STOCK MARKET WATCH, Friday 13 January

[ozymandius]

Friday January 13, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 9 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1849 DAYS
WHERE'S OSAMA BIN-LADEN? 1548 DAYS
DAYS SINCE ENRON COLLAPSE = 1510
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 3
Other Arrests of Execs = 54


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




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON January 12, 2006

Dow... 10,962.36 -81.08 (-0.73%)
Nasdaq... 2,316.69 -14.67 (-0.63%)
S&P 500... 1,286.06 -8.12 (-0.63%)
30-Year Bond 4.59% -0.05 (-1.03%)
10-Yr Bond... 4.41% -0.05 (-1.08%)
Gold future... 549.30 -0.80 (-0.15%)






GOLD, EURO, YEN, Dollars and Loonie


PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Martin Goldberg

Gold Leads Stocks in a Bullish Technical Pattern

A long-term chart ratio suggests that gold will outperform stocks in the next few years. Based on technical analysis, the odds favor stocks dropping with gold stable, gold rising with stocks stable, or gold rising with stocks falling. Since the beginning of the gold bull market, analysts have been pointing to the out-of-whack low gold to Dow ratio as a reason why gold should outperform stocks in the years ahead. This is fundamentally correct, and now it appears that there is a technical signal that suggests that the gold to Dow ratio should get back “in whack” sooner rather than later. “Sooner” means in the next 3 years or so.

-cut-



If this long-term chart above were evaluated as a stock, the technical decision would be an easy one – sell! If the pattern is seen as a head-and-shoulders reversal, the neckline would be at about 22, and the measurement principle would suggest that the Dow to Gold ratio would reach approximately 11. There is also support at about 9.5. With stocks selling at the high end of their historic valuations, and governments around the world printing paper money, it wouldn’t be too difficult to conceive of this chart reaching its technically-based measurement principle goal of 11 over the next few years. The clearly bearish DJIA to gold ratio chart puts perspective on the so called “bull market” by presenting the performance of the Dow in terms of actual money.

-cut-

Today’s Market

The major indices were down marginally today on volume that was less than the day before. The conventional wisdom is that today’s action was a healthy and overdue pullback. It has been successful to go with conventional wisdom on the bullish side, and avoid it on the bearish side. Example: A year end rally (bullish) was successful use of conventional wisdom, while expectation of a January swoon similar to what happened last year would have been failing use of similar conventional wisdom.

Our current service economy has shown resilience with respect to its ability to absorb the impact of high oil prices in both the economy and stock market. Again, use of bearish conventional wisdom would have been a loser’s game. The reason why the stock market is so resilient to rising oil prices is that our economy is now much more dependent upon a different commodity - debt. Therefore, it would be more useful to examine trends with respect to the price of debt and this is likely to provide insight into the future trend of the stock market. Generally speaking, the stock market lags the bond market (price of debt). It is with that introduction that the 5-year weekly chart of the 10-year US Treasury Note Price ($UST) is presented below. As can be easily seen, there is descending triangle forming, with important support at 107.5. If this support were to be broken, it is likely to have serious bearish implications on the stock market. It is worth watching, but until support is broken, this is just conversation.

more with charts...

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

[ozymandius]

2. Today's Reports

8:30 AM Business Inventories Nov
Briefing Forecast 0.4%
Market Expects 0.4%
Prior 0.3%

8:30 AM Core PPI Dec
Briefing Forecast 0.1%
Market Expects 0.2%
Prior 0.1%

8:30 AM PPI Dec
Briefing Forecast 0.3%
Market Expects 0.4%
Prior -0.7%

8:30 AM Retail Sales Dec
Briefing Forecast 1.0%
Market Expects 1.0%
Prior 0.3%

8:30 AM Retail Sales ex-auto Dec
Briefing Forecast 0.5%
Market Expects 0.4%
Prior -0.3%

9:50 AM Mich Sentiment-Prel. Jan
Briefing Forecast NA
Market Expects NA
Prior 91.5

[UpInArms]

12. 8:30 reports tumbling in

8:30am 01/13/06 U.S. DEC. RETAIL SALES UP 6.3% VS. DEC. 2004

8:30am 01/13/06 U.S. DEC. RETAIL SALES EX-AUTOS, EX-GAS UP 0.1%

8:30am 01/13/06 U.S. DEC. GASOLINE STATION SALES UP 0.9%

8:30am 01/13/06 U.S. DEC. AUTO SALES UP 2.6%

8:30am 01/13/06 U.S. 2005 RETAIL SALES UP 7.3% VS. 2004

8:30am 01/13/06 U.S. NOV. RETAIL SELES REVISED TO UP 0.8% VS. UP 0.3%

8:30am 01/13/06 U.S. DEC. RETAIL SALES EX-AUTOS UP 0.2% VS. 0.4% EXPECTED

8:30am 01/13/06 U.S. DEC. RETAIL SALES RISE 0.7% VS. 0.9% EXPECTED

8:30am 01/13/06 U.S. Dec. retail sales rise 0.7% on autos, gas - Rex Nutting

8:30am 01/13/06 U.S. DEC. CRUDE GOODS PPI DOWN 2.3%

8:30am 01/13/06 U.S. DEC. INTERMEDIATE GOODS PPI UP 0.2%

8:30am 01/13/06 U.S. DEC. PPI ENERGY PRICES UP 3.1%

8:30am 01/13/06 U.S. CORE PPI UP 1.7% IN 2005, VS 2.3% RISE IN 2004

8:30am 01/13/06 U.S. PPI UP 5.4% IN 2005, LARGEST SINCE 1990

8:30am 01/13/06 U.S. DEC. CORE PPI UP 0.1%, VS. 0.2% EXPECTED

8:30am 01/13/06 U.S. DEC. PPI UP 0.9% VS. RISE 0.5% EXPECTED

[UpInArms]

13. U.S. Dec. retail sales rise 0.7% on autos, gas

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38730.3545047454-857202535&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (MarketWatch) - Retail sales increased a seasonally adjusted 0.7% in December as auto and gasoline sales strengthened, the Commerce Department said Friday. Excluding the 2.6% gain in auto sales, seasonally adjusted retail sales rose 0.2% in December. Sales in October and November were revised higher by a cumulative 0.4%. Taking the revisions into account, retail sales were slightly stronger than the 0.9% gain expected by economists. Retail sales excluding autos were weaker than the 0.4% expected. Sales excluding both autos and gas increased 0.1%. Retail sales increased 0.6% in the fourth quarter. Sales in December were up 6.3% from December 2004. For all of 2005, sales increased 7.3%.

[UpInArms]

14. U.S. PPI for Dec up 0.9% on energy

Wholesale prices up 5.4% in 2005, biggest gain since 1990

http://www.marketwatch.com/news/story.asp?guid=%7B4E7FBCEA%2D5F60%2D4E31%2DA2F3%2D872920B700D9%7D&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - U.S. prices of raw materials and other producers' inputs jumped 0.9% in December, the Labor Department reported Friday.

This is the largest gain since September.

However, excluding food and energy costs, the core PPI rose a modest 0.1%. Read the full report.

Economists were expecting the December PPI to rise 0.5% and the core rate to rise 0.2%. See Economic Calendar.

The PPI fell 0.7% in November, while the core PPI had risen 0.1%.

For all of 2005, the PPI has risen 5.4% the largest calendar year increase since 1990.

...more...

[Roland99]

46. How can the media and the admin keep ignoring/hiding the truth?

I just don't get it.

[UpInArms]

15. U.S. retail sales rise 0.7% on autos (seasonally adjusted)

http://www.marketwatch.com/news/story.asp?guid=%7BAD262B8E%2D6BB6%2D4270%2DBA1D%2D9B43CA71B296%7D&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - Retail sales increased a seasonally adjusted 0.7% in December as auto and gasoline sales strengthened, the Commerce Department said Friday.

Excluding the 2.6% gain in auto sales, seasonally adjusted retail sales rose 0.2% in December.

Sales in October and November were revised higher by a cumulative 0.4%. November's sales increased 0.8%, the department said.

Taking the revisions into account, retail sales were slightly stronger than the 0.9% gain expected by economists surveyed by MarketWatch. Retail sales excluding autos were weaker than the 0.4% expected.

Retail sales increased 0.6% in the fourth quarter.

<snip>

For all of 2005, sales increased 7.3%, down from a 7.6% gain in 2004. The figures are not adjusted for price changes.

...more...

[UpInArms]

35. U.S. business inventories rise 0.5% in Nov.

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38730.4169579167-857212486&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) - U.S. business inventories increased 0.5% in November while sales grew a tepid 0.1%, the Commerce Department reported Friday. With inventories growing faster than sales, the inventory-to-sales ratio rose to 1.26 from a record low 1.25 in October. It was the first increase in the ratio since February. Economists expected inventories to increase 0.4% in November. Much of the data in Friday's report had been released earlier. The new news was retail inventories, which increased 0.9% in November while sales increased 0.8%. Retail auto inventories increased 2.1% as sales jumped 5.7%.

10:00am 01/13/06 U.S. NOV. RETAIL INVENTORIES RISE 0.9%

10:00am 01/13/06 U.S. NOV. INVENTORY-TO-SALES RATIO RISES TO 1.26 VS. 1.25

10:00am 01/13/06 U.S. NOV. BUSINESS SALES RISE 0.1%

10:00am 01/13/06 U.S. NOV. INVENTORIES RISE 0.5% VS. 0.4% EXPECTED

[ozymandius]

3. Oil at $64 on Iran, Nigeria tensions

LONDON (Reuters) - Oil rose above $64 a barrel on Friday as the standoff over
Iran's nuclear ambitions and production cuts in Nigeria stoked global supply concerns.

U.S. crude oil futures climbed 18 cents to $64.12 a barrel at 1050 GMT, after hitting a session peak of $65.10 a barrel on Thursday, the highest level since early October.

-cut-

Prices have shot up more than $7 since late December as geopolitical factors and speculative buying outweighs higher fuel stocks in the United States, the world's biggest oil consumer.

"Iran is playing a smart game of brinksmanship, they are pushing as far into the edge as they can take this and then pulling back," said Tony Nunan, a manager at Mitsubishi Corp.'s risk management business.

-cut-

If Iran uses its oil exports as a retaliatory political weapon and ceases exports of around 2.4 million barrels per day (bpd), the rest of the world's spare capacity would struggle to cover the deficit, especially with mounting tensions in Nigeria.

more...

[UpInArms]

38. Feb Crude @ $63.60 bbl - Feb NatGas @ $8.93 mln btus

10:11am 01/13/06 FEB CRUDE FALLS 64C TO $63.60/BRL IN EARLY NY TRADING

10:11am 01/13/06 FEB NATURAL GAS FALLS 1.3C TO $8.93/MLN BTUS

[UpInArms]

76. Feb Crude closes @ $63.92 bbl - Feb NatGas @ $8.791 mln btus

1:33pm 01/13/06 FEB CRUDE CLOSES DOWN 2C FOR THE DAY AT $63.92/BRL

1:33pm 01/13/06 FEB CRUDE ENDS THE WEEK DOWN 29C/BRL, OR 0.5%

1:33pm 01/13/06 FEB NATURAL GAS ENDS AT $8.791/MLN BTUS, DOWN 1.7% ON DAY

1:33pm 01/13/06 FEB NATURAL GAS LOSES 8.7% FOR THE WEEK

[EuroObserver]

4. Nikkei 225 closed up 0.06%. Testing upper limit?

http://in.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-01-13T133211Z_01_NOOTR_RTRJONC_0_India-231746-2.xml&archived=False

TOKYO (Reuters) - The Nikkei share average rose 0.06 percent to a new five-year closing high on Friday as technology stocks like Matsushita Electric Industrial Co. Ltd. gained on profit prospects.

Some machinery makers like Komatsu Ltd. advanced despite weaker-than-expected November machinery orders, while Daiwa Securities Group Inc. gave up gains after brokerage unit Daiwa Securities SMBC said it suffered a $4.37 million trading loss from an erroneous sale of shares in Sumitomo Mitsui Financial Group (SMFG).

The Nikkei ended up 9.76 points at 16,454.95, its highest close since September 2000, after bouncing in and out of negative territory.

Yasuo Ueki, a market analyst at consultancy Poko Financial Office, said the Nikkei's repeated failure to break above the 16,500 level had discouraged investors from pushing prices higher.

"The market challenged that level several times so now it's kind of burned out," he said.

The broader TOPIX index was down 0.16 percent at 1,681.69.

/more...

[EuroObserver]

49. BOJ upbeat on Japanese economy

http://www.marketwatch.com/news/story.asp?guid=%7B54E4BF39%2DBDF9%2D4905%2DA223%2D03C60E15C9FD%7D&siteid=bizjournal&dist=

Last Update: 5:55 AM ET Jan. 13, 2006

HONG KONG (MarketWatch) -- The Bank of Japan said Friday it's optimistic the country's economy has turned the corner and is set for stable growth fueled by strong domestic demand.

A central bank report indicated that all nine regions of the country upgraded their economic assessments in the most recent quarter. The last time the report was produced in October, only six regions upgraded their outlook.

"The momentum for economic recovery is strengthening in all nine regions as a whole against the background of a distinct increase in production along with a continuous recovery in private demand," the central bank wrote in the report.

Many regions indicated that private consumption was "steady" or "picking up," reflecting improvements in employment and income.

/more...

[UpInArms]

5. daily dollar watch

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

Last trade 89.33 Change -0.16 (-0.18%)

Tomorrow's Economic Releases: US Retail Sales Expected To Continue Bullish Trend

http://www.dailyfx.com/story/calendar/key_events/6013_tomorrows_economic_releases_us_retail_sales_expected_to.html

U.S. Producer Price Index (DEC) (13:30 GMT, 8:30 EST)
Consensus: 0.4% (MoM); 4.9% (YoY)
Previous: -0.7% (MoM): 4.4% (YoY)

Outlook: The Producer Price Index is expected to increase by 0.4% in December, a sharp contrast from the previous month’s reading of –0.7%. Last month’s unexpected decline was a direct result of falling energy prices, which has been playing a major role in the month to month volatility of this report. Crude oil and natural gas futures have been declining since shortly after Hurricane Katrina, but prices increased ever so slightly in December. While this will have a positive effect on the total index, core inflation (excluding the volatile food and energy components) is expected to remain tame at 0.2% in December. While higher producer price inflation has been slow in seeping through to consumer price inflation, any unexpected increases in total or core PPI inflation are likely to cause speculation of an extension of the current streak of Fed rate hikes. The greenback has been very sensitive to such data lately, as the growing consensus appears to be that the Fed tightening cycle is about to come to an end.

Previous: Producer prices fell significantly in October, dropping an unexpected 0.7%, the largest amount since April 2003. Tame inflation seems to be the theme in the United States, as falling energy costs continue to filter out through the economy. In November, the price of gasoline fell 11%, natural gas dropped 0.5%, and heating oil tumbled more than 16% - causing the largest monthly drop for energy prices in two and a half years. Prices excluding the volatile energy and food components rose a meager 0.1%, which was less than expected. Surprisingly, the spike in energy prices earlier in the fall never led to a broad-based rise in inflation that many economists had anticipated. For the year, producer prices have risen 5.2%, with core inflation checking in at a modest 1.8% clip. The overall health of the US economy remains robust, and many people believe that the Federal Reserve will continue raising interest rates early in 2006. But the question on many traders’ minds is when the Fed will indicate that rate hikes are coming to an end.


U.S. Advance Retail Sales (DEC) (13:30 GMT, 8:30 EST)
Consensus: 0.9%
Previous: 0.3%

Outlook: Retail sales are expected to have increased by 0.9% in December, the largest monthly increase since July. After three consecutive months of a 0.3% rise, December’s surge is riding on the backbone of a projected blockbuster season in holiday sales. Best Buy and Circuit City, the nations two largest consumer electronic outfits, both posted strong December sales last week. Subsequently, automakers sold 17.2 million vehicles at an annual rate last month – the largest single increase since manufacturers offered enormous discounts in July. Additionally, December’s non-farm payrolls data led to the creation of nearly two million jobs in 2005, helping to propel worker earnings by 3.1% - the largest annual gain since 2002. More jobs, rising incomes, and a drop in gasoline prices were the major themes as the year came to a close, helping to spur consumer confidence once again. With retail sales data representing nearly half of consumer spending, which in turn accounts for 67% of economic growth, speculators will be watching the report with a keen eye as it may cause Fed policy makers to consider further tightening in 2006.

Previous: Retail sales data in the month of November showed a 0.3% increase, matching precisely the increases seen in October and September. Auto-dealers and parts stores helped fuel the increase, as sales jumped by 2.6% after a 1.3% decline in the previous month. Additionally, consumer spending as a whole grew at a 4.2% clip in the third quarter, mostly driven by auto vehicle sales during a time of deep discounts in the summer. Comparatively, analysts are predicting that 4th quarter spending slowed to a paltry 1.4%, the lowest level in nearly four years. However, October’s increase in jobs and hourly earnings suggest that Americans have more money to spend this year – which may boost consumer spending in the coming months. This leaves the Federal Reserve with the daunting task of determining when the current interest rate cycle should come to an end.

[EuroObserver]

18. Tracking the (Gold-related) Rand

Rand to Dollar 1 year chart: ?s=NYBOT_ZR.H06&t=l&w=15&a=50&v=d12


Rand trades stronger in tight range 2006-01-12 06:00:01
The rand traded in a tight range yesterday, tracking moves in the dollar, but dealers said the local unit was set to resume its rally as gold prices marched upwards and the appetite for emerging markets grew.
Full Story...

Rand pulls off high on profit taking 2006-01-11 06:00:01
The rand pulled off a new eight-month peak yesterday on profit taking and forex inflows from importers, but traders said the unit was set to resume its rally and launch an assault on the R6 a dollar level.
Full Story...

Gold surge lifts rand to another peak 2006-01-10 06:00:01
The rand tested a new eight-month peak in wary trade yesterday, with surging gold prices and broad dollar weakness seen as likely to nudge the unit through the key R6 a dollar level over the next few days.
Full Story...

Rands & Bonds - January 9, 2006 2006-01-09 06:01:01
The rand surged to a new eight-month peak to the dollar on Friday as the greenback tumbled on weaker-than-expected US jobs data, but traders saw no scope for further gains for the time being.
Full Story...

Rand hits peak, with hopes of more 2006-01-06 06:00:01
The rand scaled an eight-month peak against the weaker dollar yesterday, with many players predicting a near-term break of the psychologically important R6 a dollar level as commodity prices extended gains.
Full Story...

Rand hovers near eight-month peak 2006-01-05 06:00:01
The rand hovered close to a near eight-month peak scaled early yesterday on account of broad dollar weakness and higher gold prices, with traders divided on the scope for further gains in the short term.
Full Story...

Rand hits peak on gold price gains 2006-01-04 06:00:01
The rand hopped to a near four-month peak yesterday in a knee-jerk response to gains in the price of gold, but traders said markets remained wary in thin trade, with no clear direction for the domestic unit.
Full Story...

[EuroObserver]

19. S Korean won hits record high against dollar

http://news.ft.com/cms/s/57c44442-835d-11da-9017-0000779e2340.html

By Anna Fifield in Seoul
Published: January 12 2006 11:38 | Last updated: January 12 2006 11:38

South Korea currency WonSouth Korea’s seemingly indefatigable currency set a new eight-year high against the US dollar on Thursday, as the central bank expressed concern over its recent appreciation but said it had no intention of intervening in the foreign exchange markets simply to “manipulate” the rate.

With the domestic recovery finally taking hold and the economic outlook brightening, another burst of strength in the already heady currency has come as an unwelcome New Year surprise for South Korea’s financial authorities.

“The won is rising too rapidly, compared with other currencies,” Park Seung, the Bank of Korea governor, said Thursday after announcing the bank’s decision to leave its benchmark interest rate at 3.75 per cent.

“We don’t want to intervene in the forex market to manipulate exchange rates, but efforts are needed to keep exchange rates in equilibrium by adjusting forex supply and demand in market-friendly ways,” he said.

/more...

[54anickel]

60. I've said it before, there's another currency crisis in the air and it

seems to be circling the member nations of ASEAN and South Korea, but always returning to the SK skyline. Ever since that ASEAN-South Korea Free Trade Area (AKFTA) agreement went through.

Heh, a look at some of the articles on this proves Maddie Albright correct when she implied this mal-admin is guilty of "benign neglect" of diplomatic issues since they are soooo obsessed with their ME adventures. Either they can't multi-task or the just don't give a rat's ass cuz robbing the world of it's wealth is their real agenda.

Notice the blaring omission of any mention of the USoA participation. I've also read several articles that discuss the EU negotiations and role with AFKTA. The world is moving forward without us now that we are stuck in the Bush induced quagmire.



Concrete support needed from ASEAN partners
http://vietnamnews.vnagency.com.vn/showarticle.php?num=01POL141205

KUALA LUMPUR – Prime Minister Phan Van Khai has urged ASEAN member states dialogue partners to provide concrete and practical support, especially in building up its economic capacity, human resources, finances, techniques and technology as well as other strong areas of all dialogue partners.

Prime Minister Khai made his speech at the annual ASEAN+1 Summit with China, Japan, South Korea, India and Russia.

Khai also delivered many important comments aimed at strengthening the mutual benefit between ASEAN and dialogue partners.

He proposed that dialogue partners participate and support the key role of ASEAN in maintaining peace, stability and development in the region by effectively dealing with challenges such as natural disasters and disease epidemics, as well as implementing the Declaration of the Conduct of Parties in the East Sea (DOC) and work towards the adoption of the Code of Conduct on the East Sea (COC).

At the ASEAN+1 Summit, ASEAN leaders and dialogue partners exchanged views on regional and international issues.

more...


9th ASEAN-Republic of Korea Summit Joint Declaration stresses cooperation
http://www.irna.ir/en/news/view/menu-234/0512149777104716.htm

snip>

They noted with satisfaction that "significant progress" had been made in their relations during the past year which had contributed to the strengthening of their comprehensive cooperation partnership as well as peace, stability and development of the region and the world.

They reaffirmed the importance of the ASEAN-ROK Joint Declaration on Comprehensive Cooperation Partnership signed in November 2004 in Vientiane which had helped to consolidate their partnership and chart the future direction of ASEAN-ROK relations. In this connection, they adopted the Plan of Action to implement the Joint Declaration and tasked their ministers and senior officials to oversee and coordinate the speedy implementation of the Plan of Action.

The leaders signed the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and the Republic of Korea. They also welcomed the signing of the Agreement on Trade in Goods and the Agreement on Dispute Settlement Mechanism under the Framework Agreement on Comprehensive Economic Partnership of Economic Ministers.

They further looked forward to an early conclusion of
negotiations of the AKFTA.

The Leader of the ROK welcomed ASEAN's agreement in principle to inclusion of products from the Kaesong Industrial Complex of the Democratic Peoples Republic of Korea (DPRK) in the AKFTA. The ASEAN leaders were of the view that this effort would complement and support the efforts of the ROK to bring peace and stability to the Korean Peninsula. They agreed to look into other forms of joint collaboration to support these efforts.

more...

[EuroObserver]

84. As the US dollar falls...

relative Asian (and European and other) currency strengths will worry... exporters into US markets will suffer, but growing domestic and increasingly-open regional markets will (partly) compensate... and commodity prices such as those for oil and gas will be relatively easier outside US dollar zone...

Somebody wrote "while the US gets burned, the rest of the world will be bruised. I'd rather take a bruising that get burned."

I'd dearly like to learn more about that Chinese yuan 'basket of currencies'.

[EuroObserver]

21. Sterling hits 3-wk high vs euro, ECB disappoints

http://investing.reuters.co.uk/Investing/FinanceArticle.aspx?type=ukPoundRpt&storyID=URI:urn:newsml:reuters.com:20060113:MTFH40965_2006-01-13_09-44-25_L13308792:1

Fri Jan 13, 2006 9:45 AM GMT

LONDON, Jan 13 (Reuters) - Sterling rose to a three-week high against the euro on Friday, with the single currency taking a knock after the European Central Bank disappointed euro bulls looking for a clear sign it would soon raise rates.

At a meeting on Thursday, the European Central Bank left interest rates unchanged at 2.25 percent. ECB president Jean-Claude Trichet said the bank was ready to raise rates again at any time but noted that risks to economic growth persisted.

"The euro/sterling trading has pretty much stayed in familiar territory, but it did get a bit of a boost yesterday on the disappointment with the ECB's rather benign press conference," said Geraldine Concagh, economist at AIB Group Treasury in Dublin.

At 0930 GMT, sterling was up around half a percent against the dollar at $1.7687 <GBP=> and up about a quarter of a percent against the euro at 68.23 pence <EURGBP=>.

The pound was unmoved by the Bank of England's decision on Thursday to leave UK interest rates unchanged at 4.5 percent, with focus instead on external factors.

"Activity has been dominated by what's happening with regard to the dollar," Concagh said

/more...

[UpInArms]

25. Dollar lower after PPI report suggested limited rate hikes

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38730.3932712037-857208873&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) - The dollar fell against the euro and yen Friday, after indications of tame core inflation in the December producer price report suggested to some that the Federal Reserve may not need to lift rates much more. The dollar was up 0.1% at 114.68 yen as the dollar rose 0.02% to $1.2054. Headline PPI rose 0.9% and the core rate advanced 0.1% last month. Economists polled by MarketWatch expected a 0.5% increase in the headline rate and a 0.2% core rate advance. Despite recent benign data, Chicago Federal Reserve chief Michael Moscow late Thursday said more interest rate hikes are needed to ward off inflation.

[54anickel]

67. Fed Halt Could Hurt You

http://www.thestreet.com/_pbear/funds/jubak/10261122.html

snip>

If the financial markets are right -- a big if that I'll look at in a minute -- what does the end to the Federal Reserve's interest rate increases mean for you? My best guess at the five most likely effects:

* A weaker dollar and higher prices at the store.
* Higher gasoline prices.
* Higher mortgage rates.
* A continued rally in gold stocks and new life for financial stocks.
* And an end-of-the-year surprise: interest-rate cuts from the Fed.

snip>

Hard Assets, Financial Stocks Will Rally
Investors aren't just looking at the end of a period of rising short-term interest rates; they're looking at the end of a period of extreme predictability. Month in, meeting out, we knew what the Fed was going to do: raise short-term rates by another 0.25 percentage points. We knew inflation was going to stay under control, at least officially. Whatever comes next has to be less certain than that. Already, hard-asset, safe-haven stocks that profit from gold, copper, timber and oil have moved up in 2006 on just the suspicion of future inflation. Gold closed at $541.20 an ounce on Friday, up 4.6% for the week. It's up 30% since the end of 2003.

Financial stocks will do well, not because they're safe havens in times of uncertainty, but because the end of the Fed's policy of raising rates will take the pressure off their profit margins. Banks borrow short -- from depositors or in the short-term commercial paper markets -- and lend long. They make their profits out of the spread between short-term and long-term rates. The collapse of the spread between short-term and long-term interest rates has cut into those profits.

The end of short-term rate hikes alone will help financial companies and their stocks, because no longer will the spread get smaller and smaller from month to month. A widening of the spread would be gravy for the sector, but it's not necessary for the sector to outperform in 2006.

Fed May Need to Cut Rates
The financial markets have come to rely on the godlike powers of the chairman of the Federal Reserve. With a tweak here and a polysyllable there, Alan Greenspan can tame inflation, goose growth, strengthen the dollar and -- after changing in the nearest phone booth -- fix liquidity crises with a single flood of cash. Or so the markets have come to believe.

more...

[UpInArms]

6. Dominion Homes 4Q home sales fall 41%; '05 sales down 21%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38729.7304138657-857115081&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- Dominion Homes Inc. (DHOM) said late Thursday that fourth-quarter home sales fell 41%, to 230 from 392 last year, while full-year 2005 home sales dropped by 21%, to 1,944 from 2,450 in 2004. Fourth-quarter home closings fell 6%, to 571 from 605, while 2005 home closings decreased by 24%, to 2,146 from 2,837. In addition, the Dublin, Ohio-based company said its backlog as of Dec. 31 was 430 sales contracts. Last year, the Dominion's backlog totaled 632 contracts.

[UpInArms]

30. More pain at Dominion Homes

http://www.marketwatch.com/news/story.asp?guid=%7B207339C5%2D1D4F%2D4F36%2D866F%2D8CCCF500EC9F%7D&symbol=&siteid=mktw

excerpt:

"New-home sales in our markets and throughout the Midwest continued to be a challenge throughout the year," said Chief Executive Douglas Borror.

Dominion's recent woes highlight the difficulties smaller builders face when their relatively restricted markets soften. The company focuses on first-time buyers in the Midwest, with operations in Ohio, Kentucky and Indiana.

Facing a tough market, Borror said the company "has taken steps" to reduce land holdings; trim selling, general and administrative expenses, including staff reductions; and continues to "meet the market with significant discounting."

The company has also seen a relatively high proportion of its customers default on mortgages, drawing the attention of federal regulators.

...more...

[UpInArms]

7. SEC probe of IBM becomes formal

http://www.marketwatch.com/news/story.asp?guid=%7B731FAC4D%2D4C70%2D4700%2D81F3%2D75F6CC45C9D6%7D&symbol=&siteid=mktw

SAN FRANCISCO (MarketWatch) - International Business Machines Corp. said Thursday that the Securities and Exchange Commission has launched a formal probe of how the technology giant disclosed earnings and expenses for stock options.

IBM (IBM) said it had already been cooperating with the SEC in an informal investigation since that probe was launched in June 2005, and would continue to do so.

Big Blue said the SEC has told the company that it hasn't been accused of breaking any laws related to the earnings and expense questions.

The matter involves an earnings report by IBM on April 14, 2005. At the time IBM said it earned first-quarter net income of 85 cents a share, an amount that was cut by 10 cents a share due to expenses for stock-based compensation. It was the first time IBM included the cost of employees' equity compensation in its income statement.

...more...

[UpInArms]

8. GM continues to explore sale of controlling stake in GMAC

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38730.3361227778-857199735&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- General Motors (GM) said Friday it continues to explore the sale of a controlling stake in its General Motors Acceptance Corp. finance operations to a strategic partner. The Dow component added that its U.S. hourly and salaried pension plans were about $6 billion overfunded at the end of 2005 on an accounting basis. The company, which is meeting with security analysts, didn't provide a specific financial outlook for 2006, citing a number of uncertainties that could affect business, including issues with parts supplier Delphi (DPHIQ) , the potential sale of the GMAC stake, and the timing of implementing its healthcare agreement with the United Auto Workers union.

[UpInArms]

9. Europe's biggest bank UBS fined $49.5 million for fraudulent trading in US

http://www.finfacts.com/irelandbusinessnews/publish/article_10004506.shtml

The New York Stock Exchange (“NYSE”) announced on Thursday that, as part of a joint matter brought with the New Jersey Bureau of Securities, it has censured and fined UBS Financial Services, (“UBS”), a member firm, a total of $49.5 million for failure to supervise deceptive market-timing activities engaged in by brokers, failure to establish appropriate procedures for supervision and control, and failure to maintain adequate books and records.

Half of the penalty will be paid to the State of New Jersey. Of the remaining $24.75 million, $18 million shall be placed in a Distribution Fund to compensate injured customers of UBS who, during the relevant period, invested long-term in the same mutual funds that were the subject of market-timing; a $5.75 million penalty will be paid to the NYSE; and credit was given for $1 million being separately paid to the State of Connecticut as part payment in a matter relating to improper market-timing. Any remaining amount in the Distribution Fund after compensating UBS customers will then be distributed to other investors who were not UBS customers but who invested in these affected mutual funds. Any unused portion will revert to NYSE Regulation after three years.

“When a brokerage firm permits a hedge fund or any other market participant to trade deceptively and gain an unfair advantage over other investors, it has violated the trust that forms the foundation of our capital markets,” said Richard G. Ketchum, chief regulatory officer, New York Stock Exchange. “UBS’s failure to have adequate controls in place led to this unfortunate occurrence.”

<snip>

Beginning January 2000 and continuing through December 2002, brokers in at least seven UBS branch offices engaged in deceptive market-timing to benefit their customers, typically hedge funds, to the detriment of the affected mutual funds and their non-market-timing shareholders. The brokers used deceptive trading practices to conceal their identities, and those of their customers, to enable them to trade in mutual funds that sought to limit or curtail their market-timing.

...more...

[UpInArms]

10. US insurance giant AIG expected to pay more than $1 billion to settle regu

US insurance giant AIG expected to pay more than $1 billion to settle regulatory claims: WSJ

http://www.finfacts.com/irelandbusinessnews/publish/article_10004501.shtml

The Wall Street Journal reports today that US insurance giant American International Group (AIG), seeking to close the books on an accounting scandal, is expected to pay more than $1 billion to settle civil-fraud investigations by state and federal authorities, people familiar with the matter say.

The settlement would end a lawsuit filed last May by the New York Attorney General's office and the New York State Insurance Department, claiming that the insurer and its former chief executive used improper accounting manipulations to burnish its results, misleading investors and state regulators in the process. The agreement will also include the Securities and Exchange Commission (SEC), and is likely to be completed within two to three weeks.

The Journal says that the tentative terms would represent one of the steepest monetary penalties ever paid by a financial company. Not included in the settlement is Maurice R. "Hank" Greenberg, AIG's former chief executive, who also is named as a defendant in the May lawsuit. Greenberg and his legal team are fighting the lawsuit in court and aren't participating in any settlement discussions.

...more...

[UpInArms]

11. Bush's 2007 Budget to Reveal Cost of Making Tax Cuts Permanent

http://www.bloomberg.com/apps/news?pid=10000103&sid=aRHFUB1Njp_g&refer=us

Jan. 13 (Bloomberg) -- U.S. President George W. Bush faces a day of reckoning next month when he presents a budget that for the first time will account for the cost of making permanent his first-term tax cuts, which may widen the deficit by at least $118.3 billion in 2011.

Bush's budget request for the 2007 fiscal year, due to be submitted Feb. 6 to Congress, will be the first to include the revenue impact of extending the tax cuts after 2010. The biggest cuts are currently slated to expire in 2009, and Bush wants to make them permanent. Presidential budgets project the fiscal impact of tax and spending policies on a five-year basis.

Extending Bush's policies, including lower tax rates, higher child tax credits, the removal of the estate tax and so- called marriage penalty and incentives for small businesses, would cost the government $118.3 billion in the 2011 fiscal year alone, according to past Treasury Department estimates. That may force Bush's budget writers to mask the tax cuts' impact on future budget deficits by using assumptions about spending and economic growth that are questionable, budget analysts said.

``They were fine when they were projecting through 2010, but once you get beyond that, which is where they are now, the out years are terrible,'' said Stanley E. Collender, managing director in Washington of Financial Dynamics, a business- consulting firm.

...more...

[AnneD]

27. Morning Marketeers,

:donut:Thanks UIA. That graph is my favourite.
We are having a bit of fireworks here on several fronts. First, the good news. There is a Katrina Survivors Association here and they are planning a march on Washington. Now I know how they feel about parades in NOLA so this might be a good one. Hell, if I am off then, I may march too. They are so upset about the 4 month deadline. So many of them have kids in school and won't even be able to get out there, much less move back until the school year ends-after all there are no schools in NO so to speak. The next bunch of fireworks can with the passage of the incentive pay for teachers. These things are so full of holes. I think when the dust settles and these teachers discover they work harder for less-they will really be angry. To base your bonus on how your students preform...the only place where that happen now is in coaching. So I wonder when we will start having a classroom draft.

[54anickel]

50. Great Expectations

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=50301

snip>

What I'm getting at are the extraordinarily exaggerated expectations in America over what it takes to get and stay ahead. "States Take Lead in Push to Raise Minimum Wages," reads a New York Times headline. Do these states not know that 3 billion people are competing with Americans for jobs? Can't they understand that by that math, wages will fall until Americans catch down with their global brethren?

As a would-be economic missionary over the last few years, I've found that the American economic gospel is flawed, maybe even heretical, if you ask Dr. Kurt Richebächer. The economic pagans of the world do not worship the god of consumption. No American will be left unchanged by our inevitable encounter with the ambitions of the rest of the world.

Granted, not all jobs can be outsourced. But what's really amazing when you travel outside America and then come back is the expectation that the American standard of living is a birthright that doesn't have to be earned by hard work. I'm generalizing. Of course, there are exceptions.

Lots of people work hard every day. But I wonder if most people have any inkling of the great global wealth migration I described in “The Bull Hunter,” the one that will punish nonsaving, nonindustrious, debt-laden consumers, but reward certain investors.

snip>

But borrowing money does not create wealth automatically. Business investment generally does. And in 2006, like in 2005 and 2004, a lot will come down to whether businesses invest. "U.S. growth may hinge on business." Duh. The story goes on to point out that with falling house prices, business investment should step in to fill the breach and drive the economy. New investment will create new incomes and everything will be fine.

:rofl: They've been yammering about that baton pass for years now!!!

more...

[54anickel]

51. Deficit Could Top $400 Billion

http://www.washingtonpost.com/wp-dyn/content/article/2006/01/12/AR2006011201821.html

snip>

This is the third straight year in which the White House has summoned reporters well ahead of the official budget release to project a higher-than-anticipated deficit. In the past two years, when final deficit figures have come in at record or near-record levels, White House officials have boasted that they had made progress, since the final numbers were below estimates.

"This administration has a history of overestimating the deficit early in the year, lowering expectations, then taking credit when it comes in below forecast," said Stanley E. Collender, a federal budget expert at Financial Dynamics Business Communications. "It's not just a history. It's almost an obsession."

Indeed, the dire new forecast came the same day that Treasury Department officials were touting a very different picture: The federal government posted the first budget surplus for December in three years, buoyed by a rush of corporate tax payments that more than offset record spending. On Jan. 6, the nonpartisan Congressional Budget Office reported that the deficit for the first three months of the fiscal year was about $119 billion, almost exactly where it stood for the first quarter of fiscal 2005.

After four years of budget surpluses, the government fell back into a deficit in fiscal 2002, after which the deficit climbed to $378 billion in 2003 and $412 billion in 2004. In 2005, the tide of red ink receded to $319 billion.

more...

[54anickel]

53. Corporate Taxes, Gov't Spending Hit Records

http://www.breitbart.com/news/2006/01/12/D8F3AUAG7.html

The federal government posted the first budget surplus for December in three years as corporate tax payments hit an all-time high, helping offset a record level for spending, the Treasury Department reported Thursday.

The department said in its monthly budget report that government receipts surpassed spending by $10.98 billion last month. A year ago, the government ran a deficit of $2.85 billion in December.

The improvement reflected the fact that government receipts were up 12.1 percent from a year ago to $241.88 billion while government spending rose by a slower 5.6 percent to $230.9 billion. The figure for outlays still represented an all-time high for spending for any month.

Corporate income tax collections totaled a record $73.5 billion last month, surpassing the old record of $72 billion set in September.

more...

:eyes: Leave out the fact that this was due to the huge tax break incentive to repatriate foreign earnings in the Jobs Destruction Act. Oh, and let's not forget about the cost of the idgit king's ME adventure that's completely off the budget.

[54anickel]

74. Uncle Sam’s bonanza might not be all that it seems

http://www.thelongwaveanalyst.ca/news/2006/06_01_10_sam.htm

Amajor reason for the dollar’s current overvaluation is the widespread misunderstanding of the nature of capital flows to the US. The business press and many financial analysts provide the reassuring message that the flow of capital to the US substantially exceeds the amount needed to finance the US current account deficit, and that that inflow is coming primarily from private investors who are attracted by the strength of the American economy.

This optimistic analysis of the capital inflow is wrong. It results from a misinterpretation of the data provided by the US Treasury in the press release for its monthly Treasury International Capital report. It is easy to see why analysts reach this wrong conclusion. Recent TIC press releases stated that the capital inflow was $278bn (€230bn) in the third quarter of last year, or $82bn more than the current account deficit for that quarter. The Treasury also reported that $257bn of this capital inflow came from private buyers.

In reality, there is no excess capital inflow and private investors are almost certainly not the primary source of the funds coming to the US. The figures in the TIC press release, while technically correct, are misleading for two reasons. First, the TIC release refers only to transactions in long-term securities, that is to equities and long-term bonds. It excludes bank deposits and bank lending, and flows of foreign direct investment into the US and by American investors to the rest of the world.

A comprehensive measure of the capital inflow and outflow would show that the total net inflow is almost exactly equal to the amount needed to finance the current account deficit. Whenever the net long-term capital inflows exceed that deficit, the difference is offset by a net outflow of short-term funds and direct investment.

If the total net inflow were larger than the current account deficit, the US would be accumulating large reserves of foreign exchange. In fact, reserves are virtually unchanged from year to year and are actually lower than they were two years ago. So it is wrong to conclude that the net capital flow to the US substantially exceeds the current account deficit. More generally, the TIC data should not be used to assess how easy it is for the US to finance its current account deficit.

A second source of confusion in the TIC report is an easily misunderstood classification of whether the funds coming to the US are from governments or private sources. The TIC measure of inflows from “private” sources overstates the actual private investment because it does not distinguish between a purchase by a private buyer for its own account and a purchase executed by a private institution on behalf of a foreign government. For example, if the Chinese government purchases US bonds through JPMorgan or another private bank, these funds will be recorded in the TIC data as a private purchase. Similarly, purchases of dollar assets by governments of the Organisation of the Petroleum Exporting Countries or their investment authorities that are done through British banks would look like private purchases with a British origin.

more...

[UpInArms]

16. Frist Family Hospital Corp - HCA sees FY earnings at high end of view

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38730.351093287-857202037&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Hospital operator HCA (HCA) said Friday it expects fourth-quarter earnings of about 72 cents to 76 cents a share and full year earnings of $3.17 to $3.21 a share. The company's prior forecast was for $3.10 to $3.20 a share. During the fourth quarter HCA incurred expenses of 4 cents a share, related to costs at facilities affected by hurricanes. The company expects to report revenues of $6.2 billion for the fourth quarter and $24.5 billion for the year. The provision for doubtful accounts for the fourth quarter is expected to be about $625 million, or 10.1% of revenues, compared to $626 million, or 10.5% of revenues in the year ago period.

I'm certain that Mr. Frist would not have passed any "friendly" legislation for this industry in the past year :eyes:

[AnneD]

31. HCA has such a bad rep among Nurses

As soon as I heard Frist was involved-I knew he would be evil. I am sure he didn't have anything to do with the Medicare Fraud investigation against HCA being dropped :sarcasm: Most of us Nurses are smart enough to not do a whistleblower against them...you would be blackballed forever.

[ret5hd]

36. maybe a retired (or close to it) nurse? (nt)

[AnneD]

58. Are you kidding.....

most retirement plans they let Nurses participate in are so pathetic, you could never retire on them. That is why I have stayed in a state pension system. I know too many nurses that may be having to be using walkers to make their rounds.

[w8liftinglady]

54. you're right-I just won't work for HCA-slavedrivers,amoral

[UpInArms]

17. CA: For Poor, the Squeeze May Get Tighter

http://www.latimes.com/news/local/la-me-safetynet13jan13,0,6584956,print.story?coll=la-home-local

Sena Perez works two jobs, attends a community college in Pasadena and receives a monthly check from CalWORKs, the state's welfare-to-work program.

She and her husband, Henry, a landscaper, struggle to support themselves and their four children who range in age from 20 months to 11 years.

<snipping lots>

"Those who are most needy, those whose voices are not heard are simply left out," said Patty Siegel, executive director of the California Child Care Resource and Referral Network.

<snip>

Steve and Nichole Castner need every dollar from their $600 monthly welfare check. The couple and their three young children are renting a Ventura apartment while Steve, 23, looks to boost his hours moving office furniture.

Steve Castner voted for Schwarzenegger and even named his pet pit bull Arnold in honor of the governor. But Castner said he was disappointed by Schwarzenegger's budget proposal.

"He seems to be cutting costs from the wrong places," Castner said. "I'd still have a beer with him. But I'd make him pay."

...more...

[OrangeCountyDemocrat]

40. Another Indication That People In This Country Are Stoooooopid!!

"I'd still have a beer with him. But I'd make him pay."

What a Frickin' Idiot! Perhaps people should vote based upon competence, and not whether or not you would want to toss a few cold ones with some rich celebrity.

You keep waiting for that chance to have a beer with Arnie you loser.

[UpInArms]

41. I keep wondering why there is a meme about "having a beer with"

when referring to who one would vote for.

Might as well as if someone would vote for a falling down drunk.

Do you want a drunk to run your state?

Do you want a drunk to hold the highest office in the country?

What happened to "friends don't let friends drive drunk"?

:crazy:

[AnneD]

59. Remember during the last Presidential Election...

there was a survey done about which candidate would you want to hang out with and have a couple of beers. No surprise who won that slanted poll.

[UpInArms]

61. I always thought that was a weird poll - as Dimson is supposed to be

a recovering alcoholic - not supposed to drink - beer would be definitely off-limits.

So why as people if they want to have a beer with a dry-drunk?

:crazy:

[AnneD]

65. Having grown up around one

I suppose that is why I have such a deep understanding of Bush on more levels than the FBI would permit. He is a deeply troubled individual in a position to wield enormous power. If people do not wake up and start imposing limits, we will slide further down a deep chasm.

[UpInArms]

20. GM sees flat, slightly lower sales in N. America, Europe

http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-01-13T133711Z_01_SCH349006_RTRIDST_0_BUSINESSPRO-AUTOS-GM-SALES-DC.XML

DETROIT (Reuters) - General Motors Corp. (GM.N: Quote, Profile, Research) expects "roughly flat" or slightly lower vehicle sales in 2006 in North America and Europe, Chief Executive Richard Wagoner said on Friday.

"Regionally, North America and Europe (will be) roughly flat, potentially down a little bit," Wagoner told analysts at a meeting in Dearborn, Michigan.

He also said he expected slower growth in Latin America, while the Asia Pacific region would drive the most growth.

[UpInArms]

22. Tyson to cut 400 jobs in northeast Iowa, expects Q2 charge

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38730.3879019329-857208105&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Tyson Foods Inc. (TSN) said Friday it plans to spend more than $30 million to add bacon production to its Cherokee, Iowa, plant. The Springville, Ark., company also said it plans to shut operations at its two plants in Independence and Oelwein, Iowa. Tyson said 300 people are employed in Independence and 90 people work at the Oelwein operation. The company expects a second-quarter charge of $16 million or 3 cents a share.

[UpInArms]

23. pre-opening blather

09:00 am : S&P futures vs fair value: +1.2. Nasdaq futures vs fair value: +2.0. The cash market is poised to open slightly higher. The recently released core PPI read is bullish for the stock and bond markets alike, as it reveals no sign increasing inflationary pressures and reflects a year-over-year rise of just 1.7%. Working to keep early buying action in check, though, is some stand-offishness ahead of the long holiday weekend and the impending Q4 earning season. While earnings growth is expected to be up a solid 13%, investors are focused on guidance that may suggest a deceleration in the months ahead. In addition, the market awaits Wednesday's December CPI data.

08:35 am : S&P futures vs fair value: +2.0. Nasdaq futures vs fair value: +1.5. Recently released PPI data showed that total PPI rose a more than expected 0.9% (consensus 0.4%) in December, but the closely watched core rate (ex-food and energy) rose a less than expected 0.1% (consensus 0.2%) and continues to reflect contained inflation. Retail sales rose 0.7%, below the 1% rise analysts had expected for the industry's crucial month of December; ex-autos, sales were up 0.2% versus the 0.4% consensus estimate. Futures trade has ticked modestly upward following these headline reads.

07:59 am : S&P futures vs fair value: +1.2. Nasdaq futures vs fair value: -1.5. Futures trade suggests a subdued start for the cash market, with anticipation ahead of a heavy round of economic data giving traders reason to assume a cautionary stance. At the bottom of the hour, three pieces of data will be released and may help establish a more definitive tone. Likely to garner the most attention is the December PPI report; economists expect a 0.4% total read and a 0.2% rise in the core rate. Retail sales are expected to have risen 1.0% in December -- or 0.4% excluding autos. The November business inventories (consensus 0.4%) report is also on the docket.

[UpInArms]

24. US Treasury calls 13-7/8 pct bond due May 2011

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-13T141040Z_01_WBT004546_RTRIDST_0_ECONOMY-BONDCALL-URGENT.XML

WASHINGTON, Jan 13 (Reuters) - The U.S. Treasury on Friday said it would call 13 7/8 percent bonds due May 15, 2011.

The bonds, originally issued on May 15, 1981, will be called for redemption at par on May 15.

Treasury's Bureau of Public Debt said the bonds are being called to reduce the cost of public financing. The 13-7/8 percent interest rate is significantly above the current cost of securing financing for the five years the bonds have until maturity, Treasury said.

<snip>

There are $3.55 billion of the bonds outstanding, of which $2.47 billion are held by private investors, Treasury said.

...more...

[UpInArms]

26. US rate futures trim odds of March Fed hike

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-13T141754Z_01_N13307166_RTRIDST_0_MARKETS-FEDFUNDS-PPI-UPDATE-1.XML

CHICAGO, Jan 13 (Reuters) - U.S. short-term interest rate futures rose on Friday after a mild reading on core wholesale prices and weaker than expected retail sales for December.

Taken together, the reports encouraged views that the Federal Reserve will wind down its program of interest rate hikes after one or two more increases.

"With the focus on the Federal Reserve, the PPI is probably more important to the market ... core prices improved only modestly and that's good news for the Fed," said Gary Thayer, chief economist at A. G. Edwards and Sons in St. Louis.

Futures project an increase to the federal funds rate at the Federal Open Market Committee's Jan. 31 meeting. Chances of a March hike slipped as low as 56 percent from 64 percent just before the report.

U.S. core producer prices, stripped of food and energy, rose by 0.1 percent in December for a second straight month against Wall Street forecasts for a 0.2 percent increase.

...more...

[UpInArms]

28. Printing Press Report:Fed adds banking reserves via four-day system repos

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-13T143341Z_01_N13343938_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, Jan 13 (Reuters) - The Federal Reserve said on Friday that it added temporary reserves to the U.S. banking system through four-day system repurchase agreements.

The benchmark fed funds rate last traded at 4.313 percent, above the Fed's current 4.25 percent target for the overnight lending rate.

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

[EuroObserver]

29. Samsung chalks up sales record

http://www.busrep.co.za/index.php?fSectionId=1646&fArticleId=3064462

January 13, 2006

Seoul - South Korea's Samsung Electronics reported mixed results for the fourth quarter on Friday, with operating profit below market expectations but sales chalking up an all-time record.

The world's largest memory-chip maker said its operational profit for the fourth quarter stood at 2.1 trillion won (R13.3 billion), almost unchanged from the previous quarter and well shy of market expectations of 2.4 trillion won.

But sales reached a record 15.52 trillion won, up from 14.54 trillion won the previous quarter.

Shares of Samsung Electronics fell to as low as 668 000 won before the announcement in anticipation of disappointing results, but quickly recovered to 679 000 won in the mid-morning trade on the record sales report. - AFP

[UpInArms]

32. 9:45 EST everybody's happy!

Dow 10,984.53 +22.17 (+0.20%)
Nasdaq 2,318.05 +1.36 (+0.06%)
S&P 500 1,287.48 +1.42 (+0.11%)
10-Yr Bond 4.393 -0.17 (-0.39%)

NYSE Volume 210,456,000
Nasdaq Volume 163,172,000

(adding blather on edit)

09:40 am : As futures trade had suggested, the stock market opened modestly higher and launched the major averages above the unchanged mark. A lower than expected rise in core PPI during December (0.1% versus the 0.2% uptick that economists had expected) proved bullish for both the equity and Treasury markets; the indication that inflationary pressures are not building has spurred some early buying activity. At the same time, traders' stand-offish stance ahead of an extended holiday weekend and in anticipation of the Q4 earnings season that begins in full-force next week helps keep early action somewhat in check. While aggregate earnings are expected to grow a solid 13%, investors remain focused upon guidance that may reflect slowing growth in the quarters ahead. There is little corporate news today, but downside Q1 and FY06 guidance from Tyco (TYC), alongside confirmation of its break-up plan, presents a challenge.DJ30 +18.33 NASDAQ +2.23 SP500 +1.10

[Sammy Pepys]

34. yup

Some speculation from some of my trader buddies that a drop like we experienced yesterday would go some length to establishing a new "bottom of the range."

[UpInArms]

33. Feb Gold @ $549.10 oz

9:49am 01/13/06 FEB GOLD FALLS 20C TO $549.10/OZ IN MORNING TRADING

[OrangeCountyDemocrat]

42. Gold - Bid=554.80 - +6.90 nt

[OrangeCountyDemocrat]

43. CNBC Now Says $557 - Headed Up Fast! nt

[UpInArms]

44. Gold futures rally, trade at fresh 25-year high

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38730.454404213-857218369&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- February gold climbed as high as $557.30 an ounce in New York, an intraday level not seen since March 1981. The contract was last at $556.90, up $7.70, or 1.4%. It's trading almost 3% above the week-ago close of $541.20 with metals trading on the exchange set to end by 12:10 p.m. Eastern ahead of Monday's Martin Luther King, Jr. holiday.

I guess that those planned "surgical strikes" on Iran are getting a bit of press? :eyes:

[EuroObserver]

75. US Gold Contract ends at $557

http://www.marketwatch.com/news/story.asp?guid={7AF3EDF1-83DD-4EF3-812C-B3AD0C71D45D}&doctype=103

Gold marks latest quarter-century high
Contract ends at $557; other metals also advance broadly
By Myra P. Saefong, MarketWatch
Last Update: 1:04 PM ET Jan. 13, 2006

SAN FRANCISCO (MarketWatch) -- Gold futures climbed by more than 1% during a holiday-shortened trading session Friday to close their highest level since January 1981, gaining nearly $16 an ounce for the week.

"The markets got their Friday 13th shock early this year," said Matthew Parry, an economist at Moody's Economy.com.

He attributed gold's latest rally to "heavy speculative buying ahead of the three-and-a-half-day holiday." Metals trading on the New York Mercantile Exchange closed early ahead of Monday's Martin Luther King Day holiday. Regular trading will resume Tuesday.

Gold for February delivery traded as high as $558.80 an ounce on Friday. The contract closed up $7.70 at $557, thereby finishing nearly 2.9% above the week-ago close of $541.20.

"There should be no doubt that gold remains in a secular bull market," said Peter Grandich, editor of the Grandich letter.

"The classic trading pattern of sustained rallies, followed by brief periods of profit-taking, which are then followed by an explosive move to the upside that squeezes the shorts badly, has happened yet again," he said, adding that gold reaching the $600 level "is a question of when, not if."

/more...

[UpInArms]

37. Lucent Sales Unexpectedly Decline, Cuts 2006 Forecast

http://www.bloomberg.com/apps/news?pid=10000087&sid=ahVflRbPE8gU&refer=top_world_news

an. 13 (Bloomberg) -- Lucent Technologies Inc., the largest U.S. telephone equipment maker, said first-quarter sales fell unexpectedly. The shares declined as the company cut its 2006 forecast on waning demand in the U.S. and China.

Sales in the quarter ended Dec. 31 dropped to $2.05 billion from $2.34 billion a year earlier and annual revenue will be unchanged or increase in the ``low-single digits,'' Lucent said today in a statement. JP Morgan Securities Inc.'s Ehud Gelblum had expected sales of $2.41 billion.

Wireless phone companies in the U.S. and China cut purchases of the latest network equipment that carries video and data, the company said. Growth should improve in the second half of the year, Chief Executive Officer Patricia Russo said in the statement. Murray Hill, New Jersey-based Lucent has said it's cutting 1,000 jobs this year to reduce costs as sales fall.

<snip>

Lucent has already reduced its workforce to 30,500 employees from 106,500 four years ago.

...more...

[UpInArms]

39. 10:21 EST numbers and blather (heading the other way)

Dow 10,957.15 -5.21 (-0.05%)
Nasdaq 2,314.05 -2.64 (-0.11%)
S&P 500 1,285.65 -0.41 (-0.03%)
10-Yr Bond 4.379 -0.31 (-0.70%)

NYSE Volume 460,832,000
Nasdaq Volume 353,967,000

10:00 am : Holding steady, the indices garner support from seven of the ten economic sectors. Despite a 0.8% pullback in the price of crude futures, to $63.45 per barrel, the Energy sector has risen to a market-leading 0.6% gain. Up 0.5%, Materials closely trails and enjoys added attention today following target hikes across the sector. This morning, CSFB raised its price targets on Phelps Dodge (PD 145.00 +1.81), a Briefing.com recommended holding for active investors, Newmont Mining (NEM 58.29 +0.33), and Dow component Alcoa (AA 28.88 +0.07). In addition, the firm upgraded U.S. Steel (X 50.76 +1.22) shares to Neutral from Underperform. Healthcare (-0.2%) stands as the early laggard - particularly challenged by HMOs following the industry's downgrade to Cautious at Goldman Sachs. DJ30 +18.98 NASDAQ +0.99 SP500 +0.77 NASDAQ Dec/Adv/Vol 997/1362/240.1 mln NYSE Dec/Adv/Vol 1083/1559/147.1 mln

[54anickel]

45. Sleeping dogs wake?

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=50395

Wisdom holds that the 2005 miracle avoidance of long deferred bills will continue. The admitted fly in the ointment seems to be growing consensus that housing markets may not be able to furnish double digit growth in prices, cashout refinancing and home equity extraction. Fingers are crossed - assurances are made - that this will not have serious near term macro dampening effects.



My interest, however, is to call attention to facts so long ignored they have been forgotten. The quick and dirty summary is: coming pension problems and the economic impact of losing Latin America might merit mention and concern. If these are odd subjects, almost never discussed, therein rests their import.



As we slide into what could be the 6th year without real median income growth, under funded pension plans, rising co-pays and decelerating housing gains are likely to coincide with rising interest rates and high energy prices, a combination sure to squeeze debt laden family budgets. Precious little attention has been paid to the earnings footprint of new pension and health care cost accounting. New accounting rules set to take effect will require firms to move discussion of pension costs from ignored footnotes to the general content of financial statements and filings. This will add a powerful incentive for many to follow the leads of IBM, Motorola, Verizon, airlines, autos, auto parts and the foiled NYC MTA to off-load present and future pension costs. Stop and ponder what this means and you will see why markets should be paying a lot closer attention to these developments. Pensions are massive buyers of equities and fixed income products. If they shrink and more dollars are turned over to negative savings rate America, what will follow? If there is no slack in pressured household budgets, and retirement security looms large, how smooth will the pension offload sailing be? These pressures are unfolding as baby boomers move into retirement cash out mode and US indexes lag foreign competitors. Anyway this shakes out, pensions are a huge issue likely to grab headlines and cause turmoil in 2006 and well beyond.



At some point the string of massive and costly foreign policy missteps of the last five years will be discovered by our ever prescient, wise and forward looking friends in the financial markets. Chief among the nasty little items that will occur to folks when they decide to look around again will be that US influence, prestige and potency in Latin America has plummeted to previously unthinkable lows. From Argentina and Bolivia to Uruguay, those associated with and friendly toward Washington have been dropping like flies. Our loss of influence and access have neither gone unnoticed nor, unexploited by foriegn rivals. China’s freshly inked contract with Bolivia offers an example of a global reshuffling that is proceeding briskly while America sleeps and congratulates herself over imaginary victories. I believe that losing a continent matters. Others will too when they get around to discovering it. I fear a too little, too late and heavy handed response is likely to materialize. If the past offers guidance, it will further worsen the situation.



more...

[EuroObserver]

79. "Losing Latin America"

http://www.alternet.org/story/30681

Most people in the United States know that a transit strike crippled New York City. Fewer are aware that seven South American countries, representing over 80 percent of the continent's population, recently elected presidents with anti-American sentiments. The former has an immediate effect. The latter will impact our children for decades to come.

<snip>

Evo Morales is the latest in a long list of democratically elected Latin American presidents whose primary appeal is their opposition to U.S., IMF and World Bank policies that favor foreign corporations with reputations for exploiting natural resources and local labor. Bolivia joins the ranks of previously pro-American countries that have recently turned against Washington and Wall Street, such as Argentina, Brazil, Chile, Ecuador, Uruguay and Venezuela.

<snip>

In the past year, a rising tide of people throughout the world has been rebelling against policies they see as unjust. This has occurred in Africa, Asia, Europe, Latin America and the Middle East, as well as in the United States, where New York transit workers fought to defend their economic well-being. As one transit worker told me, "We're sick of being told that our families must sacrifice while huge corporations and their executives receive tax breaks."

<snip>

Unrest in New York and Latin America, as well as in Africa, Asia, Europe and the Middle East are harbingers of the difficulties that will haunt future generations -- unless we take heed. They serve notice that if we want a peaceful and prosperous future for our children, we must recognize basic human needs; we must insist that all people -- not just those at the top -- have the right to justice and dignity. Bolivian voters, NYC transit workers and democratically elected presidents of other countries are warning us that the bottom line of the corporate balance sheet is not the final statement upon which our society will ultimately be graded.

/more...

[54anickel]

88. Oh yeah, more of that benign neglect Albright pointed to at Shrub's

"photo-op".

Don't get me wrong, I believe the US has much to repent for in it's past abuses of the world's resources and peoples. What's happening certainly is not good for us Murikans, but perhaps it is in the best interest of the rest of the world. Time for that "New Age" to take effect over Ma Earth....what's the last year of the Mayan calendar again?

[EuroObserver]

47. Oil looms large over world stage

http://newsvote.bbc.co.uk/1/hi/business/4609572.stm

Last Updated: Friday, 13 January 2006, 14:26 GMT

The price of oil, one of 2005's biggest stories, is forcing its way back into the headlines as a political row with Iran threatens to interrupt supplies.



Crude oil prices have rallied in recent weeks as concerns over Iran's nuclear ambitions have escalated.

Iran has been threatened with referral to the United Nations for restarting its nuclear programme, and there are fears that sanctions may be imposed.

As this unfolds, problems with Nigerian supply have also pushed prices higher.

...

On Friday, a barrel of benchmark light crude rose 0.6% to $64.72 in New York. Brent crude, London's main traded oil, was 0.9% higher at $63.18.

While that is well below the record of $70.85 a barrel set in August 2005, analysts are revisiting their estimates for average prices this year.

/more...

[54anickel]

48. Don't listen to your realtor, housing bubble is real

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=50308

Having lived and worked in San Francisco during the Tech and Dotcom bubble, I had a first hand glimpse into the bubble mentality and the irrational exuberance of your average consumer. From Dotcom companies throwing lavish parties (while reporting negative earnings) to college students investing their school money in the stock market, to the creation of “short- lived paper millionaires,” I easily recognized that this move up in the stock market was not sustainable. In the midst of this bubble, many people would look at their stock options or 401k plans, classify themselves as millionaires, and spend money in the economy that further propelled the rise up in the stock market and further expanded the bubble. The end result was that most of these stock options expired worthless, investors lost millions of dollars in the stock market, and the “paper millionaires” where no longer millionaires.

Throughout history, you will find notable examples of manias, Ponzi schemes, and bubbles that have ended up in disasters with investors cutting back on their spending and scrambling to atone for their financial mistakes. This scenario did not happen after the Dotcom bubble. Instead, investors shrugged off their losses as they saw the value of their homes skyrocket. Consequently, the rise up in real estate prices allowed them to continue spending and temporarily delayed the US economy from heading into a major recession. I believe that 2006 will be the beginning of the bursting of the real estate bubble, and that this bursting will have immediate and severe consequences on the US economy as a whole.

Your Mortgage Broker Does Not Know Best

As real estate prices have skyrocketed in the last several years, there have been some people that have argued that the move up in real estate prices is sustainable. Mortgage Brokers, Real Estate Agents, Appraisers, and people who lack an understanding of the markets have argued that rising real estate prices are purely based on supply and demand. They point to the fact that the supply of housing is decreasing, while the demand for these homes are constantly increasing. This argument, however, is flawed. In the last several years, homebuilders have been building homes at a record pace. In fact, there are now more housing starts per person than there was 5 years ago. Although there definitely has been an increase in demand for these homes, it has mainly occurred due to the artificially low interest rates and exotic mortgages that have allowed people to purchase homes that were traditionally out of their means.

“Don’t you see the bidding wars?” “If you don’t by now, you will never be able to afford it!” The sad reality is that most people who have purchased homes in the last several years could not afford to buy a home via traditional means. By this, I mean, that if you took away the creative mortgage packages (zero percent down, interest only, etc.), and forced these homeowners in a fixed mortgage, they would not be able to afford their monthly payment. Incidentally, when interest rates are at record lows, you want to get a fixed rate mortgage. When interest rates are at their highs, and heading lower, adjustable rate mortgages might make more sense.

This idea that people have been purchasing homes outside of their means is validated by looking at the average median home price versus per capita income. As you can see in the chart below, the valuation of median home price to per capita income is way out of historical proportions.

Remember when Greenspin was pushin' ARMs and even our old resident banker (Frodo) was saying wtf?


snip>


The Implications of an Upcoming Recession

Generally speaking, a recession is a prolonged period of time where the economy is contracting. During a recession, you will most likely see consumers spending less money and saving more, a subsequent decline in the stock market, a rise in unemployment, and a decline in real estate prices. The idea is that the economy has to have periods of contraction after years of expansions. From 1991 to today our economy has been constantly growing. Some Economists might argue that we did go through a recession in 2001. I disagree. Although we did have some characteristics that were indicative of a recession, we also had some glaring omissions. How can we have a recession that only lasts one quarter, especially after we just came off a major stock market bubble? Why would real estate prices continue to rise in a time of less spending and more saving? In either case, the recession that is to come will be a multi-year recession that will serve to slow down this economy that has been wildly expanding over the last decade and a half. Like the recession of the 1970’s, I also expect to see rising inflation and soaring commodity prices.

more...

[UpInArms]

52. IRS turns thousands into tax criminals in refund freeze

http://www.marketwatch.com/news/story.asp?guid=%7B902EE8E3%2DD191%2D46F7%2DB7C6%2D76649A174840%7D&symbol=&siteid=mktw

LOS ANGELES (MarketWatch) -- The Internal Revenue Service is being vilified in media and political circles for freezing 120,000 refunds without telling many of those taxpayers that they had been branded as criminals by the IRS Criminal Investigation division.

But IRS did nothing wrong. IRS's legal department made sure that the CI division was not breaking any laws or infringing upon due process when CI stamped a series of fraud codes on the taxpayers' files without providing them an opportunity to speak up in their own defense.

You might think this violates your Sixth Amendment rights to face your accuser. But have you ever read the Sixth Amendment? It applies to prosecutions and that's not at issue here.

Well, what about the 14th Amendment. It says no state may deprive any person of life, liberty, or property, without due process of law.

OK, the IRS took persons' property without letting them know. But IRS and its Criminal Investigation Division aren't a state. They're exempt from this provision, aren't they?

...more...

[UpInArms]

55. US's Snow-some (other countries) shift(ing) out of dollar reserves normal

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-13T163439Z_01_WBT004549_RTRIDST_0_ECONOMY-SNOW-DIVERSIFICATION-URGENT.XML

WASHINGTON, Jan 13 (Reuters) - U.S. Treasury Secretary John Snow said on Friday some countries' movement of reserves out of dollar-denominated assets would have only a small effect on U.S. markets and that investors would continue to find U.S. investments attractive.

"I think some diversification at the margin is certainly to be expected. I don't think it'll have any major ripples on our domestic markets," he said on Bloomberg TV.

"We have the deepest and most liquid markets in the world and that'll continue to be the case," he said.

[UpInArms]

56. PIEHOLE ALERT: Topic: Iran

11:53am 01/13/06 BUSH WON'T PREJUDGE U.N. RESPONSE TO IRAN

11:53am 01/13/06 BUSH: AN IRAN WITH NUCLEAR WEAPONS POSES GRAVE THREAT

11:47am 01/13/06 MERKEL: WE WILL NOT BE INTIMIDATED BY IRAN

11:39am 01/13/06 BUSH: U.S., GERMANY WANT DIPLOMACY TO RESOLVE IRAN CRISIS

[54anickel]

62. You wanna know something? Call me a fool, but I tend to half-way

believe the lil Idgit really does want diplomacy to resolve the proclaimed "Iran Crisis". Both China and Russia have vested economic interests with Iran, and they have been flexing their muscles the past couple of weeks. Russia now has the EU support for an new pipeline that does NOT go through Afghanistan, China has made it clear that it will do whatever is in China's interest. Would love to be a fly on the wall in that China/Cheney meeting. I think there's been some arm-twisting, some reality checking (with China and Russia explaining the big picture to the idgit of the rock and hard place he's stuck between) and maybe even some deals promising a cut of the spoils to do this diplomatically.

Yeah, I know it's pretty far out there - no reasoning with the Idgit. But Bush is all about Bush, perhaps self-preservation interests have kicked in. Maybe his obsession with his legacy came into play and they promised to give him some credit in the greater scheme of things. :shrug:

[UpInArms]

66. I wish I could share your optimism on that 54anickel

but I don't think the village idjit has the capability to reverse a Custer Decision. This Iran/Syria/Russia/China/Iraq/North Korea evil axis was written into the PNAC's "Rebuilding America's Defenses in the 21st Century" paper.

There is no talking the village idjit into anything as he is only the figurehead of the cabal - not the decision maker at all.

[54anickel]

68. It's not really optimism on my part ---

we are still doomed to become another banana republic in so many other ways thanks to the boy king. The only optimism I have is that we may at least postpone, if not avoid, the military conflict that could easily culminate into the next WW.

[UpInArms]

70. flashing back to some headlines regarding "diplomacy"

THREATS AND RESPONSES: THE PRESIDENT; BUSH DECLARES U.S. IS USING DIPLOMACY TO DISARM HUSSEIN

October 22, 2002, Tuesday
By DAVID E. SANGER (NYT); Foreign Desk
Late Edition - Final, Section A, Page 1, Column 6, 1394 words

DISPLAYING FIRST 50 OF 1394 WORDS -President Bush said today that the United States was trying diplomacy ''one more time'' to disarm Saddam Hussein ''peacefully'' and suggested that if the Iraqi leader complied with every United Nations mandate it would ''signal the regime has changed.'' The White House immediately said that Mr. Bush was not...

...more for subscribers only...

Britain's Blair Badgers Baghdad

WASHINGTON, Sept. 10, 2002

(CBS) British Prime Minister Tony Blair warned Baghdad Tuesday that "action will follow" if it ignores international demands to let U.N. weapons inspectors back into Iraq.

Describing Iraqi President Saddam Hussein as an "international outlaw," he said there could be "no more conditions, no more games, no more prevaricating, no more undermining of the U.N.'s authority."

"And let it be clear that should the will of the U.N. be ignored, action will follow," Blair said.

"Diplomacy is vital. But when dealing with dictators — and none in the world is worse than Saddam — diplomacy has to be backed by the certain knowledge in the dictator's mind that behind the diplomacy is the possibility of force being used."

...more...

[54anickel]

71. OK, OK. I was a fool for half believing the idgit. We are about to see

an instant replay, and my guess it will be very soon. Gotta be before the Iranian Oil Bourse opens up in March, or at least before it has an chance to catch on.

"Diplomacy is vital. But when dealing with .....(place your favorite threat to US hegemony and Empire here)

[54anickel]

72. Ukraine gas dispute -- Has Putin gone nuts?

http://www.321energy.com/editorials/engdahl/engdahl011306.html

It’s more useful to assume that the answer is ‘no.’ Then we must ask what is Russia doing with its gas price policy demands and supply cut-off to Ukraine?

It’s clear that the move is one part of a complex series of Russian moves in the ongoing Grand Chess Game. That game is between Washington as sole global superpower, and Russia as a reconstructing nuclear power--one with a vast resource wealth needed by its Eurasian neighbours from China to Germany and beyond. Russia, which holds far the world’s largest known reserves of natural gas, is playing its own energy card with Ukraine as the current field of that battle.

snip>

Ukraine’s political shift

What changed in the ‘not changeable’ Gazprom-Ukraine contract between August 2004 and January 2006, of course, was not Gazprom but rather the political complexion of Ukraine. The victory of the Washington-financed Yushchenko candidacy for President in December 2004, and his inauguration in early 2005 on a pledge to bring Ukraine into NATO, did not go down well in Moscow, which considers Ukraine historically and strategically a part of ancient Russia—Kiev Rus.

It was also clear to the Kremlin that Yushchenko’s call to bring Ukraine into NATO was no mere election gimmick to distance his party from his pro-Moscow electoral opponent.

Yushchenko’s wife, Kateryna Chumachenko Yushchenko, a Chicago-born Ukrainian-American, had previously served in the Reagan White House and State and Treasury departments, and did liaison work with Afghani and other anti-Soviet US-sponsored opposition groups, such as Bush neo-conservative Zalmay Khalilzad’s Friends of Afghanistan. She also sat on the board of a pro-NATO neo-conservative US think-tank, New Atlantic Initiative, along with Radek Sikorski, Poland’s effusively pro-Washington Defense Minister. Sikorski is a close friend and former American Enterprise Institute colleague of Richard Perle and the other neo-con hawks.

The New Atlantic Initiative was created in June 1996 following the Congress of Prague, where more than 300 conservative politicians, scholars, and investors discussed a ‘new agenda for transatlantic relations.’ The ‘new agenda’ they promoted was quite simply to encircle Russia and render it politically impotent by bringing the former Soviet satellite states into NATO and into a US-defined ‘free market.’

more...

[EuroObserver]

73. Iran: Diplomacy continues...

Measured report in the FT:

http://news.ft.com/cms/s/36528c52-8415-11da-b3f3-0000779e2340.html

Iran on Friday gave a double-edged response to US and European threats to press for its referral to the UN security council over its nuclear programme and China warned that such a move could make the issue harder to resolve.

Manouchehr Mottaki, iran’s foreign minister, offered Europe a choice between a “continuation of talks” with Iran’s “clear and explicit explanations” or the “end of co-operation”, in a statement released by the official IRNA news agency that bore all the hallmarks of leadership consensus.

Mr Mottaki said referral to the security council would lead Iran to stop “voluntary measures” and end its current acceptance of snap inspections from UN nuclear monitors. Mr Mottaki stopped short of saying Iran might withdraw from the Nuclear Non-Proliferation treaty, which allows a basic level of UN inspection.

Wang Guangya, China’s UN ambassador said on Friday a decision to refer the Iranian nuclear issue to the security council “might complicate the issue” by hardening the stance of some parties.

The foreign ministers of China, Russia, the US and Britain are scheduled to meet in London to discuss the issue. The Europeans and the US have already indicated that they would back a decision to refer Iran to the security council. But the position of China and Russia, who both hold a veto in the council, is less clear.

Mr Mottaki called on Europe to exercise “patience” and to “separate the issue of research”, which Iran resumed earlier this week, from “fuel production”, the widescale enrichment of uranium for nuclear fuel, which Iran continues to suspend.

/more...

http://news.ft.com/cms/s/4c23e6c4-8399-11da-9017-0000779e2340.html

US wants sanctions to target Iran’s leaders

Any sanctions imposed on Iran over its nuclear programme would not target the Iranian people, the Bush administration said on Thursday in a scathing attack on the Islamic republic’s leadership.

Condoleezza Rice, US secretary of state, gave assurances that scholars, musicians and athletes – a reference to Iran’s World Cup soccer team – would not be penalised, as the US joined the three leading European powers in announcing their determination to refer Tehran to the United Nations Security Council over its plan to begin uranium enrichment.

Ms Rice would not be drawn on what kind of UN sanctions the US was considering. There was a “menu of possibilities”, she told reporters in Washington.

The Bush administration, which is looking at ways to support the Iranian opposition, made clear it wanted to target the leadership. Condemning the anti-Israeli comments of Mahmoud Ahmadi-Nejad, Iran’s president, Ms Rice said: “He has increased Iran’s isolation every time he has opened his mouth.”

/more...

"Iranian opposition", what Iranian opposition? (see: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x2366435 )

[UpInArms]

57. Bayou (Hedge Fund) founders' assets to be sold - $450M Fraud

http://www.marketwatch.com/news/story.asp?guid=%7B9E6C36FE%2DC2CB%2D490E%2D9B3B%2D066C3CE9163B%7D&symbol=&siteid=mktw

NEW YORK (MarketWatch) -- A federal judge named Kroll Inc. as receiver for property forfeited by Bayou Management LLC hedge fund executives, prosecutors said Friday.

The consulting firm will liquidate the assets of Samuel Israel and Daniel Marino, after the duo defrauded investors of more than $450 million, according to the U.S. Attorney's Office for the Southern District of New York.

Israel pleaded guilty to charges of conspiracy, investment-adviser fraud and mail fraud on Sept. 29. Marino pleaded guilty to conspiracy, investment adviser fraud, mail fraud and wire fraud.

Bayou, a firm set up in the mid-1990's, allegedly persuaded investors to pour more than $300 million into its funds by overstating gains and hiding losses between 1998 and August 2005, according to a complaint filed by the U.S. Attorney on Sept. 1.

The firm also formed a phony accounting firm called Richmond-Fairfield Associates which it claimed audited and certified Bayou's financial statements, the complaint added.

...more...

hmmm.... Dimson's cousin - John Ellis (the one that was working for FAUX SNEWS on election night 2000 - the first person to call the election for BUSH despite not having any right or information that would substantiate that call - has ties to this scandal:

Bayou and the Bush Cousin

A first cousin of President Bush is emerging as a peripheral player in the increasingly bizarre Bayou Management hedge fund scandal.

Sources say John P. Ellis, a former journalist turned investment banker, represented several companies in investment presentations to IM Partners, a side venture set up by Samuel Israel and Daniel Marino. Israel and Marino were the management team that ran Bayou and who federal prosecutors allege defrauded investors out of $300 million.

People familiar with the Bayou saga say Ellis, a personal friend of Israel for the past several years, helped arranged at least five investment deals for IM Partners while working as a managing director for GH Venture Partners, a New York City-based investment bank. In all, IM Partners, a Connecticut-based investment partnership, invested at least $25 million in deals handled by GH Venture.

There's no indication that Ellis or GH Ventures were direct or indirect investors in either Bayou or IM Partners. And, other than their common principals, there's no direct evidence that any relationship existed between IM Partners and Bayou, although both operated out of the same Stamford, Conn., office.

...more...

[54anickel]

63. Danger time for America

The economy that Alan Greenspan is about to hand over is in a much less healthy state than is popularly assumed

http://www.economist.com/opinion/displaystory.cfm?story_id=5385434



DESPITE his rather appealing personal humility, the tributes lavished upon Alan Greenspan, the chairman of the Federal Reserve, become more exuberant by the day. Ahead of his retirement on January 31st, he has been widely and extravagantly acclaimed by economic commentators, politicians and investors. After all, during much of his 18½ years in office America enjoyed rapid growth with low inflation, and he successfully steered the economy around a series of financial hazards. In his final days of glory, it may therefore seem churlish to question his record. However, Mr Greenspan's departure could well mark a high point for America's economy, with a period of sluggish growth ahead. This is not so much because he is leaving, but because of what he is leaving behind: the biggest economic imbalances in American history.

One should not exaggerate Mr Greenspan's influence—both good and bad—over the economy. Like all central bankers he is constrained by huge uncertainties about how the economy works, and by the limits of what monetary policy can do (it can affect inflation, but it cannot increase the long-term rate of growth). He controls only short-term interest rates, not bond yields, taxes or regulation. Yet for all these constraints, Mr Greenspan has long been the world's most important economic policy maker—and during an exceptional period when globalisation and information technology have been transforming the world economy. His reign has coincided with the opening up to trade and global capital flows of China, India, the former Soviet Union and many other previously closed economies. And Mr Greenspan's policies have helped to support globalisation: the robust American demand and huge appetite for imports that he facilitated made it easier for these economies to emerge and embrace open markets. The benefits to poorer nations have been huge.

So far as the American economy is concerned, however, the Fed's policies of the past decade look like having painful long-term costs. It is true that the economy has shown amazing resilience in the face of the bursting in 2000-01 of the biggest stockmarket bubble in history, of terrorist attacks and of a tripling of oil prices. Mr Greenspan's admirers attribute this to the Fed's enhanced credibility under his charge. Others point to flexible wages and prices, rapid immigration, a sounder banking system and globalisation as factors that have made the economy more resilient to shocks.

The economy's greater flexibility may indeed provide a shock-absorber. A spurt in productivity has also boosted growth. But the main reason why America's growth has remained strong in recent years has been a massive monetary stimulus. The Fed held real interest rates negative for several years, and even today real rates remain low. Thanks to globalisation, new technology and that vaunted flexibility, which have all helped to reduce the prices of many goods, cheap money has not spilled into traditional inflation, but into rising asset prices instead—first equities and now housing. The Economist has long criticised Mr Greenspan for not trying to restrain the stockmarket bubble in the late 1990s, and then, after it burst, for inflating a housing bubble by holding interest rates low for so long (see article). The problem is not the rising asset prices themselves but rather their effect on the economy. By borrowing against capital gains on their homes, households have been able to consume more than they earn. Robust consumer spending has boosted GDP growth, but at the cost of a negative personal saving rate, a growing burden of household debt and a huge current-account deficit.

more...

[54anickel]

69. Monetary myopia

The accolades bestowed upon Alan Greenspan ahead of his retirement on January 31st have a strong whiff of irrational exuberance

http://www.economist.com/finance/displaystory.cfm?story_id=5381959





ALAN GREENSPAN, now in his final weeks as the chairman of America's Federal Reserve, has been proclaimed “the greatest central banker who ever lived”. Among ordinary Americans he enjoys almost rock-star status. He has been awarded the Presidential Medal of Freedom, a British knighthood and the French Legion of Honour. Does he really deserve such uniform praise? And after the accolades have faded, what will economists conclude about his tenure?

It is ironic that when Mr Greenspan took over from Paul Volcker, his inflation-busting predecessor, in 1987, some questioned whether he was really up to the job, and he went through some rocky times in his early years. The stockmarket crashed within two months of his taking office, and America's growth fell behind that of Europe and Japan for several years. For the past decade, however, he has been viewed as possessing almost magical powers. He is credited with saving the world economy—from the stockmarket crashes of 1987 and 2000-01, and from Russia's default and the near collapse of LTCM, a hedge fund, in 1998—by pumping in liquidity when it was vulnerable. At a dinner for the members of the G7 in December, Mervyn King, the football-mad governor of the Bank of England, presented Mr Greenspan with a cartoon depicting him as a goalkeeper saving one penalty after another.

On the surface, America's economic performance has been remarkable on his watch. Not only has inflation been reduced, but America has enjoyed the two longest expansions on record, marred only by two mild recessions. The previous 18 years, by contrast, suffered four recessions, including the two severest since the Great Depression of the 1930s.

On closer inspection, however, Mr Greenspan's record looks less impressive. The drop in America's core rate of inflation has in fact been no greater than the average for all the industrialised countries in the Organisation for Economic Co-operation and Development (OECD). Global disinflationary pressures have made fighting inflation easier for all central banks.

more...

[EuroObserver]

77. when the tide goes out you can see who's swimming naked

http://www.economist.com/opinion/displaystory.cfm?story_id=5385434

<snip>

Handovers to a new Fed chairman are always tricky moments. They have often been followed by some sort of financial turmoil, such as the 1987 stockmarket crash, only two months after Mr Greenspan took over. This handover takes place with the economy in an unusually vulnerable state, thanks to its imbalances. The interest rates that Mr Bernanke will inherit will be close to neutral, neither restraining nor stimulating the economy. But America's domestic demand needs to grow more slowly in order to bring the saving rate and the current-account deficit back to sustainable levels. If demand fails to slow, he will need to push rates higher. This will be risky, given households' heavy debts. After 13 increases in interest rates, the tide of easy money is now flowing out, and many American households are going to be shockingly exposed. In the words of Warren Buffett, “It's only when the tide goes out that you can see who's swimming naked.”

How should Mr Bernanke respond to falling house prices and a sharp economic slowdown when they come? While he is even more opposed than Mr Greenspan to the idea of restraining asset-price bubbles, he seems just as keen to slash interest rates when bubbles burst to prevent a downturn. He is likely to continue the current asymmetric policy of never raising interest rates to curb rising asset prices, but always cutting rates after prices fall. This is dangerous as it encourages excessive risk taking and allows the imbalances to grow ever larger, making the eventual correction even worse. If the imbalances are to unwind, America needs to accept a period in which domestic demand grows more slowly than output.

The big question is whether the rest of the world will slow too. The good news is that growth is becoming more broadly based, as demand in the euro area and Japan has been picking up, and fears about an imminent hard landing in China have faded. America kept the world going during troubled times. But now it is time for others to take the lead.

[AnneD]

87. So what do you see in a tsumani...

just the thought of Allen Greenspan in low tide has me losing my lunch :puke:

[UpInArms]

64. 12:51 EST somebody just yanked the carpet out from under the markets

Dow 10,930.02 -32.34 (-0.30%)
Nasdaq 2,312.03 -4.66 (-0.20%)
S&P 500 1,283.61 -2.45 (-0.19%)
10-Yr Bond 4.355 -0.55 (-1.25%)

NYSE Volume 1,239,843,000
Nasdaq Volume 943,939,000

12:30 pm : Recently slipping back to unchanged, the indices now encircle the flat line. The Dow, which underperforms its counterparts today, faces pressure from half of its constituents. General Motors (GM 20.59 -0.37) drives the blue chip average lower; investors appear to be uninspired by CEO Rick Wagoner's most recent comments on the auto maker's turnaround plan. Home Depot (HD 42.01 -0.54) serves as an additional sore spot, experiencing some consolidation of its recent run. Still, retailers remain higher (+0.2%) and contribute to the Discretionary sector's positive stance (+0.1%).DJ30 -2.81 NASDAQ +1.71 SP500 +1.20 NASDAQ Dec/Adv/Vol 1325/1503/873.5 mln NYSE Dec/Adv/Vol 1420/1710/771.1 mln

[UpInArms]

78. Fort Wayne to lose 650 jobs in Waterfield deals

http://www.indystar.com/apps/pbcs.dll/article?AID=/20060113/BUSINESS/601130531/1005/ENTERTAINMENT

About 650 jobs will be lost in Fort Wayne following the sale of the mortgage-origination and mortgage-servicing arms of Waterfield Mortgage Co., the Fort Wayne firm said today.


Waterfield Mortgage sold its Waterfield Financial origination unit to American Home Mortgage of Melville, N.Y., and its Quantum Settlement Services to an undisclosed buyer.
Sale prices were not disclosed. Its Union Federal Bank operations were not part of the deal and won't be affected.

[UpInArms]

92. American Home to buy Waterfield Financial

http://www.marketwatch.com/news/story.asp?guid=%7B49F8598C%2DACD3%2D4FA7%2DA5ED%2DD24FF620ADDF%7D&symbol=&siteid=mktw

BOSTON (MarketWatch) -- Mortgage real estate investment trust American Home Mortgage Investment Corp. said Friday it plans to acquire Waterfield Financial Corp. just one day after the REIT's stock took a hit after an earnings warning.

Melville, N.Y.-based American Home (AHM) said it has signed a deal to buy the unit of Union Federal Bank of Indianapolis that includes 46 retail, wholesale and correspondent mortgage-loan-production branches in 16 states.

American Home expects the purchase price to equal the book value of Waterfield's net assets when the deal closes. Waterfield's primary assets are new loans carried at the lower of cost or market, which American Home expects to sell shortly after closing.

"Waterfield has a nominal amount of fixtures and other property associated with its loan-production businesses that will remain on American Home's books," the company said in a statement, adding it expects to close the purchase in January.

...more...

[UpInArms]

80. Today's Comedian: Fed's Fisher - output gap concept no longer useful

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-13T191659Z_01_WBT004554_RTRIDST_0_ECONOMY-FED-FISHER-URGENT.XML

SAN ANTONIO, Jan 13 (Reuters) - Increased globalization has lessened the usefulness of concepts such as output gaps or capacity restraints for monetary policy-makers, Dallas Federal Reserve Bank President Richard Fisher said on Friday.

"The concepts of output gaps for economists or capacity constraints ... are rendered nonexistent," Fisher told a conference on U.S.-Mexico cross-border shopping sponsored by the Dallas Fed in conjunction with the Chicago Fed and the International Council of Shopping Centers.

"The concepts that we have for so long used to determine the course of monetary policy are being challenged" by globalization, he said, reprising a theme he has struck frequently since took the reins at the Dallas Fed last year.

Fisher does not have a vote on the cental bank's policy-setting committee this year.

Why measure anything at all? Next up: Policy determined by game of darts!

:eyes:

[UpInArms]

81. Refco board resigns-source - Trustee no longer required

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-13T192534Z_01_N13370204_RTRIDST_0_FINANCIAL-REFCO-BOARD-URGENT.XML

NEW YORK, Jan 13 (Reuters) - The entire Refco Inc. (RFXCQ.PK: Quote, Profile, Research) board of directors has resigned, a source close to the matter said on Friday, meeting a condition for the bankrupt broker to avoid being overseen by a U.S. trustee.

At the same time, Stephen Brecher, managing director of Greenwich Corporate Strategy Group, was named as a new independent director, the source said.

On Tuesday, Federal Bankruptcy Judge Robert Drain said that if Refco's board resigned, and at least one new director is named, the company would not require a trustee to oversee its affairs.

Ummm... right.... everything's fine then! :eyes:

[UpInArms]

82. PA: Direct deposit delayed for 20,000 jobless in state

http://pittsburghlive.com/x/tribune-review/trib/newssummary/s_413041.html

The check is in the mail for about 20,000 jobless Pennsylvanians whose unemployment compensation checks typically are directly deposited into their bank accounts, the state said Thursday. A computer glitch this week prevented the Department of Labor and Industry from electronically transmitting benefits to workers whose biweekly claims were filed Sunday through Tuesday, Shannon Powers, a state spokeswoman, said Thursday. The computer problem was resolved, but the state instituted an accelerated mailing check-processing system Wednesday to get the benefits to workers as soon as possible, Powers said. If the delay in the direct deposit of a benefits check caused a worker's checking account to be overdrawn, the state is asking workers to contact the U.S. Treasury Department. That department will provide documentation of the computer problem in hopes a worker's bank would waive any overdraft fee, Powers said. The toll-free phone number is 1-877-869-1956.

I wonder if those banks are going to have a field day with the fees for overdrafts?

[AnneD]

83. Secret Credit Reports Do you live in these states...

"A July study by Experian is giving consumers some insight. The study ranked the states with the highest propensity to have consumers file for bankruptcy within the next year. The top five are:


Texas

Nevada

New Mexico

Louisiana

Arizona"

it goes on to talk about the secret credit reports that they have on you.:eyes:

http://moneycentral.msn.com/content/Banking/Yourcreditrating/P137322.as

[54anickel]

93. Sleazy new debt-collector tactics

http://moneycentral.msn.com/content/Savinganddebt/Managedebt/P95315.asp

It may not be your debt, but it could be your problem. Collection agencies are bullying blameless consumers into paying debts they never owed.

snip>

Bullying the innocent
Alappat’s got company. Regulators say collection agencies increasingly are harassing innocent people and badgering consumers into paying money they don’t owe. Consider:


One of the largest collection agencies, Capital Acquisitions and Management, and its subsidiary, RM Financial Services, agreed in March to pay a $300,000 civil penalty as part of a settlement with the Federal Trade Commission over abusive debt collection practices. Some of the debts the companies tried to collect had already been paid or wiped out in bankruptcy court, the FTC charged.


Minnesota’s attorney general in June sued Allied and another collection agency, JBC and Associates, saying the companies used illegal tactics to coerce consumers into paying invalid debts. Allied repeatedly called innocent consumers despite requests to stop, the regulator said, while JBC ignored written disputes filed by consumers.


Applied Card Systems hassled relatives, neighbors and employers with repeated phone calls in its efforts to track down debtors, according to the FTC. The company ignored requests to stop calling and its representatives sometimes used obscene language when its hapless targets protested that they didn’t know how to contact the debtors. In August, the company agreed to a consent decree that prohibits it from harassing consumers in the future.

Collectors cross the line

more...

[UpInArms]

85. Tyco to Split Into 3 Cos. at Cost of $1B

http://www.forbes.com/home/feeds/ap/2006/01/13/ap2449135.html

Tyco International Ltd., still recovering from scandals that saw its longtime former chief executive sentenced to prison, said Friday it plans to split into three public companies.

It is separating its electronics and health care businesses from its remaining operations, which include security and fire-protection services.

The company, which may be best known for its ADT home alarm systems, also warned its first quarter and full-year 2006 earnings from continuing operations would be lower than expected. It estimated the cost of the breakup, planned for early next year, at $1 billion.

<snip>

Tyco has been recovering from accounting scandals first revealed in 2002. Its former CEO and longtime leader, L. Dennis Kozlowski, and former Chief Financial Officer Mark H. Swartz were sentenced to prison last year for grand larceny, conspiracy, securities fraud and falsifying business records, and are appealing their convictions.

...more...

[UpInArms]

86. 2:49 EST numbers and blather

Dow 10,948.59 -13.77 (-0.13%)
Nasdaq 2,314.17 -2.52 (-0.11%)
S&P 500 1,285.81 -0.25 (-0.02%)
10-Yr Bond 4.350 -0.60 (-1.36%)

NYSE Volume 1,663,503,000
Nasdaq Volume 1,329,137,000

2:30 pm : Little has changed within the equity market; the indices continue to hover around session lows. Here's a glimpse of the industries presenting the most substantial challenge today. Motorcycle manufacturing, due to Harley Davidson's (HDI 52.50 -1.53) downgrade at Citigroup, has slipped 2.9%. Trailing close behind, HMOs (AET, CI, HUM, UNH, WLP) are off 2.8%; after finishing as one of 2005's brightest spots, the industry was downgraded to Cautious at Goldman Sachs today. The firm sees increasing downside risk and believes that expectations, profit margins, and valuations are at peak levels. The semiconductor equipment group has booked a 2.8% loss, infected with selling as traders attempt to lock in some of the market-leading 10% that the semiconductor industry has registered thus far this year. Currently, the SOX is down 1.4%.DJ30 -25.30 NASDAQ -7.01 SP500 -1.95 NASDAQ Dec/Adv/Vol 1550/1405/1.25 bln NYSE Dec/Adv/Vol 1607/1638/1.09 bln

[ozymandius]

89. at 2:56

Dow 10,952.83 -9.53 (-0.09%)
Nasdaq 2,315.78 -0.91 (-0.04%)
S&P 500 1,286.41 +0.35 (+0.03%)
10-Yr Bond 43.50 -0.60 (-1.36%)
NYSE Volume 1,710,173,000
Nasdaq Volume 1,361,244,000

Hi folks. It's been scary busy at work today. I amtaking a moment to woof some food then get back to work.

Ozy :hi:

[Roland99]

90. Everybody I know has been busy working today

I guess we should get busy buying some stocks!


BUY BUY BUY BUY!

[54anickel]

91. A Crazy Man's Rant or Right On?

http://www.kitco.com/ind/Baker/jan122006.html

snip>

What will cause the system to implode, explode or go off on some tangent such as deflation or hyperinflation? A lot of events and circumstances (could) be the trigger, but I also think central bankers (will) continue to play for time along with their cheerleaders in the brokerage, corporate and banking sectors. It will probably be a sudden factor triggering others such as a leveraged hedge fund collapse, Israeli military hits on the nuclear capacity of Iran or a terrorist sinking of a petrol ship coming through Hormuz or Malacca straits. It will definitely cause currency gyrations and imbalances which will all cause public opinion and confidence to shrink dramatically. It is that last component which is the genuine ugly part for which manipulation by the power brokers will be ineffective to counteract.

When? I think the later part of this year will be more prone than early on. The point I want to make is that there is virtually nothing on the economic and political horizon to tell me that anyone is changing course. The US with all of its current policies, practices and scary economic and financial realities continues to operate as if it is business as usual. Moreover, there is absolutely nothing in terms of facts to suggest to me that the system will get better.

Remember that politicians only have a time horizon spanning to the next election - 6 years for Senators, 4 for the President and 2 for Congressmen. Keep in mind this is the maximum time horizon with the calendar always shortening. Their goal to is to be reelected, not raise waves, always bribe the voter with their own money and never ever tell the ignorant, TV sotted masses, or the fifty percent who actually vote, the ugly truth because they are sure to turn on the messenger.

Denial always trumps an acceptance of the truth even when one is endorsing a system designed to leave one's kids with bad values and worse circumstances than we have now. The public will always opt for the pleasure of the moment rather than deny themselves for a better future for themselves or their kids. Proof is the rate at which houses have been refinanced to enhance current living standards and lifestyle. It wasn't too long ago that people denied themselves in order to double monthly mortgage payments to become mortgage free as soon as possible. Notice too the fact we now have negative personal savings for the first time. Check too the rate at which employees use their registered retirement income tax savings entitlements and you will see that only half contribute to their defined contribution pension plans and most of those who do never come close to using their entire head room entitlement. And how about the fact that the amount in the 401k account of the average 50 to 55 year old employee is $10,000 little greenbacks. Guess how far will that get the average retiree?

[EuroObserver]

94. China, India ink energy cooperation agreements

http://www.atimes.com/atimes/China_Business/HA14Cb05.html

BEIJING - China and India signed five memoranda on energy cooperation January 12, and future exchanges will be on "a full spectrum", said Indian Petroleum and Natural Gas Minister Mani Shankar Aiyar Thursday evening.

Aiyar is visiting China as guest of Ma Kai, minister in charge of the Chinese National Development and Reform Commission(NDRC). He has been accompanied by a batch of major Indian petroleum firms.

According to the NDRC, the Indian delegation met with major China energy players January 12, including China National Petroleum Corporation (CNPC), China Petrochemical Corporation (SINOPEC), and China National Offshore Oil Corporation (CNOOC).

Aiyar said China and India have agreed to strengthen the exchange of information when bidding for oil resources in a third country in order to realize mutual benefit. China and India last month won a joint bid to buy Petro-Canada's 37% stake in Syrian oilfields, marking the first cooperation in bidding for overseas oil resources. "Unbridled rivalry between Indian and Chinese companies is only to the advantage of the seller," said Aiyar.

Aiyar said that the memoranda, four of which are commercial, cover a full scope of areas, including upstream exploration and production, the refining and marketing of petroleum products and petrochemicals, the laying of national and trans-national oil and gas pipelines, frontier and cutting-edge research and development, and the promotion of environment-friendly fuels.

The two countries will also tap potential for working together on bio-fuels, such as vegetable oils blended with diesel, and gasohol (ethanol blended with gasoline). A working group will be established soon, said Aiyar. The group will meet at least once a year to keep track of the cooperation.

/more...

[EuroObserver]

95. Japan's new energy strategy

http://www.atimes.com/atimes/Japan/HA13Dh01.html

TOKYO - Resource-poor Japan is barreling ahead to rev up its energy security, driven by the specter of another oil crisis, the global rush for energy resources and a simmering gas dispute with China.

Japan's Ministry of Economy, Trade and Industry (METI) plans to release publicly the outline of the nation's new energy strategy as early as next month and will ask an advisory panel to Minister Toshihiro Nikai to flesh out the details before formalizing it by June.

The New National Energy Strategy, the draft outline of which was made known recently, is expected to call for, among other things, reduction in the oil-dependency rate to 40% or less by 2030 from the current 50%, promotion of nuclear energy, and securing of energy resources abroad through the fostering of more powerful energy companies.

Apparently in tandem with the new government energy-security policy being drawn up, the nation's controversial nuclear-fuel-cycle policy has entered a new phase. Recently, the government unveiled a plan to construct a new 1 trillion yen (US$8.7 billion) fast-breeder reactor, and domestic power firms also announced their plutonium utilization plans ahead of the start of a key test operation next month to extract plutonium at a spent-nuclear-fuel reprocessing facility. In another important development, Inpex Corp and Teikoku Oil Co, Japan's No 1 and No 3 oil developers, will integrate their operations under a joint holding company in April in a bid to survive cutthroat competition on the global scene.

<snip>

Amid the stubbornly high oil prices, the global competition for oil reserves is intensifying. This rush for oil reserves is being driven by China and India, which both desperately need stable oil and energy supplies to power their booming economies. New sources of energy have turned into new sources of potential tension and conflict, as being exemplified in East Asia by the gas dispute between Tokyo and Beijing in disputed waters in the East China Sea.

/more...

[UpInArms]

96. closing up the shop

Dow 10,959.87 -2.49 (-0.02%)
Nasdaq 2,317.04 +0.35 (+0.02%)
S&P 500 1,287.61 +1.55 (+0.12%)
10-Yr Bond 4.350 -0.60 (-1.36%)

NYSE Volume 2,206,510,000
Nasdaq Volume 1,784,419,000

Although they staged several recovery attempts, the equity market's major indices spent Friday's session locked within a narrow range that encircled the flat line. Reassuring data on the inflation front catalyzed some early optimism, but trade was altogether lackluster and reflective of investors' vigilant stance ahead of the looming Q4 earnings season, set to begin in full force following the long holiday weekend, as well as Wednesday's CPI report. The convictionless tone to trade is further evidenced by the fact that Friday was 2006's thinnest volume trading day.

A lower than expected 0.1% rise in December core PPI, which excludes volatile food and energy prices, fed the argument that the light at the end of the Fed's monetary tightening campaign is drawing nearer. While the data was positive news for the stock market, the Treasury market took much more of a bullish cue. A slightly softer than expected rise in retail sales did not much affect equity trade - as the holiday spending season has been deemed a reasonably good one, and as November's upside adjustment served as an offsetting factor - but the data underpinned the bullish bias within bonds. Although it's not directly correlated, the data relates to consumer spending, which accounts for over 70% of real GDP.

Treasuries' session-long strength was a plus for the rate-sensitive Utilities (+0.6%) and Financial (unchanged) sectors, but the latter faced considerable pressure from Dow component American International Group (AIG 70.05 -0.21) following reports that the insurer will pay $1 billion in accounting fraud settlements. General Motors (GM 20.37 -0.59) and Home Depot (HD 41.91 -0.64) accompanied AIG in dragging the blue chip average lower. Investors appeared uninspired by the automaker's latest turnaround plan commentary, and HD suffered selling as traders attempted to secure profits registered during its recent run. Despite those lagging heavyweights, the Discretionary sector (+0.1%) managed to climb back to gaining ground just before the bell. The publishing and printing, internet retail, and distribution industries were behind the rise.

Energy (+1.4%) led the session. While buying interest was directed toward that sector all day, crude's recovery to unchanged territory, or $63.92 per barrel, fostered an uptick that pulled the indices from their lows. After CSFB raised its price targets on PD - a Briefing.com portfolio stock - NEM, and Dow constituent AA, the Materials sector (+0.2%) received some added attention. The firm's upgrade of U.S. Steel (X 50.12 +0.58) lent some further support.

Healthcare (-0.2%), sitting center stage as the bidding war over Guidant (GDT 70.87 +0.47) continued, led the laggards. It was relative weakness in HMOs, however, that had been primarily responsible for the sector's decline. Following its top of the market performance in 2005, Goldman Sachs downgraded the industry to Cautious and spurred selling. Technology was also a significant sore spot. Downgraded Advanced Micro (AMD 34.13 -1.22) shares gave investors further reason to consolidate the semiconductor industry's 10% year-to-date gain; though it partially erased its intra-day loss, that group sunk the sector. News that IBM (IBM 83.17 -0.40) is under SEC investigation did not help, but upgraded HPQ shares helped limit Tech's, and the Dow's, decline.

While Q4 earnings are expected to reflect 13% aggregate growth, investors' attention is focused upon guidance that may reflect deceleration in the quarters ahead. To that end, Tyco's (TYC 27.12 -3.19) profit warning, which accompanied its confirmed break-up plan, dragged the Industrials sector 0.4% south.

As a reminder, the financial markets are closed Monday in observation of Martin Luther King Day.DJ30 -2.49 NASDAQ +0.35 SP500 +1.55 NASDAQ Dec/Adv/Vol 1331/1666/1.77 bln NYSE Dec/Adv/Vol 1462/1805/1.26 bln

See you all on Tuesday!

:hi: