STOCK MARKET WATCH, Monday 31 January

[ozymandius]

Monday January 31, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 354 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 51 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 105 DAYS
DAYS SINCE ENRON COLLAPSE = 1166
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

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AT THE CLOSING BELL ON January 27, 2005

Dow... 10,427.20 -40.20 (-0.38%)
Nasdaq... 2,035.83 -11.32 (-0.55%)
S&P 500... 1,171.36 -3.19 (-0.27%)
10-Yr Bond... 4.14% -0.07 (-1.64%)
Gold future... 428.10 -0.30 (-0.07%)





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

---

[54anickel]

1. Good Morning Ozy! Good to see you again this morning. Hope

you've licked those pesky features.

[ozymandius]

30. Good morning 54anickel.

It's good to be back in the swing of things. I updated some software. We'll see if this sticks.

Thank you for your help.

Ozy :hi:

[54anickel]

34. Np problem, and glad to see you drop by. Coffee?

:donut:

[54anickel]

2. Worker Salaries Losing to Inflation

http://biz.yahoo.com/rb/050130/economy_wages_1.html

snip>

Just as Americans have begun receiving hefty statements for their holiday purchases in the mail, the government reported on Friday that wages rose a meager an 2.5 percent over the past year -- the smallest increase on record.

Stacked against a 3.3 percent overall increase in prices for the year, the data paints an ugly picture of debt-burdened, cash-strapped American consumers struggling to make ends meet.

Overall employee compensation is actually climbing considerably, but the bulk of the increase comes from sky-high health care costs.

"The cost of hiring workers is rising but the wage income of workers is not keeping up with inflation," said Steven Wood, chief economist at Insight Economics. "As workers become more expensive, companies will hire fewer of them."

big snip>

But apparently, say analysts, this windfall has failed to trickle down to most of the middle-class, not to mention poor Americans.

"You just have to look at corporate profits to see where the benefits of improved growth have flowed -- straight through to the business bottom line," said Nigel Gault, U.S. economist at Global Insight.

more...

[RawMaterials]

28. Personal income in record climb

WASHINGTON (Reuters) - U.S. consumer spending advanced solidly in December as personalincome shot up a record 3.7 percent on a big dividend payout by software giant Microsoft Corp., a government report showed Monday.

The Commerce Department said personal income rose 0.6 percent in December when the impact of Microsoft's dividend payment was stripped out.

Consumer spending climbed 0.8 percent in December and was up 0.9 percent when factoring in a small drop in prices. The department said the price index for consumer spending, a measure of inflation, declined 0.1 percent and was unchanged when volatile food and energy prices were stripped out.

The department estimated roughly three-quarters of a $32 billion dividend payment Microsoft made to shareholders in early December would count as personal income. In its report Monday, it said that payment gave personal income a $24.8 billion boost

http://money.cnn.com/2005/01/31/news/economy/personal_income.reut/index.htm

:scared: cough :puke:

[54anickel]

33. Heh-heh, amazing contrast between those 2 article...n/t

[durablend]

51. Everyone knows nobody eats, drives, or heat their house...

But they buys those flat screen TVs and DVD players in DROVES! :puke:

[stevebreeze]

78. not a very accurate headline...should read ..."if you're Bill Gates"

If you have a far more typical amount of Microsoft stock you're income went down...again!

[RawMaterials]

37. so trickle down doesn't work :)

But apparently, say analysts, this windfall has failed to trickle down to most of the middle-class, not to mention poor Americans.

:sarcasm:

[54anickel]

3. Dollar rises on Iraqi, China view

LONDON (MarketWatch) -- The dollar gained against the yen and the euro on Monday in London after better-than-expected turnout for Iraqi voters in that country's first democratic election in about 50 years and after comments suggesting a revaluation of China's currency is still in the distance. :crazy:

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B3EED1D81%2DC045%2D4837%2DB776%2D5DAA358D22AD%7D

Iraqi elections officials reported that perhaps 57 percent of eligible voters made it to the polling places. While there were reports of terror attacks, the number of incidents was lower than expected.

The news that so many eligible Iraqis voted was a little surprising, helping provide support to the dollar, said Ryohei Muramatsu, manager of group treasury Asia at Commerzbank AG in Tokyo.

"But the reduction in geopolitical risk in Iraq has been mostly factored into the market, so I don't expect it to provide much trading incentive," he added.

The dollar also got support after Huang Ju, executive vice-premier of China, said Saturday at the World Economic Forum in Davos, Switzerland, that Beijing needed to reform its banking sector and work on opening its markets before it changed its current policy of pegging the yuan to the dollar at a fixed rate.

"We have no specific timetable" to change foreign exchange policy, Huang told the conference. See full story.

more...

[54anickel]

5. (Meanwhile) China says in no rush to reform forex regime

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7473329&pageNumber=0

DAVOS, Switzerland (Reuters) - China told the world on Saturday it will not rush to reform its pegged exchange rate regime, dashing hopes for a breakthrough on currency issues at next week's Group of Seven finance ministers' meeting.

Senior officials attending the World Economic Forum said currency reform steps would come eventually but the world would have to wait for China to take them at its own, gradual pace.

For over a year now, top industrial nations have been urging China to let its yuan currency strengthen to help balance global growth and resolve a massive U.S. current account deficit.

"The world economic imbalance is attributable to many reasons, but not the exchange rate," Li Ruogu, China's deputy central bank governor, told the World Economic Forum. "China has not the capacity to address that so-called imbalance. We are not willing to do it, and we are not able to do it."

more...

[VegasWolf]

54. Yes, and all those people that bought the renminbi thinking that

bush could influence china to unpeg its currency.
Why should china listen to bush, half of america doesn't.

[RawMaterials]

4. Good morning Oz glad to see your computer is up and running

Missed you on Friday

[ozymandius]

41. Thank you RawMaterials.

I greatly appreciate your effort to start the thread. Thank you for being a great partner in enlivening the discourse here.

Ozy :hi:

[RawMaterials]

6. 7:59AM Commodity Update

Oil futures fell in electronic overnight trading (46.33, -0.85) after the Iraqi elections went off without further disruption to oil supplies. Also, OPEC has agreed to leave output quotas unchanged at 27M barrels a day and indicated it may raise production in second quarter...Gold (safe haven metal) is lower this morning (427.70, -1.10) following the Iraqi elections...Copper pushed lower overnight as inventories rose for the third consecutive session and the dollar strengthened against other major currencies...EU plans to ban the export of mercury by 2011

http://finance.yahoo.com/mo

lets see what the Iraq elections do to the markets should be interesting.

[54anickel]

9. Good Morning RawMaterials

The reports on the Iraqi elections have been and will be "interesting". First it was a 72% turnout, then dropped to 60 and now in that earlier post on the dollar rising it was 57% - but it all went off "splendedly" according to the Murikan MSM. :puke:

How do you call picking from 7000 names on a ballot an election?

[RawMaterials]

12. Morning 54anickel

not to mention that 1/3 of the country was to scared to go to the poles.
interesting that the 1/3 used to be the ruling party.

so lets see it was supposedly 55-70 % of 2/3 or was it 55-70% of the whole country :shrug:

[54anickel]

13. I caught a picture on the news of a long line at a poll and they

tried to state that was representative of most of the polls. I suppose there would be a bit of a wait while the guy in front of you looks over 7000 names! Somehow I think the lines were a lot shorter in the areas getting "blown up". Oh, but never mind those "few" areas that had problems - Democracy is on the march! Ain't it grand? Let freedom reign.

[RawMaterials]

16. MSM showed one polling location on Sunday

that the poll workers didn't even show up for. there just were empty box's and ballets.

It reminded me of our elections were there weren't enough voting machines in the intercity.

[54anickel]

19. I can barely stomach reading a lot of the reports in LBN on it. We all

know this "The elections went well" is nothing but BS. I just get so angry reading those reports from the MSM. :grr:

[54anickel]

7. US tax amnesty could rake in $100bn

http://news.ft.com/cms/s/0ebca2f4-7304-11d9-86a0-00000e2511c8.html

A tax amnesty for multinationals is expected to bring approximately $100bn of foreign exchange earnings into the US over the next few months after a stronger-than-expected take-up by companies last week.

The flow of money, triggered by tax breaks in the controversial American Jobs Creation Act, is so large that many currency strategists expect it to give noticeable support to the dollar.

Last week, four pharmaceuticals companies Johnson & Johnson, Eli Lilly, Schering-Plough and Bristol-Myers Squibb committed themselves to repatriating $37.4bn. Pfizer said it hoped to bring back a further $37.6bn held offshore.

This represents more half of the $135bn in overseas earnings officials estimated would be repatriated across the US economy when the legislation was passed in October.

more...

[dbt]

8. Periodic Props to this thread!

On any given day, it is the most important one on DU. Now, didn't I see a day last week where Ozymandius could not start it and somebody else jumped in to do so?

That's what I'm talkin' about! Thanks to everyone who joins here to tell us all what's going on with The Money.

:bounce:
dbt

[Kukesa]

15. Add my thanks, too.

I'm not financially wise enough to post on this thread but I read it every day and truly appreciate your comments and insight.

I'm living on a small pension and Social Security and what's left of my 401K is dwindling. I used to read Motley Fool, but since that site has turned into one big advertisement, I come here.

And, besides, I BELIEVE what all of you have to say.

Many, many thanks.

[54anickel]

18. Motley Fool has turned into a Street tool! Then again, maybe they

always were but we just didn't notice it as much back in the "good old days". :evilgrin:

Thanks for stopping by. :hi:

[54anickel]

17. Thank you, and thanks to RawMaterials for picking up the slack. We

are a bit short of coverage with UpInArms out for a couple of weeks, and Julie busy with the revolution in MI. I had a rough night Thursday and overslept. Found Ozy was still having issues with Windblows features. While I was putting together the post, RawMaterials posted a start.

Thanks to the mods for combining the two threads on Friday as well.

[54anickel]

10. Haitong, 2 Other China Brokerages Unveil $800 Mln of Losses

http://www.bloomberg.com/apps/news?pid=10000080&sid=atInNeLTXCI0&refer=asia

Jan. 31 (Bloomberg) -- Haitong Securities Co., Shenyin Wanguo Securities Co. and Guotai Junan Securities Co. reported accumulated losses totaling more than $800 million after China forced the brokerage industry to come clean about its financial condition.

The deficits, disclosed in reports filed with China's interbank market that were seen by Bloomberg News, follow the introduction of new accounting rules that require brokerages to recognize past trading losses and declines in the value of stock investments.

The reports by three of China's biggest brokerages suggest the industry's losses from a four-year stock market slump have been understated. China's about 130 securities companies lost money for the past three years running as the benchmark Shanghai composite index fell to little more than half its 2000 high, according to the Shanghai stock exchange.

``The problems of China's securities industry are much worse than their financial reports show,'' said Wu Chuanyan, a banking analyst at Everbright Securities Co. in Shanghai. ``There are many smaller companies that do not publish reports. And the whole industry is unprofitable.''

more...

[RawMaterials]

11. The conservative revolution

Commentary: World is moving from the left to the center

NEW YORK (MarketWatch) -- Much of the world is moving to economic and political freedom, and away from oppressive government controls. You might call what is happening a conservative revolution.
The revolution reaches far beyond politics and into the economy and society at large. And the upheaval is in its infancy. There is much more to come. It is inexorable and it is bound, at some point, to sweep up Iraq. In many countries, voters in just the last few years have changed their governments and moved their economies from the left more toward the center. Voters have done so in nations as disparate as Ukraine and Ireland, Israel and Norway -- not to mention Russia, Poland, Romania, the Baltic States and other formerly communist nations.

snip..

A conservative revolution is also engulfing America's young adults. Many of them grew up in a time of recession, an era of declining expectations and scary unemployment. Consequently, they value a job and put a premium on careers. They are willing to work longer and harder than the generation just a few years older than they are.

One indicator: American workers put in an average 1,792 hours a year on the job. By contrast, the average German worker puts in only 1,466 hours, the average French worker 1,453.

In this nation's universities, young people no longer expect to rise automatically to higher stations in life than their parents or older siblings. Therefore, every freshman class is more conservative,

What will power the nation's free economy in this revolutionary era?

* First, inflation will rise a bit but shows no signs of running away. None of inflation's historic causes -- oil prices, food prices, wages, interest rates -- appear ready to explode. The continuation of only moderate inflation will enhance the consumer's confidence -- and his or her spending power. Just last week the Conference Board reported that consumer confidence in January rose to a six-month high.
* Second, consumer purchasing power is also expanding because employment is heading up The U.S. consumer on average was about 5.15 percent wealthier in 2004 -- in terms of net worth -- than he or she was twelve months earlier.
* Third, except for some overbuilding of office towers and private homes in a few areas, there are no dangerous excesses in the economy. We are not overbuying and over-stockpiling in such a way as to lead to a shattering plunge tomorrow.
* Finally, because inflation is moderate and there are no excesses of demand, the Federal Reserve Board can keep a fairly loose rein on the money supply, so interest rates should go up very little in the near future. That, in turn, will not only stimulate business investment and help the housing market, but should also give a lift to the corporate profits and the stock market.

move along don't notice inflation, its not really going up.
look for example you can buy a new better car for the same price as last year and that new computer is faster. just don't pay attention to gas, food ,and the price to buy a new house. ;)



http://www.marketwatch.com/news/story.asp?guid=%7B39297620%2D5FFC%2D42B4%2DB337%2DF8FB3A40C4B4%7D&siteid=mktw&dist=

[54anickel]

22. Sheesh RM, that entire piece reads like some sort of propaganda!

I had to go see who this guy is:

Marshall Loeb has worked as Managing Editor of Fortune and Money magazines and as Economics Editor of Time magazine. He has won every major award in economic and financial journalism. His "You Inc" column runs biweekly in Fortune, his "Your Money" column is syndicated weekly to newspapers across the U.S. and his "Your Dollars" programs are broadcast daily on the CBS radio network. He is also a frequent public speaker and television commentator. His daily personal finance reports are on Compuserve
.........


Marshall Loeb is a personal finance pioneer and has been managing editor of two of the most successful magazines in history, Fortune and Money.
Under Loeb's leadership Money became the fastest growing magazine in America and Fortune was the first business magazine to win the National Magazine Award for General Excellence.

Most recently, he was editor of the Columbia Journalism Review and has been cited by the New York Times as "one of the most visible and influential editors in the magazine industry."

Loeb is now a columnist on Marketwatch.com and a commentator on CBS Radio and the television show Marketing Weekend.

[RawMaterials]

25. The whole peace fits with your tag line

"The corporation cannot be ethical, its only responsibility is to make a profit"

every thing "out there" these days has so much spin and bias that sometimes makes my head hurt. I think the key is to just pick up small peaces here and there. also IMHO I am starting to think maybe i should just do the opposite of what ever you here is a good thing to do(investment wise). I just don't really know anymore these days.

[54anickel]

27. I hear ya, it is scary. Seems there really is just no place to go if you

want a decent return with low risk. But then again, maybe that's part of the master plan. Push folks into riskier assets as they try to keep their heads above water.

[RawMaterials]

29. The great fleecing

push everyone into the risk then pull out right before the * hits the fan, your rich everyone else is stuck with nothing.

I really feel that every big thing we have seen in the last 15 year or so was just a test run for the great fleecing. ex. Waco was the test to see if anyone would care about using the military on citizens, enron was a test to see if they could Privatize SS then screw everyone's retirement.
the list goes on an on.

[54anickel]

35. You're scaring me now...n/t

[54anickel]

14. Energy Costs Trickle Through World Economy

http://www.nytimes.com/aponline/business/AP-Energy-Global-Economy.html?oref=login&oref=login

There's nothing like a trip to the gas station to raise one's awareness of energy prices. Yet it doesn't require filling up the tank -- or opening a utility bill, for that matter -- to feel the bite of rising fuel costs.

Carpet, fertilizer, paint, polyester and plastic toys, all of which are petroleum-based, are more expensive to make, wrap and ship these days. As a result, companies around the globe are struggling and a growing number are charging more for well-known products, including Goodyear tires, Scotts fertilizer and Kenmore refrigerators.

So far the price increases have been modest, and economists say there is little threat of inflation or other serious damage to the economic recovery. But if energy costs stay high, consumers might have to dig even deeper for home furnishings, auto parts, agriculture products and more.

snip>

In the meantime, the evidence of high energy costs trickling through the economy only grew last week.

snip>

Steven Wieting, a senior economist at Citigroup in New York, said a major reason why consumer prices haven't risen sharply in the United States is that as people spend more on energy-intensive products and services they naturally rein in spending in other areas.

more... too much to try and snip

[54anickel]

20. Today's reports:

Date: Time(ET): Statistic For: Actual: Briefing: Forecast: Market Expects: Prior: Revised From
Jan 31; 8:30 AM; Personal Income Dec; 3.7%; 3.0%; 3.3%; 0.4%; 0.3%
Jan 31; 8:30 AM; Personal Spending Dec; 0.8%; 0.8%; 0.9%; 0.4%; 0.2%
Jan 31; 10:00 AM; Chicago PMI Jan; -; 58.0; 59.0; 61.2; -
Jan 31; 10:00 AM; New Home Sales Dec; -; 1225K; 1200K; 1125K; -

[54anickel]

61. Chicago PMI rises to 62.4 in Jan

http://money.cnn.com/2005/01/31/news/economy/chicago_pmi.reut/

CHICAGO (Reuters) - Business activity in the Midwest expanded in January for the 21st straight month and at a faster rate than expected, a report showed Monday.

The National Association of Purchasing Management-Chicago business barometer rose to 62.4 from a revised 61.9 in December. Economists had forecast the index at 60.0. A reading above 50 indicates expansion.

The employment component of the index rose to 52.8 from a revised 51.1 in December. Prices paid fell to 76.5 from 84.4 and new orders rose to 65.8 from a revised 64.9.

[54anickel]

62. U.S. December Personal Spending Rises 0.8%; Incomes Jump 3.7%

http://www.bloomberg.com/apps/news?pid=10000103&sid=a5BvV4x7aI9o&refer=us

Jan. 31 (Bloomberg) -- U.S. personal spending accelerated in December and incomes jumped the most on record as Microsoft Corp. made a one-time $32.6 billion dividend payout, a government report showed. A measure of prices tied to spending fell for the first time in more than a year.

The 0.8 percent increase in purchases followed a 0.4 percent gain in November, the Commerce Department reported today in Washington. Incomes surged 3.7 percent as Microsoft's payment was magnified 12-fold by the government's calculations. Excluding the payout, incomes rose 0.6 percent, the government said.

Wages and salaries grew as employment improved, propelling consumer spending in the last six months of 2004 to the fastest in almost five years. The growing economy will probably prompt Federal Reserve policy makers to raise their target interest rate this week and in coming months to limit inflation, according to economists such as Sherry Cooper.

``The ongoing strength of domestic demand growth is the stuff of further Fed tightening,'' said Cooper, chief economist at BMO Nesbitt Burns in Toronto, before the report. ``They still don't have to deviate from the measured road, as the inflation readings are OK for now.''

snip>

Economists forecast spending to rise 0.8 percent after a previously reported 0.2 percent November increase, according to the median of 62 estimates in a Bloomberg News survey. Incomes were forecast to rise 3.4 percent following a 0.3 percent increase. The rise in incomes was the most since the government began keeping records in 1959. :eyes: Nice spin

more...

[54anickel]

64. New-Home Sales Rise Less Than Expected

http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20050131-000524-1008

WASHINGTON -- Demand for new homes inched up in December in a very small, surprisingly weak climb that followed a dramatic sales decline the prior month.

New single-family home sales increased a measly 0.1% to a seasonally adjusted annual rate of 1.098 million, the Commerce Department said Monday.

November home sales fell 13.1% as the government lowered the annual rate to 1.097 million from an earlier estimated 1.125 million.

Wall Street expected a bigger increase for December. In a Dow Jones Newswires-CNBC survey, 10 economists said sales would rise 6.7% to a 1.2 million annual rate from a projected revised rate of 1.217 million in November.

snip>

The inventory of homes on the market rose in December to a 4.8 months' supply from November's 4.7 months' supply.

more...

[RawMaterials]

21. US Congressional Budget Office: Gold to keep rising!

...a bit gold buggy at the end...

Well, the CBO didn't say that exactly - but it might as well have.

On January 25, 2005, the CBO released a short, less than 200 word, news item designed to calm a worrying public. In essence, it said that the decline of the dollar over the next two years will be an orderly one - a view that has since been reiterated by other US officials speaking from the World Economic Forum in Davos, Switzerland.

Phew, am I relieved!

snip..

We all know that the falling dollar means rising gold. Apparently, that's okay with the Washington crowd these days, because it's just one price to be paid for a continuing rise in US equities - or so they hope. Gold control? Who cares! That's only an issue when a higher dollar is needed, and that is now a policy of the (Clinton-era) past.

If anyone ever wants more solid proof that Bush wants - no, needs - a lower dollar, all he needs to do is watch how adroitly the Bushites have been falling onto their knees and gone begging to China to please, please, pretty-please, let their yuan rise against the dollar to remove that "unfair" trade advantage. All that is couched in terms of "tough talk" of course, lest one lose face with the electorate, but what it amounts to is nonetheless nothing more than begging.
Bush is in no position to be ordering the Chinese around.

China, of course, is in no hurry to comply. The communist regime first needs to make sure that the EU can swallow a sufficiently large chunk of its future exports before it can afford to do so. But whenever China does revalue (and eventually it will, gradually or not), the dollar will undoubtedly fall further than it already has.

For how long will they let it rise? For however long it takes the Chinese to let their currency slowly adjust to world-markets so it can "float" like a piece of you-know-what in muddy water right along the other floating pieces of the same matter down the sewer line of monetary history. Uh-hum. Sorry. I seem to be digressing a lot, lately.
snip..
We can now now introduce another aspect into the equation. It is very possible that during this best-case scenario ("controlled" dollar-drop) the Dow suddenly takes a plunge because the dollar isn't falling fast enough to sustain continued foreign interest in bottom-feeding on US equities. We have seen that even during times of dollar-stabilization the Dow tends to drift lower of late, and that it rises only during precipitous dollar-slides. in that case, we may end up with a situation where more and more domestic and foreign investors could quite possibly remember that saving money instead of throwing it into the bottomless stock-pit might be a good idea after all.

And where would that saved money go? Into bank savings accounts or CDs that pay out zip above inflation for one year deposits? Or maybe into the top-runner CD that guarantees you a paltry, locked-in 5.75% over twenty years - in a rising inflation environment? Or would you think that most of that money would go into real assets, like uhhm, say ... maybe ... gold?

http://www.321gold.com/editorials/wallenwein/wallenwein013105.html

[RawMaterials]

32. What about Gold?

Question -- What about gold in this environment of "gradual inflation?"

Answer -- I never worry about the price of gold. Gold is real money, and it always will be, despite the efforts of the central banks to have you think otherwise. Honestly, I worry about a lot of things, but I don't worry about gold. How about gold stocks? Somewhere ahead gold is going to take off to the upside, and that's where the gold stocks will make up for lost time. Very frankly, I don't think the cycles or Elliott or trendlines are going to tell us when gold is ready to make its move.

My attitude is that gold made its low in 2002 and recently rose to a 16-year high. You decide how much gold you're willing to hold, and then you forget it. Because inflation is wanted and needed in the US, the long-term trend of the dollar is down. The dollar's decline will be erratic, it will probably take place over years, not weeks or months. Gold can be likened to a Picasso painting or an autographed letter from George Washington or a flawless D-color 10-carat diamond. You just hold it. You don't try to get a quote on it every week. You consider it the safest part of your wealth, and that's it. What do you do with your gold? You leave it to your spouse or your kids or your best friend.

Gold is true wealth, discovered by expensive methods, brought out of the ground by sweat and capital. Gold can't be manufactured out of thin air by the Fed, and maybe that's the major difference. Nah, I don't worry about gold, if I have to worry, I worry about my dollar denominated assets. Now there's something that is legitimately worth worrying about.

Remember, when this bear market started I wrote that "In a primary bear market, everyone loses, and the winner is the one who loses the least." I'll stand by that statement, and this bear market has hardly begun.

more follows for subscribers . . .

http://www.321gold.com/editorials/russell/russell013105.html

[54anickel]

36. Guess I can't argue with Russell on that. Could go up, could go down

if you bought it with the mindset of a day trader, you'll probably be disappointed. I think of it more like those "collectable" things people buy, and I sure think it might be a better collectible than those "Beanie Babies" - but that's just my personal preference. B-)

[VegasWolf]

56. LOL. The short traders seem to be doing pretty well! Course

in the long run they suck the money out of the system.

[54anickel]

59. Yeah, they are doing very well in their US$ based trades. Gold's not

really moving much against other currencies, lots of speculation and money to be made betting against the buck, though that seems to be leveling off a bit - for now anyway.

[54anickel]

47. Gold bugs need a dose of humility (Equal time)

http://www.321gold.com/editorials/bainerman/bainerman013105.html

Judging from the huge responses from the gold bug community to the my article published on January 9th on 321gold, 110 in total and more than 75 in the first 24 hours alone- I feel that I may have released a valve which desperately needs an outlet- and viewpoints that are not the standard pro-gold arguments- from someone that doesn't publish a newsletter or speak at precious metals investment conferences.

First- despite what so many of the people who took the time to respond to my article wrote (Bob, believe me, your site is very well read and must reach every single gold bug from across every time zone) I am not anti-gold- but merely was presenting my conclusions after being a participant this in this investment sector.

I wasn't at all interested in presenting an "anti-gold" viewpoint- but that is what nearly everyone thought I was doing. The knee-jerk reaction to my arguments taught me a lot about how far gold bugs will go to buy their own product. Only about 10% of the responses didn't try and tell me "your wrong" as the first sentence or questioned my motives. Instead of hearing my arguments first- they nearly all assumed I was doing something terribly wrong (i.e., being down on gold) and that it was their duty to inform me of my error.

Allow me to present my observations after going over the more than 100 emails I received in response to my essay:

more...

[54anickel]

23. The Hollow Confidence of Davos (Roach)

http://www.morganstanley.com/GEFdata/digests/20050128-fri.html#anchor0

The World Economic Forum in Davos always offers ample food for thought to those of us pondering the macro landscape. This year is no exception. While it’s understandably a Euro-centric crowd, all the various constituencies of globalization are well represented. The US is a notable outlier in 2005. The Bush Administration -- whose delegations in the last two years were headed by Secretary of State Colin Powell and Vice President Dick Cheney -- is almost nowhere to be seen. That didn’t sit too well with this crowd of internationalists, especially those attending the numerous sessions on American leadership.

I find the World Economic Forum especially helpful because it deepens my understanding of the views of the global consensus that are embedded in asset markets. There were two broad areas of the debate that got my attention this year -- the first being what I would call the Davos strain of global rebalancing. The consensus at this gathering was far more sympathetic to the perils of ever-mounting global imbalances than groups I normally encounter. The notion of a newly symbiotic world -- America consumes and the rest of the world finances it -- didn’t cut it in this crowd. Concerns over ever-mounting US current account deficits, saving shortfalls, budget deficits, and household sector debt were not taken lightly. But while there was agreement on the broad outlines of the problem, there was little conviction on how these imbalances might get resolved.

Most thought that a sharply weaker dollar held the key to the global adjustment process. I argued this perception needed to be qualified -- that dollar depreciation was a necessary but not sufficient condition for global rebalancing (see my 14 January dispatch, “The Dollar Can’t Do It Alone”). With America’s import volumes currently running more than 50% larger than exports, I view the trade gap as, first and foremost, a problem of excess domestic demand. And barring a credible program of deficit reduction from Washington -- unfortunately, an entirely reasonable assumption -- the only way to temper America’s consumption binge, in my view, is through higher real interest rates. The combination of a weaker dollar and higher real rates fits the global rebalancing script to a tee. The currency realignment changes the world’s relative price structure -- precisely what macro prescribes for a lopsided world. But the risk is it only sparks a shift in the mix between foreign and domestic production that leaves US aggregate demand largely unchanged. Only by raising real interest rates will American consumers rein in the excesses of asset-dependent demand.

The Davos crowd pushed back on this key point. Higher real interest rates were thought to pose too much risk to rate-sensitive consumers. This would be very bad for a growth-conscious world. Most felt that America’s central bank didn’t have the stomach for this type of painful cure. In fact, the Fed was widely portrayed as likely to arrest its tightening campaign at the slightest sign of weakness in the US economy. Martin Wolf of the Financial Times argued that the question was not if the US monetary authorities should raise short-term real interest rates but whether the Fed can continue to raise rates. Fair point.

To me, this is where the rubber meets the road on the rebalancing story. It boils down to the critical tradeoff between growth and asset bubbles. A central bank that is fearful of setting its policy rate at the appropriate equilibrium level sets up a classic moral hazard dilemma -- it convinces the investment community that the asset-dependent American consumer has become “too big to fail.” The implication is all too obvious -- a Fed that then perpetuates a regime of subnormal real interest rates. The excess liquidity that such a policy stance creates then provides a powerful incentive for investors and speculators to borrow at the short end of the yield curve and invest in longer duration assets. This, in effect, creates artificial demand for long-dated securities -- compressing yields on riskless assets and pushing the buying into riskier asset classes.

more...

[54anickel]

24. An Unprepared World (Roach again - busy guy these days)

http://www.morganstanley.com/GEFdata/digests/20050131-mon.html#anchor0

Globalization is a wonderful subject to debate. Basically, that’s all I’ve been doing for most of the past two weeks — first at our own MacroVision exercise and more recently at the World Economic Forum in Davos. In many respects, these were two of the most intellectually enriching weeks I have spent in a long time. Yet as I now decompress and ponder the experience, I am left with a nagging sense of concern. As I see it, investors are largely unprepared for some big changes coming in the global landscape in 2005.

This potential disconnect is most evident in the debate over the US and China — currently the twin engines of global growth. America’s imbalances are widely recognized as both worrisome and unsustainable. There is a minority that believes in the new paradigm of the fungible global saving pool — that the allocation of capital, consumption and production now flows seamlessly to its destinations of highest return or comparative advantage. In its simplest sense that translates into a world where China produces, America consumes, and the rest of the world gladly pays the bill and goes along for the ride. But with global imbalances now expanding at an accelerating rate, even advocates of this point of view are starting to have second thoughts. America’s deficits are now being framed as a problem that will come to a head sooner or later. The hope of the global consensus is that it will be later.

As I have noted ad nauseum, macro is not particularly good on these issues of timing — in making the distinction between the proverbial sooner or later. But my suspicion is that 2005 will be a critical year in being able to make that distinction. I rest my case mainly on the likely behavior of the Federal Reserve. At present, the US central bank is running an utterly absurd monetary policy of maintaining a “zero” real short-term interest rate — a nominal federal funds rate of 2.25% that is basically equal to the core CPI inflation rate. That will undoubtedly change this week, but not by much. When the dust settles after what is likely to be yet another “measured” tightening of 25 basis points, the real short-term interest rate will only be fractionally in positive territory. This is well below what most believe to be a “neutral” position for the Fed’s key policy lever — somewhere in the 2% zone in real terms. Which, of course, says there is a good deal more tightening to come if the Fed is serious about containing the inflationary and speculative risks it cited in the minutes of the December FOMC meeting.

This could be a recipe for a flash point that has a lot to say about the “sooner or later” aspect of global rebalancing. Last year’s Fed tightening was inconsequential — all it did was lift short-term real interest rates from negative territory to zero. This year’s Fed tightening is likely to be a very different animal — taking the policy rate from zero toward a large enough positive number that deals with the very risks the Fed, itself, is now citing. For financial markets, the zero real federal funds rate is the candy of the carry trade — allowing investors and speculators to borrow short and pocket the spread anywhere else on the yield curve. In 2005, the Fed is going to take the candy away. This points to a likely unwinding of a multitude of carry trades that have driven spreads on risky assets to unbelievably low levels. Those include high-yield and emerging market debt, investment-grade debt, and the “refi trade” that has underpinned consumer equity extraction from increasingly overvalued homes.

This points to a critical moment of reckoning for the US economy and for a US-centric global economy....

more...

[54anickel]

26. Futures blather - put on your shades! The bulls are getting set for a run

9:00AM: S&P futures vs fair value: +7.5. Nasdaq futures vs fair value: +14.0. Still shaping up to be a higher open for the cash market as investors digest this morning's earnings reports... XOM, VC and MWV have beaten analysts' expectations while WYE, SYY and TSN have missed forecasts... Gains in major European and Asian markets have also added to the upbeat sentiment in pre-market action as has a more than 2.0% decline in crude oil futures to $46.18/bbl (-$1.00)
8:32AM: S&P futures vs fair value: +7.7. Nasdaq futures vs fair value: +14.5. Futures trade holds relatively steady following decent economic data, still suggesting a higher open for the indices... The Commerce Dept. has just released a Dec Personal Income measure of +3.7% (consensus +3.4%) while Personal Spending checked in at +0.8% (consensus +0.9%)

8:00AM: S&P futures vs fair value: +7.1. Nasdaq futures vs fair value: +14.5. Futures market indicating a higher open for the cash market as the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged... A flurry of M&A activity, such as SBC's $16 bln deal for AT&T, LEE's $1.5 bln bid for PTZ and reports suggesting that MET is close to a $12 bln deal for Citigroup's Travelers Life & Annuity Co. (C), have also contributed to the positive bias...

Meanwhile, investors are again sifting through another batch of earnings reports while waiting to get a read on Dec Personal Income (consensus +3.4%) and Spending (consensus +0.9%) at 8:30 ET

6:21AM: FTSE...4865.40...+32.60...+0.7%. DAX...4249.92...+48.11...+1.4%.

6:21AM: S&P futures vs fair value: +6.5. Nasdaq futures vs fair value: +15.5.

6:21AM: Nikkei...11387.59...+67.01...


And from INO:

The March NASDAQ 100 was higher overnight as it extends the short covering rebound off the 62% retracement level crossing at 1487.10 and is breaking out above the 10-day moving average crossing at 1518.20. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible. Closes above the 10-day moving average crossing at 1518.20 are needed to signal that a short-term low has been posted. If March renews this year's decline, the 75% retracement level crossing at 1453.38 is the next downside target. The March NASDAQ 100 was up 11.00 pts. at 1520.50 as of 5:45 AM ET. Overnight action sets the stage for a steady to higher opening by the NASDAQ composite index later this morning.

The March S&P 500 index was higher overnight as it extends last week's short covering rally and is breaking out above the 10-day moving average crossing at 1176.17. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 1181.06 are needed to confirm that a short-term low has been posted. If March renews this year's decline, a test of the 38% retracement level crossing at 1160.65 is the next downside target. The March S&P 500 Index was up 4.30 pts. at 1179 as of 5:47 AM ET. Overnight action sets the stage for a steady to higher opening when the day session begins later this morning.

[54anickel]

31. Dollar Watch

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

Last trade 83.56 Change +0.08 (+0.10%)

Settle 83.48 Settle Time 23:37

Open 83.58 Previous Close 83.48

High 83.84 Low 83.44


USD Edges Higher Ahead of Key Week

At 8:30 AM US December Core Price PCE Index y/y (exp 1.5%, prev 1.5%) Canada November Real GDP (exp 0.2%, prev 0.0%) US December Personal Spending (exp 0.8%, prev 0.2%) US December Personal Income (exp 0.5%, prev 0.3%) At 10:00 AM US January Chicago PMI (exp 59.8, prev 61.9) US December New Home Sales (exp 1.2 mln, prev 1.13 mln)

The dollar edged up slightly higher overnight in quiet trading against the majors ahead of a key week in the currency market. With the Iraqi elections and OPEC meeting completed, traders will focus their attention on the barrage of economic data slated for release this week Some key highlights include US Chicago PMI, due out today at 10:00 AM EST and forecasted to slip to 59.8, down from 61.9, Eurozone and UK manufacturing ISM, and Friday’s January US labor report. Also of importance will be monetary policy announcements from the FOMC and ECB, of which only the Fed is expected to change policy with a 25-bp increase.

Meanwhile, according to the CFTC IMM futures data, speculators continued favoring the dollar against all the major currencies, except for the Aussie amid the hawkish Fed rhetoric and emerging signs of a possible rate hike from the Reserve Bank of Australia. EUR net longs fell for the third straight week, down 38% to 768 contracts, while GBP net longs fell 15% to a 14-week low of 15,990 contracts. CHF net shorts deteriorated 371% to 5,181 contracts, the highest net short level in 4 months. CAD net longs fell 52% to 2,653 contracts, the lowest net longs level since June. JPY net longs fell 88% to 924 contracts, the lowest net long since traders were net short in Oct 2004. The Aussie was the exception as net longs rose 14% to 30,903 contracts up for the 3rd straight week and reflecting the undergoing bullishness in the currency against the greenback and the yen.

Euro Slips Beneath 1.30

The ECB is scheduled to announce the decision from its monetary policy meeting on Thursday. While no policy change is expected, traders will closely scrutinize the subsequent press conference for any change in rhetoric from its previous meeting.

more...


Trade Deficit’s Largest Drag on GDP in 6 years

Advanced estimates of US GDP growth showed a 3.1% rise in Q4 2004, the lowest level since Q1 2003. Overall real GDP growth for 2004 grew 4.4%, the biggest gain since 4.5% 1999.

The swelling trade deficit imposed a notable strain on overall growth, dragging real GDP growth by 1.73%, which is the largest negative contribution since Q2 1998, when GDP was a mere 2.7%. As we have seen in the November trade balance, falling exports joined rising imports as the key culprit in exacerbating the trade deficit, with exports down 3.9% (worst since Q4 02) and imports up 9.1%.

On the positive side, businesses and consumers continued to generate the bulk of the boost in growth with the former increasing investment by 10.3% from 13% in Q3 and the latter raising spending 4.6% from 5.1%. Despite the overall trend in durable goods orders, Q4 demand for capital goods rose 6.7%, compared to 8.8% and 13.9% in Q3 and Q3 respectively.

snip>

As the US trade deficit continues to have a visible impact on growth, some economists are starting to refer to a GDP growth rate-excluding deficit, which we believe is as almost as misleading as the increased reference to inflation excluding energy prices at a time of escalating oil prices. Rising oil has managed to spill over to the price of consumer goods and services as it has done to suppliers’ fuel shipping costs.

The relationship between higher oil and the falling dollar has become rather cogently interconnected that each serves as a catalyst to the other. A falling dollar gives no choice to OPEC but to prevent the dollar value of fuel from falling, while rising oil prices spur currency traders to shun the dollar due to the upward impact on the import bill. The first causality could deteriorate further as the G7 solifies its consent on a revaluation of China’s currency. Although we do not expect China to revalue this year, a Chinese interest rate hike could be seen as another preliminary step towards an eventual revaluation, which would have an upward impact on the freely-floating Asian currency of Japan.

more...


(Oops, edit to add the US$ blather)

The March Dollar was higher overnight and is trading above the 25% retracement level of the May-December decline crossing at 83.71. Multiple closes above the 25% retracement level of the May-December decline crossing at 83.71 are needed to extend the short covering rebound off December's low. Stochastics and the RSI are turning neutral hinting that sideways prices are possible near-term. Closes below the 20- day moving average crossing at 83.19 would confirm that a short-term top has been posted while opening the door for a larger-degree decline. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

The March Euro was slightly higher overnight as it consolidates above the 38% retracement level of the April-December rally crossing at 129.550. Stochastics and the RSI are neutral to bullish signaling that a short-term low might be in or near. However, closes above the 20-day moving average crossing at 131.004 are needed to confirm that a short- term low has been posted. If March renews this month's decline, the 50% retracement level of the April-December rally crossing at 127.290 is the next downside target. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

snip>

The March Canadian Dollar was lower overnight and is working on a possible inside day as it extends last week's decline. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. If March extends last week's decline, the reaction low crossing at.8018 is the next downside target. From a broad perspective March needs to close above .8369 or below .8018 to confirm a breakout of this winter's trading range. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

The March Japanese Yen was slightly lower overnight and is working on a possible inside day as it consolidates some of last Friday's decline. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below the 25% retracement level of last year's rally crossing at .9629 would open the door for a possible test of this month's low crossing at .9549 later this winter. Closes above last Tuesday's high crossing at .9773 would temper the near-term bearish outlook in the market. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

[54anickel]

38. Why the world loves America's deficits

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=39604

At the end of last year, the nation’s financial deficit – what the United States owes the rest of the world, minus what the rest of the world owes the United States – amounted to more than $3 trillion, and it’s still growing. This account deficit means the United States imports more than it exports. To fill the gap – and its budget deficit – it borrows heavily. However, while the trade deficit weakens the dollar, it strengthens the world! For Europe, Japan, China, and even America, as long as the nation’s trade and budget deficits continue to grow and are financed by the world’s central banks, everyone seems to win! Let me explain.

Let’s take The European Central Bank “ECB” as an example. The ECB is the central bank for Europe’s single currency, the euro. Their main task is to maintain the purchasing power of the euro and thus price stability in the euro area. The euro area comprises the 12 European Union countries that have introduced the euro since 1999. The ECB needs to be able to “place their paper” at a reasonable cost when they borrow, the same way any corporation that borrows would have to do. Given the fact that Germany and France are having a horrendous time keeping their budget deficits below three percent, and Greece is regularly “cooking their books” and running six percent budget deficits, you would wonder who in their right mind would be interested in putting their cash in sovereign euro debt.

The current account deficits – the broad gap between exports and imports of goods and services – are mushrooming out of control so much so that on a relative basis, they almost make the euro look good on an absolute basis. In 1999 when the euro was introduced, there was great fear that it might fall apart. Sure, the Europeans hate the weak dollar and the fact that the Americans and Chinese are competing with unfairly low prices. But for now, making the euro a rival to the dollar as a world reserve currency is more important! As the euro is being firmly established, European countries and businesses can borrow at subsidized rates because of the pressure to get out of the dollar. Inflation in Europe is also lower and oil is relatively inexpensive. Euro pride can run high!

snip>

For the future, however, Bush’s wish list, led by the privatization of Social Security and a reform of the tax code, seems to leave little space for policies that would reduce our country’s deficits. Greenspan, himself, in a speech to German bankers recently warned that “foreigners would probably demand higher interest rates and bond yields to hold American debt”. The real question may be “when does the debt become so big that foreigners begin to worry about getting their money back with a reasonable return?” With America taking the short-term economic view, and Asia taking the long-term economic view, the future will prove very interesting.

The losers in all this will surely be those who want to save in dollars, insist on holding investments denominated in dollars, and Americans who would simply like a job working in the most efficient and productive factories in the world, rather than sit back and watch them be built, with the latest technology, half a world away. Unfortunately, since most Americans will continue to use dollars, you can guess who’s going to be the big losers here – just look in the mirror!

more...

[VegasWolf]

58. Yes, but I think the euro was gaining only because people are

losing confidence in the USD, not because the euro was
inherently strong in itself. The Austrailian dollar though
looks like a good place to park american dollars while
bush destroys the economy.

[54anickel]

60. Yes, I think the author alludes to that further in the article where he

states:

So for now, all the major countries seem to “win” (as their central banks print up new money to finance our trade deficit) because (i) the euro is secure; (ii) Japan can finance a seven percent deficit; (iii) China gets everyone’s jobs; (iv) America gets its war paid for; (v) every major country gets financed, and (vi) all the produced goods get sold with that last $600 billion bought by Americans on credit.

Perhaps things will change as inflation bursts out into the open and exposes the fraud of prosperity through printing money. Or, at some point, central banks may discover that not only do they need to finance new U.S. debt being created but all the old debt as well, as the private sector dumps their dollars en masse. This would surely put into question the seemingly limitless dollar asset buying spree of the world’s central banks.

I took his "euro stand tall" comment to be on the facetious side. :shrug:

[54anickel]

39. ECB's Weber-Dollar Risk to Global Outlook

(edit to fix link)
http://www.reuters.com/newsArticle.jhtml?jsessionid=VLEODW3E3ENTUCRBAEZSFFA?type=businessNews&storyID=7474266

DAVOS, Switzerland (Reuters) - The U.S. current account gap is unlikely to narrow this year, putting stress on the U.S. dollar which is risky for the global economy, European Central Bank Governing Council member Axel Weber said on Saturday.

In an interview with Reuters Television on the sidelines of the World Economic Forum, Weber said he did not see a danger that the dollar would tumble by another 15 to 20 percent, as some economists have warned at meetings of global business leaders in the Swiss resort.

"That is a bit outside the usual expectations that we have for exchange rate models," he said.

But Weber said the dollar's weakness -- it has shed some 20 percent of value in trade-weighted terms over the past two years -- clearly is a risk. The United States cannot rely solely on a weakening dollar to correct its current account deficit.

"One of the issues that clearly is there is that the dollar has been a risk for the global economy in the past year," Weber told Reuters.

more...

[54anickel]

40. SBC Agrees to Buy AT&T for $16 Billion in Stock

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

Jan. 31 (Bloomberg) -- SBC Communications Inc., the second- biggest U.S. telephone company, agreed to buy AT&T Corp. for about $16 billion in stock and cash, marking the end of the 130-year-old company that brought phones into American homes.

AT&T investors will receive SBC stock worth $18.41 a share and a special dividend of $1.30 a share, the companies said today in a Business Wire statement. The total of $19.71 a share matches AT&T's Jan. 28 closing price. SBC Chief Executive Officer Edward Whitacre, 63, will be CEO of the combined entity.

snip>

AT&T's market value, which peaked at about $180 billion in 1999, has fallen to about $15.7 billion, as revenue plunged and it sold wireless and cable-television businesses. SBC's market capitalization has grown to $80 billion.

Other Targets

SBC's agreement to buy AT&T may make MCI Inc., AT&T's top rival, a target of another local-phone company such as Verizon Communications Inc., said Jeffrey Kagan, an independent telecommunications analyst in Atlanta. The deal comes amid an increase in telecommunications mergers, including Sprint Corp.'s purchase of Nextel Communications Inc. and Cingular Wireless LLC's acquisition of AT&T Wireless Services Inc.

snip>

Regulatory Hurdles

Approval of the transaction by the Justice Department, Federal Communications Commission and state regulators may take as many as 20 months and require the sale of assets such as AT&T's consumer long-distance business, said Blair Levin, a Washington- based analyst at Legg Mason Wood Walker Inc. and former chief of staff of the FCC.

more...

[54anickel]

42. U.S. stocks rally on flurry of M&A deals, slide in oil

http://biz.yahoo.com/cbsm-top/050131/5935377466149d7b51ab604ecc48c7a8_1.html

NEW YORK (MarketWatch) - U.S. stocks rallied Monday as investors cheered falling oil prices, relatively peaceful Iraqi elections and a flurry of deals including SBC Communications' $16 billion acquisition of AT&T.

snip>

"It's a day with a lot of good news out there," said Peter Cardillo, chief market analyst, at S.W. Bach.

"The Iraqi elections are giving a boost the markets. The fact that OPEC didn't cut production is another positive, sending oil prices lower and we've had a lot of M&A activity."

"I suspect the market could be headed for its best day of the year."

more...

[54anickel]

43. 10:14 numbers and blather

Dow 10,485.79 +58.59 (+0.56%)
Nasdaq 2,057.72 +21.89 (+1.08%)
S&P 500 1,177.98 +6.62 (+0.57%)
10-yr Bond 4.157% +0.019
30-yr Bond 4.614% +0.004
NYSE Volume 300,609,000
Nasdaq Volume 390,787,000

10:00AM: Little change since the last update as virtually every sector continues to attract buyers in the early going... Technology has led the charge to the upside as semiconductor, software, hardware and networking have all surged roughly 1.0%... Also showing strength have been airline, financial, biotech, retail, transportation, materials and utility... Steel (-2.6%) has been under pressure early on after Prudential downgraded the sector while energy, which continues to trade with a tinge of caution in the wake of lower oil prices, has recently bounced around in positive territory...NYSE Adv/Dec 1893/531, Nasdaq Adv/Dec 2019/530
9:40AM: Market shrugs off Friday's weakness and opens sharply higher as the Iraqi elections are declared a success... Equities had been on the defensive much of last week ahead of the elections, but after an encouraging 60-75% voter turnout that passed without a significant increase in violence and disruptions to oil supplies, buyers have returned as stocks have traded higher across the board... Separately, Jan Chicago PMI (consensus 59.0) and Dec New Home Sales (consensus 1200K) will be out at 10:00 ET...

[54anickel]

44. Exxon Mobil Profit Soars to Record as Oil Rallies (Wasn't it Shell last

week?)

http://quote.bloomberg.com/apps/news?pid=10000103&sid=a.MLFleUg8fs&refer=news_index

Jan. 31 (Bloomberg) -- Exxon Mobil Corp., the world's largest publicly traded oil company, said fourth-quarter profit rose 27 percent to a record $8.42 billion as fuel sales increased and unprecedented demand boosted prices.

Net income climbed to $1.30 a share from $6.65 billion, or $1.01 a share, a year earlier, Irving, Texas-based Exxon Mobil said in a statement today. Per-share profit was 23 cents higher than the average analyst estimate in a Thomson Financial survey. Profit for all of 2004 was $25.3 billion, the second-most in history for any U.S. company.

Chief Executive Lee Raymond boosted full-year output for the first time in four years with new projects in Africa and Europe. The gain came as oil prices rose to an all-time high, swelling 2004 sales to $298 billion. That exceeded the gross domestic products of such nations as Norway and Taiwan.

``Exxon has really capitalized on unprecedented commodity pricing by making meaningful gains,'' William Ferer, who manages $1.5 billion at W.H. Reaves & Co. in Jersey City, New Jersey, said before the statement was released.

more...

[54anickel]

45. The Great Dilemma

Article is at the end of the Credit Bubble Bulletin, interesting stats on the way down the page again though too.

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

snip>

Trade deficits have become a deep structural malady disguised as somewhat of an annoyance, at worst. Global dollar over-liquidity is “recycled” right back into U.S. securities markets, and the tussle for limited quantities of coveted securities pressures market rates lower. The New Age Bond Market relegates the “permabears” to “permabeatenups.” Meanwhile, pickled notions of permanently low rates and limitless liquidity stoke the Finance and Asset Mania.

It is the nature of Bubbles – not unlike bureaucracies - that dynamics evolve to ensure that they are bolstered and perpetuated. Left to their own devices (which they have been), they will prove powerfully self-reinforcing; Bubbles will inflate, propagate and disperse. And I have argued that the U.S. financial sector has turned dysfunctional and that financial crisis is unfortunately the likely catalyst to contain excess and redirect the flow of resources away from asset markets and to productive investment. Today, years of mortgage lending excess incite further Credit inflation, over-consumption, excess global liquidity, a weak dollar, more central bank purchases, enticing market rates, more borrowing and speculating, deeper economic distortions, and higher home and asset prices.

Interestingly, the GSEs have markedly slowed their expansion and attendant debt issuance. Banking system real estate lending, however, has more than filled the void. So we now have a strange dynamic where U.S. bank Credit expansion is a leading source of global liquidity that is then “recycled” directly back to U.S. securities markets. This bank Credit is created primarily through the issuance of short-term “monetary liabilities” (deposits and “repos”). The upshot is only greater supply/demand imbalance between the virtually endless supply of liquidity creation and the limited issuance of (perceived safe and liquid) longer maturity U.S. securities to be purchased by foreign central banks. This imbalance is complicated by the proliferation of variable-rate mortgages – a prime example of how financial sector “evolution” sustains Bubbles. Here again, there is a creation of liquidity that stokes over-consumption and trade deficits that is then accumulated by Asian central banks and others - and immediately “recycled” back to a confined quantity of long-term U.S. securities.

The pricing of finance (or, traditionally speaking, “capital”) resides at the very heart of Capitalism. Only an operative pricing mechanism will effectively allocate limited resources. And only through the interaction of supply and demand can a pricing mechanism function properly. A functional pricing mechanism would tend toward self-adjustment, limiting imbalances rather than augmenting them. The Great Dilemma of contemporary finance and economics is the limitless nature of the supply of finance/Credit/liquidity (“Global Wildcat Finance”). With no gold anchor or any restriction on the quantity of issuance, Credit will be issued in excess and the resulting liquidity will generally under-price finance (the cost of borrowing/market interest rates). Imbalances will be exacerbated – with extended booms validating mispriced Credit - and the system will become only more unstable over time (and why I use “dysfunctional”).

I would argue (as Master of the Obvious) that the Treasury and agency (and the intricately linked “swaps”) markets have developed into the “anchor” for the global price of finance. And The Great Dilemma today is one of Way Too Many Dollar Balances Chasing Too Few Treasury and Agency Securities. This has led to a seductive dislocation in the pricing of Treasuries/agencies, with extraordinary demand at the “anchor” fixing rates artificially low throughout.

more...

[54anickel]

46. DUMB JONES AND CO.

http://www.nypost.com/business/39142.htm

January 31, 2005 -- LET'S say you were the head of a multibillion- dollar public company with 7,000 employees and one of the best-known media brand names on earth. But let's also say that your stock price has been sagging for years, in part because your company has a history of stumbling into hugely expensive investments in high technology that never seem to pay off.

So would you try to jazz things up by betting on yet another high-tech corporate gamble that might not pay off?

You would if you were running Dow Jones & Co.

Last week, Dow Jones & Co., the century-old publisher of the Wall Street Journal and Barron's, did just that, completing its acquisition of an advertiser-supported investors' Web site business called MarketWatch Inc.

snip>

Meanwhile, the company has already unfurled layoffs for nearly half the MarketWatch staff. The way these things are typically handled, the brass tries to appear big-hearted and understanding by offering voluntary termination agreements to those who are willing to leave without first being fired — which means, in the Darwinian world of business, it is usually those employees with the most self-confidence, ambition and talent who take the buyouts, leaving the company in the hands ultimately of paralyzed, self-doubting 9-to-5ers who eventually spell its doom.

more...

[54anickel]

48. Rebuilding after Tsunami:

http://www.321gold.com/editorials/clarke/clarke012905.html

snip>

The best tribute we can pay to all who perished or suffered in this disaster is to heed the powerful lessons it offers us. Nature has spoken loud and clear, and we ignore her at our peril.

For over two decades, I have been an unhappy witness to the bitter armed conflict in Sri Lanka, which has consumed twice as many lives as the tsunami, and blighted the future of millions more. Peace in Sri Lanka has been my number one wish for many years -- there is now renewed hope that the lashing from the seas will finally convince everyone of the complete futility of war.

Political cartoonists in Sri Lankan newspapers were quick to make this point. One cartoon, appearing two days after the disaster, showed a government soldier and Tiger rebel swimming together in the currents, struggling to save their lives. (Indeed, there have been reports of them helping each other in the hour of need.) Their common question: what happened to the border that we fought so hard for?

In a message broadcast over local television only a few days before the tsunami, I made the same point. "We should not allow the primitive forces of territoriality and aggression to rule our minds and shape our actions. If we do, all our material progress and economic growth will amount to nothing."

I added: "I have always been an optimist, and I still remain optimistic that Sri Lanka will achieve lasting peace."

more...

[Tace]

53. You Didn't Mention This Piece Is By Sir Arthur C. Clark

He was the first to suggest communications satellites, and is one of the greats in science fiction.

[54anickel]

57. Thank you Tace. I didn't know much about him before this article...n/t

[54anickel]

49. Good grief! Another 8.250 Billion dollar O/N repo was issued today

http://www.321gold.com/fed/temp_bank_res.html

The Outstanding Public Debt as of 31 Jan 2005 at 04:22:29 PM GMT is:

The estimated population of the United States is 295,467,471
so each citizen's share of this debt is $25,828.77.

http://brillig.com/debt_clock/

[54anickel]

50. Do we say, 'Charge it!' too often?

http://seattlepi.nwsource.com/saturdayspin/209814_bq29.html

snip>

There are indications that those foreign creditors are getting nervous and are quietly moving away from the sinking dollar and over to the much more solid euro. If this becomes a general retreat, the dollar may finally be deposed as the planetary currency of choice.

It used to be we could trust Republicans to be prudent and sober when it came to our money. When British economist John Maynard Keynes said it was OK for governments to run a deficit now and then to pump up the economy, Democrats such as Franklin Roosevelt embraced the idea. Republicans reeled in horror. Keynesianism was only slightly less evil than communism in conservative orthodoxy.

Today's Republicans (at least the ones in the White House) are different. They make Keynes look like Scrooge. They pass a prescription drug plan that is a huge new government entitlement program. They propose a reform in Social Security that could put the federal government $2 trillion further in the hole. They go to war, rack up a bill of $280 billion and, rather than asking citizens to pay for it, hand out massive tax breaks to the richest people in the world.

Of course, Vice President Dick Cheney says Ronald Reagan proved deficits don't matter. As Keynes would say, that is true -- but only up to a point. There is such a thing as pushing the limit. Traditional conservatives and sensible liberals might both join me in asking this Burning Question:

Should we be frightened by our country's enormous debts?

[54anickel]

52. Libya awards 15 oil exploration permits to foreign oil companies

http://www.newratings.com/analyst_news/article_672858.html

LONDON, January 31 (newratings.com) – Libya on Saturday issued 15 permits to foreign oil companies allowing them to explore for oil over 127,000 kilometers in the African country. The licenses awarded at Libya’s first open license auction since the lifting of the US-led sanctions last year, are aimed at boosting the country’s ailing oil segment.

Libya, which has Africa’s largest oil reserves, aims to boost its oil production from the current level of 1.6 million barrels per day to 2.1 million barrels per day by the end of the current decade. US oil companies were the major winners at the auction and won five licenses on an individual basis, while sharing another four with Australia’s Woodside Petroleum Ltd. The US companies that won the auction include Occidental Petroleum, Chevron Texaco and Amerada Hess. Verenex Energy Inc of Canada, Algeria's Sonatrach, Medco Energy International of Indonesia, Petrobras of Brazil, Liwa of United Arab Emirates and Indian Oil Corp and ONGC of India also won licenses. European companies failed, however, to get any permit. Libya plans to offer another 40 blocks for exploration at a second auction next month.

[54anickel]

55. Microsoft Dividend Colors December US Income Data (Zowie!)

http://www.ecommercetimes.com/story/Microsoft-Dividend-Colors-December-US-Income-Data-40144.html

The Microsoft dividend alone added 3.1 percentage points to U.S. incomes for December. Millions of Americans hold some of Microsoft's 11 billion shares, but just one person owned 1.1 billion shares on the day of the dividend: William H. Gates. U.S. personal incomes increased by 0.4 percent on his dividend gain alone.

Thanks in part to the special one-time US$32 billion dividend paid by Microsoft (Nasdaq: MSFT) , December's personal incomes rose 3.7 percent, the Commerce Department said.

Millions Hold Shares

The Microsoft payment alone added 3.1 percentage points to incomes for December. Microsoft's 11 billion shares are held by millions of Americans, but just one really smart but not so tall person owned 1.1 billion shares on the day of the dividend: William H. Gates. U.S. personal incomes increased by 0.4 percent on his gain alone.

Excluding Gates' $3.3 billion gain, U.S. personal incomes rose by 3.3 percent. Gates said he would donate the proceeds of the dividend payment to the Bill & Melinda Gates Foundation. The charitable foundation works on education and health-care issues throughout the world.

more...

[54anickel]

63. 12:14 Lunchbreak numbers and blather

Dow 10,488.09 +60.89 (+0.58%)
Nasdaq 2,058.45 +22.62 (+1.11%)
S&P 500 1,179.53 +8.17 (+0.70%)
10-yr Bond 4.153% +0.015
30-yr Bond 4.605% -0.005
NYSE Volume 700,212,000
Nasdaq Volume 813,903,000

12:00PM : Onward and upward remains the driving mantra midday as investors embrace successful Iraqi elections, lower oil prices, increased M&A activity, decent earnings and respectable economic news... Now that the elections in Iraq have come and gone relatively peacefully, buyers have returned with a less cautious sentiment and have pushed nearly every sector to the upside...
No reports of disruptions to major oil pipeline disruptions over the weekend, as well as OPEC's decision to leave production quotas unchanged, has also provided a boost to equities as oil prices remain under pressure (46.73/bbl -$0.45)... Technology has been strong across the board, with semiconductor, software, hardware and networking all surging more than 1.0% while airline, biotech, retail, transportation, materials and utility have also shown considerable strength... Financial has also been strong following MMC's $850 mln Spitzer probe settlement and MetLife's (MET 39.86 -0.08) potential $12 bln purchase of Citigroup's Travelers Life & Annuity Co. (C 49.14 +0.76)...

Another acquisition making headlines, of the many proposed deals today, has been SBC's confirmed $16 bid for AT&T, which has kept telecom services trading with a tinge of caution... Under pressure after a downgrade from Prudential has been steel while homebuilding has also been weak after Dec New Home Sales came in slightly below forecasts (1.09 mln units versus consensus of 1.2 mln)... Other economic news of note have included Jan Chicago PMI, which showed continued manufacturing expansion with a better than expected read of 62.4 (consensus 59.8), and personal income (3.7% versus consensus 3.3%) and consumption (0.8% versus 0.9%) figures that came in as expected...

Better than expected quarterly results from blue chips like XOM, MWV and VC have also helped offset disappointments from WYE, SYY and TSN... Meanwhile, treasuries have continued to consolidate following this morning's economic reports, as the 10-year note is off 3 ticks to yield 4.15%...NYSE Adv/Dec 2252/876, Nasdaq Adv/Dec 2018/921

11:30AM : Major indices continue to put together a solid advance following a flood of M&A activity... Confirmation that SBC Communications (SBC 23.95 +0.33) will in fact acquire its former parent AT&T (T 19.13 -0.58) for about $16 bln has led the list of multi-billion deals this morning... Reports have also indicated that MetLife (MET 39.79 -0.15) may purchase Citigroup's Travelers Life & Annuity Co. (C 49.10 +0.72) for roughly $12 bln, further suggesting that large corporations remain in solid financial health...

Other notable deals have included Lee Enterprises' (LEE 43.25 -0.66) plans to buy Pulitzer (PTZ 63.38 +0.48) for $1.5 bln, Time Warner (TWX 17.90 -0.03) and Comcast's (CMCSA 32.39 +0.13) proposed $15 bln joint bid for Adelphia and Eastman Kodak's (EK 32.76 +0.06) $980 mln cash bid to acquire Creo (CREO 16.32 +1.96)...NYSE Adv/Dec 2176/918, Nasdaq Adv/Dec 1997/877

11:00AM : Buyers remain in control of the action despite oil prices climbing to their highs of session... Crude oil futures ($46.50/bbl -$0.68), which was off more than 2.0% earlier after Iraq's elections ended without serious incident and no reports showed disruptions to major oil pipelines, have rebounded somewhat in the last half hour, subsequently turning many energy stocks positive... OPEC's decision to maintain its current rate of oil production at 27 mln barrels a day has also added selling pressure to the commodity in the early going...XOI +0.4, NYSE Adv/Dec 2168/853, Nasdaq Adv/Dec 2051/775

10:30AM : Stocks continue to hold their own and sport solid gains after dissecting this morning's economic data... Jan Chicago PMI has recently checked in at 62.4, better than expectations of 59.8 and indicative of continued manufacturing expansion, while Dec New Home Sales increased 8.9% to 1.09 mln units, slightly less than forecasts of 1.2 mln, further suggesting a leveling off in the housing market... Earlier, the Commerce Dept.'s personal income and consumption figures came in as expected...

While Dec personal spending rose 0.8%, roughly in line with expectations of 0.9%, personal income posted a record 3.7% gain (consensus 3.3%), due primarily to a 3.1% gain related to Microsoft's (MSFT 26.39 +0.21) $32 bln dividend payment...NYSE Adv/Dec 2217/706, Nasdaq Adv/Dec 2091/662

[54anickel]

65. Why businesses are once again keen to merge

http://www.csmonitor.com/2005/0131/p01s01-usec.html

Corporations are embarking on what is being called a "new wave" of mergers. Although this may result in tens of thousands of layoffs, it may also mean that the improved efficiencies are passed on to consumers. It's too early to say how large the wave will be compared with the late 1980s, when hostile mergers dominated the news. But they are likely to become more common, since US companies have more than $1 trillion in cash.

"What we are seeing is that as you get late in the economic cycle, companies look for alternative ways of growing their business," says Fred Dickson, chief market strategist at D.A. Davidson. "Companies loaded with cash have to put it to work or face screaming shareholders."

The latest two examples of the merger boom are two giant couplings: Last week, Procter & Gamble Co. said it would buy Gillette for $57 billion, and in a deal that may be formally announced this week, SBC Communications is in merger discussions with AT&T. In addition, telecom companies Sprint and Nextel announced a $35 billion marriage last month.

The mergers are expected to help the stock market, which has been lagging since the beginning of the year. "It shows CEOs have confidence in the next two to three years because they wouldn't be making these acquisitions if they thought we were going into a downturn," says Mr. Dickson of D.A. Davidson, which is based in Great Falls, Mont.

The merger boom may get some fuel from the American Jobs Creation Act, which gives US companies a one-time repatriation of dividends from overseas if they will be used to create domestic jobs, go into research and development or capital expansion, or be used in acquisitions. So far, four pharmaceutical companies alone have announced they will bring back $50 billion.

more...

[wasp in a wig]

68. "improved efficiencies" for consumers ?

Not likely.

Improved efficiencies for shareholders? Of course. Layoffs = more money for them.

When already giant companies absorb more and more of the market share, are they likely to give the consumers a break?

It seems that all but those at the top get screwed.

[54anickel]

69. Tough to be a consumer if you're one of the ones that gets laid off. Then

there's that little comment in there about getting late into the economic cycle. To me that means we are on the way back down. So the measly growth we've seen thus far is all the bang we're gonna get out of those huge tax breaks and ultra-low interest rates?

[54anickel]

72. MetLife Will Buy Citigroup's Travelers for $11.5 Bln (Looks like we

may have to create a M&A section again this year) :eyes:

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

Jan. 31 (Bloomberg) -- MetLife Inc. agreed to buy Citigroup Inc.'s Travelers Life & Annuity and most of its international insurance business for $11.5 billion to become North America's biggest seller of individual life insurance.

MetLife will pay Citigroup as much as $3 billion in stock and the rest in cash, the companies said today. The New York- based company also struck a 10-year agreement to sell MetLife products through Citigroup units including the Smith Barney brokerage, Citibank branches and the Primerica network of 100,000 financial advisers.

The purchase, MetLife's biggest ever, is a departure for Chief Executive Officer Robert Benmosche, 60. His previous deals, including the $1.2 billion acquisition of GenAmerican Corp. in 1999 and Aseguradora Hidalgo SA for $960 million in 2002, targeted troubled businesses or smaller operations abroad.

``This is a bit of new territory for them,'' said Stuart Quint, who helps manage $75 billion at Gartmore Global Investments, including shares of MetLife, in West Conshohocken, Pennsylvania. ``Because of the size, it's no slam dunk.''

more...

[RawMaterials]

66. 207 EST Market Update and Blather

Dow 10,483.66 +56.46 (+0.54%)
Nasdaq 2,059.18 +23.35 (+1.15%)
S&P 500 1,179.65 +8.29 (+0.71%)
10-Yr Bond 41.49 +0.11 (+0.27%)
NYSE Volume 1,034,531,000
Nasdaq Volume 1,141,369,000

2:00PM: More of the same as the major averages continue to drift sideways in positive territory... Bucking the bullish trend, however, has been pharmaceutical (-0.7%), which has recently helped push health care (-0.3%) into negative territory... Wyeth (WYE 39.52 -3.46), the most underperforming component in the S&P 500 today, has paced the downside pressure after it said litigation reserves related to its recalled fen-phen diet drug climbed $4.5 bln in its most recent quarter, to a total of $21.1 bln...

Weaker than expected Q4 results and a warning that profits in FY05 will disappoint, has also prompted a downgrade on the drug maker to Neutral Weight at Prudential... Merck (MRK 27.76 -0.26) has also traded lower as WYE's growing reserves have raised concerns about other drugs (i.e. Vioxx) facing litigation... NYSE Adv/Dec 2321/913, Nasdaq Adv/Dec 2014/1018

1:30PM: Spearheaded by broad-based buying in technology, the Nasdaq continues to outpace its blue chip counterparts... All 20 components in the Philadelphia Semiconductor Index (SOX +1.6%) have traded higher following an SIA report that showed global chip sales reached a record $213 bln in 2004... While chip sales showed a sequential 3.5% decline in December, in line with historical seasonality, Dec sales were up 14.6% year over year...

Ongoing efforts to reduce excess inventories and intensified competition, however, are expected by many pundits to result in a 4-6% sequential decline in worldwide sales in the current quarter... Notable movers today have included TSM (+5.9%), ALTR (+4.2%), STM (+2.8%), TER (+2.3%), AMD (+1.5%) and INTC (+1.1%)...

http://finance.yahoo.com/mo

[54anickel]

67. Wall Street boosted by optimism on Iraq

http://biz.yahoo.com/ft/050131/8c2d032e_7394_11d9_b705_00000e2511c8_2.html

Wall Street stocks rose on Monday amid optimism about the success of the Iraqi elections, while several deal announcements suggested increased confidence about the future. By mid-afternoon, the Dow Jones Industrial Average was 0.5 per cent higher at 10,480.48, while the S&P500 index was 0.7 per cent higher at 1,178.97. The Nasdaq Composite index was 1.1 per cent higher at 2,058.42.Wall Street notched its first winning week of the year last week, tacking on modest advances for the five-session stretch amid warnings that a losing month could bode ill for the rest of the year. This week's meeting of Federal Reserve policymakers is expected to yield a quarter-point rise in interest rates and a keenly studied statement. Together with a widely watched labour market data report on Friday, it is expected to shed further light on the state of the world's largest economy and the outlook for its equities market. Multiple acquisition news on Monday suggested increased confidence about the future in US boardrooms as deals are rarely made amid uncertainty. In the telecoms sector, SBC Communications announced the takeover of AT&T for $16bn. The announcement of the deal, which sees a current Dow component buy a former constituent, pushed A&T shares down 3.2 per cent to $18.08 while SBC Communications shares added 1.1 per cent to $23.87. Elsewhere in mergers-and-acquisitions Lee Enterprises announced it was buying Pulitzer for about $1.4bn in cash and saw its shares inch up 0.7 per cent to $44.20, while Pulitzer gained 0.9 per cent to $63.44. Eastman Kodak announced the purchase of Creo, a supplier of printing systems, for $980m in cash. Kodak shares rose 1.3 per cent to $33.13. There was consolidation in the insurance sector as MetLife announced it would buy Citigroup's Traveler's Life & Annuity unit. MetLife shares edged off 0.6 pe rcent to $39.70 while Citi rose 1.7 per cent to $49.22. Monday's series of deals came after a landmark merger in the consumer goods sector last week, when Procter & Gamble said it would buy Gillette. The two stocks were 1.8 per cent lower at $53.20 and off 2 per cent at $50.56, respectively. The takeover news came after the conclusion of national elections in Iraq, which were declared a success by authorities in Baghdad, and also Washington and London. Traders and investors had said there had been skittishness in the market about possible terror attacks during the polls. As about half of the components of the S&P 500 index have reported earnings, a handful of prominent US corporations were still left to report earnings this week. ExxonMobil, the largest publicly traded oil group, saw shares add 1.3 per cent to $51.93 after it said record crude prices helped it achieve $8.4bn in net profits last quarter. Away from earnings, Marsh&McLennan saw shares add 4.5 per cent to $32.50 after the insurance broker agreed to pay $850m to settle charges it rigged auctions with insurers.


:eyes: Whatever....

[RawMaterials]

70. 3:30 EST Market Update and side of Blather

Dow 10,466.81 +39.61 (+0.38%)
Nasdaq 2,054.40 +18.57 (+0.91%)
S&P 500 1,177.98 +6.62 (+0.57%)
10-Yr Bond 41.32 -0.06 (-0.14%)
NYSE Volume 1,391,188,000
Nasdaq Volume 1,566,637,000


3:30PM: Indices are off their highs, but not enough to make a significant change in the standings, as stocks look to hold much of the day's gains into the close... With regards to tomorrow, 16 of this week's 93 S&P constituents (i.e. TYC, HCA, ASD, IR and UCL) will be out with quarterly results before the bell while notable earnings reports after the close will come from GOOG, CB and YUM... At 10:00 ET, investors will get a read on the manufacturing sector with the Jan ISM Index (consensus 57.0) while the Commerce Dept. will release its Dec Construction Spending (consensus 0.5%) report...

Jan Auto Sales (consensus 5.3 mln) and Truck Sales (consensus 7.9 mln) are also expected sometime after the market opens...NYSE Adv/Dec 2525/810, Nasdaq Adv/Dec 2106/977

3:00PM: Equities remain on the offensive as technology, financial, energy, retail and transportation remain influential leaders to the upside... Strength in the latter has been assisted by positive analyst comments regarding airlines (+2.3%)... Merrill Lynch, citing buying opportunities following the recent sell off in the sector, especially those that potentially benefiting from catalysts outside of lower fuel prices and/or further contraction of US Airways, has raised its rating on both Continental Airlines (CAL 10.47 +0.29) and America West (AWA 4.97 +0.23) to Buy from Neutral...

Shares of Delta Air Lines (DAL 5.41 +0.38) and AirTran Holdings (AAI 8.56 +0.39) have also surged after both were upgraded to Neutral from Sell...DJTA +1.4, NYSE Adv/Dec 2434/857, Nasdaq Adv/Dec 2108/964

http://finance.yahoo.com/mo

[54anickel]

71. Oil Rises on Worries of a March OPEC Cut (edit for dupe posting of

numbers)

http://biz.yahoo.com/rb/050131/markets_oil_3.html

NEW YORK (Reuters) - Oil prices rose on Monday on worries that production cartel OPEC could decide to cut output soon even after it kept output steady at its meeting over the weekend.
U.S. oil prices (CLc1) rose 77 cents to $47.95 a barrel.

The Organization of the Petroleum Exporting Countries kept production steady at its meeting over the weekend, but left the door open to shaving production later to contain a seasonal second-quarter buildup of supplies. The group next meets on March 16.

"There is a threat out there that OPEC might cut back quotas before their March meeting and that is keeping the market nervous," said Marshall Steeves, analyst at Refco Group in New York.

The Middle East Economic Survey said on Monday that if OPEC decided it needs to reduce oil production before its March meeting, the group would make a substantial cut that could take effect as soon as March 1.

snip>

The White House on Monday said it believes it is important for OPEC to act to ensure affordable energy supplies. "We don't comment on specific OPEC actions per se, but we believe it's always important that they act in a way that continues to further economic growth and allows there to be affordable, abundant supplies of energy available," White House spokesman Scott McClellan said.

more...

[54anickel]

73. Ford to Extend More Loans to Young Buyers

http://biz.yahoo.com/rb/050130/autos_ford_loans_1.html

NEW ORLEANS (Reuters) - Ford Motor Co. (NYSE:F - News) hopes to eke out a gain in its U.S. sales this year by offering more loans to young car buyers, a senior company official said on Sunday.

Steve Lyons, head of the automaker's core Ford Division, spoke of the change in policy toward young buyers -- and an easing of some previous restrictions on loans -- in remarks to reporters on the sidelines of the annual convention of the National Automobile Dealers Association.

"Ford Credit is doing some things for young buyers that we think will make a difference," Lyons said, referring to Ford's financial arm.

Among other moves to ease its lending policies, Lyons said Ford Credit was "changing the way they look at debt to income ratios for young buyers."

snip>

He indicated that the same lending policies had also been introduced by Ford in Hispanic markets in the United States.

more...

[54anickel]

74. WrapUp by Tim W. Wood 01.28.2005

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

Last week I introduced my Trend Indicator and pointed out that it is currently warning of a decline for China. To save you from going back to last week’s wrap up to view the charts, I have included a weekly chart of the Hang Seng below along with my Trend Indicator.

The Trend Indicator is designed to help you establish or see the direction of the market. When it is used on a daily chart it helps to determine the short term trend. When used on the weekly charts it determines the intermediate term trend. It is the crossover of the moving average that triggers the trend change. However, I have used this indicator on virtually all markets and I have found that there is another very important aspect of the Trend Indicator. That being, divergence and especially divergences at long term cycle tops and bottoms.

Notice the divergence between the Trend Indicator and price as the Hang Seng moved down into its 4-year cycle low in 2003. These divergences are marked in red. For those of you who may not be familiar with divergences, this simply means two points were not confirmed by both price and the indicator. For example, at the 2003 price low you can see that the lower price was not confirmed by the Trend Indicator because it made a higher low in 2003 while price made a lower low. This was a positive divergence. Then, in 2004 the Hang Seng moved to a new “recovery” high, but this time around the Trend Indicator made a lower high and thereby formed a negative divergence. It is this divergence combined with the fact that the Trend Indicator has turned down and crossed over that is warning of trouble for China and the Hang Seng.

We also know that China is responsible for much of the new consumption in commodities. So, if China’s stock market is headed for trouble it is logical that their consumption of commodities would in turn slow. Furthermore, if a slow down in commodities is in the wind then the Trend Indicator should also be warning of this slow down here as well.

more...

[DoBotherMe]

75. Numbers at close

Dow 10,489.64 +62.44 (+0.60%)
Nasdaq 2,062.41 +26.58 (+1.31%)
S&P 500 1,181.21 +9.85 (+0.84%)
10-Yr Bond 41.32 -0.06 (-0.14%)
NYSE Volume 1,660,297,000
Nasdaq Volume 1,805,413,000

[54anickel]

76. ACK! U.S. Treasury to borrow $147 bln in Jan-March quarter

Just saw this in LBN, how'd I miss that one!!!

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1200104

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38383.6255061227-831623170&siteID=mktw&scid=0&doctype=806&property=&value=&categories=&

WASHINGTON (MarketWatch) -- The U.S. government will have to borrow a record $147 billion in the Jan.-March 2005 quarter, the Treasury Department reported Monday. Analysts had been expecting borrowing of about $136 billion. Treasury expects a cash balance of $10 billion on March 31. Treasury also announced that it expects to borrow $12 billion in the April-June quarter.

[DoBotherMe]

77. Final Numbers and Blather

Dow 10,489.94 +62.74 (+0.60%)
Nasdaq 2,062.41 +26.58 (+1.31%)
S&P 500 1,181.27 +9.91 (+0.85%)
10-Yr Bond 41.32 -0.06 (-0.14%)
NYSE Volume 1,681,016,000
Nasdaq Volume 1,822,041,000

Close: The market opened on an upbeat note, in the wake of successful elections in Iraq, large M&A deals, respectable earnings and encouraging economic data, and maintained the bulk of its gains into the close to close nearly every sector in positive territory... A better than expected 60-75% Iraqi voter turnout that passed without a considerable increase in violence laid the foundation for buyers in the early going...
SBC Communications (SBC 23.85 +0.23) confirming that it will spend roughly $16 bln to buy former parent company AT&T (T 19.22 -0.49) led this morning's extensive list of multi-billion deals... Further suggesting the strong financial health of the US economy was MetLife's (MET 39.79 -0.15) proposed $12 bln bid for Citigroup's Travelers Life & Annuity Co. (C 49.10 +0.72) for roughly $12 bln, Lee Enterprises' (LEE 44.52 +0.61) plans to buy Pulitzer (PTZ 63.45 +0.55) for $1.5 bln and a $15 bln joint bid between Time Warner (TWX 18.00 +0.07) and Comcast's (CMCSA 32.19 -0.07) to acquire bankrupt cable operator Adelphia... Airline (+2.3%) paced the way to the upside following some positive remarks from Merrill Lynch, helping transportation touch two-week highs...
Semiconductor (+1.1%), following an SIA report that showed global chip sales reached a record $213 bln in 2004, helped technology maintain broad-based strength, while financial also surged, assisted in part by Marsh & McLennan's (MMC 32.48 +1.39) $850 mln settlement with New York Attorney General Eliot Spitzer... Also showing strength were retail, materials, utility, biotech and energy... The latter, which was under pressure early following a 2.0% sell off in oil prices, after reports showed no pipeline disruptions over the weekend and OPEC's decision to maintain its current rate of oil production at 27 mln barrels a day, recovered lost ground as crude-oil futures ($48.20/bbl +$1.20) rebounded... But not even a late 2.2% rebound in the commodity was enough to remove an underlying positive bias that kept market internals firmly bullish from start to finish... Homebuilding had been weak following Dec New Home Sales that came in slightly below forecasts (1.09 mln units versus consensus of 1.2 mln), but found renewed buying interest in afternoon trading...
Other notable economic news included Jan Chicago PMI, which showed Midwest manufacturing activity expanded for the 21st consecutive month with a better than expected read of 62.4 (consensus 59.8)... Dec personal income (3.7% versus consensus 3.3%) and consumption (0.8% versus 0.9%) figures came in as expected while better than expected quarterly results from blue chips like XOM, MWV and VC helped offset disappointments from WYE, SYY and TSN... Worse than expected Q4 earnings and an FY05 profit warning from drug maker Wyeth (WYE 39.68 -3.30), due in large part to $4.5 bln in additional litigation reserves, kept pharmaceutical, and in turn health care, under pressure most of the day...
Treasuries, which were under modest pressure early on following generally positive economic data, turned around in late trading and close slightly positive... The benchmark 10-year note closed up 3 ticks yielding 4.12%...NYSE Adv/Dec 2566/792, Nasdaq Adv/Dec 2258/872
...