The Japanese manufacturer of cameras and copying machines said Monday that group net profit for the last quarter totaled 108.2 billion yen ($922 million), up from 80.8 billion yen the same quarter a year ago.

-cut-

A stronger dollar and euro also boosted overseas earnings by inflating income when converted back to yen. Both currencies averaged about 2 percent higher against the yen than in 2004.

more...

The U.S. dollar rose Monday against other major currencies in European trading. Gold prices also rose.

The euro fell to $1.2090 from $1.2105 late Friday in New York. Other dollar rates compared with late rates Friday included: 117.59 Japanese yen, up from 117.27; 1.2859 Swiss francs, up from 1.2829, and 1.1489 Canadian dollars, up from 1.1485. The British pound was quoted at $1.7655, down from $1.7678.

Gold dealers in London fixed a recommended price of $560.30 bid per troy ounce at midmorning, up from $556.95 on Friday. In Zurich the bid price was $559.93, up from $557.30.
...
Silver opened in London at $9.64 bid per troy ounce, up from $9.57 late Friday.

/more...

http://www.kitco.com/
SPOT MARKET IS OPEN
closes in 11 mins.
Jan 30, 2006 13:19 NY Time
Bid/Ask 565.10 - 566.00
Low/High 559.70 - 566.40
Change +6.60 +1.18%
30daychg +48.50 +9.39%
1yearchg +139.90 +32.90%

SPOT MARKET IS OPEN
closes in 23 hrs. 13 mins.
Jan 30, 2006 14:16 NY Time
Bid/Ask 566.60 - 567.50
Low/High 559.70 - 567.60
Change +0.70 +0.12%
30daychg +50.00 +9.68%
1yearchg +141.40 +33.25%

This in Swiss Francs per Kilo:

SPOT MARKET IS OPEN
closes in 21 hrs. 10 mins.
Jan 30, 2006 16:21 NY Time
Bid/Ask 568.70 - 569.60
Low/High 559.70 - 569.80
Change +2.80 +0.49%
30daychg +52.10 +10.09%
1yearchg +143.50 +33.75%

1:40pm 01/30/06 MARCH SILVER ENDS AT 19-YR HIGH, UP 17C AT $9.775/OZ

1:28pm 01/30/06 APRIL GOLD TAPS $570.50/OZ HIGH, LAST UP $6.30 AT $570

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38747.5850558796-858830684&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

SAN FRANCISCO (MarketWatch) -- April gold climbed $6.90 to close at $570.60 an ounce to mark the highest futures closing level since January 1981. The contract climbed as high as $571.20 Monday, its loftiest intraday level since the high of $573.70 on Jan. 20. March silver rose to a 19-year high of $9.81 an ounce before closing at $9.775, up 17 cents, or 1.8%. April platinum reached a 26-year high of $1,082 an ounce, then closed at $1,079.10, up $6.40.

1:57pm 01/30/06 APRIL GOLD CLOSES AT $570.60/OZ, UP $6.90, OR 1.2%

1:57pm 01/30/06 APRIL GOLD MARKS HIGHEST FUTURES CONTRACT CLOSE SINCE 1981

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=50937

While the precious metals and energy sectors have garnered most of the media and investor’s attention in the past year, Sugar has quietly doubled in the midst of increase demand for a cheaper and more environmentally friendly fuel alternative. As oil prices continue to rise in the midst of global demand and geopolitical uncertainty, I expect Sugar prices to rise substantially over the next several years. In fact, I believe the agricultural sector in general will provide some of the best performance in this multi-year commodity bull market.

Since early December, Sugar has moved up over 50%. Although part of this move up has been pushed up by speculative interests entering the market, I also believe that it represents a further break out in a commodity that will benefit from higher oil prices, stricter fuel emission standards, and the demand for sugar as a food product.

Higher Oil Prices

Without question, the recent move up in Sugar has been propelled by increasingly rising energy prices. Although some analysts believe that the price of Oil is overvalued, I believe that oil is still tremendously cheap at these levels. Once again, you cannot compare the price of Oil in 1980 to the current levels that we have today. If you adjust the price of Oil for inflation, you will have an all time high that is closer to $100 barrel.



As you can see from the chart above, Oil is still tremendously cheap at these levels. Additionally, I also expect the demand for Oil to increase as China continues industrializing their economy. Although Oil companies are scrambling to find new oil deposits, this is not going to immediately translate into more Oil supply. There is a finite amount of oil in the world, and this is one of the reasons why countries are looking for other energy alternatives.

All Eyes on Brazil

more...

I dunno, is it the really alternative fuel aspect or is it yet another reflection of monetary inflation that is showing up in almost all commodities? :shrug:

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

Last trade 89.42 Change +0.03 (+0.03%)

Dollar: Hailstorm of Data

http://www.dailyfx.com/story/special_report/special_reports/6389_dollar_hailstorm_of.html

Our absolute favorite economic blogger General Glut put it best on Friday with his trenchant observation that “Fourth quarter shows the end of cheap credit”. When all is said and done and the hundreds of explanations for the paltry GDP figures of 1.1% vs. 2.5% expected are dispensed with, the ultimate truth will rest on the fact that for the past two years the US consumer has been carrying the global economy on his back by the use of ever present and inexpensive credit in the form of home equity loans. No more cheap money - no more growth. As mon Generale notes, “Why the big cutback on spending? Obviously part of the answer is higher energy costs… The neglected side of the story is the American consumer's cutback in deficit spending. In the third quarter, the US personal savings rate was -1.8%, while in the fourth quarter Americans tried a little harder to live within their means, taking the personal savings rate to -0.4%. That cutback in spending on credit meant less spending on big-ticket items that need credit… which saw real spending in 2005:IV drop to its lowest point in over four years.”

Both, the US stock markets and the currency markets rallied off the data though by drawing antithetical conclusions. Equities took the news to mean that Fed will stop at 4.5% while FX traders eagerly bought the Snow job from the US Treasury Secretary that the report was “anomalous” and growth was far better than reported. Next week the truth will out as a slew of data (FOMC, ISM, NFP) hits the market. When the dust settles traders should have a much better idea about the true direction of US economy. For the EUR/USD 1.1950 remains the critical level of support. If it gives dollar bulls will have regained control and the US growth scenario will hold for the time being.

...more...

Dollar Breaks Higher as Snow Downplays Weak GDP Report

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/6376_dollar_breaks_higher_as_snow_downplays_weak_gdp.html

US Dollar
It has been quite a see-saw ride in the markets today as we first watched the dollar sell off significantly against the majors after the weaker than expected fourth quarter GDP report to then completely reverse the move and hit a new daily high against the Euro. Price action wise this caused the EUR/USD to take out the 1.2150 support level and hit a low of 1.2087. The speed and depth of the move tells us that the triggering of stops at various levels exacerbated the sell-off, especially at the London close. The only fundamental explanations for the move are two fold, but bottom-line, it all boils down to the Fed’s rate decision. New home sales increased 2.9 percent in the month of December by a more than expected 1.26 million. Coming off the heels of a weaker existing home sales report, the strength caught the market by surprise and it certainly didn’t hurt that US Treasury Secretary Snow came on the wires 10 minutes before the home sales release downplaying the significance of the earlier GDP report. He cautioned against paying too much attention to the GDP report since he expects upward revisions in the months to come and ultimately he feels that the economy’s performance is still sound. This left the market with the impression that today’s release was an outlier, especially since the personal consumption and GDP price index figures were stronger than expected. What is most important is that despite the weaker GDP number, expectations for a March rate hike is still intact and in fact, ticked higher modestly. There is now an over 70 percent probability that we will see 4.75 percent rates by the end of the first quarter. The type of volatility that we saw this week is set to continue well into next week thanks to a heavy economic calendar. The number one event to watch will first be the Fed’s January 31st rate decision. As the last one that Greenspan chairs, the market will be watching carefully to see if there are any major shifts in tone. A more neutral statement would be not be surprising and should only be taken as mildly dollar bearish at best. If the statement is more cautionary about inflation or energy price pressures, that would be taken as dollar bullish. After the FOMC rate decision, we still have manufacturing and non-manufacturing ISM, Chicago PMI, Factory orders, and the ever important non-farm payrolls report.

...more...

http://www.kitcocasey.com/displayArticle.php?id=517

Good day... Trading on Friday was wild, as the Euro lost nearly 1.5 cents on economic news, which should have pushed it higher. The U.S. GDP figures were released Friday morning and showed an economy that is growing at much slower levels than expected. While the markets were counting on 2.8% growth in the 4th quarter, the actual number came in at just 1.1%. The markets immediately took the US$ down after this release, with the Euro trading back up to 1.2250, but then the dollar bulls took over and the Euro dropped a cent and 1/2 in less than 20 minutes before finding a floor at the 1.21 level. This free fall had everyone on the desk scrambling to find a reason, and Chuck could only find news that a major fund was selling gold and silver and buying back dollars. With the metals trading off slightly, this answer seemed to be weak at best, but it is the only one we have heard. The news over the weekend wasn't much help, as the only explanation seems to be that dollar bulls were looking past the GDP numbers at this week's FOMC decision and the all but expected rate increase in the U.S. So we seem to be back to the old SIRT (Stupid Interest Rate Talk) that dominated last year's currency trading.

But I think the markets have dismissed Friday's GDP figures too quickly. These figures are, in my opinion, the first hint of a serious slowdown in an economy that has been fueled by consumer borrowing and easy money. The interest rate moves the FOMC have carried out have only flattened the curve, with the long end staying down and the short-term rates moving up. With the Fed finally nearing the top of their rate cycle and Europe and Asia just starting to raise their rates, I look for foreign investors to start demanding higher returns on U.S. assets. This will cause the longer-term rates to finally start moving up. As these rates rise, consumers will likely find their debt service costs moving up more quickly than their income; applying the brakes to this consumer-fueled economy.

As Chuck mentioned Friday, we will get a boatload of data released this week with the release of Personal Income and Spending today, along with the PCE deflator, which is one of the inflation figures watched by the Fed. Tuesday we will get the FOMC rate decision along with the Employment Cost Index, Consumer Confidence, and Chicago Purchasing Manager numbers. Wednesday we will see Construction Spending, Mortgage Applications, Pending Home Sales, ISM data, and Vehicle Sales. Thursday will bring us the weekly jobs data along with Nonfarm Productivity and Unit Labor Costs. Finally we will close out this long and data-filled week on Friday with the release of the January employment data, Mich. Confidence, Factory Orders, and the ISM data.

Also scheduled to be released on Friday is the Net Foreign Purchases report which, in my opinion, is probably the most important release of the week. If the NFP shows a second consecutive month of slowing overseas investment, the dollar bulls will be hard pressed to continue this dollar strength. The end of this week could signal the beginning of the end for this one-week rally in the US$. This week's data should show if Friday's GDP figure is just the aberration the dollar bulls would have you believe, or if it is the start of a long slow slide.

more...

Uyyy. Glad I have my head down, at least US-related...

"...I look for foreign investors to start demanding higher returns on U.S. assets..." Hahaha! Start demanding?

it is the fault of the working middle class themselves - all of those auto/manufacturing workers should have gone on to college to get their MBAs or healthcare education. :sarcasm:
A$$holes! It's a simple transfer of wealth to the top. It would take place no matter what the educational/vocational makeup of the remaining classes. Repukes see no value in having a middle class. You are either rich enough to afford servants or you're a servant. A middle class demanding a voice in gov't and their share of the pie just mucks things up.

snip>

The White House said it did not believe that the 2003 tax cuts had much influence on wealth shares. It also said that since wealth is transitory for many people, a more important issue is how incomes and wealth are influenced by the quality of education.

"We want to lift all incomes and wealth," said Trent Duffy, a White House spokesman. "We are starting to see that the income gap is largely an education gap."

"The president thinks we need to close the income gap, and he has talked about ways in which we can do that," especially through education, Duffy said.

considering the education cuts that the GOP Congress enacted and Clueless George forgot, getting that education might be harder. It is obvious that the GOP is engaged in a class war. Their goal is to wipe out that pesky middle class.
GOP cocktail party chatter...
The middle class are nothing but a whiners...always want, want, want. They whine about education, health care, civil rights, and the enviroment. Why can't they be quite, like the poor. The middle class are lazy, they only want to work one job. Look how hard working the poor are...now there is an example for you... they work 2-3. How American is that!

http://www.latimes.com/business/la-fi-pension29jan29,1,2139721.story?coll=la-headlines-business

Like a growing number of companies, Countrywide Financial Corp. of Calabasas is phasing out its pension plan to save money, and employees hired since Jan. 1 won't be eligible for lifetime income in retirement.

But new Countrywide executives still qualify for a special executive pension — one that will pay Chief Executive Angelo Mozilo up to $3 million a year for life.

First American Financial Corp. of Santa Ana also has one plan for those in the cubicles and one for those in the executive suites. The workers saw their pension plan frozen in 2001. But a special plan for executives will pay Chief Executive Parker S. Kennedy nearly $1 million a year for life if he remains with the company until age 65.

Major corporations throughout the country are abandoning their pensions, saying the benefits are too costly and less important, with the widespread adoption of individual retirement accounts such as 401(k) plans.

But many of these same companies are retaining special pension plans for top executives, saying they would lose the top brass to rivals without them. :eyes:

more...

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

Jan. 30 (Bloomberg) -- President George W. Bush gives his State of the Union speech tomorrow night facing an unpopular war, an ethical cloud shrouding his fellow Republicans and a midterm election that will decide whether the party keeps control of Congress.

The president has one formidable weapon available to meet these challenges: the ``bully pulpit'' of his office.

<snip>

If Bush pushes his agenda, Sessions says, ``people will listen less to carping and the stuff about'' lobbyist Jack Abramoff, who has pleaded guilty to corrupting lawmakers and other public officials.

Weak Standing

Bush enters the sixth year of his presidency politically weaker than the country's most recent two-term presidents, Bill Clinton and Ronald Reagan. Bush's approval rating of 43 percent in a Bloomberg/Los Angeles Times survey last week compares with a Clinton rating of 68 percent in a Los Angeles Times poll in January 1998 and Reagan's 65 percent in January 1986.

...more...

http://www.abc.net.au/worldtoday/content/2006/s1558135.htm

excerpt:

MICHAEL ROWLAND: It's been a long and disappointing 12 months for George W. Bush since his triumphant post-election State of the Union address last year.

Vowing to spend the political capital he felt he earnt from his election win, Mr Bush outlined a sweeping domestic and international agenda, including an ambitious plan to privatise social security and a program to spread democracy around the world.

Twelve months on and these lofty goals haven't quite been met.

The President's social security plan is effectively dead and the spreading of democracy has proved to a double-edged sword - look no further than the Hamas victory in last week's Palestinian elections.

That other democracy project, bringing liberty to the people of Iraq, has been overshadowed by the continuing violence and the ever-rising US death toll.

Toss in the President's myriad political problems, ranging from the uproar over domestic spying to public discontent over his handling of the US economy, and Mr Bush enters 2006 with an opinion poll rating still hovering in the low 40s.

...more...

and they didn't mention the Katrina debacle :eyes:

He is also expected to make optimistic comments on the US economy – unbowed by a report on Friday that suggested it slowed sharply at the end of last year – and to endorse policies aimed at improving the competitiveness of US industries.

What a 'toon! :rofl:

Despite scandals, poor poll numbers, Wash. Post, NY Times see only good news for Bush

Downplaying President Bush's dismal poll numbers and growing scandals involving prominent members of the Republican Party, articles in the January 26 editions of The Washington Post and The New York Times painted a surprisingly sunny picture of the political environment for Bush and the Republicans.

The New York Times article, a preview of Bush's State of the Union address and his 2006 agenda by Richard Stevenson, began:

Having stabilized his political standing after a difficult 2005, President Bush is heading into his State of the Union address on Tuesday intent primarily on retaining his party's slim majority in Congress this year and completing unfinished business from his existing agenda.

The contention that Bush has "stabilized his political standing" is grossly misleading at best. While Bush's poll numbers do seem to have "stabilized" a bit, they have done so at very low levels. Seven straight Gallup polls, for example, have shown his approval ratings deviating by only two points. But the two-point range in question is between 41 and 43 percent, near Bush's historic low point of 37 percent.

Likewise, three consecutive Zogby polls showed "stability" in Bush's job performance ratings, with the percent of people calling his performance "excellent" or "good" at either 38 or 39 percent in the three polls, while the percent calling it "fair" or "poor" coming in between 60 and 62 each time. And the last three Fox News polls each put Bush's job approval at 42 percent.

...more...

I can't seem to link to this, but if anyone wants the rest, PM me :)

morning as well. Spike straight up, TO THE WATER LINE!

Beating Around the Bush By the Bourse
By Ingmar Lee

01/29/06 "ICH" -- -- Only the uninformed believed Bush when he said it was WMD's that made him attack, invade, occupy and massacre Iraq. Most of us thought it was to steal Iraq's oil, but we were only partly right. What totally terrorized the tyrannical Texan tycoon was when Saddam played the oil bourse card in November, 2000. When Saddam started selling Iraqi oil in euro's, he jeopardized the U.S. dollar's hegemony as the world's supreme foreign exchange transaction currency. If this brilliant idea catches on, it will trigger the total collapse of the USA economy. The oil grab is a sideshow. The main feature is the oil bourse.

The Neocon global domination agenda is engendered by the denomination of global oil transactions in greenbacks. America prints out the bucks that are required for the purchase of oil, and the world has to produce stuff they can sell to get the bucks they need to buy oil. Printing Monopoly 'fiat' money only costs America the paper and green ink, so the USA dollar has been fattened on oil-enriched chicken feed since Tricky Dick delinked the buck from the bullion. The oil bourse scheme could so seriously setback US suzerainty that Saddam got stomped to smithereens. Krassimir Petrov, who teaches international finance in Bulgaria's American University, warns "should the Iranian Oil Bourse gain momentum, it will be eagerly embraced by major economic powers and will precipitate the demise of the dollar." Saddam was just the first wavelet in the coming tsunami. On March 20, 2006, Iran will start selling oil in euros.

http://www.informationclearinghouse.info/article11704.htm

(At the end of last weeks Credit Bubble Bulletin)

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

snip>

My comment: I don’t believe that “financial globalization” per se is the real issue or the problem (scapegoat, perhaps). Rather, I will pin blame directly on the character of the current global financial apparatus that fosters unconstrained Credit growth and speculative excess - which I refer to as “Global Wildcat Finance.” Any and every Credit system – domestic or international – that operates with unlimited capacity to create and easily disseminate liquidity will, during periods of optimism, supply too much of it. Importantly, this dynamic will work surreptitiously to distort and eventually abrogate market processes – as we continue to observe. The capacity for the unfettered global financial system to create unlimited finance is at the root of today’s dangerous prevailing dynamic: a veritable breakdown in the market mechanism for creating and pricing global finance. No longer does the interaction of the supply and demand for finance determine market yields, while the surfeit of global liquidity has widely distorted asset prices, risk premiums and the allocation of Credit and finance. An unsound system has nurtured a precarious yet trumpeted backdrop, where surging demand for borrowings (by the U.S.) is easily accommodated (“relaxed constraints”) at predictably low interest rates.

I take quite strong exception with any view holding that the current dysfunctional arrangement “permits more efficient adjustment over time,” or that it “smoothes the impact of economic shocks.” The reality of the situation is that this current market failure is prolonging U.S. excesses and only delaying what will surely be a monumental adjustment process. It is a maxim of Macro Credit Bubble Theory that the risks associated with prolonging financial and economic Bubbles grow exponentially over time and generally culminate with a “blow-off” period of manic excess. Timid policymakers have watched the global cycling and recycling of dollar liquidity in awe – deer in the headlights. Having loitered long enough to recognize that there will be no self-adjustment or correction, policymakers now face the dilemma that to impose the necessary policy restraint to commence the adjustment process comes at a cost much higher than they are willing to bear. So they are stuck hopelessly eyeballing the situation, while paying more strident, but basically useless, lip service. Meantime, highly speculative markets relish in what has evolved into an historic policy vacuum.

From Ms. Lomax: “The dollar’s central role in the foreign exchange policies of Asian emerging markets adds to the uncertainty about the deficit levels at which the US will face tighter credit constraints. Since the foreign official sector - mostly Asian central banks - have been financing a substantial part of the US current account deficit and now hold a substantial amount of the outstanding stock of US Treasuries, private investors’ willingness to hold dollar assets depends to some extent on their expectations of what these Asian central banks will be doing. Since many Asian already have far more reserves than they need for self-insurance against financial crisis, their appetite for continued accumulation of US dollar assets will at some stage abate; indeed, there has been some anecdotal evidence of this over the past year.”

Bingo. Here, Ms. Lomax hits on a very key (and timely!) point with respect to the extraordinary Global Wildcat Finance backdrop commanded by the interplay between expansionist central banks and the enterprising global leveraged speculating community. I believe very strongly that the hedge funds, “proprietary trading desks,” and others’ “willingness to hold dollar assets depends to” a great “extent on their expectations of what these Asian central banks will be doing.” It’s evolved into the ultimate combination of market intervention, moral hazard, and trend-following leveraged speculation. And this gets right to the heart of the danger inherent in the confluence of activist central banking, marketplace distortions, and speculator liquidity as a key source of system liquidity. This powerful dynamic is as alluring as it is self-serving and reinforcing, yet it is progressively destabilizing and inevitably unmanageable. No one dares to remove the punchbowl.

snip>

From Ms. Lomax: “While the risk of a disruptive adjustment may still be low, the sheer scale of current imbalances increases the potential costs of policy mistakes and misperceptions. Any disconnect between what the markets expect and what policy makers intend to do becomes increasingly hazardous. That puts a premium on excellent policy communication, to reduce uncertainty and minimize the risk of sharp market corrections. And policy makers need to ensure that their policies are robust to the possibility that market expectations may not be consistent with economic fundamentals.”

Are “free” financial markets really so fragile? Why? I see it as a declaration of defeat anytime central bankers are compelled to openly pander to the marketplace...

more...

http://www.washingtonpost.com/wp-dyn/content/article/2006/01/28/AR2006012801097.html

excerpt:

One of the top agenda items will be the Bush administration's recommendation for the 2007 pay raise. President Bush will make his pay recommendation in his fiscal 2007 budget, scheduled for release Feb. 6, and Congress will take it up during the spring and summer. Federal pay raises have averaged more than 3 percent annually in recent years.

<snip>

Legislation that would add a real estate investment fund to the Thrift Savings Plan is under study in the House. The bill's backers have met with TSP officials on the proposal. Congressional aides also are looking into whether TSP rules could be changed so that bonuses could be counted as retirement contributions.

Except for the pay raise, Congress seems likely to move slowly on all civil service issues this year, aides to senators and House members said.

The deployment of troops in Iraq, the recovery and relief efforts in Gulf Coast states devastated by Hurricane Katrina, the president's fiscal 2007 budget recommendations and efforts to tighten lobbying laws will draw the most attention in Congress, including from the House and Senate committees that oversee the civil service.

...more...

machines, I don't know what is. An ELECTION year, and they're screwing every single person in the country over 65, and a whole helluva lot of those under 65.

If they were truly accountable to the voters, they wouldn't do this. But they know the voters have no voice, so they do as they damned well please.

AND vote themselves a frikkin' pay raise.

:argh:

Have I said lately how much I HATE REPUBLICANS????

:kick::kick::kick:

as I wrote in an email.,I will never endorse,recommend,or buy another DELL product as long as I live, I will continue to denounce and trash their tech support centers for the agonizing wait periods to get connected to imbeciles who many cant speak good english or direct my phone call to the proper technician. Now you post DELL will ship out 5,000 more jobs overseas. Can't say who were worse,idiots from ElSalvador,imbeciles from India or the Philipines,why we customers can't get tech help right here from the good old USA is beyond belief. A funny thing while I attempted to get tech help from DELL, I took a chance and called DELL sales, sure enough the salesman was from Tennessee and I got through in about 1 minute, 1 minute to take your money and 400 minutes (phone and online) seeking tech help. I am a computer novice, my skills are less than george bush has a brain. to wrap up, my pc problem is still not resolved and my contempt for DELL is evident..

You stock market people are super,^5 and the best of luck to you !!!

http://news.yahoo.com/s/ft/20060127/bs_ft/fto012720061724035164;_ylt=Ah3V_MUgmLOUfnbnn5XZ5oL2ULEF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

snip>

You can present the data to support either secular interpretation. If you believe in a secular bear market, it started in early 2000. None of the major US indices has yet returned to their highs of the turn of the millennium.

Or you could say that the bottom in 2003, at which point the S&P had roughly halved, signalled the beginning of a bull market, which is encountering turbulence at the moment.

The strength of the economy and corporate earnings, combined with more reasonable valuations, are all taken as pointers that the market is now on a well-supported advance.

But the evidence from history suggests that we are still in a bear market.

Earnings are on course to log their tenth successive quarter of double-digit growth. This is often cited as a reason for optimism, although earnings last year would have been much less impressive without the exceptional gains made by the energy sector.

This is not quite the bull point it appears. Ed Easterling, of Crestmont Research, who is convinced the market is still in a bear cycle, shows that the relationship of economic growth - which correlates over time with earnings growth - with bull and bear cycles is counter-intuitive.

more...

Dow 10,917.12 +9.91 (+0.09%)
Nasdaq 2,307.56 +3.33 (+0.14%)
S&P 500 1,285.80 +2.08 (+0.16%)
10-Yr Bond 4.525 +0.22 (+0.49%)

NYSE Volume 356,596,000
Nasdaq Volume 352,304,000

10:00 am : Holding modestly higher, the market's major averages garner support from six of the ten economic sectors. With its 2.3% gain, Energy leads. The sector is in focus ahead of tomorrow's OPEC meeting and oil production strategy, and Exxon Mobil's (XOM 63.86 +2.57) record fourth quarter earnings report has helped drive its advance. On a related note, Smith International (SII 43.40 +0.67) announced strong results and provided upside FY06 guidance. We continue to suggest an Overweight weighting in the Energy sector, with preference for the oil services, drillers, and equipment companies. On the other side of the aisle, the Financial, Healthcare, and Utilities sectors each levy 0.2% losses. DJ30 +13.20 NASDAQ +5.46 SP500 +2.56 NASDAQ Dec/Adv/Vol 1163/1346/262.3 mln NYSE Dec/Adv/Vol 1323/1269/162.5 mln

09:40 am : As futures trade had suggested, the equity market opened in subdued fashion. This week's busy earnings front has gotten off to a mixed start. Exxon Mobil (XOM) reported record Q4 results, but SGP, SYY, CMI, EK,TSN are amongst companies that have disappointed. About half of the S&P 500 has now reported; aggregate earnings are on track for a 13% gain. Separately, Wal-Mart (WMT) announced a preliminary same-store sales gain of 4.7% for January, which is at the high end of its 3-5% forecast, and provides early support. Fellow Dow component GM is also on the rise, following reports that Citigroup (C) is working with Cerberus Capital to make an approximate $11.5 bln bid for a majority stake in its GMAC business. Aside from the mixed earnings front, anticipation ahead of tomorrow's FOMC meeting and policy statement and the OPEC meeting may help keep early buying action in check.DJ30 +9.44 NASDAQ +4.02 SP500 +1.20

http://omega.twoday.net/stories/1485982/

In a shocking development, the Treasury Department website is openly stating that as of January 24, 2006 our national debt stood at $8,185.3 billion and on January 26th at $8,190.5 billion.

http://www.publicdebt.treas.gov/opd/opdpenny.htm

Yet the US national debt 'ceiling', the maximum amount of debt the US government may hold at any one time, stands at $8,184 billion – a full $5.5 billion less. Although called upon by John Snow, Congress has not yet passed an expansion of the debt ceiling and so the US government is now operating in technical default.

You may recall that when last the debt ceiling was approached in the months surrounding the 2004 elections, the Treasury department furiously employed every accounting trick in the book (and then some) to avoid breaching the limit. They even went so far as to take the unprecedented step of borrowing $14 billion from the Federal Financing Bank to cover up the shortfall.

But they never breached the ceiling.

On January 24th they breached it brazenly and openly and with nary an accompanying explanation. Neither have any lawmakers have broached this indelicate subject.

I suppose we could write this off as merely an unsurprising development from a government that no longer bothers to even appear to be adhering to rules, laws and procedures, let alone actually doing so.

<snip>

The federal government does not have the legal authority to borrow above the statutory debt limit, which raises the prospect of emergency congressional action to avoid a full-fledged default.

...more...

Ruh-Roh!

http://www.publicdebt.treas.gov/opd/opdpenny.htm


The estimated population of the United States is 298,390,259
so each citizen's share of this debt is $27,475.79.

The National Debt has continued to increase an average of
$2.18 billion per day since September 30, 2005

not a word in the press since 1/8/06

U.S. hovers close to its debt ceiling
Treasury boss says government business could be affected

Sunday, January 8, 2006

If consumers are overextended with credit, they're not alone. The U.S. government is poised to exceed its charge card limit and may have to quit paying its bills unless Congress raises the national debt limit soon.

That's what Treasury Secretary John Snow said in a recent letter to Congress, warning that unless the current $8.2 trillion debt ceiling is raised by mid-March, "we will be unable to continue to finance government operations."

In the last 50 years, the United States has raised its debt ceiling more than 70 times, and budget watchers say lawmakers have become expert at delaying or disguising this politically perilous task.

"The antics they go through are incredible, and they've gotten worse,'' said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget in Washington, D.C.

For instance, in his Dec. 29 letter, Snow said that while the debt limit "will be reached in mid-February 2006," he could delay default for a month using "available prudent and legal actions."

...more...

Now tell me again about the State of the Union?

...with some cogent comments.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=114&topic_id=19228&mesg_id=19228

I remember posting something to that effect last week.

I notice the search function that I used last week doesn't seem to be functional today. :shrug:

http://www.ny.frb.org/markets/pomo/display/index.cfm?fuseaction=showSearchForm

http://www.mises.org/fullstory.aspx?control=1579

Since the last serious outbreak of inflation in the 70s, central banks have conquered this pestilence and have practiced a responsible stewardship over national monetary systems ever since. Due in no small part to the benign inflationary environment that has followed their victory, stocks and bonds have outperformed historical averages. This reflects a high degree of confidence in future monetary stability and prosperity.

Or so we are constantly told.

That this consensus view is a twisted mirror of reality is the theme of an undeservedly obscure work of financial economics, Peter Warburton’s Debt and Delusion: Central Bank Follies that Threaten Economic Disaster. Published in 1999, the work rapidly went out of print but has since become a cult classic among financial contrarians.<1>,<2> Although not written from an Austrian point of view, the argument parallels an Austrian view of money and banking in many aspects. My purpose in writing this article is to present Warburton’s main argument and to interpret it through an Austrian lens.



The Demise of Inflation

During the developed world’s flirtation with hyper-inflation in the 70s, wage and price increases were driven by a rapid expansion of the money supply created by central banks to fund government deficits. The upward spiral was finally stopped when Fed Chairman Volker raised short-term interest rates enough to slow down monetary growth.

The mechanism of the last major bout of inflation was the sale of government debt to commercial banks. In this process, called "monetization," banks or the Fed create the money out of nothing with which to purchase the bonds.<3> This is often referred to as "printing money," although in modern times, the money is usually created electronically rather than through the manufacture of paper notes.

After suffering through one episode of runaway prices, public opinion had turned against inflation by the early 80s. The political parties associated with the inflationary period had been voted out of office in the US and the UK. Chairman Volker had been appointed to head the Federal Reserve, a post from which he embarked upon a painful campaign of raising interest rates sufficiently to slow money supply growth.

Warburton’s story begins in the aftermath of Volker’s triumph. The conundrum facing governments at the time was: how to enable governments to continue to live beyond their means, without suffering inflationary consequences? In this climate, a new outbreak of inflation would have contained the seeds of its own demise, for the following reason. Lenders require a positive real return in order to lend; interest rates must then exceed the rate at which the currency is losing value, by some margin. Having recently been burned by inflation, bond buyers would have resisted any signs of rising prices by insisting on higher bond yields. Such a market-driven rise of interest rates would have given the central bank little choice but to follow with rate increases of its own to slow down money growth, or else risk a total destruction of the currency through accelerating inflation.

Central bankers offered a program to solve this dilemma, the centerpiece of which was a change in the method of financing government debt. Deficit finance bonds would be sold to private investors through existing financial markets. This would place the bonds in the hands of investment funds, rather than on the books of commercial banks as would have been the case had they returned to the old style of monetization. The subsequent explosion in the size and breadth of bond markets is illustrated by a few snapshots of gross issuances: less than $1 trillion in 1970; $23 trillion by 1997<4> and nearly $43 trillion by 2002.<5>

more...

hmmmm... looks like they had better get crackin' on that debt ceiling issue :eyes:

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38747.625403669-858834526&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- The U.S. government expects to borrow a record $188 billion in the second quarter, the Treasury Department announced Monday. Earlier, the government had said it expected net borrowing of $171 billion for the January through March period. Details of next week's quarterly refunding auction, including the reintroduction of the 30-year bond, will be announced on Wednesday. In the third quarter, the government expects to pay down $30 billion in federal debt. The government still expects to hit the statutory debt ceiling in mid-February. In remarks to a bond market industry group, Assistant Treasury Secretary Mark Warshawsky said the economy is "right on track" and expects healthy consumption growth this year despite negative personal savings.

http://www.321gold.com/editorials/engdahl/engdahl013006.html

In the past weeks media reports have speculated that Washington is 'thinking the unthinkable,' namely, an aggressive, pre-emptive nuclear bombardment of Iran, by either the United States or Israel, to destroy or render useless the deep underground Iranian nuclear facilities.

The possibility of war against Iran presents a geo-strategic and geopolitical problem of far more complexity than the bombing and occupation of Iraq. And Iraq has proven complicated enough for the United States. Below we try to identify some of the main motives of the main actors in the new drama and the outlook for possible war.

The dramatis personae include the Bush Administration, most especially the Cheney-led neo-conservative hawks in control now of not only the Pentagon, but also the CIA, the UN Ambassadorship and a growing part of the State Department planning bureaucracy under Condi Rice. It includes Iran, under the new and outspoken President Mahmoud Ahmadinejad. It includes Putin's Russia, a nuclear-armed veto member of the UN Security Council. It includes a nuclear-armed Israel, whose acting Prime Minister, Ehud Olmert, recently declared that Israel could 'under no circumstances' allow Iranian development of nuclear weapons 'that can threaten our existence.' It includes the EU, especially Security Council Permanent Member, France and the weakening President Chirac. It includes China, whose dependence on Iranian oil and potentially natural gas is large.

Each of these actors has differing agendas and different goals, making the issue of Iran one of the most complex in recent international politics. What's going on here? Is a nuclear war, with all that implies for the global financial and political stability, imminent? What are the possible and even probable outcomes?

much more...

http://www.swisspolitics.org/en/news/index.php?section=int&page=news_inhalt&news_id=6422279

WASHINGTON (Reuters) - The U.S. Army has forced about 50,000 soldiers to continue serving after their voluntary stints ended under a policy called "stop-loss," but while some dispute its fairness, court challenges have fallen flat.

The policy applies to soldiers in units due to deploy for the Iraq and Afghanistan wars. The Army said stop-loss is vital to maintain units that are cohesive and ready to fight. But some experts said it shows how badly the Army is stretched and could further complicate efforts to attract new recruits.

"As the war in Iraq drags on, the Army is accumulating a collection of problems that cumulatively could call into question the viability of an all-volunteer force," said defence analyst Loren Thompson of the Lexington Institute think tank.

"When a service has to repeatedly resort to compelling the retention of people who want to leave, you're edging away from the whole notion of volunteerism."

When soldiers enlist, they sign a contract to serve for a certain number of years, and know precisely when their service obligation ends so they can return to civilian life. But stop-loss allows the Army, mindful of having fully manned units, to keep soldiers on the verge of leaving the military.

more...

Rummy and Cheney's answer would be to simply privatize it. Wouldn't that be grand. They would finally have a separate military under their control. Isn't that one of the requirements for a facist state? Middle and lower class Murikan's will be all for it - certainly don't want to have the draft reinstated. The rich (who have other methods of avoiding the draft)would see it as yet a great investment opportunity. It is a neo-con's recurring wet-dream.

that is causing the moral to suffer. Kids catch on. In order to avoid stop-loss, Kids will stop signing in the first place. John Murtha is speaking the gospel truth about our military being in critical condition.
I was USAR and had they pulled these shenanigans on me, I would be unavailable in another country. It is bad enough that by virtue of my occupation they could draft me at a time and place of their choosing. But to renege on the contract-that just makes them untrustworthy.

See also this perspective from Cuba:



/more...

propagate. We get fed one side, our "enemies" get another side and somewhere in the middle lies the truth, obscurely hidden away and "discredited" by administrations and the media in the bowels of the Internet.

http://breakingnews.nypost.com/dynamic/stories/H/HEDGE_FUNDS_NEW_ERA?SITE=NYNYP&SECTION=BUSINESS

excerpt:

Today some 7,000 hedge funds in the United States command an estimated $750 billion to $1 trillion in assets and leave a wide footprint in the financial markets, as they are believed to account for as much as 20 percent of all U.S. stock trading. They're about to be brought under new supervision by federal regulators concerned about their explosive growth and virtually unbridled operations.

But some big hedge funds are using a loophole to get around the new oversight, and the new regulation itself is being challenged in the courts.

Under a rule that bitterly divided the five-member Securities and Exchange Commission when it was adopted in October 2004, a new regime begins on Wednesday for these high-risk, largely unregulated and secretive investment pools. Hedge funds have traditionally been the investment domain of the wealthy but have become popular with small investors in recent years.

<snip>

-In September, two top officers of the scandal-ridden Bayou hedge fund suddenly emerged from hiding and admitted engaging in a fraud that totaled hundreds of millions of dollars - $450 million according to court papers. They pleaded guilty to conspiracy and fraud charges in federal court in White Plains, N.Y.

...more...

Bush cousin - John Ellis - involved in Bayou Funds fraud?

Bayou and the Bush Cousin

A first cousin of President Bush is emerging as a peripheral player in the increasingly bizarre Bayou Management hedge fund scandal.

Sources say John P. Ellis, a former journalist turned investment banker, represented several companies in investment presentations to IM Partners, a side venture set up by Samuel Israel and Daniel Marino. Israel and Marino were the management team that ran Bayou and who federal prosecutors allege defrauded investors out of $300 million.

People familiar with the Bayou saga say Ellis, a personal friend of Israel for the past several years, helped arranged at least five investment deals for IM Partners while working as a managing director for GH Venture Partners, a New York City-based investment bank. In all, IM Partners, a Connecticut-based investment partnership, invested at least $25 million in deals handled by GH Venture.

There's no indication that Ellis or GH Ventures were direct or indirect investors in either Bayou or IM Partners. And, other than their common principals, there's no direct evidence that any relationship existed between IM Partners and Bayou, although both operated out of the same Stamford, Conn., office.

A former columnist for the Boston Globe, Ellis may be best known for his work as an electoral consultant for Fox News during the 2000 presidential election. It was Ellis' analysis of the Florida vote total that led Fox to declare Bush the victor before any of the other networks.

...more...

connections. Wtf is with this "misappropriated" crap? Nice to see the headline got it right.

Dow 10,900.80 -6.41 (-0.06%)
Nasdaq 2,306.60 +2.37 (+0.10%)
S&P 500 1,284.09 +0.37 (+0.03%)
10-Yr Bond 4.539 +0.36 (+0.80%)

NYSE Volume 690,146,000
Nasdaq Volume 638,173,000

11:00 am : Continuing to hover just above the flat line, the major averages remain pressured by declines across five sectors. Pared gains in Energy (+1.8%) and Consumer Discretionary (unchanged) help to further erase some of the indices' gains. The retail industry, which had demonstrated relative strength in the early going, now sits on the unchanged mark. Wal-Mart (WMT 46.69 +0.85) continues to lend support, and Gap (GPS 17.85 +0.47) is also trending higher after Bank of America upgraded its shares from Neutral to Buy. However, some broad-based selling ahead of the industry's stream of same-store sales results, due out Wednesday and Thursday, counter their advances. DJ30 +1.92 NASDAQ +3.28 SP500 +1.01 NASDAQ Dec/Adv/Vol 1439/1358/572.9 mln NYSE Dec/Adv/Vol 1520/1459/420.1 mln

10:30 am : The indices have moved closer to the unchanged mark. Energy's 2.0% gain continues to support the market, but declines in Healthcare (-0.4%), Financial (-0.2%), Utilities (-0.3%), and Telecom (-0.2%) serve as offsetting factors. With respect to the Financial sector, a submerged Treasury market weighs upon the rate-sensitive banking industry. Investors within the stock and bond markets alike await tomorrow's FOMC meeting. A 25 basis point hike in the fed funds rate is considered virtually certain, but there is less certainty over the accompanying policy statement. The market is expecting only one more rate hike after tomorrow's, and will be looking for confirmation of such in the statement's wording. Our forecast is for two more rate hikes in the next two meetings, and that Fed policy will then go on hold.DJ30 +3.92 NASDAQ +3.22 SP500 +1.04 NASDAQ Dec/Adv/Vol 1367/1371/437.1 mln NYSE Dec/Adv/Vol 1414/1498/280.8 mln

Dow 10,908.97 +1.76 (+0.02%)
Nasdaq 2,309.67 +5.44 (+0.24%)
S&P 500 1,285.47 +1.75 (+0.14%)
10-Yr Bond 4.535 +0.32 (+0.71%)

NYSE Volume 1,015,389,000
Nasdaq Volume 890,779,000

12:00 pm : Heading into the afternoon, the market's major averages continue to float around the unchanged mark. A mixed bag of earnings reports couples with anticipation ahead of the week's full docket in tempering action on either side of the aisle.

Leadership has been limited to the Energy sector's 1.8% advance. With the OPEC meeting scheduled for tomorrow, that area of the market is in focus. Investors await the cartel's crude production decision. A record fourth quarter earnings report from Exxon Mobil (XOM 63.31 +2.02) has incited further buying interest there, and strong results from Smith International (SII 44.01 +1.28) adds to the upside. Those companies' reports underpin the Overweight rating that Briefing.com maintains on Energy.

Seven of the ten economic sectors presently trend lower. Utilities (-0.5%) and Financial (-0.4%), the market's rate-sensitive sectors, are pressured by the submerged Treasury market. Stock and bond traders alike remain cautious ahead of tomorrow's FOMC meeting. A 25 basis point hike in the fed funds rate is considered virtually certain, but there is less certainty over the Fed's accompanying policy statement. The market expects just one more rate increase following tomorrow's, and will attempt to glean confirmation of such in the statement's wording. Our forecast calls for two more rate hikes over the course of the next two meetings, after which the tightening cycle will go on hold.

Due largely to relative weakness in pharmaceuticals and biotechs, Heath Care (-0.4%) is also an influential laggard today. Schering-Plough (SGP 19.72 -0.36) announced Q4 profits that fell short of expectations and levies a weighty loss. Wide-spread selling has taken the Consumer Staples sector 0.1% lower, but rising Wal-Mart (WMT 46.80 +0.96) shares limit its decline. This morning, the world's largest retailer announced a preliminary 4.7% gain in January same-store sales. That figure is at the high end of its forecast, and follows its disappointing 2.2% increase in December. The uptick in January suggests there was an accelerator effect from gift card spending that is apt to show up in the same-store sales results from other retailers. The industry's January results will begin to stream in following Wednesday's closing bell.

Wal-Mart also helps to support the Discretionary sector (+0.1%), and upgraded Gap (GPS 17.92 +0.54) shares provide an additional lift. General Motors (GM 24.29 +0.49) is one of the sector's, and the Dow's, brightest spots upon reports that Citigroup (C 46.81 -0.06) is working with Cerberus Capital in offering an $11.5 billion bid for its GMAC business. Wachovia (WB 54.41 +0.01) is also reportedly considering an offer. Further to the M&A front, Arcelor rejected Mittal's (MT 35.85 +1.59) unsolicited $23 billion takeover bid.

On the economic front, personal income was up 0.4% and in line with expectations. Personal spending was up 0.9%, a bit more than the forecasted 0.8% increase. As the data were about as expected, and since the fourth quarter GDP numbers have already been released, the reports have had little impact on trade today.DJ30 -7.13 NASDAQ +2.30 SP500 +0.51 NASDAQ Dec/Adv/Vol 1546/1364/830.5 mln NYSE Dec/Adv/Vol 1589/1561/640.4 mln

Let's see:

Here's a couple of things:

Both were "Bush Pioneers"

Both were on the Bush/Cheney "transition team"

Both had lots of dealings with Ralph Reed

feel free to add to this list - here's a link with some more information:

Ken Lay/Enron Timeline

excerpt:

2000: According to documents filed in the Snohomish County case, Enron manipulates the energy market on more than 400 of the 537 days stretching from January 2000 to June 2001.

August: Tim Belden, head of Enron's Western trading desk, tells Richard Shapiro, Enron's Vice-President of Regulatory Affairs and principal D.C. lobbyist, of the California schemes.

October: Ralph Reed joins the legions of national political and economic figures who worked for Enron when Enron hires Reed's company Century Strategies to promote deregulation in Congress. Other figures include Bush economic adviser Lawrence B. Lindsey, Weekly Standard editor William Kristol, economist Paul Krugman, CNBC commentator Larry Kudlow, U.S. Trade Representative Robert B. Zoellick and Republican National Committee chairman Marc Racicot.

December: Enron assistant general counsel Richard Sanders is informed of an Enron trading schemes dubbed Fat Boy, Ricochet, and Death Star among others. Internal Enron documents show that with Fat Boy, the company submitted an exaggerated estimate of the power its customers would need the next day so it could reap extra payments when the state demanded more power to the grid.

December 8: California Independent Systems Operator, the agency responsible for running the transmission grid for most of the state, asks the Federal Energy Regulatory Commission (FERC) to lift price caps.

2001: It was the best of times . . .

January 3: Ken Lay is named to the Bush Administration transition team. He gives $100,000 to the Bush Inauguration.

...more at link...

Both have been guests at the Whitehouse.
Both have swindled money from people.

All 72 Trapped Canadian Miners Rescued

(CBS/AP) Rescuers retrieved all 72 central Canadian potash miners who were trapped underground by a fire and survived until Monday by using oxygen, food and water stored in subterranean emergency chambers.

<snip>

"They are glad to be on the surface," said Brian Hagan, director of health and safety for Dynatech, the contractor that employed the miners, adding they were not exposed to smoke. "They protected themselves and that is what they are trained to do."

"A lot of them said they had a good sleep down there in the refuge station," he said. "They were pretty calm. They had water, they had food, they had all the stuff that they needed."

<snip>

The miners reported smoke and quickly headed for the safe refuge rooms, which can be as large as 50 feet by 150 feet and have an internal supply of oxygen that lasts up to 36 hours, along with food, water, chairs and beds.

...more...

Safety Violations Have Piled Up at Coal Mine

Time and again over the past four years, federal mining inspectors documented the same litany of problems at central West Virginia's Sago Mine: mine roofs that tended to collapse without warning. Faulty or inadequate tunnel supports. A dangerous buildup of flammable coal dust.

<snip>

In the past two years, the mine was cited 273 times for safety violations, of which about a third were classified as "significant and substantial," according to documents compiled by the Labor Department's Mine Safety and Health Administration (MSHA). Many were for problems that could contribute to accidental explosions or the collapse of mine tunnels, records show.

In addition, 16 violations logged in the past eight months were listed as "unwarrantable failures," a designation reserved for serious safety infractions for which the operator had either already been warned, or which showed "indifference or extreme lack of care," said Tony Oppegard, a former counsel to MSHA.

<snip>

But in MSHA's reports, 18 of the 46 most recent violations were listed as "significant and substantial." Among the problems cited: inadequate safeguards against the collapse of the mine roof and inadequate ventilation to guard against the buildup of deadly gases.

...more...

No mention of "safety rooms" in that Sago Mine. :grr:

Dow 10,911.37 +4.16 (+0.04%)
Nasdaq 2,309.95 +5.72 (+0.25%)
S&P 500 1,286.77 +3.05 (+0.24%)
10-Yr Bond 4.541 +0.38 (+0.84%)

NYSE Volume 1,511,757,000
Nasdaq Volume 1,295,092,000

2:05 pm : Inching higher, the market receives a slight boost from the Technology sector's (+0.6%) uptick. Surging Apple (AAPL 76.45 +4.42) shares pave the way higher, and the semiconductor industry's near-recovery helps the sector climb. Within the SOXX index, Advanced Micro Devices (AMD 41.36 +1.51) shines brightest; Micron (MU 14.89 +0.19) has also risen in excess of 1.0%. Meanwhile, the weakest links - MRVL and BRCM - have erased some of their intra-day losses. The sector gives some added muscle to Energy's leadership. Crude remains just above $68.00 per barrel and that sector continues to garner attention ahead of tomorrow's OPEC meeting. According to the Associated Press, the cartel has ruled out any change in production at its meeting this week, but indicated that oil ministers from Venezuela and Saudi Arabia said Monday that it has a consensus to cut output in March. Based on the trading action in energy futures, it would appear the market is taking the latter comment with a grain of salt given OPEC's notoriously wishy-washy nature and the understanding that a lot can happen on the geopolitical front between now and March that would make a production cut ill-advised.DJ30 +12.80 NASDAQ +8.71 SP500 +3.78 NASDAQ Dec/Adv/Vol 1495/1486/1.23 bln NYSE Dec/Adv/Vol 1558/1675/1.02 bln

On a personal crystal-ball reading note: I think the markets will stay above 10,900 until after the SOTU (just a hunch) and then, good people, look out below!

Dow 10,904.88 -2.33 (-0.02%)
Nasdaq 2,308.82 +4.59 (+0.20%)
S&P 500 1,286.27 +2.55 (+0.20%)
10-Yr Bond 4.535 +0.32 (+0.71%)

NYSE Volume 1,775,803,000
Nasdaq Volume 1,518,904,000

2:55 pm : Very narrow range-bound trade persists. While gains, outside the of Energy sector, remain in check, losses have also been limited. Of the six economic sectors presently on negative turf, Utilities (-0.5%) occupies the laggard position. Health Care (-0.4%) trails close behind. Spurred by Schering-Plough's (SGP 19.60 -0.48) disappointing fourth quarter earnings report, the pharmaceutical industry remains a source of relative weakness. Biotechs contribute to the sector's decline. Selling there is broad-based, but extended weakness in Boston Scientific (BSX 20.85 -0.78) is a particular drag. Rising Amgen (AMGN 72.44 +1.13) shares offer some offsetting support, however. Amgen reported Q4 results that disappointed the street last Thursday, and appears to have attracted bargain hunters today. DJ30 +6.94 NASDAQ +6.00 SP500 +3.56 NASDAQ Dec/Adv/Vol 1554/1476/1.43 bln NYSE Dec/Adv/Vol 1649/1621/1.21 bln

Dow 10,891.60 -15.61 (-0.14%)
Nasdaq 2,305.76 +1.53 (+0.07%)
S&P 500 1,284.74 +1.02 (+0.08%)
10-Yr Bond 4.535 +0.32 (+0.71%)

NYSE Volume 1,999,283,000
Nasdaq Volume 1,701,377,000

3:30 pm : The Dow has slid back below the flat line, but each of the major averages remains within close proximity of the unchanged mark. The market's breadth further reflects today's neutral, non-committal sentiment. On the NYSE, declining issues outpace their advancing counterparts by a narrow 17-to-16 ratio. Decliners on the Nasdaq, meanwhile, presently maintain an 8-to-7 lead over advancing issues. As a comparison, here is a look at Friday's breadth. At the close of trade, advancers had a 7-to-4 advantage on the NYSE and a 3-to-2 lead on the Nasdaq. DJ30 -7.75 NASDAQ +4.90 SP500 +2.46 NASDAQ Dec/Adv/Vol 1610/1419/1.61 bln NYSE Dec/Adv/Vol 1681/1601/1.37 bln

I guess people needed that "wealth" for spending :eyes:

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38747.6393563657-858835976&siteID=mktw&scid=0&doctype=806&

BOSTON (MarketWatch) -- Funds that invest primarily in U.S. stocks posted net outflows of $2.18 billion in December, versus inflows of $9.23 billion the prior month, the Investment Company Institute reported late Monday. Conversely, portfolios that primarily hold foreign companies saw inflows of $12.28 billion, holding steady from November's $11.79 billion take. The exodus from bond funds continued, as investors pulled $2.71 billion after they withdrew $324 million the previous month. Total mutual-fund assets in the U.S. rose $138.9 billion, or 1.6%, to $8.906 trillion in December, according to the ICI, the main trade group for mutual funds.

funds. By golly, we really are rich!!!

Where the hell does that kind of money come from?

Every week, a majority of American's designate a small percentage of their pay checks to a 401K. Most of that goes directly into mutual funds. This is what keeps the stock market a float, as that money comes in every week consistently.

less end up as mutual funds. I mean, it's just a hard number to get your mind to even grasp. A bunch of bits and bytes whirling around in this "finacialized" economy.

Sensible, imho.

Dow 10,899.92 -7.29 (-0.07%)
Nasdaq 2,306.78 +2.55 (+0.11%)
S&P 500 1,285.20 +1.48 (+0.12%)
10-yr Bond 4.535% +0.03
30-yr Bond 4.708% +0.03
NYSE Volume 2,333,003,000
Nasdaq Volume 1,978,648,000

4:20 pm : Monday's market reflected investors' wait-and-see stance ahead of a busy week in terms of both earnings and economic news. The major indices spent the session in flat line vacillation mode, and trading volume was notably lower than last week's.

The Energy sector led the session. Ahead of tomorrow's OPEC meeting, that area of the market received added attention. According to the Associated Press, the cartel has ruled out any change in production at its meeting this week, but oil ministers from Venezuela and Saudi Arabia said Monday that it has a consensus to cut output in March. The price of crude futures ($68.40 per barrel) gained 1.1% today, and helped drive buyers to the sector. A record fourth quarter earnings report from Exxon Mobil (XOM 63.12 +1.83) was also behind the rise, and strong results from Smith International (SII 44.35 +1.62) added more momentum. Those companies' reports underpin the Overweight rating that Briefing.com maintains on Energy. Refiners fared particularly well ahead of reports from SUN and VLO due out this week.

Largely to the credit of the hardware industry, the Technology sector advanced 0.5%. After declining about 17% over the past two weeks, Apple (AAPL 75.17 +3.14) attracted bargain hunters and was the particular bright spot. Relative weakness in semiconductors, due to some profit taking, capped the sector's advance. Materials (+0.2%) also closed higher, and Industrials finished on the flat line.

While gains, outside of Energy's, remained contained, losses were similarly limited. Due to weakness in pharmaceuticals, following a disappointing earnings report from Schering-Plough (SGP 19.60 -0.48), Healthcare (-0.5%) levied the weightiest loss. The biotech industry was also a sore spot, and Boston Scientific's (BSX 20.80 -0.83) extended decline pressured the equipment group. Ahead of tomorrow's FOMC meeting and accompanying policy statement, the market's most rate-sensitive areas reflected traders' cautious sentiment. Banks kept the Financial sector (-0.2%) in the red, and wide-spread selling took Utilities (-0.6%) lower. Investors within the stock and bond markets alike fully expect a 25 basis point hike in the fed funds rate, but there is less certainty over the Fed's policy statement. The market expects just one more rate increase following tomorrow's, and will attempt to glean confirmation of such in the statement's wording. Our forecast calls for two more rate hikes over the course of the next two meetings, after which the tightening cycle will pause. With respect to financials, brokers helped limit the downside.

Some broad-based selling sent the Consumer Staples sector (-0.4%) south, but Wal-Mart (WMT 46.40 +0.56) shares offered support. This morning, the world's largest retailer announced a preliminary 4.7% gain in January same-store sales. That figure, which is at the high end of its forecast, follows its disappointing December same-store sales gain. The rise in January suggests there was an accelerator effect from gift card spending that is likely to show up in the same-store sales results from other retailers. After Wednesday's close, the industry will begin to announce its January data. An encouraging fiscal Q2 report from Sysco (SYY 32.48 +1.91) lent further upside within the Staples sector.

Along with upgraded Gap (GPS 18.07 0.69) shares, General Motors (GM 24.19 +0.39) was the Discretionary sector's (-0.2%) strongest crutch. Upon reports that Citigroup (C 46.83 -0.04) is working with Cerberus Capital in offering $11.5 billion for its GMAC business, the stock jumped. On a related note, Wachovia (WB 54.75 +0.35) is also reportedly interested in making a bid. Further to the M&A front, Arcelor rejected Mittal's (MT 35.69 +1.43) unsolicited $23 billion cash proposal, and Fairmont Hotels (FHR 44.24 +0.42) will be acquired by Kingdom Hotels and Colony Capital for $3.9 billion in cash.

The economic calendar featured two items. Personal income was up 0.4% (consensus 0.4%); personal spending rose 0.9% (consensus 0.8%). As the data generally matched expectations, and because the Q4 GDP figures have already been reported, the markets essentially overlooked the data. Investors remain focused upon tomorrow's FOMC and OPEC meetings and Friday's employment report.DJ30 -7.29 NASDAQ +2.55 SP500 +1.48 NASDAQ Dec/Adv/Vol 1629/1487/1.94 bln NYSE Dec/Adv/Vol 1702/1592/1.66 bln

head bumping my twin!

Have a great evening 54anickel!

:hi: