STOCK MARKET WATCH, Monday 24 July

[ozymandius]

Monday July 24, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 912 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2039 DAYS
WHERE'S OSAMA BIN-LADEN? 1739 DAYS
DAYS SINCE ENRON COLLAPSE = 1700
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 6
Enron execs conveniently deceased = 3
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
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON July 21, 2006

Dow... 10,868.38 -59.72 (-0.55%)
Nasdaq... 2,020.39 -19.03 (-0.93%)
S&P 500... 1,240.29 -8.84 (-0.71%)
Gold future... 620.20 -12.30 (-1.98%)
30-Year Bond 5.10% +0.02 (+0.41%)
10-Yr Bond... 5.05% +0.02 (+0.34%)






GOLD, EURO, YEN, Loonie and Silver


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 Tim W. Wood

THE DOW REPORT
Another Look at the Summer Rally

As the market rallied into the May highs, the cyclical phasing warned that a significant top was likely in the making. I warned subscribers of this top and that the cyclical phasing suggested an intermediate-term low was due in early to mid-June, and that from that low the next intermediate-term cycle advance would begin along with the “Summer Rally.” On June 14th that low occurred, and from that low the market was up and running just as the cyclical phasing had suggested. In the June 30th Market WrapUp I wrote here that the Summer Rally had begun. But, I also stated that I personally had my doubts about the Industrial’s ability to better the May high and based on current data, I still have my doubts as the odds are now against the market.

The advance into the early July top was also expected based on the short-term cyclical phasing as was the decline into the July 18th low, which served to retest the June 14th low. The bounce out of that short-term low is currently still intact and once again the question is: How far will it go? My short answer continues to be that this advance should be a failure because the current cyclical data is not supportive of any advance from here having legs enough to better the May high. Yes, of course this could change. But, until evidence to the contrary develops I can only go with the evidence at hand today.

-cut-

My point here is that the Secondary Trend, according to Dow theory, is in fact, still positive. But when we look at the cyclical phasings combined with the internals, I have my doubts about the longevity of any advance from these levels. I said in January that the first half of the year would see the gain and that the second half would see the pain. Thus far, my 2006 forecast has been right on the mark and I now think the stage is being set for the pain.

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

[ozymandius]

2. nothing scheduled on the financial calendar today n/t

[ozymandius]

3. Oil prices fall in Asian trading

SINGAPORE - Crude oil prices dropped Monday after the Saudi oil minister said OPEC wanted to avoid fluctuating prices and as U.S. Secretary of State Condoleezza Rice traveled to the Mideast to try to find a diplomatic solution to the violence in Lebanon and Israel.

Light, sweet crude for September delivery was down 22 cents to $74.21 a barrel in midafternoon Asian electronic trading on the New York Mercantile Exchange.

September Brent on London's ICE Futures exchange lost 20 cents to $73.55 per barrel.

On Sunday, Saudi Arabian Oil Minister Ali Naimi said the Organization of Petroleum Exporting Countries wanted to avoid "raising prices in a way that might affect the global economy," said.

more

[ozymandius]

4. Gas prices move past $3 to all-time high

CAMARILLO, Calif. - Nationwide gas prices hit an all-time high in the last two weeks, rising nearly 2 cents to just over $3 per gallon, according to a survey released Sunday.

The national average for self-serve regular stood at $3.0150 a gallon Friday, up 1.98 cents in the last two weeks, according to the Lundberg Survey of 7,000 gas stations across the country.

more

[ozymandius]

5. Refineries: The Achilles' heel of US oil industry

NEW YORK (AFP) - Despite record profits, US oil majors have built no new refineries on American soil for 30 years, raising the country's dependence on foreign supplies and making it vulnerable to even small accidents and bad weather.

Standing in Garyville, Louisiana, the Marathon Oil refinery is the most recently built refinery in the United States -- and that was in 1976.

Since then, the number of US refineries in operation has dropped by more than half, from more than 300 in the early 1980s to fewer than 150 today.

And while these refineries' capacities may have increased in recent years through the units' expansion, they still fail to satisfy the voracious appetite of US car drivers and industry for oil.

more

[54anickel]

52. Amazing human tricks

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

snip>

The chart below shows that despite a red line soaring so quickly that it could represent CEO pay, there has been no revolt against higher petroleum prices. Certainly the line has flattened over the last three years, but gas consumption has hardly headed south like it did following the oil price spikes in the late ‘70s.



Now, the Department of Energy will tell you that consumers aren’t completely ignoring high oil prices. In fact, the DOE figures that consumers have cut back on demand a bit. They point this out with two brightly-colored charts showing that consumption would be a couple of percent higher if the trend line for demand would have remained intact since 2002. Still, slower growth in the number of gallons of gas consumed is hardly the same thing as an abrupt reversal in demand, as anyone with a shelf full of Beanie Babies can attest.

snip>

Speaking of Kings of yore, Dell lowered expectations for second quarter results last week and its stock was slammed 10% for the forthrightness. Dell was also hosting its annual meeting where it decided, among other things, against paying a dividend in favor of buying back more stock. This, despite the pleas of a longtime shareholder who regularly attends Dell’s annual meetings. She has made her case so regularly in fact, that she has been dubbed, “The dividend lady.”

But the corporate finance crowd is no fan of dividends, preferring instead to buy back stock, often to soak up shares associated with exercised options. According to Sheryl Jean, a reporter for the St. Paul Pioneer Press who actually does real research on this kind of thing, Standard & Poor 500 companies boosted buybacks in the first quarter by 22% year-over-year. Companies are buying back so much stock that the money they spend on their own shares now far exceeds the total dividends they pay out.

But get this: Jean ran across a 2003 study by the University of Wisconsin and Brigham Young University that found no direct relationship between recent stock performance and repurchases.

A Wisconsin professor, who was one of the authors of the study, told the reporter that stock buybacks "may prove to be nothing more than short-term attempts to mollify shareholders, manage their near-term impressions and longer-term expectations and put executive stock options in the money."

more...

[54anickel]

58. Gas prices bring lifestyle changes

http://www.chron.com/disp/story.mpl/business/4064784.html

snip>

Almost 65 percent of respondents are reducing their entertainment and hobby expenditures because of higher fuel costs. Sixty-four percent are dining out less and 29 percent are choosing fewer extracurricular activities for their children. More than half are cutting back on summer travel, while 29 percent are canceling summer travel plans altogether.

Higher fuel prices may affect the workplace, too. Nearly one-third of respondents said they're considering switching to a job closer to home.

Nearly one-quarter of employers allow their workers to telecommute, while 17 percent are subsidizing mass transit.

More than one of five employers are organizing car pools or shared-ride programs, and 10 percent offer discounted parking to car pool vehicles and motorcycles.

bit more...

[Roland99]

63. Big demographic taking a hit? TEENAGERS.

My daughter's b/f and all of her friends struggle to keep gas in their cars to go places. They go to fewer movies, buy fewer CDs, eat out less at fast-food restaurants.

The domino effect is starting.

[UpInArms]

13. Crude eases on hopes for Mideast solution (@ $73.72 bbl)

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7BC39B3288%2D092F%2D4294%2DB882%2D1D3655FC4BB2%7D&symbol=

NEW YORK (MarketWatch) -- Crude-oil futures eased early Monday on hopes diplomatic efforts to resolve the conflict between Israel and Lebanon will succeed before the violence spreads to any other countries in the region.

Crude for September delivery was last trading down 71 cents at $73.72 a barrel. The contract lost more than 5% of its value last week, falling back from a record above $78 hit the week earlier.

"The situation in Israel/Lebanon remains the key near-term driver of the market as the possibility of a diplomatic solution is weighed against the risk of contagion," said James Neale, analyst at Citigroup in London.

"With effective OPEC spare capacity close to 2 million barrels a day, the threat of an outage from Iran, which produces close to 3.8 million barrels a day, continues to outweigh fundamentals, which point to a well-supplied physical market."

...more...

[UpInArms]

33. September Crude @ $73.80 - Aug NatGas @ $6.37 mln btus

10:01 AM ET 7/24/06 SEPT. CRUDE FALLS 63 CENTS TO $73.80/BRL IN EARLY TRADING

10:01 AM ET 7/24/06 AUGUST NATURAL GAS UP 23.1 CENTS AT $6.37/MLN BTUS

[UpInArms]

36. Energy Firms Seen Posting High 2Q Profits

http://www.topix.net/content/ap/3893981567309794135112515235912319159448?threadid=ULK2A3EI3BTH5GSF

Five of the world's largest energy companies are expected to report combined second-quarter profits next week of more than $30 billion, a bounty fueled by worldwide economic growth and political instability that helped keep oil above $70 a barrel.

The oil industry is braced for a backlash in Washington, where elected officials are concerned about constituents in many parts of the country paying more than $3 a gallon at the pump. But some analysts say companies could face less criticism than usual given the attention focused on Middle East violence.

Whatever the political fallout, the industry has done right by Wall Street's standards. The five oil behemoths releasing quarterly results next week _ BP PLC, ConocoPhillips, Chevron Corp., Exxon Mobil Corp. and Royal Dutch Shell PLC _ earned an estimated $33.6 billion, or 32 percent more than a year earlier, according to analysts surveyed by Thomson Financial.

World oil prices that rose 33 percent, on average, helped drive the earnings growth. On Friday, U.S.-benchmark crude-oil futures were above $74 a barrel as traders nervously eyed an expected Israeli ground invasion of southern Lebanon. The market fears that the fighting could draw Iran, a key oil producer and supporter of Hezbollah, into the conflict.

...more...

[54anickel]

55. $100 Oil Sure Bet, Rogers Says; Merrill Lynch Demurs

http://www.bloomberg.com/apps/news?pid=20601103&sid=aQsf6AlXCUuE&refer=us

July 24 (Bloomberg) -- Jim Rogers, the co-founder of George Soros's Quantum hedge fund, says oil prices will reach $100 a barrel, possibly this year. Merrill Lynch & Co.'s Francisco Blanch says no way.

``Unless somebody discovers something very quickly and very accessibly, we're all going to be dumbfounded at how high the price of oil will go, including me,'' Rogers said in an interview in Singapore.

Fighting in Lebanon between Israel and Hezbollah forces, backed by Syria and Iran, helped send New York crude oil for August delivery to a record $78.40 on July 14 on concern the violence may spread through the Middle East, the region that produces more than 30 percent of the world's crude.

Not to worry, says Blanch, the head of commodities research at Merrill, the world's biggest brokerage. Oil supplies would have to stop from a country such as Iran, the second-largest Middle East oil producer, to drive the market higher, he said.

``It's unlikely we will see another price rally from here, unless the current conflict expands beyond its current borders,'' Blanch said in a July 17 interview in London. ``You'd need physical disruptions, and large ones, to bring the price to $100. You'd probably need to lose Iran.''

A growing number of Wall Street traders are siding with Rogers. Bets on futures contracts for $100 oil tripled in the past three months, helped by demand for fuel from China, the world's fastest-growing major economy.

more...

[UpInArms]

56. Sept Crude @ $74.20 bbl - Aug NatGas @ $6.56 mln btus

12:11 PM ET 7/24/06 SEPT. CRUDE DOWN 23 CENTS AT $74.20/BRL IN AFTERNOON TRADING

12:11 PM ET 7/24/06 AUGUST NATURAL GAS TAPS ONE-MONTH HIGH OF $6.56/MLN BTUS

12:11 PM ET 7/24/06 AUGUST NATURAL GAS LAST UP 38.1 CENTS, OR 6.2%, AT $6.52

[Roland99]

68. And, yet again, gas here right back up to $3.09. Is this where we start

the Pavlovian barking on cue?

[UpInArms]

73. Natural-gas futures rally to a one-month high; oil turns higher ($74.90 bl

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7BC39B3288%2D092F%2D4294%2DB882%2D1D3655FC4BB2%7D&symbol=

SAN FRANCISCO (MarketWatch) -- Natural-gas futures climbed as much as 8% Monday, reaching their highest level in more than a month, as triple-digit temperatures across much of the United States lifted expectations for energy demand.

Strength in natural-gas prices helped support crude oil, lifting futures prices to a high of $75 a barrel and eclipsing hopes that diplomatic efforts to resolve the conflict between Israel and Hezbollah forces in Lebanon will succeed before the violence spreads to any other countries in the oil-rich region.

"Now the oil market is worrying about weather and a possible storm in the Gulf that bears watching," said Phil Flynn, a senior analyst at Alaron Trading in Chicago. At the same time, hot weather in much of the nation was the primary driver for the gains in natural gas, he said.

August natural gas rose to a high of $6.63 per million British thermal units on the New York Mercantile Exchange, its highest intraday level since June 22. The contract was last up 42.1 cents, or 6.9%, at $6.56.

Crude for September delivery was last trading up 47 cents at $74.90 a barrel after touching a high of $75. The contract lost more than 5% of its value last week, falling back from the record price hit above $78 a barrel.

...more...

[ozymandius]

6. Reports due, the market remains a gamble

NEW YORK - With a raft of key economic reports scheduled this week, the stock market's direction remains a complete gamble. Wall Street caught a brief whiff of optimism last week when Federal Reserve Chairman Ben Bernanke told a congressional panel that economic activity was abating and inflation was so far contained — a sign of a possible end to the central bank's interest rate hikes.

However, he maintained the troubling stance that high energy costs, while putting the squeeze on consumer spending, could also drive up prices elsewhere. He also acknowledged the difficulty of balancing growth and inflation, and that under- or overshooting on interest rates will have serious consequences.

-cut-

ECONOMIC DATA

Second-quarter GDP growth will be the highlight of this week's data as investors seek clues on how much economic activity has eased. When the Commerce Department releases the advance reading Friday, economists predict annual GDP growth will slow to 3.1 percent from 5.6 percent in the first quarter.

-cut-

EARNINGS

Ten more Dow Jones industrials release their earnings this week: Merck & Co., 3M Co., DuPont Co., AT&T Inc., General Motors Corp., Exxon Mobil Corp., Altria Group Inc., American Express Inc., Boeing Co. and McDonald's Corp.

more

[ozymandius]

7. Data could expose divisions over direction of US rates

The US economy is "in transition", says Ben Bernanke. This week's data will illustrate the moderation in growth that is under way and also higher than anticipated inflationary pressures, themes of the Federal Reserve chairman's testimony to Congress last week.

The UK and European data calendar is light. This week's important release is second-quarter US gross domestic product data on Friday as the market looks for evidence of slowing growth. The consensus forecast is for annualised quarterly
GDP growth to moderate from 5.9 per cent in the first quarter to 2.9 per cent.

Analysts see signs of disagreement among Fed members as to whether interest rates should rise in August and the inflation data (core personal consumption expenditure deflator) on Friday is crucial. No consensus forecast is available for the core PCE but a rise from 1.9 per cent year-on-year in the first quarter to 2.1 per cent or above would intensify pressure for an August rate rise.

more

[54anickel]

47. Sounds to me like he's trying to buy some time. Greenspin liked to

use the term "transitory" when addressing energy and commodity price inflation. How long can this transition talk pacify Wall Street anyway? Might as well start referring to our monetary and fiscal policies as "a wing and a prayer". Both are increasingly being based upon confidence as fundamentals fly out the window.

The Bear’s Lair: Will he be G. William Bernanke?
http://www.prudentbear.com/internationalperspective.asp

snip>

Wall Street wants to believe Bernanke, indeed it would like its regard for him to grow into the adulation that Wall Street held for Greenspan in his later years, an adulation that undoubtedly nipped stock market downturns in the bud on several occasions. The stock market rallied sharply April 27 when Bernanke suggested that the Fed might pause its program of Federal Funds rate increases, then dropped again when Bernanke hinted to CNBC anchor Maria Bartiromo at a Saturday night party that he might have been misinterpreted. This week, Wall Street roared its approval by pushing the Dow up over 200 points after Bernanke outlined to Congress his belief that, even though the Fed’s February forecasts had been wrong (the “core” CPI rose at 3.6% per annum in the 3 months to June) the current rise in inflation was only temporary and would be reversed as economic growth fell back to its long term trend of around 3%.

If Wall Street can continue persuading itself that Bernanke is correct in his dismissal of inflation fears, the stock market will remain high and interest rates low, and the world’s current cheap money economic growth might continue, more or less ad infinitum. Monetarists claiming that money supply is growing too rapidly can be silenced by the simple expedient of not reporting money supply figures – the Fed ceased reporting M3 money supply (which had been growing at an uncomfortably high rate for a decade) in March. Every time a country or a borrower got into difficulties, its bankers could ease the liquidity crunch by lending it some more money or its investment bankers could solve its problem by a successful stock issue at an inflated price.

All it requires is for the official inflation statistics to report that inflation remains under control. These have been massaged in past years by such techniques as “hedonic pricing” whereby quality improvements in the tech sector are counted as price decreases, then re-weighted annually so that the tech sector’s weighting in the index is sufficient for next year’s improvements to suppress inflation again. More recently, the index’s use of house rents rather than sale prices allowed it to remain helpfully quiescent in 2001-05 as house prices took off while cheap mortgage finance depressed the rental market. Recently however this effect has worn off and rising rents have pushed up reported consumer prices; we can thus expect a campaign to remove them from price indices, or to create a new price index, satisfactorily un-inflating, on which Bernanke and Wall Street can focus.

The Federal Funds futures market, following Bernanke’s presentation to Congress, was forecasting Friday a probability of only around 30% of a further rate increase at the Federal Open Market Committee meeting August 8. With restrained inflation, accompanied by a little judicious fudging of the figures, the hope is that Wall Street can remain confident, stock prices high and interest rates quiescent until an economic slowdown (but not recession) reduces worldwide inflationary pressures and takes the heat off the Fed.

The gamble seems unlikely to come off, for a number of reasons. First, reported U.S. consumer price inflation ran at 4.3% in the last 12 months, so a Federal Funds rate of 5¼% is less than 1% in real terms even before you take account of hedonic pricing. Thus monetary policy remains loose, not tight. Given the inertia in the system, it’s likely that a Federal Funds rate of 8% (i.e. close to 4% net of inflation) would be needed to have a significant downward effect on inflation. We are not likely to get near that level with Bernanke as Fed chairman unless inflation gets markedly worse, in which case a still higher interest rate would be needed – Volcker pushed Federal Funds rates to 19.1%, after all.

snip>

Once Wall Street ceases to trust Bernanke, the market effects will be severe. Interest rates will rise further than is justified by inflation, because Wall Street lacks confidence in the value of money. Stock prices, instead of rising 200 points when Bernanke issues an optimistic forecast, will decline as Wall Street denigrates “mush from the wimp.” Eventually, the economic costs of Bernanke remaining Fed Chairman will become intolerable, and he will be forced to resign.

Bernanke’s survival as Fed Chairman depends on his benign forecast of declining inflation in a moderating but still growing economy proving correct. There is a chance of this, no question. But I wouldn’t bet any money on it!

more...

[54anickel]

75. Independent Thought (Hussman)

http://www.hussmanfunds.com/wmc/wmc060724.htm

It continues to astonish me how much power investors appear to ascribe to the Federal Reserve. The institution can do nothing but purchase debt (mainly U.S. Treasuries) and pay for it by creating bank reserves, or sell debt and receive payment by reducing bank reserves. When you realize that the total volume of bank lending has virtually no link at all to bank reserves (since the majority of monetary aggregates other than checking accounts have had zero reserve requirements since the early 1990's), and that foreign purchases of U.S. Treasuries have swamped Fed activity in Treasuries three-to-six times over in recent years, this whole focus on every word, syllable, and inflection from the Federal Reserve is just preposterous.

As Bill Hester walks around the office saying, “the markets have lost the ability to think for themselves.”

I don't rely much on forecasting near-term outcomes, and our investment positions are influenced by observable valuations and market action rather than personal opinion. Still, I'm an economist by training, and given the simplistic view of the economy being taken up by investors – that the future will be driven by the actions of the Federal Reserve, that inflation and economic growth necessarily move in the same direction, and that the Fed's dilemma is to either fight inflation or promote growth – it's probably useful to articulate some independent thought.

Mine is fairly strong at present. The Fed is irrelevant.

The U.S. economy is likely to slow and inflation is likely remain persistent, because the U.S. has ascended a mountain of debt upon which there are currently no promising directions to climb. All of the growth in U.S. gross domestic investment since 1998 has been financed by foreign capital inflows, and while the Federal government continues to expand the stock of U.S. debt, the appetite of foreigners for new debt, in addition to their existing holdings, can hardly do anything but slow.

As the growth of foreign capital inflows declines (I'm not suggesting that foreigners will actually sell their existing Treasury debt, just reduce their absorption of new debt), gross domestic investment is likely to stagger, particularly in the area of housing, and credit expansion in the U.S. is likely to slow as well. The excess Treasuries not purchased by foreigners will be forced into domestic hands, either the public, or the Federal Reserve, resulting in a decline in the marginal value of government liabilities that we commonly refer to as “inflation.” If credit defaults increase, then, yes, investors will probably increase their demand for “safe” (at least default free) government securities, which would then support the value of government liabilities and therefore result in lower inflation, but would do nothing to improve economic prospects.

more...

[54anickel]

87. Investing: A simple plan, but hard to follow

http://www.iht.com/articles/2006/07/23/bloomberg/bxinvest.php

The least helpful piece of investment advice ever given may be to "buy low, sell high."

On the surface, it looks wise beyond reproach. The message is pithy and direct, dispensing with the nonessentials and making its point in words of one syllable.

What the slogan sorely lacks is any grounding in reality. Those four little words convey no sense whatsoever of how difficult it is for most investors to put them into practice.

snip>

When last I looked at the S&P 500 price/earnings ratio, it stood at less than 17 times the most recent 12 months' earnings. It has been cut in half from a high of almost 35 four years ago.

Turn the P/E ratio upside down, putting the earnings on top and the share price on the bottom, and you get something called the earnings yield. That makes it easier to compare with the interest yield one can get from bonds, which compete with stocks for investors' favor.

In rough terms, the earnings yield of the S&P 500 has risen to six from three since 2002. During that same stretch, the yield of the 10-year Treasury note has increased to about 5 percent from about 4.5 percent.

So stocks, which were 33 percent less attractive than bonds by this measure four years ago, are now 20 percent more attractive than bonds.

Present these numbers to many investors nowadays, and you will be met with a shrug. The only reason P/ E ratios look so attractive now, people will tell you, is that earnings have climbed to a cyclical peak from which they will soon descend.

more....



'What if' factor applies to stock market analysis
http://www.pittsburghlive.com/x/pittsburghtrib/business/columnists/drahuschak/s_463049.html

snip>

Take price-earnings ratios (P/E), for example.

A quick look at readily available summaries for most stocks shows the price-earnings ratio range for the stock. The range can be for a short period like the most recent year, or it can cover the entire history of the stock. Those that provide a P/E range for every year offer investors a chance to see multiple ranges through varying economic and market periods. From these, you can calculate average lows and highs. In theory, this would offer an indication of when a stock is historically too high relative to its earnings or too cheap.

Often, this offers investors useful information that can help formulate buy and sell decisions. The danger, however, comes when they are used as absolutes.

The same problem applies to other things, like the PEG ratio (price-to-earnings growth), and most technical indicators.

Let us, for example, look at a stock's price-earnings ratio history that shows a low P/E of 15 and a high of 30. When the P/E approaches 15, investors often are tempted to believe the stock should be bought. And maybe it should be, but not always.

In may seem to be perverse, but a very low P/E might be signaling some ominous earnings results.

A stock with a 15 to 30 P/E ratio history that is now at 15 might be saying that earnings are about to fall. For example, if the stock had a dollar of earnings today but future earnings slip to $0.50 a share, the stock actually is trading at 30 times those futures earnings. It is crucially important to remember that stocks largely trade based on what may be, not what was or even what is now.

more...



Meet the P/E Ratio
http://www.fool.com/news/commentary/2006/commentary06071217.htm?ref=foolwatch

You're about to get to know the most maligned metric in investing, the P/E. Why all the hate? At the top of the list is that the P/E, or price-to-earnings ratio, is easy to manipulate. I'll get to how in a minute. But first, an introduction. The P/E is simply a stock's current price divided by some period of earnings per share.

I say "some period" because there are a bazillion different ways to calculate earnings, and therefore create different P/E ratios. For example, according to Capital IQ, Starbucks (Nasdaq: SBUX) earned $0.69 per diluted share over the trailing 12 months. Therefore, its "trailing P/E" is calculated as such:

$35.98 (current share price)
-------------------------------------- = 52.1
$0.69 (trailing earnings)

Starbucks has a trailing P/E ratio of 52.1. You could say that Starbucks trades for 52.1 times trailing earnings or for a 52.1 multiple to earnings.

snip>

The P/E can (small-f) fool you
Of the problems with the P/E, the biggest is that earnings are an accounting metric and may be manipulated -- so much so that, quite often, reported earnings barely resemble the real cash-generating ability of the business being measured. That can make both the P/E and the PEG utterly useless.

Let's use Akamai Technologies (Nasdaq: AKAM) as an example. According to Yahoo! Finance, it sports a trailing P/E ratio of 15.9. If that seems low for a business that expects to see 30% to 40% growth on the bottom line for the next few years, you're right -- that number doesn't reflect reality at Akamai. In 2005, the company turned profitable and realized a $285 million income tax benefit. But no one cut Akamai a huge check; that $285 million was essentially the result of some papers being shuffled about.

more...


Are We in the Belly of a Bear?
http://www.fool.com/news/commentary/2006/commentary06070719.htm

snip>

Are we still in the belly of the bear?
Easterling marks 1999 as the final year of the last secular bull market and the beginning of the current secular bear market. That puts us a little more than 6 years into the cycle. As of June 30, the P/E for the S&P 500 stood at 17.5 -- that's slightly above the long-term average of 16, and well above the historical bear market bottom of 8 to 12. I'd certainly like to think we're at the beginning of the next secular bull market, but relatively high P/Es, rising interest rates, and signs of increasing inflation lead me to believe we're still in the belly of the bear.

In this environment, richly valued companies that don't pay dividends -- like Google (Nasdaq: GOOG) and Chipotle Mexican Grill (NYSE: CMG) -- can be lethal to a portfolio, as P/E ratios contract without payouts to cushion the blow. For further evidence, just take a look at Urban Outfitters (Nasdaq: URBN). By all accounts, it's a well-run company, but it was simply valued too richly. And while the company has struggled a bit this past quarter, the market's swoon quickly compounded the decline.

Dividends and valuation
There is no Fool-proof way to avoid the pain of a bear market, but you can take steps to preserve capital and, in some cases, actually make money. Valuation is at the top of the list. Avoiding companies that are priced for perfection or based on unreasonable rates of growth is always important, but even more so when P/E ratios are contracting across the board. Dividends also become more important, because they provide not only provide a return that can offset contracting P/Es, but also cash to purchase additional shares in companies as prices fall and valuations become more attractive.

more...

[ozymandius]

8. Washington week ahead: Keeping one eye on the Fed

As analysts wait to see whether or not the Fed will pause in its rate-raising cycle, what the Beige Books says becomes more important. Also, Nuri al-Maliki, Iraqi PM, pays a visit to the White House at a critical juncture.

TuesdayGeorge W. Bush, US President, plays host to Nuri al-Maliki, Iraqi Prime Minister. As the sectarian violence in Iraq has continued unabated, Iraqis have begun to talk about their country sliding into a civil war. Mr al-Maliki's visit will provide an important opportunity for the Iraqi PM to show that he is in control of his country. The two are slated to discuss Iraq's partnering with the United Nations as well as the fight against terrorism.

'The lightly regulated, highly volatile, hedge fund industry has been fighting off efforts to increase oversight of it by the federal government. Today, Randy Quarles, the undersecretary for domestic finance for the US Treasury, will testify about the current regulations of the trillion-dollar industry.Hedge funds show increasing signs of vulnerability.

more, but it has formatting problems

[Roland99]

9. Outsourcing gone too far?

http://funny.karmark.org/Funny%20pictures/pages/csc_jpg.htm

[UpInArms]

10. daily dollar watch

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

Last trade 86.31 Change +0.15 (+0.17%)

Talk of Slowdown Scares Dollar Longs

The conflict between Israel and Hezbollah continued unabated this week as casualties mounted and oil hovered near the $75/bbl level, but the boost to dollar longs from flight to safety concerns disappeared after Chairman Bernanke’s testimony on Wednesday in front of Congress. Instead of hammering away at the inflation theme, the Fed chief once again surprised the markets but issuing a decidedly neutral statement that focused more on the dangers of a possible US economic slowdown rather than the need to contain inflationary pressures. His words were all the more unexpected coming right after red “hot” PPI and CPI gauges which rose 0.5% and 0.3% versus 0.3% and 0.2% respectively. Other economic data was also supportive to the greenback with Industrial Production climbing 0.8% from 0.5% projected and TICS far exceeding the $58.4 Billion estimate to print at $69.6. None of the positive economic news was of much help to dollar bulls however. The end result of Dr. Bernanke’s policy U-turn was a massive markdown in the August Fed funds futures rates from near 90% certainty of a rate hike to even money along which led to a 245 point turnaround in the EUR/USD. For the week the greenback lost only 38 basis points to the euro, but the slight loss masked the true extent of the decline after a massive dollar rally in the front part of the week took the pair below the 1.2500 figure for the first time in weeks.

The slowdown story is very likely to dominate trade next week. Market participants have an array of data ahead of them including Consumer sentiment numbers from both the Confidence Board and U of M as well as housing data which may prove key to the direction of the pair. Housing has been the back bone of the Us economy for the past 3 years and if the market sees material slowdown in that sector the fears of a US economic slowdown and the concomitant pause in the Fed rate hike campaign will only increase putting further pressure on the greenback.



...more...

Start of the Week Revives Dollar's Safe Haven Theme

http://www.dailyfx.com/story/dailyfx_reports/daily_brief/Start_of_the_Week_Revives_1153736447817.html

A quiet start of the week with virtually no economic data on the G-3 calendar, saw the dollar regain some of its luster as traders considered the possibility of one final Fed rate hike in August and the unrelenting fighting on Lebanon revived safe haven demand for the greenback. Despite the fact that over the weekend Israeli leaders entertained the idea of an EU- led multinational force to police the Lebanon border, diplomatic efforts to diffuse the conflict proceeded very slowly. In the meantime carnage continued as rockets rained on Northern Israel while Israeli air force bombed Hezbollah targets in Lebanon. The lack of diplomatic progress sent traders back to the dollar as the greenback’s safe haven appeal overshadowed any concerns over the possible end of monetary tightening by the Fed.

However, the snapback in the greenback may well be temporary. Tonight’s reflex rally fueled by the stop covering action of euro bulls who were late to the party, may not have much additional momentum if US economic data this week shows weakness. Existing Home Sales due tomorrow are expected to decline from last months 6.67M run rate. Should they drop even further than expected – and there is substantial anecdotal evidence that the real estate market is beginning to crater especially on the coasts – the fears of a significant slowdown in US economy could quickly return to the market driving capital flows away from the dollar as quickly as they poured in tonight. In fact with Housing, Durable Goods and GDP all on deck this week, “data dependency” may be the true trading theme for the week, assuming the geo-political situation in the Middle east does not worsen.

In economic news, Industrial New Orders surged higher, jumping 14.2% on a year over year basis versus 9.0% projected indicating that the region’s recovery remains on pace supporting the euro bullish view that the ECB monetary policy will tighten further in the final calendar quarter of the year. In UK however, the CBI retail index dropped to 7 in August from a reading of 9 in July as the frantic spending at the start of the summer buoyed by the World Cup moderated somewhat.

...more...

[54anickel]

66. Gold May Rise on Speculation Fed to Struggle Curbing Inflation

http://www.bloomberg.com/apps/news?pid=20601087&sid=ahmcc1LSxPDw&refer=worldwide_news

July 24 (Bloomberg) -- Gold may resume its rally on speculation that the Federal Reserve will halt interest-rate increases too soon to curb inflation, as fuel costs remain near record highs.

Eighteen of 42 traders, investors and analysts from Sydney to Chicago surveyed by Bloomberg News on July 20 and July 21 advised buying gold, which fell 7.2 percent to $620.20 an ounce in New York last week. Fifteen respondents said to sell and nine were neutral.

Gold jumped 46 percent in the past year, partly on signs of accelerating inflation. Fed Chairman Ben S. Bernanke said last week economic growth is slowing and hinted the central bank may halt two years of rate increases, even after oil rose to a record $78.40 a barrel this month.

``Rising inflation is in the cards with $70-plus crude oil,'' said James Turk, founder of GoldMoney.com, which stores gold for investors and is based in Jersey, British Channel Islands. ``The Fed is losing grip of its attempt to control inflationary expectations. Gold is probably going to trade in a $600 to $700 range until September.''

Gold futures for August delivery on the Comex division of the New York Mercantile Exchange lost $47.80 last week, the biggest percentage drop since May 19. The decline surprised the majority of analysts who expected a gain when surveyed July 13 and July 14. The Bloomberg survey has accurately forecast prices in 72 of 117 weeks, or 62 percent of the time.

Inflation Hedge

more...

[UpInArms]

11. Enron: NatWest Three forced to sell homes for $4m bail

http://www.timesonline.co.uk/article/0,,3-2280931,00.html

AT FIRST, the Britons seemed strangely impassive.

But slowly, as their plea to return to Britain was thrown out and $4 million (£2.1 million) bail was set, David Bermingham, Gary Mulgrew and Giles Darby, aka the NatWest Three, became flushed with anger and fear. Yesterday morning’s hearing in a federal courtroom in Houston went about as badly it could for the former bankers.

They will each have to sell homes or other property to come up with deposits on their bail — the first instalment is due next week, the next in October — and they will not be allowed to live together in Houston while they await trail on “wire fraud” charges related to the collapse of Enron, the energy giant. They had hoped to be allowed home to Britain to wait for the trial to begin.

<snip>

The men, who used to entertain Enron executives at the Treasures strip club in Houston before the energy company collapsed, were read out a long list of other bail conditions, including a ban on “alcoholic intoxication”, firearms, and intimidating witnesses in their case.

...more...

[UpInArms]

12. Detroit Homeless Man Finds $21K in Bonds, Gets $100 Reward

http://www.cbsnews.com/stories/2006/07/22/ap/strange/mainD8J159B02.shtml

(AP) A homeless man searching for returnable bottles in a trash bin found 31 U.S. savings bonds worth nearly $21,000 in a bag of clothes.

Charles Moore, 59, took the bonds to a 24-hour walk-in homeless shelter, where a staffer tracked down the family of the man whose name was on the bonds.

"They belong to him," Moore told The Detroit News. "I did the right thing."

Ernest Lehto's family had given away many of his clothes shortly after his death in 2004.

How the bonds ended up in the trash bin is a mystery, but Lehto's family left Moore a $100 reward.

...more...

[Shipwack]

15. It's a good thing too...

If he got any more money he would have just spent it on booze... :sarcasm:

[UpInArms]

14. (Frist Family) Hospital operator HCA to be sold for $21 bln: sources

http://news.yahoo.com/s/nm/20060724/bs_nm/hca_dc

PHILADELPHIA (Reuters) - Hospital operator HCA Inc. (NYSE:HCA - news) is close to an agreement to be acquired by an investor group for about $21 billion in one of the largest leveraged buyouts in history, sources familiar with the situation said on Sunday.

The buyout group for the biggest hospital chain in the United States includes Bain Capital, Kohlberg, Kravis Roberts (KKR), and Merrill Lynch (NYSE:MER - news), as well as the family of U.S. Senate Majority Leader Bill Frist, whose relatives founded HCA, and some HCA management, sources said.

Barring any last-minute snags, the deal is expected to be announced on Monday, said the sources, who declined to be identified by name.

The Wall Street Journal said HCA's board was scheduled to meet late on Sunday to weigh the offer, but a vote would not take place until Monday "at the earliest."

HCA had been close to a deal before, but talks broke down over the price tag and concern about the company's debt load, the WSJ reported last week.

The group plans to pay about $21 billion, or $51 per share, for HCA, sources said. That marks a premium of about 6.5 percent over the hospital chain's closing stock price of $47.87 on Friday.

...more...

[UpInArms]

16. Ben Stein's Confusion at the Death Profiteers

http://www.nytimes.com/2006/07/23/business/yourmoney/23every.html?ex=1311307200&en=1bb9cf45d0de885a&ei=5088&partner=rssnyt&emc=rss

(free registration or try www.bugmenot.com)

Thanks to some fine reporting at The Wall Street Journal, we now know that right after 9/11, as the crushed bodies of heroic firemen were still being pulled from the rubble of the World Trade Center, and the nation was in deep, bone-chilling mourning, the smart people who run some of America’s biggest and most powerful corporations may have already figured out An Angle.

Certain officers and directors at companies including UnitedHealth, Merrill Lynch, Teradyne, Black & Decker and Home Depot knew that their stock was way down because of panic about the attacks and whether more were coming. They also knew that their long-term prospects were excellent and that their stocks were a bargain. And right after the attacks, they quickly awarded themselves options priced to strike at the super-low prices their stocks reached when the fires at the Pentagon were still smoldering. In many cases, they went on to make serious money from those options.

The ordinary stockholders (obviously) were not awarded options or anything similar that might allow them to take advantage of the tragedy that had befallen the nation.

This — as I see it — went beyond war profiteering. This was actual “death profiteering,” as my friend, the writer Marina Malenic, put it.

...more...

[UpInArms]

17. Ex-Pentagon Officials Accused Of Iraq Financial Fraud

Feds: Conspiracy included U.S. Firm banned From Iraq

http://www.theday.com/re.aspx?re=3bfc4a37-7a1f-4fab-a774-1bf0fab07f74

(free registration or try www.bugmenot.com)

Two former Pentagon officials, including an acting secretary of the Navy, have been accused of scheming with a banned American contractor to get lucrative rebuilding contracts in Iraq, The Associated Press has learned.

The contracting firm, Custer Battles LLC, was suspended two years ago by the military for submitting millions of dollars in fake invoices.

The charges come in a sealed federal lawsuit, a copy of which was obtained by The AP. It was filed by two whistleblowers — one of whom won a $10 million judgment in another suit when a federal jury agreed that Custer Battles had swindled the government.

The current suit names former acting Navy Secretary Hansford T. Johnson, former acting Navy Undersecretary Douglas Combs, and Custer Battles LLC officials including founders Scott Custer and Mike Battles, who were barred in 2004 after billing the government for work that was never done and for padding invoices by much as 100 percent.

<snip>

His $10 million judgment, won in March, is the first civil fraud verdict arising from the Iraq war. Isakson and a former associate contended Custer Battles created imaginary offshore companies that overcharged the Coalition Provisional Authority, which ran Iraq after the 2003 invasion, by as much as $50 million.

Isakson is joined in the current action by Rory Mayberry, a medic who said he was fired last year from a Custer Battles shell company after pointing out fraud. Under the federal False Claims Act, whistleblowers may file suits on behalf of the government and collect a portion of awarded damages.

...more worth reading...

[UpInArms]

18. Uncle Sam, Deadbeat Debtor?

http://www.nytimes.com/2006/07/23/business/yourmoney/23view.html?ex=1311307200&en=9dcf8b42abafda34&ei=5088&partner=rssnyt&emc=rss

(free registration or try www.bugmenot.com)

THE United States “is going broke.” That’s the conclusion of a new article by Laurence J. Kotlikoff, a professor of economics at Boston University who specializes in analyses with really, really long time horizons. You may not want to sell your Treasury bonds just yet, though.

The article, in the July-August issue of the Federal Reserve Bank of St. Louis Review, asks bluntly whether the United States is bankrupt. But Professor Kotlikoff doesn’t use the definition of bankruptcy that is commonly applied to people and companies.

That definition usually implies an inability to pay the interest on one’s current debts, with no future prospect of being able to pay without changes in circumstances. The professor drops the first part of the definition, asking instead whether the nation can pay all of its obligations in perpetuity, given reasonable assumptions. The answer, he says, is probably not.

He bases this conclusion, in part, on a paper written by Kent Smetters and Jagdeesh Gokhale for the Treasury in 2002 and published by the American Enterprise Institute in 2003.

...more...

Ah-ha! Now we know why that Fed paper was so bizarre in mounting the defense of the flat consumption tax!

[54anickel]

34. a bit more from your article - and the Pollyanna ending

But countries that go into default don’t always cut programs and entitlements until they can pay every bondholder. To do so would be politically unpopular, to say the least; what leader would stand in front of the population and say, “We’re going to pay off those foreign investors before we pay your pension”?
Isn't that sort of going on right now with the PBGC shuffle?

This strategy of putting citizens before investors worked most recently for Argentina, and American politicians could very well adopt it, too. The problem is that the United States, unlike Argentina, is not exactly a small country in the world’s financial markets. A default by the Treasury, whose bonds have long been the markets’ gold standard for safety, would be an event of Armageddon-like proportions.

So, from Professor Kotlikoff’s perspective, the United States may already be bankrupt, and may even be trying to reorganize itself, albeit slowly. Unless that process succeeds, he argues, the world could be headed toward the ugliest default in history.

It is, of course, possible that the American economy will make such strides in productivity that the economy will grow incredibly rapidly, and tax revenue will easily enable Uncle Sam to pay everything he owes. But until there is some concrete basis for that kind of optimism, a crucial question will remain: Who will be the first to start listening to warnings like Professor Kotlikoff’s — the financial markets, or the politicians?
That's a tough question. I mean, when you have the Treasury meeting with Wall Street (several times now) to discuss Treasury auction amounts and terms...I'd have to ask what's meant by financial markets? The big guys on Wall Street or the ordinary investor on the street?

[54anickel]

61. Report: Reform could worsen pension gap (Speaking of the PBGC shuffle)

http://money.cnn.com/2006/07/24/pf/retirement/pbgc_study/index.htm

NEW YORK (CNNMoney.com) -- Legislation expected to be voted on in Congress as soon as this week to reform the nation's private pensions could actually increase the burden on the federal pension agency, according to a published report.

The Wall Street Journal reported Monday that a study by the Pension Benefit Guaranty Corp., the agency that is on the hook for retirement obligations of failed pension plans, suggest that the agency would have to make more pension payments for companies unable to do so themselves over the next decade if the pension reform legislation passes.

Some congressional staffers called the PBGC's analysis flawed, in part because they say it overestimates what companies would have to contribute to their pension funds under current rules, according to the paper.

The legislation, which would change the minimum requirements for employers' contributions to their pension plans, is designed to keep pensions better funded and make it less likely the PBGC will have to assume their obligations.

more...

[UpInArms]

19. Foreign Central Banks are Net Sellers of U.S. Treasuries (Again)

Fewer Treasuries but More Stocks on Foreigners’ U.S. Shopping Lists

http://www.nytimes.com/2006/07/22/business/worldbusiness/22charts.html?ex=1311220800&en=e8a5608575fe5e82&ei=5088&partner=rssnyt&emc=rss

ONLY two years after foreign central banks had become virtually the only net buyer of United States Treasury securities — and thus the financier for United States budget deficits — these banks have turned into net sellers of securities.

The Treasury reported this week that foreign central banks were net sellers of Treasuries in May, as they had been in March. The May sales, of $14.3 billion, were the largest for any month since August 1998, when the United States government was running surpluses and the supply of Treasuries was shrinking.

The United States needs to attract big investments from overseas to finance its large and growing trade deficit and its ability to get such investments from private, as opposed to official sources, is closely watched by some traders as a sign of whether the dollar may decline further.

<snip>

At one point in 2004, the entire United States budget deficit was being financed by overseas investors, with Americans as a group being net sellers of Treasuries. At that time, the vast majority of overseas purchases were by central banks, and total foreign purchases for the 12 months through October 2004 came to $361 billion.

But in the most recently reported 12 months, net foreign purchases of Treasuries, including Treasury bills as well as longer-term securities, came to only $69 billion — the smallest annual total since early 2002, when United States budget problems were just starting to appear.

...more...

[Roland99]

20. Yanking the credit cards out of the Feds' hands?

[markam]

23. From the article

"What that means is that it is Americans who are now largely financing their government’s deficit, buying an additional $196 billion in Treasuries over the 12-month period."

I could smell the BS coming off my screen from that statement. The American public is not buying the treasury bills. The U.S. government monitized the deficit to the tune of 196 billion. Considering the money supply is increasing at more than a trillion a year, that is just a drop in the bucket.

[Roland99]

51. Well, our great-grandkids are financing it with their yet-to-be-paid taxes

[UpInArms]

24. US Treasuries dip ahead of week's supply

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-07-24T130126Z_01_N24343774_RTRIDST_0_MARKETS-BONDS.XML

NEW YORK, July 24 (Reuters) - U.S. Treasury debt prices eased on Monday ahead of a slew of supply this week and as a safe-haven bid into U.S. government bonds appeared to abate somewhat, strategists said.

Last week's testimony by Federal Reserve Chairman Ben Bernanke ignited a Treasury market rally on the perception that the Fed is nearing a peak of its interest rate hiking cycle and yields remain near six-week lows.

Benchmark 10-year notes <US10YT=RR> fell 1/32 in price for a yield of 5.06 percent, versus 5.05 percent late on Friday.

Bond yields and prices move inversely.

"We look for consolidation this week with a bias for a move softer as the incoming supply weighs on the market," wrote David Ader, head of government bond strategy with RBS Greenwich Capital in Greenwich, Connecticut in a daily research note.

Treasury auctions this week include a sale of $22 billion of two-year notes, $14 billion of five-year notes and a $7 billion auction of 20-year Treasury Inflation Protected Securities or TIPS.

...more...

[UpInArms]

28. Printing Press Hums: Fed adds reserves via overnight system repos

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-07-24T133207Z_01_N24342436_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, July 24 (Reuters) - The Federal Reserve on Monday said it added temporary reserves to the banking system through overnight system repurchase agreements.

Fed funds last traded at 5.25 percent, the Fed's target for the benchmark overnight lending rate.

For further details on the operation, see http://www.ny.frb.org/markets/omo/dmm/temp.cfm

[Roland99]

41. Geez. Another $8.5 billion

[UpInArms]

29. Treasurys drift higher, market awaits data, auction

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7BDD6F77ED%2D64BD%2D4768%2D9B5B%2D2E66FB7E99DA%7D&symbol=

NEW YORK (MarketWatch) - Treasury prices drifted slightly higher early Monday, nudging yields lower, with investors awaiting economic data later in the week for clues about the U.S. interest-rate outlook.

The benchmark 10-year Treasury note was up 1/32 at 100 21/32 with a yield ($TNX) of 5.037%, down from 5.044% at Friday's close. Bond prices and yields move in opposite directions.

The 30-year long bond was up 1/32 at 91/32 with a yield ($TYX) of 5.093%.

The 2-year note was 1/32 lower at 100 2/32 with a yield of 5.084%.

In the near-term, "the bias for a range-trade," said David Ader, U.S. government bond strategist at RBS Greenwich Capital. "We neutral for the early part of this week, until we get further data, and think that a meaningful break of 5% yields will have to wait for the mass of issuance to be out of the way or for the data to read soft."

The Treasury will auction 20-year Inflation-Protected Securities Tuesday, two-year notes Wednesday and five-year notes Thursday.

...more...

[UpInArms]

21. I.R.S. to Cut Tax Auditors that Audit Wealthiest Americans

http://www.nytimes.com/2006/07/23/business/23tax.html?ex=1153886400&en=695e4adb01b59378&ei=5087%0A

The federal government is moving to eliminate the jobs of nearly half of the lawyers at the Internal Revenue Service who audit tax returns of some of the wealthiest Americans, specifically those who are subject to gift and estate taxes when they transfer parts of their fortunes to their children and others.

The administration plans to cut the jobs of 157 of the agency’s 345 estate tax lawyers, plus 17 support personnel, in less than 70 days. Kevin Brown, an I.R.S. deputy commissioner, confirmed the cuts after The New York Times was given internal documents by people inside the I.R.S. who oppose them.

The Bush administration has passed measures that reduce the number of Americans who are subject to the estate tax — which opponents refer to as the “death tax” — but has failed in its efforts to eliminate the tax entirely. Mr. Brown said in a telephone interview Friday that he had ordered the staff cuts because far fewer people were obliged to pay estate taxes under President Bush’s legislation.

But six I.R.S. estate tax lawyers whose jobs are likely to be eliminated said in interviews that the cuts were just the latest moves behind the scenes at the I.R.S. to shield people with political connections and complex tax-avoidance devices from thorough audits.

Sharyn Phillips, a veteran I.R.S. estate tax lawyer in Manhattan, called the cuts a “back-door way for the Bush administration to achieve what it cannot get from Congress, which is repeal of the estate tax.”

...more...

[UpInArms]

22. seems the I.R.S. estate tax lawyers are onto something

also from that article:

Over the last five years, officials at both the I.R.S. and the Treasury have told Congress that cheating among the highest-income Americans is a major and growing problem.

The six I.R.S. tax lawyers, some of whom were willing to be named, all said that clear evidence of fraud was pursued vigorously by the agency, but that when audits showed the use of complicated schemes to understate the value of assets, the I.R.S. had become increasingly reluctant to pursue cases.

The lawyers said that the risk analysis system the I.R.S. used to evaluate whether to pursue such cases gave higher-level officials cover to not pursue tax cheats and, in the process, emboldened the most aggressive tax advisers to prepare gift and estate tax returns that shortchanged the government.

“This is not a game the poor will win, but the rich will,” said John Hruska, another I.R.S. estate tax lawyer in New York who, like Ms. Phillips, is active in the National Treasury Employees Union, which represents I.R.S. workers.

[UpInArms]

26. Huh? Extra Funding Leads to Layoffs at IRS (WTF?????)

http://www.accountingweb.com/cgi-bin/item.cgi?id=102381&d=815&h=817&f=816&dateformat=%25B%20%25e,%20%25Y

AccountingWEB.com - July 24, 2006 - On the heels of winning extra funding for enforcement and taxpayer services from a Senate panel last week, the New York Times is reporting that nearly half of the lawyers responsible for auditing the tax returns of wealthy American taxpayers may be losing their jobs.

The Senate Appropriations Committee has voted unanimously to approve a 2007 fiscal year budget of $10.7 billion for the Internal Revenue Service (IRS). The IRS budget is part on a larger $69 billion bill funding the Treasury, Judiciary, Transportation and Housing and Urban Development departments beginning October 1. A floor vote has not been scheduled.

The budget approved by the senate committee is $64.1 million more than the Bush administration requested, however, the $2.1 billion earmarked for taxpayer services is actually $30.8 million less than the White House requested, according to MarketWatch.

The $4.8 billion slated for enforcement represents an increase of $95.2 million over the 2006 budget. The Senate funding is also more generous than the $10.59 billion approved by the House, which cuts funding another $104.5 million from the administration’s proposed budget.

MarketWatch reports that the enforcement funds approved by the Senate committee are intended to “give the IRS tools to help close the $290 billion tax gap”. To do this, $245 million has been designated for the IRS’ Business Systems Modernization program. It also requires the IRS to develop a strategic plan for reducing the tax gap and boosting voluntary compliance to 85 percent by 2009.

<snip>

Calls requesting comment from members of the Senate Committee on Appropriations and the Subcommittee on Taxation and IRS Oversight were not returned Sunday. The Subcommittee meets next on Wednesday, July 26 at 2 p.m. Eastern for hearings on the size and sources of the tax gap.

...more at link...

So what in the world is going on????

[Roland99]

48. Letting the rich hide their assets before the coming market crash?

[54anickel]

53. They couldn't repeal the "dreaded death tax", so they're making it

harder to enforce. I'd bet those estate lawyer auditors cost the IRS more money than the income tax auditors, and they are barred from transferring them from estate to income auditor positions anyway. The money saved on those "nasty to the rich" lawyers and their support staff will be used to beef up the audit team that goes after us "regular folks"...You know, those of us who may be subject to the AMT tax that Congress has still done nothing about. I'd be willing to bet they hire 2 or 3 income tax auditors for the price of one estate tax auditor. It's just another form of transferring wealth up the ladder. More revenue from earned income from wages (blood, sweat, tears, time) to cover the lost revenue from sitting on your ass dealing with assets.

Just wait, as the demographics change and the majority of baby-boomers join those relying on their assets to replace their earned income, the tax laws will be changed yet again. Roth IRA earnings will become taxable. The "when you're in a lower tax-bracket" mantra that got people into the various retirement Ponzi schemes (which are currently transferring wealth as well) will be history. Meanwhile some sort of flat-tax scheme will be passed to protect the Paris Hiltons of the future.

From the article:

Despite the approval and emphasis on enforcement, Kevin Brown, an IRS deputy commissioner, confirmed to the New York Times that the administration plans eliminate the jobs of almost half (157 out of 345) of the agency’s estate tax lawyers and 17 support staff positions within 70 days. Estate tax lawyers are among the most productive enforcement personnel, finding $2,200 in taxes owed to the government for every hour worked, according to the New York Times.

Six estate tax lawyers whose jobs are likely to be eliminated told the New York Times in interviews that the job cuts were only the latest behind the scenes moves made by the administration to limit the effectiveness of the estate tax and shield politically connected individuals, as well as those utilizing complex tax avoidance devices from being audited.

Brown, however, justified the cuts, explaining to the New York Times that 10 percent of estate audits generated 80 percent of the additional taxes and calling the idea that the IRS is soft of rich tax payers “preposterous”. The money saved by eliminating the jobs of estate tax lawyers, whom civil service rules bar from moving to audit income taxes, would be used to add to the staff auditing income tax returns, Brown told the New York Times.

The New York Times reports that IRS and Treasury officials have repeatedly told Congress that tax “cheating among the highest-income Americans is a major and growing problem” during the past five years. Six years ago, the IRS stated that more taxes were owed on 85 percent of the large gifts audited, according to the New York Times.

[54anickel]

67. Tax diversification one selling point for Roth 401(k)

http://www.azcentral.com/arizonarepublic/business/articles/0724biz-roth401k0724.html

If you don't think income-tax rates could rise in the future, stop reading now.

Under a stable or lower-tax scenario, new Roth 401(k) retirement accounts probably aren't for you, assuming your employer even offers them.

But if you think tax rates might rise or suspect you could get pushed into a higher bracket eventually, a Roth 401(k) may make sense. That's because the new accounts offer a way to withdraw money tax-free in retirement. advertisement

The accounts feature most of the benefits of regular 401(k)s, plus the ability to make tax-free withdrawals in retirement, as with Roth IRAs.

But there is a catch - you can't get an up-front tax break on Roth 401(k)s, just as you can't with Roth IRAs.

The accounts debuted this year, and the reception has been mixed.

more...

[UpInArms]

25. pre-opening blather

09:15 am : S&P futures vs fair value: +3.6. Nasdaq futures vs fair value: +5.8.

09:00 am : S&P futures vs fair value: +3.8. Nasdaq futures vs fair value: +6.0. Futures are still trading above fair value, setting the stage for stocks to regain some upward momentum today. With the S&P 500 slipping into negative territory for the year on Friday and the Nasdaq extending its reach to the downside, the absence of potentially disruptive economic data is also clearing the way for buyers to get back into an oversold market / oversold on a short-term basis.

08:30 am : S&P futures vs fair value: +2.9. Nasdaq futures vs fair value: +5.0. Still shaping up to be a modestly higher open for the cash market as futures indications continue to strengthen. Aside from M&A activity offering early support, the bulk of earnings reports surpassing analysts' expectations is also helping to renew enthusiasm for equities. Dow component Merck (MRK) beat forecasts by $0.08 and raised its FY06 outlook while BellSouth (BLS) and Schering-Plough (SGP) also topped estimates.

08:00 am : S&P futures vs fair value: +2.1. Nasdaq futures vs fair value: +4.0. Futures versus fair value suggest that stocks may rebound following two consecutive days of widespread losses. An analyst upgrade on Dell (DELL) further underscores the belief that the Tech sector in particular is due for a bounce while falling oil prices (-1.0%) and M&A activity are lending more broad-based support. Reports that Advanced Micro Devices (AMD) will acquire ATI Technologies (ATYT) for $5.4 bln and that HCA Inc. (HCA) is in advanced talks to sell itself for $21 bln are serving as reminders that corporate balance sheets remain flush with cash.

[UpInArms]

27. 9:31 EST exploding upward out of the gate

Dow 10,913.29 +44.91 (+0.41%)
Nasdaq 2,036.06 +15.67 (+0.78%)
S&P 500 1,243.78 +3.49 (+0.28%)
10-Yr Bond 5.053 +0.008 (+0.16%)

NYSE Volume 35,052,000
Nasdaq Volume 59,761,000

[UpInArms]

30. 9:44 EST YEEHAW! with blather

Dow 10,939.38 +71.00 (+0.65%)
Nasdaq 2,039.74 +19.35 (+0.96%)
S&P 500 1,248.37 +8.08 (+0.65%)
10-Yr Bond 5.044 -0.001 (-0.02%)

NYSE Volume 161,997,000
Nasdaq Volume 159,020,000

09:40 am : Bouncing back following two days of broad-based losses, stocks kick off a new week on a positive note. Resurgence in M&A activity, led by HCA Inc.'s (HCA 49.80 +1.93) decision to go private in the largest leveraged buyout ever ($33 bln including debt), is adding to early optimism about the health of corporate balance sheets. Dow component Merck (MRK 38.00 +0.64) opening at a new 52-week high after more than doubling Q2 profits and raising its full-year earnings outlook is also providing a floor of early support for the broader market. DJ30 +58.24 NASDAQ +16.67 SP500 +6.34 NASDAQ Vol 114 mln NYSE Vol 68 mln

[Roland99]

31. Kindasleazy Lies doing her "air guitar diplomacy" is saving the day!

[UpInArms]

32. that swampthing is a disgrace and cannot be confused with

anything human -

the yammering jaws that don't have a bit of human decency or respect for life allow this to continue -

[UpInArms]

35. W.Va. Mill Town Suffers Slow Death

http://abcnews.go.com/US/wireStory?id=2225211&CMP=OTC-RSSFeeds0312

WEIRTON, W.Va. - Mary Tice drove along Main Street, barely seeing the worn storefronts, the seedy strip clubs, the flashy video poker bars promising better luck. Her mind was on Larry.

"I screwed up," her husband had mumbled on the phone. She'd asked what he meant, but he wouldn't say.

"I'll tell you when you get home," he promised.

She tried calling back, but Larry didn't answer.

He's busy, she tried to reassure herself. He was going to check the water heater at his mother's place. But then she called a neighbor who said Larry's pickup was in the driveway.

<snipping huge hunks of sadness>

"We believe that Larry's death was not a solitary act. We believe that it was in many ways assisted," she wrote in an open letter after his funeral. "Larry was raised to believe that if you worked hard and did a good job, you could earn financial security for yourself and your family.

...more...

[UpInArms]

37. 10:17 EST Happy! Happy! Joy! Joy!

Dow 10,941.54 +73.16 (+0.67%)
Nasdaq 2,036.79 +16.40 (+0.81%)
S&P 500 1,248.49 +8.20 (+0.66%)
10-Yr Bond 5.032 -0.013 (-0.26%)

NYSE Volume 413,419,000
Nasdaq Volume 365,307,000

10:00 am : Indices extend their reach to upside as all 10 sectors are trading higher. Aside from HCA's LBO and Merck's strong earnings report providing a huge lift to Health Care, Schering-Plough (SGP 20.33 +0.88) swinging to a profit in Q2 and AstraZeneca (AZN 61.29 +1.71) winning FDA approval for Symbicort are lending support for drug stocks. Technology, in focus following Advanced Micro Devices' (AMD 17.23 -1.03) proposed acquisition of ATI Technologies (ATYT 19.43 +2.87) for $5.4 bln (a 24% premium), is also providing some notable leadership. Even though investors aren't applauding AMD's decision, as evidenced by shares opening at a fresh 52-week low, an analyst upgrade on Dell (DELL 20.40 +0.49), Motorola (MOT 21.24 +0.84) setting a new $4.5 bln stock buyback and BellSouth (BLS 35.68 +0.28) topping Q2 forecasts further underpin a sense that the tech sector, which is off 13% year-to-date, was due for a bounce of some sort from an oversold state. ..DRG +1.0%.DJ30 +80.77 NASDAQ +17.36 SOX +0.8% SP500 +8.46 NASDAQ Dec/Adv/Vol 516/1936/256 mln NYSE Dec/Adv/Vol 430/1822/182 mln

[UpInArms]

38. Gold dips on hopes for Middle East solution (@ $607 oz)

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7BC9488D92%2DFC43%2D4C8C%2D8214%2DF1E466FC8CE6%7D&symbol=

NEW YORK (MarketWatch) -- Gold futures slipped anew Monday, as Secretary of State Condoleezza Rice arrived in the Middle East in the first American on-the-ground diplomatic effort to resolve the conflict between Lebanon and Israel.

"People are a little enthusiastic about some kind of a ceasefire," said Charles Nedoss, senior account manager at Peak Trading Group in Chicago.

Gold for August delivery was last down $13.20 to stand at $607 an ounce on the New York Mercantile Exchange. The metal lost 7.2% last week.

"Gold's taking a breather and some of the risk premium is out of it," Nedoss said.
Nedoss said that he's skeptical about the possibility of a ceasefire involving Israeli forces and Hezbollah in the near term: "Sitting down with the Lebanese government and sitting down with Hezbollah are two different things."

Other metals prices also posted losses to start the trading week. Palladium dipped $1.80 at $310 an ounce and sister metal platinum declined $25.30 at $1,195.20 an ounce. Silver dropped 6.50 cents at $10.780 an ounce, while copper edged down 4.30 cents at $3.28 a pound.

...more...

[OrangeCountyDemocrat]

70. Mideast Solution?

I've got a bridge to sell them.

[54anickel]

78. Barrick makes two mining plays

http://www.theglobeandmail.com/servlet/story/RTGAM.20060724.wbarrick0724/BNStory/Business/home

Barrick Gold Corp. is moving to consolidate mineral plays in northwest British Columbia and Alaska with a $1.5-billion (U.S.) bid for NovaGold Resources Inc. and a $65-million (Canadian) offer for Pioneer Metals Corp.

The all-cash acquisitions would add the Galore Creek copper-gold-silver development in the Stikine region of B.C. to the project portfolio of the world's largest gold miner, and would also give Barrick sole ownership of the Donlin Creek gold project in southwest Alaska.

Barrick said Monday it is offering $14.50 (U.S.) per share for NovaGold, a premium of 24 per cent over Friday's stock price, in a transaction that would increase Barrick's measured and indicated gold resources in North America by half.

NovaGold owns the Galore Creek development, 75 kilometres northwest of Barrick's Eskay Creek mine. Galore Creek has measured and indicated resources of six million ounces of gold, 75.4 million ounces of silver and 6.8 billion pounds of copper.

more...

[Buttercup McToots]

81. International Forecast July 2006

http://news.goldseek.com/InternationalForecaster/1153791991.php

International Forecaster July 2006 (#3) - Gold, Silver, Economy + More

By: Bob Chapman, The International Forecaster

US MARKETS

snip>
There is a great deal of confusion regarding reports that US Special Forces have seized control of Israel’s nuclear complex located near Demona. The word is that China’s President told Mr. Bush that if the Straight of Hormoz was blocked by Iran, China would consider it an act of war. Bush promised President Hu and Russia’s Mr. Putin that the US would secure Israel’s nuclear weapons and limit Israel’s incursion into Lebanon. Israel would secure its Northern border with Lebanon and that Israel would not attack Iran or Syria. Secretary of State Condi Rice is reporting the deal to PM Olmert of Israel.

The PPI, Producer Price Index, rose 0.5% in June. We won’t even report the core because it is just a big lie - an index without food or energy. The experts were wrong again, they predicted a rise of 0.2%; they are wrong 2/3’s of the time. Flipping a coin is more scientific. May’s PPI was up 0.2%.

Orange County, California foreclosures nearly doubled in June, rising from 35 in May to 65 in June. Overall, foreclosure activity including default warnings to delinquent homeowners rose 60% last month. The county had 639 new foreclosure filings last month, up from 399 in May. That includes 574 default notices issued to homeowners behind their monthly loan payments. LA County’s activity was up 15.7%, Riverside 25% and San Bernardino 11.7%.

Venture capital secured $11.2 billion for future investments during the second quarter. This is the biggest fundraising in five years. It totals $18 billion so far this year, a 41% increase from $12.8 billion at this juncture in 2005.

In the first solid sign that the housing market has turned south, home sales in Philadelphia, South Jersey and Delaware fell in the first six months of the year. Sales fell 4% and the number of days it took to sell a home on average soared 48% to 32 days. Prices in the Delaware Valley rose by 10.3%. The hardest hit was South Jersey, down 8%. The number of days on market for Pennsylvania homes rose 59% to 31 days, compared to 58% to 21 days for Delaware and 16% to 38 days in South Jersey. South Jersey house appreciation was 12.3% and Pennsylvania’s was 8.4%.

More than 50% of college students have at least one credit card that is billed to them and 25% of those students use credit cards to pay tuition. 55% were carrying a balance versus 38% who had not borrowed tuition on a card.

Another dirty little secret is many banks carry more real estate loans today than they did during the 1980’s real estate boom.

The SEC is ready to start filing charges against companies backdating stock options. Criminal investigations are also proceeding.


snip>

If you believe that government spending is out of control you are right, it is. Yes, tax receipts have risen but that is temporary. When the economy slows revenues will fall and the spending will still be there. By the government’s own projections the outcome of this profligacy will soon become calamitous. Unless we pay this debt down it will become a millstone around our necks. That 12% increase in money and credit every day and the piling on of debt dilutes the value of the dollars we hold and in all the assets we own. The result is a continuing depreciation in the value of the dollar, higher interest rates and higher inflation. As we repay this debt we have to consider that interest rates are at a 45 year low and in all probability will move up over the years to come making debt service more expensive and more onerous – perhaps even unpayable. Higher rates mean ever more debt to cope with existing debt. That causes a loss of confidence in the dollar driving its value ever lower. That drives gold, silver and commodities higher.

snip>

These problems have been caused by our President and our Congress. It’s spend, spend, spend, elect, elect, elect. This is why in our coming election almost all of our representatives and Senators who are up for reelection should be thrown out of office. The main culprits are the denizens of the House. These are the termites who are leading us into bankruptcy. Worse yet, there is no indication that they have any intention of slowing down. They have led our country to the threshold of bankruptcy and if it wasn’t for foreign lenders we would already be insolvent. Governments have and do go bankrupt. Worse yet, we have a fiat currency with no gold backing. We ended gold backing in 1971. If the dollar fails and it is no longer the world’s reserve currency then almost all currencies will fail with the exception of the Swiss franc and Russian ruble, both of which have heavy gold backing. The euro might survive dependent on whether European countries really have any gold left. The bottom line is the US economy and its finances are in trouble and we do not see any solution that our elected representatives want to take. The only alternative is gold and silver related assets...

snip>

GOLD, SILVER, PLATINUM, PALADIUM AND DIAMONDS


The prices of gold, silver, crude oil and corn will soar to record highs during the second half of the year, boosted by global political tensions, oil-production worries and soaring demand for bio-fuels, according to commodities analysts speaking at a panel discussion in Chicago.


Daniel Rabb, managing director of AIG Financial Products in New York says, “A combination of growing industrial demand, supply constraints in some markets, and dollar weakness are all contributing to an upward price trend for many commodities.”

College economics is generally pure Keynesianism, its no wonder the educated do not understand gold as the only real currency known as hard money. Due to that lack of knowledge, and further absence of intellectual perception, it’s difficult for many under 45 years old to remember the great gold and silver bull markets of the 1970s. We are now repeating that inflationary cycle and the dynamics are incredibly more powerful. Over the next several years there will be massive inflation because the elitists will try to buy time. They are in an impossible situation and they are well aware of it. They will play out this game until they cannot anymore – until the bitter end. This is why gold and silver and commodities as well will perform in a fashion that is unimaginable today. Only the perceptive few will retain the value of their assets and some will become very wealthy.


This is no commodities bubble and as we said before commodities will at least double from current levels. Gold and silver will go stratospheric.



Don’t listen to what passes for the truth today from our media, Wall Street, government, the banks and corporate America. It is all intellectual garbage. During the 1970’s interest rates climbed relentlessly higher, culminating in rates of 20.5%, as the US 30-year Treasury bond yielded 13.5%. This was accompanied by rising commodity and gold and silver prices. Those who tell you that these investments won’t appreciate are either stupid or liars. The result is all there. All you have to do is go back and study what happened in the 70s. We know – we lived it minute by minute. Those experts should be reminded that during the same period stocks and bonds got slaughtered. Interest rates are raised to protect the dollar, not to stop inflation. The elitists could care less about inflation. They have to keep the dollar from crashing. They will allow the dollar to decline, but slowly over a few years, if they can. They cannot allow the world to lose faith in the dollar. If they do everything will collapse around them. Don’t forget in this process if interest rates don’t continue to rise or pause, gold, silver and commodities will go even higher. Central banks wouldn’t know an inflation fighter if they stumbled into one. The Fed is increasing money and credit by 12% annualized and European central banks are doing the same at a 10% plus level. The world is awash in liquidity and we see no end in sight. Foreign government exchange reserves are at a record $4.4 trillion, up almost 10% y-o-y. That doesn’t sound like fiscal austerity to us...


-- Posted Monday, 24 July 2006

[UpInArms]

39. Another rocky week ahead for stocks (one-day stock market "wonders")

http://www.marketwatch.com/News/Story/CLFf6VJ8HGT7W9h9CXvvDDG?siteid=mktw&dist=TNMostRead

SAN FRANCISCO (MarketWatch) -- Trading of U.S. stocks is expected to be choppy next week as investors grapple with the next wave of second-quarter earnings, fresh inflation readings and what appears to be an escalation of violence in the Middle East.

The tug-of-war between market bulls and bears was highlighted on Wednesday when a buying spurt on Wall Street intensified, after comments by Federal Reserve Chairman Ben Bernanke once again spurred hopes that the central bank may soon stop raising interest rates.

The benchmark indexes surged. The Dow Jones Industrial Average ($INDU : 10,969.24, +100.86, +0.9% ) jumped more than 200 points. But the jovial mood on Wall Street didn't last long, and was followed by losing sessions Thursday and Friday.

"We've seen so many of these one-day wonders that have failed to materialize into anything else," said Barry Ritholtz, president of Ritholtz Capital Partners.

<snip>

Wednesday's jump was partially driven by hedge funds covering short positions, according to Brian Rauscher, director of portfolio strategy at Brown Brothers Harriman. Investors selling short are betting that stocks will fall.

...more...

[54anickel]

40. Nice toon today Ozy. In many ways I hope it's true. Our Foreign

Policy was rewritten to look like an old Hollywood western anyway. The producers were assigning roles to the cast, determining who'd wear the black hats and white hats, and the directors only had one action plot of pre-emptive strikes. It was getting old, being re-run over and over. And just like those old western movies, foreign producers suddenly started using the same damned script. Let's hope that sucker is buried deep.

Interesting article I came across yesterday...parts of it might make for a nice new script
July is the month to accept international law
http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/opinion/2006/July/opinion_July67.xml§ion=opinion&col=

IT IS time overdue for the US to hand back Guantanamo to Cuba, for Britain to hand back Gibraltar to Spain, for Spain to return its African enclaves to Morocco, for India to accept the Pakistan compromise on Kashmir and Russia to renounce its claim to the four southern Kuril islands.

With a few step like this we could have a lot more peace and less threats of war, more trade, more economic growth, and we’d all be happier all round.

This month two countries in different continents have shown the way — Nigeria in Africa with its dispute with neighbouring Cameroon over ownership of the oil-rich Bakassi peninsular and Argentina over its neighbour Uruguay’s decision to build two big pulp mills on the banks of the Uruguay river which divides them. Both countries decided to forgo hostilities, even war in Nigeria’s case, and go to the International Court of Justice (the World Court) and accept whatever these judges in faraway, The Hague, decided.

snip>

There is a rarely told story of the history of the last war-torn century. The fact is that during that turbulent time states committed themselves to a far more just, humane and peaceable world than their rhetoric and practice often suggested. Dorothy Jones, in her carefully researched book, Codes of Peace, argues that there is a ‘hidden history’ of the last century, "the record of un-noticed breakthroughs in treaty making when the great warrior states have adopted apparently minor stipulations that represent agreement to significant restraints on their sovereignty".

The League of Nations rests in a perpetual historical cloud because of its failure to deal with Hitler. But it did resolve the question of the ownership of the Aaland Islands that nearly led to war between Sweden and Finland, deploying a three-man team of international lawyers. It also arbitrated disputes between Albania, Yugoslavia and Greece, Greece and Italy, Iraq and Turkey, Greece and Bulgaria, and Colombia and Peru. Without the League of Nations’ application of international law all these disputes could easily have flared into war.

more...

[bahrbearian]

54. Man, the Hague could get real busy,, would they be able to handel

War Crimes

[54anickel]

77. The drums of war sound for Iran

http://www.atimes.com/atimes/Middle_East/HG21Ak02.html

WASHINGTON - The week-old Israeli-Hezbollah conflict is likely to boost the chances of US military action against Iran, according to a number of regional experts who see a broad consensus among the US political elite that the ongoing hostilities are part of a broader offensive being waged by Tehran against Washington across the region.

While Israel-centered neo-conservatives have been the most aggressive in arguing that Hezbollah's July 12 cross-border attack could only have been carried out with Iran's approval, if not encouragement, that view has been largely accepted and echoed by the US mainstream media, as well as other key political factions, including liberal internationalists identified with the Democratic Party.

"In my reading, this is the beginning of what was a very similar process in the period, between and the Iraq war," said Gregory Gause, who teaches Middle East politics at the University of Vermont.

"While neo-cons took the lead in opinion formation then, eventually there was something approaching consensus in the American political class that war with Iraq was a necessary part of remaking the Middle East to prevent future 9/11s," he said.

"That strong majority opinion was bipartisan crossed ideological lines - neo-cons supported the war, but so did lots of prominent liberal intellectuals," he said. "I think it is very possible that a similar consensus could develop over the next few years, if not the next few months, about the necessity to confront Iran."

more...

[UpInArms]

42. 10:34 EST Triple-Digits and Rah-Rah Blather

Dow 10,978.12 +109.74 (+1.01%)
Nasdaq 2,047.15 +26.76 (+1.32%)
S&P 500 1,253.34 +13.05 (+1.05%)
10-Yr Bond 5.03 -0.015 (-0.30%)

NYSE Volume 538,723,000
Nasdaq Volume 472,398,000

10:30 am : Onward and upward remains the driving mantra this morning as the bulk of industry leadership remains positive. Materials, though, is now failing to participate in today's relief rally. Aside from a rise in the greenback making dollar-denominated commodities like copper less attractive, as evidenced by FCX (-5.1%) and PD (-2.4%) spiking sharply lower within the last 30 minutes, analyst downgrades on steel stocks (e.g. X -3.0% and STLD -3.3%) are also weighing on the sector. As the least influential of the 10 S&P sectors, however, the pullback in Materials is having no impact whatsoever on the overall market as Energy and Consumer Discretionary have now joined Health Care with intraday gains of more than 1.0%DJ30 +101.28 NASDAQ +24.10 SP500 +11.60 NASDAQ Dec/Adv/Vol 671/1971/438 mln NYSE Dec/Adv/Vol 669/2208/328 mln

[Roland99]

43. oooOOOOOOHHHH it's the JUGGERNAUT!

[UpInArms]

45. 10:55 EST 11k is 2 points away! Wheee!!!!

Dow 10,998.70 +130.32 (+1.20%)
Nasdaq 2,051.85 +31.46 (+1.56%)
S&P 500 1,255.31 +15.02 (+1.21%)
10-Yr Bond 5.034 -0.011 (-0.22%)

NYSE Volume 673,482,000
Nasdaq Volume 586,953,000

[Roland99]

46. Made it, +134 on Merger and Acquisition flurry

U.S. stocks rallied Monday, with the Dow Jones Industrial Average up triple digits, as a diplomatic push in the Middle East, a flurry of merger-and- acquisition activity and strong results from Merck and Schering-Plough boosted sentiment.

[UpInArms]

50. more blather

11:00 am : Buyers remain in complete control this morning as all three major indices are now up at least 1.2%. Rebounding from a 14-month low on Friday, the Nasdaq's is turning in the best performance (+1.7%), as bargain hunters get back into beaten-down semiconductor, hardware and software names while the Dow is benefiting from 28 of its 30 components trading in the green. After hitting an all-time high last week, Altria Group (MO 79.46 -0.21) has succumbed to modest profit taking while a stronger dollar is weighing on Alcoa (AA 29.24 -0.32).DJ30 +137.29 NASDAQ +34.23 SP500 +15.79 NASDAQ Dec/Adv/Vol 668/2082/618 mln NYSE Dec/Adv/Vol 601/2370/464 mln

[UpInArms]

44. Hedge Funds Scandal Brewing? Tipster Set Fund Scandal Snowballing

http://www.washingtonpost.com/wp-dyn/content/article/2006/07/22/AR2006072200111_pf.html

Her tip concerned another part of Eddie Stern's business, two internal hedge funds -- known collectively as Canary Capital Management -- that sought to make money by engaging in a practice known as market timing. In English, that meant they were trying to exploit the fact that stock prices changed all the time but mutual funds were priced just once a day. They would move millions of dollars into a particular mutual fund whenever they thought its prices were "stale" -- lagging behind the actual value of the underlying assets -- and then sell their shares as soon as the fund price caught up, usually within a few days.

Dozens of hedge funds were trying this strategy, and many mutual fund managers hated them because the sudden inflows and outflows increased costs and cut into profits for long-term investors. The Canary team stood out from the pack -- it earned a return of more than 25 percent in 2001, a year in which the standard stock indexes all declined.

One evening in 2002, when Harrington happened to be working late, she watched the Canary team begin to celebrate a big score. "We just picked off this fund," Harrington remembered a trader crowing as the group crowded around a computer terminal they referred to as "the box." The whole scene seemed odd to her. Same-day mutual fund trading was supposed to stop at 4 p.m. This was well into the evening. "Who are you trading with? Japan?" she asked. No one answered.

Now on the alert for odd behavior, Harrington noticed that the Canary traders routinely wrote order tickets in the hours between 4 p.m. and 8 p.m. She also began to wonder if the trading was connected to a call Stern had asked her to make to Goldman earlier that year. Eddie wanted to make frequent trades in and out of Goldman's mutual funds, but the honchos there had turned him down. Stern had hoped Harrington could find him another way in.

<snip>

She also began to focus on the harm Stern was doing. In April 2003, Harrington's sister, Mary Ellen Corrigan, was so appalled by the shrinking value of her 401(k) retirement account that she sent Noreen a copy of her statement, accompanied by a bitter joke: "I guess I'll have to work forever." On the statement, Harrington recognized the names of several fund companies that she knew had been granting Stern special trading privileges.

She realized with a start that she had been working for a reverse Robin Hood. "Money isn't created," she observed. "It's taken from one person to another. people who had no money."

...more...

[UpInArms]

49. Outing the Bias at ABC's "The Note"

http://alternet.org/mediaculture/38205/

To suggest The Note is enamored of GOP talking points is no exaggeration. From July 15, 2005: "Who wrote (and edited) the latest very awesome Republican talking points defending Rove that address the Novak situation and much more?" "Hats off to the White House communication team for handling the run-up and staging of this so well," The Note wrote glowingly of the White House decision to stage a meeting between members of the 9/11 Commission and Bush. As for a White House-led public relations blitz designed to improve the tattered image of Saudi Arabia, The Note cheered, "The scheme you came up with is so clever, we think it should be used as a case study in political campaign management schools."

In The Note's view, right-wing writers are reasoned, savvy, and powerful players. Indeed, the best way to get a read on Democrats is to pay attention to what conservative columnists are saying about them. Favorites include John Podhoretz at the New York Post (who labeled Democratic National Committee chair Howard Dean a "lunatic leftist") and the "must-readable" New York Times' David Brooks, crowned by The Note as "the best columnist today writing about the Democratic Party" (Like Podhoretz, Brooks regularly ridicules Democrats.) Syndicated columnist Bob Novak and the Weekly Standard's Bill Kristol and Fred Barnes are hailed by The Note as wise men whose work should not be missed.

Meanwhile, liberal counterparts to such partisans are either ignored or mocked. The Times' Frank Rich, arguably the most influential liberal columnist in the country, essentially does not exist in the pages of The Note. The Washington Post's E.J. Dionne, another potent and powerful voice on the left, should be read, according to The Note, simply to get "a window into what anti-Bush liberals are now all thinking inside their brains."

<snipping huge chunks of examples of right-wing bias>

But most of the reasons for The Note's effective, if inadvertent, RNC shilling have to do with broader factors affecting the mainstream media in general. These include a consolidated media landscape in which owners are multinational corporations, many of which share interests with the GOP. Equally important has been a tight Republican grip on Congress and the White House, which, combined with hardball tactics, has allowed Republicans to intimidate the press corps. Adding to the chorus has been a deep-pocketed right-wing noise machine ready to pounce on any traces of "bias," which has caused the press to veer defensively to the right. (The Note frets whenever Rush Limbaugh takes issue with its work but scoffs whenever liberal critics do the same.) And journalists, despite their reputation for leftish politics, understand that advancing their careers will be difficult if they're perceived as being overtly left or contemptuous of Republicans. By contrast, being tough on Democrats ups their credibility and is rewarded.

[UpInArms]

57. 12:24 EST Soaring ever higher with blather

Dow 11,014.71 +146.33 (+1.35%)
Nasdaq 2,053.85 +33.46 (+1.66%)
S&P 500 1,258.16 +17.87 (+1.44%)
10-Yr Bond 5.051 +0.006 (+0.12%)

NYSE Volume 1,157,487,000
Nasdaq Volume 978,733,000

12:00 pm : Stocks remain in rally mode midday as M&A news, strong earnings and falling oil prices shift the market's focus back to the positives and pave the way for bargain hunters looking for a bottom amid oversold market conditions.

News on the merger and acquisition front, led by HCA Inc.'s (HCA 49.28 +1.41) decision to go private in the largest leveraged buyout ever ($33 bln including debt), has underpinned early optimism about the health of corporate balance sheets. Dow component Merck (MRK 38.69 +1.33) opening at a new 52-week high after more than doubling Q2 profits and raising its full-year earnings outlook is also providing a floor of support for the broader market. Schering-Plough (SGP 20.49 +1.04) swinging to a profit in Q2 has also helped Health Care, not only climb back into positive territory for the year but, provide some notable leadership.

Even with bonds in a holding pattern, amid a lack of potential disruptive economic data, the resurgence in M&A activity playing into our favorable opinion on the brokers advising such deals is helping the rate-sensitive Financials sector provide some notable leadership.

Secretary of State Condoleezza Rice's surprise visit to Lebanon, which may lead to an earlier than anticipated cease-fire, is also easing ongoing concerns about slowing economic growth as crude oil futures slip below $74 per barrel. Of all 10 economic sectors trading higher, Energy is actually shrugging off oil's pullback and pacing the way higher (+3.0%) as a batch of better than expected earnings reminds investors that oil stocks are possibly headed for another record quarter of profit growth.

Technology, which is in focus following Advanced Micro Devices' (AMD 17.48 -0.78) proposed acquisition of ATI Technologies (ATYT 19.43 +2.87) for $5.4 bln (a 24% premium), is also providing some influential leadership to the upside. Even though investors aren't applauding AMD's decision, as evidenced by shares opening at a fresh 52-week low, an analyst upgrade on Dell (DELL 20.65 +0.74), Motorola (MOT 21.24 +0.84) setting a new $4.5 bln stock buyback and BellSouth (BLS 36.03 +0.63) topping Q2 forecasts further underpin a sense that the tech sector, which is off 13% year-to-date, was due for a bounce. To wit, the tech-heavy Nasdaq, which hit a 14-month low on Friday, is leading the majors with a 1.8% gain. BTK +2.2% DJ30 +150.49 DJTA +2.0% DJUA +0.6% DOT +1.6% NASDAQ +35.68 NQ100 +1.7% R2K +2.4% SOX +2.2% SP400 +1.9% SP500 +18.29 XOI +3.0% NASDAQ Dec/Adv/Vol 674/2183/886 mln NYSE Dec/Adv/Vol 609/2508/690 mln

11:30 am : Market continues to climb as sellers so far are nowhere to be found. In addition to solid gains of more than 1.0% from Financials, Technology, Health Care, Industrials and Consumer Discretionary -- the five most influential sectors, Energy is pacing the way with a 2.3% surge. That is especially noteworthy since oil prices are down 1.0%, as a surprise visit from U.S. Secretary of State Condoleezza Rice in Beirut could lead to an earlier than anticipated cease-fire, and Merrill Lynch downgraded Halliburton (HAL 30.75 +0.71) to Neutral. As a reminder, Energy profits are expected to rise 25% to 30%, again providing the largest contribution to aggregate EPS growth on the S&P 500. DJ30 +147.93 NASDAQ +35.51 SP500 +17.75 NASDAQ Dec/Adv/Vol 670/2162/772 mln NYSE Dec/Adv/Vol 603/2454/596 mln

[Roland99]

60. Cue up the Van Hagar: "We'll get higher and higher. Straight up we'll fly"

[54anickel]

59. White House ‘will hit budget target early’

http://www.ft.com/cms/s/d1ac4efa-1a82-11db-848c-0000779e2340.html

The surge in US tax revenues means the Bush administration will hit its budget deficit target a year early in 2008 even if Congress continues to apply costly short-term fixes to the alternative minimum tax, according to Rob Portman, the White House budget director.

Mr Portman said in an interview with the Financial Times that the White House would continue to argue that the tax, which was designed to limit tax avoidance by the wealthy but is catching an increasing number of Americans in its net, should be reformed in a way that results in no revenue loss.

But he said the administration would now achieve its target of halving the deficit from its projected 2004 peak, even if Congress – which regularly steps in to limit the AMT’s growth – raises its threshold each year in line with inflation.

“We would still reach the targets we have been talking about,” Mr Portman said.

According to previously unpublished Treasury estimates, AMT indexation would increase the budget deficit by $21bn (€16.5bn, £11bn) in 2007, $59bn in 2008, $76bn in 2009 and $94bn in 2010.

But even taking that into account, the White House now forecasts the deficit would fall to $247bn or 1.7 per cent of gross domestic product in 2008; comfortably below its target of $260bn or 2.2 per cent of GDP.

more "everything's just fine"....


What did that nut Mogambo say about the increase in tax revenue last week? Obviously he has no idea of what he's talking about. :evilgrin:
http://www.kitco.com/ind/Daughty/jul192006.html

snip>

The WSJ crows "The real news, and where the policy credit belongs, is with the 2003 tax cuts." Hahahaha! They admit that "Monetary policy has also fueled this expansion, but the tax cuts were perfectly targeted to improve the incentives to take risks among businesses."

The Economist magazine, to its credit and to the embarrassment of the Wall Street Journal, came up with several other alternative reasons why an extra $115 billion in tax revenues could show up, including the fact that wages have been weak, and the savings showed up as profits to corporations, and indeed, capital gains and dividends have soared, which are taxable. Or maybe it was that a bunch of tax breaks for investments expired at the end of 2004, and now those investment expenses are taxable.

Or perhaps it was the unusually big profits of small businesses are taxed at the individual level. Or maybe it was the growing income inequality and the progressive tax system, where the rich got richer (but paid more taxes) and the poor got poorer (but paid the same level of taxes). Or any of a lot of things.

But nobody but the true patriots at Radio Free Mogambo (PFM) made the connection that, for 2005, total credit (debt) expanded by $3.34 trillion. To get a lousy $125 billion in extra taxes out of a $3.34 trillion increase in debt, which increased tax revenues by a miniscule 3.4% of this amount, is hardly a ringing endorsement of the Laffer Curve, as the Wall Street Journal editorial presumed when they said that the cuts "succeeded even beyond Art Laffer's dreams." Hahaha! In YOUR dreams, Wall Street Journal!

To those unfamiliar with the Laffer Curve, it is the idea that for every level of tax revenues, there are two tax rates that will produce them. One is very high, and the other is very low. The high rate produces the tax revenue directly, and the low one increases economic activity so much that more tax revenue is produced. The morons of the world immediately and consistently misinterpret this to mean that every time you reduce taxes, you will always get more tax revenue! Hahahaha!

So pardon me if I do not break out the party hats and balloons to learn that in America, in total, at least $3,400 billion was borrowed and spent last year, and the government got a piddly $115 billion in "extra" tax revenue out of it. Hell, looking only at the government's budget, the national debt went up by $569 billion in the last twelve months, exploding to $8,408 billion, all to satisfy the government's insatiable, insane, bankrupting, ravenous craving for spending. Thus the national debt increased by $7.3% in the last twelve months. Hahaha!

[Roland99]

62. That MEW-fueled GDP will have to give way to more printing press humming.

[54anickel]

64. Workers long for overtime

Employers see more suits alleging they failed to pay for the extra hours

http://www.chron.com/disp/story.mpl/business/4064793.html

snip>

With their case churning along in federal district court in Chicago, she and about 175 co-workers have joined what some experts say is the nation's fastest-growing legal battlefront between workers and companies. Since 2000, the number of wage-related cases filed in federal courts has doubled, and most involve overtime claims.

Experts say the increase in overtime lawsuits across the country resulted from a lack of clarity in federal law, which has set rules for overtime wages since 1938.

An update to that law was supposed to clarify eligibility requirements and extend protections to an additional 6 million workers, but many say the revisions only muddied the water and invited litigation.

Traditionally, all workers were eligible for time-and-a-half overtime, except for those in the executive, administrative and professional categories. The 2004 federal changes sought to define more clearly those exempt categories by using new job descriptions such as "exercises discretionary and independent judgment." The change was made because language such as "holds a position of responsibility" was deemed too vague.

But the new descriptions can seem just as fuzzy, while job functions have blurred in an era of corporate downsizing. Clock-punching issues also have become more complicated because of increased travel and flexible schedules.

more...

[54anickel]

65. Internet bubble may burst -- again

http://www.contracostatimes.com/mld/cctimes/business/15104872.htm

Is the bubble about to burst -- again?

Investment in Internet companies has climbed so steeply since the dot-com crash of 2000 that some Silicon Valley veterans worry that too much money is again pouring into too many unproven, unprofitable ideas -- setting the stage for another high-tech shakeout.

Watching venture capital firms invest billions of dollars in new companies last year, longtime Internet executive Richard Wolpert branded the upswing "a mini-bubble." But "about a month ago," he said, "I started dropping the word 'mini.'"

In the first three months of this year, venture investors funded 761 deals worth about $5.6 billion. That's up 12 percent from the same period last year and the highest first quarter since 2002. One sector in particular is heating up fast: media and entertainment.

The $254.9 million invested in blogging and online social networks in the first half of the year already exceeds such spending for all of 2005, according to Dow Jones VentureOne. The $156.3 million pumped into online video is also on pace to surpass last year's investment.

more...

[DemReadingDU]

69. Talks on WTO's Doha round collapse

U.S. presidential 'fast track' trade authority to expire in 2007

Talks by major trade powers to save the World Trade Organization's Doha Round collapsed on Monday, leaving the future of negotiations on a global free trade deal in doubt.

A well-placed trade diplomat said: "The G6 talks have collapsed. It's not immediately evident what options are available other than suspension (of the Doha Round)."

WTO Director General Pascal Lamy told ministers from the six trade powers late on Sunday he would halt the Doha Development Agenda - launched in 2001 to ease poverty and boost the global economy - without a quick end to the deadlock, diplomats said earlier.

"Lamy said that if there was no breakthrough he would propose to suspend the DDA (Doha Development Agenda round)," one of the diplomats said, adding Lamy's announcement could come as early as Monday morning.


http://money.cnn.com/2006/07/24/news/international/bc.trade.talks.update.reut/


The experts who regularly post on this thread probably are better able to comment on Doha, but Steve Clemons says: the Doha Round failing is a big deal. It's a foreshock.
http://www.thewashingtonnote.com/archives/001555.php

[54anickel]

79. No surprise there. Bushco, despite what they might say, were against

it all along. Bush is for unilateral agreements where there's more control over a trading partners resources. Sort of a "free-trade, with only us and on our terms". Multilateral agreements might bring some form of "fairness" to the system. Not good for the corporate elitists.

Not that I agree on the rhetoric regarding CAFTA, but the following article raises some good points. My apologies for the source.
http://www.nationalreview.com/nrof_bartlett/bartlett200506290858.asp

snip>

The problem for many free traders, like myself, is that the Bush administration has played politics with trade since day one. This has done serious damage to the fragile alliance that still supports free trade. The administration imposed utterly unjustified tariffs on steel, torpedoed the Doha round of multilateral trade talks by supporting a huge increase in agriculture subsidies, and has never missed an opportunity to demagogue China for all our trade woes.

Having destroyed the prospects for a multilateral trade agreement, which was primarily to be about eliminating agriculture subsidies, the Bush administration has tried to salvage some semblance of a free-trade agenda by pursuing bilateral trade agreements. Such agreements have been concluded with Australia, Chile, Jordan, and Singapore. Talks are underway with Bahrain, Morocco, Panama, and groups of countries in Africa and South America.

While the amount of activity is impressive, the results are not very great in terms of opening trade. Moreover, the heavy reliance on bilateral trade agreements may create future problems. Economist Anne Krueger, now the number-two official at the International Monetary Fund, summarized the case against preferential trade agreements in a 1999 article in the Journal of Economic Perspectives:

Once countries are inside a trading bloc such as NAFTA or the European Union, they have an incentive to support protection against countries outside the bloc.
Protectionists will use bilateral trade agreements to avoid multilateral agreements, which all economists believe are far preferable. Those who benefit from bilateral agreements will henceforth tend to oppose new multilateral deals. Once a trader has gained access to the market he is most interested in, he will not want to share those benefits with those in other countries.

Finally, the resources of organizations like the U.S. Trade Representative’s Office are limited. If they are busy with bilateral agreements, they have no time or political capital left to pursue multilateral agreements.

Jagdish Bhagwati, America’s leading trade economist, has gone so far as to call free trade agreements “a sham” that are actually undermining the world trading system. He argues that the proliferation of such agreements by the U.S. is part of a long-term effort to pursue a unilateral trade policy. “Thanks to the myopic and self serving policies of the world’s only superpower,” says Bhagwati says, “bilateral free trade agreements are damaging the global trading system.”

more...


Here's an attempt to name the winners and losers of the collapse. Tell me this doesn't sound like Bushco won.

http://www.ft.com/cms/s/5b525ebe-1b29-11db-b164-0000779e2340.html

snip>

The FT takes a stab at predicting the winners and losers in the roundtable collapse.
Winners:

-The heavily subsidised American farmers (of rice, corn, cotton) who will face no international constraint as they argue for continuing large payouts in the forthcoming farm bill.

-Politicians in India and other poor countries who will wink kudos from their countrymen for having protected farmers from wealthy country’s competitors.

-The European and American companies that prefer doing business under bilateral trade schemes under which their governments can, more or less, dictate agreement terms.


Losers:

-Exporters from Germany, the world’s biggest exporter, and other competitive manufacturers whose economies rely on foreign demand.

-The Brazilian and Australian agribusinesses that won’t gain the export markets they were expecting.

-The African cotton-growers who are undercut by heavily subsidised US cotton.

more...

[UpInArms]

71. 1:31 EST numbers and White House says ceasefire "unenforceable" blather

Dow 10,992.73 +124.35 (+1.14%)
Nasdaq 2,044.98 +24.59 (+1.22%)
S&P 500 1,255.46 +15.17 (+1.22%)
10-Yr Bond 5.036 -0.009 (-0.18%)

NYSE Volume 1,406,446,000
Nasdaq Volume 1,188,331,000

1:00 pm : Stocks continue to sport noticeable gains as buying remains widespread across most areas. Even oil prices are now catching a bid amid speculation of a tropical storm heading toward Corpus Christie, Texas and as headlines hit the wires that the White House believes a cease-fire in Lebanon would be "unenforceable." However, crude futures now up 0.8% and back at $75 per barrel is taking some of the steam out of today's recovery efforts and prompting some early afternoon consolidation. DJ30 +133.32 NASDAQ +25.97 SP500 +15.46 NASDAQ Dec/Adv/Vol 757/2165/1.09 bln NYSE Dec/Adv/Vol 650/2528/854 mln

[Roland99]

74. Yeah, not like sanctions couldn't be used. Couldn't consider that. naaahh

[54anickel]

72. China's Schizophrenic Boom Would Baffle Keynes

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

July 24 (Bloomberg) -- A year after scrapping its dollar peg, China has perfected a potent strategy to deal with speculators: Confuse them.

When China moved to strengthen the yuan 2.1 percent on July 21, 2005, the change was widely applauded. Investors rejoiced, George W. Bush's administration partied and the media tossed accolades at China's government for getting serious about modernizing the world's fastest-growing major economy. Since then, it hasn't done very much.

A year on, China's challenges have only worsened, evidenced by 11.3 percent growth in the second quarter. The fastest rate in a decade has economists such as Tao Dong at Credit Suisse Group in Hong Kong concerned that China is ``suffering from overheating'' and its monetary policy has ``failed.''

But then the world hasn't seen an economy like China's before -- a 1.3 billion-person one simultaneously on the verge of inflation and deflation. If noted economists like John Maynard Keynes, Adam Smith or Karl Marx were alive, China's schizophrenic boom would send them back to the drawing board.

``Although policy prescriptions for cooling an overheating economy can be found in economic textbooks, implementation in reality is a much more complex issue for China,'' said Chris Leung, an economist at DBS Bank in Hong Kong.

more...


Anyone catch the Design:E2 episode about China on PBS? I only caught a bit of it (was half asleep) and had to check the listings to see what was on last night. I think this is what was on the tube when I "sort of" woke up. Must have been the China:From Red to Green Episode. The part I caught was a Chinese engineer discussing their advances in alternative energy. Wish I would have looked at the clock to see what time it was. I'll have to watch for it's repeat.

http://www.pbs.org/designe2/

[UpInArms]

76. market statistics

1:44 PM ET 7/24/06 NYSE VOLUME 963.7M

1:44 PM ET 7/24/06 NASDAQ VOLUME 1.23B

1:44 PM ET 7/24/06 NYSE HAS 2,543 ADVANCERS

1:44 PM ET 7/24/06 NYSE HAS 664 DECLINERS

1:44 PM ET 7/24/06 NYSE HAS 118 ISSUES UNCHANGED

1:44 PM ET 7/24/06 NASDAQ HAS 2,111 GAINERS

1:44 PM ET 7/24/06 NASDAQ HAS 820 LOSERS

1:44 PM ET 7/24/06 NASDAQ HAS 142 ISSUES UNCHANGED

1:44 PM ET 7/24/06 NYSE HAS 48 ISSUES SETTING 52-WEEK HIGHS

1:44 PM ET 7/24/06 NYSE HAS 24 ISSUES SETTING 52-WEEK LOWS

1:44 PM ET 7/24/06 NASDAQ HAS 27 ISSUES SETTING 52-WEEK HIGHS

1:44 PM ET 7/24/06 NASDAQ HAS 54 ISSUES SETTING 52-WEEK LOWS

[RUMMYisFROSTED]

80. Pixie Sticks

[stop the bleeding]

82. DJIA is up almost 190 points

time to lock in profits.

Everything is rosey - nothing to worry about - buy, buy, buy without any real reasons:eyes:suicide

[Sammy Pepys]

83. But if you sold during the recent drop...

...you have nothing to lock in.

[mike923]

84. And it still undervalued.

[TheWatcher]

88. Wow, if you think this market is UNDERVALUED

I want the kind of drugs you have acess too.

I would love to live in that Fantasy World :hi:

[stop the bleeding]

85. should have let them go at the peaks not at the drop(s)

B-)

[54anickel]

86. Closing time

Dow 11,051.05 +182.67 (+1.68%)
Nasdaq 2,061.84 +41.45 (+2.05%)
S&P 500 1,260.91 +20.62 (+1.66%)
10-yr Bond 5.04 -0.005 (-0.10%)
30-yr Bond 5.098 -0.005 (-0.10%)
NYSE Volume 2,309,002,000
Nasdaq Volume 1,951,594,000

4:20 pm : Bouncing back following two days of broad-based losses, stocks kicked off a new week on a very positive note as encouraging merger news and strong earnings sent short sellers fleeing for cover, clearing the way for bargain hunters to rally back into a market that was showing signs of being oversold.

With stock valuations already at levels that assume slower earnings growth, as weeks of selling pressure have priced in worst-case scenarios and have pushed the P/E multiple on the S&P 500 for operating earnings to a low 14.8, the fact that there was little in the way of anything negative with regard to earnings or unrest in the Middle East also helped the market shift its focus back to the positives.

Resurgence in M&A activity, led by HCA Inc.'s (HCA 49.38 +1.51) decision to go private in the largest leveraged buyout ever ($33 bln including debt), added to early optimism about the health of corporate balance sheets. Dow component Merck (MRK 38.88 +1.52) opening at a new 52-week high and hitting pre-Vioxx levels intra-day after more than doubling Q2 profits and raising its full-year earnings outlook also provided a floor of early support for the broader market. Aside from HCA's LBO and Merck's strong earnings providing a huge lift to Health Care, which was in negative territory before today's 2.0% surge, Schering-Plough (SGP 20.60 +1.15) swinging to a profit in Q2 and AstraZeneca (AZN 61.42 +1.84) winning FDA approval for Symbicort also contributed to continued momentum in the drug space.

Another proposed M&A deal was Advanced Micro Devices' (AMD 17.37 -0.88) proposed acquisition of ATI Technologies (ATYT 19.67 +3.11) for $5.4 bln (a 24% premium). However, AMD opened at a 52-week low and added to Friday's 15% drubbing with a 4.8% decline amid concerns about earnings dilution and reduced financial flexibility. Fortunately for tech investors tired of seeing the bottom fall out of chip stocks, as reflected in the PHLX Semi Sector Index's (SOX) 17% year-to-date decline, AMD and BRCM (-0.5%) were the only components (out of 19) on the SOX that closed in negative territory.

More than offsetting the lack of enthusiasm for AMD was a change in sentiment for the other big tech name that got hammered Friday amid a 13% decline -- Dell (DELL 20.75 +0.84), which bounced off 5-year lows and surged 4.2% after it was upgraded at Citigroup. Motorola (MOT 21.14 +0.74) setting a new $4.5 bln stock buyback and BellSouth (BLS 36.15 +0.75) topping Q2 forecasts further underpinned a sense that the tech sector was due for a bounce of some sort. To wit, the tech-heavy Nasdaq, which hit a 14-month low on Friday, led the majors Monday with a 2.1% gain

Even when hopes for an earlier than anticipated cease-fire spurred by Secretary of State Condoleezza Rice's surprise visit to Lebanon dissipated in afternoon trade, subsequently renewing the risk premium in oil prices, buyers stood their ground and closed the indices near their best levels of the day. Crude futures closed up almost 1% and above $75 per barrel, getting an added boost amid speculation about a tropical storm in the Gulf of Mexico and providing some notable leadership in Energy, which paced the way higher among all 10 sectors trading to the upside.

Despite not getting any direction from the Treasury market, as bonds were relatively flat all day amid a lack of potential disruptive economic data, M&A activity playing into our favorable opinion on the brokers advising such deals helped the rate-sensitive Financials sector provide some notable leadership as well. American Express (AXP 50.64 +0.02) was in focus all morning as investors waited for Q2 earnings to hit the wires during market hours. While AXP's earnings were $0.04 better than expected, initially sending shares to session highs, Q2 profits falling 7% year/year almost as quickly pushed the Dow component to a fresh 7-month low before it finally finished the day basically unchanged. BTK +2.5% DJ30 +182.67 DJTA +2.5% DJUA +0.9% DOT +2.1% NASDAQ +41.45 NQ100 +2.1% R2K +2.0% SOX +1.8% SP400 +2.2% SP500 +20.62 XOI +2.9% NASDAQ Dec/Adv/Vol 787/2242/1.94 bln NYSE Dec/Adv/Vol 614/2676/1.56 bln