STOCK MARKET WATCH, Wednesday April 25

Source: DU

Wednesday April 25, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 635 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2306 DAYS
WHERE'S OSAMA BIN-LADEN? 2016 DAYS
DAYS SINCE ENRON COLLAPSE = 1976
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 9
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES

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AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON April 24, 2007

Dow... 12,953.94 +34.54 (+0.27%)
Nasdaq... 2,524.54 +0.87 (+0.03%)
S&P 500... 1,480.41 -0.52 (-0.04%)
Gold future... 687.70 -6.50 (-0.95%)
30-Year Bond 4.80% -0.02 (-0.50%)
10-Yr Bond... 4.62% -0.03 (-0.60%)






GOLD, EURO, YEN, Loonie and Silver

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PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact actionpost@legitgov.org

For information on protests and other actions Citizens For Legitimate Government

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Read more: DU

Several Gauges for Recession
BY FRANK BARBERA, CMT

This year has started off in bizarre fashion as we have seen a sharp slow down in Housing roil the Sub-Prime Mortgage market, a nasty worldwide stock and commodity market sell off, followed by a incredibly robust recovery rally. Of late, the stock market has been powering to new multi-year, and in the case of some indices, all-time highs. Of course, if one were just looking at the action of the stock market, you might be fooled into a better impression than is warranted regarding the state of affairs for the broad US economy. In fact, over the last few years, the decoupling between Wall Street and Main Street has been unparalleled, with Wall Street perfecting its levitation act on the back of record doses of new credit and stock buy backs.

In this vein, we are dedicating today’s update to look at the current trends in the US Economy, and the creation of a ‘watch list’ – Ten Signs for Recession. In our view, it is very likely the case that the underlying mortgage market in the US is still a long way from recovery. In fact, we would not be the least bit surprised to see more problems surfacing in the months ahead as option ARM resets in 2007 will total over 1 trillion dollars. While some may argue that the problems in the mortgage market to date will be confined to the Sub-Prime market, in our view, chances are high that both the ALT A and Prime markets will be affected as the Real Estate market slows further. In addition, we also do not buy into the logic that a down cycle in Real Estate can somehow be excised from impacting the rest of the economy, and for that matter, the financial markets. Before the proverbial Fat Lady Sings, all will be affected, yet this is a slow motion slow down, and much of this will only become more visible with the passage of more time.

-cut-

What is fascinating, and more than a little surreal, is the way the headlines continue to sound buoyant (dominated mainly by the stock market), while behind the scenes the economy is clearly “JUST NOT FABULOUS!” to use the trendy expression among teens here in early 2007. Want more proof? OK, just look at the chart above which shows Nominal Retail Sales smoothed using a three month moving average as the basis for an annual rate of change. Is the line gaining or losing momentum? Notwithstanding all claims and protestations to the contrary, retail sales are in a downtrend and fast approaching the 3% threshold which has been the edge of recession territory. Looking a little deeper, it is also worth noting that normally very ‘stable’ business in the Beer, Wine and Spirits sector is showing signs of a slow down. In the next two charts, we show Retail Sales for “Restaurants and Bars” and “Beer and Wine” both using annual rates of change. Note that in recent months, there has been a distinct trend toward slowing sales.

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

Measures of inflation are "equivocal" as always. But some measures are less equivocal than others.

8:30 AM Durable Orders Mar
Briefing Forecast 2.8%
Market Expects 2.5%
Prior 1.7%

10:00 AM Existing Home Sales Mar
Briefing Forecast NA
Market Expects NA
Prior 6.69M

10:00 AM New Home Sales Mar
Briefing Forecast 900K
Market Expects 890K
Prior 848K

10:30 AM Crude Inventories 04/20
Briefing Forecast NA
Market Expects NA
Prior -994K

2:00 PM Fed's Beige Book

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

01. U.S. March durable-goods unfilled orders up 1.8%
8:30 AM ET, Apr 25, 2007 - 1 minute ago

02. U.S. March durable-goods inventories up 0.3%
8:30 AM ET, Apr 25, 2007 - 1 minute ago

03. U.S. March durable-goods shipments up 0.8%
8:30 AM ET, Apr 25, 2007 - 1 minute ago

04. U.S. March civilian aircraft orders up 37.6%
8:30 AM ET, Apr 25, 2007 - 1 minute ago

05. U.S. March core capital equipment orders up 4.7%
8:30 AM ET, Apr 25, 2007 - 1 minute ago

06. U.S. March durable-goods ex-transportation up 1.5%
8:30 AM ET, Apr 25, 2007 - 1 minute ago

07. U.S. March durable-goods orders up 3.4% vs. 2.5% expected
8:30 AM ET, Apr 25, 2007 - 1 minute ago

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=tnBusinessNews&storyID=2007-04-25T132057Z_01_N23314455_RTRIDST_0_BUSINESS-USA-ECONOMY-DURABLES-DC.XML

WASHINGTON (Reuters) - New orders for costly and long-lasting U.S.-made goods rose a surprisingly strong 3.4 percent in March, according to a government report on Wednesday that showed businesses investing to expand operations.

The pickup in March durable goods orders followed a revised 2.4 percent February gain, the Commerce Department report showed, and handily surpassed Wall Street economists' expectations for a 2.5 percent increase.

Even excluding transportation goods, which account for more than a quarter of overall business, March orders were up 1.5 percent after declining 0.4 percent in February.

A key component of the monthly report that serves as a proxy for business investment, non-defense capital goods excluding aircraft, posted a 4.7 percent increase in orders last month.

It was the biggest increase since September 2004 when orders rose 7.9 percent and followed declines of 2.3 percent in February and 6.2 percent in January.

"This is a helpful sign for the economy," said Kevin Flanagan, a fixed-income strategist for Morgan Stanley's global wealth management unit, based in Purchase, New York. "But it is too early to say whether or not capital expenditures are going to be back on the rebound just based on one month's data."

Bond prices weakened across the board on the sign of unexpected economic vigor as investors felt it reduced chances for cuts in official interest rates. Stock index futures gained on hopes it meant corporate profits will stay strong.

more...

12. U.S. March new-home sales down 23.5% y-o-y
10:00 AM ET, Apr 25, 2007 - 7 minutes ago

13. U.S. March Midwest new-home sales up 9.8%
10:00 AM ET, Apr 25, 2007 - 7 minutes ago

14. U.S. March Northeast new-home sales up 50%
10:00 AM ET, Apr 25, 2007 - 7 minutes ago

15. U.S. March new-home median price up 6.4% y-o-y
10:00 AM ET, Apr 25, 2007 - 7 minutes ago

16. U.S. March new-home inventory falls to 7.8-months supply
10:00 AM ET, Apr 25, 2007 - 7 minutes ago

17. U.S. Feb. new-home sales revised lower to 836,000, 7-yr low
10:00 AM ET, Apr 25, 2007 - 7 minutes ago

18. U.S. March new-home sales fall short of 895,000 expected
10:00 AM ET, Apr 25, 2007 - 7 minutes ago

19. U.S. March new-home sales up 2.6% to 858,000
10:00 AM ET, Apr 25, 2007 - 7 minutes ago

Then everything would be better.

:silly:

01. U.S. crude supply up 2.1 mln brls last week: Energy Dept.
10:32 AM ET, Apr 25, 2007 - 3 minutes ago

02. U.S. distillate supply flat at 117.3 mln brls: Energy Dept.
10:32 AM ET, Apr 25, 2007 - 3 minutes ago

03. U.S. gasoline supply down 2.8 mln brls: Energy Dept.
10:32 AM ET, Apr 25, 2007 - 3 minutes ago

NEW YORK - Oil prices rose Wednesday after the government's weekly U.S. petroleum supply report showed a large and unexpected decline in gasoline stockpiles.

Traders overlooked a surprising buildup in crude oil inventories.

"This is indeed a bearish report for crude oil," said Tim Evans, energy analyst at Citigroup Global Markets. "But right now, (traders) don't care nearly as much about crude oil as we do about gas."

The report by the U.S. Department of Energy's Energy Information Administration showed that crude oil inventories rose by 2.1 million barrels in the week ending Friday to 334.5 million barrels. Traders had expected crude oil inventories to fall by 1.2 million barrels on average, according to a Dow Jones Newswires survey of analyst estimates.

http://news.yahoo.com/s/ap/oil_prices

ten cents at the pumps tomorrow.:mad:

20. Beige Book: Retail sales overall positive, auto sales mixed
2:00 PM ET, Apr 25, 2007 - 1 hour ago

21. Beige Book: Consumer prices stable except energy, raw goods
2:00 PM ET, Apr 25, 2007 - 1 hour ago

22. Beige Book: Labor markets remain tight, some wage gains seen
2:00 PM ET, Apr 25, 2007 - 1 hour ago

23. Beige Book: Factory activity 'slow' across most of country
2:00 PM ET, Apr 25, 2007 - 1 hour ago

24. Beige Book: Home real estate market continues to weaken
2:00 PM ET, Apr 25, 2007 - 1 hour ago

25. Beige Book: 3 districts of 12 districts see firmer growth
2:00 PM ET, Apr 25, 2007 - 1 hour ago

26. Fed's Beige Book sees modest growth through much of country
2:00 PM ET, Apr 25, 2007 - 1 hour ago

(just a drive-by posting - have to run away - but I will be back later after I quit working for a living :D )

SINGAPORE - Oil prices inched up Wednesday ahead of the release of a weekly U.S. petroleum supply snapshot expected to show that domestic crude stocks fell and gasoline inventories rose.

Light, sweet crude for June delivery rose 10 cents to $64.68 in Asian electronic trading on the New York Mercantile Exchange by mid-afternoon in Singapore. The contract on Tuesday fell $1.31 to settle at $64.58 a barrel.

Brent crude for June delivery gained 28 cents to $67.44 a barrel on the ICE Futures exchange in London.

Traders are also anticipating the U.S. Department of Energy supply report to show that crude oil inventories fell by 1.2 million barrels on average last week, according to a Dow Jones Newswires survey of analyst estimates.

Gasoline stockpiles will likely increase by about 200,000 barrels and distillate stockpiles, which include heating oil and diesel fuel, are seen growing by 400,000 barrels, the survey showed.

http://news.yahoo.com/s/ap/oil_prices

CAIRO (AFP) - Egypt plans to hike its oil output by 100,000 barrels per day to 800,000 bpd in 2008, the petroleum ministry said Wednesday.

"A programme was set up for developing some recent discoveries in the Gulf of Suez and the western Sahara, with the aim of hiking production by 100,000 bpd," a statement said.

"These new discoveries will be announced soon," ministry spokesman Hamdi Abdel Aziz told AFP, adding that Egypt's current output stood at about 700,000 bpd.

Production in the Gulf of Suez, which accounts for about 65 percent of Egypt's total, is expected to increase by 60,000 bpd, the ministry said. Output from the western Sahara fields is due to grow by 40,000 bpd.

http://news.yahoo.com/s/afp/20070425/wl_mideast_afp/egyptoil_070425112142

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

Last trade 81.394 Change -0.078 (-0.10%)

Can Housing Send US into a Recession and Sink the Dollar?

http://www.dailyfx.com/story/special_report/special_reports/Will_the_Sub_Prime_Crisis_Cause_1177498911549.html

Is Housing Sending US Into a Recession?

Yesterday’s very ugly existing homes sales numbers have once again fueled speculation that weakness in the housing sector will spill over into the overall US economy, tipping it into a recession. While the news from the housing front is certainly bleak, calls for an economic contraction may be premature. For the time being housing appears to act as a slow bleed on the US economy rather than as a massive coronary that threatens to shut down the whole system. There are however several potential risks lurking in the background that could escalate the present situation into a serious financial crisis.

Housing Showing No Signs of a Bottom

Sales of existing homes fell in March by the largest amount in nearly two decades, dropping 8.4 percent off of February’s pace. It was the biggest one-month decline since a 12.6 percent plunge in January 1989, which was another contractionary period in housing. Sales in March recorded a seasonally adjusted annual rate of 6.12 million units - the slowest pace since June 2003. Furthermore, the steep decline in sales was accompanied by an eighth straight fall in median home prices, the longest such period of falling prices on record. Median price fell to $217,000, a drop of 0.3 percent from the price a year ago. Weakness in demand permeated every part of the country in March. Sales fell by 10.9 percent in the Midwest, down 9.1 percent in the West, 8.2 percent in the Northeast and 6.2 percent in the South.

Yesterday’s existing home sales report clearly demonstrates that housing shows no signs of hitting a bottom. Today’s New Home Sales data may provide some small evidence of a rebound, but even if the number improves to 890K from 848K the month prior, it is more than 30% below the pace set in July of 2005 when New Home construction reached 1367K level. In short, demand for houses has been curbed materially by the blow up in the sub-prime sector which has tightened lending standards, taking many potential buyers out of the market. Since pricing in housing tends to be extremely sticky to the downside (sellers strongly resist lowering prices on what is often the biggest component of their net worth), price drops tend to show the smallest response while sales volumes decline quickly and inventories usually skyrocket. Indeed, the latest data show inventories at 7.3 month supply up from 6.8 month reading in February. As a further risk, the latest batch of data is reported from sales which occurred in January and February—prior to the much publicized implosion of the sub-prime sector. Therefore chances of further deterioration in the sector are quite high.

...more...

Euro Pops Above 1.3650 - Can it Take Out All Time Highs?

http://www.dailyfx.com/story/dailyfx_reports/daily_brief/Euro_Pops_Above_1_3650___1177499917562.html

Euro Pops Above 1.3650 –Can It Take Out All Time Highs?

The IFO survey surprised to the upside printing at 108.6 vs. 108 expected as German business optimism sparked by the ongoing global investment boom, overcame any currency concerns of the country’s exporters. Despite the near record value of the euro which was within striking distance of all time highs against the dollar, demand for German goods remained unabated as massive investment projects in Middle East, Eastern Europe and China continued to instill a strong level of optimism amongst German businesses. Indeed, the markets now expect official German GDP estimates for 2007 to inch higher from 2.3% to 2.4% as traders see further evidence of decoupling in economic growth between EZ and US.

The strong IFO results bode well for further EURUSD gains especially if they present a sharp contrast to yet another negative result in US data. Today, the US calendar contains New Home Sales and Durable Goods. Durable Goods are expected to jump to 2.5%, but the market will likely ignore the headline number given the fact that it may be skewed by large Boeing orders and will focus on the ex-transport read. If the number once again misses forecasts it will suggest a serious slowdown in US economic activity and will almost assuredly push the EURUSD to record highs. However, unless US data is especially poor, fueling speculation of a possible recession, euro gains may be capped. Given the record high value of the currency, the ECB is likely to only raise rates once by 25bp in June and then observe the impact of the tightening on EZ economy for considerable amount of time. Therefore, the compression in interest rate differentials between the euro and the dollar may not materialize as quickly as euro longs expect.

As we noted last week, the extraordinary dichotomy between the currency market (which is decidedly dour in its outlook on the US economy ) and the stock market (which is remarkably sanguine about US growth prospects) continues unabated. The strength in US equities is also affecting the trade in USDJPY. Since so much of the liquidity for equity investments is financed by the carry trade, a short USDJPY position has become an implied bet on the decline of the US stock market. So far that bet has not paid off given the relentless strength of the DJIA and despite the fact that Japanese data continues to surprise to the upside. In the latest evidence of Japanese economic strength today’s March trade surplus showed a 74% year over year increase as exports remained string while imports dropped by -7.9%. The rest of the week, brings a slew of Japanese economic news from Overall Household spending to employment figures. If Japanese economic reports continue to impress and the US stock market finally recedes from its stratospheric highs, the case for long yen positions will become materially more compelling.

...more...

http://futures.fxstreet.com/Futures/content/100300/content.asp?menu=review&dia=2042007

snip>

Will the U.S. dollar experience a catastrophic collapse? Books and articles galore have been showered upon the public in which the writers purvey a coming dollar crash, a scenario which they say will destroy the U.S. economy as well as render the dollar a has-been among the major world currencies. Could such an event actually transpire in 2007?

Dollar bears point out that the dollar's weakness so far this year is due to a perceived deterioration in "U.S. economic fundamentals as well as a rise in implied inflation." (Financial Times, April 20). A chief currency strategist at Danske Bank was quoted as saying, "Historically, a stagflationary environment has been bearish for the dollar."

With monetary liquidity making a major rebound in the U.S. and the growth stock outlook looking most promising, capital inflows will end up sustaining the dollar and preventing a stagflation-type of environment that the gloom-and-doomers keep preaching. The simple fact remains that the dollar is still the world's reserve currency and as long as it maintains its top status it will be supported and kept from crashing. There will undoubtedly be periods of weakness, perhaps even extreme weakness, but such weakness won't be allowed to develop further into an outright collapse. The dollar has been likened by one observer to a cancer patient: the poor unfortunate is given chemotherapy to the point of death, then resuscitated with vitamins and allowed to restore white blood cell count for a while. Then back to the chemo and the inevitable decline in health that follows.

Same story with the dollar: strong dollar, weak dollar, strong dollar, weak dollar....it's all part of how the global financial system operates -- a fact which apparently escapes the dollar perma-bears. They don't seem to grasp that currency fluctuations are part and parcel of how the world's financial markets and economies are run; further, that periods of weakness, sometimes prolonged weakness, are inevitable.

The news media will also use the weak dollar as a proverbial "big stick" to beat the public on the head and scare them into selling stocks whenever it is needed, as was done in part during the late February/early March stock market correction. This is all part of the gamesmanship that keeps the average retail investor out of equities while the smart traders buy stocks on the cheap. Therefore it shouldn't be surprising if the recent talk surrounding the sub-prime mortgage market is soon supplanted by talk of an "imminent dollar collapse." But as weak as the dollar is now, it won't be allowed to suffer a catastrophic decline.

more...

Thank Bob!!!! I was starting to get a bit nervous! Seems Hank, Ben and the gang have it all in check. :eyes:

http://www.financialnews-us.com/?page=uscomment&contentid=2347614255

Whenever markets get nervous, one thought occurs: what about the unsustainable position of the US dollar? Whether it is American protectionism aimed at Chinese products, worries about oil prices, or thoughts about the strengthening of the European economies, all result in dollar jitters.

These fears are not new. Since the dollar became the hegemonic currency at the end of the Second World War, every prophet has said it would not stay the course. At first, critics worried about a permanent dollar shortage but from the early 1960s, they worried about deficits and the excessive creation of dollars.

Charles de Gaulle’s critique from 1965 has been continually echoed since: “The US is not capable of balancing its budget. It allows itself to have enormous debts. Since the dollar is the reference currency everywhere, it can cause others to suffer the effects of its poor management. This is not acceptable. This cannot last.”

The dollar crisis in 1971 led to the end of the fixed exchange rate, or Bretton Woods, system but, to everyone’s surprise, the dollar emerged as the key currency of a floating rate system.

When Chinese and other Asian central banks started to peg their currencies to the dollar to prevent revaluations and push their exports on to the US market, they reproduced elements of the Bretton Woods system. De Gaulle’s prophecy remains just that.

The dollar’s position in the short term is stronger than usually thought. It is sustained by two important mechanisms. First, the yield on US assets for foreigners – the price paid by the US for its borrowing – is substantially lower than the yield for Americans on their foreign holdings. This is the reason the balance on investment income continues to be so resilient and large.

Academics Pierre-Olivier Gourinchas and Hèlène Rey have calculated that for the period 1960 to 2001, the annualised rate of return on US liabilities – 3.61% – was more than two percentage points below the annualised real rate of return on US assets at 5.72%, and that for the post-1973 period the difference is significantly larger, at 3.50% and 6.82%, respectively.

The yield difference reflects not miscalculation or stupidity on the part of foreign investors but a calculation in which they buy security in return for lower yields. The primary attraction of the US as a destination for capital movement is the unique depth of its markets, which generate a financial security, and the political and security position of the country.

Only a few other countries share the US reputation as a stable and secure haven in which property rights are protected. This is why inflows to the US may increase after global security shocks, as they did after September 11, 2001.

more...

"Only a few other countries share the US reputation as a stable and secure haven in which property rights are protected. This is why inflows to the US may increase after global security shocks, as they did after September 11, 2001."

If the republicans/globalists who are trying to destroy our country know that, then they'll make sure our property rights are no longer protected...one way or the other, I'd guess.

EVERY single thing that has made America stable seems to be under attack by the home-grown repervlikin terrorists.

:kick::kick::kick:

about opening up Imminent Domain last year. You remember-the one that said your property could be taken for business development, not just for public use (like a road, library, etc).

That was step one.

:kick:

Because Nixon pulled a "switcheroo". He traded the "gold" dollar for the "petro" dollar. We went from a gold exchange standard to a petroleum exchange standard. Look at what happens now to any OPEC country that tries to value oil in Euro. BOOM!

http://www.bloomberg.com/apps/news?pid=20601083&sid=aE3diXVYS4uI&refer=currency

April 25 (Bloomberg) -- The dollar fell against the euro, matching a record low, after a government report showed sales of new homes rose less than economists forecast.

The U.S. currency weakened on speculation signs of weakness in the housing market will encourage the Federal Reserve to cut borrowing costs in the third quarter. The dollar dropped yesterday after reports showed declines in existing home sales and consumer confidence. The U.S. currency has lost 3.3 percent against the euro this year.

``The headline number plays into dollar bears,'' said Mike Moran, senior currency strategist in New York at Standard Chartered Bank, who said some traders have stop levels at $1.3665 to $1.3670. ``The market is a bit disappointed that the new home sales underperformed expectations despite the warm weather.''

The dollar fell 0.14 percent to $1.3659 per euro at 10:26 a.m. in New York. It touched the all-time low of $1.3666, previously set Dec. 30, 2004. The European currency debuted in January 1999. The dollar fell 0.06 percent to 118.52 yen.

/..

edit: Watch on Swiss Franc (CHF), Pound Sterling (GBP)

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=5d0026e1-714b-477b-8895-ca19119dacb9

TORONTO (Dow Jones)--The Canadian dollar continues to push into new 7-month high territory early Wednesday, with the currency's latest propellants coming from a positive mix that includes strong commodity prices, renewed confidence in Canadian economic prospects from Tuesday's Bank of Canada rate statement, and more soft U.S. housing data that has weakened the U.S. dollar globally.

The U.S. dollar was trading at C$1.1171 at 10:25 a.m. EDT (1425 GMT), from C$1.1224 at 8:00 a.m. EDT (1200 GMT), and from C$1.1231 late Tuesday.

The Canadian dollar thus far Wednesday has penetrated as far as the C$1.1158 mark, according to EBS, its highest level since the beginning of October 2006.

Traders note that the currency's latest bout of strength began in overnight European dealings with no specific catalysts, though some suggested that Tuesday's Bank of Canada statement, with its glimmers of a possible tilt toward a more hawkish policy bias in future, may be underpinning the Canadian currency to some degree.

Also in play have been factors such as higher commodity prices, and demand for Canadian dollars associated with the monthly oil settlements day, when domestic energy exporters typically convert proceeds into local currency.

The most recent wave of Canadian dollar buying came in the immediate wake of a less-than-expected 2.6% rise in U.S. new home sales in March, which followed equally disappointing existing home sales figures for the same month released Tuesday.

"There's been persistent inter-bank interest to buy Canadian dollars that pushed us into the C$1.1185 area, and then with the U.S. housing data coming in weaker than expected, that's had a negative impact on the U.S. dollar to take us into current levels," said George Davis, chief foreign exchange technical analyst at RBC Capital Markets in Toronto. "The Canadian dollar has also firmed on the crosses with commodity prices remaining strong this morning."

Davis added that a close through the C$1.1180 mark for the Canadian dollar could open up a move toward the next key resistance area for the currency around the C$1.1090 area, a region last seen in late September.

/...

http://nowandfutures.com/index.html

Haven't checked a lot of it out yet, first came across their M3 page while looking at something else (can't remember what it was anymore).
http://nowandfutures.com/key_stats.html

Lots of charts and graphs throughout the site - I know how much you love pictures! ;-)

Good site to bookmark, lots of pretty pictures (I am worse than George when it comes to wanting the easy reading :( ).
Good fine :woohoo:

and this one...

:D :bounce:

here's my favorite so far



does that make your head spin, or what???

:hi:

:donut: And lurkers. Ya just gotta love 'em. Worst decline of existing home sales since way back before I can remember, and they blame it on the weather.:eyes: That's like telling the teacher that your dog ate your homework.:eyes:

It has become increasingly obvious that the Feds have painted themselves in a corner and it will be a long time before the paint dries. Inflation, despite their denials, is up-WAY UP. The thing that has worked in the past was to bump up the interest rates. If you thing the foreclosure rates are bad now-wait til they raise the rates.

It has also become increasingly obvious that WS has suffered a mental disconnect from the rest of the world. They have become so enamored of the numbers, that they have either forgotten what they mean or readjust them to suit the reality they want-not the reality that is. They are like a numerologist that keeps re figuring to get the reading they want. The only person fooled seems to be the numerologist.

The sad thing is, so many folks want to believe them too. But the truth is the truth. Our economy has some serious problems and wishful thinking will not will them away. Thanks to all the truth tellers out there. Hurray to the folks that have the courage to stand up and say the emperor has no clothes.

Happy hunting and watch out for the bears.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aonxuz3OYwLg&refer=us

April 25 (Bloomberg) -- Cheating on mortgage applications is so widespread and so seldom punished that it's fueling an increase in foreclosures that will prolong the housing slump, said Robert W. Russell, counsel to the director of the Office of Thrift Supervision, which oversees savings and loans.

Borrowers and brokers commit fraud when they exaggerate the applicant's income, qualifying the borrower for a home he otherwise couldn't afford. Such fraud robbed lenders of an estimated $1 billion last year, according to data collected by the Washington-based Mortgage Bankers Association and the Federal Bureau of Investigation.

``Misstatements about employment and income are being made every day,'' Russell said. ``The brokers are just putting down on paper what the underwriters would require. There are borrowers providing false information as well.''

Loans that require little or no documentation of income soared to $276 billion, or 46 percent, of all subprime mortgages last year from $30 billion in 2001, according to estimates from New York-based analysts at Credit Suisse Group. Homebuyers with those loans defaulted at a 12.6 percent rate in February, compared with 1.5 percent of fully documented prime mortgages, said San Francisco-based First American LoanPerformance, a mortgage consulting group.

A 2006 study cited by the Mortgage Asset Research Institute showed that almost 60 percent of stated income loans were exaggerated by at least 50 percent.

snip>

Nancy Olland's application for a mortgage said she made $6,900 a month. She needed that much income to qualify for her loan. The 48-year-old mental health therapist from Cleveland Heights, Ohio, actually makes $3,286, based on her pay stub.

She said she wasn't asked to document her income. She signed the application without reviewing it and discovered the discrepancy months later.

``I don't know where the information came from,'' Olland said. ``I didn't give it to my mortgage broker. Was it literally fabricated out of thin air?''

New Century Financial Corp., the second-largest U.S. subprime lender last year, was Olland's lender.

more...

Those poor lenders!

Poor, poor... lenders! :eyes: :sarcasm:

Blame the borrowers and the brokers then queue up for a bail-out. Seems to be the plan.

Radian was affected by jointly owned C-Bass, a buyer and repackager of high-risk home loans.

http://www.philly.com/philly/business/20070425_Mortgage_insurers_earnings_down_31_.html

Radian Group Inc., a Philadelphia mortgage-insurance provider, said yesterday that its first-quarter earnings had dropped 31 percent, in part because of an operating loss at a partly owned subsidiary that buys distressed home mortgages.
Net income at Radian, which in February announced a $4.9 billion merger with MGIC Investment Corp. of Milwaukee, fell to $113.5 million, or $1.42 per share, from $163.7 million, or $1.96 per share, a year earlier.

S.A. Ibrahim, chief executive officer, said in a news release that Radian's core business "was not significantly affected by the disruptions in the subprime business in recent months."

However, Radian's portion of the results at C-Bass, which Radian owns with MGIC, plummeted from a profit of $30 million last year to a loss of $6.8 million this year. Radian owns 46 percent of C-Bass, formally known as Credit-Based Asset Servicing & Securitization L.L.C.

C-Bass buys high-risk mortgage loans and repackages them into securities for sale to investors. Many such companies have run into trouble this year as default rates for subprime mortgages have skyrocketed.

Revenue at C-Bass dropped to $39 million in the first quarter from $171 million a year earlier.

more...

http://www.bloomberg.com/apps/news?pid=20601080&sid=abz3hm9al3EY&refer=asia

April 25 (Bloomberg) -- Japan's trade surplus widened to a record in March, buoyed by a weaker yen and exports to China, which replaced the U.S. as the nation's largest trading partner.

The surplus rose 73.9 percent to 1.633 trillion yen ($14 billion) from a year earlier, the Ministry of Finance said today in Tokyo. Exports climbed 10.2 percent, in line with the median estimate of 14 economists surveyed by Bloomberg News.

Toyota Motor Corp. and Canon Inc. anticipate higher demand from China and Europe to help them weather an imminent slowdown in the U.S., where exports grew at the slowest pace in more than two years last month. Shipments to China and Europe rose to a record, today's report showed.

``While the slowdown in the U.S. economy is becoming clearer, growth in the euro region and China has been offsetting the effect on Japan's exports,'' said Azusa Kato, an economist at BNP Paribas Securities Japan Ltd. She said exports may suffer in coming months as the effects of slower U.S. growth spread to the global economy.

The yen traded at 118.42 per dollar at 12:44 p.m. in Tokyo, compared with 118.57 before the report was published. Economists expected the surplus to widen to 1.38 trillion yen.

Imports were unchanged, failing to rise for the first time in three years, as oil prices declined. Analysts predicted a 4.2 percent drop.

China, Europe

Exports to China expanded 15.1 percent last month, and those to Europe advanced 13.7 percent, the Finance Ministry said. Shipments to the U.S., Japan's largest market, rose 2.4 percent, the slowest pace since January 2005.

China overtook the U.S. as Japan's largest trade partner in the year ended March 31, the Finance Ministry said.

/...

http://asia.news.yahoo.com/070425/kyodo/d8onf4s00.html

(Kyodo) Tokyo stocks fell Wednesday as investor confidence deteriorated, due partly to weak U.S. economic data that stirred concern about the economic outlook in the country.

The 225-issue Nikkei Stock Average lost 215.61 points, or 1.24 percent, to finish at 17,236.16. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 18.82 points, or 1.10 percent, to 1,687.34.

The Nikkei shed more than 100 points at the outset as investor confidence was hurt by the release the previous day in the United States of figures showing lackluster sales of existing homes in March and weak consumer confidence in April, brokers said.

The sluggish housing data sparked concern about the possibility of decreases in U.S. personal spending and a downturn in the world's largest economy, brokers said.

"Rather than domestic factors, the Tokyo indexes were more sensitive to outside factors like economic indicators or events in the United States," said Hiroaki Kuramochi, managing director at Bear Stearns (Japan) Ltd.

He also mentioned that the U.S. dollar's bearishness against the yen dragged down export-related stocks such as automaker and high-tech issues.

The dollar traded at the lower 118 yen level Wednesday afternoon in Tokyo, down from the upper 118 yen level late Tuesday in New York.

/...

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070425:MTFH64494_2007-04-25_12-23-38_T80179&type=comktNews&rpc=44

TOKYO, April 25 (Reuters) - Japan's Hitachi Construction Machinery Co. (6305.T: Quote, NEWS , Research), a rival of Caterpillar Inc. (CAT.N: Quote, Profile , Research), said on Wednesday its profit jumped 51 percent in the past business year and forecast growth of 18 percent as strong demand for excavators in Europe and Asia offsets a slowdown in the U.S.

The company, a unit of Hitachi Ltd. (6501.T: Quote, NEWS , Research) and one of the Japanese electronics conglomerate's few money-making operations, has been cashing in on voracious demand for excavators and other construction equipment in fast-growing China.

Hitachi Construction's upbeat results echoed an earnings report last week from industry leader Caterpillar Inc. (CAT.N: Quote, Profile , Research), which also expects strong demand outside North America to offset any pain from the faltering U.S. housing market.

Komatsu Ltd. (6301.T: Quote, NEWS , Research), Japan's top maker of construction machinery ahead of Hitachi, is also expected to post double-digit profit gains for the past year and predict solid growth in 2007/08 when it unveils earnings on Thursday.

"I'm not hopeful about the U.S. market this year, but I'm not too concerned," Hitachi Construction president Michijiro Kikawa said on the sidelines of a news conference.

"Our business is booming in other countries and we can make up for it there."

/... (especially for TrogL)

http://www.bloomberg.com/apps/news?pid=20601080&sid=ajtDwd_zeXe4&refer=asia

April 25 (Bloomberg) -- Asian stocks fell for the first time in four days after slides in U.S. home sales and consumer confidence fueled concern demand will cool in the region's biggest export market.

Toyota Motor Corp., which gets a third of its sales from North America, and Samsung Electronics Co., South Korea's largest exporter, led declines. KDDI Corp., Japan's second- biggest wireless operator, dropped the most in six months after the company reported a loss. Nissan Motor Co. sank to a nine- month low on expectations profit plunged.

All 10 industry groups included in the Morgan Stanley Capital International Asia-Pacific Index fell, while benchmarks in China and South Korea slid from records. The Nikkei 225 Stock Average lost 1.2 percent in Japan, where a government report showed exports to the the U.S. grew last month at the slowest pace in two years.

``The strength of the U.S. economy remains a concern,'' Said Liu Juming, who helps manage $1.7 billion at IBT Securities Co. in Taipei. ``Asian exporters' profitability will closely correlate with U.S. demand.''

MSCI's regional index lost 0.8 percent to 146.64 as of 2:03 p.m. in Tokyo, ending a three-day, 0.6 percent gain. Indonesia, Pakistan, the Philippines, Sri Lanka and Thailand were the region's only markets to advance, while Australia and New Zealand are closed for holidays.

China's CSI 300 Index fell for the first time in four days on concern the rally that made the market the world's best performer in the past 12 months won't be sustained. The Kospi index retreated 1 percent in South Korea, where a central bank report today showed the economy grew 0.9 percent in the first quarter, matching economist estimates.

/...

http://www.atimes.com/atimes/China_Business/ID26Cb02.html
By Mark A DeWeaver

The latest Chinese economic statistics might make one wonder if the economy is on the verge of overheating. In the past 12 months, Consumer Price Index (CPI) inflation has risen from 0.8% to 3.3%, while first-quarter GDP (gross domestic product) growth came in at 11.1%, the fifth consecutive quarter above 10%. The last time the economy grew at a double-digit rate for five quarters in a row, from the second quarter of 1994 to the second quarter of 1995, inflation was running at more than 20%. Could the country be about to enter another high-inflation period similar to those experienced in the late 1980s and early 1990s?

In fact, the dramatic structural changes that have occurred in the Chinese economy over the past two decades make such a scenario very unlikely. While past high inflation rates were the result of excess demand, infrastructure bottlenecks and trade deficits, today's inflation has more to do with money-supply growth generated by balance-of-payments surpluses. China today is more like Japan, South Korea, and Taiwan in the late 1980s, which had inflation in the 5-10% range as a result of large foreign-exchange inflows, than the China of 20 years ago.

Too much of a good thing

While it might be argued that, as Milton Friedman famously said, "inflation is always and everywhere a monetary phenomenon", the underlying cause is not always the same. Inflation may originate with an import-price shock, as appears to have been the case in the United States during the energy crises of the 1970s. But it can also result from rising export prices, as occurred in oil exporters such as Indonesia and Nigeria during that same period. And there have been many cases where the culprit was the creation of money to cover government deficits - the hyperinflations of Weimar Germany in 1920s, Republican China in the 1940s, and Argentina and Brazil in the 1980s being well-known examples.

The driver for the high Chinese inflation of the late 1980s and early '90s was excess demand for both consumption and investment goods resulting from the economic liberalization of the post-1978 "opening and reform" period. As there had been little investment in basic infrastructure and production capacity for many raw materials, demand growth led to shortages that could neither be alleviated locally nor, given insufficient export earnings, with imports. The resulting increases in producer prices were quickly passed on to finished products, and the general price level rose.

Fast-forwarding to today's China, we find a very different situation. Overinvestment has led to excess capacity in a number of sectors, while massive foreign-exchange inflows, both from exports and investment, are now available to finance the import of resources that are in short supply domestically.

Nowadays, the problem is not one of too little foreign currency but of too much. To maintain exchange-rate stability, the monetary authorities must buy as much foreign exchange as anyone wants to sell at their target exchange rate. Since these purchases result in the issuance of additional local currency, the result is an inflationary money-supply increase.

/article continues...

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=ax0mCRRqztEs

April 25 (Bloomberg) -- China's economy has humbled many smart people in recent years.

It has defied those arguing it would slow, those predicting a hard landing, those saying its currency would surge and those concerned that social unrest would shake Asia's second-biggest economy to its core.

Yet no one has been more outmaneuvered by China than the world's two biggest economic powers: the U.S. and Japan.

As Japanese Prime Minister Shinzo Abe and U.S. President George W. Bush meet in Washington later this week, both leaders may think markets give a hoot. Abe and Bush may hope that by solidifying ties, investors will somehow feel the global marketplace is a safer, more prosperous place.

Together, the U.S. and Japan produce economic output of $17.8 trillion, while China produces just $2.6 trillion. That means investors and policy makers the world over should be comforted that the U.S. and Japan have arguably never been closer. Yet even independently, both economies should have tremendous sway over smaller, developing ones.

Not China. If officials in Washington and Tokyo have learned anything in the last few years, it's that China won't be pressured into changes or concessions it doesn't feel ready for. While the examples include everything from democracy to human rights to piracy, the clearest demonstration of China's resolve to go at its own pace is the yuan.

Paulson Humbled

more...

http://china.seekingalpha.com/article/33443

...

And what happens in Shanghai is of great interest to global commodity and stock market operators, because China is the locomotive of global economic growth, and its staggering factory output is matched by its demand for industrial commodities. China’s share of global demand growth for commodities between 2002 and 2005 was: 51% for copper, 48% for aluminum, 87% for nickel, 54% for steel, 86% for tin, 113% for zinc, and 30% for crude oil.

...

At current growth rates, China’s economy would surpass the US in 25-years. But Chinese leaders worry that stiff US tariffs on Chinese imports could derail the world’s fastest growing economy, and burst the Shanghai stock market bubble. When push comes to shove with “veto proof” trade legislation in the second half of this year, Beijing would probably relent and allow the yuan to climb higher at a faster rate.

But until the political posturing turns into action, the Shanghai bubble could try to match the last great Asian stock market bubble – the Nikkei-225 of 1986-89. Chinese retail investors opened more than one million new trading accounts during the third week of April, bringing the total for the first four months of 2007 to more than 10 million. This figure is greater than that of the previous four years combined, even as signs of a bubble are getting clearer by the day. The Shanghai stock index has risen 50% so far this year, after tacking on a 130% gain in 2006.

http://imgred.com/

Chinese broker, Citic Securities, has tripled in value since early November, and is a good barometer of speculative sentiment in China. Citic Securities 600030.ss, Shanghai’s first listed broker, said its net profit in the first quarter of 2007 rose more than 12 times from the same period a year earlier. Revenue for the three months ended March 31st, was close to that for all of 2006.

Speculative fever is running very high in China, and it’s not wise to stand in the way of an Asian stampede. The Shanghai Securities News said the number of new brokerage accounts established in a single day hit a record 282,000 on April 19th, the day of the market’s 7.2% plunge, bringing total accounts to over 90 million. This is a strong signal that market setbacks are not scaring Chinese traders away.

And another PBoC interest rate hike might not scare speculators, because it would only adjust real interest rates from being sharply negative. Traders do not expect a sudden jump by the Chinese yuan, and believe authorities will hold appreciation for the rest of the year to around 3% to avoid hurting China’s export sector.

/...

great minds "thang" again.

They truly float the yuan, and its "GAME OVER". A true float of the yuan will set off a massive dollar crisis. The resulting economic constriction would make the Great Depression look like a picnic.

http://www.thetimeandmoneygroup.com/blog/2007/04/24/is-china-too-hot/

Sorry, can't copy and paste from this one.

http://www.ft.com/cms/s/f23fc672-f30a-11db-9845-000b5df10621.html

German business confidence has surged back to a level close to its all-time peak, according to a closely-watched survey that showed the strengthening euro has not had an impact on Europe’s largest economy.

The Munich-based Ifo institute’s business climate index, regarded as a good indicator of future trends in activity, rose much more than expected, reaching 108.6 this month, after 107.7 in March. That took it close to the peak of 108.7 reached in December last year. In spite of the euro’s rise, business had become more optimistic about exports, Ifo said.

“Germany is profiting particularly from the ebullient international investment upswing, which because of its specialisation is having a stronger effect on our country than in other large European countries,” said Hans-Werner Sinn, Ifo’s president. Against the dollar, the euro is close to its December 2004 peak of $1.3670.

...

Robust German growth will strengthen the case for higher eurozone interest rates. The European Central Bank has signalled that a quarter percentage point rise to 4 per cent is likely in June.

Andreas Rees, economist at HVB in Munich, said the latest Ifo results were particularly striking as in the past “the euro exchange rate often acted as a kind of trigger for a strong and sustained downturn in business sentiment”. Continuing robust export growth would spill over into domestic demand, he added.

/..

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B6f3bb4ab%2Dc3df%2D4682%2Dab91%2D0d360accbe53%7D

The economy expanded briskly in the first three months of the year, according to official figures published on Wednesday, cementing expectations of another interest rate rise from the Bank of England next month. The Office for National Statistics reported that the economy grew by 0.7 per cent in the first quarter, compared to the previous three months. This was slightly above consensus expectations of a 0.6 per cent rise. It was the third quarter in a row that the economy has expanded by 0.7 per cent, though the annual rate eased to 2.8 per cent from 3 per cent in the last quarter of 2006. The growth was driven once again by the services sector, which expanded by 0.8 per cent quarter-on-quarter. Within services, growth was broad-based and concentrated particularly on transport and communications and business services and finance. Industrial production was flat, though this was an improvement on the 0.2 per cent contraction in the last three months of 2006. Manufacturing output fell by 0.3 per cent while mining but was offset by strong rises in other components of industrial production, including energy

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B08f54c9c%2Dc900%2D40b2%2Db0aa%2De4aacfb4dcd7%7D

Takeover activity kept European equity markets in buoyant form on Tuesday as the battle for Dutch bank ABN Amro warmed up after a consortium led by RBS issued a rival bid to the agreed offer from Barclays. In mid-session trade, the FTSE Eurofirst 300 was up 0.4 per cent to 1,570.41, Frankfurt’s Xetra Dax added 0.6 per cent to 7,313.88, the CAC 40 in Paris climbed 0.7 per cent to 5,926.29 and London’s FTSE 100 rose 0.4 per cent to 6,455.8.

/...

Heh-heh, notice the page title at the top of your browser - Equity markets: Dark clouds on the Horizon

http://www.moneyweek.com/file/28533/why-are-equity-markets-soaring-as-the-economy-falters.html

Over the past week two significant milestones were reached. The first was, of course, sterling’s climb (or was it just as much the dollar’s fall?) to $2 / £1 its highest relative level since 1981. Sterling’s strength and the dollar’s weakness has much to do with the perceived direction of short-term interest rates in both countries. A strong set of March inflation data here in the UK, boosted in no small measure by food, furniture and transport (including petrol) costs, drove CPI inflation to an annualised rate of 3.1% (V’s 2.8% in February) and thus forced Mervyn King, the governor of the Bank of England, into an open letter of explanation. Underlying inflation (which excludes energy, food, alcoholic beverages and tobacco prices) also climbed year on year to 1.9% (V’s 1.7% in February).

It is by no means certain, even after such strong data, that inflation will remain as robust as it appears now over the next few months. Utility prices are likely to exert a particularly negative influence, we do not expect the oil price to remain at prevailing levels for long and furniture prices are not expected to prove as resilient as they were over early spring. That said, a further rate hike in May looks a virtual certainty. By contrast, US inflationary pressure appears, at last, to be ebbing and activity levels (as discussed below) are sagging markedly. US base rates appear to have peaked and a process of, possibly aggressive, monetary easing is anticipated by the financial markets.

The second milestone was the FTSE 100’s breaching the 6,500 level on its way to hitting multi-year highs, in keeping with the buoyancy already apparent across other global developed equity markets. The surprise to us is that equities continue to perform as well as they are while the macro economic clouds darken. This environment looks suspiciously like the exact opposite of conditions which prevailed in the latter part of 2002.

Back in late 2002 / early 2003 we (and others) were writing about the possibility of a severe deflationary spiral emerging which, unless drastic macro economic measures were taken, could result in a downward slide into depression conditions similar to those experienced in the 1930s. At that time global central bankers, following the Fed’s lead, were cutting base rates aggressively in order to pre-empt such a spiral evolving and equity markets were reacting negatively to the possibility that central bankers were grappling with conditions which were out of their control. At the same time, macro economic data was beginning to give the impression that a corner had been turned. Whilst it took the US invasion of Iraq to act as the catalyst for equities to begin their recovery what struck us then, as now, was the lag effect between the clear appearance of improving fundamentals and the lighting of the “blue touch paper” under the equity market.

Now we see the almost exact opposite at work. Equity markets have enjoyed a prolonged revival and multi-year (and in some cases all time) highs have been achieved and built upon. At the same time the macro economic picture, to some extent in the UK but to a much greater degree in the US, has deteriorated markedly.

Whilst we acknowledge the highly supportive nature of ongoing merger and acquisition activity and the possibility that Asia, and to a lesser extent Europe, might be able to decouple from a US slowdown we are not entirely convinced that either is sufficiently guaranteed as to ensure that equity markets can completely extricate themselves from deteriorating fundamentals. The purpose of this note is to look at the extent to which those fundamentals have deteriorated as a means of assessing by just how much share prices have been looking in the opposite direction. We cannot believe that the dollar’s ongoing weakness and its adverse impact on the translation of dollar revenues and profits back into sterling (or euros) can be completely offset by further improvements in profit margins. UK and European companies with significant dollar exposure must be potentially vulnerable to that currency’s slide on the foreign exchanges.

more...

http://www.prudentbear.com/articles/show/2001

The following commentary will describe the final sequence of events that will lead to the implosion of the global economy.

As US real estate prices fall and depress US economic growth, private foreign investors begin to withdraw their capital from the US financial markets. This capital flow would by itself act to elevate the currency value of the country that it is returning to. However, the governments of developing foreign countries have policies in place to fix the exchange rate of their currencies. In order to maintain this fixed exchange rate, foreign central banks will print their own currency and exchange it for US dollars (which are then invested into US government debt). The amount of money printed and exchanged into US dollars by the foreign central bank will necessarily equate to the amount of private capital returning to the country. These central bank policies will act to artificially keep the value of the US dollar elevated and artificially keep US interest rates low.

The fixed exchange rate regime is put under great stress when private investment capital begins to leave the US, because it necessitates that the foreign central bank print much greater amounts of their own currency. This will act to boost their domestic money supply and cause their own economy and stock market to “overheat”. Additionally, in the process of exchanging increasing amounts of their own currency for US dollars, the foreign central bank rapidly builds up the amount of foreign exchange reserves that they own. The increasingly large holdings of foreign exchange reserves represent a corresponding increasingly large risk of foreign exchange losses to the central bank (should the US dollar fall in value in the future).

When the central bank fixes the exchange rate, it effectively cedes control over the domestic money supply, as they are obligated to print whatever amount of currency is required in order to offset the amount of foreign currency being brought back to the country. The only tool that the central bank has left at its disposal is to change the level of the domestic short term interest rate. However, even there its’ hands are tied, because if they decide to increase the interest rate (should the economy “overheat”), then this will only serve to worsen the situation. This will cause even more investment capital to return to the country from the US because the interest rate differential between the two countries is made more favourable, drawing in capital in search of higher interest yield.

In the face of increasing private investment inflows (caused by a deteriorating US economy), the foreign central bank is faced with a tremendous dilemma. Its economy begins to overheat and yet increasing interest rates will only serve to worsen the situation. The only way to stop the rapid acceleration in domestic money supply growth is to finally abandon the fixed exchange rate regime altogether. This will negate the necessity of printing new currency with no control.

When the fixed exchange rate regime is terminated, then newly minted funds from the foreign central bank no longer act to support the value of the US dollar and maintain low US interest rates. In effect, there is nothing left to support the US consumer anymore. The value of the US dollar collapses and US interest rates skyrocket. The skyrocketing interest rates cause a real estate crash. The collapsing value of the US dollar causes the price of gold to skyrocket. And needless to say, the stock market collapses.

At this time, the key foreign central bank that is artificially supporting the US economy at present is the central bank of China. Their current foreign exchange reserves now stand at $1.2 trillion. The latest statistics indicate that their foreign exchange reserves grew by about $135 billion in the first quarter of 2007, which equates to an annualized growth rate of $540 billion. They are not alone in propping up the US economy, as total worldwide central bank reserve growth is running at an annualized rate of $1 trillion (with current total reserves of $5 trillion). Some people look at the data with puzzlement, but what it clearly reveals is that a great deal of private investment capital is being repatriated from the US. Economic growth in the US began to decelerate significantly in the fourth quarter of 2006. I don’t see that as a coincidence.

more..

http://www.dpmnewsagency.com/econ_cont.asp?id=116450

Given the diversified trade sources of the GCC countries, the dollar-peg in times of currency depreciation exchange rates can be very costly to regional economies, says a report by the National Bankof Dubai.

Macroeconomic stability is one of the criteria used to access a business environment ranking and banking sector stability.

Among other policy settings, an appropriate exchange rate regime is fundamental for macroeconomic stability, and more so for the stability of banking and financial sector.

The banking sector and foreign exchange markets are strongly intertwined. Foreign exchange crises, therefore, can easily spill over into the domestic banking sector. Evidence from some developing countries suggests that banking crises occur more often under a flexible exchange rate regime. The reasons are that, unlike under a fixed exchange regime, the national authorities often fail to follow stable and predicable policies.

On the other hand, fixed exchange rate regime, with their inherent failures to respond to market signals, have also been one of the contributing factors for banking failures. Nevertheless, there is an emerging consensus among policy makers that countries should follow either flexible or irrevocably fixed exchange rates in order to avoid financial and banking crises. Some suggest that exchange rate regimes, should be avoided because the benefits of such an intermediate regime have been often offset in terms of uncertainty in the financial markets.

The GCC countries have pegged their currencies to the dollar. Until 2001, the pegged regime was serving the twin objectives of stabilised exchange rate and minimised exchange risk. That also, obviously, encouraged banking sector stability.

However, since 2002 the dollar has been volatile and it remains so in 2006.The feed on effects of such volatility poses challenges to the banking sector. In the following section, Dr Kannapiran discusses the impacts of the volatility of the dollar and the pegged exchange regime in the GCC countries on their banking sectors.

Pegging effect

A pegged exchange rate implies a trade-off: the gain in terms of transparency and stability must be weighed against the loss of an independent monetary policy. In the UAE, since the objective of monetary policy is to maintain the external value of the UAE dirham (against the US dollar), thus such settings must always be aligned with this objective. Consequently, there is no residual capacity to use monetary policy to address other objectives, such as cyclical fluctuations in the UAE economy.

Interest rates in the UAE for example, will move in parallel with those in the United States, which may not always be optimal from the point of view of UAE's domestic economy.

/continues...

Investors encouraged by strong economic figures and mainly good corporate earnings sent the Dow over 13,000 for the first time in history.

http://money.cnn.com/2007/04/25/markets/markets_nyopen/index.htm?source=yahoo_quote

NEW YORK (CNNMoney.com) -- Stocks jumped in the first moments of trade Wednesday as investors pushed the Dow over the 13,000 level after better-than-expected economic figures and good corporate earnings.

snip>

A government report on durable goods orders showed stronger-than-expected demand for big-ticket items, as the 3.4 percent gain was well above the 2.5 percent rise forecast by economists. The February reading was also revised up to a 2.4 percent gain from the original reading of a 1.7 percent gain, and a key measure of business spending in the report showed the best gain since September 2004.

At 10 a.m. the Census Bureau will release its reading on new home sales and prices in March. Economists surveyed by Briefing.com forecast that new home sales rebounded slightly from the slowest pace in six years in February, rising to an annual rate of 890,000 from 848,000 in the February report.

Dow component Boeing (Charts, Fortune 500) reported better-than-forecast earnings.

bit more...

Dow 12,968.08 14.14 (0.11%)
Nasdaq 2,525.19 0.65 (0.03%)
S&P 500 1,482.95 2.54 (0.17%)
10-yr Bond 4.6420% 0.0200
30-yr Bond 4.8230% 0.0190
NYSE Volume 565,814,000
Nasdaq Volume 532,742,000

Blather's messed up for the moment.

Any info on that?

http://www.prudentbear.com/articles/show/1997

big snip>

Earnings season provides us a quarterly glimpse into the workings of the Credit system. I was especially interested in the opportunity to examine how various institutions were responding to the subprime meltdown. Were lenders pulling back from home mortgage lending? Were they becoming more risk averse in the lending business generally? Any reverberations in securitizations or derivatives? Most important, are we seeing evidence of slowing financial sector growth – the lifeblood of market liquidity?

Well, in regard to some of these questions, results are inconclusive. Generally, moderately rising Credit costs are putting only greater pressure on profitability for the more traditional banking businesses. Growth has slowed for some, while others are aggressively pursuing growth wherever it can be found. At this point, the more important dynamics remain the move by financial institutions into commercial lending and capital market activities. And as Citigroup’s asset growth of $137bn and JPMorgan’s $57bn demonstrate, institutions can grow securities market-related assets these days much more readily than they can traditional loans. Need earnings to please Wall Street and support the stock price – go capital markets!

So, to answer a key question, when it comes to market liquidity there is little evidence that subprime problems have led to any restraint in financial sector expansion generally. Perhaps the opposite.

Reporting last month, Goldman Sachs, Lehman Brothers, Morgan Stanley, and Bear Stearns posted combined (fiscal) first quarter asset growth of an astounding $239bn, or 34% annualized, to surpass $3.0 TN. With the subprime collapse hitting at the end of February (little impact on fiscal Q1), all eyes were on Merrill Lynch’s report for quarter ended March 31. Well, Merrill enjoyed a blow-out quarter and was pleased to broadcast that it had taken full advantage of market turbulence (including record subprime originations!) during the period. While Merrill does not release a balance sheet with its earnings release, it’s at this point a reasonable assumption that the broker/dealers are well on their way to sustaining last year’s incredible 30% growth rate.

Financial sector quarterly revenues data provide evidence as to which businesses and what types of lending are driving system Credit growth (all of them!). Balance sheets – Liabilities, in particular - help inform us as to the nature of financial sector liabilities being created in the process of financing the Credit boom. Confirming record first quarter debt issuance data, the investment banking business has never been stronger. Despite slowing household mortgage debt growth, we’re still likely on pace for record securitization issuance this year. And as far as funding financial institution asset growth, it is worth noting the aggressive expansion of “fed funds”, “repos” and other non-deposit liabilities. Clearly, M2 (or MZM) “money” supply is capturing little of the enormous ongoing expansion of market-based liquidity creation.

During the first quarter, the Liability “Fed Funds and repos” jumped $44.4bn at Citigroup and $56.7bn at JPMorgan. Goldman, Lehman, Bear Stearns, and Morgan Stanley combined for a $100 billion increase in “Repo” Liabilities, a 77% annualized growth rate. It is worth noting that the first quarter increase in “fed funds and repo” from these six institutions alone ($201bn) was larger than total M2 growth ($160bn) during the period. Over the past year, the Liability “fed funds & repo” increased 41% at Citigroup to $393.7bn and 45% at JPMorgan to $219bn. While quarterly earnings leave many questions unanswered, the issue of a historic runaway increase in securities-based finance has been reconfirmed.

A commentator on CNBC today said that it was “obvious” that Credit growth was slowing significantly. It appears obvious to me that rampant Credit excess runs unabated. Household debt growth may be moderating, while corporate borrowings are likely expanding at low double-digit rates. But it is the growth in financial sector borrowings that holds the key to liquidity puzzle. The leveraging of existing securities (there’s $45 TN of Credit market debt outstanding) – by hedge funds, in broker/dealer and bank “trading accounts” – is likely a major source of current liquidity excess.

I will conclude by respectfully taking exception to David Hale’s op-ed piece in today’s Financial Times, “The Dollar May be Volatile but Pessimists are wrong.”

snip>

Sure, as long as Credit expands at the current rapid pace the consumer will undoubtedly keep spending and asset markets will keep inflating. And as long as the Credit Bubble is sustained U.S. financial assets may appear sufficiently enticing to our foreign Creditors (although they must not be that attractive or foreign central banks wouldn’t have been forced into accumulating about $1 TN of reserves the past year). But this is Ponzi Finance at its most extreme. The U.S. financial sector must now balloon rapidly and incessantly to sustain over-consumption; to maintain inflated real estate and securities values; to support corporate earnings and income growth; and, importantly, to support the ever-growing pyramid of financial sector debt obligations. But as we have been witnessing of late, this kind of Credit system expansion creates only more dollar liquidity to add to the global deluge. If only, in Minsky’s language, “Ponzi Finance Units” could live forever. There will, at some point, be a reversal of flows out of Wall Street “finance” that will likely coincide with a flight from the dollar.

:scared:

"Ponzi Finance at its most extreme." - No kidding. :/

You caught the short summary perfectly. ;-)

There is also much to learn from the pith. :lol:

As price of staple surges, everything from drought to U.S. ethanol demand blamed

http://www.chron.com/disp/story.mpl/business/4746003.html

MEXICO CITY — Consuelo Lisea's shopping bag is considerably lighter these days when she leaves the Mercado San Juan, an indoor market crowded with stalls peddling fruits and vegetables, pork rinds, cheeses and fresh tortillas.

The slight 67-year-old widow says she buys fewer vegetables and only four or five tortillas a day, down from the 10 she bought last year with 2 pesos, or 20 cents.

"I eat less overall now that food prices have gone up," Lisea said.

"It seems that everything costs more now: tomatoes, milk, onions and, of course, tortillas."

The surge in tortilla prices comes at a time when the cost of food here is generally rising.

According to the Bank of Mexico, food prices are up 7.2 percent compared with a 4.2 percent general inflation rate, which has sparked a debate about how prices are set and whether the increases are justified.

Mexican consumers, particularly the poor, first felt the squeeze in January when tortillas leaped from 45 cents per kilogram to as high as $1.08 per kilo in some parts of the country.

There are about 28 tortillas in a kilo, and they are more expensive in northern Mexico, where many consumers prefer wheat tortillas.

more...

I just read it a few minutes ago and you beat me to it. Like minds and all. Most of the tortillas here are flour, but corn has a big following. The high price of corn is disastrous for the average Mexican. They have had revolutions over less. You really don't want an unstable neighbour...I pity the Canadians:evilgrin:

http://www.ft.com/cms/s/45d290c4-f28b-11db-a454-000b5df10621.html

The long-awaited launch of the first index tracking credit derivatives on US junk-rated loans is expected in a few weeks, according to dealers, more than six months after the debut of a similar index in Europe.

Dealers hail the development of a market in credit default swaps on loans – which the new indices are designed to promote – as the next step in the evolution of the fast-growing credit derivatives market.

They say that a liquid market in loan credit default swaps (LCDSs), which provide a type of insurance against default on loans, should help existing lenders manage risk better and encourage new investors, such as hedge funds, to make more targeted speculative bets.

However, the US and European LCDS contracts, and the indices based on them, have been fraught with growing pains.

The most commonly traded contracts in the two regions behave differently, for example, when a company repays a loan. In Europe, the CDS contract is cancelled when this happens. In the US, a dealer poll determines a suitable substitute loan. :wtf:

more...

Dow Jones Index levitate itself without any support at all. New housing down 23%! Dollar making new lows and sinking like an anchor, but the magic at NYSE just keeps floating in the air! How do they do it? See for yourself and prepare to be amazed!! This bubble may make the 2000 NASDAQ levitation act look like child's play.

http://www.kitcocasey.com/displayArticle.php?id=1347

Good day... As I wrote yesterday, the housing market continues to be a drag on the U.S. economy. Sales of previous homes fell to the lowest level in almost four years, indicating the U.S. economy will continue the slowdown that began last year. The falling home sales combined with high gas prices continued to push consumer confidence down. As I expected, this negative data sent the dollar into a tailspin with the currencies shooting back up to challenge last week's highs.

As I mentioned above, existing home sales fell as expected, but the size of the decline was what shocked the markets. Sales slid 8.4 percent in March, almost double the 4.3% decrease that was expected. A separate report showed home price declines in 20 major cities accelerated in February. As expected, some of the blame for this bad report was put on the weather, but the size of the decline reveals the fundamental weakness that persists in the housing industry. The inventory of unsold homes continues to hover around 7.3 months, and prices for existing homes have been lower year-over-year for eight straight months. Bernanke continues to say the downturn in housing won't have a major impact on the U.S. economy. That is utter nonsense!! The strong housing industry and bubble in housing prices was responsible for keeping the U.S. economy growing over the past few years, so a reversal in this industry will have to have an offsetting negative impact on our economy. As we have emphasized over and over, the U.S. economy will continue to slide toward recession as the housing market shakes out.

Consumers are starting to feel the pinch of higher gasoline prices and falling home prices as consumer confidence declined to the lowest level in eight months in April. The Federal Reserve is counting on an expanding job market to keep consumers spending and the economy growing. But this month's report shows consumers are not as confident in the job market as the Fed. The share of consumers who said jobs are plentiful declined, and the proportion who said they plan to buy a house was the lowest in more than two years. Not good news for the boys at the FOMC who are looking for another bail-out by the overly optimistic U.S. consumer. What happens if the U.S. consumer is finally forced to reverse their borrow-and-spend habits?

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"The Federal Reserve is counting on an expanding job market to keep consumers spending and the economy growing."

That wouldn't be those 'hypothetical' jobs on paper that the Labour Department keeps coming up with would it? They may exist in the FED's paper world, but you, I, and most everyone else exists in the real world. What you are seeing is reality meeting fantasy.

They can continue to drop food and fuel from the inflation index too but it won't improve my cost of living and it certainly affects MY spending. I have started downshifting again and I figure I am not alone either.

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/DangerMarketPartyingLikeItsMarch2000.aspx?ref=patrick.net

Accurate memories are in short supply in the marketplace, but greed never is. Look back seven years to the mania and note that history appears to be on the way to repeating itself.

Back in the 1999-2000 stock mania, my friend Jim Grant would on occasion call me while away from his office, asking: "What goes on?" To which I'd reply: "The market is open," meaning that by virtue of the market being open, it was up a ton, because that is in essence what was happening every day.

For those who don't recall, the reason that was the case was because we were supposedly in a new era, where productivity had trumped all of our problems, we were experiencing world peace and we would never, ever again feel the pain of the downside of the business cycle. Of course, what was really going on was that we had a bubble that was inspired by money printing.

Folks know how that ended, though the pain from the fallout of that bubble was never as extreme as it might have been, since the Federal Reserve successfully created a real estate bubble to bail out its burst equity bubble.

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yee haw!

But I have a soft spot for donkeys and especially mules. I want a mule.

Guess it came from helping Grandpa take care of Jack and Jenny after they plowed the field. They always liked me and were very gentle. They out live Grandpa by about 10 years and became pets in the end. They had a happy retirement-just put up with the occasional kiddie ride and be force feed carrots and apples by doting family. Selling them just never crossed our minds.

http://www.321gold.com/editorials/saville/saville042407.html

Intermediate-term Outlook

We've been long-term bearish on bonds since their June-2003 peak. Actually, we turned long-term bearish well before June of 2003 and have always considered the final run-up to the 2003 peak to be an irrational response to the threat of deflation. We say "irrational" because such a threat never existed. Extraordinarily -- but perhaps not inexplicably given that hardly anyone seems to know what inflation is let alone how it operates within an economy -- the fear of DEFLATION, and, consequently, the investment demand for bonds, peaked shortly after the rate of INFLATION (the rate of money supply growth) hit its highest level since the 1970s.

Since June of 2003 the inevitable EFFECTS of inflation have come home to roost and this has put some downward pressure on the bond market. The surprise, from our perspective, is that bond prices have held up as well as they have. After all, evidence of an inflation problem has been blatantly obvious in the commodity and real estate markets for a few years now and the continuing high rate of growth in the global money supply guarantees that the problem will get bigger. And yet, although T-Bond futures remain well below their June-2003 peak they also remain well above their August-2003 trough. Rather than a bear market, what we've seen over the past 4 years is a wide trading range.

Despite what we perceive to be crystal-clear evidence of an inflation problem, a number of factors have combined to prevent the bond market from breaking-out to the downside. These factors include: a) the large-scale purchasing of bonds by the central banks of Asia as part of their currency manipulation schemes; b) arbitrage related to Japan's zero -- or near-zero, as is now the case -- interest rate policy; c) the Japanese public's search for yield outside Japan; d) the downward pressure on the prices of finished goods exerted by the huge increase in productivity within emerging-market economies; and e) the general lack of understanding of what inflation is (most people, including many people who should know better, mistakenly believe that the CPI represents inflation).

Because there appeared to be no way of coming up with a high-confidence guess as to when the above-mentioned factors would lose their collective ability to support the bond market, about two years ago we stopped trying to predict the timing of a major bond market decline. We have maintained the view that a secular bond bear commenced in June of 2003, but have, since the third quarter of 2005, shied away from forecasting WHEN the inevitable break below the August-2003 bottom would occur. The situation is changing, however, and although at least some of the above-mentioned support factors are likely to remain in place, the story is unfolding in a way that points toward a bond market breakdown occurring with the next 14 months.

One of the key ingredients in the recipe for the coming large decline in bond prices (large rise in bond yields) is the irresistible upward pressure on food prices discussed in TSI commentaries over the past few months. It's important to understand, though, that if the supply of money doesn't grow then increases in food prices have to be offset by decreases in other prices. (By the way, if you understand this simple fact then you will be a step ahead of some of the smartest analysts in the financial world). Or, to put it another way, a broad-based increase in prices of sufficient magnitude to push bonds sharply lower can only occur in response to increased money supply.

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http://www.craigslist.org/about/best/sfo/309485032.html

I'm having the worst damn week of my whole damn life so I'm going to write this while I'm pissed off enough to do it right.

I am SICK of all this bullshit people are writing about the Iraq war. I am abso-fucking-lutely sick to death of it. What the fuck do most of you know about it? You watch it on TV and read the commentaries in the newspaper or Newsweek or whatever god damn yuppie news rag you subscribe to and think you're all such fucking experts that you can scream at each other like five year old about whether you're right or not. Let me tell you something: unless you've been there, you don't know a god damn thing about it. It you haven't been shot at in that fucking hell hole, SHUT THE FUCK UP!

How do I dare say this to you moronic war supporters who are "Supporting our Troops" and waving the flag and all that happy horse shit? I'll tell you why. I'm a Marine and I served my tour in Iraq. My husband, also a Marine, served several. I left the service six months ago because I got pregnant while he was home on leave and three days ago I get a visit from two men in uniform who hand me a letter and tell me my husband died in that fucking festering sand-pit. He should have been home a month ago but they extended his tour and now he's coming home in a box.

You fuckers and that god-damn lying sack of shit they call a president are the reason my husband will never see his baby and my kid will never meet his dad.

And you know what the most fucked up thing about this Iraq shit is? They don't want us there. They're not happy we came and they want us out NOW. We fucked up their lives even worse than they already were and they're pissed off. We didn't help them and we're not helping them now. That's what our soldiers are dying for.

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Blunt and to the point. I fear we won't have a Reserve System when this is over.

I watched that gutless weasel on The Daily Show. Talk about a sack of shit. I actually had some respect for the guy once upon a time.

"I would argue that the most serious threat to the United States is not someone hiding in a cave in Afghanistan or Pakistan but our own fiscal irresponsibility."
-David Walker, Comptroller General of the United States

Should be a good one - great to have him back!

http://www.democracynow.org/article.pl?sid=07/04/25/1414222

I guess the place will collapse with out me.

3:01Dow 13,072.02 Up 118.08 (0.91%)
Nasdaq 2,549.28 Up 24.74 (0.98%)
S&P 500 1,493.90 Up 13.49 (0.91%)
10-Yr Bond 4.644% Up 0.022
NYSE Volume 2,392,909,000
Nasdaq Volume 2,085,332,000

2:30 pm : Onward and upward remains the driving mantra for stocks today as today's Beige Book did not upset the apple cart. At the top of the hour, the Fed showed that most of the 12 districts reported continuing tight labor conditions, with "only modest or moderate expansions in economic activity" and "only modest overall wage increases."

Several districts also noted some slowing in lending activity, while real estate continued to generally weaken; but a majority showed positive retail sales while consumer prices remained generally stable. DJ30 +97.31 NASDAQ +22.15 SP500 +12.01 NASDAQ Dec/Adv/Vol 1184/1842/1.88 bln NYSE Dec/Adv/Vol 952/2256/1.05 bln

(1) Advertising executive
Create perceived need/value for inherently generic or worthless products

$$: Ground-level workers with writing ability move quickly to the top, immediately snagging low to mid-six figures; those who can spin mythological concepts surrounding quotidian household objects can command up to seven figures.

more...

http://money.cnn.com/galleries/2007/bing/0704/gallery.bing_50jobs.fortune/index.html

WASHINGTON (Reuters) -- New York State Attorney General Andrew Cuomo said at a congressional hearing Wednesday that criminal charges may result from his widening investigation into conflicts of interest in the student loan industry.

Cuomo told the House of Representatives Education and Labor Committee that his inquiry has found two main problem areas - improper links between colleges and banks that lend money to students; and improper links between individual financial aid officers and lending banks.

In a handful of cases involving individual financial aid officers, Cuomo said, misconduct may be more serious than violations of consumer protection laws. "There is a potential for criminal charges," he said.

http://money.cnn.com/2007/04/25/pf/college/student_loans.reut/index.htm?postversion=2007042513

Dow 13,089.89 Up 135.95 (1.05%)
Nasdaq 2,545.35 Up 20.81 (0.82%)
S&P 500 1,494.46 Up 14.05 (0.95%)
10-Yr Bond 4.646% Up 0.024
NYSE Volume 2,939,463,000
Nasdaq Volume 2,503,390,000

3:30 pm : All three major averages continue to sport sizable gains and are now up 1.0% each going into the close. The Dow is not only on pace to close well above 13,000 but is also on track to finish with its 17th gain in 19 sessions. It is also worth noting that above average volume lends even more conviction behind today’s widespread buying efforts.

The NYSE looks like more than 1.5 bln shares will exchange hands today while the Nasdaq surpassed 1.0 bln shares by 11:30 ET and is already above 2.0 shares. Sun Microsystems (SUNW 5.24 -0.70), the S&P 500’s worst performer (-12%), has seen 300 mln shares traded (nearly 5 times its average), while Amazon.com (AMZN 56.17 +11.42), the S&P 500’s best performer (+25%), has traded 13 times its average daily volume. DJ30 +140.02 NASDAQ +25.47 SP500 +15.52 NASDAQ Dec/Adv/Vol 1159/1907/2.15 bln NYSE Dec/Adv/Vol 886/2349/1.30 bln

3:00 pm : Buying remains the name of the game heading into the final hour of trading. All 10 economic sectors are now in positive territory with oil prices recently closing near session highs helping to position Energy (+2.3%) as the day's biggest winner.

Equally as influential, since it carries more than double the weighting that Energy does, is Financials. The sector still lags its S&P 500 brethren as this year's worst performing sector; but an intraday gain now approaching 1.0% for the day lift's it further into positive territory for the year and acts as an integral floor of support behind today's broad-based rally. DJ30 +111.94 NASDAQ +24.58 SP500 +13.01 NASDAQ Dec/Adv/Vol 1132/1882/2.05 bln NYSE Dec/Adv/Vol 922/2286/1.15 bln

Dow 13,089.89 135.95 (1.05%)
Nasdaq 2,547.89 23.35 (0.92%)
S&P 500 1,495.42 15.01 (1.01%)
10-Yr Bond 4.646% 0.024

NYSE Volume 3,260,176,000
Nasdaq Volume 2,735,255,000

4:20 pm : Finally, the wait is over, as the attraction of a psychologically important number such as 13,000 on the Dow helped underpin a bullish bias right out of the gate and well into the close. All three major indices finished just off their highs but averaged a one-day gain of roughly 1.0%.

While corporate profits continued to pour in better than analysts' lowered expectations, arming the bulls with enough momentum to power the Dow further into record territory, it is worth noting that news other than earnings also had a profound effect on the blue-chip index.

Alcoa (AA 35.76 +1.81) soared 5.3% after saying it will explore the possible sale of its packaging unit. Another example was IBM (IBM 101.46 +2.97), which nearly matched yesterday's surprise 3.4% surge following very upbeat buyback news.

Nonetheless, more evidence that Wall Street analysts were overly pessimistic going into the Q1 earnings season continued to provide a floor of support for stocks even though economic trends remain worrisome.

On the economic front, March durable goods rose a stronger than expected 3.4%, boosted significantly by aircraft orders which also helped Boeing (BA 94.69 +1.02) shareholders look past management's conservative guidance.

Even though the headline durable goods number combined with an upward revision to the February figure still doesn't wipe out the huge 8.8% drop in January, investors found solace in the fact that core capital equipment orders bounced back after two months of declines with a healthy 4.7% increase. Non-defense capital goods orders excluding transportation provide a clearer read on underlying business investment.

Investors were also eyeing the Fed's Beige Book to see what it may or may not say about the economy. However, after the report to be used at the May 9 FOMC meeting showed "modest or moderate" expansion, "only modest overall wage increases," and generally stable consumer prices, stocks caught another wave of buying interest.

A bidding war taking shape that is likely to result in the largest banking deal ever was also noteworthy. Brokerage stocks got a lift after a consortium led by the Royal Bank of Scotland announced a $98 bln counterbid to Barclays' (BCS 58.47 +1.62) $91 bln offer for ABN Amro (ABN 49.77 +2.37) earlier in the week.

With the market already questioning whether gasoline supplies will be sufficient by the start of the summer driving season, an 11th straight weekly decline in inventories, and refinery utilization falling to 87.8%, boosting oil prices nearly 2.0%, still wasn't enough to deter investors. Crude for June delivery closed near $65.80/bbl. The Energy sector surged more than 2.0%, providing some influential leadership as the day's best performing sector.

Technology also provided notable leadership to the upside as investors scooped up bellwethers like Apple (AAPL 95.34 +2.10) and Qualcomm (QCOM 45.34 +0.98) in anticipation of more earnings surprises in the what is expected to be one of the largest contributors to profit growth on the S&P 500 this year.

Consumer Discretionary was another bright spot Wednesday, getting its biggest boost from Amazon.com (AMZN 56.81 +12.06), which soared 27% after management raised its full-year outlook and said Q1 profits more than doubled. DJ30 +135.95 NASDAQ +23.35 SP500 +15.01 NASDAQ Dec/Adv/Vol 1251/1827/2.69 bln NYSE Dec/Adv/Vol 943/2329/1.67 bln

3:30 pm : All three major averages continue to sport sizable gains and are now up 1.0% each going into the close. The Dow is not only on pace to close well above 13,000 but is also on track to finish with its 17th gain in 19 sessions. It is also worth noting that above average volume lends even more conviction behind today’s widespread buying efforts.

The NYSE looks like more than 1.5 bln shares will exchange hands today while the Nasdaq surpassed 1.0 bln shares by 11:30 ET and is already above 2.0 shares. Sun Microsystems (SUNW 5.24 -0.70), the S&P 500’s worst performer (-12%), has seen 300 mln shares traded (nearly 5 times its average), while Amazon.com (AMZN 56.17 +11.42), the S&P 500’s best performer (+25%), has traded 13 times its average daily volume. DJ30 +140.02 NASDAQ +25.47 SP500 +15.52 NASDAQ Dec/Adv/Vol 1159/1907/2.15 bln NYSE Dec/Adv/Vol 886/2349/1.30 bln



:hi:

meet or beat lower expectations, so now those reported earnings are like manna from above and company's stock is now a bargain. :eyes:

Damn! Where are we goin' and what the f*k am I doin' in this handbasket?

G Dumbya Roolz!!!!

I can see the sparks. Night John boy.

:d