STOCK MARKET WATCH, Friday 15 July

[ozymandius]

Friday July 15, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 190 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 207 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 271 DAYS
DAYS SINCE ENRON COLLAPSE = 1328
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54


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




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90

AT THE CLOSING BELL ON July 14, 2005

Dow... 10,628.89 +71.50 (+0.68%)
Nasdaq... 2,152.82 +8.71 (+0.41%)
S&P 500... 1,226.50 +3.21 (+0.26%)
10-Yr Bond... 4.18% +0.02 (+0.41%)
Gold future... 420.20 -4.40 (-1.05%)

GOLD, EURO, YEN, Dollars and Loonie




PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Martin Goldberg

A TECHNICAL LOOK AT THE 10-YEAR TREASURY NOTE – LONG, INTERMEDIATE, SHORT TERM

It appears that there may be a trend change in the bond market. While it is still too early to make such a call with any degree of certainty, it is important to pay careful attention to the long, intermediate, and short-term behavior of the bond market. This is because so much in our financial economy is dependent on low interest rates, including historically high stock market valuations, the housing boom and US consumer spending. If interest rates turn significantly upward, we could have the bursting of three bubbles occurring almost simultaneously. Tonight, I will present a multi-term technical analysis of the bond market which is telling us that it requires the careful attention of long term investors.

Bonds Lead Stocks

Over the long term stock prices follow bond prices (and run inversely to interest rates) with a lag period. The chart below is a chart of the S&P 500 (red) plotted along side of the 10-Year Treasury note interest rate (blue) dating back to the early 1960s. I have indicated major tops and bottoms in interest rates and have connected them to the major bottoms and tops in the stock market. Note how the major stock market tops and bottoms are always at a later date than the interest rate bottoms and tops. In this way, interest rates lead stocks. In the latest stock market rally off of the October 2002 bottom, interest rates headed down for well over a year until stocks began to positively respond. Similarly, if interest rates have bottomed and head up in any significant and sustainable manner, it would be expected that the stock market would, after a time lag, respond negatively.


Today’s Market

The major US indices were higher, led by the Dow Transports which were up 1.45% while the Dow Industrials were up 0.7%, and the S&P 500 was up 0.26%. Below the surface the indices which are leading the market, the mid and small caps were down marginally today. Breadth was negative and this is an unusual event for the rally of the past week. The Dow was led higher by none other than that shareholder value juggernaut, General Motors. While Wall Street analysts were upgrading the auto parts sector, Standard and Poor’s indicated that they were going to cut the debt ratings of several companies in this sector this year.

In the market that we now have, stocks are rising simply because they are rising and with no regard to a difficult outlook in the near and/or long term. This is the behavior that can be seen in stocks such as General Motors as well as many in the auto parts sector. Of course, good news in the present is being paid immediate homage in the market as companies reporting “better-than-expected” results are awarded with a gap up at the open and more gains quickly following. Example – Apple Computer. In addition, average or mediocre results are being treated as if they are fabulous. For the moment, “it’s a bull market.” During the evening drive time, the announcer on Bloomberg radio repeated several times over a 20 minute drive that the S&P 500 closed at a 4 year high. No question the bull market has to be given the benefit of the doubt. In the very short timeframe though, the market appears to be overbought and due for a correction to the downside. Below is a six month candlestick chart of the S&P 500. Note that today’s action featured a “gravestone” doji, confirmed by high volume, which may be signaling a reversal of the S&P. The bearish implications would probably be confirmed with a move below 1220 or at least a move below today’s low of 1224. Note that the most recent 1-week long rally was characterized by a similar pattern only “upside down” as indicated by the green arrows.


more...

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

[UpInArms]

2. daily dollar watch

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

Last trade 89.39 Change -0.01 (-0.01%)

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2224&Itemid=39

Dollar Inflation Data Puts 4% Rates In Question

US Dollar

After experiencing two days of trading ranges that were close to 200 pips in the EURUSD, today was on a relative basis, rather quiet. The narrower range was actually surprising since today’s economic calendar was chock full of important data that provided a better signal of how the economy is doing and insight into what Greenspan may say at next week’s Humphrey Hawkins testimony. First off, the big surprise today was the unchanged reading in consumer prices this morning. Despite the sharp rise in oil prices, gasoline prices fell causing headline inflation to remain flat while core prices, which excludes the volatile food and energy components increased a paltry 0.1 percent during the month of June. The stronger dollar last month should have also offset some of the upside inflation pressures. It is increasingly apparent that the US inflation rate is declining gradually. This will be an interesting topic of conversation for Greenspan at next week’s testimony. Inflation pressures should be to the upside, but the data does not really confirm that. Also jobless claims increased to their highest level since May due to factory and school layoffs. Retail sales did rise, but the bulk of the increase came in the auto sector, which had higher sales as a result of the aggressive price cuts made by General Motors. As we stand, the muted reaction in the EURUSD illustrates the debate that is undergoing in the markets right now. 3.50 percent rates are certain and so is 3.75 percent - the question then turns to 4 percent rates. The latest string of data that we received today puts into doubt all of the excess optimism about 4 percent rates that we saw last week after the ISM data, which has capped further dollar gains.

Euro

The Euro held onto the 1.20 handle today thanks to some modestly positive news. Growth in the Eurozone increased 0.5 percent in the fourth quarter confirming earlier estimates. The annualized rate though was bumped up to 1.4 percent from 1.3 percent. Like the US, the focus of the day was on inflation. Six Eurozone countries reported inflation for the month of June this morning. Overall, the numbers suggest that inflation for the region as a whole should be ticking higher modestly. European Central Banker Issing laid out the ECB’s bias today when the ECB Monthly Bulletin was released. Issing expects inflation to remain above 2 percent for the remainder of the year, adding that the inflation outlook has "clearly worsened." This implies that given the central bank’s 2 percent inflation pain threshold, means that the ECB will not be cutting rates anytime soon. If anything, the ECB’s bias would be slightly to the upside with some modest optimism in terms of growth. In the ECB Bulletin, the central bank also warned that they remained "vigilant" and ready to act on rising inflation, if needed. Though a far-fetched possibility, it still further solidifies their on-hold stance.

...more...

Forex: Yen finally rallies

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2246&Itemid=62

The Yen rose today on stronger than expected Tokyo Department Store Sales. The USD/JPY fell sixty points to finish at 111.83 as of 09:45 GMT. The EUR/JPY fell forty points to end at 135.45.

Tokyo Department Store Sales were –1.1% on a year over year basis. This is a lower drop than the –2.9% experienced in the prior period. Looking ahead, the Leading Economic Index will be released on 05:00 GMT. It is expected to be 37.0% compared to 40.0% the previous period.

Japanese stocks rose slightly as the US markets gave optimism to the global economy. The Topix index gained 0.2% to end at 1,193.30. The Nikkei 225 fell 0.1% to finish at 11,758.68. A combination of lower oil prices and a strong US retail sales, pushed Japanese automakers up. Nissan, Japan’s second-largest automaker rose 1.2% to finish at 1,140 Yen. The energy sector experienced large losses as crude prices fell worldwide. Inpex dropped 2.3% to finish at 647,000 Yen. Inpex is Japan’s largest oil explorer. Sharp rose 1.2% to finish at 1,746 Yen. Sharp recently announced new technology for their flat screen televisions.

...more...

Have a Great Day Marketeteers!

[UpInArms]

3. Today's Reports:

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

Jul 15	8:30 AM	Business Inventories	May	-	0.2%	0.4%	0.3%	-	
Jul 15	8:30 AM	Core PPI		Jun	-	0.2%	0.1%	0.1%	-	
Jul 15	8:30 AM	NY Empire State Index	Jul	-	10.0	9.0	11.6	-	
Jul 15	8:30 AM	PPI			Jun	-	0.2%	0.4%	-0.6%	-	
Jul 15	9:15 AM	Capacity Utilization	Jun	-	79.7%	79.6%	79.4%	-	
Jul 15	9:15 AM	Industrial Production	Jun	-	0.5%	0.4%	0.4%	-	
Jul 15	9:45 AM	Mich Sentiment-Prel.	Jul	-	95.0	94.5	96.0	-

[UpInArms]

6. Reports coming in:

8:30am 07/15/05 U.S. PPI UP 3.6% YEAR-OVER-YEAR VS. 3.5% IN MAY

8:30am 07/15/05 U.S. JULY EMPIRE STATE EMPLOYMENT INDEX 1.4 VS 5.5 JUNE

8:30am 07/15/05 U.S. JULY EMPIRE STATE INDEX WELL ABOVE CONSENSUS 11.6

8:30am 07/15/05 U.S. JULY EMPIRE STATE INDEX HIGHEST LEVEL THIS YEAR

8:30am 07/15/05 U.S. JULY EMPIRE STATE INDEX 23.9 VS REV 10.5 IN JUNE

8:30am 07/15/05 U.S. JUNE CORE INTERMEDIATE GOODS PRICES FALL 0.8%

8:30am 07/15/05 U.S. JUNE CRUDE GOODS PRICES FALL 3.3%

8:30am 07/15/05 U.S. MAY BUSINESS INVENTORIES BELOW EXPECATIONS

8:30am 07/15/05 U.S. MAY BUSINESS INVENTORIES RISE 0.1%

8:30am 07/15/05 U.S. JUNE INTERMEDIATE GOODS PRICES UP 0.1%

8:30am 07/15/05 U.S. JUNE PPI ENERGY PRICES UP 2%

8:30am 07/15/05 U.S. JUNE CORE PPI FALLS 0.1% VS. 0.2% GAIN EXPECTED

8:30am 07/15/05 U.S. JUNE PPI FLAT VS 0.4% GAIN EXPECTED

[UpInArms]

7. June U.S. producer prices flat

http://www.marketwatch.com/news/story.asp?guid=%7B2221401D%2D0966%2D4D43%2D8AE7%2D0D9CD6601E39%7D&siteid=mktw

WASHINGTON (MarketWatch) - U.S. producer prices were unchanged in June despite higher energy prices, the Labor Department reported Friday.

The core rate of inflation at the wholesale level fell 0.2%, the agency said.

Economists had expected the producer price index to rise 0.4% in June, according to the MarketWatch survey. Core inflation was expected to rise 0.2%.

The PPI had dropped 0.6% in May while core prices increased 0.1%.

Despite the mild reading in June, inflation accelerated on a year-over-year basis to 3.6% from 3.5% a month earlier. Yearly inflation peaked at 5% in November. The core PPI is up 2.2% year-over-year.

The PPI report, combined with a similarly mild consumer price index for June, should add to the chorus of voices calling for the Federal Reserve to end its tightening cycle sooner rather than later.

...more...

[UpInArms]

8. Empire State index up to 23.9, highest in 2005

http://www.marketwatch.com/news/story.asp?guid=%7B31E2A2D7%2DEBCF%2D4067%2D9750%2D87A10E03181B%7D&siteid=mktw

WASHINGTON (MarketWatch) -- Manufacturing activity in the New York area continued to rebound in July, the New York Federal Reserve Bank said Friday.

The bank's Empire State Manufacturing index rose to 23.9 in July from a revised 10.5 in June.

The index continues to climb after hitting a two-year low of -11.1 in May

<snip>

Despite the increase there was no improvement in the labor market conditions. The employment index slipped to 1.4 in July from 5.5 in June.

<snip>

The Empire State index is of interest to traders primarily because it's seen as an early forecast of the national Institute for Supply management factory survey due out in two weeks. In June, the ISM manufacturing rose unexpectedly to 53.8% from 51.4% in the previous month.

...more...

[54anickel]

39. Dollar Gains Versus Euro After Fed Empire Factory Index Climbs

http://www.bloomberg.com/apps/news?pid=10000103&sid=aO7rWtMEFKeI&refer=us

July 15 (Bloomberg) -- The dollar rose against the euro after a Federal Reserve index of New York state manufacturing unexpectedly climbed to the highest this year.

The U.S. currency also pared a decline against the yen as the report reinforced speculation the Fed will keep lifting interest rates after nine increases since June 2004. The New York index is the first U.S. manufacturing report for July.

``Dollar investments are getting a little bit more attractive,'' said Kenneth Landon, senior currency strategist in New York at JPMorgan Chase & Co. ``The number suggests faster growth, and people use it as an indicator of upcoming manufacturing reports.''

snip>

``The Fed is going to tighten through the year harder and longer than many in the market expect,'' said Steve Pearson, currency strategist at HBOS Plc in London. Higher interest rates may increase demand for dollar-denominated debt.

more...



My new financial advisor:

[UpInArms]

40. maybe we should dig up Nancy and Ronnie's psychic?

[WhiteTara]

60. that's Joan Quigley to you

Jeane Dixon was an entirely different psychic. Not that they weren't both wrong alot.

[UpInArms]

9. U.S. June PPI flat vs. expected 0.4% gain

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38548.3541998958-838500330&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) - U.S. producer prices were unchanged in June despite higher energy prices, the Labor Department reported Friday. The core rate of inflation at the wholesale level fell 0.2%, the agency said. Economists had expected the producer price index to rise 0.4% in June. Core inflation was expected to rise 0.2%. Inflation accelerated on a year-over-year basis to 3.6% from 3.5% a month earlier. The core PPI is up 2.2% year-over-year. Prices of intermediate goods destined for further processing increased 0.1%, with core intermediate prices falling 0.8%. Prices of crude goods fell 3.3%.

[UpInArms]

10. U.S. May business inventories rise 0.1%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38548.3542750232-838500364&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- Inventories at U.S. businesses rose 0.1% in May, to $1.3 billion, the Commerce Department said Friday. The rise in inventories outpaced the 0.1% decrease in sales, the Commerce Department figures show. The inventory-to-sales ratio, a closely watched measure of how fast merchandise is moving from the warehouse out the door, was at 1.30 in May for the second consecutive month. Economists surveyed by MarketWatch were expecting inventories to rise 0.3%.

[UpInArms]

19. 9:15 EST reports in:

9:15am 07/15/05 U.S. Q2 INDUSTRIAL PRODUCTION UP 2.1% ANNUALIZED

9:15am 07/15/05 U.S. JUNE CAPACITY UTILIZATION HIGHEST SINCE DEC. 2000

9:15am 07/15/05 U.S. JUNE CAPACITY UTILIZATION 80% VS 79.4% IN MAY

9:15am 07/15/05 U.S. JUNE INDUSTRIAL PRODUCTION HIGHEST SINCE FEB. 2004

9:15am 07/15/05 U.S. JUNE INDUSTRIAL PRODUCTION UP 0.9% VS 0.4 EST

[UpInArms]

21. Industrial output surges in June

http://www.marketwatch.com/news/story.asp?guid=%7BEE12143F%2D252E%2D4715%2D9BC0%2DFD91CC7EA601%7D&siteid=mktw

WASHINGTON (MarketWatch) - Output at the nation's factories, mines and utilities surged in June, the Federal Reserve reported Friday.

U.S. industrial production rose 0.9% in June. This is the strongest monthly increase since February 2004. Read full Fed release.

Capacity utilization jumped to 80% in June from 79.4% in the previous month. This is the highest level of capacity utilization since December 2000.

The gains in production and capacity use were much larger than forecast. Economists were expecting production to rise 0.4% and capacity utilization to rise to 76.4%. See Economic Calendar.

Despite the large increase in June, production is up only 2.1% annualized in the second quarter. This is the slowest quarterly pace since the second quarter of 2003.

...more...

[UpInArms]

22. U.S. June industrial production up 0.9%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38548.3856280093-838504793&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) - U.S. industrial production rose 0.9% in June, the Federal Reserve reported Friday. This is the strongest monthly increase since February 2004. Capacity utilization rose to 80% from 79.4%. This is the highest level of capacity utilization since December 2000. The gains were much larger than forecast. Economists were expecting production to rise 0.4% and capacity utilization to rise to 76.4%. Despite the large increase in June, production was up only 2.1% annualized in the second quarter. This is the slowest quarterly pace since the second quarter of 2003. Manufacturing output rose 0.4% in June. Output of utilities jumped 5.3%. Mining output rose 0.4%.

[UpInArms]

30. July UMich Consumer confused

9:50am 07/15/05 UMICH JULY CURRENT CONDITIONS SAID 112.0 VS. 113.2

9:49am 07/15/05 UMICH JULY CONSUMER EXPECTATIONS SAID 86.6 VS. 85.0

9:48am 07/15/05 UMICH JULY CONSUMER SENTIMENT SAID 96.5 VS. 96.0 JUNE

(edited to fix line item)

[UpInArms]

4. J.B. Hunt earns, rev. rise but miss expectations

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38548.2981623843-838492695&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- J.B. Hunt Transport Services (JBHT) reported second-quarter earnings of $54.6 million, or 33 cents a share, up from $45.6 million, or 27 cents a share in the same period a year ago, but below the average analyst estimate compiled by Thomson First Call of 34 cents a share. Revenue rose to $759 million from last year's $679 million, missing analyst forecasts of $772.5 million. The company said the general freight economy slowed but there was no indication that freight demand is headed for a downturn. Therefore, the trucking company said it was on track to meet 2005 earnings targets. The stock closed Thursday up 50 cents at $20.99.

Doesn't Squal-Mart have its own fleet of trucks?

[UpInArms]

5. Consumers take a hit coming and going

Kroger, six other retailers sue Visa

http://www.marketwatch.com/news/story.asp?guid=%7B018231A7%2D8BE1%2D4487%2DAD8D%2DFDFC04B6A765%7D&siteid=mktw

NEW YORK (MarketWatch) -- A group of large supermarket and drugstore chains have gone to federal court to sue Visa USA Inc., accusing the credit-card association of price-fixing through "interchange fees" charged to merchants, Kroger Co. said Friday.

<snip>

The plaintiffs allege Visa is preventing market forces from setting "interchange fees," charged to merchants for transactions made on credit and debit cards.

"Rapidly rising interchange fees are a serious problem, costing retailers and consumers an estimated $20 billion or more each year," said Kroger in a statement.

The company added that interchange fees cost the average U.S. household more than $230 a year.

...more at link...

[54anickel]

11. Citigroup No. 2 executive to quit (Check out the bennies)

Sheesh, he's leaving cuz he wants to be a CEO when he grows up.

http://biz.yahoo.com/rb/050714/financial_citigroup_willumstad.html?.v=2

NEW YORK (Reuters) - Citigroup Inc.'s (NYSE:C - News) No. 2 executive, Robert Willumstad, on Thursday said he will leave the world's largest bank and intends to run another public financial services company.

snip>

"He is at a time and age now where he is not going to run Citigroup," said Marshall Front, the chairman of Front Barnett Associates LLC in Chicago, who oversees $1.3 billion. "It's not a huge shock, but it is a bit of a surprise."

On a conference call, Willumstad said "there is nothing in the pipeline," but that if he didn't try to find a CEO job now, "probably the opportunity won't come along."

snip>

Citigroup said Willumstad agreed to some non-compete provisions, and to an accelerated vesting of about $5.9 million of restricted stock based on Thursday's closing price, securities filings show.

Willumstad will receive an office, secretarial support and a company car and driver until Aug. 31, 2006 or the date he finds another job, whichever comes first, a filing shows.

more...

[54anickel]

12. US expects Chinese currency revaluation

http://news.ft.com/cms/s/9a234620-f4bb-11d9-9dd1-00000e2511c8.html

The Bush administration has told key senators that it expects China to revalue its currency in August ahead of a planned visit to Washington by President Hu Jintao in September, according to people familiar with the matter.

snip>

In a June meeting attended by Alan Greenspan, Federal Reserve chairman, John Snow, Treasury secretary, told the senators that he believed China would allow the value of the renminbi to increase against the dollar in August, the people familiar with the discussion said.

“Senator Graham and I believe that the administration is convinced that China will begin a revaluation process this summer, forced by our bill's success in the Senate,” Mr Schumer told the FT.

Asked how Congress would respond if China did not move over the summer, Mr Schumer replied: “Every day support grows ”.

The US Treasury has told Beijing it needs to revalue the renminbi by at least 10 per cent against the dollar. Mr Snow reiterated on Thursday that the US wanted China to move “as soon as possible.”

more...

[UpInArms]

25. China says no need for new economic tightening moves

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-07-15T121508Z_01_L1593865_RTRIDST_0_ECONOMY-CHINA-TIGHTENING-UPDATE-1.XML

BEIJING, July 15 (Reuters) - China should not issue new economic tightening measures, a top statistical bureau official said on Friday, state media reported, underscoring views that growth in the world's seventh-largest economy may be slowing.

"We should stabilise macroeconomic control policies, and in the near term the government should not issue new tightening control measures," Qiu Xiaohua, vice head of the State Statistical Bureau said in a speech to the economic committee of China's National People's Congress.

China's economy expanded a faster-than-expected 9.5 percent in the year through the first quarter, keeping pressure on Beijing to rein in growth.

But data on industrial ouput and inflation point to a cooling economy and many economists expect growth to slow to less than 9 percent for the full year.

<snip>

China generated a trade surplus of $39.65 billion for the first half of the year, driven by the country's surging exports and government restraints on investment that has been slowing imports.

...more at link...

[54anickel]

36. China's central bank denies revaluation coming in August

http://news.yahoo.com/s/afp/20050715/bs_afp/chinaeconomyforex_050715090303;_ylt=AklcyH7bBpOhp1n3OWnG1xWmOrgF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

BEIJING (AFP) - China's central bank denied it was planning to announce a revaluation of its currency after the Bush administration reportedly told key senators that it expects such a move in August.

"There is no timetable," central bank spokesman Bai Li said, reiterating China's standard position on any change in its currency regime.

The Financial Times Friday said the US government had told Senators Charles Schumer and Lindsey Graham, co-sponsors of a bill that would impose a 27.5 percent tariff on imports of Chinese goods in the absence of any forex change, that it expected a move next month.

snip>

On Thursday, opposition Democrats in the House of Representatives introduced a bill aiming to cut the massive trade deficit with China by targeting what they called unfair trade practices.

"The unrelenting, sky-high trade deficits with China reflect a failure by the Bush administration to adopt trade policies that promote the interests of US workers, businesses and farmers," said Representative Charles Rangel (news, bio, voting record), one of the sponsors.

"We can't keep whistling into the wind and ignoring these deficits. They are undermining our economy and causing hard-working Americans to lose jobs."

more...

[UpInArms]

38. Looks like Rangel just doesn't understand

the motives of the BFEE

"The unrelenting, sky-high trade deficits with China reflect a failure by the Bush administration to adopt trade policies that promote the interests of US workers, businesses and farmers," said Representative Charles Rangel (news, bio, voting record), one of the sponsors.

http://www.usatoday.com/news/washington/2002/02/19/usat-prescott-bush.htm

President's uncle shares Bush family ties to China

CHICAGO — When President Bush arrives in Beijing on Thursday, he'll embrace a policy that's something of a family tradition.

Bush's approach centers on promoting U.S.-China economic ties. That's a course favored not only by his father, the first President Bush, but also by his uncle, Prescott Bush Jr., a longtime acquaintance of Chinese President Jiang Zemin.

The Bush family's ties to China go back to 1974, when President Nixon named George Bush ambassador to China. The college-age George W. Bush spent two months in China visiting his parents during his father's two-year stint.

Seven years after his brother left the ambassadorial post, Prescott Bush made his first trip to China. He later joined with Japanese partners in 1988 to build a golf course in Shanghai, the first in China. He met Jiang, who was then the mayor of Shanghai.

<snip>

He was criticized in 1989 for visiting China to meet with business and government leaders just three months after the Tiananmen Square massacre, in which army troops fired at pro-democracy demonstrators.
His Shanghai partnership with the Japanese firm Aoki in 1988 proved embarrassing when revelations surfaced that Aoki at the same time was allegedly trying to get business contracts by bribing Panamanian leader Manuel Noriega, whom the first President Bush later ousted from power.
His connections to an American firm, Asset Management, came into question in 1989, when the company was the only U.S. firm able to skirt U.S. sanctions and import communications satellites into China.
When Asset Management went bankrupt later that year, Bush's deal to arrange a buyout through West Tsusho, a Japanese investment firm, raised eyebrows. Newspapers reported that Japanese police were investigating West Tsusho's alleged ties to organized crime.

...more (all of it worth a read)...

[54anickel]

43. Sometimes I think China is doing a turn-about. Using the younger

idiot to turn the tide more to China's favor. I don't think they're necessarily looking for the perfect win-win solution at this point either.

IMO we are watching a quiet economic war (world revolution against the US financial status) taking place behind the blaring terror, axis of evil, no-nukes for you today, headlines. Could be wrong, I tend to read between the lines a bit too much sometimes.

Did you catch this one last-night? I don't have the original thread handy.

Are they bullying, or do these countries just feel they have some muscle and support behind them to tell the US to go? :shrug:


http://news.yahoo.com/news?tmpl=story&u=/ap/20050714/ap_on_go_ca_st_pe/us_central_asia_1

Myers Accuses Russia, China of Bullying

snip>

Gen. Richard B. Myers, chairman of the Joint Chiefs of Staff, was asked by a reporter what he thought of a statement last week by a regional alliance, led by China and Russia, calling on the U.S. to set a date for withdrawing forces from bases in the former Soviet republics of Uzbekistan and Kyrgyzstan.

U.S. forces have used a base in each country since the early days of the war in Afghanistan. Both governments recently have questioned the need for continued U.S. access.

Uzbekistan has imposed new limits on U.S. use of its Karshi-Khanabad air base, after the Bush administration spoke critically of Uzbekistan's handling of anti-government rioting in May that killed 200 or more people.

The statement last week by the Shanghai Cooperation Organization was interpreted by some as an attempt by Russia and China to push the U.S. out of a region that Moscow regards as historically part of its sphere of influence and in which Beijing seeks a bigger role because of the region's extensive energy resources.

"No, I don't think the Shanghai memo or communique or whatever came out was particularly useful," Myers said. "Looks to me like two very large countries were trying to bully some smaller countries. That's how I view it."

snip>

"Security and stability in Central Asia is an important concept, and those who can bring security and stability ought to be welcome in Central Asia," he said.

:eyes: Perhaps they don't see the US as "those who can bring security and stability" You moran!!!!

more...

[UpInArms]

13. AK Steel adds steel product surcharges in August

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38548.361107037-838501405&siteID=mktw&scid=0&doctype=806&

LONDON (MarketWatch) -- Steel products maker AK Steel (AKS) said it has told its flat-rolled carbon steel customers that a $183 per ton surcharge will be added to invoices for products shipped in August. AK Steel has also advised its electrical steel customers that a $115 per ton surcharge will be added to invoices for electrical steel products shipped in August. It said the surcharges were based on reported prices for raw materials and energy used to manufacture the products, with the June 2005 purchase cost used to determine the August 2005 surcharges.

What for the impact in the August PPI

[UpInArms]

14. (25,000) Job cuts coming at HP: analysts

http://money.cnn.com/2005/07/15/technology/hp.reut/

SAN FRANCISCO (Reuters) - Hewlett-Packard Co. is expected to announce a restructuring plan this month that could lead to large layoffs as the world's No. 2 computer maker seeks to slash costs, analysts say.

When HP reported fiscal second-quarter results in May, new Chief Executive Mark Hurd said the company had a "cost structure that is off benchmark in many areas," and HP signaled that further job cuts were likely in the current quarter.

In a research note this week, Moors & Cabot analyst Cindy Shaw wrote that HP could cut as many as 25,000 jobs next week. Analyst Toni Sacconaghi of Sanford C. Bernstein has said that HP could trim its workforce by up to 10 percent, or by 15,000 people, a move he estimates could save $1.5 billion annually.

<snip>

The Wall Street Journal, citing a person familiar with the situation, said HP was due to announce a restructuring on Tuesday, and cited analysts as saying HP might lay off thousands of workers.

Analysts have been expecting sharp cuts, based on statements from executives including Hurd, who joined HP as its CEO in April after the February ouster of Carly Fiorina.

...more...

[54anickel]

20. Heh, isn't that what Carly did early on as CEO as well? Then she

got herself to the top of the list for the largest CEO pay increase that year.

[UpInArms]

24. also HP has a ton of class action suits

http://www.google.com/search?hl=en&lr=&q=Hewlett+Packard+class+action+suit&btnG=Search

[54anickel]

28. Damn, that looks like one helluva investment! - NOT

[UpInArms]

15. Receiver to hit (Sovereign, Fleet) banks in Bleidt case

http://www.boston.com/business/articles/2005/07/15/receiver_to_hit_banks_in_bleidt_case/

The two banks that held accounts for accused embezzler Bradford C. Bleidt should be held liable for some of the millions of dollars lost by defrauded clients because they failed to stop him from raiding investors' funds, the federal court-appointed receiver in the case will argue in a filing today.

Boston attorney David A. Vicinanzo, appointed to recover investors' money, said the amount of suspicious activity in accounts Bleidt held at Sovereign and the former Fleet banks ''should have put each bank on notice that funds in the accounts were being converted and otherwise being used for an improper purpose," according to a draft copy of a status report he is expected to submit today.

Vicinanzo also indicated that insurance companies for the three brokerage firms Bleidt was affiliated with over the years he allegedly swindled investors are reluctant to pay up to $4 million in coverage that could be used to reimburse victims.

Bleidt has been charged with defrauding 125 investors, many of whom are retired couples who lost their life savings, out of about $27 million. He is scheduled to appear at a hearing July 26 after being charged in June with 115 counts of mail fraud and one count of money laundering. Bleidt's lawyer, Gregory Oberhauser, did not return a call for comment.

Prosecutors have said that for more than a decade Bleidt persuaded investors to entrust him with their money, but instead of putting the funds into legitimate investments, he used millions for business and personal expenses, including buying business radio station WBIX in Boston. Bleidt concocted phony statements with fictitious balances in legitimate investments that he would send to investors, prosecutors have said.

[54anickel]

31. Hey, that's not fraud - that's just good bidness practices these days!

Use other people's money (OPM)!

http://taxmama.com/Articles-cur/opm.html

There are countless sources of cash, but by far, the best one to utilize for your business is … other people's money.

Perhaps one of the greatest "secrets" of the richest people in the world is summed up in those 3 words: Other People's Money – OPM for short.

If you took a cross-section of the most affluent business people, you'll find that the majority of them launched their fortunes using OPM. In the next few minutes, I will show you how you can obtain other people's money for your business. What you do with the money, however, is up to you – but if I were you, I'd take P.T. Barnum's advice, and make money your servant so that you, too, you can make your own fortune.

The use of other people's money has become such an ethical and acceptable mainstay in business because one can leverage other people's money to your benefit.

[UpInArms]

33. Other People's Money - that's one of the "must read" books from the 80s

http://www.amazon.com/exec/obidos/ASIN/067168101X/ref=pd_sxp_f/102-6402849-7456953

From Publishers Weekly
In their hard-hitting, credible expose of the government and private mismanagement and fraud that ushered in the national S&L disaster in the mid-'80s, real estate developer and New York University School of Business professor Pilzer and Deitz, business editor of the Dallas Times Herald , address the damage this calamity has done to the trust Americans place in financial institutions and the merit of saving money. First offering a concise history of the savings industry in the U.S., the authors go on to deplore its deregulation in the 1970s and '80s, arguing that this led to a virtually unlimited flow of brokered funds and risky investments by incompetents and crooks. Accusing the Federal Home Loan Bank Board of an extensive cover-up of such shenanigans, Pilzer and Deitz sensibly call for reform of the savings deposit system, repayment of stolen savings to investors and incentives to restore our confidence in the virtue of thrift.
Copyright 1989 Reed Business Information, Inc.

From Library Journal
Along with Dietz, the business editor of the Dallas Times Herald, Pilzer, a partner in a real estate syndicate, provides a readable and comprehensive history of the savings and loan industry from its roots in ancient times to the present, with a focus on the debacle that now plagues it. Stephen Pizzo's Inside Job ( LJ 9/15/89) provides much of the same general information; this account includes more history of the industry. It focuses more on Texas, while the earlier book is California oriented. The books complement each other as a result, providing a wealth of details on the role of the federal government and legislation on this problem. A review of another book on the savings and loan crisis, James Adams's The Big Fix , will appear in our next issue.
- Ed. -- Steven J. Mayover, Free Lib. of Philadelphia
Copyright 1989 Reed Business Information, Inc.

UIA gives it :thumbsup::thumbsup:

[54anickel]

35. Thanks! That's the one I was thinking of. Sure get a lot of hits in

Google on "Other people's money". I remember when the idea was all the rave, talk of the town, touted as the great new way to do things. Now it's just accepted as the norm, now one can remember what it was like before this new paradigm took hold.

[UpInArms]

16. Treasurys hit by strong data

http://www.marketwatch.com/news/story.asp?guid=%7BB8A19898%2DCA72%2D4BE7%2DAF7C%2D88AC6F241E92%7D&siteid=mktw

NEW YORK (MarketWatch) - Treasury prices fell early Friday, sending yields higher, after new manufacturing and business inventories reports instilled a sense that the economy is healthy.

In recent trade, the yield ($TNX: news, chart, profile) on the benchmark 10-year Treasury note rose to 4.181% from $4.173% before the news.

Initially, Treasury prices rose after producer price data for June echoed the latest consumer-level report in indicating that inflation is tame.

U.S. producer prices were unchanged in June despite higher energy prices, the Labor Department reported. The core rate of inflation at the wholesale level fell 0.2%.

<snip>

But the gains were short-lived as the market focused on a New York Federal Reserve survey that pointed toward continued recovery in manufacturing, a sector that appeared somewhat weak earlier in the year.

...more...

[UpInArms]

17. Companies set for new borrowing spree -Citigroup

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-07-15T120331Z_01_L14569284_RTRIDST_0_PICKS-MARKETS-BONDS-SPREE-DC.XML

LONDON (Reuters) - U.S. and European companies are poised for a borrowing spree in the coming months as they respond to calls from their shareholders for higher returns, said bankers at Citigroup Inc (C.N: Quote, Profile, Research) on Friday.

Pressure to boost equity value, either through stock buybacks, dividends or mergers, will prompt companies to sell more bonds, Citigroup said, pushing up borrowing costs and cutting the value of existing debt.

"As a corporate executive you need to be a slave to the equity market," said Matt King, head of quantative credit strategy at Citigroup in London. "And you will find it harder to hit your earnings per share targets if you don't boost your levels of debt."

Global merger and acquisition volume increased 35 percent in the first half of 2005 to $1,299 billion, according to data provider Dealogic, while numerous companies, including VodafoneL>, Nokia (NOK1V.HE: Quote, Profile, Research), BMW (BMWG.DE: Quote, Profile, Research) and Nestle (NESN.VX: Quote, Profile, Research), announced share buybacks.

<snip>

The low cost of borrowing means companies can more than cover interest payments out of cash flow, King said, and private equity groups are among those seeking opportunities to exploit that imbalance to launch takeover bids.

...more...

[UpInArms]

18. Misleading economic indicators

http://today.reuters.com/PrinterFriendlyPopup.aspx?type=reutersEdge&storyID=uri:2005-07-14T151028Z_01_N13669356_RTRIDST_0_PICKS-ECONOMY-LEADING-DC.XML

WASHINGTON (Reuters) - The fortune tellers of the economic data world have had their crystal balls clouded by Federal Reserve chief Alan Greenspan's so-called "conundrum."

The peculiar decline in long-term interest rates as the Fed pushes up short rates has rendered one oft-used component of leading economic indices slightly dysfunctional.

The shrinking of the gap between short and long-term interest rates -- a so-called flattening of the yield curve -- has typically been seen as a harbinger of a slowing economy, ebbing inflation and lower official interest rates.

As a result, many business cycle researchers compiling their oracles use the yield spread along with other early economic signals such as weekly jobless claims, money supply, commodity trends, new business orders and building permits.

<snip>

The Conference Board, the firm which publishes the U.S. Leading Economic Indicators series, said its index has declined 1.9 percent in the year to May, with about half of the drop due to the flattening of the yield curve.

This would typically signal a sharp economic slowdown this year.

...more...

[54anickel]

26. Well, they are certainly trying to convince themselves that an inverted

yield might not be such a bad thing. I like this line:

But Nilsson acknowledged a problem with the spread is gauging whether its movements are a positive or negative economic influence. Are falling long-term rates a plus for the economy because they mean cheap borrowing or a negative signal of future activity?


Sheesh, they have to ask themselves that question? Cripes, sure many a strong nation were built on massive amounts of cheap credit rather than making stuff to sell and trade. :eyes:

[UpInArms]

29. it would appear that they are putting

coins in a box and shaking the box back and forth to make their "money" grow :eyes:

[54anickel]

34. "The new economy" mantra strikes again.

[UpInArms]

23. pre-opening blather

9:17AM: S&P futures vs fair value: +1.0. Nasdaq futures vs fair value: flat. Futures trade holds relatively steady following more economic data... June industrial production rose 0.9%, more than doubling forecasts, while capacity utilization rises to 80.0%, which embarks on a potentially dangerous (80+%) level historically consistent with bottlenecks and rising pricing pressures... However, encouraging reads from more influential CPI and PPI data mitigate inflation fears

9:00AM: S&P futures vs fair value: +0.7. Nasdaq futures vs fair value: +0.5. Recent recovery effort in futures trade stalls, as subdued action sets the stage for a neutral open for the cash market... Even though fundamentals remain excellent, as evidenced in strong earnings and encouraging economic data, recent milestones for the major indices may be prompting some consolidation... The Dow, S&P and Nasdaq are already up 1.7%, 1.2% and 1.9%, respectively, for the week...

Separately, June industrial production (consensus +0.4%) and capacity utilization (consensus 79.6%) will be released at 9:15 ET

8:33AM: S&P futures vs fair value: +2.3. Nasdaq futures vs fair value: +2.0. Futures trade gets a modest boost, now indicating a slightly higher open for the indices, following more good news on the inflation front... June PPI was unchanged, below an expected 0.4% rise, while core-PPI fell 0.1%, versus an expected 0.2% rise... Also out, May business inventories rose 0.1% (consensus +0.4%), while July NY Empire State Index checks in above forecasts at 23.9, suggesting a favorable read on regional manufacturing...

Bonds, which were relatively unchanged before the data have actually held steady, as the 10-yr note is up 1 tick to yield 4.16%

8:00AM: S&P futures vs fair value: +1.0. Nasdaq futures vs fair value: +0.5. Futures market versus fair value suggesting a flat open for the cash market as investors wait for key economic data to set the direction to early trading amid mixed earnings results... General Electric (GE) has matched analysts' Q2 forecasts but upped the high end of its prior guidance while National City (NCC) has handily beaten forecasts and First Data (FDC) has missed estimates by a penny...


(edited to add 9:17 blather)

[ozymandius]

27. Markets are open for bidness

9:36
Dow 10,633.90 +5.01 (+0.05%)
Nasdaq 2,150.79 -2.03 (-0.09%)
S&P 500 1,226.31 -0.19 (-0.02%)
10-Yr Bond 41.88 +0.08 (+0.19%)
NYSE Volume 128,404,000
Nasdaq Volume 128,506,000

[UpInArms]

32. 9:55 EST numbers (all red now)

Dow 10,623.47 -5.42 (-0.05%)
Nasdaq 2,149.37 -3.45 (-0.16%)
S&P 500 1,225.65 -0.85 (-0.07%)
10-Yr Bond 4.199 +0.19 (+0.45%)

NYSE Volume 247,583,000
Nasdaq Volume 245,360,000

[UpInArms]

41. 10:41 EST numbers and blather

Dow 10,626.74 -2.15 (-0.02%)
Nasdaq 2,146.98 -5.84 (-0.27%)
S&P 500 1,225.27 -1.23 (-0.10%)
10-Yr Bond 4.185 +0.05 (+0.12%)

NYSE Volume 482,432,000
Nasdaq Volume 478,180,000

10:30AM: Market still languishing below the flat line as the bulk of sector leadership remains negative... Industrials have paced the way lower after General Electric (GE 35.10 -0.53), which matched analysts' Q2 expectations, guided Q3 earnings below consensus estimates... Technology has also shown relative weakness, as losses in chip stocks and software offset gains in hardware... The latter has gotten a boost amid reports of a major restructuring at Hewlett-Packard (HPQ 24.88 +0.26) while recent gains which have lifted the PHLX Semi Index to a 52-week high has sparked some profit-taking...

Financial has also been modestly weak, as reports that Citigroup's (C 46.09 -0.41) No. 2 executive is leaving overshadow stronger than expected earnings from National City (NCC 36.12 +0.36)...Energy, however, has posted a modest gain as oil prices ($58.70/bbl +$0.90) recover some of the 3.7% lost yesterday...DJTA -0.6, DJUA +0.1, DOT -0.2, Nasdaq 100 -0.2, Russell 2000 -0.6, SOX -1.0, S&P Midcap 400 -0.3, XOI +0.1, NYSE Adv/Dec 1006/1797, Nasdaq Adv/Dec 937/1641

10:00AM: Major indices get a slight boost following a stronger than expected preliminary read on consumer sentiment, but the market almost as quickly returns to previous levels... July consumer confidence, as measured by the University of Michigan index, has risen to 96.5, above expectations of 94.5 and a June reading of 96.0... However, since the data don't correlate well with consumer spending trends and such an improvement was widely anticipated, the overall reaction has been somewhat muted given the market's bullish leanings lately...

[54anickel]

37. Hit List

http://www.forbes.com/home/free_forbes/2005/0411/052.html

Trigger-happy boards of directors could take aim at any chief exec whose stock isn't doing well. Who's at risk?

Maybe it's Sarbanes-Oxley, maybe it's the spirit of the times, or maybe it's just a belated effort to earn their own, sometimes lavish, pay, but corporate directors sure are acting up these days. If Michael Eisner and Maurice (Hank) Greenberg can be eased out after creating tens of billions of dollars of shareholder value earlier in their careers, the operative question in boardrooms must now be: What have you done for us lately? Sometimes, as is shown by the sad case of Richard Grasso of the New York Stock Exchange, a boss can get canned even after doing a terrific job, if his paycheck is embarrassingly high.

Are directors handing out too many pink slips? As Nell Minow of the Corporate Library, a governance oversight group, puts it: "I do worry about the Queen of Hearts syndrome on boards, where the first response to problems is ‘Off with their heads!'" But now they have their own pocketbooks at risk. WorldCom's directors are being forced to personally chip in a total of $20 million to settle shareholder suits.

Herewith, a list of bosses with reason to worry either because their stocks are flagging and/or because their pay, with hindsight, looks too good. It will be argued that the pay cited here (from the five most recently published proxy statements) includes options cashed in recently but earned years ago during the good times. True enough, but directors--and investors--have short memories.

more...

Hey, so what? That "What have you done for us lately" is exactly the treatment employees get these days. Them's the breaks, that's the way the world turns these days.

[UpInArms]

42. Gauge of U.S. economy slips in latest week

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-15T143030Z_01_NAT001697_RTRIDST_0_ECONOMY-ECRI-WEEKLY-URGENT.XML

NEW YORK, July 15 (Reuters) - A leading index of the U.S. economy slipped in the latest week due to weaker housing activity, higher jobless, and lower industrial prices, a report showed on Friday.

The Economic Cycle Research Institute, an independent forecasting group, said its weekly leading index fell to 133.5 in the week ended July 8 compared with 134.4 in the prior week.

The index's annualized growth rate, which smoothes out weekly fluctuations, was 1.2 percent compared with 1.4 percent in the prior week.

"Despite this week's down tick, the weekly leading indicator growth rate has improved in recent weeks, indicating U.S. economic growth prospects have brightened a bit," said Lakshman Achuthan, managing director at ECRI.

...short blurb...

[54anickel]

44. Inflation Phobia (Roach)

http://www.morganstanley.com/GEFdata/digests/20050715-fri.html#anchor0

Inflation appears to be down and out, but there are lingering fears of a comeback. Those fears are based on the closed-economy inflation models of yesteryear. In the timeworn jargon of the dismal science, the “Phillips curve” tradeoff between growth and inflation is still thought to be alive and well. These fears are overblown, in my view. If anything, the risks are skewed more toward another deflation scare rather than a worldwide acceleration of inflation. Financial markets are not aligned with those risks.

America is on the leading edge of this inflation phobia. With labor and product markets tightening, unit labor costs on the rise, oil prices at $60, and an all-powerful Fed-driven liquidity cycle at work, inflation concerns are understandable. Yet those concerns are not being borne out by the data flow. Underlying inflation in the US economy has surprised on the downside yet again. The core CPI has increased at just a 1.2% annual rate in the three months ending June 2005. On a year-over-year basis, core inflation has slowed to just a 2% rate — the weakest comparison since last October.

snip>

America’s disinflation saga becomes even more interesting as we peer behind recent trends in services. The bulk of the downtrend has been concentrated in three major categories — shelter, transportation, and a hybrid category that includes a broad array of miscellaneous services. By contrast, there has been little relief in the inflation of medical care and household operations services. Of all these pieces, the one that fascinates me the most is the miscellaneous, or “other,” services inflation; in June 2005, this component of core services held at its cycle low of 2.5% — down markedly from the cycle high of 4.1% hit in November 2001. This grouping, which has a weight of about 19% in total core services, includes items such as IT services, personal care services, and legal and financial services — most of which are now exposed to the new globalization of nontradables (see my 7 June 2005 essay, “The New Macro of Globalization”). I don’t think it’s a coincidence that the most disinflationary piece of services inflation is that which is now most exposed to international competition. Moreover, there is still an important domestic force at work in services — namely, that recent wage disinflation has been increasingly concentrated in America’s vast services sector (see my 8 July dispatch, “Back to the Drawing Board”). Over the 24 months ending in March 2005, nominal compensation growth in private service producing industries averaged 3.4% at an annual rate, or just 0.9% in real terms. That works out to only about half the 1.75% pace of real compensation growth in manufacturing over that same period. The combination of globalization and reduced domestic cost pressures underscores the distinct possibility of more disinflation to come in labor-intensive services.

But what about the other pieces of the US inflation puzzle — namely, rising unit labor costs, higher oil prices, and mounting non-oil input inflation? First of all, there can no mistaking the recent deterioration on all of those fronts: Unit labor costs were up at a 4.3% y-o-y rate in 1Q05 — the sharpest increase since 2000. Moreover, input inflation as approximated by the core PPI (2.6%) is now running above core CPI inflation (2.0%) for the first time since 1990. Meanwhile, real oil prices are back to levels last seen in the early 1980s. However (gulp), this time it truly is different. I completely agree with Dick Berner that the old cost-mark-up models of the past have been rendered all but obsolete by the increasingly powerful forces of globalization (see Dick’s 3 June 2005 dispatch, “Inflation Model Uncertainty”). Price setters are no longer in the United States but, instead, they reside increasingly in Shanghai, Bangalore, Seoul, Mexico, and Eastern and Central Europe. As such, domestic cost pressures are no longer synonymous with accelerating inflation as they were in the pre-1990 era. Instead, costs now bear more directly on domestic profit margins. The ups and downs of the inflation cycle in open economies such as the US are increasingly an outgrowth of the global balance between supply and demand.

more...

[54anickel]

45. Pricing power beyond reach of many companies

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-07-14T171237Z_01_N14563184_RTRIDST_0_PICKS-MARKETS-STOCKS-PRICINGPOWER-DC.XML

While some businesses successfully have pushed through price hikes -- cruise lines, hotels and even some airlines, for example -- a vast number of U.S. companies have been forced to freeze prices or even lower them to weather competition.

"There's generally been a lack of ability to raise prices unless you are talking about narrow specific areas," said Stephen Massocca, president at investment bank Pacific Growth Equities. "Profits have largely gone up because companies have been able to be more productive and control costs better and maintain the same prices."

In many cases, with oil prices touching a record $62.10 on July 7, higher fuel costs have forced companies to consider raising prices. But unless there is a clear correlation between energy cost pressures and the price increases, businesses have faced a backlash from consumers.

snip>

"There is no pricing power in industries with worldwide oversupply and that would include sectors such as automobile, where demand may have gone up but there is so much supply that there is no pricing power and, in some cases, negative pricing power," said Jim Awad, chairman of Awad Asset Management.

more...

[54anickel]

46. Cnooc Fails to Sway Unocal, Keeps Offer at $18.5 Bln (Update8)

http://www.bloomberg.com/apps/news?pid=10000080&sid=agp1.TmyyCcY&refer=asia

July 15 (Bloomberg) -- Cnooc Ltd., China's third largest oil company, failed to persuade Unocal Corp. directors to support a takeover because it didn't raise its $18.5 billion cash offer, people familiar with the matter said.

Chief Executive Fu Chengyu has permission from Cnooc's board to raise the bid to $69 a share from $67, said the people, who asked not to be identified. Instead, he offered to set aside $2.5 billion to cover Unocal against any shareholder lawsuits should a sale to the Beijing-based company fail, they said.

Cnooc faces growing political opposition in the U.S. The company revised the terms in an effort to get Unocal's directors to switch their support at a board meeting yesterday from a rival $16.3 billion offer by Chevron Corp., the people said. Fu has until Aug. 10, when Unocal shareholders vote on Chevron's plan, to make a higher bid. Cnooc said today it's still in discussions.

``Cnooc greatly underestimated how much this would cost,'' said Mark Kajita, who helps manage $550 million, including shares of Cnooc and Chevron, as chief investment officer at Baker Boyer National Bank in Walla Walla, Washington. ``They did not take into account the kind of firestorm they were about to set off in the U.S.''

more...

[54anickel]

49. Let China Buy Unocal

http://www.thestreet.com/funds/jubak/10231975.html

Why the furor at the bid by China's third-largest oil company, CNOOC (CEO:NYSE ADR - news - research), for Unocal (UCL:NYSE - news - research), the ninth-largest U.S. oil company?

What's the surprise? That oil-hungry China would buy an oil company? That the Chinese, who are swimming in U.S. dollars, would use them to buy something other than U.S. Treasuries, with their 4% yields? Were the Chinese just supposed to start burning piles of greenbacks to heat their homes and run their factories?

And the outrage? Because the Chinese are buying our oil? Hello! Unocal's most-valuable fields are off Thailand, Indonesia and Myanmar. Because our national security will be in danger if the Chinese get new seismic technology from Unocal? Hello! The Chinese already have nuclear weapons and routinely conduct underground tests of their bombs; they don't need to buy Unocal to get better seismic data. Or because, horror of horrors, CNOOC is getting below-market-rate loans from its government (we never, never do that to help U.S. companies) so that it can overpay for Unocal? Hello! Considering our trade deficit with China, don't we want it to overpay?

I say, bring 'em on. We need more bids like CNOOC's and the bid by Haier Group, China's largest appliance maker, for Maytag (MYG:NYSE - news - research). Let's sell more struggling divisions of our multinationals to Chinese companies, a la the purchase of IBM's (IBM:NYSE - news - research) chronically money-losing PC operation by China's Lenovo Group. And I hope that some of the current rumors -- including that Aluminum Corp. of China (ACH:NYSE ADR - news - research) is on the prowl for aluminum companies when stock prices are near the top for this commodity cycle -- turn out to be true.

more... Can you tell this guy doesn't need to worry about a job from that paragraph? He does raise some other interesting points though.

[54anickel]

52. The High Costs of Involuntary Defense

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=44686

China National Offshore Oil Corporation’s (CNOOC) $18.5 billion bid for Union Oil of California (Unocal) has triggered security alarms and prompted cries against foreign purchase of strategic American companies. There is no evidence Unocal needs or wants help suppressing a cash offer with no job cuts or reductions in US energy access. Shareholders might even prefer upward pressure be placed on Chevron Texaco’s modest bid. This braying din was remarkably mute in the course of the acquisition of hundreds of billions of dollars in US assets by state owned Chinese institutions. Unocal is a mid-sized oil company with a majority of assets and growth offshore. In 2004 62% of natural gas and 56% of liquids operations were foreign. Few were spooked by Chinese purchases of $220 billion in Treasuries, $200 billion in agency debt, a trade shortfa ll of $162 billion and Lenovo’s purchase of IBM’s PC business. Why this fiery rhetoric?



Official statements from Congress and some in the administration suggest that the vital nature of Unocal’s assets require state intervention. Lately attention is focused on Stephen Hadley’s assertion that nothing like this can or ever has happened. It saddens me to report, two months running, that a trusted official has told you a whopper.



Earlier this year, United Defense Systems was sold to British BEA Systems despite the fact that UDS is a major Pentagon weapons supplier. Similarly, Mittal Steel’s buyout of ISG went unopposed. Deutsch Telecom’s 1999 purchase of Voice Stream signaled a foreign firm (partially owned by a foreign government) purchasing a firm that was, in its Western Wireless origins, American. This deal went through to create T-Mobile. Innumerable examples exist across the last 20 years, discrediting Hadley’s “never-before” thesis.



In the CNOOC bid commotion, political gamesmanship and traditional returns to xenophobia are certainly in the mix. Unocal’s history is curiously absent from discussion and analysis of the matter. Unocal operates in Thailand, Indonesia, Myanmar, Bangladesh, The Netherlands, Azerbaijan, The Congo, Vietnam, Alaska and the Lower 48 US States. The firm participates in exploration, production and development of oil, natural gas and liquids. The nations where Unocal operates are remarkable for two reasons: First, it demonstrates Unocal’s ability to operate successfully in difficult and unstable regions. Secondly, it is interesting to note the concentration of activity in China’s territorial vicinity.



Additionally, former Unocal associates are presently running the nation of Afghanistan and representing US interests in Iraq. Zalmay Khalilzad, US Ambassador to Iraq, has been linked to the firm in years past. Across 1996-1998 Unocal led a consortium in talks to build a $2 billion pipeline across Afghanistan to India and Pakistan. It was during this period that the firm (or its consultants and partners) employed Khali lzad, Robert Oakley (of Iran-Contra fame), Henry Kissinger and Richard Armitage. In December 1997, Unocal Texas hosted the Taliban during a US tour. The point is, this not a fledging family firm unable to reckon with international friction.

more...

[54anickel]

47. A Hands-Off Policy on Mortgage Loans

http://www.nytimes.com/2005/07/15/business/15mortgage.html?

snip>

It's as easy to get these loans now as it was two months ago," said Michael Menatian, president of Sanborn Mortgage, a mortgage broker in West Hartford, Conn. "If anything, people are offering them even more than before."

The reason is that federal banking regulators, from the Federal Reserve to the Office of the Comptroller of the Currency, have been reluctant to back up their words with specific actions. For even as they urge caution, officials here are loath to stand in the way of new methods of extending credit.

"We don't want to stifle financial innovation," said Steve Fritts, associate director for risk management policy at the Federal Deposit Insurance Corporation. "We have the most vibrant housing and housing-finance market in the world, and there is a lot of innovation. Normally, we think that if consumers have a lot of choice, that's a good thing."

At the Federal Reserve, officials face issues similar to those posed by the stock market bubble of the late 1990's. Alan Greenspan, the chairman of the Federal Reserve, warned about "irrational exuberance" in the stock market but did not try to pop the bubble.

snip>

The main issue for regulators is whether banks and other lenders are properly managing their own risk, and the lenders are looking good.

They have hedged their risks by bundling mortgages into securities that are then sold to investors around the world. And if interest rates go higher, they have shifted much of the risk onto consumers because a growing share of home buyers have taken on adjustable-rate mortgages. At the same time, they have built sturdier financial institutions through mergers and the breakdown of barriers to interstate banking.

:eyes: More of that OPM paradigm

more...

[54anickel]

48. Keeping Shareholders in the Dark

http://www.nytimes.com/2005/07/15/business/15norris.html

THE government had opened a criminal investigation and the company's stock plunged. What was the company to do?

At Allied Capital, the answer was clear - and effective. First, it blamed short sellers for prompting the investigation. Then it added a politician to its board and declared that henceforth it would provide less information than ever to its investors.

And it worked. More than six months later, Allied Capital's stock is back above where it was when the company disclosed the Justice Department investigation into Business Loan Express, a subsidiary that makes government-backed small business loans.

That unit has supplied Allied with profits it used to pay dividends to investors, but disclosures Allied has made seem to indicate that it was a cash drain on Allied. Even that is no longer clear. In its latest quarterly report, Allied slashed the information it disclosed on Business Loan Express.

The company declined to answer questions, but directed me to a statement on Page 59 of the latest quarterly report. "There is a need to maintain the confidentiality of the financial and other information that we have for the private companies in our portfolio," the report stated, and only legally required disclosures will be made.

more...

[UpInArms]

50. 12:14 EST numbers and blather

Dow 10,604.03 -24.86 (-0.23%)
Nasdaq 2,146.92 -5.90 (-0.27%)
S&P 500 1,223.75 -2.75 (-0.22%)
10-Yr Bond 4.168 -0.12 (-0.29%)

NYSE Volume 843,596,000
Nasdaq Volume 758,329,000

12:00PM: Market under modest pressure midday as profit-taking amid mixed earnings reports offset another batch of strong economic data... Even though the June PPI report has provided more good news on the inflation front, as total PPI was unchanged (consensus +0.4%) and core PPI fell 0.1%, versus an expected 0.1% rise, investors continue to consolidate recent gains across the board, as 8 out of 10 economic sectors trade in negative territory...

Just yesterday, the S&P - up 1.2% for the week - closed at a four-year high, while the Nasdaq - up 1.9% since last Friday - closed at its best levels of 2005... Perhaps adding to the hesitation on the part of buyers has been the latest earnings report from General Electric (GE 35.10 -0.53)... GE matched analysts' Q2 expectations and guided Q3 earnings below consensus estimates, a contrast to the recent wave of stronger than expected earnings... Other economic data so far being overlooked today has been June industrial production, which checked in at record levels, July NY Empire Index, which came in at its best levels of the year, and July consumer confidence, which rose to 96.5 - the highest reading since Dec 2004...

Meanwhile, Industrials has been under modest pressure as losses in GE and consolidation within the airline group following yesterday's strong 5.0% performance offset better than expected Q2 results and a raised FY05 outlook from WW Grainger (GWW 61.26 +4.01), strong earnings and FY06 guidance from Cintas (CTAS 44.20 +4.40) and analyst upgrades on NSC and CSX... Technology has also been weak, as losses in chip stocks and software offset gains in hardware...

[54anickel]

51. I'm still waiting for the "don't want to hold over the week-end" line..n/t

[54anickel]

53. 1:22 numbers and yada (then I've gotta run again)

Dow 10,616.89 -12.00 (-0.11%)
Nasdaq 2,150.00 -2.82 (-0.13%)
S&P 500 1,225.41 -1.09 (-0.09%)
10-Yr Bond 4.185% 0.00
NYSE Volume 1,025,057,000
Nasdaq Volume 906,086,000

1:00PM: Range-bound trading persists for the major averages as market internals still hold a slightly negative bias... As reflected in the A/D line, decliners on the NYSE outpace advancers by a 3 to 2 margin while declining issues on the Nasdaq hold a 16 to 11 edge over advancing issues... Despite modest consolidation across the board, the Dow, S&P and Nasdaq continue to trade above initial support levels of 10605, 1224 and 2145, respectively... NYSE Adv/Dec 1237/1872, Nasdaq Adv/Dec 1174/1678

12:30PM: More of the same for stocks as selling remains widespread across most areas... Bonds, however, have recently inched back above the flat line, although volume remains light... After hitting 4.20% for the first time since May 12, following the industrial production and capacity utilization figures, benchmark yields have recently stabilized around 4.16%, as the 10-year note (+1/32) has found renewed buying interest in the wake of its longest slide (6 straight days) since April 2004...NYSE Adv/Dec 1144/1941, Nasdaq Adv/Dec 1127/1695

[UpInArms]

54. 2:36 EST numbers and blather (all good now)

Dow 10,634.06 +5.17 (+0.05%)
Nasdaq 2,153.12 +0.30 (+0.01%)
S&P 500 1,226.87 +0.37 (+0.03%)
10-Yr Bond 4.176 -0.04 (-0.10%)

NYSE Volume 1,234,227,000
Nasdaq Volume 1,107,300,000

2:00PM: Indices have been kept on a tight leash by today's participants as they haven't gone anywhere too freely... While the market remains on the defensive, it appears consolidation again remains more evident among the small caps, as losses on the Russell 2000 continue to outpace those of its blue chip counterparts... Russell 2000 -0.3, NYSE Adv/Dec 1356/1809, Nasdaq Adv/Dec 1249/1658

1:30PM: Not much changed in afternoon trading as buyers remain a reluctant bunch heading into the weekend... Biotech, however, has again touched a new 52-week high... Even though Chiron (CHIR 35.60 -1.67), which will cut flu vaccine supplies in Europe upon discovering tainted batches, has fallen about 4.5%, continued momentum in shares of Genzyme (GENZ 68.94 +3.64) have helped the group lift its weekly performance to almost 2.0%... Yesterday, GENZ shares surged 6.1% to a new all-time high after the company posted better than expected Q2 earnings and issued upside FY05 guidance... NYSE Adv/Dec 1300/1832, Nasdaq Adv/Dec 1259/1645

[ewagner]

55. kick

back to the top.......

[loudsue]

56. Yep...it keeps trying to disappear...

It's a hot Friday in the LBN forum.

:kick::kick::kick:

[ewagner]

57. Geeez...needs another?

gotta comment here...

all the "good economic news" being released recently has to have something to do with the administration trying to "good news" their way out of the scandal(s).

Am I too cynical?

[UpInArms]

58. closing numbers and blather

Dow 10,640.83 +11.94 (+0.11%)
Nasdaq 2,156.78 +3.96 (+0.18%)
S&P 500 1,227.92 +1.42 (+0.12%)
10-Yr Bond 4.175 -0.05 (-0.12%)

NYSE Volume 1,716,389,000
Nasdaq Volume 1,535,180,000

Close: Despite broad-based consolidation weighing on the indices throughout most of the session, investors found enough momentum behind more benign inflation data to extend yesterday's gains in spite of split industry leadership... With the major indices rallying an average of 1.7% over the last two weeks, pressure to lock in some profits heading into the weekend had kept gains in check nearly all day, until leadership returned late in the day from influential sectors like financial and technology...

The S&P 500 closed at another new four-year high, enjoying its best winning streak (7 straight days) since last November, while the Dow closed at four-month highs and the Nasdaq finished at its best levels for the year... Meanwhile, further validation that underlying pricing pressures remain under control provided enough of an impetus for the bulls to beat out the bears... June PPI was unchanged, versus an anticipated rise of 0.4%, while core PPI, which was expected to rise 0.1%, fell 0.1%, leaving the core rate over the past five months up a modest 0.5%...

However, even though the bulk of other economic data were also upbeat - June industrial production hit record levels, the July NY Empire Manufacturing Index soared its best levels of 2005 and a preliminary read on July consumer confidence turned in its highest reading (96.5 versus 94.5) since Dec 2004 - investors still had to contend with a mixed report from bellwether General Electric (GE 35.52 -0.11)... Sure, GE posted its largest profit gain since late 2003, but since Q2 earnings merely matched analysts' forecasts and the company guided Q3 earnings below consensus estimates, the stock lost ground, perhaps underpinning some doubt about an expected acceleration in earnings...

And a Great Weekend to All! :hi:

[54anickel]

59. Heh, "lock in profits heading into the weekend". Well, I suppose Friday

being payday and all. Certainly not your father's old buy and hold market anymore, is it?