STOCK MARKET WATCH, Thursday 10 August

TUG OF WAR WITH INFLATION AND THE ECONOMY
LIKELY TO CONTINUE TO WEIGH ON FUTURE FED DECISION

As expected, the Federal Reserve went on pause yesterday, though throwing in the statement that “some inflation risks remain.” The decision to pause was not unanimous as Mr. Lacker of the Federal Reserve Bank of Richmond cast a dissenting vote, wanting to raise the federal funds rate to 5.50%. The markets initially responded favorably, but with the Fed not ruling out another rate hike, the sense of finality investors had hoped for never materialized. The DJIA fell from a post-Fed decision reaction high of 11276.13 to close at 11,173.59, falling more than 100 points and down just under half a percent on the day.

Going forward there are still concerns that the Federal Reserve must keep an eye on: housing and inflation. The Fed acknowledged both a slowing economy due to a housing slowdown as well as rising inflation. Evidence of a housing slowdown continues to pile in. Residential investment expenditures fell 6.3% in the second quarter, the third straight and largest quarterly decline.

-cut-

The slowing seen in housing is beginning to trickle through the economy as real GDP in the 2nd quarter was only 2.5%, with GDP revisions reducing nearly 25 basis points from annual real GDP growth during the nearly five-year expansion since 2001. Here are a few further sources of a slowing housing market. Home sales are off 10% from their peak last summer, unsold inventories have soared to a new record, construction spending is decelerating after peaking in early 2004, and the national median home price has decelerated sharply from the peak seen in 2005 (see charts below).

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

8:30 AM Initial Claims 08/05
Briefing Forecast 310K
Market Expects 315K
Prior 315K

8:30 AM Trade Balance Jun
Briefing Forecast -$64.8B
Market Expects -$64.5B
Prior -$63.8B

2:00 PM Treasury Budget Jul
Briefing Forecast -$33.0B
Market Expects -$35.0B
Prior -$53.4B

8:30 AM ET 8/10/06 AVERAGE PRICE OF U.S. IMPORTED OIL SETS RECORD IN JUNE

8:30 AM ET 8/10/06 U.S. JUNE TRADE GAP WITH CHINA $19.7 BLN

8:30 AM ET 8/10/06 U.S. CONTINUING JOBLESS CLAIMS UP 48,000 TO 2.48 MILLION

8:30 AM ET 8/10/06 U.S. MAY TRADE GAP REV $65.0 BLN VS $63.8 PREV EST

8:30 AM ET 8/10/06 U.S. 4-WEEK AVG INITIAL JOBLESS CLAIMS FALL 3,750 TO 308,750

8:30 AM ET 8/10/06 U.S. JUNE TRADE GAP ABOVE CONSENSUS OF $64.5 BLN

8:30 AM ET 8/10/06 U.S. INITIAL JOBLESS CLAIMS RISE 7,000 TO 319,000

8:30 AM ET 8/10/06 U.S. JUNE TRADE GAP NARROWS 0.3% TO $64.8 BLN

10:30 AM ET 8/10/06 NATURAL-GAS SUPPLIES DOWN 12 BCF IN LATEST WEEK - DOE

2:00 PM ET 8/10/06 U.S. BUDGET DEFICIT $239.7 BLN YEAR-TO-DATE, DOWN 20.8%

2:00 PM ET 8/10/06 U.S. JULY BUDGET OUTLAYS DOWN 1.3% TO $193 BLN

2:00 PM ET 8/10/06 U.S. JULY BUDGET RECEIPTS UP 12.4% TO $159.8 BLN

2:00 PM ET 8/10/06 U.S. JULY FEDERAL BUDGET DEFICIT $33.2 BLN, AS EXPECTED

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B06E7B98E%2D936B%2D4BC0%2DA31C%2D6EC537B37A4F%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - The federal government ran a $33.2 billion deficit in July, the Treasury Department reported Thursday. The deficit was down 38% from the deficit of $53.4 billion reported in the same month last year. The federal deficit was in line with the estimate released earlier this month by the Congressional Budget Office. For the fiscal year so far, the deficit is down 20.8% to $239.7 billion from $302.8 billion in the same period last year. For the year, the Bush administration estimates the deficit will shrink to $295.8 billion from $318.5 billion. In July, receipts increased 12.4% to $159.8 billion from July 2005. Outlays fell 1.3% to $193.0 billion.

SINGAPORE - Crude oil prices changed little Thursday as the market remained wary of factors influencing supply in the United States, Africa and the Middle East.

Light, sweet crude for September delivery rose 9 cents to $76.44 a barrel in midafternoon Asian electronic trading on the New York Mercantile Exchange. A day earlier, prices had risen as high as $77.44 — less than a dollar away from the trading record of $78.40 reached July 14.

-cut-

Wednesday's increases came after the U.S. government reported drops in crude, gasoline and distillate fuel inventories — aggravating concerns about a supply shortage from the shutdown of a major pipeline in the U.S. state of Alaska.

Prices also continue to be inflated by ongoing unrest in Nigeria, Africa's biggest oil producer; the standoff between the United Nations and Iran over the No. 2 oil producer's nuclear program, and fighting in the Middle East between Israel and Hezbollah, which further threatens to disrupt production in the region.

more

ANCHORAGE, Alaska - BP PLC said it is working with a number of suppliers in hopes of quickly amassing materials needed to replace 16 miles of aging oil pipes on Alaska's North Slope.

BP is taking steps to replace the pipelines after a small leak and severe corrosion in one part of the pipes prompted the company to shut down the nation's largest oil field.

-cut-

"BP is going to spare no expense to put the situation right and to ensure the safety of the pipeline," BP spokesman Scott Dean said Wednesday.

BP has approached Japan's JFE Steel Corp. and other steel producers about buying 18-inch pipe to replace the corroded sections at Prudhoe Bay, said David Belvin, senior technology manager of sales and service at JFE's Houston office.

more

:rofl: Yeah, right! In "Oilese" that means, "we will gouge our customers as much as is needed to put the situation right". Like the money is going to come out of THEIR pockets! :eyes: They'll drill into OUR wallets to pay for THEIR fuck-ups and STILL have record profits again this quarter. :grr: How stupid do they think we are?

http://www.chron.com/disp/story.mpl/business/4106789.html

BP received warnings more than two years ago about corrosion problems in its Prudhoe Bay pipeline system in letters written on behalf of company whistle-blowers and a survey commissioned by the company.

Charles Hamel, a Virginia-based consultant who has long been a conduit for BP worker complaints, wrote to BP board member Walter Massey on May 22, 2004, saying engineers in BP's Alaska operations felt there was mismanagement of the company's corrosion inspection division.

In the letter Hamel provided to the Chronicle, he said the BP engineers " ... expect (not just fear) a catastrophic event at BP Prudhoe facilities," referring to the 22-mile pipeline system BP said this week it was shutting down because of corrosion.

And a 2003 BP survey of anonymous employees, contractors and local officials posted on its Web site elicited concerns about pipeline safety at its Alaskan operations.

An employee who was surveyed described how BP maintained the Prudhoe Bay system by saying: It "will run it until it is corroded, then decommission and replace the pipe. My concern, however, is that they are not taking a look at every piece of pipe that they need to be."

more...

BP'S WOES over the partial shutdown of its Prudhoe Bay oilfield in Alaska worsened last night when Alaska governor Frank Murkowski opened an investigation into the British company's handling of its pipeline corrosion problem and said he might demand compensation for lost tax revenues that could reach $1.3bn (£682m).

Corrosion in the field's feeder pipelines forced BP to halt production there on Sunday, halving its output of 400,000 barrels a day, which accounts for 8% of US oil production.

'We will hold British Petroleum accountable for past and future field management decisions,' Murkowski told Alaska's legislature.

Alaska is expected to lose $6.4m a day in tax income during the Prudhoe Bay shutdown. With the stoppage now expected to last to January, that suggests a shortfall in tax revenues that could rise tomore than $1.27bn.

http://www.thisismoney.co.uk/news/article.html?in_article_id=411580&in_page_id=2

10:49 AM ET 8/10/06 CRUDE FUTURES DIP BELOW $75 TO $74.85 A BARREL

So which is it?

Oil goes up with terra?

Oil goes down with terra?

2:18 PM ET 8/10/06 CRUDE FUTURES ON TRACK TO END AT NEAR TWO-WEEK LOW

2:16 PM ET 8/10/06 CRUDE FUTURES FALL UNDER $74 A BARREL

LONDON (Reuters) - Wall Street shares are set to open lower on Thursday, extending the previous session's losses, after a foiled plot to blow up transatlantic flights shook European markets.

The U.S. government raised the security threat level for all commercial aviation in coordination with British security, with flights originating in the UK being raised to "severe," or red, the highest U.S. threat level and an unprecedented move in its war on terror.

"It inevitably has an impact; it raises the specter of terrorism once again," said Jonathan Monk, fund manager at Aerion Fund Management in London.

"There's not really much to keep the market going. It's going to be choppy ahead. There's still a lot of uncertainty around; you're not sure whether we're going to see a soft or a hard landing."

more

:scared: :sarcasm:

"an unnamed U.S. intelligence official" - "US" and "intelligence" no longer go in a sentence together

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B0792A7DC%2DF982%2D4F7F%2DB034%2D4C8E3D25BB29%7D&dist=newsfinder&symbol=&siteid=mktw

LONDON (MarketWatch) -- At least five major U.S. cities were targeted by the plot to blow up U.K. planes en route to the U.S., the Agence France Presse news agency reported Thursday, citing an unnamed U.S. intelligence official.

10:48 AM ET 8/10/06 QATAR AIRWAYS HIJACKING FOILED, AL-JAZEERA TV REPORTS

10:59 AM ET 8/10/06 QATAR AIRLINES PLANE WAS FROM DOHA TO AMMAN: REPORT

:donut: :donut:
The day is starting earlier than usual. Please have a wonderful day.

Ozy :hi:

I can't be around during the daytime anymore (at least as long as I'm at work)

:(

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

Last trade 84.69 Change +0.10 (+0.12%)

Tomorrow's Economic Releases: Trade Data Comes Back Around

http://www.dailyfx.com/story/calendar/key_events/Tomorrow_s_Economic_Releases__Trade_Data_1155163326988.html

US Trade Balance (JUN) (12:30 GMT; 08:30 EST)

Consensus: -$64.4B
Previous: -$63.8B

Outlook: June’s trade balance is expected to sink further after reaching its sixth-largest deficit the month before. Most of the factors that caused last month’s widening of the trade deficit are still present, but the mitigating effect of a weak dollar disappeared in June as interest rate speculation spurred a recovery in the currency. The stronger dollar, combined with high raw materials costs that will further increase prices, will likely serve to depress exports in the coming report. There is little hope for a significant decline in imports as oil prices, a major contributor to last month’s increase in the deficit, were even higher in June than in the month before. With exports likely to slip to the downside and no relief from oil prices on the horizon, expectations for a wider shortfall seem well founded.

Previous: Despite rising import prices, May’s trade deficit rose less than expected as a weak dollar helped boost export numbers. Oil, as usual, was the most blatant contributor to the broader gap in the trade balance, helping shoot import prices up by 8.4% as oil prices remained stratospheric and refineries upped their crude imports. In fact, the trade deficit actually shrank overall, if oil is excluded from the calculation. However, the deficit widened only slightly on the month, thanks to the highest level of exports on record, as the dollar weakened against the other major world currencies. With June’s stronger dollar and consistently high oil prices, the trade deficit will likely remain a concern.

...more...

2006 - What Are the Most Market Moving Economic Indicators for the U.S. Dollar?

http://www.dailyfx.com/story/special_report/special_reports/2006___What_Are_the_1155132699816.html

Non-farm payrolls use to be the most market moving economic indicator for the US dollar, but this is no longer true. Back in April of 2005, we published a report using 2004 data that ranked non-farm payrolls as the single piece of economic data that caused the biggest average daily movement for the US dollar during that year. We have now updated the analysis by looking at the impact of economic data on currency prices between June 2005 and June 2006.

The latest report indicates that the ISM or Institute of Supply Management’s index of manufacturing sentiment actually surpassed the non-farm payrolls as the market moving indicator for the US dollar over the past 12 months. The changes that we have seen in the rankings are primarily due to the shifts in the economic cycle, changes to major market themes and the Federal Reserve’s greater emphasis on inflation. Regardless of whether you are a fundamental or a technical trader, knowing which economic data can cause the biggest shifts in the markets is extremely important. Depending upon your specific trading strategy, it will help you to decide when to be in the markets and when to stay out.

Shifting Importance of Fundamental Data over Time

With the US dollar representing the other side of 90 percent of all currency transactions, US economic data is hands down the most important releases to watch. In our study, we attempt to further narrow this down to the select few that can cause the biggest movements by looking at various time frames to gage both the knee-jerk and slightly more settled reaction. Starting with the knee-jerk reaction in the first 20 minutes of trading, unemployment and the Federal Reserve’s interest rate decision still win out. However, going down the rankings, we see that the trade balance, inflation and retail sales have become much more important while the report on foreign purchases of US Treasuries has slipped from the third most market moving to the sixth. The Federal Reserve’s persistent interest rate hikes along with the rapid increases in oil and gold prices has pushed concerns about funding for the US’ current account and trade balances to the back burner. Between June 2005 and June 2006 alone, oil prices have increased to a high of 50 percent while the price of gold was up 73 percent at its highest point during the 12 months. Therefore it is no wonder that inflation has shot up in significance. As overnight lending rates reach higher and higher, market participants are more prone to use price growth (the Fed’s primary issue when determining monetary policy) to analyze how long the steady diet of 25 basis points can last.



<snip>

Where ISM Wins Out

Now we move onto the full, daily range which measures an indicator’s ability to truly spark shifts in market sentiment or otherwise key off the beginning of new trends. Not surprisingly, many of the same indicators that have held the upper echelons of the Top Market Movers’ list in 2004, remain there today. Non-farm payrolls and the trade balance are two indicators that have survived the upset. However, there are a few surprises for the most current data, the most remarkable of which was the rise of ISM manufacturing to the top spot. This development can be explained in a few ways. The ISM tends be released on the first business day of each month, which allows it to be interpreted as a leading indicator for non-farm payrolls. The ISM report contains two key subcomponents that shed more light on how the data for the rest of the month will be released. The headline ISM manufacturing number is accompanied by the components - prices paid and employment. With independent employment and inflation reads continuously ranking in the top nine, the advanced release is basically a spring board for setting up expectations for the official releases due later in the month. The prices paid indicator in particular has garnered a healthy amount of attention. The employment component is used to forecast payrolls which are released a few days later while the prices paid component is used to forecast the consumer and producer price indexes along with the Federal Reserve’s rate decision.



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

Last trade 85.24 Change +0.65 (+0.77%)

Settle Time 15:00 Open 84.59

Previous Close 84.59 High 85.29

Low 84.42 2006-08-10 10:59:34, 30 min delay

:eyes:

week I found an article that mentioned China's CB was getting into the gold leasing business. It hasn't gotten a lot of play yet, even with the goldbugs. :shrug:

Anyway, I wonder who's doing all the selling in the gold market today and -

where have all the buyers gone....
long time passing.
where have all the buyers gone....
of gold long ago.
where have all the buyers gone...
Treasuries have tricked them ev'ry one.
Oh, when will they ever learn?
Oh, when will they ever learn?

http://www.dailyfx.com/story/dailyfx_financial_markets_headlines/Dollar_Safety_1155228604450.html

Capital was flowing into the Dollar at a powerful clip in the morning hours of the New York session as the market discounted the trade account for more immediate concerns over the evolving details of the foiled terror plot in the UK. Looking to the majors, it was obvious the dollar received a wave of momentum in dollar bidding as US liquidity came online.
In the benchmark EURUSD, a third touch on 1.2905 resistance eventually led to a 160-point sell off down to 1.2745. Despite initial signs of hesitation in following through with the slide, few strong support levels were in sight. The rally against the yen ended a falling channel formed since the close of yesterday’s New York session. A low for the USDJPY was tested at 114.65 and the flip turned into a 95 point run before taking to consolidating just below resistance at 115.75. The arguably over-bought GBPUSD relieved some of the pressure in the pair with its own 225-point plunge to a spike-low of 1.8865. Finally, the USDCHF was working on two-week highs approaching mid-day after a sizable 195-point run to 1.2385.

Once again the currency markets were grappling with the question of where investment capital would be best placed as uncertainty was heightened after British police prevented a terror plot based out of their own country. While the preliminary details are still fuzzy, it is known that 21 men were arrested before they could carry out a plan to board planes with improvised explosives. News sources say six to ten planes, that were all destined for the United States, were targeted. This incidence has put airports around the world on high alert while the US has specifically raised its threat levels for inbound air traffic from the UK to ‘severe’ for the first time ever. The relative importance of the ‘safe haven’ accountability of currencies in the markets was easily grasped in European and North American trading. With scheduled economic indicators printing unimpressive results to suggest a stable US dollar, the currency was instead able to produce a sizable rally. Over the past few months, demand for the most liquid currency in the world on safety concerns has occurred several times, most notably when the war between Israel and Hezbollah began and when North Korea tested its missile capabilities. And, with new issues popping up all over the world every day, anxious global investors are likely to continue to err on the side of safety of funds when a decision has to be made. On the other hand, though fundamentals were not taking precedence at the moment of their release, their effects on valuations will be around long after fear subsides. For today, the headiest piece of data was June’s trade figure. As was expected, the deficit grew from May’s preliminary read to $64.8 billion. However, due to a sizable upward revision in the previous month’s gauge to a $65 billion shortfall, June’s figure actually represented a slight contraction. According to the Commerce Department’s statistics, imports rose 1.2% to $185.5 billion while exports advanced 2.0% to a record $120.7 billion. This ambiguous improvement in the goods and services trade account comes on part of stronger growth from foreign markets like Japan and the Euro-zone and a drop in the US dollar, which tallied 3.8% against the euro. Looking ahead to tomorrow, should fears subside that the terror plot runs deeper than is currently believed, traders will respond to July retail sales to gauge whether economic growth is improving in the third quarter.

more...

Truly weird.

http://www.nytimes.com/2006/08/10/business/10trade.html?ex=1312862400&en=84cd83996e1c0efd&ei=5088&partner=rssnyt&emc=rss

(free registration or try www.bugmenot.com)

HONG KONG, Thursday, Aug. 10 – China announced on Thursday its third monthly record trade surplus in a row, even as tensions between China and many of its trading partners have cooled somewhat.

Chinese exports exceeded imports by $14.6 billion in July, up from $14.5 billion in June and $13.0 billion in May. China has now accumulated a trade surplus of $76.0 billion in the first seven months of this year.

Officials in the United States, the European Union and Japan have been somewhat less outspoken in criticizing Chinese trade surpluses lately, and more cautious in demanding publicly that China allow faster appreciation in its currency, known as the yuan or renminbi. But many economists inside and outside China say that the trade surpluses are so large that they make it hard for the Chinese government to ratchet down economic growth to forestall inflation, and that it will be hard for China to control the trade surplus as long as the government is also intervening extensively in currency markets to keep the yuan weak.

<snip>

The People’s Bank of China has included regular expressions of concern about currency policy in its quarterly monetary policy reports, including in the second quarter report, issued on Wednesday. But it has not yet followed them up by allowing an accelerated pace of currency appreciation; after a 2.1 percent revaluation against the dollar in July, 2005, the currency has only climbed another 1.6 percent.

...more...

http://www.ft.com/cms/s/dad0107e-2825-11db-b25c-0000779e2340.html

Rises in Japanese domestically-focused stocks were counter-balanced by falls in some export-focused stocks on Thursday. The market’s uncertainty was highlighted by a 0.2 per cent fall in the tech-heavy Nikkei 225 to 15,630.91, and a 0.3 per cent rise in the broader Topix to 1,582.88.

Domestic stocks rose on renewed confidence about the Japanese economy despite evidence of a US slowdown. This week has seen the publication of strong domestic figures for bank lending and machinery orders.

Among domestic sectors, retailers were up 1.4 per cent with real estate up 1.2 per cent and securities houses 1.1 per cent higher.

/...

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-08-10T171041Z_01_NYG000318_RTRIDST_0_MARKETS-BONDS-UPDATE-2-URGENT.XML

NEW YORK, Aug 10 (Reuters) - U.S. Treasury debt prices fell on Thursday after a $10 billion long bond auction met with weak demand.

The 30-year bond's <US30YT=RR> price slipped 13/32 for a yield of 5.09 percent, versus 5.06 percent both just before the sale and late on Wednesday.

The $10 billion of reopened 30-year bonds were sold at a high yield of 5.080 percent and a bid-to-cover ratio -- an indication of demand -- of 1.77, compared with 2.05 in February's sale.

bit more...

Dow 11,078.98 +2.80 (+0.03%)
Nasdaq 2,055.79 -4.49 (-0.22%)
S&P 500 1,264.43 -1.52 (-0.12%)
10-Yr Bond 4.923 -0.014 (-0.28%)

NYSE Volume 48,172,000
Nasdaq Volume 74,557,000

Dow 11,065.29 -10.89 (-0.10%)
Nasdaq 2,051.31 -8.97 (-0.44%)
S&P 500 1,262.55 -3.40 (-0.27%)
10-Yr Bond 4.923 -0.014 (-0.28%)

NYSE Volume 130,871,000
Nasdaq Volume 145,225,000

9:36 AM ET 8/10/06 NYSE DECLINERS OUTNUMBER ADVANCERS 16 TO 7

9:36 AM ET 8/10/06 NASDAQ DECLINERS OUTNUMBER ADVANCERS 7 TO 4

09:40 am : Yesterday's losses extend into this morning's open as reports that the U.K. and U.S. raised their terrorist alerts to the highest level, after 21 extremists were arrested for plotting to blow-up U.S.-bound flights, exacerbate ongoing worries of an economic slowdown. However, early losses remain modest in scope (i.e. the Dow briefly inched into the green) amid recognition that the terrorist plot was in fact foiled. Nonetheless, the absence of any significant news on the corporate front to get investors back into buying mode, like Cisco Systems' (CSCO 19.63 -0.15) upbeat sales forecast temporarily did yesterday, is placing even more emphasis on a renewed terrorist threat that has hit stocks around the world. To wit, major European bourses are all down at least 1.0%, led by a 2.0% drubbing on Germany's DAX Index. DJ30 -12.25 NASDAQ -11.50 SP500 -3.29 NASDAQ Vol 112 mln NYSE Vol 66 mln

thanks to maxrandb and this DU thread

http://upload.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2447769

http://msnbc.msn.com/id/14251743/print/1/displaymode/1098/

Your travails have touched my heart!

:eyes:

Mortgages fall back to spring levels; will refinancing follow?

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B6D780D90%2DFED9%2D4698%2DA642%2D57AF1C1355AD%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo

CHICAGO (MarketWatch) -- Mortgage rates fell for the third straight week as the Federal Reserve paused in its interest-hike campaign, with the benchmark 30-year loan tumbling to its lowest level in 3 1/2 months, Freddie Mac said Thursday.

snip>

"The weaker than expected jobs report combined with the Fed's decision to pass on raising rates at its last meeting led directly to lower rates this week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Interest rates for fixed-rate mortgages have dropped to levels last seen in the spring of this year." See more on the jobs report.The respite in interest rate should hold, economist say. Most housing analysts do not expect mortgage rates to climb much higher the rest of the year.

"Lower rates may bring about a rise in refinancing activity as homeowners with ARMs getting ready to reset decide to take advantage by locking into a fixed-rate mortgage now rather than waiting until the adjustment date when rates may be higher," Nothaft said.

more...

Dow 11,061.13 -15.05 (-0.14%)
Nasdaq 2,055.05 -5.23 (-0.25%)
S&P 500 1,263.25 -2.70 (-0.21%)
10-Yr Bond 4.931 -0.006 (-0.12%)

NYSE Volume 433,469,000
Nasdaq Volume 353,275,000

10:00 am : Equities are still modestly on the defensive as the bulk of industry leadership remains negative. Health Care has been a notable sector losing ground, as HMOs are under pressure after UnitedHealth Group (UNH 47.40 -1.58) was downgraded amid delaying its 10-Q filing. Pacing the way lower, though, is Energy as thwarted terrorist attacks on airplanes, which could result in lower demand for jet fuel, push oil prices below $76 a barrel (-1.2%). Benefiting from falling oil prices, however, have been retailers, which has given Consumer Discretionary a lift, and transportation stocks, which have helped the Industrials sector trim some of its recent losses. DJ30 -5.84 DJTA +0.2% NASDAQ -5.78 SP500 -1.93 XOI -0.6% NASDAQ Dec/Adv/Vol 1710/661/249 mln NYSE Dec/Adv/Vol 2020/602/196 mln

10:29 AM ET 8/10/06 NYSE VOLUME 337.8M

10:29 AM ET 8/10/06 NASDAQ VOLUME 407.7M

10:29 AM ET 8/10/06 NYSE HAS 948 ADVANCERS

10:29 AM ET 8/10/06 NYSE HAS 1,884 DECLINERS

10:29 AM ET 8/10/06 NYSE HAS 145 ISSUES UNCHANGED

10:29 AM ET 8/10/06 NASDAQ HAS 973 GAINERS

10:29 AM ET 8/10/06 NASDAQ HAS 1,566 LOSERS

10:29 AM ET 8/10/06 NASDAQ HAS 159 ISSUES UNCHANGED

10:29 AM ET 8/10/06 NYSE HAS 30 ISSUES SETTING 52-WEEK HIGHS

10:29 AM ET 8/10/06 NYSE HAS 81 ISSUES SETTING 52-WEEK LOWS

10:29 AM ET 8/10/06 NASDAQ HAS 18 ISSUES SETTING 52-WEEK HIGHS

10:29 AM ET 8/10/06 NASDAQ HAS 151 ISSUES SETTING 52-WEEK LOWS

...a rush to cash in on a "disaster rally" in energy?

2:20 PM ET 8/10/06 NYSE VOLUME 1.08B

2:20 PM ET 8/10/06 NASDAQ VOLUME 1.23B

2:20 PM ET 8/10/06 NYSE HAS 1,776 ADVANCERS

2:20 PM ET 8/10/06 NYSE HAS 1,422 DECLINERS

2:20 PM ET 8/10/06 NYSE HAS 140 ISSUES UNCHANGED

2:20 PM ET 8/10/06 NASDAQ HAS 1,713 GAINERS

2:20 PM ET 8/10/06 NASDAQ HAS 1,214 LOSERS

2:20 PM ET 8/10/06 NASDAQ HAS 135 ISSUES UNCHANGED

2:20 PM ET 8/10/06 NYSE HAS 29 ISSUES SETTING 52-WEEK HIGHS

2:20 PM ET 8/10/06 NYSE HAS 34 ISSUES SETTING 52-WEEK LOWS

2:20 PM ET 8/10/06 NASDAQ HAS 15 ISSUES SETTING 52-WEEK HIGHS

2:20 PM ET 8/10/06 NASDAQ HAS 80 ISSUES SETTING 52-WEEK LOWS

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=38939.369375-880255302&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

Europe’s bourses fell sharply in mid-session on Thursday after British police said they had thwarted a plot to blow up aircraft in mid-flight. Britain raised its security threat level to “critical”, which means it expects an attack imminently. Strength in the euro and a late sell off on Wall Street as the price of oil climbed also weighed on European equities. The FTSE Eurofirst 300 fell 1.5 per cent to 1,320.78 with the Xetra Dax down 2.1 per cent to 5,585.72, the CAC-40 off 1.5 per cent to 4,952.28 and the FTSE 100 in London down 1.4 per cent to 5,781.2. Sterling was volatile against the dollar, initially falling across the board on the news, before recovering to sit just 0.25c lower at $1.9017 to the US dollar and 0.1p weaker at £0.6760 to the euro. This morning, the euro hit a record high against the low-yielding yen while the dollar inched towards a two-month low versus the euro on differing interest rate expectations. A stronger euro may impact on eurozone exporters. British Airways fell 4.1 per cent to 373.3p, Ryanair fell 4 per cent to €7.25, and Lufthansa fell 4.5 per cent to €13.99 on security uncertainty and the impact on travel sentiment as UK airports have introduced a ban on all hand baggage on aircraft leaving the UK, on government advice. Ferrovial, owner of UK airports operator BAA, fell 1.9 per cent to €61.10. Tui, the German tourism and shipping group, sank 5.8 per cent to €14.64 as it warned costs at its shipping division would hit this year’s earnings. The company blamed bunker fuel costs, pressure on freight rates and the costs of integrating its $2bn purchase, container shipper CP Ships, for the warning.

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=38939.3509490741-880253386&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

London equities stayed firmly in negative territory on Thursday, as Airlines and transport stocks were hit hard following news of a foiled terrorist plot to blow up aircraft in mid-flight between the UK and US. The FTSE 100 traded down 1.3 per cent to 5,781.8. Shares in British Airways dropped 3.5 per cent lower at 376½p as security at all British airports was increased and additional security measures were put in place for all flights. Gert Zonneveld, an analyst at Panmure Gordon said BA’s shares were likely to be more sensitive to the news than Ryanair and EasyJet, the two low-cost carriers, due to its higher profile name and route network across the North Atlantic. EasyJet lost 3 per cent to 409¾p and Ryanair fell 2.1 per cent to 7.34p. Travel companies MyTravel Group and First Choice Holidays fell 3.8 per cent to 206p and 2.3 per cent to 211p respectively, while hotel group Intercontinental dropped 3.7 per cent to 833.5p However, David Buik at Cantor Index said it might be folly to blame the decline entirely on the terrorist coup. “It was the trigger, not necessarily the bullet,” he said. “The market was already looking very heavy .The results season is almost over and the outlook on both sides of the pond for the third and fourth quarters looks murky.”

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=38939.3177083333-880250066&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

Government bonds advanced on Thursday as investors bought safe-haven assets after the UK was put on its highest state of terrorism alert. <snip> Equity markets stumbled, and bond markets rose as a result. In late morning trade, the yield on the two-year gilt fell 2.8 basis points to 4.903 per cent and the yield on the 10-year gilt lost 2bp to 4.660 per cent. Meanwhile, in the eurozone market, the yield on the two-year Schatz was down 2.8bp to 3.527 per cent while the 10-year Bund yield was 2.5bp lower at 3.905 per cent. The security alert overshadowed other market news. The European Central Bank released its monthly bulletin, raising its forecasts for inflation and growth in 2006. Though it also signalled that interest rates were likely to move higher, it was little surprise to a market that has already been pricing in further monetary tightening.

/...

Note inverted Brit (not Euro) yield-curve...

http://www.ft.com/cms/s/c67e39d0-27c5-11db-b25c-0000779e2340.html

As Europe wilts under a blistering sun, water levels in the region’s rivers and reservoirs are plummeting. The night skies over Spain’s forests glow orange with deadly wildfires. Cracked mud-flats border shrinking waterways. Fish lie stranded on the dry beds of lakes and rivers.

Water levels on parts of Italy’s longest and most commercially vital river, the Po – which has stirred awe with the fury of its floods – have dropped to their lowest in living memory. On the Rhine, Europe’s busiest waterway, low waters have forced ships to carry less cargo and make up for lost revenue with surcharges of up to 50 per cent. Spain’s reservoirs were filled to just 45 per cent of capacity as of August 7, and in one case to 13 per cent, approaching the point at which only unusable sludge remains.

Desperate to conserve water, Paris has for the first time decided not to dampen the dusty paths of its public gardens. English gardeners are banned from using hosepipes, while swimming pools remain empty in many Spanish towns.

Farmers predict a sharp fall in crops and face losses of billions of euros. In Italy, the Agricultural Confederation, a farmers’ association, says production of beets, maize, rice and animal fodder will approach record lows, while the grape harvest is expected to be the lowest in two decades. Italy’s farmers calculate losses so far this year at €500m ($644m, £337m). Ermete Realacci, head of a parliamentary environment committee, said the agricultural emergency was “verging on a natural disaster”.

In Spain, where farmers face watering restrictions of up to 60 per cent, the cereal crop is set to be 17 per cent lower than the average over the past five years. Smaller harvests are expected in Germany and Poland, where the government has promised up to 500m zlotys (€128m) to support farmers who lose more than a third of their income because of drought. The baking sun has ripened some crops early, forcing farmers to leave fruit and vegetables unharvested. In the UK – the world’s second biggest frozen pea producer – some growers have had to leave 20 per cent of their harvest in the field to be taken up when dry for animal feed.

Spanish farmers are planting fewer thirsty crops such as wheat, corn and rice and, in the parched province of Valencia, are digging up small trees to sell for ornamental use. The French ecology ministry says a 20 per cent drop in the farmland devoted to corn over the past four years has saved 360m cubic metres of water – the consumption of 6m people.

French livestock farmers have been forced to dig into their winter stocks of hay, says Jean-Michel Delmas of the French agricultural union FNSEA. He warns that stress caused by the heat has thrown cattle off their usual fertility cycles and veal production could fall 10-15 per cent.

The European Commission has given permission to farmers in nine countries – including France, Italy, Germany and Spain – to graze livestock on “set-aside” land normally off limits until August 31 to prevent over-production.

The drought is not bad news for every farmer. In the UK, harvests of some soft fruit are expected to be bigger than normal, as is winter-sown barley, while farmers whose crops escape damage can command higher prices.

<snip>

Lower hydroelectric and nuclear output has forced some countries to crank up more costly oil-burning generators, sending energy prices soaring. The heat has warmed the rivers on which Germany, Belgium and France rely to cool power plants. With the temperature of the Rhine last month reaching 28°C in places, Germany restricted the amount of cooling water nuclear power stations could siphon from tributaries. France raised the temperature ceiling at which power stations are allowed to drain water into rivers, but EDF, the country’s largest electricity producer, was nonetheless forced to import power.at prices as high as E160 per megawatt hour.

The drought has exposed some countries’ mismanagement of the little water available. Italy has relatively high rainfall but some experts estimate 40 per cent of supplies are lost through leaking infrastructure.

Spain’s environment ministry says at least 80 per cent of water used for agriculture is wasted. The sector consumes about 75 per cent of the country’s water – double the average in the EU – but accounts for only 5 per cent of gross domestic product.

<snip>

With droughts expected to hit Europe with growing frequency and parts of the Mediterranean region at high risk of desertification, long-term fixes remain elusive. The Spanish government is building 25 desalination plants in a bid to boost supply but the plants are voracious consumers of energy and the water they produce is expensive.

Environmentalists say governments must invest in reservoirs, better water canals, alternative energy sources and more efficient irrigation systems. Until they do, they can exhort consumers to turn off the tap – or turn it off themselves.

/more...

http://www.chron.com/disp/story.mpl/ap/business/4107273.html

SPRINGFIELD, Mo. — Pastures are browning and dusty across much of Missouri. Fewer barges can navigate the low water on the Mississippi and Missouri rivers. Water utilities are spending more to get mud out of sluggish rivers.

A severe drought in much of the state is entering its 18th month, and the costs are mounting _ even if it is too soon to tally them, experts say.

The online Drought Monitor of the National Drought Mitigation Center shows ugly swaths of brown and red across the central and southern United States. The National Climatic Data Center said the country appears to be on course to top $1 billion in drought-related losses this year, although it's too soon for official figures.

There are no estimates for drought damage in Missouri. "It's yet to be seen," said Judy Grundler from the Missouri Department of Agriculture.

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Had to find a different source for the article....

http://www.dailykos.com/storyonly/2006/8/4/181557/9913


A deadly combination of heat and drought is slowly wreaking a trail of devastation across much of the globe, and the full extend of this scourge will only be felt as winter nears.

The current phenomenon took meteorologists by surprise as it was unusually global in its reach. Like Murphy's Law, everything that could go wrong did.

Nourishment for winter burnt up under an unusually fiery weather, along a food chain that progressed from withered wheat crops to cattle that were hastily sold off for lack of grazing grounds.

Crops that survived wilted under the sun, yielding produce of lowered quality and quantity; leading ultimately to higher prices. Alarmingly, these were scorched in the surplus granaries of the United States, Europe and Australia.

snip>

Lester Brown, President of the Earth Policy Institute, predicts that 20 million tons of global harvest may have winnowed up as summer chaff.

In June, he warned that the global cupboard - or "reserve" - of grains were at its lowest levels since the early 70s. According to this calculation, there's enough basic grain to keep people alive for 57 days, if a combination of disasters strike.

And there is no better place for that to begin than in the Middle East.

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I can tell you, I have grown to love these often fiercely hard, dry Spanish lands in the twenty years of my self-exile here (and I live, usually, in two of the greenest corners of it).

But it is now burning, will continue to dry up and burn. The Sahara Desert is encroaching. To which, in maniacal manner, 'they' (politicians and businesspeople) are rapidly adding an ugly, even more unsustainable, concrete desert.

An injured hard man, a Brit mercenary of many incursions and wars, once asked me, in a squat in London: "Would you rather have to face extreme heat or extreme cold?". I can give you the answer immediately. If you're too cold, you can do something about it (and there'll usually be frozen water around to drink). If you're too hot - there's not a hell of a lot you can do. And if you have no water, you're quickly, painfully, finished. He nodded, I'd like to say sagely.

If we, collectively, get that far, prepare for the water wars of the near future.

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=38939.530787037-880268723&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

Thursday morning’s terror alerts, a strengthening euro and high oil prices led to lossses on European bourses during a turbulent session. The FTSE Eurofirst 300 lost 0.8 per cent to close at 1,329.72 with the Xetra Dax 1.3 per cent at 5,630.96 and the CAC-40 off 1 per cent at 4,976.64. Shares in airlines and hotels headed south. British Airways led the declines, falling 5.1 per cent to 370.8p. Air-France KLM fell 3 per cent to €19.15, Italy’s Alitalia shed 2.1 per cent to €0.8635, Irish budget carrier Ryanair lost 3.4 per cent to €7.29 and Germany’s Lufthansa slid 3.3 per cent to €14.17. Brokers were largely of the view that share-price weakness would be short term. Panmure said it was not changing its “buy” rating on airline stocks, while HSBC retained its “overweight” rating on Lufthansa and raised its target to €20 from €17.30. Strategist Jonathan Wober, added that Lufthansa’s increasing focus on value creation was responsible for the move. EADS fell 5 per cent to €23.33 on fears that this and any future attempt to bring down a passenger plane could result in a slump in airline traffic and a knock-on fall in aircraft orders. In addition, Credit Suisse downgraded the stock to “neutral” from “outperform” on concerns of futher potential problems with delivery.

Dow 11,094.11 +17.93 (+0.16%)
Nasdaq 2,062.96 +2.68 (+0.13%)
S&P 500 1,266.89 +0.94 (+0.07%)
10-Yr Bond 4.937 0.00 (0.00%)

NYSE Volume 751,686,000
Nasdaq Volume 585,936,000

11:00 am : Major averages now trade in split fashion but there isn't a strong sense of conviction on either the bullish or bearish side of the aisle. Oil prices spiking to session lows and below $75 a barrel (-1.8%) following a larger than expected draw down in weekly natural gas inventories has helped improve sentiment; advancers on both the NYSE and Nasdaq continue to narrow the bearish edge owned by decliners since the open. Be that as it may, subsequent weakness in Energy (-1.3%), today's worst performing sector, has also removed leadership from the largest contributor to earnings growth on the S&P 500 for the last several quarters. To wit, Dow component ExxonMobil (XOM 68.44 -0.53), the most profitable company in the world, is at session lows; 26 out of 29 Energy components are posting losses. DJ30 +10.12 NASDAQ -1.67 SP500 -0.82 XOI -1.3% NASDAQ Dec/Adv 1399/1250 NYSE Dec/Adv/Vol 1612/1325/472 mln

Zimbabweans are facing chaos and confusion as they try to deposit and spend their cash before it becomes worthless on 21 August

The central bank decided to lop three zeros off Zimbabwean banknotes in an attempt to help people deal with spiralling inflation which stands at more than 1,000%.

But last week's surprise devaluation has led to a bureaucratic nightmare for businesses and consumers.

snip..

Supermarkets are labelling prices with the new values, but are accepting and mainly dealing with the old currency.

"This is causing a great deal of confusion about the new values. The first day they knocked the three noughts off people went into the supermarket near where I work and were going crazy buying everything," she said.

"Then of course they got to the till and they didn't have enough money."

snip..

Spending spree

A 27-year-old artist admitted that the move has forced her to open her first bank account this week.
"I couldn't see the point of it (a bank account) before. I kept my money under my pillow because by the time you bank it you can't use it because it loses so much value."

Although, unlike some, she said she is not worried about losing her savings.

"I keep an excess in US dollars so that if anything happens I know at least I'll have some money," she said.



http://news.bbc.co.uk/2/hi/africa/5257766.stm

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=57115

The Q2 2006 Advance estimates of GDP from the BEA recently were dramatic. You might not have fully noticed because market indexes soared and Middle East violence stole the headlines away. This report is well worth a second glance. The Q1 and Q2 GDP comparisons are no less breath taking than the before and after photos of Beirut that dominate TV news of late.

Every indicator of macroeconomic health and vigor either weakened or turned negative with the exception of private expenditure on services. The rate of increase in consumer prices- including food and energy- ran up just shy of 50%. Q1 2006 readings showed acceleration of 2.7% and Q2 advance readings ran at 4%. The preferred and lower core rate- excluding food and energy- actually fell from 3.0% to 2.9%. I guess you can predict which number will get the attention?

Real final sales- which exclude inventory changes and measure the actual transactions accomplished - plunged more than did real GDP. Real final sales grew at 2.1% in Q2 down from 5.6% in Q1. Durable goods sales and residential fixed investment led the declines falling .5% and 6.3% respectively. The auto sector alone explains .34% drop in real GDP. Non-durable sales also fell sharply but stayed in positive territory in absolute terms. Service sales registered an increase.

Given the consumer spending growth deceleration you might have thought that savings were up? How profoundly wrong you would be! The Q2 private savings rate was 50% greater in negative rate territory than its terrifying Q1 reading. The Q2 2006 real personal savings rate was -1.5%! Thus, inventories rose and big ticket spending on residential “investment,” durables and autos tanked as consumers spent more than all they had across the second quarter. This is very meaningful and significantly scary. The less attention and consideration this draws the more alarmed you should be. I suppose the silver lining might be that markets have 100% ignored this information so far.

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11:54 AM ET 8/10/06 BUSH: PLOT A REMINDER THAT U.S. AT WAR WITH TERRORISTS

manna from the heavens for Bushco. Seems like such a coincidence, again.

Embattled White House seeks Iraq upper hand
http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/theworld/2006/August/theworld_August340.xml§ion=theworld

snip>

While analysts puzzled out the relative importance of Iraq, anti-incumbent sentiments and other factors in Lieberman’s defeat, the White House seized on Lamont’s win as a sign of Democratic weakness on national security.

Vice President Dick Cheney held a conference call with reporters to accuse the opposition party of a “purge” and accused the Democrats of advocating not just withdrawal from Iraq but full retreat from the global war on terrorism.

Islamist extremists “clearly are betting on the proposition that ultimately they can break the will of the American people in terms of our ability to stay in the fight and complete the task,” said Cheney.

He suggested that the Democrats increasingly believe “that somehow we can retreat behind our oceans and not be actively engaged in this conflict and be safe here at home, which clearly we know we won’t, we can’t, be,” he said.



Fuel For The Fear-Mongers' Fire
http://www.tompaine.com/articles/2006/08/10/fuel_for_the_fearmongers_fire.php

Only the most paranoid might conclude that today’s arrests in Britain in connection with an alleged terror plot was timed to coincide with Republican mobilization for the fall elections. But you have to concede that the timing is at least convenient.

snip>

The Thursday morning news conference by Homeland Security Secretary Michael Chertoff and Attorney General Alberto Gonzales, who announced that the domestic terrorist alert level was being elevated for both domestic and international flights, did not stray into overt politics. But it did not have to. The ground was already well-laid the afternoon before by the Bush administration’s top officials and by the Republican National Committee.

snip>

The Republican National Committee gleefully posted Cheney's statement on its Web site, which also contains an audio montage of out-of-context statements by Democrats under the title, “Weak And Wrong: Meet the Defeat-ocrats.”

Meanwhile, at President Bush’s Crawford, Texas, ranch, Press Secretary Tony Snow unleashed a barrage that not only hit the Democrats who were his rhetorical target but also took out President Bush’s father, George H. W. Bush, as collateral damage:

And the real question for the American people to ask themselves is, do you take the war on terror seriously, with all the developments going on around the world? And, if so, how do you fight it to win? There seem to be two approaches. And in the Connecticut race one of the approaches is ignore the difficulties and walk away.

Now, when the United States walked away, in the opinion of Osama bin Laden in 1991, bin Laden drew from that the conclusion that Americans were weak and wouldn't stay the course, and that led to September 11th.

Now, every time an American goes through heightened security at an airport, he or she will hear in the background the drumbeat of Republicans saying, “We are fighting to keep you safe, while the Democrats want to give up the fight and let the terrorists run amok."

all that shit over the Lieberman loss.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=2448873&mesg_id=2448873

His remarks came a day after the White House orchestrated an exceptionally aggressive campaign to tar opposition Democrats as weak on terrorism, knowing what Democrats didn't: News of the plot could soon break.

and then there's this one

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2448842

The US info apparently made it seem that the threat was immediate and that the terror attacks had been brought forward.


So, once again, not some miracle manna from heaven after all. :eyes:

http://www.americanchronicle.com/articles/viewArticle.asp?articleID=12307

Last December, when Congressman John Conyers released a huge report documenting the evidence that Bush and Cheney had lied us into a war, he also introduced a bill (H. Res. 635) to start a preliminary investigation of the matter and make recommendations on impeachment. This showed far more courage, not to mention long hours of work, than any other member of Congress had mustered at that time or since. But it was disingenuous. Impeachment is itself an investigation; a preliminary investigation is redundant. And any investigation is unnecessary when the impeachable offenses are part of the public record.

Last week, Conyers released an expanded report, including new superfluous evidence of proven crimes related to the war, plus a lengthy Section 2 focused on illegal spying programs. The evidence of blatant criminality and threat to the Constitution in this new section is devastating. And the crimes have been confessed to. Bush has merely offered a series of completely implausible claims that his actions are legal, a series of claims carefully refuted in this report. So, the situation of last December has grown more extreme. Impeachable offenses are public knowledge, backed by overwhelming evidence and public confession. But, rather than introducing articles of impeachment, Congressman Conyers has backed off promoting H. Res. 635. Not a single cosponsor has been added to that bill since Democratic "leader" Nancy Pelosi, some months back, ordered the Democrats in Congress to stay away from impeachment.

Ironically, Pelosi's home turf is actively ignoring her. San Francisco and Berkeley have put impeachment on the ballot for voters this November, as have Champaign and Urbana in Illinois. These cities are likely to see an increase in voter turnout, especially among Democrats. In other words, they will model a winning strategy for a party that is nationally dead-set on losing. Dozens of towns and cities have already passed impeachment resolutions, and three state legislatures are working on passing resolutions. Only one state is needed to compel the U.S. House to begin impeachment proceedings. It would be nice to see Vermont or Illinois become that state. It would be even nicer to see California come through.

Now, I have yet to hear a single citizen lobbyist for H. Res. 635 report that their Congress Member, of whichever party, won't support it because there's not enough evidence of wrongdoing. Rather, Congress Members, of both parties, won't support it because impeachment is "extreme" or "controversial" or "partisan." The open secret here is that any investigation would lead inevitably to impeachment. Thus we have the current situation: a Congress that does not investigate.

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http://today.reuters.com/news/articlenews.aspx?type=reutersEdge&storyID=2006-08-09T173522Z_01_L097543_RTRUKOC_0_US-MINING-UNIONS-STRIKES.xml

LONDON (Reuters) - Emboldened by high profits at mining companies, trade unions demanding higher wages are stretching industrial relations to the breaking point.

The highest-profile strike is at Escondida in Chile, the world's biggest copper mine, where workers downed tools on Monday when the mine's owners, BHP Billiton (BLT.L: Quote, Profile, Research) (BHP.AX: Quote, Profile, Research) and Rio Tinto (RIO.L: Quote, Profile, Research), refused to meet wage demands.

Escondida workers see their fight for higher wages as a fight for all unions.

Pedro Marin is Escondida union secretary. His family has been in mining in Chile since the nitrate mines of the 1800s. He said nothing has changed since then, when foreign companies came in and exploited local labor to enrich themselves.

"This is not just about us (at Escondida), it's about all Chilean miners," he said. "We will give an example for all the other unions to follow."

Strong words, but it's not just Chile where unions have become more militant.

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http://www.321gold.com/editorials/willie/willie081006.html

Key fundamental changes in the USEconomy are underway. Some of these changes have motivated extreme reactions by the USGovt, regarding war to secure energy supply, strain on strategic alliances, encouragement of enemy alliances, and tight partnerships with large domestic corporations. They act much like Knights of the Round Table, privy to state secrets, cooperative to formulate strategic policy, agents to preserve the union. The geopolitical stage has morphed into a chess game, overloaded with strategic requirements, where brute force seems an unsuccessful alternative to cunning and compromise. The United States is finding itself awkwardly outside looking in, as its monolithic power has been diminished. The game is changing faster than the US is capable of adapting, so it seems. On the front of the emerging powerful state corporations, large US-based multi-national corporations have emerged. They seem less adapted to compete against Russian and Chinese adversaries, and more capable of exploit war and financial chicanery. Their prominence almost forebodes more military intrigue and more financial warfare.

The future will be interesting to observe, as US firms must strive toward cooperative alliances with the USGovt for the benefit of energy supplier nations, to improve the economies and standard of living in those nations, rather than the present setup, where their ostensible modus operandi seems to pilfer from the US taxpayer, to collude in USTBond speculation, and to serve as agents in currency & gold control games. If the United States is to secure a steady reliable source of energy supply, our nation must change the culture of its multi-national corporations. They must work toward a "win-win contract" rather than the increasingly exploitative direction of the last several years.

Russia and China have embarked on different pathways. Two very different juggernaut stories have been inserted onto the global landscape, with uncertain geopolitical consequences to come. Russia and China are building gigantic state dominated economies. The planning and execution has yet to undergo critical tests. Whether political order can be fostered via equitable distribution of wealth and beneficial exploitations of natural resource wealth in their respective nations, that is to be seen.

TIGHT RUSSIAN STATE CORPORATIONS
Russian President Putin has managed to assemble a veritable "Who's Who" of former KGB officers to lead a raft of important growing Russian corporations. Each firm appears to be following a certain blueprint business model, of state majority control, tight coordination with the Russian state government, first in line opportunity to tap national resources, and political homage to Putin without challenge. Minority interest is to be sold in numerous such firms, mostly to foreign investors. Putin has shown his cards early, as he plans to use state run firms to extend their tentacles into the West, Putin has directed progress to eliminate all competition against these selected favored firms, not only from foreign sources but from domestic sources not loyal to him. He seems hellbent to invalidate past sweet deals to his opponents, and to quash deals to anyone beholden to the West. He is as efficient as he is ruthless. He is emerging as a textbook autocrat. Time will tell whether his corporate giants are as efficient. These firms span the entire spectrum of industry. Some might call the US leadership similar in autocratic tendencies. In sharp contrast, US leaders lately are not as crafty, efficient, or skilled in the game of chess on the geopolitical stage. Conflict is growing with Russia. The war of words has reached fever pitch between Putin and US VP Cheney, as states almost never engage in smooth competition for energy historically. Putin is quoted to have said that Cheney criticism is off the mark, "He took another bad shot, just like on his hunting trip." Ouch.

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http://www.321gold.com/editorials/sirchartsalot/dorsch080906.html

The synchronized phase of monetary tightening by the world's three largest central banks, the Federal Reserve, the Bank of Japan (BoJ), and the European Central Bank (ECB), appears to be fizzling-out almost as soon as it started. The Fed is widely expected to wind down its rate hike campaign on August 8th, less than a month after the BoJ raised its overnight rate for the first time in five years.

The Fed is moving to the sidelines to join the central banks of Canada and Korea, which declined to raise their overnight loan rates last month. That might encourage other central banks to keep their interest rates on hold. A residual quarter-point rate hike by the BoJ to 0.50% in the fourth quarter, and two quarter-point rate hikes by the ECB to 3.50% are expected, before the big-3 tightening spree flickers out.

Central bankers are utilizing a strategy of "Smoke and Mirrors," mesmerizing the traders with baby-step rate hikes, but falling far short of the levels needed to shrink their money supply. Whether the central bank is printing money to maintain an artificially low exchange rate, or flooding the banking system with money to peg an artificially low interest rate, the net result is the same - monetary inflation.

The strategy of "smoke and mirrors" was first announced on May 8th, when G-10 central bankers agreed that a new approach was needed to combat the "Commodity Super Cycle," the culprit behind upward pressure on global inflation. "It is not the time for complacency if we want this global growth to be sustainable. We have to be careful to see that this period of global growth does not end up in inflation," declared G-10 spokesman and ECB chief Jean "Tricky" Trichet.

The G-10 started to sound hawkish on inflation, and unveiled baby-step rate hikes over the next few months. Much to the G-10's satisfaction, the central banks in China and India also chipped in with monetary tightening to combat the common enemy. Last week, central bankers from Australia, Denmark, the Euro zone, England, India, Russia, and South Africa launched a round of baby-step rate hikes. Most surprising, the Bank of England lifted its base rate for the first time in 2-years.

snip>

Monetizing the price of Crude oil

If not for the inexorable rise of crude oil and the "Commodity Super Cycle," it is doubtful that central bankers would be lifting their lending rates at all. Although central bank rate hikes can't produce an extra barrel of oil, a gentle round of monetary tightening might prevent the world's demand for crude oil from exceeding a razor thin 2.2 million bpd of spare capacity, mostly from Saudi Arabia.

The soaring price of crude oil, if elevated long enough, transmits secondary knock-on inflation pressures. Until recently, central bankers insulated their stock markets from the taxation of oil price shocks, by expanding their nation's money supplies. But in September 2005, the gold market became very suspicious of the scheme, and rocketed 50% to 100% against most currencies around the world until May 2006.

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No mention of corruption and he blames the problems in the Middle East on "Iran's mullahs". And, the central banks always operate using "smoke and mirrors". Also, the precious metals markets bubbled because of the introduction of ETFs in the U.S. and unchecked and unregulated speculation, not because crude oil prices are going up.

Flawed premises, flawed conclusions: the guy's trying to sell gold like a used car dealer trying to sell a used SUV.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aEGTLE6KRZi4&refer=us

Aug. 10 (Bloomberg) -- U.S. stocks rose for the first time in five days as investors set aside renewed concern of terrorist attacks and turned their attention to the prospects for profit growth.

Indexes retreated at the start of the day after U.K. police uncovered a plot to blow up airplanes bound for the U.S.

American International Group Inc., the world's largest insurer, gained on a surge in property and casualty revenue. The company also said the events in Europe won't immediately affect its business. Viacom Inc. and Target Corp. pushed stocks higher after reporting profit that beat some analysts' estimates.

``Foiled plots are more of a positive than a negative because at least it shows our efforts are working,'' said David Straus, who helps manage $215 million at Johnston Lemon Inc. in Washington. ``Now you're back to the economics of it all. Earnings are good, which tends to hold up the markets.''

more...

after dumping everything yesterday. "Gas is cheap", BWAAAAAAAHAAAAAAAAAAAAAAAAAAA!

Dow 11,137.89 +61.71 (+0.56%)
Nasdaq 2,075.24 +14.96 (+0.73%)
S&P 500 1,271.56 +5.61 (+0.44%)
10-Yr Bond 4.947 +0.01 (+0.20%)

NYSE Volume 1,576,054,000
Nasdaq Volume 1,193,488,000

2:00 pm : Market breaks out of its tight trading range within the last 30 minutes and spikes to session highs, as bargain hunters catch sellers resting on their recent laurels. Continued deterioration in oil prices, especially after the Fed recently cited the lagged effects of increases in energy prices as inflation risks that could lead to additional monetary tightening, has returned market breadth in favor of the bulls. Crude futures now off 3.0% near $74 a barrel has also diminished the appeal of gold as a hedge against inflation, as the precious metal recently closing down 2.4% further underscores the market's buoyancy to acts of terror. DJ30 +56.19 NASDAQ +13.45 SP500 +5.37 NASDAQ Dec/Adv/Vol 1278/1636/1.16 bln NYSE Dec/Adv/Vol 1444/1725/1.0 bln

1:30 pm : Little changed since the last update as stocks continue to vacillate in roughly the same ranges. Bonds, however, continue to weaken after the $10 bln 30-year auction drew meager interest. The 10-yr note is now off 7 ticks to yield 4.94% while the 30-year bond is down 16 ticks, lifting the yield to 5.08%, roughly 8 basis points higher than where it was just two days ago when the Fed prudently paused to assess the economic slowdown.DJ30 +13.02 NASDAQ +3.30 SP500 +0.69 NASDAQ Dec/Adv/Vol 1459/1417/1.05 bln NYSE Dec/Adv/Vol 1653/1504/908 mln

Dow 11,104.43 +28.25 (+0.26%)
Nasdaq 2,067.31 +7.03 (+0.34%)
S&P 500 1,268.79 +2.84 (+0.22%)
10-yr Bond 4.933 -0.004 (-0.08%)
30-yr Bond 5.073 +0.026 (+0.52%)
NYSE Volume 1,863,599,000
Nasdaq Volume 1,413,505,000

3:00 pm : Stocks continue to pare some of their recent gains, but market internals remain positive. As reflected in the A/D line, advancers outpace decliners on the NYSE by a 9-to-7 margin while advancing issues on the Nasdaq hold a wider 17-to-12 edge over declining issues. Providing further evidence behind the Nasdaq's slight outperformance versus its blue chip counterparts has been a more convincing 2-to-1 ratio of up to down volume while that on the NYSE remains evenly matched. DJ30 +30.56 NASDAQ +8.34 SP500 +2.98 NASDAQ Dec/Adv/Vol 1256/1709/1.38 bln NYSE Dec/Adv/Vol 1415/1808/1.22 bln

2:30 pm : Major averages are off their best levels but still holding onto the bulk of the day's advance. Seven out of 10 economic sectors are trading higher, with notable bargain hunting interest being seen in underperforming areas like Consumer Discretionary (+1.3%), Industrials (+0.8%) and Technology (+0.6%). Also worth noting is the fact that, even though oil is off 3.0%, the Energy sector is only consolidating to the tune of 1.0%, still limiting today's market gains but not by nearly as much as such a drubbing in crude might typically warrant. DJ30 +45.12 NASDAQ +12.02 SP500 +3.98 XOI -1.8% NASDAQ Dec/Adv/Vol 1216/1713/1.29 bln NYSE Dec/Adv/Vol 1319/1874/1.12 bln

Dow 11,126.61 +50.43 (+0.46%)
Nasdaq 2,073.13 +12.85 (+0.62%)
S&P 500 1,272.23 +6.28 (+0.50%)
10-Yr Bond 4.927 -0.01 (-0.20%)

NYSE Volume 2,111,636,000
Nasdaq Volume 1,575,527,000

3:30 pm : Indices continue to weaken going into the close, as sector leadership again becomes evenly split. Fortunately for the bulls, three of the four most influential sectors -- Financials, Technology and Industrials -- are still posting gains, while Health Care's decline remains minimal. However, the broader market is now at risk at closing lower for the fifth straight day, which would be its longest losing streak since 2004. DJ30 +26.09 NASDAQ +6.18 SP500 +2.84 NASDAQ Dec/Adv/Vol 1356/1613/1.51 bln NYSE Dec/Adv/Vol 1477/1764/1.35 bln

3:00 pm : Stocks continue to pare some of their recent gains, but market internals remain positive. As reflected in the A/D line, advancers outpace decliners on the NYSE by a 9-to-7 margin while advancing issues on the Nasdaq hold a wider 17-to-12 edge over declining issues. Providing further evidence behind the Nasdaq's slight outperformance versus its blue chip counterparts has been a more convincing 2-to-1 ratio of up to down volume while that on the NYSE remains evenly matched. DJ30 +30.56 NASDAQ +8.34 SP500 +2.98 NASDAQ Dec/Adv/Vol 1256/1709/1.38 bln NYSE Dec/Adv/Vol 1415/1808/1.22 bln

gotta run - see you all later :hi:

I don't have any reason for saying it, nor will I come back to support it.

Wahhhhhhhhhhhhhh, I'm a dumbed-down Murkin n' proud of it!

Dow 11,124.37 +48.19 (+0.44%)
Nasdaq 2,071.74 +11.46 (+0.56%)
S&P 500 1,271.81 +5.86 (+0.46%)
10-yr Bond 4.927 -0.01 (-0.20%)
30-yr Bond 5.065 +0.018 (+0.36%)
NYSE Volume 2,333,085,000
Nasdaq Volume 1,776,888,000


4:20 pm : Despite digesting the biggest terrorist threat since 9/11, stocks demonstrated their resiliency Thursday to such concerns as a sell-off in oil alleviated some of the uncertainty about the impact an economy slowdown is having on corporate profit growth.

With underlying sentiment already cautious about just how much the economy is slowing, reports overnight that 21 extremists were arrested for plotting to blow-up planes traveling between London and the U.S. dominated the headlines Thursday and initially exacerbated economic concerns. As a result, the U.K. and U.S. raised their terrorist alerts to the highest level while the airline industry threat level was raised to its highest ever.

Be that as it may, recognition that the terrorist plot was in fact foiled, coupled with deterioration in oil prices throughout the session, especially after the Fed recently cited the lagged effects of increases in energy prices as inflation risks that could lead to additional monetary tightening, helped investors refocus their attention on the fundamentals -- earnings.

Kicking off another batch of better than expected results was American International Group (AIG 59.03 +0.54), which reported a 29% decline in Q2 profits last night. However, since earnings beat analysts' expectations for the first since the second quarter of 2005, handily no less, weary shareholders applauded the insurance giant's upside surprise, sending the blue chip up 3% to pace the way higher among the 20 Dow components that posted gains.

In addition to leadership from Financials, Consumer Discretionary (+1.4%) paced the way higher and provided notable leadership. Aside from benefiting at the expense of a crude oil prices losing 3.1%, Retailers got a huge boost from Target (TGT 47.51 +2.23) and J.C. Penney (JCP 65.72 +1.72), which by growing Q2 profits 13% and 37%, respectively, lent further credence behind a 12th straight quarter of double-digit earnings growth for the S&P 500. Movies & Entertainment was another group lending sector support, as Viacom (VIA 37.12 +3.37) surged 10% after topping estimates, while Restaurants got a lift after Brinker International (EAT 34.88 +2.88) beat expectations and pleasantly surprised Wall Street by affirming its 15% FY07 EPS growth projection.

Bargain hunting interest was also seen in underperforming areas like Industrials (+0.8%) and Technology (+0.6%); but even more notable perhaps was that, even though oil plunged 3.1%, the Energy sector was quite resilient. Albeit still limiting today's market gains, the sector not closing by nearly as much as such a drubbing in crude might typically warrant was also reassuring for investors, especially since Energy profits continue to account for the majority of earnings growth on the S&P 500.

While concerns that the thwarted terrorist attack may result in lower demand for jet fuel (e.g. canceled flights/delays), OPEC saying supplies would stay strong and more talks of a possible cease-fire in Lebanon also prevented the commodity from ever regaining any momentum. Further, oil's decline diminished the appeal of gold as a hedge against inflation, as the precious metal closing down 2.4% ruled out any flight-to-quality scenarios occasionally characteristic in the wake of terror threats, further underscoring the market's buoyancy to such fears. DJ30 +48.19 NASDAQ +11.46 SP500 +5.86 NASDAQ Dec/Adv/Vol 1254/1734/1.77 bln NYSE Dec/Adv/Vol 1320/1950/1.60 bln

3:30 pm : Indices continue to weaken going into the close, as sector leadership again becomes evenly split. Fortunately for the bulls, three of the four most influential sectors -- Financials, Technology and Industrials -- are still posting gains, while Health Care's decline remains minimal. However, the broader market is now at risk at closing lower for the fifth straight day, which would be its longest losing streak since 2004. DJ30 +26.09 NASDAQ +6.18 SP500 +2.84 NASDAQ Dec/Adv/Vol 1356/1613/1.51 bln NYSE Dec/Adv/Vol 1477/1764/1.35 bln

Have a great night :hi:

:rofl: