STOCK MARKET WATCH, Monday 15 May

[ozymandius]

Monday May 15, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 982 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1969 DAYS
WHERE'S OSAMA BIN-LADEN? 1669 DAYS
DAYS SINCE ENRON COLLAPSE = 1630
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 May 12, 2006

Dow... 11,380.99 -119.74 (-1.04%)
Nasdaq... 2,243.78 -28.92 (-1.27%)
S&P 500... 1,291.24 -14.68 (-1.12%)
Gold future... 711.80 -9.70 (-1.36%)
30-Year Bond 5.30% +0.07 (+1.36%)
10-Yr Bond... 5.19% +0.03 (+0.60%)






GOLD, EURO, YEN, Loonie and Silver


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 Chris Puplava

ARE THE DOW JONES AND GOLD APPROACHING PREVIOUS RECORDS?
Dose of Dollar/Inflation Reality Needed!

I am concerned with the lack of reality in the financial markets, the economy, and the country as a whole. It seems most stories on CNBC are spun with a positive light, and that reports from the White House on the economy are always “growth.” Both the financial media and government seem to want to paint a rosy picture for everyone and I think we need a dose of reality. No one seems to be listening or paying attention to what Texas Congressman Ron Paul says, “What the Price of Gold is Telling Us.”

I haven’t read anything by anyone with more of a clear understanding of the present economic situation of this country than this article by Congressman Ron Paul. I highly recommend everyone to read his “Texas Straight Talk” articles. Congressman Paul explains the present situation in plain English for anyone to understand. Below are some of his valuable points:

The point is that most who buy gold do so to protect against a depreciating currency rather than as an investment in the classical sense. Americans understand this less than citizens of other countries; some nations have suffered from severe monetary inflation that literally led to the destruction of their national currency. Though our inflation-- i.e. the depreciation of the U.S. dollar-- has been insidious, average Americans are unaware of how this occurs. For instance, few Americans know nor seem concerned that the 1913 pre-Federal Reserve dollar is now worth only four cents (See chart below). Officially, our central bankers and our politicians express no fear that the course on which we are set is fraught with great danger to our economy and our political system. The belief that money created out of thin air can work economic miracles, if only properly “managed,” is pervasive in D.C.

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

[ozymandius]

2. Today's Reports

8:30 AM NY Empire State Index May
Briefing Forecast 21.0
Market Expects 15.0
Prior 15.8

9:00 AM Net Foreign Purchases Mar
Briefing Forecast NA
Market Expects NA
Prior $86.9B

[UpInArms]

31. Empire State Index @ 12.4 (way below concensus)

8:30 AM ET 5/15/06 U.S. MAY EMPIRE STATE PRICES PAID INDEX 42.6 VS 37.9 APRIL

8:30 AM ET 5/15/06 U.S. MAY EMPIRE STATE NEW ORDERS INDEX 16.4 VS 14.1 IN APRIL

8:30 AM ET 5/15/06 U.S. MAY EMPIRE STATE EMPLOYMENT INDEX 9.1 VS 17.4 IN APRIL

8:30 AM ET 5/15/06 U.S. MAY EMPIRE STATE INDEX BELOW CONSENSUS 14.6

8:30 AM ET 5/15/06 U.S. MAY EMPIRE STATE INDEX LOWEST SINCE JUNE 2005

8:30 AM ET 5/15/06 U.S. MAY EMPIRE STATE INDEX 12.4 VS 15.8 IN APRIL

[UpInArms]

32. U.S. May Empire State index slips to 12.4 vs 15.8 in April

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B1797E45E%2D9C86%2D4817%2DABDC%2D66DA3D719F25%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- Manufacturing activity in the New York area expanded at a slower pace in May, the New York Federal Reserve Bank said Monday. The bank's Empire State Manufacturing index fell to 12.4 in May from 15.8 in April. This is the lowest level since June 2005. The decrease was larger than expected. Economists were forecasting the index to inch lower to 14.6. Despite the decline, new orders were slightly higher in May. The prices paid index rose again, as did expectations for higher prices in the next six months. The employment index declined moderately.

The employment index decline moderately????? 9.1 VS 17.4 - that is almost 50%!

[UpInArms]

62. New York Fed's May Factory Index Falls Unexpectedly to 12.4 From 15.8

http://www.bloomberg.com/apps/news?pid=10000087&sid=aTFm1Vz30N5k&refer=top_world_news

May 15 (Bloomberg) -- Manufacturing growth in New York state unexpectedly slowed in May to a pace that suggests higher energy prices and interest rates may be hurting demand, a Federal Reserve report showed.

The Federal Reserve Bank of New York's general economic index decreased to 12.4, the lowest since June 2005, from 15.8 in April, today's report showed. Readings exceeding zero signal that more surveyed manufacturers reported business improvement than deterioration. The index averaged 15.6 last year.

Higher borrowing costs and rising energy prices may be discouraging consumers from making major purchases. Business investment in new equipment and demand from overseas are still supporting manufacturing and economic growth, economists said.

<snip>

The New York Fed's outlook component, which measures expectations six months ahead, decreased to 31.3 this month from 42.7 in April.

...more...

[UpInArms]

38. Capital flows to U.S. in March fall to $69.8 billion

9:00 AM ET 5/15/06 FOREIGN OFFICIAL INSTITUTIONS SELL $6.3 BLN IN TREASURYS

9:00 AM ET 5/15/06 CAPITAL FLOWS TO U.S. IN MARCH FALL TO $69.8 BILLION

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B1630BC16%2DAC43%2D4CE1%2DA20B%2DEBB79F37A9D7%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- Capital flows into the United States fell to $69.8 billion in March after reaching a revised $90.5 billion in February, the Treasury Department said Monday. The decline was led by a sell-off in Treasury bonds and notes bought by official foreign institutions. Net foreign purchases of long-term domestic securities were $89.2 billion. Private investors bought $87.6 billion in securities, while official institutions accounted for $1.6 billion. U.S. investors bought $19.4 billion in foreign-issued securities in March, up from $12 billion in February.

[UpInArms]

43. US March capital inflows slip to $69.8 bln (expectations were $75.50 bln)

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-15T130823Z_01_WAT005551_RTRIDST_0_ECONOMY-CAPITAL-URGENT.XML

WASHINGTON, May 15 (Reuters) - Net flows of capital into U.S. assets fell to a smaller-than-expected $69.8 billion in March, but were still sufficient to cover the nation's trade deficit in that month, a Treasury Department report showed on Monday.

Analysts were expecting net capital flows of $75.50 billion. The U.S. trade deficit narrowed to $62.0 billion in March, the government said last week.

Official purchases of U.S. assets dipped to $1.6 billion, and official sources were net sellers of $6.3 billion in Treasuries, the report said.

[UpInArms]

45. that inflow may have covered the trade deficit, but fell far short of the

C/A (current account deficit for March)

Apr 12	2:00 PM	Treasury Budget	Mar	-$85.5B	-$87.0B	-$81.0B	-$71.2B	-

(edited for syntax)

[UpInArms]

72. Reuters article re inflows still ignores twin deficits -

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-05-15T142952Z_01_N15281762_RTRIDST_0_ECONOMY-CAPITAL-UPDATE-2.XML

WASHINGTON, May 15 (Reuters) - Net flows of capital into U.S. assets fell to a smaller-than-expected $69.8 billion in March, but were still sufficient to cover the nation's trade deficit in that month, a Treasury Department report showed on Monday.

Analysts were expecting net capital flows of $75.50 billion. The U.S. trade deficit narrowed to $62.0 billion in March, the government said last week.

Official purchases of U.S. assets dipped to $1.6 billion, and official sources were net sellers of $6.3 billion in Treasuries, the report said. Private buying of Treasuries slowed to $9.3 billion.

Net purchases of U.S. Treasuries fell to $3.07 billion, the lowest since February 2003, when there was a net sale of $3.2 billion in Treasuries, the Treasury Department said.

<snip>

"It has triggered a very quick knee jerk sell off in the dollar but to be honest, given overnight gains in the dollar, I don't think the sell-off will be that dramatic given that the number of $70 billion corresponds roughly to the monthly average inflow required to fund the deficit," said George Davis, chief foreign exchange technical analyst for RBC Capital Markets in Toronto.

...more...

[UpInArms]

74. Philly Fed survey sees weaker U.S. growth in 2007

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-05-15T143910Z_01_N15376221_RTRIDST_0_ECONOMY-PHILLYFED.XML

NEW YORK, May 15 (Reuters) - Stronger U.S. economic growth in 2006 is coming at the expense of weaker growth next year, according to 53 forecasters surveyed by the Federal Reserve Bank of Philadelphia.

The forecasters now see the U.S. economy growing 3.4 percent in 2006 on a year-over-year basis, an upward revision of 0.2 percentage point over their previous estimate of 3.2 percent three months ago, according to the survey which was posted on the Philly Fed's Web site on Monday.

That upward revision is offset, however, by a downward revision for 2007, when the forecasters expect growth to average 3.0 percent, a decrease from their previous estimate of 3.2 percent.

<snip>

These projections translate into monthly job gains on a year-over-year basis of nearly 170,000 in 2006 and 138,000 in 2007. On a quarterly basis, the forecasters see monthly job gains starting off strongly at a pace of 170,000 this quarter, then trailing off gradually to a rate of 125,000 per month in the second quarter of 2007.

...more...

:wow: that job "growth" projection will not even begin to cover the need for jobs - those numbers indicate a shrinking employment outlook.

[ozymandius]

3. Oil Prices Tumble More Than $1 in Asia

VIENNA, Austria - Crude oil futures sagged Monday, as markets reacted to a lower demand growth forecast from the International Energy Agency.

Despite shortfalls due to Nigerian unrest — which Vienna's PVM Oil Associates put at 550,000 barrels a day — high prices also pushed oil downward in a reflection of sentiment that global oil supplies were outpacing demand.

"There is no lack of capacity right now," Saudi oil minister Ali Naimi told reporters on the sidelines of an energy conference in Amman, Jordan. Asked about the impact of high prices, Naimi said: "In general, when prices are high, people check their pockets and when they are lower, they open them."

But the main focus appeared to be on the IEA projections.

more

[ozymandius]

4. Oil Wealth Colors the U.S. Push for Democracy

The photographs posted on the White House Web site tell the story. On April 28, President Bush had a busy day of meetings. There's a photograph of the president looking eye to eye with little Kim Han Mee, the daughter of North Korean defectors. There's a snapshot of the president greeting Sakie Yokata, representing Japanese abducted by North Korea. There's another photo of the president sitting in the Roosevelt Room meeting with Darfur advocates, including former slave Simon Deng.

And then there's a picture of Bush welcoming President Ilham Aliyev of Azerbaijan to the Oval Office.

Bush said he talked about the "wave of democracy" with a leader who had recently overseen parliamentary elections that human rights advocates had criticized as deeply flawed. But Bush also lauded "the vision of the president in helping this world achieve what we all want, which is energy security."

http://www.washingtonpost.com/wp-dyn/content/article/2006/05/13/AR2006051300842.html

[ozymandius]

9. Report: Saudi oil minister warns prices could fall (by November?)

SAN FRANCISCO (MarketWatch) -- The oil minister for Saudi Arabia warned representatives of other oil-producing Arab countries that high prices and demand may not continue, according to an article Sunday by the Associated Press.

At a four-day conference of Arab energy ministers in Amman, Jordan, Saudi oil minister Ali al-Naimi predicted that oil prices could slide if an economic crisis pushes industrialized nations to develop alternative energy sources. As evidence, he cited an 80-percent drop in oil prices during the 1980s when many of these countries adopted policies to reduce their dependency on oil.

very short

[Demeter]

40. Oil Will Fall After House and Senate Flip To Democrats

because the writing will be on the wall then!

Conversely, if we don't take back the Legislature....

[UpInArms]

29. June Crude @ $69.86 bbl in electronic trading

8:18 AM ET 5/15/06 JUNE CRUDE DOWN $2.18 AT $69.86/BARREL IN ELECTRONIC TRADING

[Robbien]

57. US asks Pakistan to abandon gas project with Iran

Islamabad: The US has asked Pakistan to abandon the seven billion dollar gas pipeline planned to Pakistan and India ahead of next week's visit by a high-level Iranian delegation, a newspaper reported Monday.

"The US has asked Pakistan to distance itself from the pipeline, but the leadership is adamant in its refusal to the constant US demands," The Nation quoted a senior government official as saying.

Iran and Pakistan have said the project would forge ahead despite US reservations. Pakistan said the project is vital to meet the country's growing energy needs.

. . .

Meanwhile, the joint working group of Iran, Pakistan and India is also scheduled to meet in the Pakistani capital May 22 to 24 for technical discussions on the proposed 2,670 km pipeline from Iran's southern Pars field.

http://www.teluguportal.net/modules/news/article.php?storyid=4100

[54anickel]

97. Did they say pretty please? Meanwhile the SCO is in preparation meetings

today for next months summit. Notice it's getting little to no press here in the US...

http://news.google.com/news?hl=en&ned=us&ie=UTF-8&scoring=d&q=SCO+summit&btnG=Search+News

[UpInArms]

61. June Crude @ $69.95 bbl - June NatGas @ $6.125 mln btus

10:08 AM ET 5/15/06 JUNE CRUDE FALLS $2.14, OR 3%, TO $69.95/BRL IN NY

10:08 AM ET 5/15/06 JUNE NATURAL GAS TRADES AT LOWEST LEVELS SINCE MID-FEBRUARY

10:08 AM ET 5/15/06 JUNE JUNE NATURAL GAS DOWN 2.5% AT $6.125/MLN BTUS

[UpInArms]

109. June Crude closes @ $69.41 bbl - June NatGas @ $6.123 mln btus

2:55 PM ET 5/15/06 JUNE CRUDE CLOSES AT ITS LOWEST LEVEL SINCE APRIL 7

2:55 PM ET 5/15/06 JUNE CRUDE FALLS $2.63, OR 3.7%, TO CLOSE AT $69.41/BRL

2:48 PM ET 5/15/06 JUNE NATURAL GAS CLOSES AT A MORE THAN ONE-YEAR LOW

2:48 PM ET 5/15/06 JUNE NATURAL GAS FALLS 2.5% TO END AT $6.123/MLN BTUS

[ozymandius]

5. More Rate Hikes Could Force Stocks Down

NEW YORK - An inflation scare sent stocks, bonds and the dollar skidding at the end of last week and analysts say more declines are possible as it dawns on investors that further increases in borrowing costs could be in store.

The Federal Reserve boosted the overnight bank loan rate to 5 percent on May 10 and left the door open for additional increases if needed to offset the inflationary impacts of higher oil and metals prices.

The central bankers also left room for a pause in their series of 16 consecutive quarter-point increases if prices show signs of behaving. But with oil prices finishing the week up about $2 a barrel and gold prices jumping more than $30 an ounce, the odds of that appear to be growing slimmer.

"What the Fed is really trying to say is that it doesn't know what it is going to do next. And if the markets abhor anything, it is uncertainty," Scott Anderson, a senior economist at Wells Fargo, wrote in a report. "Expect bond and stock market volatility to increase from here until the inflation outlook solidifies."

more

[ozymandius]

6. Closing Arguments on Deck in Enron Trial

HOUSTON - By Wednesday, the fates of Enron Corp. founder Kenneth Lay and former CEO Jeffrey Skilling will be in the hands of a dozen jurors.

-cut-

Before they retire to deliberate, U.S. District Judge Sim Lake on Monday will give jurors detailed instructions on what they can and cannot consider as they hash out a verdict, and then lawyers on both sides will take their last shot at persuading the panel to decide the case their way.

Each side has six hours to summarize the case that lasted more than 14 weeks and featured 54 government and defense witnesses, including Lay and Skilling. Each side also presented mountains of documents and hours of video and audiotapes that will be available for jurors to sift through during deliberations.

Sam Buell, a former prosecutor with the Justice Department's Enron Task Force who is a visiting professor at the University of Texas School of Law, said it will be critical for prosecutors and the defense teams to tell a coherent, compelling story. The sprawling nature of the case may leave the panel looking for a big-picture view.

more

[ozymandius]

7. Bush housing chief investigated over contract flap

WASHINGTON (Reuters) - An inspector general is investigating allegations that Housing and Urban Development Secretary Alphonso Jackson may have improperly considered politics in withholding a federal contract.

But a White House official said on Friday that President George W. Bush was standing by his Cabinet secretary and longtime friend and would withhold judgment on any investigation "at this point."

Jackson was quoted in the Dallas Business Journal as citing a contractor's dislike of Bush in describing an incident in which that person was denied a contract.

The report said that Jackson had told a real estate forum: "Why should I reward someone who doesn't like the president, so they can use funds to try to campaign against the president? Logic says they don't get the contract. That's the way I believe."

more

[Amonester]

67. Another clear indication that dissent of the criminal preznit is not...

to be tolerated in the "New..." US_SR... (?)

(?=we'll see?)

[President Kerry]

93. isn't that pretty blatantly illegal?

Contracts are awarded out of purely economic, NOT political considerations. Figures.

[ozymandius]

8. Updates, advisories and surprises

(6:26 AM ET) HONG KONG (MarketWatch) -- Japanese camera and precision equipment maker Nikon Corp. announced Monday that group net profit rose 19.9% to $263 million in the fiscal year ended March 31, on sales of $6.64 billion. Both numbers are record highs. Nikon said that operating profit in its image business, which includes cameras, more than doubled to $313 million. In the precision equipment division, operating profit also more than doubled to $240 million due to strong sales of chips and LCDs. Nikon estimates net profit will jump a further 28% to $336 million in the coming year.

-cut-

European markets start lower as inflation worries weigh (3:14 AM ET) LONDON (MarketWatch) -- European stock markets opened lower Monday, extending the previous week's losses as inflation concerns took their toll and after falls in U.S. and Asian markets. Gas utility Gaz de France (fr:FR:GAZ: news, chart, profile) lost 0.4% after posting a 39% rise in net sales, while pharmaceutical company Cambridge Antibody
AZN53.89, -0.43, -0.8% ) (uk:UK:AZN: news, chart, profile) for $1.33 billion. Shares in AstraZeneca fell 0.2%. Broadly the U.K. FTSE 100 index lost 0.3% at 5,898, the French CAC 40 index gave up 0.3% at 5,135 and the German DAX 30 index fell 0.3% at 5,901.
Eircom profit climbs 3.8%

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=google&guid=%7B51147953-4771-4B53-960D-EB747810DFB3%7D&keyword=

[ozymandius]

10. Vestas wins order for delivery of 65 wind turbines for US project

COPENHAGEN (AFX) - Vestas Wind Systems AS said it has received an order for the delivery of 107 MW capacity, consisting of 65 units of its V82-1.65 MW turbine for a wind project in the US.

-cut-

Shipment of the turbines will start in December and all the turbines are expected to be commissioned before the year-end 2007.

short story...


http://www.forbes.com/business/feeds/afx/2006/05/15/afx2744981.html

[President Kerry]

95. very welcome news, thanks.

Time to get serious about renewable energy one step at a time.

[ozymandius]

11. Bush, GOP fail again to fix alternative minimum tax

When the going gets miserable, the miserable cut taxes.

Shortly after hitting the lowest approval rating of his administration, President Bush this week will put his signature to yet another round of Republican-crafted tax cuts that (you'll be shocked to learn) overwhelmingly favor the rich.

-cut-

According to the nonpartisan Tax Policy Center in Washington, the average savings from these latest cuts for people earning between $47,000 and $67,000 is just $20. People with incomes over $1 million, on the other hand, will enjoy average savings of $42,766.

more

[ozymandius]

12. Who gains from tax-cut bill

NEW YORK – There is a nice tax cut waiting for you - that is, if people refer to you as Dr. or "my lawyer," not Mr. or Ms. And possibly, you might notice the relief if you and your spouse make between $100,000 and $200,000 a year. But if you're laying bricks or working as a teller at the local bank, you might wonder what all the fuss is about.

President Bush is expected to sign into law a one-year, $31 billion cut for 2006, along with extending current tax cuts worth $39 billion over the next five years.

Some economists think the timing could be good: By the time much of the tax relief is distributed next April 15, the economy is likely to be slowing. But the cost of the cuts worries those concerned with the budget deficit. And yes, most of the immediate benefits will go to those with high incomes, even though the legislation is supposed to bring relief to middle-income taxpayers faced with the alternative minimum tax (AMT) - something originally designed to ensure that upper-income Americans paid Uncle Sam their share.

http://www.csmonitor.com/2006/0512/p01s01-usec.html?s=t5

So this will benefit those who file their tax returns quarterly. I suppose that I could file quarterly too and do something spectacular with that extra four bucks in my pocket.

[UpInArms]

35. 'Temporary' Tax Cuts Have a Way of Becoming Permanent

http://www.nytimes.com/2006/05/14/business/yourmoney/14view.html?ei=5088&en=2a6cc7b699952a5f&ex=1305259200&partner=rssnyt&emc=rss&pagewanted=all

(free registration or try www.bugmenot.com)

THINGS that seem temporary can have a sneaky way of becoming permanent. Anyone who's ever bought a home knows how it works. At first there are dozens of fixes you plan to make — that dreadful carpet, those dingy tiles in the bathroom, maybe even a silly door knob. Ten years later, you find yourself still staring at them.

<snip>

Each year since 2001 Mr. Bush has proposed making his core tax policies permanent. The most significant items include repealing the estate tax and perpetuating the cuts in individual income, capital gains and dividend taxes. The congressional Joint Committee on Taxation recently calculated that it would cost $1.6 trillion from 2006 to 2016 to make the tax provisions permanent. And that's in addition to the $1.3 trillion cost of the 2001 tax package and $350 billion for the 2003 package, according to the committee.



All the temporary tax provisions are due to expire by the end of 2010. By then, there will be a new president in the White House and, in the view of many critics of the Bush administration, the fiscal situation will be so dire that Congress will have little choice but to let the tax cuts lapse.

<snip>

Congress's failure to address budget imbalances in recent years has already led to a significant fiscal reversal. In January 2001, the Congressional Budget Office predicted an accumulated surplus in the budget of $5.6 trillion for 2002 to 2011. Now it predicts a deficit of $2.7 trillion over the same period. And that's before any of the federal government's massive Social Security and Medicare obligations are taken into account.

...more...

[AnneD]

44. Morning Marketeers,

:donut: and lurkers. And temporary taxes seldom are. They present the toll fee as a short term fund raising until the road is paid off, yet you never see them roll back the rates once the road is paid for. No, it becomes a cash cow.:eyes: One of the bottom lines is that this countries expenses have gone up and yet the money they take in is far less than they need to paid obligation and expenses. We have never CUT taxes in a war UNTIL THIS ADMINISTRATION. It is not prudent or fiscally possible. And not only have they cut taxes, they have cut them for the wealthiest. This has had a chilling effect on the economy. I can only hope some folks in office see the light (or at least a bulb goes off) cause we are in deep doodoo here.

Happy hunting and watch out for the bears.

[UpInArms]

13. daily dollar watch

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

Last trade 84.53 Change +0.67 (+0.80%)

Dollar Can't Buy A Break

http://www.dailyfx.com/story/special_report/special_reports/ToF_May_12___18__1147481373645.html

US economy is slowing down. There was no clearer evidence of that fact last week than the failure of Retail Sales to meet expectations. Ex gasoline retail sales increased a measly 0.1% vs. 0.7% forecast and put the final nail in coffin of the dollar bull's argument that the US consumer will remain resilient in the face of higher oil prices and rising interest rates. To add insult to injury Friday's U of M plunged to 79.0 from 86 0 projected suggesting that Mr. and Mrs. America are going to curtail spending even further. As we noted earlier this week, "…The grand theme in the currency market that appears to be dictating trading at the present moment is that EU and UK economies are enjoying a renaissance while US is headed for a slowdown…most market participants continue to view the US rate hike policy as nearing its end and therefore losing its effectiveness in supporting the dollar."

Next week brings the TICs report, a slew of housing data and Industrial Production results. TICs may well set the tone for trading for the front part of the week. If it shows a second straight month of more than ample surpluses ($75 Billion or greater) against what for now at least appears to be a slightly contracting Trade Balance deficit, perhaps it can stem the slide of the greenback. But the retrace is likely to be short lived. With dollar negative sentiment prevailing throughout the FX market and the 1.3000 within pips of reach, the dollar's turn for the better could be fleeting at best.

...more...

Revenge of the Dollar

http://www.dailyfx.com/story/dailyfx_reports/daily_brief/Revenge_of_the_Dollar_1147686455862.html

After weeks being battered by sellers the dollar finally staged a turnaround in early European trade today but not before EUR/USD established new highs in the Asian session after a Washington Post story suggested that the Bush Administration was comfortable with a weak dollar policy. Having hit the peak of 1.2970 however, the euro rally ran out of gas as traders contemplated the possibility of a strong TICS number to complement the smaller than expected Trade deficit figure on Friday buoying the greenback in New York trading.

Having risen for five weeks in a row, the EUR/USD is due for a retrace and this week may yet see a bout of profit taking from euro longs as potentially positive news out of the US in combination with the possibility of a fourth consecutive decline in the ZEW survey could provide currency traders with a ready made excuse to lighten up on their USD shorts. Furthermore, our proprietary Speculator Sentiment Index which serves a contrarian signal and has been dollar long throughout this massive anti-dollar move, has finally turned euro positive suggesting that EUR/USD rally may have set a top for the time being.

Turning to Asia, we left on Friday posing the following question, “If everyone loved the carry at 120 USD/JPY and 450bp spread, how come the market hates it at 110 USD/JPY and 500bp spread?” It appears that at least some of the market participants may have shared our opinion, as the USD/JPY rallied hard from its lows set in Asia today to break above the 110 level once again. The decline in the yen came despite the fact that Chinese monetary authorities allowed CNY/USD to trade below the psychologically important 8.00 level today - a move considered by many market players to be extremely yen bullish. Yet, the market may be having second thoughts about the possibility of an early lift of the ZIRP as Japanese officials including the FinMin Tanigaki, continue to warn against premature expectations on the rate front. In short the question we raised last Friday may lead to further consideration this week.

...more...

[UpInArms]

14. Bush administration acquiescing to weaker dollar-WSJ

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-15T002638Z_01_T181866_RTRIDST_0_ECONOMY-US-DOLLAR-WSJ.XML

TOKYO, May 15 (Reuters) - The administration of U.S. President George W. Bush is "quietly acquiescing" to a weaker dollar, the Wall Street Journal reported over the weekend.

U.S. Treasury Secretary John Snow and other members of Bush's economic team see dollar weakness and stronger growth abroad as helping to curb the U.S. trade deficit, the Journal reported, citing people familiar with the administration's thinking.

Administration officials are not calling attention to their stance for fear of causing a dollar plunge if investors believe the United States is trying to engineer a weaker currency, the newspaper said.

...more...

[UpInArms]

22. Tanigaki: Snow has affirmed strong dollar policy

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=businessNews&storyID=2006-05-15T060332Z_01_T318063_RTRUKOC_0_US-ECONOMY-JAPAN-TANIGAKI.xml

OSAKA, Japan (Reuters) - Japanese Finance Minister Sadakazu Tanigaki said on Monday U.S. Treasury Secretary John Snow has reaffirmed that Washington's strong dollar policy remains unchanged.

"I understand remarks Secretary Snow has made over the past week, excluding those on the Chinese yuan, noted that values of currencies should reflect economic fundamentals and should be set in open and competitive markets, and a strong dollar is in the U.S. interest and they will keep such a policy," Tanigaki said.

Media reports said last week that Tanigaki had spoken with Snow by phone ahead of the release of the Treasury Department's currency report late on Wednesday. The conversation would have come at a critical time, as the dollar has been falling against major currencies.

But Tanigaki has declined to say whether he spoke to Snow.

...more...

[UpInArms]

88. SnowJob gets queried on speech impediment

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-15T160340Z_01_N15302176_RTRIDST_0_ECONOMY-YUAN-TREASURY-UPDATE-1.XML

excerpt:

Asked about a move in the yuan <CNY=> <CNYNDF=> <CNY=CFXS> overnight to below 8 per dollar for the first time since China in July moved from a dollar peg to a managed float referencing a basket of currencies, Fratto said any sign Beijing is moving toward a more flexible currency regime is "certainly welcome."

Fratto again declined to comment on a Wall Street Journal report that said the administration of President George W. Bush was acquiescing in a drop in the value of the dollar because it may help trim the growing U.S. trade deficit.

"Our policy on the dollar is clear. It's been stated many times, (Treasury) Secretary (John) Snow addressed it last week," Fratto said.

"We don't comment on moves in the relative values of currencies. Currency values should be set in open, competitive markets; strong dollar policy based on underlying economic fundamentals -- and I would point out, as I have, those economic fundamentals are all very strong," he added.

...more at link...

[UpInArms]

15. China April M2 money supply up 18.9 pct on yr ago

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-15T003600Z_01_SHA303981_RTRIDST_0_ECONOMY-CHINA-MONEYSUPPLY-URGENT.XML

SHANGHAI, May 15 (Reuters) - China's annual M2 money supply growth in April was 18.9 percent, slightly higher than the 18.8 percent growth in March, the China Business News said on Monday.

Economists polled by Reuters had expected an 18.5 percent increase in the broad M2 measure.

The central bank is aiming for 16 percent M2 growth in 2006.

[UpInArms]

17. China currency highest since revaluation

http://www.businessweek.com/ap/financialnews/D8HJV1G80.htm?campaign_id=rss_full_topix_bwdaily&chan=db

MAY. 14 11:08 P.M. ET China's official exchange rate rose Monday to 7.9982 yuan per U.S. dollar, its highest level since a revaluation in July, the government said.

Currency traders had been expecting the yuan to breach the psychologically important level of 8.00 yuan per dollar sometime soon.

The official central parity rate for the yuan versus the dollar, the weighted average of prices given by 13 market makers excluding highest and lowest offers, is announced each trading day by the official Xinhua News Agency.

The U.S. dollar closed at 8.0054 on Friday on the automatic price-matching system and at 8.0063 on the over-the-counter market.

<snip>

The yuan has since gained 1.38 percent against the dollar.

...more...

[UpInArms]

19. Ernst & Young says probing Chinese bad loan gaffe

Was it a gaffe or is it censorship?

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=businessNews&storyID=2006-05-15T105551Z_01_PEK303583_RTRUKOC_0_US-FINANCIAL-CHINA-REPORT.xml

BEIJING/SHANGHAI (Reuters) - Accounting giant Ernst & Young said on Monday it was investigating how it had wrongly estimated Chinese bad loans at more than $900 billion in a report it had had to withdraw amid great embarrassment.

Ernst & Young, which employs 4,500 people in mainland China, Hong Kong and Macau, withdrew its widely watched report on bad loans on Friday, a day after the central bank labeled it "ridiculous".

The London-based firm acknowledged that estimate of $911 billion in Chinese bad loans could not be supported and was believed to be "factually erroneous".

In a fresh statement issued to Reuters on Monday, Ernst & Young said it would do its best to avoid any repeat.

<snip>

The report had included a number of errors in estimating and reporting on the level of non-performing loans, and the firm had erroneously aggregated incompatible data in a table from which misleading conclusions could be drawn, it said.

The gaffe could deal a blow to the firm's efforts to win or maintain lucrative business deals from Chinese clients.

...more...

[54anickel]

94. Or did E&Y get caught red-handed in some sort of "US black-op"? The

plot thickens...could be a great Tom Clancey type novel in this story. We know the US and China have very different approaches to tackling the imbalance. The US want to again take the easy route of devaluing the buck against the yuan, while China claims to want to straighten out it's banking mess. China's plan does seem to be the more "responsible and reasonable" approach - but whom to trust in this one? :freak:

[UpInArms]

21. Yuan to be more responsive to market: draft paper

http://news.yahoo.com/s/nm/20060515/bs_nm/economy_china_eu_dc

BEIJING (Reuters) - China will press ahead with reform of its currency regime with the aim of making the yuan more responsive to market forces, according to a draft of a joint statement by China and the European Union to be issued on Monday.

The pledge by China, in a draft statement dated May 13, is due to be issued publicly on Monday, the same day that the yuan , also known as the renminbi (RMB), strengthened past 8 per dollar for the first time since the central bank revalued it by 2.1 percent and freed it from a dollar peg last July.

"China will further improve the RMB exchange rate mechanism and constantly make the exchange rate more responsive to market supply and demand," says the draft statement obtained by Reuters.

The draft adds that China will pursue a prudent fiscal stance and a prudent monetary policy, while advancing market-based interest rate reforms.

...more...

[UpInArms]

25. Yuan breaks key barrier against dollar

http://www.marketwatch.com/News/Story/BxJfbF0c1Ss30bWB2SmZjdX?siteid=mktw&dist=morenews

HONG KONG (MarketWatch) -- The Chinese yuan broke through a symbolically important barrier against the dollar on Monday after the central bank set the currency's exchange rate target below the 8.0 mark for the first time.

The yuan opened at 7.9976 to the dollar on Monday morning in Shanghai trading. The People's Bank of China had set the day's official target at 7.9982. Friday's rate was 8.0082.

"If you look at the trend, it's in line with what we've seen. I don't think it signals any major shift in exchange rate policy," said Tai Hui, an economist at Standard Chartered in Hong Kong. "The market was disappointed that it didn't happen sooner."

In July, the Chinese government raised the yuan's value against the greenback by 2.1% and announced it would let the currency fluctuate within 0.3% of a daily "central parity rate". Previously, the yuan had been pegged to the dollar.

Since the revaluation, it has appreciated a further 1.38% through frequent, carefully regulated adjustments. Its rise slowed in April, however, as growing foreign pressure on China to revalue faster appeared to backfire.

...more...

[UpInArms]

16. Japan fund holdings of foreign assets hit record

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-15T095244Z_01_T304889_RTRIDST_0_ECONOMY-JAPAN-INVESTMENTTRUST.XML

TOKYO, May 15 (Reuters) - Japanese investment trust holdings of foreign stocks and bonds hit a record high in April as increasingly confident investors keep ploughing cash into riskier funds, industry data showed on Monday.

Combined assets in foreign stocks and bonds rose by 133.7 billion yen ($1.22 billion) to 19.398 trillion yen ($176.9 billion) in April, according to Japan's Investment Trust Association.

But foreign bond holdings were trimmed by 19.3 billion yen to 15.3121 trillion yen, marking the first decline since October 2004. Frustrated with rock-bottom yields at home, Japanese investors have flocked to investment trusts to make better returns in foreign assets, even as the Bank of Japan appears set to raise overnight rates from zero in the next few months.

<snip>

By currency, holdings of U.S. bonds -- easily the biggest of any country -- were cut by 191.9 billion yen to 6.09 trillion yen. Australian bond holdings, the second-biggest, rose by 16.8 billion yen to 1.554 trillion yen.

...more...

[UpInArms]

20. Japanese Stocks Drop; Dollar Down vs. Yen

http://news.yahoo.com/s/ap/20060515/ap_on_bi_ge/japan_markets

TOKYO - Japanese stocks dropped for a fifth session Monday, as the U.S. dollar sank below 110 yen for the first time since September, prompting investors to dump exporters. Declines last Friday in U.S. and European markets also weighed on sentiment.

The Nikkei 225 index declined 114.87 points, or 0.69 percent, to finish at 16,486.91 points on the Tokyo Stock Exchange. Over the last five trading days, the index has dropped 4.7 percent.

The appreciation of the yen against the dollar, which hurts exporters by eroding their overseas income, prompted traders to sell export stocks such as automakers and electronics companies. Canon Inc. tumbled 3.46 percent to 8,370 yen ($76.09), and Honda Motor Co. fell 1.15 percent to 7,760 yen ($70.55).

In currency trading, the U.S. dollar fell as low as 109.35 yen, the lowest since Sept. 12, 2005. It later recovered to 109.85 yen, down from 110.06 late Friday in New York. The euro fell to $1.2848 from $1.2921.

...more...

[UpInArms]

23. Weak dollar puts Asia in the red

http://www.cnn.com/2006/BUSINESS/05/14/asiastox.monday.reut/index.html?section=cnn_latest

TOKYO, Japan (Reuters) -- Asian stock markets slumped on Monday, following sharp losses on Wall Street, with major exporters such as Canon further pressured by weakness in the U.S. dollar.

The dollar was trading near eight-month lows below 110 yen in Asian dealings. A soft U.S. dollar could erode Asian export competitiveness and cut profits.

Tokyo's Nikkei share average fell 0.69 percent to its lowest close in two months.

In South Korea, the Kospi ended down almost 2.2 percent, Australia lost 1.79 percent and Taiwan closed 1.41 percent lower.

Hong Kong is down almost 2 percent near the close, while Singapore is showing the region's heaviest decline, off about 2.6 percent.

...more...

[Earth_First]

26. An indication of things to come today?

Could we see a 300 point drop today if the DOW follows the international markets?

[UpInArms]

27. I just have no idea - the powers that be still appear to wield

the ability to make things have an appearance that baffles me. I know I am living in interesting times.

:hi:

[UpInArms]

28. Dollar recovers sharply as stocks, metals fall

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-05-15T121821Z_01_L15641780_RTRIDST_0_MARKETS-GLOBAL-WRAPUP-4.XML

LONDON, May 15 (Reuters) - Global stock and commodity prices tumbled heavily on Monday, hit by a domino effect as traders fretted about the long-term outlook for the dollar, though a steadying greenback after sharp falls in Asia stemmed losses.

The dollar rebounded sharply from a year-low against the euro and an eight-month trough versus the yen as nervous investors moved to cut their exposure to riskier, high-yielding assets which have rallied strongly for months as global economic growth has shown no sign of slowing.

The falls fed volatility, simmering inflation fears and the worry that global interest rate tightening could finally kill off a rally in risk that has been sustained for three years by very easy monetary conditions.

"Investors are extremely nervous and the sell-off is hectic as people are trying to minimise their losses," said a Frankfurt-based stockbroker.

As exposure to risky assets is trimmed and the interest rate outlook in the United States remains uncertain, investors are likely to increase their cash holdings, money managers said.

"The richest people are the ones who have cash, in the short term," said Emmanuel Soupre, fund manager at Neuflize Gestion in Paris.

...more...

[Lydia Leftcoast]

Sharply?

The yen is holding steady in the 109 per dollar range.

The pound fell all of one cent, $1.89 to $1.88.

[UpInArms]

48. g'morning Lydia!

Now don't start the day being critical of the spin reports! :sarcasm:

:rofl:

Let's start it with this!

[Ghost Dog]

58. Dollar bounces as investors exit short positions

http://news.ft.com/cms/s/db2890a6-e3ff-11da-8ced-0000779e2340.html

(FT) The beleaguered US dollar bounced from its lows in European morning trade on Monday as carry trade investors scrambled to exit a swathe of dollar-funded positions amid a spike in risk aversion.

As global equity markets extended last week’s sell-off, and commodity prices also headed sharply lower, the dollar benefited from the closure of a raft of leveraged speculative trades.

Short-dollar positions against a number of other currencies, such as the yen, euro and sterling, were also cut amid profit-taking, after the trade-weighted dollar fell to its lowest level since October 1997 on Friday. Data released over the weekend showed net short-dollar positions in the currency market were at their most extreme since November 2004.

“The biggest positions at risk, long emerging market equity, long commodities and long currency, are all funded out of short-dollar positions,” said Steve Pearson, chief currency strategist at HBOS.

/more...

I dunno, but does Reuters look increasingly like part of the spin, these days, making even the FT look somewhat more thoughtful?

[54anickel]

60. I dunno, that's got intervention written all over it. Did you catch some

of the dollar negative articles over the weekend?

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2283621#2283666

Taxloss (1000+ posts) Sun May-14-06 11:07 AM
Original message
Observer: IMF acts to avoid markets meltdown ($ plunging)
Edited on Sun May-14-06 11:10 AM by Taxloss
The International Monetary Fund is in behind-the-scenes talks with the US, China and other major powers to arrange a series of top-level meetings about tackling imbalances in the global economy, as the dollar sell-off reverberates through financial markets.

Amid tumultuous trading, which sent the dollar to its lowest level in a year against the euro in late trading on Friday and gave the FTSE its worst day for three years, the IMF was working privately to exercise its new powers to bring decision-makers together.

...

Analysts believe the weakening of the dollar is the beginning of a long-awaited readjustment in the global economy. After the Federal Reserve appeared to hint last week that it could pause in its series of interest rate rises, attention in the markets switched to the weaknesses of the US economy.

...

'We are in meltdown mode,' said David Brown, chief European economist at Bear Stearns. 'It's all being whipped up into a bit of a selling frenzy. The dollar has a massive portfolio of negatives against it: it's the long-term problems of the trade deficit, and the government's budget deficit.'

http://observer.guardian.co.uk/business/story/0,,177416...




http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2283621#2283713
54anickel (1000+ posts) Sun May-14-06 11:56 AM
Response to Original message
12. Dollar slide fuelling UAE inflation says official
http://www.tradearabia.com/tanews/newsdetails_snECO_art...

The dollar's decline is creating inflationary pressure in the UAE, which has pegged its dirham to the US currency, an economy ministry official said on Sunday.

The US currency's slide against the euro was a key factor in Kuwait's decision to revalue its dollar-pegged dinar by 1 percent last week and markets have been speculating that other Gulf Arab central banks would soon follow suit.

Adulla bin Ahmed Al Saleh, an undersecretary at the economy ministry, told reporters inflation in the UAE could hit 6 per cent this year, unchanged from the ministry's figure for 2005, partly due to the rising cost of non-dollar imports.

snip>

The Saudi and Qatari central banks have sought to quash market speculation that they would follow Kuwait's move. The UAE central bank has declined comment, but most analysts think a dirham revaluation is unlikely in the short-term.

more...


Game of musical chairs may end badly
http://www.insidebayarea.com/business/ci_3822548

snip>

While events in Hyderabad unfolded, the U.S. Treasury Department was unhappy with efforts by Japanese officials to slow the yen's gains since a meeting of the Group of Seven last month. Japan was miffed the U.S. seems to be encouraging a weaker dollar and downplaying its record current-account and budget deficits. China also voiced concern about the depreciation of the U.S. dollar.

All this is code for "the world's economic imbalances aren't my fault, but yours." If events in Hyderabad crystallized anything, it's that the blame game that's become a common feature of the global economy is entering a new and more dangerous phase. What's even more worrisome is that there's no adult in the room in which this game is playing out.

The G-7 can't act as referee because its members are part of the problem. The International Monetary Fund is too busy trying to remain relevant in a world devoid of crises to offer much direction. Of course, if today's imbalances get out of hand, the IMF's bailout abilities won't be up to the challenge. The world economy isn't too big to fail, but too big to save.

Here's an update on the global blame game:

more...


Treasuries May Extend Decline as Dollar Saps Foreign Interest
http://www.bloomberg.com/apps/news?pid=10000103&sid=age...

May 15 (Bloomberg) -- Treasuries may extend their biggest drop in a decade as international investors shun U.S. assets because of the dollar's decline.

Treasuries lost 2.04 percent this year, according to indexes prepared by Merrill Lynch & Co. The dollar's 9 percent decline against the euro and 6 percent drop versus the yen is making returns even worse for international investors, who own more than half the $4.2 trillion of U.S. government bills, notes and bonds.

``There's further for the dollar to drop and that might make people even less inclined to buy Treasuries,'' said Timo Schild, an investment strategist at Frankfurt-based Deka Investments GmBH, which oversees $55 billion.

The Treasury Department today may say international investors bought fewer U.S. assets in March than in February. Net purchases of stocks and bonds dropped to $79.7 billion from $86.9 billion in February, according to the median estimate in a Bloomberg survey of economists. International purchases of U.S. securities peaked at $106.4 billion in October.

snip>

Foreign investors bought an average $13.1 billion of Treasuries in January and February, compared with an average of $29.2 billion in 2005. The figures for March will be released at 9 a.m. in Washington.

more...


U.S. dollar in danger of a 'Snow' job
http://www.arkansasnews.com/archive/2006/05/13/WesleyBrown/336068.html

Amazingly, an administration so hawkish about homeland security and a strong national defense does nothing to bolster the unstable U.S. dollar.

In the past week, Tony Snow, former Fox commentator turned White House press secretary, sent out an e-mail blast decrying the media's coverage of America's economic progress.

Yet, the Fox-Snow and the White House have been quiet about the other (U.S. Treasury Secretary John) Snow's job as guardian of the nation's symbol of economic strength and prosperity.

Once the preferred exchange of all global markets, American greenbacks are now even disdained by many U.S. investors and routinely manhandled by other currencies of the world.

Most recently, the dollar slid to its lowest value in a year against the euro and its weakest in eight months after the Federal Reserve paused its near two-year cycle of raising interest rates. On Friday, the Commerce Department said that the U.S. trade gap had fallen to $62 billion, its lowest level since August.

more...

[UpInArms]

63. thanks for that compilation of reports, 54anickel -

yes, I have been reading and watching those - and this morning's movement definitely has the stench of some major intervening in the markets - who's dumping gold, who's buying the dollar, there's quite a bit of shifting going on :eyes:

[54anickel]

68. TheStreet has a headline "Japan Dumps US Treasuries", but it's

behind a subscription...Damn! Thought this was interesting....sounds like BS to me. Have we got some clandestine attacks going on here or what? :shrug:

Emerging-Market Stocks Slump, Set for Biggest Drop in Two Years

May 15 (Bloomberg) -- Emerging-market stocks fell, set for the biggest drop in two years, on speculation rising U.S. interest rates will reduce demand for the riskiest assets such as equities in South Korea and Russia.

The Morgan Stanley Capital International Emerging Markets Index, which tracks shares in 26 developing markets around the world, plunged 3.7 percent to 825.16 at 1:26 p.m. in London. All markets included in the measure that were open for trading slid, except China and Jordan.

The index has declined each day since May 10, when Federal Reserve policy makers raised the main U.S. interest rate to 5 percent and signaled the central bank may not be finished with its policy of increases. Higher borrowing costs may make emerging-market securities less attractive to investors.

``The problem is that people are concerned with the situation in the U.S.,'' Mark Mobius, who oversees $30 billion in emerging-market equities for Templeton Asset Management Ltd., said in telephone interview from Shanghai. ``If the Fed keeps on raising rates, money will start flowing back into Treasuries.''

snip>

`Crazy' Selling

The MSCI gauge for emerging-market stocks climbed to an all- time high a week ago as investors kept buying shares in the region. Funds investing in shares of developing nations attracted $2.86 billion in net inflows in the week ended May 10, Brad Durham, managing director at Emerging Portfolio Fund Research Inc., said in an interview in Hong Kong today. That was the second-highest weekly amount on record and increases the total this year to $33 billion, said Durham, whose company tracks about 15,000 funds with $7 trillion of assets.

``The market was bought up like crazy and now it's selling off like crazy,'' said Dmitry Malykhin, who manages $590 million at Wermuth Asset Management in Moscow.

:eyes: What a difference a week makes?

more...

[UpInArms]

71. Commentary: ''Shock therapy' and the freefalling greenback'

http://www.smirkingchimp.com/print.php?sid=26095

The dollar is getting hammered almost daily now. It's like watching the blood ooze from an open wound. In just one month the dollar has tumbled from $1.20 to $1.29 vs. the euro; an astonishing 7% retreat.

Can't the American people see what is happening to their future? In just 6 years Bush has taken the world's strongest currency and chopped it into finely ground hash. By the time people rouse from their stupor, the greenback will be eye to eye with the peso.

Bush has piled up more debt than all the other presidents combined. His tax cuts have fattened the bankrolls of his constituents but they've put the dollar on a downward slide. Since he took office the once-mighty greenback has plummeted a whopping 35%.

Meanwhile, at the Federal Reserve, new Fed-master Bernacke has the printing presses running at warp-speed. The soaring price of oil has soaked up more than a trillion dollars of freshly-minted fiat currency, but it's the only thing that's kept the greenback from slipping beneath the waves. Unfortunately, that trick won't last forever.

Now that Bernacke is hinting that interest hikes may slow down or stop entirely, central banks across the world are stealthily off-loading their dollar-stockpiles. The twin-deficits ($400 billion account deficit and $800 billion trade deficit) have finally come home to roost and are pushing the dollar to new lows.

...more...

[54anickel]

89. I'm waiting for a WTF Pfenning for the day. Here's Friday's. This buck

"rally" has got to be a shocker for Chuck - I sure as heck don't get it. Someone sure is working hard to get the attention back off of the deficits.

The Daily Pfennig 5/12/06: A Greater Emphasis on Deficits?

http://www.kitcocasey.com/displayArticle.php?id=715

Good day... And a Happy Friday to one and all! It's also a Mother's Day weekend, so we've got that going for us! Well... The currencies are soaring against the dollar this morning, as somehow, some way, the markets have decided that today's Trade Deficit reading in the U.S. is "important"! WOW! Took them long enough to come around, eh?

Yes, it did... All that talk last year about how Deficits Didn't Matter made my skin crawl... My friend John Mauldin used this line a month ago, and I've been using it in my presentations, but I think it needs to be used right here right now, there's no better place I'd rather use it! To all those "Deficits don't matter" campers that believed the dollar would not succumb to the deficits, I'm reminded of the man that jumps from the top of the Empire State building... As he flies past the 52nd floor, he says... "So far, so good"...

Well... That man is getting closer to the ground, because the euro, which had fallen back to 1.2720 yesterday morning, has tacked on over 2 cents within 24 hours! WOW! It's a moon shot! Like I said yesterday, this negative momentum for the dollar is reminding me of the last 3 months of 2004... And you may recall that I've been saying the euro would return to 1.30 this year... Well... Who knows the depth of this negative momentum? To me... It looks as though the euro will return to revisit its previous high vs. the dollar... And beyond that? Those are unchartered waters!

The dollar's demon overnight has been the thought that the Trade Deficit for March will take back February's gains, and post a wider deficit of $67 billion... The one quote that I saw made me chuckle... "There's a greater emphasis on the deficit now." Hmmm... So... "the plan" is playing out... What plan? Ahhh, grasshopper... Sit down... While I tell you this, you'll slap your forehead and say, "Why, yes, I have heard this before!"

Recall that my plan for 2006 was that the Fed would begin to slow down or even stop the rate hikes, thus taking away the second pillar of the reason the dollar was so strong in 2005. We had the HIA Repatriation Act expire on 12/31/2005, and once the markets got the scent of a Fed slowdown, the markets would return to the Overall Fundamentals for the U.S.... Which would mean the Twin Deficits would come into play, thus taking the dollar to the woodshed. And lo and behold, look what's happening... I love it when a plan comes together!

more...

[Ghost Dog]

87. Soaring optimism, glossing over bad news - it could be time for the bubble

...to burst

http://business.guardian.co.uk/story/0,,1774740,00.html
Larry Elliott, economics editor
Monday May 15, 2006
The Guardian

Gold is through $700 an ounce for the first time in a quarter of a century. Platinum prices have gone through the roof. Copper is now so expensive that the metal in a two-pence coin, as my Guardian colleague Richard Adams noted last week, is now worth 3p. Oil is trading between $70 and $75 a barrel; stock markets in New York and London are at their highest levels in six years. The MSCI - an index of 49 stock markets in 49 developed and developing countries - hit an all-time peak. So beware: all of this has bubble written all over it. It is a time of extreme danger for the unwary, with all the sadly familiar tell-tale signs of trouble ahead. There is the sense of supreme optimism that this time the permanent bull market is for real. There is always a reason why it's different this time, and this time that reason is China.

Secondly, there is the tendency to put the best gloss on what, on the face of it, looks like poor news. As such, the US is not really running a trade deficit of 7% of GDP because there is "dark matter" that is boosting investment income but not being captured in the data. Similarly, when US house sale figures were announced last month, all the attention was on the number of homes sold being "better than expected" at an annualised 1,213,000. Only a few analysts raised an eyebrow at the fact that developers had to cut prices by $15,000 a house to drum up business...

<snip>

That's not to say the US economy is about to face a prolonged, let alone terminal, crisis. The evidence is that the world's biggest economy recovers from setbacks quickly. Nor that China's growth is over. It is far more likely that any crisis there will be akin to the short, savage downturns that affected the US when it was growing fast in the 19th century, and rapid growth will then resume. But optimism about the long term should not disguise the fact that the short-term outlook appears challenging. It's hard to convincingly argue that the imbalances will be resolved in an orderly manner, even with the unprecedented level of international cooperation.

<snip>

In truth, the US trade deficit is merely a reflection of the real problem: debt-sodden American households. There are several ways this can be illustrated. One is to look at the personal savings rate, which in 2005 was negative for an entire year for the first time since the Great Depression. Another is to look at the balance sheet of the household sector. The latest figures suggest it is in deficit to the tune of more than 6% of GDP.

<snip>

It's worth wondering what the new spurious excuse will be now that house prices have ceased to rise. Households have been re-mortgaging at higher rates, wages are not rising very fast, and disposable incomes are being squeezed by higher inflation and the sharp rise in energy costs. With the Fed seeking to underpin the dollar, all the ingredients are in place for a savage retrenchment among US households. This precarious state of affairs has been disguised by the strength of the US corporate sector, which has been running a healthy surplus and expanding strongly. But the optimism in boardrooms would be quickly dented if consumers stopped spending. The risk is that robust expansion in the first half of 2006 will prove to be a mirage: the next 18 months will see bust follow boom. If the US consumes at a slower rate, China will produce at a slower rate. That means commodity prices are likely to come down, oil is more likely to be $50 a barrel in a year's time than $100 a barrel, the dollar is a sell and bonds are a buy.

/more...

[54anickel]

70. Dollar rallies, investors sell higher risk assets (Bwahahahaha!)

I love that headline....yeah, that's the ticket - it's a flight to safety of the US Dollar. :rofl: :spray:
This has got to be some sort of counter against all the bad press the buck's been getting around the world the past week. I'm glad to see the risk awareness rising again, but come on now - the timing is pretty suspicious. This could shake some of the weak hands out of commodities though. B-)

http://za.today.reuters.com/news/NewsArticle.aspx?type=businessNews&storyID=2006-05-15T101704Z_01_ALL537021_RTRIDST_0_OZABS-MARKETS-FOREX-20060515.XML

LONDON (Reuters) - The dollar rose sharply against the yen, euro and commodity currencies on Monday as investors sold gold, stocks and emerging currencies and bought back the greenback which had been under pressure for many weeks.

Emerging market currencies such as the Turkish lira and South African Rand fell sharply, extending last week's losses as surging bond yields in developed markets and worries over inflation undermined investor confidence in higher-risk assets.

"Obviously we are in a very (high) risk bearish environment as stocks sold off and emerging currencies sold off. People are getting risk averse, driven by inflationary fears as commodity prices had been going up," said Adarsh Sinha, currency strategist at Barclays.

"Investors are taking off positions they had over the past month which is long commodities, short dollars, long emerging markets."

more....

[54anickel]

77. Some Horror Numbers Regarding the Trade and Current-Account Deficits

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=54363

snip>

Over the last several weeks, the US dollar's exchange rate value has taken a serious beating. As of yesterday's close, the Dollar Index had sunk to levels not seen in more than a year, but a year ago, the index was in trending up. That rally took the index to a final high of a little over 92, set last October. Since then, this closely watched measure has fallen more than 8%, with an inordinate amount of the overall damage occurring since the end of March.

Can there be any doubt that the nation's record current-account and trade deficits have begun to take a serious and growing toll on the dollar? I think not. In turn, I believe the dollar's slide also has begun to make an increasing contribution to the poor recent performance at the longer end of the Treasury yield curve.

And if the dollar continues its swoon, can a negative impact on the US stock market be avoided much longer? To this, my answer is the same as above: I think not. I remind readers that the stock-market crash in October 1987 began months earlier as a dollar problem, that then became an interest-rate problem, that then became a stock-market problem -- a very, very big stock-market problem!

snip>

* January's revised gap of $68.6 billion was the largest ever. Following are the six biggest monthly deficits on record, through February 2006. Note that all six occurred over the last six months:

snip>

* At first blush, the contraction shown above in the trade deficit's contribution to the current-account deficit would appear to be a positive development. It is not, though, because it merely reflects the rapid growth in other imbalances -- for instance, the growth in this country's negative investment flows. For example, when Tout TV and others in the regular propaganda loop extol how nice it is that foreign investors continue to snap up all those Treasury securities, remember that the Treasury not only incurs a growing liability to foreign entities on its balance sheet, but it also incurs the requirement to pump even more dollars into overseas' hands via interest payments.

more...

[UpInArms]

80. an older (2003) article that proves the freaks on the right don't get it

http://www.nationalreview.com/kudlow/kudlow092303.asp

September 23, 2003, 10:20 a.m.

excerpt:

Currency manipulation has an ugly history. Back in 1986-87, the NAM persuaded then-Treasury Secretary James Baker to pick a fight with Japan and Germany in order to make their currencies more expensive and the dollar cheaper. That piece of financial handiwork led to the October 1987 stock market crash and temporarily signaled the end of the Reagan boom.

In the late 1990s, the International Monetary Fund put big pressure on various Asian tiger economies to float their currencies. As soon as the tigers caved in, their currencies collapsed, along with their economies. The virus of financial disarray spread worldwide.

The White House, of course, is worried about creating new jobs in the manufacturing sector, a development that will come naturally as the U.S. economy moves ahead in the production of new inventories and capital equipment. But on the first trading day following the G-7 agreement both stock and bond markets sold off worldwide in a clear vote of no confidence.

<snip>

If worldwide dollar demands keep falling, then the new overhang of unwanted dollar liquidity circulating at home and abroad could trigger a new bout of inflation. Gold prices are marching toward $400, a level that some economists believe is a signal of excess liquidity and higher future inflation.

When it comes to international currencies, the best thing that can be done to promote world recovery and President Bush’s reelection is absolutely nothing. Tax cuts and steady money will do the trick if left to their own devices.

...more...

[UpInArms]

85. Treas Official has ambidextrous lips (simul-talking from both sides)

11:32 AM ET 5/15/06 U.S. TREASURY OFFICIAL SAYS NO CHANGE IN U.S. DOLLAR POLICY

11:31 AM ET 5/15/06 U.S. TREASURY WELCOMES STRENGTHENING OF CHINA CURRENCY

[54anickel]

96. Reasons (End of Credit Bubble Bulletin)

http://www.prudentbear.com/creditbubblebulletin.asp

snip>

Through much of the dollar bear market, U.S. bonds continued to generate decent returns. Of late, however, Treasuries and the dollar have been locked together in poor performance, in the process slapping our distended foreign creditors with stinging losses. Not since turbulent 1994 have the markets had to deal with an extended period of simultaneous dollar and bond market weakness. Not for 25 years have U.S. securities suffered such acute relative underperformance to gold, oil, and other global commodities. Additionally, U.S. stocks are now well into their second year of major underperformance versus global equities. The reality and ramifications of U.S. securities as an out of favor asset class are now just beginning to sink in.

I’ve always assumed that behind closed doors the Fed frets about the dollar. I’ll be the first to admit I lack even a little shred of supporting evidence. But I just assume… There are, however, too many anecdotes that they worry little if at all. As part of the FOMC announcement panel discussion on CNBC, former Dallas Fed president Robert McTeer stated, “I don’t think they’re (the FOMC) worried about the weak dollar. I think we may need a weak dollar and even weaker for awhile.” If the Bernanke Fed is at this point actually seeking a weaker dollar, their burgeoning credibility problem quickly becomes irreversible.

For good Reason, markets today believe the Administration and suspect the Bernanke Fed are decidedly in favor of a weak dollar policy. There remains a steadfast view that a gradually devalued dollar will work toward rectifying U.S. imbalances, despite the reality that imbalances have worsened measurably over the four-year dollar drubbing. Everyone wants to believe that an orderly decline in the dollar poses few problems. And after four years of an extraordinarily orderly fall, few see any Reason for an abrupt shift to disorderly. But there are Reasons.

For one, do not downplay that importance of Wall Street having had four fruitful years to develop instruments, products, derivatives and strategies to generate heady profits (for clients and themselves) from a declining dollar. As I have written previously, a strong inflationary bias has developed in non-dollar asset classes – the emerging markets, commodities, metals, global private-equity, and global equities and securities generally. The global leveraged speculating community is infatuated with the “un-dollar” trade. And, increasingly, U.S. institutions and individuals combine for huge and escalating flows from dollars to better-performing global asset classes. Any policy shift from “benign neglect” to “weaker dollar” would at this point be playing with (a disorderly) fire.

more...

[UpInArms]

18. Move of Halliburton meeting draws fire

http://www.businessweek.com/ap/financialnews/D8HJUPB80.htm?campaign_id=rss_full_topix_bwdaily&chan=db

MAY. 14 10:50 P.M. ET Halliburton earned a record $2.4 billion last year, but Houston executives will forgo Texas-sized luxury when they come to this rural Oklahoma county seat this week.

Shareholders, who have gathered for the company's annual meeting since 2003 at Houston's lavish Four Seasons Hotel, will meet Wednesday in the modern, but far humbler setting of Duncan's convention center. Those staying the night can choose the Holiday Inn, with rooms opening onto the parking lot, and the Chisholm Suites Hotel, which takes its name for the cattle trail that once passed here.

Halliburton Co. says it moved its meeting to this company town of 22,500 to honor its southern Oklahoma roots. The company's critics accuse it of running to a prairie outpost to hide.

<snip>

The company, once headed by Vice President Dick Cheney, has drawn criticism for its big government contracts, some awarded without competitive bidding. Its KBR unit provides support services for troops stationed in the Middle East.

But the company denies trying to escape critics by moving to this quiet town, where Old Glory waves on Main Street and old timers drink coffee at the downtown drug store.

<snip>

A group that accuses Halliburton of war profiteering, Oklahoma Veterans for Peace, received a permit for 300 demonstrators outside the meeting at the Simmons Center, a venue Halliburton helped fund. The group's organizers expect to be joined by anti-globalization activists and other protest groups, including Houston Global Awareness.

...more...

[UpInArms]

24. Gold drops below $700: U.S. dollar broadly higher; silver slides nearly 8%

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7BC7419AF2%2D32DD%2D448E%2D99A5%2DC06DDD7985BC%7D&symbol=

NEW YORK (MarketWatch) -- Gold futures tumbled nearly 3% early Monday as a rally in the U.S. dollar helped extend a pullback from 26-year highs.

Gold for June delivery was last down $20.10, or 2.8%, at $691.70 an ounce in electronic trading, recovering slightly from a low of $685.60 hit earlier in the session. The precious metal has now lost $40.30 since reaching a high of $732 in intraday trading on Friday, which was the highest price seen since 1980. Read more.

The U.S. dollar was up 0.9% vs. the euro at $1.2812, pulling back from a one-year low hit in the prior session. The buck was 0.3% better against the yen at 110.30 and was up 1.1% vs. the Swiss franc at 1.2105. See Currencies.

A falling U.S. currency has been one of gold's drivers as investors chose to park money in the metal for its safe-haven status.

Other metals prices were also lower, with July silver plunging $1.090, or 7.7%, at $13.145 an ounce and July copper shedding 26.40 cents, or 6.8%, to $3.60 a pound.

...more...

[UpInArms]

30. June Gold @ $692 oz - July Silver @ $13.14 oz - July Copper @ $3.66 lb

8:17 AM ET 5/15/06 JULY PLATINUM DOWN $36.50 AT $1,282/OUNCE: ELECTRONIC TRADE

8:16 AM ET 5/15/06 JULY COPPER DOWN 20.4C AT $3.66/POUND IN ELECTRONIC TRADING

8:15 AM ET 5/15/06 JULY SILVER DOWN $1.095 AT $13.14/OUNCE IN ELECTRONIC TRADE

8:15 AM ET 5/15/06 JUNE PALLADIUM DOWN $39.35 AT $359/OUNCE IN ELECTRONIC TRADE

8:14 AM ET 5/15/06 JUNE GOLD DOWN $19.80 AT $692/OUNCE IN ELECTRONIC TRADING

[RawMaterials]

46. blue light special n/m

[54anickel]

82. Hang on - Grandich sees a bigger discount coming - though I wouldn't be

holding out for HIS bottom number. I'd have missed out on too many sales already setting my own strike price (which has been higher than what the "experts" call for). Of course, all my buying has been virtual these days - if I had the extra change laying around I'd still be playing. I have to be content just hoarding what I've got.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/05/15/cngold15.xml&menuId=242&sSheet=/money/2006/05/15/ixcity.html

An American metals guru has warned that gold could crash within hours or days after a speculative "blow-off" last week to a 26-year high of $727.75 an ounce.

Peter Grandich, publisher of the closely-watched Grandich Letter, told The Daily Telegraph he expected gold to plummet up to $150 an ounce after reaching the most extreme levels of speculative excess he had ever seen.

"I think there will be a very short, sharp correction of 10 to 15pc, in the worst case reaching a floor of around $575 an ounce," he said.

"In the long-term I'm still very bullish on gold because I think the US dollar is dying and I don't see what can replace it. But the latest rise is quite simply unsustainable."

more...

[JNelson6563]

33. I smell an intervention

I need to find my tin-foil hat....

Julie

[UpInArms]

34. the lies are getting pretty thick out there

check out this comparison of lie vs. reality:

8:34 AM ET 5/15/06 DOLLAR LITTLE CHANGED AFTER EMPIRE STATE DATA

8:34 AM ET 5/15/06 EURO DOWN 0.7% AT $1.2837; DOLLAR UNCHANGED AT 110 YEN

http://informer.fxcorporate.com/fxinfocache/servlet/fxinfocache/index?service=price&format=gif&variation=daily&seqNumber=26

showing the euro @ $1.2935 and yen @ 109.72

[JNelson6563]

69. Oooh, interesting!

Not to mention shameless of them. Oy!

[Demeter]

42. It Can't Last, Though

Dubya can't paper over inflation, just by definition! Opening my aluminum foil as I type...

[Ghost Dog]

55. Me, I'm gonna continue to chill out...

... I guess (hope) most DU market watchers ought to be well-enough positioned already to ride out the changes.

I do wonder how much influence Iran President Ahmadinejad's Letter to George W. Bush may have had on international markets over the last days - see eg. "An Iranian offer that America must heed" by The Hindu deputy-editor Siddharth Varadarajan.

Just now we're seeing all-important talking-down of potential US-Iran problems by the IAEA and of oil-prices by WTF (ed: read WTO-IMF-World Bank!), Saudi Arabia and other players, plus this spinning and other interventions mostly out of Washington and NY.

How long will this last? Not long, I don't think. Hiya :hi: The mountains are beautiful in Spring - all that clear air and silence. But then the lowlands are too - full of birdsong.

[AnneD]

73. Sorry Julie...

I took your tin foil hat to the recycle center this weekend...But I got a good chunk of change for it! Say, why did you make it so heavy? :spray:

[UpInArms]

75. ...

:spray:

[JNelson6563]

76. haha

:toast:

[UpInArms]

54. June Gold @ $686.70 oz - July Silver @ $13.20 oz - July Copper @ $3.755 lb

9:45 AM ET 5/15/06 JUNE GOLD TAPS $686.70/OZ, ITS LOWEST LEVEL SINCE MAY 9

9:45 AM ET 5/15/06 JUNE GOLD LAST DOWN $21.80, OR 3.1%, AT $690/OZ IN NY

9:45 AM ET 5/15/06 JULY SILVER LOSES $1.035, OR 7.1%, TO $13.20/OZ

9:45 AM ET 5/15/06 JULY COPPER DROPS 10.9C, OR 2.8%, TO $3.755/LB

[jdog]

65. Buying opp. n/t

[UpInArms]

66. Citigroup tells the world it is stupid and behind the curve

10:23 AM ET 5/15/06 CITIGROUP UPS '07 COPPER PRICE EST. 50% TO $2.25/POUND

10:23 AM ET 5/15/06 CITIGROUP UPS '06 COPPER PRICE EST. 52% TO $2.81/POUND

[54anickel]

112. Gold futures lose almost $27 to end at a one-week low

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B9867D0B8-DAFD-48AB-9BCE-C439A8ABB21C%7D&siteid=google

SAN FRANCISCO (MarketWatch) -- June gold fell $26.80, or 3.8%, to close at $685 an ounce Monday, its lowest closing level since May 8. "To say that such a correction was overdue is to state the obvious," said Jon Nadler, an analyst at Kitco.com. "On the other hand, nobody should label today's events as an 'exodus' from precious metals or the start of a bear trend." July silver also dropped 90 cents, or 6.3%, to end at $13.335 an ounce, its weakest level since late April. June palladium fell 5.9% to end at $374.75 and July platinum finished at $1,284.80 an ounce, down 2.6%. July copper fell 3% to close at $3.7465 a pound

[54anickel]

113. Gold Market In 75-Ton Deficit In Q1 2006 - Virtual Metals

http://money.iwon.com/jsp/nw/nwdt_rt.jsp?section=news&news_id=dji-00034720060515&feed=dji&date=20060515&cat=INDUSTRY

LONDON -(Dow Jones)- The gold market was in a 75-metric-ton deficit during the first quarter of 2006 due to an unexpectedly high volume of dehedging by Barrick Gold Corp. (ABX) (ABX), consultancy Virtual Metals said Monday.

Total identifiable supply, an amalgamation of mine supply, scrap recycling, hedging and central bank sales, stood at 991 tons while demand amounted to 1,066 tons.

This includes jewelry demand, legal tender coins, electronics, demand from exchange traded funds, central bank purchases and de-hedging.

snip>

"With the investment buying into a deficit physical market, it is not surprising that the price has exhibited such runaway strength," Virtual Metals said.

Barrick cut its hedge book by 4.7 million ounces, or 23%, during the first quarter, the largest single reduction in hedging on record.

more...

[UpInArms]

36. HealthSouth loss widens

http://news.yahoo.com/s/nm/20060515/bs_nm/healthsouth_earns_dc

CHICAGO (Reuters) - Rehabilitation chain HealthSouth Corp. (Other OTC:HLSH - news), which is emerging from an accounting scandal and government probes, on Monday posted a larger loss for the March quarter, as pricing pressure from Medicare and other payers hurt net operating revenue.

HealthSouth said its comprehensive net loss widened to $435.5 million, or $1.09 per share, from $258.3 million, or 65 cents per share, a year earlier. Revenue fell to $792 million from $848.6 million.

The earnings report was HealthSouth's first since an accounting scandal in 2003 rocked the company, resulting in probes by the U.S. Securities and Exchange Commission, the Justice Department, Medicare and shareholders.

...more...

[meganmonkey]

37. I have a feeling this will be a very popular thread today

Rec'd. Let's get it way up there on the Greatest page so folks who don't even know it exists can see it.

And thank you, Stock Market Watchers!!! You do us all a great service!

:yourock:

[UpInArms]

41. g'morning, meganmonkey!

Who knows - maybe the Shadow?

:hi:

[AnneD]

51. Hi meganmonkey,

:hi: It should be interesting today. I appreciate that there is always someone to explain some of the subtleties of economics. Hope everyone is positioned well.

[UpInArms]

39. Boeing to pay $615 million to end probes: WSJ

http://www.marketwatch.com/News/Story/96jHvZDcV2QZCF0bxl6Znhk?dist=RNPullDown&siteid=mktw&symbol=

SAN FRANCISCO (MarketWatch) -- Boeing Co. has agreed to pay $615 million to end three years of Justice Department investigations into high-profile contracting scandals at the defense giant, according to a media report Monday.

The deal allows Boeing (BA 87.01, -1.20, -1.4% ) to avoid criminal charges or any admission of wrongdoing, The Wall Street Journal said in its online edition, citing unnamed people familiar with the details. See Wall Street Journal story (subscription required).

Current and former federal investigators describe the tentative settlement as the largest financial penalty ever imposed on a military contractor for weapons-program improprieties, The Journal said. Under the deal, Boeing agreed to pay $565 million to cover civil claims and $50 million to resolve criminal investigations, The Journal said.

As part of the settlement, according to people familiar with the details, the government will forgo criminal charges against Chicago-based Boeing, despite a string of procurement violations and alleged corruption that has tarnished the company's reputation and prompted it to overhaul its corporate culture, The Journal said.

Boeing has been under investigation for improperly acquiring thousands of pages of rival Lockheed Martin Corp.'s proprietary documents in the late 1990s, using some of them to help win a competition for government rocket-launching business, The Journal said. Years later, Boeing illegally recruited a senior Air Force procurement official while she still had authority over billions of dollars in other Boeing contracts. She also championed company efforts to skirt normal procurement procedures in offering to provide refueling tankers to the Air Force through a controversial $20 billion leasing program, The Journal said.

...more...

[RawMaterials]

47. The Art Of Motivation

What you can learn from a company that treats workers like owners. Inside the surprising performance culture of steelmaker Nucor


http://www.businessweek.com/magazine/content/06_18/b3982075.htm

how every company needs to be run these days. Good read. :hi:

[UpInArms]

49. pre-opening blather

09:15 am : S&P futures vs fair value: -4.4. Nasdaq futures vs fair value: -7.0.

09:00 am : S&P futures vs fair value: -4.2. Nasdaq futures vs fair value: -7.0. All indications continue to point to a lower open for the cash market as futures trade still signal a bearish bias. Aside from more economic data feeding into the growing realization of further Fed tightening, the yuan breaking a key barrier against the dollar is also feeding inflation concerns in the early going.

08:30 am : S&P futures vs fair value: -4.0. Nasdaq futures vs fair value: -9.5. Still shaping up to be another poor performance for equities as futures indications continue to languish below fair value. An earnings miss from Target (TGT) is doing little to quell concerns of decelerating earnings growth. Separately, May NY Empire Index checked in at 12.4 (consensus 15.0), but reaction in both stocks and bonds so far has been muted, with the 10-yr note still up 7 ticks to yield 5.16%.

08:00 am : S&P futures vs fair value: -2.7. Nasdaq futures vs fair value: -7.8. Futures versus fair value suggest that the major averages will continue last week's slide. Despite a 2.9% pullback in the price of crude easing some worries heading into the summer driving season, speculation that more "incoming data" this week (e.g. PPI and CPI) will show that inflationary pressures are mounting continues to spark valuation concerns, especially Nasdaq-listed growth stocks.

[UpInArms]

50. Krispy Kreme reaches proposed class action settlement (pensions)

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B30094169%2DBBB1%2D425C%2DA598%2D83C9F0A3FAEA%7D&dist=newsfinder&symbol=&siteid=mktw

NEW YORK (MarketWatch) -- Krispy Kreme Doughnuts Inc. (KKD 10.85, -0.74, -6.4% ) on Monday said a proposed settlement has been reached resolving a class action filed last year in the U.S. District Court in North Carolina against Krispy Kreme and individual defendants including certain board members, officers and employees. The settlement would include a one-time $4.75 million cash payment to be made by the company's insurer. Krispy Kreme and the individual defendants deny any and all wrongdoing and would pay no money in the settlement, the company said. The lawsuit charges that Krispy Kreme and the individual defendants breached duties with respect to the management and administration of the Krispy Kreme Doughnut Corp. retirement savings plan and the company's profit sharing stock ownership plan.

[UpInArms]

52. Printing Press Hums: Fed adds reserves through overnight system repos

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-15T133349Z_01_N15343811_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, May 15 (Reuters) - The Federal Reserve said on Monday that it added temporary reserves to the banking system through overnight system repurchase agreements.

Federal funds were trading at 5 percent at the time of the operation, the Fed's current target for the benchmark overnight lending rate.

For details on the operation, see http://www.ny.frb.org/markets/omo/dmm/temp.cfm

[UpInArms]

79. Bonds get a lift from soft factory data (no interest rate hike pressure)

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B724BC6F2%2DE3D7%2D4B27%2D9BAA%2DB6A850BD1ABE%7D&symbol=

NEW YORK (MarketWatch) -- Bond prices remained higher Monday morning, with yields under pressure, after data showing weaker capital flows into the U.S., a cooling of the housing market and weaker-than-expected factory activity in the New York region.

A sharp pullback in crude and gold prices also helped to dampen inflation fears.
The benchmark 10-year Treasury note was last up 4/32 at 17 20/32, with a yield ($TNX 51.59, -0.27, -0.5% ) of 5.18%, down from 5.19% at Friday's close. Prices and yields move in opposite directions

The 30-year Treasury bond advanced 7/32 to 88 4/32, with a yield ($TYX 52.74, -0.24, -0.5% ) of 5.3%.

Shorter-term maturities were under less pressure, with the 2-year note falling just 1/32 to 99-25/32 with a 4.99% yield.

Monday's data reports, showing economic weakening on several fronts, gave hope to the fixed-income market, which last week was pressured by economic reports that suggested the economy is picking up strength.

...more...

[54anickel]

98. Poor Mr. Bernanke can't win!

http://www.ameinfo.com/86026.html

In a printing shop he could have printed everything, but at least the world would have been spared from having him at the US Federal Reserve. At the Fed he will inevitably follow the footsteps of his predecessor, Mr. Greenspan, and continue to print money.

Under him the US dollar will continue to lose its purchasing power against goods and assets at an increasing rate, as it has since the formation of the US Federal Reserve in 1913. It is true that the Fed has been increasing short term interest rates from 1% to 4.75%, since June 2004, but only in baby steps, and at the same time, without really tightening.

Bond yields were below nominal GDP growth between 1962 and 1979. This was also the period during which inflation accelerated and gold prices rose from $35 in the sixties to $850 in January 1980. At the end of the 1970s, Mr. Volcker, the only solid central banker the US has had in the last 50 years, increased interest rates massively and squeezed the economy.

Thereafter, until the late 1990s, Treasury bond yields were above nominal GDP growth, which brought about a period of disinflation. But now, and for the last few years, US bond yields are not only again below nominal GDP growth but also below the rate of inflation. This is obviously inflationary. But the market participants are not totally stupid.

Whereas Mr. Bernanke can print as much money as he likes and, therefore, support the inflated US stock and housing market, he cannot prevent US assets from declining against gold, and over the last one and five years, gold has significantly out-performed US equities.

more...

[54anickel]

115. Yet (Hussman)

http://www.hussmanfunds.com/wmc/wmc060515.htm

snip>

Another part of the story is that investor reactions here are likely to be somewhat “non-linear” in response to interest rates and oil prices. A good example of a “non-linearity” is the image of a single straw breaking a camel's back. For a good while, we've observed interest rates and oil prices moving higher, and investors have remained fairly oblivious. Some analysts have even suggested that the lack of response is a sign that the market “wants” to go up (I always worry about analysts who ascribe feelings to the market). It's more likely, in my view, that investors have simply been getting closer to their “tipping point,” and that small further increases from here may have disproportionately large effects. In other words, it's probably not a safe assumption that stocks will remain well-behaved in response to further rate and oil price increases simply because they've been well-behaved until now.

Precious metals have enjoyed a fairly explosive advance in recent months. This may partly reflect some accumulation of precious metals as reserve assets by central banks such as China and Japan. The concurrent weakness in the U.S. dollar is consistent with some degree of "diversification" of reserve assets by these foreign central banks. That said, precious metals have advanced to the point where it would not be surprising to see some amount of normal retracement. The Strategic Total Return Fund has reduced its exposure to precious metals shares to about 8% of assets, but is likely to increase rather than decrease this exposure on weakness in this group. The broad fundamentals – particularly an enormous current account deficit and reasonable prospects for stagflation – continue to be favorable for this group.

That reference to stagflation is based on two factors. First, historically, and internationally, it's not the rate of money growth per se, but the growth of government spending as a share of GDP (particularly spending that doesn't add to the productive capacity of a nation), that drives inflation pressures. Second, the enormous current account deficit means, by definition, that a substantial portion of U.S. gross domestic investment is currently being financed by foreign capital inflows. There are only two ways out of this deficit – invest less domestically, or save more domestically. Given a profligate fiscal policy and a low propensity to save among U.S. households (saving more requires income growth to outpace consumption growth), “saving more” is probably not a likely source of adjustment. More likely, we'll adjust a good part of the current account deficit through weakness in U.S. gross domestic investment (mostly via a housing slowdown, in my estimation). In any event, the U.S. has virtually zero likelihood of enjoying a sustained “investment boom” anytime soon – whatever growth we observe in capital spending is likely to come from a contraction in housing investment, leaving gross domestic investment relatively flat.

So “stagflation” isn't an outside chance, but a reasonable likelihood here. My impression is that the Fed will have a fair amount of difficulty with this outcome, as central bankers have always had. It's very difficult to manage inflation just by determining whether government liabilities take the form of cash or government bonds (which is what the Fed does) if you can't control the explosion of government liabilities itself (which only Congress and the executive branch can do). As a sidenote, statistically, periods of slower economic growth do tend to be correlated with higher, not lower, inflation (a result that follows from the “monetary exchange equation”).

more...

[UpInArms]

106. US banks eased terms for commercial loans--Fed (GACK!!!!)

rushing back to the bad old days as quickly as possible :scared:

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-15T180532Z_01_WAT005563_RTRIDST_0_ECONOMY-LOANS-URGENT.XML

WASHINGTON, May 15 (Reuters) - U.S. domestic banks eased standards and terms for commercial and industrial loans in recent months, but lending standards on commercial real estate loans were unchanged, the Federal Reserve said on Monday.

The Fed, in its April senior loan officers survey on bank lending practices, said a moderate fraction of U.S. banks reported weaker demand for mortgages, but a larger group saw weaker demand for consumer loans over the previous three months.

[54anickel]

114. Easy money, liquidity - it's all we've got goin' for us these days. Gotta

open the tap full blast now, seems there's no turning back.

[UpInArms]

108. Rates Mixed in Treasury Bill Auction

http://news.yahoo.com/s/ap/20060515/ap_on_bi_go_ec_fi/treasury_bills

WASHINGTON - Interest rates on short-term Treasury bills were mixed in Monday's auction.

The Treasury Department auctioned $15 billion in three-month bills at a discount rate of 4.740 percent, unchanged from last week. Another $14 billion in six-month bills was auctioned at a discount rate of 4.820 percent, down from 4.830 percent last week.

The six-month rate was the lowest since 4.780 percent on May 1.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,880.18 while a six-month bill sold for $9,756.32.

[UpInArms]

53. 9:38 EST wheels turning - no joy in Mudville

Dow 11,362.10 -18.89 (-0.17%)
Nasdaq 2,236.90 -6.89 (-0.31%)
S&P 500 1,288.15 -3.09 (-0.24%)
10-Yr Bond 5.188 +0.02 (+0.04%)

NYSE Volume 129,844,000
Nasdaq Volume 132,252,000

[stop the bleeding]

56. 10:03am EST

Looks like the market is still looking for a band aid -

[UpInArms]

59. NAR: Home sales down 15%-plus in once-hottest markets

10:00 AM ET 5/15/06 EXISTING HOME SALES DOWN IN ARIZ., CALIF., FLA, NEV., DC

10:00 AM ET 5/15/06 EXISTING HOME SALES DOWN 15%-PLUS IN ONCE-HOTTEST MARKETS

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BCF484786%2D4758%2D41E5%2D91C9%2DFBAF619401E5%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - Existing home sales are down more than 15% in five states that have had the hottest housing markets, the National Association of Realtors said Monday. Sales were down 22.2% year-over-year in Arizona, 19.2% in California, 18.2% in the District of Columbia, 15.7% in Florida and 15% in Nevada, the real estate group said. Nationally, sales of existing homes fell 2.1% year-over-year in the first quarter. The hot states now are New Mexico, Louisiana, Montana and Mississippi. Meanwhile, the industry group said price appreciation has slowed in the nation's major metro areas to 10.3% year-over-year from 13.6% in the fourth quarter of 2005. Prices fell in 16 metro areas, including Boston. Of the 149 metro areas, prices are up by double-digit percentages in 60. Prices have fallen in 16 metro areas, including Boston.

[UpInArms]

100. Builders' confidence falls to 11-year low

1:00 PM ET 5/15/06 U.S. HOME BUILDERS INDEX DOWN 23 POINTS IN 7 MONTHS

1:00 PM ET 5/15/06 U.S. HOME BUILDERS OUTLOOK NEGATIVE 1ST TIME SINCE 2001

1:00 PM ET 5/15/06 U.S. MAY HOME BUILDERS' INDEX FALLS TO 45, 11-YEAR LOW

http://www.marketwatch.com/News/Story/Story.aspx?siteid=mktw&guid={09B716B7-BBE0-42AD-9014-5F9475F0AD3D}&dist=bnb

WASHINGTON (MarketWatch) -- U.S. home builders have turned negative on the housing market for the first time since just after 9/11, the National Association of Home Builders and Wells Fargo said Monday.

The NAHB/Wells Fargo housing market index, a builders' sentiment gauge, fell six points in May from a revised 51 to 45, the lowest level since June 1995, the industry group said. The index shows more builders say the market is "poor" than say it's "good."

The index has fallen 23 points in the last seven months. A year ago, the index was at 70.

"Rising mortgage rates, deepening affordability issues and the retreat of investors/speculators from the marketplace are prompting single-family home builders to further adjust their perspective" on the market, the NAHB said in a press release.

The industry group expects new home sales to fall 12% this year from the record 1.28 million in 2005. They expect housing starts to fall about 7% from 2005's record 2.07 million.

<snip>

In May, builders' assessment of current single-family home sales fell to 50 from 55. The assessment of future sales dropped to 54 from 59. The assessment of traffic of prospective buyers dropped to 32 from 39. All three subindexes were at their lowest levels since mid-1995.

...more...

[UpInArms]

104. U.S. banks' mortgage demand weakens in last 3 months

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B30BB18E7%2D2889%2D424C%2DB805%2DDD9CA07EEAE7%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- U.S. banks reported moderately weaker demand for residential mortgages over the past three months, the Federal Reserve said Monday. Out of banks surveyed by the Fed, 38.5% said demand for mortgages was weaker, while 42.3% said it was about the same. By contrast, 17.3% said mortgage demand was somewhat higher in the last three months. Published quarterly, the Fed's senior loan officer survey polls 57 domestic banks and 19 foreign banks about lending trends. Of the respondents, 11.3% said they'd eased home mortgage lending standards, while only 1.9% said they'd tightened them somewhat.

[UpInArms]

64. 10:14 EST handing out the dramamine

Dow 11,388.27 +7.28 (+0.06%)
Nasdaq 2,239.49 -4.29 (-0.19%)
S&P 500 1,291.59 +0.35 (+0.03%)
10-Yr Bond 5.178 -0.08 (-0.15%)

NYSE Volume 349,507,000
Nasdaq Volume 301,376,000

10:00 am : Major averages continue to sport losses but the bulk of industry leadership remains mixed. Energy and Materials -- the year's best two performing sectors -- continue to feel the brunt of the pain from investors locking in recent gains, as commodities relinquish some of the attraction amid a rebound in the dollar. Consumer Discretionary is also under pressure, led by weakness in retail after Target (TGT 48.75 -3.46) missed analysts' expectations. Health Care, however, has posted a respectable gain amid renewed buying interest for drug and biotech stocks. Modest leadership from Financial, as falling bond yields restore some enthusiasm for rate-sensitive bank stocks, has also helped keep market losses at a minimum. DJ30 -11.69 NASDAQ -8.13 SP500 -2.63 NASDAQ Dec/Adv/Vol 1558/1010/270 mln NYSE Dec/Adv/Vol 1818/727/236 mln

09:40 am : Stocks open lower for a sixth consecutive session as uncertainty regarding monetary policy continues to act as an overhang on the market. After all, with the Fed saying last week that further rate hikes will depend on the incoming data, and with key inflation reports (e.g. PPI and CPI) on the docket this week, the realization that market valuations now have to be priced for at least another 1/4% increase in yields across the board is weighing on early sentiment.DJ30 -23.64 NASDAQ -8.43 SP500 -2.93 NASDAQ Vol 132 mln NYSE Vol 92 mln

[JNelson6563]

78. And safety glasses

Don't want anyone to put their eye out on those charts! The 10 yr. yield chart looks like it's giving us the finger. ;-)

Julie

[stop the bleeding]

81. that is not the only chart that I have seen lately that has been giving

the finger - LOL well put

[54anickel]

83. Many Forced to Retire Early

http://www.latimes.com/business/la-fi-forcedout15may15,1,6367452.story?coll=la-headlines-business

WASHINGTON — American workers, who face growing financial pressure to stay in the workforce, are far more likely to be forced into an early retirement than many expect, according to a study being released today.

Four out of 10 retired workers left their jobs sooner than they had planned, usually because of health problems or the loss of employment, according to the report by McKinsey & Co., which was based on a national survey of 3,086 people.

The survey also found that 45% of people who are currently employed planned to keep working past age 65. But among the retirees polled, only 13% said they had done so.

The findings raise fresh concerns about Americans' ability to afford a comfortable retirement. With more companies abandoning or freezing their pensions, many people say they plan to work longer to build up their nest eggs.

The reality "is quite sobering," said David Hunt, a senior partner at McKinsey. "Our research clearly shows that many people — and more than a few public policymakers — who are betting on simply working longer to compensate for a lack of current savings are setting themselves up for a rude awakening and a significantly poorer standard of living in retirement than they had expected."

more...

[54anickel]

84. Total of our unfunded liabilities is staggering

http://www.chron.com/disp/story.mpl/business/3860772.html

A major supply of bedtime reading became available on May 1 — the annual trustees' reports on Social Security and Medicare.

Clocking in at 226 and 219 pages, respectively, the reports guarantee deep sleep. They also may cause nightmares among those who dare to think about what they read.

The figures in the reports are so beyond everyday experience that few will grasp their meaning. The trustees tell a nation that lives month to month on just-in-time financing that program costs will exceed revenue in 2017, more than 132 payments from now. They also tell us the fabled Social Security trust fund will be exhausted in 2040. That may be a year earlier than last year's report, but face it: It's 34 television seasons from now. The numbers, page after page, are nearly inconceivable.

snip>

Those numbers are small relative to what you'll find in the Social Security and Medicare trustees' reports. The 2006 reports say the unfunded liabilities of Social Security increased by $600 billion. Medicare's unfunded liabilities ballooned a stunning $2.4 trillion. Mind you, that's the increase for the year. It isn't the total.

The total unfunded liabilities of Social Security now amount to $4.6 trillion. The unfunded liabilities of Medicare now amount to $32.1 trillion. A comparison is shown in the table below.

In 2005, the combined unfunded liabilities of Social Security and Medicare increased by $2.3 trillion, seven times larger than the official $318 billion federal deficit. In 2006, the combined unfunded liabilities of the two programs increased by an additional $3 trillion, an increase seven times larger than the estimated $423 billion federal deficit.

more...

[54anickel]

86. OT, but this is rather alarming to me. Got the link in an e-mail -

interesting site.

http://www.truthdig.com/report/item/20060513_battlecry_philadelphia/

snip>

This was the letter that opened the event. Its author was George W. Bush. Yes, the president of the United States sent a letter of support, greeting, prayer and encouragement to the BattleCry event held at Wachovia Spectrum Stadium in Philadelphia on May 12. Immediately afterward, a preacher took the microphone and led the crowd in prayer. Among other things, he asked the attendees to “Thank God for giving us George Bush.”

snip>

Throughout the three and a half hours of BattleCry’s first session, I thought of only one analogy that fit the experience: This must have been what it felt like to watch the Hitler Youth, filled with self-righteous pride, proclaim the supremacy of their beliefs and their willingness to shed blood for them.

snip>

Luce put great emphasis on following every word in the Bible, treating it as an “instruction book,” even when a person doesn’t understand or agree. This is, of course, the logic that leads to the stoning of gays, non-virgin brides, disobedient children and much more—because the Bible says so.

Chillingly, when I confronted Ron explicitly about these passages, he refused to disavow them. During the afternoon preceding the May 12 rally, Luce and about 300 BattleCry acolytes (almost entirely youths) rallied in front of Philadelphia’s Constitution Hall—the location having been chosen because Luce wants to “restore” the Founding Fathers’ vision of a religious society (never mind that the Founders enshrined in the Constitution an explicitly secular framework of government).

I and about 20 people representing various anti-Bush, atheistic and anti-Iraq-war factions made our way into the rally and began interacting with the youths assembled. Some said openly that it was OK that George Bush’s lies have cost the lives of thousands of Americans and Iraqis. Why was it OK? Because “God put him (Bush) there.”

[UpInArms]

91. scary is just not strong enough

[RUMMYisFROSTED]

99. *blink*

:scared:

[skids]

102. Weird (OT, too)

The guy's face which is obscured by that lady's hand looks out of place, like a photoshop or cardboard cut-out.

[Ghost Dog]

92. Furthermore, they refer to the Old,

not the specifically Christian New Testament.

[AnneD]

103. Show me a courtroom....

where they post the Beatitudes instead of The Ten Commandments and I will show you a truly Christian Nation. The Ten Commandments are the OT and Christ's birth, death, and resurrection signaled a new compact open to all.

For those that need a refresher (no judgment inferred/implied ;) )

The Beatitudes

3 ¶ Blessed are the poor in spirit: for theirs is the kingdom of heaven.

4 ¶ Blessed are they that mourn: for they shall be comforted.

5 ¶ Blessed are the meek: for they shall inherit the earth.

6 ¶ Blessed are they which do hunger and thirst after righteousness: for they shall be filled.

7 ¶ Blessed are the merciful: for they shall obtain mercy.

8 ¶ Blessed are the pure in heart: for they shall see God.

9 ¶ Blessed are the peacemakers: for they shall be called the children of God.

10 ¶ Blessed are they which are persecuted for righteousness' sake: for theirs is the kingdom of heaven.

11 ¶ Blessed are ye, when men shall revile you, and persecute you, and shall say all manner of evil against you falsely, for my sake.

12 Rejoice, and be exceeding glad: for great is your reward in heaven: for so persecuted they the prophets which were before you.

<snip>


Love for Enemies

38 ¶ Ye have heard that it hath been said, An eye for an eye, and a tooth for a tooth:

39 but I say unto you, That ye resist not evil: but whosoever shall smite thee on thy right cheek, turn to him the other also.

40 And if any man will sue thee at the law, and take away thy coat, let him have thy cloak also.

41 And whosoever shall compel thee to go a mile, go with him twain.

42 Give to him that asketh thee, and from him that would borrow of thee turn not thou away.

43 ¶ Ye have heard that it hath been said, Thou shalt love thy neighbor, and hate thine enemy.

44 But I say unto you, Love your enemies, bless them that curse you, do good to them that hate you, and pray for them which despitefully use you, and persecute you;

45 that ye may be the children of your Father which is in heaven: for he maketh his sun to rise on the evil and on the good, and sendeth rain on the just and on the unjust.

46 For if ye love them which love you, what reward have ye? do not even the publicans the same?

47 And if ye salute your brethren only, what do ye more than others? do not even the publicans so?

48 Be ye therefore perfect, even as your Father which is in heaven is perfect.

Sorry for the long passage but it really does reveal much of this holier than thou hypocrisy being touted.

[54anickel]

110. Meanwhile, Apocalyptic visions crowd the bookstores

http://www.commercialappeal.com/mca/books/article/0,2850,MCA_484_4691474,00.html

snip>

I'm not alone. Since the terror attacks of almost five years ago broke the American lull of the 1990s, there's been a healthy market for apocalyptic visions.
This, of course, is nothing new. Cassandra prophesied doom to the Trojans if they let that Greek horse in the gate, Malthus anticipated collapse by overpopulation back in 1798 and Hal Lindsey wrote the obituary for "The Late, Great Planet Earth" in a 1970s best seller that introduced many Americans to fundamentalist End Times prophecies.

But the old game of "Apocalypse: Now or Later?" seems to have been given new energy by a host of early 21st century uncertainties, ranging from the "clash of civilizations" to climate change and concerns about peaking oil production.

Here's a rundown of some literature that's focused on the topic -- some of my current favorites, plus an old standby.

The Wonk

"Countdown to a Meltdown," by James Fallows.
The Atlantic Monthly, July/August 2005.

The Premise: A memo written to a presidential candidate by a campaign manager, dated Jan. 20, 2016, surveys the economic catastrophe that has befallen the United States over the previous 15 years.

How Bad Will It Get? There's a reason they call economics the dismal science. In Fallows' 2016, a year of private college costs $83,000, a day in a hospital $1,350, a year in a nursing home $150,000 and a gallon of gas $9.

Who's The Bad Guy? Let's just say Fallows isn't a big fan of W's.....

more...


Here's a link to "The Wonk" ;-) http://www.theatlantic.com/doc/200507/fallows

[Ghost Dog]

90. European shares in biggest 2-day fall in 3-1/2 yrs

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060515:MTFH11475_2006-05-15_15-44-07_L15746021&symbol=.FTEU3&rpc=44
Mon May 15, 2006 11:44 AM ET

LONDON, May 15 (Reuters) - European stocks slumped for the fourth day in a row on Monday to close down 1.2 percent as mining issues tumbled following a sell off in red-hot commodity markets and as investors bailed out of riskier emerging markets.

By 1535 GMT, the pan-European FTSEurofirst index <.FTEU3> of 300 leading shares was 1.2 percent weaker at 1,347.1 points, near a two-month low, and off a near five-year high of 1,407.5 stuck last week. But the index is still up 5.6 percent this year.

<snip>

"We still think global growth is okay, China and emerging markets are okay. And therefore, this is a sort-of a healthy setback."

/bit more...

[JNelson6563]

101. 1:35 update

Dow 11,358.57 -22.42 (0.20%)
Nasdaq 2,230.25 -13.53 (0.60%)
S&P 500 1,287.64 -3.60 (0.28%)
10-Yr Bond 5.145% -0.41

I suspect there are nail marks on the ledge that leads to a major drop-off, PPT or no PPT. I think there's a huge stuggle to keep things from plummeting.

Julie

[UpInArms]

105. 2:21 EST numbers and blather

Dow 11,347.14 -33.85 (-0.30%)
Nasdaq 2,223.43 -20.35 (-0.91%)
S&P 500 1,285.86 -5.38 (-0.42%)
10-Yr Bond 5.151 -0.35 (-0.67%)

NYSE Volume 1,722,913,000
Nasdaq Volume 1,375,304,000

2:00 pm : Indices extend their reach into negative territory, spearheaded by further deterioration in the influential Technology sector. Even though rates are pulling back across the yield curve today, rates are starting to get to the level where even small increases start to leverage in valuation models, thus making bonds more attractive alternatives to stocks. While the move from 3.75% to 4.5% on bond yields simply made stocks less undervalued from a valuation standpoint, a move from 4.75% to 5.50% really starts to bite into valuation models. The yield on the 10-yr note currently stands at 4.14% while the overnight lending rate sits at 5.00%.DJ30 -43.65 NASDAQ -23.29 SOX -2.3% SP500 -6.24 NASDAQ Dec/Adv/Vol 2041/970/1.24 bln NYSE Dec/Adv/Vol 2082/1058/1.16 bln

1:30 pm : Stocks break out of their midday trading range as sellers return to push the blue chip averages back below the flat line. Further weakness in chip stocks has contributed most significantly to the market's recent reversal. The PHLX Semi Index, which was once the clear market leader and up as much as 16% in early February, has been on a downtrend ever since and is only another 1.5% away from turning negative on the year.DJ30 -25.38 NASDAQ -12.17 SOX -1.2% SP500 -3.70 NASDAQ Dec/Adv/Vol 1876/1116/1.11 bln NYSE Dec/Adv/Vol 1894/1210/1.05 bln

[54anickel]

107. Stagflation?

http://www.jeffvail.net/2006/05/stagflation.html

Will rising oil prices bring stagflation? Stagflation is the combination of high inflation and high unemployment/recession, a phenomenon that Keynesian economists long thought to be impossible—until it happened in the UK and the US in the ‘60s and ‘70s. According to Wikipedia, it is caused by a shock to a nation’s aggregate supply curve—such as what happens when oil prices rise significantly, although in reality nothing in macroeconomics is quite that simple. It’s particularly problematic because central banks can only address either the inflation or the unemployment, and which ever they work to reduce, they must do so by exacerbating the other. Not pretty.

So will the current spike in oil prices bring about another bout of stagflation? It is certainly possible. First, we must answer two questions: is the current oil price rise inflationary, and is it a drain on our economy that will cause recession and the accompanying unemployment? If both answers are yes, then a continuing rise in oil will bring stagflation.

Is the current rise in the price of oil inflationary? Simply put, inflation is a rise in the general price level. If oil is more expensive, then everything that is made from oil also becomes more expensive. And everything that is transported using oil. And that has any constituent component or process that utilizes oil. So everything becomes more expensive. So yes, a rise in the price of oil does cause inflation. It may take some time to trickle down to the end consumer across all processes, but it will happen. Back up…now it gets more complicated. A rise in general price level is measured in currency, and that currency’s relative purchasing power (its price) fluctuates with its supply and demand. So an oil price rise is not inflationary as long as the rise in the price of oil is paced by a gain in the value of the dollar. But, that’s not happening, with the US dollar on a dive lately—the Canadian Loonie is at $0.90! So, in the end, the answer is still YES: this rise in the price of oil IS inflationary.

Is the rise in the price of oil a drain on the economy that will cause a recession and increase unemployment? That may seem obvious, but let’s work through it. You pay more for oil, but someone gets that money. What do they do with it? Do they spend it back in the economy, buying goods and services that drive economic growth? If so, then it isn’t a drain, just an inflationary re-distribution that has some loss due to inefficiency of unplanned transition—that is, investments made in the past in reliance on low oil prices don’t pay off so well. This can still be recessionary if it is a sufficiently sharp shock caused by enough of an increase in oil prices. What if the money isn’t cycled back into the economy in the classic petrodollar recycling scheme? What if it is spent in the economy of an overseas exporter of oil—say to build the world’s tallest building in Dubai. That is definitely a drain on the domestic economy, but on the international scale it is really still just a re-distribution among nations that has some loss due to transaction cost inefficiency. So, in the end, the answer to “is the rise in oil price recessionary” is simply that IF the rise is sharp enough to cause re-distribution inefficiency losses, then YES. It’s anyone’s call whether or not we are at that point yet, but I think that we are already well on the recession path.

more....


From the linked LaRouche piece:

snip>

Comparing the present rates of rates of increase of primary materials prices with the pattern for Germany 1923, indicates the
likelihood that, under present U.S. and European policies, the world system could reach a point of collapse of the monetary system by not much later than September 2006, if not earlier.

Under the present trends in policy-making in the U.S. government, both in the careening economic-financial lunacy of the current Bush Administration, but also the “Alfred E. Newman”-like diffidence of a negligent U.S. Congressional fraction of the Democratic Party, the likelihood is that the world system as a whole will be in a U.S.-dollar-triggered collapse-phase before Autumn.

The point is not to predict what could happen by Autumn; the point is to kick the relevant political circles in the Democratic Party with the proverbial two-by-four prescribed for reluctant donkeys, and to do so hard enough, soon enough, and often enough, to move to the kind of emergency reform of U.S. policy which could stave off an otherwise onrushing general breakdown-crisis of not only the U.S. system, but the world system as well.

[54anickel]

111. 15 minutes to go and things are looking up - there's no looming US$ crisis

Dow 11,412.92 +31.93 (+0.28%)
Nasdaq 2,235.58 -8.20 (-0.37%)
S&P 500 1,292.41 +1.17 (+0.09%)
10-yr Bond 51.53 -0.33 (-0.64%)
30-yr Bond 52.65 -0.33 (-0.62%)
NYSE Volume 2,280,896,000
Nasdaq Volume 1,834,806,000

3:30 pm : Stocks regain some upside traction, enough to lift the Dow back into positive territory going into the close, but market internals still suggest a bearish bias. As reflected in the A/D line, decliners on the NYSE still hold a 20-to-11 edge over advancers and a more than 2-to-1 margin on the Nasdaq. Painting an even more dismal picture on the tech-heavy Composite is a 3-to-1 ratio in down to up volume. DJ30 +15.05 NASDAQ -11.16 SP500 -0.99 NASDAQ Dec/Adv/Vol 2096/954/1.70 bln NYSE Dec/Adv/Vol 2097/1103/1.56 bln

3:00 pm : Not much changed since the last update as sellers remain in control of the action. To wit, Energy continues to pace the way lower as crude oil closing down 3.7% at $69.40 a barrel (-$2.64) has erased 2.8% of its 10.7% year-to-date gain. Materials has also lost more than 2.0% as a rebound in the dollar has also prompted speculators to consolidate recent gains in other commodities like gold, which recorded its largest one-day loss (-4.6%) since August 1993, silver (-7.3%) and copper (-3.2%).DJ30 -21.64 NASDAQ -18.49 SP500 -3.95 NASDAQ Dec/Adv/Vol 2066/969/1.55 bln NYSE Dec/Adv/Vol 2000/1157/1.42 bln

2:30 pm : Market bounces off its worst levels but continues to sport broad-based losses. Adding to today's struggles has been the inability by the Dow, S&P and Nasdaq to find initial support above key technical levels of 11355, 1287 and 2228, respectively. The Nasdaq is still leading the way lower (-0.8%) among the majors, paced by consolidation across the board in technology led by the SOX slipping into negative territory for the year, as well as weakness in retail (e.g. BBBY, SHLD, SPLS, URBN) and transportation (e.g. CHRW, EXPD). ..Computer Hardware Index -1.2%. ..GSTI Software Index -1.1%.DJ30 -21.39 DJTA -0.7% DOT -0.9% NASDAQ -17.38 SOX -1.8% SP500 -3.62 NASDAQ Dec/Adv/Vol 2055/989/1.39 bln NYSE Dec/Adv/Vol 2119/1033/1.28 bln

2:00 pm : Indices extend their reach into negative territory, spearheaded by further deterioration in the influential Technology sector. Even though rates are pulling back across the yield curve today, rates are starting to get to the level where even small increases start to leverage in valuation models, thus making bonds more attractive alternatives to stocks. While the move from 3.75% to 4.5% on bond yields simply made stocks less undervalued from a valuation standpoint, a move from 4.75% to 5.50% really starts to bite into valuation models. The yield on the 10-yr note currently stands at 4.14% while the overnight lending rate sits at 5.00%.DJ30 -43.65 NASDAQ -23.29 SOX -2.3% SP500 -6.24 NASDAQ Dec/Adv/Vol 2041/970/1.24 bln NYSE Dec/Adv/Vol 2082/1058/1.16 bln

1:30 pm : Stocks break out of their midday trading range as sellers return to push the blue chip averages back below the flat line. Further weakness in chip stocks has contributed most significantly to the market's recent reversal. The PHLX Semi Index, which was once the clear market leader and up as much as 16% in early February, has been on a downtrend ever since and is only another 1.5% away from turning negative on the year.DJ30 -25.38 NASDAQ -12.17 SOX -1.2% SP500 -3.70 NASDAQ Dec/Adv/Vol 1876/1116/1.11 bln NYSE Dec/Adv/Vol 1894/1210/1.05 bln

1:00 pm : Market still mixed as the blue chips continue to outpace their Nasdaq counterparts. On the Dow, which is up 6.2% year to date versus a 1.7% advance for the Composite, Merck (MRK 34.98 +0.69) is pacing the way higher with a 2.0% gain while competitor Pfizer (PFE 24.78 +0.28) has also climbed on renewed buying interest. Other notable components posting gains of at least and helping offset a 4.0% pullback in Alcoa (AA 33.42 -1.39) include AIG, C, INTC, JNJ, MO and WMT.DJ30 +17.05 NASDAQ -5.35 SP500 +1.17 NASDAQ Dec/Adv/Vol 1883/1093/1.00 bln NYSE Dec/Adv/Vol 1854/1241/954 mln

12:30 pm : Market continues to trade with a sense of caution as the afternoon session gets underway. Leadership continues to change hands, as the defensive-characteristics in a rising interest rate environment make Health Care (+1.1%), the year's worst performing sector (-4.4%), more attractive. In contrast, Energy (-1.8%) and Materials (-1.6%), the best performing sectors so far in 2006 with respective gains of 13.2% and 11.2%, as well as Industrials (-0.3%) -- which has turned in the third best performance, are all trading lower.DJ30 +11.11 NASDAQ -4.64 SP500 +0.86 NASDAQ Dec/Adv/Vol 1837/1085/926 mln NYSE Dec/Adv/Vol 1804/1267/866 mln

12:00 pm : Market is still trying to find some definitive direction midday as the market comes to grips with the reality that the Fed is likely to raise rates further.

On a positive note, investors have received some more relief on the commodity price front, as a rebound in the dollar has eroded their appeal as alternative investments. However, a 3.4% pullback in the price of crude oil to below $70 a barrel and a 2.7% decline in gold have also led to the absence of leadership from Energy and Materials -- the year's best two performing sectors which are expected to contribute a significant portion of the profit growth on the S&P 500.

Bonds bouncing back after five consecutive days of consolidation, grabbing some interest from a weaker-than-expected read on May NY Empire manufacturing activity, have knocked the yield on the 10-yr note (+13/32) down to 5.13% and renewed some enthusiasm for rate-sensitive areas like Financial and Utilities. Nonetheless, with the Fed saying last week that further rate hikes will depend on the "incoming data," and with key inflation reports (e.g. PPI and CPI) on the docket this week, the realization that market valuations now have to be priced for at least another 1/4% increase in yields across the board continues to underpin a sense of nervousness.

As an aside, Target (TGT 50.10 -2.11) missing analysts' expectations by a penny amid some erosion in gross margins has also weighed on sentiment, especially heading into earnings reports from retailing giants Wal-Mart (WMT 47.20 +0.66) and Home Depot (HD 40.36 +0.36) tomorrow morning. DJ30 +10.97 NASDAQ -6.28 SP500 +0.82 NASDAQ Dec/Adv/Vol 1888/1005/842 mln NYSE Dec/Adv/Vol 1870/1163/788 mln



Advances & Declines
NYSE Nasdaq
Advances 1313 (39%) 1100 (34%)
Declines 1907 (56%) 1965 (61%)
Unchanged 129 (3%) 105 (3%)

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

Up Vol* 817 (38%) 539 (31%)
Down Vol* 1272 (59%) 1177 (67%)
Unch. Vol* 33 (1%) 17 (0%)

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

New Hi's 26 58
New Lo's 181 141

[UpInArms]

116. closing numbers - WHEEE!!! - WS dancing the happy dance!

Dow 11,428.77 +47.78 (+0.42%)
Nasdaq 2,238.52 -5.27 (-0.23%)
S&P 500 1,294.50 +3.26 (+0.25%)
10-Yr Bond 5.153 -0.33 (-0.64%)

NYSE Volume 2,506,803,000
Nasdaq Volume 2,006,700,000

[54anickel]

117. Heh-heh, flight to safety of blue chips, Treasuries and the buck - PHFFT!

[Roland99]

118. Damn, quite the turnaround at the end....(missed you guys today)

On this new job, I won't be checking/posting up here anymore during the day. :(

But, oh well, I'd rather be busy during the day than looking for something to do.


Keep on keepin' on! :D

:toast:

[UpInArms]

120. hiya Roland99!

Glad that you can at least come see us "after hours" :D

We'll keep on keepin' on - and give you lots of reading material for the evening.

Hope all goes well with the new job :hi:

[54anickel]

119. Gotta add the yada-yada

4:20 pm : Stocks closed mixed as uncertainty regarding monetary policy acted as an overhang on the market throughout most of the session; that is, until a sense that stocks may be oversold on a short-term basis renewed enthusiasm for blue chips in the last hour of trading.

With the Fed saying last week that further rate hikes will depend on "incoming data," and key inflation reports (e.g. PPI and CPI) hitting the wires over the next two days, the realization that market valuations now have to be priced for at least another 1/4% increase in yields across the board prompted follow-through selling in the wake of last week's broad-based consolidation. However, as was the case last week, the Nasdaq bore the brunt of selling efforts again as higher interest rates continue to spark valuation concerns, especially in growth stocks. To wit, the Russell 2000 turned in an even worse performance since small cap stocks often are more adversely impacted by a rise in borrowing costs.

With regard to sector strength and weakness, this year's leaders were again today's biggest laggards. Energy paced the way lower as crude oil closing down 3.7% at $69.40 a barrel (-$2.64) shaved another 1.7% off its leading year-to-date gain. Oil prices continued to consolidate after Saudi Arabia's oil minister cited the risk of OPEC capacity expansions outstripping demand while Qatar's oil minister said that oil prices around $70 a barrel may slow global economic growth. Speaking of demand concerns, metals prices also plummeted Monday as traders let some air out of the speculative bubble that has recently lifted copper to historic highs and gold prices to their best levels in 26 years.

The absence of leadership from the year's best two performing sectors -- Energy and Materials -- which are also expected to contribute a significant portion of the profit growth on the S&P 500, initially weighed on sentiment throughout the session. At the end of the day, though, more relief on the commodity price front, as a rebound in the dollar weakened their appeal as alternative investments, helped alleviate some of the concerns about inflation and further Fed tightening. In its policy statement on May 10th, central bankers noted that "elevated prices of energy and other commodities have the potential to add to inflation pressures." DUH!

Since rates are starting to get to the level where even small increases start to leverage in valuation models, the negative tone that underpinned stocks most of the day fueled renewed buying interest in bonds as more attractive alternatives to equities. Treasuries bounced back after five consecutive days of consolidation, supported by a weaker-than-expected read on May NY Empire manufacturing activity. The yield on the 10-yr note fell to 5.14%. As a result, the rate-sensitive Financial sector provided some influential leadership that, in combination with the defensive-characteristics of Health Care and Consumer Staples renewing enthusiasm for two underperforming sectors, helped offset more consolidation across the board in Technology. Even Consumer Discretionary, which was under pressure after Target (TGT 50.04 -2.17) missed analysts' expectations by a penny as profit margins fell for the first time in two years, eked out a small gain. BTK +0.3% DJ30 +47.78 DJTA +0.1% DJUA +0.4% DOT -0.4% NASDAQ -5.26 NQ100 -0.1% R2K -0.7% SOX -1.0% SP400 -0.6% SP500 +3.26 XOI -2.3% NASDAQ Dec/Adv/Vol 1989/1090/2.04 bln NYSE Dec/Adv/Vol 1867/1364/1.87 bln


All in all, I'd say a very successful day for the PTB.