STOCK MARKET WATCH, Thursday 18 May

MONETARY DISORDER & US$ REJECTION

Anyone who cannot detect rumblings with more magnitude than early volcanic tremors is brain dead, plain and simple. For a full year, the USDollar enjoyed a sizeable counter-trend bounce. It relieved the long-term oversold condition. In usual times, in typical markets, such a period of time would offer the fundamentals an opportunity to catch up, for the remedy to work its medicine, for the condition to heal itself. In the case of the USDollar, the trade deficit worsened. The Jan2005 trade deficit was a grandiose $58.3 billion, pretty doggone rotten. By Jan2006, a full twelve months for the “fix” to take hold, to work through the system, the trade deficit had ballooned to a shocking, yawning $68.6 billion, as nothing but more metastasis flowed their the body economic. Our Pied Piper Sir Alan Greenspan, who skipped town before the upcoming crises, much like Robert Rubin skipped town in June2000, proclaimed the lame line that financed deficits were a sign of flexibility. Plenty of flexibility is manifested in a bank overdraft on a stretched credit line awaiting default also. The Maestro and GoldBugs should be aware, that a revolt, an insurrection, a mutiny is in progress. The greenback is being rejected, perhaps as much as the USGovt leadership is getting a global vote of “NO CONFIDENCE.” Polls internal to US shores show low confidence in our leadership trio, in parallel.

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WEIMAR BEN AT THE CONTROLS

Chairman Bernanke denied any “managed depreciation” in the USDollar on one end. However, intellectual cover has come from former White House economist Martin Feldstein, as he called for a more competitive US$ exchange rate, but one with domestic strength. This is an important acknowledgement, one made clearly with USGovt sanction to herald a new currency phase shift in policy. He senses urgency, hopes to improve the trade balance deficit, and addresses the housing decline and consumption threat, sure to jeopardize economic growth. His historical reference to tame price inflation seems goofy. But his is just spin, from a drafted hired gun.

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BANK OF JAPAN & MARKET ACTION

It is perplexing. The announced hesitation for Tokyo to begin a rate hike tightening cycle is given as the main reason why commodities and their stocks declined. Let’s step back a minute and think about that one. In refusing to hike rates, the Bank of Japan in essence admits that have decided to embrace very big inflation risk without a policy reaction. Instead of curtailing the yen carry trade, which is the largest financial engineering machine in modern history, they openly reassure its continuation. They admit they will continue with massive monetary inflation, not hike rates, and supply the Western financial markets with evermore money to borrow at nil interest rates. SINCE WHEN IS THEIR CONTINUED ZERO INTEREST RATE POLICY BAD FOR COMMODITIES??? SINCE WHEN IS CONTINUED QUANTITATIVE EASING A HINDRANCE TO COMMODITIES???

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Rising US debt levels are no cause for alarm because they are low in comparison with the rest of the world and past US history, according to Treasury Secretary John Snow. This is a typical lunatic comment emanating from the current USGovt Administration. Debt levels have risen astronomically in the past few years to levels never seen before in human history. Snow is a hack clown, and on the way out due to his general imbecilic nature. The USGovt officials continue to point to productivity gains, despite the clear evidence that benefits go to foreign workers where the fixed business investment has gone. This is more mythology amidst economic ignorance, a convenient device governed by political motivation. US business investment has grown by 8% or 9% in the last few years, as opposed to the normal 20% in previous recoveries.

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

8:30 AM Initial Claims 05/13
Briefing Forecast 315K
Market Expects 318K
Prior 324K

10:00 AM Leading Indicators Apr
Briefing Forecast 0.1%
Market Expects 0.1%
Prior -0.1%

12:00 PM Philadelphia Fed May
Briefing Forecast 12.5
Market Expects 12.5
Prior 13.2

8:29 AM ET 5/18/06 U.S. INSURED UNEMPLOYMENT RATE 1.8%, UNCHANGED

8:29 AM ET 5/18/06 U.S. CONTINUING JOBLESS CLAIMS UP 8,000 TO 2.39 MILLION

8:29 AM ET 5/18/06 U.S. 4-WK AVERAGE INITIAL CLAIMS UP 15,750 TO 333,250

8:29 AM ET 5/18/06 INITIAL CLAIMS ABOUT 312,000 EXCLUDING PUERTO RICO SHUTDOWN

8:29 AM ET 5/18/06 U.S. INITIAL JOBLESS CLAIMS UP 42,000 TO 367,000

10:00 AM ET 5/18/06 U.S. ECONOMY NOT PICKING UP STEAM: CONFERENCE BOARD

10:00 AM ET 5/18/06 U.S. APRIL LAGGING INDICATORS RIS 0.3%

10:00 AM ET 5/18/06 U.S. APRIL COINCIDENT INDICATORS RISE 0.2%

10:00 AM ET 5/18/06 U.S. APRIL LEADING ECONOMIC INDICATORS FALL 0.1%

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B7366B075%2D6FC2%2D499C%2DA47B%2D53DB406A2111%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- The U.S. economy is cooling off, the Conference Board said Thursday. The index of leading economic indicators fell 0.1% in April, with three of the 10 indicators improving, the group said. The coincident index rose 0.2%, while the lagging index rose 0.3%. "With the price of oil still around $70, and with interest rates slowly rising, the economy isn't likely to be picking up steam," said Ken Goldstein, an economist for the private economic research group. In the past six months, the leading index is up 1.5%. "Economic growth should continue moderately in the near term" the group said. The index rose a revised 0.4% in March. Economists expected a 0.1% gain in April.

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BA1EC9CC3%2D7775%2D4FCD%2D9C95%2D0B9631B4005C%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- Factory activity expanded for the 11th straight month in the Philadelphia region in May, the Philadelphia Federal Reserve Bank said Thursday. The Philly Fed's business outlook survey rose to 14.4 from 13.2 in April. Economists expected a reading of 13.5. Readings over zero indicate growth in the region's factories. The prices paid index soared to 55.3 from 29.0, while the prices received index dropped to 10.3 from 15.4. The employment index fell to 1.1 from 21.7. The expectations index fell to 22.5 from 28.2.

How the hell can this index rise with such lousy internals?

Prices paid - up
Prices rec'd - down
employ't index - down
expectations - down

:crazy:

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B277DCFFD%2D1150%2D4C1E%2DAF0A%2D1A4F51F569B8%7D&symbol=

excerpt:

The employment index weakened. New orders and shipments grew at a slower pace.
Economists expected a reading of 13.5, according to a survey conducted by MarketWatch. See Economic Calendar.

<snip>

The prices paid index soared to 55.3 from 29.0, while the prices received index dropped to 10.3 from 15.4. About 58% of firms said they were paying higher prices for inputs, but just 16% had raised their prices for finished goods.

In response to a special question, 39.4% said they expected the prices they receive to be steady, about the same percentage in each of the past two Mays. A tiny fraction - 2.5% -- expected their prices to fall.

<snip>

In the May survey, the employment index fell to 1.1 from 21.7.

The six-month expectations index fell to 22.5 from 28.2.

...more...

There isn't anything "managed" in this country anymore--not even corporations who pay big bucks for "management".

From government and business, all we have is fraud and piracy and failure.

Looks like the Bank of Japan is doing some intervening right now (before NY/Chicago awake)...

US debt levels no cause for alarm, Snow says

WASHINGTON (Reuters) - Rising U.S. debt levels are no cause for alarm because they are low in comparison with the rest of the world and past U.S. history, U.S. Treasury Secretary John Snow said on Wednesday.

"The debt levels have risen ... but compared to most of the rest of the countries of the world, our debt levels are low," Snow said in testimony before the House of Representatives Financial Services Committee.

more

Tanigaki: Snow has affirmed strong dollar policy

OSAKA, Japan (Reuters) - Japanese Finance Minister Sadakazu Tanigaki said on Monday U.S. Treasury Secretary John Snow has reaffirmed that Washington's strong dollar policy remains unchanged.

"I understand remarks Secretary Snow has made over the past week, excluding those on the Chinese yuan, noted that values of currencies should reflect economic fundamentals and should be set in open and competitive markets, and a strong dollar is in the U.S. interest and they will keep such a policy," Tanigaki said.

Media reports said last week that Tanigaki had spoken with Snow by phone ahead of the release of the Treasury Department's currency report late on Wednesday. The conversation would have come at a critical time, as the dollar has been falling against major currencies.

more

As part of our global empire, we engineered those large foreign debts to expand our empire. He doesn't notice that we are doing it to ourselves????? He's less than dumb, he's a pimple on the dumb ass...

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-18T145352Z_01_WAT005589_RTRIDST_0_ECONOMY-SNOW-GROWTH-URGENT.XML

WASHINGTON, May 18 (Reuters) - Policymakers should avoid taking any steps to reduce the U.S. trade deficit or other global imbalances that jeopardizes high rates of world economic growth, U.S. Treasury Secretary John Snow said on Thursday.

"We could solve this problem real fast by the U.S. growing much more slowly. You wouldn't urge that. I wouldn't urge that and neither would the rest of the world," Snow told lawmakers during a Senate Banking Committee hearing.

...more...

Is SnowJob threatening something here?

He appears to be on the side of greater deficit spending, a sagging dollar (though he would never admit to it with his "strong dollar mumbo jumbo") and deeper personal debt for every American.

So who could he be working for?....

"It is a matter of extreme urgency that China act immediately to increase the flexibility of its exchange rate regime before real harm is done to its own economy, to its Asian neighbors and to the global financial system,"

Bernanke helicoptering, seems. Did he say extreme urgency? And then, you say, « Caution »?

all-powerful China rules the world. Capisco? Politely requests respect.

Backlash? Backwash. Hear here: http://neilyoung.com/ (he can take the heat).



Tao te ching.

SEOUL (Reuters) - Oil slid toward $68 a barrel on Thursday, pressured by rising U.S. gasoline inventories and concern that high energy costs are leading to inflation that could slow demand.

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"Rising U.S. gasoline stocks are providing the market with relief, easing some uncertainty over the supply of the motor fuel ahead of the driving season," said Koo Cha-kwon, head of global oil research at Korea National Oil Corp. (KNOC).

Gasoline futures in New York fell further after leading losses on Wednesday, when U.S. government data showed domestic motor fuel stocks gained 1.3 million barrels last week on high imports, the third week of rises.

more

May 22, 2006 issue - With all the histrionics about rising gas prices coming out of Washington these days, SUVs must be an endangered species in our nation's capital, right? Well, not exactly. At Capitol Cadillac, just inside the Beltway, SUVs are flying off the lot. Last week, former White House chief of staff Andy Card dropped by to pick up a new SRX, Caddy's midsize SUV, says dealer Daniel Jobe. But Jobe's hottest seller, by far, is the newly redesigned chrome-encrusted Cadillac Escalade, an incredible hulk that gets 13mpg in the city. "My biggest problem is not gas prices," says Jobe, "it's getting enough of these trucks."

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Detroit once thought $3 gas would be our ultimate pain threshold, forcing us to finally give up the keys to our big rigs. But it turns out our oil addiction is harder to kick than anyone expected. Although pump prices have nearly doubled in the last three years, we're driving more than ever. Today's cars average 12,190 miles on the road annually, up 24 percent from 1980, according to federal statistics. And the models we buy now have more horsepower and heft than those of a generation ago, which explains why gas mileage is headed in reverse. Today's new cars and SUVs average just 21mpg, down from 22.1mpg in 1987. When it comes to paying up at the pump, Americans have proved they can rationalize just about anything. "When prices are lower in June," says energy analyst Tom Kloza, "people will brag, 'I got my gas for only $2.75'." Now Detroit is recalibrating its threshold. The new CW: "Prices have to get to $4 and maybe even higher—and stay there for at least a year—before we'll see a substantial shift in what we drive," says J.D. Power's Tom Libby.

Those spikes and swoons at the pump have conditioned drivers to expect that a better deal is always coming soon, energy experts say. "Folks still think if they hold their breath long enough, we'll get back to $1.50 a gallon," says Ken Goldstein, economist for the Conference Board, which just reported that consumer confidence reached a four-year high in April, even as gas prices soared. "People are not about to trade in that Hummer." Brian Dalby just traded in an SUV—for an even bigger one. "I like to look down on traffic," says the Grosse Pointe, Mich., real-estate developer, who swapped a 16mpg BMW X5 for a 15mpg Chevy Tahoe. "Besides, gas won't stay above $3 a gallon all summer."

http://www.msnbc.msn.com/id/12777854/site/newsweek/

I live near Grosse Pointe, and this guy
probably tried to cut me off in traffic
yesterday.

:puke:

"I like to look down on traffic,"

...the Grosse Pointe, Mich., real-estate developer, who swapped a 16mpg BMW X5 for a 15mpg Chevy Tahoe.

"Besides, gas won't stay above $3 a gallon all summer."

May 18 (Bloomberg) -- Crude oil fell for a second day in New York as U.S. stockpiles declined less than expected last week and gasoline production leapt to a 10-month high, easing concern shortages will develop before the summer driving season.

Oil supplies shrank 65,000 barrels to 346.9 million last week, the U.S. Department of Energy said yesterday. That was less than a 10th of the decline analysts surveyed by Bloomberg News had estimated. Gasoline stockpiles grew by 1.3 million barrels to 206.4 million as refiners increased output for a fifth week.

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Daily gasoline production rose 2.9 percent to an average 9.2 million barrels a day, the highest since the week ended July 1, the Energy Department said yesterday. Daily gasoline imports slipped from a record 1.65 million barrels to 1.45 million barrels.

http://www.bloomberg.com/apps/news?pid=10000100&sid=a0GknEWhlPF8&refer=germany

They got what they wanted from Dumbya (a pass on ethanol, and some other goodies), so the strike is over.

NEW YORK (CNNMoney.com) - As higher gas prices eat into consumers' shopping budgets, more Americans say they could be forced to cope with the pain at the pump by cutting back on eating out, driving less often and holding off on purchases on big-ticket items like cars and TVs, according to a new industry survey Thursday.

According to the 2006 "Gas Prices Consumer Intentions and Actions Survey" from the National Retail Federation (NRF), 76 percent of consumers believe fluctuating gas prices have impacted their spending habits, up from 67.2 percent last year and 57 percent in 2004.

"Higher prices at the pump act as a tax on disposable income. As prices continue to rise, it is inevitable that consumer spending will be affected," NRF president and CEO, Tracy Mullin, said in a statement.

How do consumers plan to adjust their budget to account for the gas price hikes? About 45 percent of those polled said they will simply drive less. Additionally, 37.2 percent said they plan to decrease vacation and/or travel, while 36.2 percent will cut back on dining out.

http://money.cnn.com/2006/05/18/news/economy/retail_gas/index.htm

By The Copenhagen Post
A major investment in biofuel will help the nation's motorists to kick the petrol habit while at the same time creating a new export success

Biofuel researchers had their economic tanks topped off by the government on Wednesday as the government pumped DKK 200m into investment into alternative fuels.

The goal of the investment into biofuel is to make Denmark one of the first countries in the world to use biofuel as a supplement for petrol.

'The competition is tough, but this investment places us on the frontline,' said Flemming Hansen, minister of transportation and energy.

The funds will be spent on developing second-generation biofuels, alternative fuels based on industrial and agricultural by-products.


http://www.jp.dk/english_news/artikel:aid=3738678/

NEW YORK - It's an uncertain time for investors as robust consumer prices are again muddling the outlook for interest rates.

Wall Street had grown hopeful that the Federal Reserve would soon end its interest rate hikes, but a mix of economic data in recent days have prompted a sharp stock sell-off. The Dow has shed 437 points over the past five trading sessions, including a 214 point tumble on Wednesday.

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But those hopes came crashing down last week after the Fed signaled that inflationary pressure from record oil and metal prices continues to be a problem and could require further rate hikes. The central bank has boosted interest rates 16 times since June 2004, aiming to cap escalating prices.

On Wednesday, the Labor Department's consumer price index confirmed some of Wall Street's worst fears. Core prices rose more than economists had predicted, which came as a sign that soaring oil prices have begun to affect other parts of the economy.

more

What about stagflation, inflation, guns and butter? Any of that ring a bell? Is everyone on Wall Street under 25?

NEW YORK (Reuters) - The number of people traveling this Memorial Day weekend will rise by the smallest amount in four years as a 34 percent rise in gasoline pump prices takes a toll on pocket books, AAA said on Thursday.

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"While travel will be up slightly this Memorial Day, the increase is the smallest we've seen in recent years," Sandra Hughes, vice president of AAA Travel, said. "This is a direct correlation to the price of gas."

In 2002, the number of travelers on Memorial Day weekend, the traditional start to summer vacation season, was flat from the year before after the September 11, 2001, attacks on the World Trade Center and the Pentagon.

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The rise at the pump mirrors the increase in crude oil prices, which accounts for about half the cost of making gasoline. Strong global oil demand and market concerns about future supply disruptions stemming from geopolitical tensions have kept crude prices up.

more

;)

:donut:

Vultures are circling.

06:25 am : S&P futures vs fair value: +1.7. Nasdaq futures vs fair value: +8.0.

x( I hope that I will be wrong
Better I get laugh at than being right x(
But something are possible reality
And I like many Duer here
So I decide in this case
Being Chicken Little maybe worth if. :rofl:

I do not think that bush understand what a change of course means
So I do not see that happening
So what else is there to do but watch as it all unravel.
Pretty sad to watch all this happening.

Direct link to your journal, please?

Ok. Self-Correction. It was easy to find: http://journals.democraticunderground.com/Oversea%20Visitor

(archived, it says, won't let me reply - but, I'd like to point out, also, as regards OBL-Afghanistan: Taliban at last minute offered to hand him over in exchange for PROOF he did 9/11.

Seems there was no proof - none was offered not even at that now-famous UN Security Council session (on Iraq)).

see little brown book. Just click on it :rofl:

That is no country for old men. The young
In one another's arms, birds in the trees
-- Those dying generations -- are at their song,
The salmon-falls, the mackeral-crowded seas,
Fish, flesh or fowl, commend all summer long
Whatever is begotten, born and dies.
Caught in that sensual magic all neglect
Monuments of unageing intellect.

W.B. Yeats. (Sailing to Byzantium). "This book is copyright in all countries which are signatories to the Berne Convention". SBN Boards 333 04466 5. First Edition 1933.

To continue...

BTW, is it my fault the markets are in a "correction"? Ever since I got this new job the market's dropped over 400 points.


;)

I've already submitted two changes for testing by the users. The drive isn't so bad as I miss most of the morning rush on the way in and the afternoon rush is dying down as I head home. That's making for a longer day than I've been used to but I guess that just means that I'm "working hard".



:rofl:

NOT - LOL!!!:rofl:

:hug:

Yo-yos again! Hoola-hoops! Marilyn Monroe! Cuban Missiles! :rofl: :evilgrin:

Dogged markets! Cold Wars / Hot Wars / Diplomatic Wars / Economic Wars / Intelligence Wars. Culture Wars / Religious Wars / History Wars. Bricks in the Wall!

Remembering JFK. And Fidel. :eyes: Peace, Ecology, Economics, Love, and Gore.

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060518:MTFH88613_2006-05-18_08-16-22_L18075843&symbol=BT.L&rpc=44
Thu May 18, 2006 4:16 AM ET

LONDON, May 18 (Reuters) - European shares remained volatile on Thursday, opening up before dropping 1 percent and then recovering, as fears over the recent slide and rising interest rates dogged the market.

<snip>

The FTSEurofirst 300 index <.FTEU3> of top European shares was 0.5 percent up at 1,316.88 by 0816 GMT having earlier fallen more than 1 percent and having risen as high as 1,315.22 in opening trade. The benchmark has now fallen around 7 percent in just over a week having hit near-five year highs earlier this month on bullish earnings and takeover activity.

"In the last week, asset markets have been disrupted after an extended period of strong trends. Such bumps in the road have been quite common recently," Goldman Sachs economists wrote in a note. "This time, however, asset market turbulence comes against a backdrop of fundamental questions about whether an inflection point is at hand."

France's CAC 40 <.FCHI> rose 0.3 percent, Britain's FTSE 100 <.FTSE> was up 0.6 percent and Germany's DAX <.GDAXI> rose 0.8 percent, all having been down earlier.

Stocks in Europe suffered their biggest points fall since September 2002 on Wednesday to close at a more than three-month lows as strong U.S. inflation data sparked fresh fears the Federal Reserve will extend its monetary tightening campaign.

<snip>

The Swiss franc rose to a four-month high against the euro, boosted by growing risk aversion and supported by expectations that the Swiss National Bank will hike rates this year.

/more...

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060518:MTFH87326_2006-05-18_07-10-18_MOS000261&symbol=.IRTS&rpc=44
Thu May 18, 2006 3:10 AM ET

MOSCOW, May 18 (Reuters) - Russia's benchmark RTS stock index <.IRTS> fell below 1,500 points to 1,498 at 0650 GMT on Thursday, falling for the seventh consecutive session to return to the level it was at on April 4 this year.

The selloff in the Russian shares has wiped 300 points off the RTS index, as uncertainty over the U.S. interest rate outlook triggered a global selloff which has hit emerging markets particularly hard.

/ a little more...

I've been playing all morning, while checking out the internets, reads (amongst other things):

Mother do you think they'll drop the bomb
Mother do you think they'll like the song
Mother do you think they'll break my balls
Mother should I build a wall
Mother should I run for president
Mother should I trust the government
Mother will they put me in the firing line
Mother am I really dying?

Hush now baby don't you cry
Mama's gonna make all of your
Nightmares come true
Mama's gonna put all of her fears into you
Mama's gonna keep you right here
Under her wing
She might let you fly but she won't let you sing
Mama will keep baby cosy and warm
Ooooh Babe Ooooh Babe Ooooh Babe
Of course Mama'll help build the wall.

Hush now baby, baby don't you cry
Mama's gonna check out all your friends for you
Mama won't let anyone dirty get through
Mama's gonna wait up till you come in
Mama will always find out where you've been
Mama's gonna keep you healthy and clean
Ooooh Babe Ooooh Babe Ooooh Babe
You'll always be a baby to me.

Mother, did it need to be so high?

They have got one of the worlds largest gold reserves:

http://www.pamp.com/gold_c/Info_site/in_mark/in_offgold_tmh.htm

London's blue-chip stocks on Wednesday suffered their worst one-day points fall since October 2002, as fears of rising inflation and higher interest rates spooked an already jittery market.

Sparked by worse than expected US inflation data, the FTSE 100 lost 170.7 points, or 2.9 per cent, to 5,675.5, its worst one-day points fall since October 2002. The mid-cap FTSE 250 lost 266.3 points, 2.8 per cent, to 9,275.9.

It was the fifth day in six that UK equities had fallen. Just over a week ago, the FTSE 100 was trading at a five-year high of 6,100 while the mid-cap index topped 10,000 for the first time.

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The release of stronger than expected US inflation data spooked nervous investors on Wall Street, raising the spectre of further interest rate rises.

more

http://asia.news.yahoo.com/060518/kyodo/d8hm3kpo0.html
(Kyodo) _ Chinese Foreign Minister Li Zhaoxing will visit Qatar next week for a multilateral meeting, but whether he will hold talks with Japanese counterpart Taro Aso there remains undecided, a Chinese Foreign Ministry spokesman said Thursday.

"We are still studying the matter," Liu Jianchao said at a regular press briefing, when asked about Japan's request to hold bilateral talks on the sidelines of a meeting of the Asia Cooperation Dialogue.

Liu confirmed, however, that Li will travel to Doha from Tuesday to Wednesday to attend the gathering of ministers from the region.

Whether China will agree to bilateral talks "is not a question of whether there is time for it or not," a Chinese Foreign Ministry official later said, indicating that issues under consideration were not logistical, but rather political.

China has refused to hold top-level meetings since Japanese Prime Minister Junichiro Koizumi's most recent visit to Yasukuni Shrine last October.

Beijing has repeatedly complained about Koizumi's visits to Yasukuni, which enshrines Class-A war criminals along with the war dead, saying they prove Japan does not repent its wartime atrocities.

/more...

http://asia.news.yahoo.com/060518/afp/060518081412business.html
Photo: AFP


TOKYO (AFP) - Japan and China tried to find common ground in a heated row over lucrative gas and oilfields in the East China Sea but failed to make a breakthrough.

"Both sides have gained further understanding of each other's position but there still remains a gulf," said Kenichiro Sasae, the chief Japanese delegate to the one-day meeting -- the fifth round of talks on the issue with China.

The energy reserves are among a number of disputes that have badly damaged relations between the Asian powers, which are also divided over wartime history.

A Chinese consortium has been developing gasfields in the area, raising Japanese concerns that it could siphon off its resources. Both sides have proposed joint gas and oil development but they differ on where exactly their zones lie.

/more...

The use of thermal energy

As environmental destruction becomes a serious social problem, the spotlight has focused on the heat from volcanoes and hot springs as a clean, environmentally-friendly energy source. Oita Prefecture, which boasts the largest number of wellsprings in the nation, was the first in Japan to use geothermal heat for power generation. Today, 150,000 kilowatts of energy is generated in Oita prefecture, accounting for about 28% of the roughly 530,000 kilowatts of thermal energy generated in Japan. It is the leading area of geothermal power in Japan, and one of the leading areas in the world. Some large hotels in Beppu use privately-generated geothermal power, which accounts for more than half of the power they consume.



http://www.kyukeiren.or.jp/english/newsletter/no25/special/index.htm

http://asia.news.yahoo.com/060518/3/2kq23.html

TOKYO (Reuters) - The Nikkei fell 1.35 percent on Thursday to its lowest close in more than two months as Honda Motor Co. Ltd. and others took a hit after a sharp sell-off in U.S. stocks.

The Nikkei had earlier fallen by more than 2.4 percent to below the 16,000 mark. But a halt in the yen's rise drew bargain-hunting near the close for stocks with good earnings prospects. Konami Corp. rose on a better profit outlook.

"It's not a landslide sell-off as a level below the 16,000 mark has lured investors looking for undervalued shares," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

<snip>

Japan's economy grew at an annualised rate of 5.4 percent in the October-December quarter.

The Nikkei finished the day 220.49 points lower at 16,087.18, its lowest close since March 9. It booked its seventh decline in the past eight sessions, having erased more than 1,200 points since its close on May 8.

The TOPIX index fell 1.51 percent to 1,632.08.

/more...

http://asia.news.yahoo.com/060518/kyodo/d8hm29kg0.html
(Kyodo) _ Tokyo department store sales in April slipped 0.5 percent from the year before to 151.71 billion yen for the first fall in two months due primarily to sluggish sales of clothing for the early summer season, an industry group said Thursday.

According to data the Japan Department Stores Association compiled on a same-store basis, clothing sales fell 1.2 percent to 58.56 billion yen, falling for the first time in six months. Sales of men's clothing gained 0.2 percent but sales of women's clothing declined 1.3 percent.

Sales of sundries and other miscellaneous goods, including jewelry and cosmetics, increased 1.3 percent to 26.36 billion yen. Sales of home-use products, including furniture and home electronics, fell 5.6 percent to 9.61 billion yen with the category enmeshed in the doldrums.

Sales of personal belongings rose 3.1 percent to 21.69 billion yen, and sales of foodstuffs increased 0.7 percent to 26.93 billion yen.

/more...

LONDON (Reuters) - U.S. stock futures were pointing to a strong opening on Wall Street on Thursday, with the market set to rebound slightly from the previous session's heavy fall, but economic data due later could again buffet indexes.

Earnings from top computer maker Dell Inc (Nasdaq:DELL - news) could also help set the tone, while retailer Gap Inc (NYSE:GPS - news) reports later in the day.

By 0950 GMT, U.S. stock futures were showing gains of between 0.4 and 0.5 percent for the three main indexes , with spreadbetters in London forecasting decent gains.

-cut-

"There are strong echoes of 1987 to the extent that you have a new man at the Fed, you have slight inflationary pressures, you have rising bond yields, you have a falling dollar ... you have soaring commodity prices, and equity markets have risen an awful long way in a fairly short space of time," said Richard Cookson, head of asset allocation research at HSBC.

more

different this time. :eyes:

"The difference this time is that profits have been an awful lot stronger. In other words, markets then were pushed up by rising multiples, rather than rising profits."

And most of those profits are a result of????

HOUSTON (AP) - It's the same judge in the same courthouse but no jury this time as Enron founder Kenneth Lay goes on trial again today in a fraud case involving his personal banking.

Lay's latest trial comes as a federal jury continues deliberating in the fraud and conspiracy case against him and former Enron chief Jeffrey Skilling connected to Enron's sudden collapse.

very short

General Motors Corp. said Wednesday that its two top officials in charge of accounting were leaving the company, following a series of accounting mistakes and federal investigations that had cast doubt on the accuracy of GM's financial reports.

GM also said it was hiring Southfield-based AlixPartners LLC, the firm most known for guiding troubled and bankrupt companies, to bolster its financial controls.

The moves sent GM's stock down 4.2% as investors were startled by another turbulent day at what had long been considered one of the strongest financial organizations in the history of business. One analyst said that although the news did not suggest further problems at GM, the company owed Wall Street a full explanation.

http://www.freep.com/apps/pbcs.dll/article?AID=/20060518/BUSINESS01/605180377/1014

Toles rules!

And now it's off to work. Whee!:-)

NEW YORK (CNNMoney.com) - You don't need to be in the market to buy or sell a home to be affected by the cooling housing market.

Economists, investors and the Federal Reserve are watching home building and home sales carefully because the sector has reached so far throughout the economy in recent years, lifting all manner of consumer spending and economic activity.

-cut-

Even if prices don't fall, even if there is no housing bubble about to pop, the cooling real estate market will be felt by many of those who may not be thinking about real estate prices.

"It's going to be very similar to the stock bubble, but even more so. Many who didn't own stock lost their job when the market plummeted," said Dean Baker, co-director of the Center for Economic and Policy Research, and one of those who believes housing prices have resulted in an asset bubble ripe for a correction.

http://money.cnn.com/2006/05/16/news/economy/housing_impact/index.htm

We met in his home in Cambridge, Mass., in an upstairs study, on a stifling late-summer day. His wife, Catherine, brought us glasses of ice water as Galbraith folded his 6-foot 8-inch frame into a padded armchair. A basket of prescription-drug vials had been placed nearby. At 92, Galbraith still spoke clearly. But with pauses. Frequent pauses.

-cut-

It has been pointed out since Galbraith's death in April at age 97 that he was never viewed as an economist's economist. On the shortlist of the last century's most influential thinkers - John Maynard Keynes, Milton Friedman, Paul Samuelson, and Gary Becker, among others - he doesn't hold a place. Yet this misses the point: Galbraith is on a different shortlist.

His most durable insights were in the realm of social commentary, informed by an understanding of market behavior, global history, and his own service in government. That's what made Galbraith worth reading. He was proven wrong by some colleagues on his interpretation of various economic phenomena.

-cut-

His point was never that wealth was bad. His point was that poverty in a country of unimaginable riches was something that should trouble us. I asked that day about his greatest hope for America. "My greatest hope would be for a more equitably rewarded people," he replied. Then he paused again and quickly added, "From the bottom up."

http://money.cnn.com/magazines/fortune/fortune_archive/2006/05/29/8378029/index.htm

:donut: While JKG may not have been on the eCONomist's short list of influential thinkers-he was on an even shorter list, an articulate economist that did not forget Main St or the folks relegated to the back alleys and over the other side of the rail road tracks.

Folks that have no compassion have a hard time understanding why public persons can be beloved by the 'unwashed masses'. Take FDR for instance. That man and the programs he came up with saved many a folk and made life a little easier for those less fortunate. When he died, there were real tears shed. The number of people that turn out for the funeral train car was amazing. And take Paul Wellstone's death and funeral. The man was beloved and there was a mass of ordinary folks there to pay their last respect. The GOP cynically twisted this genuine display of affection into an unruly mob scene.
Now let's take the latest GOP equivalent Ronald Reagan. OK, I thought he was personable enough, and when he did find out that shenanigans were going on (Iran Contra) he took a little bit of action. And I do feel badly that he died of Alzheimer's, I would wish it on any one-even Dubya (even though I know the odds of him getting it are very high). But I think that much of what he did was destructive to the middle class so I was not too move by the orgy of grief I was forced to watch but I kept my mouth shut out of respect. I cried more over Ray Charles' death.

Yes JKG was a beloved economist, and you can't say that about too many of those folks.

Happy hunting and watch out for the bears.

For that, and only that (bottom-up) reason, out here in the real world, we still love (hold out hope for) what you call "America".

A pesar de todo...

We are going through some hard times here. I can't tell if we have lost our way or have been lead astray. One thing I am certain of....we are not being told the truth and the media is complicite. We are being distracted and divided to the point we no longer remember what we mean to the rest of the world. It is hard to make good choices when you don't have the facts. When you go through America, through the back roads and small towns, you discover that as a whole, America really does have a greatness of heart, a kind spirit, and a generous soul. I hope we can find our way back.

Si, a pesar de todo....a pesar de todo...a pesar de todo.

Punto.

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

Last trade 84.70 Change -0.06 (-0.07%)

CPI report increases pressure on the Federal Reserve to tighten more 25 basis points.

http://www.dailyfx.com/story/dailyfx_reports/top_fx_market_movers/CPI_report_increases_pressure_on_1147911539038.html

The dollar rallied across the board in the NY trading session after a report from the Bureau of Labor Statistics on U.S. consumer prices showed higher than expected inflationary pressures. Consumer prices rose 0.6% in April, as higher gasoline prices pushed up energy costs. Consumer prices excluding food and energy remained firm at 0.3%. This report increased the pressure on the Fed to tighten yet another 25bp. According to the Eurodollars futures contracts, the probability that the Federal Reserve will raise interest rates at its June meeting rose to as high as 54 percent from 36 percent calculated at the close on Tuesday.

Earlier, in Asian session hours, the USDJPY was enjoying a steady move higher, but momentum driven accounts and large offers around 110.00 rapidly pushed the currency to a 108.97 low. Japanese exporters bought the yen on its lows and the NY session started with the USD/JPY trading steadily higher, breaking options barriers and triggering stops all the way until 111.32.

From a technical stand point the USD/JPY initiated this move by accelerating above the 200 hours SMA and breaking trough the bearish channel acknowledged since May 7th. The currency pair is now consolidating around 110.99, both the May 8th low and the 23.6% retracement of 108.99-118.69.

...more...

Expect a Choppy US Dollar Correction

http://www.dailyfx.com/story/dailyfx_reports/daily_technicals/Expect_a_Choppy_US_Dollar_1147950193047.html

EUR/USD – It appears as if the pair has completed the first corrective wave as a zigzag from 1.2970 to 1.2700. Current price is resisted by the 38.2% of 1.2970-1.2700 at 1.2803. The current rally is a correction of the larger correction but it is possible that it trades all the way to the confluence of the 61.8% fibo of 1.2970-1.2700 / downward sloping trendline from 1.2970 at 1.2866 before resuming the larger corrective move (of the uptrend). A break above 1.2866 would negate these bearish implications and probe the 1.2970 high. Also of note is that the pair closed below the 10 day SMA yesterday for the first time since 4/14 – price then was at 1.2111.

<snip>

USD/JPY – USD/JPY made one more leg down before correcting back towards 111.00 and breaking it to nearly challenge the 5/11 high at 111.55. Like EUR/USD the drop from 111.33 is a correction of a correction and will likely be slow choppy. Immediate supports are at the 38.2% and 61.8% fibos of 108.96-111.33 at 110.43 and 109.88. Further, yesterday’s large outside day supports a material correction – to possibly the 38.2% or 50% fibos of 118.87-108.96 at 112.75 or 113.91. Immediate resistance is at the confluence of the 23.6% fibo of the decline from 118.87 / 5/17 high at 111.29/33.

<snip>

USD/CAD – USD/CAD was rejected at 1.1165 tonight – a resistance zone we described yesterday that was fortified by the “23.6% fibo of 1.1771-1.0969 / 5/2, 5/9, 5/15 highs / 20 SMA”. There is compelling evidence that we are very close to an interim end in this long decline. Long advances and declines can be broken into 5 waves. Dividing the wave near the end of a corrective 4th wave often projects the end of the decline (or advance) by a Fibonacci multiple (.382 or .618). The chart below shows that we are very close to the 131.8% fibo. However, a break below 1.0897 would suggest that the end of the decline is not until the 161.8% fibo at 1.0373 (calculations on the chart).

...more...

Tomorrow's Economic Releases: BoJ Commentary Could Set Yen Straight

http://www.dailyfx.com/story/calendar/key_events/Tomorrow_s_Economic_Releases__BoJ_Commentary_1147910842368.html

Japan BoJ Monetary Policy Meeting (May 18-19)



Outlook: The Bank of Japan will meet this week to discuss the current results of decreasing the current account deposit balance. BoJ Governor Toshihiko Fukui stated earlier this month that the liquidity drawdown may be completed within a few weeks. Analysts expect that the BoJ will upgrade their assessment of the economy to “expanding” for the first time in almost 15 years. While the bank is expected to leave interest rates near zero this week, investors began speculating a rate hike during the June 14-15 meeting. Fukui downplayed this rumor by announcing that the central bank will not immediately begin raising rates following an end to excessive liquidity. Traders will listen closely to comments made after the meeting to determine when a shift from a zero interest rate policy may occur.

Previous: On April 28th, the Bank of Japan raised their projections for growth, up to 2.4% for this fiscal year and 2.0% next year. The BoJ stated that inflation will accelerate as consumer prices increased for a fifth month in March. They expect inflation to accelerate over the next two years, supporting speculation of interest rate hikes. Governor Fukui stated that a shift from the zero interest rate policy would occur in prices continued to rise with steady economic recovery. The board will keep a keen eye on economic releases suggesting any shifts back towards deflation. As expected, the central bank will continue draining excessive funds available in the market while maintaining a zero interest rate policy.

<snip>

US Leading Economic Indicators (APR) (14:00 GMT; 10:00 EST)



Consensus: 0.1%

Previous: -0.1%



Outlook: The Conference Board's is expected to report a 0.1% growth on the Leading Economic Indicator for April which is a 0.2 percent increase from March’s negative 0.1 percent print. The indicator is a measure of current and future economic activity and may suggest that higher borrowing costs, record energy costs and a slowing housing market continue to weigh significantly on consumer spending which could in turn slow in the world's largest economy. On the positive side, manufacturers' new orders for non defense capital goods and average weekly initial claims for unemployment insurance should account for a small improvement in the indicator. The Institute for Supply Management rose to 60.4 in April from 57.5 the previous month.

Previous: The March leading indicators index fell 0.1 percent in March and the February's release was revised down to 0.5 percent. Five of the ten indicators that make up the leading index increased in March. The coincident index increased 0.2 percent and the lagging index increased 0.3 percent in March. The largest positive contributor for the leading index was vendor performance. Other encouraging components were stock prices, index of consumer expectations, manufacturers' new orders for consumer goods and materials, and interest rate spread.

...more...

By The Copenhagen Post
The weakened US currency will continue to slide past previous lows, experts predict, shaving Danish companies' profits

Question marks surrounding the value of the dollar could spell problems for major companies that trade heavily with the US.

From a 2002 high of DKK 8.50, the dollar has tumbled to DKK 5.80 in the past week, a trend that will probably continue, according to analysts.

'We have to test the all-time low of DKK 5.50 and we'll probably go through that level,' said Niels From, a former currency expert for Danske Bank.

The fall would hit a number of Danish firms, such as A.P. Møller-Mærsk, Novo Nordisk and Lundbeck especially hard, as their business activities are closely linked to the dollar.

http://www.jp.dk/english_news/artikel:aid=3738680/

Last trade 84.43 Change -0.33 (-0.39%)

Settle Time 15:00 Open 84.75

Previous Close 84.76 High 84.98

Low 84.36 2006-05-18 09:50:09, 30 min delay

1:50
yen 110.8200
euro 0.7801
loonie 1.1204

3:43
$1 =
¥en 110.9950
Euro 0.7798
Can$ 1.1209

http://www.nytimes.com/2006/05/18/business/18tenet.html?ex=1305604800&en=55eac3288397dd53&ei=5088&partner=rssnyt&emc=rss

(free registration or try www.bugmenot.com)

The Tenet Healthcare Corporation said yesterday that it had agreed to pay $21 million in a civil settlement with federal prosecutors in California to resolve long-running criminal charges of kickbacks to doctors.

The deal comes after two federal juries deadlocked on criminal charges involving Alvarado Hospital, run by Tenet in San Diego. Last week, the federal Medicare agency threatened to bar the hospital from government insurance programs.

While the Alvarado settlement removes an obstacle for the company, Tenet's troubles with the government are not over. A much bigger case is the Justice Department investigation of Tenet's Medicare billing.

Steven Campanini, a Tenet spokesman, said the San Diego settlement would let the company focus on settling the broader case. "The deal enables Tenet to continue talks with the federal government for a potential global settlement, and we are optimistic we will reach an agreement soon," he said.

As part of the deal with the United States attorney in San Diego, Tenet will sell or close the hospital.

...more...

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-18T145323Z_01_WAT005587_RTRIDST_0_ECONOMY-FED-BERNANKE-MORTGAGES-URGENT.XML

CHICAGO, May 18 (Reuters) - Federal Reserve Chairman Ben Bernanke on Thursday said that the Fed has concerns about the proliferation of products such as adjustable rate and no-money-down mortgages, and how developing market conditions will affect such products.

Non traditional mortgages have proliferated during the years-long U.S. residential housing boom.

Some 30 percent to 40 percent of new mortgages were non-traditional types in 2005, Bernanke said while answering audience questions after a speech on banking regulation.

...more...

Lacker says not to stifle what Chopper Ben worries about :crazy:

Dow 11,240.27 +34.66 (+0.31%)
Nasdaq 2,211.65 +15.85 (+0.72%)
S&P 500 1,273.90 +3.58 (+0.28%)
10-Yr Bond 5.115 -0.38 (-0.74%)

NYSE Volume 80,215,000
Nasdaq Volume 84,827,000

9:42 AM ET 5/18/06 JUNE GOLD CLIMBS $2.20 TO $694/OZ AFTER $695 HIGH

9:42 AM ET 5/18/06 JULY SILVER FALLS 3C TO $13.21/OZ IN MORNING TRADING

9:42 AM ET 5/18/06 JULY COPPER RISES 4.85C, OR 1.3%, TO $3.72/LB

Buying Opportunity!

And the dollar is dropping. This makes no logical sense. Either this market is completely controlled or people expect all industrial use of silver to disappear because of a depression.

So, it's only up 33% in the last 2 months. I can live with that.

For anyone who bought Silver for under $10, this is just a hiccup. Fear not, it will rise again. This economy is not going anywhere positive anytime soon. It's a matter of time.

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_berry&sid=aoJUHBZHGl5M

snip>

The official title of the bill, which President George W. Bush proudly signed into law yesterday, is ``The Tax Increase Prevention and Reconciliation Act of 2005.'' It cuts taxes by roughly $70 billion over the next 10 years.

Nevertheless, Republican Senator Charles Grassley of Iowa, chairman of the Senate Finance Committee, argued the legislation really only extends some parts of the tax code that have expired or would later.

``So I don't want anybody to come over and say we are cutting taxes,'' Grassley said.

The new legislation is really a stop-gap measure that settles nothing for the longer term. Still, it reduces taxes significantly, and that's a tax cut except in the land of make believe.

The bill's principal provisions involve tax rates on income from dividends and capital gains and the income thresholds at which taxpayers are subject to the alternative minimum tax. In another bit of make believe, the rates were set to expire in the first place because neither Bush nor a majority of the members of Congress was willing to own up to the amount of lost revenue if they were made permanent.

more...

I'm thinking they know damn well there's a lot of inflation coming down the pipe. Why else cut capital gains taxes at the risk of even higher deficits at a time when the "deficits don't matter" mantra is being proven the fallacy it always was? They are into Reaganomics, and what does Wanniski preach about capital gain taxes vs inflation? The markets have become our economy thanks to the de-industrialization/financialization of the Greenspin era. I'm thinking these idiots truely believe that all they have to do is protect the market - everything else is immaterial to them. :hurts:


http://www.gold-eagle.com/editorials_00/wanniski120400.html

snip>

If you think back, Bob, the 1986 Tax Act the previous year sharply lowered marginal tax rates, but also raised the capital gains tax to 28% from 20% and left capital gains without the protection against inflated gains that indexing would have provided. In February 1987, though, Treasury Secretary Jim Baker III -- the same fellow who is representing George W. Bush in the Florida recount escapades -- signed an agreement with our major trading partners to keep the dollar/D-mark/yen rates stable. It all happened in Paris, so it was called the Louvre Accord. If we were going to keep currencies stable, there would be much less chance for inflation, so it would be no big deal that dollar capital gains were not protected against inflation. In case you don’t know, there is no worse combination than a high capital gains tax and inflation. Even Alan Greenspan would tell you that, if you bothered to ask. That’s because it takes some years for most investments to produce a capital gain, and if the tax rate is 28% on the gain, and most of the gain is nominal or just a monetary inflation of the original investment, the government essentially confiscates the capital. Knowing that’s what happens, investors don’t invest, and in fact sell equities.

allowing one the opportunity of converting 401's to Roth's. Frankly I would love to do that as I know the tax rates will surly have to go up to pay down the debt and Roth's are sheltered partially as of now. Can any of you Wiz's out there give me some info (esp a down side).

raising your hometown. Cutting short, for no reason, your childrens' beautiful lives.

Peace & Love,

Right now as they are rewriting the tax codes-the average middle class (or lower) is bearing an increasingly disproportionate amount of tax burden. We are paying for the wealthy's tax break. Well, the bill for the deficit will come due and unless things change-all of the lower and middle class will be taxed out of existence.

I have notice an big increases in my own taxes and trust me, I don't have much (not even my own home at this point). The last thing I need (or any other person facing retirement) is for the government to grab any more than they already are. That little nest egg has to last a long time. I don't mind paying taxes for schools, infrastructure, etc, but it really chaps me that this money is going to Halliburton's bottom line via no bid military contracts.

First I have been encouraged to put money in tax deferred 401's (which consequently lowers you Social Security income annual average). And now Bush spends like a drunken sailor on shore leave leaving me and others about to retire to pay an astronomical amount of taxes on these tax deferred accounts. On a Roth (if memory serves), you pay taxes up front and only pay taxes on what your Roth gains. I would rather pay at today's lower rate than tomorrows God know what on the 401. In a Roth, at least the principle would be safe from future taxing. There were some conditions to rolling over a 401 into a Roth and I was hoping someone might know something about this.

GD, I don't know the depth of your knowlege on the US tax codes, but all I am trying to do is not be a burden on my family in my declining years. I don't have mega buck-I count on every dollar.

10:34
Dow 11,213.37 +7.76 (+0.07%)
Nasdaq 2,205.52 +9.73 (+0.44%)
S&P 500 1,271.77 +1.45 (+0.11%)
10-Yr Bond 51.03 -0.50 (-0.97%)
NYSE Volume 543,971,000
Nasdaq Volume 471,839,000

10:30 am : Little has changed since the last update as investors sift through another piece of uneventful economic news. The April index of leading indicators fell 0.1% as the March index was revised significantly higher to a 0.4% gain from the 0.1% decline first reported. However, much like the muted response following initial claims data hitting the wires earlier, The Conference Board's report -- a compendium of previously announced economic indicators -- has had little impact on trading. DJ30 +16.90 NASDAQ +12.17 SP500 +2.83 NASDAQ Dec/Adv/Vol 926/1744/440 mln NYSE Dec/Adv/Vol 1011/1865/370 mln

Correspondent, Becky Barrow, today:

"NEARLY £45 billion was wiped off share values yesterday after the London Stock market suffered its worst fall for almost four years.

The FTSE index of of Britain's 100 biggest companies collapsed 170 points as bad economic news from the US triggered panic. (snip)

Perhaps not Armageddon, but market conditions look decidedly uncomfortable having taken their lead from a panic-stricken Wall Street. It was triggered by severe inflation data in America coupled with heavy falls in base metal prices. (snip)

Overall nearly £100 billion has been wiped off the stock market since Thursday."

Strange thing is that when inflation rates are relatively high - as they tended to be under socially-responsible Socialist policies -the mass of the people are always better off than when they are low, under far right Governments. Low interest-rates ordinarily signify anything but an Eldorado for the people.

Predictably, with the far right, however, we are now suffering the worst of both worlds; not wholly unassociated, of course, with what is invariably their ultimate trade-marks of war and depression.

£100 billion = One hundred thousand million Pounds (once) Sterling: American, not S.U...

-->

£100,000,000,000 :eyes:

12:13
Dow 11,223.80 +18.19 (+0.16%)
Nasdaq 2,203.27 +7.47 (+0.34%)
S&P 500 1,271.67 +1.35 (+0.11%)
10-Yr Bond 50.99 -0.54 (-1.05%)
NYSE Volume 1,124,521,000
Nasdaq Volume 931,044,000

12:00 pm : Market is still struggling midday to find much conviction on the part of buyers to sustain today's rebound. While a sense that yesterday's sell-off was overdone renewed some enthusiasm for stocks and helped bonds regain some noticeable upside momentum, lingering concerns that accelerating inflation will lead to more rate hikes continue to act as an overhang and keep market gains at a minimum. The yield on the 10-yr note has fallen to 5.09%.

With regard to sector strength and weakness, Technology continues to provide the bulk of early leadership, supported largely by a 1.1% gain in Computer Hardware. The group is benefiting from follow-through buying in Hewlett-Packard (HPQ 32.86 +0.70), which was upgraded by Morgan Stanley, and a rebound in Dell (DELL 24.05 +0.42) ahead of its Q1 report after the bell. With the tech-heavy Nasdaq turning negative yesterday and down 7 days in a row, it is attracting more bargain hunters than the blue chips but not enough to offset an unwinding of the excess optimism that has been built into the market.

Consumer Discretionary is also lending some support, led by strength in Dow component Home Depot (HD 38.42 +0.41), which is up more than 1.0% after expanding its stock buyback program by $2.0 bln. Retailers are also getting a lift from strong earnings reports. Sears Holdings (SLHD 155.17 +17.21) handily topped analysts' forecasts, Limited (LTD 26.79 +1.49) beat expectations by $0.06 and Gymboree (GYMB 34.04 +1.09), a suggested holding in our Active Portfolio, more than tripled Q1 profits and raised its FY06 EPS outlook.

However, the lack of leadership from Financials, Health Care and Industrials -- three of the four most influential sectors with a combined weighting of 45.6% on the S&P

Has 28 projects in the pipeline from Moscow to Mumbai

SHIRLEY WON

Four Seasons Hotels Inc. should benefit from the robust demand for luxury travel as it pursues global expansion, and enters into new territory such as Russia and India, its chief executive officer says.

"We are just getting into those markets," Isadore Sharp said in an interview yesterday after the hotel chain's annual shareholders meeting. "It's a growth program based on opportunities that arise."

Four Seasons, which runs 70 luxury hotels and resorts, has 28 projects in the pipeline. They include one in Mumbai and two in Moscow -- a larger one on Red Square and smaller, boutique-style hotel opposite the Kremlin.

The strong demand in the high-end travel market was reflected in the Toronto-based chain's better-than-expected first-quarter results announced last week.

http://www.theglobeandmail.com/servlet/story/LAC.20060518.RFOUR18/TPStory/Business

see, business is booming, or at least it is on the luxury end of the spectrum

I remember a few months ago - Zales (main street jewelery store) reported a 25% loss in same store sales over a year. Meanwhile, Tiffany's (shee-shee) reported a 40% increase over the same period.

Dow 11,215.43 +9.82 (+0.09%)
Nasdaq 2,202.95 +7.15 (+0.33%)
S&P 500 1,271.18 +0.86 (+0.07%)
10-Yr Bond 50.85 -0.68 (-1.32%)
NYSE Volume 1,261,307,000
Nasdaq Volume 1,034,701,000

12:30 pm : No real change to the prevailing trend as the market shows little reaction to the week's last scheduled economic report. At the top of the hour, the Philadelphia Fed's regional manufacturing index unexpectedly rose 1.2 pts to 14.4 in May from 13.2 in April. However, the gain came despite a drop in new orders to 2.7 and employment to 1.1 as shipments (sales) fell to 11.7. Even though the prices paid component - the cost of materials needed - soared to 55.3 from 29.0 and looks inflationary, since the report does not fit in with the "incoming" data that the Fed depends on to dictate monetary policy, the market has so far shrugged off the report. DJ30 +0.48 NASDAQ +4.89 SP500 -0.05 NASDAQ Dec/Adv/Vol 1228/1686/978 mln NYSE Dec/Adv/Vol 1259/1835/876 mln

1:46
Dow 11,221.71 +16.10 (+0.14%)
Nasdaq 2,204.85 +9.06 (+0.41%)
S&P 500 1,272.50 +2.18 (+0.17%)
10-Yr Bond 50.91 -0.62 (-1.20%)
NYSE Volume 1,488,025,000
Nasdaq Volume 1,221,422,000

1:30 pm : More of the same for stocks as market internals only suggest a modestly positive tone to trading. As reflected in the A/D line, advancers on the NYSE outpace decliners by a 17-to-13 margin while those on the Nasdaq only hold a 4-to3 edge. The lack of conviction on the part of buyers becomes even more clouded as a split ratio of up to down volume paints more of a mixed picture. DJ30 +19.12 NASDAQ +8.21 SP500 +2.29 NASDAQ Dec/Adv/Vol 1287/1662/1.18 bln NYSE Dec/Adv/Vol 1373/1789/1.0 bln

1:00 pm : Stocks regain some momentum within the last 30 minutes, perhaps finding some comfort from recent Fed speak which helps offset earlier hawkish commentary from Richmond Fed President Lacker about rising inflation expectations and the possibility of a pause now less likely. St. Louis Fed President Poole recently said that real interest rates are returning to more normal levels and that the Fed policy path and the market's view of that path are not misaligned; "Fed decisions will evolve on new data."DJ30 +24.09 NASDAQ +8.11 SP500 +2.42 NASDAQ Dec/Adv/Vol 1320/1611/1.09 bln NYSE Dec/Adv/Vol 1393/1750/978 mln

3:40
Dow 11,152.70 -52.91 (-0.47%)
Nasdaq 2,186.41 -9.38 (-0.43%)
S&P 500 1,264.76 -5.56 (-0.44%)
10-Yr Bond 50.73 -0.80 (-1.55%)
NYSE Volume 2,163,774,000
Nasdaq Volume 1,779,075,000

3:30 pm : Indices spike lower going into the close and now trade at their lowest levels of the day, as the unwinding of the excess optimism which last week had the Dow flirting with all-time highs continues. Aside from further deterioration in the influential Financial, Health Care and Industrials sectors weighing most heavily on equities, the absence of leadership from Technology removes what little support buyers were hoping might help keep a modest rebound intact.DJ30 -36.33 NASDAQ -5.15 SP500 -3.92 NASDAQ Dec/Adv/Vol 1473/1575/1.67 bln NYSE Dec/Adv/Vol 1458/1752/1.50 bln

3:00 pm : Major averages now trade in split fashion as six of ten economic sectors now trade lower. Consumer Staples and Materials recently slipping into negative territory are two of the more obvious sources of weakness, but Energy's inability to take advantage of a 1.1% rebound in the price of crude merely adds to the lingering concerns about building inflationary pressures slowing profit growth in leadership areas like refiners, drillers and explorers.DJ30 -5.53 NASDAQ +3.88 SP500 -0.25 NASDAQ Dec/Adv/Vol 1395/1618/1.49 bln NYSE Dec/Adv/Vol 1334/1878/1.36 bln

DJIA 11,128.29 -77.32 -0.69%
Nasdaq 2,180.32 -15.48 -0.70%
S&P 500 1,261.81 -8.51 -0.67%
Gold future 680.90 -10.90 -1.58%
30-Year Bond 5.18% -0.09 -1.78%
10-Year Bond 5.07% -0.08 -1.55%

blather to follow

4:20 pm : What was shaping up to be a respectable bounce in the aftermath of yesterday's broad-based drubbing lost steam going into the close, as many of the market leaders behind this year's early stock rally succumbed to more aggressive profit-taking.

Before the bell, a sense that Wednesday's CPI-induced sell-off was overdone renewed some enthusiasm for stocks and even helped bonds regain some noticeable upside momentum. To wit, the yield on the 10-yr note fell 8 basis points to 5.06% after Richmond Fed President Jeffrey Lacker told reporters that, "containing inflation has to be the primary focus." Nevertheless, the rate-sensitive Financial sector's failure to take advantage of a welcomed decline in borrowing costs merely exacerbated lingering concerns about building inflationary pressures slowing economic expansion and potentially ending 11 straight quarters of double-digit profit growth. Energy's inability to take advantage of a 1.1% rebound in the price of crude also added to the market's apprehension and growing realization that Energy sector profits are unlikely to increase at the same pace as over the past year. Adding to today's struggles to keep sellers on the sidelines for the first time in several sessions was the inability by the Dow, S&P and Nasdaq to find support above key technical levels of 11174, 1267 and 2189, respectively.

The Dow initially found some modest support from Home Depot (HD 38.41 +0.40), which expanded its stock buyback program by $2.0 bln, and Hewlett-Packard (HPQ 32.48 +0.32), which was upgraded by Morgan Stanley. However, the temptation to lock in more gains, especially from three of the biggest reasons the Dow flirted with all-time highs last week -- Boeing (BA 82.73 -1.04), Caterpillar (CAT 74.62 -1.29) and United Technologies (UTX 62.66 -1.09) -- weighed heavily on the price-weighted index.

The Nasdaq got an early boost from Dell (DELL 23.95 +0.32), ahead of its Q1 report after the bell, Sears Holdings (SHLD 155.85 +17.89), which handily topped analysts' forecasts, and the chance that an unwinding of the excess optimism that had pushed the tech-heavy index into negative territory a day earlier might be over. In the end, though, bargain hunters were outnumbered as the Composite extended its losing streak to 8 straight days. BTK -2.1% DJ30 -77.32 DJTA -0.9% DJUA +0.2% DOT -0.6% NASDAQ -15.48 NQ100 -0.7% R2K -1.0% SOX -0.9% SP400 -0.9% SP500 -8.51 XOI -1.0% NASDAQ Dec/Adv/Vol 1895/1147/2.07 bln NYSE Dec/Adv/Vol 2014/1219/1.83 bln

that's a hell of a skid mark.

dp