STOCK MARKET WATCH, Monday 20 December

[ozymandius]

Monday December 20, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 4 YEARS, 31 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 9 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 63 DAYS
DAYS SINCE ENRON COLLAPSE = 1124
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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

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AT THE CLOSING BELL ON December 19, 2004

Dow... 10,649.92 -55.72 (-0.52%)
Nasdaq... 2,135.20 -10.95 (-0.51%)
S&P 500... 1,194.22 -8.99 (-0.75%)
10-Yr Bond... 4.21% +0.03 (+0.60%)
Gold future... 442.90 +4.30 (+0.97%)





GOLD, EURO, YEN, Dollars and Loonie

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PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

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[ozymandius]

1. WrapUp by Tony Allison

THE DEBT BOMB

Americans are growing tired and jaded reading debt horror stories. Personal debt, corporate debt, government debt, mortgage debt, unfunded debt. It’s starting to take on a “Cry wolf” syndrome. We’re sick of hearing about it, nothing really bad has happened, so why not just tune out and get on with more urgent matters? The simplistic answer is the debt levels in the U.S. are an urgent matter, and our days of blissful ignorance are growing short.

Paper Skyscrapers

Let’s try to put the numbers in some perspective. Most of us hear millions, billions and trillions tossed around and our brain’s glaze over, unable to grasp the enormity of the numbers. The following example may give some clarity to all the numbers that will follow. Suppose you were Warren Buffet for a day, and drove to your favorite bank to retrieve one million dollars, in crisp thousand dollar bills. The tightly wound stack would be about 4 ½ inches high. You could stuff it in a small bag and off you go. If you decided to withdraw a billion dollars (in thousand dollar bills), it would stack over 365 feet high, roughly the height of a small skyscraper. You would need a large, and well-guarded, truck to haul it home. A trillion dollars is another story, even beyond the reach of Warren Buffet’s savings account. A trillion dollars would stack 69 miles into the blackness of suborbital space, beyond the sight of the human eye, and perhaps the human imagination. A trillion is a ridiculously large number.

-cut-

Survival Debt

The trend in consumer credit is disturbing at best, frightening at worst. Most of us are aware of the explosion of consumer credit in this country, but not everyone knows about the rapid growth of “survival debt”. Consumers are now able to charge groceries, phone bills, mortgage payments, even income taxes. Credit cards are filling in the gaps, often gaping, in the household budget. It is one thing to cut back on vacations, shopping and restaurant visits. It is quite another to cut back on household expenses. In the first quarter of 2004, U.S. household debt rose at an annual rate of 10.9%. Household debt has risen by 30 % since 2000 to $9.8 trillion.

-cut-

Iraq & Afghanistan – An open-ended debt burden

Much like the tumultuous 1960’s in Vietnam, the cost of war in Iraq and Afghanistan is both extremely high and open-ended. The Pentagon is spending approximately $5 billion per month in Iraq and Afghanistan. These expenses do not include rebuilding Iraq’s water system, electric grid, oil infrastructure or even entire cities, such as Fallujah. Estimates for rebuilding Iraq vary from $180 to $250 billion, just for the next five years alone.

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

[ozymandius]

2. Stock Futures Up; Nokia Sets Upbeat Tone

NEW YORK (Reuters) - U.S. stock futures gained ground Monday morning, pointing to a higher market open, with technology stocks looking stronger after Nokia (news - web sites)'s (NOK1V.HE) chief executive voiced confidence in the mobile phone market.

Meanwhile, a dip in oil prices could help support stocks. U.S. light crude pulled back 40 cents to $45.88 a barrel, despite concerns about supplies from the Middle East after Muslim militants renewed threats to attack oil facilities.

-cut-

"The strength is particularly led by Nokia, which on the surface appears to be the catalyst this morning," said Andre J Bakhos, president of Princeton Financial Group.

But Bakhos highlighted retail sales as a negative factor. The Wall Street Journal reported on Monday that ShopperTrak of Chicago estimated that retail sales on Saturday were down 7 percent to $6.7 billion compared with the comparable Saturday last year.

http://story.news.yahoo.com/news?tmpl=story&ncid=1196&e=1&u=/nm/bs_nm/markets_stocks_dc&sid=95609877

[UpInArms]

3. daily dollar watch

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

Last trade 81.75 Change -0.41 (-0.50%)

http://www.sltrib.com/business/ci_2491350

Weak dollar threatening global equilibrium
"Balance of financial terror": The Bush administration says not to panic, but some economists are confident that a painful adjustment may lie ahead

excerpt:

An orderly realignment of exchange rates would be less painful than a recession, which is the other way to curb U.S. borrowing, Williamson said.

Lowering the value of the dollar gives the United States an advantage over every other debtor. Other countries borrow dollars and have to pay interest in dollars, even if their own currencies collapse. But the United States can inflate away its debts by lowering the value of its own currency.

A weakened dollar would put a brake on U.S. imports because they would be more expensive. It would also spur U.S. exports.

The dollar's value directly affects the income of oil-producing countries because oil is priced in dollars. When the dollar weakens, it drains income from Russia, Saudi Arabia and other leading oil exporters. So far, prices have increased far beyond the losses caused by a weakened dollar, but producers are inclined to hold on to their winnings.

...more...

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=MTFH58083_2004-12-20_07-02-47_T188841

FOREX-Dollar ticks up versus yen in thin trade

TOKYO, Dec 20 (Reuters) - The dollar edged up against the yen in thin trade on Monday, although much of the momentum from last week's gains was lost as the market saw no end to the U.S. currency's weakening trend.

The euro was firmer after German business confidence improved, but traders did not expect any major currency movements in coming days with the market essentially in holiday mode. "Positions are more or less closed at this point, so it's a question of whether anyone is willing to take on significant risks this week," said Hideaki Inoue, chief forex manager at Mitsubishi Trust and Banking.

Dealers said that even relatively small orders had an effect on trading, although resulting movements in either direction quickly dissipated, creating a choppy market.

<snip>

"104 yen is an awkward region for the dollar/yen to be in, because serious importer buying interest begins in the 103 area, while exporters are waiting until around 105 to start selling in earnest," said Toshihiro Azuma, forex manager at Sumitomo Trust and Banking.

...more...

Have a Great Day Marketeers!

[UpInArms]

15. Dollar down again against major rivals

http://cbs.marketwatch.com/news/story.asp?guid=%7BA5CFDA6D%2DB73A%2D4995%2D8CB4%2D1BC97DF32DD7%7D&siteid=mktw

CHICAGO (CBS.MW) - Under pressure again, the dollar declined against its major currency rivals Monday in thin, pre-holiday trade as the market focused on the overall bleak picture for the greenback.

"The number of market participants is almost close to zero," said Kikuko Takeda, manager of foreign exchange & treasury division at Bank of Tokyo-Mitsubishi in Tokyo. "There is no perceived change in the dollar-bearish sentiment, but I expect the currencies to continue trading in range bound until at least Christmas."

At 11:40 a.m. Eastern, the dollar was down almost 0.2 percent against Japan's currency, at 104.00 yen, compared to 104.18 yen in late U.S. trade on Friday. Against the euro, the dollar declined nearly 0.8 percent to $1.3392 from $1.3287 at the end of last week.

...more...

the buck

Last trade 81.59 Change -0.57 (-0.69%)

Settle 82.16 Settle Time 23:36

Open 82.01 Previous Close 82.16

High 82.13 Low 81.54

Last tick: 2004-12-20 11:16:39 ET
30-min delayed quote.

[UpInArms]

4. Social (In)Security

Debatable problem, ineffective solution

http://www.wilmingtonstar.com/apps/pbcs.dll/article?AID=/20041220/EDITORIAL/412200301

If Social Security is as sick as President Bush claims, it's a mystery why he's proposing a cure that's no cure at all.

"Private accounts" might sound attractive to some younger workers, but they'd do nothing to ease the potential financial problems facing Social Security decades from now.

The two issues simply are not connected. They should be debated separately.

Mr. Bush is using an alleged "crisis" in Social Security funding as an argument for private accounts. That's deceptive advertising.

It's easy to confuse people because the issues are complicated. But the basic facts are not really in dispute.

...more...

http://www.latimes.com/news/opinion/editorials/la-ed-summit20dec20,1,5959460.story?coll=la-news-comment-editorials

Unconnected Dots

President Bush is setting out to convince the nation that the danger is imminent and can be addressed only with bold action. Sound familiar?

The White House is deploying the strategy it used to sell the war in Iraq to sell its plan for partial privatization of the Social Security system.

The intelligence might not be as flawed, but the spin is equally disingenuous. If no changes are made to Social Security, according to the latest educated guesses, the program will not be able to pay out all its commitments by 2042. But it's absurd for Bush to equate this long-term actuarial shortfall — which could change dramatically over the years — with real deficits that make financial markets wary.

That didn't stop the president from doing it at a two-day economic pep rally he hosted in Washington last week.

...more...

[UpInArms]

34. Here we go with the "crisis" shit - Bush: Social Security in 'crisis' now

http://cbs.marketwatch.com/news/story.asp?guid=%7B446EC553%2D445D%2D43AB%2DB202%2D114B3FE76569%7D&siteid=mktw

WASHINGTON (CBS.MW) -- President Bush declared the nation's retirement system set up seven decades ago to be in crisis today and he plans to convince lawmakers on Capitol Hill that now is the time to change the way it is administered.

"Many times legislative bodies will not react unless the crisis is apparent, crisis is upon them. I believe the crisis is. And so, for a period of time, we're going to have to explain to members of Congress the crisis is here," Bush said at the second presidential news conference since winning a second term and the 17th of his presidency.

"It's a lot less painful to act now than if we wait," Bush said of his planned changes to the Social Security program.

But Bush declined to say specifically how he would make the difficult choices to change the way benefits are administered under the system, first created in 1935 under Franklin Delano Roosevelt's New Deal.

...more...

I wish someone would tell this drooling POS to STFU!

[UpInArms]

5. 9:36 EST markets are open (WHEE!)

Dow 10,713.99 +64.07 (+0.60%)
Nasdaq 2,147.60 +12.40 (+0.58%)
S&P 500 1,200.08 +5.88 (+0.49%)
10-Yr Bond 4.187 -0.22 (-0.52%)

NYSE Volume 46,639,000
Nasdaq Volume 116,547,000

pre-opening blather

9:00AM: S&P futures vs fair value: +6.3. Nasdaq futures vs fair value: +12.5. Futures trade remains comfortably above fair value, suggesting a higher open for the indices... Analyst comments are few and far between but one company in the spotlight has been AstraZeneca... Bear Stearns has upgraded AZN to Peer Perform from Underperform, citing valuation, while JP Morgan and CSFB have both downgraded the drug maker due to negative survival benefit results related to AZN's Iressa drug

8:30AM: S&P futures vs fair value: +6.5. Nasdaq futures vs fair value: +12.5. Still shaping up to be a higher open for the cash market as upbeat sentiment in futures market remains intact... Wal-Mart (WMT) still expects December same-store sales growth of 1-3% while it has been reported that Fannie Mae (FNM) CFO Timothy Howard will leave following an SEC ruling last week that could lead to a $9 bln earnings restatement

8:00AM: S&P futures vs fair value: +6.2. Nasdaq futures vs fair value: +12.5. Futures market suggesting a higher open for the cash market... Contributing to the early uptick has been a drop in crude oil prices ($45.88/bbl -$0.40), following a 5% surge last Friday, strength in overseas markets and potential stabilization in the pharmaceutical sector... Pfizer (PFE) has said it will immediately stop advertising Celebrex after a study linked the painkiller to increased heart attack risks

the buck

Last trade 81.67 Change -0.49 (-0.60%)

Settle 82.16 Settle Time 23:36

Open 82.01 Previous Close 82.16

High 82.13 Low 81.63

Last tick: 2004-12-20 09:06:07 ET
30-min delayed quote.

[Kolesar]

6. Are SPYDRs the place to hedge against the dollar?

This seems like the place to ask. Perhaps I could start another thread.

I have shifted a significant portion of my equities investments into global mutual funds. (One global and one European). I am trying to figure how to stash my conservative/money-market investments into foreign currencies. My impression is that gold has already been driven up quite high, so forget that. The bank will charge bad exchange prices, so that is not the way to go.

I recently became aware of Exchange-Traded Funds, aka SPYDERs. One can use a brokerage account to "buy" a collection of stocks (a fund). I was thinking of buying ETFs that emulate foreign indicies of equities. That would be like the "S&P 500 Index, only not from the US.

I would especially like to find an ETF that is just Euro, Yuan, or Yen-denominated "money" in the form of a money-market fund. Does anybody know of such an ETF?

[Kolesar]

8. Foriegn-denominated ETFs

http://www.latimes.com/business/la-fi-foreign20dec20,0,1745337.story?coll=la-home-business

excerpt:

Also popular this year are so-called exchange-traded funds that invest abroad. ETFs are portfolios of stocks, similar to conventional mutual funds, but trade on the New York or American stock exchanges.

The iShares MSCI-EAFE fund, which trades on the American Stock Exchange, tracks the broad-based Morgan Stanley Capital International index of European, Australasian and Far Eastern stocks. The fund's price was $156.40 a share on Friday, up 14.3% since the start of the year.

Assets in foreign-stock ETFs now total $30.4 billion, more than double the $13.9 billion they held at the end of last year. Domestic-stock ETF assets have risen 31% in the same period, to $173.4 billion, according to the Investment Company Institute, the main trade group for mutual funds.

...........snip the warnings...........

Many currency experts and investment strategists say the fundamental issues weighing on the dollar — including the nation's budget and trade deficits, and the risk that they will get bigger before they get smaller — make it more likely that the greenback is headed lower.

[RawMaterials]

7. Exelon, PSEG announce merger, see 1,400 job losses, Reuters reports

http://money.cnn.com/index.html

[UpInArms]

9. US Leading Indicators Edge Up in November

http://olympics.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7141132

WASHINGTON (Reuters) - A key gauge of future U.S. economic growth snapped a five-month losing streak and edged up 0.2 percent in November, a private research firm said on Monday.

The New York-based Conference Board said its index of leading indicators gained last month to 115.2 after slipping for five consecutive months, including a revised fall of 0.4 percent in October, which had been initially reported as a 0.3 percent slide.

"It is too early to conclude that the recent weakness in the leading index was only a pause in the rising trend, but to date the decline was not large enough and did not persist for long enough to signal an end to the current economic expansion," the Conference Board said.

Six of 10 components of the leading indicators gauge rose in November, including stock prices, money supply and consumer expectations.

...more...

[UpInArms]

10. Report: Poor cannot afford most one-and two-bedroom rentals in the U-S

http://www.wavy.com/Global/story.asp?S=2713090

WASHINGTON An advocacy group for low-income workers says that most minimum-wage earners cannot afford even a small apartment.

According to an annual report from the National Low Income Housing Coalition, the typical worker needs to make more than 15 dollars an hour to afford the average rent and utilities on a two-bedroom apartment. More than a quarter of the population makes less than ten dollars an hour.The low income advocacy group report cites government numbers showing that hourly wage increases over the past year have failed to keep up with increases in rent and utilities.The highest amount was in the District of Columbia, where workers must make 22-dollar-83 cents an hour for a small apartment. California is the highest state. Virginia is number 13 among the states. Workers here must earn 16-Oh-5 an hour to rent a small apartment.

[UpInArms]

11. SEC tells Fannie Mae to restate earnings, company leaders under fire

http://www.ethicalcorp.com/content.asp?ContentID=3314

The Securities and Exchange Commission says Fannie Mae should restate its earnings, erasing 38% of profits claimed since the beginning of 2001 and bringing the company’s executives under fire.

Fannie Mae’s accounting did not comply in “material respects” with two major accounting rules, Donald Nicolaisen, the SEC’s chief accountant says.

The company had appealed to the SEC for vindication after its regulator, the Office of Federal Housing Enterprise Oversight, accused it of manipulating accounting estimates to meet financial targets and of smoothing earnings.

A Fannie Mae spokesman said the company will take the steps necessary to fully comply with the SEC’s determination, but said it would leave the company with less capital than it is required to hold in reserve against a financial downturn.

Nicolaisen says Fannie Mae did not meet the requirements for “hedge accounting”, which allows companies to exclude changes in the value of derivatives from reported earnings.

Fannie Mae said last month the hedge accounting correction would result in a net reduction in past earnings of $9 billion. To make up the shortfall, Fannie has said it would probably have to sell part of its portfolio of mortgages, raise capital through stock issues or cut dividends.

...more...

[54anickel]

12. Overhaul of Social Security may tax wealthy

http://www.thedesertsun.com/news/stories2004/national/20041220004416.shtml

WASHINGTON -- Two of President Bush’s top advisers refused on Sunday to rule out the possibility that wealthy people might have to pay more to help cover the cost of his move to partially privatize Social Security.

Neither Treasury Secretary John Snow nor Andrew Card, the White House chief of staff, would say whether Bush’s ideas about overhauling the federal retirement program would include raising the limit on incomes subject to Social Security taxes.

People currently pay those taxes on income up to $87,900. That level will climb to $90,000 next year. One proposal to help compensate for the private accounts would raise or eliminate the tax cutoff, which would mean that wealthier people would pay more.

Asked on ABC’s "This Week" whether that was possible, Card said: "The rate that you and I pay -- contribute -- to our Social Security, the president does not want to see that rate increased." He would go no further in subsequent questioning.

Both Card and Snow, who appeared on "Fox News Sunday," said Social Security is beyond repair as it now stands. They said details of a plan to overhaul it remain to be worked out.

Card suggested "an open and honest debate about all of the ramifications" of Bush’s ideas.

"Let’s get smart people like Alan Greenspan involved,.....

more...

[punpirate]

35. This BS is...

... meant to prepare us for an eventuality which is completely necessary to accomplish the administration's plans: default on government internal debt, i.e., money borrowed from the SS trust fund. If there's no default, and the debt is repaid, there is no substantive SS crisis, period. If the government does not arrange to repay those debts, there is.

Quite apart from the obvious obfuscation in which the administration is engaged, why is that too complicated for the average American to understand?

[54anickel]

13. The Bear's Lair: World capital of Ponzi

Pushing the idea that SS is going broke, but some of his other comments are pretty good! Apologies for the source.

http://www.washtimes.com/upi-breaking/20041217-022819-1300r.htm

Washington, DC, Dec. 20 (UPI) -- Fannie Mae's accounting mishaps, the renewed protest over stock option expensing and the attempt not to count the transition costs of social security reform all emphasize one thing: Washington DC, whether or not the world capital overall, is unquestionably the world capital of Ponzi financing schemes, swindles that work for a year or two and then deluge everyone in losses.

Fannie Mae's accounting problem was quite simple: it claimed "hedge accounting" for its derivatives contracts, choosing several weeks after the derivative was bought whether to accrue it at market value or "freeze" it as a hedge of its liabilities -- thus profitable derivatives were accrued and loss-making ones frozen. The accounting rule is quite clear; I have to say Fannie Mae's accounting was borderline fraud, and has resulted in a $9 billion restatement of its net worth, on the basis of which Fannie Mae's equity and several hundred billion dollars of debt guaranteed by it had traded for more than 3 years.

The stock at $69 Friday was only $11 off its 2004 high, which proves that investors in the 1995-2004 bull market don't care about fraud, so long as the management and brokers tell a good story. In reality, to get back to the (inadequate) capital ratios required by its regulators, Fannie Mae is likely to have to sell about $300 billion of mortgage backed securities, real money in any language. Chief Executive Franklin Raines should certainly go; the question is why the Board of Directors isn't forced to resign en masse, and Fannie Mae stripped of its power to build an asset portfolio.

The whole Fannie Mae mess results from the company having an implied but not explicit guarantee of its liabilities from the federal government. That keeps its liabilities off the federal deficit, but results in bizarre cross-subsidization of Fannie Mae's activities, made much worse when its management gets performance-related bonuses and decides to push the envelope of its legal status. The deception involved in the "now you see it, now you don't" guarantee of U.S. housing finance is of the same type as that perpetrated by Charles Ponzi, who attracted money to his scheme by pretending to be arbitraging international postal rates.

It is by no means certain that the Fannie Mae mess will end up in bankruptcy, like Ponzi's -- draconian regulation of Fannie Mae and its sister Freddie Mac, combined with a smooth ride in the bond market for the next decade or two, may allow disaster to be avoided. But in the market for financing housing, which has been shown around the world to be one of the simplest and safest assets to finance without government involvement, it was appallingly foolish to run these risks in the first place.

more...

[54anickel]

14. Dilly-Dally Monetary Management

Last article on the page...

http://www.prudentbear.com/creditbubblebulletin.asp

Tuesday the Fed continued its “measured” policy stance by raising rates 25 basis points to 2.25%. Almost universally (or, at least, on Wall Street and with the U.S. media), Mr. Greenspan’s “baby-step” approach is heralded as adept (brilliant?) monetary management. The very utmost caution is taken to ensure that rate increases do not disturb the economy or, more importantly, dispirit the financial markets. I find it ironic that a system that is so trumpeted by Mr. Greenspan for its “resiliency” is treated with such delicate kid gloves.

The Mighty Credit Bubble scoffs at such timidity (and relishing all the pandering to the markets/speculators). The Fed grossly overreacted in 2002. A bursting dollar Bubble, a mushrooming global leveraged speculating community, and the runaway U.S. Mortgage Finance Bubble had already ensured the emergence of abundant liquidity and heightened pricing pressures both at home and abroad. The potential need for helicopter money – I think not. This was followed by the major error of waiting until the past June to nudge rates up from 1%. And now, years of flawed Fed policies are being capped off with the current course of Dilly-Dally Monetary Management. Why would anyone believe that taking the short-term painless course in monetary policy would yield the most beneficial long-term results?

This week provided further evidence that the Fed has not “tightened” at all. And while most would contend that rate increases are “removing accommodation,” such an assertion at this point seems less than accurate. The general financial environment is at least as loose as it has been since the Acute Monetary Disorder of 1999/2000. In many respects – certainly including the Bubbling stock market – the financing environment for business ex-technology has never been as easy. General Credit Availability has not been as easy. Examining some indicators, mortgage Credit growth is currently on record pace; corporate cash flows are booming; the small cap Russell 2000, the Value Line Arithmetic 1650, the S&P 400 Mid-cap, the AMEX Composite, Dow Transports and Utilities, and many financial indices are at all-time highs; M&A activity is approaching tech-Bubble levels; junk bond issuance is at record levels, with Credit spreads at multi-year lows; ABS issuance is at record levels; the securities broker/dealer business is absolutely booming; and it will be a record year in bank Credit growth. Emerging bond spreads have collapsed, with Brazilian bond spreads having narrowed below 400 for the first time since 1997. Evidence abounds that the Greenspan Fed is bringing new meaning to “behind the curve.”

This morning’s inflation report had the year-on-year increase for the CPI at 3.5%. This is the highest reading since May 2001. Year-to-date, the 3.7% rate of consumer price inflation is running even above 2000’s 3.4% rate. It is worth noting that the fed funds rate began 2001 at 6.50%. And last month’s 3.5% y-o-y CPI increase compares to November 2003’s 1.8% (last month's Producer Prices were up 5.0% y-o-y). Moreover, a strong case can be made that the CPI currently understates general inflationary pressures. CPI housing costs were up only 3.1% y-o-y, with “owner’s equivalent rent" up 2.2% over the past year. Meanwhile, medical care increased 4.4% from a year earlier. These do not pass the reasonableness test. It is, furthermore, worth recalling that November Import Prices were up 9.5% y-o-y, with U.S. home prices increasing “at the fastest pace in 25 years” during the third quarter (up 13% y-o-y). Inflationary pressures are strong, rising and broadening, and no amount of denial is going to change reality (although abundant liquidity can admittedly work as one heck of a tonic, for awhile).

I’m going to go out on a limb (ok, a pretty sturdy one) and predict that going forward we will be hearing much less about the Fed having “won the war on inflation.” Similar talk of a convenient (with a low CPI) “inflation targeting” approach to monetary policy will fade, as will wishful notions of the Fed having its work wrapped up at 2.50%. The inflation genie has been let out of its bottle, and historians will likely look back to the bursting of the dollar Bubble as a key inflection point in U.S. and global inflation dynamics. But for now - awash in and intoxicated by liquidity - global Credit market perceptions remain today far behind the inflation curve – echoing the Fed.

more...

[TrogL]

37. OK, I'll bite

:wtf: is "helicopter money"?

[54anickel]

42. OH, that's in reference to our good friend Ben Bernanke and his comments

about the marvels of the printing press. They'll just print their way out of any troublesome quandary. Heck, everyone seems to be running the printing presses overtime these days.

Here's an older article from Puplava on "copter money"

http://www.financialsense.com/Market/archive/2004/0223.html

[54anickel]

16. US capital swells Asia hedge fund coffers

http://news.ft.com/cms/s/d08f1014-51ea-11d9-961a-00000e2511c8.html

Investments in Asian hedge funds have nearly doubled this year, reflecting a growing influx of US capital after years of reduced exposure to the region.


Total assets have jumped to about $60bn in mid-December from $34bn at the end of 2003, according to Eurekahedge, the Singapore-based consultancy. AsiaHedge, its London-based rival, believes assets will have climbed to more than $70bn by the end of this year.

“Last year Asia was fashionable because of its capital market growth,” said Peter Douglas, head of GFIA Pte, a Singapore-based consultancy. “This year, many hedge fund investors have caught on to the idea that the region is structurally inescapable.”

While global hedge fund returns have fallen sharply this year, Asian hedge funds have continued to outperform their more mature rivals in the US and Europe. Some industry experts point to the fact that Asian financial markets tend to be less heavily researched than their more developed counterparts, creating market inefficiencies that hedge funds seek to exploit.

This has not been lost on the big US hedge fund groups, many of which cut their exposure to the region following the 1997-98 Asian financial crisis. At the time some Asian politicians accused hedge funds of making speculative trades on the rise and fall of the region's currencies, contributing to their collapse.

more...

[UpInArms]

17. 11:58 EST numbers and blather

Dow 10,681.77 +31.85 (+0.30%)
Nasdaq 2,134.33 -0.87 (-0.04%)
S&P 500 1,196.97 +2.77 (+0.23%)
10-Yr Bond 41.85 -0.24 (-0.57%)

NYSE Volume 617,273,000
Nasdaq Volume 945,104,000

11:30AM: Market pulls back a bit over the last half hour during President Bush's year-end news conference as market internals become mixed... Advancers on the NYSE outpace decliners by a narrowing 17 to 13 margin while declining issues on the Nasdaq now hold a slim 15 to 13 edge over advancing issues... The Nasdaq witnessed a seven point reversal in less than ten minutes, despite extremely light volumes, after President Bush said, "We are under no illusion that this Iraqi force is not ready to fight."...

Since volumes are expected to run extremely thin during the holiday-shortened week, intraday swings across the board should not come as too big a surprise to investors...NYSE Adv/Dec 1727/1326, Nasdaq Adv/Dec 1392/1535

11:00AM: Stocks continue to run in place at current levels as broad-based buying interest leaves virtually every sector in positive territory... Energy, biotech, materials and utility remain influential leaders to the upside with gains in excess of 1% while banks, telecom service, airline, retail and networking have also shown strength... At the same time, selling pressure has not been especially strong in too many areas as sector-specific developments have left software, hardware and drug stocks sporting modest losses...NYSE Adv/Dec 1880/1108, Nasdaq Adv/Dec 1565/1294

10:30AM: The broader averages maintain modest gains in the early going following better than expected economic data... At the top of the hour the Conference Board released November Leading Indicators data which showed a rise of 0.2%, slightly better than economists had expected (+0.1%)...

[UpInArms]

19. noon blather

12:00PM: Stocks opened higher, and remain slightly positive, prompted by expectations of a year-end rally, cheaper oil prices, few negative catalysts and better than expected economic data... End-of-the-year portfolio positioning has so far left investors hoping a Santa Claus rally is still forthcoming and that stocks will hold onto much of their recent gains... Meanwhile, profit taking in crude oil, which has left the commodity under $46/bbl all morning following the contract's largest weekly gain (15%) in four years, has helped fuel early buying interest...

But losses in oil have been limited following the sale of Russian oil producer Yukos for $ 9.4 bln to an unknown buyer and anticipation of another cold spell hitting the Northeast... Nearly every sector showed strength early on but sellers have stepped in over the last hour to trim broad-based gains... Energy, materials, utility, telecom service, biotech and banks remain in positive territory while software, hardware, transportation and health care continue to show losses... The latter remains under pressure for the second day in a row following negative Celebrex study results from Pfizer (PFE 24.95 -0.80) last week...

The drug maker, which has lost more than $25 bln in market cap since last Thursday, has said, however, it will stop advertising its widely prescribed painkiller... Separately, November Leading Indicators data came in bit better than expected at +0.2% (consensus +0.1%), following five months of declines, but as much of the data was already known the market has held its overall positive sentiment...

[54anickel]

20. Looks like another pie-hole alert...n/t

[54anickel]

18. Reasons for insiders' selling spree are unclear

http://www.denverpost.com/cda/article/print/0,1674,36%7E33%7E2598123,00.html

Wednesday, December 15, 2004 -

New York - Talk about a double standard. While corporate leaders tout the benefits of investors owning their stocks, many executives seem to be running for the doors themselves.

Selling of shares by insiders - which includes executives and other top officers and directors at a company - has been rampant in recent months, with sales rising to their highest level in more than four years in November.

While no one can pinpoint an exact reason for the run-up, the implication is troubling since big insider selling is often considered bearish for the overall market as well as for individual stocks.

Of course, not all insider selling should be construed as a bad sign. Some stock sales may just be routine or may be executives wanting to free up money to cover personal expenses or to help pay the taxes on shares they buy after exercising options. And in some sectors, namely technology, stock compensation is often the bulk of executive pay, so they sell their stock for income.

more...

[54anickel]

21. Half of Americans worry about money they owe, poll finds

Only half?

http://www.jsonline.com/bym/news/dec04/285567.asp

Washington - Shoppers are racing from store to store this holiday season, with credit cards clutched tightly in hand and visions of future bills dancing in their heads.

Advertisement

One-half of Americans say they worry about the money they owe, and many say they worry most of the time about their overall debts, an Associated Press poll found.

Those debts can come from home and car loans as well as credit cards - even more so with December buying sprees. Three-fourths in the poll said they have credit cards.

Four in 10 of those with credit cards said they will use plastic to help pay for their holiday spending this year, according to the poll conducted for the AP by Ipsos-Public Affairs.

Most of those who are using credit cards said they would pay off their holiday expenses when their next bill arrives.

About one-fourth of those with cards said they use credit for purchases when they do not have the cash.

more...

[54anickel]

22. Retailers Nervous As Traffic Is Poor

http://www.ajc.com/business/content/shared-gen/ap/Finance_General/Holiday_Shopping.html

NEW YORK — A much-hoped for sales bonanza for the nation's retailers appeared not to materialize on the last weekend before Christmas, despite an abundance of deals on toys and apparel.

Merchants needed a hefty sales surge this past weekend to recoup lost business after seeing a slow start to a holiday selling season that never gathered steam. Now, they'll have to rely even more heavily on the final days before Christmas and post-holiday sales to meet their holiday sales forecast.

"We are not getting the kind of lift we need. Traffic and sales were below expectations" on Saturday, said Michael P. Niemira, chief economist at the International Council of Shopping Centers. He serves as an adviser for ShopperTrak, which tallies sales results from 30,000 retail outlets.

Total sales were down 7 percent to $6.7 billion on Saturday, compared with the same Saturday in 2003, according to ShopperTrak. ShopperTrak will be releasing sales for the overall weekend later on Monday.

Niemira noted that luxury stores — which have enjoyed robust sales as their well-heeled customers have benefited from the economy's recovery — had the best performance. Stores like Sears, Roebuck and Co. and J.C. Penney Co. Inc. that catered to the mid- to-low income shoppers, who have pulled back on spending as they have been more vulnerable to higher heating costs and a volatile job market, attracted big crowds with deep discounts and expanded shopping hours.

more...

[RawMaterials]

28. mother in-law works in retail she says business has

been slow, and not even close to last year.

[mojavekid]

29. I am one of those "High End" Vendors at Neiman Marcus

I was just in their Northpark, Dallas store this last weekend for a two-day "trunk Show" and business was slowwwwwwwwwww. There are the amazing walk-ups and a few regular big clients dropping the money, but I believe it is not evenly distributed across all their stores. Overall the company will do o.k. this season however.

I asked a couple of the sales associates why they believe sales are off, and all they could offer was that people are worried about the war, I was a little surprised by that, but if it is not the money they are worried about, the war is next thing I suppose. I should also mention that most of the associates and the Dept. Manager are Dem's - as was Stanley Marcus, who really took care of his people, and put customer service first.

[UpInArms]

30. Hi mojavekid!

Glad you dropped in and welcome to DU! :hi:

Thanks for the anecdotal information regarding sales at NM in Dallas - we are always in need of first person views and posts :D

[mojavekid]

33. Hello and Thank you for the Welcome!

You are all AWESOME = UIA, 54, and Ozy, et al..and I really appreciate your dedication to your Thread, as I am sure do the many, many other lurkers out there like me.

[chomskysright]

38. TAKE THIS CORPORATE ECONOMY DOWN....

December 20, 2004

Hello Ms. Duker, Ms. Szluka, and Mr. or Ms. Kavanaugh:

I read with interest this article from the NY Times: http://www.ajc.com/business/content/shared-gen/ap/Finan...

"We are not getting the kind of lift we need. Traffic and sales were below expectations" on Saturday, said Michael P. Niemira, chief economist at the International Council of Shopping Centers. He serves as an adviser for ShopperTrak, which tallies sales results from 30,000 retail outlets.

Total sales were down 7 percent to $6.7 billion on Saturday, compared with the same Saturday in 2003, according to ShopperTrak. ShopperTrak will be releasing sales for the overall weekend later on Monday..."


Please be aware that your buying public are the 'blues' who were cheated, once again, from placing into office the person that they elected: yes, cheated as associated with corporate malfeasance.

If most of the the 'blues' are like me, we intend to take this economy down. No more Dell computers, for instance (re: Mr. Dell giving $250,000 to the presidential inauguration) ...and no more shopping at the mall. Let this corporate democracy wither.

We are the people, the educated people, with the incomes. We are not buying from corporate America until it listens to us.

Pass this to anyone you like.


Sincerely,

[54anickel]

23. Self-interested angel: GE is propping up ailing airlines

http://www.startribune.com/stories/535/5141415.html

It's a financial miracle that U.S. airlines have kept flying despite $25 billion in losses over the past four years.

Gee? No, GE.

General Electric Co. has been an important behind-the-scenes player in keeping airlines in the air. It isn't alone, but it has made some of the most significant moves, such as a recent deal with US Airways Group Inc. that gives the airline more hope for survival.

snip>

For GE, the world's largest aircraft-leasing firm, pumping money into airlines is in part a way to avoid huge losses from an airline collapse. GE, which has 1,239 airplanes and $29 billion of airplane loans and leases, has an interest in keeping its leased planes in circulation.

GE said it does deals only where it thinks it can profit -- and is plenty willing to take back airplanes from failing carriers and rent them someplace else. When it helps prop up airlines, it's "because we think we make a lot of money on it," said Henry Hubschman, president and CEO of GE Capital Aviation Services and the transportation-financing unit of GE Commercial Finance. "The time you do best is when they are most in need of money," he said.

more...

[54anickel]

24. Protection for home equity

http://www.latimes.com/business/la-re-harney19dec19,1,1828077.story?coll=la-headlines-business

WASHINGTON — Could you lock in your current equity value and be protected against future real estate market declines? Could you, in the lingo of the financial markets, hedge your home equity holdings?

Questions like these concern large numbers of homeowners around the country, who wonder: How long can the housing appreciation boom last? How long can the average American house continue to gain more than 1% a month in value, as it did in the last 12 months, or close to 50% in value over the course of five years?

A possible answer was filed late in November with the Securities and Exchange Commission. A company called MACRO Securities Research expects to begin offering an entirely new financial instrument in the coming months that will permit anybody — including individual homeowners and giant institutional pension funds — to hedge their bets on housing price changes in real estate markets across the country.

Though the underlying securities structure is complex, the bottom line for homeowners is this: If you are worried that your equity might decline, you will be able to go to your stockbroker and buy a hedge security that protects you from the loss you fear. If you think it's likely that housing prices will fall in your area over a period of time, you could buy what the SEC filing describes as a "Down-MACRO," which insulates you against equity loss. Think of it as taking what's known as a "short" position on a stock. You are expecting or betting that an asset, in this case your house, will sell for less at some point in the future.

more...

[54anickel]

25. U.S. Rogue Nation Image Hurts Dollar in Asia

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_pesek&sid=aIEOQx53yalU

Dec. 20 (Bloomberg) -- Being an American overseas these days can be a surreal experience. Virtually everyone, it seems, seeks that 10-minute why-I'm-upset-with-the-U.S. conversation.

Recent stops in Bangkok, Hanoi, Kuala Lumpur, Singapore, Mumbai and Vientiane, Laos, featured myriad such moments, leaving little doubt that anti-American sentiment -- or more to the point, anti-Bush-administration sentiment -- is intensifying in Asia.

And is all this negativity manifesting itself economically? Yes, argues Joseph Quinlan, chief market strategist of Banc of America Capital Management in New York. It won't make him many friends in Middle America, but Quinlan thinks the U.S. image as a ``rogue nation'' is a key force behind the dollar's decline.

``The message from the foreign exchange markets'' of late ``seems to be simply this: The free ride for the rogue nation is over,'' Quinlan argues. ``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, Quinlan says, ``could be a sign that the world is no longer willing to underwrite the designs of U.S. foreign policy. To a large extent, we believe a rebound in the U.S. dollar could hinge on a revamped foreign policy.''

The Black Market

snip>

As Ampon explained, most people in his line of work in Asia figure the dollar will plunge this year. Asked why, he answered simply: ``Bush will be around a few more years.'' :evilgrin:

more...

[UpInArms]

27. was that the sound of glass breaking?

Will they really cut up *Co's credit cards?

As painful as that will be for most of the people living and trying to survive in the USoA, it would be best for the rest of the world.

:sigh:

[54anickel]

26. Seduced, corralled, awaiting the fleecing

http://www.321gold.com/editorials/maund/maund122004.html

I have been watching the continued advance of the broad stockmarket since the US elections with a kind of morbid fascination. Despite the horrific fundamentals, the market has continued higher, yet, as I already dramatically demonstrated a couple of weeks ago by means of a Dow chart in Euros, this rally is nothing more than a "damp squib" in real money terms. The complacency in this market is truly incredible, given the drop in yields to a pitifully low level, and the fact that the market has risen into an area of truly massive overhead supply that would make even an 8-year old budding chart analyst nervous.

More ominous still is the fact that insiders have been unloading stock onto retail buyers at an ever-expanding rate that has risen to extreme levels in recent weeks. Ordinary investors have been corralled into the pen once again, seduced by slick marketing campaigns and glossy long-winded brochures, and are now helplessly awaiting their fate, which is, of course, to be fleeced.

We will now examine the charts for the broad US stock markets, focusing mainly on the Dow Jones Industrials, because there was a potentially very significant volume development on Friday. I would rather look mostly at the S&P500, which is more representative of the market as a whole, but there is no volume data available for this broader index.

A two-year time period has been selected for our 1st chart, in order to show the run-up from the March 03 low in its entirety and also the toppy action all this year. On this chart we can see that the index broke out from the gentle downtrend channel in force all year, upon the Republican party securing, apparently with the aid of more than a little tweaking of the latest vote counting technology, a clear, if marginal victory in the election in early November. This breakout, however, is regarded as a sucker rally, as it is driving into massive overhead resistance and is accompanied by frenetic insider selling.

more...


Hate to post and run, but got a lot of errands to do today. Hope to check back later. :hi:

[bain_sidhe]

39. Insider sales

some graphs from the last "fleecing" to illustrate the concept (because the graphs cover different time periods, the sections relating to the "seduction & fleecing" time frame are outlined in red):

[mojavekid]

31. Pardon my ignorance, but what is a "Pie Hole Alert"?

And sorry to clog up your thread with simple questions, but was thinking about that scene in Amercian Pie just now and.....

[UpInArms]

32. no problem!

Clog away :D

from the daily starter post (and originally coined by Radfringe - the original Stock Market Watch {SMW} founder) -

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=1085904&mesg_id=1085904&page=

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.

[UpInArms]

36. 3:48 EST numbers and blather

Dow 10,670.02 +20.10 (+0.19%)
Nasdaq 2,127.08 -8.12 (-0.38%)
S&P 500 1,194.66 +0.46 (+0.04%)
10-Yr Bond 41.99 -0.10 (-0.24%)

NYSE Volume 1,306,932,000
Nasdaq Volume 1,831,370,000

3:30PM: More of the same as the major averages continue to drift sideways with a slightly negative bias heading into the close... Tomorrow, Morgan Stanley (MWD 53.64 -0.47) and Bear Stearns (BSC 104.48 -0.05) are the only S&P 500 constituents out with earnings before the bell while General Mills (GIS 49.03 +0.31) is expected to report quarterly results during market hours... There will be no economic data out until final Q3 GDP readings hit the wires on Wednesday at 8:30 ET...NYSE Adv/Dec 1604/1688, Nasdaq Adv/Dec 1154/1996

3:00PM: Major indices rebound some but not nearly enough to make a significant change in the standings, as weakness in the software group (-1.4%) continues to weigh on the Nasdaq... Two of the weakest names in the sector have been Oracle (ORCL 13.66 -0.32) and Symantec (SYMC 24.00 -1.37), both of which announced huge merger deals last week... Bucking the bearish trend, however, has been S&P 500 constituent Compuware Corp. (CPWR 6.18 +0.11)...

The software provider, despite being removed this morning from the Nasdaq-100 index due to annual rebalancing, surged as much as 7.8% in early trading after Piper Jaffray nominated CPWR as their top stock pick for 2005... NYSE Adv/Dec 1606/1664, Nasdaq Adv/Dec 1186/1922

2:30PM: The market remains mixed, near its lowest levels of the day, as profit taking continues to pressure small cap issues... The Russell 2000 (-0.7%) and the S&P SmallCap 600 Index (0.7%) have been hit hard following several strong sessions... The latter has surged 19.7% so far in 2004, with the help of a 21.5% gain in its health care components, while the Russell 2000, which touched an all-time high last Wednesday, closed out last week up 15.3% for the year...

[UpInArms]

40. closing numbers and blather

Dow 10,661.60 +11.68 (+0.11%)
Nasdaq 2,127.85 -7.35 (-0.34%)
S&P 500 1,194.65 +0.45 (+0.04%)
10-Yr Bond 41.99 -0.10 (-0.24%)

NYSE Volume 1,467,925,000
Nasdaq Volume 2,009,295,000

Close: Stocks opened higher, but traded in split fashion most of the day and closed mixed, as investors were left with little in the way of market moving catalysts to kick start a holiday-shortened week... The notion of an upcoming Santa Claus rally spurred broad-based buying interest early on, but after gains of 0.3-1.0% for the broader averages last week, lagging economic data and lack of corporate earnings, investors tiptoed through stocks all day without much conviction...

November Leading Indicators came in slightly better than economists expected with a reading of +0.2% (consensus +0.1%), but despite turning positive for the first time since June, eight of the ten components were already known... Meanwhile, before market internals reversed course midday and closed with a slightly bearish bias, crude oil ($45.35/bbl -$0.93) hovered under $46/bbl all day and lost 2% on the heels of gaining 15% last week... However, anticipation of more frigid weather across the northeastern U.S. and the sale of Russian oil producer Yukos for $ 9.4 bln to an unknown buyer prevented the commodity from falling much further... Energy (+1.6%) took note and was the biggest gainer on the day...

Utility (+0.8%) got a boost after Exelon Corp (EXC 43.23 +1.37) agreed to acquire Public Service Enterprise Group (PEG 50.45 +3.18) for more than $12 bln, creating the largest power generation company... The news helped the Dow Jones Utilities Index hit a 52-week high of 335.60 in early trading... Materials, banks and telecom service also showed strength... Showing weakness was health care (-1.2%), influenced by aggressive selling pressure in shares of Pfizer (PFE 24.30 -1.45)...

[54anickel]

41. I dunno, looks like Santa will be by-passing Wall Street this year.

He made his list, he checked it not once, or twice but three freakin' times, and not a name came up worthy of anything more than a lump of coal - so why bother...he's looking to call it an early night this year anyway.