STOCK MARKET WATCH, Wednesday 8 June

[ozymandius]

Wednesday June 8, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 227 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 171 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 234 DAYS
DAYS SINCE ENRON COLLAPSE = 1291
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
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

AT THE CLOSING BELL ON June 7, 2005

Dow... 10,483.07 +16.04 (+0.15%)
Nasdaq... 2,067.16 -8.60 (-0.41%)
S&P 500... 1,197.26 -0.25 (-0.02%)
10-Yr Bond... 3.91% -0.05 (-1.29%)
Gold future... 426.70 -1.70 (-0.40%)

GOLD, EURO, YEN, Dollars and Loonie




PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. no WrapUp today - here, instead, is a column by Rob Kirby

WHO'S ON FIRST?
-cut-

On Wednesday June 1, 2005 CNBC’s senior economics commentator Steve Liesman conducted an 'exclusive' interview with Dallas Fed. President Richard W. Fisher. Mr. Fisher just happens to be the newest addition to the powerful FOMC group at the Federal Reserve which sets interest rate policy for the United States of America. What was so interesting about this interview was Mr. Fisher’s pronouncement that the current rate tightening cycle was in its eighth inning with the ninth inning coming up at the end of this month - the next time the FOMC meets. For those of you who are not particularly knowledgeable about baseball – the American version of the game generally has nine innings – save of course, the game is tied at it’s natural conclusion, meaning extra innings. Prior to this pronouncement, a clear message had been consistently transmitted by Fed stalwarts strongly suggesting that ‘measured’ rate hikes would indeed continue for the foreseeable future. To suggest that Mr. Fisher’s comments regarding the likely future course of interest rates ‘caught the market by surprise’ is a gross understatement – an immediate 100+ point rally ensued in the DOW Jones Industrial averages in new found optimism that the Fed may be near an end of its current rate hiking posture. In fact, the markets were so enthused with Fisher’s comments; they even prompted CNBC commentators to opine that Mr. Fisher may not be speaking for the all powerful FOMC interest rate group which he is now its newest member - and he may have committed a ‘rookie/greenhorn’ mistake in articulating his views. Looking at Mr. Fisher’s bio, we can see that Mr. Fisher has served his country as a deputy U.S. trade representative with a rank of ambassador. He was an assistant to the Secretary of the Treasury in the Carter Administration. He founded his own fund management firm. He is a former vice chairman of Kissinger McLarty Associates, an advisory firm chaired by former Secretary of State, Henry Kissinger. So, let’s just say there is no grass growing under Mr. Fisher’s feet – shall we?

That got me thinking. In the 20+ years that I’ve worked in and been around financial markets, I have never known the Fed to leave ANYTHING to chance. I feel that it’s a fair assessment to characterize their actions as extremely well planned and rehearsed. These are not people who any rational thinker would characterize as leaving anything to chance. Given these realities, I choose to believe that Mr. Fisher’s utterances were premeditated and planned as part of what’s become colloquially referred to as the “Open Mouth Committee”. There is no doubt in my mind that they were intended to achieve exactly the result they produced – namely, a more favorable equity market and a rally in bonds and perhaps to even take a little bit of starch out of the recent dramatic rise in the U.S. dollar – particularly in Euro terms.

-cut-

Fast forward, if you will, two whole days to Friday June 3, 2005 and consider the commentary of Fed Reserve Governor and current FOMC member Mr. Edward Gramlich. When questioned by reporters about Fisher’s baseball analogy comments on Friday, Gramlich responded,

"I don't know what inning we're in."

Now I don’t know about you, dear reader, but these two gentlemen allegedly play for the same team. Did one of them simply forget to bring his mitt to the ball park? Were Gramlich’s comments intended to be dollar friendly? Were these comments intended to allay fears on behalf of foreigners who fund American profligacy that the Fed will remain ‘tough on inflation’? Who knows? But for now, ‘tough on inflation’ is the second baseman, and he’s on the 15 day disabled list.

more...

http://www.financialsense.com/fsu/editorials/kirby/2005/0606.html

[UpInArms]

2. daily dollar watch

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

Last trade 87.31 Change -0.18 (-0.21%)

this column dates to before the Consumer Credit number came out:

Dollar Unchanged As Market Contemplates Why US Long Term Rates Are So Low

http://www.dailyfx.com/index.php?option=com_content&task=view&id=1440&Itemid=39

US Dollar

Trading in the US dollar continues to remain very quiet with consumer credit being the only notable piece of data released today. Consumer credit came in far below expectations, increasing only $1.3B in April, which may be indicative of slowing consumer spending. Thanks to Fed Chairman Alan Greenspan, the market seems to be transfixed on the extremely low levels of long term yields in the US today. This morning in our Market Brief we talked about the near flat yield curve, but Greenspan also warned last night at an IMF conference in Beijing that the yield curve could even become inverted. His best guess is that the market expects the economy to weaken in the months ahead, which he thinks is a “credible notion.” Yet no reason provides a perfect explanation for the “conundrum” since some of the buying could be attributed to foreign demand for US debt. This makes perfect sense to us since over the past few months, a lot of activity in the US dollar has been related to carry trades. Before the Fed began raising rates from 45-year lows of 1%, the dollar was the one of the most popular currencies to sell for carry trades. (In carry trades, a high interest rate currency is bought against a low interest rate currency with the goal of capturing the yield differential) Now that the Fed has increased rates by 200bp to 3%, short dollar carry trades are no longer as profitable, prompting these investors and traders who have sold the dollar and US treasuries to buy back those dollars and treasuries and close their positions. Alternatively, with the Fed aggressively raising rates, we also have some investors who are interested in the dollar and US treasuries as a new emerging carry trade. There are of course other reasons as well such as pension funds scrambling to buy long-term bonds to make up for unfunded liabilities and expectations for lower inflation in the future. Greenspan avoided talking about monetary policy directly and reiterated his view that China needs to revalue at some point and he expects it to happen soon. Yet he also believes that a revaluation by China will do little to fix the US’ trade imbalances. Meanwhile, GM announced plans to close factories and layoff 25,000 people. Although this will be done over the next 3 years and some people may just be reassigned different jobs within the same company, it highlights the weakness in the overall manufacturing sector.

<snip>

Japanese Yen

Dollar yen has sold off for the fourth consecutive day ahead of this weekend’s G7 finance ministers meeting. The market expects finance ministers to continue to exert pressure on China to revalue its currency. China on the other hand stands staunchly behind their resistance to international pressure. People’s Bank of China Governor Zhou said last night that even though China has a “strong determination” to move to a more flexible exchange rate regime, they are not ready to do so at this point. Meanwhile Japanese household spending increased a weaker than expected 1.0% in the month of April, pushing the annualized pace of growth lower by 3.0%. Domestic demand in Japan has been very weak, which is particularly concerning since consumer spending accounts for 55% of GDP.

...more...

Dollar Loses More Ground To Majors

http://www.dailyfx.com/index.php?option=com_content&task=view&id=1460&Itemid=39

EUR/USD – Euro bulls pushed the pair above the 1.2300 figure as the price action continues to favor the single currency. As the euro longs continue to gather momentum, greenback traders will face a tough time as they most likely might be forced to abandon the 1.2500 figure and fall back toward the 1.2700 line, which remains a strong resistance for the pair. Indicators signal a maturing trend with ADX (DMI) on the daily chart is at 46.9. Stochastic is treading above oversold on the daily chart at 20.96, which is indicative of a strong trend. The Stochastic on the dealer (4HR) chart is neutral at 68.3. RSI is treading above oversold on the daily chart at 33.16 with the 4-hour chart RSI neutral at 52.15. MACD remains deep below the zero line on the daily chart and is sloping upward toward the zero line on the dealer 4(HR) chart. In case the reversal fails greenback longs will most likely resume their advance and push the pair toward the psychologically important 1.2000 figure.

<snip>

USD/JPY – Japanese Yen continued to consolidate within a tight trading range as the pair failed to gather momentum following a move below the 107.00 figure. As the Japanese Yen traders continue to push the pair toward 106.00 figure, a break below will most likely be limited to 104.00 figure as the pair was unable to break below during the last yen rally. Indicators signal trend reversal, with ADX (DMI) dropping to 24.25. Stochastic is sloping downward on the daily chart at 31.84, supporting a view that a trend might be weakening. The Stochastic on the 4-hour chart is treading below the oversold line at 13.31, thus providing dollar bulls with a chance to mount a counterattack. RSI is neutral at 46.76 on the daily chart, with dealer (4HR) chart RSI sloping upward above the oversold line at 36.09. MACD is making a bearish crossover above the zero line on the daily chart, with MACD on the 4-hour chart crossing below the zero line. If the yen bulls retreat, a move to the upside will most likely see the USD/JPY rocket through 109.00 and target the 110.00 figure, with a breakout targeting the 115.00.

...more...

Great 'toon, Ozy - spot on!

Have a Great Day Marketeers!

[UpInArms]

20. Dollar lower as euro recovery continues

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38511.3658570718-836422190&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) - The dollar was lower against the euro early Wednesday, as the E.U.'s currency continued to recover from the rout it suffered last week. Dealers said market participants now think the euro was punished excessively after voters in France and Holland nixed referendums on the proposed E.U. constitution. In early action, the euro was up 0.3% at $1.2320. The dollar was up 0.3% at 106.87 yen, following weak leading indicators data from Japan.

[UpInArms]

49. Dollar rises on hedge fund demand (very frightening)

http://www.marketwatch.com/news/story.asp?guid=%7BA14861BF%2D2A22%2D411D%2DAB92%2D81636CF9C3FE%7D&siteid=mktw

NEW YORK (MarketWatch) -- The dollar was higher against other major currencies late Wednesday, benefiting from hedge fund sales of the euro for the U.S. currency.

In recent trades the euro was down 0.04% at $1.2238 and the dollar up 0.6% at 107.24 yen.

The dollar, which was lower against the euro during morning trade, later reversed course to trade higher, lifted largely by hedge fund plays, according to Brian Dolan, head of currency research at Gain Capital.

"There's no real news prompting this," Dolan said. "It's just a market dynamic. The euro tested the $1.2340 to $1.2350 level, and then triggered some stop losses."

<snip>

An end to the rate hikes would undermine the dollar.

...more...

I smell desperation and it certainly has a whiff of flopsweat to it.

[UpInArms]

3. Today's Report:

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

Jun 8	10:00 AM	Wholesale Inventories	Apr	-	0.5%	0.4%	0.4%	-

[UpInArms]

30. Wholesale Inventories UP 0.8% above concensus of 0.4%

10:00am 06/08/05 U.S. APRIL WHOLESALE INVENTORY-SALES RATIO 1.18

10:00am 06/08/05 U.S. APRIL WHOLESALE SALES UP 1.5%

10:00am 06/08/05 U.S. APRIL WHOLESALE INVENTORIES UP 0.8%

They are trying to put a huge spin on this number, but here is the bottom line:

http://www.marketwatch.com/news/story.asp?guid=%7B7A2A01DF%2D0C70%2D4637%2DBD53%2DD4EF02FE5BB9%7D&siteid=mktw

excerpt to the facts:

Wholesale inventories are up 11.8% from a year earlier, while sales are up 8.1%. The figures are adjusted for seasonal factors, but not for price changes.

Inventory gains were concentrated in nondurables, where inventories increased 1.4%. Petroleum inventories increased 1%, again despite falling prices. Drug inventories fell 0.4%, driving the inventory-to-sales ratio to a record low 1.04.

The inventory-to-sales ratio for nondurable goods remained at 0.88.

...more...

[UpInArms]

4. Grassley doesn't care if airline pensions are funded

Senate may be ready to help airlines

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=8726827&src=rss/businessNews

WASHINGTON (Reuters) - A key Senate lawmaker said on Tuesday he was ready to help airlines close pension gaps, as chiefs of two carriers warned that legislative action is needed soon for their companies to avert possible bankruptcy.

Sen. Charles Grassley, the Iowa Republican who chairs the Senate Finance Committee, said he was willing to let airlines stretch out pension payments, but airlines should freeze plans so no more benefits are promised that they cannot pay.

Gerald Grinstein, chief executive of Delta Air Lines (DAL.N: Quote, Profile, Research) , and Douglas Steenland, chief executive of Northwest Airlines, earlier told Grassley's committee that pensions covering more than 150,000 workers and retirees are unmanageable and could push each into court protection.

"There is no question that the single biggest uncertainty that may well determine whether or not Delta can successfully restructure outside of bankruptcy court is the pension cloud that hangs over the company," Grinstein said.

Delta and Northwest -- the third and fourth largest domestic carriers -- are lobbying for legislation that would give airlines up to 25 years to repair pension underfunding.

...more...

[RawMaterials]

12. This drives me crazy

whether or not Delta can successfully restructure outside of bankruptcy court is the pension cloud that hangs over the company,"

If a company cant make enough money to pay its planed cost then it needs to disappear, it need to fail, it needs to sell everything it owns and then give that to the government PGB. How can capitalism work if business is not aloud to fail. looks like we live in a society that is socialism(welfare) for the cooperations, and capitalism for the everyday man&woman.

[UpInArms]

17. It seems that the plan is to socialize the losses and privatize

the profits.

:argh:

[RawMaterials]

21. what a great system :sarcasm:

How long do i have to wait till the "French Revolution" :patriot:

[UpInArms]

22. Seems that dumping UA's pension was *Co admin's idea

http://www.chicagotribune.com/business/chi-0506080035jun08,1,7342034.story?coll=chi-business-hed

The possibility of United Airlines dumping its employee pension plans was raised more than a year ago by federal agencies investigating the carrier's application for a government-backed loan to help its exit from bankruptcy, Chief Executive Glenn Tilton said Tuesday.

During loan negotiations, it was clear some government staffers reviewing the application "were of the view that the defined-benefit plans would have to be terminated for us to be financeable and, ultimately, viable," Tilton said.

<snip>

Sen. Ron Wyden (D-Ore.) asked Tilton several times whether federal agencies had encouraged United to pursue defaulting on its pensions when the airline unsuccessfully sought a $2 billion bailout loan in 2004. The Treasury and Transportation Departments and the Federal Reserve review such loan applications.

...more...

[AnneD]

40. Morning Marketeers

:donut: Good to see the revolution alive and well. The trouble with these companies going bankrupt is that in a bankruptcy court...the pension is the last creditor satisfied. I think they ought to attach some of the benies the CEO's were paid and the pensions ae the first ceditor satisfied. That will make them think twice before using bankruptcy as a way to cut overhead and make their balance sheet look better. Did anyone see Frontline on PBS last night, it was all about Worldcom. Really good summary. Well, happy hunting and watch out for the bears.

[UpInArms]

5. Furniture Brands to close plants, cut about 1,200 jobs

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38510.7330715741-836386436&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

SAN FRANCISCO (MarketWatch) -- Furniture Brands International (FBN) said after Tuesday's closing bell that it will close four manufacturing plants, resulting in the loss of 1,244 jobs. The closings, including the conversion of one plant into a warehouse, are expected to be completed by September and November. St. Louis-based Furniture Brands now expects second-quarter sales to be flat to modestly down compared with last year and earnings of 11 cents to 13 cents a share, including the effects of a restructuring charge of 19 cents a share related to the plant closings and other previously announced charges. Analysts surveyed by Thomson First Call currently expect the company to post second-quarter earnings of 37 cents a share on revenue of $597 million.

[UpInArms]

6. Main Street cuts outlook on higher loan loss provisions

http://www.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7B709A13D7-1858-4484-87C9-97473D3F7179%7D&

NEW YORK (MarketWatch) -- Main Street Banks Inc. (MSBK) said Wednesday it was lowering its second quarter and 2005 earnings forecast due to higher loan loss provision expenses. The Atlanta-based community bank said a problem loan portfolio of a former lending officer will cause loan loss provision expenses to rise by $2.3 million in the second quarter. This extra expense, combined with the closure of the company's loan settlement services business, and an additional income tax provision means second quarter results are now forecast between 25 cents and 27 cents a share. Full-year earnings are expected between $1.40 and $1.46 a share. The current Thomson First Call average is for second quarter earnings of 39 cents a share and 2005 earnings of $1.60 a share. On Tuesday, the stock ended up 0.9% at $25.87.

7:42am 06/08/05 MAIN STREET BANKS SEES $1.40 TO $1.46 FOR FY 2005

7:38am 06/08/05 MAIN STREET BANKS SEES 2Q EARNS OF 25C TO 27C A SHARE

7:37am 06/08/05 MAIN STREET BANKS AUDIT FINDS $2.6M MORE IN LOSSES

7:34am 06/08/05 MAIN STREET BANKS LOWERS FORECAST ON PROBLEM LOANS

[UpInArms]

7. Spitzer sets immunity deal with former AIG exec-report

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38511.3366562384-836419874&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- New York Attorney General Eliot Spitzer has granted immunity to ex American International Group (AIG) executive Joseph Umansky, signaling that the state plans to pursue possible criminal charges against the company's former CEO Hank Greenberg, the New York Times reported Wednesday. The paper, citing a person briefed on the terms of Spitzer's deal with Umansky, said the deal could complicate any Federal prosecution because they would have to prove any evidence they used was garnered via Umansky's immunized testimony. AIG shares closed up 38 cents on Wednesday at $55.23.

[UpInArms]

13. (More AIG) Brokers to settle with NASD over fund sales - report

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38511.3468134491-836420700&siteID=mktw&scid=0&doctype=806&

BOSTON (MarketWatch) -- Over a dozen brokerage firms, including six subsidiaries of embroiled insurance company American International Group Inc. (AIG) , may settle with the National Association of Securities Dealers as early as Wednesday over undisclosed compensation arrangements they had with mutual-fund firms, according to published reports. The firms have reportedly agreed to pay $34 million for receiving payments in the form of trading commissions, in exchange for promoting certain funds. Shares of AIG gained 38 cents to $55.23 on Tuesday.

[UpInArms]

8. Capital One moving San Diego auto finance office

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38511.3408638194-836420214&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Capital One Financial Corp. (COF) said it would trim 290 positions in San Diego and add 200 positions in Plano, Texas as it consolidates its direct-to-consumer auto lending business. The financial services firm said it plans to close the San Diego location by the end of the first quarter of 2006. Shares of Capital One rose 25 cents to $75 on Tuesday.

8:03am 06/08/05 CAPITAL ONE TO CONSOLIDATE INTERNET OPS, CUT 290 JOBS

[UpInArms]

9. DIARY-U.S. Treasuries, Wednesday, June 8

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-06-08T114031Z_01_N08276174_RTRIDST_0_DIARY-U-S-TREASURIES-WEDNESDAY-JUNE-8.XML

TREASURY DEPARTMENT:

Treasury Department sells 5-year notes, at about 1 p.m.
(1700 GMT).

FEDERAL RESERVE:

Federal Reserve Board Gov. Edward Gramlich speaks on "Social
Security Reform" before the University Club, Milwaukee, 8:30
a.m., 7:30 a.m. local time (1230 GMT).

Federal Reserve Board Gov. Susan Schmidt Bies speaks on
Basel II (a new set of international rules to ensure banks
cushion themselves from risk by requiring large institutions to
set aside capital) at the RISK USA 2005 Congress in Boston, 9
a.m. (1300 GMT).

ECONOMIC INDICATORS:

The Mortgage Bankers Association released its Weekly
Mortgage Market Index for the period ended June 3. at 7 a.m.
(1100 GMT.) The headline mortgage market index rose 6.5 percent
to 755.5 and the refinancing index was climbed 10.3 percent to
2,362.1 in the previous week.

Commerce Department releases wholesale inventories for
April, 10 a.m. (1400 GMT). Economists in a Reuters survey
forecast a median rise in inventories of 0.4 percent versus a
0.4 percent rise in March.

Philadelphia Federal Reserve Bank releases semiannual
Livingston survey, 10 a.m. (1400 GMT).

[UpInArms]

29. Fed's Gramlich urges higher Soc Sec retirement age

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-06-08T134351Z_01_N08500637_RTRIDST_0_ECONOMY-FED-SOCIALSECURITY.XML

MILWAUKEE, June 8 (Reuters) - The United States would go a good way to fixing the Social Security retirement system if it looked at increasing the retirement age, Federal Reserve Governor Edward Gramlich said on Wednesday.

Gramlich told Milwaukee business leaders that his idea of raising the retirement age by a year every decade "is not huge" and that doing this alone would go a "long way" to making the system fair across generations.

"As long as we don't confront the retirement age issue, we're putting in a system that just isn't fair," he said.

Of cutting benefits, Gramlich said: "It would cause a lot of difficulties and politically I don't think it's going to happen. You realize in your heart that it isn't the great way to do it."

Gramlich said Medicare was a bigger problem and should actually be dealt with before Social Security. He also said Americans needed to save more.

...more...

[UpInArms]

10. (Seasonally Adjusted) U.S. mortgage applications increase last week-MBA

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-06-08T110014Z_01_NAT001628_RTRIDST_0_ECONOMY-MORTGAGES-URGENT.XML

NEW YORK, June 8 (Reuters) - Applications for U.S. home mortgages increased last week boosted by a rise in purchasing and refinancing activity as mortgage rates eased, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity increased 6.5 percent to 755.5, offsetting the previous week's 2.8 percent loss.

The MBA's seasonally adjusted index of refinancing applications climbed 10.3 percent to 2362.1, after dropping 1.2 percent the prior week.

The MBA's purchase index, a gauge of loan requests for home purchases, rose 3.6 percent to 479.3, after falling 4.1 percent the previous week.

...more...

[UpInArms]

11. Ex-BOJ official: time to reassess policy framework

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-06-08T053229Z_01_T286630_RTRIDST_0_ECONOMY-JAPAN-BOJ-FUJIWARA.XML

TOKYO, June 8 (Reuters) - A former deputy governor of the Bank of Japan said the time has come for the central bank to reassess its ultra-loose monetary policy, and it should defend its independence if the government opposes a policy change.

Responding to criticism of the BOJ contemplating anything remotely resembling monetary tightening at a time when consumer price deflation is in its seventh year and appears far from over, Sakuya Fujiwara said times have changed since the BOJ introduced its "quantitative easing" policy in March 2001.

The economy, notably the banking sector, is no longer in the state of emergency that existed in 2001, Fujiwara said in an interview with Reuters this week.

"The zero interest rate policy and quantitative easing policy were unprecedented, extraordinary and unknown experiments," said Fujiwara, who was deputy governor until March 2003 and is now president of Hitachi Research Institute.

<snip>

Under the policy, the BOJ pumps huge amounts of funds into the banking system, keeping banks holding tens of trillion yen (hundreds of billion dollars) of excess funds. The BOJ says it is a more vigorous monetary easing step than the "zero interest rate policy" that it ended in August 2000.

...more...

[RawMaterials]

14. Berkshire Executives Knew AIG Would `Cook the Books,' SEC Says

June 8 (Bloomberg) -- Executives at Berkshire Hathaway Inc.'s General Re unit knew four years ago that American International Group Inc. would use a reinsurance transaction to ``cook the books,'' according to phone transcripts cited in a suit from regulators.

John Houldsworth, a former General Re executive who this week agreed to plead guilty to a criminal charge of conspiring to misstate AIG's finances, discussed the planned transaction in a November 2000 phone call with the insurer's chief financial officer at the time, Elizabeth Monrad.

``They'll find ways to cook the books won't they?!,'' Houldsworth told Monrad, according to a civil complaint the U.S. Securities and Exchange Commission filed on June 6 in conjunction with the plea agreement. The comment prompted Monrad to laugh, and then Houldsworth continued, ``It's up to them! We won't help them to do that too much. We'll do nothing illegal!''

snip..
`Paper Trail'

As Houldsworth prepared policy documents in December 2000, he asked General Re colleagues in an e-mail whether his office needed ``to produce a paper trail'' that disguised the transaction by creating the false impression that General Re approached AIG about it, the SEC said.

Houldsworth ended up writing such a document and General Re received a $5.2 million fee from AIG through side agreements that weren't disclosed to regulators, according to the suit.

The complaint was preceded by a warning notice to Houldsworth, and the SEC has sent similar notices to at least two other executives from General Re, including Monrad, 50.

Shares of Berkshire have fallen 4.2 percent since AIG admitted to improper accounting on March 30, compared with a 1.8 percent gain in the New York Stock Exchange Composite Index. General Re spokesman James Heslin Jr. declined to comment.

The federal plea agreement ``demonstrates this investigation will continue to spread and will continue to reach other individuals,'' Spitzer said in an interview yesterday, praising the Justice Department.

Buffett didn't know details of the General Re policy or how AIG intended to use it, Omaha, Nebraska-based Berkshire said in a March statement. He was called a ``cooperative witness'' by Spitzer in April after being interviewed by investigators for the attorney general, the SEC and the Justice Department.

`Knowing Participation'

Later that month, Buffett said General Re's liability will depend on whether the company was aware that it might be aiding fraud. AIG is one of three General Re clients under scrutiny by investigators.

``It really gets down to whether there is knowing participation,'' Buffett, 74, told 20,000 Berkshire shareholders and admirers at the company's annual meeting on April 30. Clients ``could be doing anything with their accounting.'


http://www.bloomberg.com/apps/news?pid=10000103&sid=aKM4Ee74co20&refer=us

[UpInArms]

15. (Auto Supplier) Hayes Lemmerz swings to net loss

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38511.3535429861-836421163&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) - Hayes Lemmerz International Inc. (HAYZ) reported a net loss Wednesday for the three months ended April 30 of $7.7 million, or 20 cents a share, compared with a profit of $1.1 million, or 3 cents a share in the year-earlier period. The automotive supplier said sales rose to $618 million from $594 million as European volumes offset U.S. market declines. The company affirmed its outlook for 2005 of revenue between $2.3 billion and $2.4 billion and adjusted earnings of $220 million to $235 million, though cash flow would be "negative" rather than "slightly negative." Shares fell 11 cents Tuesday to $6.41.

[RawMaterials]

16. News Analysis: A new villain emerges in Europe: the euro

PARIS Is the euro in danger of dying before it reaches its sixth birthday?

A suggestion by Italian cabinet ministers that their country should hold a referendum on getting out of the common currency drew denunciations from much of Europe as finance ministers met in Luxembourg on Tuesday, but the fact they were discussing the issue at all highlighted the fact that the currency is taking some of the blame for the Continent's economic woes.

Few, if any, think that the euro will stop being the legal currency of much of Europe, but with French and Dutch voters having stunned the political establishment by voting against the proposed European constitution, those who are opposed to other European institutions have been emboldened.

snip...

Nostalgia for national currencies has risen in the past year as European unemployment has stayed stubbornly high and growth has trailed that of the United States and Asia. A poll taken late last month by the Forsa organization for Stern magazine found that 56 percent of Germans preferred returning to the Deutsche mark. The magazine said the margin of error was three percentage points.

snip...
If a country were to insist on withdrawing, presumably it could do so. But there would be the risk of higher interest rates and a greater reluctance of foreigners to invest. There would also be issues of debts contracted in euros, including government borrowing. While all lira debts were automatically converted to euros at the official rate of 1,936.27 lire per euro, those who lent euros would no doubt object to having their debt converted to lire at that rate, particularly if it were clear that the lira was going to depreciate against the euro.

snip..

For now, it is unlikely that talk of countries getting out of the euro will advance very far, and markets have reacted more calmly than some politicians. The yield spread between German and Italian government bonds was 19 basis points, or 0.19 percent, last Thursday, before the Italian ministers first spoke up. On Tuesday it was 22 basis points.

But the existence of the talk highlights that the financial unification of Europe is still a work in progress, one that has not advanced as rapidly as its advocates had expected, and that it is a convenient target for national politicians when, as now, economic performance is inadequate.

European officials will keep trying.

"We are proceeding too slowly," Trichet said Tuesday in Beijing, where he was attending a conference of central bankers, "but we are proceeding with unifying the market.



http://www.iht.com/articles/2005/06/08/business/euecon.php

[RawMaterials]

18. US watches China's growing oil demand with concern

WASHINGTON (Reuters) - China's global quest for crude oil is acceptable as long as the Asian nation develops the deposits and doesn't hoard them, a senior State Department official said on Tuesday

snip..

"China's energy needs are going to be enormous in the future," said Christopher Hill, the State Department's assistant secretary for East Asia and the Pacific.

"The question is, are they looking to develop energy or are they looking to take it off the market," Hill told a Senate Foreign Relations subcommittee hearing on China's growing economic might.

China consumes more than 7 million barrels per day of crude oil, versus U.S. consumption of about 20 million bpd.

State-run Chinese companies have spent billions of dollars on oil assets overseas to boost supplies for a country that imports 40 percent of its energy needs.

snip..

Canadian and Chinese firms are cooperating to build a $2 billion pipeline to ship crude from Canada's vast oil sands in Alberta to the West Coast to be sent via tanker to China.

"China has brought the competition for natural resources to our backyard," Murkowski said.

Separately, the Energy Information Administration forecast that China's oil demand would grow by 600,000 barrels per day in 2005 from last year. For all of 2005, China will consume an estimated 7.2 million barrels per day, with demand rising to 7.8 million bpd in 2006, the EIA said




http://www.reuters.com/newsArticle.jhtml?jsessionid=NZSCP4MCREAB0CRBAEKSFFA?type=reutersEdge&storyID=8726904

I Hope to GOD that this is not posturing for WW3 (the oil war):tinfoilhat:

edit to fix link

[UpInArms]

19. Treasurys lower ahead of wholesale inventories

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38511.360379537-836421736&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) - Prices of Treasurys declined, pushing yields higher, early Wednesday in an extension of losses seen earlier in Asian trading. Later in the session, investors will focus on wholesale inventories figures for April. According to a poll of economists by MarketWatch, wholesale inventories should show a 0.5% increase for April, up from a 0.4% gain in March. In recent trades the yield on the benchmark 10-year note rose to 3.928% from 3.910% late Monday.

[UpInArms]

27. Fed adds reserves through overnight system RPs

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-06-08T133406Z_01_N08343712_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, June 8 (Reuters) - The Federal Reserve said on Wednesday it added temporary reserves to the banking system through overnight system repurchase agreements.

Fed funds last traded at 3.00 percent, matching the Fed's current target for the rate on overnight loans between banks.

Further details of the operations are available at: http://www.ny.frb.org/markets/omo/dmm/temp.cfm

Liquidity or check-kiting?

[UpInArms]

28. Treasurys fall ahead of 5-year auction

http://www.marketwatch.com/news/story.asp?guid=%7B16B194D7%2D97B3%2D453C%2DAFA1%2DA22B623AF3B4%7D&siteid=mktw

NEW YORK (MarketWatch) - Treasury prices were lower early Wednesday, driving yields higher, as investors lightened their positions ahead of an afternoon auction of new five-year notes.

The yield on the 10-year bond ($TNX: news, chart, profile) rose to 3.933% from 3.91% late Monday.

The selling began overnight in Asia and was linked to a weaker dollar and rising stocks, according to Action Economics.

Selling continued into the early U.S. session, as investors positioned themselves for the U.S. Treasury's sale of $14 billion in five-year notes, said Kevin Giddis, managing director of fixed income at Morgan Keegan.

"Generally, prior to an auction people try to take a little money off the table and drive up yields as much as they can," Giddis said.

He predicted that the sale of five-year notes will go well, given there is strong demand among foreign accounts for that instrument.

...more...

Relying on "strong foreign demand"? :rofl:

[UpInArms]

50. Treasurys fall after 5-year auction

http://www.marketwatch.com/news/story.asp?guid=%7B16B194D7%2D97B3%2D453C%2DAFA1%2DA22B623AF3B4%7D&siteid=mktw

NEW YORK (MarketWatch) - Treasury prices were lower late Wednesday, pushing up yields, as investors behaved cautiously ahead of a Thursday congressional appearance by Federal Reserve chief Alan Greenspan and a sale of new 10-year notes.

The yield on the 10-year note ($TNX: news, chart, profile) rose to 3.935% from 3.912% late Monday.

Prices briefly flattened in the early afternoon after a 5-year Treasury note auction, which was characterized as "solid" by Action Economics.

The auction of $14 billion of new five-year notes produced a median yield of 3.705% and a bid-to-cover - or bids accepted to bids made - ratio of 2.60.

<snip>

However, an $8 billion sale of 10-year notes on Thursday may not go very well, given that the benchmark's yield recently has been trading near a 14-month low, according to Kevin Giddis, managing director of fixed income at Morgan Keegan.

...more...

[UpInArms]

23. Fed seeks banks' input on Basel II implementation

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38511.3752297801-836422860&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- The Federal Reserve wants to hear from banks about their efforts to implement the Basel II capital agreement, Federal Reserve Gov. Susan Schmidt Bies said in prepared remarks Wednesday. The Fed has delayed implementation of the accord, but recognizes that "certain time pressures exist for institutions wishing to implement the new framework at the earliest possible date," Bies said in a speech to a conference in Boston. Bies said the Fed wants to hear specifics about how Basel II may demand the greatest investments by banks or generate the most uncertainty. The accord requires banks to have a more risk-sensitive framework for the assessment of regulatory capital.

info on Basel II here:

http://www.bis.org/publ/bcbsca.htm

<snip>

11 April 2005

The Basel Committee on Banking Supervision has today issued a paper for public comment outlining proposed capital requirements for banks’ exposures to certain trading-related activities. This includes a treatment for counterparty credit risk. The proposals also contain a solution for double default effects, or the risk that both a borrower and guarantor default on the same obligation.

The paper, The application of Basel II to trading activities and the treatment of double default effects, represents a milestone in international capital standards-setting in that it was prepared jointly by the Basel Committee and the International Organization of Securities Commissions (IOSCO). It is available together with a summary of responses received on a survey of banks’ and investment firms’ trading books that provides background material (Trading book survey: a summary of responses).

[UpInArms]

24. SIG Specialists fined $100,000 by NYSE over trading

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38511.3800234375-836423414&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- SIG Specialists has been ordered to pay $100,000 and one of its individual specialists fined $50,000 by the New York Stock Exchange for failing to trade in one of its stocks for a six-minute period Aug. 19, 2003, the Big Board said Wednesday. The NYSE said SIG and specialists John C. Genna failed to "maintain a fair and orderly market."

[UpInArms]

25. pre-opening blather

briefing.com

9:00AM: S&P futures vs fair value: +4.3. Nasdaq futures vs fair value: +6.0. Positive bias persists in pre-market trading, setting the stage for the cash market to open higher... Providing an additional boost of confidence to blue chips have been reports that Kirk Kerkorian's Tracinda Corp. will extend its stake in General Motors (GM) to about 7.2% through last month's tender offer and solid May comps at McDonald's (MCD)

8:30AM: S&P futures vs fair value: +4.2. Nasdaq futures vs fair value: +7.0. Still shaping up to be a higher open for the indices as futures indications hold steady above fair value... Reports that IAC/InterActiveCorp (IACI) has sold its remaining 5.4% interest in Vivendi Universal Entertainment back to General Electric (GE) for $3.4 bln and falling oil prices ($53.10/bbl -$0.66), ahead of today's weekly inventories report, have also contributed to an upbeat sentiment

8:00AM: S&P futures vs fair value: +4.7. Nasdaq futures vs fair value: +8.0. Futures market versus fair value suggesting a higher open for the cash market after Texas Instruments (TXN) raised its Q2 EPS and sales guidance... Also providing a floor of early buying support for stocks has been a Prudential upgrade on Caterpillar (CAT) to Overweight from Neutral Weight while Altria (MO) has surged in pre-market trading after the Dept. of Justice reduced its smoking cessation plan by $120 bln to $10 bln

ino.com

The June NASDAQ 100 was higher overnight due to short covering as it consolidates some of Tuesday's huge key reversal down but remains below support marked by last Tuesday's low crossing at 1540. Stochastics and the RSI have turned bearish signaling that a short-term top is in or is near. Yesterday's close below last Tuesday's low crossing at 1540 signals that the short covering rally off April's low has come to an end while opening the door for a possible test of the 20-day moving average crossing at 1524.85 later this month. The June NASDAQ 100 was up 5.00 pts. at 1539 as of 5:23 AM ET. Overnight action sets the stage for a steady to higher opening by the NASDAQ composite index later this morning.

The June S&P 500 index was higher overnight due to short covering as it consolidates some of Tuesday's decline. July is consolidating above initial support marked by the 10-day moving average crossing at 1198.08 and the 62% retracement level of this year's decline crossing at 1196.55. However, stochastics and the RSI are overbought and have turned bearish signaling that a short-term top might be in or is near. Closes below last Tuesday's low crossing at 1191.70 are needed to confirm that a short-term top has been posted and would open the door for a larger-degree decline during the first half of June. If June renews this spring's rally, the 75% retracement level of the March-April decline crossing at 1209.52 is the next upside target. The June S&P 500 Index was up 3.50 pts. at 1202.50 as of 5:25 AM ET. Overnight action sets the stage for a steady to higher opening when the day session begins later this morning.

[UpInArms]

26. 9:32 EST numbers and blather (printing press going full out)

Dow 10,523.27 +40.20 (+0.38%)
Nasdaq 2,073.53 +6.37 (+0.31%)
S&P 500 1,200.01 +2.75 (+0.23%)
10-Yr Bond 3.926 +0.15 (+0.38%)

NYSE Volume 16,373,000
Nasdaq Volume 35,371,000

9:15AM: S&P futures vs fair value: +3.8. Nasdaq futures vs fair value: +5.0. Futures market still pointing toward a strong open for stocks, but the absence of notable economic data to set a more definitive tone to trading for the Treasury market, coupled with new supply hitting the market, has stalled follow-through buying interest in bonds... The benchmark 10-yr note is currently off 3 ticks to yield 3.91%

[UpInArms]

31. 10:09 EST numbers, blather and bye!

Dow 10,526.07 +43.00 (+0.41%)
Nasdaq 2,074.10 +6.94 (+0.34%)
S&P 500 1,200.81 +3.55 (+0.30%)
10-Yr Bond 3.919 +0.08 (+0.20%)

NYSE Volume 229,390,000
Nasdaq Volume 277,369,000

10:00AM: Equities still on the offensive as the bulk of sector leadership remains positive... Technology has paced the way higher, led by a 1.0% surge in Semiconductor following TXN's optimistic outlook, while modest strength in the influential Financial sector has also provided leadership... Industrials have gotten a lift from an analyst upgrade on Caterpillar (CAT 96.03 +1.50) while Consumer Discretionary has benefited from a 4.2% surge in shares of General Motors (GM 32.01 +1.28), following the expiration of Tracinda Corp's tender offer...

Despite falling oil prices ahead of the EIA's weekly oil report (10:30 ET) - crude oil inventories (consensus +250K), gasoline supplies (consensus +1.1 mln) and distillates (consensus +1.28 mln) - Energy has eked out a modest gain... Health Care, however, has been under modest pressure amid reports that Biogen Idec (BIIB 34.01 -1.06) may lose its Avonex patent in Europe while weakness in trucking stocks has weighed on Transportation... NYSE Adv/Dec 1680/795, Nasdaq Adv/Dec 1320/971

9:40AM: Market opens higher, in line with futures indications, following an upbeat Q2 outlook from TXN... Texas Instruments (TXN 27.99 +0.71) has raised its Q2 EPS outlooks to $0.27-0.30 (from $0.25-0.29) and tightened its revenue forecasts to $3.12-3.24 bln (from $3.0-3.24 bln), to reflect growing demand across a broad range of its chip products... In response to TXN's optimistic mid-quarter update, JP Morgan has raised their FY05 estimates while Piper Jaffray has said that Q2 guidance represents an inflection point for sequential growth rates for the analog/mixed-signal semiconductor industry...

I have out of town company coming and so I'll be away - have a great day at the casino!

:hi:

[RawMaterials]

32. Have a Great Day UIA

:hi:

[RawMaterials]

33. Unocal mum on possible bid from China

NEW YORK (Dow Jones) - Unocal Corp. (UCL) said Tuesday it wouldn't comment on a report that China's largest offshore oil producer is still mulling whether to make a counteroffer for the El Segundo, Calif., oil and natural gas producer.

The Chinese National Offshore Oil Corp., or CNOOC, said Tuesday it "is continuing to examine its options with respect to Unocal ," though no decision had been reached and it wouldn't guarantee it would ultimately make an offer.

On April 4, Chevron Corp. (CVX), the second-largest U.S. integrated oil producer, announced it would acquire Unocal for $16.4 billion , plus the assumption of $1.6 billion in debt.

The discount at which Unocal shares continue to trade to Chevron's offer, which was valued at $58.81 a share Tuesday morning, suggests the market isn't seriously entertaining the possibility of CNOOC submitting a higher bid.

Unocal shares recently traded up 91 cents, or 1.6%, at $58.40, while the American depositary receipts of CNOOC Ltd. (CEO) changed hands down 25 cents, or 0.4%, at $55.52 .



http://money.cnn.com/2005/06/08/news/international/unocal_cnooc.dj/index.htm

[RawMaterials]

34. US, China cross swords on how to manage yuan

China says hopes for yuan change misplaced and a heavy burden

(BEIJING) US Federal Reserve Chairman Alan Greenspan said yesterday he was sure Beijing would soon let its currency move more freely, but China's central bank chief said high expectations and outside pressure were working against an early shift.

The friendly exchange, coming days before a meeting of Group of Seven finance ministers in London, highlighted long-running differences on how to manage the yuan, which has been virtually fixed near 8.3 yuan per dollar for a decade.

'The issue of allowing flexibility in some form in the yuan strikes me as very much to the advantage of China and indeed it's something that I am certain they will take on reasonably soon,' Mr Greenspan, participating by satellite from Washington, said in a panel discussion at a commercial bankers' forum in Beijing.

The US Treasury has warned China it risks trade sanctions within six months unless it pushes up the value of the yuan. Washington says the currency is artificially cheap, giving Chinese exporters an unfair advantage.

snip...

But it has stood firm against outside pressure, saying the timetable for change would be shaped primarily by its domestic economic needs. Reaffirming this stance, Zhou Xiaochuan, China's central bank governor, said great expectations for a yuan change were misplaced given China's still small share of global output.

'It's too heavy on our shoulders,' he said of the burden being placed on China.

China still needed to complete preparations for unshackling its currency, he said, adding that policy makers were concerned about the impact on employment and economic growth.

Against this background, politically motivated pressure was not helpful. He said: 'This is not a favourable environment for China to put forward its reform and for its decision-making process.'

more...

http://business-times.asia1.com.sg/sub/news/story/0,4574,158262,00.html?

[MARALE]

35. Crude-futures rally on surprising data

http://www.marketwatch.com/news/newsfinder/pulseone.asp?guid={47FD53BC-79D8-4C34-BFF5-879F99B017EE}&siteid=mktw

July-dated crude futures rallied sharply Wednesday on the New York Mercantile Exchange after the Energy Department said U.S. petroleum supplies fell 3 million barrels in the week ended June 3. Most analysts had been looking for a build to crude inventories.

[RawMaterials]

36. 11:00 Market Update and Blather

Dow 10524.68 +41.61 (+0.40%)
Nasdaq 2069.92 +2.76 (+0.13%)
S&P 500 1200.80 +3.54 (+0.30%)
10-Yr Bond 3.920% +0.09
NYSE Volume 508,564,000
Nasdaq Volume 564,154,000



11:00AM: Stocks continue to hold their own, showing resilience in the face of a disappointing oil inventories report... While the market initially spiked to session lows as crude oil prices ($54.45/bbl +$0.69) turned positive after the EIA showed an unexpected draw in crude oil inventories of 3.09 mln barrels (consensus +250K) and a 31K draw in gasoline supplies (consensus +1.1 mln), the market has apparently found leadership in the Energy sector, which has surged more than 1.0% on the news...

In particular, ExxonMobil (XOM 57.94 +0.49), which was negative before the data was released has spiked above the flat line immediately following the news... NYSE Adv/Dec 1664/1240, Nasdaq Adv/Dec 1370/1273

10:30AM: Major indices off their highs but still maintain modest gains following this morning's only scheduled economic report... At the top of the hour, April wholesale inventories rose 0.8%, twice the +0.4% expected and versus an upwardly revised March gain of 0.6% (from +0.4%)... Wholesalers' sales jumped 1.5% in April after a weak Q1, pushing the wholesale inventory/sales ratio down to 1.18 months... However, since the data say little about personal consumption, the report has gone relatively unnoticed by both stock and bond investors...NYSE Adv/Dec 1895/931, Nasdaq Adv/Dec 1499/1047

[donkeyotay]

37. Of pensions and hedge funds

Hello Ozy and UIA. You guys rock. This thread has become an important news source for me. The other day you had bolded-up a line from a story that mentioned pension plans investing in hedge funds. I think this will become the mother of all investment scandals, and here’s a downpayment:

John Funk has posted this in LBN: “(Ohio) Workers’ Comp Bureau concealed $215 M loss; Taft, Petro knew.”
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1532130

COLUMBUS — Democrats were screaming ''cover-up'' yesterday after state officials admitted that a high-risk hedge fund that the embattled Ohio Bureau of Workers’ Compensation had invested in had lost $215 million in just a few months last year.

The bureau acknowledged that the fund, managed by a Pittsburgh-based investment firm, lost the money between February and September, 2004. MDL Capital Management relinquished control of the fund in November.

End>>>


The fund lost all the Workers’ Bureau’s during the election and the GOP didn’t mention it to anyone. So of course, that’s a story, but there is also the story of why pension funds are being put at risk in unregulated hedge funds. When those funds “go missing,” should we conclude that they were lost the old fashioned way, through incompetence, or stolen the old fashioned way through fraud? In either case, off shore hedge funds are the financial equivalent of black box voting.

The thread has more:

Foramerica links to an interview with the fund’s owner/manager in which he shares this wisdom:

<<<snip>>>
The first element is the conservative management that has been the firm's style since its inception. "Not trying to make a lot of money for clients, but not to lose any," Lay said.

MDL specializes in managing fixed-income portfolios for institutional investors such as pension funds and endowments. Lay expects interest rates to rise this year, enhancing the value of the bonds that make up nearly all of the company's assets.

The second ingredient in Lay's mix is aggressive marketing, especially in the region. "There are tons of (local) municipalities and foundations and endowments that have never heard of us," he said. To correct that, Lay said he plans to expand the company's marketing department this year.
<<<end>>>
http://www.post-gazette.com/pg/05002/434555.stm

and the same poster (foramerica) links to a site showing that Ohio State University was also invested with this firm:

$ 25,697,311
MDL Capital Management
$ 77,173,574

$ --0--

$ 77,173,574

Thought you folks would be interested in knowing that this whole issue of black box pension investing might be about to take off.

Thanks for all you do! I appreciate your daily thread.

[ozymandius]

43. Thank you donkeyotay.

Granted - Taft and Noe are two severe pieces of work. This happened on their watch with their participation. You know that unregulated hedge funds have few friends here, if any. They're just one in a series of ponzi schemes that this administration and this Federal Reserve board hails as a critical pillar of the markets' stability.

There are many stories bundled in this Ohio ponzi scheme. The coverup, as your post says, is one. I am pondering the impact of this scam on national politics in the area of campaign finance. (Ex: If this had not been covered-up during the last election cycle, might we now be speaking of President Kerry?) And as conventional wisdom often says: it's not always the crime that gets 'em. It's the coverup.

:popcorn:

[UpInArms]

38. Problem with Crude Inventories?

10:39am 06/08/05 API: DISTILLATE SUPPLIES UP 3.1 MILLION BARRELS

10:38am 06/08/05 API: CRUDE SUPPLIES DOWN 13.8 MILLION BARRELS

10:39am 06/08/05 API: GASOLINE SUPPLIES UP 1.1 MILLION BARRELS

10:30am 06/08/05 DOE: U.S. CRUDE SUPPLIES DOWN 3 MILLION BARRELS

10:30am 06/08/05 DOE: GASOLINE SUPPLIES DOWN 100,000 BARRELS

10:31am 06/08/05 DOE: DISTILLATE SUPPLIES UP 1.3 MILLION BARRELS

Analysts: API report on crude supplies questionable

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38511.4891116435-836431830&siteID=mktw&scid=0&doctype=806&

DALLAS (MarketWatch) -- Crude-oil futures reacted strongly Wednesday on the New York Mercantile Exchange to reports of a surprising drop in U.S. crude supplies, but analysts said the American Petroleum Institute's estimate of a decline of 13.8 million barrels is unrealistic. Tim Evans, senior energy analyst at IFR Markets, said he usually doesn't comment on the API data, but Wednesday's report prompted him to explain why. "A drop of this magnitude simply does not make sense, yet the API apparently lacks the ability to screen their estimates for nonsense," he said in a note to clients.

hmmmmm......

[UpInArms]

42. Crude rallies on surprise supply drop

API estimate of 13.8-million-barrel drop is derided

http://www.marketwatch.com/news/story.asp?guid=%7BEFB74766%2DB5B1%2D4FFB%2D8C83%2D615FE3C57179%7D&siteid=mktw

DALLAS (MarketWatch) -- Crude-oil futures hit $55 a barrel Wednesday on the New York Mercantile Exchange after the Energy Department and the American Petroleum Institute reported unexpected drops in U.S. crude supplies.

July-dated light sweet crude last stood at $54.50 a barrel, up 1.4%, or 74 cents.

The Energy Department said crude supplies fell 3 million barrels in the week ended June 3. The API said they dropped 13.8 million barrels. The data were contrary to most analysts' expectations.

Tim Evans, senior energy analyst at IFR Markets, said he usually doesn't comment on the API data, but Wednesday's report prompted him to explain why.

"A drop of this magnitude simply does not make sense, yet the API apparently lacks the ability to screen their estimates for nonsense," he said in a note to clients.

Analysts view the Energy Department report as the more reliable of the two because the government agency mandates that oil companies supply them with data, while the information the API gets is voluntary.

...more...

Another "fly-by" post - awaiting the arrival of guests :)

[ozymandius]

39. lunchtime check-in

12:03
Dow 10,527.26 +44.19 (+0.42%)
Nasdaq 2,071.87 +4.71 (+0.23%)
S&P 500 1,201.42 +4.16 (+0.35%)
10-Yr Bond 39.19 +0.08 (+0.20%)

NYSE Volume 701,199,000
Nasdaq Volume 730,096,000

11:30AM: More of the same as blue chips continue to outpace their Nasdaq counterparts... Motorola (MOT 18.29 +0.16) has been the most actively traded issue on the NYSE, getting a boost after Goldman Sachs raised their FY05 and FY06 EPS estimates amid an improved outlook for global handset sales following raised guidance from Texas Instruments (TXN 28.01 +0.73) - the second most active issue traded... General Motors (GM 32.32 +1.59) has been the third most actively traded stock on the Big Board but has paced the gains on the Dow as Tracinda Corp.'s offer to purchase 5% of GM's stock has ended...NYSE Adv/Dec 1844/1125, Nasdaq Adv/Dec 1492/1248

11:00AM: Stocks continue to hold their own, showing resilience in the face of a disappointing weekly oil inventories report... While the market initially spiked to session lows as crude oil prices ($54.45/bbl +$0.69) turned positive after the EIA showed an unexpected draw in crude oil inventories of 3.09 mln barrels (consensus +250K) and a 31K draw in gasoline supplies (consensus +1.1 mln), the market has apparently found leadership in the Energy sector, which has surged more than 1.0% on the news...

[MARALE]

41. U.S. firms hitch ride on French Airbus

http://www.marketwatch.com/news/story.asp?guid=%7BBBC3C354%2D020A%2D4866%2DBBE8%2D7BD6AF15EEAA%7D&siteid=mktw&dist=

...

Yet the 555-seat monster should be as big a hit in Pittsburgh, home to Alcoa Inc (AA: news, chart, profile) , as it is in Paris.

"It's fair to say we have more applications on this plane than any other," said Michael Adkins, global marketing executive for Alcoa's aerospace sheet business. Hundreds of jobs at the company's Iowa and California facilities are linked to the millions of fasteners, wing pieces, and other U.S.-made components aboard the French-built aircraft.

Alcoa is just one of at least 200 American companies counting on the super jumbo jet to expand its aerospace business, filling a gap as Boeing Co.'s (BA: news, chart, profile) longstanding dominance of the commercial aviation market slips.

Goodrich Corp. (GR: news, chart, profile) has some high-profile work building the landing gear on the A380. The Charlotte, N.C. company is also working on evacuation slides and exterior lights for the plane, among other systems.

...

[54anickel]

44. Pizza to The People! (Mogambo) - Hi everyone. Sorry to be so

absent these days, I thought things would get back to normal around here this week, but I'm not quite there yet.


http://www.321gold.com/editorials/daughty/daughty060805.html

- It was a week of extraordinary excess (WOEE) everywhere you looked in the shadowy world of modern money. At least, that is the way that it looks to me, as I nervously peer out of the periscope of the heavily-fortified Mogambo Bunker, cowering in abject overpowering fear, and predictably crying and whining about how I want my mommy to come and make everything okay again.

First off, the Federal Reserve has apparently started down the dismal path to economic hell of Ultimate Money Debasement (UMD), namely the last-ditch desperation move classically known as direct monetizing of debt. They have now sunk so low that they are now engaging in the worst behavior that a central bank can engage in, namely creating money to buy government debt, which is commonly known as "monetizing" the debt. It's not much this week, $2.4 billion, but it is a lot all of a sudden.

In effect, the Federal Reserve (which is, I hasten to point out, a private bank) creates money-- poof! --for itself and buys government debt with the money. It's that simple! Magically, money has appeared out of nowhere! The total, aggregate debt load has not, unfortunately, changed, but the total amount of money sloshing around is greater!

If you keep a close eye on your finances, you realize that you do not have more money. Likewise, I do not have more money. So if YOU do not have more money (I point to you) and I do not have more money (I point to myself) then (audience shouts in unison) "Then who the hell DOES have more money?"

The answer is, of course, that the BANKS have more money! I know what you are thinking. "Wow! What a racket, huh?" This brings us to today's timeless gem from the Mogambo's Famous Treasure Trove of Valuable Lessons In Life (MFTTOVLIL), and this lesson is that when you get a chance to make a wish, maybe by wishing upon a star, or blowing out the candles on your birthday cake, or rubbing a magic lamp and a genie pops out or something, you should wish to own a country's central bank. You can create money out of thin air, anytime you want, and buy anything you want with it! Cool!

But, and notice how my voice cracks pitifully as I pour out my despair, so much money has already been created, so achingly much money, so damnably impossible much money, has been created and borrowed. Reluctantly, I rise up from my chair and stagger over and look out the window, and I cry out in horror as I note that MORE money and credit are STILL being created right now, every minute of every day, all around the freaking world! And a lot of that the money is being used to buy some of everything, sometimes a LOT of everything, including stocks and bonds and houses and government, which drives prices up. And when a bond goes up in price, then that automatically means that the imputed yield goes down. Thus, interest rates are low! It's as simple as that!

more...

[ozymandius]

55. Glad you're able to drop in - in any case.

I have been going almost non-stop since arriving at work today. Lots of little things have kept me away from the thread.

Ozy :hi:

[54anickel]

45. The Bush Economy

http://www.truthout.org/docs_2005/060705N.shtml

With all of the debate about taxes, the economy and domestic spending, it is hard to imagine anyone supporting the notion of taking money from programs like Medicaid and college-tuition assistance, increasing the tax burden of the vast majority of working Americans, sending the country into crushing debt - and giving the proceeds to people who are so fantastically rich that they don't know what to do with the money they already have. Yet that is just what is happening under the Bush administration. Forget the middle class and the upper-middle class. Even the merely wealthy are being left behind in the dust by the small slice of super-rich Americans.

snip>

President Bush did not create the income gap. But the unheralded effect of his tax policy is its unequal impact on the modestly well to do. By 2015, those making between $80,000 and $400,000 will pay as much as 13.9 percentage points more of their income in federal taxes than those making more than $400,000, assuming the tax cuts are made permanent. Below $80,000, most taxpayers will see their share of taxes rise slightly or stay the same.

Mr. Johnston's article quotes a prominent economist who argues that people care more about the chance to move from one income class to another (upward, of course) than about income distribution. But during the Bush years, the two main sources of class mobility - a good job and money for higher education - have increasingly failed to materialize for those who most need them. Last week's jobs report from the Labor Department confirmed that a strong labor market recovery has not taken hold. Wages for most working people failed even to outpace inflation in the past year.

That might be more bearable if things were rough all over. But the share of economic growth that is going toward corporate profits, which flow to stockholders and bondholders who are concentrated at the top of the income scale, is at historic highs.

Which brings us back to the super wealthy and the merely rich. The divide between rich and poor is unfortunately an old story, but income-class warfare among the top 20 percent of the scale is a newer phenomenon. One cause is that the further up the scale one goes, the more of one's income comes from investments, which under the Bush tax cuts enjoy about the lowest rates in the tax code. But many families making between $100,000 and $200,000 are not exactly on easy street. They don't face choices anywhere near as stark as those encountered further down the income ladder, but they face serious tradeoffs not experienced by the uppermost crust, particularly when hit with the triple whammy of college for the children, care for aging parents and preparing for their own retirement.

more...

[UpInArms]

46. Inflation is real and worse than you even thought

To get a true look, perhaps this writer should have compared prices versus wages.

http://www.marketwatch.com/news/story.asp?guid=%7B15BF411E%2D2B62%2D45C7%2DB64B%2D75CC9749ECF1%7D&siteid=mktw

excerpt:

"Even with unleaded regular selling for more than $2 per gallon, the increase in gasoline prices since 1982 is 25% lower than the increase in food prices, 50% lower than the rise in housing costs, 70% lower than the spike in medical costs and a whopping 80% below the surge in college tuition," the industry research firm found.

Accounting for inflation and better miles to the gallon, the cost of gasoline per mile driven is less than half of the cost of 1981 rates, according to Herold co-director of research Nick Cacchione. He called it "America's bargain liquid," at 10% less than bottled water, 33% of the price of milk and 20% of the price of beer.

Though the price of gasoline per mile is up 41% since 1995, the cost for a family to go to a major-league baseball game is up 70%, and the average price of a movie ticket has climbed 57%. Want a half-gallon of ice cream? That will lighten the wallet by about 45% more than it did 10 years ago.

...more...

(another fly-by post - but I had to post this for the informational value) Knowledge is power and they are definitely attempting to skew this into "good news". The bad news is that the cost of living is skyrocketing and your paychecks are not.

[UpInArms]

47. 2:06 EST numbers and blather (soma wearing off?)

Dow 10,480.42 -2.65 (-0.03%)
Nasdaq 2,059.74 -7.42 (-0.36%)
S&P 500 1,195.43 -1.83 (-0.15%)
10-Yr Bond 3.930 +0.19 (+0.49%)

NYSE Volume 1,092,007,000
Nasdaq Volume 1,074,871,000

2:00PM: Sellers show some resolve as the Nasdaq turns negative for the second time today... While weakness in areas such as Internet, Software and Biotech has largely been responsible for the Composite's lackluster performance, losses across the board in Transportation have also weighed on the predominantly tech-heavy index... The largest laggards have been trucking stocks, after Bear Stearns lowered their ratings on several issues in the group based on a weakening business environment and declining demand amid rising costs...

Most notably has been a valuation downgrade on Landstar System (LSTR 31.19 -2.37), which was added to the Dow Jones Transportation Average just two weeks ago following the acquisition of USF Corp by Yellow Roadway (YELL 51.62 -1.63)... DJTA -1.8, NYSE Adv/Dec 1828/1339, Nasdaq Adv/Dec 1474/1417

1:30PM: Market pulls back to previous levels, as recent bounce is short-lived, but buying remains widespread across most areas... Bonds, however, remain under pressure despite impressive indirect bidder participation (foreign central banks) of 49.9% following the Treasury Dept.'s $14 bln 5-year auction that awarded investors 3.705%... The 10-year note is off 3 ticks to yield 3.91%, as global supply such as Qwest's $1.25 bln debt offering and an upcoming $1.0 bln debt sale from Wrigley remain on the table ahead of Greenspan's testimony tomorrow...NYSE Adv/Dec 1831/1306, Nasdaq Adv/Dec 1504/1382

[UpInArms]

48. SnowBlowJob sprays spittle across nation

2:15pm 06/08/05 WHITE HOUSE: INTEREST RATES TO RISE 'A BIT MORE'

(what happened to the "independence of the Federal Reserve"?)

2:14pm 06/08/05 WHITE HOUSE SEES CPI UP 2.9% IN '05, 2.4% IN '06

2:10pm 06/08/05 WHITE HOUSE RAISES FORECAST FOR 2005 JOB GROWTH

2:09pm 06/08/05 WHITE HOUSE STICKS WITH 3.4% GDP GROWTH EST FOR 2005

2:12pm 06/08/05 SNOW SAYS U.S. ECONOMIC FUNDAMENTALS 'ARE ROBUST'

2:11pm 06/08/05 WHITE HOUSE: '05 JOB GROWTH 178K PER MONTH VS 175K PREV

2:10pm 06/08/05 WHITE HOUSE RAISES FORECAST FOR 2005 JOB GROWTH

2:09pm 06/08/05 WHITE HOUSE STICKS WITH 3.4% GDP GROWTH EST FOR 2005

What a load of horsecrap :puke:

[Roland99]

51. Are they counting military recruits as new jobs?

[UpInArms]

53. probably, and also using the birth/death scale

and counting on more deaths - therefor, when someone is born (bringing their job into the free market) it would make that job number higher :eyes:

[ozymandius]

57. and 16 year-olds entering the labor pool are, technically, "looking"

for employment. I imagine "looking" counts as self-employment. :eyes:

[AnneD]

58. UIA....

is THAT why they keep cutting health care funds for the indigent. Seriously though, I recently read a medical article (wish I could remember where) but the jist was that poverty and the lack of care is affecting the mortality rate now. The Doc's in this study were really startled to the extent.

[ozymandius]

56. I wonder what they will try to qualify, technically speaking, as "jobs".

intersection window washing?

aluminum can collection?

panhandling?

Their projections have a habit of overstatement.

[AnneD]

60. Ozy

you need to put it in gopspeak..
sanitary technician consultant/independent contractor
resource recycling technician/independent contractor
Corporate (Haliburton, Cheveron military industrial) lobbyist.

[UpInArms]

52. Interest-Only Mortgages All the Craze

http://news.yahoo.com/news?tmpl=story&cid=509&e=1&u=/ap/risky_mortgages

Once a frustrated renter, Chris Economou is now a happy homeowner, enjoying a splendid view of San Francisco and an $80,000 increase in his property's value since he bought the one-bedroom condominium for $435,000 a year ago.

He credits his good fortune to an interest-only mortgage, an increasingly popular — and risky — loan that enables borrowers to lower their monthly payments enough for several years to afford rapidly escalating home prices in expensive markets like the San Francisco Bay area. Economou estimates he saves $1,000 a month by having his interest-only mortgage instead of a traditional 30-year fixed rate loan.

<snip>

Built on the assumption that home prices will continue to rise, interest-only mortgages represent a gamble that many home owners accustomed to conventional fixed-rate loans would never take. Unlike conventional 30-year mortgages, interest-only loans typically don't require payments toward the principal for three to seven years, substantially lowering the costs of entry and making it easier to qualify for the loan.

But the financial firepower of interest-only mortgages is affecting all home owners. They are further elevating already lofty housing prices, a trend that's raising fears of crash that could plunge the economy into a recession.

"When this market adjusts, it's going to be painful," said UCLA economics professor Edward Leamer, who has been warning of a California housing bubble for three years. "Borrowers are getting in over their heads, and lenders are too."

...more...

[ozymandius]

54. the Bush economic miracle marches on

3:02
Dow 10,471.04 -12.03 (-0.11%)
Nasdaq 2,058.58 -8.58 (-0.42%)
S&P 500 1,193.75 -3.51 (-0.29%)
10-Yr Bond 39.37 +0.26 (+0.66%)

NYSE Volume 1,308,076,000
Nasdaq Volume 1,299,149,000

2:30PM: Market continues to deteriorate following the premature release of the White House's economic report... Within the last 30 minutes, reports have surfaced that show the White House has lowered its 2005 real GDP forecast to 3.4%, from 3.5% six months ago, and estimates nonfarm payroll growth for 2005 will average 178K a month from 175K forecasted last month... The White House also believes that the 10-year note will average 4.3% for 2005...

While the forecasts have had little impact on bonds, since the forecasts come in-line with other banks and economists expectations, stocks have relinquished all of their gains... NYSE Adv/Dec 1494/1691, Nasdaq Adv/Dec 1220/1701

[ozymandius]

59. and on...

3:21
Dow 10,478.04 -5.03 (-0.05%)
Nasdaq 2,060.65 -6.51 (-0.31%)
S&P 500 1,195.04 -2.22 (-0.19%)
10-Yr Bond 39.40 +0.29 (+0.74%)
NYSE Volume 1,384,953,000
Nasdaq Volume 1,369,960,000

3:00PM: Indices continue to languish near session lows as market internals now suggest a negative tone to trading... As reflected in the A/D line, decliners on the NYSE hold a 17 to 14 advantage over advancers while declining issues on the Nasdaq hold a 17 to 12 edge over advancing issues... The ratio of down to up volume, however, holds more of a mixed bias at both the Big Board and the Composite...

Even though the Dow and S&P have found some support near key technicals, the lack of conviction on the part of buyers amid slightly lower volume questions whether or not initial resistance levels of 10507 and 1200, respectively, can again be breached... NYSE Adv/Dec 1480/1708, Nasdaq Adv/Dec 1207/1732

[ozymandius]

61. as we approach the close

3:51
Dow 10,487.57 +4.50 (+0.04%)
Nasdaq 2,062.39 -4.77 (-0.23%)
S&P 500 1,195.68 -1.58 (-0.13%)
10-Yr Bond 39.40 +0.29 (+0.74%)
NYSE Volume 1,550,424,000
Nasdaq Volume 1,511,694,000

3:30PM: Equities continue to trade in negative territory, taking a bearish cue from a sell-off in bonds... The benchmark 10-year note has recently closed near session lows, off 9 ticks to yield 3.93%, amid high levels of new corporate supply hitting the market... Nervousness ahead of Fed Chairman Alan Greenspan's testimony before the Joint Economic Committee tomorrow (10:00 ET) and the 8:30 ET release of this week's only piece of potentially market-moving economic data - initial claims (consensus 335K) - has also weighed on Treasurys going into the close... NYSE Adv/Dec 1350/1878, Nasdaq Adv/Dec 1180/1786

[ozymandius]

62. final numbers and blather

Dow 10,476.86 -6.21 (-0.06%)
Nasdaq 2,060.18 -6.98 (-0.34%)
S&P 500 1,194.67 -2.59 (-0.22%)
10-Yr Bond 39.40 +0.29 (+0.74%)

NYSE Volume 1,692,438,000
Nasdaq Volume 1,631,392,000

Close: The market closed in similar fashion to yesterday's lackluster action, as late-day consolidation efforts, spurred this time by economic uncertainty ahead of Fed Chairman Greenspan's testimony tomorrow, overshadowed an upbeat outlook from Texas Instruments... Last night, Texas Instruments (TXN 27.90 +0.62) raised its Q2 EPS guidance to $0.27-0.30 (from $0.25-0.29) and tightened its revenue forecasts to $3.12-3.24 bln (from $3.0-3.24 bln), citing increased demand for a broad range of its chips sets...

The news improved overall sentiment early on after the market failed a day earlier to retain a rally ignited after Greenspan said a flattening yield curve does not automatically mean what it has meant in the past (i.e. economic weakness)... However, nervousness related to forthcoming remarks from Greenspan before the Joint Economic Committee (10:00 ET) about inflation trends and the appropriate course of monetary policy kept buyers on the sidelines into the close, as six out of ten economic sectors closed in negative territory...

Also weighing on sentiment and acting as a catalyst behind the late-day selling efforts was the premature release of a White House economic report, which showed a reduced 2005 real GDP forecast of 3.4%, versus previous forecasts of 3.5% (six months ago), and an increased inflation estimate of 2.9%... Meanwhile, Health Care paced the way lower, due to weakness Drug, HMOs and Biotech... With regard to the latter, Biogen Idec (BIIB 33.35 -1.72) lost 5.0% and closed near 1 1/2-year lows after Bear Stearns cited a potential decline in Biogen's long-term EPS growth from 15% to 13% upon discovering that Biogen may no longer have exclusive Avonex patent protection in Europe...