STOCK MARKET WATCH, Tuesday November 21

[ozymandius]

Tuesday November 21, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 790 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2155 DAYS
WHERE'S OSAMA BIN-LADEN? 1861 DAYS
DAYS SINCE ENRON COLLAPSE = 1822
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 7
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 November 20, 2006

Dow... 12,316.54 -26.02 (-0.21%)
Nasdaq... 2,452.72 +6.86 (+0.28%)
S&P 500... 1,400.50 -0.70 (-0.05%)
Gold future... 622.10 -0.40 (-0.06%)
30-Year Bond 4.68% -0.01 (-0.30%)
10-Yr Bond... 4.60% -0.01 (-0.26%)






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 Rob Kirby

DON'T BELIEVE EVERYTHING YOU HEAR

One of my favorite weekend pastimes is listening to the Financial Sense Newshour, hosted by Jim Puplava each weekend and broadcast on the internet. This past weekend in the show’s 3rd hour, in a segment called “other voices” - Jim interviewed well known investment letter writer Dennis Gartman (begins at 21:20), author of the Gartman Letter.

Mr. Gartman opined that in the wake of Democratic mid-term electoral successes that legislative grid-lock would be a likely outcome in the upcoming Congress. Mr. Gartman sees these prospects of ‘limited government’ as the pretext for equity markets to move higher. In responding to Jim’s questioning about the current state of inventories of base metals, Mr. Gartman intimated that ‘inventories as low as they are today’ are unsustainable and inventories will in all likelihood build because, in Mr. Gartman’s words, referencing current copper prices for example which he describes as,

“egregiously, preposterously, stunningly, shockingly high.”

Mr. Gartman presumes that prices for these commodities will fall over the next six to twelve months as inventories build as a result of a supply side response (companies rushing out to bring more of these ‘expensive goods’ to market).

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

[UpInArms]

2. daily dollar watch

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

Last trade 85.37 Change -0.05 (-0.06%)

US Dollar Outlook: Christmas Shopping Season Expected to Be Strong

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar_Outlook__Christmas_Shopping_1164061756692.html

US Dollar – The markets are already going into holiday mode as trading begins to slow. The US dollar rebounded after an upward revision to October leading indicators. The strong rally in the stock market is fueling euphoria by keeping consumers happy despite an uncertain economic outlook. With little on the US economic calendar this week, we turn our focus to the Christmas shopping season. Retailers have begun to target consumers far earlier this year than they have in the past and according to the latest Gallup poll conducted last week, consumers expect to dole out the big bucks this season. The November 9-12 national Gallup poll indicated that 34 percent of adults think that they will spend at least $1000 on gifts. This is the strongest sentiment that we have seen in early November in at least 4 years. Between 2002 and 2005, only 25 to 30 percent of the people polled expected to spend that much. Average expenditure expected last week was also the highest reading for the week since 2000. Black Friday, which is the Friday after Thanksgiving will shed more light on how well retailers may do at the end of the year. If spending is strong, it would relieve some of last week’s concerns as it suggests that the slowdown in the housing market has yet to have a significant toll on the consumer and that we could actually see an increase in retail sales after two back to back months of negative readings. However for the time being, carry trades remain in favor as the market looks ahead to another week of low volatility and range bound trading.

...more...

US Fed - Steadfast on Inflation

http://www.dailyfx.com/story/strategy_pieces/global_central_bank_comments/US_Fed___Steadfast_on_1164103511657.html

The FOMC minutes clarified that inflation is the bank’s primary concern, but will it be too late by the time growth takes center stage?

From the October FOMC Meeting Minutes:

“All members agreed that the risks to achieving the anticipated reduction in inflation remained of greatest concern…Members noted that a significant amount of data would be published before the next committee meeting in December, giving the committee ample scope to refine its assessment of the economic outlook before judging whether any additional firming was needed to address those risks…All participants emphasized that the risks around the desired downward path to inflation remained to the upside.” – Released November 15, 2006

William Poole, St. Louis Federal Reserve Bank President

“Inflation expectations are well controlled ... I believe that the outlook for Fed policy is roughly symmetrical. I can imagine data coming in that would make me want to tighten policy. And I could imagine data coming in that would lead me to believe that we ought to be easing policy.” – November 15, 2006

“I am happy that it came in a 1/10th (of a percent) ... That was good news…I would not say that number means we are out of the woods on inflation ... (It is) another scrap of news that is in the right direction.” – November 17, 2006

Michael Moskow, Chicago Federal Reserve Bank President

“As reflected in the minutes of the October meeting, all Federal Open Market Committee members agreed that inflation risks remained the dominant concern. Thus, some additional firming of policy may yet be necessary to bring inflation back to a range consistent with price stability in a reasonable period of time. But that decision will depend on how the incoming data affect the outlook.” – November 16, 2006

“It's a bit premature for anyone to say that we have 'broken the back' of inflation. It's moving in the right direction; they key is whether that can be sustained and how quickly we can move to rates that are in a range that is commensurate with price stability. We're certainly not there now.” – November 17, 2006

Mr. Rato may believe so:

Rodrigo Rato, International Monetary Fund Managing Director

“What we see right now is certainly not a sharp deceleration of the US economy although a risk of an abrupt deceleration of the US economy is certainly one of the risks the world economy is facing now.” – November 20, 2006

...more...

[Systematic Chaos]

3. Say WHAT? Am I missing something here??

US Dollar Outlook: Christmas Shopping Season Expected to Be Strong

Do they mean strong-smelling? HOW are people going to come up with the disposable income to prop these corporations up yet again? Buy tons of toys and then convert the boxes into a new Mini-McMansion after their house is foreclosed?

Jesus Jumping CHRIST that is lame. :grr:

[Roland99]

4. Well, more and more don't have to worry about paying the mortgage now >>>>

Area foreclosures up 72 percent from last quarter
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=154&topic_id=1472&mesg_id=1472

[UpInArms]

5. OT: U.S. is most unfriendly country to visitors, survey says

http://today.reuters.com/news/articlenews.aspx?type=domesticNews&storyid=2006-11-20T221513Z_01_N20294102_RTRUKOC_0_US-USA-IMAGE.xml&WTmodLoc=NewsArt-R1-MostViewed-1

WASHINGTON (Reuters) - Rude immigration officials and visa delays keep millions of foreign visitors away from the United States, hurt the country's already battered image, and cost the U.S. billions of dollars in lost revenue, according to an advocacy group formed to push for a better system.

To drive home the point, the Discover America Partnership released the result of a global survey on Monday which showed that international travelers see the United States as the world's worst country in terms of getting a visa and, once you have it, making your way past rude immigration officials.

The survey, of 2,011 international travelers in 16 countries, was conducted by RT Strategies, a Virginia-based polling firm, for the Discover America Partnership, a group launched in September with multimillion-dollar backing from a range of companies that include the InterContinental Hotels Group, Anheuser Busch and Walt Disney Parks and Resorts.

The survey showed that the United States was ranked "the worst" in terms of visas and immigration procedures by twice the percentage of travelers as the next destination regarded as unfriendly -- the Middle East and the Asian subcontinent.

More than half of the travelers surveyed said U.S. immigration officials were rude and two-thirds said they feared they would be detained on arriving in the United States for a simple mistake in their paperwork or for saying the wrong thing to an immigration official.

...more...

[AnneD]

10. Morning Marketeers....

:donut: and lurkers. Where do I start today. I am continuing to have difficulty with my landlord. But it is not just me. One of the other long term tenants left, and I am looking. I want to find something neighbourly, safe, and small. I was out driving around in the area. Now this is a very nice area, near Rice University. I was not to shocked (because I read SWT on DU)but there were at least 2 for sale signs per block and frequently more. Everyone talks about how well the economy is doing in Houston, but I am seeing differently. Sure the oil companies are a buffer for us right now but I know the biz well enough to know that is a pie crust promise. This just has the smell of a bust.

And holiday spending? Like I said yesterday, I am cutting back from even last year's spartan Christmas. I mean how Christmas-y are new scrubs, thermal under ware, and pants. Daughter gets the good stuff and we get the practical. No fluff what so ever, just daily stuff wrapped in nice paper. And we are happy to get that. I will make a few things for friend and send a few things to relatives. Two hundred dollars tops. That is it for our household. I don't know where they are getting their numbers, but if it amounts to last years total+inflation....that's not an increase in my book. It should be interesting.

The good news-we pay in cash so we are not haunted in January and February.

Happy hunting and watch out for the bears.

Edited to add: No customs agent is nice, it is not their job; but American agents are the rudest by far. We greet visitors so badly. The English were the nicest (and efficient)as were the Swiss. I even had the French agents laughing. But the Americans...sigh, these folks just don't get it.

[UpInArms]

6. Worst of U.S. housing slowdown over: WSJ poll

:eyes:

http://news.yahoo.com/s/nm/20061121/bs_nm/economy_usa_housing_dc

NEW YORK (Reuters) - The worst of the United States' housing market slowdown is over, economists forecast by nearly 2-to-1 in a Wall Street Journal online economic survey, the paper reported on its Web site on Tuesday.

But the economists still predict that the average selling price of a house will fall somewhat next year, it said.

The 49 economists expect home prices, measured by the government's Office of Federal Housing Enterprise Oversight index to fall by 0.5 percent next year, the WSJ reported on its Web site. That contrasted with a 13.4 percent increase in 2005.

...more...

[54anickel]

8. Well there's another 49 eCONomists we can add to the "Paint me surprised"

list in the near future. :crazy:

[AnneD]

12. You missed the best part UIA...

"After several years of double-digit increases, house prices stopped climbing this year. Prices still have some way to fall before they stabilize but there are signs that the most drastic part of the downturn, marked by a sharp pullback in demand and new construction, have run their course, the paper said."

And 54anickle...the phrase we use in Texas is 'Well butter my butt and call me a biscuit':spray: I have to teach you guys some good old fashion Texas phrases to spice up your postings. What can I say...we put hot sauce on out eggs in the morning and eat jalapenos as an appetizer in this part of the country. :rofl:

[54anickel]

21. Housing Bubble Smack-down

http://www.smirkingchimp.com/thread/3204

Give me 5 minutes and I’ll convince you that you should sell your house immediately and invest your life-savings in gold or a Swiss bank-account.

Okay?

For some time now we’ve been hearing about the so-called housing bubble and what effect it could have on your net worth and future. Well, the numbers are finally in and you can decide for yourself whether its time to sell now or try to ride out the storm.

In 2000 the total value of homes in the US was $11.4 trillion. Today that number has shot up to $20.3 trillion; nearly double.

At the same time, mortgage-debt in 2000 was a trifling $4.8 trillion (about half) while in 2006 it skyrocketed to a whopping $9.3 trillion.

So, how do we explain these enormous increases in value? After all, wasn’t the housing boom just the natural outcome of “supply and demand”?

No it wasn’t. That’s an unfortunate myth that should be interred with the withered remains of Milton “free-market” Friedman.

If we really want to know what’s going on, we need to look back at the machinations at the Federal Reserve in 2001, that’s when Greenspan lowered interest rates to 1.5% to soften the blow from the stock market meltdown. Rather than tighten interest rates and let the country to go through a period of recession, Greenspan lowered rates and ramped up the printing presses to “full-throttle”.

much more...

[UpInArms]

7. Insiders made nearly $50M trading a money-losing company's stock

http://www.usatoday.com/money/companies/management/2006-11-20-cyberonics-usat_x.htm?csp=1

HOUSTON — Cyberonics (CYBX) said Monday that its chief executive and chief financial officer had resigned after an internal investigation found that unnamed insiders had incorrectly reported the dates of company stock options for years.

Cyberonics general counsel David Wise said in a filing to the Securities and Exchange Commission that the company had under-reported its executive compensation expense by about $10 million and would have to restate its financial statements going back to 1999.

STORY: SEC filings show new chairman got options 3 years before joining board

The company's disclosures came at a time when one of the biggest financial scandal in years is sweeping U.S. corporate boardrooms. Federal authorities are examining at least 130 companies to determine whether insiders manipulated options-award dates to illegally profit from market gains, principally by backdating the options to an earlier date than issued to give themselves a head start on rising prices. To date, dozens of companies have announced executive departures or restatements after internal investigations. Two criminal cases are pending.

In June, Cyberonics said that it was one of the companies under investigation by the SEC and by the U.S. Attorney's office in Manhattan. The company also faces several options-related lawsuits by shareholders and is embroiled in a proxy fight with a large investor demanding substantial changes in the board's makeup and governance practices.

During three interviews with USA TODAY in August, former CEO Robert "Skip" Cummins — who quit Friday — defended Cyberonics and denied any wrongdoing. "We have nothing to hide," Cummins said. But he deflected questions about the government and board probes. Company lawyer Wise said at the time that Cummins could not discuss the controversy. The company has declined to comment for this story.

...lots more...

[54anickel]

9. Paulson Says Business Is Over-Regulated

http://www.washingtonpost.com/wp-dyn/content/article/2006/11/20/AR2006112001325.html

Treasury Secretary Henry M. Paulson Jr. yesterday criticized the nation's "ever-expanding rulebook" and its burdensome legal system for constraining the economy but rejected wholesale revisions to a corporate accountability law under attack from business groups.

Paulson, a former chairman of the investment bank Goldman Sachs, called for striking a regulatory balance as he delivered his first major policy address on the subject since joining the government in July. "Excessive regulation slows innovation, imposes needless costs on investors, and stifles competitiveness and job creation," he said in a speech to the Economic Club of New York.

But under questioning, Paulson stood behind the controversial Sarbanes-Oxley law, passed in 2002 after financial scandals rocked the stock market and devastated investor confidence. Policymakers do not need to reopen the law, Paulson said. Instead, he expressed confidence in the work of securities regulators and accounting industry overseers, who are racing to make audit rules more flexible for small businesses that have complained about the regulations' cost. The eagerly awaited proposed revisions are to be unveiled within weeks, Christopher Cox, chairman of the Securities and Exchange Commission, has said.

"I don't think there is a single principle in that is ill-founded," Paulson said after the speech.

Paulson's remarks come as trade groups such as the U.S. Chamber of Commerce exhort lawmakers and regulators to retool corporate rules, which they contend are leading fewer companies to list on U.S. exchanges. A chamber-affiliated coalition led by William M. Daley, who was an official during Bill Clinton's presidency, and A.B. Culvahouse, counsel to former president Reagan, issued data yesterday that they said reflected a decade-long decline in market share of corporate listings in the United States.

more...

[54anickel]

19. Sarbanes-Oxley to undergo review

http://www.chron.com/disp/story.mpl/business/4350321.html

WASHINGTON - The Bush administration will review the regulations governing America's financial markets to make sure they don't harm the country's ability to compete in the global economy, Treasury Secretary Henry Paulson said Monday.

In his first major speech addressing market regulation, Paulson said the administration will convene a conference on capital markets and economic competitiveness early next year.

"Our capital markets remain strong and competitive, but they face some significant challenges that do not lend themselves to easy answers or quick fixes," he said in a speech to the Economic Club of New York.

Paulson said he did not believe legislation was needed to change the 2002 Sarbanes-Oxley Act, but he said changes were needed in the enforcement of that law, which was passed in response to a wave of corporate accounting scandals.

"We need to implement the law in ways that better balance the benefits of the legislation with the very significant costs that it imposes, especially on small business," Paulson said.

more...

[Roland99]

23. If US companies have trouble competing, we'll just sign a new NAFTA-like treaty....

or just invade someone else.

[54anickel]

11. Google Shares Top $500 for 1st Time

http://biz.yahoo.com/ap/061121/google_stock.html?.v=10

Google's Stock Price Rises Past $500 for 1st Time; Shares Up Nearly 2 Percent in Morning Trade


SAN FRANCISCO (AP) -- Google Inc.'s stock price surpassed $500 for the first time Tuesday, marking another milestone in a rapid rise that has catapulted the Internet search leader into the corporate elite.

Continuing a recent surge driven by Wall Street's high expectations for the company, Google's shares rose $9.67, or nearly 2 percent, to $504.72 in morning trading on the Nasdaq Stock Market.

That left Google with a market value of about $154 billion just eight years after former Stanford University graduate students Larry Page and Sergey Brin started the business in a Silicon Valley garage.

The Mountain View-based company is now Silicon Valley's most valuable business, eclipsing the likes of Intel Corp., the world's largest computer chip maker, and Hewlett-Packard Co., a high-tech pioneer that also famously started in a garage 67 years ago.

snip>

It took slightly more than a year for Google's shares to travel from $400 to $500 -- the stock's longest journey from one major milestone to the next since the company priced its initial public offering at $85 in August 2004.

more...

[DoBotherMe]

13. Bump n/t

[54anickel]

14. 1:11 numbers and blather

Dow 12,327.84 11.30 (0.09%)
Nasdaq 2,454.88 2.16 (0.09%)
S&P 500 1,402.29 1.79 (0.13%)
10-yr Bond 4.5970% 0.0020
30-yr Bond 4.6750% 0.0020
NYSE Volume 1,392,927,000
Nasdaq Volume 963,521,000

1:00 pm : Stocks continue to hold their own just above the flat line but market breadth remains mixed. As reflected in the A/D line, advancers outpace decliners on the NYSE by a 17-to-13 margin while declining issues hold a slight 15-to-13 edge over advancing issues on the Nasdaq. Below average volume due to the holiday-shortened trading week is also contributing to the lack of conviction from either buyers or sellers. DJ30 +13.54 NASDAQ +1.80 SP500 +2.01 NASDAQ Dec/Adv/Vol 1391/1502/886 mln NYSE Dec/Adv/Vol 1354/1789/724 mln

12:30 pm : The market kicks off the afternoon session at improved levels, but the recent rebound has not nearly been enough to make a significant change in the standings. Technology turning positive is contributing to the renewed wave of modest buying interest, but continued weakness in other influential areas like Financials and Health Care are keeping market gains minimal. DJ30 +12.65 NASDAQ +1.19 SP500 +2.25 NASDAQ Dec/Adv/Vol 1538/1338/800 mln NYSE Dec/Adv/Vol 1328/1789/644 mln

12:00 pm : Stocks are struggling to find much direction midday as investors weigh rising oil prices against otherwise upbeat corporate news across a wide array of industry groups.

One of the day's biggest news items has come from Dow component Boeing (BA 90.08 +0.96), which is up 1.0% at a new all-time after scoring a $5.5 bln order from Korean Air. Deere & co. (DE 93.54 +4.13) surging 4.0% after handily topping analysts' expectations is also helping the Industrials sector provide some notable leadership as one of only five sectors trading higher.

The best performing sector by far is Energy, but its 1.2% advance has come at the expense of surging oil prices (+1.4%), which is acting as an offset to huge profit contributions for the S&P 500 from explorers to refiners. Crude for January delivery is at $59.60/bbl amid reports that restrictions have been imposed on the Trans-Alaska Pipeline System due to high winds that will cut capacity by 25%.

The absence of leadership from Financials is acting as another obstacle for the bulls to overcome while further consolidation in Technology is also weighing on sentiment a bit. To wit, of the 17 Dow components losing ground, Intel (INTC 21.76 -0.50) paces the way with a 2.3% decline. With the PHLX Semiconductor Sector Index already up more than 7% this month, an analyst downgrade on Lam Research (LRCX 55.04 -1.56) because of its impressive run has brought the valuations of other semiconductor names into question. DJ30 -3.04 NASDAQ -3.84 SOX -1.4% SP500 +0.87 XOI +1.0% NASDAQ Dec/Adv/Vol 1666/1187/710 mln NYSE Dec/Adv/Vol 1452/1618/562 mln

11:30 am : So much for Energy's leadership acting as an offset to rising oil prices. Since the last update, the indices have touched fresh session lows in sympathy with crude oil futures hitting intraday highs and inching closer to $60/bbl. Be that as it may, losses on the Dow and Nasdaq are minimal at best, which still speaks to the market's resilience in response to lackluster attempts to take some money off the table no matter how overextended some believe the four-month rally in stocks is. DJ30 -10.53 NASDAQ -6.10 SP500 +0.72 NASDAQ Dec/Adv/Vol 1629/1193/596 mln NYSE Dec/Adv/Vol 1386/1645/460 mln

11:00 am : Major averages continue to trade with a sense of caution as split industry leadership now dictates this morning’s action. Recent reversals in Technology and Health Care have taken some steam out of early recovery efforts. Aside from Energy, Industrials is the only influential sector turning in a respectable performance; but the bulk of its intraday advance is coming from two Dow components -- Caterpillar (CAT 61.50 +0.59) and Boeing (BA 90.05 +0.93) -- as well as a turnaround in shares of Deere & co. (DE 94.04 +4.63). The latter has pared early losses and is now up more than 5.0% at a fresh all-time high after handily topping analysts' expectations while Boeing is up 1.0% at record levels as well after scoring a $5.5 bln order from Korean Air. DJ30 -6.98 NASDAQ -3.44 SP500 +0.67 NASDAQ Dec/Adv/Vol 1519/1239/456 mln NYSE Dec/Adv/Vol 1250/1749/342 mln

10:30 am : Equities are back on the offensive, albeit slightly, even as oil prices spike to session highs. Crude for January delivery is now up 1.1% at $59.45/bbl amid reports that restrictions imposed on the Trans-Alaska Pipeline System due to high winds will cut capacity by 25%. Fortunately for the bulls, strong leadership from the profit engine that is Energy is helping to offset the commodity’s potential inflationary characteristics. To wit, Energy is now up 1.4%, by far and away leading the charge among the six other S&P 500 sectors trading higher which are averaging a gain of just 0.1%.DJ30 +2.58 NASDAQ +2.98 SP500 +2.34 XOI +1.2% NASDAQ Dec/Adv/Vol 1483/1143/282 mln NYSE Dec/Adv/Vol 1382/1500/204 mln

10:00 am : The indices continue to vacillate around the unchanged mark as investors digest commentary from a voting Fed official. Earlier, Fed Governor Kevin Warsh said in a prepared speech that he expects the overall economy to strengthen as housing markets stabilize. However, stocks appear to be taking more of a cautious cue from a recent reversal in Treasuries after Warsh also said inflation remains "uncomfortably elevated" despite coming down from where it was earlier this year. The 10-year note was unchanged but is now down 2 ticks to yield 4.60%. DJ30 -1.88 NASDAQ -0.96 SP500 +0.92 NASDAQ Dec/Adv/Vol 1336/1128/130 mln NYSE Dec/Adv/Vol 1186/1435/68 mln

09:40 am : As futures trade presaged, stocks open slightly higher but the absence of any specific market-moving news items to account for the positive standing lends little conviction behind today's rebound. Among the biggest surprises helping to get buying efforts back on track is Medtronic (MDT 52.50 +3.55). The stock has surged 7.3% after a better than expected Q2 earnings report amid key market share gains prompted multiple analyst upgrades. To wit, Health Care Equipment (+2.7%) is this morning's best performing S&P industry group. DJ30 +3.60 NASDAQ +1.35 SP500 +1.81 NASDAQ Vol 82 mln NYSE Vol 42 mln

09:15 am : S&P futures vs fair value: +1.8. Nasdaq futures vs fair value: +3.0.

09:00 am : S&P futures vs fair value: +2.0. Nasdaq futures vs fair value: +3.8. Positive bias persists in pre-market trading, and as such, expectations for a higher start for cash market remain intact. Aside from good earnings news and some upbeat analyst commentary, investors are also finding some comfort in the fact that Dell's (DELL) delayed earnings report will now be out after today's close.

08:30 am : S&P futures vs fair value: +1.9. Nasdaq futures vs fair value: +3.0. Futures indications are off their best levels but the stage remains set for stocks to open modestly higher. As a reminder, since there are no economic reports scheduled for today, the market will be left to trade off the corporate news and may (over)react to reports of how consumer spending is trending for the holiday season.

08:00 am : S&P futures vs fair value: +2.5. Nasdaq futures vs fair value: +4.0. After a six-day winning streak was snapped, S&P 500 futures suggest the bulls will regain control this morning and open the indices on an upbeat note. Boeing (BA) inking a $5.5 bln order from Korean Air and an analyst upgrade on fellow Dow component Verizon Communications (VZ) are adding to the position disposition. Some better than expected earnings reports (e.g. DE, JWN, MDT, TECD) across a wide array of industry groups are also renewing enthusiasm for equities following yesterday’s sluggish action.

[54anickel]

15. Fast Credit, Easy Terms, Buy Now

http://www.nytimes.com/2006/11/21/business/21place.html?_r=2&adxnnl=1&oref=slogin&ref=business&adxnnlx=1164132981-kXtdZ/hFdfxuUnHdq9DBCA

Not so long ago, companies that borrowed lots of money were considered risky, appropriate only for daredevil stock pickers. Those with lots of cash on hand and few outstanding debts might be dull stocks, but they were at least safe bets for bondholders.

That view has now been turned on its head.

With Wall Street caught up in a wave of acquisitions, normally cautious bond investors are living like Las Vegas high rollers, and stock speculators are behaving like worry-warts. And for some companies, the more they borrow, the safer they are deemed.

Consider the case of Freeport-McMoRan Copper and Gold, which announced yesterday it would spend $25.9 billion to acquire Phelps Dodge, the giant copper producer. Much of the purchase will be financed with debt, which at one time would have been expected to roil Freeport’s bonds.

“The combined companies will go from having no net debt to having a staggering $15 billion in net debt,” wrote Carol Levenson, an analyst with Gimme Credit, in a research note. “The combined company will definitely be of speculative-grade credit quality,” or in other words, riskier for bondholders.

Instead, by the end of the day, the credit rating agency Moody’s Investors Service announced that it would probably upgrade Freeport’s credit rating. Bond ratings for Phelps Dodge — a company with no debt that was criticized for its underperforming stock — are expected to fall. The cost of insuring against either company’s defaulting on debt obligations was essentially unchanged at the end of yesterday’s trading.

more...

Is it just me? I'm thinking this just can't be a good thing going on here. :shrug:

[54anickel]

16. Deals earn Wall St. record $14.8B

http://www.usatoday.com/money/industries/banking/2006-11-21-deal-fees-usat_x.htm

Despite the blast of $50 billion in mergers announced Monday, the value of U.S. deals still hasn't topped the record in 2000. But don't feel bad for the Wall Street firms arranging the marriages: Their pay has already hit a record.

So far this year, investment banks have earned $14.8 billion in fees for helping along the year's deals, says Thomson Financial. That tops the previous record of $14.6 billion in 2000 amid the frenzied AOL-Time Warner (TWX) era.

With five weeks left in 2006, the value of U.S. deals could still hit a record, especially if there are more days like Monday: Private equity firm Blackstone offered $20 billion for office owner Equity Office; Freeport-McMoRan offered $25.9 billion for rival metals producer Phelps Dodge; Bank of America offered $3.3 billion for Charles Schwab's U.S. Trust unit; and Russia's Evraz offered $2.3 billion for Oregon Steel Mills.

The value of U.S. deals this year is now $1.3 trillion, up 9.3% from all of 2005, and bearing down on the record $1.5 trillion in 2000, says Dealogic. Monday's marriages:

more...

[54anickel]

17. Private cash fuels boom in takeovers

http://www.latimes.com/business/la-fi-buyouts21nov21,1,1011847.story?coll=la-headlines-business

Elite private investors are buying up major companies at a record pace, in a wave of deals that is raining riches on Wall Street but also may be raising the risk of a financial bust.

Investors led by Blackstone Group announced late Sunday the biggest takeover ever by a so-called private equity fund, a $36-billion deal to buy Equity Office Properties Trust, the largest U.S. owner of office buildings.

The proposed purchase follows announcements in recent months of buyouts that would put firms including radio giant Clear Channel Communications Inc., casino titan Harrah's Entertainment Inc. and food-service company Aramark Corp. in private hands, taking their shares off the stock market.

Takeovers are nothing new in American business, but historically the largest deals have involved companies whose shares are publicly traded buying other companies.

This year, the buyers behind the biggest deals are private equity funds — run by generally secretive investment firms that raise money from pension funds, wealthy individuals and other investors who are hungry for double-digit returns on their capital.

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Yet the surge in buyouts this year is making some on Wall Street wonder whether they're witnessing a replay of other episodes when too many investors threw too much money in the same direction — the dot-com boom of the late 1990s, for example, or a late-1980s company buyout wave led by corporate raiders. Both of those booms gave way to painful busts.

"It's sort of feeding on itself now," said Edward Yardeni, investment strategist at money management firm Oak Associates in Akron, Ohio. "You could make a pretty good case that a bubble is building in private equity, and that it will burst."

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[AnneD]

22. I heard an interesting segment...

about IPO and private equity companies on NPR. It did a good job of condensing the whole thing. It seems that these private equity companies are like those folks that buy and flip property. They take out a big loan (for themselves)on the house then try to sell the house, debt and all, BUT in the sales contract they have control of the house. It just seems like another plague of locust attacking decent folk. Yes you can make money on it but folks are going to wise up and eventually tire of the promise of riches and see this new shell game for what it is. This may be the next bubble-equity extraction.

[RawMaterials]

25. spot on anne, and in the process they extract all of the company's

real value in special dividends and such. witch is big right now with bush's low capital gains tax's

[54anickel]

18. Halliburton Reaps Benefits of IPO

http://www.cfo.com/article.cfm/8309953/c_8310381?f=home_todayinfinance&x=1

Call it a win-win for Halliburton. When a company takes a slower-growing subsidiary public, the parent generally reasons that investors will be in a better position to value the two companies. And that could result in a higher total combined value for the entities.

The motivation for such an IPO by Hall of its KBR subsidiary were surely on offer in the third quarter, when KBR accounted for 42 percent of Halliburton’s revenues but just 10 percent of its operating earnings.

Sure enough, in the days since Halliburton, formerly run by vice president Dick Cheney, sold a nearly 20 percent interest of KBR in a long-planned initial public offering late last week, it has already reaped a number of benefits.

For one thing, the shares of KBR, formerly known as Kellogg, Brown, & Root, rose more than 22 percent on their first day of trading last Thursday. The shares of both rose in the following trading days as well.

This rapid run-up lifted the value of the roughly 80 percent stake that Halliburton retained in the U.S. military's top contractor in Iraq, according to the Wall Street Journal.

Halliburton plans to spin off KBR next year in a tax-free transaction. Under the IPO deal, most of the $473.3 million proceeds will be used to repay inter-company subordinated notes to Halliburton, enabling the parent to reduce its debt.

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[54anickel]

20. Banks and Bubbles III: “We're getting ourselves back on the playing field”

http://www.dollarcollapse.com/iNP/view.asp?ID=42

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Instead, Citi and the other big banks are compelled by the logic of public markets and their own executives’ empire-building compulsions to pile into whatever sector promises growth in the next few quarters. That’s the only possible explanation for buying a European bank when Europe’s demographic and financial trends are heading off a cliff. As for expanding the U.S. consumer side of the business, this chart is all you need to handicap the prospects of another decade of booming car and home equity loans.



Even with all the pressure on banks to keep growing, you’d think at least some of them would be willing to choose prudence over expediency. That so few do means something else must be going on. That something is securitization. Here’s a riff on the subject from a real estate developer friend who spends a lot of time with bankers:

Last year, I dined with head one of Wall streets largest commercial mortgage banking operations (we’ll call him Harry). Harry had the personal objective of making his mortgage department the largest on Wall Street in originating commercial mortgage debt. After a few glasses of wine and some prompting on my part he confessed that underwriting terms on mortgages had become as easy as in the Savings & Loan era. I was curious as to why his bank was taking on these increased risks. “We’re not taking on significant risk with commercial mortgages,” said Harry. “Only the temporary risk of securitizing them and finding buyers. It ends up not being the bank’s money because I pool these mortgages, after which they are sliced and diced, rated by agencies and sold to yield-hungry investors. My bank only holds the average commercial mortgage for 45 days.”

For Harry, real estate has entered a kind of golden age. He’s just shoveling this paper out the door, to these hedge funds and German and Chinese and insurance companies that are chasing yield. They’re looking at default history and going “what’s the problem?” They’re not looking at the catastrophic event, at what happens when the imbalances unwind. For the most part the people buying this debt haven’t been through a real bear market. When you have to eat what you kill it’s different. This time around we’ve allowed the banks to become killing machines and sell the meat everywhere.”

So there’s our answer. Credit card loans, mortgages and all the rest are no longer the banks’ problems, because it’s no longer their money. They do the deals, collect their fees, and move on. Because they no longer have a stake in these loans actually being paid back, they see little risk—at least no mortal risk—in churning out as much paper as the market will bear. So the question becomes, how much more can the market take? Who knows, really. It’s a big world with a lot of dollars sloshing around.

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[54anickel]

24. And the not so big finish....

Dow 12,321.59 5.05 (0.04%)
Nasdaq 2,454.84 2.12 (0.09%)
S&P 500 1,402.81 2.31 (0.16%)
10-yr Bond 4.5780% 0.0170
30-yr Bond 4.6580% 0.0190
NYSE Volume 2,597,935,000
Nasdaq Volume 1,753,484,000

4:20 pm : If your life was in need of some excitement ahead of a long holiday weekend, Wall Street wasn't the place to look today. The major averages traded in very narrow ranges throughout the session, making modest moves on either side of the unchanged mark as investors were lacking notable trading catalysts.

For a second straight day there was nothing on the economic calendar to either support or to counter the possibility of a soft landing scenario, leaving investors to weigh a batch of generally good earnings news against a rebound in oil prices. Crude for January delivery closed above $60/bbl, surging 2.3% amid reports that restrictions imposed on the Trans-Alaska Pipeline System due to high winds will cut capacity by 25%.

Fortunately for the bulls, strong leadership from the profit engine that is Energy helped to offset some of the commodity's potential inflationary characteristics. Energy surged 1.8%, leading the charge among the five other S&P 500 sectors trading higher but which averaged a gain of just 0.2%.

Of the five sectors attracting buyers, Industrials provided the most influential leadership. Boeing (BA 90.08 +0.96) soared to a new all-time high after inking an order from Korean Air worth $5.5 bln at list prices. The sector's best performer, though, was Deere & Co. (DE 95.04 +5.63). Despite warning that fiscal 2007 sales are expected to get off to a slow start, Q4 profits handily topping analysts' expectations helped propel the stock more than 6.0% to a record high.

Medtronic (MDT 53.67 +4.72) was another surprise, climbing nearly 10% after key market share gains contributed to a better than expected Q2 earnings report. However, consolidation throughout the drug and biotech groups offset strength in the medical equipment space and prevented Health Care from offering any leadership to the upside.

Also keeping market gains in check was the absence of leadership from Financials, Consumer Staples and Technology. While the latter eventually inched into the green, as Google (GOOG 509.65 +14.60) eclipsing the $500 level for the first time ever helped offset analyst downgrades in the semiconductor space (e.g. LRCX -2.5%, NVLS -2.5%). BTK -0.9% DJ30 +5.05 DJTA +0.3% DJUA +0.2% DOT +0.4% NASDAQ +2.12 NQ100 +0.3% R2K +0.2% SOX -1.1% SP400 +0.2% SP500 +2.31 XOI +1.7% NASDAQ Dec/Adv/Vol 1503/1516/1.69 bln NYSE Dec/Adv/Vol 1262/2022/1.48 bln

3:30 pm : Going into the close, stocks continue to trade with little fanfare. It is worth noting, though, that the VIX (CBOE Volatility Index) is making new 12-year lows, further underscoring a lack of "fear" in the market. Yesterday, the VIX closed below 10 for the first time since 1994 and is at its lowest levels since December 1993. The index's decline suggests investors are actively buying call options in anticipation that a short-term bottom has been put in place that will keep the four-month rally on track. DJ30 +4.57 NASDAQ -1.05 SP500 +1.64 NASDAQ Dec/Adv/Vol 1546/1438/1.37 bln NYSE Dec/Adv/Vol 1318/1936/1.18 bln

3:00 pm : There still isn't much excitement to speak of in the market at this point as the major indices are trading close to unchanged. Oil prices recently closing near their highest levels of the day, up 2.3% and above $60/bbl, has taken some of the wind out of the market's sails and left the door open for some consolidation. As a reminder, the major indices rose 1.9% on average last week and are up an average of 2.5% in November, leaving the sustainability of such impressive gains in question. DJ30 +8.89 NASDAQ -0.08 SP500 +2.00 NASDAQ Dec/Adv/Vol 1531/1444/1.24 bln NYSE Dec/Adv/Vol 1331/1918/1.06 bln

2:30 pm : Major averages are back to trading in split fashion, leaving sector leadership evenly matched. Despite an analyst upgrade on Dow component Verizon Communications (VZ 35.17 +0.50), Telecom (-0.5%) is still today’s worst performing sector. That isn't all that surprising since it has been this year’s best performer posting a 25% year-to-date advance. However, another reversal in the Tech sector, as well as a sell-off in Biotech (e.g.GENZ -2.4%, GILD -2.2%), are contributing to the added selling pressure that has recently pushed the Nasdaq back into negative territory.BTK -1.0% DJ30 +5.93 NASDAQ -1.92 SOX -1.2% SP500 +1.34 NASDAQ Dec/Adv/Vol 1522/1433/1.17 bln NYSE Dec/Adv/Vol 1326/1928/988 mln

2:00 pm : Buyers remain in control of the action but market gains are still modest at best. Meanwhile, oil prices have eclipsed the $60/bbl mark and are now up more than 2.0% on the day; but as is often the case, subsequent leadership across the Energy sector is helping investors deal with the ramifications rising oil prices can have on consumption patterns, especially heading into the all-important holiday season. DJ30 +16.87 NASDAQ +1.59 SP500 +1.82 XOI +1.3% NASDAQ Dec/Adv/Vol 1518/1442/1.06 bln NYSE Dec/Adv/Vol 1316/1907/888 mln

1:30 pm : Little changed since the last update as the major averages continue to vacillate in roughly the same ranges. The market's holding pattern is underscored by the absence of notable catalysts to push the indices more aggressively to the upside. Industrials is still providing a floor of market support, as Boeing (BA 91.25 +2.13) extends its reach into unchartered territory (+2.4%); but the lack of buying interest anywhere else, with the exception of Energy, has stalled midday recovery efforts. DJ30 +13.38 NASDAQ +1.53 SP500 +1.71 NASDAQ Dec/Adv/Vol 1488/1450/992 mln NYSE Dec/Adv/Vol 1285/1898/826 mln

1:00 pm : Stocks continue to hold their own just above the flat line but market breadth remains mixed. As reflected in the A/D line, advancers outpace decliners on the NYSE by a 17-to-13 margin while declining issues hold a slight 15-to-13 edge over advancing issues on the Nasdaq. Below average volume due to the holiday-shortened trading week is also contributing to the lack of conviction from either buyers or sellers. DJ30 +13.54 NASDAQ +1.80 SP500 +2.01 NASDAQ Dec/Adv/Vol 1391/1502/886 mln NYSE Dec/Adv/Vol 1354/1789/724 mln

12:30 pm : The market kicks off the afternoon session at improved levels, but the recent rebound has not nearly been enough to make a significant change in the standings. Technology turning positive is contributing to the renewed wave of modest buying interest, but continued weakness in other influential areas like Financials and Health Care are keeping market gains minimal. DJ30 +12.65 NASDAQ +1.19 SP500 +2.25 NASDAQ Dec/Adv/Vol 1538/1338/800 mln NYSE Dec/Adv/Vol 1328/1789/644 mln