STOCK MARKET WATCH, Friday 24 February

[ozymandius]

Friday February 24, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 1060 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1891 DAYS
WHERE'S OSAMA BIN-LADEN? 1591 DAYS
DAYS SINCE ENRON COLLAPSE = 1552
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 February 23, 2006

Dow... 11,069.22 -67.95 (-0.61%)
Nasdaq... 2,279.32 -3.85 (-0.17%)
S&P 500... 1,287.79 -4.88 (-0.38%)
30-Year Bond 4.51% +0.03 (+0.62%)
10-Yr Bond... 4.57% +0.04 (+0.79%)
Gold future... 550.90 -5.70 (-1.03%)






GOLD, EURO, YEN, Dollars and Loonie


PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Martin Goldberg

Nasdaq 100 Fundamentals Suggest Stock Market Bubble Still Exists

Although it is difficult to remember, there once was a day where dividend yields were a significant part of the return provided by stock market investments. From 1880 to 2000 the dividends on the S&P 500 averaged 4.7%. Today, the dividend yield on the S&P 500 is 1.85%, much less than one-half of the historical average yield. Unless business fundamentals have changed in recent times, the relatively low dividend yield is way out of whack. It is not different this time! But the overvaluation in the US stock market is much more severe in some other indices and sectors, especially the Nasdaq 100 index. I have compiled some key statistics which are presented in Table 1.

-cut past big table-

Stocks in the Nasdaq 100 averaged a dividend yield of only 0.29 percent. Sixty-eight (68) of the Nasdaq 100 pays no dividends at all. The average trailing P/E was a whopping 49. Within the Nasdaq 100, there are 10 companies with no trailing earnings, and 16 companies with a trailing P/E that is over 100. There are only 13 Nasdaq 100 companies with a P/E of less than 20. While individually, one can make the case for these companies being “growth” companies, it is difficult to believe that they are all such “growth” companies.

Insiders have sold almost 200 million shares of Nasdaq 100 stock over the last 6-months, and they have not bought any significant amounts of stock.

-cut-

Ben Bernanke has left the financial community with straight forward code language of how the Fed plans to proceed. One more interest rate hike and then future policy will be based upon the economic data. I take his code to mean that he will have a fixed eye on asset prices, and the economic data will be spun and manipulated to gain the desired effect. I think the overall objective will keep the residential real estate market from crashing and keep stock prices stable here in the US, while also keeping public perception of inflation under control while having a healthy dose of actual inflation. The big question is whether this is possible. We know this game of paper money printing and excessive debt is not sustainable forever, but few people feel that it is time for the “end game” to occur now. But even though it doesn’t “feel” like it is ready to happen, I doubt that when it does happen, most people will be ready. Our markets have lulled us into thinking that they are safe and there will be plenty of time to sell or take whatever action is needed to protect one’s assets. While this has been the case throughout most of our memories, you cannot say for sure that we won’t be trapped by the action in the financial market. When will it surprise the most people? How about tomorrow morning? One purpose of the stock market has been to take money from those who would buy (or sell) for the rise (or fall) in prices. Yet in today’s atmosphere with everyone looking at the same charts and data, the only way for the markets to “do their thing” is for an event not predicted by charts or data to occur. That would catch everyone off guard and transfer wealth from one group to another. Who is to say that will not occur now? Certainly not a technician!

more...

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

[EuroObserver]

29. The mad scramble for commodities is on!

FUEL: THE CATALYST!
by Puru Saxena
Editor, Money Matters
February 23, 2006
http://www.financialsense.com/editorials/saxena/2006/0223.html

Under normal circumstances, I would avoid discussing politics. However, this is not a normal situation and therefore I want to highlight some key facts.

Whether you are aware of it or not, we are living in a highly inflationary, war cycle. The money supply is surging at an alarming rate and nations continue to out-bid each other for natural resources. In a nutshell, the mad scramble for commodities is on! Unfortunately, this dangerous fight may only get worse in the future. Glimpses of this are already unfolding with the geo-political unrest brewing in the middle-east.

Today, our world faces a unique scenario – the enormous appetite of China and India. Both these gigantic countries have been shopping around the world securing their supplies of natural resources to meet the needs of their 2.3 billion people. Recently, China and India formed a strategic alliance to bid for major oil-interests in the world and acquired interests in Kazakhstan, Nigeria and Syria. Saudi Arabia also seems very keen to tap into this growing market as demonstrated by Saudi King Abdullah’s recent visit to both these countries. And this insatiable hunger doesn’t just stop with oil. Over the past couple of years, Chinese leaders have been busy purchasing all sorts of metals and minerals from Australia, South America and Canada.

Believe me, all of the above has not gone unnoticed and the leaders in Europe and America are getting nervous. For decades, these developed regions have enjoyed an endless supply of cheap natural resources. However, this has now changed due to stiff competition from the highly populated emerging economies where demand is growing fast and per-capita consumption is amongst the lowest in world. Despite all you hear, I can assure you that the officials in Washington, Paris and London are not happy with the fact that the emerging nations now consume more oil than the developed ones (Figure 1).
...

Let’s review the daily output of some of the largest producers in the world. Saudi Arabia is at the top of the list and produces roughly 10 million barrels, followed by Russia – a close second. What is ominous is the fact that each of the top five oil-producing nations (with the exception of China) still produces less oil today than it did in the past! In other words, (despite claims of endless reserves) Saudi Arabia and Russia have failed to match their record production levels recorded in the early 1980’s! The proof is more often than not, in the pudding. If our world is really awash with an endless quantity of crude oil, why then are these nations not increasing production to meet the growing demand? Or is it that these nations are not in a position to increase production much further? The consensus view is that the lack of refining capacity is responsible for high energy prices. This can’t be true because if our world can’t refine more oil, demand can’t go up! The real reason why oil is becoming expensive is because our world is not able to pump enough crude oil from the ground to meet the rising demand. The global oil-production peak is upon us and investors must take action now in order to avoid financial pain.

...more...

[ozymandius]

2. One report today

8:30 AM Durable Orders Jan
Briefing Forecast -4.0%
Market Expects -2.0%
Prior 1.8%

[UpInArms]

19. U.S. Jan. durable goods orders plunge 10.2%

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BE7D36619%2DCEFE%2D4F0D%2D8C2F%2DFEF8B229BD77%7D&siteid=mktw

WASHINGTON (MarketWatch) - New orders for U.S.-made durable goods plunged 10.2% in January as aircraft orders dried up after three months of strength, the Commerce Department reported Friday. The decline was the largest since July 2000 and far exceeded the 2.5% drop expected by economists. Aircraft orders fell 68.2% in January after averaging more than three times the normal level from October through December. Total transportation orders fell 31.2%. Bookings were healthier elsewhere in the durable goods industries, but the performance was mixed across sectors. Excluding transportation goods, total orders rose 0.6%. Core capital equipment orders fell 0.4%

U.S. Dec. durable goods orders revised to 2.5% vs. 1.8%
8:30 AM ET Feb. 24, 2006 -

U.S. Jan. durable goods inventories rise 0.3%
8:30 AM ET Feb. 24, 2006 -

U.S. Jan. durable goods shipments fall 1.3%
8:30 AM ET Feb. 24, 2006 -

U.S. Jan. aircraft orders fall 68.2%
8:30 AM ET Feb. 24, 2006 -

U.S. Jan. core capital goods orders fall 0.4%
8:30 AM ET Feb. 24, 2006 -

U.S. Jan. durable goods ex-transportation rise 0.6%
8:30 AM ET Feb. 24, 2006 -

U.S. Jan. durable goods orders fall 10.2% vs. -2.5% expected
8:30 AM ET Feb. 24, 2006 -

[EuroObserver]

26. Prepare for much spining/revising of this data, I guess.

-10.2% vs. -2.5% expected.

[ozymandius]

3. Oil up $1, Nigerian supply fears deepen

LONDON (Reuters) - Oil rose $1 on Friday as fears of deeper disruptions to Nigerian exports overshadowed the comfort drawn from brimming fuel stockpiles in the United States.

Attacks on Nigeria's oil network have already forced Shell to cut output by 455,000 barrels a day, shutting in a fifth of the country's exports. Militants holding foreign oil workers hostage say they will continue attacks in the next few days.

But oil's upside may be limited by brimming U.S. fuel tanks. Gasoline stocks rose to 225.6 million barrels, the highest level in seven years, according to weekly data. Crude stocks rose 1.1 million barrels to 326.7 million barrels.

"The market is being tugged by two forces -- data are pulling it down and political forces are pulling it up," said independent oil consultant Geoff Pyne.

more...

[EuroObserver]

10. So why so much stockpile at current prices

...unless prices are expected to rise and/or supply to fall?

[ozymandius]

12. Supply capacity will fluctuate with the season.

The American driving season is just around the corner. Inventories will undoubtedly drop in the coming months.

It also helps to have members of Congress squawking about high oil/petrol prices. The Nymex traders take notice as well the oil companies, causing prices to adjust downward so Congress will shut up.

[hatrack]

32. Also the usual changeovers at refineries- seasonal gas formulations

Etc., etc. and so forth.

[AnneD]

51. And our Gulf Coast region...

is still not producing or refining to pre Katrina/Rita capacity.

[UpInArms]

18. Crude higher as Iraq violence raises supply concerns

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B2016AEAE%2D17F7%2D49A0%2D83FC%2D9BF37F3D42A3%7D&siteid=mktw&symbol=

NEW YORK (MarketWatch) -- Crude-oil futures rose early Friday as energy traders weighed escalating tensions in Iraq and a report of more trouble for Royal Dutch Shell in Nigeria against U.S. data showing the nation well supplied with oil and petroleum products.

Crude for April delivery was last trading up 95 cents, or 1.6%, at $61.49 a barrel. The contract ended down 47 cents at $60.54 a barrel on Thursday, recovering in part after trading as low as $59.70, its lowest since Feb. 16.

The Energy Department reported a 1.1 million-barrel increase in U.S. crude supplies for the week ended Feb. 17, placing them 9.9% above their year-ago level.

Motor gasoline supplies rose a smaller-than-expected 100,000 barrels to 225.6 million barrels, up 0.9% from a year ago and marking an eighth straight week of higher inventories.

Man Financial analyst Edward Meir said the demand side of the report was positive, particularly for gasoline, which was up 2.3% from last year.

"We have opened higher today, and should maintain these gains going into the close, as yesterday's numbers may be given a second look," he said.

...more...

[EuroObserver]

21. Court orders Shell to pay $1.5bn to the Ijaw people of the Delta region.

(BBC) A Nigerian court has ordered oil multinational Shell to pay $1.5bn to the Ijaw people of the Delta region.

The Ijaw have been fighting since 2000 for compensation for environmental degradation in the oil-rich region. They took the case to court after Shell refused to make the payment ordered by Nigeria's parliament. Ijaw militants have staged a spate of attacks against Shell facilities recently and are holding seven foreign oil workers hostage. Following the violence, Shell, the biggest oil producer in Nigeria, has cut its output.

Shell intends to appeal against the judgement.
...

Nigeria is one of the world's biggest oil exporters but despite its oil wealth, many Nigerians live in abject poverty.

...more...

[UpInArms]

46. April Crude @ $62.05 bbl - March NatGas @ $7.35 mln btus

April crude rises $1.51, or 2.5%, to $62.05/brl in NY
10:09 AM ET Feb. 24, 2006 -

March natural gas falls 10.8c, or 1.5%, to $7.35/mln BTUs
10:09 AM ET Feb. 24, 2006 -

April natural gas down 8.3c, or 1.1%, at $7.46/mln BTUs
10:09 AM ET Feb. 24, 2006

[ozymandius]

4. Survey: Rates on Mortgages Ease Slightly

WASHINGTON - Rates on 30-year mortgages as well as for some other home loans dropped this week, a dose of good news for prospective home buyers.

Freddie Mac, a big player in the mortgage business, reported in its nationwide survey released Thursday that rates on 30-year, fixed-rate mortgages averaged 6.26 percent, the first drop in five weeks. That was down from last week's rate of 6.28 percent, which had marked a two-month high.

The decline represents confidence on the part of bond investors — whose actions influence the movements of long-term mortgage rates — that new Federal Reserve Chairman Ben Bernanke and his colleagues will be reliable inflation fighters.

"Market confidence that the Fed will continue to keep inflation low kept mortgage rates in check this week," said Frank Nothaft, Freddie Mac's chief economist. "Over the long term, we expect mortgage rates will bounce back and forth a bit, remaining near current levels."

more...

[EuroObserver]

5. Tokyo: weak start, late recovery, flat close. Yen rising.

Tokyo stocks edge up but exporters hit by yen's rise vs. dollar
Tokyo stocks advanced Friday but the gains were marginal as export-oriented automaker and high-tech issues were hit by the yen's rise against the U.S. dollar. The 225-issue Nikkei Stock Average rose 5.81 points, or 0.04 percent, to 16,101.91. The Tokyo Stock Price Index of all First Section issues on the Tokyo Stock Exchange gained 7.27 points, or 0.44 percent, to 1,647.74. The Tokyo market got off to a weak start following overnight falls in U.S. shares, but a late bout of buying lifted the market slightly.

Export-oriented automaker and high-tech issues were sold reflecting the yen's rise, which lessens the value of Japanese exporters' dollar-denominated profits when they are repatriated, brokers said.

The dollar sank to the mid-116 yen level Friday in Tokyo, compared with its level above the 118 yen line early Thursday in Tokyo.

But the market was supported by investors' unabated interest in buying shares with high dividends and shares backed by favorable earnings, brokers said. ...more...

[EuroObserver]

8. Dollar hits 1-month low, remains bearish around mid-116 yen in Tokyo

(Kyodo) _ The U.S. dollar hit a one-month low at the lower 116 yen level Friday in Tokyo as the yen stayed bullish on the Bank of Japan chief's remarks the previous day signaling a near-term end to the ultra-loose monetary policy.

After falling to 116.42 yen in the morning, its lowest level since Jan. 27, the dollar was trading at 116.61-64 yen at 5 p.m., down from its 5 p.m. Thursday quotes of 117.09-19 yen in New York and 117.65-67 yen in Tokyo. The day's high was 117.16 yen, and the dollar moved most frequently at 116.65 yen. The euro traded at $1.1916-1919 and 138.98-139.02 yen, against $1.1913-1923 and 139.54-64 yen at 5 p.m. Thursday in New York and $1.1902-1904 and 140.03-07 yen at 5 p.m. Thursday in Tokyo.

The dollar fluctuated strongly in the morning, falling from the day's high to its low. Dealers said the impact of BOJ Governor Toshihiko Fukui's comments still lingered. "Although there was little news in Fukui's comments, they accelerated moves to unwind short-yen positions that had built up in recent trading," said Kikuko Takeda, manager of the foreign exchange and treasury division of the Bank of Tokyo-Mitsubishi.

...more...

[EuroObserver]

9. Key 10-year Japanese gov't bond yield ends at 2-week high

(Kyodo) _ The yield on the benchmark 10-year Japanese government bond rose to a two-week high Friday amid growing speculation that the Bank of Japan may end its ultra-loose monetary policy soon.

In interdealer trading, the yield on the No. 276 1.6 percent issue added 0.040 percentage point from Thursday's close to end the day at 1.595 percent, matching the closing yield on Feb. 10.

The price of the key March futures contract for 10-year bonds fell 0.62 point to 135.65 on the Tokyo Stock Exchange, with the yield up 0.054 percentage point to 1.795 percent.

...little more...

[EuroObserver]

6. Europe: open mostly positive on results, utilities maneouvering

Swiss SMI down -0.23% at 7965.16 in Zurich 11:25:30 CET
CAC 40 opens up 0.2% at 5,051.7 in Paris
Xetra Dax 30 opens opens up 0.1% at 5,863.5 in Frankfurt
FTSE 100 opens up 0.3% at 5,854.7 in London
FTSE Eurofirst 300 up 0.1% at 1,356.9 in London 09:41 GMT
FTSE 250 flat at 9,466.6 in London 09:23 GMT


Bourses make gains as utilities keep rising
On the final day of a busy week for corporate earnings, European equity markets made a positive start to trading on Friday with results from InBev, Sanofi-Aventis and continued takeover speculation in the utilities sector providing early interest for investors. The FTSE Eurotop 300 rose 2.69 points or 0.2 per cent at 1,358.15 while the German Xetra Dax added 3.94 points or 0.1 per cent at 5,862.4 and the French CAC 40 gained 10 points or 0.2 per cent at 5,853.6. In London, the FTSE 100 rose 18.7 points or 0.3 per cent after better-than-expected results from WPP and Lloyds TSB. In the latest development, Gaz de France , up1.4 at €29.00, and Suez ,1.7 per cent higher at €32.55, are reported as considering an alliance to fend off an approach for Suez by Italy’s Enel. ...source...

London higher as WPP and Lloyds impress
London equities moved higher in eearly trade on Friday, boosted by stronger than expected earnings news from two FTSE 100 constituents. The senior index started the last session of a busy week for company newsflow 0.4 per cent stronger at 5,856,5 and the mid-cap FTSE 250 was flat at 9,469.6.... Back in London and as the curtain started to come dome on a brisk week for earnings news, two of the best received performances came at its end. Investors applauded news from Lloyds TSB of a 10 per cent rise in group pre-tax profit of £3.82bn, enough of a rise to overshadow its forecast of further deterioration in the retail credit environment in the first half of 2006. Shares in the high street bank were 3.1 per cent stronger at 558.3p. There were also bouquets for WPP Group, the advertising and marketing giant, which made an immediate gain of 5.3 per cent after it too outstripped forecasts with news of a 36 per cent increase in headline profit before tax of £669m. ...more...

[EuroObserver]

7. UK National Grid higher on potential US deal

Shares in National Grid, the UK electricity generator, were the latest to benefit from increased international bid activity in the energy sector on Friday afterit confirmed it wasin talks to acquire US gas distributor KeySpan.
...

KeySpan, a member of the broad-based S&P 500 index in the US, operates in the North Eastern states of New York, Massachusetts, and New Hampshire and has 2.6m customers on its books. National Grid’s stock rose 2.3 per cent to 611.5p in morning trade on Friday.

...more...

[EuroObserver]

63. ...Closed mostly up on banking profits, utilities M&A/anti-M&A

Swiss SMI closes down -0.37% at 7954.33
CAC 40 closes up 0.7% at 5,073.95 in Paris
Xetra Dax 30 closes up 0.2% at 5,870.79 in Frankfurt
FTSE 100 closes up 0.4% at 5,860.5 in London
FTSE 250 closes up 0.1% at 9,478.7 in London
FTSE Eurofirst 300 up 0.3% at 1,359.13 in closing exchanges in London 16:30 GMT


Utilities, banks help push European stocks higher
LONDON, Feb 24 (Reuters) - European share indexes edged up on Friday, boosted by gains in utility stocks as merger talk continued to swirl, with stronger banks also helping outweigh a resource stock slide. Media group WPP (WPP.L: Quote, Profile, Research) and bank Lloyds TSB (LLOY.L: Quote, Profile, Research) were among the top gainers after posting healthy profits, while InBev (INTB.BR: Quote, Profile, Research) was swiftly punished after a cost-cutting target disappointed.

The FTSEurofirst 300 index of leading European shares <.FTEU3> rose 0.3 percent to an unofficial close at 1,359.13, up 1.2 percent for the week and just shy of Thursday's 4-1/2 year intraday high. "At the moment the market's fair value. It could get a little expensive, though, if we continue to see bids," said Emmanuel Soupre, fund manager at Neuflize Gestion in Paris. "The market is looking for robust growth."

Franco-Belgian utility Suez (LYOE.PA: Quote, Profile, Research) jumped 5.9 percent with Gaz de France (GAZ.PA: Quote, Profile, Research) up 4 percent on new speculation they may consider an alliance to fend off any approach for Suez from Italy's Enel (ENEI.MI: Quote, Profile, Research). Both GDF and Suez declined comment.
...

The DJ Stoxx European utility sector index <.SX60> was up 1.1 percent, reflecting merger talk which has gripped the sector. But the DJ Stoxx basic resources sector index <.SXPP> dropped 0.6 percent, pulled lower by Lonmin's (LMI.L: Quote, Profile, Research) 8 percent slide after the company said it was no longer in talks on a possible takeover.

Lower base metals prices also weighed, with copper miner Antofagasta (ANTO.L: Quote, Profile, Research) down 1.8 percent, BHP Billiton (BLT.L: Quote, Profile, Research) 0.9 percent lower and Rio Tinto (RIO.L: Quote, Profile, Research) down 1.5 percent. ...more...


FTSE boosted by strong results from WPP and Lloyds
LONDON, Feb 24 (Reuters) - Britain's FTSE 100 index closed higher on Friday after strong results from advertiser WPP (WPP.L: Quote, Profile, Research) and bank group Lloyds TSB (LLOY.L: Quote, Profile, Research), although miners fell after Lonmin (LMI.L: Quote, Profile, Research) said offer talks had ended.

Midcap 250 stock Lonmin slid 7.9 percent after it said it was no longer in negotiations about a possible takeover, news which knocked Rio Tinto (RIO.L: Quote, Profile, Research) back 1.5 percent and took a similar amount off Anglo American (AAL.L: Quote, Profile, Research). The miners had risen on speculation of further consolidation in the sector after Lonmin said last week it was in talks to be bought.

WPP was the top FTSE gainer, rising 7.9 percent after its full-year profit climbed well ahead of expectations on strong growth abroad. Market watchers said investors were particularly pleased by the contribution of WPP's U.S. acquisition Grey Global.
...

The FTSE 100 <.FTSE> index closed 24.5 points higher at 5,860.5 taking back a sizeable slug of Thursday's 36-point fall to score a modest 14- point rise on the week. Traders say the underlying tone is still firm as the market remains open to continued mergers and acquisitions activity, although some say the 4.3 percent rise since the start of the year could trigger a setback. "We're not necessarily dispelling any notion of a correction but we think any correction would be a buying opportunity," said Parkes, adding: "We think M&A activity is going to continue this year. We expect M&A to be at least as strong this year as it was last year."
...

Banks accounted for 17 points of the FTSE 100's rise on Friday as Britain's fifth-biggest bank Lloyds TSB bounced 4.7 percent after posting an unexpected rise in underlying 2005 profit. Other banks were encouraged by the results, with HSBC (HSBA.L: Quote, Profile, Research) up 1.6 percent and Royal Bank of Scotland (RBS.L: Quote, Profile, Research) 1.2 percent higher. But Next (NXT.L: Quote, Profile, Research) was a major FTSE 100 faller, slipping 1.6 percent after Dutch bank ING cut the stock to "hold" and said trading conditions could become difficult for the high-street clothing chain. "The tough trading environment could make the next 12 months as challenging as the past year for Next," ING wrote in a research note.

Oil shares showed muted gains, closing off session highs after an attack on Saudi Arabia's Abqaiq oil facility, which initially raised concerns about supply disruptions. At least two cars exploded at the gates of the main entrance to Abqaiq after being fired on by security forces. Saudi Arabia said oil and gas output was unaffected. ...more...

[ozymandius]

11. Oh crap - nobody wants to buy our debt.

from Kos diarist, dday -- http://www.dailykos.com/storyonly/2006/2/24/02146/3550

reported by Reuters

U.S. Treasury debt prices extended losses on Thursday after an auction of five-year notes garnered surprisingly weak demand, including from indirect bidders.

That category includes customers of primary dealers but also foreign central banks, and it is therefore used as a proxy for offshore interest in U.S. government debt.

Already unnerved by a drop in jobless claims that reinforced the likelihood of further interest rate hikes from the Federal Reserve, traders kept bond prices well into negative territory.

"It was a terrible auction," summed up one trader at a U.S. primary dealer. "The bid-to-cover stank, the indirect bid was bad -- I would be surprised if the market manages to rally from here."

We all know how this works. We put billions and billions on our national credit card and auction off the debt to the highest bidder. In the past, Asian nations (led by China and Japan) were happy to snap those dollars up. After all, it gave us the capital we needed to continue purchasing their goods. They were basically giving us money so we could give it back to them. It was a faith-based economy; as long as the other countries believed in the myth that we actually might pay them back, and as long as we believed in the myth that no nation would ever so no to us, everybody could rest easy.

Well, today was a very, very bad sign. Only 21% of the 14 billion dollars we offered was snapped up. The long-term yield on these notes remains lower than the short-term yield on 5-year notes, known as the inverted yield curve:

Ozy speaking here: Those were some remarkable numbers that I posted this morning. The 30-year outperforms the ten-year.

[UpInArms]

24. Treasuries rise as durable goods fall steeply

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-24T134327Z_01_N24280107_RTRIDST_0_MARKETS-BONDS-DURABLES-URGENT.XML

NEW YORK, Feb 24 (Reuters) - U.S. Treasury debt prices climbed on Friday after a surprising plunge in durable goods orders for January.

Durable goods orders dropped a startling 10.2 percent last month, against forecasts for a much milder 1 percent decline.

However, outside transportation, orders for durables rose 0.6 percent, slightly more than economists had expected, the Commerce Department report showed.

The market failed to gain major traction as investors continued to bet the Federal Reserve would raise interest rates a bit further before stopping.

...more...

[54anickel]

28. Have you noticed...

When durable goods would absolutely suck if it weren't for aircraft orders, they ignore the transportation effect. Yet they'll turn around on reports like today's and try to use the drop in transportation to soften the blow.

[UpInArms]

30. "yield curve fully inverted"

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B6AA5CA89%2D9D0C%2D4144%2D94DB%2D4254276A4EAA%7D&siteid=mktw&symbol=

excerpt:

The decline was the largest since July 2000 and far exceeded the 2.5% drop expected by economists surveyed by MarketWatch

Aircraft orders fell 68.2% in January after averaging more than three times their typical levels from October through December. Still, even with the double-digit percentage decline, aircraft orders were above average in January.

Total transportation orders fell 31.2%, the biggest decline since July 2000. Defense capital-goods orders also plunged in January, falling 64.3%, the biggest drop since November 2001.

<snip>

Other maturities were also higher. The 2-year was up 1/32 at 99 27/32, yielding 4.708%, keeping the yield curve fully inverted.

The 30-year was up 7/32 at 100 5/32, pushing its yield down to 4.489%.

...more...

[54anickel]

42. Armaggeddon Or Just One More Central Bank Inspired.....uh-oh

Another one of those long titles that could just as easily been summed up as "Oh crap".

Armaggeddon Or Just One More Central Bank Inspired ‘Justifiable Methodology To Ensure Market Stability?’

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=51737


In one of the least reported epochal stories in history, broken by the Wall Street Journal’s Wessel on Thursday’s obscure Page A2, the 14 Families, new nomenclature for the big 14 banks and brokers dominating the financial infrastructure, architecture, profits and bonuses of the world, snuck down to the Fed to try and do something about the coming Gotterdammerung in that new, but totally obscurant world known as credit derivatives. For a moment, let us hypothesize on who these Fabled 14 families are…

We would have to be in the writer’s head to be completely accurate, but will make some broad and identifications. Given mergers in the last dozen years, some of the beasts then extant are extinct. Nevertheless, here goes: Citi, Banc of America, JP Morgan Chase, Goldman Sachs, Smith Barney, Merrill Lynch, Lehman, Bear, Morgan Stanley, Wells Fargo, Wachovia, USBancorp, Bank of New York, and CSFB. We might back out one or two of the domestics above and throw in Deutsche and ABN/Amro. Net/net it is the compendium of the big settlers, hedge fund financiers, deal makers etc. of Wall Street.

DO ANY OF YOU FIND IT CURIOUS THAT THERE IS NO FURTHER MENTION OF THIS MEETING IN THE MOST ACIDULOUS READING OF THE Friday WSJ. ?

Searching that brave new world of the internet there is one brief Bloomberg reference to “these deals being settled in ‘cash’ to avoid a lengthy outcome.”

IF THE AVERAGE OF THE 57,000 LOOSE CANNONS IN THE WAY OF DEALS OUT THERE IS $100 Million, peanuts in this game, THEN WE ARE TALKING $ 5.70 TRILLION IN POSSIBLE MAXIMUM EXPOSURE. This is not the FX game or the interest game where “Notional Amount” is a minimal fraction of the whole deal. If I sell $100 million on GM and it tanks, I owe $100 million! If credit quality, truly dubiously written in today’s world, crashes, we are talking U.S. GDP Times 50-60 to sort it all out!

To digress for a moment, we may have discovered here another reason behind the addled Greenspan’s conundrum. If there are $1.2 trillion in leveraged hedge funds out there and you figure what that number might be and if I can sit around, answer the phone and make several hundred bps every time some yawa wants credit default protection, AND I don’t even have to register my deal anywhere except my lower drawer, AND my bonus depends on how many yawa’s send me a bunch of moolah for writing this stuff!

more...

[54anickel]

56. Too Big to Burst

http://www.321gold.com/editorials/schiff/schiff022406.html

It is widely believed that the Federal government has an unofficial policy that some banks and other financial institutions are simply too big to fail. As a result, it is assumed that the government will take any action necessary to ensure that they do not. It now appears to me that there is a similar doctrine in effect for bubbles, in that some are simply too big to burst. Housing, which is the lynchpin holding together the entire U.S. economy, certainly fits that category. To paraphrase Winston Churchill "never in the field of economics has so much been owed by so many to just one thing."

Through the wealth effect and cash-out equity extractions, the housing bubble has enabled Americans to consume far beyond their collective means. The result is a bubble economy, where incomes, jobs, tax revenue, corporate earnings, and the solvency of our lending institutions, are all dependent upon sustained, stratospheric home values. When prices return to earth, the economic impact will be catastrophic.

This dismal reality is certainly not lost on those in Washington. The only way for housing prices to stay high is for the Fed to keep inflating. Conveniently, the captain currently at the helm of the monetary ship of state just happens to be Ben Bernanke, who as a Fed governor spoke about the Fed's ability to fend of deflation by using the handy invention of the printing press. Though his words may have may have spoken in reference to consumer prices, his actions will certainly be concentrated on asset prices, especially housing.

snip>

What other explanation is possible after Wednesday's bond rally following an unexpected .7% rise in January consumer prices, which amounts to an annualized rate of inflation of almost 9%? Even if one takes a more moderate look at the year over year rates, the CPI has risen 4%. Why would anyone buy ten-year government bonds yielding 4.5%, when the real after-tax yield, adjusted for 4% inflation, is negative 1%? Other than leveraged short-term speculators, the only buyer would be the Fed, which has an agenda other than investment merit.

My guess is that the Fed's goal is to keep long-term interest rates low long enough to allow millions of homeowners to refinance their adjustable rate mortgages into 40 or 50 year fixed-rate loans, and to create enough inflation to cause nominal incomes to rise sufficiently in order to enable homeowners to make higher debt payments and prevent nominal home prices from collapsing.

more...

[AnneD]

31. Morning Marketeers,

:donut: Oh Crap is right. Like my use to say "Shit hit the fan, but on a good day, you get a few seconds warning."

Another warning...the judge in ruling in the Blackberry case today so get those e-mails out.

The last bit of news I have heard before on a smaller scale. This is grave robbing at its worst.

Body part theft scandal expected to spawn widespread litigation

--------------------------------------------------------------------------------
NEW YORK - Patricia Battista had thought her back surgery in early 2005 was routine. A letter from her hospital nearly a year later made it clear she was wrong.
Battista was informed that donated human tissue used in her operation could have been infected with a variety of viruses - fallout from an alleged scheme to steal body parts from Brooklyn funeral parlors.

<snip>
Authorities believe two men paid off funeral homes so they could harvest bone and skin from the dead without their families' knowledge. Worse, some body parts came from elderly people who died of cancer and possibly from victims of infectious diseases - a fact disguised by doctored paperwork that indicated they had been younger and healthier.

The Brooklyn District Attorney's office has opened a criminal case focusing on scores of funeral homes in the New York City area and hundreds of looted bodies, including that of famed British broadcaster Alistair Cooke. At the same time, the Food and Drug Administration has sought to retrace the path of an untold number of tissue products that were derived from the stolen body parts and sold to medical facilities across the country and parts of Canada.

In a Jan. 16 letter to the FDA, Sen. Charles Schumer, D-N.Y., suggested there had been a breakdown in federal oversight, and urged the agency to revise its regulations "to immediately prevent further instances of contaminated transplants." He was expected to unveil legislation on Monday that would tighten regulations.

http://www.aegis.com/news/ap/2006/AP060135.html

Happy Hunting and watch out for the bears....

[54anickel]

41. You know what I find most disturbing about stories like that?

They tend to show just how unethical our society has become, and the cabal currently in power leads by example in the ethics (lack thereof) department. Seems nearly anything goes, so long as you don't get caught. Then there are those whose minds are so twisted and perverted, they actually attempt to rationalize their unethical behavior. You need to look no further than Chimpy's rationalization for an illegal, unethical war, the defense of the lobbying scandals, the defense of Plamegate, the defense of Spygate, etc, etc, etc.

What always comes to my mind, and keeps me up at night, is the old saying "desperate times call for desperate measures". If this is how our society/govt functions in relatively normal times - imagine what it might be like once that proverbial shit actually hits the fan.

[AnneD]

45. That thought is what has me...

packing my bags.
There have been a few odd incidences of this type of thing before, but this takes it to a whole new level. In fact, I have stipulated that any of my body parts taken can NOT be sold for profit. I want cremation which will make it hard to discover something like this. They even got Allister Cook so no one was safe. I think the worst was the man that discovered that they had substituted pvc pipe in his dads leg. This is a crime that deserves the maximum punishment. And your right, it shows a complete breakdown of basic civility.:mad: :nuke:

[UpInArms]

43. Four Charged for Selling Body Parts

http://www.cbsnews.com/stories/2006/02/24/ap/national/mainD8FVE8I00.shtml

AP) The owner of a biomedical supply house and three others were charged with selling body parts for use in transplants in a scheme a district attorney called "something out of a cheap horror movie."

Prosecutors said Thursday the defendants made millions of dollars obtaining bodies from funeral parlors in three states and forging death certificates and organ donor consent forms to make it look as if the bones, skin, tendons, heart valves and other tissue were legally removed.

The indictment was the first set of charges to come out of a widening scandal involving scores of funeral homes and hundreds of bodies, including that of "Masterpiece Theatre" host Alistair Cooke, who died in 2004. The investigation has raised fears that some of the body parts could spread disease to transplant recipients.

"I think we can agree that the conduct uncovered in this case is among the most ghastly imaginable," said Rose Gill Hearn, commissioner of the city Department of Investigation. "It was shockingly callous in its disregard for the sanctity of human remains."

Michael Mastromarino, owner of Biomedical Tissue Services of Fort Lee, N.J., was charged along with Brooklyn funeral home owner Joseph Nicelli.

Mastromarino was an oral surgeon who went into the tissue business after losing his dentist license, prosecutors said. Nicelli was a partner in the business, they said. The other defendants were Lee Crucetta and Christopher Aldorasi.

...more...

http://www.tvacres.com/death_misc_bones.htm

While celebrities are alive, they are sought out for their autographs by avid fans, but sometimes the need to have something "celebrity" gets out of hand as in the case of Alistair Cooke, the popular host of PBS's MASTERPIECE THEATER from 1971-1993. When he died on March 30, 2004, Cooke's bones were illegally harvested (surgically removed) right before his body was to be cremated. Cooke had died of lung cancer that spread to his bones. His 95 year-old cancerous bones were then sold (for $7000) to tissue processing companies for transplanting purposes.

The alleged body-snatching ghoul who stole the bones was Michael Mastromarino, the operator of Biomedical Tissue Services Ltd., a tissue recovery business that sold body parts, including bone, skin and cardiac valves. Cooke's remains were supposedly sold to Regeneration Technologies Inc., of Alachua, Fla., and Tutogen Medical Inc., of Paterson, N.J.

Mastromarino altered the death records to say Cooke died from a heart attack at the age of 85 so he could sell the remains and bypass Food and Drug Administration regulations which prohibit the use of cancerous bones and aged body parts.

...more...

[UpInArms]

44. and here's one that's too weird

(now I'm gonna have to quit with the body parts stories - eeewwwww!)

http://cbs4.com/watercooler/watercooler_story_055061505.html

(CBS) McKEESPORT, Pa. A man went into a convenience store and asked the clerk to warm up in a microwave what appears to be a severed male body part.

Customers going in and out of the Giant Eagle Get-Go mini market didn't know what to think when they saw police activity on the scene, reports KDKA's Ralph Iannotti.

A man walked in and asked a female clerk if she could use the store microwave to warm up something he had wrapped in a paper towel.

Concerned about an unusual odor from the oven, the clerk opened the microwave to check on the item and out tumbled what appeared to be a severed human penis, wrapped up in the paper towel.

Police were called immediately and the man ran out of the store empty handed.

...more...

[AnneD]

48. I could right a book....

about what comes in to an ER and could do an entire chapter on genital accidents I have seen or heard about. I am seldom shocked or surprised. However, I never say I have seen it all because when I do, I see something new. Give me a few drinks and I'll have you in stitches.:spray:

[ozymandius]

95. I am ashamed to have read the last line this way.

Police were called immediately and the man ran out of the store empty panted.

[EuroObserver]

66. F... No, I'll take several deep breaths before commenting on this.

Brooklyn. Only Brooklyn?

[AnneD]

70. I use to wonder where Hoffa was buried...

now I wonder who has his parts? But then again...IMHO, I never expected him to be found in one piece.

[EuroObserver]

72. So, now, all such transplant material will have to be

thoroughly, expensively tested before use? Nah, only for those who can afford it, I guess.

[UpInArms]

37. Printing Press Report: Fed adds temporary reserves via 5-day repos

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-24T143437Z_01_N24375428_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, Feb 24 (Reuters) - The Federal Reserve said on Friday that it was adding temporary reserves to the banking system through five-day repurchase agreements.

The benchmark federal funds rate last traded at 4.50 percent, the Fed's current target for the overnight lending rate on loans between banks.

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

[54anickel]

49. March 20 to 26, 2006: Iran-USA, beginning of a major world crisis

I believe this is the same article (different site) the EO posted earlier. Found it linked at 321.gold now. Thought it was worth a re-post. Check out the cartoons link while you're there (click on the petro dollar). They are a bit slow to load.

http://newropeans-magazine.org/index.php?option=com_content&task=view&id=3463&Itemid=85

DAMN, WTF! I refreshed the page and now it's UNAVAILABLE

Probably nothing - but I'm reaching for my cap

:tinfoilhat:

[EuroObserver]

67. No, take it easy, it is available

at that link - the cartoons too (I won't add to their server overload by linking to any). But they're obviously not accustomed to all the attention (I see they seem to normally address themselves mostly just to that quite small and hermetic 'European powerbroker elite').

"Thank you to you, our readers!
"On February 22nd, Newropeans-Magazine broke a new traffic record. It was classified in 51.899tth position among the first 5 millions websites ranked worldwide by Alexa.com, subsidiary of Amazon.com. Newropeans-Magazine got about 1 million pages viewed on that single day. These results were obtained despite the traffic jam which made the site very difficult to access for half a day."

[54anickel]

79. Thanks EO, I'll put away the tinfoil for the time being. eom

[54anickel]

53. Noland: Justifications & Questions (Willie)

http://www.321gold.com/editorials/willie/willie022306.html

Over the past weekend, many articles were digested along with meals taken in alongside some more fine Olympic action (not without drama between Shani Davis and Chad Hedrick). Two essays caught my eye in particular, the brilliant but unsatisfying Doug Noland essay on the bond yield curve and a stern warning by Martin Feldstein on the exaggerated US economic condition. Noland, although expert in his bond bubble analysis, seems to have overlooked the real economy distress, and might begin to serve as an apologist for the global bond bubble and its financial cancer pathogenesis. Somehow, the label "Weimar" belongs in the discussion, given the exponential credit growth, debt dependence, and massive abuse. Feldstein, who probably is far too competent and qualified to have been appointed as USFed Chairman, has checked in with an excellent warning of faulty statistics in yet another arena, capital flows and US Treasury accounting. One would think Feldstein should be silenced, but the USFed is on honeymoon.

TROUBLING OBSERVATIONS
A preface of some troubling observations, with accompanying pithy explanations. It seems remarkable to me that three phenomena are at work.

1) The US media ignores how Asia and OPEC have slammed the brakes on USTBond support since last spring, after clear warnings for years that US credit supply heavily depends upon them. They are asleep or suffering a blind spot or sadly inept.

2) We identified a stock bubble in 1999, its creation, its causes, its outcome. Not to be denied, we created a bond bubble. Yet, with the passage of time the experts seem driven to objectively justify it and rationalize it, perhaps mystified by its marvelous longevity. Its power might be stubbornly sustained by coercion as much as export preservation.

3) Nobody in the major financial journals connects the dots which lead one to conclude that US Gross Domestic Product is grossly exaggerated domestically, the product of missing price inflation adjustments. Rate tightening adds to risks as we stall.

Item #1 is easy. A central bank revolt is underway. Foreign reserves are loaded to the gills with our paper trash bearing USTBond faces. If attention is brought to this change in attitude, then similar attention would be brought to the questionable (probably illicit) TBond support coming from England. Their operations are easily mixed with England data. Can you say printing press? Bernanke can and does, probably will again, and cite its nifty low cost. The USGovt will have to cut deals with Asians and Persian Gulfers in order to stem the bleeding and erosion of support. When OPEC requires secrecy or at least an nice opaque front, London brokers are always willing to accommodate.

more...

[UpInArms]

89. Treasuries steady to lower as more rate hikes seen - deeper inversion

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-24T201051Z_01_N24253683_RTRIDST_0_MARKETS-BONDS-UPDATE-2.XML

NEW YORK, Feb 24 (Reuters) - U.S. Treasury debt prices were narrowly mixed on Friday as a startling drop in January durable goods orders failed to dent expectations for further official interest rate increases.

Bond yields have been stuck in a tight range this month after spiking in January as strong economic data caused investors to recalibrate their monetary tightening estimates.

The market is looking for another quarter-percentage-point hike in the key federal funds rate in March and is pricing in a pretty good chance that Federal Reserve Chairman Ben Bernanke will lead the U.S. central bank toward another move in May.

"Given the strong pickup in the data, the ongoing risk of rising inflation, the easy conditions in financial markets and Bernanke's desire to establish his anti-inflation credentials, is now a good time to move to the sidelines?" asked Ethan Harris, chief U.S. economist at Lehman Brothers.

"We expect at least two more rate hikes," he said.

Two additional increases would bring the Fed's target rate to 5.00 percent from the current 4.50, which helped explain why short-term Treasury rates were hovering near five-year highs.

Longer-dated yields have had trouble adjusting accordingly, however, forcing a deepening inversion of the yield curve.

...more...

[acmejack]

13. Thanx for doing this you guys!

I enjoy reading this in the morning & I actually am learning something (which would be much to my old Economics 101 prof's amazement) Always a great AM thread.

[Tace]

50. Yeah, I Learned Not To Use The Microwaves At Convenience Stores

: )

[EuroObserver]

73. Heh, heh. I like your dry sense of humour.

Me, I don't use microwave ovens, full stop. (Sorry, do I have to translate that?)

[AnneD]

94. Some things.....

don't need translation. I'll never eat ANYTHING from a convience store again (and will try hard not to giggle or throw up at the hot dog warmer (sorry if it doesn't translate).

[UpInArms]

14. daily dollar watch

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

Last trade 90.53 Change +0.23 (+0.25%)

Dollar Bulls Have Nothing But Jobless Claims

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/6945_dollar_bulls_have_nothing_but_jobless.html

Greenback weakness could be felt since the morning hours as the U.S. fell victim to better than expected economic data in the majors and a dearth of powerful reports on the day. The sole release that powered some retracements in the market was the weekly initial jobless claims report. Expected to rise 300,000, applications for first time claims actually dipped to 278,000, additionally below the 297,000 seen in the previous week. The positive report now sets the stage for the durable goods orders report set for release tomorrow. Should the report be released better than expected, it would be a continuance of the recent string of dollar positive data seen over the course of the quarter as it reflects healthy consumer spending in the world’s largest economy as the labor market tightens. Expected to decline overall on a plunge in the demand for commercial aircraft, the monthly figure is still expected to rise once again. Ultimately, with policy makers now looking for economic data in justifying further rate hikes, policy makers may very well be prompted once again.<[br />
...more...

[UpInArms]

33. Yen rises on BoJ Chief's comments

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B44543491%2DF849%2D4BF8%2DA2B1%2D15984721B759%7D&siteid=mktw&symbol=

NEW YORK (MarketWatch) -- The yen extended a rally from the prior session, setting fresh one-month highs against the dollar early Friday, as Bank of Japan Governor Toshihiko Fukui reiterated his hawkish comments about the interest rate outlook in the world's second-largest economy.

Fukui said Friday that conditions for a monetary policy change are gradually falling into place. He said the BoJ would watch for core consumer price inflation to stabilize above zero, in addition to positive indicators of economic recovery and price stability, before amending monetary policy.

Boris Schlossberg, senior currency strategist at Forex Capital Markets, told clients the yen was trading in a volatile range with "the typical tap dance between fiscal and monetary officials, as Governor Fukui's yen bullish comments that QEP is nearing an end were partially offset by statements from Finance Minister Tanigaki who noted that Japan remains in a state of deflation."

"This volatility will only exacerbate as the currency is pulled this way and that by the latest commentary from authorities," he said.

Earlier, the dollar had a muted reaction to a sharply weaker-than-expected durable goods orders number for January, which reflected the largest decline since July 2000.

...more...

[UpInArms]

15. U.S. to Pay Big Employers Billions Not to End Their Retiree Health Plans

http://www.nytimes.com/2006/02/24/business/24retire.html?ex=1141448400&en=26ab96a3bd3c64f8&ei=5099&partner=TOPIXNEWS

America's largest companies expect the federal government to pay them about $4 billion over the next four years to help keep their retiree health plans alive at a time when such benefits are increasingly on the chopping block, according to a new study by Credit Suisse First Boston.

The money is due to start flowing to employers this month as part of Medicare's new prescription drug benefit. When Congress authorized the Medicare drug benefit, it also agreed to start subsidizing the drug component of employers' retiree health plans, to keep them from shifting their retirees into the government program.

The goal is to save the government money, even after the subsidies, while giving the retirees a better deal than they might get if they were pushed into Medicare.

Among the nation's 500 largest companies, 331 offer retiree health plans.

With the program just starting its first year, it is not yet clear whether the subsidy will achieve its goals. For one thing, there are about 36 million people 65 and older in this country who are eligible for Medicare, but only about 7 million retirees currently covered by employer-sponsored health plans. Still, the Credit Suisse study, published on Wednesday, shows that the subsidy is popular with big employers — even those that do not fit the stereotype of companies in waning industries unable to cope with health care inflation and armies of baby-boomer retirees.

The money, to be sure, will flow to some financially weaker companies staggering under the weight of their health plans, like General Motors, which is expected to receive $1.1 billion over the next four years in drug subsidies for their retired workers.

...more...

[54anickel]

35. Why do I feel like some big corporation has a gun to my head?

Reminds me of a couple of years ago when Hubby was out on strike. Hellaburnin had left Dresser Industries in a mess with piss-poor, robber baron management. This has been happening at other union companies in the area as well, so it's not just a Dresser issue.

Retirees benefits were on the line and were the main reason for hubby's strike. Generations of families worked for Dresser, so many were trying to protect the benefits of parents, grandparents, aunts and uncles, as well as their own future. The company actually won quite a few concessions from the working rank and file by holding the retirees hostage. Just wonderful to see that we'll now be paying a second premium to maintain those retiree benefits - once thru higher payroll deductions for health benefits, the again as tax-payers.

That whole Medicare bill was nothing but a scam from the beginning, a big give-away to the drug and insurance industries. It seems to be the corporate gift that just keeps giving and giving and giving. :eyes:

[UpInArms]

38. Corporate Tax Rates have PLUNGED

Government revenue has soared by more than $1 trillion in recent decades, even as top marginal income tax and corporate tax rates plunged.

[Roland99]

39. What's comprising the non-tax revenue? Seems to be a big bulk of it.

[54anickel]

88. So, how long before we start paying the corporations directly for the

privilege of having a job. Let's just cut out the gubbermints middleman role to save on the paperwork.

[UpInArms]

16. China central bank to speed up yuan convertibility under capital account

http://news.yahoo.com/s/afp/20060224/bs_afp/chinafinancebankforex%3b_ylt=A9FJqZX1uv5DAy0A5gymOrgF%3b_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA--

SHANGHAI (AFP) - China will speed up the process of making the yuan fully convertible under the capital account and improve the exchange rate mechanism, the central bank's Shanghai headquarters said.

The local office of the People's Bank of China said in a statement issued late Thursday that it will regulate capital inflows and relax restrictions on outbound investment.

The statement said China will "accelerate the convertibility of the yuan under the capital account."

The yuan is convertible on the current account for trade in goods and services, but not on the capital account, which means exchanging yuan for purposes such as stock investment is more cumbersome.

The statement also said it will improve the yuan exchange rate mechanism and accelerate the development of the foreign exchange market, without setting a timeframe for the reforms.

...more...

[UpInArms]

17. Fee processor settles charges over data breach

http://www.boston.com/business/articles/2006/02/24/fee_processor_settles_charges_over_data_breach/?rss_id=Boston+Globe+--+Business+News

WASHINGTON -- A data breach that left some 40 million customer accounts vulnerable to hackers will lead to tighter security measures to protect millions of credit and debit card users, Federal Trade Commission officials said yesterday.

CardSystems Solutions Inc. has settled charges it broke the law by failing to ensure adequate safeguards, resulting in millions of dollars in fraudulent purchases, the commission said.

The settlement calls for better safeguards. The FTC could not seek civil penalties under the law it said CardSystems violated.

Atlanta-based CardSystems processed credit card and other payments for banks and merchants. Last summer, it was disclosed that tens of millions of mostly MasterCard and Visa accounts were exposed to possible fraud after a hacker broke into the company's computer system.

''CardSystems kept information it had no reason to keep and then stored it in a way that put consumers' financial information at risk," said FTC chairwoman Deborah Platt Majoras.

The company stored information from the magnetic strip of credit and debit cards -- account numbers, expiration dates, and security codes. The commission also said CardSystems had insufficient passwords to keep a hacker from taking control of its computers.

...more...

[UpInArms]

20. U.S. stock futures fall after Saudi oil blast

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-24T132950Z_01_N24300727_RTRIDST_0_MARKETS-STOCKS-UPDATE-2.XML

NEW YORK, Feb 24 (Reuters) - U.S. stock index futures turned lower on Friday after an explosion and shooting were heard at a Saudi Arabian oil facility, according to Al Arabiya television. Oil futures rose sharply.

S&P 500 futures <SPH6> were down 0.2 point, but slightly above fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures <DJH6> fell 9 points, and Nasdaq 100 <NDH6> futures up 1.50 points.

[EuroObserver]

22. Saudis say they "foiled" refinery attack, breaking...

(BBC) The Saudi authorities have said they foiled an attempt to bomb the refinery with two vehicles packed with explosives, al-Arabiya TV reported.

...more...

[EuroObserver]

78. Some more detail from BBC, AlJazeera:

BBC: "Oil security analysts have estimated that a serious attack on the facility could halve Saudi exports for up to a year.
...
Saudi officials said at least two cars packed with explosives tried to ram the gates of the facility in the eastern province of Dammam. Security guards opened fire, causing at least one of the vehicles to explode, killing the occupants. Three Saudi guards are said to have been critically wounded

Mr al-Nuaimi said the blast caused a "small fire", which was brought under control. He denied earlier reports on al-Arabiya television that the attacks had briefly stopped the flow of oil after a pipeline was damaged.

...more...

AlJazeera: It was the first such attack on an oil facility in the kingdom, which has waged a fierce three-year crackdown on insurgents and suspected al-Qaida fighters. There have been previous attacks on oil company offices, but not on a facility where oil is present.

The blast damaged a pipeline at Buqayq, a large complex that processes crude oil 70km southwest of the oil hub of Dammam on Saudi Arabia's Gulf coast, the Saudi-owned Al-Arabiya said. Oil stopped flowing briefly but then resumed, it reported.

...more...

[54anickel]

25. Did they "plunge" because of the blast or was it in response to the

durable goods drop that, again, surprised economists? Inquiring minds and all....

[UpInArms]

23. Snow's role in ports deal is questioned

http://toledoblade.com/apps/pbcs.dll/article?AID=/20060224/NEWS09/602240364

U.S. Rep. Marcy Kaptur requested an investigation of Treasury Secretary John Snow yesterday, claiming that the sale of management rights for American ports to a Middle Eastern company might pose a conflict of interest for him.

"I don't think he's an innocent bystander in this," said Miss Kaptur (D., Toledo). "There should be sunshine on any of those who might benefit from these transactions."

<snip>

While Mr. Snow has a deferred compensation with CSX valued as high as $25 million and a $33.2 million special retirement pension, Miss Kaptur was unaware of any direct financial relationship the secretary had with Dubai Ports World.

Still, Miss Kaptur argues that Mr. Snow should have recused himself from the Committee on Foreign Investments since it was considering the sale of ports to a foreign entity that previously had acquired a division of CSX two years after he left the company.

...more...

[UpInArms]

27. OT: ABC News President Issues Update on Bob and Doug

http://abcnews.go.com/WNT/story?id=1654782

excerpt:

I have a good progress report on both Bob and Doug. As I send this to you, Doug and Vivian have checked out of Bethesda Medical Center and are on their way home to France. I spoke to them both this morning. They're in good spirits and looking forward to getting back to their children at home. Doug will continue to undergo further treatment in Europe and will return to the United States for checkups as he continues to recover.

<snip>

Bob also continues to make good progress. The doctors are slowly bringing him out of sedation and are very pleased with the progress they've seen so far, especially in the last few days. As the doctors have explained to Lee and the family, the process of lowering the sedation is a slow one; that's so Bob can continue to heal and remain as comfortable as possible while he deals with the understandable pain associated with his injuries.

...more...

[UpInArms]

34. pre-opening blather

09:15 am : S&P futures vs fair value: -0.2. Nasdaq futures vs fair value: flat.

09:00 am : S&P futures vs fair value: +0.5. Nasdaq futures vs fair value: +3.0. Futures trade has ticked back upwards, and the market is poised for a flat to modestly higher open. Crude, which still remains 2.7% higher, has pulled back slightly following news that the reported explosion at a Saudi Arabian oil complex was foiled. Oil is apt to remain in focus as supply concerns continue to trouble the market. The Saudi development adds to the geopolitical tensions that have been recently related to Nigeria. The price of crude futures for April delivery is now $62.15 per barrel, which reflects a $1.68 per barrel price increase.

08:35 am : S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: -0.5. The January Durable Orders report was recently released. The total read was a much lower than expected -10.2%; economists had expected a 2.0% decline. An upward revision, to +2.5%, in last month's number may help mitigate the current read's effect. Separately, crude futures have now gained 3.4% and are trading at $62.57 per barrel, on reports that there may have been an explosion at a Saudi facility. Futures trade has ticked lower and now suggests a slightly lower open for the stock market.

[UpInArms]

36. 9:37 EST running for the exits

Dow 11,039.76 -29.46 (-0.27%)
Nasdaq 2,273.30 -6.02 (-0.26%)
S&P 500 1,286.89 -0.90 (-0.07%)
10-Yr Bond 4.547 -0.20 (-0.44%)

NYSE Volume 88,229,000
Nasdaq Volume 82,361,000

Guess folks are wondering whether they want to own stocks over the weekend :shrug:

[UpInArms]

40. April Gold @ $555.50 oz - May Silver @ $9.64 oz

April gold climbs $4.60 to $555.50/oz in morning trading
9:42 AM ET Feb. 24, 2006 -

May silver rises 8.4c, or 0.9%, to $9.64/oz
9:42 AM ET Feb. 24, 2006 -

May copper up 1.85c, or 0.8%, at $2.218/lb
9:42 AM ET Feb. 24, 2006 -

[UpInArms]

47. Gold futures rise as much as $7

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BCF30F9D2%2DBAEB%2D4208%2DB7DE%2D1A8FECA5C6C3%7D&siteid=mktw&symbol=

SAN FRANCISCO (MarketWatch) -- Gold futures climbed as much as $7 an ounce Friday, poised to mark an overall gain for the week despite falling 1% in the previous session as investors fretted over a reported explosion at an oil refinery in Saudi Arabia.

The report of an explosion and shots fired at an Eastern Saudi Arabian oil refinery sourced the al-Arabiya television channel. The explosion came from Saudi security officials shooting at a vehicle packed with explosives, the television channel reported, according to the Associated Press.

The news lifted prices for oil by 2% in early trading. See Futures Movers.
"The mere thought of an organized, expanded terrorist effort to sabotage the West's oil lifelines (and thereby its economies) has people looking for cover and heading straight towards gold," said Jon Nadler, an investment products analyst at bullion dealers Kitco.com.

Gold for April delivery rose $5.10 to trade at $556.10 an ounce on the New York Mercantile Exchange, tapping a high of $558.40. On Thursday, the contract fell $5.70 to close under $551 -- a level not seen since Feb. 16. The contract closed out last Friday's session at $554.60.

...more...

[EuroObserver]

71. Gold recovers in Europe after Saudi blast

LONDON, Feb 24 (Reuters) - Gold rebounded to trade above $556 an ounce on Friday, supported by a blast at a Saudi Arabian crude oil facility, dealers said. Saudi Arabia's oil minister said the kingdom's oil and gas production was unaffected by an attempt to storm the huge Abqaiq oil facility on Friday, adding that exports from the plant were running normally. Nevertheless, oil <CLc1> climbed 3.6 percent to $62.60 a barrel at 1543 GMT.

Spot gold rallied over one percent following to the blast, to $556.10/557.00 at 1535 GMT, up from $548.40/549.30 in New York late on Thursday and $550 before news of the attack. "The explosion reports stopped people selling across precious metals, which has provided support," one London dealer said.

James Moore, analyst at TheBullionDesk.com said the short-term outlook for gold remained mixed, with traders closely monitoring moves in currency and oil markets on the last working day of the week. "Recently the trend has been a little bit of safe-haven positioning ahead of the weekend," he said.
...

In other precious metals, platinum <XPT=> rose to $1,031/1,035 an ounce from $1,017/1,021 in New York, while silver <XAG=> edged up to $9.56/9.59 from $9.49/9.52. Palladium <XPD=> was at $282/286 an ounce, compared with 283.50/287.50.

...more...

[UpInArms]

52. 10:44 EST and nobody's happy

Dow 11,025.83 -43.39 (-0.39%)
Nasdaq 2,275.19 -4.13 (-0.18%)
S&P 500 1,287.15 -0.64 (-0.05%)
10-Yr Bond 4.571 +0.04 (+0.09%)

NYSE Volume 509,586,000
Nasdaq Volume 414,013,000

10:25 am : While the S&P and Nasdaq continue to hover around the flat line, the Dow has slipped deeper into the red. The blue chip average lacks spirited leadership. Exxon Mobil (XOM 60.22 +0.39) is currently its strongest source of support. Declines have also been kept in check, but the modest losses levied by two-thirds of constituents overshadow the modest gains offered by the other third. Merck (MRK 35.08 -0.33) and Hewlett Packard (HPQ 32.06 -0.31) are the Dow's laggards at this point, and are each off 1.0%. With respect to their corresponding sectors, Healthcare is now 0.2% lower; Technology has managed to stay just above the unchanged mark. DJ30 -21.53 NASDAQ -0.19 SP500 +1.35 NASDAQ Dec/Adv/Vol 1321/1221/303.6 mln NYSE Dec/Adv/Vol 1372/1468/265.1 mln

10:00 am : The indices are vacillating around the unchanged mark. Five of the ten economic sectors are currently on gaining ground. Energy, not surprisingly, is the leader. Alongside crude's rise, that area of the market has advanced 1.5%. Refiners are presently faring best, but buying is broad-based and has taken each of the S&P's energy stocks higher. The other gaining sectors are Financial (+0.1%), Materials (+0.1%), Telecom (+0.3%), and Utilities (+0.3%). The Consumer Discretionary sector (-0.2%) is presently the worst-faring, but is demonstrating some resilience in light of the energy price action and geopolitical news. DJ30 -5.77 NASDAQ -0.51 SP500 +1.34 NASDAQ Dec/Adv/Vol 1524/843/180.2 mln NYSE Dec/Adv/Vol 1424/997/148.5 mln

[Roland99]

58. Recovering a bit as lunch approacheth

DJIA 11,038.70 -30.50
Nasdaq 2,277.36 -1.96
S&P 500 1,288.01 +0.22
Russell 2000 732.24 -0.21

[AnneD]

65. How 'bout

a little SW disco dance theme for Friday 'I Will Survive' by Gloria Gainer comes to mind. And for those that lost their shirts, their jobs and their dignity... "Y.M.C.A." by the Village People.

[Roland99]

75. Or, how 'bout

a reunion tour for the member of Survivor?


;)

[UpInArms]

54. As debt rises, wealth leveling off

http://www.boston.com/business/personalfinance/articles/2006/02/24/as_debt_rises_wealth_leveling_off/

WASHINGTON -- The wealth of US families barely grew from 2001 to 2004 as the economy emerged from the first recession in a decade and consumers took on more debt, a Federal Reserve report showed.

Median net worth, the difference between household assets and liabilities, rose 1.5 percent to $93,100 during the survey period, down from a 10.3 percent gain from 1998 to 2001, according to a Fed report released in Washington yesterday. Net worth fell for the bottom 40 percent of US families.

''It's discouraging," said Stephen Brobeck, the executive director of the Consumer Federation of America. ''What we see is little change in the assets of the typical American household between 2001 and 2004, after substantial increases in the previous six years."

The survey of 4,000 households, which the Fed conducts every three years, reflected a postrecession economy that expanded slowly, then gathered pace. Economic growth climbed from 1.6 percent in 2002 to 4.2 percent in 2004, while a loss of 535,000 jobs turned into a gain of more than 2 million positions. The recession lasted from March to November 2001.

Rising mortgage debt was the main reason growth of net wealth slowed during the survey period. The average housing debt jumped 27 percent to $124,100, and the share of families with mortgages rose to about 48 percent in 2004 from 45 percent three years before. Other debt, including for credit cards and installment loans, also rose. That meant more family assets were offset by debt in 2004 than in 2001.

...more...

[54anickel]

55. Bushco must be gloating, "Mission Accomplished". eom

[OrangeCountyDemocrat]

57. ''The increase in debt is holding down the net worth growth,"-William Gale

What a Moron! The minute I read this I thought....did this guy ever consider that the increase in debt is what caused net worth growth these past few years?

All I could think of was this guy complaining that if it wasn't for that pesky minor problem of debt, there would be net worth growth, and everything would be fine. Nothing is farther from the truth. Were it not for mortgage debt and credit card debt, we would be nowhere.

WHY DOESN'T ANYBODY ELSE SEE THIS? Our economy has been based on borrowing for a long time, but Especially since 2000. That's when the money and "net worth growth," as the Gale bozo would say.....really exploded.

[Roland99]

59. More people with mortgages? Woohoo! Ownership society!!

Owning a crapload of debt, perhaps.

[54anickel]

60. Heh-heh, Is Fannie Mae copping the incompetency defense? Seems to

be working so well for Bushco these days. Unfriggenbelievable.

Fannie Mae Report Spotlights `Mind-Boggling' Accounting Errors

http://quote.bloomberg.com/apps/news?pid=10000103&sid=aWR5f4dbnRDI&refer=news_index

snip>

The investigation led by former Senator Warren Rudman found that Howard and Spencer, who was promoted to controller in 1998, oversaw departments that lacked adequate staffing and expertise as they violated accounting rules to ``show a trend of stable earnings from 2001 to 2004,'' the report said. Howard and Spencer bore the brunt of the blame, the report concluded.

`Mischaracterization'

``Employees who occupied critical accounting, financial reporting and audit functions at the company were either unqualified for their positions, did not understand their roles, or failed to carry out their roles properly,'' the report found.

Howard was ousted in December 2004 along with Chairman and Chief Executive Office Franklin Raines. Spencer was let go in August 2005. Rudman said Howard declined ``repeated requests'' to be interviewed.

``Tim Howard consistently acted in accordance with the highest standards of integrity and in the best interests of shareholders,'' Steve Salky, a partner representing Howard at Zuckerman Spaeder LLP in Washington, said in an interview yesterday. ``We reject the reports' mischaracterization of Mr. Howard's motives and conduct.''

more...



Fannie fraud still a 'threat'
http://www.theaustralian.news.com.au/common/story_page/0,5744,18261847%255E36375,00.html

THE $US11 billion ($14.9 billion) accounting fraud at Fannie Mae stemmed from an "earnings at any cost culture" and the US mortgage giant still posed a systemic threat to financial markets, Randy Quarles, undersecretary for domestic finance at the US Treasury, said.

snip>

Concerns about the errors at Fannie and at Freddie Mac, its smaller rival, have led to congressional attempts to toughen the monitoring of the two, which are the biggest bond market borrowers in the US after the federal government.

But the 2652-page report did not find evidence that the accounting irregularities were associated with a desire to maximise executive bonuses, except in one instance, but were instead "motivated by a desire to show stable earnings growth, achieve forecast earnings and avoid income statement volatility".

It said many of the suggested changes to Fannie's corporate governance were under way but did not stint on criticism of the original problems.

Employees in crucial accounting positions "were either unqualified for their positions, did not understand their roles or failed to carry out their roles properly", it said. Accounting systems were also "grossly inadequate".

more...

[UpInArms]

61. National Security collides with "Free Market" Meme

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B0317AEEE%2D47AF%2D42BD%2DBEFF%2D260274800569%7D&siteid=mktw&symbol=

Since 1988, CFIUS has reviewed about 1,600 applications and ordered 25 45-day reviews. In 1989, following the Tiananmen Square massacre, President George H.W. Bush rejected a Chinese company's proposed takeover of an aircraft-parts manufacturer -- the only rejection in CFIUS history.

<snip>

CFIUS finds itself in the spotlight again, in part because its meetings are held behind closed doors. Since it reviews national security implications of proposed transactions, classified government information and also proprietary corporate information can be involved.

While analysts concede that the administration could keep Congress better informed of sensitive applications, it's unclear that giving lawmakers a say in deal approvals would pass constitutional muster. The executive, not legislative, branch is the one endowed with decision-making abilities about individual issues like the port case.

Administration officials now face a quandary over balancing national security and the free-market philosophy the White House and Treasury usually profess. The deal is set to take effect March 2. That's the same day that even more members of Congress -- namely, the Senate Banking Committee -- are slated to hold a hearing investigating the matter.

[ozymandius]

62. lunchtime check-in

12:25
Dow 11,049.04 -20.18 (-0.18%)
Nasdaq 2,282.53 +3.21 (+0.14%)
S&P 500 1,289.43 +1.64 (+0.13%)
10-Yr Bond 45.69 +0.02 (+0.04%)
NYSE Volume 921,980,000
Nasdaq Volume 725,714,000

12:00 pm : The equity market started the session near the unchanged mark, but the Dow has since fallen into the red. The S&P and Nasdaq continue to dip in and out of it. The market is becoming reacquainted with the fact that geopolitical concerns still have the potential to affect the energy market, and today's developments have sent crude sharply higher. That factor underpins the prevailing sense of uncertainty that continues to impede the market's advance.

Due to supply concerns related to pledged militant attacks in Nigeria, crude futures had risen considerably during early trade. Reports of an explosion at a Saudi Arabian oil facility sent crude even higher. The incident was later revealed to be a foiled suicide bomb attack. That country is OPEC's largest producer, and two-thirds of its oil comes from the region in which that particular oil center is located. The development exacerbates worries that have been lately focused on Nigeria and Iran. At this point, crude futures are up 3.1% to $62.40 per barrel. Not surprisingly, the Energy sector has benefited from the energy action. Its rise today is reflective of our long-term view of the sector. Its 1.7% advance helps limit the broader market's decline, but it's nonetheless overshadowed by losses across seven sectors.

Consumer Discretionary (-0.7%) is faring worst. The energy price action and related geopolitical worries do not bode well from a consumer spending standpoint. Some earnings related news from Gap (GPS 18.48 -0.62) and Nordstrom (JWN 38.08 -1.93) further contributes to the sector's decline. Last night, the former announced in-line Q4 EPS, but issued downside FY07 guidance. The latter, meanwhile, delivered better than expected earnings but its guidance left investors wanting more. Those reports reflect the fact that the market needs to lower its earnings expectations for the quarters ahead. In the retail space, Kohl's (KSS 46.75 +2.24) is a bright spot following its solid results.

Some wide-spread selling has also taken the Consumer Staples (-0.5%), Healthcare (-0.2%), Industrials (-0.1%), Telecom (-0.7%), and Materials (-0.2%) sectors lower. Technology vacillates around the flat line. On a related note, Research in Motion (RIMM 71.50 +1.97) is garnering attention as it's speculated that a judge will rule in favor of NTP in a patent ruling that is likely to involve shutting down the Blackberry service. Despite that possibility, which is not new news, the stock is trending higher.

Separately, Durable Goods Orders plunged a much more than expected 10.2% last month (consensus -2.0%), caused by a 31% drop in transportation orders. We do not view the number as a cause for concern, though. Excluding transportation, orders were up 0.6% and year-over-year total durable orders are up 6.5%. That data does not appear to be having much affect on trade today. The market remains focused on crude action and interest rate uncertainty.DJ30 -30.02 NASDAQ +0.21 SP500 +0.45 NASDAQ Dec/Adv/Vol 1507/1292/659.5 mln NYSE Dec/Adv/Vol 1484/1565/621.4 mln

[ozymandius]

64. Here's something for a dose of cognitive dissonance.

http://dailykos.com/storyonly/2006/2/24/74940/5678

Let me kill off once and for all the Iranian oil bourse story
by Jerome a Paris

Crazy scenarios involving Iran's purported attempts to create an oil bourse to start selling oil in euros make the rounds regularly, and even get recommended with alacrity on DKos.

These things WILL NOT HAPPEN, and we have, as a supposedly reality-based community, to focus on real issues and not imaginary ones.

So let me explain why an Iranian oil bourse will not work for the foreseeable future. I hope that this diary can be used as a handy reference when this crops up again in the future.

-cut-

So, say that Iran decides to sell its oil in euros. Fine. Both the Iranians and their clients will determine the price for the transaction in dollars, on one of the established markets, and will trade these dollars for euros for the actual payment operation. It will give banks active on the forex markets a little bit of income, but will change nothing to how oil is traded.

If they open a bourse, who will come? The answer is, no one, unless it is nothing more than the new place to buy oil from them and the transaction, whether in euros or in any other currency, will be negotiated in dollars, using existing market standards expressed in dollars, because there is no way that anybody will be able to express and clear the transaction in any other way.

more...

I am chagrinned and confused as to what to think.

[AnneD]

68. Time will tell,

whether we have more 'surprised' economists and nouveau poor or people on the sidelines with some of their savings in their pocket. Until we take oil out of the equation, we will only be as stable as the oil market.

[54anickel]

74. Islam’s Financial Power

Sorry about the source - a rather "Fundie" site, but gives one something to ponder yet again. They accurately cover some interesting topics, but then blow it (for me anyway) when they try to tie it all into some Biblical Prophesy.

http://www.thetrumpet.com/index.php?page=article&id=2048

Among numerous significant current events that occurred in the past couple weeks, there was one that received little coverage by the press. It has to do with the emergence of an Islamic financial system set to contend with the Anglo-American, European and Asian systems. The fact that a principal voice supporting this development came from within Asia adds its own unique sense of interest to this emerging phenomenon.

On February 7, the governor of the Central Bank of Malaysia, Dr. Zeti Akhtar Aziz, opening the Second International Research Conference on Islamic Banking, in Kuala Lumpur, called for the building of a robust Islamic financial system. In her keynote address Dr. Aziz stated, “In the recent decade, the Islamic financial system has experienced remarkable growth and transformation, demonstrating its potential as a competitive form of financial intermediation. Today, Islamic finance represents a multi-billion-dollar industry with a comprehensive range of products and services, serving a broad spectrum of consumers and businesses that extends beyond the Muslim world. …

“These developments have cumulatively evolved the Islamic financial system to increasingly become an integral component of the international financial system. … hese developments are supported by a strong regulatory and supervisory framework reinforced by the legal and sharia framework …” (RiskCenter, February 15).

So, consider: We have a dollar system under huge strain and in decline, increasingly under challenge by the upstart European Monetary Union underpinned by the euro, a currency now worth 18 to 20 percent more than the dollar. There is a continuing call for more oil contracts to be written in euros rather than dollars. We have a greatly undervalued Chinese currency. And now, rising calls for Islamic countries to separate themselves into their own financial and banking bloc.

This all spells incredible disruption in the future to the global financial system as the world has known it since the close of World War ii.

more...

I think it is the disruption - whether mild or severe that is the important issue. We are balancing on the edge and the slightest bump could send the global markets into a tizzy. That's what most of those who seem to pooh-pooh the IOB tend to overlook. Our global financial system "ain't never been here before".

[ozymandius]

76. a decent dovetail with statistical data

There is a chart (somewhere - sorry, I lost the URL) that shows the sum effect of Iraq's switching to the petro-euro in 2000. The chart, I recall, displayed how the dollar was kicked in the teeth, presumably, over Saddam Hussein's conversion of $10billion in cash reserves to euros and the change in oil sales. Ten billion is a piddly amount of money in this level of currency exchange. Nonetheless, the chart detailing the value balance of both the dollar and the euro showed the dollar fall precipitously before it stablilized.

Now, some questions come to mind: Was the dollar's fall directly attributable to Iraq's trading currency switch? Or was another global event responsible? What was the size of the EU then, compared to now? Did the EU portend to be a more viable trading partner than the U.S. in 2000?

[EuroObserver]

80. "upstart European Monetary Union" is a bit rich

;-)

[AnneD]

93. With all due respect....

of course;)

[ozymandius]

69. markets shuffling their feet

1:04
Dow 11,051.21 -18.01 (-0.16%)
Nasdaq 2,284.98 +5.66 (+0.25%)
S&P 500 1,289.73 +1.94 (+0.15%)
10-Yr Bond 45.73 +0.06 (+0.13%)
NYSE Volume 1,047,981,000
Nasdaq Volume 839,118,000

12:30 pm : Little has changed within the equity market, but the indices have managed to somewhat improve. A slight uptick in the Financial sector, which is now 0.3% higher, and Technology's (+0.2%) advance from the flat line are the main reasons for the improvement. Additionally, the declining sectors have pared some of their losses and lessen the pressure the market faces. The Dow has not been able to rise from the red, however. A majority of the blue chip average's constituents are trending lower. GM is the worst-faring. Its 1.4% decline helps stunt the average as well as the Discretionary sector.DJ30 -20.90 NASDAQ +2.98 SP500 +1.56 NASDAQ Dec/Adv/Vol 1479/1367/743.5 mln NYSE Dec/Adv/Vol 1439/1641/693.6 mln

[ozymandius]

77. Dow losses deepen again.

1:47
Dow 11,036.64 -32.58 (-0.29%)
Nasdaq 2,280.51 +1.19 (+0.05%)
S&P 500 1,287.80 +0.01 (+0.00%)
10-Yr Bond 45.71 +0.04 (+0.09%)
NYSE Volume 1,195,495,000
Nasdaq Volume 969,628,000

1:30 pm : The Dow has headed back south, but the Nasdaq and S&P remain on gaining ground. Crude is now up 4.1%, and has hit $63.00 per barrel for the first time in two weeks. Prices across the energy complex are also rising: heating oil has gained 3.8%; unleaded gas is up 1.1%; and natural gas has advanced 0.4%. The market continues to demonstrate resilience in the fact of that. On a related note, gold futures have rallied today, and they've added 1.7% to their 5.7% year-to-date gain. The yellow metal is often sought as an inflation hedge. From that standpoint, today's geopolitical news and energy price action are bullish factors for the commodity. Gold is also on the rise as a flight-to-quality play in light of worries that the Saudi incident worsens. Prevailing uncertainty over monetary policy is an addiitonal factor that continues to suuport the metal's price.DJ30 -24.82 NASDAQ +4.55 SP500 +1.16 NASDAQ Dec/Adv/Vol 1441/1455/910.7 mln NYSE Dec/Adv/Vol 1411/1733/831.1 mln

1:00 pm : The market continues to improve. The Dow remains on negative turf, but it has edged closer to unchanged territory. Its financial components are helping to drive its advance. J.P. Morgan (JPM 41.67 +0.56) contributes the most upside, booking a gain that is now superior to Exxon Mobil's (XOM 60.59 +0.76). Within the Financial sector, brokers are also demonstrating relative strength. E*Trade (ET 25.04 +0.57) is the brightest spot within that industry, but each of its peers are also attracting buyers. The space remains one of our favored within the Financial sector. We foresee robust M&A activity as theme of 2006 that will continue to support that industry's outperformance. DJ30 -12.01 NASDAQ +4.90 SP500 +2.49 NASDAQ Dec/Adv/Vol 1465/1416/817.4 mln NYSE

[UpInArms]

81. The Paradigm Shift Is Here, Or, Everybody Must Be Stoned

http://www.freemarketnews.com/Analysis/39/3924/2006-02-24.asp?wid=39&nid=3924

If we can get through the end of next month without serious economic havoc (say, the whole planet blowing up, or a full-tilt outbreak of the bird flu pandemic in Arkansas) it might be safe to dig a few of those rat-holed Maple Leafs, Morgan dollars and Krugerrands out of that backyard coffee can and trade them out for Fednotes at your local pawnbroker or coin-dealer.

<snip>

Forget digesting or recovering from a day of cheap red; we were beginning to stagger like a first-round boxer after a right hook from Ali when word arrived from Chris Laird that the Yen-carry trade was about to unwind. Being unsophisticated silver slugs from Wallace, Idaho, we didn’t know there was such a thing as a Yen-carry trade, but it’s been working like this. The Bank of Japan has been charging zero interest on loans for the past 10 years to try to revive the economy. So guys were going to Japan, borrowing Yen for no interest, converting those Yen to dollars, and lending them to us by buying U.S. Treasury notes paying 3 percent interest, or wholesale home mortgages paying a little more. Nice mark-up, if you can get it. Except that the party is about to end, because three quarters of economic growth in Japan will cause its central bank to start raising the borrowing rate.

Writes Laird: “The BOJ literally acts like a central bank of the world through the Yen carry trade, supplying liquidity that finds its way into markets everywhere. The phenomena is a decade old now for the latest manifestation. The last time this level of penetration of the Yen carry trade was reached was just prior to the LTCM collapse. Back then, when the Yen unexpectedly strengthened 20% it caused a massive move out of Borrowed Yen on the Cheap, and caused massive market sell offs world wide, and was a direct cause of the LTCM collapse, where the US FED had to act immediately to bail out banks and illiquid brokerages and financial entities with blank checks to forestall that crisis.”

We started to run from all this chaos like Fed governors abandoning a sinking ship – the second one to do so recently, with 8 years still left in his term, Roger Ferguson, bailed this week – when Libertarian Paul Gallagher and a European think tank, LEAP E2020, simultaneously and without having chatted with each other first, warned of economic calamity within the next bloody month or two.

March, the Europeans noted, is going to be one nasty month. LEAP E2020 “now estimates to over 80 percent the probability that the week of March 20-26, 2006 will be the beginning of the most significant political crisis the world has known since the Fall of the Iron Curtain in 1989, together with an economic and financial crisis of a scope comparable with that of 1929.” Why? Because the Iran Oil Bourse will open on the 20th, and the U.S. Fed three days later will quit reporting the M-3 figures, which most accurately reflect the actual amount of dollars floating around there at any given moment. Toss in an “intervention” by the Bush-Blair axis or by Israelis in the Iran nuke mess and the think tank’s estimate of calamity goes to 100 percent.

...more with more embedded links...

[54anickel]

82. Well, they'll stone ya when you're trying to be so good,

They'll stone ya just a-like they said they would.
They'll stone ya when you're tryin' to go home.
Then they'll stone ya when you're there all alone.
But I would not feel so all alone,
Everybody must get stoned.

Well, they'll stone ya when you're walkin' 'long the street.
They'll stone ya when you're tryin' to keep your seat.
They'll stone ya when you're walkin' on the floor.
They'll stone ya when you're walkin' to the door.
But I would not feel so all alone,
Everybody must get stoned.

They'll stone ya when you're at the breakfast table.
They'll stone ya when you are young and able.
They'll stone ya when you're tryin' to make a buck.
They'll stone ya and then they'll say, "good luck."
Tell ya what, I would not feel so all alone,
Everybody must get stoned.

Well, they'll stone you and say that it's the end.
Then they'll stone you and then they'll come back again.
They'll stone you when you're riding in your car.
They'll stone you when you're playing your guitar.
Yes, but I would not feel so all alone,
Everybody must get stoned.

Well, they'll stone you when you walk all alone.
They'll stone you when you are walking home.
They'll stone you and then say you are brave.
They'll stone you when you are set down in your grave.
But I would not feel so all alone,
Everybody must get stoned.

[UpInArms]

83. LOL!

That's the tune now stuck in my head :D

They'll stone ya when you're at the breakfast table.
They'll stone ya when you are young and able.
They'll stone ya when you're tryin' to make a buck.
They'll stone ya and then they'll say, "good luck."
Tell ya what, I would not feel so all alone,
Everybody must get stoned.

[54anickel]

85. Yeah, reminded me of the good old days of my youth. Had to go

out for a :smoke: after posting that one. Legal smoke that is! :hippie:

[AnneD]

96. AHHHHH

if you remember the 60's...you weren't there :hippie:
If there was ever a time when we needed to turn on, tune in, and drop out...it is now.

[54anickel]

84. Coffee can? Geez that just seems so primative....

Ziplocks and Tupperware/Rubbermaid are the way to go! Those police dogs have been trained to sniff out coffee ya know. :evilgrin:

[UpInArms]

86. 2:57 EST and all is good again!

Dow 11,072.10 +2.88 (+0.03%)
Nasdaq 2,285.55 +6.23 (+0.27%)
S&P 500 1,290.57 +2.78 (+0.22%)
10-Yr Bond 4.571 +0.04 (+0.09%)

NYSE Volume 1,460,624,000
Nasdaq Volume 1,175,881,000

2:30 pm : Sideways trade persists. The Treasury market, meanwhile, remains in the red. That market had received an early boost from the much lower than expected Durable Orders headline read, as well as from the geopolitical issues that are in today's spotlight. Largely due to technical factors, that market has been unable to remain on gaining ground. The benchmark 10-year note is presently down three ticks and yielding 4.57%. The front of the curve is faring worst - with the five-year note off 20 ticks and offering 4.63%. Separately, Kevin Warsh was sworn in as the newest governor of the Federal Reserve with a term that does not expire until January of 2018.DJ30 -16.22 NASDAQ +3.43 SP500 +1.39 NASDAQ Dec/Adv/Vol 1449/1495/1.09 bln NYSE Dec/Adv/Vol 1393/1776/995.2 mln

2:00 pm : Since the prior update, it's been more of the same for the stock market. The Dow continues to slide, and the S&P and Nasdaq move closer to the flat line. The Nasdaq remains the outperformer. One of its drivers today has been Research in Motion (RIMM 75.04 +5.51). That stock is now up nearly 8% amid developments in its ongoing patent dispute with NTP. U.S. District Judge James Spencer today concluded that Research In Motion's patents were invalid, but stopped short of ordering an injunction against the company, which would have left millions of BlackBerry users without service and cost the company billions of dollars. While the announcement has seemingly quelled near-term concerns, the injunction request is under advisement and the outcome for RIMM remains unclear. DJ30 -32.57 NASDAQ +1.38 SP500 +0.08 NASDAQ Dec/Adv/Vol 1476/1441/997.2 mln NYSE Dec/Adv/Vol 1424/1731/910.1 mln

[Roland99]

87. Friday Faeries to the rescue!

[UpInArms]

90. Consolidation, lay-offs hit US mortgage industry

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-02-24T201001Z_01_N24107584_RTRIDST_0_ECONOMY-MORTGAGES.XML

NEW YORK, Feb 24 (Reuters) - A major transition is underway in the U.S. mortgage lending industry, with consolidations and lay-offs at the forefront as companies try to deal with waning demand for home loans.

This shift is expected to pick up steam in 2006 if the housing market, as widely expected, cools off from its record-breaking five-year run.

"There are some very important signals emerging in that we have seen some pretty good companies go on the block for sale or have been sold recently, which is a clear sign that consolidation is seriously underway," said Douglas Duncan, chief economist at the Mortgage Bankers Association, an industry trade group.

<snip>

Employment in the real estate and mortgage industry peaked at 504,000 in October of last year but fell to 501,000 in December, according the Bureau of Labor Statistics.

That is a noteworthy shift, given that the sector has been gaining jobs over the past five years. Employment stood at 283,000 in March of 2001.

...more...

[OrangeCountyDemocrat]

92. 283,000 To 504,000 In 4 Years!!!!

"Employment in the real estate and mortgage industry peaked at 504,000 in October of last year but fell to 501,000 in December, according the Bureau of Labor Statistics.

That is a noteworthy shift, given that the sector has been gaining jobs over the past five years. Employment stood at 283,000 in March of 2001."

Does anyone else see a problem here? How many jobs have gone into this area of the economy, that are now going to be lost due to the bubble burst that is just beginning? There are 3 mortgage banker companies on my office floor. I wonder how many will be left by the end of 2006.

[skids]

98. In a sane, managed economy...

...there would already be a plan to deal with this well-forseen problem, for example, by retraining into the energy sector. Today's real-estate broker could become tomorrows home energy auditor. Today's landscaper could become tomorrow's geoexchange installer. Today's residential construction workers could become tomorrow's PV and solar thermal installers. Today's mortgage loan provider would start handling loans for energy improvements.

But alas, sanity is nowhere to be found.

[dweller]

91. Pardon the interruption

but would anyone care to comment on some general stock questions of a longtime DU'er that's inherited some stock?

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x19619

thanks!

okay, back to the casino! and have a great weekend.

dp

[ozymandius]

97. quittin' time

Have a great weekend everyone!

Ozy :hi:

Dow 11,061.85 -7.37 (-0.07%)
Nasdaq 2,287.04 +7.72 (+0.34%)
S&P 500 1,289.43 +1.64 (+0.13%)
10-Yr Bond 45.67 0.00 (0.00%)
NYSE Volume 1,931,827,000
Nasdaq Volume 1,583,988,000

4:20 pm : On Friday, the major averages finished near the unchanged mark. In the face of fresh geopolitical developments and a subsequent surge in the price of crude, the market demonstrated resilience. Ultimately, though, those factors underpinned the prevailing sense of uncertainty that continues to hinder a sustainable advance.

The market became reacquainted with the fact that geopolitical concerns still have the potential to affect the energy market. Supply concerns related to pledged militant attacks in Nigeria sent the price of crude oil considerably higher during early trade, and it spiked higher following reports of an explosion at a Saudi Arabian oil facility. The incident was later revealed to be a foiled suicide bomb attack. That country is OPEC's largest producer, and two-thirds of its oil comes from the region in which that particular oil center is located. The development exacerbates worries that have been lately focused on Nigeria and Iran. Crude gained 3.9% today, and closed at $62.91 per barrel. Not surprisingly, the Energy sector benefited. As today's market action evidenced, the sector will continue to benefit from geopolitics and related supply concerns. Gold futures (+1.8%) also ran today. The yellow metal benefited from inflation concerns that rising energy prices fan, and continues to attract buyers on account of geopolitical and economic uncertainty.

Energy price action sparked some broad-based selling, but some late-day buying helped to lift the market back to unchanged territory. That was particularly evidenced in the Consumer Discretionary sector's improvement. Because of higher energy costs' impact on consumer spending, that area of the market had been hardest hit by crude's rise. Disappointing guidance from Gap (GPS 18.40 -0.70) and Nordstrom (JWN 38.27 1.74) further contributed to the sector's weakness. As a side note, those reports and the selling that ensued reflect the fact that the market needs to adjust its earnings expectations for the quarters ahead. Kohl's (KSS 46.89 +2.38) was a bright spot in the retail space, following its solid results. By the bell, the sector had pared its intraday loss to 0.2%. The Staples sector booked a matching loss. A sore spot there was Wal-Mart (WMT 45.45 -0.25), which announced plans to expand its healthcare benefits program. Telecom (-0.5%) experienced some profit-taking and also closed lower.

The Energy sector (+1.2%) led Friday's trade, and an advance in the Financial sector, albeit a modest one, lent some muscle. Relative strength in banks and brokers helped the latter remain positive. In light of the inverted yield curve and lingering uncertainty about when the Fed's tightening activity will end, the recent outperformance of the Financial sector is peculiar to say the least. Nonetheless, its positive stance has been a supportive factor. Technology wavered today and closed on the flat line. On a related note, the Nasdaq outperformed. Research in Motion (RIMM 74.05 +4.52) was one of its drivers. Regarding its ongoing dispute with NTP, a U.S. Judge concluded that the company's patents were invalid, but stopped short of ordering an injunction. The announcement seemed to allay near-term concerns, but the outcome for RIMM remains unclear.

Separately, Durable Goods Orders plunged a much more than expected 10.2% last month (consensus -2.0%), largely due to a sharp drop in transportation orders. We do not view the number as a cause for concern, though. Excluding transportation, orders were up 0.6%, and year-over-year total durable orders are up 6.5%. That data did not appear to have much effect upon trade today.DJ30 -7.37 NASDAQ +7.72 SP500 +1.64 NASDAQ Dec/Adv/Vol 1271/1748/1.56 bln NYSE Dec/Adv/Vol 1289/1942/1.44 bln