STOCK MARKET WATCH, Wednesday 8 December

[ozymandius]

Wednesday December 8, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 4 YEARS, 43 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 362 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 51 DAYS
DAYS SINCE ENRON COLLAPSE = 1112
Number of Enron Execs in handcuffs = 19
Recent Acquisitions: Ken Lay
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

---

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

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AT THE CLOSING BELL ON December 7, 2004

Dow... 10,440.58 -106.48 (-1.01%)
Nasdaq... 2,114.66 -36.59 (-1.70%)
S&P 500... 1,177.07 -13.18 (-1.11%)
10-Yr Bond... 4.23% -0.01 (-0.33%)
Gold future... 453.70 -2.20 (-0.48%)





GOLD, EURO, YEN, Dollars and Loonie

---

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 [e-mail]

For information on protests and other actions Citizens For Legitimate Government

---

[RawMaterials]

1. welcome back oz n/m

[ozymandius]

2. Thank you. Good to be back!

We lost phone service yesterday - second time in two months the weather has done this to us.

I am grateful for UIA's vigilence and everyone's enthusiasm for this thread.

Ozy :hi:

[UpInArms]

3. daily dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 81.99 Change +0.75 (+0.92%)

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=MTFH67885_2004-12-08_08-41-20_KLA831282

FTSE hits 1-week low, miners sag with metal price

LONDON, Dec 8 (Reuters) - Britain's FTSE 100 share index <.FTSE> fell to a one-week low on Wednesday as Rio Tinto <RIO.L> and other miners were hit for a second day by a fall in metal prices and the broader market was rattled by a sell-off on Wall Street and downbeat news from the technology sector.

BHP Billiton <BLT.L>, Rio Tinto, Anglo American <AAL.L> and Xstrata <XTA.L> all lost about 1.5 percent after global metal prices continued a retreat, with copper prices down 2 percent to a 5-week low, undermined by a slight recovery in the dollar and easing technical tightness.

By 0820 GMT the FTSE 100 was down 24.2 points, or 0.5 percent, at 4,704.5, in line with pre-opening forecasts and wiping out Tuesday's slim rise.

Miners spearheaded the retreat but all other major sectors were under pressure, with banks knocking 6 points off the FTSE's value and oil and gas stocks taking off 4 points following a fall in crude prices.

...more...

http://cbs.marketwatch.com/news/story.asp?guid=%7BBF000B7B%2D56C0%2D4DBB%2DBC5D%2DC24C57B4B36C%7D&siteid=mktw

Dollar finds support
Metals-linked currencies lead decliners

LONDON (CBS.MW) - The dollar found its footing on Wednesday, recouping as commodity-linked currencies like the Australian and Canadian dollars stumbled on weak spot metals prices.

<snip>

The dollar gradually ticked high against the yen in Asia Wednesday, as investors used the mixed signals in revised Japanese gross domestic product data as an excuse to cover dollar short positions.

<snip>

The revised data was in the spotlight because it was the first to incorporate a new calculation method for the GDP deflator, which measures price changes.

Some private-sector economists had expected the data might be revised upward after the Finance Ministry data showed last week that capital spending by Japanese companies rose a robust 14.4 percent in the third-quarter from the year-ago level.

While capital spending was in fact revised upward, private consumption was revised downward, and Japan's second-quarter GDP was revised down to an annualized 0.6 percent contraction in real terms, instead of the 1.1 percent expansion that the government had calculated under the old method.

"If the series conveyed any useful information, this could be taken as disappointing, but the revisions have become a joke. The release does not help to resolve the question of how much growth has slowed," said Richard Jerram, chief Japan economist at Macquarie Securities in Tokyo.

"Even though the past ten years of data was completely revised in mid-November with the change in methodology, the Cabinet Office has again revised all of the historic data extensively," he said in a research note. "Japanese GDP is such a rapidly moving target it is hard to make a sensible comment on the latest version of history, as it is likely to change repeatedly in the future."

...more...

What was it that Mark Twain said: "Lies, Damn Lies and Statistics"?

Welcome back, Ozy! :hi: Great 'toon! Missed you bunches yesterday!

[54anickel]

10. Look at that buck fly!!! Interesting how that quote talks about the

US$ reacting to GOLD?!? Thought it was supposed to be the other way around? :evilgrin: Here's a bit more blather from INO on the buck. Looks like quite a bit of profit taking all around going on. Think I posted (know I read) an article that spoke of year-end profit taking hitting currencies and stocks would be coming up, and to figure the year-end to be 17th considering so many taking off for the holidays.

The March Dollar was higher overnight due to short covering and has broken out above the 10-day moving average crossing at 81.80. However, closes above the 20-day moving average crossing at 82.73 are needed to confirm that a short-term low has been posted. The daily ADX (a trend-following indicator) is turning down hinting that a short-term low might be in or is near. If March extends this fall's decline, monthly support marked by the June 1995 low crossing at 80.14 is the next downside target. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

The March Euro was sharply lower overnight due to profit taking as it consolidates some of its recent gains and is breaking out below the 10- day moving average crossing at 133.406. The daily ADX (a trend- following indicator) is beginning to turn down hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 131.784 would confirm that March has posted a short-term top. Overnight action sets the stage for a weaker tone in early-day session trading.

The March British Pound was lower overnight due to profit taking as it consolidates some of its recent gains. The daily ADX (a trend-following indicator) is in a bullish mode and rising signaling that sideways to higher prices are possible near-term. If March extends this year's rally monthly resistance crossing at 1.9920 is the next upside target. Closes below the 10-day moving average crossing at 1.9081 would signal that a short-term top has likely been posted. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

The March Swiss Franc was lower in overnight trading due to profit taking and has broke out below the 10-day moving average crossing at .8797. The daily ADX (a trend-following indicator) has turned down hinting that a short-term top may be in or is near. Closes below the 20- day moving average crossing at .8704 are needed to confirm that a short- term top has been posted. If this fall's rally continues, monthly resistance crossing at .8973 is the next upside target. Overnight action sets the stage for a weaker tone in early-day session trading.

The March Canadian Dollar was lower overnight as it extends the decline off November's high. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. If March extends the decline, the 25% retracement level of the May-November rally crossing at .8173 is the next downside target. Overnight action sets the stage for a weaker tone in early-day session trading.

The March Japanese Yen was lower overnight due to profit taking and is breaking out below the 20-day moving average crossing at .9717 and challenging this fall's uptrend line. Closes below the uptrend line crossing near .9670 would confirm that a short-term top has been posted. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. If March renews this fall's rally, a test of monthly resistance crossing at .9982 is the next upside target. Overnight action sets the stage for a weaker tone in early-day session trading.

[UpInArms]

4. Lenovo IBM deal a 'great leap' for Chinese companies on the world stage

http://www.turkishpress.com/business/news.asp?id=041208122527.57pasjxu.xml

SHANGHAI (AFP) - Computer maker Lenovo's landmark purchase of the PC business of one of America's most vaunted corporate names adds to a growing list of ambitious Chinese companies seeking to make a name for themselves on global markets.

The announcement Wednesday that China's largest manufacturer of personal computers will pay IBM 1.25 billion dollars and take on 500 million dollars in debt catapults it onto the stage of international capitalism as China pushes companies to globalise.

It may be that Lenovo is not part of the elite rich set of multinational titans such as Siemens, HSBC, or General Motors, but flush with cash, Chinese businesses are spending billions on expansion plans and are catching up as fast as they can.

Among mainland corporations rapidly carving out names for themselves overseas, TCL Corp, China's second-largest mobile handset and television manufacturer, made headlines by merging its TV and DVD operations in a major deal with Thomson of France.

<snip>

By the end of 2003 China had put more than six billion dollars into 58 overseas oil and gas projects as state companies cut deals in Africa, Southeast Asia and Central Asia.

Overall, Chinese companies had invested 33 billion dollars in 7,470 companies in more than 160 countries and territories by the end of 2003, according to the Ministry of Commerce.

"I expect more overseas companies to merge with or be acquired by Chinese companies in the future," said Zhang of Haitong Securities.

...more...

[Tempest]

21. And they're doing it with U.S. dollars

Thanks Boosh!

[54anickel]

29. Heh, soon there will be a blue light special on all of America, sale

banners screaming "Foreclosure Sale - Save 50-75%"!

Heck, they may as well spend all those US$ we've been giving them for their stuff before they're worthless. They've been on a shopping spree around the globe. May as well spend some of them right here.

[UpInArms]

5. Dollar rebounds on fresh ECB concerns, poor Japanese growth

http://www.turkishpress.com/business/news.asp?id=041208122014.dxuocso4.xml

LONDON (AFP) - The dollar rebounded from a new all-time low against the euro following weak economic growth in Japan and fresh expressions of worry from European central bankers at the US unit's recent plunge.

The single European currency was trading at 1.3332 dollars on Wednesday, down from 1.3418 overnight in New York, itself a retreat from the record high of 1.3469 dollars seen earlier that day.

The dollar rose to 103.73 yen compared with 102.92 on Tuesday.

"The dollar has corrected higher, with the move gaining some momentum in the Asian time zone," said ABN Amro analyst Aziz McMahon.

Helping the dollar was a lower-than-expected figure for Japanese third-quarter growth of just 0.1 percent, barely keeping the country's economy out of recession.

...more...

[RawMaterials]

6. Behind the Sinking Dollar: America’s Image as a “Rogue Nation?”

http://www.theglobalist.com/DBWeb/printStoryId.aspx?StoryId=4281

The world votes against the U.S. dollar

No more guns and butter, or wads of foreign cash for a nation deeply enmeshed in the Middle East, heavily indebted at home — and seemingly disengaged (some might say) from the rest of the world.

The sinking dollar could be a sign that the world is no longer willing to underwrite the designs of U.S. foreign policy. To a large degree, a rebound in the U.S. dollar could hinge on a revamped U.S. foreign policy.

The day after the presidential election, many foreigners cast their own ballot by selling the U.S. dollar — a sell-off that has only gathered momentum in the month since Mr. Bush was reelected.

America, the debtor nation

The dollar’s swoon has been blamed on America’s debtor status, manifested in a current account deficit approaching 6% of GDP and a federal budget deficit of well over $400 billion — greater than the output of most nations.

A Crisis of Legitimacy?

Rarely has U.S. foreign policy influenced the global financial markets and weighed on the U.S. dollar as it does today.

In the November/December 2004 issue of Foreign Affairs, Robert Tucker and David Hendrickson forcibly make the argument “that the United States has a serious legitimacy problem” with the world.

[54anickel]

9. Dang, you beat me to it! I posted this one late last night to yesterday's

watch. Interesting article from a "Banker". :evilgrin:

[RawMaterials]

12. I just got it this morning didnt notice you allready posted it

in yeasterdays mw

[54anickel]

18. No problem - it was late when I posted it. Way after closing -

It's a good article, no? Certainly worthy of a second post.

[ozymandius]

7. WrapUp by Jim Willie CB - WHEN COMPLEX SYSTEMS FAIL

Sometimes, unfortunately, a complex system fails. Despite the best efforts to keep an evolving system together through coordinated management, and attempts to provide fail-safe mechanisms along its evolutionary path, the system can weaken, degrade, and fail. Due to its enormity and multi-faceted nature, changes occur slowly and are perceived to evolve in an orderly manner. A strange public trust is instilled along the pathogenesis of breakdown, but official statements, encouragement, and assurance of constant tweaks to controls put aside public concern. The consequential impact from the potential failure can be beyond measure. Hyperbolic words such as “enormous” or “magnificent” or “staggering” really fall short in their description of the fallout damage. Experience through past crises, and reactions to them, tend to render the system more fragile and weakened, not more secure and efficient. It becomes more subject to stagnation and a pathetic state of near breakdown, which ironically comes to be accepted as the “normal” situation. Successive crises have indeed worsened over time. A worthwhile exercise might be to review a clinical treatise on the nature and evaluation of systemic failure.

The US Economy, stock & bond markets, futures contracts leveraged to them, and great derivative gears hold together the USDollar, the US Treasury Bonds, mortgages, major metals & energy commodities, and more. Many devices are designed to keep a limiting cap on prices and rates, like a huge rooftop atop a house or giant pyramid shrubs surrounding it. The entire system grows to become tremendously complex. It has evolved over several decades, and has responded to numerous unintended disturbances. Central banks provide the backdrop fail safe in a highly visible overt fashion. Derivatives provide the foundation underpinning in more secretive collusive fashion. System foundations date back to the post-Depression, post-WWII era. Latent growth and solidification took place until the gold anchor was abandoned, as the Bretton Woods Accord linking the USDollar to gold was defaulted in 1971. Most crises date back to that key event in their origins, a simple fact almost uniformly overlooked by a corrupted economic advisory function to this day. Shocks have been endured in many recent years. Small shocks occur almost on a monthly basis. The system continues, so the public regards the system as functionally capably. How many times must we hear “the system has not broken yet”?

-cut-

3) Catastrophe requires multiple failures – single point failures are not enough.

The array of defenses works. System operations are generally successful. Overt catastrophic failure occurs when small, apparently innocuous failures join to create opportunity for a systemic accident. Each of these small failures is necessary to cause catastrophe but only the combination is sufficient to permit failure. Put another way, there are many more failure opportunities than overt system accidents. Most initial failure trajectories are blocked by designed system safety components. Trajectories that reach the operational level are mostly blocked, usually by practitioners.

Since 2000 many detrimental events have occurred, none of which can singly bring down the system. They sure make their mark though. Fanny Mae & Freddy Mac accounting fraud combined with massive bond hedge losses and probable executive indictments. The USDollar bear market stands as a gradual failure in mega-trend shift. Sharply rising commodity prices, most notably in energy, drag down the economy as a direct effect. Colossal trade gaps and federal deficits put great strain on the international dependence, which the United States has come to rely upon. Stock index declines invite PPT response. The World Trade Center attack itself was a very visible shock, met with action. Each represents a failure of sorts. Disturbance to the insurance business (bid rigging), mutual fund business (after-hours pricing), brokerage business (IPO kickbacks), and countless corporate accounting fraud makes for financial sector strife. The FDA corrupted process for drug product approval is the latest link in the chain of failures. Through all these, we trudge on.

lots more...

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

[Tace]

23. His Conclusion: "The Inevitable Storm ... Lies Directly Ahead."

"Is that the edge of the envelope or the edge to the abyss???

"Prepare your own life, and that of your family, by building your own safety pillbox.

"Ignore the mainstream. Purchase mining and energy stocks, or physical supplies.

"The coming storm will provide real shock & awe. So be ready.

"Listen to those who can guide you through the inevitable storm, which lies directly ahead."

[UpInArms]

8. Carlyle owned: Air Cargo files for Chapter 11, sets layoffs

http://www.baltimoresun.com/business/bal-bz.cargo08dec08,1,571409.story?coll=bal-business-headlines

The Annapolis freight logistics company Air Cargo Inc. filed for Chapter 11 bankruptcy reorganization in U.S. District Court in Baltimore yesterday.

Anne Arundel County officials said last week that Air Cargo would lay off 60 of its 80 workers as a result of the filing. Air Cargo said Friday that it intended to cease some operations immediately and file for bankruptcy protection this week.

The privately held company, created in 1941, primarily is owned by the Carlyle Group, a private equity firm in Washington, and 17 commercial airlines. It manages the movement of ground freight and provides management services such as billing for the airlines and its other 70 clients.

Air Cargo listed more than 200 creditors in its filing. In the documents, the company listed its assets at $16.3 million and debt at $17.9 million.

...more...

(Fayetteville, NC) Company hands out pink slips to layoff worker

http://rdu.news14.com/content/your_news/fayetteville/default.asp?ArID=60282

A Fayetteville based humvee repair shop is handing out pink slips to dozens of workers at its plant.

Just months after opening, Lear Seigler Services Incorporated is cutting its workforce in half.

The news came as a surprise to those who are now unemployed.

Envelopes stuffed with letters announcing a layoff wasn't what employees at Lear Seigler were expecting to get for a Christmas bonus this year. They were handed out just hours before the cutbacks began.

<snip>

However, that's one side of the story. News 14 Carolina did try to talk to some of the higher-ups, but they made us leave the property, and gave us no explanation for the layoffs.

...more...

I posted that story yesterday and jmowreader responded:

Lear Seigler Services (a division of the Carlyle Group) is a Defense Contractor. Their Fayetteville-area offices and workspaces are on Fort Bragg and their primary mission is resurrecting shot-up HMMWVs that get shipped back from Iraq and Afghanistan. (Back in the pre-Bush Army, we called this 'third shop.') This is not a company that fixes soccer moms' Hummers; there aren't that many of those in Fayetteville anyway.

from this thread: http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=1052286

hmmm....

That's 2 Carlyle companies doing something weird (well, not really "weird", but....)

[54anickel]

11. U.S. Treasuries Drop Before Sales, Fed May Lift Benchmark Rate

http://www.bloomberg.com/apps/news?pid=10000103&sid=aCU6Z9dc5QVc&refer=us

Dec. 8 (Bloomberg) -- U.S. Treasuries fell for the first day in four in New York on speculation the Federal Reserve will lift its benchmark interest rate next week and as traders prepare for a government sale of $24 billion of debt.

The Fed will on Dec. 14 raise its target rate for overnight loans to 2.25 percent, according to all 22 primary U.S. government bond dealers. The Treasury is selling $15 billion of five-year notes today and $9 billion of 10-year notes on Dec. 9.

``Shorter-dated Treasuries need to wake up a little,'' said John Davies, a fixed-income strategist in London at WestLB AG. ``The Fed has given no indication that they're going to pause in raising rates, and the economy doesn't look all that bad.''

snip>

``At the beginning of this year, there was still a risk that the economy could roll over,'' said Amitabh Arora, an interest- rate strategist in New York at Lehman. ``Though we don't think the economy is going to be on fire next year, we think we'll see trend growth.''

Declines in Treasuries may be limited by expectations reports later this week will show gains in wholesale prices and the cost of imported goods slowed in November. Inflation decreases the value of debt's fixed payments.

``The U.S. will probably have benign inflation, so the Fed may not accelerate a rate increase from its current measured pace,'' said Hiroyuki Yamada, who helps oversee the equivalent of about $1.36 billion at Daiwa SB Investments Ltd. in Tokyo, a unit of Japan's second-largest brokerage. ``The market has already factored in a possible rate hike in December and February. I'm not expecting a big jump in yields in the months ahead.''

more...

[UpInArms]

15. Treasurys gain amid thoughts of overseas demand

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38329.3785819907-829171394&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

CHICAGO (CBS.MW) -- Treasury prices climbed along with the dollar in early New York trade, with investors hopeful that the U.S. currency's rise will make U.S. debt assets appealing to overseas investors. The benchmark 10-year note was up 8/32 at 100 15/32. Its yield ($TNX) , used in determining consumer and corporate loan rates, fell to 4.19 percent.

These conflicting stories make me feel like Linda Blair sans the split pea soup. :crazy:

[54anickel]

19. Hahahahohohoheehehe-sheesh! "Investors hopeful that the U.S.

currency's rise will make U.S. debt assets appealing".

I want some of whatever these folks are smokin'!!! And exactly what was behind that recent rise in the U.S. currency again? Oh yeah, a bit of skimmin' profits off the top of every single "currency" that competes against it. Including that pseudo-currency commodity.

[UpInArms]

13. pre-opening blather

briefing.com

9:00AM: S&P futures vs fair value: +1.3. Nasdaq futures vs fair value: +5.0. Still shaping up to be a slightly higher open for the cash market... The dollar continues to rebound against the yen ($104.77), after a report showed that Japan's economy grew less than expected in Q3, and against the euro ($1.3208), following overnight profit taking

8:30AM: S&P futures vs fair value: +0.8. Nasdaq futures vs fair value: +3.0. Cash market still poised for a flat to modestly higher open as futures indications continue to stall at current levels... Merck (MRK) reaffirms Q4 & Y04 guidance, but issues Y05 earnings of $2.42-2.52, below analysts' expectations of $2.58... CSFB assumes coverage of the US Major Pharmaceuticals Group with a Mkt Weight for the sector... In turn, Banc of America has downgraded several semiconductor stocks...

8:00AM: S&P futures vs fair value: +0.5. Nasdaq futures vs fair value: +4.0. Futures market versus fair value suggesting a flat to slightly higher open for the cash market (10:30 ET)... Crude oil falls below $42/bbl ($41.79/bbl -$0.67) ahead of this morning's EIA weekly inventories report... Texas Instruments (TXN) narrows Q4 guidance while Seagate Technology (STX) issues upside Q2 guidance... IBM agrees to sell its PC business to Lenovo for $1.25 bln... There are no economic reports today

ino.com

The March NASDAQ 100 was higher overnight due to short covering as it consolidates some of Tuesday's decline. However, stochastics and the RSI have turned bearish hinting that a short-term top has been posted. Closes below the 20-day moving average crossing at 1588.65 are needed to confirm that a short-term top has been posted. If March extends this fall's rally, weekly resistance crossing at 1717 is the next upside target. The March NASDAQ 100 was down 5.00 pts. at 1606.50 as of 5:47 AM ET. Overnight action sets the stage for a steady to firmer opening by the NASDAQ composite index later this morning.

The March S&P 500 index was slightly higher overnight due to short covering as it consolidates some of Tuesday's decline. However, yesterday's close below the 20-day moving average crossing at 1181.88 signals that a short-term top has been posted. Stochastics and the RSI are diverging and have turned bearish signaling that sideways to higher prices are possible near-term. If March extends Tuesday's decline, the reaction low crossing at 1171 is the next downside target. The March S&P 500 Index was up 0.5 pts. at 1180.40 as of 5:55 AM ET. Overnight action sets the stage for a steady to firmer opening when the day session begins later this morning.

[Renew Deal]

14. Why has gold gone down $15?

Is that correct?

[RawMaterials]

17. Oil hits 4-month low

LONDON (Reuters) - Oil prices sank to a four-month low below $41 Wednesday after leading OPEC producer Saudi Arabia questioned the need for the cartel to curb supplies.

U.S. light crude for January delivery fell 58 cents to $40.88 a barrel, after hitting $40.55, its lowest since mid-July. Prices have fallen more than $9 a barrel, 18 percent, in seven trading sessions since last Monday.

London's Brent crude shed 70 cents to $37.57 a barrel.

http://money.cnn.com/2004/12/08/markets/oil.reut/index.htm

oil and gold are somewhat related

[54anickel]

20. It needed a good, healthy correction for a couple of weeks now. I've

posted a few articles recently that anticipated profit taking in gold. I remember saying it was starting to smell like a sucker's rally a while back. Surpised it took this long. It is still within the channel of support, which I believe reaches down to $430? I'd have to go back and check.

[belab13]

39. Gold now down $18 and change

This is more than profit taking. I think the commercial short position might have something to do with it.


I apologize for my lack of net savy. not sure if this will appear as a live link.

http://www.cftc.gov/dea/options/deacmxlof.htm

[54anickel]

53. Gold, Metals Plunge as Dollar Rally Spurs Speculators to Sell

http://www.bloomberg.com/apps/news?pid=10000087&sid=aTp8YLJzaHOU&refer=top_world_news

Dec. 8 (Bloomberg) -- Gold in New York fell the most in 10 months, and the prices of other metals plunged, as a rebound in the dollar eroded the appeal of the commodities as an alternative to U.S. stocks and bonds.

snip>

``The dollar is a major factor in determining the price for these dollar-denominated commodities,'' said Scott Morrison, who manages $70 million at SAM Capital LLC in New York. ``When everyone decides to head for the exit door, there's not enough room for everybody to get through.''

Speculator buying, fueled by concern the dollar might continue to slide, had helped boost gold prices as much as 22 percent since mid-May. Silver in April reached the highest price since 1987, and copper jumped to a 15-year high in October and is up more than 35 percent in the past year.

The dollar rose the most since May against the yen and rallied versus the euro, Canadian dollar and a dozen other major currencies as some traders reduced bets the U.S. currency would decline.

snip>

Reduced Holdings

Hedge funds and other large speculators bought 128,453 more gold futures contracts than they had sold as of Nov. 30, down 7.3 percent from a week earlier and the first drop in four weeks, commission records show. The so-called net-long positions had more than doubled since mid-May.

more...

[mmonk]

59. Yes, I've been waiting for the correction

from the speculating. I want to see if it oversells in the same fashion it became overbought too fast. If it falls enough, I may pick up some gold index fund or something (other than gold stocks).

[54anickel]

61. Yes, I'm always on the lookout for the blue light special in my favorite

department. But alas, no income = no purchases these days.

[54anickel]

16. Corporate bond investors play it safe

http://news.ft.com/cms/s/ea21c368-4886-11d9-9162-00000e2511c8.html

Investors are starting to scale back their exposure to lower-rated corporate bonds to lock in the gains they have already made this year.

snip>

But signs are emerging in the market that investors are becoming more risk averse. In the past two months, fund managers have increased their allocations to double and triple A rated credit at the expense of triple B rated names, a survey of more than 100 European portfolio managers by BNP Paribas showed.

snip>

In this segment of the market, the telecommunications companies are the clear winners and the vehicle makers the losers.

"We see the telecoms sector as something of a 'safe haven'," said John Pearce, telecoms credit analyst at Dresdner Kleinwort Wasserstein.

snip>

Fears that the carmakers could be assigned a negative outlook - which would take them one step further towards junk status - are unlikely to abate in the short term. A majority of funds are now underweight in the sector and many expect to reduce their holdings further, according to BNP Paribas' study.

Overall, the market has been driven tighter by improving credit quality and so-called technical factors. One such factor is the low supply of new issues, another the influence of collateral debt obligations. CDOs are securities backed by portfolios of bonds, loans or credit derivatives. CDOs often include as many as 125 credit products and, because the risk on a single name is small, they have bought bonds in names that the active fund managers have stayed away from.

more...

[UpInArms]

22. 9:48 EST markets are open

Dow 10,459.14 +18.56 (+0.18%)
Nasdaq 2,112.87 -1.79 (-0.08%)
S&P 500 1,177.74 +0.67 (+0.06%)
10-Yr Bond 4.190% -0.036

NYSE Volume 116,241,000
Nasdaq Volume 324,982,000

[54anickel]

24. California, U.S. in a Housing 'Bubble,' UCLA Forecast Says

http://www.latimes.com/business/la-fi-uclaecon8dec08,1,5023316.story?coll=la-headlines-business

snip>

Although UCLA economists have raised the specter of a housing bubble in previous reports, they are now identifying it as the biggest risk to the U.S. economy.

"The housing sector's high and unusual contribution" to economic growth "is not going to continue in 2005," said Edward Leamer, director of the forecasting group and author of its national outlook.

The less-than-upbeat analysis is sure to raise plenty of eyebrows because the UCLA group was among the first to foresee the 2001 recession as well as slower growth earlier this year.

For all that, though, many experts inside and outside the housing industry reject the notion that there's a bubble waiting to pop.

They say real estate prices today are rationally propelled by low mortgage rates and high demand, while construction is justified by population growth. In California, they note, demand continues to be strong, and building in many areas has been constrained by land limitations and regulatory hurdles.

more...

[kineneb]

78. I have been waiting for this

I live in the golden state (and actually was born here!)and have watched the real estate prices go up since we bought our first house in 1996. We purchased it for $119K then and sold it in 2002 for $308K due to a job loss. Prices in the cities are insane, which is why we live in the country now. But I have been waiting for the bubble to pop for some time.

The only thing keeping the whole economy afloat over the last 4 years has been housing and low interest rates. And when (not if) interest rates go up, that will slow the housing market. Add to that the drop in the value of the dollar and we have a recipe for disaster.

[54anickel]

25. Gold and Gravity

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=38439

Is the gold price giving us a repeat performance of October’s fake-out in the oil market? My suspicion is that gold is acting a lot like crude did last month...running up to fresh highs – and making headlines all the way...But this isn’t the main event. Not yet.

The day of reckoning for America, her deficits and her dollar is surely on its way. Investors who haven’t yet bought gold as protection could be forgiven for thinking they’ve missed their chance. But we may see gold make the inevitable run up to $450 – as early as next week - and then experience a serious correction and consolidation.

For that, investors still not holding gold should read “last chance to buy before the bull is untethered...”

First, note that as gold has screamed up since the summer, gold mining stocks have failed to confirm the move. Just as happened with the Oil Sector in October, the underlying commodity has gotten way ahead of its producers. For instance, gold put on $5 - one full percent – between its Tuesday close in London and its Wednesday close in New York this week. Yet the two biggest gold producers in the world did not follow. AngloGold eked out a 0.56% gain on the day; Newmont mining, the world’s largest gold producer, managed a 0.71% gain.

Is this quibbling? Well...no. Newmont climbed as high as $49.96 in intraday trading Wednesday. But when you take a closer look at the chart, you see that it even though it closed up for the day, the second half of the session was all downhill...until it reached $49.55. In short, Newmont made a bid for $50 and couldn’t make it. The largest gold stock in the world is failing to confirm gold’s bullish move. Why?

more...

[54anickel]

26. Layoffs Surged for Past Three Months: Report

http://www.cfo.com/article.cfm/3469894/c_3470317?f=home_todayinfinance

Layoffs Surged for Past Three Months: Report

Challenger, Gray & Christmas reports three straight months of triple-digit job cuts; telecoms were hit especially hard

Stephen Taub, CFO.com
December 08, 2004

Are mass layoffs coming back to 2002 levels?

Perhaps. Consider that on Tuesday, Colgate-Palmolive Co. announced a four-year restructuring that will include a reduction of 12 percent of its workforce, or about 4,400 jobs.

What's more, General Motors Corp. said last week that it would lay off about 950 workers at its Linden, New Jersey, truck plant early next year.

Those two announcements seem to reflect a wider trend since the summer. According to a new study published by outplacement firm Challenger, Gray & Christmas Inc., employers in November announced plans to cut 104,530 jobs. That's the third straight month in which planned job cuts exceeded 100,000. It's also the first time that job cuts have exceeded 100,000 for three or more consecutive months since the January-to-April 2002 period.

Further, employers have announced 930,690 job cuts altogether so far in 2004. That, however, is a good deal less than the 1,143,406 layoffs announced during the first 11 months of last year.

Even so, if just 69,310 jobs are cut in December, it will be the fourth straight year with at least one million cuts, according to Challenger.

more...

[54anickel]

38. Honeywell plans to cut jobs in U.S. Thousands to be added in low-wage

countries.

http://www.azcentral.com/arizonarepublic/business/articles/1208honeywell08.html

TRENTON, N.J. - High-tech manufacturer Honeywell International is planning to cut some U.S. jobs in its key aerospace division while adding thousands of jobs in low-wage countries, according to internal documents obtained Tuesday by the Associated Press.

The Morris Township-based company said it plans to add jobs in "high-growth regions," while keeping flat its aerospace division employment in U.S. and other Western markets.

snip>

Company spokesman Robert Ferris described documents released by a workers union that imply major plans to move production offshore as inaccurate, though he would not elaborate.

"Our five-year growth plan for our aerospace business anticipates employment to remain flat in the United States and in other Western markets, while expanding in high-growth regions," he said in a statement.

snip>

The documents, three graphics outlining the company's five-year strategy for its avionics division - all marked "Honeywell Confidential," were found by a Honeywell employee after a management meeting at a Honeywell site in Arizona, according to Marcus Courtney, president of the Seattle-based Washington Alliance of Technology Workers.

more...

Whoops, someone let the cat outta the bag

[54anickel]

27. Tax court's secret work is questioned

http://www.kansascity.com/mld/kansascity/business/10362710.htm

WASHINGTON — The Supreme Court seemed disturbed Tuesday by the secrecy faced by Americans who take tax disputes to the U.S. Tax Court.

The justices are considering whether the tax court withholds important information, making it hard for taxpayers who lose to challenge decisions.

Taxpayers fighting with the Internal Revenue Service may use traditional courts if they pay the IRS first and then sue to recover the money. The U.S. Tax Court is available to people who want to contest IRS findings before paying any cash. The president names the 19 members of the tax court.

Although the official opinions of the court are made public, people are not allowed to see recommendations by specially appointed judges who hold trials in cases involving more than $50,000 and write detailed reports.

more...

[54anickel]

28. Mortgage Applications Rise Last Week

http://biz.yahoo.com/rb/041208/economy_mortgages_2.html

NEW YORK (Reuters) - New applications for U.S. home mortgages increased last week, as purchase activity rose amid lower mortgage rates, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted market index of mortgage activity increased 3.4 percent to 696.2 in the week ended Dec. 3 from 673.3 one week earlier. That follows a 5.8 percent drop the previous week.

snip>

The MBA reported that its seasonally adjusted index of refinancing applications declined 1.1 percent to 1,890.6 from the previous week's 1,912.3. That comes on the heels of a 12.3 percent decline registered last week.

The refinance share of mortgage activity decreased to 45.6 percent of total applications from 46.4 percent the previous week.

Meanwhile, the adjustable-rate mortgage share of activity increased to 34.5 percent from 32.3 percent of total applications.

more...

[UpInArms]

30. Petroleum Inventories Report

10:33am 12/08/04 U.S. CRUDE STKS UP 600,000 BRLS LAST WK: ENERGY DEPT

10:33am 12/08/04 U.S. DISTILLATE STKS UP 1.4 MLN BRLS: ENERGY DEPT

10:33am 12/08/04 U.S. GASOLINE STKS UP 2.4 MLN BRLS: ENERGY DEPT

[54anickel]

31. Saudi Questions Need for OPEC Supply Cuts

http://biz.yahoo.com/rb/041208/energy_opec_5.html

CAIRO (Reuters) - OPEC's (News - Websites) top producer Saudi Arabia on Wednesday questioned the need for the cartel to bolster oil prices by cutting supply, saying the kingdom would keep crude output at current high levels as long as customers wanted it.

Nervous fellow OPEC oil producers arriving for Friday's ministerial meeting have been sizing up how fast they should rein in a supply surge that has helped cut crude prices by a quarter in barely six weeks.

"The OPEC basket is still $33, the winter has not even started in the (U.S.) northeast," Saudi Oil Minister Ali al-Naimi told a small group of reporters.

"The winter is coming, our (target price) band is still $22-$28, so why should we do anything ?" said Naimi. U.S. crude, higher in value than OPEC's basket, was down another 86 cents at $40.60 a barrel on Wednesday.

more...

[UpInArms]

32. 10:39 EST numbers, blather and the buck

Dow 10,482.62 +42.04 (+0.40%)
Nasdaq 2,123.34 +8.68 (+0.41%)
S&P 500 1,181.30 +4.23 (+0.36%)
10-Yr Bond 4.193% -0.033

NYSE Volume 378,536,000
Nasdaq Volume 767,780,000

10:30AM: Stocks continue to hold their own and sport modest gains, with the Dow leading the way in the early going... Some of the strength in the blue chip average has come from Merck (MRK 28.58 +0.69), which reaffirmed its Q4 & FY04 earnings guidance... The drugmaker, however, issued FY05 (Dec) earnings of $2.42-2.52 below analysts' forecasts of $2.58, due to weakening sales of some of its key drugs, and CSFB initiated coverage of MRK with an Underperform rating, citing a worse than expected growth and margin outlook...

But as the stock has been arguably oversold following the Vioxx withdrawal, investors appear to be shrugging off the latter news... The EIA's weekly oil inventories report just came out, showing an increase of 600K in crude supplies (consensus -750K) and a 1.4 mln increase distillates (consensus +1.5 mln)... Market is close to its best levels on the news...NYSE Adv/Dec 1468/1390, Nasdaq Adv/Dec 1417/1237

10:00AM: Despite the choppy start to the day, major indices find more buying interest and move to their highs... Strength has been seen in disk drive, financial, healthcare, airline, and retail while semicondictor has shown the most weakness (-1.2%)... Banc of America downgraded several chipmakers to Sell from Neutral, citing revenue concerns, plummeting utilization rates and lofty valuations... The EIA's report on weekly oil inventories, which analysts expect to show a 750K decline in crude supplies and a 1.5 mln rise in distillates, will be out at 10:30 ET...NYSE Adv/Dec 1282/1365, Nasdaq Adv/Dec 1182/1244

Last trade 82.36 Change +1.12 (+1.38%)

Settle 81.24 Settle Time 23:36

Open 81.68 Previous Close 81.24

High 82.73 Low 81.21

Last tick: 2004-12-08 10:05:27 ET
30-min delayed quote.

:wow: Everything is seeing GREEN

[54anickel]

33. Has a Chinese Enron Popped Up in Singapore?

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_pesek&sid=a6LD1JQqfEJs

Dec. 8 (Bloomberg) -- In 2002, China Aviation Oil (Singapore) Corp. was named Singapore's most transparent company by the island's Securities Investors Association. No doubt the group is regretting that decision.

The Singapore-based company is being investigated for speculative oil-trading losses it hid from investors. The $550 million derivatives-trading loss is Singapore's biggest since trader Nick Leeson brought down Barings Plc in 1995 with more than $1.4 billion in losses. The stakes are high: Former Prime Minister Goh Chok Tong says the city's reputation as a financial center will rest on how well it handles the investigation.

Yet China Aviation Oil's story may say less about Singapore than the risks of investing in China's booming economy.

The big question is whether this is China's Enron Corp. No one knows where the China Aviation Oil saga will go from here -- all this has yet to be proven in court -- yet it could be the seminal event that prompts a reassessment of an entire economy and its companies, just as Enron's collapse was for the U.S.

At a minimum, China Aviation Oil shows how China's challenges can spill over and undermine other markets. Hundreds of state-owned Chinese companies have sold shares in Hong Kong, New York and Singapore. China Aviation Oil is an important reminder that such companies -- a foreign unit of a Beijing company -- can feature less transparency and lax corporate governance.

more...

Hmmm, less transparency and lax corporate governance. Any wonder Carlyle related groups are chomping at the bit on China? There was an article in LBN last night comes to mind...gotta go find it.

[54anickel]

34. Here it is - posted by UIA (should have guessed!)

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=1052479

Carlyle eyes two more Chinese companies

BEIJING, Dec. 7 (Xinhuanet) -- Global private equity firm The Carlyle Group was leading two financing exercises worth a total of US$27 million in China as it strived to heighten its presence in the country, the Wall Street Journal reported Monday.

Runstar International, a Beijing-based online game developer, was receiving US$14 million from an investor group that included Carlyle, China Merchant Fortune Ventures and Sino-Korean Wireless Fund, the paper said.

In the second transaction, Carlyle, Chengwei Ventures and Pacific Venture Partners are putting US$13 million into Shanghai-based semiconductor designer Huaya Microelectronics Inc.

So far this year, the U.S. venture-capital firm has invested US$40 million in China, which dwarfed last year’s total investment of less than US$15 million.

[UpInArms]

36. more on venture capitalists in Asia

HSBC Private Equity raises $700m for Asian investment

http://news.ft.com/cms/s/3d840f60-47f7-11d9-a0fd-00000e2511c8.html

HSBC Private Equity, part of the global bank, has become the latest group to seek to tap the growing Asian market by raising $700m (£360m) to invest in companies in the region.

Private equity firms raised $5bn to invest in Asia in the first nine months of 2004, according to the Centre for Asia Private Equity Research, more than last year's total and the highest since 2001. A key reason has been the growing realisation that private equity groups can reap substantial profits from Asian deals.

"We are seeing an increase in private equity deals across much of the region," George Raffini, managing director of HSBC Private Equity, told Bloomberg News.

<snip>

Between January and August, eight Chinese companies with private equity firms among their shareholders have listed in Hong Kong or New York, providing investors with an easy - and profitable - exit route.

Carlyle Group made a return of 13-times its original investment when Ctrip.com, the Chinese travel portal, listed on Nasdaq last year.

...more...

[54anickel]

40. I've never been real "up" on this stock market business before finding

this thread. Like most of the people I know, I just bought into mutual funds and 401K offerings not really "knowing" what I should know. Just pretty much trusted the folks that ran these things to be looking out for my interests.

Now today, I learn something new again - companies in far away places like China are listed on U.S. stock markets? I just never paid that much attention.

You know how funds are usually titled with something like large-cap, small-cap, growth, growth and income, and then there's the "International" or "global" fund. Sort of would lead one to assume that the funds without the terms international or global would hold U.S. based investments. HA, I guess not. :shrug:

[UpInArms]

37. China Aviation Chief Chen Arrested in Singapore

http://www.bloomberg.com/apps/news?pid=10000087&sid=agu9nSAGB1XQ&refer=top_world_news

Dec. 8 (Bloomberg) -- China Aviation Oil (Singapore) Corp. Chief Executive Chen Jiulin, who was suspended last week after the company lost about $550 million trading derivatives, was arrested on his return to Singapore from China, police said.

Singapore's Commercial Affairs Department is questioning the 43-year-old Chinese national at the Police Cantonment Complex on the outskirts of the city's business district, Deputy Director of Operations Michael Scully said by telephone. Police are investigating possible offenses under Singapore's securities and futures laws, police spokeswoman Teo Poh Ling said.

Singapore's police, central bank and exchange are investigating the city's biggest derivatives-trading loss since Nick Leeson ran up $1.4 billion of losses at Barings Plc in 1995. Former Prime Minister Goh Chok Tong has said the city's reputation as a financial center will rest on how well it handles the probe.

<snip>

``Financial difficulties of the company are due to trading losses and critical cash flow problems as a result of its losses in the trading of derivatives and the requirement to place margin deposits with counter-parties as a result of the losses,'' Chen said in an affidavit filed with Singapore's High Court on Nov. 29.

China Aviation first reported the transactions to its Beijing-based parent, China Aviation Oil Holding Co., on Oct. 10, Chen said in the affidavit.

Also under investigation is the sale of a S$196 million ($120 million) stake in the company by its state-run parent in October. The sale, managed by Deutsche Bank AG, was to raise funds to cover margin calls, or demands for funding, on the company's derivative positions, Chen said in the affidavit.

<snip>

``The risk of investing in Chinese companies has been there all along,'' said Sally Yeo, who helps manage more than $400 million in Singaporean and Malaysian stocks at Pheim Asset Management in Singapore. ``This is a good wake-up call. From the way the disclosures are being made, there could be better checks and balances.''

...more...

[54anickel]

35. China to Move Gradually to Flexible Exchange Rate, Wen Says

For some reason this is considered news again? They have been saying the same thing repeatedly. Guess everyone wanted a refresher "verbal intervention". :shrug:

http://www.bloomberg.com/apps/news?pid=10000080&sid=aTcNZ5fnKyJQ&refer=asia

Dec. 8 (Bloomberg) -- Chinese Premier Wen Jiabao said China will gradually move toward a more flexible exchange rate, at the same time taking into consideration the impact of the changes on other countries.

``In light of the market changes and fluctuations, we will gradually make the exchange rate more flexible,'' he said at a press conference today in The Hague. ``The aim of our reform is to have an exchange rate for the yuan that can be controlled and is variable. This is a complex process that is progressive.''

snip>

Wen said last month that speculation about when the government might loosen the yuan's decade-old peg to the dollar complicates changes to China's currency system.

snip>

A loosening of the peg requires a sound banking system and a stable macroeconomic environment, Wen said.

``For macroeconomic stability in the country, we need a sound financial system and a proper market economy,'' he said today. ``One needs to have a scientific approach in order to ensure that there is a healthy and sustainable development of the Chinese economy.''

more...

[UpInArms]

41. NYSE permanently bans specialist

http://cbs.marketwatch.com/news/story.asp?guid=%7BB29C573E%2D9BFA%2D404A%2DA45B%2D6879F79EF24F%7D&siteid=mktw

NEW YORK (CBS.MW) -- The New York Stock Exchange said Wednesday that it has permanently barred former specialist Michael F. Stern for failing to testify in a probe.

The Big Board said Stern was asked to testify in June regarding his trading between 1999 and 2003. The trading in question focused on his dealer account for Van der Moolen (VDM: news, chart, profile).

The action against Stern was one of seven announced by the NYSE on Wednesday.

In other actions:
Former member Paul K. Grassi was denied reinstatement. Grassi was found guilty of "engaging in acts detrimental" to the exchange when he forged a prescription and presented it to a pharmacy at the exchange in 2002. "Mr. Grassi's demonstrated lack of integrity calls for an additional period of time before he can seek to resume the privileges of membership," the NYSE's hearing panel said.

Richard L. Erb, of Alexandria, Va., was barred for two years for soliciting a $125,000 investment from an "incapacitated" 81-year-old customer for an outside investment.

...more...

[54anickel]

43. Uh, that's interesting - they're being barred and all, but, where are

the prosecutions for crying out loud? Why aren't these criminals behind bars? Forgery, conning, etc.

What is with this country? We'll toss the book at a kid for a pocketful of "personal use" pot, but these criminals are out and about spending their ill-gotten gains. :crazy:

[UpInArms]

44. white collar crime is only a crime if you're name is Martha

:evilgrin:

[54anickel]

42. The Porsche Syndrome

http://www.321gold.com/editorials/buss/buss120804.html

snip>

Meanwhile, with a bit more time off than usual, I've been able to catch up on some reading material. I don't know if I'm anymore the clever for it, more confused yes, but more clever is doubtful. One of the things which, as in love, caught my eye, was the phrase : "when we feel deeply, we tend to interpret narrowly" which I sometimes think sums up both the gold and US Dollar cheerleaders rather succinctly. Everyone says the Dollar is dead. Everyone says gold is going through the roof - and at that - it's doing it tomorrow. Dare I say, I have my doubts on both counts.

Why? Too MUCH vested interest. It's simple. The powers that be - Central Banks - I believe, do not want a US Dollar rout to take place. Nor do they want gold and silver to sky rocket. Remember, national economies hang in the balance, so if any Dollar depreciation is going to take place, then it should be "orderly." That is their mandate - keep the order. Ok, so in a downward bias towards the USD. That has certainly been the case these last 2 years going from 83 cents to 1.34 cents against the Euro. Painful certainly, but not "going Argentinian" as it were.

I have now read so many excellent articles from "experts" and "old timers" on why gold will soar - tomorrow , why gold will correct lower - tomorrow - and very few who have admitted that they don't know where it is going in the short term. I believe I'm in the last group. From a purely fundamental point of view, gold has a lot going for it - at least with respect to the US Dollar price - and therefore should be still advancing in Dollar terms. I mean, the US Dollar is still falling and has not bounced significantly upwards. Likewise, intervention to my knowledge has not been swift or even forthcoming as of yet. ECB is still on the sidelines and the Asians are likely more than fed up with FED Dollars. Technically, gold looks overbought and articles on the Der Invest Informant site, show those indicators running out of steam. Both the XAU and HUI indices have been operating poorly these last weeks and losing considerable steam, nearly 5-7% down. Individual gold equities are no where near their Q4 2003 highs. Historically, the last quarter of the year has traditionally been strong for the metals - and indeed - gold and silver have advanced nicely these last weeks.

What's going on and where does all this leave us? I currently believe the financial world is running into a fundamental conundrum which has crept up on them and, being human and lazy, and being politicians and C-Y-A orientated, have done little to rectify the "happy party" of the last years. I call it the Porsche Syndrome. Where one who is intent on killing himself (The Fed) decides to at least "go out in style" and takes the 911 turbo up to 10.000 rpm into a brick wall - that certainly seems to be the US' fiscal model. But as long as the seat-warmer is on and gentle music wafts through the interior, who cares how it all will end - I'm comfortable for now. But getting back to the point, I believe the financial world is currently in limbo. It KNOWS the US fiscal house is in terrible order. It also knows that the distasteful medicine required for the US (consumer saving, government saving, cutting budgets + deficits, increase internal investment, rolling back the empire, etc) will also harm the "export pushers" as this will cause their economies to equally be short-term affected. Hence, the dollar continues to fall and a world is turning to itself and asking "What next shall we do?." The thing is, they don't have an answer - they are groping. Meanwhile the DOW and Nasdaq are rising. Why? I think investment managers are looking to either push year end returns up or keep investors in a good mood or both. After the Bush inauguration in January, maybe the markets will give us more "clear speak."

At this point, I am searching for more clues. The bond action has been yo yo. Up and down fakes, but no real KEY action. The bond and currency markets are MASSIVE - but still no decisive movements yet.

more...

[54anickel]

45. Money--Funny, Scary, Paper Money

Found some interesting quotes in this one...

http://www.strike-the-root.com/4/herman/herman35.html

"By the mid-1980s inflation was out of control," wrote the editor of BrazilBrazil. "The good news was that the military were on their way out and democracy was on its way in. The bad news, however, was that the 'civilians' taking over were the old aristocracy from the north and northeast of Brazil (called 'coroneis', or coronels after the powerful, traditional landowners in the region). These presidents (Sarney and Mello) were so corrupt that they made the Generals look good."

Corruption and cronyism bankrupted that country. The currency of Brazil was a sad joke. After all, the credibility of a country is what gives its currency good standing in the world. Paper money must have either a foundation of precious metal to back it up--or government integrity for fiscal responsibility in the eyes of financial leaders. When both are lacking, that currency is doomed.

snip>

One of the little discussed reasons for the invasion of Iraq by the US was because Saddam Hussein had almost convinced OPEC to demand payment in euros. Had that happened, the USA would have been as credible as Brazil and just as bankrupt. Representative Ron Paul, who wrote Raising the Debt Limit: A Disgrace, remarked that "the debt limit has become merely another technicality on the road to bankruptcy."

snip>

I'm not sure the US dollar's collapse will mean the end of the world, but it might make things rather uncomfortable. Nor do I suppose the euro will become the predominate currency. I'm not sure I agree with Bruce Porteous when he says, "The new Europe will be able to dictate the terms on how the global economy should be run." Our worldwide Gunboat Diplomacy might have something to say about that while the Neocons remain in power. However, when Federal Reserve Chairman Alan Greenspan warns about a trade deficit impact, and Warren Buffet begins to advise investors to delve into euros rather than dollars, something is up. The sky ain't falling yet, but the pillars that hold it up are showing some hairline cracks.

[54anickel]

46. Why the Current Account Deficit Matters (Hussman)

http://www.hussmanfunds.com/wmc/wmc041206.htm

It's uncanny how cheerful the economic outlook seems to analysts whose ideas are unbaked by any apparent knowledge about the economy. Among the fatuous bits of applesauce dropped from the table of CNBC's monthly employment report Breakfast of Champions was the idea that the inevitable adjustment to the U.S. current account deficit will be good for U.S. growth.

At the center of that argument is the idea that the U.S. can simply grow its way out of the deficit by exporting more, creating growth in the U.S. economy, which will be stimulative to foreign growth, which will therefore support demand for our exports. The argument is so circular that it's impossible to know where to start.

In general, when you hear a suspicious economic argument, there's usually a way to clear it up if you think in terms of equilibrium.

First, it is a radical misdiagnosis to believe that the U.S. current account deficit is primarily due to a shortfall in exports. The fact is that the deficit arises from a profound shortfall of U.S. savings.

Take a look. The share of GDP absorbed by U.S. consumption and investment has never been larger.

more...

[UpInArms]

47. this chart and explanation were enlightening

Take a look. The following chart shows U.S. gross domestic investment (blue) and U.S. gross domestic saving (green) since 1993. The gap between these two measures the growing U.S. current account deficit. Notice that although U.S. gross domestic investment has now surpassed its 2000 peak, U.S. gross domestic saving is still near the same level it was in 1996.



Stated another way, the entire expansion in U.S. gross domestic investment since the mid-1990's has been financed not by domestic saving, but by an import of foreign capital. There's your trouble.

[UpInArms]

48. GM to unveil latest sales promotion (Should have called it a "Blue Light

Special" - Red Tag will always meaned "condemned unit" to me :eyes:

http://cbs.marketwatch.com/news/story.asp?guid=%7BA56D695B%2DD71D%2D4E9C%2D9BDE%2DB8D86E513C1B%7D&siteid=mktw

SAN FRANCISCO (CBS.MW) - General Motors will reportedly launch a new promotional sales program offering rebates up to $5,500, in an attempt to reverse its recent trend of declining sales and evaporating market share.

The deal, dubbed "The Red Tag Sale", begins on December 10 and is available only to buyers using GM's financing unit, according to published reports citing an email and Webcast to dealers.

GM officials could not immediately be reached for comment.

General Motors (GM: news, chart, profile), the perennial pace-setter in terms of incentives deals, turned in a 12 percent slump in November sales, which resulted in historic market-share lows at around 25 percent.

Ford (F: news, chart, profile), Chrysler (DCX: news, chart, profile), and General Motors (GM: news, chart, profile) combined spent an average of $3,379 per vehicle in November, down $283 from October, according to Edmunds.com - a sign that consumers have seemingly become numb to the onslaught of promotions.

Last month, General Motor's "Lock & Roll" deal, which allowed buyers to lock in financing for their next two vehicles, didn't live up to the company's expectations. GM said only 5 percent of its customers took advantage of the offer.

...a bit more...

[54anickel]

65. *SNARF* Has the GM auto become the toaster from the old S&L days?

Take out a loan with us and we'll give you a free Pontiac!!! :evilgrin:

[54anickel]

49. Bush's Golden Years

This is gold-buggy.

I'll agree with one thing, there will be a transfer of wealth going on, just don't agree with the recipient.

http://www.321gold.com/editorials/casey/casey120804.html

Unless you attribute the Republican victory to a vote fraud of unprecedented magnitude, the reality is that Americans thoroughly endorsed what President Bush stands for. So let's play the cards the way they've been dealt. And, perpetual optimist that I am, I think the next four years stand to be among the most profitable of a lifetime for a minority of properly positioned investors and speculators.

I'm not talking about the average American. Having sown the wind, Boobus americanus is going to reap the whirlwind. As PATRIOT 2 becomes law, what little is left of civil liberties and the Bill of Rights is going to disappear. The gigantic deficits the government will run to fund both the war and domestic programs (don't forget that Bush is the only president since the 1820's who never vetoed a bill), will take interest rates to levels we haven't seen for a generation. That will crush the current mania in real estate, and likely cause the stock market collapse that began in March 2000 to resume. Unemployment will rise. The dollar will accelerate its collapse, as foreigners, from Central Banks to the man in the street, unload their dollars, causing the price of imports to skyrocket. The American standard of living will nosedive. I expect we're looking at what will amount to a much more severe version of the 70's. And that's only if the current adventure in Iraq doesn't mutate into World War 3.

snip>

There will be an immense transfer of wealth in the years to come from those who don't own gold, to those who do. A lot of that is almost guaranteed by Bush's profligate foreign and domestic policies. Best of all, the gains in store for us will be subject to the low capital gains taxes Bush is promising-- one part of his policies I agree with.

[54anickel]

50. MONEYIZATION #4

http://www.kitco.com/ind/Schmidt/dec082004.html

Moneyization: The global financial phenomenon of individuals and businesses moving their funds to monies in which they have the highest confidence, or money which has a higher store of faith.

Monetary complacency is clearly not the norm, as evidenced by the recent collapse of the U.S. dollar. Clearly, some around the world are moving to monies in which they have a higher store of faith. Having been one of the bears on the U.S. dollar for some time, the current circumstances do not come as a surprise. With Gold recently reaching a new cyclical high, the champagne corks popping can be heard in the background of the e-mails we read. However, certain perspective and coolness of thought must be retained. Breakfast has different meaning to the chicken and the pig.

Questions and consideration on which to reflect:

Will central banks readily surrender to the fall of the dollar?

Has the dollar fallen too far too fast despite the long-term bear market?

Is the dollar the only currency falling in value?

Is my home currency at risk also?

Should I be buying Gold or retaining my home currency?

Has the bear market for the dollar really started?

How does the dollar’s bear market end?

In money, survival of the fittest will indeed be the rule. But, governments do not surrender readily or easily.

The first question deals with whether or not the central banks around the world will react or respond to the dollar’s recent depreciation. A lot of words have been wasted on the question of the dollar’s fundamentals. Most of those positive utterances were essentially nonsense, as the dollar ’s fundamentals are just simply rotten. The simple fact is that too many dollar assets are held around the world. Every central bank around the world has got dollar assets stacked in the closets, in the basements, or anywhere else they can find room.

Markets in recent times have had a tendency to move to an extreme. The current euphoria on the NASDAQ and the recent experience in oil are fairly obvious examples of market extremism. Oil prices one month are in the mid-fifties and the next in the lower forties, as an example. A subtle, and probably irrelevant, change in news on oil inventories, caused a dramatic shift in the price of oil. Similar events could unfold in the market for dollars.

more...

[54anickel]

51. Dollar Rallies as Oil, Gold Price Drops Fuel Correction

http://news.morningstar.com/news/DJ/M12/D08/200412080954DOWJONESDJONLINE000743.html?msection=DJNews

NEW YORK -- The dollar rallied Wednesday in New York, even though concerns that the Russian central bank will restructure its reserve holdings somewhat slowed the U.S. currency's forward progress.

snip>

"It's well overdue. It probably should have occured two weeks ago," said Thomas Molloy, trader at Bank Leumi in New York, who pointed to the declines in both oil and gold as the main catalysts behind the rebound. The drop in the price of gold, which had been caused initially by the rally in the dollar, has now become fuel for further gains in the buck, said Mr. Molloy.

"Weaker oil is the main driver and will be a supporter of this corrective rally in the dollar," he said.

A host of factors came together to spur the dollar's initial ascent Wednesday. Besides the price declines in oil and gold, poor economic data out of Japan fueled worries that the Bank of Japan may once again make its presence felt in markets through direct or covert intervention.

snip>

Technical factors also played a big part in the rally as investors are eager to take profits ahead of end-year book closings. Many had established dollar- bearish positions early in the autumn and some are now choosing to exit those positions to place themselves on more neutral footing.

During European trading, the dollar stabilized somewhat as the market took notice of the news from Russia. Confirmation came from the Russian central bank that it may cut the share of dollars in its foreign currency reserves.

more...

[UpInArms]

52. trying to figure out where the cart and what color horse

was pulling or pushing or kicking it was nearly impossible with this writer's jumbled logic.

Made my eyes water and my head spin. :shakesheadsadlyatlackoflogic:

but that little burst of whatever from wherever is almost gone again:

Last trade 82.02 Change +0.78 (+0.96%)

Settle 81.24 Settle Time 23:36

Open 81.68 Previous Close 81.24

High 82.73 Low 81.21

Last tick: 2004-12-08 13:08:16 ET
30-min delayed quote.

verbal intervention gave it a pop beginning with the Asian markets last night - lack of direction from reports kept if from sinking - Canada not raising rates helped to slow the bailing - but the trend is definitely down and not up

The dollar rallied Wednesday in New York, even though concerns that the Russian central bank will restructure its reserve holdings somewhat slowed the U.S. currency's forward progress

I mean, when the first freakin' sentence is nonsense, you pretty well know that their head resides somewhere dark and smelly.

[54anickel]

54. You're looking for logic again UIA. The markets look for that element

of surprise to maximize the profits from the fleecing. Get everyone on the same side of the sure bet, then hit 'em. Nice little profit in your pocket while making the victims a bit gun-shy to return to their sure bet positions based on true fundamentals.

Meantime the buck will return to it's natural trend into the abyss, just at a slower pace - just what the Dr ordered.

The game is rigged - house always wins.

[UpInArms]

57. methinks they are using the wrong deck of cards

[54anickel]

58. That deck is filled with nothing but Jokers! That one will get pulled out

later. That's when they all realize - gameover.

[UpInArms]

55. 1:58 EST numbers, blather and the buck

Dow 10,498.22 +57.64 (+0.55%)
Nasdaq 2,127.56 +12.90 (+0.61%)
S&P 500 1,183.38 +6.31 (+0.54%)
10-Yr Bond 4.145% -0.081

NYSE Volume 980,132,000
Nasdaq Volume 1,656,938,000

1:30PM: After treading water in modestly higher territory, stocks have caught another wave of buying interest and climbed to new session highs... Analyst activity has been especially active today as double-digit earnings potential - in some cases - prompt upgrades... General Electric (GE 35.75 +0.44) was upgraded to Overweight from Equal-Weight at Lehman based on the company's ability to post 15% earnings growth over the next 3 years, have climbed 1.3%...

Shares of Federal Express (FDX 98.64 +2.38) have surged more than 2.5% after CSFB raised its rating on the stock to Outperform from Neutral, citing double-digit growth in its international business and the potential for solid maring improvements...NYSE Adv/Dec 1791/1391, Nasdaq Adv/Dec 1743/1266

1:00PM: More of the same, as the major averages drift sideways with a slightly positive bias... Advancers on the NYSE have maintained a 17 to 14 edge over decliners while advancing issues on the Nasdaq have held a slim 16 to 13 edge over declining issues... Down volume at both the NYSE and the Nasdaq, however, has outpaced up volumes by modest margins... This explains why the market's gains, at this point, have been held in check... Biotech, healthcare, transportation and disk drive have maintained gains of at least 1.4% while semiconductor continues to chalk up losses in excess of 1%...NYSE Adv/Dec 1726/1434, Nasdaq Adv/Dec 1612/1367

12:30PM: The market continues to put together a solid advance, as buyers remain an active bunch... One area contributing to the positive bias has been retail (+0.98%), despite some bearish news out on the S&P Retail Index's largest component...

Last trade 82.09 Change +0.85 (+1.05%)

Settle 81.24 Settle Time 23:36

Open 81.68 Previous Close 81.24

High 82.73 Low 81.21

Last tick: 2004-12-08 13:28:31 ET
30-min delayed quote.

[54anickel]

56. Stocks Move Higher on Stronger U.S. Dollar As Investors Look to Build Year

http://biz.yahoo.com/ap/041208/wall_street_9.html

NEW YORK (AP) -- Assuaged by a stronger U.S. dollar, investors bid stocks higher Wednesday as they refocused on building their year-end portfolios.
Wall Street was encouraged as the dollar gained against the Japanese yen after Japan's government reported slower-than-expected economic growth in its most recent quarter. Analysts had been concerned that the weak dollar could lead to a drop in foreign investment.

Crude oil futures neared $42 per barrel after the Energy Department said fuel inventories were higher than Wall Street expected, but that supplies of distillates such as heating oil rose more slowly. A barrel of light crude was quoted at $41.60, up 14 cents, on the New York Mercantile Exchange.

"There's just a ton of money coming into the market, and some of the usual year-end shuffling, and it's ignoring the day-to-day ups and downs on oil and everything else," said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds. "I think the pullback we had over the past few days is good, because it'll help us move higher before the year's out." :eyes:

more...

[UpInArms]

60. delusional freaks

"stronger" dollar???????? :wtf:

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=d12

here's a one-year chart of the "strength" of the dollar - are they talking about one day of gains in the past year??

Huh?

[54anickel]

62. Heh-heh, but won't profits look absolutely marvelous for those

multinationals that convert those foreign payments to dollars for the end of the year.

[54anickel]

67. Speaking of the mighty dollar - where's that little sucker off to already?

Didn't bother to hang around very long at it's own resurrection party, did it?

Last trade 81.89 Change +0.65 (+0.80%)

Settle 81.24 Settle Time 23:36

Open 81.68 Previous Close 81.24

High 82.73 Low 81.21

Last tick: 2004-12-08 14:52:33 ET
30-min delayed quote.

[54anickel]

63. Raping the world with the dollar

http://usa.mediamonitors.net/content/view/full/11839/


Three years ago, I wrote an article advising readers to “avoid transacting in the American dollar. It is a seriously overvalued currency that gets half its value from being an accepted international means of exchange.” To back up my advice I pointed to “the size of American trade deficits and the serious irregularities that have plagued the American stock market”. I also wrote that readers should invest their money “in other more fairly valued markets. This is easily done with ADRs that are traded as shares on American exchanges. Also check foreign Bonds. The Australian and New Zealand markets offer excellent alternatives. And their currencies are at historic lows.”

Since then, America’s trade deficits have continued to balloon. This year alone, they are projected to amount to 650 billion dollars. That amounts to almost two billion dollars a day.

The prospects of any near term improvement in America’s trade balance are minimal. According to the Wall Street Journal (11/08/2004), “the agricultural-trade surplus is evaporating so quickly that some economists in the Bush administration are quietly speculating that the sector might generate an annual trade deficit as soon as the fiscal year ending September 30, 2005. That would be the first since 1959, when postwar Europe re-emerged as a major farm power.” Along with arms, high tech, commercial airplanes and pharmaceuticals, the agricultural sector is one of the few arenas where the United States continues to maintain a trade surplus.

The rapid decline of the dollar is an indication that the world is getting wise to the fact that America’s chief export commodity is currency. America gets containers of goods and services and sends back containers loaded with newly minted hundred dollar bills.

more...

[54anickel]

64. An Open Letter to GATA's Chris Powell (more GLD ETF debate)

http://www.321gold.com/editorials/walker/walker120804.html

Dear Mr. Powell,

I was considering a donation to GATA recently and just as I was about to write the check, Murphy and Turk took a walk on the wild side and started bashing the new ETF gold trust GLD.

This is unfortunate as Bill Murphy had forever complained how the WGC did not know what they were doing, as they spent their money promoting gold jewelry and if they had any sense, the WGC's money would be better off spent promoting gold as an investment.

Well, the WGC did come around and started promoting gold as an investment, not only in the US but in several other world markets as well. To date, the WGC has been extremely successful in their marketing efforts. For this they should be commended.

The recent attacks on GLD have been unwarranted and are irresponsible. Unfortunately Turk in his quest for sensationalism and perhaps in protecting his gold gram product has stepped over the line. The GLD method of owning gold brings in a whole new segment of investors who are wary of the risks of gold mining stocks and don't want the hassle of direct ownership.

GATA should be embracing this new gold product, not fighting it and raising red flags. It is my belief that the gold trust is the best thing that happened since January 1, 1975, when Americans were allowed to own gold. As such, you should get your facts straight before drawing swords.

more...

[54anickel]

77. And the battle rages on...

And a few other strange stories regarding the markets this week.

http://www.financialsense.com/editorials/murphy/2004/1208.html

BOMBSHELL!
World Gold Council's ETF Dumps 15 Tonnes of Bullion
Right BEFORE Price Collapse
by Bill Murphy, Chairman
Gold Anti-Trust Action Committee
December 8, 2004

more...

[54anickel]

66. Oil Prices Rise on Heating Oil Concerns (I'm getting dizzy watching the

the yo-yo spin these days. :crazy:

http://biz.yahoo.com/ap/041208/oil_prices_10.html

Crude oil futures prices rose Wednesday because of lingering concerns about heating oil supplies and fears that OPEC could rein in output when it meets later this week.

Light sweet crude for January delivery was up 59 cents to $42.05 per barrel in midday trading on the New York Mercantile Exchange. Despite a sharp pullback recently, oil prices are roughly 30 percent higher than a year ago.

snip>

Heating oil futures jumped 4.14 cents to $1.265 per gallon on Nymex, where they are trading roughly 40 percent above year ago levels.

snip>

But with oil prices down sharply from their late October peak above $55 a barrel, the Organization of Petroleum Exporting Countries meets in Cairo on Friday to outline its plans for the first quarter of 2005, and hawks like No. 2 producer Iran have managed to garner support from Venezuela, Libya, Kuwait and Qatar in urging compliance with OPEC's official quota in a bid to stem the decline in prices.

Staking out a conflicting position ahead of the upcoming meeting, the oil minister of production giant Saudi Arabia said Wednesday he was happy with present crude output. Saudi Oil Minister Ali Naimi also said he wasn't concerned about the U.S. dollar's weakness against most major currencies, saying fluctuations were normal.

OPEC president Purnomo Yusgiantoro, meantime, said Wednesday a production cut could occur only in the second quarter of 2005.

snip>

"While much attention is focused on possible production cuts ... the key to the near-term supply picture lies largely with one member -- OPEC kingpin Saudi Arabia," Energyintel's Tom Wallin said in a research note.

more...

[54anickel]

68. The Land of the Setting Dollar (Interesting view from the Russian

perspective)

http://www.kommersant.com/tree.asp?rubric=4&node=491&doc_id=439315

The year 2003 was a year of unchecked growth of the ruble on the Russian currency market. The year began at a rate of nearly 32 rubles to the dollar, but by November, the rate was considerably less than 30 rubles to the dollar. The result was enormous dollar inflation, which surpassed even the outrageous ruble inflation. The Central Bank was pleased, however, since currency market speculators felt powerless and official gold and foreign exchange reserves increased miraculously.


What Was Planned

The government set out its plans in the area of ruble rates and inflation in “Main Orientations of a Common State Monetary Policy for 2003,” approved at the end of 2002. The document stated that the ultimate aim of the common state monetary policy carried out by the Bank of Russian in coordination with the government was to reduce inflation and maintain it at a low level. The objective over the next three years was to bring inflation below 8% per year. Low inflation was needed in order to “decrease macroeconomic risks, expand internal credit, concentrate the capital needed to modernize capital assets in the country, and use this as a base for strengthening stable economic growth trends. “

In the opinion of the Central Bank, inflation should have been 10–12% in 2003. As has always happened in past years, the Central Bank pointed out that inflation was not entirely within its power: “Unplanned increases in prices and rates for paid public services, primarily housing and municipal facilities and passenger transport, as a result of administrative regulation had an immediate effect on consumer price trends.” Monetary policy measures will not bring quick relief here. Moreover, these measures are not always effective in Russia, even if the matter does not concern rates. “Central Bank rates do not have sufficient influence on rates on the interbank market, which remains narrow as a result of the persistent mutual mistrust of banks.” In turn, “the interbank market rate has a limited role in formulating deposit and loan rates for bank clients.” All the Central Bank can offer here is an evaluation of its operation, not on general inflation but on base inflation, which is understood as “the part of inflation that is connected with the exchange rate, monetary policy, and inflationary expectations and on which monetary control agencies have a direct influence.” The Central Bank did not emphasize that the ruble rate was not in its power. It merely noted that as usual it planned to employ a floating rate policy. The bank also stressed that in 2002 after the end of a period of high oil prices on world markets, the strengthening of the ruble in real terms with respect to freely convertible currencies had slowed substantially in the current year: “Near-zero growth of the real effective ruble rate allows the conclusion that the balance of payments status will remain stable.” The Central Bank noted in particular that the ruble rate in 2002 did not interfere with exports at all; and in general, “the influence of exchange rate trends on production indices is not unique, but depends on the level of competitiveness of various industrial sectors.” This remark was obviously directed at those who believed that the Central Bank’s artificial support of the ruble rate was a means of subsidizing imports at the expense of export sectors. A document issued in 2003 emphasized that evening out exchange rate swings and maintaining a sufficient level of gold and currency reserves would remain the objectives of exchange rate policy. “Nominal ruble devaluation rates, as expected, will be less than the typical inflation rates of recent years,” because “real strengthening of the national currency has traditionally accompanied successful market transformations in countries with transition economies.” The Central Bank also provided a forecast of the average annual ruble rate for 2003 (with references to the Ministry of Economics, of course). The original forecast was as follows: if world economic growth is poor, the rate will be 34 rubles to the dollar; if it is somewhat better, the rate will be 33.7 rubles to the dollar. The final revision of “Main Orientations of a Common State Monetary Policy for 2003” gave an average annual rate of 33 rubles to the dollar.

more...

[UpInArms]

69. SnowJob stays to reaffirm weak dollar

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38329.6466702894-829200038&siteID=mktw&scid=0&doctype=806&

Analyst: Snow decision re-affirms weak dollar policy By William L. Watts
WASHINGTON (CBS.MW) -- Treasury Secretary John Snow's decision to accept an invitation from President Bush to stay in his post during a second term will strengthen perceptions that the administration is happy with the ongoing slide in the value of the U.S. dollar, said Ethan Siegal of The Washington Exchange, a firm that tracks policy issues for institutional investors. "I think the re-appointment of John Snow is a re-affirmation of the de facto weak dollar policy that really goes back to (Snow's predecessor) Paul O'Neill," Siegal said.

and here is the dollar's response:

Last trade 81.90 Change +0.67 (+0.82%)

Settle 81.24 Settle Time 23:36

Open 81.68 Previous Close 81.24

High 82.73 Low 81.21

Volume 1,738
Add DXY0 to my INO Portfolio

Last tick: 2004-12-08 15:15:18 ET
30-min delayed quote.

[54anickel]

70. Art: The New Asset Class? (Sign of the times?)

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=38496

snip>

“Art prices are setting records again. In early November, 'No.6' by Mark Rothko was auctioned for a record $17.4 million, almost 50% above the top end of estimates… Not only are modern and contemporary artists being treated like pop starts, but earlier American masters are also soaring like late-1990’s Internet stocks…These rates of return are now attracting the interest of financial investors…”

Introducing: the New York-based Fernwood Art Investment company, which next year plans to establish several funds to buy and manage art portfolios. Bear in mind, this Big Apple firm is not a new idea; it’s jumping onto a bandwagon of art investment companies that started moving through Europe over nine months ago.

snip>

This speculative fervor is propelled by the same bullish optimism that has today’s investor leaping into hedge funds, small caps, internet stocks and the like.

And the one thing we noticed about art prices (which the mainstream press seemed to miss) was this: They “appear to save their boldest moves for the aftermath of the big advances in stocks.” We offered this example:

Early 1990: the Dow Jones Composite, NASDAQ, and the Value Line had all recorded important peaks, with the DJIA not far behind. That May, Van Gogh’s “Portrait of Dr. Gachet” sells for the highest auction price in history. By the next year, a “debacle referred to in art circles as the ‘nightmare of 1991’ ensued.”

And now, six months after Picasso’s “Boy With A Pipe” shattered the previous record amount paid for a painting, we have U.S. investment firms offering art portfolios to clients who want to cash in on the sizzling art market. All this despite the fact that the Dow Jones Industrial Average remains BELOW its 2004 highs.

more...

[54anickel]

71. NASD Warns of Risky Home-Equity Investing (Stooopid!)

http://www.reuters.com/newsArticle.jhtml?jsessionid=QMWTUW1R21GQCCRBAEOCFFA?type=businessNews&storyID=7030595

WASHINGTON (Reuters) - Too many house-rich Americans are borrowing money against their homes to play the stock market, brokerages regulator NASD warned on Wednesday.

In an alert to brokers who may be encouraging the trend, the NASD reminded Wall Street that it has a responsibility to steer investors away from unsuitable financial strategies.

"Many homeowners have become wealthier -- at least on paper -- because of escalating home values. And more of them than ever before are tapping into their increased home equity to purchase securities," said NASD Vice Chairman Mary Schapiro.

"But turning equity into cash to make financial investments ... poses significant and unique risks, and failure to understand those risks could cost them their biggest asset -- their home," Schapiro said in a statement.

About 11 percent of gains from mortgage refinancings were plowed into the stock market and other financial investments in 2001 through mid-2002, up from less than 2 percent in 1998 through mid-1999, a recent Federal Reserve study showed.

:spank:

[54anickel]

72. Gold futures slide to one-month low

http://cbs.marketwatch.com/news/story.asp?guid=%7B94A0C5EA%2D5AC9%2D42D0%2DBE56%2D357A53FF6D33%7D&?siteid=mktw

Gold for February delivery traded as low as $435 an ounce on the New York Mercantile Exchange before closing at $438.70 -- a level not seen since Nov. 11 -- down $15, or 3.3 percent, for the session.

The greenback is simply "coming off an extremely oversold condition," said Dale Doelling, chief market commentator at Bullion.com in Chicago, and "on the flip side, gold has been on a tear for months and reached levels not seen in 16 years." See Currencies.

In turn, the correction in the gold market has "arrived in brutal fashion," said Ned Schmidt, editor of the Value View Gold Report.

From here, "buyers should be patient and wait for correction to wear itself out," he said. But there is "certainly no rush to buy till after Fed's meeting next week."

more...

[54anickel]

73. Waaaayyy Too Many Dollar Bears

http://www.kitco.com/ind/Hanlon/dec082004.html


This long-time dollar bear wants off. It's no longer only the truly insightful-the legends, the Richard Russell and Warren Buffett types-that are bearish on the dollar; every Wall Street chimp that has never before even considered such things now states with absolute certainty that the dollar will fall. The problem is, based on the U.S. Dollar Index, they're 3 years and 33% late to the party!

The dollar will fall? Excuse me, gang, it already has fallen.

Before I go further, know that this is a technical commentary, one from a guy who has made some darned good calls in recent years and asks yet again for a little leeway. I see the same long-term, macroeconomic challenges the rest of the investment public is now aware of (indeed, our firm has been among the loudest and earliest out there with a bearish case on the dollar and U.S. equities), but with this essay I want to remind each of you of one important thought: ALMOST NO TREND MOVES IN A STRAIGHT LINE.

If there's a stronger consensus opinion in the markets today than the idea that the dollar just has to decline, I'd like someone to show me what it is.

snip nice chart>

The 80-level on the U.S. Dollar Index looms as massive support, an area where the currency spent approximately 6 years building a huge triple bottom. Perhaps we stand at the precipice of a dollar collapse, but calamity is precisely what is required from here to move the dollar through that level; indeed, I'm not sure if dollar bears fully realize the implications of their hopes for a meaningful decline from today's levels.

I just can't imagine that level being decisively broken without a fight.

more...

[54anickel]

74. Closing time

Dow 10,494.23 +53.65 (+0.51%)
Nasdaq 2,126.11 +11.45 (+0.54%)
S&P 500 1,182.81 +5.74 (+0.49%)
10-yr Bond 4.132% -0.094
30-yr Bond 4.780% -0.116
NYSE Volume 1,525,030,000
Nasdaq Volume 2,404,947,000

Close Dow +53.65 at 10494.23, S&P +5.74 at 1182.81, Nasdaq +11.45 at 2126.11: Stocks began the day with a mixed sentiment, but buyers stepped in throughout the day to close the indices near their highs of the session... A better than expected weekly oil inventories report, combined with the tendency of traders to use pullbacks - such as yesterday's 1.0-1.7% retreat - as a buying opportunity owing to the market's recent bullish momentum, helped pave the way an advance... A strong rebound in the dollar after trading around new lows this months also contributed to today's higher finish...
The greenback surged against the euro and yen after Japan reported weak 0.2% growth in Q3 GDP... As a result of these catalysts, just about every industry group climbed higher with retail, transportation, and health care leading the way... Merck (MRK 28.69 +0.80) paced the latter area, benefiting from bargain-hunting interest despite issuing weaker than expected FY05 (Dec) guidance... Technology was also lifted by renewed buying interest in disk drive after Seagate Technology (STX 17.00 +0.54) issued upside Q2 guidance... Hardware, software and networking also followed suit although semiconductor, strikingly, moved 1.2% lower...

The group tumbled after Banc of America downgraded several chipmakers to Sell from Neutral and comments out of JP Morgan suggested IBM's (IBM 96.65 +0.55) PC sale to Lenovo could be a net negative for Intel (INTC 23.01 -0.47)... Meanwhile, energy also showed modest gains, despite crude oil closing up $0.48 to $41.94/bbl... The commodity traded near four-month lows around $40/bbl in the early going ahead of the DOE's weekly oil inventories report, which showed a 600K build in crude oil supplies (+750K consensus) and a 1.4 mln increase in distillates (+1.5 mln consensus)...

But with the possibility of OPEC trimming oil production at its Friday meeting, and much of the strong inventory news already factored into recent losses in oil prices, crude oil rebounded to close at their highs for the day... Strong buying interest was also witnessed in the bond market, with the 10-year note climbing 27 ticks to yield 4.11%, after a Treasury auction in the 5-year note saw a record 65.8% in direct bidder participation...NYSE Adv/Dec 1962/1336, Nasdaq Adv/Dec 1758/1394

3:30PM : With half an hour of trade remaining, stocks run into some modest resistance but appear positioned to close the session higher... Tomorrow, the last of this week's S&P 500 companies reporting earnings will post quarterly results... Costco (COST 48.64 +0.58) and Ciena (CIEN 2.28 -0.05) will be out before the bell while National Semiconductor (NSM 15.86 -0.70) is expected to report Q4 earnings during market hours... Economic data will again be on the lighter side, with weekly jobless claims (consensus 335K) out at 8:30 ET and October Wholesale Inventories (consensus 0.5%) out at 10:00 ET...NYSE Adv/Dec 1902/1380, Nasdaq Adv/Dec 1649/1484

3:00PM : Stocks regain some lost momentum after retreating from earlier levels... Blue chip averages continue to see the largest gains in healthcare, transportation and retail, with the latter recording solid gains despite weakness in leading department stores like Wal-Mart (WMT 52.39 -0.11) and Sears (S 52.45 -0.32)... Storage, hardware, and biotech continue to be the drivers keeping the Nasdaq in positive territory... Software has also surged despite PeopleSoft's (PSFT 23.77 +0.08) comments that suggest the Oracle (ORCL 13.29 0.23) takeover bid still undervalues PSFT on nearly every metric... NYSE Adv/Dec 1924/1340, Nasdaq Adv/Dec 1704/1401

2:30PM : Indices relinquish some of their gains as late-day profit taking pushes several sectors back into negative territory... Technology, which typically moves in a direct correlation to changes in the semiconductor space, has bucked the trend today with several chipmakers down... The technology-heavy Nasdaq has shown resilience today after having spent most of the morning near a technical support level of 2116... Should the Nasdaq regain its earlier highs and continue to rally through the 2136/2138 area, it could in turn wipeout yesterday's losses... NYSE Adv/Dec 1927/1298, Nasdaq Adv/Dec 1733/1333

Advances & Declines
NYSE Nasdaq
Advances 1973 (57%) 1758 (53%)
Declines 1326 (38%) 1394 (42%)
Unchanged 149 (4%) 134 (4%)

--------------------------------------------------------------------------------

Up Vol* 826 (54%) 945 (39%)
Down Vol* 683 (44%) 1444 (60%)
Unch. Vol* 16 (1%) 14 (0%)

--------------------------------------------------------------------------------

New Hi's 88 71
New Lo's 40 21

And the buck, drifting back down.....gently like a feather - for now.

Last trade 81.83 Change +0.67 (+0.82%)

Settle 81.90 Settle Time 16:36

Open 81.68 Previous Close 81.24

High 82.73 Low 81.21

Last tick: 2004-12-08 16:44:17 ET
30-min delayed quote.

Have a great evening :hi:

[54anickel]

75. Dang, late to the party again. Came across this earlier this evening, but

couldn't get around to posting until now.

http://www.forexnews.com/AI/default.asp

December 2004 FX Forecasts

NOTE:
Today’s dollar bounce has been the result of no single particular fundamental catalyst except of profit-taking occurring in a relatively data-vacant day.

We warned in our Sunday note that we could see some dollar interest late in the week ahead of next week’s FOMC meeting, which is expected to lift short-term US interest rates above those of the Eurozone. One particularly dollar positive aspect of next week’s FOMC meeting is the overwhelm expectation that rate hike will take place in subsequent meetings as well as next week’s.

Indeed, yesterday’s decisions by the Bank of Canada and Reserve Bank of Australia to NOT raise interest rates were of no surprise, but definitely highlighted the central banks’ growing concern with the appreciation in their currencies. This mini dollar bounce is also overdue considering the sharp pull-back in oil, which had engendered little dollar reaction up until today.

Also watch today’s $15 billion Treasury auction of 5-year notes, and the extent to which foreign investors will subscribe to the offering, which has stood at a bullish 35-40% so far this year.

EURUSD: Cheap Talk vs. Cheap Dollar

We expect the euro to edge its way past the $1.35 level by end of the year on a combination of self-reinforcing dollar bearishness and traders’ willingness to test the overbuild of stops at $1.3490-00 in the face of an increasingly repetitive/decreasingly effective rhetoric from the European Central Bank. Although Monday’s concentrated chorus of cautionary remarks from Eurozone central bankers and Finance ministers succeeded in capping the currency, traders (mostly speculators) shall require more aggressive talk over the course of the month to stave off renewed waves of euro buying, especially in the midst of thinning Holiday trading volumes. Thus, as repetitive ECB talk becomes cheap, so will the dollar. This is in stark contrast to 5 years ago when the freefall in the euro overcame constant ECB talk asserting the strong euro was in the interest of the Eurozone.

Nonetheless, as consistent as the recent rhetoric may have sounded, it’s worth noting that that the quality of the rhetoric does not yet suggest operational intervention. ECB president Trichet said earlier this week that it was the dollar that was weak and not the euro that was strong, suggesting the unsuitability of ECB interference would disrupt the regular functioning of money markets and the already highly liquid conditions in the region. In addition, with the ECB’s constant pointing out of the US twin deficits, the ECB is implicitly suggesting that any efforts to stabilize the dollar’s declines MUST include the full commitment of the US authorities. Without such a commitment from the US, an ECB intervention would neither be impossible nor ineffective; but the point has repeatedly been made that the issue of the sliding dollar is a matter of “collaboration” between the US, Europe and Japan.

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[54anickel]

76. Oh, and today's auction went smashingly well...

http://www.forexnews.com/NA/default.asp

Dollar’s Bounce Fades

The dollar staged a broad rally in early Wednesday Asian trade gaining 2.5 cents against the euro and 3 yen against the Japanese currency, before later paring nearly ½ of those gains. A combination of pre Fed meeting profit-taking and fresh declines in oil prices encouraged traders to unwind short dollar positions. Oil prices’ 20% retreat to a 6-month low of $41.48 per barrel has also helped trigger the dollar’s jump, especially that the currency had hardly showed any reaction in past oil bounces. Yesterday’s decisions by the Bank of Canada and Reserve Bank of Australia to not raise interest rates were of no surprise, but definitely highlighted the central banks’ growing concern with the appreciation in their currencies and bring up the topic of the dollar’s tumble to the fore.

Strongest foreign participation in Treasury Auction

In another dose of positive dollar news, today's 5-year Treasury note auction of $15 billion drew a record high 65% participation by indirect bidders, which are usually a proxy of foreign central bank participation. This is not only higher than the 44% seen in last month's 5-year auction, but the highest foreign participation since the data have been made available in summer 2003. The auction is supportive for the US dollar as it stabilizes emerging fears that foreign central banks are tempering their demand for US treasuries. The news pushed the 10-year note yield to a 3-week low of 4.12%.

Next week’s expected rate hike from the Fed is also dissuading traders to hold on to some of their dollar shorts. The 25-bp rate hike to 2.25% in the fed funds rate would lift US rates above their Eurozone counterparts for the first time since March 2001. Another particularly dollar positive aspect of next week’s FOMC meeting is the overwhelming expectation that tightening will take place in subsequent meetings as well as next week’s.

Euro retraces ½ of the slide

The 1.8% drop in the euro was followed by a 50% rebound towards the 1.3330s. We expect the pair to consolidate around the $1.3270-1.3430 range into the end of the week as traders remain cautious ahead of the week’s remaining data and next week’s FOMC meeting. Friday’s PPI and the University of Michigan sentiment from the US will shed important light on inflation and consumers.

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