STOCK MARKET WATCH, Monday October 16

THE DOW REPORT
The Probe into the 4-year Cycle Top Continue

The last 4-year cycle low occurred on October 10, 2002 at 7,197.49. With the recent advance above the May 2006 high, this 4-year cycle advance has proven to still be alive and well. As of this writing on October 13, 2006, this advance has carried the Dow Jones Industrial Average up 4,763.02 points on an intra-day basis, or 66.17%. At present, this advance remains intact and my Cycle Turn Indicator remains bullish on the short, intermediate and long-term basis. The Cycle Turn Indicator turned bullish on both the intermediate and long-term basis in conjunction with the June/July lows and have remained bullish ever since. Beginning in September as we approached the May 2006 highs I began being cautious of this advance and I remain cautious today. When I say cautious, what I really mean is that I know this advance is mature and subject to at least an intermediate-term top. Let me make it clear that at this time I have no indication of such top and I have not had an intermediate-term sell signal since my indicators turned up in June. It is merely the maturity of the intermediate-term advance out of the June/July lows as well as the maturity of the entire 4-year cycle that is causing by cautionary stance at this time. However, until at least the intermediate-term Cycle Turn Indicator turns down, this advance is not done and can continue pushing even higher.

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Another topic surrounding the 4-year cycle that I want to share with you has to do with something called cycle translation. Cycles are measured from low to low. With the 4-year cycle we know that since 1896 this cycle has averaged 47 months in duration. The mid point of this cycle is therefore approximately 23 months. So, any cycle that tops out to the left of this center point is considered a left translated cycle and any cycle that tops out to the right of the center point is a right translated cycle. Of course the exact mid point is not actually known until a cycle has actually bottomed, but this can be used as a rough guide. I have found the 20 month mark to be a significant marker in regard to the 4-year cycle.

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

LONDON, Oct 16 (Reuters) - Sea Containers, the U.S.-listed passenger and freight transport company, said on Monday it had filed for Chapter 11 bankruptcy protection and had failed to pay a $115 million bond that fell due on Oct. 15. Bob Mackenzie, chief executive officer of Sea Containers (SCRA.PK: Quote, Profile, Research), said in a statement that the company would continue with its business strategy, with Chapter 11 protection providing time to put a reorganisation plan in place.

"Although we have not paid the October 15 public notes, we are optimistic about the success of our restructuring program and our ability to reach agreement with creditors," Mackenzie said.

The company said talks had been held with noteholders, and that while progress had been made, it had not been able to reach agreement with all stakeholders prior to the notes' maturity date.

The company said the filing only covered Sea Containers Ltd and two subsidiaries, Sea Containers Services Ltd and Sea Containers Caribbean Inc. It said operating subsidiaries such as UK rail operator Great North Eastern Railway and New Jersey ferry services company Seastreak would continue their normal day-to-day operations.

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-10-16T063117Z_01_L16502608_RTRIDST_0_TRANSPORT-SEACONTAINERS-BANKRUPTCY-UPDATE-1.XML

8:30 AM NY Empire State Index Oct
Briefing Forecast 13.0
Market Expects 12.0
Prior 13.8

8:30 AM ET 10/16/06 OCT. EMPIRE STATE INDEX 22.9. VS. 12.6 EXPECTED

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7BEC74C13F%2D4F03%2D4BDF%2D9979%2DC01D9474A312%7D&symbol=

WASHINGTON (MarketWatch) -- Factory activity accelerated in the New York region in early October, according to the Empire State index released Monday by the New York Federal Reserve Bank. The Empire State index rose to 22.9 in October from 13.8 in September. Economists were expecting a decline to about 12.6. The new orders index fell to 11.8 from 14.0. The prices paid index fell to 30.8 from 41.0, showing lesser inflationary pressures.

SINGAPORE - Oil prices rose Monday following a weekend announcement that OPEC would meet later this week to discuss production quotas, including the possibility of cutting output by 1 million barrels a day to stop falling prices.

The market also was reacting to the shutdown last week at two of Norway's offshore oil platforms — reducing flows by about 10 percent from the world's third-largest oil exporter — and an early snowstorm that hit the northeastern United States late last week.

"That reminds the market that the winter heating season is coming, the time when demand for petroleum peaks," said Victor Shum, an analyst with Purvin & Gertz in Singapore.

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The Organization of Petroleum Exporting Countries said this weekend that it would hold an emergency meeting Thursday in Qatar to review the market situation and discuss production quotas.

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VIENNA (AFP) - The Organization of Petroleum Exporting Countries (
OPEC) said it was revising its world oil demand growth forecast for 2006 down by 100,000 barrels to 1.0 million barrels per day, in its monthly report published in Vienna.

"In light of preliminary data for the first three quarters of 2006, world oil demand growth was revised down by 0.1 mb/d (million barrels per day) for 2006" from the last monthly report, the cartel said Monday.

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NEW DELHI - Niger is keen to import Indian rice milling machines — and get advice on how to drill for oil. South Africa welcomes Indian investment to build stadiums for the 2010 World Cup soccer tournament. And Ethiopia wants help from India for its highway projects.

African countries are increasingly looking to India, as well as China, for help developing their economies — moves that could significantly shape the future of global trade flows.

"We want to learn from India's experience," said Amadou Dioffo, managing director of Sonidep Petrol and Gas Company of Niger. "Like us, India also has a colonial past. We want to know how and why it is doing so much better now."

For India, these opportunities come as its economy is booming and its companies are aggressively scouting for new markets and new resources.

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:donut: and lurkers.

"We want to learn from India's experience," said Amadou Dioffo, managing director of Sonidep Petrol and Gas Company of Niger. "Like us, India also has a colonial past. We want to know how and why it is doing so much better now."

Hmmmmm :dilemma: Let me make a few guesses here.
1) They were colonized by the British, and as bad as that was-the British were not that gung ho about slavery. They might have been bigoted, but they didn't dehumanize the Indians the ways the Dutch, Portuguese, German, and others did in Africa.
2) The Indians had a written tradition of history-Africa had an oral tradition. Both have the same value, but the written is more prized.
3) Africa was kept divided tribally within artificial borders (divide and conquer). Britain was only able to divide along religious lines-Moslem and Hindu.
4) Ghandi-he was able to unite, and for the first time India was able to see itself as one country. Africa has yet to unite.

Frankly, if we could have a do over, African states should be divided along tribal borders. Just that alone would bring a lot of peace to that ares. We should support the pan African military forces with material and money. It is a first attempt by these governments to stabilize the region and they are doing well, all things considered.

The funny thing is...Americans are liked in Africa. As one of my missionary friends put it 'they like us because we treat them like human beings'. We have the potential to have good personal and business relations in Africa and it is through lifting the folks up that we can have lasting peace in the region.

Lions, and tigers, and bears, Oh My. Happy hunting.....

... and griffins, unicorns and dragons. Happy hunting (cooperatively, one hopes) indeed!

('Morning, AnneD. I'll be around for a few days only :hi: )

P.S. Never forgetting the elephant, of course :-)

:hi: We really miss you when you are out of pocket. Always a pleasure to see you back. You are always welcome to hang you hat on this thread. Take care.

Accusing oil companies of lying about the cost of Proposition 87, former President Clinton on Friday called "bogus" their contention that approving a tax on oil revenues would trigger higher gas prices for California motorists.

During a rally at UCLA, the former president said the state ballot measure would help California move toward less expensive, cleaner forms of energy by funding research into alternative fuels.

Gas prices are lower in other states that already have oil taxes like the one proposed by Proposition 87, Clinton added.

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The measure on the Nov. 7 ballot would impose up to $485 million a year in taxes on companies that extract oil from California land, with the money going to finance research and development of alternative energy. Over its life, the measure would raise $4 billion for grants and loans to projects developing alternative fuels and more energy-efficient vehicles.

With opponents, led by oil companies, pumping more than $52 million into the campaign to defeat the state ballot measure, supporters brought Clinton into the state just days after launching a television ad campaign in which his former vice president, Al Gore, said the measure would reduce the state's dependence on foreign oil and clean the air.

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http://today.reuters.co.uk/news/articleinvesting.aspx?type=stocksNews&storyID=2006-10-16T110904Z_01_NOA631199_RTRUKOC_0_ENERGY-SHELL.xml

MOSCOW (Reuters) - Russia threatened Royal Dutch Shell on Monday with the full armoury of sanctions at its disposal if it fails to address environmental violations at its Sakhalin-2 project, which has run far over budget.

But, Resources Minister Yuri Trutnev said, Shell (RDSa.L: Quote, Profile, Research) had no reason to fear for the future of the vast oil and gas project if it tackles a catalogue of environmental concerns raised by Russian officials.

"If the company presents an exhaustive plan to remove environmental damage ... then it is completely obvious that there will be no point in stopping the project," Trutnev told reporters on the fringes of a meeting with foreign investors.

"If such measures are not proposed, then absolutely any sanctions are possible from our side."

Shell is developing fields off the coast of the Pacific island of Sakhalin and building one of the world's largest liquefied natural gas plants. The project is due to start supplying Asian and U.S. customers from mid-2008.

Sakhalin-2 has come under pressure from the Kremlin over ecological and technical issues which analysts say are part of a broader Kremlin campaign to limit foreign involvement in the strategic energy sector.

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http://today.reuters.co.uk/news/articlebusiness.aspx?storyid=2006-10-16T145412Z_01_L16418243_RTRUKOC_0_UK-ENERGY-SAKHALIN-EXPLORATION.xml&type=businessNews&WTmodLoc=Business-C3-More-4

YUZHNO-SAKHALINSK, Russia (Reuters) - State oil firm Rosneft (ROSN.MM: Quote, Profile, Research) is preparing to turn Russia's island of Sakhalin into a huge energy exploration hub with the help of the likes of BP (BP.L: Quote, Profile, Research), despite growing pressure on other majors.

Rosneft officials said last week they were speeding up exploration to confirm the huge potential resources of the Pacific island, which will soon see as many rigs in its offshore waters as the Gulf of Mexico or the North Sea in their heyday.

"There is a new surge of exploration activities on Sakhalin today," said Lev Brodsky from Rosneft, which leads or participates in a total of six projects in Russia's Far East. "There is a very limited number of places in the world where nine or more drilling platforms are working simultaneously", he said.

Sakhalin had long relied on 10-year-old production sharing deals with foreign majors Exxon Mobil (XOM.N: Quote, Profile, Research) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research), which are developing the huge Sakhalin-1 and Sakhalin-2 oil and gas blocks. But they have come under pressure from ecological and technical agencies as they get closer to completion and analysts say the Kremlin is seeking to regain control over them or get large stakes on lucrative terms.

The new deals on Sakhalin, all of which are led by Rosneft, have never got PSA terms as Russia told oil firms to switch to the regular tax regime. This gives them a huge advantage over PSA deals, which have fallen from the Kremlin's favour, industry sources say.

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http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2564222

Companies are not building power plants and power lines fast enough to meet growing demand, according to a group recently assigned by the federal government to assure proper operation of the power grid.

The group, the North American Electric Reliability Council, in its annual report, to be released Monday, said the amount of power that could be generated or transmitted would drop below the target levels meant to ensure reliability on peak days in Texas, New England, the Mid-Atlantic area and the Midwest during the next two to three years.

The council was established in 1965 after a blackout across the Northeast, and has since set voluntary standards for the industry. After the blackout of 2003, which covered a vast swath of the Midwest, Northeast and Ontario, Congress set up a process that would eventually give the council the authority to fine American companies that did not follow certain operating standards. It is seeking a similar designation in Canada, since — electrically speaking — the border is irrelevant.

For years, the council has produced often-gloomy annual reports, but this is the first to be officially filed with federal agencies, and to recommend specific action.

The report says, for example, that utilities should be encouraged to pursue financial incentives for customers to cut use during peak hours, thereby lowering demand for new power plants and transmission lines. Financial incentives could reward customers’ installation of more efficient equipment or, more drastically, reward a factory for closing on a day when electricity supplies are expected to be tight.

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The oil price should be edging up towards $65 if the market thorght there was going to be a cut.

Possibly bush*'s Arab friends think they might not want to cut production just before the mid-terms.

(Another completely wrong prediction alert)

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2564412
by Jack Rosebro

Marking the removal of the final bureaucratic barrier to the construction of the world’s largest full-scale CO2 capture-and-storage (CCS) facility, Norway’s Ministry of the Environment has issued a carbon dioxide emission permit to Norwegian energy company Statoil ASA in conjunction with its planned co-generation plant in Mongstad.

Statoil is taking a phased approach to the project. The initial carbon capture capacity will be about 100,000 tonnes per year starting in 2010, and Statoil will decide in 2012 whether or not to invest in a larger capture facility for Phase 2. If realized, Phase 2 would be fully operational by the end of 2014 with a capacity of more than 1.3 million tonnes of CO2 per year—the world’s largest CCS project of its kind.

Statoil plans to test several technological solutions will be tested in parallel in the first phase of the project with an eye to developing solutions of “broad international relevance and not...project-specific to Norway.”

A technology company responsible for various aspects of the further development of the carbon capture technology is to be set up at Mongstad. The government will invite interested parties to consider part ownership, while Statoil will assume 20% per cent ownership from the start.

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

Last trade 87.02 Change -0.15 (-0.17%)

Dollar Rallies as All Signs Point to a Soft Landing

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/Dollar_Rallies_as_All_Signs_1160775484605.html

US Dollar

The influx of surprisingly strong US economic data has made it difficult for the US dollar not to rally. Recession forecasters as well as hard landing advocates have probably reverted back into their shells as US consumer confidence hit a 1 year high and retail sales excluding gasoline prices jumped 0.6 percent to the second highest reading in 6 months. Even though the headline retail sales number was the worst that we have seen since May 2002, the decrease was primarily due to a hefty 9.3 percent drop in gasoline station sales, which can be perceived as a positive for the US consumer who has had to deal with high prices at the pump for more than six months. This has left room for additional spending on sporting goods, general merchandise and clothing, just like the Redbook and same store sales reports have been signaling. If oil prices continue to remain low, the strong confidence of consumers, as measured by the University of Michigan survey, could lead to more spending in the months to come. For doomsday forecasters, a soft landing may be all that they will see as the latest data indicates a very lively consumer base, pushing out any possibility of an interest rate cut by the Federal Reserve early next year. The dollar’s rally reflects the changing sentiment of the market and it will be up to the data due in the week ahead to determine whether the US dollar has what it takes to break 1.25 against the Euro and 120 against the Japanese Yen. The calendar is very heavy with producer and consumer price reports due for release along with the numbers for net foreign purchases of US securities, industrial production, the Philadelphia Fed manufacturing survey, housing market indices and a number of speeches by Federal Reserve officials including Chairman Bernanke on Monday.

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Retail Runs the Dollar

http://www.dailyfx.com/story/strategy_pieces/trade_or_fade/Retail_Runs_the_Dollar_1160975077317.html

How strong is the US economy? That’s the key question facing the currency market as the EUR/USD now trades near the psychologically important 1.2500 level. This week’s US Advanced Retail Sales and University of Michigan survey went a long way towards making the dollar bull’s case. While the headline numbers looked bearish at first glance dropping -0.4% versus 0.2% expected, they masked underlying strength. Ex-gasoline Retail Sales actually rose 0.6% indicating that the US consumer was alive and kicking and since the US consumer comprises 70% of the US economy US GDP growth for Q4 may not be as tepid as market initially thought. The Retail Sales news was further enhanced by much better than expected U of M numbers which printed at 92.3 with the outlook component jumping to a yearly high. Overall the end of week data suggested that despite the contraction in housing US economy continues to perform well and consumption should remain firm into the critical Christmas season.

Yet as quickly as they can brighten fortunes can fade as well. Clearly the above estimate numbers from last week we driven by the massive decline in the price of oil and gasoline. But oil may be hitting a near term bottom. With early snow storms occurring in Buffalo Chicago and Detroit, it may be time to say goodbye to Indian summer and hello to an early winter which is sure to wreak havoc with oil prices especially if there is even a hint of geo-political risk. In short, with EUR/USD now trading near critical support levels we wonder if there is enough strength in US data to propel the greenback further. Next week Empire and Philly may weigh on trade again but the marquee event of the week may well be the TICS report. With US Trade deficit hitting record highs of -$69 Billion the US can ill afford another poor showing from foreign capital inflows. If the number prints low once again talk of structural problems will return to the markets. If however, it surprises to the upside, the greenback longs may be emboldened to test the 1.2400 figure.



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http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39006.2916435185-883126901&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

The yen strengthened on Monday, hitting a one-week high against the euro and retreating from a 10-month low against the dollar, after Russia’s central bank said it was starting to buy the Japanese currency for its reserves. Alexei Ulyukayev, first deputy chairman of the Russian central bank, said the proportion of Russia’s foreign exchange reserves currently invested in the yen was close to zero, but the bank would try to increase it to several per cent. “We are thinking about diversification and want to broaden the number of currencies in which we are allowed to invest assets,” Mr Ulyukayev told a conference in Moscow. “Recently we have included the yen.” Russia’s $268bn gold and foreign exchange reserves had previously been invested 45 per cent in dollar-denominated assets, 45 per cent in euros and 10 per cent in sterling.

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The yen rose 0.3 per cent against the euro to Y149.19 and climbed 0.2 per cent against the dollar to Y119.35.

http://today.reuters.co.uk/news/articleinvesting.aspx?type=ukPoundRpt&storyid=2006-10-16T141654Z_01_L16580327_RTRIDST_0_MARKETS-STERLING-CLOSE.XML&WTmodLoc=InvArt-C2-AlsoToday-7

LONDON, Oct 16 (Reuters) - Sterling rose to one-week highs against the dollar and euro on Monday, supported by strong house price data, and with investors betting that this week's economic releases will back the case for at least one more UK rate hike.

The Rightmove house price index showed prices in England and Wales surged an annual 11.5 percent in October, taking asking prices to a record high, in a further sign higher borrowing costs have not stifled demand.

Investors are now looking ahead to inflation data on Tuesday, minutes from this month's Bank of England meeting on Wednesday and third quarter GDP numbers on Friday for evidence that the BoE will raise rates in November and for insight into the likely path of monetary policy into 2007.

"We are moving into a week when you are going to get very important data for sterling ... and I think the market might be positioning for a positive set of numbers," said Adarsh Sinha, currency strategist at Barclays Capital. "A November rate hike is pretty much priced in and I guess the market is now thinking in terms of whether the MPC is going to move in 2007 or not, and if the data comes in on the strong side, that's what the market will start pricing in which would be positive for sterling."

By 1358 GMT, sterling was up 0.4 percent at $1.8634 <GBP=>, rebounding from last week's 2-1/2 month lows of $1.8516. Against the euro, it hit a one-week high of 67.19 pence <EURGBP=>. On a trade weighted basis sterling also rose to a one-week high, at 102.8 <=GBP>.

The market took background support from a jump in the yen after Russia's central bank said it had started buying the Japanese currency for its reserves and was looking into buying other currencies. In June, Russia said sterling and yen together made up 10 percent of its FX reserves.

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http://www.ft.com/cms/s/9debfe50-5ced-11db-9d15-0000779e2340.html

European shares were higher on Monday, as energy stocks were boosted by rising oil prices, while merger speculation continued to drive sentiment.

By midday, the FTSE Eurofirst 300 was up 0.3 per cent to 1,444.48, Frankfurt’s Xetra Dax was rose 0.2 per cent to 6,183.76, the CAC 40 in Paris gained 0.1 per cent to 5,357.84 and London’s FTSE 100 climed 0.4 per cent to 6,179.2.

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Oil companies figured high up on the Eurofirst leaderboard as crude prices continued to rise after Opec, the oil producer cartel, announced an emergency meeting in Qatar later this week to discuss how to implement production cuts.

Norsk Hydro gained 3.3 per cent to NKr155, while Statoil rose 3.1 per cent to NKr166 and OMV, the Austrian group, gained 2.9 per cent to €42.92.

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http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=2006-10-16T104237Z_01_L16548350_RTRIDST_0_MARKETS-BRITAIN-STOCKS-UPDATE-1.XML

LONDON, Oct 16 (Reuters) - Britain's FTSE 100 (.FTSE: Quote, Profile, Research) index pressed ever higher on Monday, scoring a sixth day of progress underpinned by miners and oil producers and by takeover talk in the banking sector.

As commodity prices rebounded from recent falls, the index of Britain's leading shares touched its highest intra-day levels since February 2001 having ended on Friday at its highest closing level in more than five-and-a-half years.

While copper's rally was capped by demand concerns, nickel hit new highs and gold continued to shine, sending mining heavyweights BHP Billiton (BLT.L: Quote, Profile, Research), Rio Tinto (RIO.L: Quote, Profile, Research), Anglo American (AAL.L: Quote, Profile, Research) and Xstrata (XTA.L: Quote, Profile, Research) up close to 1 percent. Lonmin (LMI.L: Quote, Profile, Research) led the sector, rising 1.7 percent.

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http://www.ft.com/cms/s/48da1e4c-5d1f-11db-9d15-0000779e2340.html

The German economy is growing at its fastest rate since 2000 and companies have begun to re-hire after five years of downsizing.

The German government will on Friday add just less than a percentage point to its gross domestic product growth estimate for this year, underlining the robustness of the recovery under way in Europe’s largest economy.

A senior government official involved in compiling the new forecast told the FT that the government had yet to settle on a precise figure, but that it would be at the top end of a 2-2.5 per cent range, up from the 1.6 per cent forecast made in January.

<snip>

Economists have been surprised by the vigour and breadth of the recovery in Germany. The economy, heavily reliant on exports, is now benefiting from healthy corporate investment.

Companies have begun to hire more staff. The number of employees in the country has risen steadily from 38.3m to 39m between January and August.

“Private consumption is the one indicator that is not quite where it should be,” the official said. “But given the improvement on the investment front, I would expect consumption to rebound shortly.”

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http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39006.4866087963-883142748&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

London equities extended gains to reach fresh 5-year highs on Monday as stronger crude prices boosted major oil companies and continued bid-talk lifted banks. The FTSE 100 ended the day up 0.3 per cent at 6,172.4 a rise of 15 points over Friday’s 5-year closing high of 6,157.3. The heavily weighted oil and mining sectors responded to stronger prices on world commodities market, in line with improving sentiment toward prospects for sustained global economic growth. Oil giant BP rose 1.4 per cent to 600.5pp with Royal Dutch Shell 0.9 per cent stronger at 1837p. Lonmin was 4.1 per cent higher at 2810p and BHP Billiton made gains of 1.1 per cent to 1010p. On the downside, British Energy tumbled 23 per cent to 433.1p after the electricity generator revealed details of worse-than-expected technical problems at its power stations, raising fears about the impact of the news on its earnings. Fellow generator Drax Group rose 4.5 per cent to 811.5p on hopes that the coal-fired power supplier could plug some of the gap left by British Energy’s failings.

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=eurMktRpt&storyID=2006-10-16T163545Z_01_L16061029_RTRIDST_0_MARKETS-EUROPE-STOCKS-UPDATE-4.XML

LONDON, Oct 16 (Reuters) - Firm energy and mining shares and ongoing takeover news pushed European stocks to a fresh five-year closing peak on Monday as they posted a ninth straight session of gains, their longest winning run since March.

Gains were capped, however, with a disappointing update from Philips (PHG.AS: Quote, Profile, Research) unsettling some investors as the third quarter reporting season kicks in. Nuclear firm British Energy (BGY.L: Quote, Profile, Research) also slumped 24 percent after being hit by repair concerns.

The pan-European FTSEurofirst 300 index <.FTEU3> of top shares closed up 0.2 percent at 1,443.5 points, its highest official closing level since June 2001.

The benchmark is up 13 percent on the year and has rebounded 17 percent from a seven-month low hit this June after inflation worries sparked a sell-off in May when the market was last at five-year highs.

Strategists doubt there will be another correction soon.

"Although several indices have surpassed their May levels, we do not see the same excesses that brought the market lower then. We remain bullish," said Shanthi Nair, strategist at Lehman Brothers.

The wider DJ Stoxx 600 <.STOXX> also added 0.2 percent, the narrower DJ Euro Stoxx 50 <.STOXX50E> ended 0.07 percent higher, while Germany's DAX <.GDAXI> ticked up 0.2 percent and France's CAC 40 <.FCHI> rose 0.16 percent.

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http://asia.news.yahoo.com/061016/afp/061016092027eco.html

TOKYO (AFP) - Japanese share prices have climbed to a five-month high with sentiment buoyed by another record-breaking performance on Wall Street as the yen stayed soft to boost the exporters, dealers said.

The headline Nikkei-225 index of the Tokyo Stock Exchange closed up 156.22 points or 0.94 percent at 16,692.76, the best finish since May 11. The interday high was 16,732.44.

The broader TOPIX index of all first-section issues rose 18.05 points or 1.11 percent to 1,646.05, just off the high of 1,649.17.

Gainers led decliners 1,443 to 189, with 61 stocks flat.

Volume fell to 1.49 billion shares from 1.84 billion shares on Friday.

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http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061016:MTFH63405_2006-10-16_10-44-19_PEK373725&type=comktNews&rpc=44

BEIJING, Oct 16 (Reuters) - China's efforts to curb runaway expansion in some industries are starting to pay off, but fixed-asset investment growth remains too rapid, the country' top economic planning official said in remarks published on Monday.

Ma Kai, head of the National Development and Reform Commission, said curbing the launch of new investment projects remained the main focus of the broad array of macro-control measures that Beijing was deploying.

In a speech made on Friday and posted on the agency's Web site, Ma said the economy was in good shape but the country faced some striking problems: fixed-asset investment and credit were still expanding too fast, while the trade surplus was too large.

"The government has taken a series of timely macro-economic measures and these measures have initially helped contain the momentum of blind expansion in some industries, but the problem of overcapacity has yet to be fundamentally resolved," the top economic planner Ma said.

Excess capacity in sectors such as steel, alumina, coking and autos showed no let-up, while risks remained for overinvestment in other industries including coal, power and textiles, he said.

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http://www.chinadaily.com.cn/bizchina/2006-10/16/content_709207.htm

China's annual economic growth is expected to slow to 10.5 percent in 2006 as government measures to cool the economy have some impact, a senior official from a top government think-tank said in remarks published on Monday.

While the economy had grown rapidly in the first half, fixed-asset investment and credit growth had slowed in July and August, the Shanghai Securities Journal quoted Fan Jianping, head of the State Information Centre's forecasting unit, as saying.

"As long as the government doesn't relax its tightening stance, we reckon economic growth will slow slightly and remain high, and that the economy will grow by an annual 10.5 percent this year," Fan said.

Still, the economy would be faced with problems such as the risk of an investment rebound and excess liquidity.

Annual fixed-asset investment growth was expected to slow to around 26.5 percent for the whole year from 29.8 percent in the first half, he said.

Retail sales were expected to grow 13.7 percent on the year in the second half and 13.5 percent for the full year.

Exports would grow 24.5 percent this year from a year earlier, while imports would likely expand 21.5 percent, he said.

China's trade surplus would near $150 billion in 2006, up around 40 percent compared with the previous year, he said.

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http://www.hindustantimes.com/news/181_1822085,00020003.htm

Foreign direct investment (FDI) inflows in South, East, and South-East Asia reached a new high of US $165 billion (Rs 742,500 crores) in 2005, a 19% increase over 2004, according to UNCTAD's World Investment Report 2006.

In South Asia, India received an FDI inflow of $7 billion out of a total of $10 billion.

“Rapid economic growth in South, East, and South-East Asia shows few signs of slowing, and a further expansion of FDI into and from the region is expected. FDI inflows to India have been gaining momentum in recent years, and the country's prospects for attracting FDI are promising”, said the report.

With continued high economic growth, the region has become more attractive to market-seeking FDI. It is a hot spot for transnational corporations, investors in financial services and high technology industries, said the report.

About two-thirds of the FDI in South, South-East and East Asia went to two economies -- China ($72 billion) and Hong Kong ($36 billion). The UN still lists the two as separate economies.

China was the largest recipient of FDI among all developing countries worldwide. Non-financial FDI alone was US $60 billion, a slight decline over the past year, while flows into financial services rose to US $12 billion, driven by large investments in Chinese banks. Hong Kong (China) and Singapore retained their positions as the second- and third-largest recipients in the region, attracting FDI of US $36 billion and US $20 billion, respectively.

A number of Association of South East Asian Nations (ASEAN) member states also received their highest FDI inflows ever. Inflows to Indonesia surged by 177% to US $5.3 billion.

/...

World Investment Report 2006: China surges in FDI rankings as Ireland plunges in ominous warning given dependence on foreign firms for 90% of our exports
http://www.finfacts.com/irelandbusinessnews/publish/article_10007657.shtml

China has become the world's third largest foreign direct investment (FDI) recipient, according to the World Investment Report 2006. The UK heads the rankings and Ireland, which relies on foreign-owned firms for almost 90% of its exports, has plunged.

According to the report released by the United Nations Conference on Trade and Development (UNCTAD) on Monday, China is the largest FDI destination of all developing countries, receiving 72.4 billion U.S. dollars of FDI in 2005.

However, Ireland plunged in the ranking from fifth place in 2004 to 89th ranking of 141 countries, in 2005.

The change in Ireland's fortunes mainly result from repatriation of profits of US companies due to a tax amnesty in the US.

In 2004, Ireland had a FDI figure of €9 billion. In 2005, there was an outflow of €18 billion.

Ireland's performance also reflects a contraction in the manufacturing sector in recent years resulting from a loss of competitiveness and a surge in the focus of multinationals on China and India in particular. Economists also say the reversal is down to Ireland's poorer performance in manufacturing.

/...

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=goldMktRpt&storyID=2006-10-16T095627Z_01_L16538585_RTRIDST_0_MARKETS-PRECIOUS-UPDATE-2.XML

LONDON, Oct 16 (Reuters) - Gold rose to fresh two-week highs on Monday, tracking firmer oil prices, but a firmer dollar was preventing prices from regaining the psychological $600 level.

Some traders said the precious metal, which has rallied some 3.5 percent from its low last Thursday, may need to pause before trying to crack $600.

Gold has also gained on tensions over North Korea's nuclear ambitions. The U.N. security council voted unanimously on Saturday to impose financial and weapons sanctions on North Korea for its claimed nuclear test -- a resolution Pyongyang immediately rejected.

Spot gold <XAU=> hit a high of $592.90 an ounce shortly after the morning fix, and was at $592.40/593.40 an ounce by 0944 GMT, against $588.80/589.80 late in New York.

James Steel, analyst at HSBC, said the potential influence of other commodities over gold should not be entirely discounted.

Base metals rallied last week and grains markets are also buoyant. Gold has recently shown a much stronger correlation than usual with oil.

/...

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39006.4534375-883140531&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

Nickel hit a new record in London on Monday with the three month futures price rising to £31,300 a tonne, with global invetories remaining at critically low levels. There are just 2,514 tonnes of nickel in London Metal Exchange warehouses available for delivery to the market. Sentiment towards nickel prices was boosted by concerns about supplies. Eramet, which operates the world’s largest ferronickel plant in New Caledonia, has declared force majeure (a form of legal protection) on nickel deliveries to Asian customers. Striking workers blocked access to two mines on the Pacific Island, limiting supplies of ore to the Eramet smelter. Tin retreated to $9,875 a tonne after the three-month contract hit $9,950 a tonne on Friday, the highest since 1989, on concerns about supply disrutptions in Indonesia, one of the world’s most producers. Lead traded at $1,490 a tonne, just short of the record $1,514 level reached on Friday.

and wall street continuing to use 'creative accounting' to fabricate a rosy economic picture that has ALL the validity of the existence of WMDs. 'WE' need some REAL ECONOMISTS to start telling the DAMN TRUTH. 'WE' will continue to hope for the truth!!

Militarism
Don Stott
http://www.gold-eagle.com/gold_digest_05/stott101206.html

As America goes down the drain economically, and the buck loses ever more value and purchasing power, there are many reasons for it. We have discussed the huge problem of overseas jobs, and how some of it comes about by tinkering with tariffs. But there are other serious things, which debilitate the dollar, causing it to shrink in value. Among them is the fact that America has become an extremely militaristic nation.

Many are now comparing us to the Roman Empire, which self bankrupted itself by means of expansionism and militarism, which the Romans could not pay for, and which caused them to fail and fall. Chalmers Johnson's book, "Nemesis: The Last Days of the American Republic," illustrates the situation very clearly, and he especially takes it out on the military. Economics is the thing which we all live and die by, and economics is the main thrust of "Militarism." According to the Federation of American Scientists, since the beginning of WW II, America has used military force in other nations, 201 times, and in most cases we were the instigator of the use of force. We have never succeeded in creating a single democratic institution in any of these forays. This leads the rest of the world to believe that we are an imperialist power, a new Rome, an out of control military society, fully determined to dominate the rest of the world.

40% of the military budget is "black," or secret, even from most members of Congress. The Black Budget, as an example, constructed a $300 million National Reconnaissance Office building without anyone knowing about it, even though it was plainly visible on Route 28, west of D.C. Elegant Lady, Tractor Rose, Forest Green, Senior Citizen, island Sun, and Black Light, White Cloud, and Classic Wizard, are all black budget items, which few outside of the military know how much they cost, or what they are. They cost hundreds of millions of paper dollars, all run off the printing presses, which decay the dollar. Johnson says, "We don't manufacture that much in this country any more, are the largest single weapons manufacturer on earth, and will sell weapons to practically anyone who wants them. We like to pretend that this is capitalism, but it isn't. It has only one customer, and the industry is extremely concentrated. According to the Pentagon's own count, we currently have 737 American military bases located in other countries. It took 300 years for the Roman Empire to succumb. In my lifetime, I've seen the collapse of the Nazi, Imperial Japanese, British, French, Dutch, Portuguese, and Soviet Empires. If you and I were talking in 1985, and I said to you that four years from now, the Soviet Union would disappear, you'd have thought he's probably daydreaming, but now it's gone." Very observant fellow.

America today, thanks to trade imbalances, welfare expenditures of various types, huge military expeditions, and the various black budget items, has unfunded but committed expenditures of $70 TRILLION DOLLARS, which obviously are un-payable. We have become dependent on foreign nations to buy our debt, in order to keep us trading with them. China knowingly holds hundreds of millions of US debt paper, and it well knows we are bankrupt. China and other nations keep buying our debt because we spend the dollars with them, which fosters their development and liquidity with un-backed pieces of paper. Both sides are participating in a game of musical chairs, except the public doesn't know the game is on-going. The public, thanks to the bought and paid for media, keep telling us that the economy us wonderful, and Bush has announced that he has cut the deficit by 50% as he promised. The "official" government figures on everything to do with economics are fairy tales, but everyone believes them.

/continues...

on cnbc talk about how wonderful the economy is or the 'bush boom' I want to just :puke: !!! Much like corporate america, there is ABSOLUTELY NOTHING REAL that comes from bushco; ABSOLUTELY NOTHING!!!!!!! The Roman's fate has become our reality, thanks to the neocon mentality.

I think the problem with the people concerned about the economy, is that they can't just quit complaining and start living in the reality-based world of the economists who say EVERYTHING IS FINE.

People like us, continue to focus on "economic principles," and standards which although they've been around for decades, are clearly not in keeping with the new POSITIVE mantra, which the folks at CNBC try to convey each and every day to us uninformed viewers.

The sooner we accept this reality, the better off we'll be in the long run. I myself plan on going out and splurging this holiday season. Run up my credit cards, tap into my home equity....maybe even buy an investment property in Tucson and an overpriced SUV to drive between my home and Arizona.

Or perhaps I'll just stick with Cash, Metals & Foreign Currency, just in case the know it alls are wrong.

'new math' and Prozac and Zoloft in the drinking water. Sorry for the mistake.

"40% of the military budget is "black," or secret, even from most members of Congress...We like to pretend that this is capitalism, but it isn't."

Up until September 10th, 2001, the Republicans were all about the allegedly free market, which was basically a pseudo-religion they foisted on middle-to-right America. It was a fraud, and people were beginning to catch on, but trifecta-time, 9-11 happened and they were tranceformed into the party keeping us safe from terra. Republicans didn't like being bleed dry by welfare moms? Well, I don't like being bled dry by the military-industrial complex without so much as a say in whether they are keeping us safe or destroying us. Power corrupts. Lots of power and lots of secrecy over the years as made national security our achilles heel. I wonder if the real patriots and real soldiers defending our Constitution can do anything to stop it now.

http://www.gold-eagle.com/editorials_05/mchugh101306.html
October 13 th, 2006
Robert McHugh, Ph.D.
(Please forgive if already published here Friday)

One of the things we do each night is evaluate the quality of each day's price move. We want to know whether a trend is genuine, with broad-based participation, implying a longer shelf life, or whether it is the result of panic buying or selling, which suggests high risk of termination, and reversal. When directional volume, issues, and points are near, or over 90 percent, that is an indication of fear being the motivating factor for the price move, not a solid sustainable trend. Selling panics are an indication of selling exhaustion, often leading to strong reversal rallies. But the reverse is true, which is important when we are in what appears to be a strong price rally, since Bear markets can wipe out months and years of gains from Bull markets in short order, in a matter of weeks. So, we want to know if a multi-month rally has occurred from solid, broad-based buying, or whether it was intervention short-covering induced.



Most autumns we see a significant decline. This attracts shorts. Bears take aggressive short positions where they buy puts, or agree to sell shares in the future at today's prices but do not yet own those shares. They are gambling prices will decline. Interventionists feed off of shorts. The rally since July has been almost entirely short-covering. We get one big move, about once a week, on buying panic, then no follow-up, with slightly down to sideways price action until the next week. What has been missing has been supply. Sellers have noticed these out of the blue short-covering rallies, so have disappeared. The interventionists have succeeded in muting supply pressure. This type of rally can continue for quite some time, and drive prices quite high, as we have seen. But it is a death trap. It is artificial. It will end as soon as some trigger event sends fear into markets, the kind that catches shorts on the sidelines, buyers exhausted, and interventionists helpless to play their game. We believe a Democrat victory in the coming election could be such an event.

Get this: All of the progress of this three month summer/autumn rally, all of it, occurred in only 9 days of trading, and all but one of the nine was a short-covering rally. In other words, without intervention induced short-covering, the Dow Industrials would be exactly where they stood in mid July, at the start of this rally. Other than those 9 trading days out of 63 since July 14th, the other 54 days of trading produced only 4 percent of the upside progress, and zero since July 19th. Zero. In 8 of the 9 trading days where upside progress was made, evidence of short-covering was present. That evidence included a larger rise in Demand Power than the decline in Supply Pressure, suggestive that shorts joined the buying. That evidence also included either upside volume, advancing issues, or upside points coming in at or very near a buying panic 90 percent. In each instance, a sharp up move started early in the day, followed by buying panic as shorts felt compelled to cover, pushing the rally higher throughout the day. There was only next-day follow-through to the upside one time, on August 16th, after a short-covering rally on the 15th, but it too showed evidence of short-covering. No days other than August 15th showed strong upside follow-through. Solid rallies see follow-through. This rally has been manufactured.

<snip>

The point of examining whether the quality of this rally is broad-based or is from short-covering, is critical as to the risk that it will end badly. Clearly the rally from July has not been broad-based, is not sustainable on its own, is not a classic "Bull" market, but has occurred from a lack of supply and a ton of buying and price pushing from those most pessimistic about the market, not from optimists. There was no net progress in 52 of the past 60 trading days. Think about that. All this market requires to tank is a reason to sell. The buying isn't there. Overall, the decline in Supply Pressure since July 19th was 25 points, more than the rise in Demand Power, which was 21 points. This is not what we should see in a solid bona fide rally. Sustainable rallies require a stronger rise in Buying Power with a corresponding decline in Selling Pressure. We have the opposite condition here, a weak rise with the decrease in Supply exceeding the increase in Demand. Can prices rise further from here? Sure. Figure another intervention short-covering rally or two before the election, and maybe another 200 points? But, it will stop when an event sends fear into Wall Street, and end badly.

Genuine rallies occur typically with 2 to 1 upside volume, advancing issues, and upside points, with the Demand Power rise about equal to the Supply Pressure decline each day, and we see follow through several days in a row. We don't see once a week hundred point gains, and then sideways action for four or five days. If buyers are excited about the future, we should see strong steady buying on a daily basis, with periodic profit-taking selling. That is not what has happened since July.

The motive? The November elections. Wall Street loves Republican control. The means? Hidden M-3, and the lawful actions of the Working Group and their surrogates as established by President Reagan in 1988.

/continues...

I wonder though if it isn't just what I want to hear. From my vantage point the recent rally makes absolutely no sense whatsoever,yet it was there anyway.

It has appeared to me to be no more than manipulation in an attempt for all to look good going into the election for the pukes.

What scares me the most is such a level of manipulation could be sustained for so long.It makes the whole idea of investing seem so much more risky when apparently the powers that be can push your investment one way or the other at will with no regard to reality based fundamentals.

Assuming that this article is right and I have no reason to doubt it. We are heading for a sharp decline after the elections. Which is exactly what I expect actually. The question is for me at that point. How does one try to get out of the way and not become a victim of the impending crash back to reality.

Is the answer to simply throw ones hands up in disgust and get the hell out ahead of time?

Still the yapping goes on though.... The economy is strong! Look at that market go! All indicators point up! rah rah sis boom bah!

It makes my head spin just trying to continue fooling my lying eyes!

http://www.financialnews-us.com/?page=uscomment&contentid=1045631696

President George Bush and the Republican Party are under pressure. The US army’s body count in Iraq is reaching unacceptable levels, let alone the death toll of locals. At home there are fears the country is heading for a serious recession. If the Republicans lose control of Congress, let alone the Senate, the lame duck tail-end of Bush’s second term could be calamitous.

The long-run economic problems are nothing new. Although growth has been excellent, inflation has been running well above target and with the balance of payments deficit being so large, the dollar is in continual danger of tanking. Personal savings are nil and the US is, in effect, being financially supported by China.

Until the summer, the trends appeared ominous. The Fed was raising short rates and inflation was climbing. The price of crude oil stopped short of $80 a barrel. Sales of new homes were dropping off a cliff.

Then, as if by magic, everything changed. The oil price went into reverse, tumbling to under $60 with favourable implications for the Consumer Price Index measure of inflation – although not for the core rate, excluding energy. Similarly, the gold bullion price – an indicator of the potential fragility of the dollar exchange rate – has crashed from its early summer high. The Dow Jones Average two weeks ago advanced to a high, at last beating the bubble top in January 2000.........

/snip

It is hard to see how the American government could manipulate home values. And yet long treasury bond yields have been falling for weeks. This is significant because the 30-year fixed mortgage rate has tumbled 50 basis points since touching a peak of 6.8% in July. Mortgage refinancing, which can revitalise the spending power of US consumers, has begun to pick up in volume. Confident consumers are more likely to vote for the party in power.

However, the pattern is curious. Most markets have been moving in directions favourable to the Bush regime. Perhaps bonds and commodities have been anticipating a recession. But then why has the equity market climbed?

Conspiracy theories have abounded since Hank Paulson, boss of Goldman Sachs, was nominated in May to become treasury secretary. He had no political qualifications but a powerful reputation as a market fixer.

Was he brought in to shore up the financial and commodities markets ahead of the poll? Goldman Sachs has enormous market power: soon after Paulson’s transfer to Washington, it achieved annual records for revenues and earnings.

It is big in commodities. Strangely, in August, it cut the weighting of lead-free petrol in its influential GSCI commodities index. Since June, the weighting has been rolled back from 8.7% to 2.3%. Perhaps this was related to questions of market liquidity.

Analysts argued, however, that this reallocation triggered a sale and a sharp price reduction, as index trackers – running $60bn in commodity funds – cut their exposures to the new level.

Other cynical observers ask whether the US has been manipulating its strategic oil reserves stored underground in Louisiana. It ceased to top them up last April but there has been no attempt to dump crude on the markets.

The gold bullion price is controversial. Why has it slumped when global economic growth remains strong and inflation is running above target in Europe as well as the US? Gold bugs are seizing on the public admission this month by Bundesbank president Axel Weber that, although his institution was not a seller of gold, he had been asked by central banks to release reserves through swap deals – presumably so that they can sell borrowed gold and push the price down further.

The Fed, acting on behalf of the US treasury, is regarded as the prime suspect. After all, European central banks are not keen sellers of bullion: they fell more than 100 tonnes short of their 500 tonnes annual selling limit under the Washington Agreement, in the year ended September.

Intervention by governments in markets is not unusual. A “plunge protection team” of top officials has been used occasionally by the US authorities to stabilise securities markets. Governments regard it as normal to manage currencies, including gold, in that category. The US treasury has an Exchange Stabilisation Fund, the activities of which are kept under wraps. It would be irregular, though, if such techniques were to be used to pursue political objectives.

/continues...

Dow 11,967.79 Up 7.28 (0.06%)
Nasdaq 2,365.06 Up 7.77 (0.33%)
S&P 500 1,366.51 Up 0.89 (0.07%)
10-Yr Bond 4.788% Down 0.018
NYSE Volume 373,620,000
Nasdaq Volume 303,735,000

10:00 am : Not much has changed since the last update as spilt industry leadership continues to dictate early action. Of the six sectors trading lower, the absence of leadership in Financials is acting as the biggest constraint for the bulls. Wachovia (WB 55.35 -1.12) reported a 13% year/year rise in Q3 earnings, keeping the S&P 500 on pace for a 13th straight quarter of double-digit profit growth. However, WB’s in-line report on lower-than-expected revenue and some concerns about the impact an inverted yield curve will have on other money center banks has sparked some sector consolidation. Follow-through strength in Technology, however, is acting as somewhat of an offset, at least for the Nasdaq as it clings to a small gain. Intel (INTC 21.97 +0.37) saying Q4 sales will be higher than expected on market share gained from Advanced Micro Devices (AMD 25.20 -0.03) and easing concern about the release of Microsoft's new Vista operating system is acting as the biggest source of support. Intel reports tomorrow after the close. DJ30 -3.93 NASDAQ +2.96 SOX +0.9% SP500 -0.21 NASDAQ Dec/Adv/Vol 1148/1371/166 mln NYSE Dec/Adv/Vol 1194/1558/96 mln

09:40 am : Even though it appears Q3 operating earnings for the S&P 500 in aggregate are on track to rise 14% or more from a year ago, without much disruption to Q3 forecasts, stocks open with little fanfare. Three consecutive weeks of solid gains, and the Q3 earnings season not expected to kick into full gear until tomorrow, has left investors questioning the sustainability of a broad-based rally that also has the Dow within striking distance of 12,000. To wit, valuation concerns have prompted Merrill Lynch to downgrade General Electric (GE 35.70 -0.28) to Neutral. However, more evidence

Dow 11,971.39 Up 10.88 (0.09%)
Nasdaq 2,364.87 Up 7.58 (0.32%)
S&P 500 1,366.95 Up 1.33 (0.10%)
10-Yr Bond 4.7880% Down 0.0180
NYSE Volume 873,861,000
Nasdaq Volume 693,240,000

11:30 am : The Dow is back in the green but there still isn't much conviction on the part of buyers. Intel (INTC 21.78 +0.18) has regained some of its earlier momentum, contributing to an uptick on all three major averages; but sharp gains of 3.9% and 3.5% on SanDisk (SNDK 61.45 +2.29) and Broadcom (BRCM 30.75 +1.03), respectively, are providing more noticeable support for the tech-heavy Nasdaq. Broadcom was added to Cowen's Focus List while upbeat analyst commentary is also giving SanDisk a boost. DJ30 +5.44 NASDAQ +6.98 SP500 +1.08 NASDAQ Dec/Adv/Vol 1084/1728/612 mln NYSE Dec/Adv/Vol 1082/1978/448 mln

11:00 am : Recent recovery efforts are short-lived as oil prices hitting session highs contribute to the Dow slipping back into the red. Oil, which was under pressure earlier following reports that OPEC cut their 2006 outlook for world oil demand ahead of its emergency meeting Thursday, has since turned positive. Crude futures are trading in sympathy with cold weather in parts of the U.S. boosting the prices of natural gas futures (+7.6%). Intel (INTC 21.65 +0.05) relinquishing most of a 2.0% gain early on that had shares at fresh nine month highs is also stalling some of the market's attempt to extend recent gains.DJ30 -6.97 NASDAQ +4.78 SOX +0.3% SP500 +0.28 NASDAQ Dec/Adv/Vol 1012/1743/480 mln NYSE Dec/Adv/Vol 1053/1932/338 mln

10:30 am : Market rebounds a bit since the last update but only enough to inch the blue chip averages above the flat line. A turnaround in Health Care has been the most noticeable reason for the market's modest improvement. Unitedhealth Group (UNH 49.39 +0.64) opened down 3.3% amid reports of a management shakeup, but further analysis of the news has removed some of the ongoing uncertainty tied to departing chairman and CEO William McGuire. UNH shares are now up 1.3%. DJ30 +9.52 NASDAQ +9.10 SP500 +1.72 NASDAQ Dec/Adv/Vol 939/1751/334 mln NYSE Dec/Adv/Vol 962/1950/222 mln

---...Financial deregulation has produced a monster, and resolving the many problems that have emerged is scarcely possible for those who deplore controls on making money. The Bank for International Settlement's (BIS) annual report, released in June, discusses these problems and the triumph of predatory economic behaviour and trends "difficult to rationalise". The sharks have outflanked more conservative bankers. "Given the complexity of the situation and the limits of our knowledge,

it is extremely difficult to predict how all this might unfold" (22). The BIS does not want its fears to cause panic, and circumstances compel it to remain on the side of those who are not alarmist. But it now concedes that a big crash in the markets is a possibility, and sees "several market-specific reasons for a concern about a degree of disorder".

We are "currently not in a situation" where a meltdown is likely to occur, but "expecting the best but planning for the worst" is still prudent. The BIS admits that, for a decade, global economic trends and financial imbalances have created worsening dangers, and "understanding how we got to where we are is crucial in choosing policies to reduce current risks" (23). The BIS is very worried. ---

http://www.zmag.org/content/showarticle.cfm?SectionID=10&ItemID=11199

"There are now at least 10,000 hedge funds, of which 8,000 are registered in the Cayman Islands. However, the 400 funds with $1bn or more under management do 80% of the business. They cannot be regulated. They have over $1.5 trillion in assets and the daily global derivatives turnover is almost $6 trillion (equal to half US gross domestic product). With the economic climate euphoric over the past five years, most funds have won, although some have lost. In the year ending this August, nearly 1,900 were created and 575 were liquidated. Standard & Poor would like to rank their credit-worthiness, but has yet to do so: bigger funds claim to use computer models to make trades, and three of the 10 biggest claim they make purely quantitative decisions

Dow 11,983.08 Up 22.57 (0.19%)
Nasdaq 2,366.52 Up 9.23 (0.39%)
S&P 500 1,368.79 Up 3.17 (0.23%)
10-Yr Bond 4.7880% Down 0.0180
NYSE Volume 1,343,204,000
Nasdaq Volume 1,050,963,000

1:30 pm : Even though the recent uptick in stocks has been modest, it has been enough to lift the indices to fresh session highs. With Fed Chairman Bernanke scheduled to address the American Bankers' Association at 1:30 ET, stocks were in trading in a relatively narrow range. However, investors are also awaiting Q&A from St. Louis Fed President Poole, who is likely to elaborate on his dovish comments from last week which indicated a willingness to cut rates should the economy stumble.DJ30 +17.85 NASDAQ +7.19 SP500 +2.28 NASDAQ Dec/Adv/Vol 1151/1774/1.0 bln NYSE Dec/Adv/Vol 1092/2063/766 mln

1:00 pm : As investors make their way through the New York lunch hour, they are now grappling with oil prices surging to their best levels of the day. Crude oil futures are up 1.1% and back above $59/bbl as cold weather concerns continue to fuel momentum in natural gas futures (+10.1%). Fortunately for the bulls, subsequent leadership from the profit engine that is Energy (+1.5%) is acting as an offset to oil's inflationary characteristics.DJ30 +4.16 NASDAQ +5.03 SP500 +1.09 XOI +1.5% NASDAQ Dec/Adv/Vol 1141/1764/908 mln NYSE Dec/Adv/Vol 1097/2050/696 mln

12:30 pm : Stocks continue to hold their own as the afternoon session gets underway. Of the six sectors trading higher, Energy (+1.3%) is pacing the way higher as a 9% surge natural gas futures bodes well for explorers like DVN (+1.7%), APC (+2.2%), and EOG (+1.1%). Also benefiting from a pullback in the dollar has been Materials (+1.0%), which ranks second today on a percentage basis and is getting its biggest boost from Steel (+2.1%). The lack of leadership from the more influential Financials sector, though, continues to keep blue chip gains at a minimum. DJ30 +3.60 NASDAQ +5.28 SP500 +0.93 XOI +1.3% NASDAQ Dec/Adv/Vol 1094/1780/830 mln NYSE Dec/Adv/Vol 1050/2064/624 mln

12:00 pm : The major averages are holding onto modest gains midday as those trying to fight the upward trend in equities continue to come up short. However, even though it appears operating earnings for the S&P 500 in aggregate are on track to rise 14% or more in Q3 from a year ago, without much disruption to Q4 forecasts, even the bulls remain a bit hesitant to get overly excited since earnings season doesn't begin in earnest until tomorrow.

Bernanke seeks to be a sensitive supervisor
http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7BEF9FEDB6%2D2DCF%2D482C%2DBBBA%2D9052F7BA0631%7D&

WASHINGTON (MarketWatch) -- The Federal Reserve and other bank regulators are trying to reduce unnecessary costs of financial regulations while maintaining the safety of the banking system, Fed Chairman Ben Bernanke said Monday.
In a speech delivered by satellite to two banking organizations, Bernanke said the Fed is constantly working to maximize the social benefits of its regulations while minimizing the costs. Read his speech.

<snip>

In his speech, Bernanke noted that the Fed has reduced the costs of complying with laws on money laundering, community reinvestment and capital requirements standards. :eyes:

"Making good regulatory policy requires that we take a broad view of the way our rules affect our economy and our society, while maintaining a suitable degree of humility about our ability to accurately quantify the relevant benefits and costs," he said.

Recent legislative changes will allow the Fed to pay interest on banks' reserves, which will ultimately put a stop to inefficient tricks used by banks to minimize their required reserves. Bernanke said the changes would help the Fed conduct its monetary policy with less cost to banks.

Bernanke promised that the Fed would review its final capital standards rules to implement the Basel II international rules to make sure that U.S. banks have a level playing field with their large international competitors.

/...

http://news.yahoo.com/s/ap/20061016/ap_on_el_ge/economic_uncertainties

WASHINGTON (AP) - The nation's economy has encountered its shares of bumps this year, and voters are uneasy. They've seen the value of their homes drop and surging prices for energy and other goods take a big cut out of their paychecks.

In the face of these uncertain economic times, they think Democrats can do a better job handling the economy.

Never mind that gasoline prices have started dropping, that the value of their 401(k)s rises with each new Dow Jones industrial average record, and that the interest rates on their credit cards and adjustable mortgages have leveled off for now.

"Even though the economy is doing well by some indicators, voters are still nervous about the economy," said Costas Panagopoulos, a political science professor at Fordham University.

"They watched gas prices come down but watched them go up just as precipitously not too long ago. The stock market is doing well but that doesn't mean it can't come crashing down in days. Voters are reluctant to be overly confident about economic trends," he said.

America's voters care deeply about pocketbook issues. Eighty-eight percent of likely voters say the economy is an important issue — on par with the percentage of people who view the situation in
Iraq and terrorism as crucial matters, according to an Associated Press-Ipsos poll.

With the Nov. 7 elections looming, 59 percent of voters believe Democrats would do a better job handling the economy, while 39 percent prefer Republicans — the party that controls Congress and the White House.

/...

(ed. I think I'll post this also in LBN... see here ... and monitor comments...)

Dow 11,979.96 Up 19.45 (0.16%)
Nasdaq 2,363.50 Up 6.21 (0.26%)
S&P 500 1,368.89 Up 3.27 (0.24%)
10-Yr Bond 4.7840% Down 0.0220
NYSE Volume 1,772,212,000
Nasdaq Volume 1,441,480,000

3:00 pm : Little changed since the last update as investors find few catalysts to lift stocks more convincingly to the upside. To wit, even though advancers continue to outpace decliners on the NYSE by at least a 2-to-1 margin, total volume having yet to exceed 1.0 bln shares lends less credence behind today's move to the upside. Not to mention, the Q3 earnings season will kick into full gear tomorrow, with Dow components JNJ and UTX scheduled before the bell with IBM and INTC after the close, while investors will also digest an update on inflation at the wholesale level when the PPI report comes out at 8:30 ET. DJ30 +21.21 NASDAQ +8.15 SP500 +3.38 NASDAQ Dec/Adv/Vol 1126/1855/1.31 bln NYSE Dec/Adv/Vol 1041/2199/984 mln

2:30 pm : Indices are off their highs but are holding on to the bulk of today's gains with spirited leadership coming from a number of blue chips. Of the 16 Dow components trading higher, Alcoa (AA 27.33 +0.69) is still turning in the best performance (+2.6%). Also notable is a 1.9% advance from Exxon Mobil (XOM 69.73 +1.33), which is at its highest level in six weeks as oil prices remain poised to log their first three-session gain since August 22. Crude oil futures are up 2.3% at $59.94/bbl.DJ30 +20.12 NASDAQ +8.02 SP500 +3.11 XOI +2.1% NASDAQ Dec/Adv/Vol 1105/1858/1.22 bln NYSE Dec/Adv/Vol 1069/2160/926 mln

2:00 pm : More of the same for stocks as buyers remain in control of the action. Meanwhile, Bernanke's testimony has come and gone with little fanfare, as there was no mention about the U.S. economy or monetary policy in his prepared speech. Nonetheless, the Dow is setting a new intraday record and is now only 18 points shy of eclipsing the psychological 12,000 level as the underlying bullish tone focused on strong earnings growth helps investors shrug off a nearly 2.0% surge in oil prices. DJ30 +22.67 NASDAQ +10.23 SP500 +3.39 NASDAQ Dec/Adv/Vol 1070/1887/1.09 bln NYSE Dec/Adv/Vol 1014/2188/840 mln

Dow 11,980.60 Up 20.09 (0.17%)
Nasdaq 2,363.84 Up 6.55 (0.28%)
S&P 500 1,369.05 Up 3.43 (0.25%)
10-Yr Bond 4.7880% Down 0.0180
NYSE Volume 2,248,854,000
Nasdaq Volume 1,875,105,000

4:20 pm : Stocks extended their winning streak to three on Monday and, more notably, lifted the Dow to within 3 points of 12,000 before closing at another new all-time high of 11980.60.

After stumbling out of the gate on early profit taking efforts, it didn't take long for the market's underlying bullish tone to resurface and again sideline those trying to fight the upward trend in equities. Even though the Q3 earnings season is not expected to begin in earnest until Tuesday, any evidence to support a 13th straight quarter of double-digit profit growth for the S&P 500 kept investors keyed in on the bottom line.

Better than expected Q3 earnings from Eaton (ETN 75.53 +5.23) and WW Grainger (GWW 72.70 +2.18), coupled with a stronger than expected early read on October manufacturing conditions which suggested the much desired soft landing remains on track, provided a floor of support for the Industrials sector. Even the sector's transportation components turned in notable performances despite dealing with a third consecutive rise in oil prices.

Directly benefiting from crude's 2.4% climb back toward $60/bbl was the profit engine that is Energy - the day's best performing sector (+2.2%). Crude oil was up in sympathy with cold weather in parts of the U.S. boosting the prices of natural gas futures (+14%).

The financial sector was also in focus after Charles Schwab (SCHW 17.10 -0.46) beat expectations and Wachovia (WB 55.25 -1.22) matched Wall Street forecasts. However, with SCHW shares up more than 30% since bottoming out in mid-July, shareholders took some money off the table. In turn, Wachovia missing on its top line renewed some concerns about how much of an impact an inverted yield curve will have on other money center banks. Thus, the absence of leadership in Financials kept blue chip gains at a minimum and left investors still waiting for the Dow to reach its next milestone. DJ30 +20.09 NASDAQ +6.55 SP500 +3.44 NASDAQ Dec/Adv/Vol 1093/1942/1.85 bln NYSE Dec/Adv/Vol 1015/2243/1.42 bln

3:30 pm : A renewed wave of buying entering the final stretch now has the Dow just 10 points away from 12,000. Market breadth remains positive as eight out of 10 sectors post gains. With oil closing higher for a third straight session and up 2.4% on the day, it's easy to see why Energy (+2.2%) is pacing the way higher. Materials continues to hold on to the #2 spot in terms of performance (+0.8%) but the influential Industrials sector is providing more notable leadership, getting a boost after Eaton (ETN 74.76 +4.46) and WW Grainger (GWW 72.37 +1.85) topped analysts' expectations. DJ30 +29.61 NASDAQ +7.63 SP500 +3.58 NASDAQ Dec/Adv/Vol 1157/1840/1.51 bln NYSE Dec/Adv/Vol 1092/2138/1.11 bln

U.S. stocks up, Dow at record on economy, oil shares

NEW YORK (Reuters) - U.S. stocks rose on Monday, pushing the Dow to an all-time high just 3 points shy of 12,000, amid positive assessments of the economy and an advance in energy shares, boosted by a jump in oil prices.

Recent company comments and government data have underscored the notion that the U.S. economy is stronger than expected, heading into the end of the year, and that companies will post another quarter of double-digit earnings growth.

Crude oil futures rose more than $1 to nearly $60 a barrel, pulling up energy stocks such as Exxon Mobil Corp. as OPEC tries to cobble together a deal to cut production. Exxon Mobil's shares climbed 2.1 percent, or $1.43, to $69.83 on the New York Stock Exchange and were the top positive weight on both the Dow and the S&P 500.

But shares of top U.S. home improvement chain Home Depot Inc. fell 1.5 percent, or 55 cents, to $36.35, while those of diversified manufacturer General Electric Co. dropped 1.2 percent, or 42 cents, to $35.56. The two stocks ranked among the biggest drags on the Dow Jones industrial average after broker downgrades of both.

"Inflation news was looking decent toward the end of last week and economic growth is looking a little better than expected," said John Forelli, a senior vice president with Independence Investment in Boston, citing those reasons and the fact that "so far, earnings have been on target," for the positive sentiment surrounding equities.

The Dow Jones industrial average was up 20.09 points, or 0.17 percent, to end at a record 11,980.60. The Standard & Poor's 500 Index was up 3.43 points, or 0.25 percent, at 1,369.05. The Nasdaq Composite Index was up 6.55 points, or 0.28 percent, at 2,363.84.

Solid September retail sales numbers followed by favorable comments on the U.S. economy by GE's chief executive on Friday have helped alleviate recent concerns about U.S. growth through year end.

/...

Come on, Dow! Give me 12,000 tomorrow! Nothing would make me happier!







:hide:



I'm beginning to wonder if the market will crash post-Nov. elections if the Dems win. Sorta pull the rug out from under their victory and the GOP will use that to regain power in '08

put on your parachute and jump.