STOCK MARKET WATCH, Tuesday 4 April

TAKING HEED AT TAX TIME

Another April is upon us, which to a good many folks means not only “tax time” but the bothersome annual ritual of “portfolio review.” One of the primary tasks performed in a proper portfolio review is to “rebalance” a portfolio to its stated or intended asset allocation. According to Investopedia.com – asset allocation is defined as:

“The process of dividing a portfolio among major asset categories such as bonds, stocks or cash. The purpose of asset allocation is to reduce risk by diversifying the portfolio”.

I would like everyone to stop and think about how the assets in their own investment portfolios are “divided” amongst the categories listed above – namely, bonds, stocks and cash. If you are reading this, you might (and I hope you are) asking yourself WHY conventional and accepted asset allocation models do not even make mention of gold or precious metals as a distinct or important asset category.

Why Reinvent The Wheel When Someone Lets Air Out of Your Tires?

Current methodologies of determining prudent and proper asset mixes employed by these funds were developed fifty or more years ago – in an era when data was gathered and reported accurately and honestly. These asset allocation models were designed and sold to the pension funds as a means to provide for adequate and sustainable benefits for their employees and retirees on an ongoing basis. Farmers were well aware of the demographics of their labor force. They knew folks would age and they also knew what average age folks would choose to retire. These things are all, by their very nature - predictable. However, these asset allocation models would never have had assumptions built into them that presupposed or assumed that the data they were inputting would be “patently false.”

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

A late-day selloff left stocks mixed Monday as investors put aside their enthusiasm over evidence of a moderating economy and cashed in profits from an early advance.

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The reports fed optimism about the economy's health and a possible end to the Federal Reserve's interest rate increases. The early buying sent the Dow Jones industrials up 138 points and had the Standard & Poor's 500 and Nasdaq composite indexes near multiyear highs.

more about the sucker rally

:donut: All the chatter here is about DeLay's resignation. It was really clever on his part. The polls showed Lampson neck and neck. Rather than spend a ton of money on a reelection that he might loose-he leaves, keeps the money to use for his legal fund (which I hear is pretty tapped right now) and live in Va and continue as a lobbyist.
It changes the nature of the campaign. It will now be more on issues and not anti Delay, so it might improve odds for the GOP to retain. Time will tell, but Lampson is a strong candidate.

My ears perked up yesterday when I heard about the aid Ruby becoming a witness. I always figured that DeLay could go down if they could get someone to flip. I think this may do it. Why do 5 years when your boss gets off. Yeah, DeLay will be tied up for some time on this.

Loved Ronnie Earl's comment...This doesn't change anything. And it won't. If Earl is anything it's tenacious.

Happy hunting and watch out for the bears.

SINGAPORE - Oil prices dipped Tuesday as traders pocketed gains after a recent rally, although analysts said that concerns about petroleum supply out of Iran and Nigeria would keep a floor under prices.

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Last week, prices made solid gains on supply concerns linked to U.S. gasoline inventories, which have been falling ahead of the U.S. summer driving season, when demand peaks.

"The profit taking is still continuing today," said Ken Hasegawa of brokerage Himarawi CX in Tokyo, who predicted the front-month crude contract would stay within the $66.00-$66.80 a barrel range.

The uncertain outlook for supplies out of Iran and Nigeria was bolstering oil prices, analysts said.

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10:11 AM ET 4/4/06 MAY CRUDE FALLS 49C TO $66.25/BRL IN EARLY NY TRADING

10:11 AM ET 4/4/06 MAY NATURAL GAS DOWN 4.4C, OR 0.6%, AT $7.195/MLN BTUS

10:11 AM ET 4/4/06 MAY HEATING OIL FALLS 0.5%; MAY UNLEADED GAS LOSES 0.2%

NEW YORK - Bonds fell modestly Monday, as traders and investors ignored a key manufacturing report and allowed other factors to drive the market.

The small gains in yields came in fairly quiet action as the market enjoyed a day of calm after last week's pummeling at the hands of changing monetary policy expectations.

Bond prices and yields move inversely.

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BEIJING (Reuters) - China should trim its holdings of U.S. debt, a senior Chinese official said, rattling markets on Tuesday in the run-up to a visit by President
Hu Jintao to Washington this month.

As China is a leading financier of the U.S. current account deficit and holds the world's largest foreign exchange reserves, the comments from Cheng Siwei, a vice chief of the national parliament, sent the dollar and U.S. government bonds lower.

The comments could add to the contentious issues that will come up during Hu's visit, notably what some U.S. politicians and companies see as currency manipulation by China, accused of holding down the yuan to gain an unfair trade advantage.

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LONDON — Lucent Technologies and Alcatel have finalized their proposed ‘merger of equals’ over the weekend to create a telecommunications equipment group that will have sales of just over $25 billion.

The French group will control 60 percent of the shares in the combined operation, and after tough talks it was agreed a separate, independent entity would be established to oversee sensitive contracts with the U.S. government.

The companies revealed ten days ago they were in merger talks, and the biggest obstacle to the merger was believed to be how to address political and security concerns regarding the work done by Lucent’s Bell Labs subsidiary for the U.S government, particularly for the Pentagon.

The deal was also complicated by Alcatel’s plans to increase its 9.5 percent stake in French aerospace and defence group Thales. The announcement on Sunday (April 2) said the combined group would “remain the industrial partner of Thales and a key shareholder alongside the French state,” and that talks would continue over the possibility of Alcatel increasing its stake in Thales. The French government currently has a 30 percent stake in Thales.

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NEW YORK (CNNMoney.com) - Investors could be looking to oil prices for direction in trading Tuesday following an up and down day to start the new quarter.

Stock futures were up narrowly, indicating a flat to slightly higher open for stocks, after Monday'sstock rally ran out of steam in the afternoon on lower U.S. auto sales, led by sharp drops in sales at General Motors (Research) and Ford Motor (Research).

short blurb

Holy cow look at the size of those spikes! :wow:

What bit of news is behind that? A few thousand lay-offs announced? Tax increases for the poor announced? What gives?

Julie

P.S. On edit, wanted to note today's and yesterday's 'toons Ozy. Great fun. Many thanks for kicking things off every day and adding a dash of good humor.

:toast:

buy stock in Dramamine, Tums, Pepcid, and Nexium....:evilgrin:

http://www.kitco.com/ind/benson/apr032006.html

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- Home equity can suddenly shift from a market reality to a purely existential concept. The homeowner is now engaged in an “Existential Equity Extraction” or “EEE”. An example of this in today’s world is when a home, with equity taken out, is routinely appraised for a mortgage refinancing at 5 to 10 percent higher than it would be appraised for an actual sale;

- Home prices are under horrible pressure. There are probably a few million property owners, including speculators, flippers, and second-home buyers, who are in way over their heads. We’ve all heard stories about second-home buyers who really couldn’t afford the luxury and high expense of a second-home priced at $200,000, yet they purchased one for $250,000 and rationalized its affordability because “the value would only go up to $300,000 or more”. Besides, they naively believed “it could always be sold quickly in a bidding war for a profit”. In resort areas – given the number of days people actually use their second home – staying at the Ritz for $500 a night could be a much better deal. Do the math; it’s not pretty.

- Demand for over-priced housing is slowing and new buyers are taking their time, being picky, and even renting. Homeownership, as a percentage of the population, is already at a record-high. This level was achieved by using every trick in the mortgage lending book, regardless of income or down payment. Virtually every borrower was approved for a loan of some kind. Fifty percent of mortgages written over the last two years have been adjustable-rate mortgages (ARMs) and many buyers qualified for a mortgage because of the low teaser rates. In addition, sub-prime mortgage lending has reached $700 billion, or 12 percent of total mortgages. As interest rates adjust up, housing prices are forced down.

Given these statistics, it should be no surprise that the affordability index for the first time buyer is at a 20-year low, or that the University of Michigan’s Home Buying Index is approaching an all-time low. In the housing crash of 1991, that index low was set once the housing price crash was well underway and more than a year old!

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Over the past 30 years, the United States has seen a Housing Hell scenario a number of times. In 1980-82, property values declined significantly each year. In ‘90, prices fell painfully again for five straight years in a row. There was a slight recovery in ’95, but prices fell again in ’96. When you look back, you will realize that the housing markets that suffered the most (particularly the Northeast and California), took almost 10 years to recover from the downturn. You may also remember when homeowners lost money every month and were forced to rent out their properties at a loss because they couldn’t sell them. Perhaps you know one of these homeowners.

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http://www.cbsnews.com/stories/2006/04/03/opinion/main1464727.shtml

With new home sales down 10.5 percent in February, and with home prices declining for the fourth month in a row, it's high time for a sober look at the consequences of a major housing correction. The Federal Reserve, Wall Street economists, and other observers of the U.S. economy are closely watching the housing market because it has been a key driver of economic growth over the past several years.

Roughly a quarter of the jobs created since the 2001 recession have been in construction, real estate, and mortgage finance. Even more important, consumers have withdrawn $2.5 trillion in equity from their homes during this time, spending as much as half of it and thus making a huge contribution to the growth the U.S. economy has enjoyed in recent years (consumer spending accounts for two-thirds of GDP).

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Countless articles in the financial and popular press have now been devoted to the question of whether we are in a housing "bubble." It is a favorite topic of many liberal economists, columnists, and bloggers, who argue that President Bush's tax cuts and other policies have created a hollow and unsustainable economy. They are laying the groundwork to hang a housing bust around the necks of President Bush and congressional Republicans.

Economic observers on the right have been strangely silent on this debate. A few conservatives have argued that the record appreciation of home prices is justified by economic fundamentals. Others, who apparently slept through the 80 percent decline in the NASDAQ, don't believe bubbles are possible in a free market economy. Certainly most conservatives have an innate optimism about America and the resilience of its free market economy, and a strong and well-justified aversion to doomsayers. And naturally, the White House and congressional Republicans have no interest in highlighting the vulnerabilities of the economy.

Yet the concerns about unsustainable growth in consumer debt and home prices are not easily dismissed. A weakening housing market could transform what has been a virtuous cycle into a vicious one, substantially reducing economic growth during the next couple of years (and going into the 2008 election). If economic analysts on the right ignore this risk, they may be blindsided by a weaker economy. They will also be unprepared to answer those on the left who will blame tax cuts for what could be a painful unwinding of a credit bubble that, in fact, was fueled by a loose monetary policy from 2002 to 2004.

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I am not a homeowner at the moment.

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

Last trade 89.03 Change -0.65 (-0.72%)

Dollar Sells Off as Weak Data Puts to Question Bernanke’s Optimism

http://www.dailyfx.com/story/dailyfx-reports/daily-fundamentals/7753-dollar-sells-off-as-weak-data-puts-to.html

US Dollar

On the first day of trading in the month of April, we have seen quite a bit of volatility in the currency market. The dollar had a very mixed day against the majors as it lost strength versus the Euro, British pound and Japanese Yen, but gained strength against the commodity currencies (AUD, NZD and CAD). The sell off against the majors took off after the much weaker than expected Institute of Supply Management report. The manufacturing sector is showing signs of waning strength with the ISM index falling from 56.7 to 55.2 last month. Although this still suggests that the sector is expanding, traders were really hoping for activity to accelerate and were forecasting for the ISM index to rise to 57.7. Ahead of this Friday’s non-farm payrolls report, the dip in the employment index was also worrisome. After last Tuesday’s hawkish FOMC statement, the market was really looking for the stronger data to back up Bernanke’s view that the slowdown in the fourth quarter was only “temporary.” However, with manufacturing activity weakening and the housing market delivering yet another piece of bad news, traders began to doubt the new Fed Chairman’s optimism. According to the National Association of Realtors, pending home sales fell 0.8 percent in February. This follows the 10.5 percent drop in new home sales reported last week. Although construction spending ticked higher, it remains questionable how much longer this can be sustained with interest rates driving mortgage rates higher. Not all news was bad news today however. The prices paid component of the ISM report jumped to 66.5 from 60.9 indicating that inflation is still prevalent, giving the Fed a good reason to continue increasing interest rates. However, even so the turn in the dollar is significant and we expect more weakness than strength in the days to come. Meanwhile the commodity currencies are seeing a strong liquidation. The New Zealand dollar continues to be hit with the unwinding of long term carry trades. The Australian dollar has sold off in sympathy.

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Last trade 88.85 Change -0.83 (-0.93%)

Settle Time 15:01 Open 89.67

Previous Close 89.68 High 89.76

Low 88.80 2006-04-04 09:59:09, 30 min delay

http://www.321gold.com/editorials/saville/saville040406.html

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Japan is actually a good example of how deflation CAN be avoided under the current monetary system even in the face of collapsing stock and real estate bubbles. However, it's one thing to avoid outright deflation and another thing entirely to keep inflation going at the rate desired by the authorities. Using the above chart it could be argued, for instance, that the Bank of Japan (BOJ) might have avoided deflation but it proved to be incapable of generating any significant inflation after the boom turned into a bust.

Our view is that the BOJ and Japan's Ministry of Finance had the power to do a lot more to promote inflation than they actually did. For example, throughout the 1990s the Japanese banking system laboured under the weight of massive non-performing loans. Had this non-performing loan crisis been 'handled' in the same way that the "Savings and Loan Crisis" of the 1980s was handled in the US, that is, had there been some form of government bail-out of the banks using newly-printed Yen, Japan's inflation rate would have been considerably higher.

The Japanese monetary authorities were, we think, hamstrung by the incredibly high savings rate of the voting public. To be specific, when a large chunk of the public's savings are held in the form of cash and income-producing securities a monetary policy that significantly lowers the value of the currency will probably not be popular, especially when it is clear that the currency is being devalued as part of a plan to 'paper over' the lending mistakes of large banks.

The US Federal Reserve obviously isn't operating under the same political constraints as the BOJ because the average member of the US voting public has very little savings and is up to his/her eyeballs in debt. Also, there might have been a better chance of the US following Japan's path if Japan had never followed this path in the first place. That is, the Fed has fewer restrictions on its ability to inflate as well as the luxury of being able to learn from the BOJ's post-bubble experiences.

At this point it's important to note two things. First, although people with lots of debt and no savings will generally prefer inflation, keeping the voting public happy between now and the next election is not the only, or even the main, reason why more inflation is in store for the US over the next several years. The main reason is simply that the current system could not survive a period of deflation. It's a giant Ponzi Scheme, which means that the supply of money MUST continue to expand or the system will collapse. Second, inflation doesn't make anything better. It can create the illusion of prosperity for a while, but the misdirection of investment that it causes always leads to slower real growth (which, ironically, provides the excuse for the central bank to facilitate more inflation).

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http://www.321gold.com/editorials/vaneeden/vaneeden040406.html

Thursday was an interesting day: the US dollar fell sharply against the euro and other European currencies, causing a spike in the gold price. Silver and other metals prices also benefited. US bonds fell, US stocks fell, US interest rate rose and the gold price increased. There it was: the dollar falling with rising interest rates and a rising gold price. Regular readers of these commentaries know we were waiting for this exact scenario. Under these conditions, I expect the gold price to continue to move upwards; even though it never does so in one, smooth, straight line.

What caused the drop in the dollar? US Commerce Secretary Carlos Gutierrez warned of rising protectionist sentiments in Washington while in Beijing on Thursday. Later in the day US Treasury Undersecretary Timothy Adams told a congressional committee that his department's number one priority is to get China to revalue its currency (upwards) against the dollar. Prior to this, Senators Schumer and Graham had proposed a tariff of 27.5% on all US imports from China and were going to force a Senate vote on the issue Friday. However, after returning from a trip to China, the two decided that they would, after all, not force the Senate to vote on Friday.

Anti-Chinese sentiment in America has been brewing for a while and it seems to be only a matter of time until they either enact protectionist legislation, such as tariffs, or force the Chinese and Japanese to let the dollar fall. I wrote about this before and showed that the most likely outcome would be for the Chinese and Japanese to let the dollar fall.

The problem, of course, is the ballooning US trade deficit with China. In order to let the renminbi appreciate against the dollar, China will have to sell more of the trade dollars it receives and buy fewer US Treasuries. That also means Japan will have to buy fewer Treasuries because the yen will follow the renminbi, and so will all the other Southeast Asian currencies and probably also the European currencies. But if all these currencies appreciate against the dollar, then all foreign investments in the US will have their returns diminished. If you were not a US resident, would you invest your capital in the US knowing that its Legislature is hell-bent on devaluing the dollar? Probably not, which is why investors reacted with their pocket books this week.

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In some metal-fund launches, pullback follows launch

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B93A43D8B%2DC95D%2D46E3%2DB098%2D843BD6D55D61%7D&siteid=bigcharts&dist=news

BOSTON (MarketWatch) -- A highly anticipated exchange-traded fund tracking silver prices may usher in a correction from multidecade commodity highs if it follows the pattern of gold ETFs, analysts say.

Although the silver ETF has yet to gain final regulatory clearance, precious-metal traders are eagerly awaiting the fund in registration from Barclays Global Investors. Some are speculating it could launch as early as this week on the American Stock Exchange after silver prices reached a 22-year high of $11.815 an ounce Monday.
Analysts, though, say the introduction of the silver ETF could actually set up a price pullback in the days and weeks following the start of trading.

There are already seven ETF-like products listed on exchanges in the U.S., the U.K., Australia and South Africa that track gold prices, and the launches have been marked by an interesting trend, according to J.P. Morgan analyst Anindya Mohinta in London.

The most successful gold ETF launches were Gold Bullion Securities (UK:GBS: news, chart, profile) on the London Stock Exchange in December 2003, and StreetTracks Gold Trust in November 2004 on the New York Stock Exchange. For example, investors put an estimated $550 million into the StreetTracks Gold Trust on its first day of trading, and the fund currently houses over $6 billion.

Mohinta found gold prices rose by up to 12% in the 90-day periods leading up to the ETF launch dates, only to fall between 7% and 10% in the corresponding period after the listing date.

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http://www.kitcocasey.com/displayArticle.php?id=641

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First of all... As I left you yesterday, I told you that traders were marking the euro down on thoughts that the U.S. Manufacturing report (ISM) for March was going to be very strong... Well, a funny thing happened on the way to the forum... U.S. Manufacturing in March actually fell 2.5 index points! The Index now stands at 55.2 which, for new readers to class, means that manufacturing is still in an expansionary mode... The line in the sand is drawn at 50... Anything above is expansionary, and anything below means manufacturing is contracting...

Now... The media likes to spin this so you feel good about the economy... They only mentioned that the manufacturing sector was still expanding, which is true, it's true, but... Doesn't it start flashing amber in front of your eyes when an index that was supposed to kick some rear and take names later falls? It does for me... And it did for the currency traders and investors, who immediately began a fire sale on dollars!

I was reading (again) my copy of Bill Bonner and Addison Wiggin's latest book "Empire of Debt" on the plane last week... What a great book! I tell you this because I'm reading this book, and then I see a story yesterday morning that our corporate FX guru, Ashish, sent along to me regarding the Current Account Deficit... This from Goldman Sachs...

"The globalization glue that has helped fund the significant U.S. current account could be fraying at the edges - breaking the recycling of USD back to U.S. bonds. If that is the case, then the market could see a painful scenario of a weaker USD, a weaker bond market, higher inflation and a FED unwilling to ease."

I'm not going to get up on my soapbox now and rant and rave about "How Deficits Do Matter"... I think you've all heard that song before from me... I just think that sooner or later, traders and investors are going to have a V-8 moment, and realize this... What? You don't know what a V-8 moment is? You know, when you wish you would have thought to have a V-8 (drink) instead of some sugary soda pop, and you slap yourself in the forehead and say... "Wow! I could have had a V-8! HAHAHAHA!

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from the link above:

Still, Paulson has worked in government before. He served on the White House Domestic Council during the Nixon era and was a Defense Department aide from 1970 to 1972. He and Cheney know each other from that period.

are paying off. http://www.newsmeat.com/ceo_political_donations/Henry_Paulson.php



http://www.ita.doc.gov/TD/PEC/henrypaulson.html
Mr. Paulson has been Chairman and Chief Executive Officer of Goldman Sachs since May 1999, and has been a director since August 1998. He is also Chairman of the firm’s Management Committee. He served as President and Chief Operating Officer from 1994 to 1998 and as Co-Head of the Investment Banking Division from 1990-1994. He was made Managing Partner of the Chicago office in 1988 and head of Investment Banking Services for the Midwest Region in1983. He became Partner in 1982.

Prior to joining the firm in 1974, Mr. Paulson was a member of the White House Domestic Council, serving as Staff Assistant to the President from 1972 to 1973 and as Staff Assistant to the Assistant Secretary of Defense (Comptroller) at the Pentagon from 1970 to 1972.

Mr. Paulson is a member of the Board of Directors of the NYSE, ...



http://www.americaneconomicalert.org/view_art.asp?Prod_ID=2015

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The article they ran July 14 by Goldman Sachs chairman and CEO Henry M. Paulson, Jr., titled “CAFTA is the American Way,” was simply the usual pro-treaty drivel with one critical exception. Paulson never mentioned, and the Journal never disclosed, that the Goldman Sachs chief is a de facto paid agent of the Chinese government.

After all, Goldman is advising the Chinese government-owned and controlled China National Offshore Oil Company on its bid to take over the U.S.-owned Unocal oil company. Indeed, Goldman reportedly is thinking of contributing to a $3 billion fund to help finance the takeover – which, of course, CNOOC couldn’t afford even to think about without its own subsidized loans from Beijing.

Maybe that’s why Paulson never mentioned that CAFTA is full of loopholes that will allow mountains of Chinese fabric and apparel into the U.S. market via Central America, contrary to the assurances of the Bush administration. Maybe that’s why he didn’t mention that continuing to do nothing to combat China’s predatory trade policies will mire workers in the United States and Central America into a no-win race to the bottom in living standards.

Agents of foreign governments – even governments as dictatorial and dangerous as China’s – have a right to publish their opinions. But Americans have an even more important right to know who’s pulling their strings.


Here he sings praises to Raines and Grasso...
http://www.goldmansachs.com/news/docs/restoring-investor-confidence.pdf

Conclusion

My remarks here today represent my best thoughts on how to fix some of the problems facing
our financial markets. They do not pretend to be comprehensive or original. In fact, many, if not
most of them, have been suggested by others, including the Business Roundtable chaired by
Franklin Raines, the NYSE under Dick Grasso’s leadership, and the Financial Services Forum
chaired by Phil Purcell.

All my suggestions have one aim: restoring trust in our system—trust in the accuracy of financial
statements, trust in the integrity of corporate management, trust in the honesty of investment
analysis. Without such confidence, we all lose. Investors will forego gains, entrepreneurs will
have less access to capital, there will be fewer and less attractive jobs, less business to be done,
and fewer tax dollars to support government programs. And the impact would fall most heavily
on the less privileged. It is our job to see that our capital markets continue to be models of
fairness and efficiency.

Self-correction, I’m pleased to say, is already underway. But, without overreacting, we need to
move quickly to implementation to reduce uncertainty.

In retrospect, it is perhaps not surprising that the 18-year bull market we have enjoyed was also
accompanied by certain excesses. Hindsight is 20/20, and it is only natural for society to look for
someone to blame whenever there is a setback.

I am confident we can move beyond second-guessing and finger-pointing to attain real progress
on meaningful reform. Having seen how we, as an industry and a nation, responded to the
terrible attacks of September 11th, how could I not be an optimist? Working together, I am certain
that we can achieve our common goal of restoring investor trust and ensuring that our financial
system and economy emerge even stronger than before.

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-04-04T130638Z_01_N04221841_RTRIDST_0_ECONOMY-RETAIL-REDBOOK-URGENT.XML

NEW YORK, April 4 (Reuters) - U.S. chain store sales fell in the fifth week of March as consumers held back shopping due to a later Easter holiday, a report said on Tuesday.

Sales at major retailers were down 1.1 percent on a year-over-year basis for the week ended April 1, following a 2.2 percent rise in the prior week, said Redbook Research, an independent company.

Last year the Easter holiday was three weeks earlier than in 2006, boosting sales in March. This year the holiday falls on April 16 and sales could pick up during the month.

Sales at U.S. retailers through March were down 3.2 percent when compared with the same period in February, Redbook said.

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Generally, I do not consider Redbook to be a very good source. I will post the ICSC report when it becomes available.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x830341

The Social Security Report is due by law before April 1, and the administration has yet to release the report.. Do they feel that they are above the law, or are they trying to hide something? Anyone know what points are covered in the report?

On edit- I don't know enough about the report to know if it's a big deal or not..

Somewhat related - looks like the U.S. is foo-bar

GAO's Report on the U.S. Government's Financials Describe a Complete Disaster

http://www.expertclick.com/NewsReleaseWire/default.cfm?Action=ReleaseDetail&ID=11989

Reading financial statements is something that only an accounting firm (like us) might enjoy doing. But the just-released financial statements for the U.S. government and related auditors’ report deserve more attention than has been reported in the press.

The U.S. government’s records are so bad that no one can figure out how bad it really is.

Since 1996, the Government Accountability Office (GAO) is required to audit the annual financial statements of the U.S. government. The audit report continues to report a disaster that no one would begin to tolerate in private industry. For example, imagine that you were on the board of directors of a company that obtained even one of the multitudes of problems reported by the GAO. How would you react to the following language from the most recent GAO audit report?

“A significant number of material weaknesses relating to financial systems, fundamental recordkeeping, and financial reporting, and incomplete documentation continued to:

(1) hamper the federal government’s ability to reliably report a significant portion of its assets, liabilities, costs and other information;

(2) affect the federal government’s ability to reliably measure the full cost as well as the financial and nonfinancial performance of certain programs and activities;

(3) impair the federal government’s ability to adequately safeguard significant assets and properly record various transactions;

(4) hinder the federal government from having reliable financial information to operate in an economical, efficient, and effective manner.”

“We found … material deficiencies in financial reporting (which also represent material weaknesses) and other limitations on the scope of our work resulted in conditions that continued to prevent us from expressing an opinion on the accompanying financial statements for the fiscal years ended September 30, 2005 and 2004.

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In other words, the recordkeeping is so bad we can’t even figure out the scope of material law violations, inefficiency, and theft, and whether the accompanying financial statements are a reasonable representation of what actually happened.

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what can we deduce about the stats that keep painting the rosy scenario.:eyes:

sort of popped the doom and gloom predictions by Bushco for SS and Medicare. They can't get the gov't reports to jive anymore. "What a tangled web we weave..."

Census Report Foresees No Crisis Over Aging Generation's Health
http://www.nytimes.com/2006/03/10/national/10aging.html?ex=1299646800&en=0f38dfe9a730f9d0&ei=5088&partner=rssnyt&emc=rss

The next few decades will see an explosion in the percentage of Americans over the age of 65, but the economic and social impact of this baby boomer sunset may be gentler than had been feared because of a significant drop in the percentage of older people with disabilities, a new federal study has concluded.

Released yesterday, the United States Census Bureau's 243-page report on the aging population, among the largest and most comprehensive on the subject that the bureau has ever compiled, showed that today's older Americans are markedly different from previous generations. They are more prosperous, better educated and healthier, and those differences will only accelerate as the first boomers hit retirement age in 2011.

"Older Americans, when compared to older Americans even 20 years ago, are showing substantially less disability, and that benefit applies to men and to women," said Richard J. Hodes, director of the National Institute on Aging, on whose behalf the study was conducted. "All of this speaks to an improved quality of life."

What this suggests, Dr. Hodes said, is that while many of these older Americans will eventually become disabled, it will happen later with more of the years beyond 65 free of disability — an increase in what scientists call health expectancy.

And while, as baby boomers age, the growing ranks of the infirm will become a substantial drain on government coffers and devour health care resources, the total impact may not be as devastating as once feared, Dr. Hodes said.

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April 4, 2006 -- FRIDAY. . .
Is the day . . .
When you'll start to see . . .
Interest rates explode.

http://www.nypost.com/business/66403.htm

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At 8:30 on Friday morning the Labor Department in Washington will report the latest job growth - and the figure is likely to be much stronger than the majority of overpaid economists are predicting.

Don't get me wrong. There isn't really a boom in the job market, although Washington politicians would like you think there is.

What is happening is much simpler (and, in a way, more inister): starting with the March number to be released Friday, the government starts making optimistic assumptions about hiring spurts caused by new companies coming into existence.

Each spring the Labor Department adds hundreds of thousands of jobs on the theory - never proven - that new companies suddenly pop into existence when the weather gets nicer.

Last March, for instance, the federal government added 179,000 of these phantom jobs to its monthly count.

And there's every reason to believe it will add as many - if not more - this year.

more single sentence paragraphs....

procedures were so loose.. It was a flabbergasting read to say the least.. I don't know why, but I was under the impression that there was a tighter reign.. I wish my business could get away with this crap..

Edited for my many spelling issues..

mainly due to the number of discouraged workers not being captured.....but pulling job numbers out of your ass? And others make decisions based on these bogus numbers (like interest rate hikes). :eyes:

Apparently there's a fight:

EDIT: and then there's this:

(sorry can't remember the freeper spelling)

They are definintely hiding something. Dubya and his minions want to dissasemble social security and replace it with something privatized they can make money off of or steal from. They want to claim social security dead and in need of replacement.

it was voted down, without much fanfare. Google it and you'll only get a few rightwing media hits.

http://news.google.com/news?hl=en&ned=us&q=DeMint-Crapo+Amendment+&btnG=Search+News

The best one, that at least offers some type of explanation for the no vote is, unfortunately, this one: http://www.nationalcenter.org/2006/03/senate-social-security-demagoguery.html

snip>

The DeMint-Crapo amendment was voted down 46-53. According to Andrew Roth, the following eight Republicans joined Senate Democrats in voting "no":
Conrad Burns (MT)
Richard Lugar (IN)
Lincoln Chafee (RI)
Gordon Smith (OR)
Susan Collins (ME)
Olympia Snowe (ME)
Pete Domenici (NM)
Jim Talent (MO)
The measure did not receive any serious debate in the Senate...

snip>

Senator Max Baucus (D-MT) then said:
Mr. President my colleagues are not being fooled. This is privatization of Social Security. Turn to page 29, paragraph 3. It so provides.

We have already gone down the road on privatization of Social Security.

The so-called surplus that the Senator referred to is just to privatize Social Security.

The American public said no to privatizing Social Security. The President has realized that it is a bad idea. The Congress should realize it. It is a bad idea. The AARP sure knows it is a bad idea. I have a letter from the AARP. Let me read from it. They say:

AARP strongly opposes this attempt to resurrect a proposal that the American public has soundly rejected.

This is privatization of Social Security, pure and simple. The Senate should reject it as the American people have rejected it.

I ask unanimous consent that the letter be printed in the RECORD.

There being no objection, the material was ordered to be printed in the Record, as follows:

more with the RW spin added...

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B55064192%2D743D%2D4E34%2D8307%2D27EC818C821B%7D&dist=newsfinder&symbol=&siteid=mktw

SAN FRANCISCO (MarketWatch) -- June gold climbed 10 cents to $594.40 an ounce in New York after reaching a high of $594.80. Prices tapped a 25-year high of $596.80 on Monday. Meanwhile, May silver added 2 cents to $11.785 an ounce. "We continue to look for expanded trading ranges, higher degrees of volatility and a much higher participation level by institutional and individual investors alike," said Jon Nadler, an investment products analyst at bullion dealers Kitco.com. "When the $600 level (and $12 respectively for silver) are taken out, many analysts will focus on what is logically next: $680 gold and $15 silver," he said.

9:49 AM ET 4/4/06 JUNE GOLD FALLS 30C TO $594/OZ IN MORNING TRADING

9:49 AM ET 4/4/06 MAY SILVER RISES 1C AT $11.775/OZ AFTER $11.645 LOW

9:49 AM ET 4/4/06 MAY COPPER CLIMBS 0.35C TO TRADE AT $2.551/LB

Dow 11,161.74 +16.80 (+0.15%)
Nasdaq 2,340.14 +3.40 (+0.15%)
S&P 500 1,299.25 +1.44 (+0.11%)
10-Yr Bond 48.45 -0.29 (-0.59%)
NYSE Volume 363,217,000
Nasdaq Volume 388,090,000

10:00 am : Leadership lacks, and each of the major indices are trading within close proximity of the flat line. At this point, three sectors are sitting on the unchanged mark, four are levying modest losses, and three have edged marginally higher. Healthcare, down 0.4%, is currently the worst-faring. A majority of the S&P's healthcare stocks are in the red, despite Merck's (MRK 35.55 +0.14) upped first quarter earnings guidance. In addition, Goldman Sachs reinstated its coverage of Amgen (AMGN 71.79 -0.09) with an Outperform rating. That assertion has not done much to attract buyers, though. On the other side of the coin, the Telecom sector is faring best. Because that area accounts for just 3% of the S&P, though, it's having a muted effect on the indices' performances.DJ30 -3.93 NASDAQ +1.18 SP500 -1.13 NASDAQ Dec/Adv/Vol 1498/1008/166.5 mln NYSE Dec/Adv/Vol 1436/1266/183.2 mln

http://www.washingtonpost.com/wp-dyn/content/article/2006/04/03/AR2006040300869.html?nav=rss_business

The former chief executive of Westar Energy Inc. was sentenced yesterday to 18 years in prison for his role in a corporate looting case known in some circles as "the Enron of Kansas."

David C. Wittig, 50, and the utility's onetime top dealmaker Douglas T. Lake, 55, were convicted in September of conspiracy, wire fraud, money laundering and circumventing internal controls at the Topeka, Kan., utility.

U.S. District Judge Julie Robinson sentenced Lake to 15 years and ordered each man to pay $5 million in fines plus restitution. The two have already been ordered to forfeit more than $53 million to Westar.

Wittig's sentence is one of the longest handed down in a major white-collar fraud case and reflects the government's increasingly harsh reaction to corporate malfeasance.

<snip>

"Eighteen years is a long term. It sends a pretty powerful message that the government takes these sorts of financial very seriously," said University of Delaware corporate governance professor Charles M. Elson. "It serves as both punishment and, more important, strong deterrence."

...more...

DeLay's part in all of this:

Westar Energy Bribery Scandal

Rep. Chris Bell's Ethics Complaint Concerning Tom DeLay's Role in the Westar Bribery Scandal (June 2004)

Public Citizen's Letter to House Members (4/07/04)
The Press Release (4/07/04)
Public Citizen's Department of Justice Complaint (6/17/03)
Public Citizen's Original Compliant to the House Committee on Standards of Official Conduct (6/17/03)

Press Releases
(7/1/03) Public Citizen Seeks Full Disclosure of All Internal Communications Involving Westar Influence-Peddling Scandal
(6/19/03) U.S. House Members Should Return Ill-Gotten Contributions From Westar

Memos
Westar Internal Memo Describing Influence Plan
Westar Internal Memo Outlining Contribution Schedule
Westar Contribution Patterns

...more...

from the Ethics Complaint at http://www.citizen.org/documents/bellcomplaint.pdf

11. In May 2002, Westar executives then contributed $58,200 to various campaigns and to political action committees. A chart detailing Westar executives' political donations shows that Douglas Lake, the executive who had never heard of John Shimkus, contributed $1,000 to Mr. Shimkus’ campaign. Chart compiled by Public Citizen from Center for Responsive Politics data (attached as Exhibit C).

In addition, Mr. Tauzin's political action committee, the Bayou Leadership PAC,
received $2,800 and Mr. Barton's PAC, the Texas Freedom Fund, received $4,000. Id.
Finally, Mr. DeLay's PAC, Texans for a Republican Majority, received $25,000 from
Westar - the exact amount Douglas Lawrence earmarked for soft money contributions.

David C. Wittig...was sentenced yesterday to 18 years in prison

U.S. District Judge Julie Robinson sentenced Lake to 15 years and ordered each man to pay $5 million in fines plus restitution. The two have already been ordered to forfeit more than $53 million to Westar.

I wonder what the Grand Wizard of the K-Street Project will get.

I love reading about these guys getting what they deserve -- justice!

http://www.usatoday.com/news/washington/2006-04-02-federal-spending_x.htm

WASHINGTON — Federal spending is outstripping economic growth at a rate unseen in more than half a century, provoking some conservatives to complain that government under Republican control has gotten too big.

The federal government is currently spending 20.8 cents of every $1 the economy generates, up from 18.5 cents in 2001, White House budget documents show. That's the most rapid growth during one administration since Franklin Roosevelt.



There are no signs that the trend is about to turn around. The House Budget Committee last week rejected a proposal that would require spending hikes to be offset by cuts in other spending or by tax increases.

This week, the House is scheduled to debate the $2.8 trillion budget for 2007, which projects an additional $3 trillion of debt in the next five years.

snip>

"You take anything, and we've grown it big," says Rep. Jeff Flake, R-Ariz., a leading critic of the spending spurt. "When you're in control of the presidency and both houses of Congress, there's just no stop on it. There's no brake."

more...

Cartoons can sometimes get so accurate it's scary:

http://www.freemarketnews.com/Analysis/107/4361/2006-04-03.asp?wid=107&nid=4361

This year may be different. That’s because a bevy of stories have emerged, sounding like they’re April Fool’s jokes but aren’t. Instead, these are real news items that appear to be straight out of the Weekly World News. We’ll call them Reverse April Fool’s Stories because not only are they true, the April Fool isn’t the one reading them.

Senate cracks down on lobbying unless on corporate jets

After realizing that Americans placed more trust in Nigerian emails than in the U.S. Congress, senators overwhelmingly passed a lobbying reform measure which actually mentions the word “reform” somewhere in the text. The bill also prohibits lawmakers from accepting gifts or meals from lobbyists, although it’s still okay to take gifts from non-lobbyists, like corporate CEOs who need a favor. Senators defeated efforts to include a ban on corporate jet travel in the bill but at least traveling lawmakers would have to report who picked up the tab. Supporters of the bill hailed it as a bi-partisan victory but one watchdog group dismissed the bill as “window dressing” in the wake of the Abramoff lobbying scandal(s). However, the senate version does make it tougher for “earmarks” to be hidden inside spending legislation while in House/Senate conference committees. If the reform bill passes, senators could demand a vote on any particular earmark, forcing that particular pork package to garner 60 votes to stay in the bill. This is such a good idea that it may disappear quicker than Iraqi weapons of mass destruction.

Clock may be running out for Congressional insider trading

For a number of reasons, which I’m sure they could come up with if pressed, Congress doesn’t have to comply with the trading rules they have, for decades, imposed on corporate insiders. So if a Congressman or his staffer is working on legislation that subsidizes oil companies, to take a purely hypothetical example, lawmakers in the know can buy stocks or commodities based on this inside skinny. But now, two House members have proposed legislation that would prohibit trades based on insider information. If passed, the next time Congress builds a bridge to nowhere at least they won’t be able to buy stock in the contractor.

With oil prices near historic highs, government helping out oil companies

Speaking of subsidizing oil companies, the General Accounting Office figures that the government will miss out on $7 billion in royalties over the next five years because of a program that encourages oil companies to drill on federal offshore leases. According to the New York Times, the government will forego $20 billion over the next 25 years. And if oil companies win their suit, they would make even stingier payments, and the government could lose out on as much as $28 billion over five years. The government granted oil companies incentives for drilling off of the Gulf Coast back in 1995 when oil prices were below $20 per barrel. But subsequent legislation, including the 2005 energy bill, extended the royalty deal despite the surge in oil prices. Getting preferential treatment at a time of near-record oil prices was too much for one Shell official, who told the Times reporter that, “'Under the current environment we don't need royalty relief.' They beg to differ at Kerr-McGee. The Times reports that the company is suing to expand royalty relief.

Texas ethics commission says politicians should keep contribution amounts secret

more...

It should also be mailed to your Congress critter.

EDIT: Ask them to exlain the divine ethics of these technical procedures.

Protectionism v. Exposure-ism-- The Realities of "Free Trade" In An Undemocratic World

http://www.opednews.com/articles/opedne_kent_wel_060402_protectionism_v__exp.htm

"America's growing trade deficit is selling the nation out from under us...our country's net worth is now being transferred abroad at an alarming rate. A perpetuation of this transfer will lead to major trouble."
Warren Buffett

Missing amongst discussions of trade policies today are any examinations of the corrupt origins of GATT/NAFTA and its on-going lack of democratic process. Clearly, however, no discussion of trade policy can be either relevant or honest without discussion of the capital-controlled, origins of GATT-NAFTA and its enclosure of the vast wage-earning majorities.

In effect, GATT/NAFTA is no less than a coup d’etat by capital, as chronicled in "The Selling Of Nafta" and revealed in polls in 1993 indicating that up to 87% of the people did not then agree with NAFTA. Missing during the entire election of 1993 was any discussion of trade policy by the candidates. Yet immediately after the election, what occurred (amidst a media blackout) was a midnight-style passage of this most important treaty only five days after the election.

Thus, a wholesale re-writing of trade policy - with its crippling loss of tariff freedom and economic sovereignty in a very disparate and undemocratic world - was voted upon by no less than 100 lame ducks, and by a Congress ignorant of both the content, and the effects, of this seminal legislation. In any case, with both GATT/WTO and NAFTA we do not elect our trade representatives nor do we have a National Initiative process by which the people might bypass a bought and paid for Congress, and implement smarter, and more democratic, trade policy.

In short, when you begin with a corrupt process you can only get a corrupt, undemocratic, unwanted, and now widely protested globalization Clearly, if we had a National Initiative, GATT-NAFTA would have been history within a year or two of its devious inception. Unfortunately, no capital-controlled society (like the USA) wishes to give you this basic freedom. In addition, capital’s corporate media has created an information enclosure in which free trade is blameless, unchangeable, and impervious to any democratic processes. We, the people, are simply to await its rapture and banish those nasty protectionists.

As a result of this chicanery and economic fascism, what we have now is forced trade with the greater slave – i.e., one, set to benefit employers alone and hollow out the work and social progress of centuries. Now well down the road to abject dependency, we no longer have the freedom not to trade, nor to adjust horrendous trade imbalances with compensating-incentivizing tariffs. In short, we are forced to reward the greater slave and his worst-of-world conditions, and to compete on the downside rather than the upside.

more...

we were once a self reliant country-now look where we are today. Pretty sorry state of affairs.

http://www.morganstanley.com/GEFdata/digests/20060403-mon.html#anchor0

The global growth debate could well prove decisive for financial markets in 2006. An increasingly synchronous and vigorous acceleration in world economic activity has been evident in the early months of this year. With the markets now discounting the likely persistence of this synchronous boom, it pays to ponder whether the global growth story might swing the other way.

There can be no mistaking a decisive acceleration of the world economy in early 2006. A quarterly global GDP proxy maintained by Morgan Stanley’s global economics team now points to a 3.4% gain in industrial world GDP in 1Q06 -- fully 70% faster than the anemic 2.0% pace recorded in 4Q05 (all figures expressed as annualized sequential quarterly increases). Within the developed world, the acceleration was particularly evident in the US, where the Katrina- and energy-related shortfall in the final period of last year (1.7%) appears to have been followed by a 4.1% rebound in the quarter just ended. I should note, however, that this latest calculation of 1Q06 real GDP growth in the US is not nearly as vigorous as we had once thought would be the case; just six weeks ago, our peak “tracking” estimate for the first period -- a calculation we continually update on the basis of incoming data -- stood at a far more robust 5.9%. We have since marked down our 1Q06 estimates for growth in personal consumption, business capital spending, and foreign trade. Looking through the volatility, our latest take on the underlying pace of aggregate US economic activity works out to an average of nearly 3% over the past two quarters. While that’s not bad for an expansion now in its fifth year, it does represent a bit of a downshift from the headier 3.8% average gains of 2004-05.

snip>

Financial markets are currently dismissing downside growth risks leaning the other way -- betting more on the upside of the global momentum play or, at worst, believing that any deceleration in the pace of world activity is likely to be minimal. That’s certainly the message to take from the recent sharp back-up in real interest rates, as well as the latest surge in metals prices -- precious and industrials, alike. Central banks have reinforced this pro-growth cyclical play by sending signals that they remain very focused on the traditional closed-economy linkage between rapid growth and inflation. In my view, that leaves markets increasingly exposed on the other flank to the possibility of a downside growth surprise. If those risks play out, bonds could rally and equities could sag on growth concerns.

The biggest risk, however, is that it doesn’t take all that much to turn the global liquidity cycle. For their part, the world’s major central banks are all on the tightening side of the monetary equation for the first time in 15 years. The Federal Reserve has already gone a long way down the road toward policy neutrality, and there are those who argue that it may already have entered the restrictive zone (see Joachim Fels and Manoj Pradhan’s 28 March dispatch, “The Supernatural Fed”). Nor should we underestimate the potential impacts of the sea change in Japanese monetary policy now under way -- the shift away from quantitative easing that has already commenced and a possibly sooner-than-expected ending of the BOJ’s zero-interest-rate policy this summer (see Takehiro Sato’s 28 March dispatch, “Earlier and Smaller”). If the turn in the global liquidity cycle reinforces a downshift in global growth, financial markets could be especially vulnerable. Recent action in some of the more exotic corners of the markets may well be providing a hint of how that vulnerability might spread. An unwinding of carry trades in Iceland and New Zealand, corrections in Middle Eastern equity markets, and very recent pullbacks in commodity-linked currencies (i.e., Canada and Australia) could well be canaries in a much bigger coal mine. Even the big equity markets in the US, Europe, and Japan have looked a bit toppy in recent days as yields on long-dated US Treasuries close in on the 5% threshold.

The global economy has just come off a very hot and increasingly synchronous burst of growth. Momentum-driven financial markets are betting this trend will continue. However, there is good reason to suspect that the ever-fickle pendulum of global growth is now about to swing the other way. If that turns out to be the case, increasingly myopic markets could reverse course in a flash.

more...

If you work, then you shouldn't be poor

Guided by the sentiment that if you work you shouldn't be poor, lawmakers in the 1990s made improvements in two policies that, taken together, ensured that full-time, year-round work would provide an income at or above the poverty line. Raising the minimum wage from $4.25 to $5.15 in 1996-97 directly improved the wages of 9% of the workforce—almost 10 million workers—and indirectly raised the wages of millions more low-wage workers. Improvements in the Earned Income Tax Credit (EITC) and a new refundable Child Tax Credit also rewarded work and supplemented wages. After the minimum wage increase, the combination of full-time, year-round work and the above-mentioned federal tax credits resulted in a net income for a parent with two children equal to 105% of the poverty line in 1997.

Although there is broad agreement that, for a family to pay for the basic essentials, it actually requires an income level of around twice the poverty line (higher in some areas), improving the minimum wage and EITC still meant important progress for a substantial number of struggling families.

Nine years later, however, the system has broken down. The minimum wage has not kept pace with inflation and thus has lost 20% of its previous purchasing power. To exacerbate the problem, the EITC levels are linked to inflation, so for the last two years a person can work full-time, year-round at the minimum wage but still not be eligible for the maximum EITC. The combination of an out-of-date minimum wage and the existing federal tax credits mean that this same parent of two now only earns 89% of the poverty line.

http://www.epi.org/content.cfm/webfeatures_snapshots_20060322

good graphics in article. This is what the DEMS need to make 'their issue'......

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=2203983#2204265

--- ...Last year was the first year on record, according to an annual study conducted by the National Low Income Housing Coalition, that a full-time worker at minimum wage could not afford a one-bedroom apartment anywhere in the country at average market rates. ---


I lived outta my car for a few months nearly 20 years ago - it wasn't easy then and I'm sure it's a lot harder now. Back then there was still overnight parking at the waysides, it wasn't as dangerous, and I got away with hanging out at the community college - used the showers in the Athletics building. I don't think I could get away with a lot of that now days.

of modular paper housing units...really nice.

Funny, a couple months ago you could smell another currency crisis in the air, but I never would have guessed Iceland. I think I was betting on S Korea - the won.

http://business.guardian.co.uk/story/0,,1745379,00.html

It may just be a chilly island close to the Arctic Circle with a population barely above 300,000 and fish its main export - but it could end up cutting the value of your home and your share portfolio.

Events in and around the Icelandic economy, culminating last Thursday in a further interest rate rise from its central bank, may be the first sign of problems in global financial markets with unpleasant consequences for all of us.

The crisis in Iceland is not about to bring the world economy crashing down. It is too small. But the run on its currency and that of New Zealand could be warning signs that the world ignores at its peril. "It is possible that Iceland is the tip of the iceberg, the first domino to fall, albeit a very small one," says Julian Jessop, chief international economist at the consultancy Capital Economics in London.

Iceland, an open economy with a freely floating currency, has experienced a rapid boom in recent years as mining and energy companies piled in to take advantage of its geothermal heat sources. Icelanders have borrowed heavily and pushed up the housing market. The economy expanded a hefty 8% in 2004 and 5.5% last year. It has also pushed up inflation, which is at 4.5%, nearly double the central bank target of 2.5%. In response, the central bank has slammed on the monetary brakes, pushing rates up by more than six percentage points in less than two years to an eye-watering 11.5%. It hinted last week that further rises lie ahead.

The rises have been less to do with the domestic economy than with preventing a run on the Icelandic krona. The krona has fallen 10% in recent weeks, threatening to further push up inflation because of rising import prices. The reason all of this matters is that Iceland, like many small or "emerging" economies, has attracted inflows of speculative money borrowed in Japan or the eurozone at very low interest rates and invested in Iceland where rates have been much higher. These are known as "carry" trades.

more...

http://news.bbc.co.uk/2/hi/americas/4861320.stm

As the BBC begins a special series on Latin America, Newsnight presenter Gavin Esler gives his view on the region's leftward trend and its changing relationship with the US.
There is trouble ahead for Uncle Sam in his own backyard. Big trouble.

It is one of the most important and yet largely untold stories of our world in 2006. George W Bush has lost Latin America.

While the Bush administration has been fighting wars in Iraq and Afghanistan, relations between the United States and the countries of Latin America have become a festering sore - the worst for years.

Virtually anyone paying attention to events in Venezuela and Nicaragua in the north to Peru and Bolivia further south, plus in different ways Mexico, Argentina and Brazil, comes to the same conclusion: there is a wave of profound anti-American feeling stretching from the Texas border to the Antarctic.

And almost everyone believes it will get worse.

more...

I've been amazed at how it hasn't gotten more coverage. This is one of the most significant political revolutions in modern history that is only really rivaled by the wave of democratic movements that came at the end of Communist rule in Eastern Europe.

Focus on the "Axis of Evil" and rile up Central and South America in the meantime and then once the Axis is taken care of and democratized, move in and invade/occupy the Americas.

And it's all going according to plan!

MUA HA HA HA HA HA HA HA HA!!








p.s. I'm only somewhat joking there. :scared:

they are adding numbers to their National Guard to protect their oil from the US. Frankly, when you hear a religious leader like Pat Robertson all but swear out a warrant for your death...well I can't say as I blame him.

'the primary determinant of spending is income, and we see solid and improving prospects for real incomes for the nation as a whole......he was not concerned about the current level of household debt.:wow:

:wtf: I don't know how it is around your house...but here is how our bi weekly budget meetings go...

We total up our money from all our jobs and part-time jobs. We pay our bills with checks and mail them. Next we take those thing we pay cash for and place the cash into the marked envelope. We allow (budget) a certain amount for food, gas, car repair, clothes and things base on what an average should be. Money left over goes toward paying off debt.

The recent spikes in prices have wrecked havoc on our budget and the jump in rent will really hurt. We have both taken part time jobs just to maintain our level of bill payment from last year-no frills. We don't have cable or suscribe to anything, I bought some new clothes last year for the first time in 2 yrs. We paided cash for our used cars.

I measure my real income by my ability to maintain my living standard. Now if I (and Hubby) have to take on part-time work to maintain our modest standards.....where's the real growth? I am glad he is not concerned with debt because I worry about it all the time as do my creditors. They are smoking SOMETHING over there:eyes:. I can only imagine how those poor folks with ARMS are coping.

your "free-time" budget allowance by taking on the extra part-time jobs. Notice he used the term "real incomes" - that's usually where the lies in the CPI come into play. He's simply predicting a drop in the inflation figures (which are nothing but lies). He's certainly not talking wage increases - that would send the markets into a tizzy as wage inflation is the ONLY inflation the Fed tends to fight to the death with rate increases.

Meanwhile Murika attempts to make ends meet by increasing their household income by taking on additional part-time jobs. The single-income idea died long ago, then we went to dual incomes to make ends meet and now that's not enough. If you each took part-time jobs at say 18-20 hours/week, you're now a TRIPLE income household. Do you feel lucky yet? You hit the Trifecta!!!

so many jobs to go around and only so many hours in a day.

But comparing Greenspan's hypnotic weaving and caution to the Bush appointees have a few more points of unreality been added to tweak growth out of the market? Even Greenspan had his critics for his view of the world and its economy. With this new crop is everyone afraid to breathe and any reassurance is given even more faith than was accorded to their predecessor? It just feels to me like the BS has apotheosized around tin gods who cannot sustain much real inspection, feeble background music to distract instead of in sync marching music.

This question is just about Bernanke and the others more than the actual state of the economy. Is this a another case of the mysterious Bush Inc. free pass because no one dares rock the boat?

http://www.nytimes.com/2006/04/03/business/03labor.html?ex=1144296000&en=0c4959e084bd3715&ei=5087

SHENZHEN, China — Persistent labor shortages at hundreds of Chinese factories have led experts to conclude that the economy is undergoing a profound change that will ripple through the global market for manufactured goods.

The shortage of workers is pushing up wages and swelling the ranks of the country's middle class, and it could make Chinese-made products less of a bargain worldwide. International manufacturers are already talking about moving factories to lower-cost countries like Vietnam.

At the Well Brain factory here in one of China's special economic zones, the changes are clear. Over the last year, Well Brain, a midsize producer of small electric appliances like hair rollers, coffee makers and hot plates, has raised salaries, improved benefits and even dispatched a team of recruiters to find workers in the countryside.

That kind of behavior was unheard of as recently as three years ago, when millions of young people were still flooding into booming Shenzhen searching for any type of work.

A few years ago, "people would just show up at the door," said Liang Jian, the human resources manager at Well Brain. "Now we put up an ad looking for five people, and maybe one person shows up."

For all the complaints of factory owners, though, the situation has a silver lining for the members of the world's largest labor force. Economists say the shortages are spurring companies to improve labor conditions and to more aggressively recruit workers with incentives and benefits.

more...

Damn, time for the corporatists to look for greener pastures already?

that there are plenty of workers AND factories available in the US. They could make stuff here and save shipping:idea:

No reports today means everything's fine.

Dow 11,203.85 +58.91 (+0.53%)
Nasdaq 2,345.36 +8.62 (+0.37%)
S&P 500 1,305.93 +8.12 (+0.63%)
10-Yr Bond 48.72 -0.02 (-0.04%)
NYSE Volume 2,139,835,000
Nasdaq Volume 2,082,333,000

4:20 pm : The market managed to sustain its gains on Tuesday. As had been the case yesterday, buying interest was broad-based. The difference today, though, was that there were some macro factors that supported the market's rise. Bond yields stabilized, the price of crude declined, and influential areas of the market provided leadership. Underpinning the optimistic tone was another dose of M&A activity.

In the early going, the Treasury market staged a recovery. With that, stocks rose and followed Treasuries' direction for part of the session. Bond traders lacked a catalyst, however, and demonstrated some caution ahead of Friday's much anticipated Employment report. At the close of equity trade today, the 10-year was yielding 4.87%. That still leaves it at a 22-month high, but the facts that bonds were less defensive and their yields stood relatively still provided some relief for the stock market.

That stabilization was one reason for a solid, market-leading gain in the Financial sector (+1.2%). Another reason was the brokerage industry. Per usual, that group lent considerable momentum. The merger and acquisition front continues to be a robust one, and reports that Computer Science (CSC 59.80 +2.51) is up for sale, that 3M (MMM 77.04 +1.20) is considering a divesture of its branded pharmaceutical business, and that International Paper (IP 34.90 +0.18) is selling over $6 billion worth of land only emphasized that idea today. On a related note, Citigroup (C 48.21 +0.80) was another factor. The Fed lifted a ban on its ability to pursue major acquisitions. The rate-sensitive Utilities sector (+1.1%) also caught a bid from the tame Treasury trade.

Lately, the equity market has not responded to energy price action in a very consistent manner. For example, both intra-day spikes and late-day slides went under yesterday's radar, but an extended decline in crude was a reason behind today's rally. Natural gas' 3% pullback and a decline in heating oil were also supportive. The action was bullish for the broader market, and even more so in that it did not (today) result in any market-dragging selling in the Energy sector. In fact, that area of the market contributed a strong 1.3% gain. A catalyst was gasoline, which rose more than 1%. Expectations ahead of tomorrow's inventory report were a reason behind the disjointed trade across the complex. Analysts are expecting a 1.2 million barrel build in crude and a 1.4 million drawdown in gasoline supply. The latter is garnering some particular attention as supply concerns surface ahead of the summer driving season.

Industrial stocks also fared well today. 3M, as mentioned above, benefited from M&A news. Transportation stocks caught a bid from the energy price declines, and the Dow Jones Transportation Average hit an all-time high. Positive comments on Caterpillar (CAT 75.30 +1.80) lent further upside to the sector as well as to the Dow. Speaking of Dow components, Merck (MRK 35.48 +0.07) also received some added attention. With the first quarter earnings season looming, the market is mindful of guidance updates. Merck, for its part, upped its first quarter guidance. The good news was somewhat stifled, however, by the fact that its full-year, in-line guidance was left in tact. Check Point Software (CHKP 18.76 -1.07), on the other hand, issued a profit warning. That stock weighed on the Nasdaq, but it did not prevent its advance.DJ30 +58.91 NASDAQ +8.62 SP500 +8.12 NASDAQ Dec/Adv/Vol 1477/1561/2.06 bln NYSE Dec/Adv/Vol 1377/1905/1.50 bln

Highlights

Current:



30-day and 90-day:



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

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

Up-to-the-minute graph: http://quotes.ino.com/chart/?s=CME_CD.H06&v=s

Current TSE



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

2006-03-03 Friday, March 3 0.880902 USD
2006-03-06 Monday, March 6 0.877116 USD
2006-03-07 Tuesday, March 7 0.871992 USD
2006-03-08 Wednesday, March 8 0.863931 USD
2006-03-09 Thursday, March 9 0.862589 USD
2006-03-10 Friday, March 10 0.861698 USD
2006-03-13 Monday, March 13 0.860882 USD
2006-03-14 Tuesday, March 14 0.865951 USD
2006-03-15 Wednesday, March 15 0.865576 USD
2006-03-16 Thursday, March 16 0.866551 USD
2006-03-17 Friday, March 17 0.863036 USD
2006-03-20 Monday, March 20 0.860067 USD
2006-03-21 Tuesday, March 21 0.85859 USD
2006-03-22 Wednesday, March 22 0.858295 USD
2006-03-23 Thursday, March 23 0.857854 USD
2006-03-24 Friday, March 24 0.856531 USD
2006-03-27 Monday, March 27 0.855798 USD
2006-03-28 Tuesday, March 28 0.854993 USD
2006-03-29 Wednesday, March 29 0.853097 USD
2006-03-30 Thursday, March 30 0.859993 USD
2006-03-31 Friday, March 31 0.856898 USD
2006-04-03 Monday, April 3 0.853388 USD
2006-04-04 Tuesday, April 4 0.857486 USD


Current values

Last trade 0.8617 Change +0.0067 (+0.78%)
Settle Time 15:05 Open 0.8573
Previous Close 0.8549 High 0.8623
Low 0.8555 Open Int. 81447


Blather (from http://quotes.ino.com/exchanges/?r=CME_CD)

The June Canadian Dollar closed higher on Tuesday and above the 10-day moving average crossing at .8583. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at .8618 are needed to confirm that a bottom has been posted.

Analysis

Look at the top of this thread for the three currency indicators. The greenback is falling against all currencies (their graphs are going down) but the loonie is going down faster.

It's the first days of Parliament and Harper doesn't appear to be doing anything monumentally stupid - yet. I'm wondering if we're getting back to safe-haven territory like last month's bubble.