STOCK MARKET WATCH, Wednesday 21 July

[ozymandius]

Wednesday July 21, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 187
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 222 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 276 DAYS
WHERE ARE SADDAM'S WMD? - DAY 489
DAYS SINCE ENRON COLLAPSE = 972
Number of Enron Execs in handcuffs = 19
Recent Acquisitions: Ken Lay
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

---

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

---

AT THE CLOSING BELL ON July 20, 2004

Dow... 10,149.07 +55.01 (+0.54%)
Nasdaq... 1,917.07 +33.24 (+1.76%)
S&P 500... 1,108.67 +7.77 (+0.71%)
10-Yr Bond... 4.45% +0.09 (+1.99%)
Gold future... 402.10 -3.70 (-0.91%)


|||


GOLD, EURO, YEN and Dollars

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PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

[54anickel]

1. Doha is a Phoney Bill Of Goods

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

The Doha round of multilateral trade negotiations is, yet again, on the brink of failure.

We are told that a failure to resolve ongoing tensions between the developed and developing world will engender a collapse of free trade and a corresponding reduction in economic growth, particularly ominous given the apparent slowdowns increasingly manifesting themselves in the US and China.

Not so fast. The doomsayers largely predicate their negativism on the so-called “Washington consensus” school of thought, which holds that the only viable option for developing countries is maximum integration into the world economy plus domestic reforms to stabilize integration and make domestic markets more efficient (including “good governance” reforms to bring the poor into the process). Sectoral-industrial policy, and anything intended to foster nationally controlled industries over foreign-owned, or to transfer technology beyond the speed desired by private foreign firms, is out. It seems to us that this line of thinking has little to do with free trade and much to do with an increasingly discredited ideology that has done much to impoverish both American workers and the developing world it purports to help.

Within the realms of policy making and academia, there are finally some challenges being proffered in opposition to the market fundamentalism embodied in the Washington Consensus. In recent co-authored work, Joseph Stiglitz, the former chief economist of the World Bank, argues that the development focus of the Doha round is a myth. He wrote in the FT on June 21: "Recent negotiations have not only failed to push an agenda that would promote development; they have included a host of issues that are of tangential interest, or even detrimental, to developing countries."

A real development agenda, argue Prof Stiglitz and Andrew Charlton, the Oxford economist, would be very different from the one on offer at the current talks. Above all, they argue, “trade negotiations must begin from the premise that the less developed countries are deserving of special and differential treatment, both because they have been disadvantaged in the past and because of differences in their current circumstances. This will entail a movement away from the principles of reciprocity and bargaining…It will entail unilateral concessions by the developed countries, both to redress the imbalances of the past and to further the development of the poorest countries of the world.”

The views of Stiglitz and Charlton may seem heretical to free trade ideologues, but their notions of special and differential treatment are consistent with successful growth strategies adopted by virtually every developing economy. Britain was protectionist when it was trying to catch up with Holland. Germany was protectionist when trying to catch up with Britain. Japan was protectionist for most of the twentieth century up to the 1970s, Korea and Taiwan to the 1990s. Hong Kong and Singapore are the great exceptions on the trade front, in that they did have free trade and they did catch up—but they are city-states and not to be treated as economic countries. By and large, countries that have caught up with the club of wealthy industrial countries have tended to follow the prescription of Friedrich List, the German catch-up theorist writing in the 1840s: “In order to allow freedom of trade to operate naturally, the less advanced nation must first be raised by artificial measures to that stage of cultivation to which the English nation has been artificially elevated.”

more...

[UpInArms]

2. daily dollar watch

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

Last trade 88.14 Change +0.31 (+0.35%)

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?font=Reuters&pv_noticia=MTFH34957_2004-07-21_12-16-36_L21499212

GLOBAL MARKETS-Greenspan drives up stocks, hits bonds

LONDON, July 21 (Reuters) - Upbeat comments from U.S. Federal Reserve Chairman Alan Greenspan on the state of the U.S. economy boosted stocks on Wednesday but drove investors away from safe-haven debt.

The dollar added to gains made on Tuesday against major currencies. Wall Street looked set for a positive start, particularly on news that Microsoft <MSFT.O> plans to return more than $75 billion in cash to shareholders.

Greenspan, who was to speak again later on Wednesday, set the tone on Tuesday by saying the U.S. economy had entered a sustainable expansion that should weather a June slowdown.

He added that it was under no serious threat from inflation, allowing interest rates to rise at a measured pace.

The relatively bullish outlook rippled across world financial markets where worries about a U.S economic slowdown and a monetary tightening cycle from the Fed have dominated for much of the year.

"The Greenspan testimony was more upbeat than expected. The Fed's forecast on growth looks above consensus, while its inflation view is at the dovish end of the spectrum," said Anais Faraj, a strategist at Nomura.

...more...

http://www.washingtonpost.com/wp-dyn/articles/A149-2004Jul20.html

Economy in 'Soft Patch,' Greenspan Tells Panel

Federal Reserve Chairman Alan Greenspan said yesterday that the U.S. economy is "going through a soft patch," but that it won't hold back a "broadening" economic expansion that has gained momentum this year.

High energy prices in recent months have both boosted inflation and sapped consumers' spending power, Greenspan told members of the Senate Banking Committee at a semiannual hearing on Fed policies.

But the recent flare-up in inflation should prove temporary, Greenspan said, adding that the Fed still expects to raise short- term interest rates only gradually in coming months.

"Those higher prices, by eroding households' disposable income, have accounted for at least some of the observed softness in consumer spending of late, a softness which should prove short-lived," Greenspan said.

Despite such problems, he said, "economic developments in the United States have generally been quite favorable" this year. "Not only has economic activity quickened, but the expansion has become more broad-based and has produced notable gains in employment," he said.

<snip>

However, Greenspan conceded that the economy does not feel like it is "charging ahead," a fact he attributed to lingering business cautiousness after the Sept. 11, 2001, terrorist attacks and the corporate scandals of the following year.

...more...

http://news.com.com/House+says+no+to+expensing+options/2100-1014_3-5276558.html

House says no to expensing options

The U.S. House of Representatives on Tuesday sided with Silicon Valley over Wall Street, voting overwhelmingly to largely preserve the current method of accounting for the cost of stock options.

By a 312-to-111 vote, House members approved a bill that mostly maintains the status quo by blocking a recent decision by the Financial Accounting Standards Board to treat stock options as an expense. That proposed change had alarmed many U.S. businesses, especially large technology companies that might be required to report lower profits to investors.

"The notion that stock options are an expense is absolutely absurd," said Rep. David Dreier, R-Calif. Stock options "align the employee interest with the company interest, and that produces a motivated worker," he said.

Rep. Pete Sessions, R-Tex., denounced "inside-the- Beltway accounting technicians" who could harm America's economy by forcing the expensing of stock options. FASB's decision "threatens to destroy broad-based plans and the productivity, innovation and economic growth they currently generate," Sessions said.

...more...

http://www.iht.com/bin/print.php?file=530383.html

Ford set to build its 3rd car factory in China

TOKYO Ford Motor will construct a third factory in China to make cars with its Mazda Motor affiliate, part of a $1.5 billion investment to catch up with rivals in the world's third-biggest car market, officials of the two companies who declined to be named said Wednesday.

Ford will sign an agreement Thursday with its Chinese partner, Changan Ford Automobile, to build a factory in the eastern city of Nanjing, Ford and Mazda officials said. James Padilla, Ford's chief operating officer, will attend the signing ceremony with Mazda's president, Hisakazu Imaki, they said.

The Nanjing plant will be Ford's third Chinese assembly site as it tries to close the gap with General Motors, Toyota Motor and Volkswagen in China. The Dearborn, Michigan-based carmaker will use the plant to build eight new models based on shared parts and platforms with Mazda, said the Ford and Mazda officials, declining to give details.

"Mazda is good in engineering, but lacks expertise and size for effective marketing," said Masayuki Kubota, a manager at Daiwa SB Investments. "This is a very good step forward" for both Ford and Mazda to use their resources to compete, he said.

Mazda, which is a third owned by Ford, is sharing more of production globally with its biggest shareholder to trim development and purchasing costs. Ford is vying with Toyota as the world's second-biggest automaker by unit sales, while Mazda is Japan's fourth-largest carmaker.

...more...

Have a Great Day Marketeers!

[UpInArms]

3. pre-opening blather

briefing.com

8:53AM: S&P futures vs fair value: +5.0. Nasdaq futures vs fair value: +8.0. Futures market continues to give back gains, although it is still well-positioned above fair value... A handful of disappointing earnings reports - FNM, PFE, RFMD, and SGP, for instance - have knocked the wind out of the indices' sails.

8:28AM: S&P futures vs fair value: +5.5. Nasdaq futures vs fair value: +10.5. Futures indications slip off their initial highs, but continue to suggest a higher open for the indices... Last night's batch of strong earnings reports, which sent the Asian (Tokyo's Nikkei +2.2%) and European (Germany's DAX +1.5%) soaring, continues to influence trading this morning.

8:01AM: S&P futures vs fair value: +6.3. Nasdaq futures vs fair value: +13.0. Futures trade pointing to a sharply higher open following a number of well-received earnings reports last night and this morning... UTX, GD, TXN, MOT, and NXTL are among the highlights with their solid earnings releases... MSFT has also contributed to the upward bias - announcing a one-time $3 dividend, a $30 bln stock buyback plan, and an increase in the annual dividend to $0.32/share.

ino.com

The September NASDAQ 100 was higher overnight due to short covering as it extends this week's rebound off the 75% retracement level of the May-June rally crossing at 1414.51. Tuesday's close above the 10- day moving average crossing at 1423.85 signals that a low has likely been posted. Stochastics and the RSI have also turned bullish signaling that a low is in or is near. The September NASDAQ 100 was up 9.50 pt. at 1437.00 as of 6:46 AM ET. Overnight action sets the stage for a steady to firmer opening by the NASDAQ composite index later this morning.

The September S&P 500 index was higher overnight due to short covering as it continues to rebound off support marked by the 62% retracement level of the May-June rally crossing at 1104.86. Tuesday's close above the 10-day moving average crossing at 1108.95 hints that a short-term low has likely been posted. Stochastics and the RSI are very oversold and have also turned bullish signaling that a low has likely been posted. If September resumes this month's decline, the 75% retracement level crossing at 1095.17 is the next downside target. The September S&P 500 Index was up 2.20 pts. at 1114.20 as of 6:48 AM ET. Overnight action sets the stage for a steady to firmer opening when the day session begins later this morning.

[54anickel]

5. Hey UIA, I thought all the talking heads were saying that qrtly earnings

were going to be fabulous this time around....What happened to all that?

[UpInArms]

7. seems like fabulous is not good enough

http://cbs.marketwatch.com/news/story.asp?guid=%7BD11E6C9E-9C6A-4EC2-8BD9-B48DEFC9D6EE%7D&siteid=google&dist=google

Legg Mason shares tumble
Quarterly earnings higher, but miss analysts' estimates

SAN FRANCISCO (CBS.MW) -- Shares of Legg Mason plunged in heavy trading Monday after the investment manager's quarterly results missed analysts' estimates and investors worried about lower trading profits.

The stock of Baltimore-based Legg Mason (LM: news, chart, profile) tumbled 8.8 percent to $75.55, down $7.25 on almost 10 times the average volume, even after the firm noted record results for its key mutual fund business.

Before the opening bell, Legg Mason reported net income of $86.4 million, or $1.14 per share, for the fiscal 2005 first- quarter ending June 30, vs. $58.4 million or 83 cents a share in the year-ago period.

Results finished 9 cents shy of Wall Street's target of $1.23 a share. The company cited "difficult" comparisons in its capital markets business, which saw revenues fall 16 percent year over year.

"The absence of new issues and retail products hurt the corporate finance revenue base," Chairman and Chief Executive Raymond "Chip" Mason told analysts on a conference call.

...more...

http://www.azcentral.com/business/articles/0720taser20-ON.html

Taser stock tumbles despite great quarterly earnings

Taser International's stock took another drubbing today as continuing safety issues overshadowed blockbuster financial results.

Shares of the Scottsdale-based stun-gun maker fell nearly 15 percent, to $31.04 in heavy trading on the Nasdaq market. That's on top of a 10 percent drop on Monday that followed published reports in The Arizona Republic and New York Times that focused on deaths linked to Taser shootings and a lack of significant medical testing on the device. The company has vigorously defended the safety of its products, which it bills as non-lethal.

Taser's profit in the April-June quarter zoomed to $4.5 million from $347,000 a year ago. Its sales nearly quadrupled, going from $4.2 million to $16.3 million. Its per-share earnings were slightly better than analysts expected.

"We're happy to report that despite some adversity we've weathered we continue to see the company growing at a brisk pace," Chief Executive Officer Rick Smith said in a conference call with Wall Street analysts and investors.

...more...

http://www.detnews.com/2004/autosinsider/0407/21/a01-218625.htm

Ford makes $1.2 billion, but trouble looms

Analysts cautious as company's finance arm buoys struggling auto business in 2nd quarter

DEARBORN — Ford Motor Co.’s second-quarter profits nearly tripled to $1.2 billion on strong financing operations, but the company is struggling to make money selling cars and trucks.

Ford raised profit projections and now expects to make $5.3 billion pretax this year. But the good news for Chairman and CEO Bill Ford Jr.’s ongoing turnaround effort was tinged with signs of trouble.

Ford’s worldwide automotive operations lost money in the second quarter and its European-based Premier Automotive Group — including Jaguar, Volvo, Land Rover and Aston Martin — posted an alarming $362 million loss despite sales that rose 8 percent to $6.9 billion. Ford warned Tuesday that its luxury auto division likely will finish the year in the red and that another restructuring at Jaguar is needed.

Investors pushed Ford shares down 38 cents — or 2.5 percent — to $14.60 a share Tuesday in unusually heavy trading volume.

...more...

[54anickel]

4. Reflation With a Twist

http://www.thestreet.com/options/futuresshocktsc/10172011.html

snip>

The Fed, Money and Inflation

One thing is for certain in the public mind: 2003 was a year of remarkable monetary stimulus. After all, the federal funds rate was lowered to 1%, and Federal Reserve officials were both warning about the dangers of deflation or insufficient inflation and promising that neither would happen under their watch.

Upon further review, however, the stimulative intent was not matched by growth in the monetary aggregates. This is the mirror image of a 1970s phenomenon, the combination of ever-higher federal funds and strongly growing monetary aggregates. That decade is now and forever associated with its resulting inflation.

snip>

The Misdirection Play

The markets of 2003 looked like a reflation trade, even though money-supply growth was slowing and the reported price indices were quite tame. How else could we account for bond yields falling with the economy growing sharply, stocks soaring, commodities rallying, credit spreads contracting, the federal deficit deepening and the dollar hitting new lows against the euro on a fairly regular basis?

The logical extension of all of this as we entered 2004 was that the Fed would have to remove the proverbial punch bowl in short order. The yield curve would flatten, inflation would continue to rise as the lagged effect of all that stimulus and stocks would do fine as profit growth would outweigh the effects of higher short-term interest rates. In addition, the dollar would firm on improved interest rate differentials, and commodity prices would stall because of higher interest rates and a firmer dollar.

Several aspects of this scenario came to pass. The ratio of the forward rate between two and 10 years, the rate at which you can lock in borrowing for eight years starting two years from now, to the 10-year rate itself, fell precipitously in April and May. The closer this measure gets to 1.00, the flatter the yield curve. Stocks, as measured by the Russell 3000, and commodities, as measured by the Dow Jones-AIG index, both stalled.

That misdirection lasted for just over two months. A spate of weaker economic data has ended the flattening of yield curve, and while the weaker dollar and higher commodity prices of the past month were consistent with the 2003 experience, the weaker stock market most certainly is not.

If the Federal Reserve is a reluctant cop on the monetary beat, we may see a return to the accommodative policies and rhetoric of 2003 very soon. But do not expect to party like it's 2003: While bonds, commodities and foreign currencies will benefit, stocks will not. This reflation attempt, whether accompanied by rising monetary aggregates or not, will have higher reported inflation, notwithstanding last week's producer price index and consumer price index reports, slower economic growth and profit growth and the prospects for higher federal taxation with which to contend.

more...

[ozymandius]

6. Good morning all.

:donut: :donut: :donut: :donut: :donut: :donut:

My apologies for acting like a spammer on this message board. I have so much to tell you. First off - we are moving in ten days. So things are a bit nuts right now. I am still looking for a job with some help from new friends in the museum community.

I had some business with my financial planner yesterday. The nice fellow works at A.G. Edwards and I've known him for about ten years. I find him honest in his assessment of everything. He has helped me considerably in planning for the future. I've promised to exercise his advice when steady money becomes a reality in my life.

The conversation turned to the abysmal performance of the markets. This range-bound activity has not escaped his attention. Mind you, he endorses a long-term approach to investing. However, the current markets' sentiments do not sync with his views. He says that current market levels are, in a way, engineered in that the administrators will routinely drop companies from their index if they are underperforming. De-listing of companies is common knowledge. What I did not realize is the Dow and especially the S&P do this all the time. If the Dow drops a company it is a big deal. The S&P drops companies and acquires new ones like a carousel ride changes passengers.

This may add some perspective on those numbers at the end of the day.

Some months ago, I posted the entire Dow-30 and many of the S&P companies. I wonder how many are still listed?

The second component of the conversation regarded my particular financial situation in relation to all the other clients he serves. I am apparently among a significant number or clients who have ransacked their retirement accounts in order to make ends meet. He told me of a recent chart he generated to guage the financial standing of all his clients. What he found is that long-term investors are generally doing okay. Long term means more than ten years. Those who have been investing for less than ten years are really hurting. These people represent the majority who have done the ransacking of their IRAs.

And what of money flowing into in the markets? He says that there is still an ocean of money waiting in money market funds that are deliberately withheld from investment in the stock market because the securities environment is (a) hostile to the average investor and (b) there is a large degree of mistrust in equitable administration of the markets. People with lots of money appear to be waiting for the next plunge.

His observation: the market is now guaged to be prohibitive and hostile to the individual investor.

Finally: I thought my man to be a staunch conservative. I was wrong. He says that he has not seen such poor economic governance since the Hoover administration. The past fifteen years, when Greenspan has been articulating monetary policy, represent the most volatile and hostile period since Herbert Hoover. The markets are not the average person's friend.

[54anickel]

10. Interesting Ozy, my $ guy called me yesterday as well. Strange

conversation - first he was wondering if I had any extra funds I'd like to invest - HA! He seemed to be choking on the Greenspan Kool-aid as he repeated Unca Al's "good news". I called him on it and he fessed up he wasn't buying into it either, that the markets have gone nowhere since the beginning of the year and he's not yet confident in the "recovery".

Wonder if I should be looking for a new $ guy? I asked him that if he was that uncertain, why would he call to spew the Greenspanism? Gave some sort of a lame "try to be objective" sort of reason. I've always liked him for that - he'd give you the pros and cons based on facts, but does he take Greenspan's Kool-aid as a fact these days? I'm thinking the guy is hurting for money himself these days. :shrug:

[ozymandius]

22. Sounds like redifinition of sorts...

It looks like there cold be some redefinition of what is a "long" position. What can one say when a former bluechip company is de-listed? You wanna go long on that? Not hardly.

A second notion comes to mind: where does your money guy want you to put your money and by how much? I know that some smart investments can still be made if you have insightful and surgically precise knowledge.

My friend at AG Edwards will call and talk to people whom he knows to have money to invest. He will make overtures as part of his standard job expectations. Part of his job involves offering knowledge that does not fall under the definition of insider trading. I'll give you an example: Before I invested in the markets, a colleague was already contributing to an IRA using the manager described above. This manager called to suggest that he invest in the pharmaceutical company that makes Viagra. Viagra was not yet available - but soon would be. Everyone knew that Viagra was in development and its purpose. The FDA testing was complete, minus someone's signature.

That kind of performance epitomizes a responsible financial manager. If any manager will not square with you on Greenspan's gross exaggerations then I would look elsewhere for advice.

[54anickel]

35. Heh-heh, Well, he did square with me on Greenspan once I asked him

"Do you truly believe what he's saying?" I suppose it's what you called "standard job expectation". As to where he thought I should invest, I have no idea as we didn't get that far into the conversation.

[UpInArms]

11. Hope your move goes smoothly, Ozy

as I would prefer a housefire to a move :D

Sounds like your financial guy actually understands and cares about his clients.

I find the market conditions rather forbidding.

[ozymandius]

23. Thank you UpInArms!

I, too, despise moving. We moved two years ago and had the luxury of someone packing us. Not this time. Agggh!

I am away soon to pick up boxes. And, hopefully, to meet with someone who is looking for woodworking equipment.

That money guy is all aces. He has been in the business a long time and really loves his work.

[54anickel]

8. Fannie Mae 2nd-Qtr Income Rises 0.9% as Portfolio Growth Slows

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

July 21 (Bloomberg) -- Fannie Mae, the largest source of U.S. mortgage money, said second-quarter profit rose 0.9 percent, restrained by slower portfolio growth and a drop in the value of contracts designed to guard against swings in interest rates.

snip>

Core earnings slowed from a 20 percent gain the same quarter a year ago as growth in Fannie Mae's portfolio of mortgage investments slowed. The portfolio produces more than two thirds of the Washington-based company's profit.

``The character of the company as a stock has changed,'' Thomas Dehudy, a fund manager at MTB Investment Advisors in Baltimore, which has $14 billion under management, including shares of Fannie Mae. Earnings per share is `` probably not going to grow as rapidly as it has in the past'' slowing to 9 percent to 11 percent from about 15 percent, he said.

snip>

Derivatives

A drop in the value of derivatives subtracted $1.98 billion from net income. Derivatives are financial obligations whose value is derived from debt or equity securities, commodities or currencies.

Fannie Mae said it holds derivatives to maturity, meaning its risk is default by a counterparty, not quarterly changes in their values. Standard accounting rules require derivatives be written down or up to market values even if they aren't sold, In the year-ago quarter, the decline in the value of the contracts was $1.9 billion.

A more volatile interest rate environment would make hedging more difficult and ``potentially pressure margins,'' said Robert Napoli, an analyst at Piper Jaffray & Co. in a research note before the report. He rates Fannie Mae ``outperform.''

more...

[UpInArms]

9. markets are open at 9:33 EST

Dow 10,184.15 +35.08 (+0.35%)
Nasdaq 1,930.22 +13.15 (+0.69%)
S&P 500 1,112.60 +3.93 (+0.35%)
10-Yr Bond 4.483% +0.035

9:05AM: S&P futures vs fair value: +5.3. Nasdaq futures vs fair value: +9.0. Still looks like a moderately higher start to the day for the cash market... The futures trade has stabilized, comfortably above fair value... The day's mostly better than expected earnings reports has provided impetus to the indices that already moved 0.5-1.8% yesterday... Meanwhile, the treasury market is weaker across the yield curve on account of the strength in equities.

[54anickel]

12. GM Profit Rises on Strong Financing

DETROIT (Reuters) - General Motors Corp. (NYSE:GM - News) on Wednesday posted higher quarterly earnings, boosted by record results from its credit arm and stronger profits from its core automotive business.

GM's second-quarter earnings, at the high end of Wall Street forecasts, rose to $1.34 billion, or $2.36 per share, up from $901 million, or $1.58 per share in the year-ago quarter.

The Detroit automaker reconfirmed its earnings projection for 2004, but set a target for the third quarter that was below most analysts' estimates.

GM and cross-town rival Ford Motor Co. (NYSE:F - News) suffered double-digit drops in U.S. sales in June, which prompted them to boost their costly incentives to higher levels and raised concerns that they might have to cut production to reduce inventories of unsold vehicles.

GM's North American automotive operations posted stronger results, but the automaker said it was disappointed with the overall figures.

"While earnings at GM North America improved, overall sales, market share and financial results were well below our expectations," GM Chief Executive Rick Wagoner said in a release.

more...

[54anickel]

13. J.P. Morgan Posts Quarterly Loss

http://biz.yahoo.com/rb/040721/financial_jpmorgan_earns_3.html

NEW YORK (Reuters) - J.P. Morgan Chase & Co. (NYSE:JPM - News), the No. 2 U.S. bank after its recent purchase of Bank One, on Wednesday reported a quarterly net loss after boosting litigation reserves by $2.3 billion.

It also approved a $6 billion stock repurchase program.

snip>

Excluding the litigation charge and merger costs, the bank said it earned 85 cents per share.

Wall Street analysts, on average had forecast the company would earn 83 cents a share, according to Reuters Estimates.

The bank faces increased legal risks as a result of its involvement in the former telecom company WorldCom and the energy firm Enron. In May, Citigroup Inc. (NYSE:C - News) said it would pay $2.65 billion to WorldCom investors who had accused it of participating in financial fraud.

[UpInArms]

14. Kodak Earnings Rise (but....)

http://www.thestreet.com/markets/marketfeatures/10172660.html

Kodak's (EK:NYSE - news - research) second- quarter earnings rose 37% from a year ago, with operating profit wiping out analyst estimates. But the company also said it is stepping up the pace of job cuts and now expects to sell less film in 2004 than it previously estimated.

Rochester, N.Y.-based Kodak earned $154 million, or 54 cents a share, in the three months to June 30, compared with $112 million, or 39 cents a share, last year. Sales rose 6% to $3.47 billion. Excluding charges for restructuring and layoffs, the company earned 89 cents a share.

<snip>

Kodak is in the process of cutting 12,000 to 15,000 jobs and said 2,700 positions were eliminated through the second quarter under a plan outlined in January. The company plans an additional reduction of 800 to 1,300 over the balance of the year. The cuts will result in charges this year of $315 million to $375 million.

...more at link...

[54anickel]

16. 12K-15K?!?!?! Holy crap! n/t

[54anickel]

15. Hedge funds fill a strategy gap

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1087373855302&p=1012571727143

Hedge funds, faced with weak returns or losses on some of their strategies, have been flocking to a new one called capital structure arbitrage, which exploits mispricings between a company's equity and debt.


"Cap arb" burst on to the scene two years ago when there were plenty of tele- communications companies and other former high fliers whose equity collapsed while their bonds were slower to reflect the impact.

"The fortunes of the two became interlinked in a downward spiral," says Viswas Raghavan, co-head of equity capital markets at JP Morgan.

The trick was to catch the arbitrage profits before the companies became "fallen angels" and their credit rating was downgraded to junk.

Several factors have since conspired to make the technique more popular.

more...

[UpInArms]

17. will Schwab be the next Enron?

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/07/21/BUG397PVRU1.DTL

No easy fix for troubled company

Charles Schwab Corp. stock rose nearly 7 percent Tuesday on news that its founder and namesake would come back as chief executive.

Wall Street's enthusiasm for the discount brokerage pioneer is somewhat surprising, considering that Chuck Schwab has played a role in the company's problems, and the problems won't be easy to fix.

Although he is a reassuring presence and well- known face, Schwab was co- CEO with David Pottruck from January 1998 until May 2003, when some strategic blunders were made. Even after Pottruck took over as sole CEO, Schwab remained an active chairman.

"Chuck has been very involved in the strategy, the direction of the company, our recent pricing moves, our recent efforts to identify and bring down costs..." Schwab Chief Financial Officer Christopher Dodds said in a conference call with analysts Tuesday.

The call followed a disappointing earnings release and the surprise announcement that Pottruck had abruptly left the company.

...more...

hmmmm.....

http://www.infoimagination.org/ps/politics/bush_contributions.html

Charles Schwab & Co .................... $346,850

http://www.pww.org/article/view/1762/1/103/

At the summit, Bush sat beside Charles W. Schwab of Charles Schwab brokerage corporation, which poured $406,000 in soft money into Republican campaign coffers in the 2000 elections. “The bear market that we’re suffering through right now is probably the worst I have ever gone through and that’s not a very comfortable place to be,” Schwab said glumly. As he spoke, his $700 billion corporation was announcing 400 layoffs.

[ozymandius]

24. Do you remember when he dumped a boatload of his own stock?

That dump raised a few eyebrows. Soon after, the market tanked spectacularly. I think that was 2002.

[UpInArms]

25. oh yes, I do remember

http://www.fortune.com/fortune/specials/2002/insiders/execs.html

THE GREEDY BUNCH
You Bought. They Sold.

Meet the greediest executives on our list. Of all the officers and directors on our main list, these 25 bigwigs made the most money via stock sales from January 1999 through May 2002.

1 Philip Anschutz Director Qwest Communications $1.57 billion

2 Ted Waitt CEO Gateway $1.10 billion

3 Henry Samueli Co-Chairman, CTO Broadcom $810 million

4 Henry Nicholas Co-Chairman, CEO Broadcom $799 million

5 John Moores Chairman Peregrine Systems $646 million

6 Gary Winnick Chairman Global Crossing $508 million

7 Steve Case Chairman AOL Time Warner $475 million

8 Sanjiv Sidhu Chairman, CEO i2 Technologies $447 million

9 Naveen Jain Chairman, CEO Infospace $406 million

10 Charles Schwab Chairman, Co-CEO Charles Schwab $353 million

11 John Malone Former Director AT&T $348 million

12 Craig McCaw Director Nextel Communications $343 million

13 Bobby Johnson Chairman, CEO Foundry Networks $308 million

14 Jay Walker Former Vice Chairman Priceline $276 million

15 Lou Pai Former Division Head Enron $270 million

16 Kevin Kalkhoven Former CEO JDS Uniphase $246 million

17 John Chambers CEO Cisco Systems $239 million

18 Joe Nacchio Former CEO Qwest Communications $230 million

19 Bob Pittman Former COO AOL Time Warner $225 million

20 Rob DeSantis Former EVP Ariba $222 million

21 Jim Barksdale Director AOL Time Warner $213 million

22 Danny Pettit Former CFO JDS Uniphase $206 million

23 Keith Krach Chairman Ariba $191 million

24 David Pottruck Co-CEO Charles Schwab $188 million

25 Jozef Straus CEO JDS Uniphase $175 million

...more...

[54anickel]

18. Sex On Demand: A Big Disappointment

http://www.forbes.com/home/sciencesandmedicine/2004/07/21/cx_mh_0721viagra.html

NEW YORK - When Viagra was approved by the United States Food and Drug Administration on Apr. 10, 1998, the blue impotence--sorry, erectile dysfunction--pill got a big rise out of drug-industry stock analysts.

"It was a cultural phenomenon," remembers Robert Hazlett, an analyst at SunTrust Robinson Humphrey. In its first three months, $411 million worth of Viagra was sold, and 160,000 physicians wrote prescriptions for the drug. "That first quarter was extraordinary, but we've never seen anything like it--before or since."

Some sell-side analysts had rose-colored forecasts. One estimate reportedly predicted Viagra sales would hit a stellar $11 billion. That would have made Viagra the top-selling drug in the world. But last year, Viagra sales came in at a mere $1.88 billion worldwide--a fifth of the total revenue brought in by the real top dog, the cholesterol-lowering drug Lipitor (see "The World's Best-Selling Drugs"). Both medicines are made by Pfizer (nyse: PFE - news - people ). Two new cholesterol drugs are entering the market, but some analysts say that even with the new entrants the total number of patients on impotence drugs is not increasing. Says Jim Birchenough, an analyst at Lehman Brothers: "The market's just never taken off."

More than 12 million men have tried Viagra, but only three million have stuck with it. Several factors could have hurt the pill's total sales. For one thing, while cholesterol medicines are generally paid for by health plans, men pay for erectile-dysfunction pills out of their own pocket. Neil Sweig, an analyst at Fulcrum Global Partners, who emphasizes that Viagra was still a "breakthrough product," points out two other problems: Viagra is widely counterfeited, particularly outside the U.S., and the pill doesn't work for one in three men who try it. Sweig thinks that new erectile-dysfunction drugs could eventually expand the market to as much as $4 billion, but he says Viagra may have peaked.

more...

Sheesh, wouldn't you think folks would prefer to get their cholesterol under control anyway? You go to the doc for ED, he runs the tests and finds that your problem may be due to your stinkin' high cholesterol. What, you say "no thanks doc just get my buddy working again"? :eyes:

That was one good thing (among others of course) that came about with the release of Viagra - you got men who normally wouldn't go to the doctor unless they were very sick to get some blood work done.

A side note, I recently read that the gov't was lowering the target numbers for cholesterol. Wonder if that recommendation was based on sound science or lobbyists?

[54anickel]

20. New Aggressive Cholesterol Guidelines Questioned After Reports on Drug

Company Financial Support for Authors

(Article has link to new guidelines as well)

http://www.seniorjournal.com/NEWS/Health/4-07-17questions.htm

July 17, 2004 - Consumer groups are aggressively questioning the credibility of a government-backed group that has recommended more aggressive treatment of bad cholesterol with more drug therapy. The doubts developed after it was revealed that substantial financial support has been provided most of the authors by the companies that make the cholesterol drugs.

The only author not receiving pharmaceutical company supports was the coordinator James Cleeman, M.D.

These charges began to emerge last week after the nonprofit Center for Science in the Public Interest released a study showing medical journals often fail to reveal the financial conflicts of their authors. (Report Faults Scientific Journals on Financial Disclosure) Newsday was the first to report on the financial ties on Thursday.

The National Heart, Lung and Blood Institute (NHLBI) reacted on Friday by posting on the Web information on the financial support provided to the authors of the study they sponsored. It shows that eight of the nine authors have received money from cholesterol drug makers, including Pfizer Inc., Merck & Co., Bristol-Myers Squibb and AstraZeneca LP. (Web page - click here)

more...

[TrogL]

50. I take it you haven't been around somebody with erectile problems

no thanks doc just get my buddy working again

Cholesterol problems are pretty much invisible to Joe Sixpack. His wilting appendage isn't. However, he lacks the belief in causality to make the connection.

[54anickel]

55. What does my having been around someone with ED have to do with it?

My point was that as men were seeing the Dr. to "get their buddy working again" the cholesterol problems were diagnosed and treated, which is a good thing for the patient.

My point was Kudos to the doctors who took the time to run the tests and fix the cause rather than simply treat the symptom with Viagra alone (which was all Joe six-pack wanted - a prescription for Viagra).

[UpInArms]

19. 10:11 EST update and blather

Dow 10,215.66 +66.59 (+0.66%)
Nasdaq 1,924.78 +7.71 (+0.40%)
S&P 500 1,113.65 +4.98 (+0.45%)
10-Yr Bond 4.488% +0.040

10:00AM: Stock market slips a bit off its opening highs, but continues to sport a bullish bias... Up volume is outpacing down volume by a 2-to-1 basis at the NYSE and Nasdaq... Sector leadership is fairly broad-based at this juncture, with brokerage, semiconductor, airline, and oil service posting large gains... The three all owe their gains to strong earnings reports out of key members (JP Morgan, Texas Instruments, Northwest Airlines, and BJ Services in this case)... Another supportive factor to the stock market this morning has been the over 2% decline in the price of crude oil...

The drop comes ahead of a weekly report on US inventories...NYSE Adv/Dec 1542/994, Nasdaq Adv/Dec 1425/934

9:45AM: Major indices pick up where they left off last session, moving solidly higher... Today's catalyst is a bunch of earnings reports that have come in at, or ahead of, Street expectations... Texas Instruments (TXN 22.14 +0.38), Motorola (MOT 16.41 +0.32), Nextel (NXTL 26.37 +0.37), General Dynamics (GD 98.55 +0.90), Sanmina (SANM 7.91 +1.04), and United Technologies (UTX 92.50 +1.93) have all turned in reports that demonstrate solid growth...

An announcement from Microsoft (MSFT 29.36 +1.04 ), in which the software giant plans to spend $75 bln in a share buyback and one-time dividend offer, has also contributed to the buying drive...

[UpInArms]

21. more mergers coming

http://quote.bloomberg.com/apps/news?pid=10000082&sid=aOiBXooxgD5s&refer=canada

Molson, Coors May Announce $6 Bln Merger Tomorrow, Journal Says

July 21 (Bloomberg) -- Molson Inc., Canada's biggest beermaker, and No. 3 U.S. brewer Adolph Coors Co. may announce a $6 billion merger plan tomorrow, the Wall Street Journal reported, citing unidentified people familiar with the matter.

Tomorrow is the day Coors reports second-quarter earnings and meets with shareholders and analysts, the newspaper said.

The transaction will be a ``merger of equals'' and will have little or no premium for Molson shareholders, the Journal said.

Molson's board is expected to meet today to vote on the merger, which is supported by Coors Chairman Peter Coors and the company's board, the paper said, adding that spokeswomen for both companies declined to comment.

...more...

http://www.reuters.co.uk/newsPackageArticle.jhtml?type=businessNews&storyID=551162§ion=finance

EMI shares rise on music merger hopes

LONDON (Reuters) - Shares in record company EMI Group have risen to take their two-day rally to over 7 percent, boosted by talk the firm will be involved in further industry mergers after regulators approved another deal.

Dealers said on Wednesday EMI's rise was sparked by the European Commission's decision on Tuesday to allow Sony Music and BMG to merge.

Industry executives and sector analysts said EMI EMI.L and Warner Music could now dust off their own merger plans to remain competitive as Sony BMG will join Universal Music in having a market share of over 20 percent market.

...more...

http://triangle.bizjournals.com/triangle/stories/2004/07/19/daily23.html?jst=b_ln_hl

Charles River-Inveresk merger receives FTC clearance

The Federal Trade Commission has given anti-trust clearance to Charles River Laboratories International Inc.'s proposed $1.5 billion acquisition of Inveresk Research Group.

The companies announced Wednesday that the Federal Trade Commission has granted early termination of the waiting period required by the Hart- Scott-Rodino Antitrust Improvements Act in connection with the proposed merger.

The merger is scheduled to close in the fourth quarter of 2004, pending receipt of additional regulatory and shareholder approvals.

Wilmington, Mass.-based Charles River Laboratories, one of the world's largest providers of animals for drug research, announced in early July that it was buying the Cary-based contract research organization.

...more...

http://louisville.bizjournals.com/louisville/stories/2004/07/19/daily21.html?jst=b_ln_hl

Commonwealth Industries to post $18.5 million in charges

Louisville-based Commonwealth Industries Inc. (Nasdaq: CMIN) expects to report more than $18.5 million in charges for the second quarter that are related to a restructuring of the company and a planned merger with IMCO Recycling Inc.

According to a news release, officials expect to incur restructuring costs of about $15.2 million. The company's second- quarter earnings also will include about $3.3 million in transaction costs related to the previously announced sale of its Alflex subsidiary. Aflex, which makes wire products, is being sold to Southwire Co. for $60 million in cash. The deal is expected to close July 30.

Commonwealth's restructuring charges include costs for a variety of cost-saving initiatives, including the closure of a tube manufacturing facility in Kings Mountain, N.C.; the departure of the company's former CEO and other key executives related to the upcoming merger with IMCO; and other streamlining overhead costs, the release said.

...more...

http://www.thestreet.com/_tscs/tech/telecom/10172498.html

AT&T Wireless Posts Surprise Profit

AT&T Wireless (AWE:NYSE - news - research) surprised Wall Street Wednesday morning with a small quarterly profit and some modest gains on the subscriber front.

For its second quarter ended June 30, the company posted a profit of $61 million, or 2 cents a share, on revenue of $4.21 billion. That's down from the year-ago profit of $228 million, or 8 cents a share, on revenue of $4.16 billion.

<snip>

The results come as Wall Street keeps an eye on the Redmond, Wash., cell phone service provider ahead of its scheduled merger with giant rival Cingular. The companies are due to combine at year-end in a $15- a-share deal creating the nation's largest wireless carrier, supplanting current No. 1 Verizon Wireless.

AT&T Wireless said it "continues to make good progress in its merger process with Cingular Wireless," which remains under review by the Federal Communications Commission and the Department of Justice. AT&T Wireless said it "shares Cingular's goal of concluding the transaction as soon as possible, but before the end of the year."

AT&T staggered into the arms of Cingular, a venture of local telcos BellSouth (BLS:NYSE - news - research) and SBC (SBC:NYSE - news - research), after a long spell of service disruptions and customer service shortfalls. Users' dissatisfaction with the company emerged this winter, when AT&T Wireless shocked Wall Street by reporting that a stunning 3.7% of its customers were leaving each month. That so- called churn rate, along with the loss of some 400,000 subscribers, was nearly off the charts for a big player.

...more...

[UpInArms]

26. 11:15 EST Update and blather

Dow 10,208.51 +59.44 (+0.59%)
Nasdaq 1,917.93 +0.86 (+0.04%)
S&P 500 1,112.12 +3.45 (+0.31%)
10-Yr Bond 4.518% +0.070

11:00AM: Equity market holds close to its best levels, giving up very little ground since its latest run... Fed Chairman Greenspan has just begun the Q&A session with the House Financial Services committee after giving the same prepared remarks he delivered at the Senate Banking Committee yesterday... As there was no change to his bullish economic outlook (accented by his expectation of accelerating real GDP growth in 2H04), the market has been relatively unaffected by it...

So far, Senate Committee members have asked fairly benign questions that have not prompted any surprise statements from the FOMC Chairman... The treasury market is currently much weaker across the yield curve - in a profit-taking move off last week's rally and a response to the advance in stocks... NYSE Adv/Dec 1533/1400, Nasdaq Adv/Dec 1375/1332

10:30AM: Buyers catch a second wind and send the blue chip averages to new session highs in the past half hour... The Dow has successfully cleared its 50-day simple moving average, at 10218, and taken the rest of the indices with it... Heavy buying in many of its issues (JP Morgan, Honeywell, United Technologies, Merck) that delivered encouraging earnings reports has made the Dow the best performing index... The Nasdaq has lagged behind somewhat today - due in part to its large, 1.8% rally yesterday, and some notable selling in chip equipment, disk drive, and biotech...

The latter has fallen following a Q2 (June) report by Imclone Systems (IMCL 71.33 -9.40) that contained an Erbitux (its leading cancer-fighting drug) result that was below whisper numbers...NYSE Adv/Dec 1452/1372, Nasdaq Adv/Dec 1282/1327

[TrogL]

27. Loonie Watch

http://www.angelfire.com/ab/trogl/looniewatch.html

Highlights.



http://www.x-rates.com/d/USD/CAD/data30.html

2004-06-21 Monday, June 21 0.733138 USD
2004-06-22 Tuesday, June 22 0.735727 USD
2004-06-23 Wednesday, June 23 0.734538 USD
2004-06-24 Thursday, June 24 0.744602 USD
2004-06-25 Friday, June 25 0.741345 USD
2004-06-28 Monday, June 28 0.744325 USD
2004-06-29 Tuesday, June 29 0.742666 USD
2004-06-30 Wednesday, June 30 0.745879 USD
2004-07-01 Thursday, July 1 0.750469 USD
2004-07-02 Friday, July 2 0.754489 USD
2004-07-06 Tuesday, July 6 0.754091 USD
2004-07-07 Wednesday, July 7 0.757805 USD
2004-07-08 Thursday, July 8 0.759648 USD
2004-07-09 Friday, July 9 0.757174 USD
2004-07-12 Monday, July 12 0.758265 USD
2004-07-13 Tuesday, July 13 0.754205 USD
2004-07-14 Wednesday, July 14 0.756144 USD
2004-07-15 Thursday, July 15 0.755287 USD
2004-07-16 Friday, July 16 0.763825 USD
2004-07-19 Monday, July 19 0.764409 USD
2004-07-20 Tuesday, July 20 0.763417 USD

The loonie gained modestly against all major currencies except the greenback, HKD and Yen. These losses were modest.

Major economic news - Edmonton, Alberta won the new Dell call support centre which will support 500 jobs.

[Maeve]

28. 12:12 and where did the love go?

Dow 10,200.03 +50.96 (+0.50%)
Nasdaq 1,908.48 -8.59 (-0.45%)
S&P 500 1,109.83 +1.16 (+0.10%)
10-Yr Bond 4.506% +0.058

11:55AM: The stock market has turned in a winning performance this morning, although its gains have been held back by a weak Nasdaq... The index started strong, but came barreling down as biotech and semiconductor turned negative... Analysts were generally unimpressed with earnings reports out of key members of those groups... Imclone's (IMCL 68.03 -12.70) Q2 (June) report contained an Erbitux result that was shy of analyst whisper numbers, and Texas Instruments's (TXN 20.94 -82) WLAN revenues declined in the double-digits sequentially...
Other than those two releases, the market was generally pleased with most earnings reports... General Dynamics (GD 97.86 +0.21), United Technologies (UTX 93.57 +3.00), Merck (MRK 45.57 +0.74), JP Morgan (JPM 37.62 +1.22), and BJ Services (BJS 49.19 +1.29) all turned in solid earnings releases and helped send the aerospace, industrial, drug, brokerage, and oil service groups higher... Software has also crept higher and bucked the lackluster trend in technology, on account of an announced $75 bln cash disbursement... The company plans to repurchase $30 bln of stock, issue a one-time dividend of $3/share, and double its annual dividend to $0.32...

In other news, Fed Chairman Greenspan has continued his testimony today - this time to the House Financial Services Committee... Greenspan has stuck to the same text as yesterday and Q&A has not produced any surprise answers, and thus the market has been relatively unaffected...

[Maeve]

29. 1:24 and not getting better

Dow 10,175.76 +26.69 (+0.26%)
Nasdaq 1,898.54 -18.53 (-0.97%)
S&P 500 1,107.47 -1.20 (-0.11%)
10-Yr Bond 4.499% +0.051

12:25PM: Major indices take a turn for the worst as the Nasdaq extends its pullback... The Composite has dropped 10 points in the past half hour, and pushed the Dow and S&P 500 down 15 and 3 points, respectively... Faltering semiconductor and biotech sectors continue to be a thorn in the market's side - the two groups setting a succession of new session lows... Their influence in the market has offset still solid gains in areas like banking, drug, and telecom... Market internals reflect the more bearish tone of trading, with decliners ahead of advancers at the NYSE and Nasdaq...

[UpInArms]

30. 1:48 Update and blather (still slipping)

Dow 10,168.24 +19.17 (+0.19%)
Nasdaq 1,894.73 -22.34 (-1.17%)
S&P 500 1,106.62 -2.05 (-0.18%)
10-Yr Bond 4.502% +0.054

1:30PM: Sellers renew their efforts and push the Nasdaq and S&P 500 to new worst levels - marking the first time this session the S&P has dropped below the unchanged mark...

The market's recent weakness is probably the product of several things: (1) the Nasdaq falling below a short- term support area at 1903/1900, (2) weak sector leadership with only the financial, industrial, and telecom industries showing gains, (3) a sense that few earnings reports can really impress this temperamental market - obsessed with the notion of slowing growth rates, and (4) a lack of strong conviction from buyers since March - with traders quick to take profits in the wake of any selling pressure...NYSE Adv/Dec 1131/2046, Nasdaq Adv/Dec 1018/1931

1:00PM: Equities recoup some of their losses but continue to trade at much lower levels... The collapse in the semiconductor and biotech groups remains an impediment to a market recovery, as these groups command a large presence in the technology and health care sectors... The selling isn't confined to the large-cap issues alone - the mid-cap and small-cap shares have actually fallen further... These issues tend to lead the market in both a rally and downturn, so it's not surprising to see them trailing their large-cap counterparts...Russell 2000 -1.1, SOX -1.4, S&P Midcap 400 -0.6, NYSE Adv/Dec 1100/2064, Nasdaq Adv/ Dec 1009/1922

12:25PM: Major indices take a turn for the worst as the Nasdaq extends its pullback... The Composite has dropped 10 points in the past half hour, and pushed the Dow and S&P 500 down 15 and 3 points, respectively... Faltering semiconductor and biotech sectors continue to be a thorn in the market's side - the two groups setting a succession of new session lows...

[UpInArms]

31. Lift in business caution could help U.S.- Greenspan

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5733885

WASHINGTON, July 21 (Reuters) - Federal Reserve Chairman Alan Greenspan told Congress on Wednesday U.S. businesses remain guarded in their spending and hiring, but said the economy could benefit next year if their caution lifts.

In a second day of testimony on the central bank's semi-annual monetary policy report, Greenspan told the House of Representatives Financial Services Committee corporate America had shown an unusual reluctance to make new capital investments, build inventories and take on permanent hires.

"We are far from behaving the way we typically did (in other expansions)," the Fed chief said in answering questions before the panel, pinning the corporate constraint on a number of "caution-creating factors."

"To the extent these are capable of being assuaged, what it probably will be doing is rather than creating a large surge in economic activity, is to gradually stretch it out, if indeed a degree of confidence gradually returns," Greenspan said. "That would be one the reasons why a gradual expansion which we now seem to be experiencing does bode well for next year."

Greenspan cited the bursting of the U.S. stock market bubble in 2000 and ensuing corporate scandals as factors that had cut into businesses' willingness to take risks.

He also said fears of possible terrorist attacks were likely at play. "I think that the issue of potential terrorism is latent. It's there," he said, adding: "I have no way of making a judgment as to how significant it is."

...more...

(edited to correct an old Meanspin article posted in error :( )

[UpInArms]

32. 2:16 EST Updagte and blather

Dow 10,153.57 +4.50 (+0.04%)
Nasdaq 1,892.94 -24.13 (-1.26%)
S&P 500 1,104.24 -4.43 (-0.40%)
10-Yr Bond 4.495% +0.047

2:00PM: Stocks continue to travel south amid little intervention from buyers... Traders have simply closed up positions in fear that the market will continue to tumble... Right now, the Nasdaq has fallen below above another level of short-term support, 1894... However, the selling remains ugly with the biotech index down 5.2%... ImClone's (IMCL 66.92 -13.81) softer than expected Erbitux result has likely sparked concerns about other companies with second-to-third line cancer drugs... Fears that these new products will not be able to deliver on their high-touted promises have wrecked the group today...

Genentech (DNA 48.22 -1.73) - with Avastin, OSI Pharmaceuticals (OSIP 56.00 -3.39) - with Tarceva, and Millennium Pharmaceuticals (MLNM 10-74 -0.77) - with Velcade have all been hit...NYSE Adv/Dec 1038/2172, Nasdaq Adv/Dec 941/2029

[UpInArms]

34. 2:33 EST Update and blather (all red now)

Dow 10,143.98 -5.09 (-0.05%)
Nasdaq 1,891.23 -25.84 (-1.35%)
S&P 500 1,104.30 -4.37 (-0.39%)
10-Yr Bond 4.492% +0.044

2:30PM: Indices hold steady around their lows of the day as most sectors continue to sport losses... Today's plummet - from a fundamental perspective - remains puzzling as the majority of most earnings were better than expected... Microsoft (MSFT 29.03 +2.01) also did its part with its large stock buyback and one-time dividend... Such a move, however, has not been as warmly received as one would initially think...

In some senses, the announcement has worked against the company - and the rest of the tech sector - as some investors surmise that Microsoft could be trying to 'lessen the blow' of some less than inspiring earnings Thursday night... Read Briefing.com's Looking Ahead column for more insight into this idea...NYSE Adv/Dec 930/2309, Nasdaq Adv/Dec 880/2119

[54anickel]

33. Midyear Economic & Market Review: More Disappointment Ahead?

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=34405

snip>

Summary

With regard to the stock market in particular, this year's first half had to be a disappointment -- to bulls and bears alike. However, when you consider the extraordinary ebullience in evidence as the year commenced, disappointment must be much greater among those in the bullish camp. And if January through June proved disheartening to optimists, the market's slide thus far in July certainly has done nothing to lift spirits. On the other hand, popular sentiment measures have remained quite buoyant. Thus, if my views about 2004's second half are in line with what comes to pass, the really major disappointments lie ahead -- but not for the bears!

In a nutshell, here is how I currently see the balance of 2004:

* Real GDP growth in the second half will come in at a rate of 3.3%, give or take, well below the 5% or even higher rate many continue to project.

* Crude oil prices are likely to reach higher than current levels during the second half, even in the absence of possible exogenous events creating supply interruptions. Were the latter to occur, $50/barrel West Texas intermediate crude would become a genuine possibility.

* Interest rates, across the yield curve, will continue to trend irregularly higher during the balance of the year.

* The dollar has rolled over and appears to be heading for a test of its early 2004 lows -- around 85 on the Dollar Index. If such a test proved unsuccessful, and the fundamental prospects for such an outcome are pretty good, a material break in the dollar's exchange-rate value would likely foster higher interest rates and lower stock prices.

* As for stock prices, I believe there is a good and growing chance the bellwether measures already have seen their 2004 highs. If so, there is also a good chance that for all of 2004, most equity-market proxies will record negative returns.

* The price of physical gold is poised for a strong second half. I would think that bullion visiting the $475 to $500 range by year-end is quite likely.

* Wall Street analysts are fond of avoiding incorporating exogenous events into their forecasts, sloughing them off as "unpredictable." And indeed, they are. But this certainly does not mean one cannot or should not assess the climate for their occurrence. In this regard, I remain pessimistic about new bouts of terrorism aimed specifically at Americans, and I continue to believe that domestic incidents represent a growing threat.

more...

[54anickel]

36. Halliburton's Work in Iran Stirs Democrats

http://www.washingtonpost.com/wp-dyn/articles/A110-2004Jul20.html

snip>

In a filing with federal regulators Monday, Halliburton disclosed that the three-year investigation had escalated from an inquiry by the Treasury Department's Office of Foreign Assets Control to a criminal investigation by the Justice Department.

Such cases are referred to Justice only when there is evidence "intentional or willful" violations have occurred, government officials said.

The Justice Department investigation relates to a subsidiary called Halliburton Products & Services Ltd., an oil field services company incorporated in the Cayman Islands. In a 2003 report, the company said the subsidiary "performs between $30 and $40 million annually in oilfield service work in Iran."

According to financial disclosures filed with federal regulators, the company received an inquiry in 2001 about possible violations of national security sanctions that prohibit U.S. companies from doing business in Iran. Under federal sanctions law, foreign subsidiaries of U.S. companies can do business in a sanctioned country only if its operates independently of the parent company.

Halliburton has said repeatedly in documents on file with the government that its subsidiary operated legally in Iran, outside the control of U.S. executives.

"We look forward to answering any and all questions. It is important to understand, especially in the current political environment, that this is not a condemnation of the company, but a method of further studying the facts," Halliburton spokeswoman Wendy Hall said in an e-mail yesterday, referring to the Iran subpoena. "We welcome a thorough review of any and all of the company's business. We continue to believe that Halliburton's business in Iran is in compliance with applicable laws and regulations."

more...

[54anickel]

37. Halliburton's boss from hell

Subscription or view the ad for a day pass

http://www.salon.com/news/feature/2004/07/21/halliburton/

July 21, 2004 | In early September, during the Republican National Convention, the GOP is almost certain to name Dick Cheney as its nominee for vice president of the United States. In the meantime, it's clear that Cheney deserves another nomination: as one of the worst CEOs in recent American history.

Of course, there are plenty of CEOs that should to be on that list, including Enron's Kenneth Lay, Tyco's Dennis Kozlowski and Adelphia's John Rigas. While those bosses certainly are being pilloried, Cheney's disastrous five-year-long tenure at Halliburton deserves far more scrutiny than the mainstream business press has bothered to provide.

Cheney's job at Halliburton is particularly newsworthy now that John Kerry has chosen John Edwards as his running mate. The Republicans have already begun hammering Edwards for his work as a trial lawyer; Democrats have an opportunity to bash Cheney's performance at Halliburton. Given the wreckage that Cheney left behind, that record offers a target-rich environment.

Since Cheney's departure, the company's net worth has gone into free-fall, debt has soared, and it is now facing embarrassing legal entanglements that could hamper its profitability for years to come. Furthermore, despite being the largest oil-field services company on earth (last year, its revenues surpassed those of French giant Schlumberger), Halliburton hasn't been able to make any money. Instead, it's losing money -- lots of money. In 2002, the company lost $1 billion. In 2003, despite revenues of $16.2 billion, it lost another $800 million. In the first quarter of this year, losses totaled $65 million. More bad news is expected when the company reports its second quarter results on Friday.

more....

[lfairban]

52. A very good article from Salon.

I'll have to add it to my collection of Halliburton Links.

[54anickel]

56. Ewww, thanks for the Halliburton Links! I've bookmarked that one.

"Hubby" loves to keep up on Hellaburnin' after what they did to Dresser Industries. Looks like Dresser may have gotten the last laugh though. Unfortunately, their employees did not fair so well and got the short end of the stick, sort of screwed from both ends.

[54anickel]

38. 3:21 and more of the same (red)

Dow 10,117.14 -31.93 (-0.31%)
Nasdaq 1,886.34 -30.73 (-1.60%)
S&P 500 1,100.83 -7.84 (-0.71%)
10-yr Bond 4.487% +0.039
30-yr Bond 5.208% +0.024

NYSE Volume 1,350,105,000
Nasdaq Volume 1,718,927,000

3:00PM: Little change in the standings of stocks, as they remain underwater after starting the day with gains... The Dow has now joined the Nasdaq and S&P 500 in negative territory, after clinging to slim gains following the earnings reports of several components (UTX, JPM, MRK, GM, HON)... The losses in technology and biotech remain largely insurmountable, and their combined leadership has prompted reversals in other key areas (retail, financial, transportation)...
At this point, the equity market is poised to finish near its worst levels - which speaks to the deteriorating technical tone seen over the past weeks...NYSE Adv/Dec 924/2340, Nasdaq Adv/Dec 899/2126

2:30PM: Indices hold steady around their lows of the day as most sectors continue to sport losses... Today's plummet - from a fundamental perspective - remains puzzling as the majority of most earnings were better than expected... Microsoft (MSFT 29.03 +2.01) also did its part with its large stock buyback and one-time dividend... Such a move, however, has not been as warmly received as one would initially think...

In some senses, the announcement has worked against the company - and the rest of the tech sector - as some investors surmise that Microsoft could be trying to 'lessen the blow' of some less than inspiring earnings Thursday night... Read Briefing.com's Looking Ahead column for more insight into this idea...NYSE Adv/Dec 930/2309, Nasdaq Adv/Dec 880/2119


Advances & Declines (OUCH!!!)
NYSE Nasdaq
Advances 905 (26%) 843 (26%)
Declines 2384 (69%) 2193 (68%)
Unchanged 122 (3%) 151 (4%)

----------------------------------------------------------------------

Up Vol* 343 (27%) 387 (23%)
Down Vol* 907 (72%) 1202 (73%)
Unch. Vol* 4 (0%) 53 (3%)

----------------------------------------------------------------------

New Hi's 117 50
New Lo's 23 123

[54anickel]

39. No feather headdresses, but . . . (Mogambo)

http://www.321gold.com/editorials/daughty/daughty072104.html

snip>

Doug Noland passes along a little bit of news from the Bloomberg site, where Michael McKee and Jessica Brice quote U.S. Commerce Secretary Donald Evans, who said that he's "not worried that oil prices will lead to higher inflation." If he really wanted to get my attention, he would have said that he is not worried that eating bag after bag of chocolate-chip cookies will lead to higher weight gain. They both make the same amount of sense, although one is much more delicious than the other.

But Mr. Evans is not finished sounding really stupid. He went to on say, and I am providing the exact quote, because if I did not you would accuse me of making this up because it is hard to believe that a senior member of the government would say something so ridiculous, "Oil prices have been above $35 to $40 for quite some time now. If that was going to have a serious impact on inflation in this economy, it would have begun to feed its way into it. From what I can tell, inflation remains in check and remains under control."

The Fed has raised rates to stem this rise in prices, yet this guy says "From what I can tell, inflation remains in check and remains under control." All the inflation indicators are rising, rising, rising, and yet we get a government doofus saying "From what I can tell, inflation remains in check and remains under control."

Oil is staying over $40 a barrel, and yet "From what I can tell, inflation remains in check and remains under control."

snip>

They then give a little snapshot of how prices are acting lately. "Last month import prices soared at an annual rate of 19.2%. Consumer prices had their biggest jump in 14 years this year with the latest rise at 7.2% annualized. This included a 55% surge in energy prices and a nearly 11% gain in food prices (both annualized). Excluding these, the popular core rate was obviously less. But since we all eat and drive, the core rate is actually meaningless."

"Producer prices reinforced the other inflation figures. They too have soared the most in 14 years over the past year with the latest up at an annual rate of nearly 10%. Energy and food prices surged over 19% and 18% annualized, respectively. So who says there's no inflation? There is, and it's soaring."

Richard Russell "The fact (which few seem to realize) is that the Fed is still fighting the dragon of deflation. For the year-to-date (the last 25 weeks), M-3, the broad money supply, is up $430 billion or an annualized rate of 10.1%. This is double last year's rate, so it seems clear that Alan Greenspan still believes it's necessary to fight deflation."

And what is this deflation that Greenspan is so worried about? The prices of stocks and bonds and houses. The sky-high prices of stocks are the end result of the damnable Congress making IRA and 401(k) and all those other retirement accounts deductible, and we have had over twenty years of people and businesses pouring their money into the stock market, with everyone believing that they will get rich and retire with the riches provided from their stock market investments, although there is not one instance of that happening to all the participants in an entire economy.

more...

heh-heh, he even brings up one of my pet peeves about public restrooms ;-)

[54anickel]

40. Hunt for Nonfilers Turns up Millionaires, Lawyers, CPAs

http://www.accountingweb.com/cgi-bin/item.cgi?id=99494

AccountingWEB.com - Jul-19-2004 - In a crackdown on people who have not filed their tax returns, state and federal officials are finding millionaires, medical professionals, lawyers and other heavy hitters.
For example, the suspected list of nonfilers in California for 2002 includes 865 millionaires, 6,756 lawyers, 1,458 CPAs and 20,473 medical professionals, the Wall Street Journal reported.

Taxpayers who still haven't filed "have some explaining to do," said Steve Westly, the state controller and chairman of the California Franchise Tax Board.

Some people don’t file on time due to health problems or family crises. Tax-collection agencies also make mistakes, and disputes over whether someone who lives in one state needs to file in another are common. In some cases, nonfilers owe very little, said Ernest Dronenburg of Deloitte & Touche in San Diego and a former chairman of California's Franchise Tax Board.

Officials from the Internal Revenue Service and state agencies are hunting down people who don’t file for years, a problem that costs billions and has been difficult to beat. Officials are turning to sophisticated document matching programs, information sharing and tax amnesty programs to recover back taxes.

more...

[West Coast Democrat]

41. Whoa! Out of nowhere...Dow Down Over 100!

[54anickel]

42. Holy crap! Quite the move from today's high!!!

[Media_Lies_Daily]

57. Gee...THAT was entertaining.

[54anickel]

43. A Visual Measure of the Recent Selling Pressure in Gold

One of those articles that makes you go hmmmmm? :tinfoilhat:

http://www.gold-eagle.com/editorials_04/norcini072004.html

Bill Murphy and I have been commenting for the last week and a half on an almost daily basis about the fierceness of the recent selling pressure we are witnessing taking place in gold. Commitments of Traders data as well as the daily releases of open interest totals reveal an extraordinary effort taking place by the government sponsored gold cartel to cap this recent advance. The two of us have remarked about the enormity of the daily jumps taking place in the cumulative open interest totals and have observed that the enemies of gold have seemingly embarked on a gargantuan effort this time around to absorb the entire amount of new fund buying that is entering the gold market. Their strategy at this point seems to be focused on the region near $410 as that has become a type of pivot point. Apparently, there is an all out effort to hold gold under this price.

I am of the opinion that the reason for this undertaking is that once resistance in place near $410 fails, gold will vault directly to the $425-$430 region and test the double top highs. A breach of that region will then send gold directly to a test of $450. It would seem the financial powers that be have decided to send a message to speculators that gold is off limits as a soaring gold price a few months before the general election is not something they desire. By pouring on the paper shorts, they are obviously of the opinion that they can cause frustrated longs to ditch their newly established positions and remove the buying pressure that has been rebuilding under the gold market. Whether they succeed in this gambit remains to be seen. What is certain however is that the statistics reveal the desperation of the haters of gold and the lengths they are going to this time around to keep the illusion of economic wholesomeness alive and by consequence to once again plunder the public.

I have included a chart of August gold complete with a graph of the open interest totals over that same time period. For the sake of illustration, I have marked both charts with lines and included the closing gold price along with the date and above that, on the open interest graph, the total number of contracts open along with the date for that figure as well.

snip>

What this reveals is quite extraordinary. The commercial short category, a.k.a. the gold cartel, has been expending a tremendous amount of firepower in order to absorb the prodigious amount of new buying which is entering the gold market. They are currently selling at a rate of more than 2X the pace of their selling a mere four months ago. It is almost as if they are in overdrive. From where this trader sits, this determined effort has the smell of desperation to it. A failure to hold gold here and a run to $430 and gold will be screaming out "TROUBLE" to all who have ears to ear.

Contrary to the assertions of the half-wits who continue to deny government collusion in the gold price suppression, the commitments data reveals that the only sellers of size in this market are the commercial category. Since it is a know fact that the majority of mining outfits have indicated they are REDUCING short hedges, not increasing them, that leaves the bullion banks as the main entities making up this segment of the open interest. As a trader of many years experience, what I find particularly odd about the above data is that normal hedging activity would be diametrically opposite in mode to what is seen here. Let me explain.

more...

[radfringe]

44. thar she goes

did someone flush today?

AOL's "welcome" screen headline Home Owners Rush to Sell as Boom Cools Off
By Ilaina Jonas, Reuters

(July 21) - Is the bloom off the boom?

The U.S. housing market, a pillar of economic strength that propped up the sagging U.S. economy last year, may be showing some cracks, experts said.

From Laguna Hills, California, to Lexington, Massachusetts, Realtors said home-buying dynamics have changed from just a few months ago.

It's no longer a seller's game, they said.

---snip---

U.S. housing starts unexpectedly fell 8.5 percent in June to their lowest level in more than a year as rising interest rates cooled the hot housing market, the Commerce Department said on Tuesday.

Permits, a sign of builder confidence in future demand, dropped 8.2 percent in June, the biggest monthly decline since February 1994 -- the last time the Federal Reserve started raising interest rates after a recession.

"This is, I think, the long-awaited start of the slowdown in the housing market," said Drew Matus, an economist at Lehman Brothers.

================== the boom went boom ================


meanwhile -- have a chuckle -- new cartoon -- scroll to bottom right
http://radicalfringe.freeservers.com/

[54anickel]

46. Oh man, I hopes it holds up a bit longer in the VA Beach area until

my brother can sell his place....Lost his job and is moving back to FL. Luckily his wife got her old job back in FL, and he has a couple of prospects that really don't care where he lives. He travels constantly in his line of biz anyway so many outfits he applies to have little preference on where he lives. Too bad this last job insisted that he move. The position itself was (at the time) too good to pass up.

Whodathunk they'd start going belly up a couple of years later.

[West Coast Democrat]

47. Here is a link from Yahoo with that story

http://news.yahoo.com/news?tmpl=story&u=/nm/20040721/us_nm/property_homemarket_dc_1

[KoKo]

59. Give it to the "Media" for hype. Just yesterday articles "housing boom"

and today it's "The Sky is Falling."

It's not falling in California according to yesterday, but California isn't the rest of the country.

Amazing..yet folks who read the Marketeers here, have known housing is in for a bad time...we were forewarned.

[54anickel]

49. Great new toon, Rad. Also love that Krugman column you have posted

there - That one's a keeper!!!!

[54anickel]

45. Closing numbers and yada (I thought those Adv/Dec numbers were looking

a bit scary in that last update) Still waiting for the final blather.

Edit for the closing blather

Dow 10,046.13 -102.94 (-1.01%)
Nasdaq 1,874.37 -42.70 (-2.23%)
S&P 500 1,093.88 -14.79 (-1.33%)
10-yr Bond 4.487% +0.039
30-yr Bond 5.208% +0.024

NYSE Volume 1,679,865,000
Nasdaq Volume 2,082,420,000

Close Dow -102.94 at 10046.13, S&P -14.79 at 1093.88, Nasdaq -42.70 at 1874.37: Stocks started the day with respectable gains, but then surrendered all of them - and then some - in a dramatic afternoon sell-off... From their highs (the opening) to their lows (the close), the Dow, Nasdaq, and S&P 500 gave up 180, 56, and 32 points respectively - the Nasdaq coming 9 points within its worst levels of the year... On the surface, today's plunge was a bit surprising considering the positive earnings announcement of last night and this morning...
Sector leaders like United Technologies (UTX 92.80 +2.23), General Dynamics (GD 97.56 -0.09), Texas Instruments (TXN 20.65 -1.11), Merck (MRK 44.72 -0.11), JP Morgan (JPM 36.82 +0.42), Imclone Systems (IMCL 65.28 -15.45) and Motorola (MOT 14.94 -1.15) turned in seemingly strong June quarter reports, but investors and analysts were able to poke holes in most of them... In the case of Texas Instruments and Imclone Systems, those criticisms were potent enough (with implications to other sector members reaching) to send their respective sectors flailing... The sizable losses seen in semiconductor and biotech collapsed the Nasdaq, and eventually led to the turnaround in the Dow and S&P 500...

Financial, telecom, and telecom - areas that were at one time showing gains - soon reversed course and closed with losses of 1.0% or more... Buyers basically lost all confidence they had at the beginning, especially as the indices fell through a series of key technical levels (200-day moving average for the Dow and S&P 500)... Volume was heavy on the move lower and suggested that - for the time being - bears remain in control of trading... Down volume led up volume by a 4-to-1 margin at the Nasadq and NYSE's close...DJTA -2.1, Russell 2000 -2.8, SOX -3.7, S&P Midcap 400 -2.0, XOI -2.0, NYSE Adv/Dec 722/2604, Nasdaq Adv/Dec 749/2330

3:30PM: The market continues to crumble under the weight of immense selling pressure... Decliners now lead advancers by a 2-to-1 margin at the NYSE and Nasdaq, and down volume now outpaces up volume by a more than 3-to-1 ratio... Buyers have simply been unwilling to stand by their long positions, and used any sign of intraday weakness to sell... This kind of activity has marked the market for the past 3 weeks, and has prevented the indices from sustaining any advance... Yesterday's move higher - especially in tech - has probably acted as a hindrance to the market today...
Tonight, ALTR, EBAY, ISSX, SBUX, and SEBL will all be reporting...DJTA -1.6, Russell 2000 -2.1, SOX -3.3, S&P Midcap 400 -1.5, XOI -1.6, NYSE Adv/Dec 834/2247, Nasdaq Adv/Dec 830/2218


Advances & Declines
NYSE Nasdaq
Advances 726 (21%) 749 (23%)
Declines 2601 (75%) 2330 (72%)
Unchanged 117 (3%) 147 (4%)

----------------------------------------------------------------------

Up Vol* 271 (16%) 382 (18%)
Down Vol* 1400 (83%) 1673 (80%)
Unch. Vol* 6 (0%) 15 (0%)

----------------------------------------------------------------------

New Hi's 118 50
New Lo's 39 154

[TrogL]

48. Last time I saw a graph like that was in physics class

Curve of a thrown ball in free-fall.

[midwayer]

51. Retrace points

The SPX and the Dow broke thier 200 DMA's, could not reverse and signals probable more selling

Just some key points to watch for

On a Dow weekly chart, from the March low of 7416 to the high of 10753 the 38.2 % retrace is 9475 and 50 % is 9085

There is a key trend line within a hundred points of the 38.2 fib

Looks like the shorts & sellers have come out to play for a bit

maybe a relief rally so use caution

[54anickel]

53. UPDATE 3-Bolder businesses would help US economy-Greenspan

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5734697

WASHINGTON, July 21 (Reuters) - U.S. businesses are unusually reluctant to spend and hire, but the economy could benefit next year if their caution ebbs, Federal Reserve Chairman Alan Greenspan told Congress on Wednesday.

In a second day of testimony on the central bank's semiannual monetary policy report, Greenspan told the House of Representatives Financial Services Committee that even with the recovery gaining pace, Corporate America has held back from new capital investments, inventory building and permanent hires.

"We are far from behaving the way we typically did" in other expansions, the Fed chief said in answering questions before the panel. He pinned the corporate restraint on a number of "caution-creating factors."

"To the extent these are capable of being assuaged, what it probably will be doing is rather than creating a large surge in economic activity, is to gradually stretch it out, if indeed a degree of confidence gradually returns," Greenspan said. "That would be one the reasons why a gradual expansion which we now seem to be experiencing does bode well for next year."

Greenspan cited the bursting of the U.S. stock market bubble in 2000 and ensuing corporate scandals as factors that had made businesses less willing to take risks.

Fears of possible terrorist attacks were likely at play as well, he said. "I think that the issue of potential terrorism is latent. It's there," Greenspan said, adding: "I have no way of making a judgment as to how significant it is."

POLITICAL THEATER

more...

[Media_Lies_Daily]

58. Right. In this economic climate, bolder businesses will create an even...

...bigger mess when the sand foundation slips out from under this "booming economy".

I find it amazing that Greenspan made the exact opposite analyses and decisions when Clinton was in office. He must think we're all stupid.

[54anickel]

54. Hey, we missed the Market Wrap-up this morning. Better late than never

Lot's of charts again. A few of them have the explanation of "The recent decline has just gotten started."


http://www.financialsense.com/Market/daily/tuesday.htm

Today's WrapUp by Ike Iossif 07.20.2004

One of my favorite types of analysis is ratio analysis, because it tends to reveal when the historical numerical ratio between correlated markets/sectors is at extreme points, and thus, ripe for reversal.

The ratio analysis is telling us that more likely we ought to expect for the intermediate term, a top in oil prices in the $42.5-$45 (unless there is an exogenous event that disrupts production for several weeks), higher interest rates, lower equity prices, a secular top in the financial sector, and a short-term bottom in the dollar index in the 86-84 zone.

I like to buy gold stocks when the gold/XAU ratio is above 5.00 and sell when the ratio dips below 3.75. We are a long way from an entry point now.


The gold/dollar ratio is telling us that the dollar may be close to a bottom, while gold may be close to a top.

Notice that despite near record high oil prices, the gold/oil ratio is not even close to its 2001 bottom, which means oil can continue to outperform gold in the near term.