STOCK MARKET WATCH, Thursday 2 March

MARKETS TURN 180 DEGREES FROM YESTERDAY

Tuesday’s closing bell had stock prices sharply lower, bond prices higher, and the dollar lower versus most major currencies, but today is a different story. Yesterday we saw a great deal of data depicting weakness in the U.S. economy, but today we see continuing strength in consumer spending, increased business spending, and more strength than was expected in U.S. manufacturing. The anchor on CNBC asked the man on the floor of the NYSE if traders were reacting to higher oil inventories or the possibility of the Fed backing-off interest rate increases. His response was, “No, neither! The talk on the floor is the resilience of the stock market, as if nothing ever happened yesterday.”

Let’s have a brief review of some recent economic data, and then see what changed today. Going back to last Friday, we got the steepest decline in over five years for durable goods orders with a drop of 10.2% reported for January (much to do with Airbus taking business away from Boeing). Monday had new home sales down by 5.0% and Tuesday existing home sales were reported lower by 2.8%. Also yesterday, fourth quarter GDP was revised to show growth of 1.6% for the overall U.S. economy. Inventory growth and investment in software and equipment rose more than expected. In the big picture, the GDP report showed weakness. The Chicago purchasing manager’s index and consumer confidence both came in weaker than expected. All the negative data pushed the dollar and stock prices lower. Part of the thinking was that the Federal Reserve would be able to back off the interest rate increases, but not so!

Early in today’s session, bonds were flat, the dollar opened lower and stocks began with a modest bid. As the good news rolled in, the dollar reversed direction, bonds began to sell-off (pushing interest rates higher) and stock prices continued to march higher led by technology shares. The ISM manufacturing report was the big one traders were waiting for today. Weakness in the report would have added confirmation to yesterday’s numbers and meant the Fed could at least pause on rate increases. As it turns out, the report came in better than expected with a reading of 56.7 following 54.8 in January. Consensus expectations were looking for 55.5. As Bloomberg reports, “Businesses are rebuilding inventories, investing in new equipment and expanding production capacity to meet demand. Strength in manufacturing and accelerating consumer spending will keep the economy growing and prompt the Federal Reserve to continue raising interest rates to contain inflation, economists said.”

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Now back to the resilience of the U.S. economy, personal spending and incomes. The Commerce Department reported today that U.S. incomes rose 0.7% in January and consumer spending rose 0.9%. Yes, you guessed it; debt continues to move higher as the personal savings rate fell to negative 0.7%. Savings have been negative for eight out of the last ten months. To make matters worse, the 0.7% gain in personal incomes was largely offset by consumer inflation of 0.5% for the month of January. The Fed reports core inflation of 1.8% annualized, but the January figure translates to 6% annualized and I believe the 6% level still understates our true inflation rate.

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

8:30 AM Initial Claims 02/25
Briefing Forecast 285K
Market Expects 285K
Prior 278K

8:30 AM ET 3/2/06 U.S.INSURED UNEMPLOYMENT RATE STEADY AT 1.9%

8:30 AM ET 3/2/06 U.S. 4-WEEK AVG. INITIAL JOBLESS CLAIMS UP 5,250 TO 287,250

8:30 AM ET 3/2/06 U.S. CONTINUING JOBLESS CLAIMS FALL TO 5-YEAR LOW OF 2.49MLN

8:30 AM ET 3/2/06 U.S. INITIAL JOBLESS CLAIMS RISE 15,000 TO 294,000

U.S. initial jobless claims rise 15,000 to 294,000

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BB8BB8A5C%2D7C94%2D4276%2D970A%2D2280693B2099%7D&dateid=38778%2E3542331019%2D862501458&siteid=mktw&dist=newsfinder

WASHINGTON (MarketWatch) - Initial applications for U.S. state unemployment benefits rose by 15,000 to 294,000 in the week ending Feb. 25, the Labor Department reported Thursday. The four-week average of new claims rose by 5,250 to 287,250. Meanwhile, the number of workers collecting state unemployment benefits fell 2,000 to a five-year low of 2.486 million in the week ending Feb. 18, the same week the government surveyed hundreds of thousands of businesses and households for its monthly employment report. The four-week average of continuing claims dropped by 2,750 to a five-year low of 2.508 million.

:donut: Wall St should be really happy today what with the 'low' unemployment rate. I think our real rate is 6-12% (depending on the region) and may go up more in some areas. But that really isn't what's weighing on my mind today. I know the corporations and WS don't give a rat's ass about the guy on Main St.

The burr in my saddle is the released video tape proving that Bush knew about Katrina. What is it going to take to get this guy impeached-photos of him in bed with Satan getting a BJ? When you mention that Bush lied the RW nuts will say, well Clinton did too...and I always reply, well, Clinton went through impeachment hearings...so where's the difference? Clinton had a marital indiscretion that only involved 3 people. Bush's lies and incompetence has actually killed thousands. So what is the greater crime.

And I am also mad at our Representatives that forgot why they are in Washington. The last 5 years have so soured me that I don't know if I will ever be able to vote for a GOP candidate again....even a great one. They may be in power, but they are a dieing party. The only way they can retain power is to cheat the system, pack the court, and put moles in every institution.

Well, I've been so pissed lately I have had to switch to decaf. I hope we survive the damage that has been done.

Happy hunting and watch out for the bears.

SINGAPORE - Crude futures rose Thursday as traders ignored U.S. government data showing growing supplies, focusing instead on Nigeria and other geopolitical threats to global oil supples.

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Attacks on the oil industry in the Niger Delta had already shut down 455,000 barrels per day in crude production, nearly 20 percent of the country's daily output of 2.5 million barrels per day.

In its weekly supply report released Wednesday, the U.S. Department of Energy said domestic oil inventories grew by 1.6 million barrels last week to 328.3 million barrels, or 9 percent above year ago levels.

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(BBC) Militants in southern Nigeria have released six members of a group of nine foreign oil workers they have been holding hostage since 18 February.

Five of them - two Egyptians, two Thais and a Filipino - were taken to the office of the state governor. A US man was handed to journalists earlier. Another two Americans and one Briton are still being held.

The militants have been demanding a greater share of the region's oil wealth for local Ijaw people. Their attacks have led to a 20% drop in Nigeria's oil exports.
...

But the Movement for the Emancipation of the Niger Delta (Mend) said that the remaining captives would be held until the group's demands were met and threatened to step up attacks against the country's oil industry.

"We will commence with attacks in another area of the Niger Delta with an aim to ensuring the total discontinuation of export of onshore crude oil," the group said in a statement after releasing the US hostage.

The militants said they wanted a pledge from the government that it would not launch reprisal attacks and said id should release two prominent local leaders, the BBC's Alex Last in Warri reports. The militants also demanded that the Shell comply with a recent Nigerian court order and pay $1.5bn (£858m) in compensation for pollution in the Niger Delta, our correspondent says.

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10:10 AM ET 3/2/06 APRIL CRUDE CLIMBS 48C TO $62.45/BRL IN EARLY NY TRADING

10:10 AM ET 3/2/06 APRIL NATURAL GAS UP 4.7C AT $6.78/MLN BTU AHEAD OF STK DATA

10:31 AM ET 3/2/06 U.S. NATURAL GAS SUPPLIES DOWN 171 BLN CUBIC FT: ENERGY DEPT

10:31 AM ET 3/2/06 APRIL NATURAL GAS RISES 12.7C TO $6.86/MLN BTUS

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BBC6C4C4A%2DB7F5%2D43BC%2DABF8%2DCBD2794D8D25%7D&dateid=38778%2E6268972801%2D862550776&siteid=mktw&dist=newsfinder

SAN FRANCISCO (MarketWatch) -- April crude rose $1.39, or 2.2%, to close at $63.36 a barrel in New York. That was its highest closing level since Feb. 9, with global production concerns continuing to provide support despite climbing U.S. crude inventories. April natural gas rebounded from a one-year low of $6.54 per million British thermal units to close up 2.7 cents at $6.76. Domestic supplies of the fuel fell more than expected last week, but remained well above average.

2:57 PM ET 3/2/06 APRIL CRUDE CLOSES ATOP $63/BRL FOR FIRST TIME SINCE FEB. 9

2:57 PM ET 3/2/06 APRIL CRUDE CLIMBS $1.39, OR 2.2%, TO END AT $63.36/BRL

2:57 PM ET 3/2/06 APRIL NATURAL GAS UP 2.7C TO END AT $6.76/MLN BTUS

NEW YORK (CNNMoney.com) - Stocks could slide at Thursday's open on continued high prices.

U.S. futures were down, indicating a lower open for markets, on higher oil prices as militants in Nigeria threatened new attacks to disrupt production there, and a winter storm threatened the Northeast, the region of the country that uses the most home heating oil.

The April light crude futures contract for NYMEX gained 72 cents to $62.69 a barrel in electronic trading, while the April contract for Brent crude rose 72 cents to $63.17. This despite continued high inventories, as reported by the government Wednesday.

Internet bellwether Google holds a much anticipated meeting with analysts starting at 1 p.m. ET Thursday. Comments Tuesday from its chief financial officer about a slower growth outlook caused shares to fall sharply and hurt the markets overall. Shares of Google (Research) were up about 0.6 percent in Frankfurt trading Thursday ahead of the meeting.

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http://money.cnn.com/2006/03/02/markets/stockswatch/index.htm

NEW YORK (Reuters) - U.S. stock index futures fell on Thursday, signaling a weaker market open a day after strong gains by the Nasdaq Composite index, as energy supply threats in Nigeria and Iran drove up crude oil prices.

Threats of renewed violence in Nigeria where around a fifth of production has been interrupted pushed up oil prices, casting doubt about the prospects for corporate profits and consumer spending.

Oil producer Iran has raised fears in the West that it is attempting to develop a nuclear bomb.

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Another concern for investors was the health of some retailers. Costco Wholesale Corp. (Nasdaq:COST - news) said on Thursday that quarterly profit fell from a year earlier but sales rose. The No. 1 U.S. warehouse club operator failed to meet analysts' earnings estimates.

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Swiss SMI down -0.01% at 7979.80 in Zurich 10:27:55 CET
Xetra Dax 30 opens up 0.1% at 5,872.18 in Frankfurt
FTSE 100 opens up 0.3% at 5,863.3 in London
CAC 40 opens up 0.2% at 5,068.02 in Paris

Shares turn mixed, euro firms as ECB hike looms
LONDON, March 2 (Reuters) - European stock markets turned mixed on Thursday, failing to push through recent multi-year highs, while the euro firmed and Bunds sagged ahead of an expected euro zone interest rate hike.

The European Central Bank is universally seen raising rates by a quarter point to 2.5 percent at 1245 GMT after an initial rise to 2.25 percent in December -- the ECB's first hike in five years.

But with that already priced in, the news conference by ECB President Jean-Claude Trichet due at 1330 GMT was more eagerly awaited (Double click here for a preview).

"Given the recent surge of business sentiment across the euro area, the ECB could already start to pave the way for another 25 basis points hike. If so, we see upside risks to our current forecast of a 25 bp rate rise in the second quarter," economists at Morgan Stanley wrote in a note.

The FTSEurofirst300 index <.FTEU3> of leading European shares slipped 0.1 percent to 1,354.7 points, having bounced in the previous session after the benchmark on Tuesday posted its biggest one-day fall since October. ...more...

SMI down -0.68% at 7926.22 in Zurich 17:31:41 CET
Xetra Dax 30 down 1.4% at 5,783.5 in closing exchanges in Frankfurt 17:49 CET
CAC 40 down 1% at 5,009.1 in closing exchanges in Paris as banks and pharmas weigh 17:47 CET
FTSE 100 closes down 0.2% at 5,833.0 as banking stocks and oil companies fall the furthest 16:45 GMT

Bourses sharply lower on prospect of increased inflationary pressure
Europe’s bourses turned sharply negative mid afternoon on Thursday as Wall Street opened lower and weak banks, insurers and autos weighed. The European Central Bank as expected added a quarter percentage point to interest rates in the eurozone taking them to 2.5 per cent. This followed a rise to 2.25 per cent in December, which was the ECB’s first hike in five years. The ECB’s President Jean Claude Trichet was widely interpreted to be adopting a more hawkish tone on the prospect of further rises, resurrecting fears about increased inflationary pressure within the eurozone. The FTSE Eurofirst closed 0.9 per cent lower at 1,343.2, with the Xetra Dax in Frankfurt down 1.4 per cent at 5,783.5 and the CAC-40 in Paris 1 per cent lower at 5,009.1 ...more...

FTSE gives up strong gain on interest rate jitters
LONDON, March 2 (Reuters) - Britain's leading shares closed lower on Thursday, turning tail from a higher start after the European Central Bank hiked rates, although strong results buoyed financials such as Standard Chartered (STAN.L: Quote, Profile, Research) and Aviva (AV.L: Quote, Profile, Research).

Asia-focused bank Standard led the minority of FTSE 100 gainers, closing 3.8 percent up after topping analyst forecasts with a 19 percent annual profit rise, boosted by its biggest-ever acquisition and its participation in fast-growing markets.

Britain's biggest insurer Aviva also bettered expectations with a 29 percent increase in 2005 profit, which along with a confident outlook for 2006 boosted its shares by 3.7 percent.

The FTSE 100 index <.FTSE> closed 11.1 points down at 5,833.0, swinging in a big range after touching 5,880 in early business, unsettled by the ECB's rate hike and warning on the inflationary outlook. The index is still up around 4 percent since the beginning of the year. ...more crap, details...

was "impeach"

:evilgrin:

...But I'm sure we'll be the first to hear it here, when it finally happens!

(Kyodo) _ Japan puts emphasis on both its oil development project and nuclear nonproliferation in dealing with Iran, its top government spokesman said Thursday following a U.S. call on it to think through the project in light of Tehran's nuclear ambitions.

"The Azadegan oil development is a quite important project in terms of our country's energy security and so we will deal with things from the viewpoint that both the issues of nonproliferation and stable crude supply are important," Chief Cabinet Secretary Shinzo Abe said in a press conference.

"We would like to continue to strongly urge Iran to respond in a manner that convinces the international community and build up diplomatic efforts," Abe said.

Abe commented as U.S. Ambassador to the United Nations John Bolton urged Japan on Wednesday in New York to think through the $2 billion project to tap into Azadegan, one of the world's largest oil fields.

Bolton made the call in an exclusive interview with Kyodo News referring to what he thinks is Iran's tendency to use resources as leverage, especially when the country faces possible action from the U.N. Security Council over its nuclear ambitions.
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Iran is the third-largest supplier of crude oil for Japan.

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BEIJING, March 2 (Reuters) - Chinese energy major PetroChina Co. Ltd. (PTR.N: Quote, Profile, Research) (0857.HK: Quote, Profile, Research) on Thursday signed a deal with French peer Total S.A. (TOTF.PA: Quote, Profile, Research) to jointly explore a natural gas field with proven reserves of over 100 billion cubic metres. The agreement calls for cooperating in development and production in the south Sulige block in northern China's Ordos Basin.

"There will be total investment of at least $20 million during an evaluation period of 30 months to evaluate if full-field development is acheivable," said Denis Palluat de Besset, general manager of Total Kuwait, who is about to be named general manager of the company's China operations. He said when full field production started it could reach 400 million cubic feet per day, though he added such production could only commence two years after the evaluation period.

PetroChina President Jiang Jiemin said of the project, "Politically it's very important for China. In three to five years, this will account for five percent of China's natural gas output."

Both sides declined to comment on ownership structure.

The whole Sulige field has gas reserves of up to 602.6 billion cubic metres, state media has previously reported.
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Foreign firms are eager to build up a presence in China's booming energy market, with BP Plc. (BP.L: Quote, Profile, Research), Exxon Mobil Corp. (XOM.N: Quote, Profile, Research) and Royal Dutch/Shell (RDSa.L: Quote, Profile, Research) among majors with stakes in ventures from ranging from refining to service stations.

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LONDON - U.S. stock market futures were lower Thursday as data began to filter in suggesting that same-store sales growth won't be as strong in February as it was in January.

Dow Jones futures were recently down 22 points, S&P 500 futures declined 2.2 points, and Nasdaq 100 futures were off 2 points.

On Wednesday, U.S. stocks bounced back from a drubbing, with the Dow industrials rising 60 points, the Nasdaq Composite climbing 33 points at 2,314 and the S&P 500 rising 10.6 points at 1,291, as investors sought out bargains in the technology sector.

Thursday's economic agenda will be centered more around Frankfurt than Washington, D.C, with the European Central Bank expected to hike its key interest rate by a quarter-point to 2.5 percent.

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Interesting perspective on potential for regional Asian markets to steadily increase in importance in relation to USA for Asian export production.

SINGAPORE (Reuters) - Chip sales are falling everywhere and American consumers are less exuberant -- worrying signs for Asia's export-heavy economies? Not really, say many economists.

Buoyant Japanese consumption, more positive signals from China and lesser-watched indicators such as freight rates suggest the region will keep growing briskly. "There is some sign of softening in some of the typical export indicators," said Rob Subbaraman, economist at Lehman Brothers. "But we don't think it is time to throw in the towel and say exports are doomed in Asia. At this stage we are sticking to our view that exports are going to do reasonably well this year."

The latest Asian headline figures have been inconsistent. Even as Singapore posted annual export growth of 18 percent in January, the same indicator in Taiwan slowed to 4.5 percent from double-digit rates in the previous three months. South Korea's exports grew at their slowest annual pace in three years in January, although they did rebound in the next month's figures. The signals are also mixed when looking at two of the flashpoints for Asia watchers: tech sales and U.S. consumption. In both cases, there are plenty of negative numbers out there but economists are more persuaded by new signs of demand. Economists at Goldman Sachs, for instance, expect annual export growth in the newly industrialised economies of Singapore, Taiwan, Hong Kong and South Korea to exceed 18 percent in the first half of 2006.
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Analysts say even if exports slow, they would do so later in 2006. "These indicators tend to have a lead-lag of three to six months. We still may have sufficient strength in exports in the first quarter and even into the second," said Joseph Tan, an economist at Standard Chartered Bank.

Chinese imports can also be seen as a proxy for global demand since a large proportion of them are used to make goods that are then exported. Chinese imports in January climbed 25 percent from a year earlier, following annual growth of more than 20 percent in December and November.
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Now the Chinese are buying more goods from Asia for their own use and that, along with rising domestic consumption in other parts of Asia, could provide a buffer even if U.S. consumers tightened their purse strings. About a fifth of Asia's exports on average go to the United States. But South Korea sells another fifth of its goods to China and for Taiwan and Hong Kong the proportion of exports sold to China is double that. A new source of demand is Japan. After a rare four quarters of economic expansion, consumers there are emerging as big buyers of Asian goods. Citigroup says Indonesia and the Philippines could benefit the most since Japan buys more than 20 percent of their exports. Taiwan, Singapore, China and Hong Kong would also see more demand for clothing, manufactured goods, fuels and electrical machinery that form the bulk of Japanese imports.

A less-watched indicator of demand for Asian goods is the cost of shipping. Ocean freight rates are surging as measured by the Baltic Exchange's Capesize Index, which charts demand for cargoes in excess of 150,000 tonnes.

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http://yahoo.reuters.com/news/NewsArticle.aspx?storyID=urn:newsml:reuters.com:20060302:MTFH93721_2006-03-02_12-48-19_L02193798&related=true

LONDON, March 2 (Reuters) - The euro held steady against the dollar and yen on Thursday after the European Central Bank raised its interest rates by 25 basis points to 2.5 percent as expected.

Investors are focusing on a news conference from 1330 GMT by ECB President Jean-Claude Trichet for clues on the outlook on interest rates.

By 1248 GMT the euro stood at $1.1933 <EUR=>, steady from pre-announcement levels and up 0.15 percent on the day, having hit a three-week high of $1.1974 on Wednesday.

It was up 0.2 percent on the day at 138.61 yen <EURJPY=>.

http://investing.reuters.co.uk/investing/financeArticle.aspx?type=allBreakingNews&storyID=URI:urn:newsml:reuters.com:20060302:MTFH96102_2006-03-02_13-56-23_NYH000153:1

NEW YORK, March 2 (Reuters) - The euro rose broadly on Thursday, after European Central Bank President Jean-Claude Trichet in a news conference cited upside inflation risks and said the ECB has revised up its inflation forecasts for 2007.

The euro <EUR=> climbed to around $1.1964 according to Reuters data from around $1.1925 shortly before the conference began. Against sterling, the euro rose to a session high of 68.51 pence before settling back to 68.43 pence <EURGBP=>.

Trichet said that inflation in the euro zone will likely remain above the central bank's target of 2 percent in the near term. He added that forecasts for inflation next year have been increased to a range of 1.6 percent to 2.8 percent.

LONDON, March 2 (Reuters) - The euro firmed, Bunds fell and European shares were mixed on Thursday after the European Central Bank opened the door to further interest rate rises after a well-flagged and expected rate hike. The ECB raised rates by a quarter point to a three-year high of 2.5 percent after an initial rise to 2.25 percent in December -- its first hike in five years.

ECB President Jean-Claude Trichet said the hike reflected the upside price risks and that the conditions remained in place for a continuing economic expansion in the region. Trichet said ECB staff had upped their forecasts for euro zone GDP growth this year to 1.7-2.5 percent and also revised up inflation forecasts, citing higher oil prices.

"He's left open the possibility of more rate hikes going forward...We've got the changes to the forecasts which have been slight upward revisions to HICP and also on the growth side. He's also talking tough on the monetary side," said David Keeble, head of fixed income strategy at Calyon.

The euro rose to as high as $1.1964. The currency has been stuck in a $1.18-$1.23 range since December.

Yields on 2-year euro zone bonds rose after Trichet's comments and were near levels not seen since December 2002, at around 3.04 percent.

Earlier, the head of the world's largest luxury goods company LVMH (LVMH.PA: Quote, Profile, Research) warned the ECB against tightening credit too quickly. "What worries me ... (is) that they will penalise European growth through hasty increases in interest rates without any justification," said LVMH's Bernard Arnault.

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Now, has anyone seen the ECB showing signs of hastiness since its inception?

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

Last trade 90.25 Change +0.02 (+0.02%)

Are we headed for a Major Turn in USD/JPY?

http://www.dailyfx.com/story/special_report/special_reports/7058_are_we_headed_for_a_major_turn_in.html

Over the past week, the Japanese Yen has staged a strong 330 pip rally against the US dollar and justifiably so. Fundamentals have been shifting with one of the major barriers that prevented the Yen from rallying finally being lifted. The economy is showing solid signs of improvement while the Japanese government has given the Bank of Japan their blessing to move away from quantitative easing. In the meantime, our friends in China are taking more steps towards loosening controls over their financial markets and eventually plan on allowing the Yuan to free float.
There has also been a major breakdown technically in USD/JPY, which suggests that the latest sell-off could be the beginnings of a larger turn in the currency pair. However, a one-way slide down to 110.00 is not going to be easy. There are still many caveats that stand in the way of a free fall. As an export dependent country, 115 has always been an important level of defense for the Japanese government and even if Japan raises interest rates, there is no way that they will come close to closing the soon to be 4.75 percent interest rate gap with the US.


Economy improving

After many years of slow growth, the economy is finally improving. GDP rose 1.4 percent in the fourth quarter, bringing the annualized pace of growth to 5.5 percent, the fastest rate since 1991. With consumer confidence at 15 year highs, companies are hiring, wages are increasing and consumers are spending. In fact, Japanese growth last year (+2.8 percent) was over double that of Eurozone growth (+1.3 percent) and in the last quarter of 2005, Japan grew five times faster than the US. Many economists at major investment banks have already upgraded their growth forecasts for Japan this year. Morgan Stanley upped their forecast from 2.7 percent to 3.2 percent citing a higher base effect thanks to a prolonged recovery in “personal consumption and capital investment.” With the Nikkei sitting near 5 ½ year highs and the economy continuing to improve, the conditions are favorable for a sustained rally in the Japanese Yen and for the Bank of Japan to shift course.


Bank of Japan Shifting Course

The Bank of Japan has been talking about moving away from quantitative easing and dropping their zero interest rate policy since late last year. However, strong words from the Japanese government heated up a big debate on who holds the power of changing monetary policy in Japan. Even though the Japanese government passed laws in 1998 to give the BoJ operational independence from the Ministry of Finance (MoF) and complete control over monetary policy, comments from LDP party policy chief Nakagawa back in November (11/13/05) suggested otherwise. Nakagawa said specifically that the “BoJ has no independence when it comes to policy targets," and "if it does not understand this, we need to consider amending the BoJ Law." His words are as direct as you can get, leaving barely any room for misinterpretation therefore it is no coincidence that over the next 20 days, USD/JPY rallied from 117 to 121.40. Now the tables have completely turned which is why USD/JPY fell from 119 to 115.50 over the course of 6 trading days. Both the Prime Minister (Koizumi) and the Economics Minister (Yosano) said that it was up to the central bank to make the decision on interest rates. At a time when Bank of Japan Governor Fukui has picked up on making hawkish comments, the Japanese government’s blessing has given traders a good reason to begin liquidating their short yen carry trades. If more liquidation comes off of the first move in interest rates in over 6 years, the yen could continue to rally against all of the other majors.


More Moves by China

With China inching closer to the final deadlines set forth by the World Trade Organization to open up their markets up to the world, more subtle shifts are expected and probably on a more frequent basis. As the proxy for Asia, the Japanese Yen is set to benefit from any initiative that moves China closer to being able to free float their currency. Just yesterday, China announced plans to make the Yuan convertible on the capital account in the near term.” This means that they plan on easing some of their controls on money leaving China. For some time, China has had restrictions or allowances on the amount of money that can be sent overseas and now they are taking steps towards making inflows and outflows more balanced. The Japanese Yen has sold off as the move encourages outflows and relieves some of the upside pressure on the Yuan, but over the long-term, it should be Yen positive since it is yet another step that China is taking towards making the Yuan fully convertible.

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http://www.contraryinvestor.com/mo.htm

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“The Federal Open Market Committee decided today (1/31) to raise its target for the federal funds rate by 25 basis points to 4-1/2 percent.

Although recent economic data have been uneven, the expansion in economic activity appears solid. Core inflation has stayed relatively low in recent months and longer-term inflation expectations remain contained. Nevertheless, possible increases in resource utilization as well as elevated energy prices have the potential to add to inflation pressures.”

One might think for a moment that they are referring to capacity utilization of some type. Many folks on the Street believe the comment is directly pointed at supposedly tightening US labor markets. (We subsequently penned a piece in the subscriber portion of the site disputing the "tight labor market" thesis.) But, we believe they may be at least in part referring to commodity prices and the potential for higher commodity prices to ultimately flow through into CPI measures of inflation, both the headline and the all-sacred core rate. As we mentioned at length in our investment themes and considerations discussions in January, we believe the continuation of global liquidity growth arising from both monetary policy decisions and specifically US Fed open market operations (repo and coupon pass activity) has now reached the point where perhaps the unintended consequence is the accelerating flow of that very liquidity into commodity and hard asset prices, both real world and "paper" demand. As we suggested, Fed sponsored liquidity generation, aided and abetted by the BOJ and PBOC primarily, has already helped support US financial asset prices and US residential real estate values. But as excess liquidity generation continually seeks out positive and ever higher real rates of return, it has now come to ever increasingly influence hard asset prices higher at the margin. For a little example of what we’re talking about, just have a look at the table below.


Asset Class January 2006 Price Performance

Dow 1.4%
S&P 2.6
NASDAQ 4.6
Russell 2000 8.9

HUI 23.7
XAU 20.4
CRB 5.5
Aluminum 9.2
Copper 7.4
Lead 28.1
Tin 16.6
Platinum 11.1
Silver 10.6
Palladium 14.9
Zinc 21.0
Gold 10.9
Nickel 13.6



Get the picture? Of course you do. Most everything related to the broader commodity complex was up double digits in a single month. Do you think this is lost on the Fed? We think not. So although the Street has lately been tripping over itself trying to anticipate and discount the end of the Fed interest rate tightening cycle, let alone guess as to when the first easing may happen either later this year or early next, it may be the proverbial case of the counting of one’s chickens well before they are hatched. For ourselves, the change in the Fed comments suggests this band of merry pranksters is mindful of follow through. That is, the potential for already realized price advances in energy, broader commodities, etc. to eventually show up in headline and core CPI numbers.

snip>

Yes, crude prices have been volatile year to year, just as was true in the 1970’s. It has not been a straight up game. Same characterization can be applied to the CRB. And yes, at least since 2003, the headline and core CPI readings have been accelerating. But, as we look ahead, the key question is one of follow through. How much more upward pressure on the CPI and core reading is still yet to come? As we suggested, we also need to realize that, at least according to our book, CPI calculations across the decades leave a lot to be desired. If we can be so bold, there is certainly a meaningful degree of non-comparability as the CPI calculations began to be heavily influenced by hedonic adjustments in the 1990’s. But be that as it may, we’re a bit stunned by the fact that both crude and the CRB prices have grown so significantly over the last six years while the reaction/follow through in the headline and core CPI readings up to this point appear almost benign. Is the Fed telling us in their recent change to FOMC meeting note commentary that they believe there may be follow on pressure to come in the CPI and core ahead due to what has already happened “yesterday” with crude and broader commodity prices? Although we never want CI to sound like conspiratorial corner, we believe that’s a very reasonable interpretation. Clearly, six years ago the Fed acted to cool the bubble in equities they themselves helped create as they raised the Funds rate meaningfully into 2000. We believe the monetary tightening cycle of the last year and one half was their way of in part cooling the housing bubble they sparked post the equity market break. Now are they setting their sights on a perceptual bubble in energy and commodity prices that excess Fed sponsored liquidity generation helped inspire short term?

A few last explanatory items that bear on what we’ve said above. First, we’ve heard it said a million times now that the US is less energy and commodity dependent as a total economy than was the case in the 1970’s and early 1980’s. No argument from us at all. As we have outsourced the US manufacturing economy, we’ve also outsourced to an extent the economic factors of manufacturing input costs and energy usage. We can just thank our lucky stars at the moment that China has so graciously agreed to support massive overcapacity and lack of profitability in the interests of helping to keep US CPI growth to an absolute minimum (and most importantly to grow their own long term global market share, to which many in the US seem blind, or at worst totally complacent). But you’ll remember our absolute fixation on the US consumer looking into 2006, not just for what consumer trends will mean to the US economy, but really to the global economy. Let’s have a look at a few relationships of just how “meaningless” higher energy and commodity prices are to US consumers, shall we?

more...

certain it would have gone down, to gold's benefit.

Was someone trying to get gold back down to 560, was it the drop in bonds, or??????

The reports certainly didn't seem dollar friendly. :shrug:

Last trade 89.92 Change -0.31 (-0.34%)

Settle Time 15:00 Open 90.24

Previous Close 90.23 High 90.27

Low 89.87 2006-03-02 10:07:26, 30 min delay

52wk High 92.63 52wk High Date 2005-11-16

52wk Low 81.28 52wk Low Date 2005-03-11

Open Time 19:00 Close Time 15:00

Last trade 89.68 Change -0.55 (-0.61%)

Settle Time 15:00 Open 90.24

Previous Close 90.23 High 90.27

Low 89.64 2006-03-02 13:18:40, 30 min delay

52wk High 92.63 52wk High Date 2005-11-16

52wk Low 81.28 52wk Low Date 2005-03-11

Open Time 19:00 Close Time 15:00

Last trade 89.55 Change -0.68 (-0.75%)

Settle Time 15:03 Open 90.24

Previous Close 90.23 High 90.27

Low 89.53 2006-03-02 15:19:41, 30 min delay

52wk High 92.63 52wk High Date 2005-11-16

52wk Low 81.28 52wk Low Date 2005-03-11

Open Time 19:00 Close Time 15:00

...on the date of loonie-dollar parity?

http://www.reporter.gr/fulltext_eng.cfm?id=60222123113

22 February 2006 - Turkey's long history of economic shocks present a valuable case for studying dollarization and currency substitution, terms used interchangeably in a report issued this week by investment bank Morgan Stanley. Recurrent periods of economic uncertainty altered portfolio choices and accelerated the flight from lira-denominated assets.

The monetary disruptions increased currency and inflation volatility and thereby kept fuelling the hysteresis, or lag between cause and effect, in dollarization.

Even though currency substitution was a form of financial adaptation protecting savings and income against unexpected developments, dollar addiction and the resulting vulnerability to shocks became detrimental to economic performance at an aggregate level.

Turkey is a unique success story in reversing financial dollarization.

bit more...

http://www.eurasianet.org/departments/business/articles/eav030106.shtml

It looks like a euro, it’s denominated like the dollar. Azerbaijan’s newly denominated banknotes and coins have been touted as a sign that the oil-rich state has finally come into its own as a regional economic heavyweight with a strong currency. But some observers worry that the government was too hasty in slashing zeroes off old banknotes. Without prior consideration of incoming oil revenues and ongoing economic reforms, the new bills could merely fuel inflation, they say.

To boost confidence in Azerbaijan’s currency, the government had first to tangle with the dollarization of the country’s economy. The old manats, known as AZM, encouraged a preference for dollars, noted independent economist Nazim Imanov. With the largest AZM banknote a mere 50,000 (a bit more than $10), people routinely used dollars for large purchases such as real estate and cars. "And it is understandable. To buy a car for $5,000, a customer would have to carry two suitcases filled with manats," Imanov commented.

snip>

Under the new currency denomination, introduced on January 1, far fewer bills will be needed to make large purchases; one new manat, known as AZN, is equal to 5,000 AZM. When the transformation process is complete, there will be 1, 3, 5, 10, 20, and 50 gyapik (penny) coins and AZN 1, 5, 10, 20, 50, and 100 banknotes.

Arif Babayev, owner of a popular Baku café, agrees that the new denomination will boost confidence in the manat, and notes that private banks now offer slightly higher interest rates for manat-denominated accounts than dollar-denominated ones. "The manat is becoming stronger and if the government does not stop the process, the exchange rate will even increase. After the dollar crisis in October, savings in dollars seem risky to me," he said. .

more...

It was only a Cat 3 when it hit--no one expected levees breaching for a Cat 3!!!"

So, y'see...he was telling the truth even when it looks like he was lying.. :eyes:

(though I understand there was some controversy about that).

In any case, while the force of even cyclonic winds may ease of that quickly, the same certainly doesn't apply to the power of all that surging sea-water.

wind -

Flood insurance seems to be a minimal return for the payments that all those people made.

So, once again, it appears that if there were not going to be severe corporate losses, there was no worry.

its that he is in crawford but the video says the white house.
Isn't the white house in freaking washington DC. Yet another time when bush is on vacation during a
national disaster. :puke:

But I'm pretty sure he had a hand in making sure the right cronies would get the right 'clean-up' contracts, and then in making even more sure he had his portfolio well positioned to benefit.

http://newsblogs.chicagotribune.com/news_theswamp/2006/03/bushs_katrina_p.html

Today's Associated Press report about videotape of a videoconference in which President Bush was told before Hurricane Katrina's landfall that the storm would be hugely catastrophic and that there was concern that New Orleans' levees might fail is a stunning piece of bad news for the White House.

What makes this revelation particularly bad for Bush is that it directly contradicts his by now famous statement on the Good Morning America television show days after the hurricane. "I don't think anyone anticipated the breach of the levees," he said.

The video makes clear that such levee breaches were definitely anticipated by experts like Max Mayfield of the National Hurricane Center who told the federal officials assembled for the videoconference as much, including Bush who participated from his Crawford, Texas ranch. Mayfield warned that the hurricane would be among the worst to hit the U.S. in recorded history.

About the levees, Mayfield specifically said: "I don't think any (computer) models can tell you with any confidence right now whether the levees will be topped or not, but that's obviously a very, very grave concern." Bush made his Good Morning America statement just five days later.

Ironically, Mayfield was joined in his dire warnings by none other than Mike Brown, the man who has become the poster child for the federal government's botched response to the hurricane. As the video reveals, Brown was eerily prescient in his predictions that Katrina was "a bad one, a big one." Brown even warned of trouble at the Superdome, worrying about not having enough medical and mortuary teams there and telling his listeners, the president included, that the floor of the Superdome was 12-feet below sea level. The only reason that would matter would be if he expected a flood.

...more...

"No one anticipated the breach of the levees" - put that on his tombstone

King george could drink a 6-Pack, get in a car and crash it into a school bus killing 20 kids, and would get in front of the cameras and say...."I don't think anyone anticipated this would happen just because I drank 6 beers," and people would believe him.

Further, they could poll the public, and about 40% of them would say, "now there's a guy I'd like to have a drink with someday."

This country is FUBAR, and I don't see how this little video is going to change their minds. I mean, he got away with the "I don't think anyone anticipated that planes would crash into the WTC," even though they had the PDB's proving that he had been briefed on the possiblity 1 month earlier.

deniability" (coined by GHWB) - in that the pattern becomes more apparent - this joker of freak of nature or blivet - is proving that he lies and lies and lies and lies - ad nauseum and the cognitive dissonance grows to the breaking point.

Pretty soon, even the kool-aid drinkers will understand that instead of yummy kool-aid, they are consuming antifreeze.

You know there's a pattern.....I know there's a pattern....99.999% of the people reading these posts know there's a pattern. We all KNOW that he LIES & LIES & LIES & LIES.....

I guess after seeing everything this administration and it's chronies have gotten away with these past few years, I still wonder if the public of this country, or at least 35-50% of them, will ever see the light.

It just seems like they're Always, and I mean ALWAYS, able to get out of these things. If at least they got caught once in awhile, I would have more optimism, but it begins to feel like....another day, another F Up by our government. And nobody cares. Since the start of the year....NSA Spying, case closed. Dick quail shooting, case closed. Dubai Ports deal, case closed. Katrina report, case closed I'm certainly missing some, but how long will it be until this video release gets spun in their favor?

if they don't continue to show that there is a pattern and allow the spin from the WH to become the acceptable lie de jour, the kool-aid drinkers can continue to think that yummy antifreeze will not kill them.

he has lied AND been caught in so many and yet he is still in office. What will it take for the rest of the country to get off their butts and demand justice.

is that most of our fellow citizens are just freakin' lazy.

They want nothing to do with their futures - or the future of this country.

It is easier to let someone else make all the decisions and thusly, they never have to take responsibility for what is going on anywhere - in their own lives or elsewhere - they can just bitch and moan when their jobs leave, when their kids get pregnant or die in some faraway country.

Apathy is our biggest commodity (not the DU community - but just generally in the country).

:(

are to busy just trying to survive, we are all slaves to the debt.

this has been getting airtime on our CBS affilliate, and it has not been good. Of course, here in Houston, we knew this was a screwup screw job early in the game. And since we can just as easily share the same fate as NOLA, we have been watching it intently. Katrina has lost them many GOP voters here in Houston AND along the Gulf Coast.

Dow 11,022.47 -31.06 (-0.28%)
Nasdaq 2,308.16 -6.48 (-0.28%)
S&P 500 1,286.63 -4.61 (-0.36%)
10-Yr Bond 4.616 +0.27 (+0.59%)

NYSE Volume 165,303,000
Nasdaq Volume 182,424,000

09:40 am : Market takes a breather following yesterday's broad-based relief rally as stocks open lower across the board. Prompting investors to lock in some profits on the heels of the Nasdaq hitting a six-week high and turning in its second best day of the year so far (+1.5%) has been confirmation that same-store sales growth in February was not nearly as robust as it was in January. Even though February is one of the least important months for retail, it can act as a good indicator about demand for spring merchandise.. RLX -0.9%DJ30 -35.12 NASDAQ -7.81 SP500 -4.78 NASDAQ Vol 126 mln NYSE Vol 78 mln

09:15 am : S&P futures vs fair value: -4.4. Nasdaq futures vs fair value: -3.5.

09:00 am : S&P futures vs fair value: -4.0. Nasdaq futures vs fair value: -3.0. Still shaping up to be a lower start for the indices as investors continue to sift through more disappointing retail sales numbers than good ones, suggesting comps growth in February may show the smallest gain since May. Among the notable retailers missing forecasts include GPS, DDS, ANF, ARO, TLB and HOTT while only a handful of retailers (e.g. TGT, COST, FD, AEOS and GYMB) have checked in better than expected.

08:32 am : S&P futures vs fair value: -3.4. Nasdaq futures vs fair value: -2.5. No real change in sentiment following claims data, as futures indications still point to a lower open for equities. Weekly jobless benefits rose 15K to 294K (consensus 285K), checking in below the 300K level for a seventh straight week and reflective of strong labor market conditions. Bonds, which were modestly lower ahead of the data have held relatively steady, as the yield on the 10-yr note (-02/32) stands at 4.59%.

what is going on here. Not even necromancers should go near this thing.

NEW YORK (CNNMoney.com) - The new $10 bill starts to circulate Thursday, as the third more colorful bill designed to thwart counterfeiters is rolled out.

One of the most noticeable design changes is the portrait of Alexander Hamilton, the nation's first treasury secretary. While Hamilton's likeness is the same, it is no longer surrounded by an oval as on the old bill.

As is always the case with new currency introductions, the old cash can still be used. But the U.S. Bureau of Engraving and Printing is rolling out the new currency in order to make counterfeiting more difficult.

"The intention was not to create a counterfeit-proof note -- which is basically impossible -- but one that's harder to duplicate and easier to authenticate," said Eric Zahren, spokesman for the Secret Service, when the new design was unveiled in September. The Secret Service is in charge of combating counterfeiting.

"The new designs have definitely improved upon our efforts in detection and enforcement," he said. "Ten years ago, one percent of (counterfeit) bills were produced on digital equipment. These days, 56 percent are produced on digital equipment, and the technology is more accessible to the general population."

The new series began with the introduction of the $20 bill on October 9, 2003, and continued with the $50 bill issued on September 28, 2004.

The government currently has no plans to redesign the $5, $2 or $1 bills.


http://money.cnn.com/2006/03/02/news/funny/new_ten/index.htm?cnn=yes


yea freshly printed new colerfull money :evilgrin:
yes the fed wants to make sure they are the only one's who can do the counterfeiting.

They cut the damn pony tail off on the new nickel. Bastards!

As I told my parents about the $20 bills. A few years ago, when they issued the new $20's, they Completely Pull the old ones out of the system.

Think of it this way. As the new $10's come out, they'll want to maintain the same amount overall in the system. Thus, they'll begin hoarding the old $10 bills. You spend a $10 at the store, the store deposits the money at the bank. The bank gives the money to the government, and the government then keeps the money, and it stays out of circulation.

Thus, if you want a way to save, and also keep those old $10 bills for posterity, now is the time to do it. In another month or two, you won't be seeing the old bills anymore, ever again....unless you have saved them NOW. Think about it, when was the last time you saw an old $20, especially one with the picture centered. They're long gone.

Dow 10,995.97 -57.56 (-0.52%)
Nasdaq 2,302.54 -12.10 (-0.52%)
S&P 500 1,283.74 -7.50 (-0.58%)
10-Yr Bond 4.610 +0.21 (+0.46%)

NYSE Volume 301,648,000
Nasdaq Volume 312,008,000

Dow 11,002.86 -50.67 (-0.46%)
Nasdaq 2,305.29 -9.35 (-0.40%)
S&P 500 1,285.01 -6.23 (-0.48%)
10-Yr Bond 46.12 +0.23 (+0.50%)
NYSE Volume 475,053,000
Nasdaq Volume 470,810,000

Dow 10,999.42 -54.11 (-0.49%)
Nasdaq 2,306.64 -8.00 (-0.35%)
S&P 500 1,285.35 -5.89 (-0.46%)
10-Yr Bond 4.614 +0.25 (+0.54%)

NYSE Volume 540,238,000
Nasdaq Volume 520,551,000

those faeries seem to jump back in every time that 11K number is breached :eyes:

adding blather:

10:30 am : Despite a turnaround in semiconductor stalling consolidation efforts throughout Technology, led by a 1.6% gain in Texas Instruments (TXN 32.69 +0.51), stocks continue to languish near session lows. Hardware has also been another bright but losses in software, networking and computer storage continue to weigh on the sector. DJ30 -50.03 NASDAQ -9.35 SOX +0.3% SP500 -6.13 NASDAQ Dec/Adv/Vol 1615/1018/474 mln NYSE Dec/Adv/Vol 1800/1038/348 mln

10:00 am : Equities are still on the defensive as the bulk of industry leadership remains negative. An increase in the cost of borrowing, as evidenced by weakness in Treasuries, has left the rate-sensitive Financial sector as this morning's largest drag on the market. Consumer Discretionary, led by losses in retail, autos, and homebuilding has been another influential leader to the downside. Hovnanian (HOV 45.90 -0.23) acknowledged that conditions have cooled in many of its housing markets. Energy, though, continues to regain some of the momentum lost in recent weeks, benefiting from a third straight day of rising oil prices and an analyst upgrade on Schlumberger (SLB 119.98 +1.92). DJ30 -42.43 NASDAQ -9.17 SP500 -5.74 NASDAQ Dec/Adv/Vol 1475/918/266 mln NYSE Dec/Adv/Vol 1597/866/206 mln

I've read in more than a couple of places about the manipulation, even by the government body setup for just this purpose, of all the markets.

They have a real fascination with that 11,000 number, as well as the 2,000 Nasdaq. The gold forums I have gone to also claim that they're keeping the price of Gold from breaching the $570 level, because apparently that figure holds some significance. I believe it's supposedly the midpoint between the low price in the 200's and the high point in the 800's.

:applause::applause::applause::applause::applause::applause::applause::applause:

Oh look Tinkerbell is getting better.

:kick:

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B2814CD34%2DC0BE%2D4A6D%2DAA48%2DEA669AB6625F%7D&dateid=38778%2E6285587963%2D862551080&siteid=mktw&dist=newsfinder

NEW YORK (MarketWatch) -- Treasury prices closed sharply lower Thursday, pushing the benchmark yield to a 4-month high, after a rate increase and hawkish rhetoric from the European Central Bank sparked concerns about euro-zone economic strength spilling over to the U.S. Economic strength typically sends money out of the fixed-income market and into riskier investments, and prompts concerns about aggressive monetary policy. The 10-year benchmark note closed down 12/32 at 98-29/32 with a yield ($TNX 46.38, +0.49, +1.1% ) of 4.637%, its strongest level since early November and up from 4.589% at Wednesday's close.

3:02 PM ET 3/2/06 <$TYX> 2-YR TREASURY YIELD ENDS AT 4.716%; 30-YR YIELD AT 4.616%

3:01 PM ET 3/2/06 <$TNX> 10-YR TREASURY CLOSES DOWN 12/32 AT 98-29/32; YIELD 4.637%

Standing on the floor of the NYSE discussing the slowdown in housing sales, and lower prices.

"Isn't the fact that prices are declining a good thing? Don't you think most people would welcome a 10% decrease in prices around the country."

The other guy's response"

"Well, wouldn't that depend upon whether you're a buyer or seller?"

I assume they hire these BOZO's because they look good on camera, and have articulate voices. Even though some of them spew jibberish with those voices, so long as people can hear them clearly, that's all that matters.

Yes, Mr. cnBS Windbag.....lower prices are good. Unless of course you need to sell, so you can pay off that Home Equity Loan you borrowed against 80% of the house's value, Before prices began their decline.

- all those re-fi's where they spent all the funds on consumable items (like food and energy).

after getting an education on this thread, I really listen to those coiffed talking heads. They sound so stupid. I listen for the humour and wish I had that job. Then again, they may not want me to talk 'cause I wouldn't be trying to sell a scam.

They just haven't seen the drop in housing yet. Those refi and exotic loans AND that disasterious savings rate will screw so many. How are these folks EVER going to retire? They won't even be able to do a reverse mortgage (not that I would ever recommend it). This is so bad.

they aren't idiots, they are pure whores who will lie at any second for 5 cents. They are human beings who gave up on being human and sold their souls. They would gladly torture, kill and slaughter people for that same 5 cents, it's why they support those who do.

Lastly, they are also a constant horrible reminder of what a ghastly culture we've become, preying on innocence, trust and what humanity remains.

It's to the point where I too am willing to profit on the misfortune of others. Although I'd rather it were isolated to the others who are STOOPID enough to buy into all this garbage, and who support the administration, especially those who support it to this day. But I realize that the only way anything will change is if enough misfortune befalls a large amount of the population, which would include many who don't necessarily like what's going on, but also fail to realize they're constantly being lied to and defrauded morally and mentally on a daily basis.

At the same time, I wish to take advantage of my foreknowledge of the impending collapse, by securing my funds and my future. If somehow the collapse results in my having gold worth $3,000/ounce, then so be it.

by choice even! Let the sht-fer-brainers change their own minds. I'm most definitely not perched up on a moral high ground, I trade the S&P. But what I will not do is lie my ass off for a living. I put the truth out there, if people don't want to believe it that's their problem.

For instance, the mini S&P market has been periodically rigged since May 04. A large buyer, referred to by many as account xxx or account 990N, comes into the market and buys 20,000 contracts in 1-2 minutes. This buyer's motives are clear, to prop the market up. The buying usually happens on days when a Federal Reserve mouthpiece is speaking in public. I call it "Fed speaks, Fed pumps".

I've told people about this ever since it started happening and most people don't even want to hear it. I am instantly minimized, smeared and discounted by all the "serious" investors and speculators. These people's minds cannot be changed, they are simply too stupid and too mezmerized by the massive amount of propaganda they choose to believe. They will never learn either, hence all the cycle theories like Kondratieff's.

http://members.shaw.ca/trogl/looniewatch.html

Highlights.



http://www.x-rates.com/d/USD/CAD/data30.html

Detailed analysis (http://quotes.ino.com/exchanges/?r=CME_CD)

Up-to-the-minute graph (http://quotes.ino.com/chart/?s=CME_CDY&v=i)

Current TSE:




2006-02-01 Wednesday, February 1 0.877116 USD
2006-02-02 Thursday, February 2 0.877116 USD
2006-02-03 Friday, February 3 0.87184 USD
2006-02-06 Monday, February 6 0.872981 USD
2006-02-07 Tuesday, February 7 0.870322 USD
2006-02-08 Wednesday, February 8 0.866927 USD
2006-02-09 Thursday, February 9 0.872981 USD
2006-02-10 Friday, February 10 0.866326 USD
2006-02-13 Monday, February 13 0.865951 USD
2006-02-14 Tuesday, February 14 0.866101 USD
2006-02-15 Wednesday, February 15 0.866476 USD
2006-02-16 Thursday, February 16 0.863782 USD
2006-02-17 Friday, February 17 0.867905 USD
2006-02-21 Tuesday, February 21 0.872296 USD
2006-02-22 Wednesday, February 22 0.870928 USD
2006-02-23 Thursday, February 23 0.868659 USD
2006-02-24 Friday, February 24 0.868056 USD
2006-02-27 Monday, February 27 0.87581 USD
2006-02-28 Tuesday, February 28 0.878812 USD
2006-03-01 Wednesday, March 1 0.879894 USD




I wanted to get this up early. Current numbers: http://quotes.ino.com/chart/?s=CME_CD.H06&v=s

Last trade 0.8837 Change +0.0026 (+0.30%)
Settle Time 15:05 Open 0.8814
Previous Close 0.8812 High 0.8844
Low 0.8812 Open Int. 119730

Blather:

The March Canadian Dollar closed higher on Wednesday and above January’s high crossing at .8805. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are still possible near-term. Tuesday’s close above January’s high crossing at .8804 has opened the door for a possible test of weekly resistance crossing at .8825.

It's rising against all major currencies for no particularly good reason that I've heard (at least as of this morning's news) other than as a safe haven for other currencies in trouble. I'll update if I find anything.

Are we about to see bank failures?

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-02T172447Z_01_N02541866_RTRIDST_0_FINANCIAL-BANKING-KATRINA-UPDATE-1.XML

NEW ORLEANS, March 2 (Reuters) - Most U.S. banks in the Gulf Coast areas affected by last year's hurricanes are well or adequately capitalized, although bank regulators are monitoring a small group of institutions, the acting chairman of the Federal Deposit Insurance Corp. said on Thursday.

"Based on our assessments now, most of those institutions are doing reasonably well," said Martin Gruenberg, acting chairman of the bank regulatory agency. "All of them, as of today, remain well capitalized or adequately capitalized and they are holding their own."

<snip>

"There's no systemic issue here," he said. "There's no issue, at least at this point, that presents a threat to the economies of the region."

He said of the 280 banking institutions in the region, about 120 are in counties most affected by Hurricane Katrina, and 75 percent of those are community banks.

Gruenberg said the FDIC was monitoring a small group of banks, but would not say how many or name the institutions.

Some analysts and lawmakers have expressed concern about the health of financial institutions in the most storm-affected areas of Louisiana, Mississippi and Alabama. Institutions there also have asked U.S. bank regulators to be flexible when examining the institutions for compliance with some standards.

...more...

"small group"? 120 out of 280 may be less than half, but is not a "small group".

Dow 10,993.97 -59.56 (-0.54%)
Nasdaq 2,300.63 -14.01 (-0.61%)
S&P 500 1,284.31 -6.93 (-0.54%)
10-Yr Bond 4.660 +0.71 (+1.55%)

NYSE Volume 1,242,879,000
Nasdaq Volume 1,138,409,000

12:30 pm : Indices extend their reach into negative territory, spearheaded by further deterioration in Technology. Semiconductor, which had lifted the influential sector modestly to the upside, continues to consolidate its 13.8% year-to-date gain. Hardware, software and networking have also slipped to session lows. DJ30 -64.20 NASDAQ -14.31 SOX -0.8% SP500 -7.60 NASDAQ Dec/Adv/Vol 1767/1123/1.09 bln NYSE Dec/Adv/Vol 1874/1263/854 mln

12:00 pm : Stocks still struggle midday to extend yesterday's broad-based relief rally as tempered Feb. retail sales growth following January's surprisingly strong gains, coupled with higher bond yields and rising oil prices, incites modest profit-taking.

Before the bell, investors sifted through a batch of same-store sales results from more than 75 retailers; however, the reappearance of cold weather in February -- usually a good barometer for spring merchandise -- resulted in more disappointing sales numbers than good ones, earmarking Consumer Discretionary as the day's worst performing sector. Among the notable retailers missing forecasts were apparel names (e.g. GPS and TLB) and teen retailers (e.g. ANF, ARO, PSUN and HOTT) while discounters (e.g. TGT and COST) and dept stores (e.g. FD, KSS, JCP and JWN) checked in better than expected. Gymboree (GYMB 24.88 +2.02), a suggested holding in our Active Portfolio, turned in the day's most impressive growth (18% vs. 3.9% consensus) among the nearly 60 retailers with consensus estimates.

Rising borrowing costs, as evidenced by increases across the yield curve, has left the rate-sensitive Financial sector under pressure. The yield on the 10-yr note (-15/32) now stands at 4.64% -- the highest level since November, following reports that the ECB, albeit widely anticipated, raised their key lending rate to 2.50%. Bond traders are speculating that the ECB will raise rates to 3% by year-end, which has made dollar-denominated Treasuries less attractive. Jobless claims checking in below 300K level for a 7th straight week, which hints at strong payrolls data next week, have also done little to sideline ongoing concerns of further Fed tightening.


Energy, though, continues to regain some of the momentum it has lost in recent weeks, benefiting from a third straight day of rising oil prices. However, crude futures trading near $63 per barrel underpin concerns that higher energy bills will crimp discretionary spending. Technology was recently trading higher, led by strength in the semiconductor group, but a reversal in chip stocks has since pushed the sector back into the red. BTK -0.5% DJ30 -38.42 DJTA -0.6% DJUA -0.4% DOT -0.2% NASDAQ -6.29 NQ100 -0.2% R2K -0.2% SOX -0.1% SP400 -0.4% SP500 -3.67 XOI +0.7% NASDAQ Dec/Adv/Vol 1635/1207/944 mln NYSE Dec/Adv/Vol 1701/1381/742 mln

Maybe some of these 'analysts' really need to see an Analyst.

http://news.bbc.co.uk/2/hi/business/4765906.stm
(BBC) Profits at reinsurer Swiss Re have suffered a 40% drop in the wake of the damage caused in the US by 2005's devastating hurricane season.

Net profits fell to 1.45bn Swiss francs ($1.1bn; £634m) for the full year, as the company was forced to pay out three billion francs in disaster claims.

Premiums earned dropped by 6%, as Swiss Re avoided underwriting business at cheaper prices.

Insurers face claims of about $80bn after last year's spate of disasters.

August's Hurricane Katrina in the US alone is expected to cost $45bn in claims, the world's second-biggest reinsurance company said.

This will make it the most expensive insured single event in history.

Swiss Re's results were far lower than had been expected by analysts, who had estimated profits of about 1.8bn Swiss francs.

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-02T175159Z_01_L01606174_RTRIDST_0_MARKETS-M-A-HEDGEFUND.XML

LONDON, March 2 (Reuters) - Hedge funds are filling their boots on share speculation, as European hostile or unsolicited M&A bids reach a six-year high, fund sources say.

Unsolicited bids are good news for share-speculation -- the initial bid is typically rebuffed, increasing the chances of a second or rival offer and resulting share price hike.

In a recent textbook case, shares at British ports firm P&O (PO.L: Quote, Profile, Research) rocketed 65 percent during a three-month bidding war between Dubai Ports and PSA International, ending in Dubai Port's second, 520 pence offer.

Its shares were trading near 315 pence per share before the first offer at 443 pence.

"With this activity, specifically the amount of hostile situations, counter bids, multiple bidders, returns in this space should be good for a while," said one hedge fund manager.

Froth in the M&A scene has arisen as corporations flush with cash scour the financial markets for rivals, after a four-year spell of low interest rates and keen global demand.

...more...

"Froth"? Isn't that what is euphemistically known as "bubbles"?

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B5EC0A6F7%2D6F70%2D460F%2D8191%2D87A5C4E4B041%7D&dateid=38778%2E5416159606%2D862535505&siteid=mktw&dist=newsfinder

SAN FRANCISCO (MarketWatch) -- April gold climbed to a high of $569.30 an ounce in New York, touching its highest intraday level since Feb. 7. The contract was last up $3 at $568.80. Other metals futures mirrored the strength, with May silver up 32.5 cents, or 3.3%, at $10.115 an ounce -- surpassing the $10 mark for the first time in a month.

12:54 PM ET 3/2/06 APRIL GOLD TAPS HIGH OF $569.30/OZ, ITS HIGHEST SINCE FEB. 7

12:54 PM ET 3/2/06 APRIL GOLD LAST UP $3 AT $568.80/OZ IN NY

1:12 PM ET 3/2/06 APRIL GOLD TAPS HIGH OF $570.30/OZ, HIGHEST SINCE FEB. 6

1:12 PM ET 3/2/06 APRIL GOLD LAST UP $3.90 AT $569.70/OZ

1:04 PM ET 3/2/06 MAY SILVER CLIMBS PAST $10/OZ FOR THE FIRST TIME IN A MONTH

1:04 PM ET 3/2/06 MAY SILVER LAST UP 39C, OR 4%, AT $10.18/OZ

1:54 PM ET 3/2/06 APRIL GOLD ENDS ABOVE $570/OZ AT HIGHEST LEVEL SINCE FEB. 6

1:54 PM ET 3/2/06 APRIL GOLD UP $4.60 TO CLOSE AT $570.40/OZ

1:54 PM ET 3/2/06 SILVER FUTURES CLOSE AT THE HIGHEST LEVEL IN AT LEAST 22 YRS

1:54 PM ET 3/2/06 MAY SILVER UP 4.3% TO END AT $10.208/OZ AFTER $10.235 HIGH

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BE9BCC020%2DD629%2D4023%2D980A%2D897ADBDB8D37%7D&dateid=38778%2E5821195486%2D862542900&siteid=mktw&dist=newsfinder

SAN FRANCISCO (MarketWatch) -- Silver futures closed above $10 an ounce Thursday for the first time in more than two decades with traders upbeat about the prospects for a silver exchanged-traded fund. April silver climbed 41.8 cents, or 4.3%, to close at $10.208 an ounce after a high of $10.235. Gold futures touched a one-month high to mark a third-straight session of gains, as concerns about global unrest lifted oil to a high above $63 -- supporting investment in gold as a safe-haven asset. April gold closed at $570.40, up $4.60.

This from the greatest page here. Make too high a pay-down on that credit card, your money gets held up by Homeland Security while they peer at you malevolently.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x555864

But of course, they don't care what's coming in the shipping containers... sigh.

"All new accounts are subject to the scrutiny of Homeland Security under the provisions of the USA Patriot Act"

Dave Ramsey listeners that are trying to pay off our bills will get nailed I guess. Can't decide if it is a CC fraud excuse or the real deal. Wouldn't be surprised either way.

Dow 11,013.52 -40.01 (-0.36%)
Nasdaq 2,306.57 -8.07 (-0.35%)
S&P 500 1,286.66 -4.58 (-0.35%)
10-Yr Bond 4.650 +0.61 (+1.33%)

NYSE Volume 1,544,838,000
Nasdaq Volume 1,398,847,000

1:30 pm : Sellers remain in control of the action as recent recovery efforts appear to have stalled. Of the 139 S&P industry groups, Construction & engineering (-6.5%) still paces the way lower as Fluor Corp's (FLR 82.10 -5.71) reaffirmed FY06 guidance has done little to excite investors. Autos, in the wake of disappointing monthly sales figures, are a distant third (behind Tires & Rubber) but the group is still down 2.2%. Internet retail is also a notable laggard after Amazon.com (AMZN 36.75 -0.37) lost a legal case with Toys 'R' Us. DJ30 -50.90 NASDAQ -11.49 SP500 -6.11 NASDAQ Dec/Adv/Vol 1815/1118/1.30 bln NYSE Dec/Adv/Vol 1943/1217/1.03 bln

1:00 pm : Major averages bounce off their worst levels, as the networking group turns positive and Energy regains some of its leadership status. However, the improvement has been modest at best as concern about Fed policy, decelerating profit growth and higher energy prices continue to underpin an overall sense of nervousness.DJ30 -50.67 NASDAQ -12.06 SP500 -6.04 NASDAQ Dec/Adv/Vol 1854/1048/1.18 bln NYSE Dec/Adv/Vol 1964/1173/924 mln

3:17
Dow 11,038.64 -14.89 (-0.13%)
Nasdaq 2,311.34 -3.30 (-0.14%)
S&P 500 1,290.24 -1.00 (-0.08%)
10-Yr Bond 46.36 +0.47 (+1.02%)
NYSE Volume 1,992,834,000
Nasdaq Volume 1,746,849,000

Dow 11,034.00 -19.53 (-0.18%)
Nasdaq 2,310.56 -4.08 (-0.18%)
S&P 500 1,289.43 -1.81 (-0.14%)
10-Yr Bond 4.636 +0.47 (+1.02%)

NYSE Volume 1,957,723,000
Nasdaq Volume 1,716,156,000

3:00 pm : Little changed since the last update as the indices remain surprisingly resilient despite oil prices recently closing up 2.3% and above $63 per barrel. Fortunately for the bulls, Energy's leadership has helped offset further weakness in areas like Consumer Discretionary adversely affected by higher energy costs. DJ30 -41.63 NASDAQ -11.16 SP500 -4.28 NASDAQ Dec/Adv/Vol 1914/1069/1.65 bln NYSE Dec/Adv/Vol 1918/1293/1.33 bln

2:30 pm : Major averages, albeit still in the red, continue to trade above their lows of the day, but market internals remain negative. As reflected in the A/D line, decliners on the NYSE hold a 19-to-12 edge over advancers while declining issues on the Nasdaq hold a larger 19-to-10 advantage over advancing issues. Adding to today's struggles have been the indices' inability to find support near key technical levels of 11,015, 1289 and 2308 on the Dow, S&P and Nasdaq, respectively. DJ30 -43.87 NASDAQ -12.76 SP500 -5.34 NASDAQ Dec/Adv/Vol 1932/1033/1.54 bln NYSE Dec/Adv/Vol 1956/1229/1.22 bln

3:38
Dow 11,029.51 -24.02 (-0.22%)
Nasdaq 2,310.19 -4.45 (-0.19%)
S&P 500 1,289.38 -1.86 (-0.14%)
10-Yr Bond 46.38 +0.49 (+1.07%)
NYSE Volume 2,142,708,000
Nasdaq Volume 1,862,237,000

3:30 pm : Stocks are making a late-day push toward positive territory as market losses are now modest at best. Energy (+1.3%) still leads the charge but turnarounds in brokerage, semiconductor and HMOs have helped Financial, Technology and Health Care, respectively, pare some of their losses going into the close. DJ30 -14.74 NASDAQ -3.37 SP500 -1.15 NASDAQ Dec/Adv/Vol 1789/1189/1.8 bln NYSE Dec/Adv/Vol 1836/1388/1.5 bln

4:20 pm : The market's see-saw action -- up one day and down the next -- continued Thursday as investors used sluggish retail sales, higher energy prices and rising bond yields as the latest excuses to consolidate recent gains. Yesterday, a technology-induced rally helped the Nasdaq record its second largest gain of the year so far (+1.5%) and close at a six-week high, which followed an unfounded Google-inspired sell-off a day before that.

Before the market opened, investors sifted through a plethora of same-store sales results from more than 75 retailers. However, the reappearance of cold weather in February, which is typically a decent barometer for spring merchandise, checked in with the smallest gain in nine months and weighed heavily on Consumer Discretionary -- the day's worst performing sector. Among the notable retailers missing forecasts were specialty apparel names like Talbots (TLB 25.93 -0.40) and Chico's FAS (CHS 41.35 -6.41) as well as teen retailers like ANF, ARO, PSUN and HOTT. The three largest retailers, discounters Wal-Mart (WMT 45.06 -0.09), Target (TGT 53.71 -0.86) and Costco (COST 52.80 +0.61), beat expectations, as did Gymboree (GYMB 24.70 +1.84), a suggested holding in our Active Portfolio, and several dept stores (e.g. FD, KSS, JCP and JWN). Nonetheless, tempered sales growth following January's surprisingly strong gains, coupled with rising prices across the energy complex, weighed heavily on retail stocks as well as overall sentiment.

An increase in the cost of borrowing also sparked some nervousness, especially in the rate-sensitive Financial sector. A late-day turnaround in brokerage helped pare sector losses but weakness in several leading bank stocks (e.g. C, BAC, WFC) took a toll on the S&P's most influential sector. The yield on the 10-yr note (-12/32) hit 4.63% following reports that the ECB, albeit widely anticipated, raised their key lending rate to 2.50%. Bond traders speculated that the ECB will raise rates to 3% by year-end, which diminished the desire to own dollar-denominated Treasuries. Doing little to sideline ongoing concerns of further Fed tightening was another jobless claims read which checked in below 300K level for a 7th straight week, reflective of a strong labor market.

Technology turned positive briefly intraday and helped lift the Nasdaq into the green for a moment, but weakness in hardware and software overshadowed semiconductor's late-day recovery efforts. Energy, however, finished the day on a strong note and acted as the market's biggest source of buying support as oil prices (+2.3%) rose for a third straight day and closed above $63 per barrel. BTK +0.1% DJ30 -28.02 DJTA -0.7% DOT -0.1% NASDAQ -3.63 NQ100 -0.1% R2K -0.3% SOX +0.1% SP400 -0.4% SP500 -2.10 XOI +1.1% NASDAQ Dec/Adv/Vol 1701/1304/2.08 bln NYSE Dec/Adv/Vol 1794/1447/1.79 bln

And why we call it a Casino, ya know. Funny, when I posted the numbers to the thread this morning - I paid particular attention to the Nasdaq and S&P. I know that anyone who tracks the health of the markets should track those indeces - particularly S&P. But my attention often gravitates to the Dow. The S&P and Nasdaq are still laggards behind the Dow over the past five years. They still haven't seen the heights they saw on January 20, 2001.

That is a sharp point of concern over our economic health.The S&P now has an average earnings-to-price ration of 1.7% Just nuts. If people catch onto this while the Fed keeps raising rates, then we'll see a whole bunch of stock brokers out of work.

I was warning people of the impending correction.

Don't know if I was paying particular attention to the Russell 2000 but I was noticing the P/E ratios and we're seeing quite inflated ratios again. Although, the ratios now aren't as wild as they were for dot-com companies (like Ebay being over 11,000 at one point) but we're seeing ratios of established companies well above what they should be.

It's almost like Enron accounting has taken over the entire financial markets.

growth rates are. However, that implies a flat market, not a rising one. Unless we go into Iran, I don't see a major correction, even in the event of a recession. Maybe 10%, 15% at the worst if the Fed takes rates much past 5%, but much of the excess valuations have been wrung out.

300 points. PEs on a forward going basis are now about 17 or 18 which is reasonable, but does not call for a major rally. It is still a stock picker's market.

Btw, if anyone is interested, I have started my own stock market blog where I will post daily commentary on the markets. If anyone is interested, they can come on by and check it out:

http://brazillion.blogspot.com/