STOCK MARKET WATCH, Friday 10 June

[ozymandius]

Friday June 10, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 225 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 173 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 236 DAYS
DAYS SINCE ENRON COLLAPSE = 1293
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54


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




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90

AT THE CLOSING BELL ON June 9, 2005

Dow... 10,503.02 +26.16 (+0.25%)
Nasdaq... 2,076.91 +16.73 (+0.81%)
S&P 500... 1,200.93 +6.26 (+0.52%)
10-Yr Bond... 3.97% +0.03 (+0.63%)
Gold future... 426.10 -0.50 (-0.12%)

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

[ozymandius]

1. WrapUp by Martin Goldberg

Transports Lag in the Intermediate Term
Internets Facing Short-Term Turbulence Too

If the stock market is going to head higher it appears that it will have to do so without the leadership of the transportation index. In fact, the intermediate term picture of the transports is quite bearish. Can the stock market forge ahead in the short term with leadership from the Nasdaq, while the transports falter in the intermediate term? Can the stock market forge ahead in the intermediate term while the Nasdaq trading rally leaders falter in the short term? As this article is drafted on Wednesday evening, it seems as if we will get insight that may prove valuable to answer these questions by studying the market’s reaction to the positive talk that Mr. Greenspan presented before congress today and Intel’s “mid-quarter update.” There is more discussion on that in “Today’s Market” below.

Transports Flash Warnings

The chart below is a 2-year weekly candlestick chart of the Dow Jones Transportation index. While the most recent rally was decisive and impressive for short term traders, there are some key intermediate term features of the transportation index that are quite ominous. The chart may have formed the right and final shoulder of a simple head-and-shoulders (HAS) reversal formation. Of course, the pattern is not completed until the neckline is broken. Yet examining the most recent three weeks of trading indicates that as of Wednesday evening, this week’s red (down) candlestick engulfed the previous two weeks of trading. The immediate implications are bearish.



-cut-

Today’s Market

Here’s the headline from today’s Yahoo Finance after the close of trading:

“Greenspan Says Economy Is on Firm Footing”

So I ask you, just what was he going to say? After being up late last night contemplating the Chairman’s testimony, I dreamt that Greenspan was playing the song, “Blue Skies” on the clarinet.

Pretty much as expected the stock market reacted with a rally on the positive Greenspan talk. After hours Intel announced a rosy “mid quarter update,” but the after hours trading is down for Intel and most Nasdaq stocks. Yet, it’s an illiquid after hours market and I wouldn’t be surprised to see Intel trading up by tomorrow mid-morning. The Nasdaq was back to its leadership roll trading up 16 points to close at 2077, the Dow Up 0.25% (10,503) the S&P 500 up 0.52% (1201), the S&P mid-caps up 0.57%, the Russell 2000 small caps up 0.93%, the internet holders up 0.96%, and the Dow Jones Transports DOWN 0.24%. Volumes were heavier today than yesterday, indicating that some rally follow through in the major indices is likely.

more...

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

[ozymandius]

2. As Mr. Goldberg points out -

Oil was up over $3 yesterday.

And good morning all. :donut: :donut: :donut:

Ozy :hi:

[Tace]

3. Good Morning Ozy!

[ozymandius]

23. Good morning Tace.

How are things with you?

[Tace]

25. Things Are OK -- I Just Survived A Move

It was just from one apartment to another a few blocks away... but dang, moving sucks.

I've been putting all my free time into the World News Trust project.

Chrs

[AnneD]

27. Morning Marketeers

:donut: and all you lurkers. Good to see you around the cooler. I have been getting a chuckle (with sympathy too) about all these bears trying to get a snack that have made the news lately. We tended to be a bit sympathitic to the bears, but VERY respectful to Mama Bear. They are really very shy and are incredibly hungry after hibernation. If you just leave them alone or frighten them off, they will leave (of course, they will do a bit of damage, but that can be repaired). I am glad everyone survived the encounter. Well, Trace, I am still unpacking from April's move. I think I got a part-time job yesterday (yipee-I have a full time job already but have mountains of debt-lawyers fees for a custody dispute, IRS, you name it-it's been a bearish and hellish 2 years for me). Things are looking up but it is still rough going. Well, Happy hunting and watch out for the bears.

[AnneD]

29. Is this 'firm footing'

in the soft patch....morning Ozy:hi:

[ozymandius]

34. You make a solid point.

Firm footing in a soft patch.

Greenscam is living up to his absolutely iron-clad guarantee of spewing nonsense.

(incompetent has-been political hack)

[AnneD]

45. last time I had solid footing in a soft patch

I lost one of my sneakers in quicksand (thank God for a branch).

[Tace]

4. IEA Raises 2nd-Half Demand Forecast, Straining OPEC

June 10 (Bloomberg) -- The International Energy Agency, an adviser to 26 countries, raised its forecast for oil demand in the second half, signaling greater strains on OPEC's capacity to ensure supplies as consumption peaks in the fourth quarter.

Global demand will reach 86.4 million barrels a day in the fourth quarter, the IEA said in monthly report today, up 200,000 barrels a day from its prediction one month ago. That means the Organization of Petroleum Exporting Countries will need to pump 29.6 million barrels a day in the final quarter, 300,000 a day more than expected last month, the IEA said.

OPEC members ``are producing at close to capacity,'' Jeff Brown, the IEA's oil demand analyst, said in an interview from Paris. ``Hopefully by the end of the year the pressures that we see will ease.''

Oil futures remain above $50 a barrel as OPEC nations increase output to build inventories to ensure supplies are ample for use later this year. Traders are concerned about tighter supply during the Northern Hemisphere's winter months, when heating fuel consumption will peak, and constraints in oil- refining systems.

(more)

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aU2_8.PY6Ir8&refer=home#

[UpInArms]

5. daily dollar watch

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

Last trade 87.94 Change -0.13 (-0.15%)

Dollar See-Saws On Greenspan Comments

http://www.dailyfx.com/index.php?option=com_content&task=view&id=1488&Itemid=39

US Dollar

The dollar held its breath before the much-anticipated comments by Alan Greenspan, hoping for some direction from the Fed Chairman. However once the text of Greenspan’s speech started coming across the wire, the dollar began seesawing, first rallying on the relief that Greenspan remained steadfast on his view that the economy is on a firm footing, inflation is well-contained and rates will continue to be raised at a measured pace, avoiding all baseball inning talks. Then all gains were given back when the market realized that the Chairman didn’t really say anything new and keeping us guessing about whether we will be done at 3.50%. The one thing that we do know for sure is that the next rate hike will not be our last. Greenspan promised that the Federal Reserve would continue to watch the trend of economic data and respond as needed. Tomorrow we are finally getting some meaningful pieces of economic data. The trade deficit for the month of April is expected to rise to -$58 billion after dipping in March. This leaves the deficit fairly close to the record trade gap of -$60 billion set in February. The upcoming release will be interesting to watch, but the market will be paying closer attention to next week’s data on foreign purchases of US securities. If you recall, purchases of US securities fell almost 50% between February and March, falling short of the same month’s funding needs for the trade deficit.


Euro

We are continually amazed by the razor sharp accuracy of the FXCM Speculative Sentiment report. Released this morning, the report indicated that speculative positioning flipped from shorts to longs over the past week. The data was for 5am EDT, which makes the flip a perfect contrarian indicator for today’s price action. We typically do not report on positioning till the next week, but as of 1pm EDT today, speculators flipped back to net shorts from net longs (ratio shifted from positive 1.24 to minus 1.15). This suggests that the EURUSD could rebound even further from current levels. USDCHF positioning also moved back to net longs (1.10) from net shorts –1.25, providing a further confirmation that we may be in store for a rally in the EURUSD and corresponding sell-off in USDCHF. Meanwhile, the ECB’s monthly report echoed recent comments made by President Trichet, which is that even though inflation remains well contained for the time being, the central bank will need to continue to be vigilant, especially since oil prices are back on the rise.

<snip>

Japanese Yen
Dollar yen rebounded for the second consecutive day despite better than expected consumer sentiment data. Rising for the second consecutive month, consumers’ confidence rose in May, lending to the notion that a pickup in domestic demand could subsequently follow. Expected to show 47.9, the release was higher than consensus rising to 48.2, slightly below the expansionary 50 figure. Ultimately, given the time lag in household spending data, the loftier demand is anticipated to surface sooner than later and could add to further yen strength. Additionally, rising machine tool orders were released in conjunction with the current account total. With global foreign demand waning, orders for machine tools rose a paltry 0.1 percent on an annualized basis. Although rather lackluster, the figure may be more reflective of a balancing as the report vaulted 18.2 percent in the previous period and not suggestive of a dramatic slowdown in demand. Additionally tepid, the current account surplus grew less than expected as higher oil prices limited foreign spending on Japanese exports. As a result, the account total grew to 1.579 trillion yen compared to 1.851 trillion in the month of March.

...more...

Dollar Fails To Gain New Ground

http://www.dailyfx.com/index.php?option=com_content&task=view&id=1499&Itemid=39

EUR/USD – Euro longs experienced a deja vu when the dollar bulls once again pushed the pair toward the 1.2200 figure during the latest attempt to reestablish their dominance. As the remains suspended above the 1.2200 handle, an inability by the dollar traders to advance past the 1.2200 level only confirms that the greenback has exhausted the latest trend. An upcoming advance will most likely favor the euro bulls and will most likely see the pair move toward the psychologically important 1.2500 figure. A move of such magnitude might have a positive impact on the battered euro crosses, especially EUR/JPY and EUR/CAD which have seen losses in excess of 1000 pips each. Indicators signal a maturing trend with ADX (DMI) on the daily chart is at 40.16. Stochastic is treading below oversold on the daily chart at 18.12, which is indicative of a trending market. The Stochastic on the dealer (4HR) chart is treading above oversold at 25.08. RSI is treading above oversold on the daily chart at 31.28 with the 4-hour chart RSI neutral at 42.91. MACD remains deep below the zero line on the daily chart and is sloping downward below the zero line on the dealer 4(HR) chart. In case the reversal fails greenback longs will most likely resume their advance and push the pair toward the psychologically important 1.2000 figure.

<snip>

USD/JPY – Japanese Yen remained in suspended animation as the pair hardly budged after the dollar bulls tried to make their way above the 107.50. As the price action in the USD/JPY remains subdued, cross traders will most likely take an advantage of the overextended moves especially in EUR/JPY and GBP/JPY. EUR/JPY will most likely target the point of the latest breakdown at 134.25 with GBP/JPY most likely touching the 198.00 figure. A move to the downside by the yen bulls will most likely be capped by 104.00 figure thus establishing a triple bottom reversal. Indicators signal trend reversal, with ADX (DMI) dropping to 21.70. Stochastic is sloping downward on the daily chart at 27.30, supporting a view that a trend might be weakening. The Stochastic on the 4-hour chart is treading above the overbought line at 83.19, thus providing dollar bulls with a chance to mount a counterattack. RSI is neutral at 52.95 on the daily chart, with dealer (4HR) chart RSI is neutral at 60.20. MACD has made a bearish crossover above the zero line on the daily chart, with MACD on the 4-hour chart is pointing upwards toward the zero line. If the yen bulls retreat, a move to the upside will most likely see the USD/JPY rocket through 109.00 and target the 110.00 figure, with a breakout targeting the 115.00.

...more...

Have a Great Day Marketeers!

[UpInArms]

17. Dollar Near Nine-Day High on Speculation Rate Gap Will Widen

http://www.bloomberg.com/apps/news?pid=10000101&sid=aI0rOaq2xBwk&refer=japan

June 10 (Bloomberg) -- The dollar traded near a nine-day high against the euro on speculation the interest-rate gap between the U.S. and Europe will widen.

The dollar has gained 11 percent versus the euro this year as the Federal Reserve raised its target rate to 3 percent and the European Central Bank kept its benchmark rate at 2 percent. The spread between 10-year U.S. Treasury notes and similar- maturity German bonds widened to the most in a month today.

``The measured pace of rate increases is still on track and my guess is that we get to four percent,'' said Simon Derrick, head of currency strategy at Bank of New York in London. ``People are jumping on this as another reason to buy the dollar.''

<snip>

Gains in the dollar may be limited on expectations a government report today will show the U.S. trade deficit widened in April. Imports exceeded exports by $58 billion, up from $55 billion in March, according to the median forecast of analysts surveyed by Bloomberg.

The gap signals an increasing amount of money is leaving the country to pay for imports. The U.S. currency fell for three straight years through 2004 as the trade deficit widened. The Commerce Department is due to release the report at 8:30 a.m. in Washington.

...more...

[UpInArms]

6. Today's Reports:

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

Jun 10	8:30 AM	Export Prices ex-ag.	May	-	NA	NA	0.5%	-	
Jun 10	8:30 AM	Import Prices ex-oil	May	-	NA	NA	0.4%	-	
Jun 10	8:30 AM	Trade Balance		Apr	-	-$58.5B	-$58.0B	-$55.0B	-	
Jun 10	2:00 PM	Treasury Budget		May	-	-$36.0B	-$45.0B	-$62.5B	-

[UpInArms]

14. reports coming in

8:30am 06/10/05 U.S. APRIL EXPORTS UP 3.0% TO RECORD $106.4 BLN

8:30am 06/10/05 U.S. MARCH TRADE GAP REV $53.6 BLN VS $55.0 BLN PREV

8:30am 06/10/05 U.S. APRIL TRADE GAP IN LINE WITH CONSENSUS FORECAST

8:30am 06/10/05 U.S. APRIL TRADE GAP WIDENS 6.3% TO $57.0 BLN

8:30am 06/10/05 U.S. MAY CHINA IMPORT PRICES UP 0.1%

8:30am 06/10/05 U.S. APRIL TRADE GAP WITH CHINA $14.7 BLN

8:30am 06/10/05 U.S. MAY IMPORTED OIL PRICES FALL 6.5%

8:30am 06/10/05 U.S. MAY EX-AG EXPORT PRICES FALL 0.4%

8:30am 06/10/05 U.S. MAY EXPORT PRICES FALL 0.1%

8:30am 06/10/05 U.S. MAY NON-OIL IMPORT PRICES FALL 0.3%

8:30am 06/10/05 U.S. MAY IMPORT PRICES FALL 1.3%

[UpInArms]

15. U.S. APRIL TRADE GAP WIDENS TO $57.0 BILLION

http://www.marketwatch.com/news/story.asp?guid=%7B0E5A2A2E%2DB134%2D4ACB%2D976E%2DD15B12DD6007%7D&siteid=mktw

excerpt:

So far in 2005, the trade deficit -- the difference between imports and exports -- is up 12.6% from the pace a year ago. The U.S. trade gap was a record $617.58 billion in 2004.

The trade gap in March was revised down to $53.6 billion, compared with the initial estimate of $55.0 billion.

U.S. producers sold a record amount of goods overseas in April, but on the flip side, U.S. consumers and businesses bought a record amount of imported goods.

Exports rose 3.0% to a record $106.4 billion in April.

Imports rose 4.1% to a record $163.4 billion, mostly as a result of record crude oil prices.

Imports of goods alone rose 4.8% to $136.7 billion. U.S. businesses bought a record amount of industrial supplies- mostly petroleum- and capital goods. The U.S. imported $19.4 billion of crude oil in April, the second highest amount on record.

<snip>

The U.S. trade deficit with China widened to $14.7 billion in April compared with $12.0 billion in the same month last year. Imports of Chinese textiles, a contentious political issue this year as global quotas on textile products have ended, are up 51.7% year to date, the department said.

...more at link...

[UpInArms]

16. U.S. May import prices fall 1.3% - export prices fall 0.1%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38513.3542643981-836547894&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) - Led by a drop in crude oil prices, the prices of imported goods fell 1.3% in May, the first decline since December, the Labor Department said Friday. Imported oil prices sank 6.5%, while prices of other imports fell 0.3%. It's the first decline in non-oil import prices since October. Export prices also fell in May, dropping 0.1%. Excluding agricultural goods, export prices fell 0.4%. Import prices are up 5.7% in the past 12 months, down from the 8.7% year-over-year gain in April. Economists were expecting import prices to fall 0.2% in May.

[UpInArms]

7. Mittal Steel plans 700 layoffs amid outage

http://www.reuters.com/newsArticle.jhtml?type=electionsNews&storyID=8748562

SAN FRANCISCO (Reuters) - Steelmaker Mittal Steel (MT.N: Quote, Profile, Research) said on Thursday it would lay off about 700 employees at its plant in Weirton, West Virginia, because market conditions that spurred an original outage have not improved.

The company estimated the conditions would spur a continued outage lasting 8 to 10 weeks, based on its current outlook. A small crew will stay on to keep the ironmaking and steelmaking equipment ready for a quick return, the company said.

...very short newsblurb...

[UpInArms]

8. China's strong May exports fuel huge surplus

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-06-10T093515Z_01_PEK29574_RTRIDST_0_ECONOMY-CHINA.XML

BEIJING, June 10 (Reuters) - China posted another big
monthly trade surplus on Friday, with surging exports likely to
fuel criticism from the United States and others that Beijing
should let its currency rise in value.

The May surplus was $8.99 billion, almost double April's
$4.6 billion and the largest monthly surplus this year. It was
much larger than the median forecast of $6.2 billion in a
Reuters survey of six economists.

"This is again just going to fuel the clamour over surging
exports to the United States and Europe," said Tim Condon, head
of Asian research at ING in Singapore.

<snip>

China has until Saturday to agree to curb the rise in
exports of T-shirts and flax yarn to the European Union to 7.5
percent compared with the previous year, or face the imposition
of temporary quotas on these products within days.

Some of China's trading partners, in particular the United
States, have said that Beijing must allow the yuan, also known
as the renminbi, to rise in value because the current peg of
8.28 to the dollar is too low and makes China's exports much
cheaper than they would if the currency floated freely.

"The pressure on the renminbi is getting bigger and bigger,
and the rising trade surplus is providing evidence for critics
in the United States and Europe," said Xiao Minjie, an
economist at the Daiwa Institute of Research in Shanghai.

...more...

[54anickel]

47. 8.99 B-B-B-Billion!!! Holy T-shirt Batman!!! I see they are still tying

it to the Yuan peg :eyes:

[UpInArms]

9. Pentagon/Boeing Tanker Scandal

http://www.oregonlive.com/news/oregonian/david_sarasohn/index.ssf?/base/editorial/111839762317620.xml&coll=7


Tuesday, the Senate Armed Services Committee held a hearing on a $23.5 billion Pentagon deal to lease tankers from Boeing, a deal that has already sent two people to jail and was described by a Pentagon auditor as the dirtiest he'd seen in 33 years on the job. Somehow, the report from the Pentagon auditor general made no mention whatsoever of the people who were running the Defense Department at the time, Secretary Donald Rumsfeld and Deputy Secretary Paul Wolfowitz.

"You found nothing in your interviews with the secretary of defense and the deputy secretary of defense that was relevant to this report?" asked committee chairman John Warner, R-Va., in what the Chicago Tribune called "a surprised tone."

But the surprise is that anyone would be surprised.

For the past five years, Donald Rumsfeld has achieved a steady record of disaster without responsibility.

Rumsfeld's ability to parachute out the back of the tanker scandal is particularly striking because former Air Force Secretary James Roche told investigators the secretary ordered him to back the idea: "He did not want me to budge on the tanker lease proposal."

...more...

[54anickel]

48. So, where's the MSM on this one? Out to lunch like they are on every

other freakin' story that shows how corrupt and just plain evil the BeelzeBush administration is.

Wake up America, the clock is ticking closer and closer to the point of no return.

[UpInArms]

10. Tuesday, the Senate Armed Services Committee held a hearing on a $23.5 bil

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38513.3250519792-836546420&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Citigroup (C) said Friday it has agreed to pay $2 billion to settle a class action suit brought by Enron stock and bond holders who had sued the company for its role as banker and adviser to the bankrupt energy giant. Citi said it will pay the amount from existing litigation reserves and does not plan to adjust those reserves, which it said are adequate to meet all its remaining exposure to additional pending Enron and research-related cases. Citigroup shares fell 7 cents to close at $47.68 on Thursday.

[UpInArms]

11. Silicon Image: auditor PricewaterhouseCoopers resigns

http://www.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7B0D4788CE-9A99-4120-B372-81B81D9E4F0A%7D&

LONDON (MarketWatch) -- Silicon Image Inc. (SIMG) said that it has filed a Form 8-K with the Securities and Exchange Commission notifying that PricewaterhouseCoopers LLP has resigning as the company's independent registered public accounting firm, effective immediately. The company said that, as of March 31, 2005, a material weakness in internal controls over financial reporting existed due to the fact that the oversight of the company's control over financial reporting by the Company's Audit Committee was ineffective after the resignation of four of the five independent members of the company's board of directors. Additionally, the sole remaining member of the Audit Committee was not a "financial expert," the company said.

[UpInArms]

12. Pension deficit may hit $71 billion

http://www.detnews.com/2005/business/0506/10/B03-211024.htm

Federal officials expect the shortfall will swell in 10 years because more firms are shedding promise of benefits. With shortfall currently at $23.3 billion, Fed expects it will inflate in 10 years due to firm's ending obligations.

WASHINGTON -- The federal agency that insures worker pensions could see its deficit balloon to $71 billion in the next decade, but a pair of House chairmen say they believe they can help prevent that crisis.

The Pension Benefit Guaranty Corp., which already has a $23.3 billion deficit, could face a threefold increase because companies like United Airlines are shedding their pension obligations in bankruptcy court, Congress' top budget analyst said Thursday. At the same time, the premiums businesses pay for the insurance have not kept pace with claims.

Douglas Holtz-Eakin, director of the Congressional Budget Office, told the House Budget Committee on Thursday that current premiums would have to be increased fivefold to cover the projected deficit, which he acknowledged was based on a model for such projections that is still under development.

"PBGC often reports that plans that appeared to be well-funded prior to termination turn out to be deeply underfunded when they are transferred to the agency," said a statement Holtz-Eakin submitted to the committee.

...more...

[AnneD]

44. This is a time bomb

a sleeper issue. I have been doing some reading into the hx of Social Security and pensions. Seems the political leaders were pissing in their pants at the time of the Depression that we would go socialist or worse and the SS was founded. I venture to say those phony baloney unemployment numbers are going to catch up with them. We will have a hell of a lot of suprised politician to go with those suprised economists. I can assure Washington and esp Wall St that should the pension situation not be addressed soon, all hell will break loose. They are messing with the future retirement security of too many hard working citizens. Wall St may wind up dealing with some serious things (I like to bandy the 'Nationialize' word-hey we privitize, we sure as hell can nationalize...it IS a 2 way street afterall). OK maybe nationalize may not fly but regulations sure will.

[54anickel]

49. I don't think there will that many surprised politicians - they may ACT

surprised, but most of them know damned well what's goin' on, they are on the payroll of the big corporations, banks and their lobbyists. Look how many freakin' Dems voted for that piece of shit bankruptcy legislation...

On a side note - got a newsletter from the folks at Vanguard the other week and the top article was "The new retirement". Here's a snippet - that re-edumacation at work again. Gotta get Murikans to just accept this new reality.

For years, American workers were retiring earlier. The average retirement age fell from 68 in 1950 to 63 by 2000.

But the trend towards earlier retirement is coming to a halt, according to researchers at Boston College, and now seems to be reversing. A new type of retirement is taking root.

Earlier generations of retirees typically had 3 sources of income to draw upon: a private pension, Social Security and their retirement plan savings. But fewer of today's workers are covered by pensions--and we've all been hearing about Social Security's long-term uncertainties.

As a result, today's workers will need to be more creative to afford retirement. Mnay baby boomers intend to work longer, or retire and then launch a part-time career. Others may sell their home and spend their home equity in retirement. (They got any left?) :eyes

snip to the "good stuff">

Vanguard's latest research suggests that workers making $25,000 should save 14% of their income for retirement. But those making $50,000 should save even more -- 17%.

Why should savings rates rise with income? A main reason is Social Security. Founded in 1935 to protect Americans against a poverty-ridden retirement, Social Security pays less to higher-income earners, so more must come from savings.

There's a foot note that expands on that last claim a bit to add "on a percentage basis". Well DUH!

Meanwhile, they've got Mr.$50,000 feeling like he's getting ripped off and just chomping at the bit for BeelzeBush's privatization gimic.

Hey, Mr. 30-something, $50K a year - how long you think you're gonna be making that kind of money with the global imbalance we're feeding daily? The only way that imbalance is going to be remedied as for the US standard of living to drop, while the other side of the scale is allowed to rise. But go ahead, vote and back yet another scheme that is against your own best interest. :eyes:

[UpInArms]

13. U.S. 10-Year Notes Fall for 3rd Day, Longest Slump Since March

http://www.bloomberg.com/apps/news?pid=10000103&sid=aOWiX1Cd7jek&refer=us

June 10 (Bloomberg) -- U.S. 10-year Treasuries fell for a third day, their longest slump since March, amid speculation yields near their lowest in 14 months don't reflect prospects for U.S. economic growth.

Federal Reserve Chairman Alan Greenspan said yesterday the economy is on a ``firm footing'' and policy makers may keep the ``measured'' stance of raising rates. Economists have lifted their forecasts for U.S. growth, a Bloomberg monthly survey shows, helping diminish demand for government bonds.

``The market is getting a little more excited about rate hikes,'' said Sarah Luetgert, a fixed-income strategist at WestLB AG in Frankfurt. ``People were cautious ahead of Greenspan as they were worried he might say something a little dovish and he didn't, so we've seen bonds drop.''

The benchmark 4 1/8 percent note due May 2015 fell 1/8, or $1.25 per $1,000 face amount, to 101 9/32 at 7:40 a.m. in New York, according to Cantor Fitzgerald LP. The yield rose 2 basis points, or 0.02 percentage point, to 3.97 percent. Luetgert forecasts the 10-year yield at 4.7 percent by year-end.

<snip>

``Greenspan caused some people to temper some of their bullish views on Treasuries,'' said Steve Mansell, an interest- rate strategist at Banc of America Securities in London. ``The Fed is going to keep hiking rates at a measured pace which means at least another two more rate increases.''

...more...

[UpInArms]

18. Mass. pension fund: No new money to Fidelity

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38513.3578979051-836548251&siteID=mktw&scid=0&doctype=806&

BOSTON (MarketWatch) -- The Massachusetts pension fund will send no new money to Fidelity Investments while the firm is under investigation in a gift-giving probe, State Treasurer Timothy Cahill told the Associated Press Thursday. The board that oversees the $36 billion fund also decided it will not tap Fidelity while the fund increases its exposure to high-yield debt, not because of the ongoing investigations, but because the Boston-based firm doesn't manage the appropriate debt. Cahill told the AP the board of the Mass. pension fund will await the outcomes of the probes before deciding to send new money to Fidelity.

[UpInArms]

19. Treasury prices fall slighly after in-line trade gap

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38513.3639554514-836548522&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) - Treasury prices fell slightly early Friday, pushing yields a little higher, after the Commerce Department reported that the trade gap widened 6.3% in April to $57.0, roughly in line with the estimate of economists polled by MarketWatch. Exports rose 3.0% to a record $106.4 billion in April. Separately, the Labor Department said prices of imported goods fell 1.3% in May, the first decline since December; economists had expected a decline of just 0.2%. The yield on the 10-year Treasury rose to 3.985% from 3.980% before the news.

[54anickel]

50. UIA, how much of that May decline in import pricing is attributable

to the rise in the buck? Yeah, I know they point to the drop in oil, but isn't it really the "wind beneath the wings" of the buck? (which will subside again one of these days).

[UpInArms]

20. pre-opening blather

briefing.com

9:15AM: S&P futures vs fair value: +3.1. Nasdaq futures vs fair value: flat.

9:00AM: S&P futures vs fair value: +3.5. Nasdaq futures vs fair value: flat. No real change in sentiment, as futures trade indicates a stronger start for blue chips than for technology stocks... Dow components in focus include DuPont (DD), which has been added to JP Morgan's Focus List, while Altria (MO) could get a boost following upbeat comments from Smith Barney... Also, reports suggest that the UAW has voted to help GM reduce its spiraling employee health care costs while Citigroup (C) has agreed to pay $2.0 bln to settle Enron investors' claims

8:33AM: S&P futures vs fair value: +3.3. Nasdaq futures vs fair value: flat. The April Trade Deficit widens to $57.0 bln, but checks in slightly below expectations of $58.0 bln and below Feb.'s record $61.0 bln figure... As a result, futures trade improves somewhat but still indicates a mixed open for the indices, while the dollar has reversed course, strengthening against the euro and yen... Bonds, however, have held relatively steady, as the 10-yr note is still off 7 ticks yielding 3.97%

8:00AM: S&P futures vs fair value: +2.8. Nasdaq futures vs fair value: flat. Futures market versus fair value suggesting a mixed open for the cash market amid some consolidation following Intel's raised guidance ahead of economic data... While the analyst community remains positive on Intel (INTC), after it raised Q2 revenues to $9.1-9.3 bln, the fact that INTC shares have surged nearly 25% over the past seven weeks has tempted investors to lock in some profits...

ino.com

The June NASDAQ 100 was slightly higher overnight as it consolidates above support marked by the 20-day moving average crossing at 1532.32. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 1532.32 would open the door for a possible test of the 38% retracement level of the April-June rally crossing at 1508.22 later this month. The June NASDAQ 100 was up 1.50 pts. at 1539 as of 5:36 AM ET. Overnight action sets the stage for a steady to higher opening by the NASDAQ composite index later this morning.

The September S&P 500 index was higher overnight as it extends Thursday's short covering rebound. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. If September renews this spring's rally, the reaction high crossing at 1219.30 is the next upside target. Closes below Thursday's low crossing at 1196.30, which coincide with support marked by the 20-day moving average would signal that a short-term top has been posted. The September S&P 500 Index was up 2.10 pts. at 1208.20 as of 5:43 AM ET. Overnight action sets the stage for a steady to higher opening when the day session begins later this morning.

[ozymandius]

21. I heard a whore on the radio this morning talking about Google.

I didn't catch his name. He spoke of how Google is this wunderkind of the Internet age as part of some vacant estimation of its worth in the coming months. He says that there is no reason why it could not go to $400/share - or even higher.

How many times have I heard this line?

[hatrack]

26. "Some people" say it's different this time . . . .

Some things never change.

[AnneD]

32. Yes....

they all say that just before they pick your pocket. Until they make real market changes, cash is my position.

[punpirate]

28. That was James Stewart...

... of Smart Money magazine:

http://www.npr.org/templates/story/story.php?storyId=4697519

Loved the bit about 100:1 (and higher) PEs being of no consequence....

:shrug:

[54anickel]

51. Heh-heh, the guy at the place I was working at this AM was on the horn

placing an order for another 300 shares of it. Guess he heard the same thing or saw it on Yahoo's Finance page (was up on his screen).

[54anickel]

52. Google stock soars Shares hit $287.23 after bullish analyst raises

target price

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2005/06/02/BUG7LD1PC327.DTL&type=tech

Google Inc.'s shares soared to a new high Wednesday after an analyst raised his price target to $350, citing the continued strength of the company's business.

The Mountain View search engine's shares closed at $287.23, up $9.96, or 3.6 percent.

Heath Terry, an analyst for Credit Suisse First Boston, raised his 12- month price target to $350 from $275 after Google's stock exceeded his previous prediction.

In a research note, he said, "We believe shares have further to go, given the momentum in the company's core advertising business, the growing impact of new businesses like Gmail, Froogle and Local, and a valuation that, relative to the company's growth rate, is far from stretched."

Google's shares are trading at 42 times Terry's estimated 2006 earnings for the company. In contrast, online portal Yahoo is trading at 55 times its estimated 2006 earnings while Internet auctioneer eBay is trading at 37 times its estimated 2006 earnings, Terry said.

more...

Google, Yahoo Seen Boosted by Ad Surge

http://news.yahoo.com/news?tmpl=story&u=/ap/20050610/ap_on_hi_te/google_yahoo_2

NEW YORK - Shares of Internet search rivals Google Inc. and Yahoo Inc. (Nasdaq:YHOO - news) rose Thursday, helping to lift the broader technology sector after an analyst report suggested that total online advertising could reach $12.4 billion this year.

The two companies are expected to benefit from strength in search advertising, which is generated when Web users type in certain keywords. A report from Merrill Lynch & Co. projects search advertising will generate about $5.6 billion this year — then more than double to $12.3 billion by 2009.

Investors moved into both Google and Yahoo shares, making technology stocks one of the overall market's main drivers. Google shares rose $5.69, or 2 percent, to $285.25 in afternoon trading on the Nasdaq, while shares of Yahoo jumped 81 cents, or 2.2 percent, to $37.44.

For the most part, analysts pin surging online advertising on one thing — the growth of high-speed Internet connections.

"We continue to believe that broadband growth is driving Internet traffic growth," said Merrill Lynch analyst Lauren Rich Fine. "Especially with recent discounts by broadband providers, we believe this will drive more users online or to simply switch from dial-up connections to high bandwidth connections."

more...

[ozymandius]

54. Whaaa.... Are these buyers borrowing money? Are they buying on margin?

Who could afford to buy this stock if PE is so out of whack?

[54anickel]

56. HA! Guess Google's 42 looks like a bargain next to Yahoo's 55!...It's

gotta be that herd mentality again. How often do you see a lone lemming?

[ozymandius]

64. Not that often. They get scolded for not plummetting to their deaths.

[54anickel]

66. SNARF!!!...eom

[ozymandius]

22. markets are open for giving people the bidness

9:34
Dow 10,518.32 +15.30 (+0.15%)
Nasdaq 2,073.51 -3.40 (-0.16%)
S&P 500 1,201.40 +0.47 (+0.04%)
10-Yr Bond 39.94 +0.29 (+0.73%)
NYSE Volume 40,397,000
Nasdaq Volume 56,819,000

[ozymandius]

24. numbers and blather

9:59
Dow 10,518.61 +15.59 (+0.15%)
Nasdaq 2,068.84 -8.07 (-0.39%)
S&P 500 1,201.20 +0.27 (+0.02%)
10-Yr Bond 39.95 +0.30 (+0.76%)
NYSE Volume 196,546,000
Nasdaq Volume 215,227,000

9:40AM: Stocks open mixed, in line with futures indications, amid concern that the recent rally in stocks is outpacing the outlook for profit growth... Last night, Intel (INTC 27.30 -0.40) raised its Q2 revenue forecast to $9.1-9.3 bln, compared to a previous range of $8.6-9.2 bln, due to ongoing strong demand for notebook products, and increased gross margin expectations... However, with INTC shares up sharply in recent weeks, it appears the good news may already be discounted in the stock...

Perhaps also restraining the market is the possibility that earnings warnings could pick up over the next couple of weeks heading into the end of quarter...

[ozymandius]

30. Greenscam's gotta be loving these numbers (sic)

11:10
Dow 10,503.61 +0.59 (+0.01%)
Nasdaq 2,064.53 -12.38 (-0.60%)
S&P 500 1,198.30 -2.63 (-0.22%)
10-Yr Bond 40.04 +0.39 (+0.98%)
NYSE Volume 533,306,000
Nasdaq Volume 509,109,000

11:00AM: Blue chip indices continue to fluctuate around the unchanged mark, as investors continue to weigh rising bond yields and a sell-off in technology against a much improved sentiment in, of all areas, Automotive... An 11.0% surge in shares of General Motors (GM 35.30 +3.49), which are now up nearly 30% from mid-April lows, has been the driving catalyst, providing a boost to rival Ford Motor (F 10.77 +0.75) and several auto suppliers such as DPH (+7.6%), VC (+5.4%), LEA (+2.7%), JCI (+2.3%) and DCN (+1.7%)...NYSE Adv/Dec 1347/1560, Nasdaq Adv/Dec 1134/1480

[ozymandius]

31. afterthought

I wonder if GM is participating in a buyback of its stock to boost investor "confidence".

[AnneD]

33. how much confidence can you have....

if they equate your stock to 'junk bond' status (ouch). You know, if more people had living wage jobs (and GM stopped pushing SUV's so much), maybe they could afford a new or newer car. I know my car is long in the tooth and I would love to get a newer one but not for a while longer.

[ozymandius]

35. 11:29

Dow 10,504.79 +1.77 (+0.02%)
Nasdaq 2,065.03 -11.88 (-0.57%)
S&P 500 1,198.57 -2.36 (-0.20%)
10-Yr Bond 40.18 +0.53 (+1.34%)
NYSE Volume 610,144,000
Nasdaq Volume 567,103,000

[ozymandius]

36. all red with blather

Dow 10,498.29 -4.73 (-0.05%)
Nasdaq 2,062.60 -14.31 (-0.69%)
S&P 500 1,197.50 -3.43 (-0.29%)
10-Yr Bond 40.11 +0.46 (+1.16%)
NYSE Volume 678,266,000
Nasdaq Volume 625,358,000

11:30AM: Little changed since the last update, as the absence of spirited leadership from a number of influential sectors continues to weigh on the proceedings... Providing much of the pressure on stocks have been losses across most areas of technology... While a 1.6% drubbing in the Semiconductor has weighed most heavily on the sector, losses in Networking and Hardware have also weakened sentiment...

The former has been under pressure following the unexpected resignation of Nortel Networks' (NT 2.57 -0.24) President and COO while reports that Microsoft will offer a subscription music service to compete against Apple Computer's (AAPL 36.30 -1.35) iTunes has left the latter trading lower... NYSE Adv/Dec 1418/1543, Nasdaq Adv/Dec 1236/1463

[gratuitous]

37. Excellent cartoon

New background on my desktop.

[ozymandius]

38. Thank you. n/t

[ozymandius]

39. Looks like they got their toilet fixed.

12:29
Dow 10,465.05 -37.97 (-0.36%)
Nasdaq 2,056.78 -20.13 (-0.97%)
S&P 500 1,193.98 -6.95 (-0.58%)
10-Yr Bond 40.10 +0.45 (+1.13%)
NYSE Volume 819,869,000
Nasdaq Volume 759,056,000

12:00PM: Market remains under pressure midday, as widespread consolidation - spurred largely by a sell-the-news reaction to Intel's raised guidance - offsets a smaller than expected trade deficit... Earlier, investors sifted through a report that showed the U.S. trade balance widened to -$57.0 bln in April, slightly less than the -$58.0 bln economists anticipated, as the prior month's figure was revised lower (to -$53.6 bln from -$55.0 bln) to reflect a narrower than expected deficit in March...

However, even though the improving trade data provide an optimistic start to Q2 GDP growth, Treasurys sold off for the third straight day, as yields on the benchmark 10-year note (-16/32) surpassing the psychological 4.0% level for the first time since late May have weakened overall sentiment... Meanwhile, Technology has paced the way lower, due largely to aggressive profit-taking in chip stocks...

While the analyst community remains positive on Intel (INTC 26.84 -0.86), after it raised Q2 revenues to $9.1-9.3 bln yesterday, the reality that INTC shares - along with several other chip makers - have surged over the past several weeks, has been too enticing for investors to hold such issues over the weekend... Reports that Microsoft plans to offer a competitive subscription music service to Apple Computer's (AAPL 36.14 -1.51) iTunes and the unexpected resignation of Nortel Networks' (NT 2.58 -0.23) President and COO have also weigh on technology... Financial, Health Care and Industrials have also been influential leaders to the downside... The Materials sector, however, has paced the way higher, benefiting largely from a 2.4% surge in DuPont (DD 47.44 +1.09), which has been added to JP Morgan's Focus List...

[ozymandius]

41. updated blather

12:30PM: Bearish bias persists in stocks as the major averages extend their reach into negative territory... Even though oil prices have recently turned negative and fallen below $54/bbl, the lack of leadership in Energy (-0.6%) - which has comprised one of the few pockets of strength for the broader market - has weakened the overall tone of trading... Exacerbating the recent spike lower has been a failure by the Dow, S&P and Nasdaq to find support near key technical levels of 10480, 1198 and 2067, respectively... NYSE Adv/Dec 1366/1714, Nasdaq Adv/Dec 1194/1601

[54anickel]

55. Heh, nothing about not wanting to hold stocks over the week-end? That's

been the usual blather on a down Friday. :shrug:

[AnneD]

46. Remember Ozy

in the words of a Scottish starship engineer from the future..."the more complicated the plumbing, the easier it is to stop up the drain"

[Tace]

40. Something Happened At Noon That Gold Likes

[ozymandius]

42. piehole?

[Tace]

43. Dang, You're Probably Right : )

[54anickel]

63. Comex Gold Bounces To Close Higher (hit 350 EU)

http://www.futuresource.com/news/story.jsp?i=i4569039729225105472

1747 GMT Comex gold overcame early weakness, surging sharply late in the day when the cash market climbed above 350 euros. This was an important psychological level that the market had been eyeing for some time, explains Bernard Hunter, director of precious metals for Scotia Mocatta. Stops were triggered as the market rallied. August gold settled up $3.20 to $429.30. July silver recouped early weakness to finish with a 1.8-cent gain to $7.288. (ALS)

[ozymandius]

53. 2:37

Dow 10,473.39 -29.63 (-0.28%)
Nasdaq 2,059.97 -16.94 (-0.82%)
S&P 500 1,194.89 -6.04 (-0.50%)
10-Yr Bond 40.30 +0.65 (+1.64%)
NYSE Volume 1,190,347,000
Nasdaq Volume 1,053,694,000

2:00PM: Buyers show some modest late-day tenacity, paring blue chip losses, but it is not enough to lift the indices above the flat line... On the Dow, Intel (INTC 26.93 -0.77) has paced the way lower with a 2.7% decline while weakness from the likes of UTX (104.68 -1.26), CAT (96.75 -0.70), MMM (75.63 -0.55), IBM (74.41 -0.52) and MO (68.85 -0.40) continue to pressure the price-weighted index...

General Motors (GM 34.12 +2.31), however, continues to be the standout to the upside while DuPont (DD 47.51 +1.16) - now JP Morgan's best large-cap idea in the Chemical space - and an analyst upgrade on Hewlett-Packard (HPQ 23.00 +0.24) have helped minimize losses... NYSE Adv/Dec 1443/1692, Nasdaq Adv/Dec 1271/1613

[54anickel]

57. DSP- Data, Statistics and Psychology

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=43695

A few years ago, an evening discussion about the stock market valuation methods led a friend of mine to remark that all human phenomena can be explained by the two ‘S’s, Statistics and Psychology<1>. However, to comprehend the behaviors of the markets, a distinction has to be drawn between what statisticians call “raw data” and what is massaged and reported as “official” government statistics. This article uses the Consumer Price Index (CPI) report and the Employment Situation Summary report issued by the government to illustrate the way data experienced by individuals is transformed into “official” statistics that are then purported to drive market psychology and result in observed actions in the financial markets.

snip>

Positioning the Data

Excerpts from the Minutes of the Federal Open Market Committee, May 3, 2005.

snip>

“A third factor determining inflation is long-term inflation expectations. If inflation expectations are well anchored, in the sense that the public has confidence that inflation will remain low in the long run, the central bank's task of actually keeping inflation low becomes easier…… Of course, the benefits that flow from well-anchored inflation expectations make keeping inflation low (and thus validating those expectations) all the more important.”

- Remarks by Fed Governor Ben S. Bernanke at a Finance Committee luncheon of the Executives’ Club of Chicago, Chicago, Illinois, March 8, 2005.

Psychology:

Despite the Federal Reserve raising the federal-funds rate eight times to 3% during the past year, the yield on the benchmark 10-year bond is around 3.95%, down from about 4.7 percent a year ago. The “200%” rate hike since May 2004 is cited as a reason for the bond market pricing in low inflation expectations, resulting in an end to rate hikes and the possibility of rate cuts next year. Wall Street’s consensus estimates call for GDP growth of around 3.7% for 2005 with “overall” inflation around 2.4%. and unemployment at 5.1%. This has created a bullish view for equities, fixed assets, and the housing markets.

Historical data suggests that politicians tend to exaggerate a little. It is therefore no surprise that any government run by politicians tends to slightly “adjust” the truth to suit the politicians. When folks who are entrusted with other people’s money (like fund managers) and the mass media who are entrusted with people’s time and an obligation to ‘educate’ buy into the official statistics without questioning it is cause for concern.

more...

[54anickel]

58. Is Greenspan trying to cool housing market?

http://www.msnbc.msn.com/id/8160947/

Federal Reserve Chairman Alan Greenspan left little doubt Thursday that the central bank intends to continue pushing short-term rates higher. One major reason could be that Greenspan wants to do everything within his power to remove what he calls “froth” from some of the nation’s booming housing markets.

In testimony before a joint House-Senate committee Thursday, Greenspan reiterated that he is puzzled by the decline in long-term interest rates, which has seen rates for traditional 30-year mortgages slide to their lowest levels in more than a year. Such low mortgage rates are buoying the housing market, sending home prices surging at a 12 percent annual rate, according to one recent government report.

Greenspan and the Fed have little control over these fixed mortgage rates, which are pegged to movements in the massive global bond market. But the Fed does have a powerful influence over one important segment of mortgage rates through its control of short-term bank lending rates.

“The only part of the mortgage market that the Fed has control over is adjustables,” said Vince Boberski, senior economist at RBC Dain Rauscher.

Is THAT why the little weasel was pushing ARMs last year? Without a larger percentage of these gems out there they would have ZERO control? :shrug:

snip>

By continuing to raise short-term rates, the Fed can reduce the differential between such relatively risky loans and higher-quality, fixed-rate mortgages, Boberski said.

“It’s a way for them to let some air out of the housing market,” Boberski said.

more...

[ozymandius]

62. I remember Krugman dressed him down on ARM promotion.

Reading the writing on the wall - Krugman forked over some cash to convert his own mortgage from an ARM to fixed.

Control looks to be one motivator with boosting this awful plan. The other motivator is providing liquidity. If people cannot extract equity - in essence, eat their house - then spending comes to a screeching halt. Consumerism must be maintained to provide cover for the myriad harmful fiscal policies that Greenscam has endorsed.

The Fed has only limited control over mortgage rates. That is primarily achieved by the language Greenscam uses when waxing fairy tales about the economy. Notice how recent adjustments in the overnight lending rate hasn't motivated mortgage lenders to adjust their rates much. The 10-year note has often served as a benchmark for the 30-year mortgage. Yet recent months have seen little variance in the standard 30-year mortgage rate versus the wild fluctuations in the 10-year treasury note.

Greenscam must keep jabbering his verbal froth so that markets will not get spooked from the real direction the economy is taking.

[54anickel]

65. Greenspan versus the bond market

http://www.kitco.com/weekly/paulvaneeden/jun102005.html

snip>

Since June last year the Federal Reserve has raised its short-term interest rate target from 1% to 3% while at the same time ten-year Treasury rates have declined from 4.7% to less than 4%. This flattening of the yield curve is what many are calling the “bond market conundrum”.

Whenever long-term interest rates fall below short-term interest rates (referred to as an inverted yield curve) there is a good chance that a recession is ahead. Greenspan, however, does not believe falling long-term interest rates indicate economic troubles ahead. Federal Reserve Officials are upbeat on the economic outlook and Mr. Greenspan stated that even if the yield curve did invert they would “not automatically assume it will mean what it meant in the past” -- meaning that he does not think an inverted yield curve implies the economy will slow down.

The chief economist for Manufacturers Alliance/MAPI, a public policy group in Arlington Virginia, recently stated that the rate of manufacturing growth is decelerating virtually across the world. I look at the US auto industry and note that US auto sales fell 8% in May compared to a year ago. We know General Motors will eliminate 25,000 jobs; how many other manufacturing jobs are at risk?

Back in the Nineties, several currency crises caused massive international capital flows that distorted exchange rates and affected various financial sectors including US bonds and stocks (see “The Greater Depression” in the Commentary Section of my website: www.paulvaneeden.com, dated January 30, 2004).

Those imbalances caused, and continue to cause, misallocations of capital that must be reversed before real, sustainable economic growth will be possible.

I believe we will experience a severe recession while these imbalances are corrected, and until then the best we can hope for is to muddle along as we have been doing lately.

more...

[ozymandius]

59. 3:12 - Yikes! bonds are getting thrashed

Dow 10,495.26 -7.76 (-0.07%)
Nasdaq 2,063.47 -13.44 (-0.65%)
S&P 500 1,197.16 -3.77 (-0.31%)
10-Yr Bond 40.41 +0.76 (+1.92%)
NYSE Volume 1,323,319,000
Nasdaq Volume 1,170,630,00

[54anickel]

61. WTF is that about? And look at the buck soar!!!!

Last trade 88.73 Change +0.66 (+0.75%)

Settle 88.07 Settle Time 23:36

Open 87.99 Previous Close 88.07

High 88.74 Low 87.90

[54anickel]

60. Do China and U.S. Face Same Woes?

http://www.nytimes.com/2005/06/10/business/worldbusiness/10norris.html?

snip>

Millions of people rely on the companies for more than jobs. They have promised to provide the most basic of needs, including health care and old-age pensions. If they are allowed to fail, the costs could be large.

So it is today in China - and in the United States. It is remarkable that two major economies have followed such very different paths to get to such similar problems.

In China, the problem lies in the old state-owned industries. Communist China gave those companies all the social responsibilities that governments have in the West, and gave them the right to borrow what they needed at state-owned banks. Now post-Communist (in reality if not in name) China must deal with the residue. It hesitates to close those money-losing operations, and papers over the problems by forcing the banks to keep making loans.

In the United States, the problems are with pensions and health care costs, both of them traditionally paid by employers. General Motors, having announced plans to cut employment by 25,000 workers, is trying to get unions to let it cut benefits, but what it really wants is to shift some of what it calls "legacy costs" - pension and health benefits for retired workers - to the government.

snip>

There are many differences between the problems faced by China and America, of course, but perhaps one stands out. China is accumulating money that could be used to meet those obligations, while the United States is going deeper into debt.

more...

[54anickel]

67. Federal Budget Deficit will be Unsustainable (WILL be?)

http://www.kitcocasey.com/displayArticle.php?id=148

The US budget deficit is at record levels and is expected to expand even more as the War on Terror continues and the baby boomers born just after WWII all retire together. This deficit is so big that government borrowing will affect the whole economy. There are three general approaches to meeting these growing government expenditures: 1) Raise taxes, 2) Borrow money, or 3) Use the Fed to print money. Raising taxes is extremely unpopular and therefore less likely that the other two, which will raise interest rates and inflation. The following analysis shows how big the deficit is and how it may affect interest rates, inflation and the value of the dollar. My conclusion is that the deficit is a short term fix for the economy by providing money for consumers to spend, but that it plants seeds of longer term inflation that will be hard to control.

The accumulated Budget Deficit is rising faster than the economy

The US government spent $412B more than it collected last year. Below I show below the total accumulated debt of the Federal government:



There is an upward shift in the debt after 2001. For a more detailed look at the source of the shift, we can see the policy shift of increasing deficits that occurred after 2001 more dramatically in the annual chart below. The four tax cuts, slowing economy and the expanded cost of war contributed.



Government accounting is more elaborate than these graphs show because there are several views of what should be included in the definition of this deficit. The above charts show the increase in debt assuming that the money in Trust Funds, for example for Social Security, are a debt to the government, so last year’s increase in government debt was $600B. With the more commonly quoted view that the Trust Funds don’t really need to be included, so that the money in them has been spent as part of current accounting, the deficit is quoted as $412B for 2004. Neither view is right or wrong, but it is important to know what is included in the number discussed.

The reason for the big shift back to deficit has more to do with tax cuts than spending increases as seen in the chart below that tracks both. The blue line of tax receipts takes a decided dip, mostly from tax cuts, and some from a slower economy. The pink line shows increasing revenues from defense spending, but to a lesser extent. The bottom red line shows the difference between the first two lines as the deficit. The projection of future years shows an improvement in the deficit that might be optimistic.

much more...(Yikes!)

[54anickel]

68. G8 finance ministers look to strike debt relief deal

http://news.yahoo.com/s/afp/20050610/bs_afp/g8economygrowth_050610094808;_ylt=AqR3xrx5W5ghtp0DKeA6q3ymOrgF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

LONDON (AFP) - Top finance officials of the Group of Eight industrialized nations will try to clinch agreement on debt relief for the world's poorest countries at a meeting here.

The United States has shown no signs that it will back European methods of writing off the debt, such as selling or revaluing gold reserves and introducing fuel taxes for airlines.

"There is a will to come to an agreement," British Chancellor of the Exchequer Gordon Brown told BBC radio on Friday as he prepared to meet other finance chiefs and central bankers of the world's richest powers -- Britain, Canada, France, Germany, Italy, Japan, the United States and Russia.

The traditional pre-G8 summit finance meeting will attempt to lighten the crippling debt burden under which many impoverished countries are buckling, building enough momentum for a debt relief deal in the run-up to next month's G8 summit in Gleneagles, Scotland. Britain is this year chairing the G8.

British Prime Minister Tony Blair and US President George W. Bush met this week and said they were close to completing their proposal for cancelling 100 percent of debt for the world's poorest countries.

more...

[54anickel]

69. Closing, and a good night to all (need a mop and bucket in treasuries)

Dow 10,512.63 +9.61 (+0.09%)
Nasdaq 2,063.00 -13.91 (-0.67%)
S&P 500 1,198.11 -2.82 (-0.23%)
10-Yr Bond 40.47 +0.82 (+2.07%)
NYSE Volume 1,640,786,000
Nasdaq Volume 1,426,081,000

Close: Stocks finished the day mixed, as Intel's raised guidance, a smaller than expected trade deficit and falling oil prices failed to offset surging bond yields and strengthen sentiment, closing virtually every sector in negative territory... Last night, Intel (INTC 27.30 -0.40) raised its Q2 revenue forecast to $9.1-9.3 bln, compared to a previous range of $8.6-9.2 bln, due to ongoing strong demand for notebook products...
However, since INTC shares had surged more than 25% over the last seven weeks, coupled with the observation that several other chip makers (i.e. TXN and NSM) had also ran up into positive news, participants were tempted to lock in some profits heading into the weekend... Meanwhile, the Commerce Dept. showed the U.S. trade balance widened to -$57.0 bln in April, less than the -$58.0 bln economists anticipated, as the prior month's figure was revised lower (to -$53.6 bln from -$55.0 bln) to reflect a narrower than expected deficit in March...

However, even though the improving trade data provide an optimistic start to Q2 GDP growth, Treasurys sold off for the third consecutive session, as yields on the benchmark 10-year note (-24/32) surpassing the psychological 4.0% level for the first time since late May weakened overall sentiment... With regard to sector strength and weakness, Technology led the list of laggards, due largely to aggressive profit-taking in Semiconductor, ... Chip maker LSI Logic (LSI 7.89 +0.28), however, surged raising its Q2 revenue forecast to $465-475 mln, versus a previous range of $450-465 mln, due to strength in storage components...

(link to the "rest of the blather" seems to be broken)


Advances & Declines
NYSE Nasdaq
Advances 1621 (47%) 1420 (44%)
Declines 1609 (46%) 1586 (49%)
Unchanged 198 (5%) 178 (5%)

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Up Vol* 795 (49%) 454 (31%)
Down Vol* 785 (48%) 940 (65%)
Unch. Vol* 40 (2%) 32 (2%)

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New Hi's 144 88
New Lo's 24 35


Have a great weekend! :hi:

[RawMaterials]

70. Cont.. Blather

Weakness in Hardware and Software also contributed to widespread losses, following reports that new Microsoft (MSFT 25.43 -0.08) products for graphic design and downloading music over the Internet weighed on iTunes' operator Apple Computer (AAPL 36.14 -1.51) and Adobe Systems (ADBE 31.13 -1.36)... The unexpected resignation of Nortel Networks' (NT 2.58 -0.23) President and COO also kept tech buyers on the sidelines... Health Care was under pressure, amid profit-taking in HMOs and weakness in Drug stocks, following a Bear Stearns downgrade on GlaxoSmithKline (GSK 49.13 -1.12)... Financial and Industrials were also influential leaders to the downside, losing ground as the jump in rates increased borrowing costs for both consumers and corporations...

Despite a late-day rebound in ExxonMobil (XOM 58.38 -0.06), Energy posted a modest loss as oil prices closed lower (-1.4%) for the first time in three weeks... Crude oil futures ($53.54/bbl -$0.74) relinquished some of yesterday's large gains (+3.3%), as only a 10-15% chance that this year's first tropical storm (Arlene) could become a hurricane prompted traders to lock in profits...

Consumer Discretionary was in focus, but also closed just below the flat line, as reports that the UAW voted to help General Motors (GM 34.51 +2.70) reduce spiraling health care costs was not enough to keep the sector in positive territory... The only economic sectors to close higher were Materials, Telecom Services and Utilities sectors; however, since all three sectors combined only account for 9.6% of the S&P's weighting, neither had much of an influence on the broader market... Despite a strengthening dollar, which typically makes dollar-denominated commodities less attractive, the Materials sector got a boost from DuPont (DD 47.25 +0.90), which is now JP Morgan's best large-cap idea in the Chemical space after being added to their focus list...

The dollar surged to a nine-month high against the euro (1.2121) and more than 1.0% against the yen (108.63) following better than expected trade data for both April and March (revised)... Telecom Services also traded higher, getting a lift after Sprint (FON 24.70 +0.27) and Nextel (NXTL 31.87 +0.26) set July 13 as the date to vote on their $35.0 bln merger... While falling (not rising) bond yields typically make dividend-paying stocks more attractive, Utilities still attracted buyers...

Partly responsible for the sector's solid performance were reports that the source behind a recent leak at a power plant in New Jersey owned by Public Service Enterprise Group (PEG 57.09 +0.86), which is being acquired by Exelon Corp (EXC 49.00 +0.81), has been found... Separately, the May Treasury Budget checked in at -$35.3 bln (consensus -$45.0 bln), the lowest May deficit in four years, but since the data can be predicted with reasonable accuracy, the report went relatively unnoticed...DJTA -0.2, DJUA +0.6, DOT -1.4, Nasdaq 100 -1.2, SOX -1.8, S&P Midcap 400 -0.1, XOI -0.1, NYSE Adv/Dec 1620/1624, Nasdaq Adv/Dec 1420/1586