STOCK MARKET WATCH, Wednesday 18 January

[ozymandius]

Wednesday January 18, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 369 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1854 DAYS
WHERE'S OSAMA BIN-LADEN? 1554 DAYS
DAYS SINCE ENRON COLLAPSE = 1515
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 14, 2006

Dow... 10,896.32 -63.55 (-0.58%)
Nasdaq... 2,302.69 -14.35 (-0.62%)
S&P 500... 1,282.93 -4.68 (-0.36%)
30-Year Bond 4.51% -0.01 (-0.31%)
10-Yr Bond... 4.33% -0.02 (-0.41%)
Gold future... 554.30 -2.70 (-0.49%)






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 Ike Iossif - WEEKLY CHARTS

SUMMARY

-excerpt-

Currently, one of the most important things when trying to decipher what the market is telling us, is to avoid getting fooled, which can happen rather easily! As we mentioned early on in the week, the markets could be at an "inflection point" and the rally could very well be over. However, both the current chart formation and the pattern formation of the technical indicators, are identical to what we see right before either a rally termination, or right before a rejuvenation of the rally (see charts below). Therefore, based upon the evidence at hand, it is early to make the determination with any degree of authority or certainty. If the first is true, we ought to see a close below last Tuesday's lows (Dow<10950, SP500<1283, NASDAQ<2300) sometime this week, followed by a subsequent close below support. If the second is true, we ought to see a close above last week's highs by mid-week. Stay long and keep half of your stops below Tuesday's lows and the other half below support (also please see sentiment).

with alotta charts...

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

[ozymandius]

2. Treasury yield curve inverts again

Yields on 10-year Treasuries on Tuesday fell below yields on three-month Treasury bills in what is the classic economist definition of an inverted yield curve, triggering more market speculation about the potential for a wider economic slowdown.

more...

[54anickel]

26. Well that's not according to plan!

Treasuries May Fall as $100 Billion of Debt Overwhelms Buyers

http://www.bloomberg.com/apps/news?pid=10000087&sid=azrTz0.O0E44&refer=top_world_news

Jan. 17 (Bloomberg) -- Treasury yields may rise in coming weeks as the U.S. government overwhelms investors with $100 billion of debt sales.

The Treasury plans to borrow $171 billion between January and March to pay for rebuilding after Hurricanes Katrina, Rita and Wilma, $27 billion more than in last year's first quarter. Banc of America Securities LLC analysts forecast about 60 percent of the sales will take place by Feb. 9.

A JPMorgan Chase & Co. survey on Jan. 9 showed investors in the $4 trillion Treasury market are the most bearish on government debt since September. The Treasury's auction of $13 billion of five-year notes on Jan. 11 drew the least demand since April. Companies added to the strain with a record $37.9 billion of bond sales last week.

``I don't want to get overly bearish,'' Ted Ake, co-head of U.S. Treasury trading at Mizuho Securities USA Inc. in New York, said Jan. 12. ``But we're getting a ton of supply, and not just Treasuries.''

The yield on the benchmark 10-year note reached 4.46 percent on Jan. 11, the highest since Dec. 22, before ending the week down 2 basis points at 4.36 percent in New York, according to New York- based bond broker Cantor Fitzgerald LP. The price of the 4 1/2 percent note due in November 2015 closed at 101 3/16. Yields move inversely to bond prices. A basis point is 0.01 percentage point.

`Tipping Point'

``We are at a tipping point now where people may decide yields should go higher and more supply may increase the chances of that,'' Christopher Mahony, who invests $2 billion of bonds at J&W Seligman & Co. in New York, said in a Jan. 11 interview.

more...

[UpInArms]

122. Fed's Lacker (the hacker) says yield curve fears overblown

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-18T191129Z_01_WBT004591_RTRIDST_0_ECONOMY-FED-LACKER-CURVE-URGENT.XML

BALTIMORE, Jan 18 (Reuters) - Richmond Federal Reserve President Jeffrey Lacker on Wednesday said fears the rise of short-term Treasury bond yields above long-term yields heralds an economic slowdown are unwarranted.

In response to audience questions after a speech to a Towson University conference, Lacker said the situation differs from the 1960s, 1970s and early 1980s, when Federal Reserve credibility was weak and the component of the yield curve dictated by inflation expectations varied widely.

"Some of the reaction, some of the discussion, reminds me of Medieval times when the arrival of a comet would spark a sort of apocalyptic hysteria. Concerns about inverted yield curves are somewhat overblown," said Lacker, who is a voting member on the rate-setting Federal Open Market Committee under this year's rotation.

In other words: "We're just talking out of our asses."

[ozymandius]

3. European stocks set for sharp sell-off

European stocks were expected to open lower on Wednesday after a number of US companies reported disappointing results, while Tokyo equities fell sharply for a second straight session.

-cut-

And stocks in Tokyo fell nearly 3 per cent for a second consecutive session. The Tokyo Stock Exchange closed trading 20 minutes before the close of normal trade due to excessively high volumes of selling as investors fled the market in the wake of an investigation into Livedoor, the internet company.

more...

[EuroObserver]

6. Japan, Euro Markets Report

Nikkei -2.94%, Topix -3.49%. Immature investors flee system-troubled market
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh42406_2006-01-18_09-19-46_t136978_newsml
These will merely be American investors reacting, on first opportunity since MLK day, to the "Livedoor shock," as AP, AFP and others suggest, or is this a sign of a deeper, international malaise (see European markets report below)?

Japan's chief Cabinet secretary Shinzo Abe said. "The decline appears to be a little too rapid. Our country's economic fundamentals remain firm," while the Economics and Financial Services Minister Kaoru Yosano said "I am certain that share prices will again reflect the strength of Japan's economy once this extraordinary situation comes to an end."

TOKYO, Jan 18 (Reuters) - A flood of sell orders forced the Tokyo stock exchange to close early as investors stampeded from the world's second-largest share market on Wednesday, spooked by fall-out from an investigation into a high-flying Internet firm.

The Tokyo Stock Exchange, where shares were down almost 5 percent at one point, suspended trading 20 minutes before the normal closing time after the number of trades threatened to overwhelm its computer system's capacity of 4.5 million per day.

The exchange has been hit by a series of system problems in recent months, including a glitch that halted business for almost a full day late last year.

But this was the first time that it was forced to halt trading as a result of capacity constraints since it opened its doors in its current incarnation in 1949.
...
News in the afternoon that the exchange was considering a shut-down accelerated selling across the board, pushing down the Nikkei share average by as much as 4.7 percent.

It clawed back to end down 2.94 percent at 15,341.18.

But that was still its biggest one-day fall since April 18, 2005, when it fell 3.8 percent. The broader TOPIX index fell 3.49 percent to close at 1,574.67. Weaker-than-expected earnings by U.S. chipmaker Intel Corp. (INTC.O: Quote, Profile, Research) also weighed on the market.

The share-price tumble also briefly hit the yen, which fell to a day's low of 115.88 yen to the dollar before recovering to around 115.25, and even sent gold prices tumbling.

"The problem has caused a selling climax. Everyone is throwing in sell orders, said Ken Masuda, a senior dealer at Shinko Securities shortly before trade was halted. "Even after five minutes, orders aren't going through. This is ridiculous."

/more...

The Yen fell a little, then recovered:

http://asia.news.yahoo.com/060118/kyodo/d8f70fgg0.html
At 5 p.m., the dollar was quoted at 115.23-25 yen, compared with Tuesday's 5 p.m. quotes of 115.43-53 yen in New York and 114.70-72 yen in Tokyo.

The dollar moved between 115.17 yen and 115.90 yen, trading most frequently at 115.65 yen. The day's peak was the highest since Jan. 6 when it traded at 116.27 yen.

The euro was quoted at $1.2122-2124 and 139.69-73 yen, against Tuesday's 5 p.m. quotes of $1.2101-2111 and 139.74-84 yen in New York and $1.2136-2138 and 139.20-24 yen in Tokyo.

After fluctuating at the mid-115 yen level in the morning, the dollar rose to its session high in the afternoon in sync with heavy losses in Tokyo stock prices, which followed an announcement by the TSE that it may suspend trades on all listed shares because of an unusually large amount of orders.

But the dollar fell back to the lower 115 yen level later in the afternoon due to selling from Japanese exporters, dealers said.

/more...

The dollar finally fell 1/3 pct on day against the yen. - "Risk aversion is rising in the marekt and investors are nervous about what will happen when U.S. equities open," said Niels Christensen, senior currency strategist at Societe Generale in Paris.

See also Tokyo precious metal closing prices.

----------------------------


European tech stocks follow IBM, Intel, Tokyo down

FT: London falls as miners and financials weaken
London’s equities market was sharply lower in opening trade, after panic selling forced Tokyo markets to close early and Wall Street markets fell after weak earnings news from the technology sector... There was little upside in opening exchanges, but enough support came from the oil majors to help London lose less ground that its European peers. Royal Dutch Shell was 0.3 per cent higher at £19.48 and BP ticked 0.1 per cent higher to 662.5p. /more...

FT: European stocks suffer sharp sell off
By mid morning, the FTSE Eurofirst 300 was off 1.3 per cent to 1,280.63, while Frankfurt’s Xetra Dax shed 1.6 per cent to 5,375.01. In Paris, the CAC 40 slid 1.2 per cent to 4,748.87 and London’s FTSE 100 fell 1 per cent to 5,643... Wall Street fell overnight, with the Dow Jones Industrial Average down 0.6 per cent to 10,896.32, while the Nasdaq Composite shed 0.6 per cent to 2,302.69. IBM reported revenues below expectations, while after the close, Chipmaker Intel missed estimates on its quarterly profits, as did internet service provider Yahoo. /more...

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh41221_2006-01-18_08-23-12_l18465026_newsml
PARIS, Jan 18 (Reuters) - Disappointing results from U.S. giants IBM (IBM.N: Quote, Profile, Research) and Intel (INTC.O: Quote, Profile, Research) and oil prices near four month highs knocked European shares early on Wednesday, while a 3-percent slump at the Tokyo bourse added to the market's woes. /more...

Bunds up, Europe shares drop as Nikkei slides
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh42364_2006-01-18_09-18-03_l18572464_newsml
LONDON, Jan 18 (Reuters) - Investors stormed into safe-haven European government bonds as global shares fell on Wednesday, led by a slump in Japan's Nikkei and climbing oil prices that raised concerns about the global economic outlook. /more...

Europe stocks - Factors to watch on Jan 18
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh39502_2006-01-18_07-05-27_ire825638_newsml
Spread betters in London are calling the FTSE 100 , CAC 40 , and Dax indexes between 40 and 64 points lower... Gold fell more than 1 percent in volatile trade as funds and investors cashed in the metal's rise to a 25-year high... U.S. Treasuries edged higher in Asian trading with investors switching to safe-haven bonds as a sharp slide in Asian shares raised concern about the outlook for economic growth. Benchmark U.S. 10-year yields were trading at around 4.318 percent. Comparable 10-year euro zone government bonds yielded 3.241 percent... Oil futures climbed to their highest levels in almost four months, nearing $67 a barrel, amid new worries of a supply crunch after militants behind a spate of kidnappings and attacks on oil facilities in Nigeria's oil-rich delta threatened to stage more attacks over the next few days... Other Asian indexes such as the Kospi , Hang Seng and Straits Times were all sharply lower, with technology shares most hit after disappointing earnings from U.S. technology firms... /more...

[ozymandius]

10. Yikes! This reads like an indictment.

I am having trouble finding any good news today. The only good I've seen is an old report on industrial production in the U.S.

Thank you for the roundup EuroObserver!

Ozy :hi:

[EuroObserver]

15. Stand by for a rebound???

...European markets stabilising now?...

http://mwprices.ft.com/custom/ft-com/html-ftalerts.asp?FTSite=FTCOM&q=&t=&s1=&s2=&extelID=&ticker=&company=NEW&ftep=&isin=&sedol=
12:18 Xetra Dax 30 down 1.4% at 5,383.40 in Frankfurt
12:10 CAC 40 down 1.1% at 4,755.45 in Paris
12:06 FTSE 100 down 1.1% at 5,636.4 in mid-session trade in London

[EuroObserver]

18. Europe stabilising for now...

http://mwprices.ft.com/custom/ft-com/html-ftalerts.asp?FTSite=FTCOM&q=&t=&s1=&s2=&extelID=&ticker=&company=NEW&ftep=&isin=&sedol=
13:10 FTSE Eurofirst 300 down 1.2% at 1,282.21 in London
slightly up now from:
09:12 FTSE Eurofirst 300 down 1.2% at 1,281.95 in London

[EuroObserver]

100. Europe Stabilised

http://mwprices.ft.com/custom/ft-com/html-ftalerts.asp?FTSite=FTCOM&q=&t=&s1=&s2=&extelID=&ticker=&company=NEW&ftep=&isin=&sedol=
FTSE Eurofirst 300 down 0.8% at 1,286.61 in closing exchanges in London 16:24

Beware (short-term) gut-overreaction. Some people made money today.

The mid-term is a different issue.

ed: I miss that spot-gold graph, though. Kitco server overloaded today? Will look elsewhere.

[EuroObserver]

107. Europe Closed Thus:

http://mwprices.ft.com/custom/ft-com/html-ftheadlines.asp
FTSE 100 closes down 0.6% at 5,663.7 in London 16:43
Xetra Dax 30 closes down 1.2% at 5,395.61 in Frankfurt 16:42
CAC 40 closes down 0.7% at 4,772.09 in Paris 16:41
FTSE 250 closes down 0.4% at 8,846.8 in London 16:40
FTSE Eurofirst 300 down 0.8% at 1,286.61 in closing exchanges in London 16:24

[UpInArms]

28. Selling stampede shuts down Tokyo stock market

http://today.reuters.com/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-01-18T110743Z_01_T136978_RTRIDST_0_MARKETS-JAPAN-WRAPUP-2-PICTURE-GRAPHIC.XML

TOKYO, Jan 18 (Reuters) - A flood of sell orders forced the Tokyo stock exchange to close early as investors stampeded from the world's second-largest share market on Wednesday, spooked by fall-out from an investigation into a high-flying Internet firm.

The Tokyo Stock Exchange, where shares were down almost 5 percent at one point, suspended trading 20 minutes before the normal closing time after the number of trades threatened to overwhelm its computer system's capacity of 4.5 million per day.

The exchange has been hit by a series of system problems in recent months, including a glitch that halted business for almost a full day late last year.

But this was the first time it was forced to halt trading as a result of capacity constraints since it opened its doors in its current incarnation in 1949.

Wednesday's shut-down dealt another blow to the image of the exchange, which has plans to list its own shares.

"It is an embarrassment for this to happen in the world's second-largest economy, and that's the emotional aspect of the debate," said Hideo Ueki, chief investment officer at UBS Global Asset Management Japan.

...more...

[AnneD]

38. Morning Marketeers,

:donut: I love that 'immature investors' flee system troubled market. Well I survived the 80's crash but lost a large chunk of change in the dot com bubble. THIS immature investor wants out for a while til I see which way the wind blows. That is not immature, that is prudent. Sell crazy to someone else.
Happy hunting and watch out for the bears.

[EuroObserver]

42. 'Morning AnneD...Timing is all...

Didn't I warn you about the rats?

ed: "A plunge in Tokyo so severe that the market had to close early further unsettled investors. The fall was triggered by a probe into Japanese Internet company Livedoor."

[AnneD]

59. I had been trying for a while...

to get out. OK. OK I wanted to take advantage of the Dec rally. It has been obvious that the rats have been on the move. Dec was the set up. This is now the shakedown. Thanks for all the Tokyo and Euro news by the way.....

[ozymandius]

4. Today's Reports

Jan 18 8:30 AM Core CPI Dec
Briefing Forecast 0.2%
Market Expects 0.2%
Prior 0.2%

Jan 18 8:30 AM CPI Dec
Briefing Forecast 0.2%
Market Expects 0.2%
Prior -0.6%

Jan 18 8:30 AM NY Empire State Index Jan
Briefing Forecast NA
Market Expects NA
Prior 28.7

Jan 18 9:00 AM Net Foreign Purchases Nov
Briefing Forecast NA
Market Expects NA
Prior $106.8B

Jan 18 10:30 AM Crude Inventories 01/13
Briefing Forecast NA
Market Expects NA
Prior -2887K

Jan 18 2:00 PM Fed's Beige Book

[UpInArms]

23. 8:30 reports:

8:30am 01/18/06 U.S. DEC. REAL WEEKLY EARNINGS UP 0.1%

8:30am 01/18/06 U.S. DEC. MEDICAL CARE PRICES RISE 0.1%

8:30am 01/18/06 U.S. DEC. HOUSING PRICES RISE 0.1%

8:30am 01/18/06 U.S. DEC. CPI ENERGY PRICES FALL 2.2%

8:30am 01/18/06 U.S. CORE CPI UP 2.2% IN 2005, SAME AS 2004

8:30am 01/18/06 U.S. CPI UP 3.4% IN 2005 VS. 3.3% IN 2004

8:30am 01/18/06 U.S. DEC. CORE CPI RISES 0.2% AS EXPECTED

8:30am 01/18/06 U.S. DEC. CPI FALLS 0.1% VS. 0.2% GAIN EXPECTED

[UpInArms]

25. CPI and Core CPI info (did they start taking energy into the formula?)

CPI sinks 0.1% on falling energy prices
Core CPI rises 0.2% as expected in December

http://www.marketwatch.com/news/story.asp?guid=%7B619D2167%2D7AFD%2D49B9%2D989F%2DD19B017AD531%7D&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - U.S. consumer prices fell a surprising 0.1% in December as energy prices continued to drop off from the spike in September, the Labor Department reported Wednesday.

It was the second straight decline in the consumer price index, which fell 0.6% in November.

Core prices - which exclude food and energy prices - rose 0.2%, as expected, for the third month in a row.

Economists were expecting the CPI to rise 0.2% in December, according to a survey conducted by MarketWatch.

For all of 2005, the CPI increased 3.4%, not much different than the 3.3% increase in 2004. It was the largest yearly gain since the 3.4% increase in 2000.

<snip>

The surprising moderation in inflation at the end of the year could give the Federal Reserve a reason to end its cycle of interest rate increases after a 14th rate hike on Jan. 31. Currently, financial markets expect the Fed to stop after a rate hike in March.

...more...

[4dsc]

56. Remember there's no inflation just high prices

I read that somewhere yesterday and thought is was funny..

[publius_jr]

83. It is not funny, unless you are masochistic.

I agree: the idea that there's no inflation, just high prices is preposterous. If anything, monetary inflation exceeds price inflation.

But, officially (i.e. by government-B.S.-CPI-definition), inflation is not monetary inflation (something like 7% if measured by M3 ). Nor is it, to them, price inflation, exactly (probalby also around 7%). Instead, it is a modified price inflation, one which, by design, underweights those price increases are high.

So, my friend, we are wrong, for we do not define, but only Sam does. He has defined, and thus it is true that there is no inflation, just high prices.

[UpInArms]

118. Consumer prices rise on energy cost surge

http://www.businessweek.com/ap/financialnews/D8F74858F.htm?campaign_id=apn_home_down&chan=db

JAN. 18 8:35 A.M. ET Consumer prices rose by the largest amount in five years in 2005, reflecting a surge in energy costs, although other prices remained well behaved.

The Labor Department reported that its closely watched Consumer Price Index was up 3.4 percent for the 12 months ending in December, the biggest jump since a similar 3.4 percent rise in 1990, another year when global oil prices were soaring because of Middle East turmoil. But outside of the volatile sectors of food and energy, core inflation posted a 2.2 percent rise for all of 2005, unchanged from the 2004 gain.

And in other good news, inflation ended the year on a tame note with overall prices dropping by 0.1 percent in December following an even bigger 0.6 percent decline in December. It marked the first back-to-back monthly declines in consumer prices since late 2003.

[UpInArms]

137. Energy drives U.S. inflation to 15-year high

http://www.cbc.ca/story/business/national/2006/01/18/usinflation-060118.html

U.S. consumer prices had their largest rise in 15 years in 2005, as surging energy costs drove up the price of gasoline, heating oil and petrochemical products.

But remove energy and food from the calculation, and core inflation would have come in at a normal 2.2 per cent, the same as in 2004.

<snip>

Both 2004 and 2005 were heavily influenced by soaring energy prices, which jumped by 17.1 per cent last year and 16.6 per cent in 2003.

However, excluding energy and food, the 2.2 per cent rise in core inflation matched the increase in 2004. That was double the rate in 2003, when the U.S. Federal Reserve cut interest rates to a 45-year low to guard against deflation.

...more...

and this article was linked within:

U.S. wholesale inflation jumps to 15-year high

Inflation at the wholesale level in the United States rose at its fastest rate in more than 15 years last month, the U.S. Labour Department reported Tuesday.

The Producer Price Index (PPI) gained 1.9 per cent in September alone, mainly because of surging energy prices in the wake of hurricanes Katrina and Rita.


The increase was well above the consensus estimate of economists. They had forecast an increase of just 1.2 per cent.

September's increase of 1.9 per cent also marks the biggest monthly rise in the PPI since an identical increase in January of 1990.

...more...

[UpInArms]

32. Weekly retail sales slump-report

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38735.3660493287-857629358&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- U.S. chain store sales slipped 1.4% for the week ended Jan. 14 compared to the prior week, according to data from the International Council of Shopping Centers and UBS Securities. ICSC economist Michael Niemira said he still expected January sales to rise by 3% to 3.5% compared to last year. The report cited warmer weather, weaker consumer confidence and higher gasoline prices for the drop. Sales rose 3.1% for the week compared to the year-ago period.

[UpInArms]

34. U.S. November capital flows fall to $89.1 billion

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38735.3753680903-857631049&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) - Capital flows into the U.S. fell to $89.1 billion in November after hitting a revised $104.2 billion in October, the Treasury Department said Wednesday. The decline was led by a drop in foreign official institutions' purchases of Treasury securities and government agency bonds. They bought $5.9 billion of those securities in November, down from $13 billion in October. Private foreign investors bought $50.8 billion in bonds and notes in November, doubling their October purchases. It's the highest level since March 2005.

9:00am 01/18/06 CHINA, JAPAN HOLDINGS OF U.S. TREASURIES RISE IN NOV.

9:00am 01/18/06 PRIVATE INVESTORS BUY $97.3 BLN OF U.S. SECURITIES IN NOV.

9:00am 01/18/06 FOREIGN OFFICIAL INSTITUTIONS BUY $5.9 BLN OF SECURITIES

9:00am 01/18/06 FOREIGNERS PURCHASE $103.2 BLN OF U.S. SECURITIES IN NOV.

9:00am 01/18/06 U.S. NOVEMBER CAPITAL FLOWS FALL TO $89.1 BILLION

[UpInArms]

43. more info:

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-18T140745Z_01_WBT004579_RTRIDST_0_ECONOMY-CAPITAL-URGENT.XML

WASHINGTON, Jan 18 (Reuters) - Net flows of capital into U.S. assets eased to $89.1 billion in November, in line with expectations, a Treasury Department report showed on Wednesday.

Inflows were well ahead of the $64.2 billion U.S. trade deficit for the month and could ease any market concerns over the country's ability to attract capital.

Analysts had expected net inflows to slip to $87.5 billion after October's revised record high $104.2 billion, which was first reported as $106.8 billion.

Excluding foreign stocks and bonds, net capital inflows declined slightly in November to $103.2 billion from a revised $107.3 billion in October.

...more...

[54anickel]

90. I don't suppose those private foreign investors were based in the

Caribbean again. :eyes: Front companies monetizing the debt? :shrug:

[UpInArms]

121. Pirates of the Caribbean strike again?

http://www.marketwatch.com/news/story.asp?guid=%7BA09FDAAF%2D2F2B%2D448D%2D9043%2D96B43BA63FBD%7D&symbol=&siteid=mktw

excerpt:

Separately, the Treasury Department said capital flows into the U.S. fell to $89.1 billion in November after hitting a revised $104.2 billion in October. See full story.

The decline was led by a drop in foreign official institutions' purchases of Treasury securities and government agency bonds, although private foreign investors in November doubled their purchases from October levels.

Currency markets were not overly concerned about the decline in capital flows into the U.S. in November because a drop of some size had been expected, Cairns said.

The flows data is seen as a good indicator of whether the U.S. is able to fund its enormous current account deficit. The swelling deficit has weighed on the dollar in recent years.

[UpInArms]

120. Fed's Beige Book shows inflation pressure 'less intense'

when did it show it as "more intense"?

http://www.marketwatch.com/news/story.asp?guid=%7BEAC83C14%2DFCB4%2D4989%2D8DBE%2D4300A3EFE216%7D&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - The economy continued to expand at a moderate pace in most regions of the United States in the past six weeks while consumer prices were said to be rising only moderately, the Federal Reserve reported Wednesday.

In its periodic Beige Book report on current economic conditions, the Fed said inflationary pressures "were less intense at year-end than earlier."

"Moderate" was the operative adjective in the Fed's anecdotal account of the economy.

Employment growth was said to be moderate. Wage increases were said to be moderate. Consumer spending was moderate in five of 12 Fed banking districts, with stronger activity reported in six others.

Most regions reported a moderation in residential real estate markets, the Fed said.

Increases in manufacturing activity were widely reported.

Retail sales increased in most regions, but were disappointing in the Cleveland region. Consumer borrowing was flat or falling, while most regions reported "some cooling" in housing markets.

...more...

2:00pm 01/18/06 INCREASES IN MANUFACTURING WIDESPREAD: BEIGE BOOK

2:00pm 01/18/06 RETAIL SALES RISING IN MOST REGIONS: BEIGE BOOK

2:00pm 01/18/06 SOME COOLING IN HOUSING REPORTED IN MOST REGIONS: BEIGE BOOK

2:00pm 01/18/06 EMPLOYMENT, WAGE GROWTH SAID TO BE MODERATE: BEIGE BOOK

2:00pm 01/18/06 INFLATION PRESSURES 'LESS INTENSE' THAN EARLIER: BEIGE BOOK

2:00pm 01/18/06 FED'S BEIGE BOOK: MODERATE GROWTH, STABLE PRICES

[ozymandius]

5. Nasdaq futures tumble on tech, oil, Japan worries

LONDON (Reuters) - U.S. stock futures dropped on Wednesday, indicating a sharp fall on Wall Street, after techs Intel Corp. (Nasdaq:INTC - news) and Yahoo Inc. (Nasdaq:YHOO - news) posted results lagging expectations while oil rose toward $67 a barrel.

A stampede of sell orders also forced the early shut-down of the Tokyo stock exchange, with the Nikkei (^N225 - news) slumping 3 percent, spooked further by fall-out from an investigation into Internet company Livedoor (4753.T).

more...

[ozymandius]

7. Oil near $67 as Nigeria tensions rise

LONDON (Reuters) - Oil neared $67 on Wednesday as Nigerian militants set their sights on Total (TOTF.PA), Agip (ENI.MI) and Chevron (NYSE:CVX - news) operations in a drive to halt oil flows from the world's eighth biggest crude exporter.

Previously the rebel Movement for the Emancipation of the Niger Delta had focused on Royal Dutch Shell (RDSa.L) forcing Nigeria's biggest foreign operator to scale back output by 226,000 barrels per day, roughly 10 percent of national output.

In a statement e-mailed to Reuters on Wednesday, the group said it had widened its attacks to Agip and Total facilities and would also target Chevron. Agip and Total issued denials.

U.S. crude oil climbed as far as $66.91 a barrel, the highest since September 30 last year, and was up 52 cents at $66.83 at 1020 GMT. London Brent crude was up 45 cents at $65.35.

more...

[ozymandius]

8. Shell may pull out of Niger Delta after 17 die in boat raid

The oil giant Royal Dutch Shell was considering pulling out of the volatile Niger Delta region yesterday after heavily armed militants stormed one of its facilities and killed at least 17 people.

The attack early on Sunday, the latest during an upsurge of violence in the oil-rich swamp area, came only days after the kidnap of four foreign oil workers. Militant groups demanding local control of oil wealth warned Shell to withdraw immediately from the world's eighth largest oil exporter.

-cut-

Last month an attack on another key pipeline similarly forced the company to suspend export of large quantities of crude oil from its Bonny oil export terminal for two weeks.

Shell is the largest oil producer in Nigeria, which is key to US hopes of reducing dependence on supplies from the volatile Gulf region. A major staff pullout is likely to trigger more output cuts in the country, already hit by the attacks.

more...

http://news.independent.co.uk/world/africa/article339109.ece

[54anickel]

33. Oil Rises to 3-Month High, Nearing $67, on Iran Supply Concern

When it rains, it pours. What other concerns are out there driving up the price for oil?

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

Jan. 18 (Bloomberg) -- Crude oil rose to a three-month high, nearing $67 a barrel in New York, on concern shipments may be disrupted from Iran, which accounts for almost 5 percent of world production.

The U.S., Britain and France want the United Nations Security Council to consider measures including sanctions over Iran's refusal to abandon nuclear research. Such action might limit investment in Iranian oil production, or prompt the nation to retaliate by cutting exports.

``Iran is the real threat because there's just so many ways it could play out,'' said Mark Waggoner, president of Excel Futures Inc. in Huntington Beach, California. ``This is the one that could actually get us to $100.''

Crude oil for February delivery rose as much as 60 cents, or 0.9 percent, to $66.91 in after-hours electronic trading on the New York Mercantile Exchange, the highest price since Sept. 30. The contract traded at $66.83 at 10:19 a.m. London time. Prices, which reached a record $70.85 on Aug. 30, are 38 percent higher than a year ago.

Yesterday, the contract jumped $2.39, or 3.7 percent, to $66.31, the highest close since Sept. 29 and the biggest one-day gain since Sept. 19, when Hurricane Rita threatened the U.S. Gulf of Mexico coast. Oil also rose after unrest in Nigeria cut output.

more...

[54anickel]

49. The Proposed Iranian Oil Bourse

http://www.321gold.com/editorials/petrov/petrov011706.html

Abstract: the proposed Iranian Oil Bourse will accelerate the fall of the American Empire.

I. Economics of Empires

A nation-state taxes its own citizens, while an empire taxes other nation-states. The history of empires, from Greek and Roman, to Ottoman and British, teaches that the economic foundation of every single empire is the taxation of other nations. The imperial ability to tax has always rested on a better and stronger economy, and as a consequence, a better and stronger military. One part of the subject taxes went to improve the living standards of the empire; the other part went to strengthen the military dominance necessary to enforce the collection of those taxes.

Historically, taxing the subject state has been in various forms - usually gold and silver, where those were considered money, but also slaves, soldiers, crops, cattle, or other agricultural and natural resources, whatever economic goods the empire demanded and the subject-state could deliver. Historically, imperial taxation has always been direct: the subject state handed over the economic goods directly to the empire.

For the first time in history, in the twentieth century, America was able to tax the world indirectly, through inflation. It did not enforce the direct payment of taxes like all of its predecessor empires did, but distributed instead its own fiat currency, the U.S. Dollar, to other nations in exchange for goods with the intended consequence of inflating and devaluing those dollars and paying back later each dollar with less economic goods - the difference capturing the U.S. imperial tax. Here is how this happened.

Early in the 20th century, the U.S. economy began to dominate the world economy. The U.S. dollar was tied to gold, so that the value of the dollar neither increased, nor decreased, but remained the same amount of gold. The Great Depression, with its preceding inflation from 1921 to 1929 and its subsequent ballooning government deficits, had substantially increased the amount of currency in circulation, and thus rendered the backing of U.S. dollars by gold impossible. This led Roosevelt to decouple the dollar from gold in 1932. Up to this point, the U.S. may have well dominated the world economy, but from an economic point of view, it was not an empire. The fixed value of the dollar did not allow the Americans to extract economic benefits from other countries by supplying them with dollars convertible to gold.

Economically, the American Empire was born with Bretton Woods in 1945. The U.S. dollar was not fully convertible to gold, but was made convertible to gold only to foreign governments. This established the dollar as the reserve currency of the world. It was possible, because during WWII, the United States had supplied its allies with provisions, demanding gold as payment, thus accumulating significant portion of the world's gold. An Empire would not have been possible if, following the Bretton Woods arrangement, the dollar supply was kept limited and within the availability of gold, so as to fully exchange back dollars for gold. However, the guns-and-butter policy of the 1960's was an imperial one: the dollar supply was relentlessly increased to finance Vietnam and LBJ's Great Society. Most of those dollars were handed over to foreigners in exchange for economic goods, without the prospect of buying them back at the same value. The increase in dollar holdings of foreigners via persistent U.S. trade deficits was tantamount to a tax - the classical inflation tax that a country imposes on its own citizens, this time around an inflation tax that U.S. imposed on rest of the world.

more...

[EuroObserver]

87. Yes, an old man, a Belgian freedom-fighter, neighbor of mine,

who died just one week short of his 90th birthday on the island of Fuerteventura a few years ago, as I tried to help, as I'd tried to keep him company during the preceeding ten years or so since his wife died, used to go on and on, sometimes, trying to tell me this, to warn me of this. So I looked into it, and saw it was historically true. The USA did not (eventually) fight in two Great Wars (and others) for freedom, or democracy, or any such 'noble' principle, but in exchange for Gold. To obtain US support, one had to pay. At wartime prices. The British (Empire) above all. Gore Vidal's novel 'The Golden Age' gives some clues to this; then there are a historian's sources.

This much is history. I buried him, in the company of a hundred representatives from the village, in total silence, with great respect. :headbang:

ed: out of respect, I should add: Stonemason and freedom fighter. Of the old school.

[AnneD]

96. Thanks Euro...

I love Gore Vidal and will hunt that book up. Sounds like a meaty topic.
Your friend sounded like a wise elder. I am sure he appreciated your company. I love working with the elderly-they have so much wisdom (and great stories). Unfortunantly, working in Nursing Homes in the US as a Nurse leaves much to be desired. But that is another thread.

[UpInArms]

68. Platts says OPEC's Dec output fell by 250,000 barrels a day

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38735.4119088426-857637970&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- OPEC crude production fell by 250,000 barrels a day in December to average 29.8 million barrels a day for the month, according to a survey by Platts. Iraq's output and export problems grew worse and pipeline sabotage shut in some Nigerian production, said Platts, a division of McGraw-Hill Cos. (MHP) A 50,000 barrel-a-day decline in Saudi production also contributed to the decline from November's average of 30.05 million barrels a day, Platts said. December was the first time since April that output from the Organization of Petroleum Exporting Countries had fallen below 30 million barrels a day.

[UpInArms]

72. Feb Crude @ $66.30 bbl - Feb NatGas @ $9.19 mln btus

10:09am 01/18/06 FEB CRUDE FALLS 1C TO $66.30/BRL IN EARLY NY TRADING

10:09am 01/18/06 FEB NATURAL GAS ADDS 2.2C TO TRADE AT $9.19/MLN BTUS

[UpInArms]

108. Feb Crude @ $65.90 bbl

12:02pm 01/18/06 FEB CRUDE FALLS 41C TO $65.90/BRL AFTER $66.90 HIGH

[UpInArms]

112. Feb Crude @ $65.55 bbl - Feb NatGas @ $8.61 mln btus

1:08pm 01/18/06 FEB NATURAL GAS DROPS 55.8C, OR 61.%, TO $8.61/MLN BTUS

1:08pm 01/18/06 FEB NATURAL GAS TRADES AT LOWEST LEVEL SINCE MID-JUNE

1:08pm 01/18/06 FEB CRUDE DOWN 76C AT $65.55/BRL, WELL BELOW $66.90 HIGH

[UpInArms]

135. Feb Crude closes @ $65.73 bbl - Feb NatGas @ $8.694 mln btus

3:00pm 01/18/06 FEB NATURAL GAS CLOSES AT LOWEST LEVEL SINCE JUNE 30

3:00pm 01/18/06 FEB NATURAL GAS DROPS 5.2% TO END AT $8.694/MLN BTUS

3:00pm 01/18/06 FEB CRUDE CLOSES AT $65.73/BRL, DOWN 58C AFTER $66.90 HIGH

[UpInArms]

138. Forget Cheaper Oil in 2006?

http://www.businessweek.com/bwdaily/dnflash/jan2006/nf20060118_8113_db039.htm

Only a month ago chances seemed good that 2006 would break the streak of five consecutive years of rising oil prices. But not anymore. Less than three weeks into the new year, the prospect that the average price per barrel for light, sweet U.S. crude in 2006 would fall below last year's nearly $57 per barrel look considerably diminished.

Political turmoil in Iran and Nigeria, two key exporters, combined with the Bush Administration's determination to crack down on Tehran's nuclear program are to blame. These factors have sent crude prices back toward the $70-plus high-water mark hit last September when hurricanes battered oil installations in the U.S. Gulf Coast. On Jan. 17 prices jumped more than $2 per barrel to nearly $67. In trading on Jan. 18, oil held onto most of its gains: The price for U.S. benchmark futures contracts for Februrary delivery fell slightly from the previous day's close, to $65.78 per barrel.

The recent surge was prompted by the potent combination of a real cut of more than 200,000 barrels a day in production from Nigeria and fears -- probably exaggerated -- of an output disruption on a far grander scale in Iran. The world can weather the loss of a couple of hundred thousand barrels daily from Nigeria, although the perennial unrest that swirls around the Niger Delta's oil facilities appears to be on an upward curve. But the shutoff of Iranian exports would be a far more serious matter. "Frankly, we couldn't cope with the loss of Iranian oil," says Leo Drollas, deputy director of the Center for Global Energy Studies, a London-based think tank.

FEAR AND LOATHING. The calculus is very simple. The world's spare capacity is about 2 million barrels per day, nearly all of it in Saudi Arabia. The loss of Iran's 2.5 million barrels in daily exports would breach that limit in one shot, sending prices who knows where. "With oil supplies so tightly balanced right now, it doesn't take much to stir the imagination," says Bernard J. Picchi, an analyst at Foresight Research, a New York-based independent research firm. "This wouldn't have happened five years ago," when the world was awash in oil, he adds.

...more...

[amandabeech]

146. Nigerian crude, Bonny light, is of extremely high quality.

It is "light," meaning that it contains fewer carbon atoms per hydrogen atoms, and low-sulfur. It is likely that any additional crude coming out of Saudi Arabia is likely to be heavier and higher in sulfur.

Not all refineries that use Nigerian crude can easily substitute Saudi heavier crude.

If the Nigerian situation continues to worsen, and more heavier crude is substituted for the light, then the actualy output of lighter products such as gasoline and diesel may decrease.

Crude is not always fungible. I'm surprised that BW doesn't know that.

[ozymandius]

9. Consumer confidence gauge falls: report

NEW YORK (Reuters) - U.S. consumer confidence slid sharply in the latest week as prices of heating fuels and gasoline rose, ABC News and the Washington Post said on Tuesday in a weekly survey.

ABC News and the Washington Post said their Consumer Comfort Index fell to -13 in the week ended January 15, down from -8 the prior week.

more...

[liberal N proud]

11. How is Tokyo going to effect Wall Street?

Selling stampede shuts Tokyo stock market
Capacity constraints trigger closure of world's second biggest bourse

Updated: 3:38 a.m. ET Jan. 18, 2006
TOKYO - A stampede of sell orders forced the shut-down of the world’s second-biggest stock exchange on Wednesday as investors fled the Tokyo market, spooked by fall-out from an investigation into Internet company Livedoor
The Tokyo Stock Exchange, where shares were down more than 4 percent at one point, suspended trading 20 minutes before the normal closing time after the number of trades threatened to exceed its computer system’s capacity of 4.5 million per day.
http://www.msnbc.msn.com/id/10900819/

[ozymandius]

13. Futures point to a neurotic day.

Nasdaq futures have already issued a warning that a nosedive awaits morning trading. With Intel and Yahoo reporting badly - the whole tech sector will suffer. This could bleed into blue chips as companies like IBM and GE are exposed to tech companies.

Could be ugly.

[54anickel]

24. Eww, they are still down. I checked last night after a late post to the

thread about the troubles overseas. They DOW was down some 80 points, but bounced back to -50. I thought there was some magic in the works before this mornings open, but I guess not. Those fairies are going to be working mighty hard to try and "ease" the markets down.

[ozymandius]

12. Bye-bye, rally?

Disappointing results from Intel, Yahoo!, surging oil, could mean that the 2006 rally is history.

NEW YORK (CNNMoney.com) - There could be a tech wreck on Wall Street early Wednesday as big earnings misses from Intel and Yahoo!, as well as rising oil prices, look set to drive stocks sharply lower at the open.

The news from the two U.S. tech giants, as well as an investigation into Japanese Internet company Livedoor, helped spark a sell-off in markets around the world, with Tokyo shares tumbling 3 percent, and European stocks slumping in early trading.

-cut-

Yahoo! (Research) also missed fourth quarter forecasts and issued lower-than-expected sales guidance, painting a bleak picture for the tech industry. The stock sank about 11 percent in Frankfurt. (More U.S. stocks traded in Frankfurt.)

A number of big-name companies are due to report results later Wednesday, including J.P. Morgan Chase (Research), Apple Computer Inc (Research). and eBay Inc. (Research)

more...

http://money.cnn.com/2006/01/18/markets/stockswatch/index.htm

[JNelson6563]

14. Things look grim

Many will tune into this thread today for answers on the bloodbath that will be the trading day.

Thanks for keeping us all informed Marketeers! :hi:

Julie

[EuroObserver]

16. Stand by...

...to pick up some Apple, Google or whatever shares at a nice price when the time comes?

...check out oil, gas, other (especially alternative) energy?

...keep an eye on precious metals?

-->above all, remember The Hitch-hiker's Guide: DON'T PANIC

ed: observe, European markets now stabilising... Gold rising again now...

[JNelson6563]

17. There's always opportunity somewhere, of course

but I think there will be reckonings. I agree that there is no need to panic. Besides, I brought my towel. :-)

Julie

[AnneD]

53. Julie...

:hi: Heck with the towel. I don't think it is too early:beer: :popcorn: It will be a most interesting day.

Thank you Jesus I am transfered my big IRA. My 403B small and is 30% guaranteed,13% growth,5%small cap growth, 10% emerging markets, 12% a portfolio. It should be an interesting read. I was told that you pay attention to what holds value in a downturn. I feel much better prepared thanks to you guys.

[Maeve]

98. Good. You should always know where your towel is

You can loan it to others to cry into....

Y'all ever see the 1999 version of "House on Haunted Hill"? The market seems too close to the roller coaster in the opening of that movie (track opens, car goes flying..that sort of thing)

[ret5hd]

ecactly what would a "nice price" for google be? (nt)

[oioioi]

36. anything below $1000 / share

GOOG is still probably a good buy relative to its long term potential, although you have to have the stomach to watch it come off maybe 50% in the short term.

[EuroObserver]

45. Keep watching that (short) term n/t

[RawMaterials]

52. historically advertising company's do really

bad in a recession and goog scares me because they not only are just advertising right now its this new fangled internet advertising.
with the inverted yield curve, I wouldn't want to be betting on higher prices for goog.

[oioioi]

55. Yeah, but long term, GOOG will be the ONLY way into US consumer market

This isn't just ad space in the New Yorker.

GOOG's future is complete control of the supply chain of information between business and consumer.

It's too hot for me to touch as a stock, but (unfortunately) GOOG's operation isn't going away.

[oioioi]

58. INTC over-reaction - looks oversold

Now down almost 11%

Intel said Tuesday that fourth-quarter earnings rose 16% to $2.45 billion, or 40 cents a share, missing estimates by 3 cents due to a shortfall in sales of microprocessors for desktop computers. Fourth-quarter sales rose 6% to $10.2 billion, well below the company's previous estimate of $10.4 billion to $10.6 billion and the Wall Street consensus estimate of $10.56 billion.

http://www.thestreet.com/_yahoo/tech/hardware/10262223.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

[zippy890]

19. double thanks!

I always check in on this thread - great info
:hi:

[UpInArms]

29. U.S. stocks set to plunge on Intel, Yahoo, Tokyo slide

http://www.marketwatch.com/news/story.asp?guid=%7B3045A299%2D05EA%2D45C4%2DB842%2D6B3A8475C08C%7D&symbol=&siteid=mktw

NEW YORK (MarketWatch) - U.S. stock futures are pointing to major losses at the open Wednesday as weaker-than-expected results from Intel Corp. and Yahoo Inc. stoked concern the fourth-quarter earnings season is not living up to expectations, with a fresh spike in crude-oil prices also weighing on sentiment.

A plunge in Tokyo so severe that the market had to close early further unsettled investors. The fall was triggered by a probe into Japanese Internet company Livedoor. See full story.

Dow futures were off 84 points at 10,850, Nasdaq 100 futures dropped 33.5 points to 10,850 while S&P 500 futures fell 10 points to 1,279.50.

"It's going to start bad but the key is how the market finishes," said John Hughes, managing director at Epiphany Equity Research. "You've haven't really had any good earnings reports just yet and after the big run-up, you're going to have a lot of people questioning whether or not there is valid, fundamental support for that run."

Commenting on the plunge in Japan's stock market, Hughes said it was "disconcerting," for equity traders as it raised the possibility U.S. markets could follow suit with a similar run of down days.

Hughes added that the rise in oil is not helping matters. "It's not as if we haven't dealt with crude prices at these levels, but again you're pushing up against the historic highs."

...more...

Hang on to your hats, folks. It's gonna be a wild ride.

[arachide]

20. 369 days left in the * regime???

I must have missed something! Oh please, tell me I slept through a couple of years of this...

[Roland99]

21. I was wondering the same thing.

Maybe oz knows something we don't?

;)

[EuroObserver]

22. Marketwatch: A Perfect Storm

(Yup, who else is reminded of that inside-view book describing the rise to greatness of the long-gone Data General Computers?)

http://www.marketwatch.com/news/story.asp?guid=%7B74A1A85F%2DC0E4%2D436C%2DA818%2DD9695846CE33%7D&siteid=bizjournal&dist=
Intel, Yahoo, Tokyo slam stock futures
Citigroup, UBS both downgrade Intel
By Steve Goldstein, MarketWatch
Last Update: 7:28 AM ET Jan. 18, 2006

LONDON (MarketWatch) - U.S. stock market futures pointed to a tumble Wednesday, on results from Intel Corp. and Yahoo Inc. that missed expectations and a stock slide in Tokyo so severe the market had to close early. A slightly better-than-forecast earnings report from J.P. Morgan Chase provided a floor to the losses.
MARKETWATCH TOP NEWS
Intel, Yahoo, Tokyo point to U.S. market tumble
Tokyo slammed as orders overwhelm exchange
Intel tumbles 10% in pre-open on sales miss, outlook
CORRECT: Yahoo shares drop 13% on results, outlook

S&P 500 futures dropped 10.8 points at 1,278.70 and Nasdaq 100 futures were down 34.5 points at 1,717.0. Dow industrials futures slid 80 points.
...
Intel tumbled over 10% in pre-open trade after it reported a 6% sales rise, which missed its own estimate as demand for desktop PC chips softened in the quarter. Its first quarter sales forecast also was below consensus forecasts. See Intel story.
...
Yahoo Inc. also disappointed on fourth quarter earnings and first-quarter outlook, losing 11%. Rival Google fell more than 4% in the pre-open. /more...

[UpInArms]

27. daily dollar watch

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

Last trade 89.11 Change -0.25 (-0.28%)

Dollar Weak Ahead of TIC

http://www.dailyfx.com/story/dailyfx_reports/daily_brief/6128_dollar_weak_ahead_of.html

The euro recaptured the 1.2100 handle once again in early European trade buoyed by a healthy jump in Industrial Production and continued demand from Middle East accounts. EZ Industrial Production rose 1.3% vs. 1.0% expected to the highest level in 6 months. Surprisingly German data actually declined in November from the month prior, but the losses were more than offset by a jump in French Industrial activity along with increases from Italy, UK and Ireland. The news suggests that the business sector recovery is indeed broad based and should bode well for EZ growth in the upcoming quarter. The fact that EUR/USD refuses to give up the 1.2100 figure indicates that the currency is benefiting from reserve diversification with global investors now shifting part of their capital from dollars to euros. If the EU can keep its political problems at bay while producing steady, albeit unremarkable growth for the next two quarters the single currency may see further gains as worries about US structural imbalances resurface once again.

On that note, today’s TICs data may set the tone of trading for the rest of the week. If the number meets the $80 Billion expectation more that offsetting the -$65 Billion Trade Balance dollar worries may abate. However, even a match of flows would be viewed negatively by the market as it would suggest that foreign capital flows – so critical to financing of US deficits – may be on the verge of contracting just at the moment when US needs them the most.

Finally, in a turn of events that always makes FX so interesting and unpredictable, the yen strengthened materially despite the fact that Nikkei suffered its third day of severe losses, dropping as much as 6% before rebounding slightly. Such action would normally connote a weakness in the currency, but the massive margin calls in Japanese equity market created a need to repatriate funds from abroad by Japanese spec accounts needing to meet their capital requirements. Thus the rally in the yen.

[EuroObserver]

31. "(Euro) continued demand from Middle East accounts."

Hmmm.

"massive margin calls in Japanese equity market created a need to repatriate funds"

Double Hmmm.

[AnneD]

69. Wonder what Cheney's tour to the Mid East...

is yielding?

[54anickel]

74. Perhaps the euro's "continued demand from Middle East accounts"

You don't suppose the House of Saud placed an order to reiterate their "request" of Cheney's patience with Iran, do ya?

I nearly choked when I read that headline in LBN lastnight! "Mideast Asks Cheney for Patience With Iran" Something tells me it was less a request and more of a demand to "back off".

[AnneD]

84. SA has Bush and Cheney by the short hairs....

but it seems like Germany and the EU are the ones with the short fuse. They are the ones bent on taking Iran to the Security Council. China and Russia, while concerned appear to want to broker a deal still. It may get really intense over there.

[54anickel]

86. Short fuse or buying time? Would be difficult for Bushco to bomb

Iran while the issue is being taken up with the Security Council. Just a guess on my part, who knows what really goes on in this global chess game for dominance. :shrug:

[EuroObserver]

92. It's not Chess. It's more like Wei-chi, or Go

(much more subtle; much less obviously aggressive)

[AnneD]

93. Bush and the neocons would love to spread

'democracy' in Iran but we really can't right now. What I meant is that Germany really seems to be pushing the point. I heard that the Chancelor went ballistic at some of the remarks that the President(?) of Iran made. I think that is the reason for some of the thaw in German American relations. They really loath Bush and I was surprised at the recent visit. There are some interesting political dynamics in play at the moment.

[54anickel]

103. Ah yes, the Iranian President Mahmoud Ahmadinejad (I had to look

up his name as well)....I don't quite know what to make of him and his comments yet. One moment he comes off as fairly reasonable, the next he sounds like a raging lunatic. Sort of reminds me of my "buddy" Mahathir Mohamad. He'd toss out those tidbits of red meat to get the dogs off his scent while he defied the IMF and put the screws to the western capitalists. While there may not be a lot to like about Mahathir, I can't help but admire the transformation of Malaysia's economy under his rule.

[AnneD]

125. I am reading it the same way.

Remember, he has a hard line constituency and some of these tidbits of red meat may be for home consumption.

[EuroObserver]

50. So, the Canadian dollar heads in the opposite direction?

What gives?

[UpInArms]

30. Personal bankruptcies cost J.P. Morgan $403 mln in Q4

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38735.3654872801-857629235&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- J.P. Morgan Chase & Co (JPM) said Wednesday that a surge in personal bankruptcies in October cost the firm $403 million after tax as the impact worked its way through the balance sheet in the fourth quarter. The company said pre-tax, the effect of the bankruptcy filing was $650 million. "The total consumer managed provision for credit losses was $2.4 billion, $581 million higher than the prior year, primarily due to higher bankruptcy-related net charge-offs in Card Services and the release, in the fourth quarter of 2004, of the allowance for loan losses related to the sale of the manufactured home loan portfolio in Retail Financial Services," the company said.

[hatrack]

41. Crying here. Really.

Poor, poor J.P. Morgan Chase!!

:evilgrin:

[UpInArms]

35. $US1bn payment to Indonesians sparks scrutiny

http://www.theage.com.au/news/national/us1bn-payment-to-indonesians-sparks-scrutiny/2006/01/18/1137553652087.html

FREEPORT-McMoRan Copper & Gold paid Indonesia about $US1billion ($A1.33 billion) since 2004, including a sum for security at the Grasberg mine in Irian Jaya that has sparked a US Government inquiry, according to its chief executive, Richard Adkerson.

All payments were fully disclosed, and New Orleans-based Freeport spent about $US7 million a year to guard the mine, Mr Adkerson said.

Between 1998 and 2004, Freeport paid military and police officials almost $20 million, the New York Times reported last month, citing company records it had obtained.

"The amounts we're talking about are not unreasonable," Mr Adkerson said. He was not not sure where the amounts reported in Times came from.

The US Government had made inquiries since the article and an editorial were published, Mr Adkerson said. The $US1 billion in payments includes taxes, royalties and profit from the Government's 9.36 per cent stake in Grasberg, the world's biggest gold and second-biggest copper mine.

...more...

[UpInArms]

37. AT&T to pay $25 million for code violations

http://www.signonsandiego.com/news/business/20060118-9999-1b18settle.html

AT&T has agreed to pay as much as $25 million to settle a lawsuit that contended the telecommunications company repeatedly failed to test and repair its network of underground fuel storage tanks.

The settlement was announced yesterday in Oakland by state Attorney General Bill Lockyer, who brought the suit along with district attorneys in San Diego, Los Angeles, Alameda, Monterey, Solano and San Joaquin counties, as well as San Diego City Attorney Michael Aguirre.

The suit alleged 17 violations of the state's Health and Safety Code and Unfair Competition Law.

"Every day they (AT&T officials) postponed inspections and repairs, they risked catastrophic leaks and spills of MTBE (methyl tertiary butyl ether) and other toxic chemicals into our environment and surrounding communities," Lockyer said.

"This settlement will force AT&T to overhaul its business practices throughout the state so that its underground storage tanks, and the public, are safe."

...more...

[54anickel]

39. The Perfect Time to Buy Palladium (Mogambo)

http://www.kitco.com/ind/Daughty/jan182006.html

- I knew something was wrong when I woke up Friday morning. Not only was my Wall Street Journal missing, but my wife was acting real nervous and suspicious, and the damned kid was hiding behind the couch. What the hell is going on? I soon found out, and, as obviously predicted, was highly frightened to see that Total Fed Credit actually declined by $17 billion last week! The ability, or actions, of the banks in creating money out of thin air was, gulp, lowered by $17 billion dollars? In one freaking WEEK?

To be fair, reversing the excesses of the customary end-of-year monetary goosing by the Federal Reserve is pretty par for the course, as it happens every year about this time. But meanwhile, the money supply is still growing quite handsomely, as reported by Bill Bonner at DailyReckoning.com, who writes "In the latest reported week, more than $25 billion was added to the nation’s money supply. If this were to continue, it would add more new money in 18 months than the present value of all the gold ever mined." Hahaha! The money supply is going up faster than the growth in the economy, which means that prices will increase (to absorb all that money), and the supply of money is increasing, in one lousy freaking year, more than the value of all the gold in the whole world? And now you wonder if gold is going to go up in price? Hahaha! It's not IF gold will go up, my darling little Mogambo larva (DLML), but how freaking MUCH it is going to go up in price! And I am betting gold will go up a LOT! And if it does not, then I will be surprised as hell (SAH) because this would be the first time in all of history when gold did NOT rise mightily in price when faced with the enormous economic idiocies, like the ones that currently bedevil us, especially when using a fiat currency as money!

But we aren't here to talk about gold and how freaking much money is going to be made in gold, although it is one of my favorite things to talk about. Instead, we were talking about the money supply, and almost as if by accident I happened upon the essay "The Fed's Money Supply Armament Is Underway" by Robert McHugh, which was posted on Financial Sense.com. He writes that the money supply figure known as M-3 "has been launched into outer space, up another $56.3 billion last week, up $92.4 billion over the past two. This is some real horsepower. Over six weeks," he says, M-3 is "up $177.8 billion. These annualized growth rates are 28.7 percent, 23.6 percent, and 15.3 percent respectively."

snip>

So how would you describe how big government is, but without actually using numbers? She thinks about it for a moment. "Big Government in America is so huge," she says, "it boggles the mind and numbs the senses."

And if you are thinking "What in the hell do they do with all the money?", then welcome to the club. Well, perhaps Robert B. can help enlighten us when he writes "The 10 Commandments: 179 words. The Declaration of Independence: 1,300 words. The US Government regulations on the sale of cabbage: 26,911 words. "Hahaha! Now you know what they are doing with their time!


more...

[EuroObserver]

47. Hahaha!

Thanks! I'll read this now, over lunch!

[oioioi]

48. Gold tough to call.

Some very big vested interests with large holdings and strong motivations to keep AU price relatively stable regardless of money supply. Looking to short POG if goes radically higher in the short term - a good run for the past year - there might be another 20% in it, particularly if Iran rhetoric heats up more, but I doubt it.

[oioioi]

75. Gold selling off - down $10

I expect to stablize at about $500 longer term.

[OrangeCountyDemocrat]

119. Gold Won't Reach $500 Again nt

[ret5hd]

126. i tend to agree...

but it could go down as low as $480 without breaking thru current trend-lines...if it does it soon. If it does, it is an excellent buying opprtunity...but then, i think todays price is also (i just don't have any money).

[UpInArms]

40. AMR (American Airlines) 4Q loss widens to $604M vs year-ago $387M

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38735.3763767245-857631337&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- AMR Corp. (AMR) Wednesday posted a loss of $604 million, or $3.49 a share, for the fourth quarter, wider than its year-ago loss of $387 million, or $2.40 a share. The latest results for the parent company of American Airlines include $155 million in aircraft charges, $73 million in facility charges, a $37 million gain related to debt restructuring. Excluding items, the company lost $413 million, or $2.39 a share, in the quarter. Revenue rose 13.8% in the latest three months to $5.17 billion from $4.54 billion in the same period a year earlier. The average estimate of analysts polled by Thomson First Call was for a loss of $2.55 a share in the December period. The stock closed Wednesday at $18.86, down 7.2%.

[54anickel]

44. Hedge fund failures on the rise as market grows

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2006-01-17T154636Z_01_L17402783_RTRUKOC_0_US-FINANCIAL-HEDGE-FAILURE-ANALYSIS.xml

LONDON (Reuters) - A record number of hedge funds went bust last year, and the failure rate is likely to keep accelerating, but unfazed investors see this as a sign of health in a growing market.

Chicago-based data provider Hedge Fund Research estimates that around 5.7 percent of the total of more than 8,500 hedge funds closed in 2005, compared with 3.6 percent of around 7,500 in 2004.

The previous high was 5.5 percent of around 5,500 in 2002.

Over the next five years the casualty rate could rise to 10 percent or higher as more hedge funds enter the market to meet growing demand from institutional investors such as pension funds and insurance companies, investors say.

"More people are aware of how institutional allocations have changed," said Gavin Rankin, head of investment analysis in Europe at Citigroup Private Bank. "There is more demand. You will see many more hedge funds starting up.

more selling of this latest Ponzi scheme....

[donkeyotay]

117. I'm no financial guru like Greenspan or Mogambo

But haven't hedge funds simply been the vehicle by which regulation was removed from the market? The retail investor, the widows and orphans were enticed to think mutual funds were safe. Along comes hedge funds who ignore limits on leverage, who operate in secrecy and try to manipulate markets like the Robber Barons did in the good old days. Then gradually, hedge funds (originally just being for rich people who could afford to lose the money) became for pension funds and too big to fail. In fact, could these hedge fund failures have anything to do with the M-3 ballooning? We would be the last to know.

[ret5hd]

128. heeheehee...i'm gonna email mogambo and tell 'im...

that you think he's on the same level as greenspan...

i think you're gonna get a dose of "The Great Mogambo Can O' Whoop-Ass"(TGMCOWH).

:rofl: :rofl: :rofl: :rofl:

[donkeyotay]

136. Think how much more entertaining fed-speak would be if M. was chair

If he delivers TGMCOWA please post it here in the SMW so I can catch it.

:hi:

[UpInArms]

46. pre-opening blather

09:00 am : S&P futures vs fair value: -8.3. Nasdaq futures vs fair value: -29.0. The cash market remains poised to open well below the unchanged mark. The Technology sector remains the drag and will likely maintain the spotlight as investors continue to dwell on disappointing reports from INTC and YHOO, and as they await post-close earnings news from Apple (APPL), Advanced Micro (AMD), and QLogic (QLGC). The Financial sector is apt to garner similar attention on account of recent reports from JP Morgan (JPM), Mellon (MEL), Northern Trust (NTRS), and Schwab (SCHW). JPM and MEL slightly exceeded EPS expectations, while NTRS and SCHW modestly missed them. Washington Mutual (WM) is slated to report after the bell.

08:33 am : S&P futures vs fair value: -8.7. Nasdaq futures vs fair value: -28.0. Recently released December CPI data reflected a 0.2% rise in the core rate, matching economists' expectations. Total CPI unexpectedly fell 0.1% versus the expected 0.2% increase. Stock futures continue to indicate a sharply lower open as INTC and YHOO remain in focus; bonds have rallied in the data's immediate wake. Separately, decidedly bearish overseas trading, particularly in Asian markets, exacerbates the downbeat domestic tone. The Nikkei fell 3% in its most recent session, which ended early for the first time because of a selling surge.

07:59 am : S&P futures vs fair value: -7.7. Nasdaq futures vs fair value: -29.0. Versus fair value, futures trade indicates a sharply lower open for the cash market. Behind the bearish sentiment is a pair of disappointing Q4 earnings reports from tech bellwethers Intel (INTC) and Yahoo (YHOO). Following yesterday's close, the former delivered EPS of $0.40 and fell $0.03 short of expectations. Revenue was light, and the chip maker issued downside revenue guidance for the current quarter. Four analyst downgrades have been prompted. YHOO, meanwhile, missed estimates by a penny with its $0.16 per share. Its Q4 sales and Q1 guidance were in-line with expectations. INTC and YHOO shares have plunged 10% and 11%, respectively.

[RawMaterials]

51. Buffett Issues Warning Over Trade Deficit

RENO, Nev. (AP) -- The U.S. trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to "political turmoil," billionaire investor Warren Buffett warned.


"Right now, the rest of the world owns $3 trillion more of us than we own of them," Buffett told business students and faculty Tuesday at the University of Nevada, Reno. "In my view, it will create political turmoil at some point. ... Pretty soon, I think there will be a big adjustment," he said without elaborating.



snip..

The U.S. trade deficit soared to a record $665.9 billion in 2004, and Buffett said he expects it to top $700 billion this year.

"That's $2 billion a day. We are like a super rich family that owns a farm the size of Texas. You sell off a little bit of the farm and you don't see it," he said.

Fifteen years ago, the U.S. had no trade deficit with China, he said.

"Now it's $200 billion. If we don't change the course, the rest of the world could own $15 trillion of us. That's pretty substantial. That's equal to the value of all American stock," Buffett said.

http://biz.yahoo.com/ap/060118/warren_buffett.html?.v=3

:hi:
Morning Everyone today might be an interesting day.
Hope Everyone has a good one.

[AnneD]

57. The Oracle has spoken...

too bad it falls on deaf ears in the White House. Wonder when and if they'll reverse those tax cuts. They have almost sapped everything out of the lower middle class and mid middle class. I noticed that some of their new tax proposals will hit the upper middle class. It really has become a class war.

[wordpix2]

113. Buffett is right--where will this huge deficit end?

[UpInArms]

54. 9:32 EST PPT working on the DOW - Nasdaq cratering

Dow 10,870.31 -26.01 (-0.24%)
Nasdaq 2,264.89 -37.80 (-1.64%)
S&P 500 1,277.72 -5.21 (-0.41%)
10-Yr Bond 4.320 -0.12 (-0.28%)

NYSE Volume 45,518,000
Nasdaq Volume 110,884,000

[UpInArms]

61. 9:45 EST pay no attention to that man behind the curtain

Dow 10,873.35 -22.97 (-0.21%)
Nasdaq 2,272.73 -29.96 (-1.30%)
S&P 500 1,278.23 -4.70 (-0.37%)
10-Yr Bond 4.312 -0.20 (-0.46%)

NYSE Volume 177,470,000
Nasdaq Volume 285,523,000

09:40 am : As expected, the stock market opened sharply lower and launched each of the major averages well into the red. Due to a pair of fourth quarter earnings disppointments announced following yesterday's bell, there's a wide divergence between the tech-heavy Nasdaq its blue chip counterparts. Intel's (INTC) profit and revenues fell short of analysts' estimates, and the company issued downside revenue guidance for the current quarter. Yahoo (YHOO) reported profit a penny below expectations on light sales. While these reports do not indicate how Q4 earnings in general will check in, they are presently driving trading and stirring concerns over the upcoming quarters during which we expect earnings growth to slow. Adding to the bearish backdrop are crude's $66.50 (+0.20) per barrel price tag and a sharp sell of in the Japanese Nikkei (-3%). On the economic front, December CPI is in focus. The expected 0.2% uptick in the core rate is ambiguous, however, as it reflects a firming trend that, at the same time, isn't enough to cause great concern. DJ30 -46.27 NASDAQ -36.28 SP500 -6.56

09:13 am : S&P futures vs fair value: -6.4. Nasdaq futures vs fair value: -25.5.

[ozymandius]

64. 9:53 and still stammering

Dow 10,864.22 -32.10 (-0.29%)
Nasdaq 2,274.42 -28.27 (-1.23%)
S&P 500 1,278.29 -4.64 (-0.36%)
10-Yr Bond 43.14 -0.18 (-0.42%)
NYSE Volume 239,318,000
Nasdaq Volume 367,426,000

[54anickel]

62. Makes you wonder how bad off the NAS really is....

From previous discussions and articles it's my understanding that the PPT usually concentrates on the S&P and DOW. Generally there is enough "cross-over" into the tech sector to flow over into the NAS. Must be some big drops going on in the NAS today for that MO to be failing today. Wonder if they'll move directly into the NAS at the 10:00 push. :shrug:

[AnneD]

65. Those are the 64K questions....

how good are the brakes, how long or often can they apply them, and can they stop momentum. A very exciting day on WS.

[54anickel]

77. Off topic, but your post reminded me of that runaway train back in

May of 2001. I just had to google for an article on it. Just trying to picture Greenspin or Chopper Ben hopping onto a moving train.

http://archives.cnn.com/2001/US/05/16/runaway.train/

[AnneD]

89. And our Stock Watch Thread theme song today is....

Locomotive Breath by Jethro Tull...

In the shuffling madess
Of the locomotive breath,
Runs the all-time loser,
Headlong to his death.
He feels the piston scraping --
Steam breaking on his brow --
Old charlie stole the handle and
The train won’t stop going --
No way to slow down.

He sees his children jumping off
At the stations -- one by one.
His woman and his best friend --
In bed and having fun.
He’s crawling down the corridor
On his hands and knees --
<snip>
He hears the silence howling --
Catches angels as they fall.
And the all-time winner
Has got him by the balls.
He picks up gideons Bible --
Open at page one --
<snip>
jethro tull lyrics

[54anickel]

95. Excellent choice AnneD!!! Loved that song back in the days. I'll

have to go dig the old album out of the library now. I've been thinking about putting together a SMW collection - something to have playing in the background in the mornings while I participate in this fine daily thread.

Gotta run off to work for the day. I'll be sure to check back to catch up on the day's action. :hi:

[AnneD]

99. That sounds almost like a thread project.....

and kinda cool actually. I'm game for it.

[EuroObserver]

97. Ah! The great Jethro Tull.

Please check out also Jim Jarmusch's great movie "Dead Man", if you haven't yet, (Pandora Films; Johnny Depp, Gary Farmer,... Mili Avital, ... Iggy Pop, Billy Bob Thornton, Jared Harris, Gabriel Byrne, John Hurt, Alfred Molina,... Robert Mitchum, ... Neil Young...

Starts on a train...

ed: from memory:

Every night and every morn
Some to misery are born

Every morn and every night
Some are born to sweet delight

Some are born to sweet delight!
Some are born to endless night.

- William Blake

[54anickel]

60. The Global Delta, Part II (Roach)

http://www.morganstanley.com/GEFdata/digests/20060117-tue.html#anchor0

Despite an outpouring of China hype, today’s world economy is still very much dominated by the behemoths of the industrial world. In the first installment of this essay, I made the simple point that scale effects matter -- that one percentage of nominal GDP growth in either the US or the European economy was the functional equivalent of 7-8 times the dollar-based increment of one percentage point of Chinese growth and fully 18-19 times the increment generated by one percentage point of Indian growth (see my 13 January dispatch, “The Global Delta”). That’s the state of play today. But what about the future? How quickly is this disparity in global growth contributions likely to change in the years ahead?

To answer that question, we ran some simple 30-year simulations of nominal GDP growth in the G-3 economies (US, Europe, and Japan) compared with trajectories in China and India. For each of the economies in question, we made assumptions with respect to long-term potential GDP growth, inflation, and currency movements. In the case of the US economy, nominal GDP growth was held at 6% over the 30-year interval -- consisting of 3% potential real GDP growth and 3% inflation. For Europe, the simulation was run off 5% nominal GDP growth -- comprised of 2% potential growth and 3% inflation. In Japan, we assumed 4% nominal GDP growth -- made up of 2% potential growth and 2% inflation. For China, the simulation was based on 12% nominal GDP growth -- consisting of 7% potential growth, 3% inflation, and 2% annual currency appreciation. And finally, for India, a 10% nominal GDP growth rate was assumed -- comprised of 6% potential growth, 3% inflation, and 1% annualized currency appreciation.

snip>

As noted in the first installment of this essay, the dollar-based translation of China’s and India’s rapid growth rates in 2005 was overwhelmed by the growth contributions of the much larger, but slower-growing economies of the US and Europe. For the G-3, my advice is to enjoy it while you can. Under our steady-state growth simulations, it doesn’t take long for those relative positions to change. Several key milestones are evident over this 30-year time horizon:

snip>

I find this simulation especially useful in that it lays bare the economic assumptions that are embedded in the notion of a China-centric 21st century. Right now, the world is only just beginning to sense what lies ahead if China continues to stay the course of reforms and productivity enhancement. Commodity prices are already surging in response -- oil and non-oil alike. Trade frictions are building as China leads the way in driving the global labor arbitrage. If these assumptions are anywhere close to the mark, the world has a grace period of about five years before it really begins to feel the heat of China’s emergence. How the world then copes with China may well be the biggest what-if of all.

more...

[UpInArms]

63. Printing Press Report:Fed adds reserves via overnight system repos

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-18T144342Z_01_N18346908_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, Jan 18 (Reuters) - The Federal Reserve said on Wednesday that it added temporary reserves to the U.S. banking system through overnight system repurchase agreements.

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

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

[UpInArms]

66. Fed Gov Bies spews

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-18T144819Z_01_WBT004582_RTRIDST_0_ECONOMY-FED-BIES-RATES-URGENT.XML

BETHESDA, Md., Jan 18 (Reuters) - Federal Reserve Board Governor Susan Bies said on Wednesday that economic data would dictate when the U.S. central bank stops raising interest rates, saying the Fed had become much more data-dependent.

"We realized that we are much more data-dependent in this year," she told reporters after speaking to an event sponsored by the Tech Council of Maryland. "We're going to have to watch very carefully to what's happening to inflation, what's happening to capacity utilization, what's happening to employment, so that we can respond and look at the signals to see really how much more we need to do."

Bies said she expects the U.S. economy to slow to a more sustainable pace this year, with growth in the mid-3 percent range.

hmmm.... that seems to be a bit selective in its reporting:

9:34am 01/18/06 BIES SEES SHORT-TERM RISK TO SPENDING FROM HEATING BILLS

9:33am 01/18/06 FED'S BIES SEES 2006 GROWTH IN MID-3% RANGE

9:34am 01/18/06 BIES SEES COOLING HOUSING MARKET, BUT NO BIG DROP

[UpInArms]

67. Odds of March Fed rate hike dip below 50%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38735.4156365278-857638616&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- The odds that the Federal Reserve will raise interest rates at its March 28 meeting dipped below 50% on Wednesday, following a report of a surprising decline in December consumer prices. In the Chicago Board of Trade's federal funds futures market, the price of an April futures contract implied a 48% chance of a rate hike to 4.75% on March 28, down from 56% before the data were released. The market is pricing a 75% chance that the Fed raises rates to 4.75% by mid-summer. A Jan. 31 rate hike to 4.50% is assured at this point, with a 94% chance.

[UpInArms]

73. US Treasuries turn lower on year-on-year CPI gain

http://today.reuters.com/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-01-18T151112Z_01_N18350734_RTRIDST_0_MARKETS-BONDS.XML

NEW YORK, Jan 18 (Reuters) - (Reuters) - U.S. Treasury debt prices turned lower on Wednesday, after a rise in year-on-year consumer inflation caused the market to trim early gains, resulting from declining global equity markets and concerns over high oil prices.

Traders and analysts stressed the rise in the year-over-year core consumer price index at the end of December put the measure above the Fed's comfort zone, and overshadowed an otherwise mild snapshot of inflation at the consumer level.

"The year-on-year was (up) 2.2 percent. That is a change and that is worrisome for the Fed ... You would expect a bit of a sell-off in the bond market," said Kurt Karl, head of economic research at Swiss RE in New York.

Benchmark 10-year notes<US10YT=RR>, often a bellwether of inflation expectations, were off 4/32 for a yield of 4.346 percent.

Signs of inflation normally lead bond investors to reduce their holdings because rising prices erode the value of fixed-income investments.

...more...

[UpInArms]

116. U.S. Treasuries fall on comments by Fed's Lacker

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-18T184030Z_01_NYG000117_RTRIDST_0_MARKETS-BONDS-LACKER-URGENT.XML

NEW YORK, Jan 18 (Reuters) - (Reuters) - U.S. Treasury debt prices turned lower on Wednesday afternoon after Richmond Fed President Jeffrey Lacker highlighted inflationary threats to the economy, particularly those related to energy.

Lacker said to maintain credibility the Fed must remain vigilant in its fight against inflation, and he also repeated the Fed's often-stated line that any pass-through of energy inflation to the broader economy would be unwelcome.

Traders said the market was vulnerable to selling on such statements in part because of comments in a report -- since disavowed -- by European central banker Bini Smaghi -- that he favored higher rates in the euro zone.

...more...

[UpInArms]

124. Fed's Lacker says at least one more rate hike to go

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-18T193451Z_01_WBT004594_RTRIDST_0_ECONOMY-FED-LACKER-RATES-URGENT.XML

BALTIMORE, Jan 18 (Reuters) - The Federal Reserve has at least one more rate hike to go before halting its 18-month tightening campaign but policy visibility expires beyond that point, one of its top officials said on Wednesday.

"The (Dec. 13) minutes suggested that a couple more increases, a number of further increases, are in store. I think that means at least one. Beyond that, I don't really have anything to offer by way of guidance," Richmond Federal Reserve President Jeffrey Lacker told reporters. He was speaking after delivering a speech to a Towson University-sponsored conference.

Lacker was talking about the minutes of the Dec. 13 meeting of the Fed's interest-rate setting Federal Open Market Committee, of which he is a voting member this year.

"We're obviously going to take it a meeting at a time and do our best to assess what the appropriate rate is. From my point of view I will be looking at whether the current rate and the expected trajectory of the rate is consistent with a balance in terms of current versus future resources," he said.

[UpInArms]

131. Treasury investors more bearish in week - poll

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-18T200455Z_01_N18216783_RTRIDST_0_FINANCIAL-TREASURIES-JPMORGAN.XML

NEW YORK, Jan 18 (Reuters) - More investors turned bearish on Treasuries for a second week despite a growing view the Federal Reserve could soon stop raising U.S. interest rates, a poll released on Wednesday showed.

Investors who said on Tuesday they were "short" Treasuries, holding fewer U.S. government securities than their portfolio benchmarks, grew to 47 percent from 41 percent a week ago and 36 percent the previous week, J.P. Morgan Securities said.

The survey showed the greatest number of outright shorts since September 2005, J.P. Morgan said.

The share of "long" investors, those holding more Treasuries than their benchmarks, held steady at 9 percent, while the number of "neutral" investors holding Treasuries equal to their benchmarks declined to 44 percent from 50 percent.

...more...

[UpInArms]

70. 10:04 EST looking for the bounce?

Dow 10,857.66 -38.66 (-0.35%)
Nasdaq 2,273.21 -29.48 (-1.28%)
S&P 500 1,278.14 -4.79 (-0.37%)
10-Yr Bond 4.326 -0.06 (-0.14%)

NYSE Volume 321,129,000
Nasdaq Volume 467,486,000

[54anickel]

71. Retiring with Bernanke-Are You Prepared?

http://www.kitcocasey.com/displayArticle.php?id=490

When you plan for retirement, do you take the long-term economic outlook into account? The world is changing, and if we are to be prepared, we should step out of the box and look at what may be driving the markets in the coming years.

While you may be busy developing your retirement plan for the distant future, Ben Bernanke, successor to Federal Reserve (Fed) Chairman Alan Greenspan, will be guiding the Fed for the foreseeable future. As we elaborate below, Bernanke inherits unprecedented challenges. We lay out scenarios that may not be captured by traditional allocation models. Should you agree that these scenarios are possible, you may want to consider taking additional steps to diversify your portfolio.

Inflation may be picking up just as consumer spending is slowing down. To understand the challenges we face, how the Fed may react to them, and what it means to your portfolio allocation strategy, it is helpful to take a step back and look at the big picture. In the center of the scenario, we have the American consumer, responsible for about 70% of US Gross Domestic Product (GDP). While corporate America went through a recession as the tech bubble deflated, monetary and fiscal stimuli (low interest rates and tax cuts) kept consumer spending up. As consumers have piled on additional debt, their interest payments remained contained because of lower interest payments. The Fed had to redefine the way it gauges how much households spend on serving their debt, as consumers can buy anything and everything on credit now. Your monthly salary can be stretched much further if you buy everything on credit. However, this tendency makes American consumers, and with it the economy as a whole, much more interest-rate sensitive. Interest-rate sensitivity has been amplified by consumers refinancing their homes with adjustable rate mortgages, as well as by linking credit cards to home equity loans.

snip>

While consumer spending is likely to slow, inflation is making its way through to the consumer. Globalization has held back inflation, but has not eliminated it. We have seen inflation creep up in anything that cannot be imported from Asia – the cost of healthcare and education are the most prominent examples. Inflation is not a light switch that the Fed can turn off; it is a cancer that has been spreading. Just because the symptoms are not yet severe doesn’t mean we don’t need to be concerned. Ben Bernanke may continue a policy of moderate interest rate increases. Note that while the markets believe the Fed is almost done raising rates, the Fed has merely removed its accommodating stance. In plain English, the Fed has not even begun to fight inflation, as that would require a restrictive monetary policy. Small increases in rates may stall an economy that has become highly interest-rate sensitive. To compound the situation, although the economy may stall, inflation may not be contained.

How can you position your client portfolios in this environment? Equities may be at risk: investors may need to liquidate their investment portfolios to service their mortgage payments. “Old-economy” companies will have an increasingly difficult time competing in a global marketplace if labor cost is an important element in their business model. Financial services firms may struggle in a rising interest rate environment. The flexibility of the US economy allows for new jobs to be created in industries that thrive in this environment. Consider the contrast between a General Motors with an old-economy model and unable to effectively compete on cost; and a Google, the “new-economy” rising star. Global forces have lead to a transformation at a breathtaking pace, a pace that shows no signs of abating.

more...

[UpInArms]

76. 10:25 EST almost all better now!

Dow 10,883.75 -12.57 (-0.12%)
Nasdaq 2,285.74 -16.95 (-0.74%)
S&P 500 1,282.01 -0.92 (-0.07%)
10-Yr Bond 4.344 +0.12 (+0.28%)

NYSE Volume 482,336,000
Nasdaq Volume 647,296,000

[ozymandius]

78. 10:31 and back down again

Dow 10,874.91 -21.41 (-0.20%)
Nasdaq 2,283.05 -19.64 (-0.85%)
S&P 500 1,281.10 -1.83 (-0.14%)
10-Yr Bond 43.44 +0.12 (+0.28%)
NYSE Volume 517,879,000
Nasdaq Volume 685,268,000

[ozymandius]

82. blather

10:30 am : Blue chips inch towards the flat line and the Nasdaq improves further, but the 1.3% loss levied by the Tech sector leaves the market submerged. Aiding the recovery effort is a reversal in the Financial sector. JP Morgan (JPM 39.53 -0.18), which exceeded EPS estimates by a penny but posted somewhat disappointing revenues, has well pared its early decline. Northern Trust (NTRS 51.91 -0.63) exerts some downside pressure following its earnings miss, but an upside report from Mellon (MEL 35.35 +0.20) serves as an offsetting effect within the space. Positive stances of several financial bellwethers (C, BAC, WFC, WB) support the banking industry amid a declining bond market and JPM's effect, and have fueled the sector's 0.3% advance.DJ30 -9.21 NASDAQ -16.75 SP500 -0.65 NASDAQ Dec/Adv/Vol 1657/999/682.2 mln NYSE Dec/Adv/Vol 1826/1110/344.6 mln

10:00 am : The indices have improved to some degree, but each remains on negative turf. The Nasdaq particularly languishes on account of a 1.7% plunge in the Technology sector. Due to the YHOO effect, internet software and services (-12.0%) stands as the worst-faring of the S&P's 139 industry groups. INTC, meanwhile, has spurred a 5.2% decline in the semiconductor industry and a 1.0% drop in the SOX index. That stock's 10% plummet simultaneoulsy drags the Dow. Leadership lacks in the early going -- with modest 0.1% gains in each of the Consumer Staples, Healthcare, and Utilities sectors providing the only support. Even Energy, despite crude's continued rise and $66.50 per barrel price tag, trends 0.5% lower. DJ30 -32.42 NASDAQ -28.74 SP500 -4.62 NASDAQ Dec/Adv/Vol 1886/586/400.1 mln NYSE Dec/Adv/Vol 1936/690/169.7 mln

[54anickel]

91. Weak Tech Earnings Push Stocks Lower

Disappointing Tech Sector Earnings Push Stocks Lower; Investors Also Fret Over Japan Market

http://biz.yahoo.com/ap/060118/wall_street.html?.v=13

NEW YORK (AP) -- Disappointing tech sector earnings set off a second day of selling on Wall Street Wednesday as investors also worried about a massive tumble in Japan's market and rising oil prices.

Earnings from Intel and Yahoo raised investors' anxiety about other companies' results during the first big week of quarterly reports. Meanwhile, crude oil futures remained well above $66 per barrel, an unusually high price for this time of year.

snip>

Yet most of the U.S. market's losses could be blamed almost entirely on tech-sector selling, with other stocks generally holding firm after the Labor Department reported better-than-expected retail inflation data.

snip>

The government's inflation data helped keep Wall Street's losses confined to the tech sector. The consumer price index, which measures the price of retail goods and services, fell 0.1 percent, better than the 0.2 percent rise expected on Wall Street. So-called "core" CPI, with food and fuel prices removed, rose 0.2 percent, in line with economists' forecasts.

In earnings news, Dow component Intel posted a 16 percent jump in fourth-quarter profits, but missed Wall Street's earnings forecasts by 3 cents per share. The chip maker blamed soft computer demand for the shortfall. Intel, considered a barometer for the rest of the tech sector, tumbled $2.68, or 10 percent, to $22.84.

more...

[oioioi]

79. Market coming back - in the black by close?

Nasdaq is toast, but wouldn't be surprised if the DOW finished up today.

[Ishoutandscream2]

80. Shit hitting fan. 9:35 CST, and already 80 posts

Feel like I'm watching a car wreck.

[oioioi]

81. Nope - no crash today.

Looked like there might be a huge sell off afer Toyko last night, but so far it's pretty painless.

[AnneD]

101. Faeries...

on steroids. By the way, steroids are known to mask the signs and symptoms of infections.

[54anickel]

85. Asset growth outstrips the world economy

http://news.ft.com/cms/s/ba2f0974-878f-11da-8762-0000779e2340.html

One of the most comprehensive private surveys of the world’s financial markets indicates continued rapid growth of financial assets and a shift from banks to market securities.

Confirmation of these well-established trends will come as no surprise, but the new survey from McKinsey Global Institute, an independent economics think-tank within the consultancy, provides an unusual snapshot of the global financial system.

It concludes that by the end of 2004 the stock of the world’s financial assets totalled $136,000bn, and will exceed $228,000bn by 2010 if current trends persist. The figures suggest the stock of financial assets grew by a remarkable 15 per cent in 2004, and compares with $53,000bn in 1993 and $12,000bn in 1980.

But whereas 45 per cent of global financial assets were held in bank deposits in 1980, that percentage fell to 29 per cent in 2004.

The share of equity has increased from 23 per cent in 1980 to 29 per cent in 2004, but still stands below 1999 when booming stock markets swelled equity assets to 38 per cent of the total.

snip>

Yet, the report notes financial depth is not always beneficial. Growing financial depth is sometimes associated with asset price bubbles and excessive government debt that can lead to a financial deepening and painful corrections.

more...

[54anickel]

88. 43% of first-time home buyers put no money down

http://www.usatoday.com/money/perfi/housing/2006-01-17-real-estate-usat_x.htm

snip>

The trend is potentially ominous. The real estate market is cooling in some areas, and rates on adjustable-rate loans are creeping up. As a result, some no-money-down buyers could owe more than their homes are worth.

The median first-time home buyer scraped together a down payment of only 2% on a $150,000 home in 2005, the NAR found.

Already, home prices in many areas are declining, and the "For Sale" signs are hanging in front yards longer. There's now at least a 50% risk that prices will decline within two years in 11 major metro areas, including San Diego; Boston; Long Island, N.Y.; Los Angeles; and San Francisco, according to PMI Mortgage Insurance's latest U.S. Market Risk Index.

snip>

Red-hot home building, acquisitions, remodeling and refinancing in recent years helped drive the economy and raise fears of a real estate bubble. Dean Baker of the Center for Economic and Policy Research says that if housing prices fall at least 10%, it could be even more damaging than the collapse of the high-tech stock bubble in 2000.

"If we do get a spike in mortgage rates, and a modest decline (in the housing market) turns into a rout, there's almost no bottom to that," Baker says. "That's a crash scenario."

snip to wtf quote>

NAR President Thomas Stevens says he isn't worried that nearly half of first-time home buyers put no money down, but adds, "If the number was higher than that, I'd be concerned."

And just what number would raise his concern?

[RawMaterials]

94. 43.5%

That would raise his concern

:evilgrin:

[AnneD]

102. You too bad for me RM

:rofl: They are selling homes to those that really can't afford them. They don't care about the consumer-they just take the money. Well these poor folks end up in bankruptcy. The question is...where will the buck stop.

[ramapo]

105. Mind-boggling

I wonder what the average mortgage size is for these people? It used to be, not that long ago when financial responsibility was somewhat of a virtue, that a 20% down payment was pretty standard.

You have to put more money down to rent an apartment...

[mike923]

110. It was cheaper to borrow the money...

With interest rates down in the low 5% range, it is cheaper in the long run to borrow a higher percent for the mortgage, and invest the difference in the market.

Not sure if everyone is doing this, i suppose that's not always the case. But with rates as low as they have been the last 4 years or so, it makes sense that people would borrow more.

I know that's what i did, and i'm not near a financial collapse.

[AnneD]

Chew on this...

putting 20% down gets you an even better rate. A fixed rate 15 year with 20% down will get you an even better rate and you pay off your house sooner.

And about putting nothing down and investing the difference in the market, please....I would not borrow to invest. You are taking on a lot of unnecessary risk. Just because it hasn't come up and bit you in the butt yet doesn't mean it won't in the future.
And when the market tanks taking all difference with it, where will you be. Stuck paying a huge mortgage...if you still have a job, cause crashes tend to adversly affect the job market too.

The thing is not to put everyone into these huge homes with tricky financing...but to build affordable housing.

[mike923]

134. Yes, we poor Americans are stupid

We buy more than we can afford, because we aren't smart. Is that what you are saying?

Money was lent at low rates the last few years, allowing most people without much money (but who have steady jobs) to afford a house. This is good. A little equity in a house, versus gaining zero renting, is a good thing. Also socially, those that have an investment such as a house, will on average act more responsibly.

People with a little bit of money, also had the choice of taking a zero down mortgage. You are correct, they could have received a slightly better rate. They also could have avoided mortgage insurance, usually tacked on if you do not have 20% down. But, borrowing at 5.5%, keeping the cash liquid or investing in a 401k or mutual funds or even keeping it in the bank, is also not a bad idea. Houses were appreciating at 5 to 10% clips during this time, meaning they could still reach the 20% figure in a short period of time, yet still not having to outlay a lump sum of cash.

In summary, a larger portion of the country was able to get their foot in the door in a house, for little money. This historically is a wise investment (mortgage versus rent, plus appreciation), leads to more responsible citizens, and general happiness. All good things.

If a small percentage falls through the cracks, the net gain is still huge. People are able to buy houses at a younger age, like myself. Allowing me to have the house i paid off by my early 50's will allow me to retire earlier than planned. Thus creating a job for someone of the next generation! A real good thing.

[AnneD]

142. I plan to buy in 3 yrs....

I have been out shopping. Houston is a reasonable area as far as the national average.....however, the new homes are overpriced. And they are overpriced with frivolous 'amenities'. Housing should be no more than 25%-35% of a budget. These current crop of homes far outstrip the budgeted amount of our combined salaries.

So the new game (to sell these overpriced behemoths) is to qualify people using these slick new mortgages (ARM, Interest Only, etc)-to hell with these poor folks being unable to afford them. Once the economy shifts there will be many a hard working folk that will lose house, equity, credit...etc. I think people should have homes...but there is a definite lack of 'affordable' homes.

From your post, I believe I am older than you and have survived more downturns than you have. While my ideas seem quaint, even old fashioned, I stand by my first post. I have seen too many others with a smart plan (like investing the difference) fail, losing their retirement fund AND their homes. You are only as successful as you are at managing risk.

[EuroObserver]

145. Virtually no fixed rates available here in Spain:

...weigh it the way you like... take your pick or have no choice (even if your your family is rich (bourgeoisie)) Who can afford to take the risk).

Nope: Variable. Fiat. Plus, this country is full of economic criminals, starting with some of our largest companies.

Very few young people can see their way (without help) to make a start, these days.

+...On the subject of Spanish, presumably (on the evidence) essentially CRIMINAL Spanish companies (or, mejor dicho, their bosses) I may have more to say very soon...

[Roland99]

104. Bloody Faeries for lunch?

DJIA 10,833.30 -63.00
Nasdaq 2,273.52 -29.17
S&P 500 1,274.68 -8.25
Russell 2000 702.07 -1.55

[UpInArms]

106. 11:54 EST heading back to the toilet

Dow 10,833.25 -63.07 (-0.58%)
Nasdaq 2,273.03 -29.66 (-1.29%)
S&P 500 1,274.53 -8.40 (-0.65%)
10-Yr Bond 4.330 -0.02 (-0.05%)

NYSE Volume 933,155,000
Nasdaq Volume 1,110,059,000

11:00 am : Heading back to where it stood an hour ago, the Dow's recovery effort lost its steam. While 16 of its 30 constituents trend lower, it's Intel's (INTC 22.80 -2.72) 11% plunge to which the blue chip average's status can be mostly attributed. Just one other issue -- Pfizer (PFE 24.09 -0.19) -- has slipped in excess of 1% at this point. Of the gaining minority, General Motors (GM 20.07 +0.25) and IBM (IBM 83.90 +0.90) lead; the latter works to counter INTC's and YHOO's effects upon the Tech sector as well as the broader market. Despite lackluster sales, IBM beat earnings expectations last night with its 13% rise in profit and surpassed Wall Street's estimates in terms of both gross margin and global service bookings. DJ30 -30.18 NASDAQ -20.82 SP500 -2.61 NASDAQ Dec/Adv/Vol 1612/1125/814.0 mln NYSE Dec/Adv/Vol 1719/1283/460.7 mln

10:30 am : Blue chips inch towards the flat line and the Nasdaq improves further, but the 1.3% loss levied by the Tech sector leaves the market submerged. Aiding the recovery effort is a reversal in the Financial sector. JP Morgan (JPM 39.53 -0.18), which exceeded EPS estimates by a penny but posted somewhat disappointing revenues, has well pared its early decline. Northern Trust (NTRS 51.91 -0.63) exerts some downside pressure following its earnings miss, but an upside report from Mellon (MEL 35.35 +0.20) serves as an offsetting effect within the space. Positive stances of several financial bellwethers (C, BAC, WFC, WB) support the banking industry amid a declining bond market and JPM's effect, and have fueled the sector's 0.3% advance.DJ30 -9.21 NASDAQ -16.75 SP500 -0.65 NASDAQ Dec/Adv/Vol 1657/999/682.2 mln NYSE Dec/Adv/Vol 1826/1110/344.6 mln

[UpInArms]

109. noon blather

12:00 pm : A pair of disappointing fourth quarter reports from the Technology sector set the stage for today's sharply lower open, and remain the force behind the indices' submerged statuses. Intel (INTC 22.58 -2.94) and Yahoo (YHOO 35.70 -4.41) both fell short of Wall Street's profit expectations; downside guidance form the former and an in-line outlook from the latter have exacerbated selling pressures that have sent the stocks 12% and 11% south, respectively.

Leadership remains altogether absent - with a 0.4% advance in Utilities serving as the only source of support. Increasing declines in eight other sectors mutes that sector's gain, however. The INTC and YHOO effects have catalyzed a 1.8% drop in the Tech sector and are behind the Nasdaq's 1.2% slide. At the same, the Dow's decline can be almost entirely attributed to INTC's performance. While these reports will not determine the outcome of Q4 aggregate earnings, their results and accompanying forecasts spark concerns related to the deceleration that we expect during 2006. On the bright side, IBM (IBM 88.81 +0.80) surpassed expectations with its 13% profit growth as well as in terms of its gross margin and global service bookings. Intel's report appears to have sparked some optimistic anticipation of Advanced Micro's (AMD 33.73 +0.87), which is due out this evening; investors also await Apple's (APPL) results, but with a more bearish sentiment that leaves hardware as an additional pocket of weakness today.

The 0.6% loss levied by the influential Financial sector lends further muscle to the market's decline. Dow component JP Morgan (JPM 39.25 -0.46) is in focus there; despite its slightly better than expected earnings, light revenues have incited selling. Its fellow Financial bellwethers contribute further downside, and an earnings miss from Northern Trust (NTRS 51.19 -1.35) adds to the decline in banks. At the same time, Schwab's (SCWB 14.71 -0.27) EPS disappointment and some caution ahead of Merrill Lynch's (MER 69.23 -0.91) has taken brokers into the red. Separately, the inversion of the yield curve between the two and 10-year notes' yields serves as bearish backdrop for the rate-sensitive sector.

Even Energy, despite a price tag over $66.00 per barrel that crude maintains, trends lower. The sector's 0.9 loss weighs heavily.

On the economic front, the morning release of December CPI assumed the spotlight. Ultimately, though, the data has had little effect upon trade within either the equity or Treasury markets. The 0.2% increase reflected in the core rate was in-line with expectations as well as ambiguous; on the one hand, it signifies a firming (it's the third straight month of a 0.2% rise) while, on the other hand, the uptick is not enough to generate much concern. The reading's implication in terms of Fed tightening is thus unclear, and it is consistent with 2005's 2.2% gain. DJ30 -57.32 NASDAQ -27.44 SP500 -7.62 NASDAQ Dec/Adv/Vol 1694/1150/1.15 bln NYSE Dec/Adv/Vol 1968/1164/714.3 mln

[ozymandius]

111. toilet dwelling persists

12:33
Dow 10,830.28 -66.04 (-0.61%)
Nasdaq 2,270.87 -31.82 (-1.38%)
S&P 500 1,273.80 -9.13 (-0.71%)
10-Yr Bond 43.32 0.00 (0.00%)
NYSE Volume 1,090,281,000
Nasdaq Volume 1,259,273,000

[UpInArms]

115. 1:26 EST continuing to circle the drain

Dow 10,824.42 -71.90 (-0.66%)
Nasdaq 2,272.46 -30.23 (-1.31%)
S&P 500 1,273.19 -9.74 (-0.76%)
10-Yr Bond 4.344 +0.12 (+0.28%)

NYSE Volume 1,295,266,000
Nasdaq Volume 1,440,664,000

1:00 pm : Little has changed within the equity market over the past half an hour. Treasuries, meanwhile, continues to trend in the red. The spread between yields on the two-year and 10-year notes has inverted again today, a factor that serves as an additional bearish overhang for the stock market. At this point, that yield curve has moved back to flat: The front end (2-year) offers 4.323% while the back end (10-year) yields 4.326%. Attention to the bond market adds to the challenge that the Financial sector, and the banking industry in particular, faces today. The effect of a narrowing spread on profits remains in focus as Q4 earnings reports from banks hit the wires. To that end, NTRS remains a heavy drag and JPM remains well below the unchanged mark following their disappointing results. DJ30 -53.31 NASDAQ -28.65 SP500 -7.69 NASDAQ Dec/Adv/Vol 1817/1098/1.32 bln NYSE Dec/Adv/Vol 2054/1138/890.5 mln

12:30 pm : As the session's second half begins, the market sits at its worst points of the day. Even Utilities, the only sector that has managed to cling to a gain today, has fallen to the flat line. Erasing its early 0.3% gain, the price of crude futures for February delivery has recently reversed course. Although oil currently remains above $66.00 per barrel (right now it's trading at $66.15 per barrel), the downswing adds to the effect of soaring LUV shares in providing transportation issues with a bullish cue. This morning, Southwest Airlines (LUV 16.51 +0.64) announced its 33rd consecutive year of profitability -- despite an unexpected TSA security fee assessment and in spite of rising fuel costs that continue to plague the industry. At this point, the Dow Jones Transportation Average (DJT) has risen an outperforming 0.7%. DJ30 -59.39

[ozymandius]

114. Dow hemmorhages past 70

1:26Dow 10,823.96 -72.36 (-0.66%)
Nasdaq 2,272.43 -30.26 (-1.31%)
S&P 500 1,273.58 -9.35 (-0.73%)
10-Yr Bond 43.44 +0.12 (+0.28%)
NYSE Volume 1,294,149,000
Nasdaq Volume 1,439,854,000

[UpInArms]

123. 2:18 EST two-o'clock faeries report for duty!

Dow 10,855.74 -40.58 (-0.37%)
Nasdaq 2,280.30 -22.39 (-0.97%)
S&P 500 1,277.27 -5.66 (-0.44%)
10-Yr Bond 4.347 +0.15 (+0.35%)

NYSE Volume 1,536,839,000
Nasdaq Volume 1,657,994,000

2:00 pm : Standing relatively static, the market remains at recently established lows. While virtually every sector, except vacillating Healthcare, has been stunted in the red all day, there are some pockets of relative strength across the market's spectrum. Here is a look at the S&P 500's best-faring industry groups. Airlines (LUV) are up 4.7% - and, as previously mentioned, the Dow Jones Transportation Average (+0.6%) outperforms - followed by a 3.8% gain in agricultural products (ADM). Tied for third place, home entertainment software (ERTS) and personal products (ACV, AVP) have each advanced 1.3%. In contrast to languishing semiconductors (-5.9%), the semiconductor equipment group (AMAT, KLAC, NVLS, TER) is up 1.2%. Similarly 1.2% higher, healthcare services (CMX, ESRX, RX, LH, MHS, DGX) round out the list. DJ30 -70.76 NASDAQ -28.81 SP500 -9.89 NASDAQ Dec/Adv/Vol 1874/1062/1.55 bln NYSE Dec/Adv/Vol 2128/1082/1.05 bln

[specimenfred1984]

127. PPT: Maybe but Maybe Not

I follow the illegal interventions in the S&P closely. This morning the S&P just sat still for 12 minutes after the open, then rallied up to fill the gap in price between yesterday's close and today's open.

The volume during the price run up was steady, suggesting a lot of buying from a lot of sources. Typically, when the PPT or whoever is in the S&P manipulating the price makes their move, they wait until a slow period, then you'll see a 20k to 30k volume spike, preceded by low volume and followed by low volume. It didn't happen that way this morning.

I think the price run up in the morning was just a reaction to a lack of selling during the 1st 12 minutes.

There is most definitely a trader in the S&P who manipulates the market but I don't think it was him/them today.

[UpInArms]

129. Mellon rebuffs hedge fund's call to break up

Too delicious! Mellon may be in the hands of the pirates! Have they sold out the nasty little souls?? Stay tuned - I'll check for more details.

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-01-18T195532Z_01_N18204498_RTRIDST_0_FINANCIAL-MELLON-FUND-UPDATE-1.XML

BOSTON, Jan 18 (Reuters) - Mellon Financial Corp. (MEL.N: Quote, Profile, Research) on Wednesday defended its record and rejected calls from one its largest investors to split its investment management and processing businesses to help boost the company's share price.

In a firmly worded letter, Mellon Chief Executive Officer Martin McGuinn told hedge fund Highfields Capital, "We are committed to the asset management and asset servicing business and our clients understand this commitment."

McGuinn, who has led the Pittsburgh-based company since 1999, and Mellon's board are being criticized by the Boston-based hedge fund for failing to earn shareholders more money in the last few years.

While Mellon's stock price climbed nearly 19 percent in the last year, beating the 13 percent gain for the Standard & Poor's Asset Management and Custody Banks Index <.GSPAMCB>, Highfields argued that Mellon's share price could be higher if it concentrated all of its efforts on one or the other business.

Highfields increased the pressure on Mellon last month when it made its correspondence with Mellon public.

...more...

[UpInArms]

132. here's the letter to Mellon - sounds fairly threatening

http://www.newratings.com/analyst_news/article_1166891.html

BOSTON, December 22 /PRNewswire/ -- Highfields Capital Management today released a letter addressed to Mr. Martin G. McGuinn, Chairman and Chief Executive Officer of Mellon Financial Corporation (NYSE: MEL). The full text of the letter is set out below.

Dear Marty,

I wrote to you on December 9 requesting an informal meeting with two of
Mellon's independent directors and have not heard back since. On the same
day, you were quoted in The New York Times saying Mellon has "the mix of
businesses that's right" and that Mellon's processing and portfolio
management businesses are "complementary." Unfortunately, since we were not
afforded an opportunity to convey our concerns directly to members of the
Board, we are sharing those concerns through this letter.

I am aware of your belief that Mellon has not materially underperformed
its peers over a variety of time periods but beg to differ. Since you became
CEO in 1998 through November 30 of this year, Mellon's shares are up 10%,
whereas a shareholder of State Street has enjoyed appreciation of about 100%,
Northern Trust over 50%, T. Rowe Price and Franklin both over 100% and
BlackRock (since its IPO in September 1999) almost 700%. Even the Bank of New
York has appreciated more than Mellon.

<snip>

In summary, shareholders have had a long, hard wait of over seven years
to see Mellon create value. It's time to do something other than hunker down
and blame inaction on the limitations of the marketplace and potential
transaction partners. As you know, your larger shareholders' patience has
worn thin for good reason.

Our offer to meet with Mellon's directors still stands and a quick look
at our track record as an investor in companies such as Janus, Morgan
Stanley, Wendy's and Circuit City shows that significant shareholder value
can be created when management is open to our input. In each of those
companies, the status quo did not continue and all are better off for it
today.

...more...

[UpInArms]

130. 3:04 EST numbers and blather - faeries too tired - floor too bloody

Dow 10,823.49 -72.83 (-0.67%)
Nasdaq 2,275.43 -27.26 (-1.18%)
S&P 500 1,274.39 -8.54 (-0.67%)
10-Yr Bond 4.347 +0.15 (+0.35%)

NYSE Volume 1,759,226,000
Nasdaq Volume 1,880,620,000

3:00 pm : Again failing in its latest recovery attempt, the market settles back to its worst levels of the session. Healthcare (+0.2%) and Utilities (+0.3%) are the only sectors to have remained higher over the past 30 minutes. With respect to the former, Johnson & Johnson (JNJ 61.87 +0.59) lends considerable support and stands as one of the Dow's brightest spots. Within the blue chip average, McDonald's (MCD 35.14 +0.55) - a Briefing.com recommendation for active investors - shines brightest; IBM and GM continue to help limit the Dow's decline. Gains offered by those issues, as well as by six other constituents, are ultimately insufficient in challenging INTC's 10% drop. JPM, XOM, and CAT also are weighty, market-stunting laggards. DJ30 -68.84 NASDAQ -26.91 SP500 8.41 NASDAQ Dec/Adv/Vol 1679/1302/1.86 bln NYSE Dec/Adv/Vol 1937/1330/1.28 bln

[AnneD]

133. And our Stock Watch closing theme is....

Slip Sliding Away...
Slip sliding away, slip sliding away
You know the nearer your destination, the more you slip sliding away

<snip>
I know a woman, (who) became a wife
These are the very words she uses to describe her life
She said a good day ain’t got no rain
She said a bad day is when I lie in the bed
And I think of things that might have been

<snip>
Whoah God only knows, God makes his plan
The information’s unavailable to the mortal man
We’re workin’ our jobs, collect our pay
Believe we’re gliding down the highway, when in fact we’re slip sliding away

[UpInArms]

139. 3:36 EST in the last half hour - which way will it go?

Dow 10,845.49 -50.83 (-0.47%)
Nasdaq 2,281.35 -21.34 (-0.93%)
S&P 500 1,277.36 -5.57 (-0.43%)
10-Yr Bond 4.340 +0.08 (+0.18%)

NYSE Volume 1,944,028,000
Nasdaq Volume 2,057,112,000

3:25 pm : Heading towards the close of Wednesday's trade, the stock market remains stuck in the red. Aside from the day-long losses registered by the Dow, the S&P 500, and the Nasdaq, as well as by a majority of the economic sectors, the market's breadth reveals the decidedly bearish bias that dominated trading. Presently, decliners maintain a 20-to-13 lead over advancers on the NYSE. On the Nasdaq, decliners currently have a 17-to-13 lead. These ratios have been in place for the better part of the session. DJ30 -60.05 NASDAQ -24.84 SP500 -7.19 NASDAQ Dec/Adv/Vol 1748/1250/1.97 bln NYSE Dec/Adv/Vol 2021/1254/1.38 bln

[EuroObserver]

141. Ok, a moment of (relative) calm.

Mid-term, those who need to play safe, maybe cash in some gains, ok, seems very reasonable to want to cash in now, but watch your timing, (if not sooner)- remeber: stock market investments (and similar) are NOT savings: until you cash in (and pay commissions, taxes and similar expenses), they are mere chips on the table.

"Savings" means putting it somewhere relatively solid that will, mid-to-long term, pay some interest and at least return the deposited (relative to your local (currency?) future requirements). Eg. with a bank unlikely to disappear overnight... Some people speak in terms of Land, Self-Sufficiency, Guns: Maybe: your place not mine.

Meanwhile, for those who can afford to enjoyy some risk, I still see room to play...

[loudsue]

140. Just checked in with DU, and came here. Surprise, surprise....

Hi Marketeers! :hi:

I just got to my computer for the first time today, and ---- lookie here!!

Looks like the Battle of the Bulging markets! Duck & cover, ey?

Thanks to you guys, our $$ has been moved to cash since the last rally. Our Marketeers are the best!!

:yourock:

[UpInArms]

143. closing numbers and yada

Dow 10,854.86 -41.46 (-0.38%)
Nasdaq 2,279.64 -23.05 (-1.00%)
S&P 500 1,277.93 -5.00 (-0.39%)
10-Yr Bond 4.340 +0.08 (+0.18%)

NYSE Volume 2,210,246,000
Nasdaq Volume 2,319,270,000

From start to finish, Wednesday's stock market languished in negative territory. Despite several recovery attempts, the indices were unable to survive the effects of disappointing Q4 reports - and Q1 guidance - from tech titans Intel (INTC 22.54 -2.98) and Yahoo (YHOO 35.19 -4.92). A 3% drop in Japan's Nikkei exacerbated the early bearish sentiment that pervaded today's session, and a pullback in crude catalyzed a sharp, market-dragging drop in the Energy sector.

Leadership failed to emerge, and seven of the ten economic sectors levied losses. Twelve percent declines in each of Intel and Yahoo shoved the Tech sector nearly 2% lower in the early going and fostered the Nasdaq's underperformance. With respect to their reports, the former checked in below Wall Street's profit and revenue expectations and simultaneously issued downside revenue guidance for the current quarter. Yahoo also fell short of analysts' estimates, and its in-line outlook proved a disappointment. While those reports will not determine the outcome of the current earnings season, the disappointing results and accompanying outlooks feed concerns over the deceleration that will likely occur during 2006.

IBM (IBM 83.83 +0.83) offered some countering support, following its better than expected earnings, gross margin, and bookings results, and optimistic anticipation ahead of Intel rival Advanced Micro's (AMD 34.34 +1.48) report helped send semiconductors back towards the unchanged mark. Just when the Tech sector started to improve, though, a 0.8% reversal in the price of crude futures incited aggressive selling across the Energy sector. Commodities in general faced consolidation pressure: Gold futures lost 1.8%, while 3.4% and 2.8% respective declines in diversified metals and steel left the Materials sector 1.1% lower. The crude action did benefit one area of the market, though. Underpinning the effect of Southwest Airlines (LUV 16.77 +0.90) solid earnings report upon the airlines industry, lower oil prices helped send the Dow Jones Transportation Average 1.0% north.

The influential Financial sector lent muscle to the challenges posed by a Energy and Tech. With earnings season in investors' focus, some uninspiring reports from banks weighed heavily. In particular, J.P. Morgan's (JPM 39.28 -0.43) light revenues bogged down the sector as well as the Dow; Northern Trust's (NTRS 51.14 -1.40) lower than expected earnings contributed to weakness in the space. As a narrowing spread's impact upon profits sits center stage, today's yield curve, which vacillated between flat and slightly inverted, served as a further overhang. Separately, Schwab's (SCHW 14.68 -0.30) disappointing results and some nervousness ahead of Merrill Lynch's (MER 69.50 -0.64) report left brokers as an additional sore spot.

On the economic front, this morning's CPI report garnered the most attention. As the 0.2% rise in December's core rate was expected, though, trading within either the stock or bond markets was little affected. Further, the up-tick is essentially ambiguous in terms of its implication on the Fed's monetary tightening cycle. In one sense, the increase can signify a firming trend because December marked the third consecutive 0.2% rise following five straight 0.1% increases. At the same time, that increase is not substantial enough to cause alarm and is in-line with 2005's year-over-year gain. The market also received November net foreign purchases data (which checked in at $89.1 billion) and the Fed's Beige Book, but both went largely overlooked by equity and Treasury traders alike.DJ30 -41.46 NASDAQ -23.05 SP500 -5.00 NASDAQ Dec/Adv/Vol 1592/1448/2.29 bln NYSE Dec/Adv/Vol 1837/1475/1.69 bln

[EuroObserver]

144. Cool n/t