STOCK MARKET WATCH, Thursday February 22

[ozymandius]

Thursday February 22, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 697LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2250 DAYS
WHERE'S OSAMA BIN-LADEN? 1954 DAYS
DAYS SINCE ENRON COLLAPSE = 1914
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 9
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 February 21, 2007

Dow... 12,738.41 -48.23 (-0.38%)
Nasdaq... 2,518.42 +5.38 (+0.21%)
S&P 500... 1,457.63 -2.05 (-0.14%)
Gold future... 684.00 +23.00 (+3.36%)
30-Year Bond 4.79% +0.01 (+0.19%)
10-Yr Bond... 4.69% +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. Today's Market WrapUp

Bad Moon Rising?
BY CHRIS PUPLAVA

I’m not ringing any alarm bells, just pointing out some interesting developments. The current advance after last summer’s lows is fairly extended and there are some signs brewing, hinting of a “Bad Moon Rising” where we might be seeing a market correction, or at least a breather coming soon.

Westpac Strategy Group publishes economic data designed to track the evolution of economic data surprises over time. Their percent surprise index and size of surprise index for U.S. economic data can be used to determine reversals of economic sentiment. The Westpac Positive Surprise Index measures the percentage of releases beating Bloomberg consensus estimates in the previous eight weeks, presented as a percentage and is bounded by 0% and 100%. The Westpac Size of Surprise Index captures the size of economic data surprise from Bloomberg consensus forecasts, with the data bounded by z-scores of -1 and +1. The z-score reveals how many units of the standard deviation a result is above or below the mean.

-cut-

Both indices turned sharply lower prior to last May’s correction and have both recently rolled over hinting at another possible correction as economic data is turning more negative in terms of the size of the surprise and the number of positive economic surprises contracting. We have already seen some negative economic news from subprime mortgage lenders and higher energy prices as of late after January’s fall. More fuel is coming from today’s economic reports with a higher headline CPI number that came in above the consensus, and a negative year-over-year percent change in the Conference Board’s Leading Indicator Index (discussed below) are possibly putting the breaks on investor enthusiasm.

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

[ozymandius]

2. Today's Reports

8:30 AM Initial Claims 02/17
Briefing Forecast 320K
Market Expects 325K
Prior 357K

10:00 AM Help-Wanted Index Jan
Briefing Forecast 33
Market Expects 34
Prior 33

10:30 AM Crude Inventories 02/16
Briefing Forecast NA
Market Expects NA
Prior -589K

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

[UpInArms]

16. Initial Claims @ 332,000

05. U.S. 4-wk. avg. continuing jobless claims rise to 2.52 mln
8:30 AM ET, Feb 22, 2007 - 5 minutes ago

06. U.S. continuing jobless claims fall 45,000 to 2.50 mln
8:30 AM ET, Feb 22, 2007 - 5 minutes ago

07. U.S. 4-wk. avg. initial jobless claims up 1,250 to 328,000
8:30 AM ET, Feb 22, 2007 - 5 minutes ago

08. U.S. weekly initial jobless claims fall 27,000 to 332,000
8:30 AM ET, Feb 22, 2007 - 5 minutes ago

[54anickel]

48. Oil prices rise on inventory report

http://www.businessweek.com/ap/financialnews/D8NERP500.htm

Oil prices rose further above the $60 a barrel mark Thursday after a U.S. government report showed larger-than-expected drops in gasoline and heating oil inventories last week.

Traders also kept an eye on developments in the Middle East, where tensions are escalating between Western powers and Iran over the nation's nuclear program.

Light, sweet crude for April delivery rose 30 cents to $60.37 a barrel in morning trading on the New York Mercantile Exchange.

Crude inventories rose by 3.7 million barrels to 327.6 million barrels in the week ending Feb. 16, the Energy Information Administration said Thursday. But gasoline inventories fell by 3.1 million barrels to 222.1 million barrels, and distillates, which include heating oil and diesel, fell by 5.0 million barrels to 128.3 million barrels. Most of the drop in distillates was due to diminishing heating oil supplies.

Analysts were expecting, on average, a modest rise in crude oil and gasoline inventories and a smaller drop in distillates.

more...

[ozymandius]

3. Oil prices hover around $60 a barrel

SINGAPORE - Oil prices hovered around the psychologically important US$60-a-barrel mark in Asian trading Thursday ahead of the release of the U.S. government's fuel stocks data later in the day.

Light, sweet crude for April delivery fell 13 cents to $59.94 a barrel in electronic trading on the New York Mercantile Exchange midday in Singapore.

-cut-

Data from the U.S. Department of Energy due later Thursday was expected to show domestic crude oil stockpiles rose in the week ending Feb. 16, while distillates are falling, according to a Dow Jones Newswires survey of nine analysts.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

4. Average gasoline price jumps more than 5 cents to $2.30 a gallon

The average price of gasoline bounced up 5.5 cents in the past week, to $2.296 a gallon, marking the third consecutive week of price increases, the U.S. Energy Information Administration reported Tuesday.

The stream of price increases signals the start of the yearly jump in fuel prices that typically tapers off in May, though has continued through the summer the past two years.

"We don't see any indication that we're headed toward $3," as happened the past two years, says EIA senior analyst Mike Burdette. "Realistically on a given day or week we could see $2.60" this spring or summer, he says.

http://www.usatoday.com/money/industries/energy/2007-02-20-weekly-gas-price_x.htm?csp=N009

[AnneD]

40. Morning Marketeers.........

:donut: I just finished a breakfast chat with a friend of mine in the oil field tool supply biz. He said it has been going like gang busters in his field and hasn't let up. All the oil field suppliers are steadily booming. He said that although the price went down, it has been going up so steadily that the economy is absorbing the shock so folks aren't noticing quite as much. He was telling me to keep an eye on it cause the refineries haven't even started switching over to their summer blends and gotten their summer inventory in yet. Now take it for what it is worth but that is just one opinion from a sharp guy in the oil patch. I just love my little diner and the morning gang-it is my fav watering hole. Real folks having real food and real conversation. Now I understand how Molly Ivins got so many seeds for her stories. You get the right mix of folks, add a little good conversations and wit and the stories will write themselves.

Happy hunting and watch out for the bears.

[ozymandius]

5. Exxon to Abandon a Big Investment in Qatar

HOUSTON, Feb. 20 — Exxon Mobil announced on Tuesday that it would abandon one of its biggest investments ever, a project with Qatar’s state-run oil and gas company to produce clean-burning diesel from natural gas.

Instead, Exxon Mobil said that it could concentrate on a new gas drilling project in the emirate’s rich Barzan field, which is close to the site of the gas-to-liquid project. The Barzan project will initially produce 1.5 billion cubic feet of gas a day and eventually much more for the fast-growing Qatar domestic market in 2012.

The Exxon project is apparently a victim of those costs, although the company would not explicitly say so.

-cut-

Energy companies have shelved or delayed several projects in Canada over the last year or so because of cost overruns in oil sands and conventional fields, and Qatar itself announced a moratorium on new gas projects last year. But Tuesday’s announcement came as a surprise since the chief executive of Exxon, Rex W. Tillerson, had said as recently as September that the company was moving forward with the project, albeit with efforts to control costs.

http://www.nytimes.com/2007/02/21/business/worldbusiness/21exxon.html?_r=1&oref=slogin

[ozymandius]

6. Whole Foods to buy Wild Oats for $565 million

LOS ANGELES/NEW YORK (Reuters) - Whole Foods Market Inc. said on Wednesday it will buy smaller rival Wild Oats Markets Inc. for about $565 million to compete better with larger traditional grocers, which are increasingly encroaching into its organic and prepared foods niches.

Shares of the world's largest natural and organic grocery chain, which is facing slowing growth at established stores, rose 5 percent following the announcement, while Wild Oats shares soared more than 17 percent.

The news came as Whole Foods reported a 7.7 percent drop in quarterly earnings. Even though total sales rose, sales at stores open at least a year rose 7 percent in the quarter -- about half the 13 percent rise a year earlier.

http://www.reuters.com/article/ousiv/idUSN2133905320070222

[ozymandius]

7. GM awards AT&T $1 billion contract

DETROIT -- Five years ago, General Motors Corp.'s worldwide telecommunications system was lagging the company's fledgling effort to globalize vehicle design, engineering and manufacturing.

It would take an hour or more for an engineer in Europe to send a large computerized design file to a manufacturing plant overseas, and another hour for the plant to send the file back with any changes.

Now, as the company moves toward building more models in more places off the same underpinnings to save billions of dollars, GM and AT&T Inc. have a network in place that allows engineers and plant officials worldwide to simultaneously view the same data and discuss it.

On Wednesday, GM gave AT&T even more business, awarding it a five-year, $1 billion global networking contract that will prepare the world's largest automaker for whatever electronic breakthroughs lie ahead.

http://seattlepi.nwsource.com/business/304629_attgm22.html

[ozymandius]

8. Why America spends so freakin' much on health care

A new study by researchers at the agency that runs Medicare estimates that health spending will hit $4 trillion by 2016, eating up 20% of the economy. (Here's the link; and here's the subscription-required WSJ story on the report.) By that time the government will be paying close to 50% of the nation's health care bill. If that sounds shocking, consider that the government already pays about 45% of health care costs--or maybe as much as 60% if you count various tax subsidies and some other spending, according to calculations by med-school professors Steffie Woolhandler and David Himmelstein. Who says we don't have nationalized health care?

These are big numbers, and it's not easy to keep them in perspective. Is 20% a lot? Is it something we, as a nation, can afford?

Here are some important things to keep in mind:

-cut-

--That doesn't mean there isn't a problem. We already spend much more on health care, as a percentage of GDP, than any other developed economy. But unlike nearly all those other countries, we haven't managed to guarantee access to care to every citizen, or even to every citizen with a full-time job. And there's pretty good evidence that lots of the health care we buy is a waste of money. I'm feeling lazy, so I'll just cut-and-paste from the 2003 article of mine which I'm shamelessly recycling for this post.

I visited Fisher this summer at Dartmouth's Center for Evaluative Clinical Sciences, which during the past 14 years has been studying the weird regional variations in how doctors in the U.S. decide what care their patients need. For example, even after adjusting for obvious demographic differences, annual Medicare reimbursements in 1996 added up to $8,414 per enrollee in Miami vs. just $3,431 in Minneapolis. Earlier this year, Fisher and a team of five researchers produced a study that suggests Minnesotans might actually get the better care....

http://money.cnn.com/blogs/generationrisk/2007/02/why-america-spends-so-freakin-much-on.html

[UpInArms]

9. dollar watch

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

Last trade 84.46 Change +0.24 (+0.28%)

US Dollar Strengthens as Inflation Data Surprises to the Upside

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar_Strengthens_as_Inflation_1172096907703.html

US Dollar- US consumer prices were slightly better than expected today which helped to contribute to the overall strength of the US dollar. Having rallied going into the release of the CPI report, the true impact on the dollar was limited. Central banks were the focus of the day with interest rate decisions, comments and minutes from prior meetings occupying the calendar. The Bank of Japan’s decision to raise interest rates gave little support to the Yen in light of the dovish comments from BoJ Governor Fukui following the decision. The British pound remained under pressure as the minutes from the most recent BoE meeting suggests that the central bank will need more time to assess data before tightening rates again. Comments from the central bank governors of Australia and Switzerland indicate that both policy makers are looking to lift interest rates over the next year. In the US, the minutes from the January FOMC meeting delivered no surprises. The Federal Reserve was relatively upbeat about growth and agreed that inflation risks still remain. Even though another rate hike was “not warranted” at the time, they decided against dropping the tightening bias. The tone of the statement contained the same degree of hawkishness as the comments made by Fed Chairman Bernanke last week, which should keep the prospects of a rate hike later this year in play. A deeper look at today’s US data indicates that the rise in core prices was driven by higher medical costs and tobacco prices. Leading indicators fell short of expectations for the month of January, but the sharp upward revision in December offset any negative implications. Looking ahead, the dollar could retain its strength against the Japanese Yen and British pound because of the divergence in monetary policy outlooks between the US, Japan and Great Britain. At the same time, it could be vulnerable to further losses against the Euro and commodity currencies, where the monetary policies of those countries are slightly more aggressive than that of the US.

...more...

and this one is actually from the end of last week:

Major Events in China this Past Week: China Raises Reserve Requirements

http://www.dailyfx.com/story/strategy_pieces/weekly_option_strategy/Major_Events_in_China_this_1171662430351.html

G7 Fails to Increase Pressure on China to Revalue the Yuan

Following a relatively uneventful G7 meeting this weekend, the yuan market pulled back from record levels after suggestions emerged of a more rigid currency regime in the short term by Chinese officials. Previously, speculation pushed the Chinese yuan to a record high as expectations for a near term adjustment to the current basket regime mounted ahead of the weekend. However, the heated anticipation was quickly cooled by comments from People’s Bank of China Governor Zhou. Speaking on the sidelines of the weekend meeting, the bank chief dampened expectations by referring to the underlying valuation as “appropriate” and that the current “pace of appreciation is suitable”. Since the July 2005 revaluation, the Chinese yuan has climbed by a mere 6.6 percent, leaving some in the global forum complaining of a 40 percent undervaluation. Most recently, it called for further jawboning by US Congressman as the Chinese economy reported a record trade surplus. The statements continue to show how resilient Chinese officials remain against further cajoling by foreign trade partners, seeing the likelihood of an adjustment in the far future.

<snip>

Bank of China Eliminates Fund On Yuan Appreciation

Bank of China, a major lender in mainland China, experienced a setback in its four month old overseas investment fund. The poor performance, attributed to the record appreciation in the yuan, has forced the bank to terminate the fund this past week. Subsequently, the move deals a blow to the QDII or Qualified Domestic Institutional Investor policy instituted by the government late last year. In an effort to increase the outflow of capital, helping to stabilize the domestic currency, the government created QDII allowing domestic investors to take positions in returning assets outside of China. However, it seems that with the appreciated Yuan, returns translated back into the domestic currency yield a much lower gain. Other funds that have attempted to capture opportunities abroad are finding the task equally difficult, not accounting for dollar denominated depreciation. Taking into account the 1.5 percent decline in the dollar, some funds have returned a negative figure in the first five months of operation. As a result, Bank of China is seeking regulatory approval to offer another fund that is more “liquid and transparent”.



China Raises Reserve Requirements

In a move to hopefully curb inflationary pressures, the People’s Bank of China is raising the reserve requirement that banks are required to set aside. For the fifth time in eight months, central bank Governor Zhou Xiaochuan has increased the ratio, concerned that continued growth is helping to stoke consumer prices as the economy marks a record trade surplus. Under the auspices of the new decision, lenders must place aside 10 percent of deposits beginning on February 25th. The amount is up from the 9.5 percent previously set by the Governor. The decision will likely be followed up by one more increase as inflationary pressures continue to remain relatively high. According to the report, released earlier in the week, consumer prices remain higher above 2 percent, supporting notions of possible economic overheating in China.

...more...

[54anickel]

25. Storm Cloud at the Global Bazaar?

http://www.washingtonpost.com/wp-dyn/content/article/2007/02/20/AR2007022001291.html?sub=AR

Global finance is mysterious, exciting and sometimes reckless. A specter now haunts it -- the specter of excess "liquidity." Will this prove a passing anxiety or, as in 1997 and 1998 with the Asian financial crisis, will it threaten the stability of the entire global economy? Good question.

snip>

In the past quarter-century, points out economist Richard Berner of Morgan Stanley, the financial system -- the way that savings are channeled into investments -- has changed in three fundamental ways.

First is "securitization." Banks, savings and loan associations (S&Ls) and insurance companies have retreated as direct lenders. In 1980, for example, S&Ls and banks made and held most home mortgages. Now, most mortgages are bundled into bondlike securities and sold to institutional investors -- pension funds, endowment funds and insurance companies as well as banks. The same has happened to credit card debt, auto loans and business loans. About 53 percent of U.S. nonfinancial debt is now "securitized"; in 1980, that was 28 percent.

Second is the explosion in the number of financial institutions -- hedge funds, mutual funds, private equity funds. The channels for savings have multiplied. Hedge funds, for instance, are large pools of loosely regulated money from wealthy individuals and institutional investors. These funds control more than $1 trillion.

Finally, finance has gone global. In 1980, most countries (one exception: the United States) restricted or prohibited their citizens from investing abroad -- and foreigners from investing in their countries. Since then, governments have relaxed or removed most of these "capital controls." Cross-border investments now exceed $6 trillion annually, reports the McKinsey Global Institute.

snip>

One big worry now is the "yen carry trade." Investors (speculators?) borrow at 1 or 2 percent in yen, convert the yen into other currencies (say, Brazilian reals or Turkish lira) and reinvest the funds in those countries at much higher interest rates. For Brazil and Turkey, three-month rates are roughly 13 and 19 percent. Low interest rates on Swiss franc loans have also inspired a sizable "carry trade," says Grant's Interest Rate Observer. The danger is that a sharp shift in exchange rates (either the borrowing or lending currency), or higher interest rates in the lending country, could make these appealing trades unprofitable. A panic might ensue as investors seek to escape. Historically, "excess liquidity" often evaporates through losses.

more...

[54anickel]

27. Japanese rate increase is unlikely to interrupt flow of yen overseas

http://www.iht.com/articles/2007/02/21/business/yen.php

TOKYO: A rate increase Wednesday by the Japanese central bank lifted borrowing costs, but not enough to interrupt the huge but potentially volatile flow of cheap yen out of Japan that now helps prop up global stock and real estate markets, economists said.

The flow, known as the yen carry trade, is the product of the yawning gap between rock-bottom Japanese borrowing rates and the much higher rates in other countries.

This has led Japanese individuals to pour money overseas in search of higher returns. Some of the money also comes from foreign investors, who borrow cheaply in Japan to invest in real estate and other markets abroad.

The carry trade has become a major source of low-cost capital for the world, with money flowing into everything from Wall Street stocks to real estate in South Korea, India and even Eastern Europe.

Economists say the risk of the carry trade is that if it suddenly dried up — or worse, if Japanese investors started pulling back their money — global markets could suffer sharp sell-offs, hurting everyone from home buyers in Bucharest to holders of retirement savings accounts in New York.

This has led some economists to begin calling the trade a giant bubble, funded by cheap Japanese credit, that is just waiting to burst. But the rate increase Wednesday is unlikely to prick that bubble on its own.

more...

[54anickel]

28. No end in sight for yen carry craze

http://www.reuters.com/article/reutersEdge/idUSL218404520070221

LONDON (Reuters) - High risk yen carry trades exploiting Japan's low interest rates are in no danger of losing their appeal as long as Japanese monetary policy remains predictable and financial market volatility stays low.

The BOJ raised rates to a decade high of 0.5 percent on Wednesday, saying it would tighten borrowing costs further but gradually.

Japan's rates are still the lowest in the industrialized world and the yen quickly erased initial gains to resume a broad decline, hitting a record low against the euro beyond 159.

Carry trades, where investors borrow in currencies with low interest rates and invest the proceeds in high yielding currencies, are seen by many as an unsustainable long-term strategy that can only thrive in a low-volatility environment with ample cheap money.

But investors seem eager to amass ever more yen-financed positions in higher yielding assets.

"We are again in a framework where carry trades work very well. As long as expectations of BOJ hikes remain moderate then shorting yen may be still in the market for some time," said Umberto Alvisi, currency strategist at Credit Suisse.

"There is fairly low volatility in the market. At a global macro level we are in an acceptable path of economic growth. It doesn't appear we have a big inflation or big growth issue." Continued...

1 | 2 | 3 | 4 Next

more...

[54anickel]

54. IMF's Lipsky says BOJ rate rise reflects better econ

http://www.signonsandiego.com/news/business/20070222-0614-imf-lipsky-yen.html

BRUSSELS – The Bank of Japan's interest rate increase on Wednesday reflects better economic fundamentals in the Japanese economy, a top IMF official said, but he declined to comment on the subsequent fall in the yen.

Euro zone countries have complained about the weak yen, which is trading near all-time lows against the euro, because it gives Japanese exporters an advantage over European rivals on world markets.

“The yen rate at this point is a market-determined rate, the authorities are not intervening,” the International Monetary Fund's first deputy managing director John Lipsky told Reuters in an interview on Thursday.

The weakness of the yen stems largely from low Japanese interest rates, which make investment in higher-yielding markets more attractive.

snip>

“What determines exchange rates in the short run is always a complex matter, and I think it's not very productive to try to judge daily variations in the exchange rate relative to longer-term trends,” he said.

bit more...

[54anickel]

34. U.S. Current-Account Deficit Deserves Some Noise

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_berry&sid=aWuQCgZ0ewDU

Feb. 22 (Bloomberg) -- To read the annual Economic Report of the President, one would think the whopping U.S. current- account deficit is no more than a minor bookkeeping entry of little importance to the future of the U.S. economy.

Yes, in the fourth quarter of 2005 the current-account deficit jumped to 7 percent of gross domestic product because of a surge in oil imports, though it came down a bit last year, says the 2007 report released by the president's Council of Economic Advisers on Feb. 12.

And what did that mean? Apparently not very much.

``Current-account deficits mean that domestic investment continues to exceed domestic saving, with foreigners financing the gap between the two,'' the report explains.

Harvard University economist Kenneth Rogoff, who is also a former chief economist of the International Monetary Fund, says he believes the current-account deficit is worth a good deal more comment than that. For one thing, it could lead to a plunge in the dollar, he warned recently.

``Many people have been asking why the dollar hasn't crashed yet,'' Rogoff said in a commentary posted Feb. 7 on a Web site of the U.K. newspaper, the Guardian.

more...

[54anickel]

39. Today's Pfenning - A Moon Shot For Gold!

http://www.dailypfennig.com/

Good day... Well... Things look a bit differently on the currency screens this morning, as the dollar has bounced back... Trust me, it wasn't from any of the data yesterday! No... With a lack of data the rest of this week, the markets are looking at two Fed Head speeches due tomorrow, and buying dollars...

Here's the skinny... Fed Heads Fisher and Yellen will speak tomorrow, and both have indicated recently that they are not happy with rising prices. So, this really gives me reason to laugh out loud... Jawboning a currency higher or lower is one thing... But this? They haven't even begun to speak, and the markets are anticipating that they will talk about inflation pressures... So we have a new term... "Anticipation Jawboning"... Of course when I was typing the word "Anticipation" I could hear Carly Simon singing the song!

So... With traders buying dollars this morning, the euro has slipped back below 1.31... I don't expect this dip to last too long, but while traders are buying dollars, it always seems to me to be an opportunity to sell them! If they want to buy them... I'll sell them all day long!

On Tuesday, I promised you a special treat for Wednesday's Pfennig, and then forgot about it altogether... But then, no one must have been paying attention in class, because I did not receive one reminder that I had failed to deliver the special treat! Anyway... I won't let that lack of attention get in the way of a good story, so here's one of my faves... Stephen Roach, and his take on last week's awful showing of the TIC's Data...

Stephen Roach, from his Monday letter...

snip>

And finally... The minutes of the FOMC meeting... Not much here... The Fed Heads are happy with what they've done so far... I think they are wearing rose colored glasses!

I couldn't get through this without talking about the $22 increase in Gold yesterday! WOW! With all the Fed Head talk about "inflation pressures" and "rising prices", Gold traders finally pushed the shiny metal past the $670 level, and once it was past that previous tough row to hoe, it soared! Good Show!

more...

[UpInArms]

10. Patent Held by Genentech Is Revoked by Government

http://www.nytimes.com/2007/02/22/business/22patent.html?ex=1329800400&en=6f632668b0a6b64d&ei=5088&partner=rssnyt&emc=rss

The Patent and Trademark Office has decided to revoke a fundamental patent held by Genentech, the biotechnology company, that was at the center of a recent Supreme Court decision.

The patent office’s decision could cost Genentech hundreds of millions of dollars in royalties over the next decade but would save a like amount for rivals that are paying the royalties, including MedImmune, Abbott Laboratories, Johnson & Johnson and ImClone Systems.

In a statement yesterday, Genentech said it would appeal the decision through the patent office and, if necessary, the courts. The company said the patent would remain “valid and enforceable” through the appeals process.

The decision is the latest in a long controversy, and even mystery, surrounding the patent. The patent was awarded in 2001 even though the inventions on which it was based were made in the early 1980s. If not revoked, the patent, often called the Cabilly II patent after the lead inventor, Shmuel Cabilly, would expire in 2018.

...more...

[UpInArms]

11. Corn Futures Prices Reach 10-Year High

http://www.nytimes.com/2007/02/22/business/22corn.html?ex=1329800400&en=71619c0a35efb919&ei=5088&partner=rssnyt&emc=rss

Corn futures rose to 10-year highs yesterday on the Chicago Board of Trade as a bull market attracted speculative buyers.

Corn for delivery in March settled 11 cents higher, at $4.2625 a bushel. The May futures contract settled up 10.75 cents, at $4.39 a bushel, and the December contract was up 9.75 cents, at $4.23.

Traders said that midday weather forecasts from Cropcast Weather Services, pointing to the formation of a La Niña weather pattern, added to the bullish theme. The pattern could cause wet spring conditions in the eastern Corn Belt, particularly in the Ohio River Valley, according to the forecast.

...a bit more...

[UpInArms]

12. U.S. Won't Seek to Restore Fraud Conviction of Ex-Westar Officials

http://www.nytimes.com/2007/02/22/business/22westar.html?ex=1329800400&en=63a174b6ec973a33&ei=5088&partner=rssnyt&emc=rss

The government will not try to reinstate the fraud convictions of two former Westar Energy executives, prosecutors said yesterday.

The United States attorney’s office in Topeka, Kan., said it would not ask an appeals court in Denver to reconsider its decision in January to reverse the convictions of the executives, David C. Wittig and Douglas T. Lake. The appeals court said that evidence at the trial did not justify the guilty verdicts.

Mr. Wittig, the former chief executive, and Mr. Lake, a former vice president, were accused of looting Westar, a public utility based in Topeka. They were convicted in 2005 of money laundering and wire fraud.

“We had until Feb. 20 to notify the 10th Circuit whether we wanted to ask for a rehearing,” a government spokesman, Jim Cross, said, referring to the federal appeals court in Denver. “We have allowed that deadline to pass.”

The court said prosecutors could not retry the wire fraud and money laundering counts, but could retry some lesser claims. Mr. Cross said that prosecutors had not decided on a retrial.

...more...

[UpInArms]

13. Raymond James Fined in Lack of Oversight

http://www.nytimes.com/2007/02/22/business/22fund.html?ex=1329800400&en=8a45c9a608d79da2&ei=5088&partner=rssnyt&emc=rss

NASD, the brokerage firm regulator, said yesterday that it had fined Raymond James Financial $2.75 million for failing to supervise more than 1,100 branch managers nationwide, including one who urged an 84-year-old woman to put most of her money into a single aggressive mutual fund.

According to NASD, Raymond James let branch managers supervise their own sales activities from April 2000 to September 2004 and failed to assess properly whether the investment advice was sound.

The NASD also permanently barred Donna Vogt, a branch manager in Campbellsport, Wis., from the industry for urging retirees to buy “unsuitable” mutual funds and variable annuities, and for disregarding age, risk tolerance and investment needs in advising clients.

According to the regulator, the 84-year-old client, with Ms. Vogt’s encouragement, put 80 percent of her portfolio into a single “momentum” mutual fund, resulting in a loss exceeding 60 percent.

...a bit more...

[UpInArms]

14. Even for Rungs Below the Top, Goldman Bonuses Were Hefty

http://www.nytimes.com/2007/02/22/business/22goldman.html?ex=1329800400&en=277adf71bb9ca6b7&ei=5088&partner=rssnyt&emc=rss

Goldman Sachs already has the highest-paid chief executive on Wall Street. Now, even his lieutenants make more than nearly all other C.E.O.’s on the Street.

The investment bank paid its two co-presidents, Gary D. Cohn and Jon Winkelried, bonuses of about $52.5 million each for the 2006 fiscal year, the firm said in a regulatory filing yesterday. Added to their $600,000 salaries, Mr. Cohn and Mr. Winkelried made nearly $53 million.

In the same report, Goldman reiterated that it paid its chairman and chief executive, Lloyd C. Blankfein, a $53.4 million bonus, shattering the record for a Wall Street chief executive set by his predecessor, Henry M. Paulson Jr. The firm gave John S. Weinberg, a vice chairman and co-head of investment banking, a $31.5 million bonus.

Goldman also paid Mr. Paulson, now the Treasury secretary, $110 million to cash out his outstanding stock options and restricted stock.

The disclosure further illustrates just how profitable last year was for Wall Street’s top investment banks, Goldman in particular. The firm reported a record profit of $9.5 billion for 2006, and its stock price rose 56 percent.

<snip>

To call last year a good year for Wall Street’s elite would be an understatement. High returns from their trading arms and lucrative fees from advising in the mergers and acquisitions boom helped propel investment banks to record levels of revenue, profit and earnings per share. Those figures have translated to lush pay packages for investment bankers and traders.

...more worth reading...

[UpInArms]

15. Home Lenders Hit by Higher Default Rates

http://www.nytimes.com/2007/02/22/business/22lend.html?ex=1329800400&en=81ed3f10642b7dd0&ei=5088&partner=rssnyt&emc=rss

Shares of NovaStar Financial, which makes loans to people with weak credit, fell almost 43 percent yesterday after the company announced a surprise loss of $14.4 million for the fourth quarter and told investors that it might not make enough money to pay dividends for the next four years.

The announcement, which highlighted the fact that more home loans made last year were delinquent than mortgages from 2005 and earlier, echoed reports issued earlier this month by New Century Financial and HSBC Finance, the American mortgage division of the global banking giant.

Though each lender is suffering from a variety of individual ills, rising default rates among loans made to people with spotty, or subprime, credit appear to be the central problem for the industry.

A major indicator of the trouble in the subprime market is the early-payment default rate, which measures the portion of borrowers who fall behind on their house payments within the first few months of taking a loan.

Rising default rates and the related financial troubles of mortgage companies could hurt a broad segment of the American housing market. Among them will be the largely poor and minority home buyers who will see interest rates on adjustable mortgages rise, as well as investors in mortgage-backed securities who poured billions of dollars into these loans.

The default rate jumped for loans made in 2006, as lenders allowed more borrowers to take out loans without documenting their incomes or making a down payment. Also, analysts note, homeowners who encountered financial problems had a tougher time refinancing or selling their properties because home prices were no longer rising in many parts of the country.

...more...

[54anickel]

30. A Painful Hiss from the Subprime Balloon

Subprime lender NovaStar's warning of little, if any, taxable income through 2011 sends another unwelcome jolt through mortgage company stocks

http://www.businessweek.com/bwdaily/dnflash/content/feb2007/db20070221_387085.htm

Well, at least NovaStar Financial (NFI) has $154 million in its bank accounts.

In a quarterly report that staggered analysts with the breadth of its bad news, the Kansas City (Mo.) subprime mortgage lender revealed a quarterly loss, said it may not have any taxable income through 2011, and strongly hinted its days as a real estate investment trust (REIT) are drawing to a close. Many subprime lenders avoid Uncle Sam's tax take by distributing their taxable income as dividends. If they don't have any taxable income, well, operating as a REIT may not make much sense. And as NovaStar's loan volume drops, that $154 million will serve as a needed cushion throughout a lean 2007. Chris Brendler, an analyst with Stifel Nicolaus in Baltimore, called the report "alarming" and a "shock." And as NovaStar's loan volume drops, that $154 million will serve as a needed cushion throughout a lean 2007.

The company's news was especially unwelcome to the market, coming on Feb. 21 just as the Labor Dept. reported a 0.3% jump in core inflation, above the 0.2% increase analysts had expected. That dimmed the prospects of any interest rate cut by the Federal Reserve that could buoy the housing market, and it sent stocks lower (see BusinessWeek.com, 2/21/07, "Consumer Prices Heat Up"). Minutes of the last Federal Reserve board meeting also showed that central bankers remain more worried about the threat of inflation than about an overall slowing of the housing market. "All members agreed that the predominant concern remained the risk that inflation would fail to moderate as desired," according to minutes of the Fed's Jan. 30-31 meeting released on Feb. 21.

"One of the Scariest Signs"
A subprime mortgage is one granted to borrowers with less-than-perfect credit histories because they've missed payments on credit cards, they are too young to have established a credit record, or a similar issue. As housing boomed in recent years, lenders rushed into making these loans, in some cases letting people borrow hundreds of thousands of dollars without ever having to prove their income or assets. Subprime lenders now represent about one-fifth of the overall $5.5 trillion U.S. mortgage market.

The quick growth of subprime mortgages in the recent housing boom has been eclipsed by an equally rapid decline, with several major subprime lenders, ResMae Mortgage, Mortgage Lenders Network USA, and OwnIt Mortgage Solutions declaring bankruptcy since December. Others very well may follow.

more...

[54anickel]

31. Moody's might cut ratings of sub-prime mortgage lenders

http://www.latimes.com/business/la-fi-wrap22.1feb22,1,685108.story?coll=la-headlines-business

New Century Financial Corp. and Ameriquest Mortgage Co., both based in Orange County, are among five sub-prime mortgage lenders that may have the ratings cut on the part of their businesses that collect home loan payments amid a rise in delinquencies, Moody's Investors Service said Wednesday.

Moody's said it would review the so-called servicer ratings for affiliates or units of New Century, Ameriquest, NovaStar Financial Inc., Accredited Home Lenders Holdings Co. and Winter Group. New York-based Moody's said it anticipated lowering the ratings by no more than one level.

More than 20 sub-prime lenders have shut down, scaled back or been sold in the last five months amid rising late payments and lower prices for new loans. Others, including San Diego-based Accredited Home and NovaStar Financial of Kansas City, Mo., this month reported quarterly losses.

New Century has said it expects to post a loss. Shares of the Irvine-based lender fell $1.22 to $17.55. Orange-based Ameriquest is privately held.

Moody's said its review was "prompted by the heightened level of volatility in the sub-prime mortgage market." The companies face "lower profitability as well as potentially an increased level of liquidity risk given current market conditions," it said in a statement.

more...

[nitpicker]

35. Toll Brothers quarterly profit falls sharply

http://www.reuters.com/article/ousiv/idUSWEN461420070222

Toll Brothers quarterly profit falls sharply
Thu Feb 22, 2007 9:39AM EST

By Ilaina Jonas

NEW YORK (Reuters) - Toll Brothers Inc. (TOL.N: Quote, Profile, Research) on Thursday said the weak U.S. housing market drove down its quarterly profit 67 percent after write-downs for lower land values, and the luxury home builder lowered its forecast.

U.S. housing demand has dropped over the course of the year on higher prices and interest rates and Toll said it could not yet see a rebound going into the industry's spring selling season.

For the fiscal first quarter that ended January 31, Toll said it earned $54.3 million, or 33 cents per share, down from $163.9 million, or 98 cents per share, in the year-earlier quarter.

The results included write-downs of $96.9 million for the lower value of the land Toll owns or from forfeiting payments for land options Toll decided not to exercise, as well as a $9 million goodwill impairment charge related to its 1999 acquisition of Silverman Cos. in Detroit.

Excluding these items, the company said it earned 72 cents per share.

Analysts on average had expected the company to earn 36 cents per share, according to Reuters Estimates. The average did not include the acquisition-related charges.

Gross margins of 29.8 percent were better than expected and down 1.1 percentage points from a year earlier, indicating less use of incentives to sell homes
Earlier this month, Toll said first-quarter land charges could run as low as $60 million or as high as $160 million.

Total revenue for the quarter fell 19 percent to $1.09 billion while contracts for new homes fell 33 percent to 1,027 units. The value of the contracts fell 34 percent to $749 million.

Prospective buyers canceled their contracts at a rate of 33 percent during the quarter, Toll had said earlier this month. Investors, home builders and other industry watchers have been looking for signs of an upturn, but Toll's chief executive expressed caution.

"There are too many soft markets at this stage of the selling season to call a general upturn in the new home market," Chief Executive Robert Toll said in a statement. "Demand varies greatly from week to week in individual markets."

The year's strongest selling period is in its early days and will pick up over the spring quarter. The industry is looking to the spring for an indication of a recovery or a protracted slump.
(snip)

Based on the company's current backlog, the impact of lower first-quarter contracts and the continuing higher-than-normal cancellation rate, Toll lowered its forecast for the full year, to net earnings per share of $1.46 to $1.85, including write-downs of $60 million in the remaining three quarters. That is down from a prior forecast of $1.58 to $2.08.

The land-related charges could change, Toll said.

Given that Toll's first-quarter results missed the company's initial outlook of 59 cents, its new forecast Actually raised the remaining three quarters to $1.33 from $1.24 per share, JP Morgan analyst Michael Rehaut said in a note.

Toll said it expects to close on the sale of 6,000 to 7,000 homes in 2007. It had earlier forecast a range of 6,300 to 7,300 homes.

Toll said it sees fiscal 2007 home-building revenue in the range of $4.20 billion to $4.96 billion.

Toll shares slipped 18 cents to $32.68 in early New York Stock Exchange trading after opening more than 1 percent higher. Since hitting a recent trough in July 2006, Toll shares have gained about 41 percent.

(snip)

[Ghost Dog]

17. Japan's trade balance returns to surplus in January

http://asia.news.yahoo.com/070222/afp/070222102520eco.html

TOKYO (AFP) - Japan's trade balance swung into surplus in January from a deficit a year earlier, beating market expectations due to brisk exports to the booming Chinese economy, the government said Thursday.

Japan logged a trade surplus of 4.44 billion yen (37 million dollars) last month, much better than a deficit of 353.53 billion yen seen a year earlier, the finance ministry reported.

January tends to be a weak month for exporters due to the New Year break, but even so the surplus was well above an expected deficit of 149.5 billion yen, although down from December's surplus of over one trillion yen.

The solid start to 2007 was mainly due to robust exports to China, particularly strong shipments of computer equipment for video games ahead of the Lunar New Year holiday.

Overall exports rose 18.9 percent in January year-on-year to 5.953 trillion yen, the largest ever for January, the ministry said.

Imports gained 10.9 percent to almost 5.949 trillion yen as the weakness of the Japanese yen raised the cost of incoming shipments despite a drop in the volume of crude oil imports, it added.

Japan's trade deficit with China shrank by 33.9 percent to 368.02 billion yen as exports to its biggest trade partner surged 50.8 percent to 893.51 billion yen, while imports were 9.7 percent higher at 1.26 trillion yen.

/...

[Ghost Dog]

18. Nikkei breaches 18,000 after rates move

http://www.ft.com/cms/s/e4e67a76-c21c-11db-ae23-000b5df10621.html

Japanese stocks rose strongly on Thursday, responding to the Bank of Japan’s interest rates increase and its remarks that the rates will rise further only gradually.

The BoJ raised rates from 0.25 per cent to 0.5 per cent on Wednesday, the highest level in more than a decade, signalling the central bank’s confidence in the underlying strength of the economy. The move led to strong rises across the board, including domestically focused and export stocks.

The Nikkei 225 breached the 18,000 level for the first time in almost seven years, ending the day up 1.1 per cent to 18,108.79. The broader Topix advanced 0.9 per cent to 1,802.90.

...

The Mothers market of smaller growth stocks, dominated by retail investors, leapt 4 per cent to 1,162.25, outperforming the rest of the market.

Most of the rises in export-focused stocks were less spectacular, despite the further weakening of the yen due to the prospect of a slow pace of rate rises. The euro reached a record high of Y159.13 against the yen during the day.

/...

[Ghost Dog]

19. Key money market rate rises to 0.528% after BOJ's target rate hike

http://asia.news.yahoo.com/070222/kyodo/d8nemv1o0.html

(Kyodo) _ The weighted average of unsecured overnight call rates came to 0.528 percent Thursday, a day after the Bank of Japan decided to steer the key money market rate higher by 0.25 percentage point to 0.5 percent for its monetary policy, the BOJ said.

The average rate spells a rise of 0.126 point from Wednesday. It temporarily surged to as high as 0.600 percent.

The yield on newly issued two-year government bonds, which is greatly affected by the central bank's monetary policy change, climbed 0.015 point to a one-month high of 0.815 percent.

But the yield on the No. 284, 1.7 percent 10-year government bond, a key barometer of long-term interest rates, fell 0.035 point to a one-month low of 1.655 percent.

/..

[Ghost Dog]

20. European shares climb as earnings, payouts please

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070222:MTFH69015_2007-02-22_11-52-45_L08435636&type=comktNews&rpc=44

LONDON, Feb 22 (Reuters) - European shares rose strongly by midday on Thursday as a robust set of company results reassured investors a day after interest rate worries threatened to crimp a bull run in stock markets.

At 1128 GMT, the FTSEurofirst 300 index <.FTEU3> of top European shares was up 0.5 percent after a fall on Wednesday brought about by higher-than-expected U.S. inflation figures that raised the prospect of interest rate increases.

German stocks led the way, with the DAX <.GDAXI> rising nearly 0.7 percent on gains at chemical maker BASF (BASF.DE: Quote, Profile , Research) and insurer Allianz (ALVG.DE: Quote, Profile , Research), which both reported strong results and proposed chunky dividend increases.

BASF rose 5.7 percent and hit a record high, and Allianz climbed 4.8 percent.

Other gainers included Allianz's French rival AXA, which put on 2.8 percent after a profit surge, and British energy firm Centrica (CNA.L: Quote, Profile , Research), after strong results.

Nestle rose 2.6 percent after the world's largest food group topped its own sales growth target and widened profit margins in 2006.

"The underlying theme in Europe is strong results," said Bernd Meyer, a European strategist at Deutsche Bank.

/...

[Ghost Dog]

21. FTSE strong amid results, commodities steam ahead

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070222:MTFH69568_2007-02-22_12-10-05_L22448857&type=comktNews&rpc=44

LONDON, Feb 22 (Reuters) - Britain's leading share index forged higher at mid-session on Thursday as commodities steamed ahead on sturdy oil and copper prices and a slew of corporate results boosted stocks such as Centrica (CNA.L: Quote, Profile , Research).

On one of the busiest earnings days of the quarter, Centrica scored a record high and topped the FTSE 100 .FTSE chart, up more than 4 percent, after beating analysts' earnings forecasts. Britain's biggest domestic energy supplier said customers had started flocking back to its British Gas unit after it lost about 1 million last year.

BAE Systems (BA.L: Quote, Profile , Research) jumped 3.7 percent after posting a 33-percent jump in 2006 underlying operating profit, meeting analysts' expectations and helped by its U.S. businesses.

...

By 1200 GMT the FTSE 100 .FTSE was 36.2 points, or 0.57 percent higher at 6,393.3.

Commodities accounted for about 50 percent of the index's advance, pushing higher as copper rose and U.S. crude oil prices eased but hovered near $60 a barrel after the closure of a fuel pipeline in the United States.

/...

[Ghost Dog]

22. Swiss SMI Boosted by Nestle

http://www.postfinance.ch/pf/content/en/topics/etrade/news/stockreportchmi.html

Swiss shares extended early gains and traded comfortably in the black in midday deals on Thursday, driven by sharp gains in heavyweight Nestle after the group today published better-than-expected full-year results.

At 11.21 a.m., the Swiss Market Index was 64.02 points or 0.7% higher at 9,271.11 with gainers outnumbering decliners 22 to 4. The broader Swiss Performance Index rose 43.14 points or 0.59% to 7,360.38.

Nestle jumped 2.59% to CHF 476.00 after reporting record full-year net profit of CHF 9.197 billion, up 13.8% compared with the previous year, thanks to successful refocusing on the nutrition, health and wellness business as well as the impact of recent acquisitions and divestments. Sales amounted to a new high of CHF 98.5 billion in 2006, up CHF 7.3 billion or 8.1%. In addition, Nestle said that the Board is to propose a dividend increase of 15.6% from CHF 9.00 per share to CHF 10.40 per share. Furthermore, the Board will propose that following completion of the CHF 3 billion share buy-back programme in 2006, shares amounting to that value be cancelled.

...

At the other end of the spectrum, Roche dropped 1.4% to CHF 224.90 even though the pharma group today announced that a phase III study investigating Avastin in combination with chemotherapy met its primary endpoint of improving progression free survival in patients with previously untreated advanced non-small cell lung cancer (NSCLC), the most common form of the disease. In addition, the FDA on Wednesday told Genentech to add the strongest warning possible to the label of its asthma drug Xolair. Novartis firmed 0.21% to CHF 71.90 in the meantime, recovering somewhat from recent losses.

/...

[Ghost Dog]

23. European Economies: French, Italian Business Confidence Rises

http://www.bloomberg.com/apps/news?pid=20601068&sid=aaac1g_sr4kI&refer=economy

Feb. 22 (Bloomberg) -- French and Italian business confidence rose more than expected in February, suggesting Europe's economic expansion may maintain its momentum.

A gauge of optimism among French manufacturers rose to 107 this month from 106 in the previous two months, Insee, the Paris- based national statistics office, said today. An index of Italian business confidence produced by the Rome-based Isae Institute rose to 95.4 from a revised 94.7 in January. Economists expected the French index to hold at 106 and the Italian gauge to read 94.6.

/...

[Ghost Dog]

24. Eurozone new industrial orders hit 10-year high

http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/business/2007/February/business_February670.xml§ion=business&col=

(AFP) BRUSSELS - Eurozone factories saw demand rise in December as a new industrial orders rose to the highest level in 10 years, figures by the Eurostat data agency showed on Thursday.

New orders in the 12 nations sharing the euro in December -- Slovenia adopted the currency in January -- grew 2.8 percent over one month and 1.6 percent over one year.

A Eurostat official said that the December increase brought the index to the highest level since 1996.

The result also beat private economists’ forecasts for an increase of only 0.3 percent over one month and 0.5 percent over one year, as polled by financial news agency AFX News.

/...

[Ghost Dog]

62. Spain's investors offset 'gentle slowdown' (through debt)

http://www.ft.com/cms/s/966df628-c21a-11db-ae23-000b5df10621.html

Heavy investment last year by Spanish companies ref-lected broader confidence in the eurozone among exporters, according to finance minister Pedro Solbes, and would help offset a "gentle slowdown" in domesticconstruction.

"The most important statistic we have at the mom-ent is a 9.7 per cent rise in 2006 in investment in capital equipment," he said yesterday. "In the last quarter the year-on-year rise was 11.4 per cent. This says to me that Span-ish companies are thinking of increasing capacity and producing more, which has to be good news."

His comments were made amid latest figures that showed output in Spain grew 4 per cent in the final quarter of last year against the same period in 2005, to give full-year growth in gross domestic product of 3.9 per cent. It was the country's 11th consecutive year of expansion.

Mr Solbes forecast a slight slowdown this year but defied doomsayers who claim that high levels of household and corporate debt left the country dangerously exposed to further rate rises by the European Central Bank.

He said with rampant consumer spending starting to flag and house price inflation decelerating, Spain was entering a "transitional phase" in which growth levels would settle "at closer to 3 per cent than 4 per cent".

"If you analyse indebtedness in absolute terms the levels in Spain are perfectly comparable with the rest of Europe," he said. "What is remarkable about Spain is the pace at which the level of indebtedness has risen. But this has gone hand-in- hand with increased asset values and wealth."

Spanish multinationals in particular were big spenders last year, borrowing heavily to buy foreign banks and infrastructure and telecommunications companies. According to Dealogic, they spent a total of €140bn ($184bn, £94bn) on domestic and overseas acquisitions, putting the country third behind the UK and France. Most analysts say companies such as Telefónica, which bought O2 of the UK, and Ferrovial, which led a consortium that bought airport operator BAA, have the cashflow to support their debt loads.

/...

[Ghost Dog]

64. Migrants help tolerant Spain boom

http://www.ft.com/cms/s/3b044a6e-c088-11db-995a-000b5df10621.html

The spoils of Laurentiu Barldamu's two years in Spain are modest: €1,500 ($2,000, £1,000) in savings and a 10-year-old Ford Escort with dented doors. But the 24-year-old Romanian, who earns €800 a month delivering fish, is optimistic that one day he will upgrade his vehicle and buy a house back home.

For many of the 4m immigrants who have flooded into Spain in the past five years, the country holds the promise of a living that would take months or years to earn in their country of origin.

"I like it here," Mr Barldamu says. "It is a very free society. And I earn a lot more."

Spain's ability to absorb Europe's fastest-rising immigrant population without falling prey to the social tensions that have plagued France's poor suburbs or Britain's inner cities comes down to a combination of economics, demographics and national temperament, say immigration experts.

The Spanish economy has grown every year for the past decade and is expected to grow 3.7 per cent this year, according to European Union estimates. Unemployment is at its lowest level in 27 years, while an explosion in the construction industry has created hundreds of thousands of low-paid jobs.

/...

[54anickel]

67. Well, he nailed that one on the head.....

...the level of indebtedness has risen. But this has gone hand-in- hand with increased asset values and wealth."

Nothing like stating the obvious. :eyes:

[Ghost Dog]

71. I like the line about "house price inflation decelerating"

... when it looks like the air is rapidly leaking out of most parts of the home-(and second-home)-price and construction (and even tourism) bubbles around here...

[Ghost Dog]

77. OECD warns Spain over property prices

http://www.euronews.net/create_html.php?page=detail_eco&article=402578&lng=1

The Organisation for Economic Cooperation and Development is warning that Spain is increasingly vulnerable to a correction in property prices. It estimates they are currently overvalued by around 30% and believes an abrupt adjustment with plunging prices would have very serious consequences, though it sees as the most likely scenario a moderate revaluation of prices.

The warning comes in the OECD's latest report on the Spanish economy in which it expects growth to slow from last year's 3.75% but stay strong in 2007 at 3.3%, going down to 3.1% next year. It predicts inflation will fall from last year's 3.6% to 2.8% this year, rising back to 3.1% in 2008.

With rising European Central Bank interest rates boosting mortgage costs, the OECD is concerned that a sharp fall in demand for property could hit prices and builders. It feels the Spanish government should progressively phase out tax breaks on property purchases as one way of avoiding potential problems.

/..



Spanish property bubble
From Wikipedia, the free encyclopedia
http://en.wikipedia.org/wiki/Spanish_property_bubble
This article has been tagged since October 2006.
This article is about the housing bubble in Spain. For the general phenomenon of housing bubbles, see real estate bubble.

Real Estate prices in Spain rose 170% from 1997 to 2005, in what many consider a remarkable example of bubble economics. 651.168.000.000 € is the current mortgage debt (second quarter 2005) of Spanish families (this debt continues to grow at 25% per year -2001 through 2005-, with 97% of mortgages at variable rate interest). Spain started to build 900,000 new houses in 2005 (800,000 in 2004). 2004 estimations of demand: 300,000 for Spanish people, 100,000 for foreign investors, 100,000 for foreign people living in Spain and 300,000 for stock; in a country with 16.5 million families, 22-24 million houses and 3-4 million empty houses.

House ownership in Spain is above 80%. The ownership feeling was inducted by the government in the 60's and 70's, as the way to follow for a "honest" family, thus being deeply embedded in spaniard's mind. If the speculative bubble pops Spain is likely to be one of the worst affected countries. As opposed to the Ireland case, in Spain the labour cost does not follow the rise of the house market in same proportion. While some observators suggest that a soft landing, others suggest that a crash in prices is probable. Lower home prices will allow low-income families and young people to enter the market, however there is a strong perception that house prices never go down. The main actor for speculation are banks, taking young people as hostages for 40 and, recently, 50 year mortgages.

/...

[54anickel]

80. What was that line in an earlier post?...

Historically, "excess liquidity" often evaporates through losses.

[Ghost Dog]

47. Russian RTS index hits all-time high of 1927.68 points

http://www.interfax.ru/e/B/finances/26.html?menu=2&id_issue=11683763

MOSCOW. Feb 22 (Interfax) - The RTS index, the main Russian stock index, reached a new all-time high on Thursday of 1927.68 points, which is 1.16% more than at the close of trading on Wednesday.

The previous record was set on February 6 - 1927.06 points.

The growth leader among blue chips on Thursday was Sberbank of Russia (RTS: SBER) common stock, which gained 3.3% to 95,850 rubles per share.

[Ghost Dog]

50. Buoyant earnings spur European stock gains

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070222:MTFH77854_2007-02-22_16-43-21_L22608550&type=comktNews&rpc=44

LONDON, Feb 22 (Reuters) - European stocks notched up moderate gains on Thursday, boosted by a batch of upbeat corporate earnings, a day after interest rate worries threatened their bull run.

Indexes pared gains towards the close, tracking a slide on Wall Street, after investors were rattled by Iran saying it would not accept suspending its atomic work.

The FTSEurofirst 300 index <.FTEU3> of top European shares closed unofficially up 0.4 percent at 1,540.2, after dipping in the previous session as higher-than-expected U.S. inflation figures raised the prospect of interest rate rises.

The United Nations's nuclear watchdog earlier said Iran had ignored a Security Council deadline to halt work the West fears could lead to Tehran building an atomic weapon.

Around Europe, Britain's FTSE 100 .FTSE gained 0.4 percent, while Germany's DAX <.GDAXI> added 0.5 percent and France's CAC 40 <.FCHI> rose 0.2 percent.

/...

[Ghost Dog]

51. Insurers lift European equities

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39135.4913541667-890159581&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

Insurers helped lift European equities on Thursday, as markets recovered from the previous session’s losses when fears over inflation and interest rates drove them off recent six-year highs. BASF was top of the shop after the German chemicals group reported a 17.3 per cent rise in fourth-quarter core earnings, meeting expectations, thanks to demand growth and the performance of recent acquisitions. The company, the world’s largest chemicals group by sales, also announced it was proposing to raise the annual dividend from €2 to €3 a share and said it also planned to buy back shares worth a total €3bn over the next two years. BASF gained 5.4 per cent to €79.98. Axa, Europe’s second-biggest insurer, gained 1.7 per cent to €33.69 after reporting a forecast-beating 18 per cent rise in full-year net profit thanks to strong performances from global stock markets last year. The company also raised its target synergies from the integration of Swiss insurer Winterthur, which it bought from Credit Suisse last year. German rival Allianz, Europe’s top insurance group, gained 4.7 per cent to €163.86 after a 57 per cent rise in fourth-quarter profit. This included a one-off benefit from changes in Germany’s corporate tax rules and helped also by lower claims from natural disasters. By the close, the FTSE Eurofirst 300 recovered much of Wednesday’s losses, standing 0.4 per cent higher at 1,540.22. Frankfurt’s Xetra Dax added 0.5 per cent to 6,973.73, the CAC 40 in Paris gained 0.2 per cent to 5,707.86 and London’s FTSE 100 climbed 0.4 per cent to 6,380.9.

[Ghost Dog]

52. London ends higher after strong earnings news

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39135.4896180556-890159281&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

London equities regained upward momentum on Thursday as a series of strong earnings reports helped the FTSE 100 back toward the 6,400 level. Centrica was 4.7 per cent higher at 387.3p after the energy distributor said its British Gas unit returned to profit in the second half despite the loss of over 1m customer account. A lower group tax rate helped it report an 8 per cent rise in earnings of £715m. Defence contractor BAE Systems rose 4.3 per cent at 466.5p after it reported earnings of £1.2bn, up from £909m a year ago. It also issued an upbeat outlook for the year ahead, predicting strong demand for its US operations and its fighting vehicle products. Takeover speculation boosted Drax Group, up 3.6 per cent to 715.5p, and Scottish & Southern Energy, 2 per cent higher at 1489p. On the downside, investors took profits in Capita after the outsourcing company reported an 18 per cent increase in full-year profit before tax, in line with expectations. Shares in the collector of the London congestion charge and the BBC licence fee fell 2 per cent to 654p. By the close, the senior index rose 0.4 per cent to 6,380.9, a gain of 24 points, helping restore some of the 55 lost from the previous session. The mid-cap FTSE 250 was 0.4 per cent stronger, a rise of 41 points also fuelled by robust corporate newsflow.

[Ghost Dog]

53. Swiss SMI Closes Comfortably In The Black

http://www.postfinance.ch/pf/content/en/topics/etrade/news/stockreportchev.html

The Swiss blue chip benchmark closed Thursday's session on solid ground with a positive opening on Wall Street and sharp gains in Nestle lending strong support.

The Swiss Market Index closed 44.71 points or 0.49% higher at 9,251.80 with 21 gainers and 5 decliners. The broader Swiss Performance Index advanced 28.65 points or 0.39% to 7,345.89.

Nestle closed 2.91% higher at CHF 477.50 after reporting record full-year net profit of CHF 9.197 billion, up 13.8% compared with the previous year. Sales amounted to a new record high of CHF 98.5 billion in 2006, up CHF 7.3 billion or 8.1%. In addition, Nestle said that its board is to propose a dividend increase of 15.6% from CHF 9.00 per share to CHF 10.40 per share. Furthermore, the board will propose that following completion of the CHF 3 billion share buy-back programme in 2006, shares amounting to that value be cancelled.

Credit Suisse climbed 0.22% to CHF 92.15 after the banking group announced the launch of a new Center of Excellence (CoE) in Wroclaw, Poland. The Center supports both the further expansion of the bank's global sourcing initiative and its commitment to the Eastern European region. Sector peer UBS, meanwhile, ended the day 0.13% lower at CHF 76.20.

Among top performers, Givaudan surged 4.3% to CHF 1,117 after the European Commission concluded that the group's proposed acquisition of Quest poses no significant impediment to effective competition in the European Economic Area as the two companies are not the closest competitors in these markets. Syngenta climbed 1.88% to CHF 227.80, Lonza jumped 1.99% to CHF 117.60 and Swiss Re moved 1.83% higher at CHF 105.50.

/...

[54anickel]

26. States try to calm ire over high property taxes

http://www.stateline.org/live/details/story?contentId=182270

Taxpayers in the Arizona communities of Rio Verde and Troon found a novel way to keep their property-tax bills low: They created a school district in name only. The scheme helps them avoid higher real-estate taxes while they send their students to nearby districts.

Property-tax increases, fed by rising real-estate values, are awakening a slew of tax relief proposals across the country, including some that look at lessening public schools’ heavy reliance on local real-estate taxes. About half of all property taxes go to public schools, according to a special report from the Tax Foundation.

Texas last year passed a $15.7 billion property-tax cut by shifting some of the costs of funding schools to higher taxes on cigarettes and some business activities. This year, New York Gov. Eliot Spitzer (D) and Connecticut Gov. M. Jodi Rell (R) both are pitching proposals to increase state aid to schools to take some of the costs off the back of homeowners.

Proposals for property-tax cuts are in vogue once again. The most famous property-tax revolt occurred in California in 1978 when voters approved Proposition 13, which limited annual increases to 2 percent and led the way for copycat proposals in nearly half the states.

snip>

“No tax riles the American people more than property taxes,” says Gerald Prante, an economist at the Tax Foundation, which ranks New Hampshire, Vermont, Connecticut, and Wisconsin as the highest property-tax states after New Jersey.

Property taxes make up less than 2 percent of states’ revenues, but local governments rely heavily on the tax to provide a range of services, including fire and police protection, and especially schools.

more...

[54anickel]

55. Fla.: Trade property tax for sales tax

http://www.businessweek.com/ap/financialnews/D8NE9PC80.htm

Florida voters would be able to abolish property taxes on primary homes and put caps on government revenues in exchange for adopting the nation's highest statewide sales tax under a plan proposed Wednesday by House Republican leaders.

A second part of the proposal is designed to reduce taxes by an average of nearly 20 percent for all property owners, although most of those savings would go to businesses. It would not require voter approval but could go into effect sooner.

House Speaker Marco Rubio, R-Miami, said a proposed constitutional amendment that would raise the statewide sales tax by 2.5 percentage points -- from 6 percent to 8.5 percent -- could go on the ballot later this year or at the 2008 general election.

California has the highest statewide sales tax at 7.25 percent including 1 percent that goes to local governments.

The amendment would eliminate all property taxes on homesteads -- a homeowner's primary residence. Average savings are estimated at $2,283 per house, but the actual amount would depend upon a home's current tax value.

more...

[54anickel]

29. Goldman Details CEO's $54.3 Million Pay

http://biz.yahoo.com/ap/070221/compensation_goldman.html?.v=1

NEW YORK (AP) -- Goldman Sachs Group Inc. Chief Executive Lloyd Blankfein received $54.3 million in compensation after leading the top U.S. investment bank to record profits in 2006, according to a regulatory filing released Wednesday.

Blankfein, who took over the helm last year when former CEO Henry Paulson became Treasury Secretary, received a $600,000 salary in 2006 and a $27.2 million cash bonus. He also was granted $26.2 million from restricted stock and stock option grants, according to a filing with the Securities and Exchange Commission.

He was allocated $262,000 that was used for a car and driver, and financial counseling services. About $83,000 was allotted for additional health insurance, contributions to the company's pension plan, and other items.

Paulson was given $19.2 million in total compensation for his work last year through July. This included a salary of $346,000 and cash bonus of $18.7 million.

He was allotted $150,000 for car and driver and financial counseling, and $20,300 under Goldman's pension and benefit plan.

The company also reported Paulson and his wife received $51.4 million as Goldman repurchased their investments in the company's private-equity and hedge funds. Of that amount, Paulson's wife was given $5.5 million to redeem her investment in a Goldman hedge fund.

more...

[54anickel]

32. 9:38 and the race is on!

Dow 12,749.07 10.66 (0.08%)
Nasdaq 2,524.68 6.26 (0.25%)
S&P 500 1,459.14 1.51 (0.10%)
10-yr Bond 4.716% 0.024
30-yr Bond 4.812% 0.023
NYSE Volume 137,291,000
Nasdaq Volume 117,938,000

09:15 am : S&P futures vs fair value: +2.5. Nasdaq futures vs fair value: +5.5.

09:00 am : S&P futures vs fair value: +2.4. Nasdaq futures vs fair value: +5.2. Still shaping up to be a decent start for stocks as the futures market continues to trade above fair value. While the Dow looks to get back on track after its five-day winning streak was snapped, the Nasdaq is poised to attract even more buying interest. Apple (AAPL) and Cisco Systems (CSCO) finally ending a trademark battle over the use of the iPhone name are providing a floor of support while the primarily tech-heavy Composite will also get a boost from a grocer. Whole Foods (WFMI) is surging nearly 8% in pre-market action as investors applaud its $565 mln bid for rival Wild Oats Markets (OATS).

08:32 am : S&P futures vs fair value: +2.8. Nasdaq futures vs fair value: +6.5. The stage remains set for stocks to open on an upbeat note as investors embrace the latest read on labor conditions. Initial claims fell 27K to 332K (consensus 325K), suggesting the prior read was just a one week aberration. The data, which were compiled during the same week as the crucial monthly payrolls report, suggest a resilient job market will continue to lift wages and stimulate consumer spending.

08:00 am : S&P futures vs fair value: +2.2. Nasdaq futures vs fair value: +3.0. Early indications are pointing to a modestly higher open for the cash market. While there is little in the way of specific market-moving news to account for the positive disposition, it can be argued that the bulls are taking advantage of sellers' lack of conviction a day earlier to consolidate market gains in the face of $60 oil and a hotter than expected read on consumer inflation.

Strong gains in overseas markets, though, are noteworthy, especially with Japan's Nikkei 225 (+1.1%) eclipsing the 18,000 mark for the first time since May 2000 a day after the Bank of Japan raised interest rates.

06:19 am : S&P futures vs fair value: +1.3. Nasdaq futures vs fair value: +2.8.

06:18 am : FTSE...6394.10...+37.00...+0.6%. DAX...6988.90...+47.24...+0.7%.

06:18 am : Nikkei...18108.79...+195.58...+1.1%. Hang Seng...20809.23...+157.81...+0.8%.

[54anickel]

33. Gold stays close to nine-month high as investors flood back in

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=f7ffc64c-aa60-4832-9371-5447d103b537

Thu, Feb 22 2007, 13:16 GMT

LONDON (AFX) - Gold stayed close to nine-month highs as geopolitical concerns and energy prices increased, prompting banks to diversify some of their reserves.

Investors bought back into the gold as a safe-haven asset as the likelihood of US intervention in Iran grew. Iran has failed to meet a UN deadline Wednesday to halt its uranium enrichment programme.

Gold was also underpinned as investors hedged against possible inflationary threats from higher fuel prices -- which are testing the 60 usd level.

At 12.49 pm, spot gold was quoted at 678 usd an ounce, down a touch from the 679.75 usd level seen at yesterday's close.

Notably, gold has risen in spite of a stronger dollar. The precious metal's traditional relationship with gold showed signs of weakening. Gold usually moves in an opposite direction to the US currency as it is seen as an alternative asset.

"The gold market's character now shifts to high volatility and possible de-coupling from conventional drivers," said Kitco analyst, Jon Nadler.
The 20 usd dollar surge in gold feeds analysts' expectations which, on the whole, call for a test of the 700 usd level.

more....

Investors? That was a damned big move yesterday, looked more like hedge funds or some sort of short squeeze to me :shrug:

[54anickel]

38. Newmont Mining Profit More Than Tripled on Gold Rally (Update1)

http://www.bloomberg.com/apps/news?pid=20601103&sid=aQTLfJ6wjK1w&refer=news

Feb. 22 (Bloomberg) -- Newmont Mining Corp., the world's second-biggest gold producer, said fourth-quarter profit tripled as a rally in metals prices more than offset a drop in output and higher operating costs at its mines.

Net income rose to $223 million, or 49 cents a share, from $62 million, or 14 cents, a year earlier, Denver-based Newmont said today in a statement. Sales rose 13 percent to $1.46 billion.

The price of gold from Newmont's mines jumped 31 percent even as sale of the metal fell 4.6 percent and costs rose. Chief Executive Officer Wayne Murdy cut the company's sales estimates three times in 2006 because of lower output in Uzbekistan and Ghana, sending Newmont shares down 17 percent in the past year.

``Questions still remain in terms of their cost structure,'' Ian Nakamoto, director of research at MacDougall, MacDougall & Mactier Inc., which manages C$4 billion ($3.45 billion) in Toronto, said before the announcement. ``Obviously costs are increasing and it's a matter of the price of gold outpacing the escalation in manpower and energy costs.''

The cost of sales jumped 39 percent to $322 an ounce in the quarter and 28 percent for the year to $304. Newmont in July raised its estimate of costs for 2006, saying it would produce gold at $290 to $310, up from an April estimate of $280 to $295. It forecast $283 in February 2006, up from $237 in 2005.

Production Will Decline

more...

[54anickel]

97. Gold Impresses with a Major Rally. Who was Buying?

http://www.kitco.com/ind/Wiegand/feb222007.html

snip>

When gold had a great day like yesterday observers wonder where the action came from. The ETF’s were obviously big buyers but we think our greatest trades come from the hedgies with too much investable money and not enough homes for it.

The gold market is certainly not puny but hedge funds have the buying gas to produce our most significant moves in both gold and silver. We have repeatedly remarked about their buying power and yesterday was a perfect example. Gold and silver cycles are not finely tuned in unison but their technicals are telling me we have at least five to six more weeks of price rallies before reaching a hard resistance ceiling.

snip>

In previous similar precious metals rallies, current strength and power were absent or not nearly as strong as what I am seeing today. Further, other commodities like crude oil and grain along with copper and some softs are all bullish. If these markets were individually bullish with the larger preponderance of the commodity group not as strong, the indication would be the funds are on the sidelines.

This is not the case as funds have covered large short positions in crude oil after its recent low correction. Further, they prefer to purchase a basket of markets to spread the risk and buy most of the entire commodities market at one time. This is why you’ll notice a substantial commodities group all bull higher at once. Watch the CRB for this indicator.

snip>

One major point this week, largely over-looked in my opinion, was the openly negative attitude by Japan toward Vice President Cheney’s coming visit to Tokyo. Their Prime Minister when asked the reason gave a mediocre and somewhat negative response. The Veep is in Australia right now attempting to drum-up support for the Iraq adventure. The Aussies were cordial and supportive. We don’t think the Japanese will feel the same way and Cheney’s performance will be watched closely. Never forget that Japan to a large extent holds the fiscal future of the United States in their hands.

more...

[54anickel]

36. Fed Faces Credibility Crunch

http://www.thestreet.com/markets/marketfeatures/10340179.html

snip>

So even as the January minutes show the Fed is close to a neutral policy stance, the central bank is now perhaps just as close to a credibility crunch. That's if inflation were to tick up toward 3% year over year, says James Paulsen, chief investment strategist at Wells Capital Management.

"Ever since Bernanke came to the chairmanship, the Fed has said that 2% or lower is their comfort zone, and they've acknowledged it is above the comfort zone, but they've said it would peak as the economy slowed," says Paulsen. "Well it's still above 2%, and it didn't peak. It went back up."

While many, including the Fed, have noted that oil prices could be the volatile commodity that impacts inflation, the real story is in the other raw materials, says Paulsen. Investors took note today, as commodities indices that exclude energy are at or a hair short of new all-time highs -- including the Journal of Commerce Raw Industrial Commodity Price Index, the Goldman Sachs Commodity Index ex-energy, and the CRB Raw Industrial Index.

Gold soared $23 Wednesday to $684 per ounce, while gold-based exchange-traded funds like streetTracks Gold Shares (GLD - Cramer's Take - Stockpickr - Rating) and iShares Comex Gold Trust (IAU - Cramer's Take - Stockpickr - Rating) gained 3% on the day.

IDEAglobal's chief economist Joe Brusuelas believes that inflation will remain "sticky" and bring higher readings for the next few months as home rental prices remain high. But more supply will come onto the rental market as developers shift unsold units to rental units, which he believes eventually will bring rental prices and core inflation back down. Brusuelas says this puts the Fed on hold for the remainder of the year. Next week brings the January reading of the Fed's preferred inflation measure -- core personal consumption expenditures. As of December, core PCE is running at 2.2% year over year.

As I said in a speech Tuesday night at a gathering of the Society for the Investigation of Recurring Events, or SIRE, there was too much liquidity in the world to suggest the Fed would cut rates even before Wednesday's CPI report. Junk-bond spreads are near all-time lows hit in 1997. M&A activity is running at 47% more by volume than it was in the same period of 2006. Risk appetite and animal spirits are alive and well in the markets.

That's why investors should perhaps have paid more attention to Fed Vice Chairman Donald Kohn's comments Wednesday in a speech at the Exchequer Club in Washington, D.C. Kohn warned of too much complacency in financial markets amid low interest rates and ample liquidity. Evidence of such complacency came Wednesday in markets' minimal reaction to the Bank of Japan's rate hike.

more...

[54anickel]

37. Bernanke the Dove

http://www.merkfund.com/merk-perspective/insights/2007-02-21.html

In his recent testimony to Congress, Federal Reserve (Fed) Chairman Ben Bernanke painted a rosy picture of the U.S. economy. If the Fed were satisfied with the economy, it could afford to be blunt about challenges ahead; instead, the Fed is working very hard to appease the markets. What is Bernanke worried about? Why is he so dovish?

Our economy is hooked on access to easy money. Until about a year ago, consumers were able to print their own money by extracting equity out of their homes. Since then, record low volatility across most asset classes has encouraged speculators to increase the leverage in their bets on investments; increasing leverage, directly or through derivatives, increases money supply. As a result of these forces, control of money supply has shifted from the Fed to the marketplace.

There have been ominous signs that the credit bubble is bursting. In the mortgage industry, we have seen an implosion of sub-prime lenders. Sub-prime lenders had been churning out mortgages to anyone who they could reach with their aggressive advertising campaigns, no matter how bad their credit rating was. Originators of mortgages sell off their loan portoflio to intermediaries; they in turn sell mortgages tranches or derivatives to the marketplace. Everyone was happy: aggressive lending practices increased the demand for homes, pushing up home prices; some investment banks loved the business so much that they started buying sub-prime lenders for billions of dollars, so that they could be ‘closer to the source’. This game is ending, and it is ending fast. Now, few investors want to touch these once prized mortgages as it has become apparent that many borrowers cannot even make their second payment (they have to make the first payment when they sign the mortgage). As intermediaries cry foul, mortgages are returned to the originators. In the meantime, sub-prime lenders are better at selling than at managing mortgages; they lack the capitalization to hold any significant inventory of bad debt and have to declare bankruptcy. We are talking about big numbers: HSBC announced this month it is increasing to $10.6 billion the allocation to cover losses in the sub-prime lending market. Both Morgan Stanley and Merrill Lynch were amongst the premier investment banks that have spent billions in recent years acquiring sub-prime lenders.

As this weakest link of the credit market is imploding, the fear is that any fallout may spread. While many investors are cheery about the “soft-landing” and are under the illusion that we have seen the worst from the housing market fallout, we believe Bernanke is gravely concerned that we might just be at the beginning of a treacherous unwinding that is long overdue. Any credit contraction might spill over to the debt-laden and thus interest-rate sensitive consumer.

Trouble in housing and with it in the mortgage industry are symptoms of a much broader credit debacle: the risk of an implosion in the credit derivatives market. A popular segment of this market is credit default swaps (CDS); with a CDS, a periodic fee is paid in return for a contingent payment upon a credit event, such as a default. What may sound like an obscure market is huge: easy credit has allowed this market to mushroom to $26,000 billion. In this market, you can insure against the risk of a security defaulting without entering into an agreement with the issuer of the security. The problem is that if the security vanishes, the derivatives may become worthless. As an example, two global steel conglomerates, Tata Steel & Corus, are in currently in merger discussion. Corus currently has over $1.5 billion in bonds, but CDS contracts written by unaffiliated parties linked to Corus debt are estimated to be between five and ten times as large. If the merger does take place, Tata Steel has made it clear that they might retire the existing debt; that may render the credit derivatives worthless.

more... I thought he was The Beaver?

[AnneD]

41. "Well gee Beav....

that was a dumb thing to do."
"It seemed like a good thing to do at the time, Wally."
"That's what you get for listening to Eddie Haskell."

[54anickel]

42. Hey, you don't suppose....Nahhhh

[AnneD]

43. Like minds....

roll down the same gutter.....:spray::rofl:

[Ghost Dog]

58. Snark

[54anickel]

60. Ya know, the banker always reminded me of Rove, and doesn't the

Baker look a bit like Greenspin?




He came as a Butcher: but gravely declared,
When the ship had been sailing a week,
He could only kill Beavers. The Bellman looked scared,
And was almost too frightened to speak:

[Ghost Dog]

68. Banker (with Bellman)

:-)

[54anickel]

70. Is that Cheney with his shotgun under his arm? Maybe it's Rove carrying

Cheney's shotgun and a dartboard?

[AnneD]

73. snark...

you guys are too funny.

[ozymandius]

107. Is Bernanke still the Fed chief?

I thought Bullwinkle had taken his place.

[54anickel]

111. Heh-heh....Hey Rocky -

Watch me pull a recovery out of my ass hat.

[specimenfred1984]

44. The FED has credibility? LOL

All the criminals ever do is propagandize about how "nothing costs more". The FED is nothing but the big bank's propaganda arm.

[54anickel]

45. 11:32 "down"date

Dow 12,662.95 75.46 (0.59%)
Nasdaq 2,510.01 8.41 (0.33%)
S&P 500 1,451.43 6.20 (0.43%)
10-yr Bond 4.7260% 0.0340
30-yr Bond 4.8220% 0.0330
NYSE Volume 1,005,127,000
Nasdaq Volume 826,762,000

11:30 am : After failing to more convincingly consolidate market gains yesterday, the bears have stepped back into to argue that stocks are overbought at current levels. While the absence of leadership in Energy is noteworthy, it has come at the expense of a reversal in oil prices, which is a net positive for stocks. The more influential reasoning comes from Technology slipping into negative territory.

With earnings growth for the S&P 500 expected to slow to near 5% in Q1, and perhaps 7% for Q2 and Q3, it now appears evident investors aren't overly convinced that upbeat guidance in the chip space (e.g. ADI) will carry over into the rest of the influential tech sector. DJ30 -55.36 NASDAQ -6.15 SOX +2.2% SP500 -4.28 NASDAQ Dec/Adv/Vol 1484/1307/730 mln NYSE Dec/Adv/Vol 1614/1436/460 mln

11:00 am : More of the same for stocks as the Dow and Nasdaq continue to trade in opposing directions. Market breadth now exhibits a slightly bearish bias as oil prices spiking to session highs underpin a sense of nervousness.

Even though crude for April delivery is only up 0.5% at $60.40/bbl, following much larger than expected draw downs in weekly gasoline and distillate supplies, there is a growing concern that oil above $60/bbl may bring the commodity's inflationary potential back into focus among policy makers. As a reminder, yesterday's FOMC minutes showed that "lower energy prices" have improved the odds that inflation pressures would diminish. DJ30 -12.26 NASDAQ +4.70 SP500 +0.73 NASDAQ Dec/Adv/Vol 1423/1315/590 mln NYSE Dec/Adv/Vol 1583/1402/362 mln

10:30 am : The major averages are now trading in split fashion as stocks spike lower within the last 30 minutes. While reports that Iran failed to suspend its nuclear enrichment activity by the February 21 deadline surfaced right around the same as the market's downturn, it remains unclear if that has been the catalyst since there has been no subsequent safe-haven buying in Treasuries or oil prices.

It is worth noting, though, that technical breakdowns may be contributing factors since the Dow and Nasdaq have both ran into notable resistance at respective levels of 12760 and 2530. DJ30 -7.93 NASDAQ +2.39 SP500 +0.14 NASDAQ Dec/Adv/Vol 1269/1405/400 mln NYSE Dec/Adv/Vol 1151/1736/224 mln

10:00 am : The indices are extending their reach to the upside, spearheaded by strength across the board in Technology (+0.7%). While a settlement between Apple (AAPL 90.21 +1.01) and Cisco Systems (CSCO 27.45 0.07) over use of the iPhone name continues to top the tech headlines, the real story is in the semiconductor space. Not only did Analog Devices (ADI 35.45 +2.13) post a sequential revenue increase in a seasonally weak quarter, but orders beginning to strengthen again in January and management issuing some encouraging guidance based on improving business conditions have renewed optimism about the tech sector's growth prospects.

The news has helped vault shares of competitor Texas Instruments (TXN 31.92 +0.94) more than 3% while the likelihood of a bottoming in National Semiconductor's (NSM 25.41 +1.76) current quarter has prompted Morgan Stanley to upgrade NSM. ADI shares are up 6.4% and Semiconductors (+2.1%) currently ranks as today's best performing S&P industry group. DJ30 +18.67 NASDAQ +12.97 SOX +1.8% SP500 +3.81 NASDAQ Dec/Adv/Vol 1129/1329/168 mln NYSE Dec/Adv/Vol 1138/1342/74 mln

09:40 am : As expected, stocks open modestly higher. While there isn't much in the way of specific market-moving news to impact the underlying tone, the market's buoyancy in the face of oil prices above $60/bbl oil following a surprisingly worrisome read on consumer inflation yesterday has carried over into this morning's action.

However, even though the focus on the positive fundamentals has kept the upward trend of the past seven months in place, the market's ability to hold off the much anticipated correction/consolidation talks doesn't mean that such a threat isn't still looming, especially with so many indices near record levels.

DJ30 +14.84 NASDAQ +7.37 SP500 +1.95 NASDAQ Vol 86 mln NYSE Vol 42 mln

[54anickel]

46. Stocks Fall in Late Morning Trading on News That Iran Won't Suspend Uranium Enrichment Program

http://biz.yahoo.com/ap/070222/wall_street.html?.v=21

NEW YORK (AP) -- Wall Street fell Thursday as investors digested news that Iran refused to suspend its uranium enrichment program, stopping short a tech rally spurred by a strong outlook from chip maker Analog Devices Inc.

Investors who largely pulled back in the previous session were uneasy after a U.N. nuclear chief said Iran did not agree to Security Council demands that it suspend its nuclear ambitions. Also hurting stocks was a U.S. government report that showed a larger-than-expected drop in gasoline and heating oil inventories.

This chilled the mood among investors who were at first encouraged by strong corporate announcements and a rally in foreign stock markets. A rally among semiconductor stocks initially helped drive the Nasdaq composite index to six-year highs.

Analog Devices Inc., which gave an optimistic outlook about improving business conditions. Also lending support for techs was the end of a trademark dispute between Apple Inc. and Cisco Systems Inc. over the iPhone trademark.

snip>

"With the lack of real market-moving news traders are taking a look at the Iran thing and the technical breakdowns and we're seeing a little bit of a pause on that," said Jody Giraldo, vice president of equities at vFinance.

more...

[54anickel]

49. T.J. Maxx probe finds broader hacking

http://news.com.com/T.J.+Maxx+probe+finds+broader+hacking/2100-7349_3-6161019.html

The TJX Companies, the discount retailer best known for its T.J. Maxx and Marshalls clothing stores, said Wednesday that its hacking investigation has uncovered more extensive exposure of credit and debit card data than it previously believed.

Information on millions of TJX customers may have been exposed in the long-running attack, which was made public last month. It affects customers of any of TJX store in the U.S., Canada or Puerto Rico, with the exception of its Bob's Stores chain.

The breach of credit and debit card data was initially thought to have lasted from May 2006 to January. However, TJX said Wednesday that it now believes those computer systems were first compromised in July 2005.

TJX said credit and debit card data from January 2003 through June 2004 was compromised. The company previously said that only 2003 data may have been accessed. According to TJX, however, some of the card information from September 2003 through June 2004 was masked at the time of the transactions.

more...:eyes:

Big deal, my freaking state sent names, addresses, SS# and who the hell knows what else in a data file to a GD third party printer who then happened to select the SS# field as part of the address label. Golly gee, I sure hope no one at the printers exported the damned data to a spreadsheet or something...mailing data files are worth quite a bit of money out there...with a SS# included? Sweet bonus!!!! :eyes:

[AnneD]

56. 'Bill of rights' for fliers questioned

WASHINGTON — Aviation experts warn that proposals for a "bill of rights" for airline passengers could lead to unwieldy regulations and could actually create more inconvenience for travelers.
Pressure for legislation increased after hundreds of people were kept aboard nine grounded JetBlue (JBLU) planes for at least six hours Feb. 14 during an ice storm at New York's Kennedy International Airport. Passengers on one plane were stuck for nine hours and said they had no food, water or clean bathrooms.

Sen. Barbara Boxer, D-Calif., and Sen. Olympia Snowe, R-Maine, introduced a bill on Saturday that would require airlines to let passengers leave a plane once it was delayed for three hours after its scheduled departure. It would also guarantee "adequate food and potable water" on delayed flights.

<snip>

The Air Line Pilots Association, the largest pilots union, has not taken a stance on the legislation, but it says any law should not undercut a captain's authority to preserve safety. "You can't legislate good judgment," union Vice President Chris Beebe says.

http://www.usatoday.com/money/biztravel/2007-02-21-passengers_x.htm

:eyes: You may NOT be able to legislate good judgement-but you sure can redress a wrong. Three hour delay sounds more than reasonable to me.

[54anickel]

57. The New Iraqi Oil Law: Leaked

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x266724

I spent the weekend translating this leaked copy of the Iraqi oil law with Niki (thank you Salam for sending me the link). Translating legal documents can be really hard!

We just finished the translation, and you can download it by clicking here.

Please feel free to widely distribute this document. It's important to start a stronger debate and to try to educate Iraqis and Americans about this catastrophic law that will facilitate the further looting of Iraqi oil, and will achieve nothing other than increasing the levels of violence and anger in Iraq.

This law legalizes PSAs (production sharing agreements) in Iraq. Iraq will be the only country in the middle east with such contracts privatising Iraqi oil and giving foreign companies crazy rates of profit that may reach to more than three fourth of the general revenue. Iraq and Iraqis need every Dinar that comes from oil sales. In addition to the financial aspects of this law, it can be considered the funding tool for splitting Iraq into three states. It undermines the central government and distributes oil revenues directly to the three regions, which sets the foundations for what Iraq's enemies are trying to achieve in terms of establishing three independent states.

Privatizing Iraq's oil and splitting Iraq into three regions are just two negative features of this 29 pages law. I am translating some important analysis written by Iraqis and other Arabs, and am also working with British and U.S. experts to publish more analysis soon.

http://www.informationclearinghouse.info/article17120.htm

[54anickel]

59. 1:06 numbers and yada

Dow 12,671.52 66.89 (0.53%)
Nasdaq 2,513.46 4.96 (0.20%)
S&P 500 1,453.92 3.71 (0.25%)
10-yr Bond 4.7280% 0.0360
30-yr Bond 4.8280% 0.0390
NYSE Volume 1,448,612,000
Nasdaq Volume 1,194,261,000

1:00 pm : The indices continue to pare its losses, getting some assistance from a turnaround in Technology. However, a rally in chip stocks is still struggling to offset weakness throughout the hardware and networking groups.

While Tech has inched into positive territory, its advance is minimal (+0.1%) and subject to sellers' incessant efforts to have their overbought argument heard. As a reminder, the Nasdaq, which is still in negative territory, has surged 4.3% just seven weeks into the year. DJ30 -59.64 NASDAQ -2.47 SOX +2.2% SP500 -3.02 NASDAQ Dec/Adv/Vol 1682/1216/1.14 bln NYSE Dec/Adv/Vol 1868/1271/764 mln

12:30 pm : No real change in sentiment as the afternoon session gets underway. What is surprising, though, is the market's resilience amid a renewed wave of buying interest in oil. Crude for April delivery has tacked on an additional 1% since the last update and is now trading at session highs above $61/bbl.

Be that as it may, an ensuing rally in the Energy sector (+0.8%) is so far countering crude's latest uptick, leaving investors anxiously waiting to see if oil prices are sustainable at current levels. DJ30 -65.66 NASDAQ -4.60 SP500 -4.03 NASDAQ Dec/Adv 1658/1211 NYSE Dec/Adv/Vol 1830/1287/690 mln

12:00 pm : Stocks continue to languish in negative territory midday after a failed tech rally removes notable support for all three major indices.

Renewed confidence throughout the semiconductor space following an encouraging Q1 report and guidance from Analog Devices (ADI 36.39 +3.07) initially gave the market some reassurance about the sustainability of recent market gains. However, as evidenced by follow-through selling in Hewlett-Packard (HPQ 40.39 -0.71), a tech bellwether and much better barometer of tech spending, growing concerns that tech sector profit forecasts remain overly optimistic continue to leave valuations in question.

With Fed officials continuing to cite "lower energy prices" as a reason behind diminishing inflation pressures, oil prices trading above $60/bbl are also underpinning a sense of nervousness. Crude for April delivery is up 0.7% near $60.50/bbl following much larger than expected draw downs in weekly gasoline and distillate supplies.

As an aside, reports that Iran failed to suspend its nuclear enrichment activity by the February 21 deadline surfaced around the same the market began to lose momentum. However, it remains unclear if that has been a catalyst since there has been no subsequent safe-haven buying in Treasuries and Iran's continued failure to comply with U.N sanctions isn't all that surprising despite the obvious geopolitical concerns Iran's nuclear ambitions hold. DJ30 -70.54 NASDAQ -5.81 SOX +1.9% SP500 -4.64 NASDAQ Dec/Adv/Vol 1696/1146/946 mln NYSE Dec/Adv/Vol 1906/1192/614 mln

[AnneD]

61. Payday lenders craft user protections

WASHINGTON — Under siege by state regulators, payday lenders unveiled voluntary consumer protections Wednesday, including giving some borrowers more time to repay loans and ending ads promoting the product for "frivolous purposes," such as vacations.
The proposals will "greatly reduce the risk of any customer getting caught in a new cycle of debt," says Don Gayhardt, president of Dollar Financial, which operates 1,250 outlets in the USA, Canada and the United Kingdom.

<snip>

Payday lenders offer short-term loans to consumers to be repaid with their next paycheck. Many strapped borrowers, unable to repay, repeatedly roll the loans over, incurring fees of 300% to 1,000% on an annual basis. The industry has grown into a $40 billion annual business, with more payday outlets than McDonald's fast-food restaurants.

The industry says the fees reflect the risk of its product. But state and federal regulators, in response to consumer complaints, are starting to crack down. Congress set a 36% annual interest cap on payday loans to the military. Oregon recently passed a rate cap on loans in that state. Credit unions are offering lower-cost alternatives to payday loans, and federal regulators want commercial banks to develop small-loan products.

http://www.usatoday.com/money/industries/banking/2007-02-22-payday-loans-usat_x.htm

"Congress set a 36%annual interest cap on payday loans to the military." Thanks for supporting the troops guys.:eyes: First the payroll fucks theses guys over by not correctly issuing the proper amount (if at all), and stuck with no other resources, the folks head to the happy lending folks conveniently located right outside the base entrance.

As for everyone else-as more and more folks live close to the edge, these folks will become as big the credit card companies. Their rates should be fixed period. They take advantage of those that are the weakest. I can really understand Jesus' anger with the money changers at the temple.

[54anickel]

66. Oh AnneD, you're such a bleeding heart! Don't you get it? To succeed

in this day and age you've got to take advantage of every opportunity put in front of you. If you don't someone else surely will. It's the Amerikun way!!!
Do I need to add?..... :sarcasm:

[AnneD]

69. Sorry...

I keep forgetting this is the New World Order. I don't care for this new Amurika. Can I have my old America back now?

edited to add...love the graphic. Explains my headaches on some days:evilgrin:

[54anickel]

72. Good question. Guess that would depend on how many are willing to

help get it back. :shrug:

[AnneD]

75. I haven't seen too many folks ...

covering my back side yet, cause I still feel a draft. One day soon maybe....

[54anickel]

78. One Day Soon....

http://cdbaby.com/mp3lofi/geg4-01.m3u (Press the play button)

if I could write you in a novel
I'd portray you on a farm somewhere in France I could diagram the story
I could see that you escape
I could disguise you and drive you to the cape but I never want to tell you why all of this happened

and if I could send you letters
I would sculpt my words with insights
from six centuries
I could talk of my philosophy
watching stars out on the dock
I could argue all the finer points
of Kant, Rousseau and Locke

but I never want to fear anything that I say and I never want to stop you
or keep you from play
and I never never never never ever
want to run away
from my own life

one day (when there's fairer weather)
one day (when you feel much better)
one day soon (when it's so much clearer) one day soon
none of this will matter

so if I brought you painted flowers
could I take you to New Orleans for the summer I could read to you from Dickinson
on her battle with herself
and complain about the heat there
and effects it has on health

.......

http://cdbaby.com/cd/geg4

[Ghost Dog]

79. THE USURY PROBLEM REMAINS

Stephen Zarlenga gave this talk on usury to Lord Sudeley's "Monday Club" discussion group at London's Carlton House on May 5th, 2004:

http://www.monetary.org/usurytalk.htm

We’ve been to the moon; were on the verge of artificially creating life, yet we have made almost no progress on a question which most societies considered a great danger – a destroyer of nations - the question of usury. Even bringing up the matter invites pre-judgement. What should civilized society’s attitude be toward usury?

Lets start today with Solon's Reform In Athens about 600 BC shortly after the introduction of coinage. The class of free small farmers was vanishing, with land becoming concentrated into the hands of the Oligarchy. Professor Clahoun identified the problem:

"Before the introduction of coined money the peasant farmer borrowed commodities and repaid the loan in kind, and … was probably able to meet the obligation without great difficulty; but after the introduction of coined money the situation became decidedly more difficult…he must take a loan of money to purchase his necessary supplies at a time when money was cheap and commodities dear. When a year of plenty came and he undertook to repay the loan, commodities were cheap and money was dear."

Unable to get out of debt, eventually bad weather or a poor harvest would bring foreclosure on their land and even bind them into slavery. This enslavement grew to crisis proportions, when Solon came to Athens rescue with his "Seisachtheia" or "shaking off" of burdens. Personal slavery was no longer allowed as security for debts. He canceled such existing debt contracts; and gave back land which had been seized. Farmers who had been sold into slavery abroad by those to whom they owed money were "bought" back and returned to Athens.

SOLON ALSO DECLARED A MINIMUM MONETARY VALUE FOR EACH AGRICULTURAL PRODUCT SETTING FLOOR PRICES FOR THEM (Heichelheim presents the ancient source for this). He switched from the "Aeginatic" to the lighter weight "Attic" monetary standard reducing coinage weights and increased the amount of coinage in circulation.

Several Hundred Years Later Aristotle (384-322 Bc) Formulated The Classical View Against Usury. Aristotle understood that money is sterile; it doesn’t beget more money the way cows beget more cows. He knew that "Money exists not by nature but by law":

"The most hated sort (of wealth getting) and with the greatest reason, is usury, which makes a gain out of money itself and not from the natural object of it. For money was intended to be used in exchange but not to increase at interest. And this term interest (tokos), which means the birth of money from money is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of getting wealth, this is the most unnatural." (1258b, POLITICS)

And Aristotle really disliked usurers:

"...those who ply sordid trades, pimps and all such people, and those who lend small sums at high rates. For all these take more than they ought, and from the wrong sources. What is common to them is evidently a sordid love of gain..." (1122a, ETHICS)

THE CHRISTIAN SCHOLASTICS DIFFERENTIATED BETWEEN USURY AND INTEREST
The Scholastics (1100 -1500 AD), the Church scholars familiar with the available writings in existence, echoed Aristotle. Acquinas argued that money is a measure, and usury "diversifys the measure" placing extra demands on the money mechanism which harmed its function as a measure. Henry of Ghent wrote: "Money is medium in exchange, and not terminus." Alexander Lombard noted: "Money should not be able to be bought and sold for it is not extremum in selling or buying, but medium."

The Scholastics made the first attempt at a science of economics and their main concern was usury; but this was not the same as just charging interest. It was generally not forbidden to earn interest if the lender was actually taking some risk, without a guaranteed gain. Interest could also be charged when the lender suffered some loss or passed up some opportunity by extending the loan. Venice used advanced financial forms for centuries without violating the Scholastic usury bans.

TWO TYPES OF LOANS WERE ALWAYS EXEMPT FROM BANS ON INTEREST: the "Societas", where the lender assumed some portion of the risk of the enterprise. Also exempt was the "Census" - an obligation to pay an annual return based on some "fruitful" property. At first it was paid in real produce, later in money.

The Census was normally capitalized at 8 times the annual return, but the risk of the "fruitful" base was on the lender not the borrower, for if the crop were destroyed by weather, the borrower had no obligation that year. Later cities issued "census" obligations based an tax revenues, which came to be called "rents".

Usury was much more than charging interest - it was taking unfair
advantage; USURY WAS AN ANTI-SOCIAL MISUSE OF THE MONEY MECHANISM. Similar to the term Riba in the Islamic world.

THE CHURCH’S CONDEMNATION OF USURY:
Observation of its bad effects-
Pope Innocent IV (1250-1261) noted that if usury were permitted rich people would prefer to put their money in a usurious loan rather than invest in agriculture. Only the poor would do the farming and they didn’t have the animals and tools to do it. Famine would result. Burudian (d.1358), a professor at the University of Paris wrote that: "Usury is evil …because the usurer seeks avariciously what has no finite limits". This places its results outside of nature - often outside of the possible. St. Bernardine of Siena (1380-1444) observed that usury concentrates the money of the community into the hands of the few.

DIVINE AND HUMAN LAW-
All mankind’s moral/legal codes censured usury, normally with mild limits on interest rates. But the Old Testament strictly forbade Jews from taking usury from their "brothers" (other Jews), and discouraged taking it from strangers.
The Scholastics looked on all mankind as brothers. Other codes restricted usury:

*Code Of Hammurabi (2130-2088 BC) limited usury to 33%;

*Hindoo Law - Damdupat - limited interest to the full amount of the loan;

*Roman Law limited interest; Justinian’s 6th century Code reduced the 12½%
limit of Constantine the Great, to 4-8%, and accumulated interest could not
exceed principal.

*The Koran totally forbids usury, from the 7th century;

*Charlemagne’s laws flatly forbade usury in 806 AD.

*As you know your own Magna Carta placed limits on usury in 1215 AD.

*Most States of the United States enforced usury limits until 1981.

/continues...

http://www.submission.org/islam/usury.html
{Qu'ran 2:275} Those who charge usury are in the same position as those controlled by the devil's influence. This is because they claim that usury is the same as commerce. However, GOD permits commerce, and prohibits usury. Thus, whoever heeds this commandment from his Lord, and refrains from usury, he may keep his past earnings, and his judgment rests with GOD. As for those who persist in usury, they incur Hell, wherein they abide forever

The Quran forbids usury, not interest. Quite a few states in USA have laws against usury. Usury is defined as excessive interest. A Dictionary defines usury as "an excessive or inordinate premium for the use of money borrowed", "extortionate interest", or "the practice of taking exorbitant or excessive interest." The Arabic language also makes distinction between interest (Fa'eda) and usury (Reba). The Quran forbids Reba or usury.

Earning interest and paying interest is perfectly acceptable, as the Quran has not prohibited interest. Interest is an essential component of the financial aspect of an individual or an organization. Individuals may need to save money in a bank, may carry a credit card for convenience, or may borrow and pay interest for an automobile or to own a house. Borrowing money and thus paying interest for business loans is an essential component for business and organizations. Thus paying interest, as long as it is not considered excessive by the standard of the day and community, to a credit card company, to a financial institution for a loan of any kind (business, car, house mortgage) is allowed and perfectly legal from a Quranic point of view. Also earning interest from a financial institution like a bank or bonds or mutual fund is also fine.

As defined above usury is excessive interest. Unlicensed or illegal moneylenders (mafia as a well known example) charge usury, excessive interest. Such unlicensed or illegal moneylenders are all over the world and can easily be accessed by a few inquiries. For those who live in USA, any individual can find out about these moneylenders by asking about them within their ethnic business community. These illegal moneylenders have entirely separate standards for making loans - they charge excessive interest (usury) and usually rely on someone's life (guarantor) as collateral. The Quran forbids in dealing with usury - borrowing money and paying usury or earning money by charging usury. The Quran specifically states that usury cannot be equated to commerce or taken as a normal business practice. The practice of usury, unfortunately, is prevalent all over the world with individuals and business engaged in this practice.

/...

[54anickel]

81. Nice find GD! Thank you. n/t

[AnneD]

92. Thank you

that was an excellent post. Gave some good psychological insite too.

[54anickel]

63. Stocks are headed for a fall

http://biz.yahoo.com/cbsm/070221/fc8b8b150c5e4e1692335597e825e19f.html

KAHULUI, Hawaii (YF) -- Market wise, equities are in the midst of the second-longest rally since 1929. Yet there are some serious warning signs -- especially sentiment
The odds are high that the current advance won't be able to continue. Stocks remain stretched and trade above past market multiples. What goes up must come down.

On the economic front, we are overdue for a recession. The last one occurred in 2000 and 2001. Business expansions don't last forever. The boom-and-bust pattern of an economic cycle has not been repealed.

An inverted yield curve almost always points to a deep business slowdown. The Fed publicly claims there's a 40% chance of a recession. However, a model of the Federal Reserve Bank of New York is essentially forecasting an outright recession.

Double-digit corporate earnings growth will be a thing of the past. Companies should consider themselves fortunate to experience single-digit growth.

The housing industry remains on the verge of a massive collapse. In our estimation, this real estate debacle is only in the top half of the second inning of a nine-inning ballgame.

Sentimentally speaking, our indicators are flashing major warning signals. At extremes, sentiment can indicate a peak or an important low. This contrary indicator is presently at an extreme level. Unfortunately, it's a very bearish one.

You need not look far for the evidence of the euphoria in today's market:

more...

[Ghost Dog]

65. Brussels imposes €992m fine on lift cartel

http://www.ft.com/cms/s/8ee3b9ac-c1f1-11db-ae23-000b5df10621.html

The European Union’s top antitrust regulator on Wednesday slapped a record €992m fine on ThyssenKrupp and four other lift manufacturers, in the latest sign that the Brussels watchdog is drastically ramping up the financial pain for companies that violate competition rules.

It was the highest penalty imposed by the European Commission, topping a previous record set only last month. Brussels hopes that the recent increase in antitrust fines will deter companies from abusing the law and encourage people involved in cartels to blow the whistle on co-conspirators in exchange for immunity.

Neelie Kroes, the EU competition commissioner and the ­official behind Brussels’ get-tough approach, said the lift and escalator cartel had behaved “outrageously”, while her spokesman said taxpayers, public authorities and other customers had been “ripped off big time” by the cartel.

ThyssenKrupp, the German engineering group, received the toughest penalty, €479.7m ($630m, £322.5m). Otis, a unit of US group United Technologies, was fined €224.9m, Schindler of Switzerland was given a €143.7m penalty and Finland’s Kone was ordered to pay €142.1m. Mitsubishi’s Dutch subsidiary was fined €1.8m.

Ms Kroes said: “The damage caused by this cartel will last for many years because it covered not only the initial supply but also the subsequent maintenance of lifts and elevators. For these companies the memory of this fine should last just as long.”

The Commission said the lifts installed in its own headquarters as well as at the European Court of Justice in Luxembourg were covered by the cartel. It urged customers of the companies involved in the agreement to renegotiate their contracts, and said they might have the right to sue for damages.

/...

[54anickel]

74. Heading into the "magical hour" at 2:02....Can they change the color of this horse before the close?

My guess is no, but stranger things have happened.....

Dow 12,682.81 55.60 (0.44%)
Nasdaq 2,516.88 1.54 (0.06%)
S&P 500 1,455.41 2.22 (0.15%)
10-yr Bond 4.738% 0.046
30-yr Bond 4.837% 0.048
NYSE Volume 1,685,565,000
Nasdaq Volume 1,368,235,000

2:00 pm : Range-bound trading persists as the absence of notable industry leadership continues to dictate today's action. Of the six sectors trading lower, Industrials (-0.7%) continues to pace the way. After hitting an all-time high yesterday, Deere & Co (DE 112.34 -3.61) has succumbed to the most aggressive of profit-taking efforts. Transports, also a day removed from reaching historic highs, is another sector sore sport.

Surging oil prices are also prompting consolidation throughout the Consumer Discretionary sector (-0.5%), especially retailers. Two days ago, the S&P Retail Index closed at its best levels ever, but JC Penney (JCP 83.55 -2.80) following up record Q4 results with downside Q1 guidance has exacerbated consolidation efforts. DJ30 -55.24 NASDAQ -2.70 SP500 -2.62 NASDAQ Dec/Adv/Vol 1708/1237/1.34 bln NYSE Dec/Adv/Vol 1909/1258/918 mln

1:30 pm : More of the same for stocks as selling remains widespread across most areas. Not even bonds, in the face of geopolitical worries tied to Iran no less, are attracting buyers. The 10-year note, which has been under pressure all day ahead of a $13 bln 5-year note auction, has recently slipped to session lows in response to today's mediocre sale.

While the auction attracted decent 26.5% indirect bidder participation, a relatively low bid-to-cover ratio of 2.43 has exacerbated consolidation throughout the credit market. The 10-year note is now down 10 ticks, lifting the yield to 4.73%. DJ30 -55.52 NASDAQ -2.52 SP500 -2.63 NASDAQ Dec/Adv/Vol 1720/1215/1.24 blnAuction Push NYSE Dec/Adv/Vol 1907/1265/842 mln

[AnneD]

76. Why am I reminded

of the Emerald City and the horse of another colour. Maybe the Wizard can still pull the strings one more time.

[54anickel]

85. It really depends on the lens your looking through

[Ghost Dog]

99. Damn. Where in hell do you get all these apposite images from?

(& btw, check the mouth, there).

[54anickel]

101. Don't you be lookin' my gift horse in the mouth!!!! Bwahahaha. As to

where I get these apposite images from....just "doin' the google" for images.

Edit to add....

I really shouldn't for the sake of our dial-up friends, but there are days I just can't help myself (like today) when I'm in a "visual learning" mode.

[54anickel]

89. Hey AnneD

Here are some "fun" calculators (I've always hated those "are you saving enough for retirement" ones)

http://finance.yahoo.com/calculator/index

[citizen snips]

82. Dow, Nasdaq Drop in Midafternoon Trading

NEW YORK (AP) -- Wall Street pulled back Thursday as Iran's refusal to suspend uranium enrichment rattled investors, stopping short a tech rally spurred by a strong outlook from chip maker Analog Devices Inc.

Investors were uneasy after a U.N. nuclear chief said Iran did not agree to Security Council demands to suspend its nuclear ambitions. Also hurting stocks was a U.S. government report that showed a larger-than-expected drop in gasoline and heating oil inventories, causing oil prices to bound above $60 a barrel.

This chilled the mood among investors who at first were encouraged by upbeat corporate announcements and a rally in foreign stock markets. Strength among semiconductor stocks initially helped drive the Nasdaq composite index to six-year highs.

Analog Devices Inc., which gave an optimistic outlook about improving business conditions, lent support to chip stocks. Investors were also encouraged about takeover activity so far this year as Whole Foods Market Inc. said it will buy rival Wild Oats Markets Inc. in a $565 million deal.

more...
http://biz.yahoo.com/ap/070222/wall_street.html?.v=37

[citizen snips]

83. J.C. Penney 4Q Profit Falls on Tax Costs

PLANO, Texas (AP) -- Department store operator J.C. Penney Co. said Thursday its fourth-quarter profit fell 13 percent partly due to higher taxes, and it predicted a weaker first quarter than Wall Street expected.

"We're seeing February being soft," said Chairman and Chief Executive Myron E. Ullman III. But he said sales would rebound with new spring fashions, and the company stuck with a bullish outlook for the next 12 months.

Penney shares fell $3.15, or 3.7 percent to $83.20 in midday trading on the New York Stock Exchange.

Net income for the three months ended Feb. 3 fell to $477 million, or $2.09 per share, from $551 million, or $2.34 per share, a year earlier. Earnings from continuing operations totaled $2 per share compared with $1.92 per share a year ago.

more...
http://biz.yahoo.com/ap/070222/earns_j_c_penney.html?.v=11

[citizen snips]

84. Officials Vow Vigilance Over Hedge Funds

WASHINGTON (AP) -- The Bush administration and top financial regulators pledged increased vigilance over hedge funds Thursday but stopped short of proposing any new regulations to control the trillion-dollar industry.

Instead, the President's Working Group composed of administration officials and various market regulators put forward a set of guidelines they said would enhance information about the largely secretive investment pools.

"These guidelines should serve as a foundation to enhance vigilance and market discipline further, which will strengthen investor protection and guard against systemic risk," Treasury Secretary Henry M. Paulson, the head of the working group, said in a statement.

The working group, which was formed after the stock market crash of 1987, is composed of the Treasury secretary and the heads of the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission.

more...
http://biz.yahoo.com/ap/070222/hedge_funds.html?.v=6

[citizen snips]

86. Chips Snap: Micrel, Maxim Up on ADI News

NEW YORK (AP) -- Shares of analog integrated circuit makers got a boost in Thursday's trading, thanks to an encouraging quarterly report from Analog Devices Inc.

ADI said Wednesday its first-quarter income increased 27 percent as revenue climbed 6 percent, and the company projected "good growth" in its second-quarter.

"Their revenue levels were a little bit better than people expected, so now investors may feel more comfortable (with the analog processor makers) now that we've got signs that revenue reductions are less of a risk," said American Technology Research analyst Doug Freedman.

ADI shares, which have traded between $26.07 and $39.81 over the last 52 weeks, shot up $3.30, or 9.9 percent, to $36.62 in afternoon trading on the New York Stock Exchange.

The news helped boost shares of other analog chip makers including National Semiconductor Corp., whose shares were up $1.54, or 6.5 percent, at $25.19 on the NYSE.

more...
http://biz.yahoo.com/ap/070222/sector_snap_semiconductors.html?.v=1

[citizen snips]

87. Big Movers on Wall Street

NEW YORK (AP) -- Stocks that were moving substantially or trading heavily Thursday on the New York Stock Exchange and Nasdaq Stock Market:

NYSE

Analog Devices Inc., up $3.20 at $36.52.

The chip maker told Wall Street it expects stronger sales due to improving trends in some of its business segments.

Toll Brothers Inc., down 54 cents at $32.32.

The luxury home builder reported fiscal first-quarter profit tumbled 67 percent on expenses to write down the value of land.

J.C. Penney Co., down $3.10 at $83.25.

The department store said fourth-quarter profit fell 13 percent due, in part, to higher taxes.

more...
http://biz.yahoo.com/ap/070222/wall_street_stocks.html?.v=2

[citizen snips]

88. Safeway 4Q Profit Rises 77 Percent

SAN FRANCISCO (AP) -- Safeway Inc.'s fourth-quarter profit surged 77 percent to cap the grocer's best performance in five years, a comeback driven by contentious cost cutting and a recent makeover that has infused more elegance into its stores.

Although the results released Thursday exceeded analyst expectations, the showing still wasn't enough to satisfy investors apparently disappointed by Safeway's slowing sales growth and conservative outlook for this year. Safeway shares had dropped by more than 5 percent by early afternoon.

The Pleasanton-based company said it earned $307.9 million, or 69 cents per share, in the three months ended Dec. 30. That compared with net income of $173.5 million, or 39 cents per share, at the same time in 2005.

If not for a series of tax benefits, Safeway said it would have earned 61 cents per share. That figure was a penny above the average estimate among analysts polled by Thomson Financial.

more...
http://biz.yahoo.com/ap/070222/earns_safeway.html?.v=12

[citizen snips]

90. Microsoft Infringed Alcatel-Lucent MP3 Audio Patents, Jury Says

Feb. 22 (Bloomberg) -- Microsoft Corp., the world's biggest software maker, infringed Alcatel-Lucent patents related to the standard for playing music files on a computer and should pay $1.52 billion in damages, a federal jury in San Diego said.

Alcatel-Lucent accused Microsoft of infringing the patents with its Windows Media Player, including the version in the new Vista Operating System. The jury of eight men and one woman began weighing the case Feb. 15, a day after lawyers made final arguments in a 12-day trial.

The victory for Alcatel-Lucent might clear the way for legal actions against hundreds of companies that rely on MP3, the standard for playing music and sound files on a computer, mobile phone or digital-music player. The verdict allows Alcatel-Lucent to seek an order barring Microsoft from using the patented technology.

Microsoft, based in Redmond, Washington, claimed Alcatel- Lucent is demanding royalties already being paid to another inventor and that the patents are invalid.

more...
http://www.bloomberg.com/apps/news?pid=20601087&sid=a8gLVVzIb9u8&refer=home

[citizen snips]

91. Whole Foods Shares Climb After Purchase of Wild Oats

Feb. 22 (Bloomberg) -- Shares of Whole Foods Market Inc., the largest U.S. natural-foods grocer, rose 14 percent after the company announced plans to buy rival Wild Oats Markets Inc. for $565 million after markets closed yesterday.

Shares of Whole Foods jumped $6.18 to $51.88 at 2:24 p.m. New York time in Nasdaq Stock Market composite trading. Wild Oats shares climbed $2.71, or 17 percent, to $18.43. Austin, Texas- based Whole Foods will pay $18.50 in cash for each share of Boulder, Colorado-based Wild Oats, 18 percent higher than its closing price yesterday.

Whole Foods shares fell for the first time since 1999 last year as competition from Wal-Mart Stores Inc. and Safeway Inc. cut into sales growth. The acquisition may help Whole Foods lower costs while spurring growth at new stores, Chief Executive Officer John Mackey said yesterday on a call with investors.

The CEO and his team ``are really now going to be put to the test to see how well they can integrate this Wild Oats company,'' Robert Lutts, president of Salem, Massachusetts-based Cabot Money Management, said in an interview. Cabot Money Management sold its Whole Foods shares last year.

more...
http://www.bloomberg.com/apps/news?pid=20601087&sid=ah3nJQumnWG8&refer=home

[citizen snips]

93. HSBC U.S. Head Mehta Resigns After Loan Losses Jump

Feb. 22 (Bloomberg) -- HSBC Holdings Plc, Europe's biggest bank by market value, said Bobby Mehta stepped down as head of the North American unit after the lender raised its forecast for bad loans in the U.S.

Mehta, 48, also resigned as chief executive officer of HSBC Finance Corp., formerly Household International, the bank said in a statement today. London-based HSBC bought Household, which lends to clients with below-average credit, for $15.5 billion in 2003.

HSBC CEO Michael Geoghegan said Feb. 8 he would shake up management after the bank increased the amount set aside for U.S. bad loans to about $10.6 billion, 20 percent more than analysts estimated. Shares of banks including New Century Financial Corp. have tumbled this year on fears that higher interest rates and falling home prices will trigger indebted customers to default.

``Mehta was the guy charged with driving the growth of Household into mortgages, and that has been the source of disappointment,'' said Simon Maughan, a London-based analyst at Blue Oak Capital Ltd., who doesn't have a rating on the stock. ``So he's the guy who has to fall on his sword.''

more...
http://www.bloomberg.com/apps/news?pid=20601087&sid=aaaSrY6PnDmA&refer=home

[citizen snips]

94. Treasuries Extend Decline on Tepid Demand in Five-Year Auction

Feb. 22 (Bloomberg) -- U.S. Treasuries extended their decline after the government's monthly auction of five-year notes drew lukewarm demand.

Government debt prices fell for the second straight day as traders pared bets the Federal Reserve will cut interest rates this year. A government report yesterday showed consumer prices rose in January more than economists forecast.

``We are smack in the middle of the most recent range we've been in, which doesn't get most people excited,'' said Glen Capelo, who trades five-year notes in Greenwich, Connecticut, at RBS Greenwich Capital. ``That led to a fairly ham-on-rye type auction.'' The firm is one of the 21 primary U.S. government securities dealers that are required to participate in Treasury auctions.

The 10-year yield has ranged from 4.64 percent to 4.90 percent since Jan. 10. It rose more than 4 basis points, or 0.04 percentage point, to 4.74 percent at 2:10 p.m. in New York, according to bond broker Cantor Fitzgerald LP. The price of the 4 5/8 percent security due in February 2017 fell 11/32, or $3.44 per $1,000 face amount, to 99 3/32.

The government sold $13 billion of five-year notes maturing in February 2012 at a yield of 4.719 percent. The yield was about half a basis point higher than the yield in pre-auction trading moments before the 1 p.m. bidding deadline, a sign demand was weaker than dealers anticipated.

more...
http://www.bloomberg.com/apps/news?pid=20601009&sid=a3D3JZKtXWT8&refer=bond

[citizen snips]

95. Gold Falls in New York as Price Volatility Discourages Buyers

Feb. 22 (Bloomberg) -- Gold fell from a nine-month high in New York as wide fluctuations in the metal's price this week discouraged purchases.

Gold rose 3.5 percent yesterday, the biggest percentage gain since June, after falling 1.8 percent a day earlier. The historical volatility of gold futures, or the rate at which a price moves up and down, was at 23 percent in the past 10 days. A week ago, the rate was 10 percent for the previous 10-day period.

``We're seeing enormously volatile movements and it'll discourage buyers,'' said Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois. ``The physical market can't handle volatility.''

Gold futures for April delivery fell $1, or 0.2 percent, to $683 an ounce on the Comex division of the New York Mercantile Exchange. Prices rose to $686.40 an ounce yesterday, the highest for the most-active contract since May 19. Before today, gold had climbed 23 percent in the past year.

more...
http://www.bloomberg.com/apps/news?pid=20601012&sid=aEcGaoc4JvII&refer=commodities

[54anickel]

103. Bwahahaha!!! ``The physical market can't handle volatility.'' Is THAT what

they're striving for now? BOOO! :scared: :rofl:

[Ghost Dog]

112. Bullsh*t. Although heavy, small. Ideally portable

(especially off-'official'-market).

Perhaps, the only thing (temporarily) better is this:

(ed. link, emphasis (sorry, precise dates unavailable): http://news.bbc.co.uk/1/shared/spl/hi/business/03/euro_cash/currency/html/500_euro.stm )

The 500 euros note (around $595, £360) is the biggest bank note of them all - and not everybody is happy about that. High-value banknotes are very portable and could make the euro the currency of choice for tax cheats and money launderers.

One million dollars might not buy as many drugs as it used to, but in $100 bills they would fill a large suitcase. Exchanged into 500 euro bills, the money would fit into a large handbag.

...

Spain probes big jump in 500-euro notes
http://www.eubusiness.com/Euro/060419195615.gwk9hedi

Spanish Finance and Economy Minister Pedro Solbes on Wednesday said the government was probing a remarkable rise in the number of 500-euro notes in Spain, pointing to an increase in black market deals.

Solbes said that there were now roughly 100 million 500-euro notes in circulation in the country, an increase of about 35 percent.

Finance ministry inspectors said this was an indication that the black market had grown as these notes are often used in illicit transactions since they are much harder to trace than cheques or credit cards.

They said the property sector was one of the main culprits, as some 60 percent of estate agents in Spain accepted or even demanded cash payments in a bid to escape taxes.
19 April 2006, 16:17 CET

...

Euro Trash
Even drug dealers are giving up on the dollar.
http://www.slate.com/id/2111504/

Currency of choiceCurrency of choice
The dollar's decline against the euro shows no sign of ending. Clearly, currency traders have made a long-term judgment about the relative value of the currencies of the Old and New Worlds. That sounds bad enough. But now there are signs that we're losing some of the most devoted fans of the greenback: drug dealers, Russian oligarchs, and black-market traffickers of all kinds.

James Grant, of Grant's Interest Rate Observer, whose animadversions about the dollar and other subjects are as droll as they are pricey, highlighted the latest indignities to befall the once-mighty dollar in his Dec. 17 issue. (Alas, it's not available on the Web.)

People the world over—central banks, companies, and individuals—like to hold the dollar. It's stable, liquid, easily convertible, and never goes out of style. The dollar is popular in the official global economy—the money that changes hands through computer terminals, checks, and wire transfers. But it has also been extremely popular in the world's vast cash economy. For American tourists, Chinese smugglers, Ukrainian arms dealers, and African dictators, the dollar has long been the currency of choice. The fearful and shady, those who subsist on tourism, and residents of countries with unstable domestic currencies love the greenback. Citing Federal Reserve estimates, Grant writes that "between 55% and 70% of the $703 billion of U.S. currency outstanding circulates outside the 50 states."

The United States benefits greatly from the fact that the dollar is the world's reserve currency. Many of the $100 bills circulating throughout the globe are essentially loans that we never have to pay back. Americans use them to buy goods, services, or other currencies. But many of those bills never return to our shores to be redeemed for anything we make or produce. Instead, they stay under mattresses in Bogotá, circulate in Iraq, and are stashed in bank accounts around the world.

But among a subset of global cash connoisseurs, the dollar is losing ground to the euro—and it has nothing to do with concerns over U.S. multilateralism. First, the euro zone has been expanding with the addition of new countries and the continued integration between Eastern and Western Europe. So there are simply more people who accept and use euros now. Since 2002, the growth rate of euros in circulation has far outpaced that of dollars. Add in the euro's recent strength against the dollar, and the case for Eastern Europeans and euro-neighbors to use euros becomes more compelling. In the 1990s, the dollar was remarkably popular in Russia, where residents had long been deprived of coveted Western imports. But between January 2002 and August 2004, Grant notes, the percentage of private Russian currency transactions employing the dollar fell from 94.1 percent to 84 percent while the euro's share rose from nothing to about 15 percent.

Finally, in the past two years, euros have also become easier to carry, store, and hide than dollars. Generally, the largest denomination of U.S. currency readily available is the $100 bill. But in the past two years, the European Central Bank has started to print 200-euro and 500-euro bills. These larger bills thus allow for the concentration of wealth in smaller packages. At today's rates, a 500-euro note is worth $682.

/...

I make that a little less than $660 at the moment - ie. a little less than an ounce of pure gold.

[citizen snips]

96. Hewlett-Packard Planning to Sell $2 Billion of Bonds

Feb. 22 (Bloomberg) -- Hewlett-Packard Co., the world's largest personal-computer maker, plans to sell $2 billion of senior unsecured notes to repay debt, according to a person familiar with the offering.

The sale is split between $1.5 billion of fixed- and floating-rate notes due in five years and $500 million of 10-year fixed-rate notes, said the person, who declined to be identified because the terms aren't set. The debt sale will be the largest by Palo Alto, California-based Hewlett-Packard that isn't convertible into stock, according to data compiled by Bloomberg.

Investors are demanding about the lowest corporate debt yields ever relative to risk-free Treasuries, allowing companies to refinance debt at cheaper rates. Since Hewlett-Packard's last sale in May 2006, its credit rating was raised to A from A- by Standard & Poor's, and yields on bonds for similarly ranked companies have declined to about 5.54 percent on average from 5.90 percent, according to Merrill Lynch & Co. data.

``This should be a pretty good offering,'' said Dave Novosel, an analyst at debt research firm Gimme Credit Publications Inc. in Chicago. ``The performance of the company has been much better than in the past. The upgrade reflects what's already been happening'' at Hewlett-Packard, he said.

Not many industrial companies have issued bonds this year, which will ``bode well for the deal,'' Novosel said.

more...
http://www.bloomberg.com/apps/news?pid=20601009&sid=aMJME5Q1DAPI&refer=bond

[citizen snips]

98. Morningstar Net Rises 35%; to Buy S&P Fund-Data Unit

Feb. 22 (Bloomberg) -- Morningstar Inc., the U.S. research company best known for its mutual-fund rankings, posted a 35 percent gain in fourth-quarter earnings and agreed to buy a Standard & Poor's unit to expand its coverage of non-U.S. funds.

Net income increased to $13.6 million, or 29 cents a share, from $10.1 million, or 22 cents, a year earlier, the Chicago- based company said in a statement today. The shares rose 5.8 percent to a record high.

Chairman Joe Mansueto has boosted earnings in seven of the eight quarters since Morningstar went public, helped by acquisitions that expanded its products. The company will buy S&P's mutual-fund data unit for $55 million in cash. That follows last year's purchases of Ibbotson Associates, which sells asset-allocation advice, for $83 million, and the hedge- fund data unit of InvestorForce Inc. for $10 million.

``Acquisitions are a big part of this company's story,'' Marvin Loh, an analyst with Oppenheimer & Co. in Boston, said in an interview. ``Morningstar generates a lot of cash, and there are absolutely more acquisitions to come.

more...
http://www.bloomberg.com/apps/news?pid=20601014&sid=ahvLwo99Ytj8&refer=funds

[citizen snips]

100. Sector Snap: Airline Stocks Dip

NEW YORK (AP) -- Most airline stocks fell on Thursday, hit by surging crude oil prices.

The Amex Airline Index dropped about 1 percent, with eight of 11 components declining.

A barrel of oil climbed above $61 for the first time in 2007 on the New York Mercantile Exchange, due to unexpectedly large drops in U.S. gasoline and heating oil inventories. It slipped back to $60.65 a barrel near the close of trading.

Jet fuel is one of an airline's top costs, and crude gains generally have great effect on airline stocks.

Among the index's big percentage decliners, Continental Airlines Inc. fell $1.54, or 3.4 percent, to $44.15 on the New York Stock Exchange, and United Airlines parent UAL Corp. lost $1.67, or 3.8 percent, at $42.88 on the Nasdaq Stock Market.

Shares of AirTran Holdings Inc. dropped 24 cents, or 2.1 percent, to $11.30 on the NYSE after regional carrier Midwest Air Group Inc. again called its hostile buyout bid inadequate.

more...
http://biz.yahoo.com/ap/070222/airlines_sector_snap.html?.v=1

[citizen snips]

102. Chrysler CEO Tries to Reassure Workers

DETROIT (AP) -- Chrysler Group Chief Executive Tom LaSorda has spent the past few days soothing the nerves of employees and dealers as stories swirl about a possible sale of his company.

LaSorda sent an e-mail message to workers on Wednesday saying that he knows there have been a "frenzy of rumors" since last week's announcement that German parent DaimlerChrysler AG is seeking partners and strategic options for its U.S. operations.

Chairman Dieter Zetsche wouldn't rule out selling Chrysler, and late last week, reports surfaced that General Motors Corp. was among the entities interested in buying the company.

In his message, LaSorda said he couldn't respond to the reports because of legal requirements, but said the DaimlerChrysler Board of Management has a duty to consider all options.

"It may take weeks or months before official comments can be made on some issues," the e-mail said, adding that the DaimlerChrysler board has strongly endorsed the struggling Chrysler's recovery plan.

more...
http://biz.yahoo.com/ap/070222/chrysler_lasorda.html?.v=1

[ozymandius]

109. "Don't you worry," says LaSorda,

"my golden parachute will prevail. Kinda like my sound business decisions."

[54anickel]

110. Flashback to May 2005....His 1st anniversary as COO

http://www.autofieldguide.com/articles/050503.html

snip>

So, some five months after he made that statement, I ask him if he still believes it. He laughs, and then goes on to explain, "I've been in the business 28 years now. I think it becomes more and more fascinating. There's something about competition and pressure that brings a lot of good things out of people." There's also something about competition and pressure that brings a lot of people to their literal or figurative knees. LaSorda is not one of them. In fact, it is a straightforward seriousness (not solemnity, however) about the business that is characteristic of the kind of success that Chrysler Group is achieving in the market. While its cross-town rivals are having their share of problems, Chrysler, with hot products like the 300, is doing very well, comparatively speaking. But LaSorda cautions: "You have to be careful, because if you'd asked us a few years ago, you'd have said, 'You're the worst in town; what are the other two doing right?' It is a cyclical business." One day you're up, and the next you're not. But LaSorda thinks that because of some hard choices that the company executives made back in 2001, which he describes as "the year we'll all remember here," there should be less in the way of a negative swing going forward. Headcount was reduced. Plants were closed. There were mandated cuts to supplier invoices. It was a trying time, to say the least. But now things have sorted themselves so that the company is working more efficiently and effectively.

He says that a word that will not be a part of the thinking of any members of the leadership team at Chrysler is complacent. That just won't cut it. Listen to LaSorda:

"We've got to get leaner and better and design content out."

"We've got to get leaner and have lower costs."

"We're not going to add staff."

"We don't know what's next. But we'd better be ready."

snip>

Not only is LaSorda focused on doing things right today, this son and grandson (both sides of the family) of autoworkers states, "I think our obligation is to look at the business on behalf of not only our shareholders, but the employees, and the unions, and to protect it for the next generation." So decisions today have a ramification on what is to come.

snip>

New creative ideas are part and parcel of what seems to be LaSorda's approach to vehicle manufacturing. He thinks that the business models of the past are just that—of the past. So there are transformations underway. For example, next to the Toledo North Assembly Plant, three suppliers are building a facility to produce the body, paint the body, and provide the rolling chassis for a forthcoming Jeep Wrangler. While that doesn't sound necessarily different in and of itself—there are, after all, supplier parks—but what is exceedingly different is that ordinarily Kuka Group, Haden International,, and Hyundai Mobis are providers of capital equipment, and in this case they're that, but then something entirely different, as well. Kuka, for example, typically provides robots, tooling and associated gear for a body shop. In this case, Kuka will actually own and operate the equipment. Instead of providing equipment, they'll be supplying bodies. Haden will be running the paint shop that it has designed, engineered and built. Hyundai Mobis will be in charge of putting together the rolling chassis.

LaSorda explains that each of these companies would otherwise be working within a Chrysler-owned facility to install, setup, tune, and aid with the equipment they've designed, engineered and built. LaSorda says that he knows, for example, what the layout for a body shop should be, what it would cost, and the number of people that are necessary to operate in it. So does the supplier of the equipment. But LaSorda says that to get the body shop, Chrysler pays a premium to the supplier. By having the supplier own and operate the equipment, Chrysler doesn't pay that premium—in fact, it doesn't pay for the equipment at all. It is, instead, buying bodies, not machines. This is in line with something that he's learned in the business: "A customer will not pay for machinery and equipment." A customer in a dealership wants a Chrysler, Dodge or Jeep product, not to have to offset the cost of a robot or a paint booth or a weld line. Overall, Chrysler will be saving about $300 million in this undertaking, which LaSorda points out is enough money to put another product on the road, which will potentially make more money for the corporation.

"It's a great business model, and we'll prove that it works," he states with no equivocation. He acknowledges that there are doubters in the industry, and that doesn't bother him. He's certain that this will be a competitive advantage for Chrysler, so he's not disturbed by their doubt. It may work to Chrysler's advantage.

more...

[citizen snips]

104. Allianz 4Q Profit Rises 57 Percent

FRANKFURT, Germany (AP) -- Insurer Allianz SE said Thursday its fourth-quarter profit rose 57 percent as fewer claims were made and it reaped the benefit of a tax gain after a change in German corporate tax law.

Europe's biggest insurer by premium income earned 1.37 billion euros ($1.8 billion) in the three months through December, compared with 872 million euros a year earlier. That beat the average forecast of 1.25 billion euros ($1.64 billion) expected by analysts polled by Dow Jones Newswires.

The tax gain was 500 million euros ($657 million).

For the year, the Munich-based company posted a profit of 7.02 billion euros ($9.23 billion), up 60 percent from 4.38 billion euros in 2005 and above estimates of 6.81 billion euros ($8.95 billion).

more...
http://biz.yahoo.com/ap/070222/earns_germany_allianz.html?.v=3

[ozymandius]

105. not quite the fit hitting the shan

3:27
Dow 12,673.60 Down 64.81 (0.51%)
Nasdaq 2,518.26 Down 0.16 (0.01%)
S&P 500 1,454.68 Down 2.95 (0.20%)
10-Yr Bond 4.73% Up 0.038
NYSE Volume 1,950,774,000
Nasdaq Volume 1,723,815,000

3:00 pm : The indices finally break out of their narrow afternoon ranges; but to the dismay of the bulls, it's to the downside. The tech sector slipping back into negative territory has removed what little support the market was trying to muster amid broad-based consolidation efforts.

On a positive tech note, at least for networking stocks, Alcatel-Lucent (ALU 13.27 +0.20) is now up 1.5% (after being down as much as 1.4% earlier) following reports that Microsoft (MSFT 29.20 -0.15) must pay ALU $1.52 bln for infringing on its MP3 patent. However, since Lucent (post merger) is no longer an S&P 500 component, the stock's rebound is having minimal impact on the broader market. DJ30 -73.96 NASDAQ -5.22 SP500 -4.12 NASDAQ Dec/Adv/Vol 1727/1231/1.53 bln NYSE Dec/Adv/Vol 2013/1219/1.04 bln

[54anickel]

108. Well, hasn't the NAS turned out to be the little darling the past couple of

sessions. Lends new meaning to the "Flight to quality" phrase. :eyes: :wtf:

[citizen snips]

106. After the Close: Intuit, H&R Block

NEW YORK (AP) -- Intuit Inc. will be among the companies under close watch after the closing bell Thursday when it reports its fiscal second-quarter results.

The Mountain View, Calif. software company, known for its TurboTax tax preparation program, in November said it expects to report revenue between $743 million and $760 million, and adjusted earnings per share between 39 cents and 42 cents.

Wall Street, which is expecting the company's results to provide an early look at this year's tax season, projects, on average, a profit of 42 cents per share, on $762.4 million revenue, according to an analyst poll by Thomson Financial.

Intuit shares were down 26 cents, at $30.99 in afternoon trading on the Nasdaq Stock Market.

Also getting ready to report the period before its busiest season is tax preparer H&R Block. Analysts, on average, expect the Kansas City, Mo.-based company to report profit of 12 cents per share, on revenue of $1.13 billion for its fiscal first quarter.

more...
http://biz.yahoo.com/ap/070222/intuit_after_the_close.html?.v=1

[citizen snips]

113. DJIA Leaders & Laggards: GM MRK

NEW YORK (AP) -- General Motors Corp. pulled the Dow Jones industrial average lower Thursday as investors speculated the Detroit-based auto maker may buy the struggling Chrysler Group division of DaimlerChrysler AG.

Shares of General Motors fell 74 cents, or 2.1 percent, to close at $34.63 on the New York Stock Exchange.

Another laggard on the DJIA was Merck & Co., which said recently it stopped lobbying to make its Gardasil cervical cancer vaccine mandatory for pre-teen girls.

Merck's stock fell 75 cents to finish at $43.20.

more...
http://biz.yahoo.com/ap/070222/djia_leaders_gm.html?.v=1

[citizen snips]

114. Nasdaq Leaders and Laggards: WFMI PDCO

NEW YORK (AP) -- Natural foods grocer Whole Foods Market Inc. led the Nasdaq 100 Index higher Thursday after the Austin, Texas-based company said it plans to buy rival Wild Oats Markets Inc. for $565 million.

Whole Foods' stock spiked $6.41, or 14 percent, to close at $52.11 on the Nasdaq Stock Market, where the shares have traded between $42.13 and $74 in the past year.

Another leader was Linear Technology, a Milpitas, Calif.-based chip maker that benefited from a sunny outlook from fellow chipmaker Analog Devices Inc. Shares of Linear Tech Corp. rose $3, or 9.6 percent, to finish at $34.37.

Analog Devices' outlook, which was based on improving business conditions, also boosted Maxim Integrated Products Inc. Shares of the Sunnyvale, Calif.-based chip maker rose $2.45, or 7.9 percent, to close at $33.59.

more...
http://biz.yahoo.com/ap/070222/nasdaq_leaders_whole_foods.html?.v=1

[citizen snips]

115. Sector Wrap: Shares of Coal Miners Rise

NEW YORK (AP) -- Shares of coal producers traded higher on heavy volume Thursday, on evidence that the industry continues to demonstrate disciplined production.

Shares of Peabody Energy rose 91 cents, or 2.1 percent, to close at $43.88, while shares of Massey Energy added $1.11, or 4.5 percent, to finish the session at $26.01. Shares of Arch Coal Inc. closed up $1.30, or 4.1 percent, at $32.99, and shares of Consol Energy jumped $2.18, or 6.1 percent, to finish at $37.80. All the stocks trade on the New York Stock Exchange.

The activity came on the heels of a government report showing that the industry produced less coal last week, as producers try to lower inventories at electric utilities.

During the week of Feb. 17, the industry produced a total of 21,404 short tons, down 3 percent from the previous week and about flat with same period in 2006, according to the Energy Information Administration.

more...
http://biz.yahoo.com/ap/070222/coal_producers_sector_wrap.html?.v=1

[citizen snips]

116. Sector Wrap: Subprime Mortgage Lenders

NEW YORK (AP) -- Shares of mortgage banks that loan to home buyers with bad credit weakened further Thursday after a credit rating agency said it may cut its rating on how dependably five lenders can collect payments.

The "subprime" mortgage industry, or the sector of mortgage banking targeting people with blemished credit, is in upheaval. A handful of companies said more borrowers are missing payments on their mortgages, hurting the value of these companies' loan portfolios.

Shares of NovaStar Financial Inc. have lost 46.8 percent in the two days since the Kansas City, Mo.-based lender said it expects little-to-no taxable income in the next five years. The company reported a loss of more than $14 million in the fourth quarter, recording nearly $45 million in charges anticipating borrowers defaulting on mortgage payments.

Moody's Investors Service said late Wednesday it is considering downgrading NovaStar Financial's servicer quality rating, which measures how capably a lender can collect debt.

more...
http://biz.yahoo.com/ap/070222/subprime_mortgage_sector_wrap.html?.v=1

[citizen snips]

117. Sector Wrap: Supermarket Shares Waver

NEW YORK (AP) -- Supermarket shares wavered Thursday as one chain reported quarterly earnings, another issued guidance and investors reacted to a Whole Foods Market Inc. acquisition that gives the store an even bigger share of the natural foods market.

Shares in most of the sector either fell slightly or rose slightly throughout the day. Safeway was the exception, dropping $1.43, or 3.8 percent, to $35.54 by the afternoon on the New York Stock Exchange.

Before the market opened, Safeway reported its fourth-quarter profit rose 77 percent on favorable tax items and higher sales. The chain also reaffirmed its 2007 full year earnings guidance.

Goldman Sachs analyst John Heinbockel said in a note to investors that the store's earnings were impressive and "bode well for 2007 and beyond."

Heinbockel noted the company's gift card program, called Blackhawk, and said the company has done a good job controlling its expenses.

more...
http://biz.yahoo.com/ap/070222/supermarkets_sector_wrap.html?.v=1

[citizen snips]

118. Treasury Bond Prices End Lower

NEW YORK (AP) -- Treasury bond prices ended down Thursday as new supply from a five-year auction and the aftermath of Wednesday's stronger-than-expected inflation data pressured the market.

At 5 p.m. EST, the 10-year Treasury note was down $3.13 per $1,000 in face value, or 10/32 point, from its level at 5 p.m. Wednesday. Its yield, which moves in the opposite direction, rose to 4.73 percent from 4.69 percent. Earlier, the note reached as high as 4.74 percent, its top level in a week.

The 30-year bond fell 21/32 point. Its yield rose to 4.83 percent from 4.79 percent.

The newly issued 2-year note yielded 4.87 percent, up from 4.84 percent Wednesday for the previous note.

Yields on 3-month Treasury bills were 5.19 percent as the discount rate rose 0.02 percentage point to 5.06 percent.

more...
http://biz.yahoo.com/ap/070222/bonds.html?.v=2

[ozymandius]

119. The finish. Check out the puny volumes!

Dow 12,686.02 Down 52.39 (0.41%)
Nasdaq 2,524.94 Up 6.52 (0.26%)
S&P 500 1,456.38 Down 1.25 (0.09%)
10-Yr Bond 4.73% Up 0.038
NYSE Volume 1,950,774,000
Nasdaq Volume 2,034,320,000

4:20 pm : In similar fashion to yesterday's mixed finish, investors were again split as to whether or not stocks at current levels are overbought.

With so many different indices, from the Dow Industrials and Transportation averages to the S&P 400 MidCap and Russell 2000, hitting records, it's easy to see why some on Wall Street remain concerned that the market is getting ahead of itself.

That's especially true since continued market gains require an expansion in the P/E multiple, which typically is associated with an improving earnings growth outlook or declining interest rates. However, it remains to be seen if the Fed will ease anytime soon while earnings growth for the S&P 500 is expected to slow to near 5% in Q1, and perhaps 7% for Q2 and Q3.

Aside from an encouraging outlook from Analog Devices (ADI 36.59 +3.27) renewing growth prospects for some semiconductor stocks (e.g. TXN +2.3%, MXIM +7.8%, LLTC +9.8% and NSM +6.4%), which helped Technology provide some decent leadership, the bulk of notable reports making headlines today confirmed that profits are decelerating.

JC Penney (JCP 83.65 -2.70) posted record results, but Q4 earnings fell 13% from a year ago and management guided Q1 EPS below consensus estimates. Aside from JCP's report providing an excuse to lock in retail gains, weakness among homebuilders also weighed on the Consumer Discretionary sector. Toll Brothers (TOL 31.69 -1.17) posted a 67% drop in quarterly earnings.

Of the six sectors losing ground, Industrials turned in the worst performance. After hitting an all-time high yesterday, Deere & Co (DE 112.85 -3.10) succumbed to the most aggressive of profit-taking efforts. Transportation, also a day removed from reaching historic highs, was another sector sore sport as oil prices surging 1.4% to close near $61/bbl provided a reason to take some money off the table.

Crude for April delivery tacked a 1.4% advance onto yesterday's 2.0% gain after the Energy Dept. reported much larger than expected drawdowns in gasoline and distillate supplies. Oil got an added boost following reports that Iran failed to suspend its nuclear enrichment activity by the February 21 deadline.

Per usual, the Energy sector took notice of crude's climb, halving its year-to-date decline with a 1.0% gain. However, with oil above $60/bbl potentially bringing the commodity's inflationary characteristics back into focus among policy makers, Energy's leadership was not enough to act as an offset.

Dow component Exxon Mobil (XOM 75.00 +0.22), which as the most influential S&P 500 constituent accounts for 23% of the weighting in Energy, only closed up 0.3%. DJ30 -52.39 DJTA -0.3% DJUA +0.4% NASDAQ +6.52 NQ100 +0.4% SOX +2.8% SP400 -0.2% SP500 -1.25 XOI +0.6% NASDAQ Dec/Adv/Vol 1343/1651/2.03 bln NYSE Dec/Adv/Vol 1753/1477/1.40 bln

[Ghost Dog]

120. Foreign brokers place net Japan stock buy orders

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070222:MTFH87896_2007-02-22_23-51-54_T246295&type=comktNews&rpc=44

TOKYO, Feb 23 (Reuters) - Orders for Japanese stocks placed through 13 foreign securities houses before the start of trade on Friday showed an intention to buy a net 900,000 shares, market sources said.

There were buy orders for 46.8 million shares and sell orders for 45.9 million, the sources said.

[Ghost Dog]

121. Nikkei seen extending gains from nearly 7-yr high

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070222:MTFH87686_2007-02-22_23-40-29_T209675&type=comktNews&rpc=44

STOCKS TO WATCH

/...

[54anickel]

123. Japan's Nikkei continues push above 18,000

http://www.marketwatch.com/news/story/japans-nikkei-continues-push-above/story.aspx?guid=%7BD6EC32D4-AA20-4FA3-A2D5-25C30EF47C45%7D

SAN FRANCISCO (MarketWatch) -- Japan's Nikkei 225 index continued its climb above the 18,000 level Friday, finishing the morning session at 18,127.98, a gain of 0.11%, as major trading companies led the advance and Sanyo Electric Co. plunged on news of a government investigation .

In Asian regional markets, stocks generally advanced. Markets in China and Taiwan remained closed for Lunar New Year holidays and are scheduled to reopen Monday.

Japan's tech-heavy Nikkei, which crossed 18,000 on Thursday for the first time since May 8, 2000 and finished the session at 18,108.79, continued its upward trend after an early-morning blip Friday that saw it slip as much as 0.3%. The broader Topix, which closed Thursday at 1,797.80, its highest since Nov. 15, 1991, also continued gains Friday, finishing the morning session up 0.26% at 1,807.67.

Media reports attributed the Nikkei's gains to a rally led by big trading companies benefiting from the rise in crude-oil and metals prices, and a report that Morgan Stanley raised its forecast for Japan's five largest trading companies.

more...


Asian Stocks Advance Led By Rise In Commodity Prices And Crude Oil Prices

http://www.tradingmarkets.com/.site/news/Market%20Analysis/502710/

RTTNews) - The major markets in Asian region are trading in positive territory on Friday, led by resource-related stocks and oil stocks.

The price of commodities, as a measure of six metals, including copper and zinc, traded in London Metals Exchange, rose 3% on Thursday. Copper prices for delivery in three months surged 6% to US$ 6,135 per ton, while price of Zinc surged 3.6%. Crude oil prices for April delivery rose as much as 2% to $61.25 a barrel in overnight US market.

Major resource related stocks such as BHP Billiton, Rio Tinto, Zinifex, and trading companies such as Mitsubishi Corp. Sumitomo Corp., led the gains in the markets.

snip>

The price of commodities in the international markets, as measured by a group of six metals including copper and zinc, rose 3%. Copper prices spurted by 6% while the price of zinc increased by 3.6%. Resource-related stocks such as BHP Billiton, Rio Tinto and Zinifex have been trading in the positive territory following the rise in commodity prices.

snip>

The stock market in Tokyo, Japan, is trading marginally higher on Friday, led by commodity stocks and oil related stocks following rise in price of commodities and oil in overnight US markets. The price of commodities, comprising of six metals, including copper and zinc, surged 3% while the price of crude oil rose 1.5% in New York. Electric power companies were also trading in the positive territory on speculation that losses suffered by these companies in the market during the last couple of weeks had been excessive.

The benchmark Nikkei 225 Index is presently trading at 18,127.98, up 19.19 points or 0.11%, while the broader TOPIX Index is trading at 1,807.67, up 4.11 points.

[Rydz777]

122. Puts

An advisory I subscribe today today urged backing up long positions with option puts. Choppy waters ahead.

[54anickel]

124. But, but, but the charming NAS just hit a 6 year high! The sky's the limit!

:sarcasm:

Thank you for the info Rydz777. :hi: The next few weeks could get interesting around here again.