STOCK MARKET WATCH, Tuesday 21 March

WHAT MAKES A RESERVE CURRENCY?

Never has there been anything more widely used and increasingly more plentiful – through the avails of the printing press – but yet so completely misunderstood, than what we affectionately refer to as money.

First, What Is Money?: -cut-

With today being March 20, 2006 – a date long held to be the proposed first day of trade on a new Iranian Oil Bourse – it seems fitting to have a review or primer if you will, as to what exactly gives a currency unit the qualities worthy of reserve status?

Few would argue that the U.S. Dollar is the world’s reserve currency. Put simply, this means that the greenback is the unit of account for settlement of most international transactions – be they gold, oil, wheat, lumber or any base metal that is traded globally.

-cut-

To resolve the stability issue, let’s just say that it never hurts to have friends in powerful places – like the Bank of Japan – with an export led economy who are always ready to support your currency for their own mercantilist interests. When considering official interventions on the part of Central Banks – one should remember that Central Banks generally try to do so sparingly since their credibility can be jeopardized if such actions are viewed to be too heavy handed

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

8:30 AM Core PPI Feb
Briefing Forecast 0.1%
Market Expects 0.1%
Prior 0.4%

8:30 AM PPI Feb
Briefing Forecast -0.3%
Market Expects -0.2%
Prior 0.3%

8:29 AM ET 3/21/06 U.S. FEB. PPI INTERMEDIATE CORE PPI UP 0.5%

8:29 AM ET 3/21/06 U.S. FEB. PPI SHOWS BIGGEST DROP IN 3 YEARS

8:29 AM ET 3/21/06 U.S. FEB. PPI ENERGY PRICES FALL 4.7%

8:29 AM ET 3/21/06 U.S. FEB. PPI CORE UP 1.7% IN PAST 12 MONTHS

8:29 AM ET 3/21/06 U.S. FEB. PPI UP 3.7% IN PAST 12 MONTHS

8:29 AM ET 3/21/06 U.S. FEB. PPI CRUDE GOODS PRICES FALL 9.2%

8:29 AM ET 3/21/06 U.S. FEB. PPI INTERMEDIATE GOODS PRICES FALL 0.3%

8:29 AM ET 3/21/06 U.S. FEB. CORE PPI RISES 0.3% VS. 0.1% EXPECTED

8:29 AM ET 3/21/06 U.S. FEB. PRODUCER PRICE INDEX FALLS 1.4% VS. -0.3% EXPECTED

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B2C614DCB%2D36CA%2D4500%2DA45B%2D9D5536023A02%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - U.S. wholesale prices plunged 1.4% in February, the biggest decline in nearly three years, the Labor Department reported Tuesday. Energy prices fell 4.7%, also the biggest drop since April 2003. Food prices fell 2.7%, the most in four years. Economists expected the PPI to fall about 0.3%. The core producer price index - which excludes food and energy prices - rose 0.3%, stronger than the 0.1% gain expected by Wall Street economists. In the past year, the PPI has risen 3.7%. The core rate has accelerated to a 1.7% increase in the past 12 months.

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

March 21 (Bloomberg) -- U.S. wholesale prices fell in February by the most in almost three years, led by a drop in food and fuel costs even as other prices rose more than forecast, a government report showed.

The 1.4 percent decrease in the measure of prices paid to factories, farmers and other producers followed a 0.3 percent rise in January, the Labor Department said today in Washington. The core rate, which excludes food and energy, increased 0.3 percent after a 0.4 percent rise.

Stronger economic growth in Japan, Europe and China is pushing up demand for raw materials, forcing American producers to pay higher prices. To keep those costs from finding their way to the consumer, Federal Reserve policy makers will raise interest rates one or two more times, economists forecast.

``The global demand for a lot of these products and materials is moving upward,'' John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, said before the report. ``It won't be skyrocketing inflation, but the bias on inflation is upwards.''

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Those last couple of snippets point out to what we've often been reading here. US monetary policy is loosing it's effect in the global economy. Just how does raising US interest rates alone slow down economic growth on the other side of the globe? So, we have Japan and EU beginning their tightening as the Feds bag of tricks is just about used up. Will it work to cool demand for raw materials? Wouldn't that require a reduced demand for finished goods, and doesn't that point directly at the US consumer? :shrug:

INGAPORE - Oil prices were mixed Tuesday as traders weighed recent supply disruptions in Nigeria against growing U.S. petroleum stockpiles.

Light, sweet crude for April delivery slipped 2 cents to $60.40 a barrel in Asian electronic trading on the New York Mercantile Exchange. The contract, which expires when the market closes Tuesday, dropped $2.35 Monday to settle at $60.42 a barrel.

May Brent crude futures on London's ICE Futures gained 25 cents to $61.59 a barrel.

Gasoline futures rose 0.34 cent to $1.8335 a gallon while heating oil futures gained 0.59 cent to $1.7476 a gallon. Natural gas futures lost 11 cents to $6.725 per 1,000 cubic feet.

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WASHINGTON - The average retail price of gasoline soared by almost 14 cents last week, rising above $2.50 a gallon for the first time since late October.

The federal Energy Information Administration said Monday that U.S. motorists paid $2.504 cents a gallon on average for regular grade last week, a rise of 13.8 cents from the previous week. Pump prices are still 39.5 cents higher than a year ago.

The jump in retail prices follows a 42-cent-per gallon rise in unleaded gasoline futures since mid-February. On Monday, gasoline for April delivery settled at $1.8301 per gallon.

Average retail prices peaked at $3.07 a gallon in early September, a reflection of the extreme tightness in the market following Hurricane Katrina, which knocked out refineries in the Gulf region, as well as pipelines that deliver fuel to the East Coast and Midwest.

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NEW YORK - A closely watched gauge of future economic activity declined slightly in February following a sharp rise in January, a private research group said Monday.

The decline, which follows four months of gains, suggested to some analysts that the nation's economic growth will slow in the second half of the year.

The Conference Board said its Index of Leading Economic Indicators fell 0.2 percent in February, following a revised 0.5 percent rise in January. The January increase had initially been reported at 1.1 percent.

Economists on Wall Street had expected the index to decline 0.3 percent in February.

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NEW YORK (AFP) - New Federal Reserve chief Ben Bernanke said the US economy is not on course for a sharp decline despite a strange pattern of behaviour on the bond market that foxed his illustrious predecessor.

In a speech to the Economic Club of New York, Bernanke shed little light on the direction of US interest rates as he prepares to chair his first meeting of the Fed next week.

But his speech, devoted to the bond market's so-called yield curve, did not suggest any major shift in policy by the US central bank.

"Although macroeconomic forecasting is fraught with hazards, I would not interpret the currently very flat yield curve as indicating a significant economic slowdown to come, for several reasons," he said in his prepared text.

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http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-03-21T023235Z_01_N20290367_RTRIDST_0_ECONOMY-BERNANKE-UPDATE-2.XML

NEW YORK, March 20 (Reuters) - Federal Reserve Chairman Ben Bernanke said on Monday it was hard to gauge why long-term interest rates were so low and said the U.S. central bank could not rely on them as its sole guide for policy-making.

"The implications for monetary policy of the recent behavior of long-term yields are not at all clear-cut," Bernanke told the Economic Club of New York.

In his first public foray onto Wall Street since taking over as Fed chairman on Feb. 1, Bernanke ran through several competing explanations for the unusually low level of U.S. bond yields despite a steady ratcheting up of short-term interest rates by the U.S. central bank.

Bernanke revisited a thesis he first laid out a year ago that a "global saving glut" - an excess of savings because of a dearth of enticing investments - could be depressing rates.

If this were the case, he said, then as long as the factors behind it persisted "global equilibrium interest rates - and, consequently, the neutral policy rate - would be lower than they otherwise would be" to keep the economy on an even keel.

But Bernanke laid out a number of other possibilities and concluded: "The bottom line for policy appears ambiguous."

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8:01 PM ET 3/20/06 BERNANKE: HOUSING SECTOR REMAINS A RISK TO OUTLOOK

8:01 PM ET 3/20/06 BERNANKE SEES SLOW REPRICING OF ADJUSTABLE RATE MORTGAGES

7:59 PM ET 3/20/06 BERNANKE: YIELD CURVE ONLY ONE FACTORS IN SETTING POLICY

7:59 PM ET 3/20/06 BERNANKE: TRADE GAP REQUIRE ACTION FROM U.S. AND PARTNERS

7:49 PM ET 3/20/06 BERNANKE: EVIDENCE SO FAR SHOWS MODERATE SLOWING IN HOUSING

7:47 PM ET 3/20/06 BERNANKE: SOME HOME PRICE MODERATION WOULD NOT HURT ECONOMY

:donut: What surprised me about Bernanke's comments was what little news they made this morning in MSM. When Greenspin spoke, it was endlessly noted. Now that I see his comments, I think he is wrong. I am hearing too much about ARM's being jacked up. The co's that sell these products are the ones that would squeeze blood from a turnip. They are in the same catagory credit card lenders and other preditory lenders. They don't care who they foreclose on because to them, there is a sucker born every minute. I feel for those that are soon to be upside down in their home loans in a flat market. Right now it is regional but I think it will spread. Wish I could be happier about it, but I'm not.

Happy hunting and watch out fot the bears.

HOUSTON (Reuters) - E-mails and memos showing Enron Corp. used financial gimmicks to fatten its earnings drew shock and indignation on Monday from two former Arthur Andersen accountants, who worked on the company's books.

Testifying in the fraud and conspiracy trial of former Enron chiefs Ken Lay and Jeffrey Skilling, they insisted the documents showed Enron tried to mislead them as the energy trading firm struggled to meet Wall Street earnings forecasts.

"This agreement is three pages of lies," accountant Thomas Bauer said when shown a copy of a secret, handwritten agreement between then-chief financial officer Andrew Fastow and former chief accounting officer Rick Causey.

"Enron had an obligation to me to provide all documents, all agreements, oral or written and they didn't do that. I would have wanted to know that," said Bauer, who worked on the Enron account for Andersen from 1995 until the company collapsed into bankruptcy in December 2001.

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As an auditor, they have the obligation to provide you with documents, BUT you have the obligation to have setup a proper audit plan, and tested your audits well enough to detect the possibility of fraud. This is assuming of course that you bothered to ask for all of the documents and didn't expect them to just fall out of the sky and into your hands to audit.

NEW YORK (CNNMoney.com) - Tech stocks appeared headed for a modest selloff Tuesday morning after a disappointing financial report from tech bellwether Oracle and comments from new Federal Reserve Chairman Ben Bernanke.

U.S. stock futures were down, although a comparison to fair value indicated a mixed open for broader markets and a lower start for the Nasdaq,

Software provider Oracle (Research) reported improved fiscal third quarter earnings that topped forecasts. But shares of Oracle fell due to weaker than expected sales of its database software. Shares of Oracle were off 4 percent in heavy trading in Frankfurt early Friday.

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SAN FRANCISCO (Reuters) - Google Inc. is introducing a financial news, stock quote and chat service that seeks to shake up the online finance information market now dominated by Internet media rivals and online brokers.

The Web search leader said late Monday that it has begun offering a trial version of the service called Google Finance that uses a keyword search system to help consumers target information on public and private companies and mutual funds.

Google Finance primarily provides financial news, stock quotes, charts and data. In its trial form, the site is far less comprehensive than established financial sites such as those from Yahoo Inc. (Research), Microsoft Corp.'s (Research) MSN, and America Online's Money & Finance and CNNMoney.com, both of which are units of Time Warner Inc. (Research)

"We are going to provide quick, easy access to financial information ... by taking complex financial data and making it more digestible," Katie Jacobs Stanton, product manager for Google Finance, said in a phone interview.

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it's called DU StockWatch thread....thanks Ozy :grouphug:

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

Last trade 89.30 Change -0.04 (-0.04%)

Bernanke Boosts the Dollar

http://www.dailyfx.com/story/dailyfx-reports/daily-brief/7459-bernanke-boosts-the.html

“The implications for future economic activity are positive rather than negative,'' said Fed Chairman Ben Bernanke at yesterday’s speech to the Economic Club of New York and his generally upbeat assessment of the US economy helped to buoy the dollar for the second straight day of gains against the euro. Dollar’s bounce however did not last long as the EUR/USD recovered all of its losses by midday European trade off the back of strong French Consumer spending.

France saw its consumer spending jump by 1.8% versus a forecast of only 0.3% suggesting that the regions second largest economy may be finally showing signs of recovery as pent up demand fuels spending. Long the sick man of Europe, France has had to deal with a series of political problems over the past few months including riots last fall and student protests against labor law changes this week. Yet despite the social upheaval, the country’s economy is slowly expanding as the government of Prime Minister Villepin institutes much needed economic reforms. If the French economy continues to improve it would go a long way in underpinning long term support for the euro but analysts are cautious about the country’s potential for growth in 2006 with most GDP forecasts still clustered around the 1.7% level.

With Tokyo closed for holiday, Asian markets were extremely quiet, but action in FX may heat up later in the day with the release of the US PPI data at 13:30 GMT. Market consensus calls for a -0.2% month over month decline, but if the data surprises to the upside it could move the dollar higher as the market would instantaneously re-price the possibility of 5% Fed funds rates in the near future. In short, the debate in the FX market now revolves around dollar bears who argue that US economy is headed for an inevitable slowdown and dollar bulls who contend that inflationary pressures in US will force the Fed to raise rates far higher than the market’s present expectations.

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http://www.321gold.com/editorials/willie/willie032106.html

IRANIAN OIL EXCHANGE IS "ON HOLD"
To begin with, an "I TOLD YOU SO" is warranted, as the Iranian Oil Exchange is delayed by several months, maybe a year. My impassioned "Mosques, Civil War, Oil & Gold" article, dated March 2nd, forewarned on the delay and its side-tracked launch. See postings #1, #2, #3, which some editors found to be too controversial or portions off topic politically to post. The true motives behind the delayed launch are to remain debated. Perhaps a motive was to remove from the landscape yet another bomb target, a very easy target to hit and destroy. However, such delay will not put a stop to the USDollar decline. My source is quoted by the author of the Globe & Mail article, dated 14 March 2006 and cited below, by way of a reliable well-informed personal friend. In that article, John Partridge from the INVESTMENT REPORTER writes:

As the nuclear standoff pitting Iran against the West continues, some conspiracy theorists are more focused on another plan that the Middle Eastern nation is pursuing. But they are jumping the gun if they still figure Iran is within days of launching a new international oil exchange that would sell its own and other Middle Eastern oil producers' black gold in euros rather than U.S. dollars, and which, the theory goes, could ultimately torpedo the greenback and the U.S. economy. Despite repeated reports over the past 18 months or so that the planned bourse would finally open for business on March 20, 2006 -- and go head to head with the New York Mercantile Exchange and the ICE Futures Exchange in London -- the start date has been postponed by at least several months and maybe more than a year.

"In the middle of 2006, we are able to start the bourse," Mohammad Asemipur, special adviser on the project to Iran's Oil Minister, said when reached in Tehran. The plan is to trade petrochemical products first, with a crude oil contract coming last, a rollout that likely will take three years, he said. "Oh, crikey, it's at a much earlier stage than people would think," said British consultant Chris Cook, who claims credit for coming up with the idea for the exchange in the first place and is a member of the consortium headed by the Tehran Stock Exchange that is charged with bringing the project to life. "You can rest assured, there will not be a crude oil contract, Gulf-based, in my opinion, within a year -- and that would be really pushing it," Mr. Cook, a former director of ICE's predecessor, the International Petroleum Exchange, said when reached in Scotland. The electronic exchange is to be located on Kish Island in the Persian Gulf, an Iranian duty- and tax-free zone.

The euro will benefit from Persian Gulf oil sales, with or without an official oil exchange. The important factors are where key OPEC nations store their surplus money and in what instruments, whom they sell oil to, and how they finance significant capital investments. Future energy sales will be encapsulated in grand contracts. Lately OPEC nations have been pouring money into the Middle East stock markets, but those markets have endured serious selloffs in recent weeks. They have also gone bonkers with a construction boom, complete with the giant amusement park Dubai World and golf courses. As investors exit the Middle Eastern stock markets, young and fragile to be sure, much of their money will find its way to a more stable gold bullion, whose destination has a long reliable history.

GOLD MIGHT HAVE FINISHED ITS "REST"
With little argument from anybody, gold has made a huge run since last autumn. Typically, in a strong bull market, most of the gains will be retained. Often a retracement of 3/8-ths of the gain from the breakout occurs into clear ground. In our case here, the gold upward path was painted by too many geopolitical brushes. Gold benefited from the monetary response to the natural hurricane disasters which persist. Gold was pushed by too many participants fed up with the bloated world currency, the most mismanaged currency in modern history, the USDollar, which fights the good fight in battling the inefficiencies of debt overhang and the threat of asset bubble dissipation.

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Speaking of China, I saw somewhere that they and Russia have been penning quite a few deals today.

http://www.kitcocasey.com/displayArticle.php?id=614

snip>

Not much happened overnight, rhetoric wise, except of course if you count Senators Graham and Schumer still harping on the Chinese to allow their currency to flow, right now! I just wish these guys would go home and worry about things that they CAN change! By the way, the renminbi rose to yet another post dollar peg high! My favorite economist, Stephen Roach of Morgan Stanley said... "They are asking for a lot"

You know... The Chinese may seem to move slow on the changes they have promised to make, but come on, they have the Goose and the Golden Egg right now! You wouldn't want the U.S. to mess that up if they had that situation...

The dollar did come back a bit yesterday, sending the euro and other currencies down but not much... The dollar's ebb and flows continues to center around the "thought of the day"... Will it be "inflation is slowing, no need to raise rates more"... Or the one that filtered through the markets yesterday... "the economy is strong, so more rate hikes are coming"... You know me... I don't really care if rates here are going up, that just means the yield curve remains inverted, the housing sector's balloon gets popped, and consumer spending comes to a halt...

What I focus on is the "overall fundamentals" of the country, and whether or not they can support the currency... Here, the U.S. fails miserably, and should show on the dollar eventually...

snip>

Nothing new on the India making their currency fully convertible story from yesterday... I think this development is good news, and if you think about it, India is laying the ground work and developing a blue print for China... India's currency used to be pegged to the dollar too... And then they slowly moved to the current policy, which is now going to be replaced... That all took about 2 1/2 years... China just dropped their peg last July!

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http://www.kitco.com/ind/vaneeden/mar202006.html

snip>

After last week’s commentary I received several emails from readers who suggested that China and Japan would not allow the dollar to fall, since they each have about one trillion dollars in their foreign reserve accounts and the losses they would incur due to a declining dollar would be too great. Not only would they realize losses in their foreign reserve accounts, a weaker US dollar would also make their exports more expensive to US consumers and that could in turn hurt their export-driven economies. Those are good points, but completely irrelevant. Here’s why.

The argument that China and Japan would not let the dollar fall assumes first of all that they have a choice in the matter. Up until now it has taken a concerted effort by both China and Japan, as well as an enormous demand for US assets from private international investors such as pension funds, mutual funds and hedge funds, to keep the dollar afloat. When all these players together desire US financial assets then the dollar can stay afloat. But when appetite for US financial assets starts waning, the house of cards implodes. So you have to ask yourself, will international demand for US financial assets remain as strong going forward, as it has been in the past?

The US economic expansion -- if there currently is one -- has only been made possible during the past several years by rapidly rising real estate prices that have injected large amounts of money into the US economy through cash-out refinancings, etc. Take away rising real estate prices and you will be hard pressed to find a stimulus for US economic growth. Now consider that inventories of homes for sale in the US are at a 19-year high, affordability is at a 14-year low, home prices have started falling and home ownership has begun to decline. Home starts in February were down 7.9% from a year earlier and new home sales in January fell by 5%. As I said, if you take away the growth in real estate then you pretty much take away the fuel the fires US economic growth.

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The Commerce Department put on a brave face and announced that the US economy expanded at a slightly stronger pace in 2005 than suggested by earlier estimates, but that a slump in consumer spending held growth to its slowest pace in three years. Now, let’s get back to answering the question about whether China and Japan will allow the dollar to fall.

The reason that China and Japan have been supporting the dollar is that they both run export-driven economies and with a strong US dollar, US consumers had great appetite for their products. But, if US consumption has reached its limits, and the growth of US consumer spending is nearing an end, then the marginal benefit to China and Japan for supporting the US dollar has also come to an end.

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http://www.freemarketnews.com/Analysis/194/4194/2006-03-20.asp?wid=194&nid=4194

excerpt:

In 2005, the Federal Reserve abandoned its cheap dollar policy, and tried to defend the greenback against the Euro and yen through a series of baby-step rate hikes, without puncturing the US stock market rally or the US housing bubble. The Fed achieved its twin objectives, because Asian central banks and Arab oil kingdoms were heavy buyers of US Treasury bonds, keeping US mortgage rates low.

The most notorious Asian buyers of US debt were China and Japan, which recycled hundreds of billions of US dollars acquired through foreign currency intervention back into the US debt markets. All told, Asian central banks hold a whopping $2.75 trillion of foreign exchange reserves, led by Japan’s $851.7 billion, China’s $818.9 billion, Taiwan’s $257.3 billion, and South Korea’s $217 billion.

Beijing is on course to top $1 trillion in FX reserves this year, and wants to diversify this year’s build-up of cash away from the US dollar. Beijing’s satellite colony, Hong Kong, owns another $127.8 billion of foreign currency reserves. Therefore, the US Treasury is afraid to identify China as a currency manipulator, even after the US rang up a $202 billion trade deficit with China, due to fear that Beijing and its satellite could retaliate by selling US bonds, and driving mortgage rates higher.



To discourage Asian central banks from dumping their US dollars, the Greenspan Fed engineered a 15% counter trend rally for the US dollar against a basket of major currencies, including the Euro, British pound, and Japanese yen. Higher Fed rates were required to prevent the US dollar from falling under its own weight, due to a rising tide of current account deficits. Despite a sharp 26% devaluation of the dollar from its highs in 2002, the US still posted a record trade deficit of $723.6 billion in 2005, and started 2006 with a record $68.5 billion shortfall in January.

The Fed’s rate hike campaign failed to slow the US appetite for foreign made goods, as Americans extracted $600 of home-owners equity to meet their expenditures. Also, Washington is on track to borrow $364 billion in 2006, more money than any other government in the world, or 34% of gross global government borrowing, up 14% from 2005, according to Standard and Poor’s. And greater amounts of US debt held in foreign hands will require larger interest rate payments abroad.

Thus, the US dollar’s rally in 2005 was quite pathetic, given the magnitude of its interest rate advantage over the Euro and yen. Unless the US dollar index can eclipse the 92.00 level on a sustained basis, its 2005 rally could stall out, and become nothing more than a counter-trend rally in a longer-term bear market.



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It should get the attention it deserves. tia

I felt that it was noteworthy also :hi:

I can refuse to give out info by choosing NOT to apply for a credit card and not providing info and requesting privacy. I have no choice with the IRS. I am required by law to provide sensitive info, including my SS # every year. This just chaps my ass, as we say here in Tx.:nuke:

Dow 11,279.65 +5.12 (+0.05%)
Nasdaq 2,306.92 -7.19 (-0.31%)
S&P 500 1,303.08 -2.00 (-0.15%)
10-Yr Bond 4.658 +0.02 (+0.04%)

NYSE Volume 99,758,000
Nasdaq Volume 135,655,000

09:15 am : S&P futures vs fair value: +0.4. Nasdaq futures vs fair value: -2.0.

08:58 am : S&P futures vs fair value: -0.1. Nasdaq futures vs fair value: -3.5. In the wake of the February PPI report, futures trade is holding relatively steady. A slightly lower open for the cash market is still expected. Along with the speech that Fed Chairman Bernanke delivered yesterday evening, Oracle's (ORCL) fiscal third quarter earnings report is another item garnering attention and contributing to the early tone. The company surpassed EPS expectations by a penny, but its in-line revenues and reiterated guidance for the current quarter has disappointed the market.

08:35 am : S&P futures vs fair value: -0.5. Nasdaq futures vs fair value: -5.0. The February Producer Price Index has been released. Core PPI, which excludes food and energy, rose 0.3%, higher than the 0.1% increase that economists had anticipated. Total PPI, meanwhile, fell a more than expected 1.4%. Economists were expecting a 0.2% decline. The year-over-year core rate of PPI is 1.7%. The fact that the February Consumer Price Index was released last week may temper the PPI data's effect. The stock market's initial reaction has been a muted one; stocks remain poised to open lower. The bond market has held relatively steady - with the 10-year still yielding 4.65%.

10:42 AM ET 3/21/06 BUSH: 'ECONOMY OF THE UNITED STATES LOOKS VERY STRONG'

10:21 AM ET 3/21/06 BUSH: 'SATISFIED' WITH WHITE HOUSE STAFF'S PERFORMANCE

10:08 AM ET 3/21/06 BUSH SAYS IRAQ HASN'T SLIPPED INTO CIVIL WAR

10:06 AM ET 3/21/06 BUSH: WILL WORK WITH CONGRESS TO CUT DEFICIT

10:05 AM ET 3/21/06 BUSH: 'ENCOURAGED' BY STRENGTH OF U.S. ECONOMY



Kind of like Dimson's Rose E. Scenario on Iraq, isn't it?

http://www.washingtonpost.com/wp-dyn/content/article/2006/03/20/AR2006032000341.html?referrer=email&referrer=email&referrer=email

and defensive. Saw Stephanoplous (however you spell that) on GMA saying he's out getting in touch with the people - it's what he does best - should bring up his poll numbers - taking tough questions from the people, blah, blah, blah.

He sounds like a drunk hollering at the wife who dared to ask where he's been.

Then there's the old straw-man, "some people say... but I think, I disagree, yada yada".

It's too early in the day for a drinking game King george. How many times has he said "Terror" and "9/11" so far?

Staphylococcus

staph·y·lo·coc·cus (stăf'ə-lō-kŏk'əs)
n., pl. -coc·ci (-kŏk'sī, -kŏk'ī).

A spherical gram-positive parasitic bacterium of the genus Staphylococcus, usually occurring in grapelike clusters and causing boils, septicemia, and other infections.

a youngin'.

Guess that, unlike us on SW thread...some things don't get better with age;)

doling out WH spin. He certainly seems to have lost his regard for "ethics" in promoting the current WH spin though. Guess it doesn't matter ethically if you're not creating the spin but just reporting it as fact. :eyes:

"I'm spending your grandchildren's capital on my war."

"Social security, we'll git her done when we shut her down after having looted her for gummit contracts for my Base."

Impeach.

Talking about National Debt. Not answering question of course. "Modernize & Strengthen Social Security & Medicare."

mouth did not say "Military Industrial Complex". Can't give the exact quote, something about "descretionary, I mean non-security related spending".

I'm gonna have to look at the transcript later. I really can't stand to listen very closely. He certainly does sound defensive though. Stammerin, stutterin, higher and higher shrieking voice and LOUD!

Spread liberty - a noble cause.

Didn't some woman ask him about the Apocolypse yesterday too? Caught that on GMA as well. He said he hadn't thought about it that way or some such BS.

I got one of those e-mail chain things the other day. It lists about 20 things in the Bible about Iraq then finishes with this:

...Indeed Iraq is a country with deep roots and is a very significant country in the Bible. No other nation, except Israel, has more history and prophecy associated with it than Iraq.
And also... This is something to think about! Since America is typically represented by an eagle. Saddam should have read up on his Muslim passages...
The following verse is from the Koran, (the Islamic Bible)

Koran (9:11) - For it is written that a son of Arabia would awaken a fearsome Eagle. The wrath of the Eagle
would be felt throughout the lands of Allah and lo, while some of the people trembled in despair still more
rejoiced; for the wrath of the Eagle cleansed the lands of Allah; and there was peace.
(Note the verse number!)


Tell me we're not on some stinkin' crusade. Now I've got to try and research that verse number they gave for the Koran. I'm betting it's BS, just like the Saddam-9/11 link these idiots still push. :eyes:

On edit: Nope, no such verse, nothing about an Eagle, hardly any instances of the word wrath compared to the Bible. NOW I can continue the chain, with a few corrections. :evilgrin:

a search came across this site (Biblical and Theological Resources/CRI-Voice, Institute, a global and ecumenical ministry dedicated to providing biblical and theological resources for growing Christians) which takes that chainmail apart
http://www.cresourcei.org/urbanlegend.html

I believe the false Koran 911 verse had one time been a separate chainmail ... looks like someone has combined the Iraq list with it ...

here's the Snopes link re the 'false' Koran chainmail
http://www.snopes.com/politics/war/quran911.asp


thanks for all your efforts here

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-21T155602Z_01_WAT005114_RTRIDST_0_BUSH-ECONOMY-URGENT.XML

WASHINGTON, March 21 (Reuters) - President George W. Bush said on Tuesday that the U.S. economy was strong and showed every indication of gaining momentum.

"Projections for first-quarter growth this year look pretty decent," Bush said at a press conference. "That's just projections, that's a guess by some economists" but most indicators including job growth appeared healthy, he added.

"From my perch, the economy appears to be strong and getting stronger," Bush said.

Someone needs to knock him off that "perch". :grr:

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BF7F5E3D7%2DFBA9%2D4716%2D9B52%2D84C3FF1F3C8A%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- President Bush on Tuesday said he doesn't believe Iraq has slipped into civil war. "We all recognize that there is violence, that there's sectarian violence. But the way I look at the situation is that the Iraqis took a look and decided not to go to civil war," Bush said at a White House news conference. He was asked to respond to remarks by formeer Iraqi interim prime minister Ayad Allawi, who told the British Broadcasting Corp. on Sunday: "If this is not civil war, then God knows what civil war is."

One word: Delusional

I know I NEVER gave any weight after the WMD didn't show up in Iraq by summer 2003.

Still Crazy After All These Years...by Paul Simon.
<snip>
I’m not the kind of man
Who tends to socialize
I seem to lean on
Old familiar ways
And I ain’t no fool for love songs
That whisper in my ears
Still crazy afler all these years
Oh, still crazy after all these years

Four in the morning
Crapped out, yawning
Longing my life a--way
I’ll never worry
Why should i?
It’s all gonna fade

Now I sit by my window
And I watch the cars
I fear I’ll do some damage
One fine day
But I would not be convicted
By a jury of my peers
Still crazy after all these years
Oh, still crazy
Still crazy
Still crazy after all these years

http://www.freep.com/apps/pbcs.dll/article?AID=/20060321/BUSINESS01/603210332/-1/BUSINESS07

Many of the thousands of Delphi Corp. workers who are expected to return to General Motors Corp. in a deal under negotiation with the UAW could work at the automaker for a few days or weeks and then retire with a GM pension and retirement benefits, according to people familiar with the talks.

GM, the UAW and Delphi, continued to talk Monday after meeting through the weekend and discussed the deal that would encourage tens of thousands of hourly workers to retire from both companies.

If the workers retire from GM, the automaker would foot their bills for benefits. Workers could be persuaded that their benefits are more secure by retiring from GM rather than Delphi, which filed for bankruptcy.

The massive job-cutting effort is designed to cut the automaker's workforce and create some openings for Delphi workers to move back to GM, the former owner of the parts supplier, people familiar with the talks said Monday.

snip>

GM is playing a part in the talks because it depends on Delphi for parts and is potentially liable for up to $12 billion in pension and retirement health care and other benefits for Delphi workers. That was part of its agreement with the UAW to spin off Delphi as a separate company in 1999.

more...

http://www.thestate.com/mld/thestate/14147413.htm

ANDERSON, S.C. - Timken Co. has laid off 20 workers at its Honea Path plant in an effort to cut costs.

The company, which makes bearings for automobiles and industries, blames the layoffs on decreasing demand.

Timken tried cut costs and hours, but couldn't save enough money, said David Williams, a manager at the plant.

The 20 jobs cut came from around the plant, but most were service-related, Williams said.

These are the first layoffs in 10 years at the plant that employees about 400, Williams said.

...more...

The Price of an Ambassadorship




William Timken Jr. (right) greeted President Bush at the Timken Co. in Ohio in 2003. When the company announced layoffs the following year, Bush’s opponents sought to make political hay out of the news.

Timkin was/is a big supporter of Ken Blackwell, too.

can count.

I fear that I miss lots of their tricks - and am unutterably weary from the dog-and-pony shows that they put out for general consumption.

Fattened on the sweat of his employees.

I'd be getting my financial affairs in order. It seems to be the kiss of death for jobs. Who needs a photo op, I'd rather have a job.

Dow 11,295.18 +20.65 (+0.18%)
Nasdaq 2,321.30 +7.19 (+0.31%)
S&P 500 1,305.57 +0.49 (+0.04%)
10-Yr Bond 4.723 +0.67 (+1.44%)

NYSE Volume 728,848,000
Nasdaq Volume 880,373,000

11:30 am : Mixed and tightly-range bound trade persists. Bond yields are heading higher, and rate-sensitive areas are weighing on the market. The Financial sector (-0.4%), which had attracted solid buying interest as Treasury yield improved last week, is experiencing some profit taking. The homebuilding industry and the Utilities sector (-0.6%), other particularly rate-sensitive areas, are also considerably lower. Tech (+0.4%), meanwhile, continues to support the market. A recent recovery in Industrials is also helping to prop up the indices. DJ30 +2.48 NASDAQ -0.97 SP500 -1.75 NASDAQ Dec/Adv/Vol 1688/1110/772.5 mln NYSE Dec/Adv/Vol 2010/1006/434.5 mln

10:55 am : The Dow has bounced back to gaining ground, but the S&P and Nasdaq remain modestly lower. A recovery in the Energy sector (+0.5%) and an uptick in Tech (+0.2%) are lending support. Crude, while still lower on the day, has halved its loss. That price action is helping the Energy sector. Some renewed buying interest across the semiconductor industry is driving the Technology sector. Intel (INTC 19.93 +0.31), one of our recommended holdings for active investors, is faring especially well. The stock has gained about 1.6% following Bank of America's assertion that upcoming Intel releases will swing the balance of technological power back in favor of Intel. The comment was included in an INTC versus AMD summary that the firm compiled. Intel is currently one of the Dow's strongest sources of support. DJ30 +9.12 NASDAQ -4.09 SP500 -0.97 NASDAQ Dec/Adv/Vol 1737/996/566.7 mln NYSE Dec/Adv/Vol 1977/965/311.8 mln

stupid! That's about all that fell out of his piehole! At least he didn't declare another war----yet.

http://www.washingtonpost.com/wp-dyn/content/article/2006/03/20/AR2006032000683.html

ATLANTA -- Delta Air Lines Inc., which is operating under bankruptcy protection, asked a judge Monday to allow the nation's third-largest carrier to void roughly 93 million stock options held by 70,000 current and former employees and directors.

The Atlanta-based company said the options, if exercised, would provide little to no real value, making the $305,000 a year it costs the airline to maintain, account for and administer the benefit an unnecessary burden on Delta.

The company's motion says the request has the support of the creditors committee in its bankruptcy case and the Air Line Pilots Association, the union that represents holders of roughly one-third of the options Delta is seeking to reject.

<snip>

"We didn't oppose the motion to void the stock options because they were worthless once management forced the company into bankruptcy anyway," the chairman of the pilots union's executive committee, Lee Moak, said Monday.

...more...

Killing their pensions and trashing their options :eyes:

P/E Ticker Company
69.01 GOOG Google
17.30 IBM IBM
23.13 MSFT Microsoft
34.37 AAPL Apple Computer
14.29 INTC Intel
20.88 DELL Dell
49.23 EBAY Ebay
23.79 YHOO Yahoo
18.87 LMT Lockheed Martin
24.59 BA Boeing
69.01 GOOG Google
22.39 GE General Electric
21.72 PG Proctor and Gamble
17.49 JNJ Johnson and Johnson
31.65 LLY Eli Lilly
24.17 PFE Pfizer
25.14 NVS Novartis
12.86 DE Deere & Co.
18.78 CAT Caterpillar
13.98 KUB Kubota
11.25 BGG Briggs & Stratton
19.46 LOW Lowes
15.81 HD Home Depot
24.36 WY Weyerhauser
25.17 VMI Valmont

....

http://www.hussmanfunds.com/wmc/wmc060320.htm

snip>

Based on the most recent (record) figures for trailing net earnings, the S&P 500 now trades at a price/earnings ratio of 18.3. From the standpoint of the past decade or so, that doesn't seem to be a very threatening valuation. The problem is that the past decade or so represented the most extended valuation bubble in history, and a denouement that, even including the 2000-2003 bear market, never included a period of historically normal valuations.

Normal Valuations

Over the long-term, the average price/earnings ratio for the S&P 500, based on net trailing earnings, has been about 15 (importantly, most of that history was characterized by interest rates and inflation at or below current levels). Never slander this “15” figure by quoting it anywhere in the vicinity of P/E ratios based on “operating earnings,” or “forward operating earnings.” Those latter earnings figures are typically substantially higher than net trailing figures, producing commensurately lower P/E ratios. Though the whole concept of “operating earnings” was created in the past couple of decades (abandoning generally accepted accounting principles in order to exclude anything – I mean anything – that might make earnings less predictable), it's safe to conclude that “normal” P/Es based on operating earnings should be a whole lot lower than 15.

The same is true if we look at the chart above. Notice that most of the time, S&P 500 earnings have been substantially below that 6% growth line that connects historical earnings peaks. So you might guess that the average historical P/E, when earnings have been at the top of their channel, would probably have been something less than 15.

And you'd be right. Excluding the late 1990's bubble peak, the price/earnings ratio for the S&P 500, when earnings have been within 5% of that top channel, has historically averaged just 9.0… again, the current multiple is 18.3. Makes you think.

Even if we look at a larger number of periods since 1950 where S&P 500 earnings were anywhere within 20% of that top channel, we still find that the average price/earnings ratio for the S&P 500 was just 10.6.

That's important, because that 2-to-1 comparison between current and normal P/E ratios is about what we observe when we compare current and normal price-to-book and price-to-dividend ratios. That's not to say that stocks are about to drop in half. But it most definitely implies that stocks are currently priced to deliver nowhere near the returns they historically have. It's a point that I've made often, and is one of the reasons why, despite marginal new highs in the major indices, an emphasis on risk management here is not likely to impair long-term returns.

Economic Fundamentals

more...

There's a quaint idea that has emerged in analyst talk these days, which basically goes “concerns about valuations, the current account deficit and other things aren't really important, because everyone has already looked at them, and markets don't usually respond to things that investors have already considered.”

are the very ones that will be surprised when things correct. This isn't my first rodeo and I'd file that statement along with......
the war will only take 6 weeks
a gentleman southerner can outfight a yankee
this ship is unsinkable
the market will never drop below_________(fill in the blank)
we will be greeted with flowers
the oil will pay for the reconstruction
the levees will withstand a F 3 hurricane
etc,etc,etc

I know the post is about Oneida's finances and not about it's product, but I have to say how shocked I was when recently shopping for new flatware. Their high-end lines still look great, though they're not cheap. But their moderate to low-end lines appear to have little quality control -- inconsistent pattern stamping was very noticeable, as were some rough, unfinished edges. It was certainly affordable, but I couldn't force myself to waste money on such a crude product. No wonder Oneida's got troubles. I ended up digging out my mother's old sterling and now we're using that as the everyday stuff.

http://query.nytimes.com/gst/fullpage.html?res=990CE6DB1330F932A35752C1A9659C8B63

COMPANY NEWS; ONEIDA TO CLOSE BUFFALO PLANT AND 4 OTHERS OVERSEAS

Published: November 1, 2003

Oneida said yesterday that it would close its manufacturing plant in Buffalo and four plants in Mexico, China and Italy as it adjusts to slumping sales and tries to return to profitability. The closings eliminate about 1,000 manufacturing jobs at the company, the world's largest maker and distributor of flatware and tableware. The company will close its 100-year-old factory and decorating plant in Buffalo, eliminating 350 jobs. No final decision has been made about closing a warehouse in Buffalo, which employs 100 workers, Peter J. Kallet, the chief executive, said. Oneida estimated that it would cost about $46 million to close all five plants, but that the closings would save it $12 million annually.

...more for $...

and welcome to DU and to the SMW clar8130! :hi:

12:20
Dow 11,320.63 +46.10 (+0.41%)
Nasdaq 2,331.25 +17.14 (+0.74%)
S&P 500 1,309.39 +4.31 (+0.33%)
10-Yr Bond 47.13 +0.57 (+1.22%)
NYSE Volume 958,275,000
Nasdaq Volume 1,157,652,000

12:00 pm : Similar to yesterday's trading action, the market's major averages spent the morning hovering within a narrow range that surrounded the unchanged mark. A recent advance in the Technology sector has sent the indices higher, though, and each begins the afternoon on positive turf.

There are a few items weighing on investors' minds today. First, Fed Chairman Bernanke's speech before the Economic Club of New York, which was delivered Monday evening, has been a focal point. The market had had a false sense of hope that the Chairman would provide some insight into the direction of Fed policy. He did not, and expectations for a rate hike next Tuesday remain. We continue to expect another one after that, and we have not dismissed the possibility of a third. Much like the most recent Fed policy directive, Bernanke's speech arguably emphasized the strength in the economy. That point has been highlighted by this morning's Producer Price Index. The core rate, which excludes food and energy, rose a more than expected 0.3% in February. As it is follows a 0.4% increase in January, the reading is a bit disconcerting. The two above-trend gains have pushed the year-over-year gain in core PPI to 1.7%. While that figure is not worrisome, a similar rise in March could foster concerns over tight resources and pricing pressures. Because of the fact that the PPI report followed the February Consumer Price Index (CPI), PPI's effect on trade appears to be somewhat diminished.

Nonetheless, the Treasury market has found reason to consolidate. Yields are rising across the curve, and weakness in that market does not bode well for stocks. Rate-sensitive areas are further consolidating gains that last week's yield improvements had driven. The Financial and Utilities sectors are currently the market's laggards, and homebuilders are an additional pocket of weakness.

Energy prices have extended their declines today, but sharp rebounds off of early lows has helped the Energy sector reassume positive footing. That area of the market had weighed heavily, but its 0.4% advance is now helping to boost the market. The Consumer Staples sector has also recently rebounded. Colgate-Palmolive (CL 57.83 +0.83) is a bright spot, on account of its announced cash acquisition of Tom's of Maine. The proposed deal plays into our belief that the defensive-oriented consumer staples sector remains ripe for further consolidation activity, and underpins our bullish view on the investment banking industry. Technology, now up 1.1%, is the market's muscle. Renewed, and spirited, buying interest across the semiconductor board is fueling the advance and driving the Nasdaq's outperformance. Intel (INTC 20.16 +0.54), one of our stock picks, is faring especially well following positive comments out of Bank of America. A positive article on Dell (DELL 30.68 +0.92) has helped send the hardware industry higher; even software, despite an earnings-related drop in Oracle (ORCL 13.77 +0.05), is registering a gain. DJ30 +44.35 NASDAQ +16.31 SP500 +4.32 NASDAQ Dec/Adv/Vol 1301/1546/1.02 bln NYSE Dec/Adv/Vol 1545/1526/564.8 mln

http://today.reuters.com/investing/financeArticle.aspx?type=governmentFilingsNews&storyID=2006-03-21T172155Z_01_N21330882_RTRIDST_0_MARKETS-SILVER-COMEX-HIGH-URGENT.XML
<snip>
The SEC said it has approved rule changes that will allow the American Stock Exchange to list shares in Barclays Plc's (BARC.L: Quote, Profile, Research) iShares Silver Trust, which is designed to track the price of the metal.
</snip>

http://www.afxpress.com/about488/index.php?lg=en&c=00.00&story=1433660

SAN FRANCISCO (AFX) -- May silver closed Tuesday at their highest level since late 1983, up 20.3 cents, or 2%, to finish at $10.565 an ounce. Prices got a boost after a proposed silver exchange-traded fund took a step closer to its potential trading launch. The Securities and Exchange Commission approved a rule change for Barclay's silver ETF that would allow it to list on the American Stock Exchange, but the product hasn't been cleared to launch by regulators. Meanwhile, April gold closed at a one-week low of $553.20 an ounce, down $2.90. May copper climbed as high as $2.374 a pound, but closed down 1 cent at $2.324.

Dow 11,263.41 -11.12 (-0.10%)
Nasdaq 2,312.34 -1.77 (-0.08%)
S&P 500 1,301.32 -3.76 (-0.29%)
10-Yr Bond 4.725 +0.69 (+1.48%)

NYSE Volume 1,439,954,000
Nasdaq Volume 1,661,645,000

2:00 pm : Over the past half hour, the market has pared gains. The Dow and Nasdaq are clinging to gains, but the S&P has fallen into the red. Six of the ten economic sectors are now booking losses, and leadership has faded. Tech (+0.6%) continues to fare best and is the market's strongest source of support, but its afternoon gain has been halved. At the same time, bargain hunting across the Energy sector (+0.3%) has subsided; that sector's gain has similarly been well-pared. The Industrials (+0.2%) and Telecom (+.03%) sectors are also maintaining positive footing, but their modest advances are having minimal effects on the broader market. Rising yields continue to give traders a reason to secure profits across the Financial sector, and its 0.4% loss is weighing heavily.DJ30 +4.40 NASDAQ +3.48 SP500 -1.90 NASDAQ Dec/Adv/Vol 1452/1483/1.49 bln NYSE Dec/Adv/Vol 1724/1482/887.8 mln

1:30 pm : The indices are sustaining moderate gains. Semiconductors remain the muscle behind the market. That area has been under some recent pressure, but renewed buying interest has taken each of the S&P 500's semi stocks significantly higher. The Philadelphia Semiconductor Index, meanwhile, has registered a 2.1% gain. As mentioned earlier, strength in Intel (INTC 20.12 +0.50) is helping to support the Dow. Within the blue chip average, IBM (IBM 84.73 +1.15) General Motors (GM 21.65 +0.80), Merck (MRK 36.06 +0.40), McDonald's (MCD 35.13 +0.40) are other particularly bright spots. DJ30 +37.06 NASDAQ +11.39 SP500 +2.44

A follow up to the LEAP/E2020 article that EuroObserver posted a few weeks back.

Speaking of EO...where's he been? eta - nevermind I found the answer.


http://www.newropeans-magazine.org/index.php?option=com_content&task=view&id=3612&Itemid=85

Nine indicators prove that the crisis is unfolding:
Nine indicators developed in this month’s GlobalEurope Anticipation Bulletin N°3, which I coordinated, out of which 5 are presented in this public communication, enable LEAP/E2020 to confirm the beginning of a global systemic crisis by the end of March 2006. The recent international trends that particularly affect the international financial system, and the preoccupying trends in the US, namely as concerns the reliability of statistics on the US economy<1>, have brought our research team to conclude that this global systemic crisis is already unfolding.

snip>

Five out of nine indicators suggesting an acceleration of the process of crisis
These are five out of the nine indicators proving, according to LEAP/E2020, that the system crisis is unfolding:
1. the US government operates in technical default since mid-February 2006, the debt ceiling authorized by the Congress has been reached since then. Since this date, the US government has suspended sales of the « State and Local Government series (SLGS) non-marketable Treasury Securities » designed to enable the printing of Treasury Bonds<17>. According to US Treasury Secretary John Snow, if by mid-March, the Congress has not voted a rise of the statutory debt ceiling by 800 billion dollars (i.e. 10% of the current ceiling of 8,200 billion dollars, which was already raised twice in the last 3 years), the technical default will become very problematic.
2. Unexpected resignation of the Fed’s vice chairman, Roger Ferguson, in charge of crisis management, one week after the publication of our Alert while he had 8 years left to serve<18>. Roger Ferguson had won high marks for his handling of the Fed’s initial response to the Sept. 11, 2001 attacks, which occured while Greenspan was in Europe. His opposition to the strategic choices made by new Fed’s chairman, was notorious.
3. Bank of China’s decision to allow investors to buy and sell gold using their USD in order to diversify its holdings, today mostly in USD<19>.
4. Continued increase of US public and trade deficits in 2006 (respectively $119 billion in February et $68,5 billion in January) showing that current trends are not handled: on the contrary the drift accelerates. The deficit of the monthly budget review is the highest ever recorded. Washington no longer tries to mention improvements, but prefers to explain that these deficits do not mean anything because “the economy has changed”. This type of explanation was used too on the eve of the collapse of the « Internet » bubble, referring to the « new economy ».<20> For information, along these last five years, the US borrowed more money from the rest of the world that they did in their cumulated history going from 1776 to 2000<21>.
5. Growing doubts in the US themselves on the reliability of US economic statistics<22>, leading to counter-analyses showing that in the last three years, the US GDP is in fact decreasing and not increasing<23>, and that the real inflation today rates between 6 and 12% (with direct consequences of course on the real profitability of the various types of investments).

more...

I think I'll go take a nap....I don't feel so good after all.

:kick::kick::kick:

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-21T190824Z_01_N21334357_RTRIDST_0_POLITICS-CALIFORNIA-DIEBOLD.XML

SAN FRANCISCO, March 21 (Reuters) - Some California voters and activist groups sued the state's top election official on Tuesday in an effort to reverse the certification of certain electronic voting machines made by Diebold Inc. (DBD.N: Quote, Profile, Research).

The suit, filed in Superior Court in San Francisco, is the latest salvo in an ongoing dispute about the security of Diebold electronic voting machines, focused on Diebold's TSX touch-screen system.

A month ago, Secretary of State Bruce McPherson certified Diebold Election System's TSX and Optical Scan products for use in this year's elections after a review of their security. An earlier, slightly modified version of the TSX was used in California's November 2005 special election.

"In certifying the Diebold machines, the secretary has sidestepped his duty to deny certification to voting systems that violate state and federal standards," Dolores Huerta, a co-founder of the United Farm Workers of America and plaintiff in the case, said in a statement. "Diebold systems have failed in security tests and in communities around the country."

...more...

To all those "voters and activists groups":

:yourock:

http://business.timesonline.co.uk/article/0,,16849-2095653,00.html

FORECASTS that gold prices are set to smash through the $600-an-ounce barrier saw Gordon Brown come under renewed pressure last night over his controversial decision to sell the majority of Britain’s gold reserves.

Merrill Lynch predicted that gold would hit $600 an ounce in the long term after its recent rise above $500. Last month the precious metal hit a 25-year high of $579.50 an ounce amid concern among investors that America’s huge trade gap would force a weakening of the dollar.

The Chancellor sold 395 tonnes of Britain’s gold reserves between 1999 and 2002, generating $3.5 billion. At yesterday’s London closing price of $554.10 he would have generated more than $7 billion (£4 billion).

snip>

The sale of Britain’s gold reserves — which are stored in vaults under the Bank of England, alongside billions of pounds of bullion owned by other institutions — was attacked even in 1999 for poor timing. Gold prices fell $5 an ounce on the news and swiftly tumbled to a 20-year low. The scheme was also suspected by some of being a stealth plan to ease Britain’s entry into the European single currency.

more...

http://www.atimes.com/atimes/China/HC22Ad02.html

The US trade deficit with China ballooned in 2005 to US$202 billion, more than one-quarter of the total deficit. Rising trade imbalance between the US and China in recent years has given rise to intense pressure from the United States on China to revalue the fixed exchange rate of its currency, which had been pegged at 8.28 yuan to a dollar within a narrow band of 0.03% for a decade, from 1995-2005.

On July 21, 2005, after repeated pronouncements that no revaluation was necessary or even being considered, China announced a surprise 2% appreciation of the currency, putting it at 8.11 yuan to the US dollar. It also announced that the yuan would henceforth be pegged with the same narrow range to a basket of foreign currencies that includes the dollar, the euro, the yen and others likely to reflect China's trade relationships with the rest of the world. The components and weight of different currencies within the basket is not disclosed to the market. China appears to be following Singapore's managed-float model, keeping both weights and effective bands confidential to allow maximum flexibility within a narrow range tied to a reference peg to the dollar. Many saw it as an obvious political move to appease US pressure.

Yet US pressure on China to revalue the yuan further continues, as the trade deficit with China for January 2006 registered $17.9 billion, a 10% increase from the previous month. Total worldwide US trade deficit for the month was $68.5 billion despite a rise in US exports of aircraft and soybeans. This pressure from the US is motivated by the misguided conventional assumption that a lower exchange rate of the dollar will reduce the US trade deficit, despite clear historical data showing that past revaluations of the Japanese yen and the German mark had not reduced US trade deficits with these major trade partners in the long run.

All such revaluations did was to lower the domestic cost in local-currency terms more than raise the dollar price of Japanese and German exports. The net effect was deflation in Japan and Germany, with inflation in the US while the US trade deficit continued.

The dollar takes the form of a US Federal Reserve note, a monetary instrument issued by a central bank. The yuan takes the form of Chinese People's Currency (renminbi, or RMB) issued by the People's Bank of China (PBoC), another central bank. Both are fiat currencies issued by central banks in that they are money with no intrinsic value, not backed by gold or other species of value. Both currencies are not issued directly by their respective governments, but by their respective central banks. This means that the full faith and credit of the nation is not directly behind either of these currencies.

more...

Dow 11,232.26 -42.27 (-0.37%)
Nasdaq 2,302.51 -11.60 (-0.50%)
S&P 500 1,297.48 -7.60 (-0.58%)
10-Yr Bond 4.725 +0.69 (+1.48%)

NYSE Volume 1,632,294,000
Nasdaq Volume 1,872,368,000

2:30 pm : Fully erasing gains, the indices are now trading in negative territory. Exacerbated selling is particularly targeting the Financial, Healthcare, and Materials sectors - each of which are now down 0.7%. Together, those sectors account for about 38% of the S&P 500. Leadership is now just about absent. Tech is the lone bright spot, and it 0.2% gain is not able to much offset declines across the broader market. To that end, the semiconductor industry has taken back nearly two-thirds of its intra-day gain. The market's afternoon rise had been on that industry's heels, and the loss of its leadership has taken the steam out of the market. DJ30 -11.61 NASDAQ -1.48 SP500 -3.67 NASDAQ Dec/Adv/Vol 1682/1279/1.67 bln NYSE Dec/Adv/Vol 1975/1264/1.00 bln

I think they might have had enough.

:kick:

Dow 11,235.47 -39.06 (-0.35%)
Nasdaq 2,294.23 -19.88 (-0.86%)
S&P 500 1,297.23 -7.85 (-0.60%)
10-Yr Bond 47.17 +0.61 (+1.31%)
NYSE Volume 2,152,227,000
Nasdaq Volume 2,407,289,000

4:20 pm : Monday, investors took a breather. Tuesday, they took some profits. Several factors weighed on the market's mind, but a mid-day rally in the semiconductor industry caught its attention and served as a diversion. Buyers stepped in and sent the indices to solid gains, but the enthusiasm did not last. Semiconductors retraced their steps, and, by late afternoon, the market had fully erased intra-day gains.

Fed Chairman Bernanke's speech, which he delivered last night to the Economic Club of New York, was the first item behind the early bearish bias. As expected, his talk focused on the yield curve. The market had hoped that he would provide some insight into the direction of monetary policy, though, and he did not. Expectations for a rate hike next Tuesday remain; we continue to foresee another one in May, and we do not think that the possibility of a third should be dismissed. The fact that the core rate of the Producer Price Index rose a more than expected 0.3% in February did not help matters today. That increase followed a 0.4% rise in January, and is somewhat disconcerting. The two above-trend gains have pushed the year-over-year gain in core PPI to 1.7%. That figure is not worrisome, but a similar gain in March could foster concerns over tight resources and pricing pressures.

The data, juxtaposed with the argument that Bernanke's speech emphasized the economy's strength, fed interest rate worries. Those concerns, anticipation of the FOMC decision, a lingering sense of uncertainty, and technical factors led to a sell-off across the Treasury market. Last week, improvements in bond yields drove the stock market's advance. Today, the benchmark 10-year rose to a 4.72% yield. Yields were up across the curve, and the Treasury action prompted consolidation within the equity market. The Financial sector came under particular pressure, and its 0.9% loss was the force behind the indices' declines. Other rate-sensitive areas, like Utilities (-0.9%) and homebuilders, also suffered. Some caution ahead of this week's housing data contributed to the extended weakness in the latter area.

Trading action across the broader market has lately appeared to be less tied to oscillating energy prices. However, the fact that energy prices recovered today contributed to the market's tone. Early declines had resulted in a weighty drop in the Energy sector, but price rebounds did not fully reverse its fortunes. It too faced some wide-spread selling and closed 0.2% lower. Although metal commodities performed in relatively flat fashion, the Materials sector fell 1.3%. Silver was the exception; the metal surged to a 22-year high after the SEC approved a rule change regarding a silver ETF.

As mentioned earlier, semiconductors had spurred the market's afternoon advance. Bargain hunters had taken the SOX up more than 2%. Intel (INTC 19.78 +0.16), one of our recommended holdings, fared especially well following positive comments out of Bank of America. The rally was short-lived, though, and gains were not sustained. Semis' fall spurred selling across the Tech board. The sector dropped 0.5% and the Nasdaq lost 0.9%. Separately, Oracle (ORLC 13.62 -0.10) was a sore spot that contributed to the market's early bias. The company beat expectations for its fiscal Q3 EPS, but its in-line top line growth and reiterated guidance did not inspire investors. Other than the Oracle news, the corporate front was a light one. Continued attention to General Motors' (GM 22.00 +1.15) negotiations with the UAW and Delphi helped limit the Dow's decline. News of Colgate-Palmolive's (CL 57.58 +0.58) cash acquisition of Tom's of Maine helped support Consumer Staples, but the defensive sector still fell 0.4%. The Telecom sector was the only sector to close higher. Its 0.1% gain had a muted effect upon trade, though.DJ30 -39.06 NASDAQ -19.88 SP500 -7.85 NASDAQ Dec/Adv/Vol 2038/998/2.33 bln NYSE Dec/Adv/Vol 2391/899/1.57 bln