STOCK MARKET WATCH, Friday 22 July

[ozymandius]

Friday July 22, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 183 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 214 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 278 DAYS
DAYS SINCE ENRON COLLAPSE = 1335
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 21, 2005

Dow... 10,627.77 -61.38 (-0.57%)
Nasdaq... 2,178.60 -9.97 (-0.46%)
S&P 500... 1,227.04 -8.16 (-0.66%)
10-Yr Bond... 4.28% +0.11 (+2.51%)
Gold future... 425.70 +3.60 (+0.85%)

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

[wli]

1. is this stagflation?

I remember stagflation from the Reagan years, and wonder if it applies here. We're certainly at best treading water.

[whistle]

3. Treading water is exactly where Greenspam wants the economy

...to be until he officially leaves the Federal Reserve Chairmanship in January 2006. He can then pass the blame to the incoming chairman who will have a real mess to deal with.

[wli]

4. what is the exact nature of the mess?

I don't really understand what's going on apart from currency sucking, some kind of housing bubble, and rampant offshoring. I can see these phenomena (and surely they're not exhaustive) but not the trend behind them or any deeper meaning.

[whistle]

8. Outsourcing U.S. jobs overseas, Social Security about to be axed

....half a trillion dollar deficits being projected endlessly into the future, rising interest rates, just as a start, all of which Greenspam has had a major hand in creating.

[wli]

10. relatively easy to understand

Good thing I don't have to worry about retirement. Permanent health conditions will kill me long before I'm old enough for that (of course, the nonexistence of healthcare will ensure that happens more swiftly than necessary).

[UpInArms]

39. 3 MILLION manufacturing jobs have offshored since 2000

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=1645023&mesg_id=1645379

[WhiteTara]

74. that is a staggering number

especially when you think about the fact that chimpy renamed burger flippers as manufacturing employees.

[54anickel]

76. Crap, I forgot about that. We really are screwed...eom

[WhiteTara]

82. is sure looks like it!

especially since we are going to get all our crap back at higher rates on our $7.00 jobs.

[ozymandius]

6. Martin Goldberg echoes my sentiments. Dishonest reports rule the day.

If you try to get an honest answer from the Fed, especially Alan Greenscam, you might have a few sharp statements about how perilous is our course followed by how deliriously happy everyone is.

Thing is - the Fed arrives at its statements without considering the full body of data. The calculations of inflation do not include commodities that everyone needs: food and energy. So the CPI is disingenuous at best.

Its' not just the Fed promoting propoganda and cherry-picked information. The Bureau of Labor Statistics, I believe, understates the unemployment rate. MarketWatch called them on this last week. MarketWatch cited statistics measuring thenumber of people underemployed and those who have fallen off the unemployment rolls due to sustained unemployment.

But I digress.

The Consumer Price Index and the Producer Price Index, CPI and PPI, are a big piece of the picture in determining how we are doing as a society. Looking at them with a critical eye helps identify any presence of stagflation.

There is downward pressure on consumer prices. In other words, how much price can the market bear? Downward pressure on consumer prices is in stark contrast to how much it costs to produce a product. Energy costs are up. This includes prduction and transportation costs plus the money required to move an item off the shelves.

Meanwhile, consumers spend more on energy in all its forms. So there is less money to consume the goods produced. As people who were formerly unemployed gain employment, their income does not appreciate significantly on average. Retailers know this.

So given the scenario I just described, we are, at best, treading water. Stagflation? Maybe. We might have to wait until a rogue economist like Krugman, Roach or Mogumbo make that determination.

[ozymandius]

2. WrapUp by Martin Goldberg

Tell Your Fundamentals to be Quiet!
“It’s a Technician’s Market”

“Tell your fundamentals to be quiet!” It’s that kind of market. Bad news is good news and good news is good news. Sure, there are many fundamental facts that would suggest stocks don’t deserve historically high valuations in the aggregate and bubble-like valuations in several isolated localities. Even as quarterly earnings are coming in with numerous write-offs, one time events, and special items, their interpretation by the market is similar to the 1990’s when any optimistic explanation by management would suffice. After reporting increased sales a few weeks ago based on an “employees discount,” General Motors reported shrinking margins and a huge quarterly loss of $1.2 billion, yet the stock finished little changed. This occurred as their two US rivals initiated similar margin-threatening price war tactics. Eastman Kodak, a company whose core business is dying a quick death due to obsolesce, badly missed earnings expectations as film sales “eroded,” and the stock gapped down, yet finished little changed. Yahoo and Intel reported earnings which showed the world it’s hard, even for technology companies, to make money, and yet this has little effect on the general stock market. A few soothing words by Alan Greenspan who suggested that the economy is on a sustained expansion followed by about an hour of accolades by various congress-people, and the stock market had all the reason it needed to produce a high volume decisive rally. Forget any thought of the long-term fundamental picture. In many cases that will get you only rationalizations about the long term while your next door neighbor gets paper profits.

While the major indices are making 4-year highs, negative emotions have never run higher from the bear camp, and optimism has probably never been greater with the bulls. From the bullish side, “Mad Money” was shown before a live universally bullish cheering and hooting public. Such optimistic bullishness draws out the negative and emotional feelings in the bears. While reading a FSO editorial, I identified an abbreviated derogatory term that would make a sailor blush, used to describe government economic data reports. Even our webmaster, a resident of a Navy town, hadn’t heard of this term before. (It was quickly edited out.)

Emotions are running high. The public is being bombarded by a wealth of economic data suggesting things are fundamentally sound. Yet, for anyone who views the big picture with a critical eye, most of this data is fiction at best and dirty, bad-spirited deception at worse. Negative emotions are running higher in the bear camp for the simple reason that the “truth” of the data is being confirmed and accepted by the public based on the positive direction of the stock and real estate markets. It is tough to refute or take issue with the “truth” that is making much of the public wealthy on paper. For those who professionally manage other people’s money for a living, the current environment must be even more frustrating. Consider the thoroughly considered and cerebral debate between the professionals in the inflation and those in the deflation camps. While their emotions may be running high, it must be even more frustrating that over the last 2 years, these folks have been locked in both a debate and trading range with their fundamentally-based positions, while money managers who suggested clients to buy Nordstrom based on the potential for a good quarter were better off.

more...

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

[wli]

5. what about 990N? urban legend or is it for real?

[ozymandius]

7. 990N seems to have been pulled out of the urban legend realm. n/t

[specimenfred1984]

62. Sure, It's all a Myth

Nobody's corrupt, the markets are 100% clean and on the up and up.

Nobody's ever been arrested for trying to rig markets and, the Fed's never intervened.

It's all urban legend. This administration is restoring integrity to America. Those Enron traders: myth, just a few bad apples. Derivatives: another myth. 9/11/01 just another myth - the markets never closed, no behind closed door deals took place, no plunge protection team was ever used.

Large traders in the S&P and tech markets: myth. Suspiciously high volume, always to the buy side: myth. These markets always behave this way on the same day the Fed makes statements: myth.

Ya see, urban legends just have a really vivid imagination, don't take them seriously. They must be minimized and ignored. These markets are as clean as a whistle, just like the current administration is.

[ozymandius]

77. I may not have made myself clear.

I meant to say that 990N has been cleared of "urban legend" status. It is real. Continued observation into 990N makes it appear to be the trigger the PPT pulls when markets look vulnerable to a fall.

[specimenfred1984]

93. OK, My Mistake

I was just being sarcastic to make a point and it looks like I missed the original sarcasm.

Some entity is driving stocks up right now, Citigroup (C) and Exxon (XOM) are surging identically to their group the S&P and a surge in the price of crude oil. Banks and oil, the Fed and the neo-cons.

With these groups driving the markets, I don't see how any investor could trust it, especially when higher energy and credit prices mean less money to invest and yet the stock markets keep going up counter-intuitively.

Speculative fever mixed with corruption, this will end ugly. When it'll end, I don't have a clue.

[ozymandius]

96. No prob.

It is curious how very select industries are climbing that would have a wide range of market affect - especially banking. Banking is so closely tied to insurance that it would seem a shaky deal. Some banks, as I recall, have issued profit warnings and have even fallen short of their warning thresholds. Citigroup among them.

Oil is a no-brainer. Mounds of cash with token government oversight.

[realFedUp]

85. what do we do with our money?

Would just appreciate some suggestions from
a message board of people following this stuff
more closely than I am.

[specimenfred1984]

94. I'm Stupid Enough to Attempt an Answer...

Personally, I prefer cash right now. However, investing is a very personal matter with many personal considerations to keep in mind like age, financial goals, risk tolerance, etc...

Also, an internet board is a horrible place to ask for advice, even though the people on this board are way above the average investor's level of knowledge.

So, go talk to some investment professionals in person. They'll help you set up something. It'll probably be a mix of U.S. and foreign stocks and bonds. Then, keep track of it. If what you have set up is performing poorly, think about changing it, hanging on to losers is usually a bad idea. Keep the things that are performing well and ditch the losers. You or your investment people will have to re-evalute things periodically.

Speculation is rampant now, assume that a higher amount of risk will have to be taken if you plan on investing immediately. Hope this helped.

[realFedUp]

97. Good advice, thanks. nt

[teryang]

9. Interesting credit analysis on kitco

There was an interesting analysis on the creation of credit in the US economy dated July 20 in the commentary on kitco.com. This article suggested that the Fed was no longer in control of the institutional sources of credit expansion and the supply of credit was so great that long term rates were being kept down.

It is for this reason, the housing bubble and the incredible buoyancy of the stock market in the face of obvious instability continue to defy expectations of reasonable observers. There is just a huge oversupply of money despite obvious fundamental weaknesses in the American economy.

[UpInArms]

11. daily dollar watch

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

Last trade 89.08 Change +0.15 (+0.17%)

Chinese Revaluation Makes Things Easier for Greenspan

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2392&Itemid=39

What an exciting day in the currency markets! China announces revaluation, there were more bombings (to our dismay) in London, jobless claims fell by the biggest amount in 2.5 years while Greenspan was fielding questions once again in the Senate. For a detailed recap of the Chinese revaluation and its effect on global markets, please visit our sister site www.chinarevaluation.com. Chinese revaluation was definitely the big event that the markets has been anticipating for months now if not years. China has finally caved in and delivered a 2.1% revaluation with further plans to move to a managed float against a basket of currencies. Even though the move is extremely extremely small, its significance is not. Many predict that this is only the beginning of more revaluation announcements to come. First of which, the components of the basket have yet to be announced and need to be. Given that 65% of China’s trade is with the European Union (18.5%), the US (17.5%), Japan (18%), and Hong Kong (11%), the basket would naturally have to include not only US dollars, but also Euros and Japanese Yen. As a result, at some time, China would have to replace its US Treasury holdings with holdings of Eurozone and Japanese government bonds. When that occurs and China begins their accumulation, it should be very beneficial for the Euro and Japanese Yen. Chinese revaluation also takes some pressure off of the Federal Reserve to raise rates more aggressively than they may have wanted to. A revaluation means that a big buyer of US Treasuries is leaving the market and the prospect of that occuring has already hit bonds hard. The sell-off in US Treasuries is sending yields soaring and effectively helping to resolve the “yield curve conundrum” and the excess stimulus that they have been providing for the US economy. China’s surprising announcement a week or so after the US time stamped a possible Chinese revaluation suggests that this is certainly more about politics than economics. As a result, we expect China’s buying spree to pick up in the months to come. Shifting over to other news, the economic data released today was indicative of the improving conditions in the US. The Philly Fed survey, leading indicators report and jobless claims all rebounded from the previous month. Jobless claims fell by the largest amount in 2.5 years, but the drop was most likely distorted by the auto-retooling period. Greenspan for the most part kept most of his comments unchanged from yesterday.

...more...

Chinese Revaluation - An In Depth Look At What It Means For The Markets

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2385&Itemid=39

After years of speculation, China has finally dropped its decade long peg to US dollar. As we have been predicting for some time, the one major currency pair that will be impacted the most by the revaluation announcement would be the Dollar against the Japanese Yen (USDJPY) and indeed the pair slid 200 pips or points following China’s announcement.

So what did China do?

- China adjusted the RMB peg to 8.11, which is 2% higher in value against the dollar

The pegged value of the RMB has been adjusted to 8.11 from 8.31. This rather modest revaluation of 2.5% will for the most part do little to reverse or relieve the US’ burgeoning trade deficit. It does however have significant political and market implications. (See market section) Immediate pressure on China to revalue its currency should move to the backseat for at least a few weeks. However, despite the move, we would not be surprised to hear some protests from US Senators that the revaluation move was too small and that China needs to make a much more concerted effort to allow the currency to increase in value, especially since 2.5% pales in comparison to the RMB’s predicted undervaluation of 30-40%.

<snip>

What does it mean for the markets?

Treasuries - China’s move has ramifications for all of the financial markets. The most significant of which will probably be in US treasuries. As the world’s second largest holder of US treasuries, China’s revaluation and move to a basket float significantly reduces their need for US treasuries and could potentially take away a big buyer from the market. If this is the case, it will cause bond prices to slide and long-term yields to rally, which could offset some of the additional pressure on the Federal Reserve to continue raising rates. If China even begins to dump US treasuries, we could see the “yield curve conundrum” begin to fix itself.

Currencies - The reduced demand for US treasuries and the possibility of increased demand for other currencies such as Euros and Japanese Yen could be very negative for the US dollar. Right now, the dollar is holding somewhat steady against the Euro thanks to the fact that China has yet to announce the components within the managed float. Once they confirm that the Euro will be included in the basket, the single currency could skyrocket.

...more...

Yen down as markets question yuan impact

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2005-07-22T113407Z_01_L22425934_RTRIDST_0_BUSINESS-MARKETS-FOREX-DC.XML

excerpt:

Many details remain unclear, including the composition of the basket, China's plans for any future moves and any follow-up from other Asian countries.

"The market has realized that this is a small move from China," said Paul Mackel, currency strategist at ABN AMRO in London.

"There is wariness of selling the dollar versus Asia too aggressively. And there is also some profit-taking after yesterday's move."

<snip>

On paper, China allows the yuan to move 0.3 percent each day against the dollar compared with the prior day's close.

Chinese yuan non-deliverable forwards, used by foreigners to bet on the yuan, showed the yuan would rise just over six percent in a year to about 7.64 per dollar from the 8.11 level.

<snip>

Investors grew slightly nervous about the possibility of intervention after Asian authorities repeatedly warned the would take action if needed.

...more...

No Reports today.

Have a Great Day Marketeers!

[phgnome]

64. The other side of the yuan revaluation

There seems to be a lack of focus (on the media's part) on the other side of the yuan revaluation. Specifically, I'm talking about the interest in the debt payments to China.

Right now, as a country, we're living largely on credit. Some companies who import haven't paid for the items they've imported yet. In other cases, the government has also borrowed money from China through IMF, World Bank, and other international finance facilitating agencies.

With the revaluation of the yuan, suddenly, each person in the US will also owe more to creditor nations (such as China) in US$ but, as a whole, the US will also owe more to other creditor nations whose currencies were strengthened by the revaluation move.

Suddenly, the amount owed (in US$) and the interest payments become greater.

With the gain of jobs through the revaluation, there comes a price of a greater debt and interest payments.

I don't understand why the critics of the amount of the revaluation did not consider this in their arguments. I'm not even sure why the point hasn't been raised. We don't want the yuan to be revalued so quickly because raising it too much all at once can have very bad (and lasting) effects on our economy.

We're in quite a bad downward spiral right now. All this talk about recovery and growth (from Greenspan and the likes) is not credible from how I see it.

The revaluation might create jobs in the short term but at what cost to our quality of life? We need to pay down the debt NOW.

[Gregorian]

66. Hey, thanks for explaining this so even I can understand it.

I really appreciate it. I feel terrible, though, about the situation our country is in. We aren't going to wake up, as a country. Too bad.

[UpInArms]

12. Kimberly-Clark to cut (6,000) jobs; profit drops

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2005-07-22T115254Z_01_N22600483_RTRIDST_0_BUSINESS-MANUFACTURING-KIMBERLYCLARK-EARNS-DC.XML

CHICAGO (Reuters) - Kimberly-Clark Corp. (KMB.N: Quote, Profile, Research) on Friday said it will cut 6,000 jobs and close or sell 20 plants and seek to boost its diaper and health-care units and expand operations in such emerging markets as India and China.

The maker of Kleenex tissues and Huggies Diapers also reported that second-quarter profit dropped 7 percent, weighed down by the tax cost of repatriating overseas earnings.

The Dallas-based company said the restructuring program will cut about 10 percent of its work force and eliminate 17 percent of its manufacturing facilities and result in charges of between $625 million and $775 million through 2008.

It expects cost savings of $300 million to $350 million annually by 2009, and will use the funds to improve its diaper business, speed growth in emerging markets like India and China, move its health-care business into higher-margin items and increase spending on product development.

...more...

[WhiteTara]

81. the planned layoff numbers are staggering also

have you had a chance to calculate the number to be laid off in the coming year?

[punpirate]

100. Ah, the irony is filling...

... but not very delicious. The American Jobs Creation Act, so-called, allows for repatriation of foreign profits at heavily discounted tax rates, if the repatriating company puts that money into mergers, takeovers, acquisitions or development.

(Doncha just love that phrase, btw, "second-quarter profit dropped..., weighed down by the tax cost of repatriated earnings." More like weighed by the sacks of cash derived from the tax savings.)

Everyone predicted this scheme would actually cost jobs because that's an inevitable outcome of mergers and acquisitions.

Well, "Tex" Sensenbrenner's family's company, Kimberly Clark, has actually beaten everyone to the punch. They've announced layoffs before actually doing any merging, acquiring or taking over with that repatriated cash.

That's the spirit of this country--innovation!

[54anickel]

13. Greenspan Points to Dangers of a Volatility Trap

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_currier&sid=aibtCLNIdfGc

snip>

In his semi-annual report to Congress, Greenspan laid out a series of explanations for the great bond market enigma of 2005: Why bond interest rates fell even as short-term money market rates rose.

Investors are less worried about inflation, for one thing. They are more confident about the stability of the economy -- and less bothered by the prospect of sudden swings in prices of bonds, stocks and other securities.

Beneath that last change, benign as it appears, lurks a dragon. ``Risk takers have been encouraged by a perceived increase in economic stability,'' Greenspan said, as evidenced by ``significant declines in measures of expected volatility in equity and credit markets.''

He added: ``History cautions that long periods of relative stability often engender unrealistic expectations of its permanence and, at times, may lead to financial excess and economic stress.''

One implication of this, simple to infer, is that a calm and orderly atmosphere in the markets breeds complacency, which leads to insufficient attention to risk. Noticing no cracks in the ice on the surface of the pond, the skaters venture further and further from the safety of the shore.

Plot Thickens

more...

[54anickel]

35. Greenspan Era Taught People to Gamble

http://www.nytimes.com/2005/07/22/business/22norris.html?adxnnl=1&adxnnlx=1122039015-SlhuzDkIIvMyTIiSt5tzrQ

THE Alan Greenspan era, which is drawing to an end, deserves to be remembered as the era in which many millions of Americans were forced to become gamblers. That it was also an era when many of those gambles paid off should not obscure the fundamental change.

Skip to next paragraph

When Mr. Greenspan took over the Federal Reserve from Paul A. Volcker in the summer of 1987, the stock market was hot and there were warnings of a price collapse. The crash arrived, but what seems remarkable now is just how unimportant that was. No recession followed.

One reason for the mild economic impact was that the world of 1987 was still largely one in which people who played the stock market wanted to play the stock market. Those who did not could lock in perfectly reasonable returns without taking much risk, for example by investing in Treasury bills. As Mr. Greenspan took office, banks were advertising one-year certificates of deposit at more than 8 percent, more than double the annual inflation rate.

But the most important fact for average Americans was that they were likely to have defined-benefit pension plans from their employers. In such pensions, the company put money into stocks and bonds to pay for benefits, and it took the risk that the investments would not work out.



more...

[54anickel]

47. Greenspan Concerned About Pension Issues

http://www.washingtonpost.com/wp-dyn/content/article/2005/07/21/AR2005072100983.html

snip>

Private analysts and others worry that a taxpayer-funded bailout could happen at some point if the agency cannot get on firmer financial footing, especially if additional companies opt to dump their pension obligations.

The agency's operations are financed by insurance premiums, which are paid by companies that sponsor traditional pension plans. It also earns money from investments and receives funds from pension plans that it takes over. The agency is not funded through tax revenues.

snip>

"It's hard to see at this stage any spillover effects yet on economic forces. As large as the numbers are _ relative to a $12 trillion economy, obviously, they're not at a stage where it is critical," he said.

snip>

Greenspan has issued several warnings about the potential perils these types of mortgages can pose to homeowners as well as lenders if home prices _ which are now surging _ suddenly fall, or if interest rates were to rapidly escalate.

"We don't need any legislative remedy. This is totally under the regulatory authorities of the banking agencies," Greenspan said.

The Fed chief said banking agencies are currently reviewing the situation. Banking authorities, he said, "are making decisions as to what, if any, guidance to the banking system we would endeavor to convey."

:eyes: Fox, henhouse. Reminds me of when he raised rates instead of margins during the last bubble. Second verse same as the first.

more...

[UpInArms]

49. I fear that the Second Verse will be worse than the First

as our economy is much weaker and the fundamentals will not support even a minor crack in the facade anymore.

[54anickel]

55. True, very true. I question why Greenspin is raising rates yet not

reeling in the creative lending of the banks. He's talked about it long enough, yet does nothing. I remember posting something just this week where someone from the Fed was praising those innovative lending practices.

It's just seems so eerily familiar, just exchange real estate for stocks and it's deja vu.

http://www.epi.org/content.cfm/webfeatures_viewpoints_greenspan_talented

snip>

Moreover, in 1999, Greenspan initiated a series of interest rate hikes, when inflation was even slower than it was in 1996 and productivity was growing even faster. In addition to his rote reference to the specter of inflation, Greenspan indicated that he had finally decided to do something about the overpriced stock market. But why was it necessary to slow down the entire economy because speculators had driven up the price of corporate shares? A much better and safer way would have been to use his authority to restrict credit to the stock market by requiring higher "margins," that is, down payments on the purchase of stock. By 1999, margin debt in the stock market had reached the heights it held just prior to the market meltdown in 1987.

A number of market observers, including financier George Soros and Stanley Fischer, deputy director at the International Monetary Fund, advocated that the Fed let the air out of this credit boom by raising margin requirements. But Greenspan refused this more sensible strategy. At his confirmation hearing before the U.S. Senate Banking Committee in 1996, he said that he did not want to discriminate against individuals who were not wealthy and therefore needed to borrow in order to play the stock market. Given that people who use margin leverage to buy stock are typically wealthy by any reasonable standard, this is a weak rationale for favoring higher interest rate policies that would cause unemployment and personal bankruptcies among lower- and middle-income working people.

His refusal to raise margin requirements suggests that Greenspan's goal was not to lower share prices. Rather, it was to raise profits to levels that would justify the high stock prices. Obviously, a stock's price-earnings ratio can be lowered by changing either side of the ratio by reducing prices or raising earnings. Given that the economy was already at high levels of productivity and close to full capacity, there was little room to raise profits through more economic growth. But a dose of unemployment might help squeeze labor costs. Thus, Greenspan's raising of the interest rates can be seen not so much as a "pre-emptive" strike against a phantom inflation, but a rather desperate effort to avoid a market decline by raising the earnings of investors through lowering the earnings of workers.

Now we have Krugman suggesting that the decision to raise rates may have been immature. Maybe I'm comparing apples to oranges here, I don't know. :shrug: I do know that this time around is much scarier than the last - but my perception may be negatively affected by the Idiot-n-Thief we have squatting in the WH.

http://www.kansascity.com/mld/kansascity/business/12192022.htm

So the economy probably has plenty of room to expand before inflation becomes a problem (which implies that the Fed’s decision to start raising interest rates was premature). But it’s hard to see where further expansion will come from. We’ve already had four years of extremely loose fiscal and monetary policy. Tax cuts have pushed the federal budget deep into the red. Low interest rates have helped generate a housing bubble that has lifted real estate prices to ludicrous heights.

If all that wasn’t enough to give us a full economic recovery, what will?

[UpInArms]

14. China's revaluation hits U.S. bonds,stocks slip

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-22T094223Z_01_L22454934_RTRIDST_0_MARKETS-GLOBAL-WRAPUP-4.XML

LONDON, July 22 (Reuters) - China's revaluation of the yuan drove a wedge between U.S. and euro zone bonds on Friday on expectations that Beijing may diversify its foreign reserves, while some stock markets faltered.

The dollar recovered somewhat from Thursday's losses against the yen, the biggest daily slide against the Japanese currency in three years, but was lower against the euro.

Britain's FTSE 100 index, meanwhile, opened steady a day after an apparently failed bid to bomb London's transport system.

"People are focusing more on the Chinese currency move than the bombs that didn't go off in London," said Geoff Langham, head of trading at online spread betters CMC Group.

...more...

[Maeve]

17. On the issue of China, here's Krugman

I'll cut to the chase--

In the long run, the economic effects of an end to China's dollar buying would even out. America would have more industrial workers and fewer real estate agents, more jobs in Michigan and fewer in Florida, leaving the overall level of employment pretty much unaffected. But as John Maynard Keynes pointed out, in the long run we are all dead.

In the short run, some people would win, but others would lose. And I suspect that the losers would greatly outnumber the winners.

And what about the strategic effects? Right now America is a superpower living on credit - something I don't think has happened since Philip II ruled Spain. What will happen to our stature if and when China takes away our credit card?

This story is still in its early days. On the first day of the new policy, the yuan rose only 2 percent, not enough to make any noticeable difference. But one of these days Chinese dollar purchases will trail off, and we'll find ourselves living in interesting times.

http://www.nytimes.com/2005/07/22/opinion/22krugman.html?

[54anickel]

24. Stop Partying John Snow -- GDP Forced China

Here I thought from yesterday's dribble that it was Greenspin :silly:

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_pesek&sid=aX07NIJXs98I

July 22 (Bloomberg) -- John Snow and his colleagues at the U.S. Treasury should stop patting themselves on the back and put away the champagne glasses. It wasn't the U.S. that forced China to revalue the yuan -- it was rapid growth.

snip>

This was indeed the tiniest move Asia's No. 2 economy could make, and the motivation seems purely political. China, it seems, wants to buy some time to placate U.S. officials growing impatient with China's trade advantage and threatening sanctions.

Keep two things in mind.

One, officials in Beijing had no intention of going for a knockout punch. You don't mess with a 10-year-old currency peg that's the backbone of your economy more than you have to the first time out.

Two, could it really be a coincidence that China moved a day after reporting that it's economy accelerated to a blistering 9.5 percent growth rate in the second quarter? Perhaps, yet it's highly unlikely.

more...

[UpInArms]

36. Many Industries Impacted by Currency Move

http://www.forbes.com/business/services/feeds/ap/2005/07/22/ap2152093.html

Lower sales for China's textile exporters but cheaper fuel for its airlines. Higher prices for foreign buyers of Chinese toys and shoes but more exports to China. A windfall for Australian farmers and a mixed blessing for U.S. and European retailers.

The impact of China's decision to cut its currency's tie to the U.S. dollar will reverberate through the world economy, creating thousands of winners and losers at home and abroad.

The decision immediately raised the value of the yuan by 2.1 percent against the dollar, pushing up the price of Chinese exports and offering a brief relief to foreign companies that are trying to compete with a flood of low-priced Chinese exports.

Throughout Asia, the change is a boon to hotels, farmers and factories whose goods are suddenly slightly cheaper beside China's and could be more attractive to increasingly well-off Chinese consumers.

<snip>

Abroad, consumers who rely on China for bargain-priced shoes, clothes, sporting goods and appliances will see prices edge upward. Retailers could see higher wholesale prices cut into profits.

<snip>

Economists say the direct impact on the huge U.S. trade deficit with China - a record US$162 billion (euro124 billion) last year - should be limited. But in the longer-term, U.S. officials are hoping a rising yuan will help struggling American manufacturers, which have lost 3 million jobs since mid-2000.

...more...

[54anickel]

43. Thisdoesn't bode well for the Wal-Mart, Dollar store, type of retailers

or the consumers that rely on those low prices....

"The only thing we can do is to try to readjust our product structure, selling more high-grade products instead of lower-grade goods," Gao said.

Abroad, consumers who rely on China for bargain-priced shoes, clothes, sporting goods and appliances will see prices edge upward. Retailers could see higher wholesale prices cut into profits.

[54anickel]

65. Across Asia, China's act wins praise

http://www.iht.com/articles/2005/07/22/business/yasia.php

China's long-awaited decision to allow its currency to strengthen was greeted with widespread praise from its main trading partners in Southeast Asia and the Pacific, signaling a diplomatic triumph for Beijing despite the mixed economic consequences the move will bring to the region.


From Tokyo to Canberra, governments and central banks welcomed Beijing's decision to revalue the yuan and to sever its link to the dollar as a signal that China was willing to be a cooperative partner in trade and finance by expanding the scope of its free market policies.


"China's move will likely have both positive and negative effects on Japan's economy," Trade and Industry Minister Shoichi Nakagawa of Japan told reporters. "But the move is welcome as it shows China is moving toward international currency rules.

snip>


"The debut of the yuan as an international currency presents a major challenge to the yen," an editorial warned Friday in Japan's leading business daily, The Nihon Keizai Shimbun.

snip>

Some forecasts show China overtaking Japan's $5 trillion economy within 10 years. But a number of analysts say political factors will still prevent the yuan from become a truly global currency.

more...

[54anickel]

70. China revalues the renminbi (Van Eeden)

http://www.kitco.com/weekly/paulvaneeden/jul222005.html

The magnitude of the renminbi’s revaluation against the dollar is totally insignificant, but it was interesting that China will in future peg the renminbi against a basket of currencies. They did not say which currencies make up the basket, although one can assume that it would include the dollar, the euro and the yen. It makes sense to use a basket of currencies for a currency peg since the US dollar is losing its hegemony as the world’s only reserve currency. The euro block economies rival the US economy and therefore the euro should be just as important to international trade and foreign reserve accounts as the dollar. The same goes for Japan; it is the third largest economy behind the US and Europe.

Perhaps the most striking result of China’s revaluation of its currency was the effect it had on the dollar with respect to other currencies in Asia. I expected Japan and many other Southeast Asian countries to follow suit when China revalued its currency and, indeed, just minutes after the Chinese announcement, Malaysia announced that it would loosen the ringgit’s peg to the dollar and adopt a strategy similar to China’s.

I also expected the dollar to fall across the board following the renminbi’s revaluation, and it dropped against the Japanese yen, the Singapore dollar, the Thai Baht, the Indian rupee and the Korean won, to name but a few. As the dollar declines anything bought on international markets with dollars will become more expensive, including gold.

The US dollar-gold price moved up as the dollar fell on Thursday although it was mitigated somewhat by the fact that the euro also fell against the yen and other South East Asian currencies. The big move, however, is unlikely to occur until China allows the renminbi to appreciate more significantly.

[54anickel]

92. Who says no one rings a bell?

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=44971

The old saying “no one rings a bell,” certainly doesn’t apply today, as China rang the “mother of all bells.” So deafening was its sound, that its vibrations will be felt around the world. Nowhere will the amplitude of these waves be more pronounced than in the United States.

snip>

However, the pressure on China to prop up the dollar will be greatly diminished. To maintain the peg against its new basket, Chinese monetary authorities will most likely now be buyers of those other currencies likely to be included in its basket, such as the Euro or Yen. Since its reserves are already disproportionately held in dollars, it will likely rebalance those reserves to more accurately mirror the basket to which the Yuan will be pegged. Such a rebalancing will only exacerbate the dollar’s decline. However, a declining dollar will not automatically require offsetting dollar buying by the Chinese as it has during the period of the yuan-dollar peg. As long as dollar weakness is offset by strength in other currencies in its basket, the peg can be maintained.

The implications for America are enormous. Far from being the panacea that American politicians proclaim, China’s decision to alter its peg could be the pin that finally pricks America’s bubble economy. For America, the direct result of this action will be the following:

1. Higher consumer prices.
2. Higher interest rates.
3. Reduced profits for American companies, particularly those dependent on domestic consumption and consumer debt.
4. Lower stock prices, as earnings decline and multiples contract.
5. The busting of the housing bubble, as tighter credit standards and higher interest rates squeeze current home prices.
6. Rising unemployment, as higher interest rates and vanishing home equity slow consumer spending and reduce jobs dependant on that spending.
7. A severe recession as a result of all of the above.
8. Rising federal budget deficits, as recession reduces tax revenue, while higher interest rates and escalating outlays increase expenditures.

In conclusion, July 21, 2005 will be another date likely to live in infamy. This time the aggressor is China not Japan, and the bombs are purely economic. Though there will be no immediate loss of life, and no American retaliation, the financial damages will be devastating. History will remember this date as the beginning of Chinese independence, and the beginning of the end of America’s ability to depend on China.

[UpInArms]

15. Motorola plans 150 layoffs at Plantation facility

http://www.sun-sentinel.com/sports/motorracing/sfl-zmotorola22jul22,0,882328.story?coll=sfla-sports-motorracing

Motorola Inc. said Thursday it was laying off about 150 assembly line workers at its cellular phone manufacturing center in Plantation.

The employees, who put together cell phones and parts for Motorola's Integrated Digital Enhanced Network, will be let go starting in September, company spokesman Steven Hendricks said. The jobs are being eliminated and the work will be done from a Motorola plant in Fort Worth, Texas.

The firings account for 5 percent of the almost 3,000 Motorola employees in Plantation. Motorola is hiring workers for other departments in Plantation, including research and development, finance, engineering, technology and sales, Hendricks said. As a result, total head count at the complex is expected to remain about the same, he said.

<snip>

Worldwide, Motorola has embarked on a major cost-cutting campaign in recent years, slashing its work force from about 150,000 in 2000 to fewer than 70,000 today. In December, it shut down operations in Boynton Beach, where it employed 3,500 people five years ago.

...more...

[UpInArms]

16. Job cuts boost Office Depot results as it pursues 'culture of thrift'

http://www.sun-sentinel.com/business/local/sfl-zofficedepot22jul22,0,7515190.story?coll=sfla-business-front

Cost-cutting helped Office Depot Inc. report quarterly profits up 26 percent Thursday, compared with last year's quarter. And Steve Odland, who has been leading the company for four months, said that more streamlining is likely as the Delray Beach chain pursues a "culture of thrift."

The news sent shares of Office Depot up $2.85, or 11.49 percent to close at $27.65Thursday, a 52-week high.

Net income for the quarter reached $100.1 million, or 31 cents a share, from $79.2 million, or 25 cents, a year earlier. Sales in the three months ended June 25 rose 6.4 percent to $3.36 billion. North American retail sales were up 8 percent, and stores open at least one year saw a 3 percent sales gain.

<snip>

Meanwhile, the company has begun offering the 2,200 workers at its headquarters incentive packages to leave.

Yet in a phone interview Thursday, Chief Financial Officer Charlie Brown said that the firm's goal is not necessarily to shed jobs, but to offer an attractive exit to workers whose philosophies don't dovetail with Office Depot's new approach.

...more...

Huh????

[cosmicdot]

84. "culture of thrift"

yet, Home Depot held its annual stockholders meeting at the ***Boca Raton*** Marriott in May ...

... mmm-kay ...

[54anickel]

18. Fed Minutes Suggest Policy Makers Had `Lively Debate' on Rates

http://www.bloomberg.com/apps/news?pid=10000103&sid=a_O7EDXy0xpE&refer=us

snip>

``Views differed on the amount of tightening that would likely be required to keep inflation contained and bring output in line with potential,'' the minutes said. The Fed raised the target to 3.25 percent at that meeting. The forecasts for the target in the last Bloomberg News survey of economists for the end of this year range from 3.25 percent to 4.25 percent.

``It was very wonderful to read in the minutes that there is enlightened and perhaps lively debate about that issue on the FOMC,'' said Paul McCulley, a managing director and fund manager at Pacific Investment Management Co., in an interview. ``You need to have that debate before you can get a consensus of that committee to say `enough is enough.'''

snip>

``The minutes beg the question, `Is this the beginning of the end or the end of the beginning?''' said David Ader, managing director of government bond strategy for RBS Greenwich Capital Inc. in Greenwich, Connecticut.

Eric Hiller, chief interest rate strategist for Bank of America Corp. in Chicago, said the diversity of opinion is interesting ``because we could have had more of a tighter consensus built around Greenspan's views.''

``For all the Fed's efforts, it's almost impossible to tell what the ideal neutral rate is,'' he said.

more...

[54anickel]

22. Fed Won't Use Rates to Curb Home Prices, Minutes Show

http://quote.bloomberg.com/apps/news?pid=10000103&sid=asNnO4mIDhh8&refer=news_index

snip>

``A strategy of responding more directly to possible mispricing'' of assets such as housing ``was seen as very unlikely to contribute, on balance, to the achievement of the committee's objectives over time,'' the minutes of the FOMC meeting, which were released today in Washington, showed. The Fed document cited ``the unavoidable uncertainties associated with judgments regarding the appropriate level of and likely future movements in asset prices.''

Committee members discussed the danger of home prices rising faster than incomes and the potential ``challenges'' both to borrowers and lenders from ``riskier types of mortgages.'' Home prices nationally rose 12.5 percent in the first quarter from a year earlier, according to the Office of Federal Housing Enterprise Oversight.

While housing prices ``might be somewhat above the levels'' consistent with wage growth and interest rates, it is difficult to measure the extent of any overvaluation, according to the minutes.

``It's relatively clear the housing market has the Fed's attention,'' Eric Hiller, chief interest rate strategist for Bank of America Corp., said in an interview from Chicago. ``To actually slow down the housing market is potentially dangerous. To talk it down is probably the Fed's goal.''

snip>

``Clearly, the inflation outlook is a key focus of debate within the Fed, with Mr. Greenspan in the hawkish camp, but open to debate on the quality'' of labor cost data, said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

:wow: The Fed questioning the BLS BS? :rofl: That's rich!

[UpInArms]

25. I next expect them to lower the minimium wage to contain

that "labor cost" data.

:eyes:

[ozymandius]

28. Either that

or to use the labor statistics that go under-reported. With HP, Kimberly-Clark, et al cutting workforce, labor costs in this country will look fine and dandy indeed.

[54anickel]

52. Statistics in dispute? It figures (Krugman on BLS BS)

free subscription or use www.bugmenot.com

http://www.kansascity.com/mld/kansascity/business/12192022.htm

snip>

Economists who argue that something’s wrong with the unemployment numbers are buzzing about a new study by Katharine Bradbury, an economist at the Federal Reserve Bank of Boston, which suggests that millions of Americans who should be in the labor force aren’t. “The addition of these hypothetical participants,” she writes, “would raise the unemployment rate by one to three-plus percentage points.”

snip>

The answer, according to the survey used to estimate the unemployment rate, is a decline in labor force participation. Nonworking Americans aren’t considered unemployed unless they are looking for work, and hence counted as part of the labor force.

snip>

Those with a downbeat view of the jobs picture argue that the low reported unemployment rate is a statistical illusion, that there are millions of Americans who would be looking for jobs if more jobs were available. Those with an upbeat view argue that labor force participation has fallen for reasons that have nothing to do with job availability — for example, young adults may have chosen to stay in school longer.

That’s where Bradbury’s study comes in. She shows that the upbeat view doesn’t hold up in the face of a careful examination of the numbers. In fact, because older Americans, especially older women, are more likely to work than they were in the past, labor force participation should have risen, not fallen, during the past four years. As a result, she suggests that there may be “considerable slack in the U.S. labor market”: There are at least 1.6 million and possibly as many as 5.1 million people who aren’t counted as unemployed but would take jobs if they were available.

So the economy probably has plenty of room to expand before inflation becomes a problem (which implies that the Fed’s decision to start raising interest rates was premature). But it’s hard to see where further expansion will come from. We’ve already had four years of extremely loose fiscal and monetary policy. Tax cuts have pushed the federal budget deep into the red. Low interest rates have helped generate a housing bubble that has lifted real estate prices to ludicrous heights.

more...

[UpInArms]

53. well, there again - we lost 3 MILLION jobs since the putz took over

3 MILLION manufacturing jobs GONE!

[UpInArms]

19. HP's job cuts include (drum roll please)

The cuts hit Massachusetts and Palo Alto, Calif., and stop work by pioneer Alan Kay

http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/1122026704186880.xml&coll=7

SAN JOSE -- As part of a massive restructuring that includes 14,500 job cuts companywide, Hewlett-Packard Co. is killing off four research projects at HP Labs, including one headed by pioneering technologist Alan Kay.

<snip>

Discontinued research projects include Kay's Advanced Software Research team, which was looking into a new operating system for the Internet. Kay, who is leaving HP, is best known for his work in graphical user interfaces while working at Xerox's research lab in the 1970s. He also pioneered modern programming languages.

<snip>

The other cut projects include HP's Cambridge Research Lab, which studied health-related technology in Cambridge, Mass.; the Consumer Applications and Systems Laboratory; the Emerging Technologies Laboratory; and Kay's Advanced Software Research team. With the exception of the Cambridge lab, all the cut projects were based in Palo Alto.

...more...

[hatrack]

21. "So, who wants to eat more seed corn?"

"I do! Sure tastes good, doesn't it?"

"Yeah - profitable, too!"

:eyes:

[54anickel]

23. WOW!!! Alan Kay is leaving. They're killing 4 R&D projects? But

wasn't that where companies were expected to put their bootie from the Jobs Creation Act? Weren't we expected to innovate our way out of this "quagmire" to come up with the jobs of the future? :eyes:

HP, sorry for anyone employed there. It's gotta be hard working for a company once considered one of the best places to work along with being one of these brightest innovators. It's become yet another POS corp.

[ramapo]

31. Short-term "fix", long-term failure

Decisions like this mock the whole "our children must excel in science and math, bla, bla blah" chant.

HP IS just another POS corp. The amazing (or tragic) thing is that it incorporates three other once innovative corporations, Digital, Compaq, and Tandem.

[UpInArms]

20. Gas prices push Canada June annual inflation higher - gas is a factor????

unlike here in the USoA - other countries obviously feel that the cost of living is something that affects people :eyes:

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-07-22T122921Z_01_N22602714_RTRIDST_0_ECONOMY-CANADA-CPI-UPDATE-2.XML

OTTAWA, July 22 (Reuters) - Canada's annual inflation rate
edged higher in June, though not as much as forecast, and the
tame data is not expected to sway the Bank of Canada from
raising interest rates in the fall.

Statistics Canada said on Friday that inflation was 1.7
percent in June compared with 1.6 percent in May, mainly
because of higher gasoline prices. Analysts had on average
forecast a June year-on-year inflation rate on 1.8 percent.

"For the second quarter we've basically got the CPI
year-on-year pretty much where the Bank of Canada expected. So
quite benign, I think," Scotia Capital economist Carolyn Kwan
said.

...more...

[ozymandius]

27. Yeah. Odd isn't it?

Canada includes the price of energy in calculating inflation. I admit to being jealous of their reality-based community.

[ozymandius]

26. pre-open blather

9:00AM: S&P futures vs fair value: +2.0. Nasdaq futures vs fair value: flat. Futures market continues to improve heading into the opening bell, now suggesting a flat to slightly higher open for the cash market... Even in the absence of notable economic data to set a more definitive tone to trading, the paring of losses in the Treasury market, as the 10-yr note is up 6 ticks to yield 4.25%, appears to be improving overall sentiment... Benchmark yields hitting three-month highs of 4.28% yesterday provided additional pressure to equities

8:30AM: S&P futures vs fair value: +0.5. Nasdaq futures vs fair value: -2.5. Futures trade off its worst levels now indicating more of a neutral open for the indices... Perhaps offsetting some of the negative bias in pre-market trading has been Express Scripts' (ESRX) proposed $1.3 bln bid for Priority Healthcare (PHCC) and reports that Ford (F) could slash up to 30% of its current white-collar work force... Better than expected earnings this morning from S&P constituents like BDX, CMI and SLB may also be lending some support for blue chips

[54anickel]

29. Oil Rises on Speculation Chinese Refiners May Import More Crude

http://www.bloomberg.com/apps/news?pid=10000100&sid=ado_tpQrrZHo&refer=germany

July 22 (Bloomberg) -- Crude oil gained for the first day in three on speculation China's refiners will boost imports and increase output of fuels after the country yesterday let its currency rise against the dollar for the first time in a decade.

The yuan strengthened 2.1 percent, making imports of crude cheaper for refineries in China because oil is denominated in the U.S. currency. China, the world's second-biggest user of oil, and the U.S. have led a surge in consumption, sparking a 77 percent rise in prices since 2003.

Demand in China may rise further because ``in the near term, it increases the purchasing power for crude and other commodities,'' said Jonathan Copus, an analyst at Investec Securities in London.

Crude oil for September delivery climbed 54 cents, or 1 percent, to $57.67 a barrel on the New York Mercantile Exchange at 12:15 p.m. London time. Oil has still dropped 7.1 percent from a record $62.10 on July 7.

more...

Is this really based on speculation that China's going to buy more, is it based on the fact that the "petro-dollar" is, again, going to go down? Maybe a combination of the 2. :shrug: I'm still waiting for OPEC to officially price oil to a basket - this may give them the excuse they need.

[UpInArms]

30. Halliburton posts profit for second quarter

http://www.mercurynews.com/mld/mercurynews/news/breaking_news/12197530.htm

(free registration or try www.bugmenot.com)

HOUSTON - Oilfield services firm Halliburton Co. reported a second-quarter profit, driven by an influx of new government contracts that boosted results at its KBR and energy services units.

In a report after the markets closed Thursday, Halliburton said it earned $392 million, or 78 cents per share, for the three months ended June 30 compared with a loss of $667 million, or $1.52 per share, last year. The year-ago result included a $200 million loss from an offshore engineering, procurement, installation, and commissioning project in Brazil.

Revenue rose 4 percent to $5.2 billion from $5 billion.

<snip>

Meanwhile, Halliburton's energy services group, which provides drilling and production services, posted operating income of $522 million, up 93 percent from the same period last year.

...more at link...

[UpInArms]

46. When do we get the "Windfall Profits Tax" back?

although I would prefer a "War Profiteering Tax".

http://www.marketwatch.com/news/story.asp?guid=%7B7F41477A%2D1AC7%2D4F02%2DB998%2DFC46625D7352%7D&siteid=mktw

excerpt:

By division, KBR, the engineering and construction business, said revenue fell 12% to $2.7 billion on lower government-services sales in the Middle East and other offshore work. But KBR still turned a profit of $122 million, reversing last year's loss, as the company benefited from its work for the U.S. government in Iraq and Kuwait.

[UpInArms]

59. Halliburton optimistic, sees high energy prices

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-22T153044Z_01_N22613454_RTRIDST_0_ENERGY-HALLIBURTON.XML

HOUSTON, July 22 (Reuters) - Halliburton Co, the world's No. 2 oilfield services company, said on Friday it expected oil prices to remain strong and was optimistic about its future because of heavy exploration and production spending in the energy sector.

"Oil and gas prices have continued to be very robust (and) recent (exploration and production) spending surveys suggest additional growth in the back half of 2005 and 2006," Andy Lane, Halliburton's chief operating officer, told a conference call.

China and India also were consuming far more energy than in the past, he said, and U.S. consumption kept growing.

"In addition, world economies appear to be absorbing higher oil and gas prices with minimal impact to GDP growth rates," he said.

"While we will continue to monitor the situation and maintain a disciplined approach to cost of capital, we are very optimistic about our prospects in this robust market," he said.

...more...

[UpInArms]

32. Schlumberger quarterly profit jumps 36 percent

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-22T131631Z_01_N22599267_RTRIDST_0_ENERGY-SCHLUMBERGER-UPDATE-2.XML

HOUSTON, July 22 (Reuters) - Schlumberger Ltd. (SLB.N: Quote, Profile, Research), the world's largest oilfield services group, on Friday posted a 36 percent jump in second-quarter earnings, lifted by strong worldwide demand from oil and gas producers.

Schlumberger also said it had bought an additional 25 percent equity stake in Russia's largest independent oilfield services company, PetroAlliance Services Company Limited, for an undisclosed amount, bringing its share to 51 percent.

It expects to purchase the remaining 49 percent of that company in 2006.

The company reported second-quarter net income of $482.2 million, or 80 cents per share, up from $355.6 million, or 59 cents per share, a year earlier.

Income from continuing operations in the period was 78 cents per share. Analysts, on average, expected the company to earn 67 cents per share, according to Reuters Estimates.

"They beat us by 11 cents. Profitability in North America blew the doors off," said James Wicklund, analyst with Bank of America Securities.

...more...

[UpInArms]

33. How are local governments faring?

http://www.baxterbulletin.com/apps/pbcs.dll/article?AID=/20050722/NEWS01/507220321/1002

(Baxter County Arkansas) County judge announces layoffs

Baxter County Judge Dan Hall laid off five Road and Bridge Department employees Thursday and said two more might lose their jobs within the next month.

The five employees, and an additional retiring employee, will work until July 28. The fired employees are Ed Mitchell, Johnny Bowman, David Moore, Robert Luther and Gary Williams.

The position held by the retiring employee will not be filled.

Hall said this was a difficult decision to come to, but one that had to be made due to budget constraints.

"We have been wrestling with budget shortfalls and unfunded obligations which we have to work with," he said. "We have less money this year than we have had since 2001."

<snip>

The money in the personnel budget will be shifted to fuel and material line items to cover a $107,831 shortfall.

...more...

[UpInArms]

34. 9:45 EST - Don't Worry! Be Happy!

Dow 10,639.87 +12.10 (+0.11%)
Nasdaq 2,179.90 +1.30 (+0.06%)
S&P 500 1,229.87 +2.83 (+0.23%)
10-Yr Bond 4.255 -0.27 (-0.63%)

NYSE Volume 109,635,000
Nasdaq Volume 150,252,000

[UpInArms]

37. NYSE files $6.2B IPO in ArcaEx merger

http://www.marketwatch.com/news/story.asp?guid=%7BC0AEB042%2DF71A%2D4806%2D9748%2D8DDA571F8CFC%7D&siteid=mktw

NEW YORK (MarketWatch) - The New York Stock Exchange late Thursday filed to raise up to $6.2 billion in an initial public offering as part of its reverse merger with Archipelago.

The Big Board took the official corporate name of NYSE Group, Inc. as it combines its business with Archipelago (AX: news, chart, profile) in what would be one of the largest U.S.-based IPOs of all time.

The New York Stock Exchange set plans to trade under the ticker symbol "NYX."

The NYSE plans to register 158.3 million shares at a proposed maximum offering price of $39.60 a share.

...more...

[UpInArms]

38. NYSE trading costs to soar after merger

http://business.timesonline.co.uk/article/0,,13129-1703705,00.html

NEW York Stock Exchange traders face paying a high price just to do their jobs while the cost of buying and selling shares on the Big Board is set to soar under terms of business proposed in the $6 billion with Archipelago, an electronic trading firm.

John Thain, the NYSE chief executive, called a meeting of members last night to present the “Draft S4”, a regulatory document filed with the Securities and Exchange Commission laying out the terms of the deal.

Mr Thain told The Times before the meeting that, once the deal was struck, NYSE member firms would have to buy licences to trade. The licences would replace the trading rights that are currently attributed to the members by the stock exchange seats that they own.

But close analysis of the 844- page Draft S4 shows that the proposed licences could cost New York traders dear while trading costs are also set to rise.

<snip>

Meanwhile the merger also spells bad news for some NYSE staff, despite the promise of $50 million of shares as a bonus from Mr Thain.

...more...

[UpInArms]

40. SEC suspends trading in Host America (something to do with Squal-Mart)

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38555.4160478935-839010680&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- The Securities and Exchange Commission suspended trading in shares of Host America Corp. (CAFE) over concerns that the food services provider gave investors misleading information about its dealings with Wal-Mart Stores Inc. (WMT) in a July 12 press release. The suspension is effective Friday and will end by Aug. 5, the SEC said.

:wtf:

So who let the fart: Host America or Squal-Mart???

[Robbien]

44. Could be that the second largest shareholder dumping almost all holdings

set off warning bells.

NEW YORK, July 19 (Reuters) - One of the top shareholders of Host America Corp., which has seen its shares rally more than threefold over the past week, has sold 94.1 percent of his stake in the company, according to a filing with the U.S. Securities and Exchange Commission.

Roger D. Lockhart sold 392,330 shares of Host America for $13.85 a share, in trades worth almost $5.3 million, according to the filing. That reduced his holdings in the company to 24,500 shares.

http://today.reuters.com/investing/financeArticle.aspx?type=hotStocksNews&storyID=URI:urn:newsml:reuters.com:20050719:MTFH98767_2005-07-19_21-06-29_N19377349:1

[UpInArms]

45. Can you say "Insider Trading"?

I knew you could. :hi:

[54anickel]

50. After its shares went up 3-fold!?! Whoa, babycakes!!! Was that a

pump and dump, insider trading or a hybrid? Maybe he just needed the cash to buy a house. ;-)

[UpInArms]

41. More restatements by insurers seen (scams away!)

http://www.marketwatch.com/news/story.asp?guid=%7B02D757C8-AD6D-4692-88EF-29CA67D2B12F%7D&siteid=google

SAN FRANCISCO (MarketWatch) -- At least three companies have restated multiple years of results in 2005 to correct accounting for a controversial form of reinsurance called finite risk reinsurance.

After accounting fixes by American International Group (AIG: news, chart, profile) , Ace Ltd. (ACE: news, chart, profile) and RenaissanceRe Holdings (RNR: news, chart, profile) , some experts are predicting more restatements in the insurance industry this year.

"That's one of implications here: You will see more buyers and sellers of finite reinsurance restate financials," Adam Klauber, an analyst at Cochran, Caronia & Co. said. "There's so much regulatory scrutiny of these transactions that companies will become more and more conservative in how they account for the products."

<snip>

In May, Spitzer sued AIG, Greenberg and the insurer's former chief financial officer, Howard Smith, alleging they used improper accounting and financial reporting schemes to deceive investors and regulators.

Ace, a Bermuda-based insurer headed by Hank Greenberg's son Evan, said Thursday that it accounted for eight finite-risk reinsurance agreements incorrectly and will restate more than five years of earnings to fix the errors. See full story.

...more...

I guess being a crook just runs in some families :eyes:

[UpInArms]

54. Reinsurance Group of America tumbles on earnings

http://today.reuters.com/investing/financeArticle.aspx?type=marketsNews&storyID=2005-07-22T140118Z_01_N22632504_RTRIDST_0_FINANCIAL-REINSURANCEGROUP-STOCK.XML

NEW YORK, July 22 (Reuters) - Reinsurance Group of America Inc. (RGA.N: Quote, Profile, Research) shares fell as much as 11.3 percent on Friday after the company said quarterly profit fell two-thirds below analysts' forecasts, hurt by high claims levels and a charge to boost Argentine pension reserves.

The St. Louis-based company, one of the world's largest life reinsurers, late Thursday said second-quarter net income fell 67 percent to $21.8 million, or 34 cents per share, from $65.3 million, or $1.04, a year earlier.

Operating income fell 65 percent to $20.1 million, or 32 cents per share, from $57.2 million, or 91 cents, the company said. On that basis, analysts polled by Reuters Estimates on average had forecast $1 per share.

"We are obviously disappointed with the results," Chief Executive A. Greig Woodring said in a statement.

Reinsurance Group of America said it suffered from high U.S. and British claims levels, with U.S. claims rising $32 million from a year earlier.

The company also took a $24 million pretax charge, or 24 cents per share, to increase reserves for its Argentine pension business, which is being run off. Woodring said he believed the additional reserves should eliminate future negative earnings impact related to this business.

...more...

[UpInArms]

42. 10:15 EST numbers and blather

Dow 10,621.08 -6.69 (-0.06%)
Nasdaq 2,173.91 -4.69 (-0.22%)
S&P 500 1,228.57 +1.53 (+0.12%)
10-Yr Bond 4.239 -0.43 (-1.00%)

NYSE Volume 301,052,000
Nasdaq Volume 355,438,000

10:00AM: Equities still on the offensive as the bulk of sector leadership is positive, but gains remain minimal at best... Energy has paced the way higher, benefiting from a rebound in oil prices ($57.70/bbl +$0.57), strong Q2 reports from HAL (+6.8%) and SLB (+3.7%) as well as analyst upgrades on BR and APA... The Materials sector has also been strong amid a notable rating change - an upgrade on U.S. Steel (X 43.42 +2.25)...

Consumer Discretionary has traded higher, amid strong follow-through buying in retail and a rebound in homebuilding while falling bond yields have helped interest-rate sensitive sectors like Financial and Utilities... Health Care, however, has shown relative weakness as a UBS downgrade on Gilead Sciences (GILD 44.34 -1.83), citing valuation, has prompted consolidation throughout the biotech group (AMGN -2.0% and GENZ -1.6%)...DJTA +0.5, DJUA +0.5, DOT -0.1, Nasdaq 100 +0.1, Russell 2000 +0.3, SOX +1.8, S&P Midcap 400 +0.7, XOI +1.1, NYSE Adv/Dec 1539/940, Nasdaq Adv/Dec 1446/887

9:40AM: Stocks opens in lackluster fashion, as investors try to find some footing amid a mixed batch of earnings reports...While the majority of notable earnings reports (i.e. BDX, CMI, KMB and SLB) out this morning have again checked in better than expected, the inability by tech giants Microsoft (MSFT 26.22 -0.22) and Google (GOOG 304.64 -9.30) to overwhelm Wall Street with stronger quarterly revenues and outlooks last night has so far minimized market gains...

Microsoft beat analysts' Q4 EPS forecasts by $0.03 but revenues were light and Q1 sales guidance was about $120 mln below consensus while Google, despite quadrupling Q2 profits, failed to exceed the high end of analysts' estimates...

[UpInArms]

56. 11:12 EST numbers (mixed) and blather (mixed)

Dow 10,611.83 -15.94 (-0.15%)
Nasdaq 2,169.39 -9.21 (-0.42%)
S&P 500 1,228.20 +1.16 (+0.09%)
10-Yr Bond 4.232 -0.50 (-1.17%)

NYSE Volume 582,820,000
Nasdaq Volume 630,171,000

11:00AM: Major indices slip to their worst levels of the day, coinciding with a spike in oil prices to session highs... While crude oil futures ($57.95/bbl +$0.83) have been rebounding all morning, amid speculation that the yuan revaluation may weaken China's competitiveness or perhaps increase energy demand growth as a result of dollar weakness, renewed buying interest that has pushed the commodity over $58/bbl has dampened market sentiment... NYSE Adv/Dec 1729/1141, Nasdaq Adv/Dec 1449/1210

10:30AM: Stocks still struggling to gain much traction in the early going, as the Dow and Nasdaq inch below the flat line... Perhaps providing much of the recent weakness, albeit modest, has been continued deterioration in Microsoft (MSFT 25.89 -0.55) shares, which have recently slipped to session lows... With the weekend upon us, worrisome reports about continuing terrorist incidents in London may also be adding to some of the reluctance on the part of buyers...NYSE Adv/Dec 1779/979, Nasdaq Adv/Dec 1503/1054

[UpInArms]

48. Treasuries up on bargain buying, London shooting

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-22T134714Z_01_N22339526_RTRIDST_0_MARKETS-BONDS.XML

NEW YORK, July 22 (Reuters) - U.S. Treasury debt prices rose on Friday as investors, mainly from Asia, jumped into a market looking for bargains and taking advantage of a big sell-off after China's scrapping of the yuan's peg to the dollar.

Buyers also came back into the market on news that British law enforcement officers shot dead an assailant on the London subway who was suspected of possibly conspiring of carrying out another bomb attack.

"There's the London thing, but (Asian) buyers came in overnight," a trader in New York at a Wall Street primary dealer said. "The yuan revaluation is not going to stop them, but it will slow them down," he added.

Compared with Thursday's intense session, Friday should be relatively calm. The day's only scheduled data offering is the Economic Cycle Research Institute's weekly U.S. economic index at 10:30 a.m.(1430 GMT).

...more...

[54anickel]

61. Asian Currencies Surge After China Lets Yuan Gain Versus Dollar

Heh-heh, so why are they really buying?

http://www.bloomberg.com/apps/news?pid=10000087&sid=a2nX.wJlA2.w&refer=top_world_news

snip>

The South Korean, Taiwan and Singapore currencies ``have a bigger potential to rise'' because of those nations' trade links with China, said Mirza Baig, a currency research analyst at Deutsche Bank AG in Singapore.

snip>

The local markets in the Taiwan and Korean currencies were closed when China said yesterday evening that it would end its peg of about 8.3 to the dollar in favor of letting the yuan fluctuate 0.3 percent against an undisclosed basket of currencies.

snip>

Asian central banks may not let their currencies rise too much, too fast, said Enrico Caruso, chief trader at currency hedge fund Tempest Asset Management in Newport Beach, California.

South Korea's central bank on Dec. 2 said it bought dollars to stem the won's ascent, helping push up foreign-exchange reserves to $192.6 billion in November. The reserves, the world's fourth largest, rose to $205 billion by the end of June, suggesting it is still buying dollars.

``If there's a big run on the Korean won, the Singapore dollar and other currencies, I would imagine the central banks will step in to not make it a one-way proposition for speculators,'' Caruso said. ``I won't be surprised to see other Asian central banks at least'' checking the markets.

more...

[UpInArms]

72. US Treasury mulls special lending facility - return of the 30 year bond

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-22T160256Z_01_WAT003603_RTRIDST_0_ECONOMY-TREASURY-BONDS-URGENT.XML

WASHINGTON, July 22 (Reuters) - The U.S. Treasury Department said on Friday it is considering a special lending facility to be a lender of last resort when demand for Treasury securities exceeds supply in the debt repurchase market.

Treasury is asking bond dealers for comment on the issue and plans to follow up with a more detailed proposal at its November refunding meeting.

Treasury is taking the action to address an increased incidences of "fails episodes," when demand for Treasuries in the repurchase market has outstripped supply, a Treasury official told reporters at a briefing.

Treasury will announce its quarterly refunding plans on Wednesday and is widely expected to unveil plans to reintroduce the 30-year bond to give the government greater flexibility to borrow across a range of maturities.

...very short blurb...

To Our Children's Children's Children :(

[54anickel]

51. No Bottlenecks without a Bottle (Roach)

http://www.morganstanley.com/GEFdata/digests/20050721-thu.html#anchor0

The more I ponder the inflation story, the more I become convinced that we need to come up with a new approach. In two earlier essays, I addressed the shifting composition of inflation (see “Inflation Phobia” July 15, 2005) and the cross-border convergence of pricing (see “Inflation Convergence, July 18, 2005). In what follows, I explore some important shifts in the macro relationships that have long been at the heart of the inflation process. What emerges from this trilogy is a strong conviction that increasingly powerful forces of globalization have fundamentally altered the inflation outlook. Barring a setback to globalization or a major policy blunder, low inflation could well be here to stay for the foreseeable future.

snip>

Third, there is also solid evidence of sharply diminished linkages between inflation and the broadest gauges of market pressures. This shows up in the form of reduced sensitivities between fluctuations in core inflation and changes in the so-called output gap -- the difference between actual and “potential,” or full-employment GDP. The UK experience is an exception to this trend, but sharp reductions in this elasticity were evident between the globalization and pre-globalization periods for Japan, France, Italy, the US, and Germany. Not surprisingly, this result fits well with equally-impressive declines in the linkages between unit labor costs and core inflation that I noted in the second installment of this trilogy (see my 19 July dispatch, “Inflation Convergence). If the broadly-based output gap has lost its potency in driving fluctuations in inflation, it stands to reason that a similar result can be expected from the linkage between inflation and the cost pressures that arise from cyclical fluctuations in the labor-market piece of the output gap.

Don’t get me wrong -- this is not ironclad evidence that globalization has repealed the macro rules of inflation. However, there can be no mistaking the evidence of a sharp reduction of the linkages between price setting and several of its key determinants -- namely, currencies, import prices, output gaps, and labor costs. It’s the timing of these diminished linkages that brings globalization into the story. For six major developed economies, the elasticities and correlations have declined during the same period when globalization has burst forth with extraordinary scope and speed. Maybe that’s just a coincidence. After all, there could certainly be other powerful forces at work. Central bankers would like you to believe that they deserve credit for their success as inflation fighters. In addition, the explosion of the Internet points to a new technology of price setting. These developments can hardly be dismissed as inconsequential events on the inflation front. But, in my view, they are dwarfed by the far more powerful market-driven forces of globalization. I do not think it is a coincidence that global inflation convergence has occurred at the same time when the roles of currencies, import prices, and labor costs have all diminished in importance in shaping inflation. Nor do I think it is a coincidence that these developments have all occurred during a period when global trade has soared repeatedly to new records as a share of world GDP.

At work, in my view, is the globalization of disinflation. Our old closed-economy models have been rendered increasingly obsolete by the emergence of far more powerful cross-border influences on pricing. As a result, in making inflation calls, we now need to pay less attention to country-specific shifts in unemployment and capacity utilization rates. Instead, we need to focus more on the global balance between supply and demand that shape the far more open models of globalization. In that broader context, the outlook for inflation remains very constructive, in my view. After all, it’s hard to have bottlenecks without a bottle.

more...

[54anickel]

57. California on power alert, blackouts possible

http://www.msnbc.msn.com/id/8662257/

LOS ANGELES - The California Independent System Operator Thursday declared a power emergency in southern California and said rotating blackouts were "possible" later in the day.

"Involuntary curtailments of service to customers including rotating blackouts are possible during this emergency declaration," the state agency said.

The California ISO, which controls most of the state's power grid initially declared a transmission emergency as high demand and power plant outages sparked some voltage problems. Within minutes it also declared a stage two power alert for southern California.

snip>

Southern California Edison, a unit of Edison International , said its customers were currently using 21,675 megawatts of power, a new historic record. The previous usage record of 21,112 MW was set on Wednesday with a heatwave engulfing the southern half of the state.

[UpInArms]

58. Bush nominates Campos, Nazareth to SEC

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38555.4747548611-839015051&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- President Bush will renominate Roel Campos to the Securities and Exchange Commission and will also nominate Annette Nazareth, a top staff member at the regulator, to fill an open seat on the commission, the White House announced Friday. The pair would occupy the two Democratic seats on the five-member commission. Campos will be nominated to fill the remainder of a term that expires in 2010; he has served as a member of the SEC since 2002. Nazareth, currently the head of the SEC's division of market regulation, will be nominated to fill the remainder of a five-year term expiring in 2007.

[UpInArms]

60. ECRI - Manufacturing Outlook Still Poor

http://today.reuters.com/news/newsArticleSearch.aspx?storyID=209459+22-Jul-2005+RTRS&srch=ecri

NEW YORK, July 22 (Reuters) - A leading index of the U.S. economy edged up in the latest week due to lower jobless claims and higher industrial material prices, a report showed on Friday.

The Economic Cycle Research Institute, an independent forecasting group, said its weekly leading index rose to 134.7 in the week to July 15 from 133.5 in the prior week.

The index's annualized growth rate, which smoothes out weekly fluctuations, was 1.6 percent compared to a downwardly revised 1.1 percent in the prior week.

"U.S. economic prospects have brightened a bit further though the manufacturing outlook is still poor," said Lakshman Achuthan, managing director at ECRI.

[UpInArms]

63. Ford may slash 10K white-collar jobs

http://www.marketwatch.com/news/story.asp?guid=%7BDC56006A%2D7631%2D446C%2DB9F1%2D500EBBEFD2A8%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) - Ford Motor, in an effort to stem losses in its auto business, may cut as much as 30% of its North American white-collar work force over the next few years, according to the Wall Street Journal on Friday.

The reductions could amount to as many as 10,500 jobs in the Dearborn, Mich.-based company's auto operations, the report said.

Ford officials didn't immediately return calls seeking comment.

The potential move comes after Ford (F: news, chart, profile) in June slashed its 2005 profit target and said it would cut about 1,750 of its salaried employees in North American by Oct. 1. See full story.

On Tuesday, Ford turned in a 19% slide in second-quarter earnings with the troubled automotive side taking a loss of $245 million amid higher costs and lower sales. See full story.

<snip>

Fitch followed the report by downgrading Ford's debt to one level above junk status with a negative outlook, citing a sharp decline in demand for its big truck and SUV lineup, as well as restructuring-related spending. See full story.

...more...

[54anickel]

67. CNOOC critcs took money from Chevron

http://www.businessweek.com/ap/financialnews/D8BGFF5G0.htm?campaign_id=apn_home_down&chan=db

Three leaders in the congressional campaign to discourage Chinese oil company CNOOC Ltd.'s acquisition of Unocal Corp. accepted campaign contributions from rival suitor Chevron Corp. in recent weeks, according to reports filed with the Federal Election Commission.

The lawmakers -- Rep. Richard Pombo, R-Calif., Sen. Kent Conrad, D-N.D., and Sen. James Inhofe, R-Okla. -- have been among the most vocal on Capitol Hill in criticizing CNOOC's proposed deal as anticompetitive and a threat to national security. The perception that Congress could delay or spike a CNOOC deal is viewed as a major factor in Unocal's decision to stick with Chevron despite its lower bid.

All three donations were disbursed by Chevron on June 29, about a week after CNOOC announced its bid, according to Chevron's June report to the FEC. Pombo received a contribution of $2,000, while Conrad and Inhofe each received $1,000.

snip>

Spokesmen for the three lawmakers said they haven't worked with Chevron on the issue. They said the lawmakers' criticism of CNOOC's proposal reflects long-standing concerns about China, and isn't tied to campaign donations.

more...

Just another reason to see huge changes in the campaign financing paradigm. They can deny all they want, it looks dirty to me.

[ozymandius]

68. lunchtime check-in

12:16
Dow 10,615.93 -11.84 (-0.11%)
Nasdaq 2,170.94 -7.66 (-0.35%)
S&P 500 1,229.32 +2.28 (+0.19%)
10-Yr Bond 42.19 -0.63 (-1.47%)
NYSE Volume 803,350,000
Nasdaq Volume 840,822,000

12:00PM: Market struggle to find much direction midday, as a mixed batch of earnings data, rising oil prices and another potential terrorist scare in London underpin a sense of nervousness in the wake of yesterday's weakness... Even though the bulk (6 out of 9) of S&P constituents (i.e. BDX, CMI, KMB, SLB) posting results today have again beaten expectations, quarterly reports from Microsoft (MSFT 25.80 -0.64) and Google (GOOG 298.35 -15.39) that failed to impress investors have kept market gains in check...

Last night, Microsoft beat analysts' Q4 estimates by $0.03, but revenues missed forecasts and Q1 sales guidance was disappointing, while Google, which has soared roughly 75% in anticipation of another blowout quarter, quadrupled Q2 profits but did not surpass the high end of analysts' estimates... Also weighing on sentiment that has left six out of ten economic sectors underwater have been rising oil prices... After losing nearly 3.0% over the last two sessions, crude oil futures ($57.95/bbl +$0.83) have rebounded upon further analysis of the yuan's potential impact on the commodity...

The shooting in London of a suspected would-be bomber earlier has also kept buyers on the sidelines heading into the weekend... Meanwhile, Technology remains the most influential leader to the downside, as declines of 2.5% and 5.0% from tech giants like MSFT and GOOG, respectively, offset a rebound in chip stocks... Semiconductor has gotten a boost following Broadcom's (BRCM 42.88 +4.27) strong Q2 report... Health Care has also been under pressure amid weakness in drug stocks and a 3.4% sell-off in biotech...

[54anickel]

69. There's that weekend line again. Comes up on every down Friday, a

simple reminder that this is not the old buy and hold market.

The shooting in London of a suspected would-be bomber earlier has also kept buyers on the sidelines heading into the weekend

[UpInArms]

73. 12:51 EST selling before weekend remorse

Dow 10,594.65 -33.12 (-0.31%)
Nasdaq 2,166.82 -11.78 (-0.54%)
S&P 500 1,227.31 +0.27 (+0.02%)
10-Yr Bond 4.231 -0.51 (-1.19%)

NYSE Volume 906,535,000
Nasdaq Volume 937,286,000

12:30PM: While the major U.S. indices continue to languish near session lows, it is worth noting that the FTSE 100 Index (+0.4%) closed in positive territory a little over an hour ago... Even though the news of yet another incident in London is not the only issue adding to investors' apprehension to own U.S. equities, the resilience of the FTSE, in response to ongoing terrorist threats, should not be overlooked, as Europe's leading index has surged 8.3% compared to poor performances of -1.4%, +1.2% and +0.14% for the Dow, S&P and Nasdaq, respectively... NYSE Adv/Dec 1789/1266, Nasdaq Adv/Dec 1534/1305

[54anickel]

75. Hey, are they insinuating US investors are whimps?

That's sounds like a challenge or something. They want a repeat of that "resilience in the face of terror" commentary from 7/7.

the resilience of the FTSE, in response to ongoing terrorist threats, should not be overlooked

Come on Merika, look at the Footsie!!! Get out there and buy a few shares. :evilgrin:

[ozymandius]

80. Ha ha ha ha!

:rofl:

C'mon folks! Nothing's more patriotic than a ghoul.

[UpInArms]

86. What a mantra!

Bombings = Buy Stocks!

Was that a new meme by Brit Hume?

:rofl:

Should really work to pump up the markets as there have been bombings everywhere on a daily basis (gotta include Iraq in that since it really is now our 52nd state -counting Puerto Rico)

[54anickel]

71. The Rise to Ruin

http://www.321gold.com/editorials/denning/denning072205.html

Loss of Paper Money's Purchasing Power as a Result of Asset Inflation

Today, we have a similar situation. However, people are not concerned about paper money losing its purchasing power as a result of consumer prices rising, but as a result of paper money losing its value because of rising asset prices.

If, on given income of 100, consumer prices rise from 100 to 110 the real income will have declined by 10%. But if on an income of 100 and cash assets of 1,000 which only yield 2%, real-estate prices rise by 10%, both the income and the cash assets will have lost their purchasing power compared to real estate.

Therefore, if real estate prices rise for an extended period of time at a faster rate than incomes and interest rates on cash deposits, it is only natural that people become concerned that they won't be able to afford to purchase their own home in future.

Their concern about future affordability, which is nothing else than the fear of their income and savings losing their purchasing power, then induces them to purchase their homes now rather than later.

This incremental demand drives prices even higher and attracts speculators who want to capitalise on the rise in prices, which is driven first by the genuine buyers and later by themselves as well.

more...

[54anickel]

78. Maytag Says Whirlpool's $1.36 Billion Offer May Not Succeed

http://quote.bloomberg.com/apps/news?pid=10000103&sid=aJHVZPS.HZ0w&refer=news_index

July 22 (Bloomberg) -- Maytag Corp., the No. 3 U.S. appliance maker, said Whirlpool Corp.'s $1.36 billion offer for the company may not succeed, signaling concern that the bid may be derailed on antitrust grounds.

Maytag's board is unable to determine whether Whirlpool's $17-a-share offer is ``financially superior'' and has a ``reasonable chance of being completed,'' Newton, Iowa-based Maytag said in a statement last night. The company said it won't open its books to Whirlpool and reiterated its backing of a $14-a- share bid by a group led by buyout firm Ripplewood Holdings LLC.

The combination of Maytag and Whirlpool would give the new company almost 50 percent of the U.S. market. Maytag may be trying to thwart the Whirlpool transaction out of concern that it wouldn't pass muster with federal regulators. The board may also be worried that Whirlpool may decline to make a bid after examining Maytag's finances, leaving the company without a buyer and owing Ripplewood a $40 million breakup fee.

``There's two unknowns: the Federal Trade Commission and that Whirlpool may get in there, look at the numbers and say `never mind,''' FTN Midwest Securities Corp. analyst Eric Bosshard said in an interview. Should Maytag ``open the door to Whirlpool, they would be violating their deal with Ripplewood,'' he said.

more...

[54anickel]

79. UPDATE 3-Maytag net lower than expected, hurt by high costs

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-22T160126Z_01_N22422693_RTRIDST_0_MANUFACTURING-MAYTAG-EARNS-UPDATE-3.XML

ATLANTA, July 22 (Reuters) - Appliance maker Maytag Corp. (MYG.N: Quote, Profile, Research), the focus of a blossoming takeover battle, reported lower-than-expected quarterly profit on Friday as sales gains were offset by higher steel and energy-related costs.

The company, which has agreed to be acquired by a private equity group but has a higher offer from rival Whirlpool Corp. (WHR.N: Quote, Profile, Research), said sales were up in all major categories -- refrigeration, laundry, cooking, dishwashing and floor care.

But rising steel and resin costs, higher fuel and transportation costs, and lower vacuum prices offset sales growth.

Despite the estimate miss, Maytag shares gained 2.5 percent. "People may be speculating that Whirlpool will sweeten the deal," Morgan Keegan analyst Laura Champine said. "The stock is trading on merger activity."

more...

[cosmicdot]

83. Occidental Petroleum 2Q Earnings Double

Former Bu$h Secretary of Energy, Spencer Abraham, joined Occidental's Board of Directors this year.

Occidental Petroleum 2Q Earnings Double
```````````````````````````````````````````
July 22, 2005 10:00 AM EDT

LOS ANGELES - Occidental Petroleum Corp., an oil and gas exploration
and production company, said Friday its second-quarter earnings more
than doubled, driven by several large gains, high energy prices and
strong margins in its chemicals business.

Occidental, which also makes basic chemicals, plastics and
petrochemicals, reported earnings of $1.54 billion, or $3.78 per
share, compared with $581 million, or $1.46 per share, in the year-
ago quarter.

Earnings, which exclude extraordinary items, totaled $851 million,
or $2.12 per share, versus $584 million, or $1.49 per share, in the
prior-year period.

~snip~

http://my.earthlink.net/article/bus?guid=20050722/42e06f40_3ca6_15526200507221285090243
http://makeashorterlink.com/?W2B324B7B


from Occidental SEC Proxy Filing dated March 15, 2005

The Board of Directors recommends a vote FOR themselves:


SPENCER ABRAHAM, 52

Since February 2005, Mr. Abraham has been a distinguished
visiting fellow at the Hoover Institution, a public policy
research center headquartered at Stanford University and
devoted to the study of politics, economics and political
economy as well as international affairs. He served as the
Secretary of Energy, United States Department of Energy from
2001 through January 2005. Prior to that, he was a United
States Senator, representing the State of Michigan, from
1995 to 2001. From 1993 to 1994, he was of counsel to the
law firm of Miller, Canfield, Paddock & Stone. He was a
co-chairman of the National Republican Congressional
Committee from 1991 to 1993 and chairman of the Michigan
Republican Party from 1983 to 1991. Mr. Abraham has a juris
doctorate degree from Harvard Law School.

First Time Nominee

fwiw

AXA Financial Inc. is the beneficial owner of 7.8% of Occidental's common stock; Barclays owns 8.88%; and Barrow, Hanley, Mewhinney & Strauss, Inc. of Dallas, TX, owns 5.94%.

[UpInArms]

87. RUNNING UP THE DEBT - Frist says Senate to vote on Estate Tax Repeal

2:44pm 07/22/05 SEN. FRIST: SENATE VOTE NEXT WEEK ON ESTATE-TAX REPEAL

[ramapo]

89. How helpful

You have to love our representatives...they really are working to help out the average American. Just think yu won't have to worry about paying taxes when you're dead. So what that only a small fraction of taxpayers ever have to face this hapy problem because nobody has that much of an estate.

arghhhh!

[UpInArms]

90. more "help" for those struggling at the top 1%

:banghead:

[UpInArms]

88. 2:48 EST market loves tax cuts! debts! destruction! Hurrah!

Dow 10,631.67 +3.90 (+0.04%)
Nasdaq 2,174.36 -4.24 (-0.19%)
S&P 500 1,231.68 +4.64 (+0.38%)
10-Yr Bond 4.227 -0.55 (-1.28%)

NYSE Volume 1,265,918,000
Nasdaq Volume 1,263,230,000

2:30PM: Major indices continue to trade in split fashion but market internals now suggest a more positive tone to trading... Advancers on the NYSE outpace decliners by an 18 to 13 margin while advancing issues on the Nasdaq hold a 15 to 13 edge over declining issues... A split ratio of down to up volume, however, still paints more of a mixed picture at the Big Board and the Composite...

Meanwhile, the S&P and Nasdaq continue to trade above initial support levels of 1224 and 2165, respectively, while selling pressure on the Dow, primarily from MSFT, has prevented the blue chip index from finding support near 10610... NYSE Adv/Dec 1828/1310, Nasdaq Adv/Dec 1553/1389

2:00PM: Little changed since the last update as participant find few catalysts to more aggressively push the indices in either direction...While bonds continue to gain momentum in afternoon trading, improving borrowing costs for consumers and corporations as benchmark yields hold steady near session lows (4.21%), it appears oil prices, trading near session highs (above $58/bbl) merely counter such positive developments in the Treasury market... NYSE Adv/Dec 1773/1353, Nasdaq Adv/Dec 1421/1529

[54anickel]

91. Corporate Icons Lead Bad U.S. Labor Week

http://biz.yahoo.com/ap/050722/economy_job_losses.html?.v=4

Led by Kodak and Hewlett-Packard, Corporate Icons Make It a Bad Week for American Labor


ROCHESTER, N.Y. (AP) -- In a week where Alan Greenspan said he expected the U.S. economy to keep growing and Wall Street seemed generally pleased with corporate performance, workers at Eastman Kodak Co., Hewlett-Packard Co. and Kimberly-Clark Corp., among others, were warned about thousands of new layoffs.

"You get immune to it after a while," longtime Kodak technician John Hladis said with barely a shrug when the scythe fell once more at the Rochester-based photography company, slicing away another 10,000 employees.

But some economy watchers are suddenly concerned that this latest flurry of job cuts -- a byproduct of various trends such as outsourcing, mergers, automation, changing technology and consumer demands -- may foreshadow some trouble ahead.

"We won't know till afterwards, but I do think we may be seeing a tipping point in the economic cycle that these big layoffs are flagging," said John A. Carpenter, chief executive of Challenger, Gray & Christmas, a Chicago-based employment research firm. "I think it's a sign that leaks are breaking out."

snip>

U.S. corporations announced plans in June to cut 110,996 jobs -- the highest monthly total in 17 months -- and July's toll could turn out to be steeper. Overall job cuts are on the rise in 2005, reaching 538,274 through June, according to Challenger's monthly job-cut analysis.

more...

[ozymandius]

95. Apparently, there's a willingness to hold stocks over the weekend.

3:28
Dow 10,638.84 +11.07 (+0.10%)
Nasdaq 2,176.39 -2.21 (-0.10%)
S&P 500 1,232.25 +5.21 (+0.42%)
10-Yr Bond 42.23 -0.59 (-1.38%)
NYSE Volume 1,456,431,000
Nasdaq Volume 1,428,969,000

3:00PM: Renewed buying interest improves the market's stance but the major indices continue to trade in split fashion... Dow components turning positive within the last 30 minutes include AIG, CAT, DD, GE, HD, IBM and KO... However, limited participation, amid a typically light volume summer Friday (as the NYSE has finally seen 1.0 bln shares traded), has provided little conviction behind a rebound attributed primarily to a technical breakout out of a narrowing intraday range... NYSE Adv/Dec 1844/1342, Nasdaq Adv/Dec 1626/1365

[54anickel]

98. True Patriots I guess...eom

[ozymandius]

99. closing numbers

Dow 10,651.18 +23.41 (+0.22%)
Nasdaq 2,179.74 +1.14 (+0.05%)
S&P 500 1,233.68 +6.64 (+0.54%)
10-Yr Bond 42.23 -0.59 (-1.38%)
NYSE Volume 1,766,985,000
Nasdaq Volume 1,695,174,000

blather still to come

[UpInArms]

102. closing blather

he market showed its resilience in the face of disappointing quarterly reports from two tech giants and surging oil prices, as a relief rally in bonds, blue chip leadership and late-day short covering ahead of the weekend helped stocks shrug off a day of lackluster trading... In fact, when it was all said and done, early weakness may have been more company-specific than initially thought... Microsoft (MSFT 25.68 -0.76) beat analysts' Q4 expectations by $0.03 but missed on revenues and issued disappointing Q1 sales guidance, losing almost 3.0% on the day; but other software companies like ORCL, ADBE, ADSK and BMC traded higher... Google (GOOG 302.40 -11.54), which quadrupled Q2 profits but failed to exceed the high end of analysts' estimates, lost nearly 4% as investors locked in profits following a three-month 75% surge in shares ahead of another widely expected blowout quarter... But rival Yahoo (YHOO 33.53 +0.59) surged 1.8%, due in large part to a Prudential upgrade... Even in the absence of schedule economic reports, which placed even more emphasis on earnings and guidance, renewed buying efforts in bonds knocked benchmark yields on the 10-year note (+14/32) down from two-month highs of 4.28% to 4.21%, providing investors some reprieve after yesterday's drubbing positioned bonds for their worst losing streak (four straight weeks) since January... Bond traders stepped in ahead of the weekend, attracted to yields offering value at 2-month highs as concerns that the yuan revaluation would lead to less demand for U.S. Treasurys faded... Perhaps also improving overall sentiment was another solid recovery effort on the FTSE 100 Index (+0.4%), following the fatal shooting of a suspected would-be bomber a day after a second set of explosions rocked London... Pacing the way higher was Energy, which benefited from a 2.7% surge in oil prices ($58.65/bbl +1.52), strong Q2 reports from Halliburton (HAL 53.29 +4.59) and Schlumberger (SLB 82.28 +4.32), both of which hit new 52-week highs, and analyst upgrades on Apache (APA 69.95 +3.86) and Burlington Resources (BR 62.37 +3.26) ahead of their Q2 reports next week... Materials also showed relative strength, following an upgrade on U.S. Steel (X 42.56 +1.39), while falling bond yields helped interest-rate sensitive areas like Financial and Utilities close to the upside... Consumer Discretionary traded higher, getting a boost from strong follow-through buying in retail, a rebound in homebuilding and reports that Ford (F 10.72 +0.08) could slash up to 30% of its current white-collar work force... Technology, however, paced the way lower, as a 2.9% selloff in MSFT and weakness from INTC and CSCO, offset a 1.3% rebound in Semiconductor... Chip stocks got a lift following Broadcom's (BRCM 43.00 +4.39) strong Q2 report... Health Care also closed lower amid weakness in drug stocks and biotech... The latter slipped from its best levels in four years after a UBS downgrade on Gilead Sciences (GILD 44.47 -1.70), citing valuation, prompted consolidation throughout the group... ..DJUA +1.1%. ..SOX +1.3%. ..DOT -0.1%. ..XOI +2.6%. ..BTK -2.6%. ..Nasdaq 100 -0.1%. ..S&P Midcap 400 +0.9%. ..Russell 2000 +1.6%. ..NYSE Adv/Dec 2129/1105. ..NASDAQ Adv/Dec 1866/1165.

Have a Great Weekend All!

:hi:

[54anickel]

101. Dow Ends Up 23 Despite Microsoft Earnings (in lieu of blather)

http://biz.yahoo.com/ap/050722/wall_street.html?.v=25

Dow Ends Up 23, Nasdaq Gains 1 Despite Tepid Earnings From Microsoft, Surge in Oil Prices


NEW YORK (AP) -- Wall Street eked out modest gains Friday to finish the week higher, overcoming tepid earnings from Microsoft Corp. and a fresh surge in crude oil futures to extend Wall Street's rally for a fourth consecutive week.

Microsoft's after-hours earnings report Thursday initially failed to provide any lift, while the jump in oil prices also stymied trading for much of the session. A barrel of light crude was quoted at $58.64, up $1.51, on the New York Mercantile Exchange.

Yet investors' optimism, buoyed by generally strong earnings throughout the week, asserted itself in late trading and produced modest gains for the major indexes. Maintaining that optimism, however, with stocks near four-year highs, will be difficult in the days ahead.

"The markets are just treading water here," said Michael Sheldon, chief market strategist at Spencer Clarke LLC. "Despite a generally positive week of earnings, the markets are in for a bit of consolidation or profit-taking over the next few days."

snip>

Trading was somewhat lackluster due to a dearth of economic news and the typical light volume of a summer Friday, but the late rally extended Wall Street's winning streak to four straight weeks. For the week, the Dow edged 0.1 percent higher, the S&P gained 0.47 percent and the Nasdaq rose 1.06 percent.

Analysts noted that the markets rallied even as oil prices moved to their highs of the session, showing that investors are looking forward with optimism.

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