STOCK MARKET WATCH, Friday May 16

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday May 16, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 250
DAYS SINCE DEMOCRACY DIED (12/12/00) 2672 DAYS
WHERE'S OSAMA BIN-LADEN? 2397 DAYS
DAYS SINCE ENRON COLLAPSE = 2688
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
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 May 15, 2008

Dow... 12,992.66 +94.28 (+0.73%)
Nasdaq... 2,533.73 +37.03 (+1.48%)
S&P 500... 1,423.57 +14.91 (+1.06%)
Gold future... 880.00 +13.50 (+1.53%)
30-Year Bond 4.58% -0.06 (-1.32%)
10-Yr Bond... 3.84% -0.10 (-2.41%)






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

---

Read more: du

[ozymandius]

1. Market WrapUp: Government Inflation Data at Odds With Reality

BY GARY DORSCH

In an age where governments of every political stripe distort economic data to promote their own self-interests, it’s hardly surprising that they present inflation statistics that are wildly at odds with the reality faced by consumers and businesses, and regarded with utter disbelief. In the latest US government report on inflation for instance, there was a glaring “seasonal adjustment,” for energy prices that cast great doubt as to the accuracy of the findings.

US Labor Dept apparatchiks said consumer prices rose a smaller than expected 0.2% in April, tamed by energy prices, which were unchanged last month. Utilizing an obscure “seasonal adjustment,” Labor figured that gasoline prices actually fell 2% in April, which doesn’t reflect the reality of what consumers were paying at the pump. Furthermore, the IMF’s global food price index rose 43% over the last 12-months, but the US consumer price index for food is only 5.1% higher.

Wall Street cheered the tame inflation rate, reckoning it gives the Federal Reserve more time to peg the fed funds rate at 2% to jig-up the stock market with massive money injections. But the folks who aren’t fooled by the government’s propaganda on inflation are the American people, whose dollars buy less with each passing month. The inflation tax is the great thief of the middle class.

.....

On May 14th, upon hearing Labor’s report of a scant 0.2% inflation rate during April, former Fed chief Paul Volcker had doubts about the way the government measures inflation. “It doesn’t feel quite right. I think the bias clearly is more towards higher inflation, offset by the weakness of the domestic economy,” he said. “Seasonal adjustments” are just one of the useful tools that Labor apparatchiks have developed to fudge inflation statistics. The Bernanke Fed has a simpler model; it simply strips out food and energy costs in its inflation calculus.

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

---

I love this. Here's a person willing to call bullshit on the economic data and he packs the math to back it up.

[ozymandius]

3. Interesting bit on inflation data

"Inflation here, there and everywhere"

Willem Buiter argues that the focus on oil and food price shocks, which economists view as relative price changes rather than inflation, is muddying the discussion about inflation. He sees considerable evidence of widespread inflation and it's central bankers' fault.

Inflation is rising just about everywhere. Why is this and what can be done about it?

To get some basic concepts clear: inflation is a sustained rise in the general price level. Both the words ’sustained’ and ‘general price level’ are imprecise and in need of operationalisation. By general price level I mean a broad, representative index of consumer prices. That excludes the (headline) CPI in the UK....

I also exclude as unrepresentative various ‘core’ price indices, which exclude from the headline index such things as food, drink, energy and fuel. Among leading central banks, only the Fed has focused mainly on core inflation rather than on the headline index of consumer goods and services prices. Focusing on core inflation will be misleading unless either the relative price of core and non-core goods and services is expected to remain constant or Americans don’t eat , drink, drive cars and heat their houses or use air conditioning.

.....

Who or what causes inflation?

This one is easy. In a fiat money world, central banks cause inflation, or, more precisely, only central banks are resposible for inflation. Other shocks, real and nominal, can influence the general price level if the central bank does not respond swiftly and determinedly, but these non-central bank-induced changes in the general price level can always can be offset by the central bank, given enough time, freedom to act and courage.

So, in the medium and long term (at horizons of two years and over, say) central banks choose the average rate of inflation. Not globalisation; not indirect taxes; not bad harvests; not OPEC and the price of oil; not the Chinese and their exchange rate management. There is no oil inflation, food inflation or cost-push inflation. There is just inflation. Inflation may be accompanied by changes in key relative prices - in the real prices of oil, of food, of oil and of labour for instance - if other relative demand and supply shocks accompany the inflationary impulses created by the central bank. Large increases in the real price of food will be bad news to food importers (including most urban households) and good news to rural food producers and exporters. But don’t confuse it with inflation.

.....

Inflation is rising (almost) everywhere

.....

I am willing to grant the old-Keynesians and new-Keynesians among us, the empirical regularity that at very high frequencies, the fact that most nominal commodity prices (and prices of non-core goods in general) are flexible (both ways), while most nominal core goods and services are sticky in the short run. So relative demand or supply shocks that cause the relative price of non-core goods to go up will tend to do so in the first instance through an increase in the nominal price of non-core goods rather than through a reduction in the nominal price of core goods and services; likewise relative demand or supply shocks that cause the relative price of non-core goods to do down will tend to do so in the first instance through a decline in the nominal price of non-core goods rather than through an increase in the nominal price of core goods and services.

more here

[ozymandius]

2. Today's Reports

08:30 Building Permits Apr
Briefing.com 900K
Consensus 912K
Prior 927K

08:30 Housing Starts Apr
Briefing.com 940K
Consensus 940K
Prior 947K

10:00 Mich Sentiment-Prel. May
Briefing.com 65.0
Consensus 62.0
Prior 62.6

http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

[UpInArms]

17. U.S. April single-family housing starts fall 1.7% - housing starts down 31% in past year

02. U.S. building permits down 34% in past year
8:30 AM ET, May 16, 2008

03. U.S. April multifamily housing starts up 36%
8:30 AM ET, May 16, 2008

04. U.S. housing starts down 31% in past year
8:30 AM ET, May 16, 2008

05. U.S. April building permits rise 4.9% to 978,000
8:30 AM ET, May 16, 2008

06. U.S. April single-family housing starts fall 1.7%
8:30 AM ET, May 16, 2008

07. U.S. April housing starts much higher than 939,000 expected
8:30 AM ET, May 16, 2008

08. U.S. April housing starts up 8.2% to 1.032 million
8:30 AM ET, May 16, 2008

[UpInArms]

23. People are UNHAPPY: May UMich consumer sentiment 59.5 vs 62.6 in April: report

01. May UMich consumer sentiment 59.5 vs 62.6 in April: report
9:57 AM ET, May 16, 2008

[UpInArms]

32. U.S. consumer confidence tumbled to its lowest in 28 years

http://www.reuters.com/article/bondsNews/idUSN1639947620080516?sp=true

U.S. consumer confidence tumbled to its lowest in 28 years this month, according to the Reuters/University of Michigan Surveys of Consumers, as short-term inflation expectations hit their highest since the stagflationary era of the early 1980s.

The price of oil CLC1 shot to a record high near $128 a barrel after Goldman Sachs (GS.N: Quote, Profile, Research), the most active investment bank in energy markets, sharply raised its price forecast.

[ozymandius]

4. a look at conservative idealism

http://krugman.blogs.nytimes.com/2008/05/09/avoiding-moral-hazard/

[ozymandius]

5. Oil prices rise after volatile session

BANGKOK, Thailand - Oil rose Friday in Asia following a whipsaw overnight session during which the expiration of options and a mix of news played havoc with prices trading in a range almost $6 wide.

During Thursday's session, the front-month crude oil contract dropped as low as $120.75 before bouncing back to finish above $124 a barrel.

.....

Besides the expiration of options contracts, a temporary shutdown of ICE Futures trading in crude oil and other futures products due to a power outage also contributed to the previous session's volatility.

.....

Oil initially climbed in the floor session as U.S. diesel fuel prices jumped 3.6 cents at the pump to a new national average of $4.455 a gallon ($1.178 a liter). Diesel is used to fuel most truck, trains and ships, and is a large part of the reason prices of food and consumer goods are rising so fast.

There has also been some concern that extra Chinese demand for diesel to run emergency power generators after this week's deadly earthquake may further tighten the distillates market.

But as oil reached for new records above $126 a barrel, the U.S. Energy Department reported that natural gas inventories rose 93 billion cubic feet last week, more than analysts had expected, and that pulled the whole petroleum energy complex lower.

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

[ozymandius]

9. Speculative bets roil oil markets

Big fund money is flowing into oil markets sending prices to levels never seen before. Is it profiteering or an essential way to ensure supply?

NEW YORK (CNNMoney.com) -- There's no question about it, a new breed of speculator is pouring money into the oil market and helping drive prices to record levels. What's less certain is if this new money is essential to a healthy market.

Many blame record prices on Wall Street investors new to the oil market, saying they're bidding up gas prices to artificially high levels - and soaking drivers.

As oil nears $130 a barrel, some say $10 to $70 of that price is due to Wall Street speculation.

.....

What is a speculator?

Speculators originated in the food market, and were intended to give farmers a set price in the spring to buy seed, according to Peter Beutel, an oil analyst at Cameron Hanover.

For example, a speculator would offer a farmer $3.50 in April for a bushel of corn to be delivered and paid for in October- these are called futures contracts. The speculator hopes that by October corn will sell for $4.00, and he'll make money. The farmer can plant his filed's certain that he's making $3.50 a bushel.

Conversely, a speculator might bet the price of corn will fall.

http://money.cnn.com/2008/05/16/news/economy/oil_speculator/index.htm?postversion=2008051604

---

The more I read Galbraith and Keynes - the more adamant I become in my stance that these commodities should be removed from speculation. This means taking measures of either partial or total nationalization of these industries.

[Robbien]

43. The SEC takes the opposite view

Last fall they relaxed the regs which opened up more speculation in commodities and just a week or two ago they put together a meeting to further relax commodity speculation regs. Too bad for speculation lobbyists that this meeting was scheduled right in the middle of all the worldwide food riots and their plans for more reg relaxation had to be put on hold.

While they may have blown the meeting, the speculation lobbyists have been very effective in keeping speculation out of the media when the pundits are talking about reasons for commodity prices.

[UpInArms]

16. June crude up $2.79 at $126.91 a barrel on Nymex

01. June crude up $2.79 at $126.91 a barrel on Nymex
8:20 AM ET, May 16, 2008

[UpInArms]

18. Oil futures rally to record high of $127.43 a barrel

http://www.marketwatch.com/news/story/oil-futures-rally-record-high/story.aspx?guid=%7BD3B5FB78%2D87AA%2D4A65%2DA65C%2D45AA759B4A61%7D&dist=hplatest

NEW YORK (MarketWatch) -- Crude-oil futures rallied Friday to a fresh record high of $127.43 a barrel in electronic trading on the New York Mercantile Exchange. Crude oil for June delivery was last up $2.75 at $126.87 a barrel on the Nymex. Friday's record high of $127.43 surpassed the previous peak of $126.98 hit on Tuesday.

[UpInArms]

22. June crude hits record high of $127.82 a barrel on Nymex

09. June crude hits record high of $127.82 a barrel on Nymex
9:27 AM ET, May 16, 2008

[Ghost Dog]

47. Europe shares benefit from oil but end off highs

LONDON, May 16 (Reuters) - European shares rose on Friday, fed by a rally in energy stocks as crude oil hit new record highs, although banks coming under pressure and U.S. consumer sentiment data knocked the market back from session peaks.

Crude oil futures CLc1 hitting a high just shy of $128 a barrel drove up the oil and gas sector in Europe, pushing up shares in Total (TOTF.PA: Quote, Profile, Research), BP (BP.L: Quote, Profile, Research) and Royal Dutch Shell (RDSa.AS: Quote, Profile, Research) by 1.5 to 2.5 percent, making them the three largest positive influences on the broader market.

Shares in the UK's biggest electricity producer, British Energy (BGY.L: Quote, Profile, Research), rose 5.2 percent after the company said it had received early stage takeover proposals.

Pharmaceuticals put on a strong performance, with France's Sanofi-Aventis (SASY.PA: Quote, Profile, Research) rising 2.2 percent after investors welcomed positive clinical trial results for its heart drug Multaq.

A decline in bank stocks took some of the lustre off the index, particularly as U.S. stocks slipped into the red.

The FTSEurofirst 300 index of top European shares rose 0.4 percent to 1,365.2 points, after earlier rising by as much as 1.2 percent to four-month highs. Data showing U.S. consumer confidence data hit its worst level in nearly 28 years stripped the market of many of the day's gains.

But the index still gained 1.5 percent this week, helped by fairly robust earnings as well as U.S. data that showed inflation moderating and consumer spending holding up.

"In general terms, the data specifically coming out of the United States has certainly been supportive, despite the fact that we had disappointing consumer confidence numbers today," said Barclays Stockbrokers strategist Henk Potts.

/... http://www.reuters.com/article/marketsNews/idCAL1690111320080516?rpc=44

[Hugin]

25. JPMorgan to start physical oil trade, eyes $200 oil

SINGAPORE (Reuters) - JPMorgan Chase & Co will begin trading physical oil by year-end, increasing its exposure in a market that could rise to $200 a barrel, the bank's global head of commodities said on Wednesday.

The bank plans to expand in commodities and energy trading, Blythe Masters said, despite expectations of job cuts in other areas as it prepares to take on staff from Bear Stearns at the same time it deals with turbulent financial markets.

"We will start trading in physical oil and refined products by the end of this year," she told Reuters in an interview.

JPMorgan will join a growing list of investment banks from Goldman Sachs to Barclays Capital seeking to boost profits on their big derivatives trading desks by gaining a foothold in physical markets.

more......

http://www.reuters.com/article/ousiv/idUSSP14850120080514?rpc=64

AnneD's Post: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3310463&mesg_id=3311132

______________________________________________________________________________________________

Comment: I know AnneD posted this link yesterday, but, it was late in the day and it's important.
Thanks AnneD.

This is important because if they can get their hands on both ends of the garden hose they can squeeze it on
the supply end driving up prices downstream. Anyone ever heard of Hydraulic despotism? Well, it works with any
critical staple. http://en.wikipedia.org/wiki/Hydraulic_despotism (BTW, thanks to whoever put the definition -BACK-
on the Wiki... It disappeared under suspicious circumstances.

[Ghost Dog]

52. Calls to mind The Ouroboros:

[TalkingDog]

54. A skewed alchemy: Not lead, but oil into gold n/t

[ozymandius]

59. Just like yesterday, I'll be rude.

Screw these evil bastards.

Nationalize the oil industry. Remove the price hikes and wild fluctuations by removing the speculators. At least it will free up capital for more important things.

By the way - the way business is currently conducted is not "free market" magic. It's outright price manipulation by a cartel.

[ozymandius]

6. Senate votes to roll back media ownership rule

WASHINGTON - The Senate Thursday night voted to nullify a Federal Communications Commission rule that allows media companies to own a newspaper and a television station in the same market.

The unusual "resolution of disapproval," sponsored by Sen. Byron Dorgan, D-N.D., and 26 other senators, was approved by a voice vote. The measures sponsors include both Democratic candidates for president, Sens. Hillary Rodham Clinton of New York and Barack Obama of Illinois.

Republican FCC Chairman Kevin Martin has described the agency's action as a "relatively minor loosening" of broadcast media ownership restrictions. The rule was approved by the FCC on a 3-2 party-line vote in December with both Democrats dissenting.

The FCC decision allows one company to own a newspaper and a broadcast station in the nation's 20 largest metropolitan areas. The TV station may not be among the top four in the market, and post-transaction, at least eight independent media voices must remain. The rule replaced an outright ban on cross-ownership.

.....

The FCC's media ownership decision has been met with opposition on both sides. The newspaper industry has complained that the FCC did not go far enough, while activists who want to keep big media companies from getting bigger said the agency went too far.

http://news.yahoo.com/s/ap/20080516/ap_on_go_co/media_ownership

[ozymandius]

7. UN: World economy to grow by 1.8 percent in 2008

UNITED NATIONS - The world economy is "teetering on the brink" of a severe downturn and is expected to grow only 1.8 percent in 2008, the United Nations said in its mid-year economic projections Thursday.

That's down from a global growth rate of 3.8 percent in 2007, and the downturn is expected to continue with only a slightly higher growth of 2.1 percent in 2009, the U.N. report said.

The mid-year update of the U.N. World Economic Situation and Prospects 2008 blamed the downturn on further deterioration in the U.S. housing and financial sectors in the first quarter, which is expected to "continue to be a major drag for the world economy extending into 2009."

But the U.N. said developing countries will suffer as badly: They should grow by 5 percent this year and 4.8 percent next year, compared to a robust 7.3 percent in 2007, the report said.

The U.N. economists said the deepening credit crisis in major market economies triggered by the U.S.-led slump in housing prices, the declining value of the U.S. dollar, persistent global imbalances and soaring oil and commodity prices pose considerable risks to economic growth in both developed and developing countries.

http://news.yahoo.com/s/ap/20080516/ap_on_bi_ge/un_world_economy

---

As usual - the end of the story will be written by the United States in how it deals with its mess.

[ozymandius]

10. World economy on thin ice - U.N.

UNITED NATIONS (AP) -- The world economy is "teetering on the brink" of a severe downturn and is expected to grow only 1.8% in 2008, the United Nations said in its mid-year economic projections Thursday.

That's down from a global growth rate of 3.8% in 2007, and the downturn is expected to continue with only a slightly higher growth of 2.1% in 2009, the U.N. report said.

The mid-year update of the U.N. World Economic Situation and Prospects 2008 blamed the downturn on further deterioration in the U.S. housing and financial sectors in the first quarter, which is expected to "continue to be a major drag for the world economy extending into 2009."

.....

But if the monetary and fiscal measures the U.S. government has taken to stimulate the economy - including tax refunds and lower interest rates - boost consumer spending and restore confidence in the business and banking sector, the world economy could only slow to 2.8% growth this year and 2.9% in 2009, it said.

The report, prepared by the U.N. Department of Economic and Social Affairs, forecast that U.S. economic growth will decline from 2.2% in 2007 to -0.2% this year, with only slight recovery in 2009 to 0.2% growth.

http://money.cnn.com/2008/05/15/news/international/global_economy.ap/index.htm?postversion=2008051605

[ozymandius]

8. Veto-proof farm spending bill passes Senate

The Senate passed the $290 billion, five-year farm bill by a strong veto-proof margin Thursday, ensuring that the measure becomes law despite President Bush's threatened veto, which would be the first presidential veto of a farm bill since Dwight Eisenhower's in 1956.

The 81-15 Senate vote followed overwhelming bipartisan passage of the bill in the House Wednesday. The measure continues $25 billion in direct payments, mainly to grain growers despite record prices; contains $3 billion in first-ever research and marketing money for California produce growers; and creates a new "permanent disaster" program that will subsidize wheat growers who plant marginal prairie land now set aside for wildlife and watershed protection.

.....

California Democratic Sens. Barbara Boxer and Dianne Feinstein both voted for the bill after joining an effort last year to radically overhaul the 1933-era subsidy system. When that effort failed, Boxer battled back-door efforts to attach pesticide and wetlands provisions she said would have set back the move toward safer farm production methods and weakened farmer participation in wetlands conservation programs. She went so far as to block the bill the last few weeks until those provisions were removed.

...

Feinstein was thrilled about a provision she added that closes what she called the "Enron loophole" in energy trading on electronic platforms. The new measure extends federal regulatory oversight to electronic energy trading and requires record keeping that would end what she called excessive speculation.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/05/16/MNMG10N32I.DTL

[Robbien]

44. Damn.

No matter how many very small victories some Dems may add to this bill, the main bill is a stinker. It should be vetoed.

[ozymandius]

11. Fed Should Avert Price Bubbles With Regulation, Mishkin Says

May 16 (Bloomberg) -- Central bankers should strengthen regulation to avert a credit-fueled increase in asset prices and forgo raising interest rates in an attempt to reverse a future price surge, Federal Reserve Governor Frederic Mishkin said.

``It falls to regulatory policies and supervisory practices to help strengthen the financial system and reduce its vulnerability to both booms and busts in asset prices,'' Mishkin said yesterday in remarks at the Wharton School at the University of Pennsylvania in Philadelphia.

.....

U.S. central bankers, when faced with asset price bubbles in technology stocks and housing during the past decade, chose not to intervene with the federal fund rate.

Internet Stocks

As investors began pushing Internet stocks higher in 1996, the Fed held the benchmark lending rate at 5.25 percent and raised it only once, by a quarter point, the following year.

.....

The Fed's hands-off approach to soaring asset prices is ``a dangerous, reckless and irresponsible way to run the world's largest economy,'' Stephen Roach, chairman of Morgan Stanley Asia, said at the World Economic Forum in Davos in January.

Greenspan, Fed chairman from 1987 until January 2006, has defended the monetary policy that coincided with the surge in technology stocks and home prices, saying an increase in borrowing costs would harm employment and growth.

http://www.bloomberg.com/apps/news?pid=20601103&sid=a.SdHIs8eucU&refer=us

[ozymandius]

12. I hope your day goes swimmingly.

:donut: :donut: :donut:

It's time for me to report to school. Just a week left after today - and I may be teaching summer school (will find out soon).

I'll return when the day allows.

Ozy :hi:

[UpInArms]

13. dollar watch

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

Last trade 73.269 Change -0.101 (-0.14%)

A Weak US Dollar May Not Be Good Enough

http://www.dailyfx.com/story/bio1/A_Weak_US_Dollar_May_1210885894055.html

Since the beginning of the year, the US dollar has fallen 5.9 percent against the Euro and 6.7 percent against the Japanese Yen. For many countries, including the US, a weak dollar has caused major problems ranging from deteriorating export growth to inflation. The one good thing that the weaker dollar was supposed to do is to save the US manufacturing sector. Unfortunately, today’s US economic data proved otherwise. Industrial production dropped 0.7 percent in the month of April, manufacturing activity in the NY region dipped into negative territory and even though the Philly Fed index rebounded from -24.9 to -15.6, it still remains deep in contractionary territory. Unfortunately the depreciating value of the US dollar has failed to offset slowing demand. The automobile sector has been the hit the hardest from the double blow of higher oil prices and a weaker labor market. The US economy is continuing to struggle and there is no doubt that the Federal Reserve has a tough task ahead of them. Jobless claims increased last week while the NAHB housing market index fell to 19, one point shy of its record lows. Although foreign purchases of US securities increased $80.4 billion in March, including short term securities like US Treasury bills and non-market transactions such as stock swaps, foreigners were actually net sellers. This reflects the sharp liquidation out of short term securities in the immediate aftermath of the Bear Stearns debacle. Tomorrow we are expecting housing starts, building permits and the University of Michigan Consumer Confidence survey. With many construction projects still underway in big cities New York, a lot of inventory has yet to flow onto the markets. Combined with the uncertainty of the outlook for the US economy, housing starts and applications for building permits should continue to fall. In such conditions, it will be difficult for consumer confidence to improve and as a result, we expect the UMich index to fall to a fresh 26 year low. Dollar weakness should prevail, particularly against the Japanese Yen, Canadian and Australian dollars.

...more...

Pound Positioning Holds Net Long With 1.94 Support In Sight

http://www.dailyfx.com/story/topheadline/Pound_Positioning_Holds_Net_Long_1210881185550.html




EURUSD – The uncertainty surrounding the EURUSD’s prevailing trend is clearly reflected in speculative positioning. After the past three week’s Speculative Sentiment Index readings reported a modest skew towards the long side, the gauge fell victim to its proximity to parity - and the doubt in direction - and flipped to -1.04. However, this is certainly not a very significant flip considering there has been no substantial bias for either side of the market since EURUSD topped out at 1.60. What’s more, the pair’s ratio has seen a number of intraday dips below parity over the past few weeks. Nonetheless, this modest negative reading follows a 1.10 figure last Thursday and 1.31 from two weeks ago. The details of the report further suggest that retailers are waiting for direction before taking a trade as positioning has changed little. Long positions slipped only 2.2% since yesterday and were 3.1% lower through the week. On the other side of the market, shorts were 2.7% higher from Wednesday and 6.3% stronger since last week. Overall, open interest has held relatively stable - rising 1.9% from last week and holding 2.8% above the monthly average. As a contrarian indicator, the SSI reading now points to gains, but with little conviction.

...more...

[UpInArms]

14. Fannie to change down payment policy: report (lower down payments?)

http://news.yahoo.com/s/nm/20080516/bs_nm/fanniemae_downpayments_dc

NEW YORK (Reuters) - Fannie Mae (FNM.N) is expected to announce on Friday that it is getting rid of a policy that requires higher down payments on home mortgages in areas where home prices are dipping, the Wall Street Journal reported.

The current policy, due to end on June 1, limits loan amounts in areas with falling home prices, and includes most of the thickly populated parts of the country, the Journal said.

But under the new policy, which go into effect next month, Fannie will have the same maximum loan percentages across the United States for people purchasing single family homes they plan to occupy, the Journal said, citing people familiar with the plan.

...more...

[UpInArms]

15. US declines to cite China as a currency manipulator

http://news.yahoo.com/s/ap/20080515/ap_on_bi_ge/china_currency

WASHINGTON - The Bush administration has declined to cite China for manipulating its currency to gain unfair trade advantages against the United States.

The finding announced Thursday came despite pressure in Congress for penalties because of America's growing trade deficit with China, which last year hit an all-time high of $256.3 billion, the largest deficit ever recorded with a single country.

In a report it is required to deliver to Congress every six months, the administration said China needed to address the "substantial undervaluation" of its currency compared with the dollar. But the report said China did not meet the technical requirements under the law to be designated as a currency manipulator.

The report noted that the Chinese currency, the yuan, has risen in value by 18.4 percent against the dollar since the Chinese government loosened its currency system in July 2005. However, American manufacturers contend the yuan is still undervalued by as much as 40 percent, making Chinese products more competitive in this country and U.S. goods more expensive in China.

<snip>

Deputy Secretary of State John Negroponte faced tough questioning Thursday on the currency issue during a Senate Foreign Relations Committee hearing on U.S. relations with China.

Sen. Benjamin Cardin, D-Md., said he could not understand why the administration was not taking a tougher approach on the currency issue. Sen. George Voinovich, R-Ohio, said his constituents were "livid" about the China trade issue. He accused the administration of failing to get tough with Beijing because the administration wanted Chinese support for dealing with North Korea over nuclear weapons.

...more...

[UpInArms]

19. June gold up $16.80 at $896.80 an ounce on Nymex

01. June gold up $16.80 at $896.80 an ounce on Nymex
8:35 AM ET, May 16, 2008

[UpInArms]

28. June gold touches a high of $900/oz in NY

01. June gold touches a high of $900/oz in NY
10:18 AM ET, May 16, 2008

02. June gold last up $17.80, or 2%, at $897.80/oz
10:18 AM ET, May 16, 2008

[Hugin]

29. Yeah, I caught that out of the corner of my eye.

I'm sitting here watching it... Sort of the opposite of the Instantaneous $25 fall last week.

[AnneD]

20. Morning Marketeers.....

:donut: and lurkers. The school year is winding down and there is a flurry of last minute activities. And of course, I have been very active with helping my little one leaving the nest in a few short months. This truly is the hardest job you'll every love-as the old Army commercial use to say. I have always known my time with my child was short (yes, 18 years is short when you're talking about growing a human being)and have always tried to have the most impact that I could in this short time. If I have done my job right, she will be able to stand on her own. Of course the first steps will be unsure, unsteady, much like a new born colt. But I'll keep nudging her until she has the confidence, not only to stand, but to gallop. I use to think the birth was such a good thing, but now, I think watching them take those big steps has an even deeper satisfaction.

My only regret is that I can't give her the world I inherited, the country I inherited, or the economy I inherited. I will continue to try to improve as best I can, but it tries my spirit some days.

I want to take the time to thank some really kind person-and I an sure it is someone here, for the really sweet gift I received. It was very thoughtful and much appreciated. I hope to play it forward soon. Thanks for the kind thoughts.

Happy hunting and watch out for the bears.

[Hugin]

26. Good Morning AnneD...

:hangover:

I reposted your link about the Banks dipping their toes in the "physical oil". They've screwed up everything they've
ever touched.

Have a great day.

[AnneD]

41. Feel free to spread the word....

that is one of the more scarier things I've read lately. Morning Prag, have another cup:donut:

[Ghost Dog]

53. Hi AnneD. I like your young horse analogy there.

That's for real.

[UpInArms]

21. Booz Allen: Carlyle to buy majority stake in govt. business

01. Booz Allen: Carlyle to buy majority stake in govt. business
9:16 AM ET, May 16, 2008

02. Booz Allen Hamilton to separate core businesses
9:15 AM ET, May 16, 2008

[UpInArms]

24. 10:01 EST and no joy in Mudville

Dow 12,974.10 18.56 (0.14%)
Nasdaq 2,524.08 9.65 (0.38%)
S&P 500 1,421.97 1.60 (0.11%)
10-Yr Bond 3.848% 0.005

NYSE Volume 604,803,437.5
Nasdaq Volume 376,176,718.75

[Hugin]

27. ~10:10 EST: It's only a flesh wound...

Index Last Change % change
• DJIA 12953.58 -39.16 -0.30%
• NASDAQ 2517.97 -15.76 -0.62%
• S&P 500 1419.61 -3.96 -0.28%

Looks like Housing Start data and perhaps the $127 OIL is on the Market's mind.

[UpInArms]

30. 11:01 EST struck an artery

Dow 12,918.98 73.68 (0.57%)
Nasdaq 2,507.32 26.41 (1.04%)
S&P 500 1,415.82 7.75 (0.54%)
10-Yr Bond 3.79% 0.053

NYSE Volume 1,178,687,000
Nasdaq Volume 760,453,750

10:30 am : The stock market has moved lower. Seven of the ten economic sectors are trading with losses.

The tech-rich Nasdaq is trading with the largest loss. Index component Apple (AAPL 187.91, -1.82) has taken a sharp downturn. The company announced earlier today it has signed a deal with French wireless carrier Orange to sell Apple's popular iPhone in the Middle-East, Africa, and select countries throughout Europe.DJ30 -27.85 NASDAQ -17.83 SP500 -3.34 NASDAQ Dec/Adv/Vol 1644/898/582.38 mln NYSE Dec/Adv/Vol 1673/1183/401.00 mln

10:00 am : The stock market continues to trend along the unchanged mark. Nearly 60% of the S&P 500 components are trading lower.

The preliminary May consumer sentiment survey from the University of Michigan came in at 59.5. Economists were expecting a reading of 62.0. The prior reading came in at 62.6.

Despite positive earnings surprises from Nordstrom (JWN 37.92, +0.63), Kohl's (KSS 49.02, -1.47), and Abercrombie & Fitch (ANF 76.79, 0.71), the S&P 500 Retailing Index is trading noticeably lower. The index is currently down 1.6%.DJ30 -16.69 NASDAQ -9.65 SP500 -1.36 NASDAQ Dec/Adv/Vol 1459/966/388.72 mln NYSE Dec/Adv/Vol 1534/1241/316.76 mln

[Hugin]

31. BREAKING NEWS: White House says Saudi Arabia does not see a reason to increase oil production - AP

Saudi Arabia rebuffs Bush on oil production
White House says Riyadh doesn't seen enough demand to raise output

BREAKING NEWS

updated 2 minutes ago
"RIYADH, Saudi Arabia - The White House said Friday that Saudi Arabia's leaders are making clear they see no reason to increase oil production until customers demand it.

President Bush was in the oil-rich country to appeal to King Abdullah for greater production to help halt rising gas prices in the United States.

But his national security adviser, Stephen Hadley, said Saudi officials stuck to their position that they already are meeting demand."

Via: MSNBC http://www.msnbc.msn.com/id/24660754/

______________________________________________________________


Maybe that has something to do with it.

I guess they're not listening to Dub.

[UpInArms]

37. OMG - Bush Would Use Power of Persuasion to Raise Oil Supply

http://query.nytimes.com/gst/fullpage.html?res=9A03E4D71030F93BA15755C0A9669C8B63&sec=&spon=&pagewanted=all

By KATHARINE Q. SEELYE
Published: June 28, 2000

Gov. George W. Bush of Texas said today that if he was president, he would bring down gasoline prices through sheer force of personality, by creating enough political good will with oil-producing nations that they would increase their supply of crude.

''I would work with our friends in OPEC to convince them to open up the spigot, to increase the supply,'' Mr. Bush, the presumptive Republican candidate for president, told reporters here today. ''Use the capital that my administration will earn, with the Kuwaitis or the Saudis, and convince them to open up the spigot.''

Implicit in his comments was a criticism of the Clinton administration as failing to take advantage of the good will that the United States built with Kuwait and Saudi Arabia during the Persian Gulf war in 1991. Also implicit was that as the son of the president who built the coalition that drove the Iraqis out of Kuwait, Mr. Bush would be able to establish ties on a personal level that would persuade oil-producing nations that they owed the United States something in return.

''Ours is a nation that helped Kuwait and the Saudis, and you'd think we'd have the capital necessary to convince them to increase the crude supplies,'' he said.

Asked why the Clinton administration had not been able to use the power of personal persuasion, Mr. Bush said: ''The fundamental question is, 'Will I be a successful president when it comes to foreign policy?' ''

He went on to suggest, as he did in answer to other questions, that voters should simply trust him.

''I will be,'' he said in answer to his own question about whether he would be a successful president. ''But until I'm the president, it's going to be hard for me to verify that I think I'll be more effective.''

can you believe this boob goes over there on bended knee and begs - for crying out loud - this country used to have some self-respect and now under this crap-weasel maladministration - we "beg" and can be "ignored".

:fuming:

[Hugin]

39. A ridiculous attitude he has...

But, I'm of conflicted thoughts about the outcome.

If the high prices lead ultimately to energy independence, in the long run. It could be a good thing.

Then OTOH... If we don't start encouraging American's Innovative Spirit. It could cause a collapse we'd
find difficult to overcome. Incentive!

[uppityperson]

40. another article/take on this "asking" calling bs

http://seattletimes.nwsource.com/html/nationworld/2004418263_saudi16.html

n April 1986, Vice President George H.W. Bush traveled to Saudi Arabia with a stern warning. Record low oil prices of $10 a barrel threatened the U.S. oil industry and U.S. national security. If prices don't rise, he warned, perhaps a U.S. tariff on imported oil would do the job. More than 22 years later, his son George W. Bush is on a similar mission, but with the opposite goal in mind. President Bush meets today with Saudi King Abdullah and will lobby for help in bringing down world oil prices, which have raced past $125 a barrel.

(clip)

His numbers are somewhat squishy; actual production numbers are hard to verify. Some critics believe the Saudi government has increased capacity but actually dropped output by 1 million bpd over the past two years. The Energy Information Administration, the statistical arm of the Energy Department, said that in 2006 — the last full year for which it has data — the Saudis produced 10.7 million bpd. That's why some Democrats in Congress, including New York Sen. Charles Schumer, are threatening to hold up a $1 billion-plus arms deal for the Saudis, a crucial ally in the global war on terror, unless the kingdom puts more oil on international markets.

(clip)

The Saudis are said to be reluctant to pump much more oil since U.S. oil inventories of late have been higher than five-year averages. That suggests that oil isn't in short supply here, and that other factors, such as the weakening U.S. dollar and speculation in commodities markets, are driving up prices. "I think the president has no intention whatsoever of having the Saudis put more oil in the market," said Fadel Gheit, an industry analyst for Oppenheimer & Co. in New York. "If the president wanted the Saudis to do that, he would not have asked them publicly."...(more)

[TalkingDog]

48. Ummm.....

I think this fell off the hind-quarters of his horse.

[lib2DaBone]

50. They're not listening!

They're just not listening to little Georgie.... AHHH heheheeh hahahahah ROFL...... Better get that war on in IRAN Georgie Boy... time is wastin'.....

[InkAddict]

35. Abdominal aortic aneurysm - a really bad "bubble"

Treatment of an aortic aneurysm is based upon how big it is and how fast it is growing. If you have a large or fast-growing aneurysm, you need surgery to fix it. In most cases, a doctor will replace the damaged part of the blood vessel with man-made graft.

Dr. Ben Bernacke: pick up the House phone STAT.

[Hugin]

36. "It's probably nothing. Just watch it..."

"All you need is more blood." -- Phoned in Diagnosis from the Fed.

[UpInArms]

38. 11:24 EST more blood on it's way!

Dow 12,895.85 96.81 (0.75%)
Nasdaq 2,506.81 26.92 (1.06%)
S&P 500 1,414.67 8.90 (0.63%)
10-Yr Bond 3.788% 0.055

NYSE Volume 1,377,178,500
Nasdaq Volume 885,343,750

[AnneD]

42. Our theme today...

All You Need Is Blood (sung to Beatles All You Need Is Love)

There's nothing you can do that can't be done.
No one you can ring that can't be rung.
Nothing you can say they won't learn about anyway
It's easy.

There's nothing you can make that can't be made.
factories are closed and can't be saved.
Nothing you can do but stand in the unemployment line
It's easy.

All you need is blood, all you need is blood,
All you need is blood, blood, blood is all you need.
blood, blood, blood, blood, blood, blood, blood, blood, blood.
All you need is blood, all you need is blood,
All you need is blood, blood, blood is all you need.

There's nothing you can know they won't make known.
Nothing you can see that you aren't shown.
Nowhere you can be that isn't where you're meant to be.
It's poverty.

All they want's your blood, all they want's your blood
All they want's your blood, blood, blood is all they need.
All they want's (all together now)
All they want's your blood(everybody)
All they want's your blood, blood, blood is all they need.


Sincere groveling apologies to the Beatles-but Lennon might smile-I hope.

[DU GrovelBot]

33. ## DON'T DONATE TO DEMOCRATIC UNDERGROUND! ##

==================
GROVELBOT.EXE v4.1
==================



This week is our second quarter 2008 fund drive. Democratic Underground is
a completely independent website. We depend on donations from our members
to cover our costs. Whatever you do, do not click the link below!

[specimenfred1984]

46. You mean "SmearUnderground", the 24/7 bash-a-dem site.

Buying into the smear culture just to sell your crap is truly "groveling'.

[TalkingDog]

55. Bitters: good for the liver, but too much will make you sick n/t

[UpInArms]

34. Libor volatility due to poor liquidity-JPMorgan

http://www.reuters.com/article/bondsNews/idUSNYE00028120080516

NEW YORK, May 16 (Reuters) - The Libor interbank rate-setting process is not broken, and recent rate volatility can be blamed largely on reluctance among banks to lend to each other amid the current credit crunch, JPMorgan said on Friday.

JPMorgan (JPM.N: Quote, Profile, Research) is one of the 16 banks surveyed by the British Bankers' Association daily to set or "fix" the daily London Interbank Offered Rates on overseas dollar deposits.

"The question of whether a benchmark could be designed that is less flawed than Libor is debatable," JPMorgan analysts said in a note published on Friday.

Moreover, the spread of three-month Libor and three-month overnight index swap (OIS) rate, a gauge of banks' aversion to lend to each other, was hovering at historically wide levels until recently.

...more...

[antigop]

45. Paulson: Markets are calmer, economy will rebound by second part of the year

http://tpmelectioncentral.talkingpointsmemo.com/

Treasury Secretary Henry Paulson said Friday that financial markets are "considerably calmer" now than they were two months ago. He predicted the economy will be rebounding by the second half of this year.

In a speech to business executives in Washington, Paulson said the drag from housing, which he characterized as still the biggest risk to the economy, will soon be lessened by nearly $100 billion in economic stimulus payments to U.S. households.

"The fiscal stimulus will provide support to the economy as we weather the housing correction, capital markets turmoil and higher energy and food prices," Paulson said in his prepared remarks.

[Robbien]

49. Swiss bank UBS will be forced to name wealthy US clients

GENEVA • Swiss bank UBS will be forced to reveal the names of rich American clients who may have used its services to avoid paying income taxes.

UBS declined comment when contacted. According to the report, US prosecutors will use a subpoena to make the bank reveal its client list, after an indictment in the Florida federal court on Tuesday of former UBS private banker Bradley Birkenfeld and Liechtenstein businessman Mario Staggl.

The move follows investigations by the US Justice Department into whether UBS, as well as Birkenfeld and Staggl, helped wealthy Americans to evade paying income tax on their investments, said the report.

Last week, the Swiss bank made a securities filing revealing the Justice Department’s probe into its activities.

“In particular, DOJ is examining whether certain US clients sought, with the assistance of UBS client advisors, to evade their US tax obligations by avoiding restrictions on their securities investments,” the Swiss bank’s securities filing said.

Banks often help wealthy clients to legally minimize their tax bills, but it is illegal in the United States actively to evade paying income tax on earnings.

http://www.thepeninsulaqatar.com/Display_news.asp?section=Business_News&subsection=market+news&month=May2008&file=Business_News2008051684319.xml

[Robbien]

51. It also appears there is a whistleblower out there on Swiss bankers

Swiss private banker blows whistle on banking secrecy laws

Rudolf Elmer, a former manager with Julius Baer, has lodged a case with the European Court of Human Rights against Switzerland's rules on bank secrecy, according to a report in the Financial Times.

Elmer told reporters in Berlin the Swiss banking law permits finance institutions to cover up their "criminal support for white collar crime" such as tax evasion, and allows witnesses in legal cases to remain anonymous if bank secrecy is at risk. These factors mean "fair trials are not possible under the law".

The complaint is significant in light of Germany's tax investigation against Liechtenstein, which was sparked by stolen bank data.

Elmer said he also has information on alleged tax evasion at Julius Baer via the bank's Cayman Islands branch. Elmer - who worked for the Swiss private bank in the Caribbean tax haven until being dismissed in 2002 - said he still had data on about 300 Cayman Island accounts.

He said he would present the Strasbourg-based court with internal protocols and evidence of false documentation by the bank for clients "showing that (Julius Baer) knew it was encouraging tax evasion".

http://www.wealth-bulletin.com/wealth-business/content/2350669815/

[Ghost Dog]

56. One's financial experts advise making no comment.

... And if that fails, some associated experts who, while of course working for this household name highly respectable financial institution, are actually based on Paradise Island (no, I don't think it's Diego García) can arrange a quick preemptive change of domiciliary and/or nationality status, for a further fee...

Seriously, US persons, unless they are in fact US corporations, 'foundations', etc, are not permitted to hold undeclared tax-opaque offshore bank accounts.

[skoalyman]

57. Do I hear 135.oo for a barrel of oil by next Wednesday or friday at the

latest :crazy:

[ozymandius]

58. Here's the capper on today's bidness.

Dow 12,986.80 Down 5.86 (0.05%)
Nasdaq 2,528.85 Down 4.88 (0.19%)
S&P 500 1,425.35 Up 1.78 (0.13%)
10-Yr Bond 3.85% Up 0.007
NYSE Volume 3,847,776,500
Nasdaq Volume 2,293,488,250

4:25 pm : The stock market closed just above the unchanged mark Friday, locking in a 2.6% gain for the week. Despite being an options expiration date, the session's tone was rather subdued.

Several popular retailers posted mixed results during Friday's trading. Nordstrom (JWN 38.44, +1.15), Kohl's (KSS 49.27, -1.22), and Abercrombie & Fitch (ANF 76.19, +0.11) each announced better-than-expected earnings results for the most recent quarter. Only Nordstrom traded noticeably higher, despite announcing worse-than-expected same-store sales results and a lowered outlook.

The S&P 500 Retailing Index ended the session 1.1% lower, off its session low.

The Dollar Index fell to its lowest point in more than one week, helping to inflate commodity prices. Notably, the CRB Commodity Index advanced more than 1.0%. Gold also had a strong showing -- closing $20.50 higher at just over $900 per ounce.

Crude hit a fresh all time record high of $127.82 per barrel before closing at $126.30 on the New York Mercantile Exchange. Oil is up almost 35% year-to-date.

Oil's rise lent support to the energy sector (+2.5%), where mega-cap Exxon Mobil (XOM 92.67, +1.37) provided leadership. Shares of ConocoPhillips (COP 91.98, +2.67) and Chevron (CVX 100.38, +1.89) also lent support to the sector.

The financial sector (-1.4%) lagged its counterparts for virtually the entire session. Citigroup (C 23.12, -0.61) weighed the most on the sector, though regional banks (-3.3%) were the sector's worst performing industry.

Encouraging economic data came in the form of new housing data. Seasonally adjusted annualized housing starts for April totaled 1,032,000, which is above the 939,000 that economists expected. Annualized starts for March were revised from 947,000 to 954,000. Meanwhile, building permits for April jumped 4.9% to 978,000.

Separately, the University of Michigan issued its preliminary consumer sentiment survey reading for May, which came in at 59.5. The reading dropped month-over-month from 62.6 and was below the reading of 62.0 economists expected.DJ30 -5.86 NASDAQ -4.88 NQ100 +0% R2K -0.3% SP400 +0.3% SP500 +1.78 NASDAQ Dec/Adv/Vol 1644/1230/2.27 bln NYSE Dec/Adv/Vol 1491/1612/1.26 bln

[Rob_4_Obama]

60. The Dow really seems to have stabilized in the last few months

Maybe the worst of the economic downturn is over for now.