STOCK MARKET WATCH, Tuesday 28 February

[ozymandius]

Tuesday February 28, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 1056 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1895 DAYS
WHERE'S OSAMA BIN-LADEN? 1595 DAYS
DAYS SINCE ENRON COLLAPSE = 1556
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 27, 2006

Dow... 11,097.55 +35.70 (+0.32%)
Nasdaq... 2,307.18 +20.14 (+0.88%)
S&P 500... 1,294.12 +4.69 (+0.36%)
30-Year Bond 4.55% +0.03 (+0.66%)
10-Yr Bond... 4.59% +0.02 (+0.50%)
Gold future... 557.00 -4.20 (-0.75%)






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 Rob Kirby

POTPOURRI

With this being the last Market WrapUp I write before we enter the month of March – I felt it appropriate to take a look ahead, because the month of March has the potential to be one of the most memorable (for a host of reasons) on record. In the words of Michel de Chabert-Ostland, chief trader at Royal Palm Trading – there’s a convergence of some very important events occurring this month:

March 20: Iran to open a new oil bourse ( exchange ) on which countries all over the world can buy and sell oil and gas in Euros. It also establishes a new oil " marker " based on Iranian crude and denominated in Euros, in open rivalry to the existing West Texas, Norway Brent and UAE Dubai markers, all of which are calculated in US dollars. It should be obvious that if the bourse opens as planned that it would reduce considerably, over time, the need for dollars by all the Eurozone countries. Russia has already moved in this direction.

March 24: M3 no longer being reported by the Fed - we all know why.

March 27/28: Fed meeting on interest rates. Markets presently give it almost a 100% probability of an increase of 25 basis point on Fed Funds to 4.75% - we'll see what happens between now and then. I predict that if we go to 4.75%, that will be the last rate hike for this cycle.

more...

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

[JNelson6563]

6. Looks like trouble

March 20: Iran to open a new oil bourse ( exchange ) on which countries all over the world can buy and sell oil and gas in Euros. It also establishes a new oil " marker " based on Iranian crude and denominated in Euros, in open rivalry to the existing West Texas, Norway Brent and UAE Dubai markers, all of which are calculated in US dollars. It should be obvious that if the bourse opens as planned that it would reduce considerably, over time, the need for dollars by all the Eurozone countries. Russia has already moved in this direction.


Uh-oh. I wonder how much China will invest in this?

I have to say Iran is pretty smart. They've got oil and they know how to use it.

This looks grim for the US. *sigh*

[EuroObserver]

10. Definitely serious trouble brewing:

Just posted DU LBN thread (ref. Guardian): http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2136677

The head of the world's nuclear watchdog declared last night that he could not give Iran's nuclear programme a clean bill of health, blaming Tehran for frustrating almost three years of inspections and detective work by experts from the International Atomic Energy Agency.
...

A confidential report by Dr ElBaradei, supplied to Vienna diplomats ahead of next week's meeting and obtained by the Guardian, said that the IAEA was still not in a position to assert that Iran's nuclear programme was "entirely peaceful".

Mogambo-style bunker time very, very soon now :-(

[Changenow]

81. My neighbor keeps telling me it's time to repent

and make my peace with Jesus. The end is near, it's all in the Bible.

Five years ago she'd be locked up, today her view is certainly understandable.

How do you spell self fulfilling prophecy? The nuts in charge believe the end of the world is soon, and they are going to make damn sure it is.

[ozymandius]

99. Your neighbor needs to read more books.

For instance, if you need salient ideas about the foundations of America's economic troubles:

"Money: Whence it came, where it went", by John Kenneth Galbraith

[54anickel]

39. Check out yesterday's Daily Reckoning posted at Howe Street

(It includes last weeks Mogambo Rant which ties in to the March potential at the end)

http://www.howestreet.com/articles/index.php/daily?article_id=2101

Resistance...denial...debt.

We Americans are a people in revolt against fate. Wealth and power are migrating from West to East...our empire is peaking out...our dollar is doomed - if only we could take it more gracefully. Instead, politicians, central bankers and ordinary consumers want to dispute it, as if they could stop the tides of history, like Xerxes’ troops doing battle with the waves.

Just listen to the mindless rants coming from Congress: The Arabs want to take over our ports; the Chinese are taking over our oil companies! What do they think this is...a free country? Last year, 96 American companies were bought by firms from emerging markets. Those transactions were worth about $14 billion and were hardly noticed. But when a big offer makes the headlines, you can count on resistance, indignation, and dissembling.

Who do these Chinese think they are? How dare they try to stabilize their economy by tying their currency to that of their largest trading partner? Don’t they know they’re supposed to let their paper money rise so ours can fall?

Meanwhile, the Financial Times reports on “How China is Winning the Resources and the Loyalties of Africa.” China needs resources; Africa has a lot of them. So far, they seem to be going after them honestly - with smiles and cash, both of which they have in abundance.

snip>

The Russian newspaper, Pravda, reports:

“The United States is heading to financial crisis at top speed. That is correct, America will default on its foreign debt sooner or later if the actual trends remain unchanged. Consequently, the whole dollar-based world (including savings in U.S. currency) may crumble. The picture looks pretty grim this time around. Several factors will have an extremely detrimental effect on the dollar, according to U.S. Secretary of the Treasury John Snow who forwarded a letter full of ominous predictions to 21 members of U.S. Congress. The letter was made public after the markets had been closed for Christmas and New Year's holidays – a rather appropriate precautionary move in terms of the international foreign exchange market, which is extremely sensitive to any sound produced by U.S. bureaucrats.

“Besides, the U.S. Federal Reserve is going to stop publishing the so-called ‘M 3 aggregate’ reports i.e. data on increase rates in money supply. Given the New Year's predictions by John Snow, the Fed's intentions look pretty suspicious. In other words, the international community will have no tool for measuring a real value of the dollar...

“The Fed is going to pull the plug on the data in March this year. Several events should occur in different countries more or less at the same time and thus damage credibility of the U.S. securities. Risk-averse investors get rid of speculative securities e.g. the dollar securities under the circumstances.

“All in all, the situation is quite alarming though it looks like a play being staged on purpose.”

more...

[EuroObserver]

98. This is going to be a Greek tragedy

and we are part of the chorus. :smoke:

[ozymandius]

2. Today's Reports

8:30 AM Chain Deflator-Prel. Q4
Briefing Forecast 3.0%
Market Expects 3.0%
Prior 3.0%

8:30 AM GDP-Prel. Q4
Briefing Forecast 1.6%
Market Expects 1.6%
Prior 1.1%

10:00 AM Chicago PMI Feb
Briefing Forecast 59.0
Market Expects 58.2
Prior 58.5

10:00 AM Consumer Confidence Feb
Briefing Forecast 104.0
Market Expects 104.0
Prior 106.3

10:00 AM Existing Home Sales Jan
Briefing Forecast 6.60M
Market Expects NA
Prior 6.60M

[UpInArms]

17. 8:30 4th quarter revisions to reports previously not accepted are in

8:30 AM ET 2/28/06 U.S. 4Q RESIDENTIAL INVESTMENT UP 2.6% VS. 3.5% PREVIOUSLY
8:30 AM ET 2/28/06 U.S. 2005 GDP UP 3.2% 4Q-4Q VS. 3.1% PREVIOUSLY
8:30 AM ET 2/28/06 U.S. 4Q CORE PCE PRICE INDEX UP 2.1% VS. 2.2% PREVIOUSLY
8:30 AM ET 2/28/06 U.S. 4Q CAPITAL SPENDING UP 6.2% VS. 3.5% PREVIOUSLY
8:30 AM ET 2/28/06 U.S. 4Q CONSUMER SPENDING UP 1.2% VS. 1.1% PREVIOUSLY
8:30 AM ET 2/28/06 U.S. 4Q REVISIONS AS EXPECTED
8:30 AM ET 2/28/06 U.S. 4Q FINAL SALES UNCHANGED VS. -0.3% PREVIOUSLY
8:30 AM ET 2/28/06 U.S. 4Q GDP REVISED TO 1.6% ANNUALIZED VS. 1.1% PREVIOUSLY

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BCDDB91E1%2DE829%2D4FDE%2D8EDF%2D34C4CBEA81D2%7D&dateid=38776%2E3542458218%2D862158355&siteid=mktw&dist=newsfinder

WASHINGTON (MarketWatch) - The U.S. economy grew at a 1.6% annual pace in the fourth quarter, a bit faster than previously thought, while core inflation was a touch lower, the Commerce Department said Tuesday. In its second estimate of real seasonally adjusted gross domestic product, the government said inventory rebuilding accounted for all of the growth in the economy during the quarter. A month ago, the government had said GDP increased at a 1.1% annual pace. The revisions were just as expected by economists surveyed by MarketWatch. Inventory rebuilding was revised higher, as was spending by consumers, businesses and governments. The trade deficit was more of a drag than in the earlier estimate.

[UpInArms]

19. earlier spin from 6 a.m.

http://www.marketwatch.com/News/Story/Economic+Outlook?siteid=mktw&dist=morenews

WASHINGTON (MarketWatch) - The U.S. economy didn't perform quite as horribly in the fourth quarter as initially portrayed.

But it still wasn't anything to cheer about.

The Commerce Department will release its second estimate of fourth-quarter gross domestic product on Tuesday at 8:30 a.m. Eastern.

Economists surveyed by MarketWatch are looking for an upward revision to 1.6% annualized growth vs. the initial estimate of 1.1%. It would still be the weakest growth in three years. See Economic Calendar.

The upward revision will mainly reflect higher inventory building, not more final sales, said James O'Sullivan, an economist for UBS.

Consumer spending and business investment will likely be revised higher marginally, while foreign trade was more of a drag than thought. Construction spending also contributed more to growth than previously assumed.

The inflation figures embedded in the GDP report won't be changed, economists say.

The weakness in the fourth quarter is only temporary, with growth bouncing back to a 5% annual pace in the current quarter, said Joseph LaVorgna, an economist for Deutsche Bank. "Much of this surge is due to unseasonably warm weather that got the quarter off to a tremendous start."

...more...

[EuroObserver]

28. I smell a rat, but it's not for me to rock the boat. n/t

[UpInArms]

37. jmho - but here it is

They have to say that the economy is "roaring" so that they can continue to hike the interest rates - if the interest rates actually were to hold or fall, interest in our dollar and bonds would crater -

The house of cards teeters on the brink of a volcano.

[UpInArms]

45. News from last Friday: US economy can weather a Fed "mistake": Poole

http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=OBR&Date=20060224&ID=5535633

CLAYTON, Missouri (Reuters) - The U.S. economy can cope if the Federal Reserve makes a "mistake" and raises interest rates too high, one of its top policy-makers said on Friday, in remarks implying he did not fear delivering more rate hikes.

"Could we make a mistake by carrying the restriction too far? The answer is yes we could. But we have to balance the inflation risk against the risks of undershooting on progress in increasing employment," St Louis Federal Reserve President William Poole told reporters.

[54anickel]

51. Ties in well with Maudlin in Post 50. Fed is purposely inverting?

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=2136575&mesg_id=2136859

[UpInArms]

116. U.S. economy slumps in Q4 on soaring energy prices

http://www.cbc.ca/story/business/national/2006/02/28/usecon-060228.html

The U.S. economy grew at an annual rate of just 1.6 per cent in the final quarter of 2005, dragged down by high energy prices, a relatively low U.S. dollar and the impact of hurricane Katrina.

The economy grew at the slowest quarterly rate in three years, and well below the brisk 4.1 per cent pace of the third quarter, say the latest estimates of gross domestic product released Tuesday by the U.S. Department of Commerce.

The GDP was higher than the 1.1 per cent rate that many pundits had forecast after surveying the hurricane's impact.

They blamed the fourth-quarter slump on the lingering fallout of the Gulf Coast hurricanes and elevated energy prices. As a result, consumers tightened their belts, cut their energy use and put off purchases of large automobiles.

<snip>

"Consumers are growing increasingly concerned about the short-term health of the economy and, in turn, about job prospects," said Lynn Franco, director of the Conference Board Consumer Research Center.

...more...

"put off purchasing large automobiles"? :rofl:

[UpInArms]

55. 10:00 reports - "surprised economist" time yet again!

0:01 AM ET 2/28/06 U.S. FEB CHICAGO PMI 54.9 VS 58.6 EXPECTED
9:59 AM ET 2/28/06 U.S. FEB. CONSUMER CONFIDENCE DN TO 101.7 VS. REV JAN. 106.8
9:59 AM ET 2/28/06 U.S. FEB. CONSUMER CONFIDENCE BELOW CONSENSUS 103.9
10:00 AM ET 2/28/06 U.S. JAN. HOME INVENTORIES 5.3-MONTH SUPPLY, 6-YEAR HIGH
10:00 AM ET 2/28/06 U.S. JAN. MEDIAN EXISTING HOME SALES PRICE UP 11.6% Y-O-Y
10:00 AM ET 2/28/06 U.S. JAN. EXISTING HOME INVENTORY UP 2.4% TO 2.91MLN
10:00 AM ET 2/28/06 U.S. DEC. EXISTING HOM SALES REVISED UP TO 6.75M VS. 6.60M
10:00 AM ET 2/28/06 U.S. JAN. EXISTING HOME SALES LOWEST SINCE FEB. 2004
10:00 AM ET 2/28/06 U.S. JAN. EXISTING HOME SALES FALL 2.8% TO 6.56MLN PACE

[UpInArms]

56. U.S. Jan. existing home sales fall 2.8% to 6.56 million pace

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B8150C62E%2DBE03%2D43AD%2D8DF5%2D4460DE0FCEBD%7D&siteid=mktw

WASHINGTON (MarketWatch) -- Resales of U.S. homes dropped 2.8% in January to a seasonally adjusted annualized rate of 6.56 million, the lowest in two years, the National Association of Realtors said Tuesday. Economists were expecting sales of about 6.65 million. Sales in December were revised higher to a 6.75 million pace from 6.60 million earlier. The median sales price rose 11.6% year-over-year to $211,000 in January. The inventory of unsold homes on the market increased 2.4% to 2.91 million, a 5.3-month supply at the January sales pace. The months' supply is the largest since August 1998. The increase in inventories portends a deceleration in home price appreciation this year, said Lawrence Yun, senior economist for the realtors group.

[UpInArms]

61. US January existing home sales down, supply climbs

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-28T150906Z_01_N28109575_RTRIDST_0_ECONOMY-EXISTINGHOMES-URGENT.XML

WASHINGTON, Feb 28 (Reuters) - Sales of existing U.S. homes slipped 2.8 percent in January to the slowest pace in nearly two years while the inventory of homes on the market climbed to its highest point since 1998, according to data on Tuesday.

Sales of existing U.S. homes fell to a 6.56 million unit annual rate in January, the fifth monthly decline in a row, from December's upwardly revised 6.75 million unit pace, according to the National Association of Realtors. The sales figure includes both single-family homes and condos.

Analysts had forecast existing homes sales at a 6.6 million unit pace in January, unchanged from what was originally reported for December.

The decline in total sales was driven by a 1.5 percent decline in the pace of single-family sales and a 10.6 percent drop in condo sales in January, the Realtors data showed.

Inventories climbed in January by 2.4 percent, leaving 2.91 million existing homes available for sale at the end of the month. That equates to 5.3 months' supply at the current sales pace -- the highest inventory level since August 1998.

...more...

[Changenow]

80. Is a "..deceleration in home price appreciation.."

an acceleration in decline? Or does it just precede it?

[UpInArms]

94. Existing home sales fall for fifth month

http://www.myrtlebeachonline.com/mld/myrtlebeachonline/business/13981761.htm

WASHINGTON - Sales of existing homes fell for a fifth consecutive month in January as the once-sizzling housing market cooled further.

The National Association of Realtors reported Tuesday that sales of previously owned homes dropped by 2.8 percent compared to a seasonally adjusted annual rate of 6.56 million units, the slowest pace in two years.

Even with the slowdown in sales, home prices held steady with the median price in January at $211,000, unchanged from the December level.

Sales of both existing and new homes set records for the fifth straight year in 2005, but analysts believe that sales of existing homes will fall by around 5 percent this year as rising interest rates cut into demand.

The drop in sales of existing homes followed a 5 percent decline in sales of new homes in January as that segment of the market cooled as well. Both declines were bigger than expected and occurred even though the weather in January was the mildest in more than 100 years.

Analysts saw the declines in both existing and new home sales as strong signals that the once-hot housing market has begun to cool.

...more...

[UpInArms]

57. U.S. Feb. consumer confidence drops sharply

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B1CF1E1B3%2D229A%2D4F74%2DBB06%2D45D7C737CADA%7D&dateid=38776%2E4167493866%2D862168252&siteid=mktw&dist=newsfinder

WASHINGTON (MarketWatch) -- U.S. consumer confidence ended a three-month gaining streak in February, falling to 101.7 from a revised January level of 106.8, the Conference Board said Tuesday. The expectations index fell to its lowest level since March 2003, to 83.3 in February from 92.1 in January. The present situation index rose to a four-and-a-half year high of 129.3 in February from 128.8 in January. The group's consumer research director said declining expectations may cloud the economic outlook for the rest of 2006.

[AnneD]

85. Got smelling salts?

Guess I won't be eating glass for lunch after all.:woohoo: Not for the economy of course, but that I nailed it.

[UpInArms]

62. U.S. Midwest business growth slows in February

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-28T150714Z_01_N28362405_RTRIDST_0_ECONOMY-MIDWEST-URGENT.XML

NEW YORK, Feb 28 (Reuters) - Business activity in the U.S. Midwest expanded in February but grew at a slower pace than forecast, a report showed on Tuesday

The National Association of Purchasing Management-Chicago business barometer fell to 54.9 in February from 58.5 in January matching January's level and analysts' expectations.

Analysts polled by Reuters had expected the February figure to be unchanged from January. A reading above 50 indicates expansion.

The employment component of the index rose to 54.9 from 50.2 in January. Prices paid rose to 71.6 from 75.3 and new orders fell to 54.9 from 63.7.

There appear to be some nonsequitors in that article :shrug:

here's the updated version:

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-28T152303Z_01_N28362405_RTRIDST_0_ECONOMY-MIDWEST-URGENT-CORRECTED.XML

In NEW YORK story "U.S. Midwest business growth slows in February," please read in second paragraph "The National Association of Purchasing Management-Chicago business barometer fell to 54.9 in February from 58.5 in January," instead of "The National Association of Purchasing Management-Chicago business barometer fell to 54.9 in February from 58.5 in January matching January's level and analysts' expectations." (cut extraneous phrase)

A corrected version of story follows:

NEW YORK, Feb 28 (Reuters) - Business activity in the U.S. Midwest expanded in February but grew at a slower pace than forecast, a report showed on Tuesday

The National Association of Purchasing Management-Chicago business barometer fell to 54.9 in February from 58.5 in January.

Analysts polled by Reuters had expected the February figure to be unchanged from January. A reading above 50 indicates expansion.

...more but they didn't address this statement: Prices paid rose to 71.6 from 75.3...

updated story once again (this time address prices paid):

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-28T153235Z_01_N287231_RTRIDST_0_ECONOMY-MIDWEST-UPDATE-1.XML

excerpt:

Analysts polled by Reuters had expected the February figure to be unchanged from January. A reading above 50 means that business activity is strengthening.

The employment component of the index rose to 54.9 from 50.2 in January. Prices paid fell to 71.6 from 75.3 and new orders fell to 54.9 from 63.7.

Many analysts and investors consider the Chicago PMI barometer as a gauge of the manufacturing sector because the Midwest is concentrated in heavy industries like auto and mining. Service companies are also for the monthly survey.

Analysts polled by Reuters predicted that U.S. vehicle sales likely rose 1 percent to 3 percent in February from a year ago.

Economists have been predicting that manufacturing growth will accelerate in 2006 to make up for a slowdown in the housing sector.

...more...

[UpInArms]

73. Chicago business gauge falls in Feb.- "surprised economists"

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BCC79E7A0%2D5F44%2D4A94%2DB325%2D5C70E6617C34%7D&dist=newsfinder&symbol=&siteid=mktw

CHICAGO (MarketWatch) -- Chicago-area business activity slowed in February, according to the latest Chicago Purchasing Managers index.

The index, issued Tuesday by the National Association of Purchasing Managers of Chicago, fell to 54.9% this month.

The decline was unexpected. Wall Street economists forecast the index to inch higher to 58.6% from 58.5% in January. See Economic Calendar.
Readings above 50% indicate a majority of businesses reported steady or stronger conditions.

The Chicago data follow the release of the latest U.S. gross domestic product report, which showed the first quarter growth was revised to 1.6% from the initial estimate of 1.1%.

The Chicago PMI measure of production fell to 56.0% in February from 60.6% in January, while new orders were down to 54.9% from 63.7%. The measure of inventory conditions rose to 56.0% from 53.9%.

...more...

[ozymandius]

3. Crude Oil Prices Fall

SINGAPORE - Crude oil futures fell Tuesday amid receding concerns about threats to supply in oil-rich hot spots like Iran, Nigeria, Saudi Arabia and Iraq.

Light, sweet crude for April delivery dipped 40 cents to $60.60 a barrel in Asian electronic trading on the New York Mercantile Exchange. The contract lost $1.91 Monday to settle at $61.00 a barrel.

The contract on Friday jumped by more than $2 a barrel after a thwarted attack by suicide bombers in explosives-packed cars on a massive oil facility in Saudi Arabia heightened supply fears.

-cut-

A weekend announcement that Iran may let Russia shoulder some of its nuclear-development plans prompted selling.

more...

[UpInArms]

63. April Crude @ $60.55 bbl - April NatGas @ $6.66 mln btus

10:08 AM ET 2/28/06 APRIL CRUDE FALLS 45C TO $60.55/BRL IN EARLY NY TRADING

10:08 AM ET 2/28/06 APRIL NATURAL GAS TAPS AN ALMOST 1-YR LOW OF $6.66/MLN BTUS

[UpInArms]

77. April Crude @ $61.25 bbl

11:12 AM ET 2/28/06 APRIL CRUDE CLIMBS 25C TO $61.25/BRL AFTER $60.30 LOW

[UpInArms]

120. April Crude closes @ $61.41 bbl - April NatGas @ $6.714 mln btus

3:03 PM ET 2/28/06 APRIL CRUDE CLOSES AT $61.41/BRL, UP 41C FOR THE DAY

3:03 PM ET 2/28/06 CRUDE FUTURES ENDS FEB. DOWN 9.6% FROM JAN. 31 CLOSE

2:59 PM ET 2/28/06 APRIL NATURAL GAS CLOSES AT LOWEST LEVEL SINCE MARCH 2005

2:59 PM ET 2/28/06 APRIL NATURAL GAS FALLS 7.5C TO CLOSE AT $6.714/MLN BTUS

2:59 PM ET 2/28/06 NATURAL-GAS FUTURES DOWN ALMOST 28% FROM JAN. 31 CLOSE

[ozymandius]

4. Consolidation and lay-offs hit mortgage industry

NEW YORK (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.

-cut-

Even the larger firms are poised for a downturn.

more...

[AnneD]

23. Morning Marketeers,

:donut: To me, this is another indication that the housing bubble has popped. This is a second ripple (inventory was 1st). IMHO we are watching the bear stick his nose out of the den to sniff the air. I expect the used housing available to be more, on the market longer and sales down. I am prepared to eat glass if the crystal ball is wrong.

Other news today....Jack Abramoff is 49 today. How to celebrate? :dilemma: I want to give him something simple-a blanket party, a neck tie party perhaps. I finally decided to give him a chicken hawk special...tar and feathers and send him out of DC via Amtrak up the east coast corridor. I know, it is cliche, but it is cliche because it is classic. Party hardy. :party:

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

[UpInArms]

25. Or perhaps a pinata party?

:evilgrin:

[AnneD]

36. Yeh...

the hispanic variation of the blanket party.:party: :evilgrin:

[UpInArms]

27. and we should chip in and buy him some new

cement shoes - I would say size 50 lbs?

[AnneD]

38. Nahhhhh....

we want him to sing like a canary....the shoes were a gift from the GOP NLC.

[UpInArms]

42. New-home sales lowest in a year

http://www.suntimes.com/output/business/cst-fin-home28.html

New-home sales in the U.S. fell to the lowest level in a year in January and the number of properties on the market was the most ever, more signs housing is losing its luster after five record years.

Sales declined a greater-than-expected 5 percent to an annual rate of 1.233 million from a revised 1.298 million in December, the Commerce Department said Monday. The number of homes for sale rose to an all-time high of 528,000 in January from December's 515,000.

While housing stocks suffered on the news, with Toll Brothers Inc. falling 69 cents to $32.65 and D.R. Horton Inc. dropping 87 cents to $35.23, the markets were bullish overall. Tumbling oil prices and strong earnings from home improvement retailer Lowe's Cos. sent stocks higher Monday as investors regained their optimism about corporate profits and the health of the economy. Oil prices fell $1.91 to $61.

<snip>

Higher mortgage rates and home prices will push down sales and might contribute to a slowing of the economy in the second half, economists said. Homeowners are expected to borrow half as much cash from the value of their houses this year as last, according to Freddie Mac, the second-largest mortgage lender, and that might curb consumer spending.

''The combination of slower demand and looser supply is likely to put downward pressure on housing-price growth,'' said Jonathan Basile, an economist at Credit Suisse. ''Housing won't be the driver for growth as it has been.''

...more...

[UpInArms]

54. More Home builders say orders declining

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B745530A9%2DD813%2D4357%2DB3FC%2DB28EFC4E0E34%7D&dist=newsfinder&symbol=&siteid=mktw

BOSTON (MarketWatch) -- In another sign the U.S. housing market is cooling, more public homebuilders are reporting declining quarterly sales on slowing demand.

Standard Pacific Corp. (SPF) late Monday said new home orders, excluding joint ventures, were down 13% from the year-ago period.

The company blamed the decline on "the slowing of demand in some of our markets from the unsustainable pace of the past few years, a trend that we began to experience in the fourth quarter of last year."

Slower activity is "particularly evident in markets which have experienced significant price increases and investor-driven demand in recent years, such as California and Florida," Standard Pacific said.

Additionally, the Irvine, Calif.-based firm said the year-to-date cancellation rate for the period ended Feb. 26 was 26%, up from 18% the prior year.

Also after the closing bell Monday, troubled Dominion Homes Inc. (DHOM) said fourth-quarter sales were 230 homes, down from 392 homes the previous year.

The Dublin, Ohio company said its 2005 year-end backlog was "the lowest in several years and reflects a slowdown in home sales that began during the second quarter of 2004 and continued throughout 2005."

...more...

[ozymandius]

5. Bonds Weaken Slightly

NEW YORK - The bonds slipped modestly on technical factors Monday, a mild surprise to market participants who expected month-end extension buying and fairly weak housing data to boost prices.

Jason Evans, head of government trading at Deutsche Bank in New York, said extension-buying — when fund managers match their portfolios to extensions in benchmark indexes — "will be more a feature of tomorrow's market than today's."

The Lehman Aggregate Index is extending by a larger-than-usual 0.20 year this month, the biggest extension since August 2002. The government's resuscitation of the 30-year bond earlier this month contributed to the much of the extension.

more...

[EuroObserver]

7. Tokyo: Nikkei +0.08% Topix +0.22%. 10 year BOJ bond yield down

Japanese Stocks Rise for Fourth Day

Japanese stocks rose for a fourth day Tuesday, eking out gains on buying by foreign investors and new domestic investment trusts. The dollar was little changed against the yen. The Nikkei 225 index rose 12.48 points, or 0.08 percent, to finish at 16,205.43 points on the Tokyo Stock Exchange. But for the first time in nine months, the benchmark index ended a month lower than it began. During February, the index dropped 2.7 percent, down from its Jan. 31 close of 16,649.82.

After spending part of the day in negative territory, the market managed to advance by the closing bell, helped by demand from overseas investors and a spate of new domestic investment trusts. However, the index's gains were largely neutralized by Japanese pension funds seeking to sell shares as the start of the new fiscal year draws near.
...

The broader TOPIX, which includes all issues on the exchange's first section, edged up 3.60 points, or 0.22 percent, to 1,660.42. Losers beat gainers 927 to 675 on the index.
...

The yield on the 10-year Japanese government bond fell to 1.5800 percent, from Monday's close of 1.5950 percent. Its price rose 0.12 point to 100.16. ...more...

See also: Tokyo flat as sectors put in mixed performance

[EuroObserver]

16. Margin stock buying in Japan down for 2nd straight week

(Kyodo) _ Margin buying on Japan's three major stock exchanges fell last week for the second straight week, the Tokyo Stock Exchange said Tuesday.

The combined balance of shares bought on credit as of Feb. 24 came to 5,306.21 billion yen, down 311.95 billion yen from a week earlier, according to data collected at the Tokyo, Osaka and Nagoya bourses.

Margin selling increased for the first time in three weeks, with the balance of shares sold short on the three markets totaling 1,575.77 billion yen, up 6.67 billion yen. ...source...

[EuroObserver]

18. Yen pauses from rally, focus stays on BOJ policy

LONDON, Feb 28 (Reuters) - The yen was steady against the dollar and lower versus the euro on Tuesday as the Japanese currency paused from Monday's rally on expectations of a near-term end to the Bank of Japan's super-loose monetary policy.

The yen slipped as Japanese importers converted the currency to dollars, and as Japanese institutional investors bought the dollar and the euro on dips. But investors were reluctant to short the yen aggressively with expectations building for the BOJ to end its policy of flooding the banking system with cash by the end of April, and possibly as soon as a meeting late next week.

"The story still is Japanese monetary policy and unwinding of yen carry trade. We have to look from the yen aspect and move away from a dollar-centric view," said Neil Mellor, currency strategy at Bank of New York in London.

By 0920 GMT, the dollar was at 116.19 yen <JPY=>, steady from late U.S. trade on Monday, when it fell 0.6 percent. The Japanese currency had climbed to a one-month high of 115.64 per dollar on Monday.

The dollar has tumbled as much as 2.5 percent against the yen over the past week, but with the U.S. currency finding support in the 115-116 yen zone traders were reluctant to declare that it had entered a new downtrend.

...more...

[EuroObserver]

22. Tokyo gives BoJ green light for policy shift

(FT) The government of Junichiro Koizumi on Monday gave the green light to the Bank of Japan to end its unorthodox monetary policy when it sees fit, ending months of sparring between politicians and the central bank.

Mr Koizumi signalled that the government would not interfere in the timing of an exit from quantitative easing, the policy introduced in 2001 through which the bank floods the market with excess liquidity.

Until Monday, it was widely believed that should the BoJ move swiftly, the government might publicly object, provoking a showdown.

“The government and the BoJ are trying in concert to move the economy out of deflation,” Mr Koizumi said. “The question of what measures are needed in accordance with this policy is a matter for the BoJ to decide.”

...more...

[UpInArms]

123. BOJ considering ways to limit rate rises--paper

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-28T202810Z_01_N28279606_RTRIDST_0_ECONOMY-JAPAN-BOJ.XML

TOKYO, March 1 (Reuters) - The Bank of Japan, as it prepares to end its ultra-easy monetary policy, is considering ways to limit a possible rise in short- and long-term interest rates, the Nihon Keizai Shimbun reported on Wednesday.

The central bank currently has a "quantitative easing" policy, under which it floods the banking system with excess funds, virtually keeping short-term interest rates at zero percent.

However, hawkish comments by BOJ Governor Toshihiko Fukui last week and signs that government officials are more tolerant of a near-term shift in policy have led to speculation about a change as early as the BOJ's next meeting on March 8-9. Most market participants expect a policy shift in April.

The business daily said when the BOJ decides to scrap the current policy framework, it will also likely announce a measure to ensure that an uncollateralized overnight call rate does not exceed 0.1 percent. Such a step would effectively keep the key short-term rate close to zero percent.

Currently, the overnight call rate, which serves as the money market benchmark, stands around 0.001-0.002 percent.

...more...

[54anickel]

43. IMF to raise projection for Japan's 2006 growth rate+

http://www.tmcnet.com/usubmit/2006/02/28/1413807.htm

The International Monetary Fund is expected to sharply raise its projection of a 2.0 growth rate for Japan's economy this year when it issues its next biannual report in April, senior IMF officials said Tuesday.

"I welcomed the recent strong and broad-based economic growth in Japan, and we agreed that the economy should continue to recover steadily," IMF First Deputy Managing Director Anne Krueger said after meeting in Tokyo with Japanese Finance Minister Sadakazu Tanigaki and Vice Finance Minister for International Affairs Hiroshi Watanabe.

David Burton, director for the IMF's Asia and Pacific Department, said at a press briefing with Krueger that he believes the IMF will "significantly" upgrade its outlook for Japan's economy in 2006 from the 2 percent growth it projected in its World Economic Outlook released last September.

Japan's 2006 growth rate is likely to be "quite a bit higher" than 2 percent, Burton said. He stopped short of presenting specific figures.

more...

[Mnemosyne]

8. That toon is just too hysterical oz, and most likely true! n/t

[EuroObserver]

12. Shrub as Zen master, Now there's a thought.

(On second thoughts, better not think about it...) :think:

[AnneD]

26. The only person I known to make more from nothing....

was Jerry Steinfeld. The difference is Jerry makes you laugh til you cry. With Bush, you have to laugh to keep from crying.

[UpInArms]

49. It seems to me that *Co has made the US a nothing from something

:(

[Mnemosyne]

72. He is a master with such an empty mind! n/t

[EuroObserver]

9. Profit-taking in Europe markets driven by "fear and greed"

So predictable at the moment...

Midday:

Swiss SMI down -0.40% at 7963.05 in Zurich 13:15:45 CET
CAC 40 down -0.4% at 5,058.77 in Paris 13:40 CET
Xetra Dax 30 down 0.4% at 5,893.16 in Frankfurt 13:42 CET
FTSE 100 down -0.5% at 5,849.7 in mid-session trade in London 12:00 GMT

Opening:

Xetra Dax 30 opened down 0.2% at 5,904.49 in Frankfurt
CAC 40 opened down 0.1% at 5,076.82 in Paris
FTSE 100 opened flat at 5,873.5 in London


Europe shares fall; telcos, utilities offset banks
PARIS, Feb 28 (Reuters) - European shares were lower on Tuesday following a slew of mixed corporate reports and as brokers lowered their price target on Vodafone (VOD.L: Quote, Profile, Research), offsetting upbeat results from Royal Bank of Scotland (RBS.L: Quote, Profile, Research) and insurer AXA (AXAF.PA: Quote, Profile, Research).

Utilities stocks were weaker following several sessions of mergers and acquisitions frenzy, miners tracked losses in Australia, and oil and gas stocks were down as crude prices <CLc1> slid 0.4 percent to $60.78 a barrel.

By 1147 GMT the pan-European FTSEurofirst index <.FTEU3> of 300 shares was off 0.4 percent at 1,358.12 points, after striking a 4-1/2-year high of 1,363.8 on Monday.

"The numbers this morning were mixed to say the least, there are quite a few stocks trading lower on the back of their reports this morning," said a trader. Shares in Swiss chemical maker Clariant (CLN.VX: Quote, Profile, Research) fell more than 1 percent as restructuring costs weighed on the fourth quarter, although net profit rose above expectations in 2005.

Spain's Telefonica Moviles (TEM.MC: Quote, Profile, Research) slid nearly 2 percent after it missed forecasts with 2005 net profit growth of 13 percent after taking an unexpected 89 million euro charge to cover the remaining value of its UMTS licence in Italy.

"At the moment it is very much stock-for-stock," said a trader. "We have seen a lot of M&A activity in the broader markets and today is there is not too much breaking news, so what's driving the market is fear and greed." ...more...

See also: Bourses lower as oils and utilities slip; FTSE undermined despite strong RBS results.

[EuroObserver]

106. Fear trumps greed, naturalmente.

Swiss SMI down -1.28% at 7892.63 in Zurich 17:30:50 CET
CAC 40 down -1.6% at 5,000.5 as banks, pharmas and oil stocks lead losses 17:52 CET
Xetra Dax 30 down -2% at 5,796.0 in closing exchanges in Frankfurt as oils and utility stocks fall 17:49 CET
FTSE 100 sharply lower in closing exchanges as energy, mobile telecoms and mining sectors all lose ground: London blue-chips down -1.5% at 5,788.7 16:33 GMT


...sorry, a little family crisis here (my partner's 88-year old grandmother). No (personal) time for more right now.

[54anickel]

11. The Gang Who Couldn’t Talk Straight

http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2006/IO+March+2006.htm

A copy of the annual Economic Report of the President arrived at my desk the other day, replete with a giant bald eagle on the cover and formatted, incredibly enough in OVERSIZED print – fit for an aging boomer population. My compliments to the chef, at least for the exterior garnishments. The verbiage however, was another story. It’s not so much that the report was a compilation of untruths or even half-truths. It’s just that it failed to tell the truth, the whole truth, and most definitely nothing but the truth. Although submitted by ex-CEA Chairman and newly christened Fed Chairman Ben Bernanke, it was as if it had been written by Dick Cheney, a man who not only cannot shoot straight but seems to have difficulty talking straight as well. If there were WMD in our economic future, you’d be hard pressed to find them here. Mild innuendos about global and demographic challenges yes, but nothing that couldn’t or wouldn’t be overcome with good old American ingenuity, hard work, and a fawning foreign investment public nearly trampling each other to get their hands on attractive U.S. "investments." Nowhere to be found was the catchy phrase à la Tennessee Williams referring to the "kindness of strangers" or a suggestion of "living on borrowed time." Our 700 billion dollar current account deficit, in fact, could and might continue "indefinitely" as long as we use the capital inflows in ways that promote future growth, the report intoned. Ah, but that, it seems to me, was the critical rub. Have we, can we, will we use capital to foster future growth or must we earmark it for future liabilities that have been under-reserved? Have we borrowed from the future to pay for today’s party and will our future creditors allow us to pay it back on our own terms with low yields and a strong dollar? While the gang that couldn’t shoot (or talk) straight expressed few doubts, I as you can probably tell, have mine. Let me summarize a few of the pertinent chapters of this year’s report to help you make up your own mind.

Education
As we shall see in future paragraphs, the U.S. is beset with the necessity to provide services and funding for an aging boomer population. Chapter 2 of the Council’s report speaks to skills for the U.S. workforce and suggests the obvious – that education will be a key contributor to the economic growth which will provide these future services, and that the "U.S. can create a workforce that will thrive in the fast-changing world economy." A few pages in, however, the report offers a Cheneyesque comment that the "U.S. still has great potential for increases in the schooling levels of its residents." Turns out that "great potential" was a misplaced euphemism for "failing grade." The Council’s own math and science rankings on international tests are shown in Chart 1 and they don’t even include those of Japanese and Asian competitor nations. If grades were awarded on a curve, a D+ for our graduating seniors would be the honest result. "Potential" indeed – as in nowhere to go but up! If these students are whom we boomers are relying upon to take care of us during our old age, then we’d better petition Congress to release Dr. Kevorkian from prison instead.

snip>

Health Care Spending
Our gang really tries to con us when it gets to the topic of healthcare. Medical expenditures they suggest resemble a discretionary outlay – sort of like moving up from a Chevy® to a BMW® or substituting a Heineken® for a Budweiser®. "As the United States grows richer and older," they write, "Americans are likely to continue to spend a rising share of their growing incomes on health." The "older" part is hard to dispute. That we would willingly allocate growing incomes on healthcare if given the chance and/or a more efficient system is debatable. Also under contention should be their follow-up statement that "our healthcare spending overall has returned good value with Americans living longer and healthier." Say what? Have they heard of the obesity/diabetes crisis? Have they checked into (and out of) a hospital lately to verify that "good value?" How about checking out their own chart and its projections for the next two decades (Chart 3). National healthcare will consume 23% of GDP in 20 years time vs. 6% in 1965 and 16% today. Who amongst you straight-talkers are going to suggest a way to pay for that?

snip>

The Current Account Deficit
It’s in chapter 6 that the gang really becomes its most imaginative. Why admit to a chronic malady known as the current account deficit when tautologically you can discuss, and in fact label the entire chapter "The U.S. Capital Account Surplus!" A surplus sounds better than a deficit does it not? And if these surplus inflows reflect foreign investor preferences for "higher risk-adjusted U.S. returns," then all the better. You see folks, it’s not that we’re spending too much, it’s that foreigners are "pushing" (yes those are the authors’ words) in these funds because we’re so damned productive and we’ve got no recourse but to reap the rewards and shop ‘til we drop. Well, maybe as the gang suggests we should save a little of it to bring down this capital account surplus, but it’s really China, they claim and other Asian countries which need to promote higher domestic demand. Nowhere in the chapter is there a chart on the current account deficit. Instead we are treated to the rosier mirror image appearing in Chart 4 – "Net Capital Inflows." Additionally, we are told that these inflows (deficits) can continue indefinitely as long as we use these investments (spending) to promote economic growth.

more...

[UpInArms]

13. daily dollar watch

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

Last trade 90.49 Change -0.14 (-0.15%)

Dollar Steady as Market Awaits Upward Revision to Q4 GDP

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/7004_dollar_steady_as_market_awaits_upward_revision_to.html

The US dollar gained strength against the Euro and British Pound, but its weakness against the Japanese Yen and Canadian Dollar completely overshadowed its performance against the two more liquid currencies. Starting off what is expected to be a very busy week, we had weaker new home sales reported this morning. Falling 5 percent on the month, new home sales were 1.233 million versus the market’s forecast of 1.265 million. Inventories hit a record high, raising continued concerns that the housing market may be floundering. With new condo developments still springing up left and right in New York, California, and Florida, the slowing sales of new homes is particularly concerning. We have always said that the first indication of waning demand is a buildup of inventory and according to today’s report that is exactly what we have been seeing. There is also word that home sales were able to increase only because of additional free add-ons that builders are providing such as flat screen TVs and upgraded floors. CNN Money reported Friday that more people are cancelling their purchases of new homes due to an inability to sell their previous homes. If the housing market continues to show signs of slowing, people may just give up on their down payments rather than get stuck in a losing investment. Yet even though housing is fading, the low level of jobless claims should be very good news for consumer spending, confidence and ISM reports. Tomorrow’s fourth quarter GDP figure is also up for revision. As signaled shortly after the advance release by the government, the number was somewhat distorting and expected to be notched higher at the next release. The market is forecasting an upward revision from 1.1 percent to 1.6 percent.

...more...

Tomorrow's Economic Releases: Plenty Of Dollar Data For The Bull

http://www.dailyfx.com/story/calendar/key_events/7007_tomorrows_economic_releases_plenty_of_dollar_data_for.html

U.S. GDP Annualized (4Q) (13:30 GMT, 8:30 EST)
Consensus: 1.6%
Previous: 4.1%

Outlook: After massive expansion from July to September, economic growth in the United States is expected to have slowed to a pace of 1.6% in the fourth quarter. Although a GDP growth rate of 1.6% is higher than the initially issued figure of 1.1%, the slowdown in expansion will represent a break in the country’s longest quarterly growth spurt since the mid 1980’s. Just as in the previous quarter, consumer spending will have a momentous effect on GDP growth in the fourth quarter. Except this time, the effect will not be positive. In the period from October to December, consumer spending expanded at its slowest pace since 2001. This is largely the result of a huge drop-off in automobile sales in October following the end of manufacturer discount incentives. Also, surging oil prices following Hurricanes Katrina and Rita will probably show their effect on spending in the fourth quarter. Lagging growth towards the end of 2005 does not mean that inflation will no longer be a threat in 2006. The slip in expansion is most likely a periodic dip and growth is expected to return to its speedy pace in the first quarter of the New Year. Business sentiment is strong, which will translate into strong capital expenditures. Additionally, historically low levels of unemployment and increasing wages may re-encourage spending on the retail level.

Previous: The U.S. economy picked up to a roaring pace of growth in the third quarter of 2005 when it grew at a rate of 4.1%, up from 3.3% the previous quarter. Negative effect from the Gulf Coast hurricanes was less than expected as consumer spending and manufacturing continued to expand. Automobile sales were the largest contributor to consumer spending as auto-makers issued heavy discounts until the end of the summer. This pushed the rate of growth in consumer spending to 4.1%, the fastest it had been all year. Spending, which accounts for 70% of the nation’s economy, had also benefited from a strong employment environment. Zealousness towards spending was also reflected in housing market activity. New housing starts took on an annual rate of 2.1 million, up from 2.04 million in the previous quarter. Improvements in productivity accounted for much of the increase in manufacturing output, which helped corporate profits over the quarter. Although inflation in general increased over the period of economic expansion because of steep energy prices, the core price indicators were relatively tame.

Chicago Purchasing Managers Survey (FEB)(15:00 GMT, 10:00 EST)
Consensus: 58.1
Previous: 58.5

Outlook: Expected to remain relatively unchanged, the February reading of the Chicago Purchasing Managers survey is expected to boast another expansive suggestion, printing a reading of 58.1. Lending to the bullish bias are two stronger manufacturing surveys supplied by the New York and Philadelphia regions. Manufacturing activity in the New York region rose to 20.3 from a 20.12 percent seen in the month of January as the Philly Fed Index vaulted completely past the consensus, jumping to a 15.4 print from the previous 3.3. The higher figures not only lend to a higher Chicago report, but also lend to previous speculation of further interest rate hikes by the Federal Reserve. Anticipating inflationary pressures, monetary authorities will more than likely remain cautious as higher rates of manufacturing are indicative of expansion and increasing prices, raising another 25 basis points.

Previous: Area business fell to a reading of 58.5 in the month of January according to the Purchasing Management Association of Chicago. With a reading above 50 suggestive of expansion, the recent report lends to further dollar bullishness as it continues the trend of upticks in consumer spending and growth seen in the first quarter of 2006. Although narrowing slightly from the 60.8 figure seen in December, the slight dips looks to be negligent as it is representative of underlying lower raw material costs as energy prices thinned out in the month. Subsequently, the other sub-indexes remained in line or slightly lower with the employment component remaining healthy at a 50.2 reading. With the Chicago area boasting the second largest concentration of factory workers, the report lends to further trader optimism that Federal Reserve officials will be raising rates in March.

U.S. Consumer Confidence (FEB) (15:00 GMT, 10:00 EST)
Consensus: 104.5
Previous: 106.3

Outlook: Consumer confidence in the United States as measured by the Conference Board Index is expected to decline over February as the indicator is predicted to issue a reading of 104.5. The decline in confidence comes after January’s increase to the highest level in three years. Although energy prices began to trend downward at the end of January, consumers feel that the longer term trend in expensive fuel costs will make it difficult to pay home heating bills in spite of low unemployment rates and rising wages. As temperatures were lower than expected in February after a relatively warm January, the cumulative effect of expensive energy will force consumers to tighten their pockets from January. Even though an index value of 104.5 indicates a decline in confidence from the previous month, the estimated reading is still relatively strong, suggesting that consumer sentiment may serve as a sturdy base for a rebound in spending. If unemployment continues to fall and hourly wages keep on their recent upward trend, consumption in the U.S. economy will be able to spring back from a brief falter at the end of 2005.

Previous: In January, consumer confidence in the U.S. improved for the second straight month when the Conference Board Index climbed to 106.3 from 103.8. This was the highest reading since June of 2002. The largest reason for the jump in the index was the fact that consumers were more optimistic about current conditions, especially employment, than they had been in the previous four years. While enthusiastic about economic conditions at the time of the survey, consumers did not express optimism in their views of conditions in coming months. In fact, consumer expectations for the future had actually declined on the month as the gap between current and future condition sentiment maintains considerable width. January’s overall increase in consumer confidence, however, may be a signal that consumption will rebound in 2006 after spending toward the end of last year fell off significantly.

...more...

[54anickel]

21. Coming Soon, a Backup Bank for the Treasury Market

http://www.nytimes.com/2006/02/28/business/28bank.html?_r=1&oref=slogin

A bank created to provide emergency backup for the Treasury market will be ready to operate in the next 18 months, a bond industry group is set to announce today.

The so-called NewBank exists largely on paper, but like a superhero on standby, it can spring into action to stabilize the government securities market if a legal or financial disaster strikes.

The bank is a result of a five-year effort by government and banking officials to draw up plans in the unlikely event that either J. P. Morgan Chase or the Bank of New York, the only existing clearing banks in the Treasury market, are suddenly unable to operate.

The two clearing banks play an obscure but crucial role in the government securities market, processing more than $1.9 trillion of very short-term trades each day between investors who want small but safe returns and dealers who want to finance securities positions. The industry's dependence on just two big institutions has long concerned the Federal Reserve, which fears the fallout of a potential trading disruption.

"All of a sudden half of the securities would not be able to clear their overnight positions," said Donald H. Layton, the former vice chairman of J. P. Morgan Chase who will lead the NewBank effort. "This is a very low likelihood event but it is highly disruptive if it occurs."

more...


Oh my, this is rather troubling - even more so if you are inclined to the LIHOP/MIHOP theory.

[UpInArms]

24. is a result of a five-year effort by government

hmmmm....

5 years....

That was the *Co coup dateline :eyes:

[54anickel]

31. Yes, but they claim 9-11...it did change EVERYTHING ya know.

Whenever I see stuff like this I think of that article from a few weeks ago - the jist of it was that the sophisticated financial types would understand the changes coming about in monetary policy and that the focus would be on getting the rest of us to find the changes as acceptable and necessary "evolution" rather than to react in a panic. The old, "trust us, things are different this time".

[JNelson6563]

44. Do not be alarmed, the facade will be maintained

I am so reassured by this news! Not.

[EuroObserver]

104. Make sure you've got your towel, in any case, Julie!

¡DON'T PANIC! :hi:

BTW. The bad news here in Europe is that a cat has now been killed by bird flu in North Germany :-(

[54anickel]

50. Probabilities of Recession (Maudlin on inverted yield)

http://www.gold-eagle.com/editorials_05/mauldin022606.html

This week we look at the possible direction of interest rates both at the long end and the short end. Bottom line: history suggests there is some serious volatility in the future on the long end of the interest rate curve later in the year. The yield curve and the 6/50 Rule when looked at together reveal some very interesting insights. (This letter may print longer than usual, but that is because there are a lot of charts. In words it is actually shorter than most letters.)

snip>

The current level of spread on the yield has happened several times in the past 40 years and we have not had a recession follow. So why should we pay attention today? Because it is going to get worse.

Most observers suggested we ignore the full-blown yield curve inversions in 2000 as well. I think it was something like 50 out of 50 Blue Chip economists failed to predict the last recession even a few months out. They ignored the yield curve, all finding reasons why "this time it's different."

In a follow-on paper, Estrella documents that each of the previous yield curve recessions since 1978 produced major academic papers telling us why this time it's different. They were all wrong. We will have another spate of papers and economists suggesting that we ignore the curve as well. That is one prediction you can take to the bank.

snip>

Why would the Fed purposely invert the yield curve? Because they are looking over their shoulder at inflation. I wrote about the sacrifice ratio a few weeks back. It is one of Bernanke's academic specialties. Basically the idea is how much pain in terms of higher interest rates and presumably lower employment do you suffer today (sacrifice) to avoid an even bigger pain of inflation and worse problems tomorrow?

big snip to holy sh*t, I didn't realize that!>

One final thought. Fed Governor Ferguson resigned this week. He was one of the last voices on the Fed which resists targeting inflation, which is what Bernanke has argued the Fed should do. His departure also means that President Bush will have appointed every Fed governor, which is unprecedented.

lots more...

[UpInArms]

53. Bush will have appointed every Fed governor, which is unprecedented

:scared:

This means that the entire Fed is wholly corrupted.

[54anickel]

65. Shocking, ain't it? I hadn't realized that fact until I read that. Gotta

wonder was that really just a coincident or was it by design? Is Fergie being pushed out? Add that little tidbit to what's happened on the SC and the speculation that there is a great possibility he may have one, if not two, more appointments to the court. :crappingbrickssmiley:

[EuroObserver]

105. Why is Ferguson apparently still not talking? n/t

[54anickel]

69. Fed's Geithner says wary of derivatives risks

http://biz.yahoo.com/rb/060228/markets_fed_geithner.html?.v=1

NEW YORK (Reuters) - Complex securities like derivatives make the global financial system increasingly vulnerable, and require vigilance from banking executives and policy-makers, a top Federal Reserve official said on Tuesday.

While noting the recent resilience of financial markets to adverse events, New York Federal Reserve President Timothy Geithner said this strength should not turn into complacency in the face of magnified risks.

snip>

Geithner also suggested that because of the expansion of non-bank financial institutions means that such risks need to arise from within the banking system itself.

"We still face considerable uncertainty about how market liquidity will behave in the context of a major deterioration in credit conditions or a sharp increase in volatility in equity and credit spreads," warned Geithner.

more...

[54anickel]

83. Yen Carry Trade to Unwind - Market Crash Alert

http://www.kitco.com/ind/Laird/feb222006.html

snip>

That zero rate interest policy has lasted about ten years, and is the first source of the liquidity bubbles world wide, and is very much a part of the liquidity bubbles here in the US. Once the BOJ starts to raise interest rates in Japan, the Yen carry trade will start to unwind.

The Yen carry mechanism is to borrow Yen at virtually zero rates, and then to purchase US treasuries at about a 3% interest rate gain net. There are literally trillions USD of yen carry trade positions scattered amongst hedge funds, insurance companies, and mutual funds. The phenomena is so widespread and has gone on so long, that the BOJ and even the BIS does not have data on the known net amount of YEN carry trade floating out there in the world. The result is that the effects of an unwinding of the Yen carry trade are unknown, but are sure to be very negative.

Here are the kinds of things that will happen when the Yen carry trade is unwound:

• US treasuries will become less desirable, much of the purchases of UST’s last year were from foreign private entities who bought the UST’s to benefit from the interest differential of about 3% net over Japan.

• UST’s were not the only beneficiaries of the Yen carry trade. Markets world wide are given massive amounts of liquidity, as Yen borrowed for virtually nothing are then invested eventually in foreign stock markets everywhere. Real estate markets also benefit greatly, as the Yen carry trade finds its way into real estate markets from Shanghai to the US to everywhere. 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.

more...

[UpInArms]

91. kind of a dated (June 2005) article, but ....

http://www.fxtsp.com/forex_report10.htm

Fed’s Rate Hikes Are Holding The Dollar Up

Part of the reason why EUR/USD has been able to ignore US data is because the US continues to aggressively raise interest rates, keeping the dollar bid. This is very important because the Federal Reserve is the only central bank to be aggressively raising rates this year. As a result, traders are buying back dollars to either reverse old carry trades (when they sold dollars as rates were being slashed to 1.00%) or to initiate new ones. In fact, this could even explain some of the confusion with long-term interest rates. The Fed is expected to bring rates back up to at least 3.50%, which means that there may be some more carry trade premium left in the dollar. However once the Fed is done tightening, we may finally get back to fundamentals, at which time, the sole pillar propping up the dollar could topple.

But Fundamentals In The US Are Deteriorating


Across the Atlantic, although the economies of the countries within the Eurozone still remain very weak, especially with Italy sliding back into recession, the 1600 pip slide in the EURUSD appears to be having some stimulative effect on the region’s health. Eurozone industrial orders and the German ZEW survey are but only 2 economic indicators that have surprised on the upside. The US on the other hand has come out with a barrage of disappointing releases; In May of 2005, non-farm payrolls failed to reach 50% of expectations, consumer spending took a sharp dive, inflation pressures were very muted, the manufacturing sector showed signs of significant weakness with the Philadelphia Fed Survey plunging into negative territory, and the current account deficit ballooned to a new record high. Foreign purchases of dollar denominated assets also failed to meet the funding needs of the trade deficit for 2 consecutive months. Globally oil prices have shot to another record that will certainly hurt growth and consumer spending across the globe. The changing trend of economic data should be beneficial for the euro, yet with political factors and the Fed’s aggressive rate hike campaign, the EURUSD could remain under pressure for a few more months.

Greenspan’s Departure Could Be Positive For EURUSD


The end of the Fed's tightening cycle should coincide perfectly with increasing speculation of a replacement for Federal Reserve Chairman Alan Greenspan. After having served under four different Presidents of both Republican and Democratic Administrations, the Fed Chairman is expected to leave office at the end of January, 2006. As one of the most respected central bankers of our time, Greenspan has managed to navigate the nation through the 1987 Stock Market crash, the 1991 oil spike sparked by the Gulf War, the collapse of Long Term Capital Management in 1998, the burst of the NASDAQ bubble, and 9/11, with only minimal setbacks for the economy. During his tenure as Chairman, US GDP increased in 16 out of 17 years - one of the smoothest periods of economic growth in US history. Therefore it will be very difficult to a find a replacement for the world's most effective and esteemed central banker. Right now, there has been minimal speculation for a replacement, but come late summer, early fall, talk of possible successors should be in full swing. With no successor-possibility having as much respect as Greenspan has had with the financial markets, speculation about who his replacement will be will only cause more uncertainty for the US dollar. This timing will coincide perfectly with the end of the Fed tightening cycle.

[54anickel]

125. There is just so much coming to head in March this year - I wish I was

into Astrology and stuff. Wonder what the stars have to say about all of this? The Ides of March may take on a whole new meaning.

[UpInArms]

107. forex info:

http://www.forextelevision.com/FT/Text/ShowStory.jsp?id=6731

The yen was little changed vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥116.45 level and was supported around the ¥116.00 figure. Technically, today?s intraday high was just below the 38.2% retracement of the move from ¥108.75 to ¥121.40. Finance minister Tanigaki, who just yesterday said he would respect Bank of Japan?s decision to unwind its long-standing quantitative easing policy, today reiterated ?mild deflation? persists in Japan. Some trader believe the central bank will announce a policy shift as early as its 8-9 March Policy Board meeting while others believe the 28 April Policy Board meeting will be a more suitable time for the BoJ to make a move. Interest rate futures are predicting the BoJ?s short-term rate target will be nearly 0.50% by the end of 2006. Many economic data were released in Japan overnight. First, January industrial output was up 0.3% m/m and February output is expected to climb 0.5%. These data represent the longest stretch of monthly growth in this sector since 1998 but were below estimates. Second, January commercial sales were up 5.4% y/y, the third consecutive monthly climb, while retail sales were off 0.2%. Third, January housing starts were down 2.2% y/y at 92,899. Fourth, January orders received by the 50 largest Japanese contractors were down 21.5% y/y. The government announced it did not intervene in the FX market between 28 January and 24 February and this means the government has nearly gone two years with conducting overt yen-selling intervention. Traders? attention will be firmly glued to Friday?s core inflation numbers. The Nikkei 225 stock index climbed 0.08% to close at ¥16,205.43. Dollar bids are cited around the ¥115.60/ 114.80 levels. The euro sputtered higher vis-à-vis the yen as the single currency tested offers around the ¥138.30 level and was supported around the ¥137.45 level. The British pound and Swiss franc appreciated vis-à-vis the yen as the crosses tested offers around the ¥203.40 and ¥88.30 levels, respectively. The Chinese yuan appreciated marginally vis-à-vis the U.S. dollar today as the greenback closed at CNY 8.0403 in the over-the-counter market, down from CNY 8.0408, and closed at CNY 8.0402 in the exchange-traded market. Data released in China overnight saw 2005 GDP unrevised at 9.9%.

[TrogL]

129. Loonie Watch

http://members.shaw.ca/trogl/looniewatch.html

Highlights.



http://www.x-rates.com/d/USD/CAD/data30.html

Detailed analysis (http://quotes.ino.com/exchanges/?r=CME_CD)

Up-to-the-minute graph (http://quotes.ino.com/chart/?s=CME_CDY&v=i)

Current TSE:




2006-01-27 Friday, January 27 0.87184 USD
2006-01-30 Monday, January 30 0.873897 USD
2006-01-31 Tuesday, January 31 0.874432 USD
2006-02-01 Wednesday, February 1 0.877116 USD
2006-02-02 Thursday, February 2 0.877116 USD
2006-02-03 Friday, February 3 0.87184 USD
2006-02-06 Monday, February 6 0.872981 USD
2006-02-07 Tuesday, February 7 0.870322 USD
2006-02-08 Wednesday, February 8 0.866927 USD
2006-02-09 Thursday, February 9 0.872981 USD
2006-02-10 Friday, February 10 0.866326 USD
2006-02-13 Monday, February 13 0.865951 USD
2006-02-14 Tuesday, February 14 0.866101 USD
2006-02-15 Wednesday, February 15 0.866476 USD
2006-02-16 Thursday, February 16 0.863782 USD
2006-02-17 Friday, February 17 0.867905 USD
2006-02-21 Tuesday, February 21 0.872296 USD
2006-02-22 Wednesday, February 22 0.870928 USD
2006-02-23 Thursday, February 23 0.868659 USD
2006-02-24 Friday, February 24 0.868056 USD
2006-02-27 Monday, February 27 0.87581 USD
2006-02-28 Tuesday, February 28 0.878812 USD




I wasn't gonna do one, but this caught my eye.

The US dollar gained strength against the Euro and British Pound, but its weakness against the Japanese Yen and Canadian Dollar completely overshadowed its performance against the two more liquid currencies.

The Canadian and Japanese economies are based upon the production of real goods or harvesting/mining of real resources - something you can touch and feel. The US economy is based upon smoke and mirrors. The European and British economies are in trouble because of the artificially high oil prices - caused by Dubya's war on everybody and everything.

[UpInArms]

14. Bend Over for Higher Rates: US storm damage predicters see bigger risks

US storm damage predicters see bigger risks ahead

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-02-28T131326Z_01_N28382_RTRIDST_0_FINANCIAL-WEATHER-STORMS.XML

NEW YORK, Feb 28 (Reuters) - After failing to predict how costly Hurricane Katrina would be last year, companies forecasting catastrophes are now saying U.S. damage from large storms will rise as much as 60 percent in some regions in coming years.

This boost in anticipated hurricane losses could also push the cost of insuring coastal areas much higher and have serious implications for the insurance industry.

"Some companies (buying insurance) may be stunned by how much rates will go up," said James Auden, an insurance analyst with Fitch Ratings. Insurers are also seeking to raise premiums for home owners.

Storm modeler Risk Management Solutions (RMS) told Reuters hurricanes could cause 50 percent more damage in the future.

Eqecat, another catastrophe forecaster, expects the storm loss potential for the Atlantic and Gulf coasts to rise by 20 percent to 30 percent and costs in Florida could surge 50 percent to 60 percent.

As expectations for losses rise, insurers will have to retain more capital to pay for them, said industry analysts.

...more...

[UpInArms]

15. Intel to build $300 mln chip building plant in Vietnam

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B9FD4CCF1%2D8488%2D46D8%2DB043%2D983A8412E0C6%7D&dateid=38776%2E3483839005%2D862157505&siteid=mktw&dist=newsfinder

NEW YORK (MarketWatch) -- Intel (INTC 20.52, +0.16, +0.8% ) said it would invest $300 million to build a semiconductor manufacturing plant in Ho Chi Minh City, marking the first move by a chipmaker into Vietnam. Construction will begin immediately. The company said the build is part of the company's plan to spend $6 billion on capital additions on 2006. The stock, a component of the Dow industrials, closed Monday up 16 cents at $20.52.

[UpInArms]

20. Veterans May Face Health Care Cuts in 2008

http://www.cbsnews.com/stories/2006/02/28/ap/national/mainD8G1PUB80.shtml

(AP) At least tens of thousands of veterans with non-critical medical issues could suffer delayed or even denied care in coming years to enable President Bush to meet his promise of cutting the deficit in half _ if the White House is serious about its proposed budget.

After an increase for next year, the Bush budget would turn current trends on their head. Even though the cost of providing medical care to veterans has been growing by leaps and bounds, White House budget documents assume a cutback in 2008 and further cuts thereafter.

In fact, the proposed cuts are so draconian that it seems to some that the White House is simply making them up to make its long-term deficit figures look better. More realistic numbers, however, would raise doubts as to whether Bush can keep his promise to wrestle the deficit under control by the time he leaves office.

"Either the administration is proposing gutting VA health care over the next five years or it is not serious about its own budget," said Rep. Chet Edwards of Texas, top Democrat on the panel overseeing the VA's budget. "If the proposals aren't serious, then that would undermine the administration's argument that they intend to reduce the deficit in half over the next several years."

In fact, the White House doesn't seem serious about the numbers. It says the long-term budget numbers don't represent actual administration policies. Similar cuts assumed in earlier budgets have been reversed.

...more...

[AnneD]

30. A real..

f**k fest. They get you coming in with stop loss, then they get you when you leave. I use to recommend the military to some kids as a means of getting a better start in life. I haven't done that in years and probably never will again. I was never injured in my service, so I was ok with it....but this is so unacceptable. It is typical of the lack of integrity of this administration. I am sure the DEM ranks will swell with these returning Vets.

[Roland99]

60. But...but...but...what about all those "Support Our Troops" ribbons?

Surely those will take up the slack, right?

[AnneD]

79. Unless these guys come back with injuries....

that respond to magnetic theraphy...they don't mean shit. Money talks, bullshit walks (better than some of our wounded Vets).

[UpInArms]

29. Picture and song for the morning

(The Boss does has my vote again)

I'm Goin' Down Lyrics

We sit in the car outside your house, whoah
I can feel the heat coming ’round
I go to put my arm around you
And you give me a look like I’m way out of bounds
Well you let out one of your bored sighs
Well lately when I look into your eyes
I’m goin’ down...

We get dressed up and we go out, baby, for the night
We come home early burning, burning in some fire fight
I’m sick and tired of you setting me up, yeah
Setting me up just to knock-a knock-a knock-a me down
I’m goin’ down...

I pull you close to me baby, but when we kiss I can feel a doubt
I remember back when we started
My kisses used to turn you inside out
I used to drive you to work in the morning
Friday night I’d drive you all around
You used to love to drive me wild, yeah
But lately girl you get your kicks from just driving me down

I'm goin' down down down down
I'm goin' down down down down

Bruce Springsteen

[AnneD]

34. That theme

works for me.:thumbsup:

[UpInArms]

35. Ports Argument and Iraq Hurt Bush in a New Survey

http://www.nytimes.com/2006/02/28/politics/28bush.html?ex=1141794000&en=88bb6ea736963f5a&ei=5099&partner=TOPIXNEWS

WASHINGTON, Feb. 27 — Americans are strongly opposed to the Bush administration's agreement to allow a Dubai company to operate terminals at six American ports and are increasingly negative about the situation in Iraq, according to the latest CBS News poll.

Seventy percent, including 58 percent of Republicans, said Dubai Ports World, a company controlled by the emir of Dubai, should not be permitted to operate at United States ports, while 21 percent supported the arrangement.

In addition, 62 percent of those polled said the efforts to bring stability and order to Iraq were going badly, up from 54 percent last month.

The port agreement and the pessimism on Iraq appear to be significant factors in driving Mr. Bush's approval ratings back down to the lowest levels of his presidency. In the poll, 34 percent approved of how he is handling his job, down eight points from a New York Times/CBS News poll conducted in January.



...more...

[UpInArms]

32. S.E.C. Chief Rebukes Enforcement Unit for Subpoena

http://www.nytimes.com/2006/02/27/business/27cnd-sec.html?ex=1141707600&en=cce47528ef4526b4&ei=5099&partner=TOPIXNEWS

WASHINGTON, Feb. 27 — The chairman of the Securities and Exchange Commission rebuked the agency's enforcement division today, accusing it of operating in a renegade fashion for issuing a subpoena earlier this month to two journalists.

The rare criticism of the agency by its chairman, Christopher Cox, followed the decision late last Friday not to enforce the subpoena, at least temporarily, after the commission received calls about it from other reporters. The subpoena had demanded information from two Dow Jones journalists, Herb Greenberg of MarketWatch and Carol S. Remond, a columnist for Dow Jones Newswires, about articles they had written that drove down stock prices of several companies.

"The issuance of a subpoena to a journalist which seeks to compel production of his or her notes and records of conversations with sources is highly unusual," Mr. Cox said in a statement today. "Until the appearance of media reports this weekend, neither the chairman of the S.E.C., the general counsel, the office of public affairs, nor any commissioner was apprised of or consulted in connection with a decision to take such an extraordinary step. The sensitive issues that such a subpoena raises are of sufficient importance that they should, and will be, considered and decided by the commission before this matter proceeds further."

The subpoena was issued by a lawyer in the S.E.C.'s San Francisco office, which is investigating allegations of a conspiracy by a research firm and several hedge funds and traders to manipulate stock prices. Overstock.com, an Internet company, contends that its stock has been manipulated. In a lawsuit filed in Superior Court in California, it has accused the research firm, Gradient Analytics, and stock traders and hedge funds of working together to put out false information about Overstock just after the traders executed heavy bets that the stock would decline.

...more...

[RawMaterials]

33. U.S. GDP revised up to 1.6%

Core inflation a tick lower at 2.1%

WASHINGTON (MarketWatch) -- The U.S. economy grew at a 1.6% annual pace in the fourth quarter, a bit faster than previously thought, while core inflation was a touch lower, the Commerce Department said Tuesday.
In its second estimate of real seasonally adjusted gross domestic product, the government said inventory rebuilding accounted for all of the growth in the economy during the quarter. Final sales were flat, the weakest since the first quarter of 2002. Read the full report.
A month ago, the government had said GDP increased at a 1.1% annual pace, with final sales falling 0.3%.
The slowdown from 4.1% in the third quarter was largely due to weak auto sales, slower business investment, a rise in imports and a drop in federal spending.

snip..


Core inflation - which excludes food and energy costs - increased at a 2.1% annual rate in the quarter, down from 2.2% in the earlier estimate. Over the past year, the core personal consumption expenditure price index has increased 1.9%, at the top end of the Federal Reserve's comfort zone.

Financial markets and economists are nearly unanimous in predicting a rate hike to 4.75%, but after that, the Fed's course becomes murkier, with incoming data on inflation, jobs and housing the keys to policy. Read more about the Fed.
In the fourth quarter, consumer spending increased 1.2%, up from 1.1% previously. Spending on durable goods fell 16.6%, the biggest drop in 19 years.

Capital spending on equipment and software increased 6.2% annualized, significantly higher than the 3.5% growth estimated earlier.
Investments in homes increased 2.6%, down from 3.5% earlier. Investments in business structures increased 3.3%, up from 0.7% earlier.
Government spending fell 0.7%, including a 2.6% decline in federal spending. In the previous estimate, government spending reportedly fell 2.4%, including a 7% drop in federal spending.

Inventories increased by $30.4 billion, adding 1.6 percentage points to growth.
The nation's trade imbalance subtracted 1.4 percentage points from growth, as imports grew 12.8% while exports increased 5.7%.
Personal incomes were also revised higher. For the third quarter, incomes increased 0.6% vs. 0.4% earlier, with wages rising 1.6% vs. 1.2% earlier. For the fourth quarter, incomes increased 2.3%, with wages up 1.2%.



http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B8D8E2A51%2DE687%2D4A07%2DA713%2D9E7CF2BF142D%7D&siteid=mktw&dist=bnb

[Changenow]

82. They were spending on heat. nt

[UpInArms]

40. pre-opening blather

09:01 am : S&P futures vs fair value: -3.7. Nasdaq futures vs fair value: -3.5. Stage remains set for stocks to open on a downbeat note, as futures trade still holds a modestly negative bias. Meanwhile, Staples (SPLS) grew Q4 profits 15% and boosted its dividend 32% while Heinz's (HNZ) Q3 profits fell 24%; but with earnings season in the rearview mirror, neither report will have broad impact on the market as investors remain focused on more economic data.

08:32 am : S&P futures vs fair value: -2.3. Nasdaq futures vs fair value: -1.5. Still shaping up to be a relatively lower open for equities as Q4 GDP data do little to incite early buying interest. As expected, Q4 GDP was adjusted up to 1.6% from 1.1%, reflecting higher inventories, while the Chain Deflator was upwardly revised to 3.3% from 3.0%. Bonds, which were up slightly ahead of the report, have also held relatively steady, as the 10-yr note is up 3 ticks to yield 4.57%.

08:00 am : S&P futures vs fair value: -1.6. Nasdaq futures vs fair value: -1.0. Futures trade versus fair value suggests a sluggish start for stocks amid a dearth of any market-moving corporate news. At 8:30 ET, though, the first installment of today's economic data -- a revision to Q4 GDP -- will give investors something to digest until a more definitive tone to today's action is established after the last of the day's reports (i.e. Chicago PMI, Consumer Confidence and Existing Home Sales) hits the wires at 10:00 ET.

[UpInArms]

41. More Evidence Against Enron Execs

http://www.forbes.com/markets/2006/02/27/enron-retail-oscars-cx_tm_0227video3.html?partner=topix

Topping the headlines this afternoon, a former accountant at Enron testified today that he helped manipulate earnings at the firm's profitable trading division in order to beat Wall Street's expectations in mid-2000.

Former accountant Wesley H. Colwell told jurors in the corporate-fraud trial of former Chief Executive Jeffrey Skilling and company-founder Kenneth Lay that he tapped Enron's reserves to beat consensus estimates in the second quarter of 2000. Colwell said he understood it was Skilling's preference to top expectations.

...more unrelated snews at link...

[UpInArms]

46. Effect of H&R Block tax blunder on filing business unclear

Do you want these folks calculating your numbers? :evilgrin:

http://ap.cjonline.com/pstories/business/20060224/3671946.shtml

KANSAS CITY, Mo. — Call it a gift to late-night television comedians.

But marketing experts say a $32 million tax mistake by H&R Block could drive away potential customers, and that would be no laughing matter for the nation's largest tax preparer.

"For a firm like H&R Block, credibility is of paramount importance," said James McAlexander, an Oregon State University marketing professor who has looked at how professional services providers appeal to consumers. "If the H&R Block story becomes fodder for late night television, where they become the butt of the joke, that could affect their credibility with prospective clients."

Shares of Kansas City-based H&R Block fell $2.18, or almost 9 percent, to close at $23.01 Friday on the New York Stock Exchange. The company on Thursday reported a 68 percent drop in third-quarter profits and executives told analysts that they were lowering their earnings expectations for the year.

The company also said it was restating earnings for 2005 and 2004 and the first two quarters of this year after discovering it had made a mistake in determining its state income tax rates.

...more...

[Roland99]

59. heh...Letterman's Top 10 last night was about HR Block

:)

[UpInArms]

47. US Treasuries up as GDP inflation gauge trimmed

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-28T143329Z_01_N28323329_RTRIDST_0_MARKETS-BONDS.XML

NEW YORK, Feb 28 (Reuters) - U.S. Treasury debt prices rose slightly on Tuesday as a revision in fourth-quarter gross domestic product matched forecasts in a government report that also trimmed a key inflation reading.

While the revised fourth quarter GDP showed year-over-year inflation remains at the high end of the Federal Reserve's presumed target level, traders said information gleaned from the GDP report would likely not change expectations the Fed will raise interest rates at least once, and perhaps twice, before mid-year.

"It's a little bit (bond) positive because GDP did rise as expected," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. in Lake Tahoe in California.

"Overall, I think what it shows is the fourth quarter, despite good profit numbers, in terms of overall economic growth was not a very strong finish to the year," Pado said.

...more...

[UpInArms]

48. Printing Press Rept:Fed adds temporary reserves via overnight system repos

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-28T143320Z_01_N28342635_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, Feb 28 (Reuters) - The Federal Reserve said on Tuesday that it was adding temporary reserves to the banking system through overnight system repurchase agreements.

The benchmark fed funds rate last traded at 4.563 percent, above the Fed's 4.50 percent 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

These reports will cease on March 21 :(

[UpInArms]

64. Treasuries rise as data weak across-the-board

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-28T151419Z_01_N28238002_RTRIDST_0_MARKETS-BONDS-DATA-URGENT.XML

NEW YORK, Feb 28 (Reuters) - U.S. Treasury debt prices rose on Tuesday after weaker-than-expected figures on regional manufacturing, consumer confidence and existing home sales.

An index of Midwest business conditions slipped to 54.9 in February from 58.5 in January, well below forecasts for an unchanged reading.

Consumer confidence also posted a sharper decline than Wall Street had predicted, falling to 101.7 this month from 104.5 in January.

Meanwhile, existing home sales came in at a 6.56 million unit annual rate, just below estimates and the slowest pace in nearly two years.

Ten-year notes <US10YT=RR> were trading 8/32 higher in price for a yield of 4.56 percent, down from 4.59 percent on Monday.

...a bit more...

[UpInArms]

102. Yield Curve Still Fully Inverted

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BE7946F17%2D66C0%2D40E2%2DAFBF%2D91D31F61380D%7D&dist=newsfinder&symbol=&siteid=mktw

The yield curve remained fully inverted Tuesday, with the yield on the 2-year note at 4.679%, above the 4.551% yield on the 10-year note and the 4.518% yield on the 30-year bond.
Some economists are nervous about the inversion because they believe it signals a recession.
However, new Federal Reserve chief Ben Bernanke thinks the inversion results from strong foreign demand for U.S. assets and does not reflect deteriorating fundamentals.

[UpInArms]

111. Minneapolis Fed voted to hold discount rate steady

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-28T190150Z_01_WAT004964_RTRIDST_0_ECONOMY-FED-DISCOUNT-URGENT.XML

WASHINGTON, Feb 28 (Reuters) - The Minneapolis Federal Reserve voted to hold the discount rate unchanged at 5.25 percent in mid-January while all other regional Fed banks favored a hike to 5.5 percent, documents released on Tuesday showed.

"Directors in favor of maintaining the primary credit rate did not consider the case for an increase compelling at this point, although they noted it was a close call," according to minutes of the Fed's discount rate meetings.

Minneapolis Fed directors had voted for no rate change on Jan. 19, the same day that directors of the New York and Philadelphia Feds voted for a quarter percentage point hike. Dallas voted for a hike on Jan. 25 and the remaining regional Feds voted likewise the next day, the minutes showed.

...more...

[UpInArms]

121. Treasuries close with inverted yields

3:02 PM ET 2/28/06 <$TYX> 2-YR YIELD CLOSES AT 4.687%; 10-YR YIELD AT 4.504%

3:01 PM ET 2/28/06 <$TNX> 10-YR TREASURY NOTE CLOSES UP 13/32 AT 99-21/32;YIELD 4.545%

[UpInArms]

52. U.S. stocks open lower; GDP data show inflation

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-28T143558Z_01_N28327068_RTRIDST_0_MARKETS-STOCKS-UPDATE-4.XML

NEW YORK, Feb 28 (Reuters) - U.S. stocks opened lower on Tuesday after government data showed the economy grew slightly faster in the fourth quarter than first reported and inflation quickened a touch.

The Dow Jones industrial average <.DJI> was down 17.21 points, or 0.16 percent, at 11,080.34. The Standard & Poor's 500 Index <.SPX> was down 1.77 points, or 0.14 percent, at 1,292.35. The Nasdaq Composite Index <.IXIC> was down 7.09 points, or 0.31 percent, at 2,300.09.

[UpInArms]

58. 10:08 EST numbers and blather

Dow 11,057.46 -40.09 (-0.36%)
Nasdaq 2,297.74 -9.44 (-0.41%)
S&P 500 1,286.68 -7.44 (-0.57%)
10-Yr Bond 4.573 -0.17 (-0.37%)

NYSE Volume 315,872,000
Nasdaq Volume 322,265,000

10:00 am : Equities are still on the defensive as the bulk of sector leadership remains negative. Energy has paced the way lower again following further deterioration in crude futures. The pullback in energy prices has benefited retailers, however, but not enough to offset a profit warning-induced 14% decline in Apollo Group (APOL 49.98 -8.49) and weakness in the media group, as Consumer Discretionary pares its 3.2% year-to-date gain. Health Care, amid biotech consolidation as well as weakness in medical equipment and drug, has been another influential leader to the downside. Technology, though, has recently inched into positive territory, led by Intel's (INTC 20.78 +0.26) announcement to invest $300 mln in a Vietnam chip facility. BTK -1.6% DJ30 -25.21 NASDAQ -3.51 SOX +0.5% SP500 -4.89 XOI -1.1% NASDAQ Dec/Adv/Vol 1554/837/242 mln NYSE Dec/Adv/Vol 1400/726/172 mln

09:40 am : As futures indications presaged, the market opens lower across the board. Even though an upward revision to Q4 GDP was widely anticipated and will not alter economic expectations, growth of 1.6% versus an originally reported 1.1% rate, perhaps raising concern about further Fed tightening to stave off inflationary pressures, has given buyers an early excuse to sit on the sidelines and wait to get more perspective on Fed policy speculation following the last of today's batch of data at 10:00 ET. DJ30 -36.35 NASDAQ -6.29 SP500 -5.73 NASDAQ Vol 98 mln NYSE Vol 68 mln

[UpInArms]

67. 10:33 EST heading further south

Dow 11,046.40 -51.15 (-0.46%)
Nasdaq 2,292.15 -15.03 (-0.65%)
S&P 500 1,285.62 -8.50 (-0.66%)
10-Yr Bond 4.561 -0.29 (-0.63%)

NYSE Volume 482,606,000
Nasdaq Volume 495,204,000

[DemReadingDU]

66. Thanks for these stock market threads

Just recently started reading them, as I am getting worried about, well, everything. Seems to me like the market is artificially high, for Bush's cronies in big business.

Unfortunately, I know many people at the bottom who have lost their jobs, paying more for health care, and barely making ends meet. I keep thinking this country is in for another nasty downturn, sooner rather than later.

[UpInArms]

70. Hi DemReadingDU!

Glad to "see" you here at the SMW!

What you are seeing is called "anecdotal evidence" and as such cannot be verified by the proper "surprised economists" as real and should not affect the markets :sarcasm:

Drop in anytime and please add your views and thoughts :)

[AnneD]

84. Wilkommen..

:hi: DemReading. We have alot of poster and lurkers. This thread finally puts to rest the myth that DEM's don't know jack about Economics. You will learn so much from this thread. And more importantly, you will realize that the financial news outlet lie about our economy as frequently as MSM does about politics. Here we aim for the truth. When we look at the numbers-we see them trying to tell us 2+2=5 when we know it just isn't adding up. They can only deceive for so long. It will get very interesting when this prefect storm hits. Hopefully you will have heard it here first.

[ozymandius]

88. Hi there DemReadingDU!

Thank you for saying so.

Please stay with us, participating if you wish, as we explore the profound depths of this economic shell game.

Ozy :hi:

[UpInArms]

68. 10:49 EST redder numbers

Dow 11,020.87 -76.68 (-0.69%)
Nasdaq 2,284.06 -23.12 (-1.00%)
S&P 500 1,282.86 -11.26 (-0.87%)
10-Yr Bond 4.561 -0.29 (-0.63%)

NYSE Volume 585,560,000
Nasdaq Volume 617,328,00

updating the tune - I seem to be hearing Tom Petty now :eyes:

She’s a good girl, loves her mam a
Loves jesus and america too
She’s a good girl, crazy ’bout elvis
Loves horses and her boyfriend too

It’s a long day living in reseda
There’s a freeway runnin’ through the yard
And I’m a bad boy cause I don’t even miss her
I’m a bad boy for breakin’ her heart

And I’m free, free fallin’
Yeah I’m free, free fallin’

All the vampires walkin’ through the valley
Move west down ventura boulevard
And all the bad boys are standing in the shadows
A ll the good girls are home with broken hearts

And I’m free, free fallin’
Yeah I’m free, free fallin’
Free fallin’, now I’m free fallin’, now i’m
Free fallin’, now I’m free fallin’, now i’m

I wanna glide down over mulholland
I wanna write her name in the sky
Gonna free fall out into nothin’
Gonna leave this world for a while

And I’m free, free fallin’
Yeah I’m free, free fallin’

[AnneD]

90. I was bummed out when this was on oldies lyrics site, but how about

Helter Skelter (for those moments of utter chaos)

When I get to the bottom I go back to the top of the slide
Where I stop and I turn and I go for a ride
Till I get to the bottom and I see you again
Yeah yeah yeah hey

Do you, don't you want me to love you
I'm coming down fast but I'm miles above you
Tell me tell me tell me come on tell me the answer
Well you may be a lover but you ain't no dancer

Now helter skelter helter skelter
Helter skelter yeah
Ooh!

Will you, won't you want me to make you
I'm coming down fast but don't let me break you
Tell me tell me tell me the answer
You may be a lover but you ain't no dancer

<snip>
Look out, cos here she comes

[UpInArms]

92. Oh here she comes

She’ll only come out at night
The lean and hungry type
Nothing is new, I’ve seen her here before
Watching and waiting
She’s sitting with you but her eyes are on the door
So many have paid to see
What you think you’re getting for free
The woman is wild, a she-cat tamed by the purr of a jaguar
Money’s the matter
If you’re in it for love you ain’t gonna get too far

Oh here she comes
Watch out boy she’ll chew you up
Oh here she comes
She’s a maneater
Oh here she comes
Watch out boy she’ll chew you up
Oh here she comes
She’s a maneater

I wouldn’t if I were you
I know what she can do
She’s deadly man, and she could really rip your world apart
Mind over matter
The beauty is there but a beast is in the heart

Oh here she comes
Watch out boy she’ll chew you up
Oh here she comes
She’s a maneater

Hall & Oates

[AnneD]

95. Wiiiicked....

Howz about Witchy Woman by the Eagles..to continue the theme of evil spirits in the market place...


Raven hair and ruby lips
sparks fly from her finger tips
Echoed voices in the night
she's a restless spirit on an endless flight
wooo hooo witchy woman, see how
high she flies
woo hoo witchy woman she got
the moon in her eye

She held me spellbound in the night
dancing shadows and firelight
crazy laughter in another
room and she drove herself to madness
with a silver spoon
woo hoo witchy woman see how high she flies
woo hoo witchy woman she got the moon in her eye

Well I know you want a lover,
let me tell your brother, she's been sleeping
in the Devil's bed.
And there's some rumors going round
someone's underground
she can rock you in the nighttime
'til your skin turns red
woo hoo witchy woman
see how high she flies
woo hoo witchy woman
she got the moon in her eye

[UpInArms]

97. hmmm.... were the 70s full of misogynists?

Well, the light’s turnin’ gray, nearly eve’ry day
Come a walkin’ into town and try to find the way
Well, I’ve only got a nickel, got to score myself a dime
And try to make it ’til tomorrow, buy a little more time

Evil woman, evil woman
Evil woman

Well, my damsel she’s a woman with coal black hair
Don’t you look her in her eye when she starts to stare
’cause her beauty drive you crazy
And her potions steal your soul
No matter how you beg her she don’t ever let you go
Well, you can cry, you can plead
It won’t help you none
She’ll keep you in the shadows, never see the sun
Try to run, try to hide
Find a place to stay
No matter where you go you can’t get away

Evil woman, evil woman
Evil woman, oh

For evil woman set my life free
I can’t go on livin’ this way, no
Evil woman set my life free
Pullin’ me down, down
I can’t go on this way
Down, down my head will go against the floor again
Down, down my head will go against the floor again
Down, down I can’t go on this way
Down, down my head will go again
Down, down I can’t go on this way
Down, down my head will go again
Down, down I can’t go on this way
Down, down my head will go again
Down, down I can’t go on this way
Down, down, down

Well, the light’s turnin’ gray
Nearly ev’ry day
Come a walkin’ into town
Try to find my way
I said I only got a nickel
Got to score myself a dime
Try to make it ’til tomorrow
Buy a little more time
My damsel she’s a woman with coal black hair
Don’t you look her in her eye when she starts to stare
’cause her beauty drive you crazy
And her potions steal your soul
No matter how you beg her she don’t ever let you go

Evil woman, evil woman
Evil woman

Doobie Brothers

[AnneD]

103. Yeh...

they joined the GOP and run the country now.:eyes:

[EuroObserver]

126. Because of a few songs

Because of a few songs
Wherein I spoke of their mystery,
Women have been
Exceptionally kind
to my old age.

They make a secret place
In their busy lives
And they take me there.
They become naked
In their different ways
and they say,
"Look at me, Leonard
Look at me one last time."
Then they bend over the bed
And cover me up
Like a baby that is shivering.

- Leonard Cohen

[54anickel]

71. Nations Rebuild Barriers to Deals

http://www.nytimes.com/2006/02/28/business/worldbusiness/28protect.html?_r=1&oref=slogin

LONDON, Feb. 27 — As the ties of world trade grow stronger and the tempo of globalization quickens, a boisterous player has re-emerged in the arena of cross-border mergers: government.

In the past month, efforts in continental Europe to keep foreign buyers out have spread. In the latest instance, French politicians said last weekend that the private utility Suez and Gaz de France would merge, effectively halting a bid by Enel, an Italian company, for Suez.

Elsewhere, the intrusion has been subtler, but palpable. In the United States, lawmakers have raised security concerns over Dubai Ports World's takeover of the British company Peninsular & Oriental Steam Navigation, which manages some United States ports. In Britain, officials fretted earlier this month over scrutiny by Gazprom, the Russian government-controlled monopoly, of the British gas company Centrica as a possible takeover target.

Around the world, globalization has lowered barriers to entry. But some of its costs, like large-scale job losses, have created fertile conditions for politicians hoping to build national champions and keep out foreign buyers. Also, national security concerns — about everything from energy sources to ports — have coalesced into government action to keep strategic assets out of foreign hands.

big snip>

Using the amount of time it took Americans to accept Japanese acquisitions in the United States as a guide, Mr. Swagel estimated it would be a decade before Europe and America are comfortable with the idea of third-world economies owning assets on home soil.

more...

[54anickel]

74. Open Macro, Closed Politics (Roach)

http://www.morganstanley.com/GEFdata/digests/20060227-mon.html#anchor0

Economics and markets may be increasingly global but politics remain decidedly local. That contrast has been glaringly obvious in recent weeks in the face of a growing outbreak of Islamic protest, US protectionist backlash, and yet another round of destabilizing events in the Middle East. Meanwhile, the world’s major central banks are pushing ahead on their normalization campaigns, underscoring the distinct possibility of a turn in the global liquidity cycle. The tensions of open macro are building. The key questions are how and when they will be vented.

snip>

But open macro is not without its potential pitfalls. Frictions have arisen from three key features of the current strain of globalization: The first is technology -- namely, the Internet. The rapid penetration of IT-enabled connectivity has brought the world together at an extraordinary speed. With that speed comes a multitude of unintended consequences. For example, ubiquitous access to information creates the potential for resentment at the lower end of the income distribution in rapidly growing developing economies like China and India. Nor can there be any doubt of the role played by the Internet in facilitating the instant dissemination of Danish anti-Muslim cartoons, an incident that set off a firestorm in the Islamic world. Moreover, IT-enabled offshoring into once sacrosanct white-collar occupations heightens the odds of a politically actionable worker backlash in the rich, high-wage developed world. From the start, the Internet has been billed as the ultimate enabler of a new global democracy. Yet the faster the growth of IT-enabled connectivity, the greater the strains on the entrenched body politic. The Internet may well be the ultimate enabler of a new set of socio-economic tensions.

A second destabilizing characteristic of globalization is its flawed policy architecture -- namely, the presumption that the best global policies are the sum of the best approaches of individual nations. Unfortunately, this “new math” of globalization doesn’t add. America’s China-bashing is, in many respects, an example of misguided US saving policies -- and the unwillingness of Washington’s increasingly populist politicians to accept any responsibility for their own actions. The same can be said about the xenophobic reaction of US politicians to Dubai Ports World’s proposed acquisition of several American container shipping ports (see my 24 February dispatch, “Saving Tensions and the Protectionist Backlash”). Moreover, the increased irrelevance of the IMF and the World Bank -- the original Bretton Woods stewards of the post-World War II era -- is yet another flaw in the policy infrastructure of an integrated world. The longer an open global economy stays with antiquated policies designed for closed economies, the greater the potential for a serious policy blunder.

snip>

Of course, a shift in the global liquidity cycle is not the only factor likely to bear on the financial market outlook. The tensions of globalization are also germane to the outcome. In that vein, I would be the first to concede that the role of economics in shaping the outcome may be less significant than we economists would like to think. Social, political, ethnic, religious, military, and security considerations have always been important pieces of the macro puzzle. But in today’s world, as noted above, these non-economic factors may be more relevant than in the past. New York Times columnist David Brooks argued recently that the role of economics has been relegated to bit-player status in today’s increasingly fractured world -- going so far as to posit that “Economics … is no longer queen of the social sciences” (see his op-ed piece, “Questions of Culture” in the 19 February 2006 New York Times). Brooks’ point is well taken. Perhaps the greatest irony of this strain of globalization is that cross-border integration has unmasked cross-cultural frictions. The closer knit the world becomes through trade flows, capital flows, and information flows, the greater the discomfort level that seems to arise within individual segments of the world.

Throughout history, financial markets have served the useful -- and at times, painful -- purpose of arbitrating the interplay between economic and non-economic factors. That venting function could take on a very different meaning in today’s era of IT-enabled globalization. A turn in the global liquidity cycle may well amplify the implications of any such venting. Left to its own devices, “open macro” could perpetuate the disinflationary underpinnings of a very bullish financial market climate. The bond market conundrum might endure, as could the resilience of the US dollar. The politics of globalization, however, raise serious questions as to whether open macro ultimately will be left to its own devices. From time to time, economics has its limits in shaping the macro outcome for world financial markets. This feels like one of those times.

more...

[UpInArms]

75. 11:07 EST redder numbers and blather

Dow 11,001.90 -95.65 (-0.86%)
Nasdaq 2,279.91 -27.27 (-1.18%)
S&P 500 1,281.55 -12.57 (-0.97%)
10-Yr Bond 4.557 -0.33 (-0.72%)

NYSE Volume 693,263,000
Nasdaq Volume 726,771,000

11:00 am : Major indices spike lower, spearheaded by a blow to Technology following reports that Google's (GOOG 352.59 -37.78) CFO is saying they will have to find "other ways" to boost revenue as growth, now largely organic, is slowing. The stock, which holds the fourth heaviest weighting (3.61%) on the Nasdaq-100 index, was up 1.3% at the bottom of the hour but is now off nearly 10%. DJ30 -76.73 DOT -1.7% NASDAQ -23.04 SP500 -10.90 NASDAQ Dec/Adv/Vol 2006/747/654 mln NYSE Dec/Adv/Vol 2175/809/456 mln

[UpInArms]

76. Fed's Moskow says pension reforms could be painful

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-28T160056Z_01_NAT002025_RTRIDST_0_ECONOMY-FED-MOSKOW-URGENT.XML

NEW YORK, Feb 28 (Reuters) - Restructuring of public pension plans could require painful tax hikes or cuts in government services in some states, a top Federal Reserve official said on Tuesday.

In his speech on "The Regional Perspective on Pension Issues," Chicago Fed President Michael Moskow did not discuss the economy or monetary policy.

Moskow said that to help cover shortfalls in meeting obligations, pension plans will need to be restructured, despite the legal obstacles to structural change.

"For states with relatively weak balance sheets and large pension obligations, such as Illinois and Michigan in our district, restructuring could be particularly painful if it requires higher taxes or reductions in other government services to cover shortfalls," Moskow said in prepared remarks.

He said pension issues are more acute in many Midwestern states because of slower population growth and older demographics.

Moskow said published government estimates suggest that the largest state and local pension funds faced a funding gap of $278 billion in 2003, while an analysis by Barclays Global Investors put the gap at closer to $700 billion.

...more...

[UpInArms]

78. April Gold @ $561.10 oz - May Silver @ $9.77 oz

11:05 AM ET 2/28/06 APRIL GOLD CLIMBS $4.10, OR 0.7%, TO $561.10/OZ

11:05 AM ET 2/28/06 MAY SILVER RISES 7.5C, OR 0.8%, TO $9.77/OZ

[UpInArms]

109. April Gold closes @ $563.90 oz

1:44 PM ET 2/28/06 APRIL GOLD CLOSES AT $563.90/OZ, UP $6.90 FOR THE SESSION

1:44 PM ET 2/28/06 GOLD FUTURES FINISH THE MONTH 2% BELOW THE JAN. 31 CLOSE

[UpInArms]

86. US bank, thrift earnings fall 5 percent in 4th qtr

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-28T163002Z_01_N28145888_RTRIDST_0_FINANCIAL-FDIC-EARNINGS-UPDATE-1.XML

WASHINGTON, Feb 28 (Reuters) - Profits at U.S. commercial banks and thrifts fell 5 percent in the fourth quarter of 2005 from a third quarter record as net interest margins narrowed, credit card loan chargeoffs swelled and trading profits declined, the Federal Deposit Insurance Corp. said on Tuesday.

Federally insured banks and thrifts posted net income of $32.9 billion in the fourth quarter, down $1.7 billion from the third quarter. The average return on assets for these institutions fell to 1.22 percent from 1.31 percent in the third quarter, and 1.25 percent in the fourth quarter of 2004.

For the full year, however, bank and thrift earnings rose 9.6 percent, or $11.8 billion, over 2004 earnings to reach $134.2 billion, a fifth consecutive annual record. The fourth quarter earnings were up 5.4 percent from a year earlier.

"We've had five straight years of record earnings for the industry, we haven't seen a bank failure in six quarters. That is a historic strong financial performance for the industry that's taken place under a very benign set of economic conditions and that's not necessarily going to persist in the future," FDIC chief economist Richard Brown told a news conference.

"The expectation would be that eventually there'll be another bank failure and there will be a year where we won't have record earnings," he added.

Brown noted the FDIC is closely monitoring housing markets for signs of a slowdown, but noted loan underwriting standards are significantly stronger than at the end of the real estate boom of the 1980s.

...more...

I definitely did not get a case of the warm fuzzies from that last paragraph :eyes:

[ozymandius]

87. lunchtime check-in

11:59
Dow 11,005.98 -91.57 (-0.83%)
Nasdaq 2,282.75 -24.43 (-1.06%)
S&P 500 1,281.82 -12.30 (-0.95%)
10-Yr Bond 45.57 -0.33 (-0.72%)
NYSE Volume 941,461,000
Nasdaq Volume 948,124,000

[Roland99]

93. Are the faeries gonna show up and keep it above 11k?

[UpInArms]

96. 12:33 EST faerie alert - under 11K

Dow 10,993.17 -104.38 (-0.94%)
Nasdaq 2,279.85 -27.33 (-1.18%)
S&P 500 1,279.64 -14.48 (-1.12%)
10-Yr Bond 4.551 -0.39 (-0.85%)

NYSE Volume 1,090,688,000
Nasdaq Volume 1,063,685,000

12:00 pm : Stocks remain under pressure across the board midday amid mixed economic data, reports of slowing growth at Google (GOOG 356.82 -33.56), and a lack of sector leadership. Even though an upward revision to Q4 GDP before the bell was not much of a surprise, faster than initially estimated growth of 1.6% only added to the uncertainty as to when the Fed will end its tightening effort. Then again, a trio of softer than expected data (e.g. consumer confidence, existing homes sales and Chicago PMI) also left investors nervous about monetary policy, setting up an already weakened market sentiment to revisit the reality that profit expectations for this year need to be lowered, especially following Google's bombshell. Reports that Google will have to find "other ways" to boost revenue amid slowing growth prompted an extension of today's losses, reversing relative strength in Technology, and has raised the bar of uncertainty for investors holding onto the Nasdaq 100 index's fourth heaviest weighted component.

Of the ten economic sectors trading lower, though, Health Care remains the most influential leader to the downside, led by consolidation in biotech spurred by an analyst downgrade on Millennium Pharmaceuticals (MLNM 10.46 -0.69) and a 52-week low on Affymetrix (AFFX 34.80 -4.55). Despite modest buying efforts in Treasuries, which have knocked the yield on the 10-yr note (-10/32) down to 4.54%, the rate-sensitive Financial sector is consolidating some of the 4.8% gain it has enjoyed since bottoming out in early February. Industrials, led by consolidation throughout the transportation group, Consumer Staples and Utilities have also lost more than 1.0%.BTK -2.6% DJ30 -91.57 DJTA -1.3% DJUA -1.2% DOT -1.7% NASDAQ -24.46

[ozymandius]

100. pumped-up faeries turn sideways to get through the door

12:44
Dow 11,005.90 -91.65 (-0.83%)
Nasdaq 2,283.89 -23.29 (-1.01%)
S&P 500 1,281.31 -12.81 (-0.99%)
10-Yr Bond 45.49 -0.41 (-0.89%)
NYSE Volume 1,134,193,000
Nasdaq Volume 1,098,375,000

[Roland99]

113. Fighting hard to stay at or above 11k

DJIA 11,000.30 -97.20
Nasdaq 2,282.21 -24.97
S&P 500 1,281.40 -12.72
Russell 2000 730.82 -9.81

[UpInArms]

89. With the US current account deficit close to a trillion dollars of course

With the US current account deficit close to a trillion dollars of course foreigners will soon own most of the US capital stock

http://www.rgemonitor.com/blog/roubini/118568/

The current political saga and debate about the purchase by a Dubai-based company of the management of six US ports misses the most crucial point: with a US current account deficit running towards $900b this year and probably above one trillion $ next year, in a matter of a few years foreigners may end up owning most of the U.S. capital stocks: ports, factories, corporations, land, real estate and even our national parks. This is basic accounting: if you run a current account deficit (import more than export, spend more than your income, save less than you invest) you need to borrow from the rest of the world to finance such excess of spending (on private and public consumption and investment) over your national income. And you need to borrow on net every year to the tune of the current account deficit. That is why countries that run current account deficits become net foreign debtors. There are only two ways in which this accumulation of foreign liabilities of a debtor country can occur: either debt (when you issue private or government bonds purchased by foreigners and when you borrow in the form of bank or other loans from foreigners) or equity that can take the forms of FDI (foreign direct investment when non-residents acquire a domestic firm or other domestic assets such as real estate or when they build a new factory in the US) or portfolio investment in the equity market. So, it is either debt or equity but in either case the foreign liabilities of the US go up and foreigners increase debt or equity claims against the US. It is as simple as that and, with a trillion $ current account deficit the US foreign liabilities will increase every year by a trillion dollars.

Now, until recently, foreigners have financed the US current account deficit more in the form of debt rather than equity. Since a good fraction of this current account deficit was driven in the 2004-2005 period by the growing US fiscal deficit, the foreigners have piled up more and more Treasury bills and bond. Indeed, by now over 53% of all Treasuries are held by non-residents, a good fraction of which by foreign central banks. But, increasingly, foreigners are starting to realize that exchanging their goods and services for lousy low-return IOUs of the US government is a most lousy deal for them. Why to hold Treasuries that give you a mediocre 4.5% return over 30 years when you can instead buy higher return capital such as US corporation, US factories, ports, real estate and any other asset currently owned by American in this great land of ours?

The nationalistic political backlash against this foreign acquisition of US capital it altogether hypocritical. Foreigners are selling us their high quality goods and services because we are on a national consumption binge and they are getting tired of getting in return useless low-return IOUs of the US government. There are plenty of great assets and gems in the US that are much more worth and provide in the long run much higher returns than T-bills. So, they rationally want to buy those assets, i.e. lend us in the form of equity rather than debt. An these foreigners are, increasingly, not just private investors but also central banks and other public authorities that have accumulated low-return dollar reserves to the tune of almost $400b last year alone with a total stock of such dollar reserves that is close to $3 trillion now. Also, altogether hypocritical is the behavior of US politicians who lobby hard all of the world to open up their markets to US foreign direct investment and now they are screaming, under the fig leaf of national security, about the foreign FDI into the U.S. And a big fig leaf it is as "national security" arguments have always been the first and last refuge of protectionist scoundrels. In France, the attempt by a US company to buy Danone, a yogurt producer, was repelled based on similar national security - or national pride - arguments; and such French resistance led to rightful mockery and scorn of such French yogurt nationalism. Now, both in the CNOOC-Unocal case and the Dubai-port case, national security scoundrels are hiding behind a flimsy national security argument to stop an altogether legitimate business transaction. Unfortunately, since the US is hollowing out the only goods and services that we are still producing at home are weapons, airplanes, high tech good, oil and other important commodities, financial services and other high tech services. And for each of these goods/services, one could make the argument that they are of some "national security" interest; any of these goods may have in principle military or security implications, even our ports as the current saga suggests. Unfortunately, for a country like the US whose core industrial base is hollowing out these are the goods and services that are up for sale and that foreigners want to buy. So, we may want to get used to it.

...and this guy's answer to the DP World issue: Get over it!...

[UpInArms]

101. Potential global rating downgrades rise - S&P

(knife sharpening sounds in the background?)

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-28T174633Z_01_N2899365_RTRIDST_0_MARKETS-DOWNGRADES-S-P.XML

NEW YORK, Feb 28 (Reuters) - Standard & Poor's on Tuesday said the number of potential global ratings downgrades have edged higher since mid-January as the consumer-related sectors face growing pressure.

As of Feb. 22, there are 636 global entities whose ratings may be cut compared with 620 in mid-January, and 87 percent of those entities are in the United States or Europe, S&P said.

"Many of the companies at risk were in the consumer discretionary domain, for example telecommunications, consumer products, automotive, and retail/restaurants," S&P said. Pressures have been building in this area due to greater consumer indebtedness, growing uncertainty about the housing outlook and high energy prices.

The "B-plus" rating level, which is the fourth highest junk level, had the highest potential for downgrades. It made up 20 percent of the total potential downgrades globally.

U.S.-based issuers made up 68 percent of the 636 entities with a negative outlook or placed on "CreditWatch with negative implications."

...more...

[UpInArms]

108. LandAmerica to pay $4.5 mln to settle rebate charge - Title Ins Scam

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-28T182310Z_01_N28383252_RTRIDST_0_FINANCIAL-LANDAMERICA-REINSURANCE-UPDATE-1.XML

NEW YORK, Feb 28 (Reuters) - LandAmerica Financial Group Inc. (LFG.N: Quote, Profile, Research) on Tuesday agreed to pay $4.5 million to settle charges by the California Department of Insurance that it illegally rebated money from captive insurers to banks and builders in order to get more business.

The real estate insurance company, which specializes in title insurance, will refund $2.6 million to customers and pay $1.9 million in penalties and legal fees, according to California Insurance Commissioner John Garamendi.

Garamendi called the payments by several companies owned by LandAmerica "kickbacks" and said they had given back nearly half the premium they collected to lenders, builders and Realtors in return for referrals. As part of the agreement, LandAmerica has agreed to stop captive reinsurance agreements, he said.

A "captive" is a company owned by another company that is used to finance certain lines of insurance. Reinsurers assume some of the risk and provide backup coverage for insurers.

...more...

[UpInArms]

110. Delphi posts $121 million January loss

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BC4609EFD%2D4391%2D44E6%2DBBE2%2DCB2C2C2CD7D2%7D&dist=newsfinder&symbol=&siteid=mktw

NEW YORK (MarketWatch) -- Auto-parts maker Delphi Corp. said in a monthly progress report filed with a bankruptcy court Tuesday that it lost $121 million in January.

Struggling to turn around its operations while in Chapter 11 proceedings, the former General Motors Corp. (GM 20.21, +0.10, +0.5% ) subsidiary and major parts supplier said that sales came to $1.47 billion in January. Slightly more than 40% of that revenue came from customers other than GM, according to Delphi's filing.

The Troy, Mich.-based company said that its January loss before special items and reorganization costs was $149 million.

Delphi (DPHIQ 0.33, +0.01, +1.6% ) said that pension obligations at the end of January were $3.33 billion, while post-retirement obligations, including health care and other items, totaled $7.4 billion.

On Feb. 17, Delphi said that it won't immediately move to cut retiree-health benefits to speed its exit from bankruptcy, a decision welcomed by the auto-manufacturer's largest union.

...more...

[UpInArms]

112. King Pharma plunges on weak sales, inventory troubles

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B889CD38F%2DF9E2%2D4448%2D807B%2D0FAB754134BC%7D&dist=newsfinder&symbol=&siteid=mktw

BOSTON (MarketWatch) -- King Pharmaceuticals stock plunged Tuesday after the company released disappointing fourth-quarter earnings due in part to inventory reporting problems.

<snip>

Early Tuesday, King reported a net loss of $94.6 million, or 39 cents a share, compared to a profit of $14.7 million, or 6 cents a share, for the same period in 2004. Excluding special items, adjusted earnings increased to $92.3 million, or 38 cents a share, compared with adjusted earnings of $33.8 million, or 14 cents a share.

King said it recorded net of tax charges of $186.9 million during the fourth quarter 2005, the bulk of which was related to its recently announced collaboration with Pain Therapeutics to develop pain relievers.

<snip>

King attributed the sales shortfall in part to higher than expected inventory levels for its top-selling drugs Skelaxin and Altace due to inaccurate reporting of third-quarter inventory by two of its biggest wholesalers.

King said the skewed information resulted in Skelaxin sales being negatively impacted by $17 million during the fourth-quarter, while Altace sales were off $13 million. Fourth-quarter sales of the high blood pressure drug Altace grew 64% year-over-year to $150 million, while sales of the muscle relaxant Skelaxin fell 14% to $70 million.

...more...

hmmmm - is this some of that "buildup of inventory" that was sooooo good for the GDP?

[ozymandius]

114. 11,000 is such an elusive number

2:38
Dow 10,998.86 -98.69 (-0.89%)
Nasdaq 2,281.51 -25.67 (-1.11%)
S&P 500 1,280.65 -13.47 (-1.04%)
10-Yr Bond 45.45 -0.45 (-0.98%)
NYSE Volume 1,587,568,000
Nasdaq Volume 1,508,971,000

2:30 pm : Indices continue to languish near their lows of the session as buying interest remains scarce across the board. In fact, of the 139 S&P industry groups, only five are trading in positive territory. Of the remaining 134 groups losing ground, educations services continues to pace the way with a 14% decline. Gold, another loser during the month of February (-14%), is off 2.8% while a 2.6% sell-off in Internet Software & Services, fueled by Google's (GOOG 364.69 -25.69) cautious commentary, has earmarked the group as this month's worst performer. DJ30 -97.32 DOT -1.5% NASDAQ -24.96 SP500 -12.72 NASDAQ Dec/Adv/Vol 2110/887/1.47 bln NYSE Dec/Adv/Vol 2294/911/1.12 bln

2:00 pm : Major averages continue to vacillate in roughly the same ranges as investors find few catalysts to get the 2006 rally back on track. Before the market opened, the Dow and S&P were on pace to record their best two-month advance in six years. However, declines of 1.0% for both indices are currently erasing nearly one third of their respective year-to-date gains. DJ30 -100.37 NASDAQ -23.20 SP500 -12.91 NASDAQ Dec/Adv/Vol 2049/919/1.36 bln NYSE Dec/Adv/Vol 2227/957/1.03 bln

[UpInArms]

115. 9/11 Detainee Scores $300,000 Settlement - *Co policies cost taxpayers

http://www.wcbs880.com/pages/10491.php

NEW YORK (AP) -- The U.S. government has agreed to pay $300,000 to an Egyptian man who sued after he was detained for nearly a year following the Sept. 11 attacks.

The settlement was filed Monday in federal court in Brooklyn, said attorney Haeyoung Yoon, who represents Ehab Elmaghraby. She said she believed it was the first settlement involving claims from people detained after Sept. 11.

"Despite the fact that the U.S. admitted no wrongdoing, they are compensating Mr. Elmaghraby for the injuries he suffered," Yoon said.

Voicemail boxes for the Department of Justice were full Monday night and could not accept messages from The Associated Press. The New York Times said Justice Department officials had no comment on the agreement.

Elmaghraby, a former restaurant worker, was held at the Metropolitan Detention Center in Brooklyn from October 2001 until August 2002, Yoon said. He was cleared of allegations he had terrorist ties but was deported in August 2003 after pleading guilty to credit card fraud.

The settlement, first reported by The Times, must be approved by a federal judge. A case against the government by another former detainee, Pakistani immigrant Javaid Iqbal, continues.

In a lawsuit filed in August 2004, the men claimed their rights were violated in U.S. custody and sought compensatory damages. They argued the government would not let them appeal their solitary confinement in a special unit of the detention center.

...more...

[UpInArms]

117. SEC sues International Management Hedge Fund for Fraud

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B2401202B%2D4067%2D433F%2D9833%2DDDDA9B323F1F%7D&dist=newsfinder&symbol=&siteid=mktw

SAN FRANCISCO (MarketWatch) -- The Securities and Exchange Commission has sued hedge fund firm International Management Associates LLC and its manager Kirk Wright, accusing them of fraud.

From early 1997, Wright and IMA raised $115 million to $185 million from as many as 500 investors by offering seven hedge funds, according to the SEC's complaint, which was filed on Monday in the U.S. District Court for the Northern District of Georgia in Atlanta.

Since at least 2003, Wright and IMA misrepresented the assets and returns of the funds, claiming they generated gains when "in fact, virtually all of the assets of the funds have been dissipated," the SEC claimed.

Jacob Frenkel, an attorney representing IMA and Wright, wasn't immediately available to comment on Tuesday afternoon. He told the Wall Street Journal this week that Wright hopes to resolve the issue in a way that satisfies the funds' investors.

Wright has already been sued by several professional and retired American football players who claim they lost millions of dollars investing in his funds.

...more...

[UpInArms]

118. SnowJob opens hole - shit falls out

2:35 PM ET 2/28/06 SNOW REITERATES CHINA MUST ALLOW MORE CURRENCY FLEXIBILITY

2:33 PM ET 2/28/06 SNOW: DUBAI PORTS DEAL "ENTIRELY CONSISTENT" WITH SECURITY

So when will this complete conflict-of-interest crapweasel STFU?

[UpInArms]

119. 3:12 EST steroid buzz has evaporated

Dow 10,982.05 -115.50 (-1.04%)
Nasdaq 2,277.81 -29.37 (-1.27%)
S&P 500 1,279.01 -15.11 (-1.17%)
10-Yr Bond 4.539 -0.51 (-1.11%)

NYSE Volume 1,771,533,000
Nasdaq Volume 1,665,711,000

3:00 pm : Stocks continue to trade sideways, albeit well below the flat line, heading into the final hour of trading. Sherwin-Williams (SHW 46.33 +3.74), however, is recovering almost half of last Wednesday's 18% drubbing and is now the second best performer on the NYSE after a Rhode Island judge denied punitive damages in landmark lead paint case. Unfortunately for the bulls, the A/D line still favors decliners as a more than 4-to-1 ratio of down to up volume on the Big Board also still underscores the bearish sentiment that has kept buyers on the sidelines since Monday. DJ30 -99.89 NASDAQ -26.33 SP500 -13.43 NASDAQ Dec/Adv/Vol 2116/904/1.58 bln NYSE Dec/Adv/Vol 2304/919/1.22 bln

2:30 pm : Indices continue to languish near their lows of the session as buying interest remains scarce across the board. In fact, of the 139 S&P industry groups, only five are trading in positive territory. Of the remaining 134 groups losing ground, educations services continues to pace the way with a 14% decline. Gold, another loser during the month of February (-14%), is off 2.8% while a 2.6% sell-off in Internet Software & Services, fueled by Google's (GOOG 364.69 -25.69) cautious commentary, has earmarked the group as this month's worst performer. DJ30 -97.32 DOT -1.5% NASDAQ -24.96 SP500 -12.72 NASDAQ Dec/Adv/Vol 2110/887/1.47 bln NYSE Dec/Adv/Vol 2294/911/1.12 bln

[Roland99]

124. Last minute injection? But was it potent enough? (1 shy of 11,000)

DJIA 10,999.00 -98.50
Nasdaq 2,279.36 -27.82
S&P 500 1,280.63 -13.49
Russell 2000 730.01 -10.62

[specimenfred1984]

122. Question from GD: 'How Much of U.S. Economy is Under the Radar?'

What percent of the U.S. economy is currently considered underground or black market? I researched this a little and can't find much of value, just a bunch of repugs blaming porn, pot and illegals.

I think this is becoming a huge issue with all the current corruption.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x539766

[AnneD]

127. In my honest humble opinion....

I don't know the percent but I think that as the tax laws become more and more punitive to wage earners (as opposed to those that were once taxed on investment and capital gains and very large estates)we will begin to see more underground or black market work. I also think you will see more co-ops spring up.

This once honest group of tax paying citizens will be forced into this to make ends meet. Look how the laws have been blatantly skewed in the last 5 years. The total tax burden has shifted to the middle class. They will start looking up and see they pay more get little of nothing in return and voila, a new attitude based on desperation.

[ozymandius]

128. and the final damage tally

Dow 10,993.41 -104.14 (-0.94%)
Nasdaq 2,281.39 -25.79 (-1.12%)
S&P 500 1,280.66 -13.46 (-1.04%)
10-Yr Bond 45.47 -0.43 (-0.94%)
NYSE Volume 2,370,257,000
Nasdaq Volume 2,179,497,000

4:20 pm : Sellers were in total control Tuesday as tepid economic data and cautious commentary from the market's biggest momentum stock -- Google -- sparked widespread consolidation that closed virtually every (131 out of 139) industry group in negative territory. Adding to the market's volatility and some conviction behind today's broad-based move to the downside was heavier than usual volume due to some end-of-the month portfolio rebalancing by fund managers.

Before the bell, investors digested an upward revision to Q4 GDP; but even though that was widely expected, faster than initially estimated growth of 1.6% added to the uncertainty as to when the Fed will end its tightening effort. Not helping matters was a trio of data that showed consumer confidence is waning, regional manufacturing activity is slowing and the housing market continues to cool off. While Briefing.com does not place great significance on any of those reports, the market found them of some concern, as the data in aggregate suggest some pockets of slower growth.

With the market still adjusting to the reality that profit expectations for this year need to be lowered, however, reports that Google (GOOG 361.38 -28.99) will have to find "other ways" to boost revenue amid slowing growth weighed heavily on sentiment, prompting an extension of the day's losses which never recovered. The decline in Google, the Nasdaq 100 index's fourth heaviest weighted component removed the Technology sector's early attempts to embrace news of Intel's (INTC 20.65 +0.13) $300 mln investment in a Vietnam chip facility. Of the ten economic sectors losing ground, Health Care turned in the day's worst performance, led by consolidation in drug, HMOs, medical equipment and biotech. The latter group was spurred by an analyst downgrade on Millennium Pharmaceuticals (MLNM 10.48 -0.67).

Despite a decline in borrowing costs, weakness in Financial weighed heavily on the proceedings, as investors consolidated some of the 4.8% gain the rate-sensitive sector has enjoyed since bottoming out in early February. Treasuries attracted buyers for the first time in four sessions following softer than expected economic data as some investors looking to park capital in risk-free accounts rather than invest it in stocks helped knock the yield on the 10-yr note (+10/32) to 4.54%. Industrials, led by consolidation throughout the transportation group, was another influential leader to the downside while Consumer Staples also lost more than 1.0%, as everything from personal products to drug retail succumbed to selling pressure.

Even though crude futures recovered some of yesterday's 3.4% decline and Transocean (RIG 74.16 +2.63), a suggested holding in our Active Portfolio, was awarded a three-year contract extension, the Energy sector failed to provide any leadership whatsoever. Utilities was weak due in large part to a Q4 earnings miss and downside FY06 guidance from Williams Companies (WMB 21.56 -0.57). Staples (SPLS 24.54 +1.47), however, hit a 52-week high after beating expectations and boosting its dividend 32%, and Sherwin-Williams (SHW) surged 7.0% upon learning that a Rhode Island judge denied punitive damages in a landmark lead paint case. Nevertheless, Consumer Discretionary, led by a profit warning-induced 15.5% decline in Apollo Group (APOL 49.38 -9.09), was unable to take notice. BTK -2.3% DJ30 -104.14 DJTA -1.1% DJUA -0.9% DOT -1.5% NASDAQ -25.79 NQ100 -1.5% R2K -1.4% SOX -0.8% SP400 -1.1% SP500 -13.46 XOI -1.0% NASDAQ Dec/Adv/Vol 2053/998/2.15 bln NYSE Dec/Adv/Vol 2293/982/1.77 bln