STOCK MARKET WATCH, Friday February 2

Cups With Handles Move Leading Indices Higher
BY MARTIN GOLDBERG

In the last few days, several of the major indices have broken out of a technical pattern known as the cup with handle. Accordingly, this generally portends more bullish action for stocks, provided that the indices maintain their former break out levels as support. Also important to the short term future of the stock market is the behavior of these indices as they now try to move into new higher ground. If the indices reverse and move below these breakout levels, what now appears to be bullish, will likely to turn quickly bearish. But for now, the breakouts deserve the bullish benefit of the doubt.

Most clear in this behavior is the action of the S&P 600 small cap index. The uptrend which proceeded from 2004 to May of 2006, has since corrected until last summer. A somewhat “V” shaped recovery proceeded until late October. Since that time the small cap index has corrected in the form of a high handle, until it has broken into new high ground this week with the formation of a long white candlestick. There is little for the bearish to hold on to in the S&P small cap’s technical chart.

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Now the Nasdaq 100 is in a similar lagging technical predicament. Still, it would not be a good decision to “play” this weakness as such an approach has been a consistently failing venture. As illustrated in the chart below, the Nasdaq sits near mid-field coming into Super Bowl Sunday. A decisive break of 1750 on the downside is the level where it appears that a new downtrend would be confirmed. It appears that 1850 is but a few Nasdaq 100 CEOs resignations away.

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Finally, the chart below depicts the long term trend of Weekly Jobless Claims versus the 10-year Treasury note yield (100 week moving averages are plotted for both parameters). Although these two parameters seemed to have tracked each other from the late 1960’s onward, the most recent recession in the early ‘00s produced a significant rise in unemployment claims that occurred concurrent with interest rates cuts. This looks like a serious long term divergence.

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

8:30 AM Nonfarm Payrolls Jan
Briefing Forecast 135K
Market Expects 150K
Prior 167K

8:30 AM Unemployment Rate Jan
Briefing Forecast 4.5%
Market Expects 4.5%
Prior 4.5%

8:30 AM Hourly Earnings Jan
Briefing Forecast 0.2%
Market Expects 0.3%
Prior 0.5%

8:30 AM Average Workweek Jan
Briefing Forecast 33.9
Market Expects 33.9
Prior 33.9

10:00 AM Factory Orders Dec
Briefing Forecast 2.0%
Market Expects 1.8%
Prior 0.9%

10:00 AM Mich Sentiment-Rev. Jan
Briefing Forecast 98.0
Market Expects 97.8
Prior 98.0

http://biz.yahoo.com/c/e.html

09. U.S. Jan. average workweek falls to 33.8 hours vs 33.9 Dec
8:30 AM ET, Feb 02, 2007 - 4 minutes ago

10. U.S. Jan. average hourly earnings up 0.2%
8:30 AM ET, Feb 02, 2007 - 4 minutes ago

11. U.S. Jan. construction jobs up 22,000
8:30 AM ET, Feb 02, 2007 - 4 minutes ago

12. U.S. Jan. factory jobs down 16,000; services up 104,000
8:30 AM ET, Feb 02, 2007 - 4 minutes ago

13. U.S. Jan. unemployment rate 4.6% vs 4.5% in Dec.
8:30 AM ET, Feb 02, 2007 - 4 minutes ago

14. U.S. Q4 nonfarm payrolls up revised net 104,000
8:30 AM ET, Feb 02, 2007 - 4 minutes ago

15. U.S. Jan. nonfarm payrolls up 111,000 vs 170,000 expected
8:30 AM ET, Feb 02, 2007 - 4 minutes ago

But the economy is on fire!!!

even more. Folks (Losers) desperate for work, for a few pennies.

And our police, homeland security dept. and military will be well prepared and thoroughly in the mood, the way things are going, to cope with the eventual consequences...

...Do I have to append: :sarcasm: :-( :crying:

02. UMich Jan. sentiment above 91.7 in Dec.
10:01 AM ET, Feb 02, 2007 - 3 minutes ago

03. UMich Jan. sentiment below 98.0 forecast
10:01 AM ET, Feb 02, 2007 - 3 minutes ago

04. UMich Jan. sentiment revised down to 96.9 vs 98.0 prev
10:01 AM ET, Feb 02, 2007 - 3 minutes ago

05. U.S. Nov. factory orders revised to 1.2% vs. 0.9%
10:00 AM ET, Feb 02, 2007 - 4 minutes ago

06. U.S. Dec. factory inventories rise 0.1%
10:00 AM ET, Feb 02, 2007 - 4 minutes ago

07. U.S. Dec. core capital orders rise 3.1%
10:00 AM ET, Feb 02, 2007 - 4 minutes ago

08. U.S. Dec. factory shipments rise 1.4%
10:00 AM ET, Feb 02, 2007 - 4 minutes ago

09. U.S. Dec. nondurable goods orders rise 1.8%
10:00 AM ET, Feb 02, 2007 - 4 minutes ago

10. U.S. Dec. durable goods orders rise 2.9%
10:00 AM ET, Feb 02, 2007 - 4 minutes ago

11. U.S. Dec. factory orders rise 2.4% vs. 2% expected
10:00 AM ET, Feb 02, 2007 - 4 minutes ago

We thought we were happy, but we really weren't. Gee I can't wait to see how really really we thought we were, but really weren't next month. :eyes::sarcasm:
Actually we don't have an smilie to express my contempt.

SINGAPORE - Oil prices rebounded Friday amid continued cold weather in the United States, a major consumer of heating oil, and as traders watched for signs that
OPEC members were cutting output.

Light, sweet crude for March delivery rose 18 cents to $57.48 a barrel in electronic trading on the New York Mercantile Exchange, mid-afternoon in Singapore.

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Oil prices have climbed nearly 14 percent since touching a 20-month low of $49.90 a barrel Jan. 18. The advance has been triggered by the arrival of cold weather in the U.S. Northeast, the nation's main heating oil consuming region.

A winter storm rushed across the U.S. Southeast Thursday, grounding flights a day after coating roads with deadly ice in the Midwest. Analysts expect continued colder-than-normal temperatures to boost natural gas and crude oil prices in the near term.

more

OMAHA, Neb. - Claiming U.S. dollars used to purchase gasoline made from Middle East oil funds terrorism, a group called the Terror-Free Oil Initiative opened the nation's first "terror-free" gas station.

The Coral Springs, Fla.-based group opened its first station Thursday in west Omaha, seeking to sell only gas that originates from countries that do not support terrorism and from oil companies that don't do business in the Middle East.

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Dalton Kehlbeck, a regional manager for Salt Lake City-based Sinclair, said most of the company's oil comes from the U.S. or Canada, but some is bought on the New York Mercantile Exchange, where oil from all over the world is traded.

"It's a basket of crude oil," he said of the exchange oil. "We cannot be sure where the conglomeration of the product comes from."

more

Sounds like false advertising to me since they cannot verify the provenance of all their crude.

Black gold helped Exxon Mobil make a record-setting profit of $39.5 billion last year, but the gaudy number brought heat from lawmakers in Washington who want to end tax breaks for the highly lucrative biz.

The bonanza works out to more than $108 million per day, 24/7/ 365, and equals the gross domestic product of countries like Ecuador and Croatia.

Still, a company spokesman said the profits were not out of whack, given the company's sales and investments around the world.

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But the record profits drew angry calls on Capitol Hill. After taking over Congress this year, Democrats have moved quickly to roll back oil industry tax breaks and aim to force the companies to pay more for drilling on federal land.

http://www.nydailynews.com/front/story/493991p-416074c.html

Grass clippings could be made into a gasoline substitute, and bacteria might revive abandoned oil fields, under an ambitious research project funded by petroleum giant BP PLC and to be carried out at the University of Illinois and the University of California at Berkeley.

Announced Thursday, the $500 million project to establish the BP Energy Biosciences Institute holds the potential to bring some technology now in the laboratory into the real world, perhaps within a few years.

Other research by the institute might take longer to complete but could make available huge amounts of energy.

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Jim Breson, BP's general manager for the institute, said cellulosic technology will be the main target of research in the beginning. Cellulosic technology, which converts waste into energy, is the holy grail of bioenergy.

http://www.chicagotribune.com/business/chi-0702020098feb02,0,3998542.story?coll=chi-business-hed

Ford Motor Co. and General Motors Corp. suffered sharp sales declines in January after cutting low-profit sales to rental fleets, but analysts said they should have taken that medicine long ago.

Ford's sales fell 19 percent, dropping it to fourth place among manufacturers, and GM's were off 17 percent. Both reduced sales to rental companies by 30,000 units last month from a year earlier.

"It doesn't look good from a sales standpoint, but eventually this will help their bottom line," said Art Spinella, president of CNW Marketing Research.

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"It hurts used values when you can buy these cars for next to nothing," Spinella said, adding that rental cars usually create a bad impression. "No matter how well they maintain those cars, it doesn't take long before they're totally trashed. Even the (Toyota) Camry rental cars were bad-mouthed in our surveys.

http://www.chicagotribune.com/business/chi-0702020097feb02,0,3605325.story?coll=chi-business-hed

Great-West Lifeco Inc.' s US$3.9-billion acquisition of Putnam Investments nabs the Canadian life insurance company not only a large-scale asset manager in the United States but also a stake in a significant player in the red-hot private-equity industry.

As part of GWL's acquisition of Putnam, the Winnipeg-based life insurer -- a unit of Power Financial Corp. -- gets a 25% stake in Thomas H. Lee Partners, a private-equity firm with funds of US$19.7-billion.

The Putnam deal, announced yesterday after months of speculation, values the stake in T.H. Lee at US$350-million.

http://www.canada.com/nationalpost/financialpost/story.html?id=8f59ca23-32d8-4749-8b7b-2b285c6a202b&k=99346

If you saved money last year you're part of a select group of Americans. The Commerce Department just reported that the nation's savings rate fell to negative 1% in 2006, its lowest level since the Great Depression.

The Bureau of Economic Analysis has a graphic that shows how the savings rate has changed over time.

When the savings rate moves into the red it means that people are spending everything they earn and tapping into savings or borrowing on credit. Here's a primer. Newsweek looks at the implications.

http://blogs.usatoday.com/ondeadline/2007/02/new_data_shows_.html

:donut: and lurkers. I don't need a reports to warn me of global warming or that we don't have enough jobs-I am doing the work of two Nurses and it has been hell in here the last few days (as you might guess by my lack of posts). And saving for a rainy day? folks better wake up-the clouds are forming and if we don't do something quick-we may be at our species end.
This week I submitted my information for a tribal role card and it was received on the 31st. I am taking the first steps into my past, I am sure it will be an interesting journey. I also came to a decision that after my daughter graduates from high school (and I am no longer obligated to pay almost 1K in child support and court ordered extras), I will be leaving the School Nursing scene. This week and dealing with the administration has pretty much soured me for good. And when you've had enough, you've had enough. I love the kids but it is getting increasingly hard to deal with the crap that goes with it. We are trying to figure out where to go and what to do-these reports about global warming combined with our sorry government has hubby and I doing even more thinking about our priorities.

Happy hunting and watch out for the bears.

edited to be in sync with Ozy :hi:

I was able to save last year. Thanks to low overall expenses and an extremely low mortgage payment, I could put away savings and retirement $.

Obviously I'm the exception. How can this economy survive? What's going to happen with all this debt?

Sometimes I think I'm missing the boat, and that I should be joining along for the ride by drawing down my home equity and going on a spending spree. What's wrong with me?

You're a grown up! Hope that makes you feel better.

NEW YORK (Reuters) - Stock futures signaled a flat Wall Street open on Friday as investors awaited January jobs data to shed light on the health of the U.S. economy.

Analysts look for the payrolls report, due for release at 8:30 a.m. (1330 GMT), to provide further evidence that the economy continues to grow with little risk of inflation.

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Standard & Poor's 500 futures (SPc1) were up 0.6 points, a fraction above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures (DJc1) were up 7 points, and Nasdaq 100 (NDc1) futures were up 0.50 points.

http://www.washingtonpost.com/wp-dyn/content/article/2007/02/02/AR2007020200321.html

:donut: :donut: :donut:

Time for me to head out the door. I will check back in when the day is done.

Please have fun watching today's bidness.

Ozy :hi:

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

Last trade 84.44 Change -0.20 (-0.24%)

Instant Insight - Non-Farm Payrolls Falls Short of Expectation

http://www.dailyfx.com/story/special_report/special_reports/Instant_Insight___Non_Farm_Payrolls_1170423337667.html

Payrolls 111k vs 150K expected

Non-Farm payrolls fell short of expectations for the month January rising by a mere 111K versus 150K expected. The unemployment rate rose from 4.5% to 4.6%. The report is not as dollar bearish as the initial reading reveals since the prior month's payrolls was revised upwards to 206K, washing out the disappointment in the report. Wages saw tepid growth despite the overall health of the labor market, suggesting that inflationary pressures remain muted.

As we had mentioned in our Daily Fundamentals, there were plenty of clues that signaled potential weakness. The CME derivatives auction on Thurs settled at 136.3K while the auction today settled at 120K. To start, the number of jobs added to payrolls in the month of December was a very strong 167k. It will be difficult for January payrolls to surpass that level. Secondly, even though jobless claims have been very lean and the ADP Employment Survey was calling for job growth in excess of 150k, layoffs according to Challenger Gray and Christmas increased by 15 percent from last month. This is yet another reason for the Federal Reserve to continue to hold back any rate hikes. The tides are shifting in February as more US data surprises to the downside, questioning the sustainability of the impressive growth that we saw in the fourth quarter. Their concern is that the recent strength may be as much of a fluke as the weather patterns that we have seen so far this year and so far it appears to be.

US Dollar Rallies Ahead of Payrolls, but Watch Out for a Disappointment

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar_Rallies_Ahead_of_1170367468956.html

US Dollar
In January the main theme in the currency market was dollar strength. This was due to a combination of seasonality and upside surprises in US data. However in February we are beginning to see the tides shift. US data is surprising more often to the downside than to the upside, questioning the sustainability of the impressive growth that we saw in the fourth quarter. This morning we had the national ISM manufacturing index drop right back into contractionary territory to hit the lowest level since April 2003. Having only spent one month in expansionary territory, the manufacturing sector as a whole returned to weakness. The prices paid index rose significantly, but that rise was primarily attributed to the recent increase in energy prices. The employment component of the ISM survey also remained in contractionary territory for the third straight month. This suggests that we could see another month of job losses in tomorrow’s payrolls report for the manufacturing sector. As for the non-farm sector, traders are covering their dollar shorts in anticipation of a strong payrolls report. The leading indicators that we usually watch to forecast payrolls are actually mixed which means that payrolls could be more of a coin toss. To start, the number of jobs added to payrolls in the month of December was a very strong 167k. It will be difficult for January payrolls to surpass that level. Secondly, even though jobless claims have been very lean and the ADP Employment Survey is calling for job growth in excess of 150k, layoffs according to Challenger Gray and Christmas increased by 15 percent from last month. Bloomberg’s forecast of 81 analysts range from 20k to 225k and the CME payroll derivative auction settled at 136.3k this morning. The price action in the US dollar today indicates that traders are expecting a strong report, which means that the bigger market reaction could be if payrolls fall short of expectations, at which time we could see a major flush in the US dollar.

...more...

Last trade 84.95 Change +0.31 (+0.37%)

Settle Time 15:00 Open 84.63

Previous Close 84.64 High 84.98

Low 84.44 2007-02-02 10:10:03, 30 min delay


Forex - Dollar recovers as weak Jan US payrolls numbers offset by back revisions

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=52e1b128-1ec4-4c86-9667-38150eef38d1

LONDON (AFX) - The dollar recovered earlier losses in the wake of this afternoon's key US jobs data as market players turned to focus on upward revisions to back data, rather than the weaker-than-forecast headline reading and a higher unemployment rate.

Official data released this afternoon showed US non-farm payrolls rose by 111,000 during January, well below the 150,000 gain forecast by analysts. The unemployment rate also rose unexpectedly to 4.6 pct from 4.5 pct in December.

Immediately after the data, the euro reached a four-week highs against the US currency of 1.3064 usd, while the pound briefly touched an nine-day high of 1.9748 usd.
The dollar soon recovered much of those losses, however, as the headline readings were offset by news of substantial revisions to back data, with payrolls for November and December revised up by a total of 81,000.

"The upward revision in December jobs was a bright spot in the data and some dollar bulls are taking heart from the data," said Russell Bloom at Thomson IFR Markets.
For 2006 as a whole, revisions meant that a total of 405,000 additional jobs were created than previously estimated.

The figures are strong enough to confirm the market's view that the US Federal Reserve will not cut interest rates any time soon.

http://www.ft.com/cms/s/a6a179d2-b24a-11db-a79f-0000779e2340.html

Rarely in the history of central banking can so many observers have read so much into so little.

When the Bank of Japan concluded a two-day policy board meeting last month, it arrived at the seemingly drama-free decision of leaving interest rates precisely where they were: at 0.25 per cent. But its non-move caused uproar in the financial markets for three interconnected reasons.

First, markets – rightly or wrongly – had come to the conclusion that the BoJ had intended to raise rates a notch to 0.5 per cent. A few days before the January meeting, futures markets concluded there was an 80 per cent chance of an increase. When the bank did not move, market participants surmised that the board must have come under pressure from politicians, who want interest rates to remain low.

Second, according to some economists, the criteria by which the bank makes its decisions are becoming murkier. The BoJ has set out a forward-looking framework that allows it to raise rates in anticipation of inflation, releasing it from the shackles of historical data. However, in interpreting the ­language that accompanied January’s decision to hold rates, many economists detected a shift to a more backward-looking stance.

snip>

John Richards, a senior strategist at Royal Bank of Scotland in Tokyo, says: “I think the BoJ has lost considerable credibility in international circles. What people would like to see is the bank having a dialogue with the markets that makes some sense and not one that is overridden by the government at the last minute.”

more...

http://www.bloomberg.com/apps/news?pid=20601083&sid=aqD7JV1LAhao&refer=currency

Feb. 2 (Bloomberg) -- The dollar gained versus the yen and euro after a U.S. government report showed a revision in payroll numbers.

The Labor Department added 754,000 jobs to the previous estimate for the year ended March 2006, the biggest change since the agency started adjusting the numbers in 1991. The dollar touched the highest against the yen in more than four years this week as economic growth quickened and spending rose. Unemployment climbed to 4.6 percent last month from 4.5 percent in December.

``The upward revision made the headline number not as bad as it looks like,'' said Christian Dupont, a senior currency trader at Societe Generale SA in Montreal. ``The market is over-long the euro against the dollar.''

The dollar traded at 121.10 yen at 10:41 a.m. in New York from 120.82 yesterday. The dollar increased to $1.2978 per euro from $1.3022. The yen traded at 157.16 per euro from 157.32.

The U.S. currency extended its gains versus the euro after the Reuters/University of Michigan's index of consumer sentiment gained to 96.9 last month from a December reading of 91.7. The dollar reversed an earlier decline versus the euro. The U.S. currency fell to as low as $1.3070.

snip>

ECB's Pause

The European Central Bank will pause for ``some time'' after raising interest rates 25 basis points in March or April ``at the latest,'' Market News International reported, citing unidentified ``well-informed sources.''

According to the news agency, the Frankfurt-based bank's governing council will pause at 3.75 percent to evaluate the effect of a German sales-tax increase, wage negotiations and oil prices on inflation.

more...

http://www.321gold.com/editorials/phillips/phillips020107.html

snip>

Zhu Min, group executive vice president of the Bank of China, one of the country's largest banks, told the audience that China was poised for another year of strong growth. "China will have an even better year this year," Zhu said, citing last year's efforts in the second half of 2006 to re-balance the economy by slowing export-led growth and encouraging domestic consumption.

Why mention this again you ay well ask? The ramifications of such a change are critical for the globe. To imagine that such a shift in power will happen without a whimper is to live in a dream world. Our concern is simply on the ramifications for gold and precious metals.

What we can say going forward is that global growth will remain strong irrespective of the performance of the States, so there will be a climate where safe investments are sought by Investors with the competence to invest in them. The uncertainty that will prove a growing feature of the future will increase Investors attention on the stateless nature of gold. The importance of the origin of national currencies will grow as the global economy evolves into its new shape, changing structures put in place at the end of the last world war.

The comfortable confidence in the U.S.$, on which so much of the globe has depended for the entire working lives of the world's executives is going to change. Companies will have to understand and measure currency and political risk far more than in the past. With the lowering of the importance of the U.S. will come the raising of China and the emerging economies places in the international money systems.

It may even get to the point where the price set for a U.S. export item is set in the ¤ and eventually in the Yuan. Can you imagine that? As currency performances become more and more volatile, a certain 'currency patriotism' could emerge in international trade. As we are already seeing the concept of a "basket of currencies" reflecting another's currency is taking hold, replacing the previously solid link to the U.S.$. It should be more common to see emerging nations pricing their own goods in their own local currencies, diversifying larger countries foreign exchange reserves remarkably.

more...

http://www.rgemonitor.com/blog/roubini/176117

Let me tell you a cautionary tale for 2007. The Yen has been weak and has kept on depreciating sharply for the last few months relative to the US dollar. Still mixed and weak economic data are coming out of Japan and short term interest rates there are still 0.25% while they were closer to 5.5% in the US; so the yen is weak and weakening. Massive amounts of carry trades using the yen – and the swiss franc – as the funding currency have been going on for months now leading to sharp increases in leveraged positions by investors who have been shorting the yen to play the carry trade bet.

Then, the yen starts to appreciate again – by a sharp 9% in one month - when a small emerging market economy defaults (Ecuador soon?) and a large hedge fund goes belly up (another Amaranth?). Then, suddenly one piece of good news comes out of Japan (a growth pickup?) and in a matter of 72 hours the yen appreciates by 12%. Then a major global macro hedge fund loses $2 billion dollars in 48 hours on the yen unraveling and decides to close shop; another one loses billions too and decides to restructure its operations. Carry trades unravel rapidly, margin calls are triggered, levered positions go belly up and the entire financial system goes into a seizure. Then the Fed is forced to cut the Fed Funds rate in between meetings by 75bps (in spite of still good US GDP growth) in order to avoid a financial meltdown, a collapse of US financial markets and a global recession.


Readers of this blog may think that the first paragraph above describes very precisely the current situation of the yen and of the global financial system in the last year. Indeed, news reports have been endlessly talking about the yen carry trades driven by low Japanese interest rates. Readers of this blog may also think that the second paragraph above is a typical Roubini "doom & gloom" fear mongering and describing a scenario that is totally unlikely to occur in 2007.


But what I was describing in the first two paragraphs above is not 2006 and a fear mongering scenario for 2007 but rather what actually and exactly happened in August-October 1998. During the Asian crisis the yen weakened all the way to 147 to the US dollar by late August 1998; and the BoJ reduced its policy rate to 0.25% (the same level as today). Then in August 1998 Russia defaulted (this time around it may be Ecuador this month) and this default triggered a seizure of global financial markets as major players with levered position started to get margin calls, had to dump their assets to cover their margin calls and started to cover their yen carry trade shorts. LTCM then was hit by this liquidity seizure and avoided a near default in late September 1998 via a private sector bailout coordinated by the NY Fed.

In the month between the Russia default and the near LTCM default the yen went up from 147 to 134, a 9% appreciation as some of the carry trade were unwound when the hedge funds had to reduce their leveraged positions after the Russia losses. Then, on October 5th a minor piece of good news came out of Japan: the Japanese government came out with a plan to recapitalize its problem banks. This mildly yen-positive news led to an appreciation of the yen that was massive: in a matter of 72 hours the yen went from 134 to the dollar on October 5th to 118 to the dollar on October 8th, a whopping 12% increase. And on the peak day of the yen correction – October 6th - the dollar, the US equity market and the US bond market all fell rapidly on the same day.

more...

Found! 1 million jobs
Government revisions to payrolls are likely to show job growth has been much stronger than first thought.
http://money.cnn.com/2007/02/01/news/economy/jobs_outlook/index.htm?postversion=2007020115




Something stinks like Cheney about this.

Hemorrhaging manufacturing jobs, doubling up on those great "service" jobs. The economy is growing alright.

snip>

But Baumohl and other economists say the big revisions to be announced Friday signal that the way the BLS has been compiling the number used by everyone from the Federal Reserve to corporate America when making judgments about economic strength needs to be changed going forward.

"It's very hard to capture all the employment that takes place at small companies and new businesses," said Wachovia's Vitner. "The BLS tries to incorporate new business start-ups, but the economy is always changing. For example, young people are much more likely to go out and start a new business today than they were in the past."

The BLS will only say that it's not planning any major changes in the way it estimates payrolls, but that it will discuss changes that will take place in the future estimates when it releases the revision on Friday.

There have been other estimates that showed much stronger job growth than the BLS employer survey. A survey of households, also conducted by the BLS and used to calculate the unemployment rate, showed a 3.1 million gain in jobs for the 12 months ending in March 2006, compared to the 2 million job gain recorded in the department's payroll survey of employers.

snip>

"The BLS says that the payroll estimate has a margin of error of 150,000 jobs, while the household survey is plus or minus 300,000 jobs," he said. "So when you see a gain of 150,000 in the payroll number, it could be zero, or 300,000. It's tough to draw any conclusions about the state of the economy from that."

Every time the numbers get bad, they figure out a new way to lie about them.

http://www.ft.com/cms/s/3fef9ec6-b213-11db-a79f-0000779e2340.html

The US manufacturing sector contracted unexpectedly this month as factory activity fell to its slowest pace in nearly three years, according to a fresh survey.

The Institute for Supply Management said its manufacturing index fell into negative territory in January as it slipped below the 50 mark to 49.3.

The poor performance underlined economists’ fears that the sector could be sliding into recession.

Industry leaders have been predicting a recovery this year after a weak performance in recent months. But a fall in new orders in January suggests further weakness ahead, economists said.

Richard Iley, an economist at BNP Paribas, said: “The ISM manufacturing index was weaker than expected and dovetails with our assessment that the manufacturing sector is really very weak and on the brink of recession.”

Investors largely shrugged off the poor factory performance as US stock markets touched new highs, sustaining a rally that began this week after the Federal Reserve expressed increasing confidence in the economy.

more...

http://www.marketwatch.com/news/story/us-dec-factory-orders-rise/story.aspx?guid=%7B4B9320C2%2D67F5%2D454B%2DB86D%2D3E87A1E8D344%7D&siteid=yhoo&dist=yhoo

WASHINGTON (MarketWatch) -- Orders for U.S.-made factory goods rose by 2.4% in December, as orders for metals and machinery offset a big drop in demand for defense capital goods, the Commerce Department reported Friday.


Excluding defense goods, factory orders rose by 3.1% in December, according to the report. Taking out transportation, orders climbed by 2.2%.
The overall gain in factory orders was propelled by a 5.4% gain in orders for primary metals and a 5.2% climb in orders for machinery.

Orders for durable goods rose 2.9% in December, slightly lower than the 3.1% estimated by the government a week ago.

snip>

November's factory orders were revised higher, to a gain of 1.2% from 0.9%.

The report follows a weaker-than-expected report about the U.S. factory sector. On Thursday, the Institute for Supply Management said the sector shrunk in January for the second time in the past three months, led by a sharp drop in inventories.

more...

http://apnews.myway.com/article/20070201/D8N0V3C00.html

WASHINGTON (AP) - People once again spent everything they made and then some last year, pushing the personal savings rate to the lowest level since the Great Depression more than seven decades ago.

The Commerce Department reported Thursday that the savings rate for all of 2006 was a negative 1 percent, meaning that not only did people spend all the money they earned but they also dipped into savings or increased borrowing to finance purchases. The 2006 figure was lower than a negative 0.4 percent in 2005 and was the poorest showing since a negative 1.5 percent savings rate in 1933 during the Great Depression.

snip>

The savings rate has been negative for an entire year only four times in history - in 2005 and 2006 and in 1933 and 1932. However, the reasons for the decline in the savings rate were vastly different during the two periods.

During the Great Depression when one-fourth of the labor force was without a job, people dipped into savings in an effort to meet the basic necessities of shelter and clothing.

Economists have put forward various reasons to explain the current lack of savings. These range from a feeling on the part of some people that they do not need to save because of the run-up in their investments such as homes and stock portfolios to an effort by many middle-class wage earners to maintain their current lifestyles even though their wage gains have been depressed by the effects of global competition. :eyes:

more...

By diversifying into a broad range of assets and deals, it aims to flourish long after the buyout boom fizzles

http://www.businessweek.com/magazine/content/07_07/b4021001.htm?campaign_id=rss_daily

In the two decades since private equity firms first stormed the business world, they've been called a lot of things, from raiders to barbarians. But only one firm has been tagged in the popular imagination with warmongering, treason, and acting as cold-eyed architects of government conspiracies. The broadsides got to be more than David M. Rubenstein, William E. Conway Jr., and Daniel A. D'Aniello, founders of Washington's Carlyle Group, could take. "It was nauseating," Rubenstein says.

Carlyle, founded 20 years ago in the shadow of Washington's power centers, long went about its business far from the public eye. Its ranks were larded with the politically connected, including former Presidents, Cabinet members, even former British Prime Minister John Major. It used its partners' collective relationships to build a lucrative business buying, transforming, and selling companies--particularly defense companies that did business with governments.

Carlyle might have continued happily in that niche except for the confluence of three events. First there were the terrorist attacks of September 11. In the aftermath, conspiracy theorists seized on Carlyle's huge profits, intense secrecy, and close dealings with wealthy Saudi investors. The scrutiny reached a crescendo in Michael Moore's documentary Fahrenheit 9/11, which made Carlyle seem like the sort of company image-conscious investors like public pension funds might choose to avoid. The second factor was the tsunami of capital that has been sloshing around the globe for five years, providing almost limitless funding for the kind of dealmaking that is Carlyle's specialty. All that liquidity has brought with it immense opportunity as well as stiff new competition. Finally, there's the succession issue. Carlyle's baby boomer founders can see retirement around the corner. And they badly want the firm, their legacy, to outlast them.

At this make-or-break juncture, Carlyle's founders, billionaires all, decided to refashion their firm radically--to transform it into something more ambitious, more diverse, and more lasting.

Stage I of what some have dubbed the Great Experiment was largely cosmetic. The founders asked members of the bin Laden family to take back their money. They sat down with George H.W. Bush and John Major and discussed, improbable though it might seem, how the two were no longer wanted as senior advisers because they hurt the firm's image. Out went former Reagan Defense Secretary Frank C. Carlucci as chairman. In came highly regarded former chairman and CEO of IBM (IBM ), Louis V. Gerstner Jr., along with former Securities & Exchange Commission Chairman Arthur Levitt, former General Electric (GE ) Vice-Chairman David Calhoun, and former Time Inc. (TWX ) Editor-in-Chief Norman Pearlstine, among others, to underscore Carlyle's commitment to portfolio diversification and upright corporate citizenship. Carlyle also pared back its defense holdings dramatically.

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were do I begin....
1)thanks to the internet, there are a few sharp folks that have connected the dots...
2)Sunshine is the best cleanser and disinfectant.
3)Folks are on to the racket and are not so quick to take a company private for so cheap.

It seems this little game of 'Strip the Liquidity' can only work best in secret. Seems someone left the door open a bit in the High Roller Suite and some of us in the great unwashed masses got a gander.

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_gilbert&sid=aMyiYHGEvrFA

Feb. 2 (Bloomberg) -- After rising in tandem for much of 2006, bonds and equities are starting to diverge, to the detriment of some sections of the fixed-income markets in the first month of the year. It might not last.

In January, the Standard & Poor's 500 Index of U.S. stocks eked out a 1.4 percent gain, while Europe's Dow Jones Stoxx 600 Index climbed 2 percent. Fixed-income returns, meantime, are a sea of red, with U.K. bonds maturing in more than a year losing 1.5 percent. Euro-area debt has fallen 0.4 percent and the U.S. futures contract on long-dated bonds more than a point.

The bond market is rediscovering reasons to be concerned. U.S. consumers haven't taken fright at the parlous state of the housing market and fled screaming from the shopping malls. The Federal Reserve isn't about to start cutting interest rates. So far, the inverted yield curve, with two-year note yields higher than 10-year levels, doesn't seem to be a harbinger of recession.

snip>

Meantime, governments are flooding the market for long-dated bonds; regulators are increasingly vocal about their concerns that the derivatives market is an opaque accident waiting to happen; and even some of the people who depend on the credit market to finance their businesses are hitting the klaxons.

Sovereign borrowers are being seduced into the long end as the relative cost of selling 30-year debt rather than two-year notes has melted.

Two years ago, for example, Germany would have paid about 1.8 percentage points more to extend its borrowing. The average gap between two- and 30-year German government bonds was 80 basis points in the first half of 2006, and about 60 basis points for the year as a whole. Today, the relative difference is down to about 26 basis points, or hundredths of a percentage point.

Germany, Greece, Austria, the Netherlands, France, Turkey and Italy sold almost $24 billion worth of 30-year debt in January. Japan sold 600 billion yen ($5 billion) of 30-year bonds, while France also borrowed 1.2 billion euros ($1.6 billion) for 50 years.

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The inverted yield curve and a hectic pace for mergers and acquisitions are two factors that should contribute to another double-digit rise, according to Standard & Poor's.

http://www.cfo.com/article.cfm/8649344/c_8650544?f=home_todayinfinance

Total commercial paper outstanding is expected to rise 15.8 percent in 2007, to $2.29 trillion from $1.98 trillion, according to a new report from Standard & Poor's.

That double-digit increase would follow an even larger surge in 2006, when the total rose 21.5 percent, from $1.63 trillion.

Two major factors behind the boom, observed Standard & Poor's, are the inverted yield curve, which has pulled in many investors from the long end of the market, and a hectic pace for mergers and acquisitions, which is requiring many companies to put bridge financing in place.

Financial commercial paper outstanding is expected to climb 12.3 percent in 2007, to $852 million, but Standard & Poor's expects nonfinancial issuance to rise just 1.8 percent. Even after last year, when nonfinancial paper outstanding jumped 26.5 percent, to $171 billion, "the strong cash balance position and relatively inexpensive longer-term financing" leaves that total far short of its record $350 billion, attained in August 2000.

Asset-backed commercial paper is forecast to reach $1.3 trillion in 2007, up from an already high $1.05 trillion in 2006. Standard & Poor's observed that Basel II, which have lowered the regulatory capital requirements for off-balance-sheet exposures, will continue to provide a powerful incentive to securitize.

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http://www.latimes.com/business/la-fi-harley2feb02,1,2944473.story?coll=la-headlines-business

Harley-Davidson Inc. locked out employees at its largest plant Thursday after workers authorized a strike that could start today.

The company suspended production of Touring and Softail motorcycles at the York, Pa., factory, where the union representing 2,798 workers is fighting a contract proposal that would cut wages for new hires and change health benefits.

A strike in York would be Harley-Davidson's first in 16 years. A walkout may cost the Milwaukee-based company 1 cent a day in per-share net income if lost production can't be recouped later, UBS Securities estimated in a report Thursday.

Harley-Davidson's five-year contract with Local 175 of the International Assn. of Machinists and Aerospace Workers expired at 12:01 a.m. today. The union called the lockout "a betrayal."

Shares of Harley-Davidson rose 49 cents to $68.76.

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http://www.ft.com/cms/s/fd276a5a-b240-11db-a79f-0000779e2340.html

Pay settlements have risen sharply to their highest level for six years, increasing concern that wage demands will fuel inflation and trigger further interest rate rises.

The Bank of England monetary policy committee has identified inflationary pay rises as one of the main factors that could push inflation above the government’s target levels.

According to Incomes Data Services, the pay and benefits specialists, the median level of annual settlements jumped to 3.5 per cent during the three months to the end of January. This compares with a revised figure of 3.05 per cent during the three months to the end of December.

The last time annual pay increases reached this level was in 2001, “and then only briefly”, said IDS. “We need to go back to 1998 to find a sustained period during which pay settlements were at or above 3.5 per cent. This coincided with a rise in inflation, to a peak of 4.2 per cent in May 1998.”

Most of the settlements will have been agreed before last month’s announcement that the retail price index had risen to a 15-year high of 4.4 per cent.

The rise in the RPI has fuelled fears that workers will step up wage demands to offset the higher cost of living. Mervyn King, Bank of England governor, warned last week that it was the job of the MPC to act to ensure that “self-defeating” pay rises “did not lead to a persistent rise in inflation”.

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But, on the other hand....


Debt crisis grows as 100,000 declared insolvent
http://business.timesonline.co.uk/article/0,,9063-2580931,00.html

Britain’s spiralling debt crisis reached new levels today as figures showed that more than 100,000 people declared themselves insolvent last year.



The total number of bankruptcies, insolvencies and individual voluntary arrangements (IVAs) taken out between October and December hit 29,804, up 44.1 per cent on the same period in 2005.

This takes the total for 2006 to a record 107,288, against 67,580 the year before.

Experts fear that the level could rise as high as 150,000 this year, as consumers pay the price for chronic overspending in the first half of the decade.

This week the Council for Mortgage Lenders announced a 65 per cent rise in the number of households whose homes were repossessed in 2006.

Louise Brittain,head of personal insolvency at Baker Tilly, said: "We believe that total personal insolvencies will be between 130,000 and 150,000 - another record figure.

"People are without doubt behaving irresponsibly with credit, blindly taking on debt without thinking how they will repay it."

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:shrug:

http://www.ft.com/cms/s/eae38d36-b198-11db-b901-0000779e2340.html

As Stephen Roach, chief economist at Morgan Stan-ley, moved around the debates on the world economy in Davos last week, he admitted that some of the discussions were distinctly bland. With the world economy growing steadily, de-bates about big economic themes lacked real drama.

However, in one area there was a raging debate: the role that the fast-growing derivatives sector may, or may not, be playing in distorting the cost of credit.

"We have just had a pretty lively discussion," Mr Roach said at a lunch to examine derivatives, attended by senior policy officials, economists and financiers. "In fact, this has probably been the fiercest argument I have had in Davos."

A cynic may suggest this reflects the fact that the global economy is so benign that policymakers now have the "luxury" of worrying about financial markets and esoteric instruments, as John Lipsky, the first managing director of the Internal Monetary Fund, put it.

snip>

Meanwhile, the issue of legal authority poses a dilemma, as Stanley Fischer, governor of Israel's central bank, noted. For while banks such as the US Federal Reserve managed to quell the crisis at Long Term Capital Management in 1998, markets are now so international in scale that they cannot easily be controlled by any single authority. That made it hard to gather data in the short term but it also made unclear who had res-ponsibility for the system in a crisis, Mr Fischer said.

snip>

Howard Davies, former head of the Financial Services Authority and now an academic, said: "We all know that the reality of the financial markets is that risk is being parcelled up and paced around. But international regulatory architecture is still organised as if the world had not changed. As a result, we have a regulatory architecture designed for a bygone age."

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I think I posted this earlier in the week from a different source, but it ties in nicely with the above. Pardon the dupe. "Stop me if you've heard this before".

BANKERS WARN OF IMPENDING FISCAL CRISIS
by Dr. Chris Martenson
The End of Money
January 30, 2007

http://www.financialsense.com/fsu/editorials/martenson/2007/0130.html

This past week, Ben Bernanke warned the US Congress that our nation faces a ‘fiscal crisis' if the out of control spending habits of Washington aren't soon curbed. I suspect he used the word ‘curbed' quite deliberately as the politicians starting back at him probably looked like a row of dogs listening to white noise. Can't you just picture it? A bunch of congressional heads all tilted to the side with studious expressions on their faces, but a stylized question mark floating in a little text balloon over each of their heads?

As the author Upton Sinclair famously remarked; "It's difficult to get a man to understand something, when his salary depends on him not understanding it."

Which is a fancy way of saying that roughly zero congressmen "understood" what Bernanke was saying, although at least a few probably possessed the requisite intellectual candlepower to ‘get it'.

Bernanke began his testimony by restating what we already know:

1. "Dealing with the resulting fiscal strains will pose difficult choices for the Congress, the administration, and the American people," Bernanke said.

2. "However, if early and meaningful action is not taken, the U.S. economy could be seriously weakened, with future generations bearing much of the cost," he added.

Breaking out our handy-dandy central banker decoder ring we can decipher his statement as follows:

"You guys are gonna have to either break your past entitlement promises and face an angry electorate or you're going to have to raise taxes to hurtful levels and face an enraged electorate".
"Unless you do one (or both) of these things, the future looks mighty bleak".

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http://www.prudentbear.com/articles/show/303

It looks like David Lereah, the buffoonish and pathologically optimistic chief economist of the National Association of Realtors, now faces stiff competition in his quest to win this year's "Baghdad Bob" award.

His rival's name is John Lipsky, and in contrast to others' recent warnings about an explosive build-up of risk in the global financial system, this policymaker apparently believes things aren't necessarily all that bad, reports the Financial Times, in “Big Risks To Global Economy ‘Receding’.”

Lower energy prices and a more stable US housing market have diminished risks in the global economy to the point where the world now has the "luxury" of worrying about mispriced financial markets, according to the new first deputy managing director of the International Monetary Fund.

Excuse me, but did he say something about a more “stable” housing market, or has surrealist painter Salvador Dali been reborn as a new age economist? Last time I looked, the only thing holding steady in the residential real estate market is a sense of foreboding.

John Lipsky told the Financial Times that financial market risks including general high asset prices, an explosion of structured finance or unwise trading in the yen - were "less pressing than those we worried about a few months ago".

Hmm, “less pressing.” Is he actually suggesting that a bursting property bubble, an imploding subprime finance sector, an orgy of leveraged speculation, and extremes in risk-taking that make dot-com exuberance seem almost rational really give little cause for concern, or did I miss something?

"Now, we have the luxury of worrying about these other issues," he said.

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Dow 12,652.85 20.83 (0.16%)
Nasdaq 2,472.37 3.99 (0.16%)
S&P 500 1,446.18 0.24 (0.02%)
10-yr Bond 4.8180% 0.0190
30-yr Bond 4.9160% 0.0170
NYSE Volume 943,733,000
Nasdaq Volume 764,252,000

11:30 am : Little changed since the last update as the major averages continue to vacillate in roughly the same ranges. With the Dow and S&P 500 up 1.5% and 1.7%, respectively, this week alone, with the broader market on pace for its best weekly performance since August, it's not all that surprising to see blue chip stocks looking a bit tired. The Nasdaq, which is turning in a respectable advance as well (+1.6%), is building on that momentum; but the narrow 14-to-13 edge being awarded to advancers over decliners leaves the door wide open for some consolidation heading into the weekend. DJ30 -12.18 NASDAQ +5.82 SP500 +0.98 NASDAQ Dec/Adv/Vol 1362/1445/720 mln NYSE Dec/Adv/Vol 1382/1630/460 mln

11:00 am : The Nasdaq continues to reclaim leadership status after trailing its blue-chip counterparts over the last couple of days, but index gains remain modest at best. While strength across the board in Technology is largely responsible for the Composite's positive disposition, the Dow is still struggling to find its footing. A strengthening greenback in the wake of today's solid jobs report is making dollar-denominated commodities stocks (e.g. AA, DD, XOM) less attractive while a 1.2% decline on General Motors (GM 32.63 -0.40), after disappointing Jan. auto sales, is also stalling momentum on the Dow.DJ30 -9.48 NASDAQ +6.52 SP500 +2.34 NASDAQ Dec/Adv/Vol 1343/1411/592 mln NYSE Dec/Adv/Vol 1240/1708/362 mln

10:30 am : Equities are back on the offensive, albeit modestly, even after an unexpected decline in sentiment. According to the recent release of a study compiled by the University of Michigan, sentiment weakened a bit in late January, inching lower to 96.9 from 98.0 earlier in the month. However, since the data do not correlate well with short-term consumer spending trends, the report has been relatively ignored.

Spearheading the recent recovery is Technology, which is pacing the way among the now eight sectors in positive territory. Tech was yesterday's worst performing sector but is getting a lift from a couple of software names. Electronic Arts (ERTS 53.94 +3.40) is up nearly 7% after topping analysts' expectations while CA Inc (CA 27.06 +2.06) is surging 8% after saying 2007 sales should top previous forecasts. DJ30 +4.68 NASDAQ +7.67 SP500 +2.21 NASDAQ Dec/Adv/Vol 1281/1357/400 mln NYSE Dec/Adv/Vol 1305/1512/214 mln

10:00 am : Early gains are short lived as a renewed wave of selling pressure steps in to nudge all three major averages into the red. The blue-chip index initially set a new intraday high right out of the gate, but with today's jobs report also reminding investors that a rate cut still isn't likely to happen anytime soon, it appears investors have found an excuse to take some money off the table following three straight days of gains. Fortunately for the bulls, there is little conviction on the part of sellers as eight out of 10 sectors may be trading lower, but the biggest disappointments are also being seen among the least influential areas on the S&P 500. DJ30 -25.88 NASDAQ -1.32 SP500 -1.43 NASDAQ Dec/Adv/Vol 1141/1297/190 mln NYSE Dec/Adv/Vol 1120/1311/70 mln

09:40 am : Stocks open on an upbeat note as investors digest more proof that the Fed is doing a remarkably good job of managing a soft landing for the economy. Given its influence on the market's outlook for the economy and monetary policy, an encouraging January jobs report is acting as the biggest source of early support. January nonfarm payrolls rose a lower than expected 111,000; but with December and November payrolls upwardly revised to account for an additional 81,000 jobs, the January figure is also likely to be revised higher.

More notably, though, was the fact that workers' average hourly earnings rose only 0.2%, following a downward revision to the previous month. That does not reflect the inflationary wage pressures that the Fed remains concerned about as evidenced by their continued focus on "the high level of resource utilization." An unexpected rise in the unemployment rate for the first time in three months is also noteworthy. DJ30 +6.49 NASDAQ +7.15 SP500 +1.35 NASDAQ Vol 88 mln NYSE Vol 48 mln

09:15 am : S&P futures vs fair value: +2.4. Nasdaq futures vs fair value: +6.5.

09:00 am : S&P futures vs fair value: +2.8. Nasdaq futures vs fair value: +7.0. Futures continues to hold a positive tone as investors rally around more evidence that the U.S. economy remains on a good growth path. As evidenced by subsequent buying interest in bonds, January hourly earnings rising just 0.2%, coupled with a downward revision to the December increase of 0.5% to 0.4%, easing concerns about inflationary pressures from wage costs is the underlying driver that looks to extend the market's winning streak to four. It is also worth noting that Nasdaq 100 futures hold an even stronger upward bias following an analyst upgrade on the index's most influential component -- Microsoft (MSFT).

08:33 am : S&P futures vs fair value: +2.7. Nasdaq futures vs fair value: +4.3. Futures indications are now signaling a higher open for stocks as an encouraging jobs report provides more evidence that a soft landing is on track. The employment report showed a nonfarm payrolls gain of 111K for January (consensus 150K), but payrolls figures for December and November were upwardly revised to account for a net gain of 81K new jobs. Hourly earnings rose just 0.2%, below the 0.3% consensus, further cooling inflationary potential and pushing the year/year rate to 4.0%; the unemployment rate unexpectedly rose to 4.6% from 4.5%. Bonds are also strengthening as the yield on the 10-year note (+5/32) falls to 4.80%.

08:00 am : S&P futures vs fair value: +0.3. Nasdaq futures vs fair value: +2.2. Early indications suggest some carry-over momentum may lift stocks at the open. However, that disposition is certainly subject to change as the closely-watched January employment report (8:30 ET), given its influence on the market's outlook for the economy and monetary policy, will be the catalyst behind today's performance.

As a reminder, the tight labor market condition is the key item the Fed was referring to in its policy statement when it asserted "the high level of resource utilization has the potential to sustain inflation pressures." Inflation now acting as the main concern will place added emphasis on the report's hourly earnings component while the market will also be on guard for changes made to previous nonfarm payroll figures given all of the sizable revisions of late.

Treasury Secretary says he'll seek a bipartisan approach to support the retirement system, wants players to 'come to the table without preconditions.'

http://money.cnn.com/2007/02/02/news/economy/paulson.reut/index.htm?postversion=2007020207

WASHINGTON (Reuters) -- Treasury Secretary Henry Paulson conceded Friday that chances are slim for agreeing on a way to reform Social Security financing but said he will keep trying to find bipartisan support for it.

"There's not a high degree of likelihood. I'm not naive, given how politically contentious this is, that we'll get this done," Paulson said in a televised interview.

Paulson said it is important to try to "get people together and come to the table without preconditions" but, if it doesn't work, at least he will "move the ball downfield" and get in position for reform in the future.

The Treasury chief has been meeting Democrats privately on Capitol Hill to try to find grounds for agreement on a method for reforming Social Security before the retirement system comes under severe pressure as more "baby boomers" retire.

Democrats, however, are suspicious that the Bush administration wants to revive its proposal to make private accounts part of Social Security as it unsuccessfully sought to do in 2005.

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http://www.guardian.co.uk/uslatest/story/0,,-6387934,00.html

WASHINGTON (AP) - A White House management official said Thursday there is ``very little real accountability'' in the federal government, and he welcomed the tougher oversight the Democrats have promised now that they control Congress.

``There cannot be enough accountability in the federal government,'' said Clay Johnson, deputy director of the Office and Management and Budget, which supervises executive branch agencies. ``There is very little today. Very little real accountability.''

snip>

He added that Democrats who run congressional hearings should do more than just draw public attention to problems. ``Let's focus on things that aren't working like we want them to, but let's make sure we're focused on fixing them - not just identifying them,'' he said.

snip>

The White House under Bush has taken steps to become more accountable to the public. One of them is a Web site, www.expectmore.gov, which singles out government programs that work well and ones that don't.

snip>

``The average agency today has more management capability than the best agency did five years ago,'' he said. :spray:

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You've gotta check it out....In the "Not performing" category they like to use Susan E. Dudley's label of "Results Not Demonstrated".

http://www.whitehouse.gov/omb/expectmore/index.html

Came across this linked at 321gold

http://news.nationalgeographic.com/news/2007/01/070126-rome-palatine.html

Archaeologists say they have unearthed Lupercale—the sacred cave where, according to legend, a she-wolf nursed the twin founders of Rome and where the city itself was born.

The long-lost underground chamber was found beneath the remains of Emperor Augustus' palace on the Palatine, a 230-foot-tall (70-meter-tall) hill in the center of the city.

snip>

"We didn't enter the cave but took some photos with a probe," Iacopi added.

"They show a richly decorated vault encrusted with mosaics and seashells, too rich to be part of a home. That's why we think it could be the ancient sanctuary, but we can't be sure until we find the entrance to the chamber."

snip>

The Palatine Hill also became the residential area of the most affluent Roman citizens beginning in 500 B.C.

When the Roman Republic became the Roman Empire in the first century B.C., Augustus even built himself and his wife Livia palaces on top of the hill.

Later emperors followed his example and built larger and larger homes on the same spot. Now the whole hill is a honeycomb of buildings and tunnels extending far underground.

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http://www.marketwatch.com/news/story/gold-futures-drop-still-poised/story.aspx?guid=%7B8E0CC96D%2D96D6%2D4A42%2D910C%2DAB7293F223A7%7D&dist=moreover

SAN FRANCISCO (MarketWatch) -- Gold futures dropped as much as $13 an ounce Friday as growth in fourth-quarter U.S. payrolls sent the U.S. dollar higher, but the metal was still ready to end higher for the week.

Gold had climbed to a six-month high in the previous session.

"Today we find the funds making the play," said Julian Phillips, an analyst at GoldForecaster.com.

"Seeing no follow through from the physical side and from the long-term Investor, the funds are hesitant to move in, so demand has dropped ahead of the weekend," he said. "The fall below support in the mid-$650s could pull it back a little further, but we are now in consolidation mode for the weekend at least."
"Nothing has changed except the dollar has firmed back up, he said. "This is enough to make the funds hesitate to make new long positions."

snip>

On the supply side, gold inventories increased 32,150 troy ounces to stand at 7.49 million troy ounces as of late Thursday, according to Nymex data. Silver supplies dropped 34,164 troy ounces to 113.93 million troy ounces, while copper stockpiles added 200 short tons to stand at 36,169 troy ounces.

Hedge fund news

A report that Red Kite Management, a $1 billion metals trading hedge fund, wants to extend the notice period for investor redemptions after losses of as much as 15% in January, may be affecting metals trading as well, analysts said Friday.

Red Kite, run by Michael Farmer, Oskar Lewnowski and David Lilley, asked investors in its metals fund to approve an amendment that would require 45 days notice before money can be withdrawn, according to a copy of a Jan. 31 letter from the firm obtained by MarketWatch. See full story.

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http://www.bloomberg.com/apps/news?pid=20601087&sid=aL1r70ExzU.k&refer=home


Feb. 2 (Bloomberg) -- NYSE Group Inc., operator of the world's largest stock exchange, said it had a fourth-quarter profit of $45.5 million on increased transaction fees and gains from options trading.

Net income was 29 cents a share, compared with a net loss of $20.3 million before the exchange became a publicly traded company through the purchase of Archipelago Holdings Inc. Revenue rose 55 percent to $658.5 million, NYSE Group said in a statement today.

During the fourth quarter, Chief Executive Officer John Thain led the New York Stock Exchange through one of the biggest restructurings in its 214-year history. The company eliminated a 25-year-old cap on fees, gained market share among U.S. options markets and announced its deepest workforce reduction in more than a decade. Thain also won shareholder approval for the $14.3 billion purchase of Paris-based Euronext NV and followed by striking deals this month with markets in India and Japan.

``NYSE seems to be leading the way in the growing globalization of the exchange industry,'' said Patrick O'Shaughnessy, an analyst at Morningstar Inc. in Chicago. ``As they continue to integrate Archipelago and cut costs, as they finish the merger with Euronext and do more things internationally, I foresee the NYSE being one of the big winners.''

Excluding expenses related to the Euronext deal and the staff reductions announced last quarter, profit was 45 cents a share, meeting average estimate of 11 analysts surveyed by Bloomberg.

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http://www.bloomberg.com/apps/news?pid=20601087&sid=abxXyL9ElzZk&refer=home

Feb. 2 (Bloomberg) -- The U.S. will bring a trade complaint against China at the World Trade Organization alleging that China unfairly subsidizes the steel, wood products, information technology and other industries, U.S. Trade Representative Susan Schwab said in Washington.

``The United States believes that China uses its basic tax laws and other tools to encourage exports and to discriminate against imports of a variety of American manufactured goods,'' Schwab said in remarks prepared for reporters at press conference at the U.S. Trade Representative's Office today.

The Bush administration signaled it was preparing to bring a case against China at the Geneva-based WTO last December when Treasury Secretary Henry Paulson led a delegation of government officials and business executives to Beijing for economic talks.

``The export subsidies give an unfair competitive advantage to Chinese products when they are exported,'' Schwab said. ``That means a range of domestically produced goods in the United States, from steel to paper to computers, are denied an opportunity to compete fairly in the United States and in third country markets where they are up against subsidized imports from China.''

In the first 11 months of 2006 the U.S. trade deficit with China surged to $213.5 billion, representing almost 30 percent of the total U.S. shortfall, from $185.3 billion in the same time a year earlier.

``The subsidies at issue are offered across the spectrum of industry sectors in China -- whether in steel, wood products, information technology, or others-and they tend to distort trade in two specific ways,'' Schwab said.

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Dow 12,655.58 18.10 (0.14%)
Nasdaq 2,475.21 6.83 (0.28%)
S&P 500 1,448.23 2.29 (0.16%)
10-yr Bond 4.8290% 0.0080
30-yr Bond 4.9250% 0.0080
NYSE Volume 1,651,419,000
Nasdaq Volume 1,294,655,000

2:00 pm : Absent a trading catalyst ever since this morning's jobs report, stocks so far are showing little reaction to a late-day rally in crude futures. Oil prices are spiking higher to the tune of 1.8% and are back above $58/bbl as geopolitical concerns resurfacing to join weather conditions as market-moving news items spark some safe-haven buying interest in the commodity going into the weekend. Energy stocks are benefiting somewhat from oil's extended upturn, but the sector is currently up only 0.4%. DJ30 -14.05 NASDAQ +8.09 SP500 +2.84 NASDAQ Dec/Adv/Vol 1331/1613/1.24 bln NYSE Dec/Adv/Vol 1379/1809/860 mln

1:30 pm : As evidenced by the Dow and Nasdaq still trading in opposing directions, split industry leadership continues to dictate today's action. Of the six sectors trading higher, Tech still paces the way; but its modest 0.4% gain isn't all that compelling. One sector that has turned the corner but is so far failing to provide much momentum for blue chips is Energy. Evidently further appreciation in the price of oil is acting as more of an offset than renewed enthusiasm for beaten-down oil stocks is from a leadership standpoint.DJ30 -12.77 NASDAQ +7.65 SP500 +2.30 NASDAQ Dec/Adv/Vol 1321/1580/1.15 bln NYSE Dec/Adv/Vol 1366/1806/790 mln

1:00 pm : More of the same for stocks as the major averages remain mired in relatively tight trading ranges. Of the few areas bucking the market's neutral bias, Home Entertainment Software (+4.0%) is today's best performing S&P industry group. Electronic Arts (ERTS 52.55 +2.01) beating analysts' expectations last night has renewed some optimism throughout the group (e.g. ATVI +1.9%, THQI +2.0%, and TTWO +2.6%).

Homebuilding (+2.9%) rank second after Standard Pacific (SPF 29.83 +2.06) issued upside Q1 and fiscal 2007 earnings guidance. The stock is up nearly 8% and is pacing the way among the 19 (out of 20) components in the PHLX Housing Sector Index (HGX +2.5%) posting gains.DJ30 -12.02 NASDAQ +8.00 SP500 +2.24 NASDAQ Dec/Adv/Vol 1385/1518/1.07 bln NYSE Dec/Adv/Vol 1443/1722/726 mln

12:30 pm : No real change in sentiment as traders make their way through the New York lunch hour. The market's holding pattern has been further evidenced in the A/D line, as advancers and decliners on both the NYSE and Nasdaq remain evenly matched. The ratio of up to down volumes at the Big Board and the Composite further underscores the lack of conviction on either the bullish or bearish side of the aisle. DJ30 -10.77 NASDAQ +6.28 SP500 +1.71 NASDAQ Dec/Adv/Vol 1412/1448/952 mln NYSE Dec/Adv/Vol 1504/1598/636 mln

12:00 pm : The indices are trading in split fashion midday as investors remain mixed as to what today's encouraging employment data means for Fed policy. A sense that stocks may be overbought at current levels, as four straight days of gains currently leave the S&P 500 on pace for its best weekly performance in six months, is also acting as an overhang.

Before the bell, the Labor Dept. reported a lower than expected rise of 111,000 in nonfarm payrolls. However, an upward revision left the December figure at a strong 206,000, which equates to an additional 39,000 jobs. Add that to a January figure that is likely to be revised higher as well, and the net two-month gain is exactly what the economists' Jan. forecast of 150,000 assumed.

With investors now more preoccupied with inflation than the pace of economic growth, the report's hourly earnings component garnered some added attention. To the market's surprise, average hourly earnings rose just 0.2%, following a downward revision to the previous month. That does not reflect the inflationary wage pressures that the Fed remains concerned about, as evidenced by their continued focus on "the high level of resource utilization." An unexpected rise in the unemployment rate for the first time in three months was also noteworthy.

Nonetheless, more evidence that a soft landing for the economy is on track doesn't exactly imply that the Fed' next move will be to cut interest rates. Thus, with policy makers still exhibiting a tightening bias -- a fundamental shift from the point of view that helped stocks rally in the second half of 2006, it is not surprising to see such a tepid response on the part of buyers. In fact, if not for a modest rebound in Technology, fueled in part by some decent earnings news, it is likely the Nasdaq would also be consolidating some of this week's impressive gains. DJ30 -17.30 NASDAQ +5.81 SP500 +1.09 NASDAQ Dec/Adv/Vol 1410/1430/862 mln NYSE Dec/Adv/Vol 1571/1502/558 mln


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

Last trade 85.00 Change +0.36 (+0.43%)

Settle Time 15:00 Open 84.63

Previous Close 84.64 High 85.04

Low 84.44 2007-02-02 14:06:51, 30 min delay

52wk High 91.16 52wk High Date 2006-03-10

52wk Low 82.24 52wk Low Date 2006-12-05

Came across this while digging for old articles on the Cheney 1% Doctrine. Thought it was interesting....

http://www.boston.com/news/local/massachusetts/articles/2007/02/01/richard_clarke_chat_transcript/

snip>

P-Dawg: Supporters of the Bush Administration say that the President has been a "victim of his own success>' Because there have been no more terrorist attacks since 9/11, they say, people have lost their sense of urgency about the war on terror and that's why they're turning on the President.


Richard_Clarke: I don't know of any real success that the President has had. People are turning on him because he is mindlessly getting people killed in Iraq, there was no reason to go into Iraq in the first place, and he can't admit his error and stop the carnage. He's forcing the next president to clean up his mistake...knowing that the clean up will be messy. Not exactly a profile in courage.

snip>

suburbanite: I wonder what paralyzes the thought process of neo-cons and the White House, do you think it's more arrogance or stupidity, or a combination of the two, or something more related to protection of oil interests in the middle east?


Richard_Clarke: Oil played a part in it, but mostly it was arrogance, "the World's Only Remaining Superpower has a window in which to fix the world..."

snip>

P-Dawg: What do you think about Cheney's reported "One Percent Doctrine" that we need to treat a 1% chance of terrorist attack as though it were a certainty? How does that serve or defeat US interests in the world, particularly in the war on terror?


Richard_Clarke: The one per cent solution means that if there is a one percent chance something will be a threat you go after it. Well, if you really took that attitude you would be bopping a lot of innocent people...which would make you more enemies.

more...

I like Richard Clarke, thanks for sharing!

Dow 12,653.49 20.19 (0.16%)
Nasdaq 2,475.88 7.50 (0.30%)
S&P 500 1,448.39 2.45 (0.17%)
10-yr Bond 4.8270% 0.0100
30-yr Bond 4.9260% 0.0070
NYSE Volume 2,529,848,000
Nasdaq Volume 1,928,007,000

4:20 pm : The major averages finished in split fashion Friday, indicative of the divide among investors as to what today's encouraging employment data mean for Fed policy.

Before the bell, the Labor Dept. showed that only 111,000 nonfarm payrolls were added in January. Since that was weaker than the consensus estimate and below the average gain of 153,000 per month for all of 2006, some investors viewed the news as bearish.

Throw in the Dow closing at record levels for a fifth time this year a day earlier and the S&P 500 on pace for its best weekly performance since August and a sense that blue chips may be overbought at current levels offered sellers an excuse to take some money off the table. The Dow snapped a three-day winning streak.

Be that as it may, looking beyond the headline read of lower payrolls did in fact show that the Fed is doing a surprisingly good job of managing a soft landing for the economy. Upon further analysis, an upward revision to previous data left the December figure at a strong 206,000, which equates to an additional 39,000 jobs. Add that to a January figure that is also likely to be revised higher, and the net two-month gain was exactly what the economists' January forecast of 150,000 assumed.

With investors now more preoccupied with inflation than the pace of economic growth, the report's hourly earnings component garnered even closer attention. To the market's surprise, average hourly earnings rose just 0.2%, following a downward revision to the previous month, and lowered the year/year gain to 4.0%. That was good news since it does not reflect the inflationary wage pressures that the Fed remains concerned about, as evidenced by their continued focus on "the high level of resource utilization."

Nonetheless, more evidence that the economy remains on a good growth path also did little to renew optimism about the Fed cutting rates anytime soon. Thus, with policy makers still exhibiting a tightening bias -- a fundamental shift from the point of view that helped stocks rally in the second half of 2006, it was not surprising to see a lack of conviction on the part of both buyers and sellers.

The market's resilience of late to rising energy prices was noteworthy. A late-day rally closed the March crude contract up 3.1% and at its highest levels for the year ($59.10/bbl); but since policy makers now believe that the "impetus from energy prices" has been reduced so much that there was no mention of it whatsoever in the Fed's recent FOMC statement, oil's inflationary potential was somewhat muted. The Energy sector's failure to take full advantage of oil's extended upturn, however, posed a problem from a leadership standpoint as Energy's modest 0.4% gain was only outdone by Telecom and Utilities -- two of the least influential sectors on the S&P 500.

As evidenced by the Nasdaq turning in the day's best performance among the majors, Technology attracted modest buying interest, but not even enough to offset Thursday's pullback. In fact, had it not been for a 2.0% surge in shares of Cisco Systems (CSCO 27.14 +0.55) following upbeat analyst commentary, the tech-heavy Composite might have also succumbed to some modest consolidation heading into the weekend. BTK +0.1% DJ30 -20.19 DJTA +0.2% DJUA +0.8% DOT +0.9% NASDAQ +7.50 NQ100 +0.4% R2K +0.2% SOX +0.9% SP400 +0.3% SP500 +2.45 XOI -0.3% NASDAQ Dec/Adv/Vol 1356/1648/1.92 bln NYSE Dec/Adv/Vol 1386/1869/1.41 bln

3:30 pm : The indices remain mixed going into the close. Further deterioration in blue chips like Altria Group (MO 86.58 -0.90), Merck (MRK 44.45 -0.68) and Microsoft (MSFT 30.19 -0.36) leave the Dow trading near session lows. Weakness in Microsoft, which was up nearly 1% early on after being upgraded, is also preventing a more persuasive move to the upside on both the S&P 500 and Nasdaq. DJ30 -27.00 NASDAQ +5.08 SP500 +1.95 NASDAQ Dec/Adv/Vol 1424/1576/1.59 bln NYSE Dec/Adv/Vol 1425/1813/1.13 bln

3:00 pm : Heading into the final hour of trading, there's about as much conviction on the part of investors as there is certainty about which team is going to win the big game this Sunday. For subscribers of theories about the stock market, one of the more interesting ones is the Super Bowl stock indicator.

Albeit purely coincidental, it has accurately predicted a bull market 80% of the time, at least when a team from the NFC emerges victorious. If an AFC team wins, the theory is right about half the time, so that's a push. However, this year presents an interesting win-win situation for the bulls since the theory also cites a victory by an original, pre-1970 merger NFL team (i.e. the Colts) as bullish for stocks. Go Bears!DJ30 -22.43 NASDAQ +3.72 SP500 +1.94 NASDAQ Dec/Adv/Vol 1388/1592/1.45 bln NYSE Dec/Adv/Vol 1398/1826/1.02 bln

would the savings rate be more accuarate if IRA's and 401K's were used in the accounting?
_________________

personal savings rate (I assume that's what you're asking about) could actually be lower.

Any money directed into 401(k) plans is considered to be part of take-home pay in the government calcuation. But that 401(k) money isn't available to spend.

Take a person who contributes 10 percent of income to a 401(k). If the government counts him or her as having a zero savings rate, he or she is actually spending about 10 percent more than the actual take-home pay, liquidating assets or taking on debt to support spending.

snip>

"We've backed ourselves into a very dangerous situation," said Dean Baker, co-director of the Center for Economic and Policy Research. "The economy is dependent on everyone consuming like crazy. If everyone heard my diatribe and said, 'Yeah, we better start saving,' the economy would go into a recession."

And while it's not going to be the warnings of economists that start people saving, the slowing of housing price growth or actual declines will put brakes on the spending as people will run out of equity they can tap.

The savings rate will also have more downward pressure as Baby Boomers start retiring and drawing down on retirement savings. While Social Security benefits count as income, withdrawals from 401(k) and other retirement accounts do not.

So if there is no change in the spending habits, the aging of the U.S. workforce could soon make zero or negative savings rates the norm.

"I find it just odd for all these economists and policy makers to be cheering for all this consumer spending when we're just digging ourselves into a hole," said Brusca. "With all the obligations we have ahead, to retirees and to ourselves, we have all the reasons in the world for people to be saving more and be controlling their spending."
from: http://money.cnn.com/2005/08/02/news/economy/savings/index.htm


It's interesting to look back to the Feds 2002 explanation
http://www.frbsf.org/publications/economics/letter/2002/el2002-09.html#subhead2

that's exactly the info. that I needed. Appreciate your help.

NEW YORK (AP) -- Media company Viacom Inc., which owns the cable networks MTV, VH1, Nickelodeon and the Paramount Pictures movie studio, asked YouTube on Friday to remove more than 100,000 unauthorized clips from its hugely popular video-sharing site.

Viacom said in a statement that after several months of talks with YouTube and its corporate parent, the online search leader Google Inc., "it has become clear that YouTube is unwilling to come to a fair market agreement that would make Viacom content available to YouTube users."

Viacom said that YouTube and Google had failed to deliver on several "filtering tools" to control unauthorized video from appearing on the hugely popular site.

The company was now asking YouTube to take the clips down, but stopped short of filing a lawsuit.

more...
http://biz.yahoo.com/ap/070202/viacom_youtube.html?.v=5

SAN RAMON, Calif. (AP) -- Chevron Corp. pumped out its third consecutive year of record profits in 2006 despite a fourth-quarter stumble that demonstrated how quickly the oil industry can be tripped up by volatile energy prices largely out of its control.

The San Ramon-based company said Friday that it earned $3.77 billion, or $1.74 per share, during last year's final quarter, a nine percent decrease from net income of $4.14 billion, or $1.86 per share, at the same time in 2005. The earnings were a penny above the average estimate among analysts polled by Thomson Financial.

Despite its first quarterly earnings decline in 18 months, the nation's second largest oil company finished 2006 with a full-year profit of $17.1 billion to smash its previous record of $14.1 billion set in the previous year.

more...
http://biz.yahoo.com/ap/070203/earns_oil.html?.v=2