STOCK MARKET WATCH, Wednesday 31 May

[ozymandius]

Wednesday May 31, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 966 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1985 DAYS
WHERE'S OSAMA BIN-LADEN? 1685 DAYS
DAYS SINCE ENRON COLLAPSE = 1646
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 5
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 30, 2006

Dow... 11,094.43 -184.18 (-1.63%)
Nasdaq... 2,164.74 -45.63 (-2.06%)
S&P 500... 1,259.84 -20.32 (-1.59%)
Gold future... 653.90 +2.90 (+0.44%)
30-Year Bond 5.19% +0.03 (+0.62%)
10-Yr Bond... 5.09% +0.03 (+0.67%)






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 Ike Iossif

XAU-INTERMEDIATE TERM TECHNICAL ANALYSIS

In our previous "EXTRA" report for the XAU on 3-24-06, we presented three scenario outcomes for the XAU that investors/traders needed to consider and plan for accordingly. Specifically we had said the following:

"The bullion will break above resistance and rally to 630; in that case it will pull the XAU along to new marginal highs. If the bullion closes above 590, and the XAU can close above 144 over the next 5-10 trading days, then the odds will be better than even in favor of scenario#1, and we ought to expect the XAU to test resistance in the 150-160 zone

-cut-

The XAU ended up rallying up to 171, and then over a seven day period it lost a whopping 20% declining to 134, but it managed to recover 6 points by the end of the day on Friday, finishing the week at 140.04, down 19.37 points.

The decline was so violent and--on the surface--the price action so bearish, many investors/traders understandably began to wonder whether--in the best case scenario--gold stocks reached an important intermediate term top, or whether--in the worst case scenario--the bull market in gold/gold stocks was finished. altogether!

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

[ozymandius]

2. Today's Reports

10:00 AM Chicago PMI May
Briefing Forecast 57.0
Market Expects 56.0
Prior 57.2

10:30 AM Crude Inventories 05/26
Briefing Forecast NA
Market Expects NA
Prior -2998K

2:00 PM FOMC Minutes May 10

[UpInArms]

49. Chicago May PMI at 61.5% (vs 57.2 in April)

10:00 AM ET 5/31/06 MAY CHICAGO PMI RISES TO 61.5% VS. 56.2% EXPECTED

10:01 AM ET 5/31/06 MAY CHICAGO PMI PRICES PAID 76.9% VS. 77.2%

edited to add:

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B88A1DCB7%2D6E82%2D47BB%2DBFAF%2DA50683F39241%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- Business activity expanded in the Chicago region for the 37th consecutive month in May, the National Association of Purchasing Managers-Chicago said Wednesday. The Chicago purchasing managers' index rose to 61.5% from 57.2% in April, much stronger than the expected decline to 56.2%. It was the highest level since October. Anything over 50% indicates growth. The prices paid index fell to 76.9% from 77.2%. The new orders index rose to 69.6% from 60.8%. The employment index rose to 52.8% vs. 47.2%.

[stop the bleeding]

54. so these sound like good numbers/good news???

I wouldn't excpect any action until the minutes report later today, but this report would seem to be good news for the market?

[UpInArms]

56. on the surface these appear to be good numbers for the market

but upon examination (based on how the "market" reads inflationary news, that employment number sounds better for the workers than for the markets -

the cost of production fell only slightly, not enough to be a "mover"

:eyes:

[UpInArms]

85. Inflation concerns dominate FOMC May 10 meeting - 1/2 pt hike discussed

2:00 PM ET 5/31/06 FOMC: HIGHER INFLATION EXPECTATIONS WOULD IMPACT POLICY

2:00 PM ET 5/31/06 FOMC: INFLATION EXPECTATIONS HAD RISEN SOMEWHAT

2:00 PM ET 5/31/06 FOMC: 'CONCERN' EXPRESSED ABOUT INFLATION AT MAY MEETING

2:00 PM ET 5/31/06 FOMC: CORE INFLATION PRESSURES GREATER-THAN-EXPECTED IN MAY

2:00 PM ET 5/31/06 FOMC: 50 BASIS POINT HIKE AND PAUSING WERE OPTIONS IN MAY

2:00 PM ET 5/31/06 FOMC: UNSURE 'HOW MUCH, IF ANY' MORE HIKES NEEDED AFTER MAY

2:00 PM ET 5/31/06 FOMC: UNCERTAIN ABOUT NEXT MONETARY POLICY MOVE AFTER MAY

2:00 PM ET 5/31/06 FOMC MINUTES: INFLATION WORRY DOMINATES MAY 10 POLICY TALK

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BA1FA5C26%2D525E%2D49B4%2DA0BF%2D514F192ED208%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- At their policy meeting earlier this month, Federal Reserve officials appear very worried about rising prices and expectations among consumers that prices will rise further, according to a summary of their meeting released Wednesday. At its May 10 meeting the FOMC voted to raise its target for the federal-funds rate to 5.0% from 4.75%. It was the 16th consecutive quarter-point increase since June 2004. According to the summary, Fed officials even debated whether to increase the funds rate by 50 basis points at the meeting, although there was also discussion about leaving policy unchanged. But recent price developments clearly had the central bankers' attention. FOMC members expressed "some concern" about recent price developments, with core consumer inflation rising a little higher than they expected.

[ozymandius]

3. Oil prices dip below $72 a barrel

SINGAPORE - Oil prices dipped below $72 a barrel Wednesday on expectations that weekly U.S. petroleum supply data due Thursday would show across-the-board gains.

Light, sweet crude for July delivery fell 28 cents to $71.75 a barrel in Asian electronic trading on the New York Mercantile Exchange. It had closed Tuesday at $72.03 after climbing as high as $72.75.

"The expectation is that demand is still strong and inventory may go up because of the increased refinery production in the U.S.," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "There is more upside potential than downside."

Although the price had fallen in early trading, Shum said traders that with China's robust demand and positive U.S. outlook, "there is a little bit of bullish news for the market to chew on."

more

[ozymandius]

4. OPEC to keep gushing oil

CARACAS (AFP) - The OPEC cartel looks set to keep its oil output at full flow, reluctant to disturb a record-breaking market that is reaping its 11 members a bonanza of petrodollars.

Ministers of the Organization of the Petroleum Exporting Countries will meet here Thursday, giving Venezuela's populist President Hugo Chavez a stage to hurl more anti-US invective if he wishes.

Venezuela, the only Latin American member of a group dominated by Middle Eastern producers, had been calling for the cartel to cut its total production quota from a 25-year high of 28 million barrels per day.

But Venezuelan energy minister Rafael Ramirez toned down his appeals Monday, calling instead for the cartel "at least to maintain" current levels of production even if global supplies are plentiful.

more

[hatrack]

61. So output will not increase and that's "gushing"?

How about "OPEC maintains status quo", "OPEC to hold at current production levels" or "OPEC will not increase production"?

Oh, but we can't have headlines like those, now can we?

:eyes:

[Roland99]

5. Gas had jumped from $2.61 to $2.89 here yesterday

Found one station left at $2.61 and went ahead and filled up (was down to 1/4 tank)

It's been a yo-yo like that seems about every 2 weeks. Slowly drops down to $2.60 or so and then boom! Right on back to @2.89.

[4dsc]

6. Are you used to it yet??

With the era of cheap oil OVER, and no alternative to take its place, are you getting use to higher gas prices??

[Roland99]

24. Well, it's just like a buddy of mine predicted last summer.

They're preparing us to be comfortable with $3/gal gas. Last time it was below $2 here was back in mid-Feb.

My new job is 20 miles further away than the old one (but it's pretty much all highway driving) but at least I make more money now (even though I now have to pay my own insurance)

[leftyladyfrommo]

52. Ours jumped overnite - 2.539 to 2.699

[Roland99]

58. That's more like a tip-toe, not a jump

:P

Mizzou does seem to have some of the cheapest gas in the country.

[mojavekid]

87. $3.39 here,

in Venice, Ca. Will be filling up today and expect another increase.

[leftyladyfrommo]

105. Seemed like a jump to me.

It costs me about $45 to fill up my tank. I think that is awful.

[UpInArms]

67. July Crude @ $70.15 bbl - July NatGas @ $6.15 mln btus

11:38 AM ET 5/31/06 JULY CRUDE FALLS $1.88, OR 2.6%, TO $70.15/BRL

11:38 AM ET 5/31/06 JULY NATURAL GAS GAINS 2.7 CENTS TO $6.15/MLN BTUS

11:38 AM ET 5/31/06 JUNE HEATING OIL DOWN 3%; JUNE UNLEADED GAS FALLS 3.3%

11:38 AM ET 5/31/06 JULY HEATING OIL FALLS 2.9%; JULY UNLEADED GAS LOSES 3.6%

[ozymandius]

7. U.S., Vietnam sign trade pact

HO CHI MINH CITY, Vietnam - The United States and Vietnam signed a trade pact Wednesday that removes one of the last major hurdles in Hanoi's bid to join the World Trade Organization.

The deal would knock down remaining trade barriers between the two countries, which saw bilateral trade rise 21.6 percent to nearly $8 billion last year, by ending U.S. quotas on Vietnamese textiles and garments and giving American companies greater access to a growing Southeast Asian market.

It also paves the way for Vietnam to reach its goal of becoming a member of the global trading body before Hanoi hosts the Asia Pacific Economic Cooperation summit in November, which President Bush is scheduled to attend.

A vote in the U.S. Congress is still needed for the pact to take effect.

more

[ozymandius]

8. Bush's Treasury nominee praised

WASHINGTON - President Bush's selection of a savvy Wall Street veteran to be his third treasury secretary is winning widespread praise, but Democrats say it will take a change in policies — not just personnel — to deal with budget and trade deficits and other economic problems.

With his approval rating at record lows despite strong economic growth and low unemployment, Bush announced Tuesday that he was turning to Henry Paulson, chairman and chief executive of Goldman Sachs, to become the administration's chief economic spokesman.

By choosing a 32-year veteran of one of Wall Street's premier investment houses, Bush is hoping for the same economic credibility that Bill Clinton gained when he picked Robert Rubin, one of Paulson's predecessors at Goldman Sachs, as his treasury secretary.

more

[54anickel]

21. Paulson's First Hurdle May Be Restoring Treasury's Policy Clout

http://www.bloomberg.com/apps/news?pid=10000103&sid=aWTsCLqRu4b4&refer=us

May 31 (Bloomberg) -- In Henry Paulson, President George W. Bush chose a Treasury secretary nominee in the mold of Robert Rubin -- a Wall Street heavyweight with built-in credibility in financial markets.

The question is whether Bush will give the Goldman Sachs Group Inc. chief executive officer the leeway to run Treasury and shape policy like Rubin, Bill Clinton's top economic adviser.

Under Bush, no one has been allowed to take that role. Outgoing Treasury Secretary John Snow and his predecessor, Paul O'Neill weren't part of the president's inner circle and were relegated to being salesmen of White House ideas. No sooner had Paulson been nominated yesterday than administration officials were insisting he would have a seat at the table.

``You don't bring in a Treasury secretary as a PR man,'' White House spokesman Tony Snow told reporters. ``You bring in a Treasury secretary as being one of your key economic aides.''

That hasn't been the case in the first 5 1/2 years of the Bush administration. Some officials who came to Washington with glittering corporate or Wall Street reputations left as diminished figures, as White House political operatives dominated decision-making. Those officials include former National Economic Council Director Stephen Friedman, also a one-time Goldman Sachs chairman, and O'Neill, Bush's first Treasury secretary, who once ran Alcoa Inc.

more...

[ozymandius]

9. Enron broadband jury still deliberating

HOUSTON - Jurors in the fraud and conspiracy retrial of two former executives from Enron Corp.'s defunct broadband unit have deliberated for 32 hours over five days without reaching a verdict.

The panel of eight women and four men was slated to resume deliberations for a sixth day on Wednesday. The case is the first of three retrials of five former broadband executives whose first trial ended in a hung jury last year.

-cut-

The broadband jury's deliberations, which began last week, overlapped those of the panel that convicted Lay and Skilling of conspiring to portray the wobbly company as healthy in the years before Enron crumbled into bankruptcy proceedings in December 2001.

Lawyers for the broadband defendants — former broadband unit finance chief Kevin Howard and former in-house accountant Michael Krautz — couldn't persuade Gilmore to quiz each juror on whether they heard or read about the Lay-Skilling outcome.

more

[UpInArms]

15. Commentary: Former Enron chief's first day behind bars

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B11F5555C%2D88B9%2D47F7%2DA570%2DA41FA6182EAA%7D&symbol=

SAN FRANCISCO (MarketWatch) -- At the height of California's energy crisis in 2001, the state's attorney general, Bill Lockyer, famously said "I would love to personally escort Kenneth Lay to an 8-by-10 cell that he could share with a tattooed dude who says, 'Hi, my name is Spike, honey.'"

But the wheels of justice turn slowly, so even with Lay's conviction last week, it may be a while before Lockyer gets his wish.

Still, here's how that first day in prison may ultimately turn out.

June 25, 2009

With all appeals finally exhausted and no beds at minimum-security "Club Fed" prisons available, Lay is assigned to medium-security prison for 20 years. At this exclusive address, license plates, not plates du jour, are the creations.

8:05: Lay meets cellmate Leon "Bonecrusher" Smith, serving 20-30 for armed robbery and carjacking. "Lay is NOT a good name to have in prison," the blue-collared white-collar criminal is told. Lay is consoled by the fact that he's the smartest guy in THIS room, although certainly not the most athletic.

9:30: Lay's spirits boosted when he notices that the cell's sole TV has cable. Asks cellmate if it gets religion channels. Is brusquely informed it only gets "Cops," pro wrestling, and something called "The Metalworking Channel." Is told to shut pie hole.

...more...

:rofl:

[RUMMYisFROSTED]

20. Oh, my!

...he's the smartest guy in THIS room, although certainly not the most athletic.

[UpInArms]

94. One of two ex-Enron Broadband Execs convicted in retrial

2:32 PM ET 5/31/06 ONE OF TWO EX-ENRON BROADBAND EXECS CONVICTED IN RETRIAL: AP

[ozymandius]

10. Stock futures up slightly before Fed minutes

NEW YORK (Reuters) - U.S. stock futures edged higher on Wednesday after the market fell sharply the day before, but investors remained cautious before the release of minutes from the Federal Reserve's May interest rate-setting meeting.

Details from the Fed's May 10 meeting will be released at 2 p.m. (1800 GMT), with investors looking for hints on the outlook for U.S. interest rates after a long campaign of hikes.

-cut-

On the economic agenda, National Association of Purchasing Management-Chicago will release its May index of manufacturing activity at 10 a.m. (1400 GMT). Economists in a Reuters survey forecast a median reading of 56.0 in the month compared with 57.2 in April.

more

[ozymandius]

11. CEOs see slower 2nd-half growth pace: survey

NEW YORK (Reuters) - Chief executives of small- and mid-sized companies expect the rapid pace of U.S. economic growth this year will slow in the second half amid tightening labor markets and rising costs, according a survey released on Wednesday.

The Vistage Confidence Index -- a survey of 1,836 chief executives who are members of the CEO group Vistage International -- fell to 97.8 in the second quarter, down nearly 7 points from the first-quarter reading of 104.2.

Nearly an equal number of surveyed firms expect conditions to improve as to worsen in the next 12 months, contrasting with a year ago when three times as many firms expected a faster rather than a slower rate of economic growth.

-cut-

As for rising energy prices, 30 percent of CEOs said they are absorbing the growing energy costs while 27 percent of those surveyed said they are increasing prices to customers.

more

[UpInArms]

12. daily dollar watch

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

Last trade 84.37 Change +0.02 (+0.02%)

Dollar Bears Return

http://www.dailyfx.com/story/dailyfx_financial_markets_headlines/Dollar_Bears_Return_1149017807084.html

Plenty of dollar weakness around as traders bid the majors higher on a contraction in consumer confidence for the month. The greenback dipped against the sterling, euro and Japanese yen while dropping through key support against the Canadian dollar.

Attributed to the sell off was the month’s consumer confidence report which showed some concern over the current economic situation and higher crude oil prices by individuals. For May, the Conference Board’s survey slipped 6.6 points to a 103.2 reading, higher than the consensus estimates. However, the decline came in comparison to last month’s 109.6 figure, as consumers continue to site some weakness in the economic infrastructure and the higher cost of gasoline. Additionally, making some headlines in the currency markets was the morning’s appointment of a new Treasury Secretary in Goldman Sachs Inc. CEO Henry M. Paulson Jr. Paulson, chairman of Goldman Sachs for the past seven years, follows a series of presidential appointments including Robert Rubin, treasury secretary under President Bill Clinton. With the current policy most likely favoring continued dollar weakness, traders took the appointment as minor and continued dollar selling.

Comparatively, stocks were weighed down as monthly sales in Wal Mart trailed off and crude oil prices returned to loftier levels following the Memorial Day weekend. As a result, the Dow Jones Industrial Average dipped 118.22 points to 11,160.39 as the broader S&P 500 shed 12.68 points to 1,267.48. Notably with crude prices rising 91 cents to $72.20 on the New York Mercantile Exchange, Wal Mart posted same store sales that grew at the lower end of earlier forecasts. For the week, same store sales jumped 2.3 percent. Subsequently, with weaker figures, the stock dipped $1.16 to $48.49 in mid afternoon trading. Kinder Morgan additionally remained in the news as its chairman and chief executive officer continues to push forth on a $13.4 billion bid to take the company private. The current offer is for $100 a share with traders pushing the issue higher by $17.57 to $101.98.

...more...

US Dollar Consolidation to Continue

http://www.dailyfx.com/story/dailyfx_reports/daily_technicals/US_Dollar_Consolidation_to_Continue_1149068760446.html

EUR/USD – EUR/USD is stronger and may have completed a 5 wave impulse at 1.2907 (from 1.2699). 1.2907 is yesterday’s high and is immediate resistance. The subsequent retrace to 1.2840 and current rally back to 1.2900 could be the beginning of a correction of the rally to 1.2907. If this is the case, then initial support comes in at the reaction low from yesterday at 1.2807. Oscillators on the daily are cautiously bullish but are not of much use in a tight ranging market. Hourly oscillators are bearish as RSI has dipped below 70. The inability of the pair to hold above 1.2900 favors more range trading but a break above yesterday’s 1.2907 high exposes the 5/17 high at 1.2918 and eventually the 5/15 high at 1.2971.

<snip>

USD/JPY – USD/JPY has tested support this evening at the 5/26 low of 111.44 and has since bounced towards the 112.00 figure. The range conditions of the last few weeks favor a continued bounce over a break lower to test previous lows. Supporting this view is positive divergence with oscillators on the hourly and support from the 20 day SMA at 1.1154. Resistance is at the last two day’s highs of 112.37 and 112.78. In the event of a break below 111.44, the 5/23 low of 110.96 is potential support.

<snip>

USD/CAD – USD/CAD is breaking down and has held below a supporting trendline on the hourly. The pair has also broken below the previous low of 1.0969 on5/9. Oscillators on the daily are all bearish again after the recent decline from 112.64. MACD is sloping down and CCI is in negative territory. However, there is positive divergence with RSI on the daily but no obvious support that we can cite as a point of reference until the 138.2% fibo of 1.0969-1.1272 at 1.0853. For more on USD/CAD, see Weekly Chart Analysis at http://www.dailyfx.com/story/charting_center/weekly_chart_analysis/Short_Term_and_Long_Term_1148656347381.html.

...more...

[UpInArms]

27. Dollar falls slightly ahead of Fed meeting minutes

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B35E5C5FB%2D2AEC%2D40BA%2D894E%2D33D60AF3FF70%7D&dist=newsfinder&symbol=&siteid=mktw

NEW YORK (MarketWatch) - The dollar was modestly lower early Wednesday with traders awaiting the release of the minutes from the last Federal Reserve meeting, due out at 2 p.m. Eastern, for clues on the U.S. interest-rate outlook. The Fed on May 10 lifted rates to 5% and left markets in the dark as to whether it would go for 17 rate hikes in a row. "Any suggestion as to when we'll see an end to the ongoing cycle of interest rate hikes from Washington could be sufficient to push the dollar lower still, testing new levels for the month although equally an emerging consensus that the hawkish stance is set to continue is set to initiate another run of greenback buying," said Tim Wilbraham, senior foreign-exchange dealer at CMC Markets. The dollar last traded down 0.1% at 112.18 yen, while the euro rose 0.1% to $1.2867.

[UpInArms]

28. g'morning 54anickel! Twins again!

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=reutersEdge&storyID=2006-05-30T181051Z_01_N30438210_RTRUKOC_0_US-ECONOMY-PAULSON-DOLLAR.xml

excerpt:

Despite the impression that Paulson may be a steward for a stronger dollar, he is on record saying the dollar has to decline to restore balance to the U.S. current account deficit. Last year, the deficit grew to more than 6 percent of gross domestic product.

In a U.S. public television interview two years ago, Paulson said, "I'm concerned about the current account deficit, but I would say by order of magnitude, I'm more concerned about the budget deficit than the current account deficit because I really believe that the decline in the dollar -- the orderly decline in the dollar -- will lead to a natural adjustment."

...more...

It appears that 54anickel and I are reading the world with the same view in mind!

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=2314654&mesg_id=2314808

:toast:

[54anickel]

32. Morning UIA. Sorry about the head bump. I'd be surprised if Bushco

gives Paulson any room to actually make policy. Unless the matta is really about to hit the fan and they don't have a clue on what line to "sell" next. I find all this speculation on Wall Street about a return to Rubinomics interesting. I don't think it can work from where we and the global economy are today - you can't go back. Rubin wasn't exactly a saint, while his ideas did work, there were some questionable ethics in some of his policies.

[UpInArms]

35. Actually, those headbumps don't even leave a bruise

and they make me feel so much less alone :D

That commentary that I posted (#33) - you should read those last 2 paragraphs for a complete morning shiver

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B838CD389%2D89BB%2D4D20%2DA872%2D3AC592AEFDCF%7D&symbol=

:hi:

[54anickel]

48. Heh, I had just finished before I came back to your post here. I tend to

shiver anytime someone closes with "Good Luck" after a discussion on risk.

Just keep telling yourself "hedge funds and derivatives are good for me". :eyes:

[UpInArms]

93. Dollar little changed after FOMC minutes

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B261F0AC5%2D04BD%2D4E52%2D9571%2D057BD217109F%7D&dist=newsfinder&symbol=&siteid=mktw

NEW YORK (MarketWatch) -- The dollar initially edged higher, then pared gains after minutes from the Federal Reserve's May 10 monetary-policy meeting showed that worries about inflation dominated the session. "On balance, it's mixed" for the dollar, said Mike Malpede, senior currency analyst at Man Global Research. It's "a little bit dollar positive" because they cited "higher risk of inflation." "They also seemed to be uncertain about growth outlook' and "mentioned their concerns about the dollar erosion because of the U.S. imbalances," Malpede said. The euro was last down 0.1% at $1.2844, while the dollar traded at 112.33 yen, up 0.03%.

[UpInArms]

13. Toyota to recall 320,000 Prius hydrids for steering part: L.A. Times

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7BA66E45D7%2D90AE%2D4C9B%2D8C1B%2DED2CD5CEF853%7D&symbol=

NEW YORK (MarketWatch) -- Toyota Motor Corp. (TM) said Tuesday that it planned to begin a global voluntary recall of nearly 320,000 of its Prius gasoline-electric hybrid sedans to repair a potentially faulty steering system component, The Los Angeles Times reported in its Wednesday editions.

The recall involves about 170,000 vehicles sold in the U.S., said spokesman Sam Butto of the Japanese automaker's Torrance-based U.S. sales unit. Toyota, noting that no accidents or injuries had been reported, said it would begin sending letters in mid-June to owners of 2004 through early 2006 models, the Times reported.

Priuses built after November 2005 and sold as 2006 models will not be affected by the recall because Toyota changed suppliers and the later models don't have the faulty component, Butto said.

...more...

[UpInArms]

14. US home loan demand falls as interest rates climb

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-05-31T110052Z_01_N31185630_RTRIDST_0_ECONOMY-MORTGAGES-UPDATE-1.XML

NEW YORK, May 31 (Reuters) - U.S. mortgage applications fell last week, reflecting a decline in home refinancing loans as interest rates climbed, an industry trade group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended May 26 decreased 1.9 percent to 541.9 from the previous week's 552.6.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.66 percent, up 0.05 percentage point from the previous week, and matching a four-year high touched two weeks ago.

The MBA's seasonally adjusted purchase mortgage index fell 0.2 percent to 395.5.

The purchase index -- considered a timely gauge of U.S. home sales -- was also below its year-ago level of 462.7.

The group's seasonally adjusted index of refinancing applications decreased 4.8 percent to 1,409.0. A year earlier the index stood at 2,142.1.

The refinance share of mortgage activity decreased to 34.9 percent of total applications from 35.7 percent the previous week.

...more...

[UpInArms]

89. US housing slowdown well under way, set to drag on

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-05-31T175903Z_01_N31210697_RTRIDST_0_ECONOMY-HOUSING.XML

WASHINGTON, May 31 (Reuters) - America's booming housing market has clearly slowed, and that cool-down could last at least another year before homeowners see a pick-up in the pace of house price increases again, economists say.

Economic data on mortgage applications, sales and construction all point to consistent and sustained easing in the market in 2006 following a five-year rally that shattered home purchase and price records, though the pace of the slowdown has varied across the nation.

Economists say the softening has been driven in good part by rising mortgage rates, which now stand at a four-year high of 6.66 percent for a 30-year fixed-rate loan.

<snip>

Indeed, inventories are soaring. The number of new homes and existing houses on the market both hit records in April, according to the National Association of Realtors and the U.S. Commerce Department.

At the current sales pace, the number of homes up for resale amounted to a six-month supply -- the largest in more than eight years.

...more...

[UpInArms]

16. Retirement for no one? TV program spurs debate

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B38C8C197%2D1074%2D4FA4%2DA9AB%2DF554567C8E1F%7D&symbol=

SAN FRANCISCO (MarketWatch) -- Does a TV documentary that points to the failures of the U.S. retirement system work to shock nonsavers into action or does it freeze them in the headlights? That depends on whom you ask.

The Frontline show "Can You Afford to Retire," which aired earlier this month on PBS stations, details the latest news on traditional pensions, including United Airlines' termination of its plan. The show also shines a spotlight on how some workers fail miserably at saving with a 401(k) plan, interviewing some who found it necessary to return to work after retiring.

The segment ends with Teresa Ghilarducci, a professor from Notre Dame University sounding a call of alarm: "We're shifting from lifetime pensions to lifetime work. It's the end of retirement."

The TV segment does talk to workers who succeeded with their 401(k), and it shows a company that's doing everything it can to promote workers' ability to succeed in a self-managed retirement plan. Still, the program's dire outlook on the future of retirement spurred a debate between two nonprofit groups that work on retirement-planning issues.

<snip>

"No private-employer defined-benefit plan in the U.S. comes close" to providing complete retirement funding, he said. "The target of a typical defined-benefit plan is 30% or 40% of final pay, because Social Security is going to provide" additional benefits.

...more...

[wordpix2]

46. if Congresspeople had to depend on social security like so many seniors

now do, they would fix the problem. Instead, they're given and retirement plan like no one else in this country gets (except the heads of BigOil).

[UpInArms]

17. Bayou US hedge funds seek bankruptcy protection

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-30T214403Z_01_N30439728_RTRIDST_0_FINANCIAL-HEDGEFUND-BANKRUPTCY-UPDATE-2.XML

NEW YORK, May 30 (Reuters) - Bayou Management LLC, the hedge fund group that failed last year after losing hundreds of millions of investor dollars in a massive fraud, filed for Chapter 11 bankruptcy protection in New York on Tuesday, according to court filings.

In conjunction with the bankruptcy filing, Bayou filed suit against previous investors in the firm, including UT Medical Group Inc.'s pension plan and 25 others, in a move to recover profits that Bayou paid to those defendants before it collapsed. The suit applies only to Bayou's U.S. operations, not those in the Cayman Islands.

The Chapter 11 filing and lawsuits are the latest in a litany of disgraces for Bayou, which raised some $450 million from investors but lost much of it through a series of flawed trading strategies even as it told investors it was making money.

Bayou founder Samuel Israel III and finance director Daniel Marino pleaded guilty last September to federal fraud and conspiracy charges and are awaiting sentencing.

The suit charges that UT Medical and other investors received fictitious profits and outsized returns for their investments in Bayou. It was filed by Bayou's court-appointed Bayou receiver Jeff Marwil, a bankruptcy attorney with Jenner & Block and Jeffrey Schwartz of Dechert LLP,

...more...

[UpInArms]

18. Bayou and the Bush Cousin

http://www.thestreet.com/_tscs/markets/matthewgoldstein/10243545.html

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

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

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

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

A former columnist for the Boston Globe, Ellis may be best known for his work as an electoral consultant for Fox News during the 2000 presidential election. It was Ellis' analysis of the Florida vote total that led Fox to declare Bush the victor before any of the other networks.

...more...

[susu369]

29. Whoa! Excellent find, UIA

:kick:

BFEE - more proof every day.

[UpInArms]

31. G'morning, susu!

So glad to see you here!

:hi:

Hoping all is well in your world!

:pals:

Yes, that BFEE definitely has its hand in just about every pot. I'm not certain that I shall ever be able to wrap my mind around that "one fodder unit" approach to humanity. In my book, they are just monsters.

[UpInArms]

19. Chain store sales fall 1 percent on week: ICSC/UBS

http://news.yahoo.com/s/nm/20060531/bs_nm/economy_retail_icsc_dc

NEW YORK (Reuters) - Chain store sales fell in the latest week as customer traffic in stores slowed, according to a report released on Wednesday.

Sales fell 1.0 percent in the week ended May 27 from the prior week after slipping 0.8 percent in the previous week, according to the report produced by the International Council of Shopping Centers and UBS Securities LLC.

The ICSC said sales rose 3.6 percent last week versus the same week in 2005. In the previous week, sales rose 3.5 percent versus the same week a year earlier.

"National weather was a positive for seasonal demand," wrote Michael P. Niemira, ICSC's chief economist and director of research in a release. "But offsetting that was the lack of any immediate reason to spend, which in turn, resulted in a slower pace of customer traffic over the last week," he wrote.

...more...

[54anickel]

22. I, Emperor Mogambo...

http://www.321gold.com/editorials/daughty/daughty053106.html

-- I was rudely and abruptly awakened by alarm bells ringing. I reflexively shot off an entire clip of expensive ammunition into the darkness before I realized it was not the Mogambo Homicidal Wife Detector (MHWD) that was ringing, but the Mogambo Economic Seismograph (MES). As I switch on the light, my wife peeks out from under the bed, and is yelling "What in the hell was THAT all about, you crazy stupid bastard?" I calmly reply, trying to be soothing, "Shut your fat yap. It looks like Total Fed Credit fell $1.8 billion last week, and at the same time as foreign banks' holdings of US debt at the Fed decreased by $7.8 billion, too."

I gulp at the news. My wife sees me gulp, and quickly slides back under the bed. An economy based on debt-created fiat currency, like ours, must have a continuously-rising level of debt just to pay the interest on the existing debt, if nothing else. And we need even more rising levels of debt to achieve "growth." And now we don't seem to have it anymore. Again I gulp in fear.

But this is all just statistics proving the onset of the inevitable. The announcement last month by the G-7, of which the USA is a member, was that they all agreed that the US dollar has to be massively devalued to address our gaping, terrifying trade and budget imbalances. The current range of estimates of the total proposed devaluation of the purchasing power of the dollar is between 30% to 50%!
For one thing, at the most optimistic, least-damaging 30% total devaluation of the dollar, and further assuming that absolutely nothing else changes except the buying power of the dollar, this means that we'll be buying crude oil for $95 per barrel.

And if you think that "nothing will change" when oil is at $95 (and up!) per barrel and the dollar is 30% weaker, then I am sorry to tell you that you are very, very wrong. And if you further think that not being heavily-armed and heavily into gold and silver bullion is a good idea at this particular point of the boom-bust cycle, then I am also sorry to tell you that you are wrong about that, too.

And while we are talking about the dollar and things that are wrong, we bid farewell to John Snow, who is resigning as Secretary of the Treasury. I don't know whether John Snow was as stupid as he sounded, or whether he was somehow forced to say those asinine things, such as constantly invoking the Laffer Curve argument that low tax rates can mean higher tax collections, or how even THAT ridiculous, special-case over-simplification morphed into the absurd idea that lower taxes automatically produce higher tax revenues! Hahaha! But the United States was not well served by such silliness, except to convince the rest of the world that we are a nation of greedy, raving imbeciles.

more...

[Roland99]

76. Silly Mogambo. Doesn't he realize what's really behind the smaller debt #?

It's obviously the Bush tax cut policy having a positive effect on the economy. There's nothing but blue skies ahead!

[UpInArms]

23. HealthSouth options practice raises issue: WSJ

http://news.yahoo.com/s/nm/20060531/bs_nm/accounting_healthsouth_dc

NEW YORK (Reuters) - The timing of stock options awarded to former HealthSouth Corp. (Other OTC:HLSH - news) Chief Executive Richard Scrushy raises issues about the company's practice, The Wall Street Journal reported on Wednesday.

Options received by Scrushy, whom the company fired in 2003 and whom federal government charged with criminal conduct, appear to have been awarded at low points in HealthSouth's stock price, according to a Wall Street Journal study.

Scrushy was acquitted of all 36 criminal charges in 2005.

The findings come amid a flurry of federal investigations into other companies for possible backdating of options for top executives. These companies include semiconductor equipment maker KLA-Tencor Corp. (Nasdaq:KLAC - news), Altera Corp. (Nasdaq:ALTR - news) and Analog Devices Inc. (NYSE:ADI - news)

Backdating involves boosting the value of stock options by resetting their grant dates to coincide with a low point in the market price of the underlying shares.

Scrushy told the Journal that his options were granted on the day of regularly scheduled board meetings, "generally for the closing prices of that day," and that they were never backdated.

...more...

[UpInArms]

25. Crystal Ball Gazing on the NPF Report (It looks bad)

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B6F88745D%2DEA61%2D4FC1%2DA918%2D1E341B894847%7D&symbol=

WASHINGTON (MarketWatch) -- U.S. private-sector nonfarm payrolls increased by about 122,000 in May, according to the ADP national employment survey released Wednesday.

"These findings suggest a deceleration of employment relative to growth experienced over the last 12 months," said Joel Prakken, chairman of Macroeconomic Advisers, the economic forecasting firm that computes the index from anonymous payroll data provided by Automatic Data Processing (ADP : 0.00, 0.00, 0.0% ) .

In April, the ADP survey showed 178,000 net new jobs, while the Labor Department's survey indicated 131,000 new jobs in the private sector.

The Labor Department will report on the May figures on Friday. Economists expect a gain of about 175,000 jobs, including government employment. See Economic Calendar.

Over the past five years, the ADP survey has a correlation with the Labor Department survey of about 0.90, making it the best predictor of the monthly jobs figure, Prakken said.

...more...

They are predicting 122,000 for May - and they were off by a negative 57,000 in April. :eyes:

[UpInArms]

36. Gamblers Anon Mtg: Derivative traders see May US payrolls at 177,500

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-31T130536Z_01_N31325217_RTRIDST_0_ECONOMY-PAYROLLS-DERIVATIVES.XML

NEW YORK, May 31 (Reuters) - Traders are betting U.S. employers added about 177,500 jobs in May, a shade above economists' expectations, in the first derivatives auction related to the government data.

The U.S. Labor Department will issue the May jobs report on Friday at 8:30 a.m. (1230 GMT).

The median forecast of economists polled by Reuters predicted a 175,000 job increase in nonfarm payrolls following a 138,000 gain in April.

Among possible outcomes in this derivatives auction, a payroll gain between 150,000 and 225,000 drew about 35 percent of traders betting on that outcome.

...more...

[54anickel]

26. Not even Paulson can save the dollar

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2006-05-30T181051Z_01_N30438210_RTRUKOC_0_US-ECONOMY-PAULSON-DOLLAR.xml

NEW YORK (Reuters) - The nomination of Henry Paulson as U.S. Treasury secretary is seen as a boon for financial markets, but the Wall Street free-marketeer is unlikely to stand in the way of the falling dollar.

The depth of the U.S. current account deficit is such that financial markets increasingly believe this fundamental root of widening global imbalances will adjust only if the dollar weakens.

Having the market-savvy chief executive of Goldman Sachs at the helm of the world's largest economy instead of John Snow, often seen as more of a cheerleader for the White House's economic policies than a policy-maker himself, could lend confidence to Wall Street's perception of the Bush administration. But it won't be enough to prop up the dollar.

"Financial markets do typically like it when a Wall Streeter takes a key role in the administration," said David Mozina, head of foreign exchange strategy with Lehman Brothers in New York.

more...

Stupid headline - nobody wants to save the dollar from falling, we get to pay the debt with cheaper dollars, our foreign lenders once again get screwed. Why don't they write articles that explain what a cheaper dollar is going to mean to MY pocketbook? Imports become more expensive and what's not imported these days?

[UpInArms]

30. Transcript of "The Disposable American: Layoffs and Their Consequences"

http://yaleglobal.yale.edu/display.article?id=7488

excerpt:

Chanda: So you are writing in your book that the corporations basically look at mass layoffs as the only cost-cutting measure they could adopt in order to adjust to the competition. Now how did they get away with doing this?

Uchitelle: Well it’s very interesting. It’s not just mass layoff, it’s all sorts of layoffs. Part of this, of course, was, they were going through a period when unions were in decline. The unions were strongest in the companies most exposed to global competition, and there was an undercurrent of resistance to unions that developed in the 1980s, part of it brought on by the unions themselves. And we got into the idea, which was a myth, that look, we’re not efficient, but if you’ll just bear with us folks and bear the pain of losing your job in a few years we’ll become efficient and the layoffs will stop and we’ll reach a new equilibrium. I think what developed was that labor cost-cutting in the form of layoffs became the route of least resistance and a form of capitalizing on profits – on profitability and the stock market, which became the single measure, rather than in the past when CEOs had the shareholders to worry about, but also the workers and the community and the suppliers and the customers and society as a whole.

Chanda: So this was a kind of paradigm shift.

Uchitelle: It was a paradigm shift, yes.

Chanda: In terms of the company shareholders and directors caring not about workers, but caring only about the quarterly bottom line.

...more...

[ramapo]

39. The "glorious" '80s

I remember the obvious shift in our society from a pro-worker to an anti-worker sentiment
driven in large part by the Reagan revolution.

The part I've never understood is the extent to which this was embraced by workers. There was the anti-union trend, again championed by Reagan. What irony that one of the few unions that supported him (PATCO) was the one that he destroyed.

American workers were screwed over during the '80s when downsizing entered the lexicon. There was never any real backlash to corporations profiting at the expense of their (or their former) workers and the there has been no let up in the ensuing 20 years.

[UpInArms]

41. In the Ownership Society, you own your own misery. ... eom

[UpInArms]

40. People have no place in Society

more from that interview:

Uchitelle: It’s still a mystery to me, as much as I’ve explained it. But the paradigm shift included going from a society in which we thought of ourselves as a community if you will, everyone in it for everyone else, to this individualism which has always been a strain in American society, which got out of hand. I think that it became very convenient to blame workers for their own layoffs. We got to the point where we said, “Look, we have to lay you off because you’re not worth what we’re paying you.” A tremendous psychologically damaging blow to people. And then we said the solution is training and education and you’ll qualify for the good jobs out there. There weren’t enough good jobs out there so you’re blamed again for not enough training, not moving around, not being flexible enough. Very convenient for the Republicans and the Democrats – they didn’t have to come up with policies that might challenge the layoffs, and challenge what was going on. Very convenient of course for the CEOs. They were absolved of responsibility.

But we did not measure the social damage. We used to measure in this country all sorts of social damage. And we didn’t measure, for example, the psychological damage from being told that you don’t have value. I was amazed doing this book, you know a journalist goes out and interviews somebody for a daily story, or for a story that’s done after a month’s research, and you don’t get deeply into the lives of these people until you do a book, and then you really become involved tracking families. And I only used in the book some of the people that I got to know over the years. I never thought I would be so drawn into the psychiatric aspects of layoff. I’m not talking unemployment, unemployment is a separate issue.

Chanda: Right.

Uchitelle: Just this traumatic statement that you don’t have a place in society, in the workplace. In a society where people’s identity is very much wrapped up in the workplace among other forms of identity – family, community, so forth. The workplace is very important. So here you’re doing this damage, and I went to psychiatry, they said “Yes, we run across it all the time in therapy, and we are undermining public health.” In fact I’m going to make this point to a psychiatric convention in less than a month, and we’re not putting a warning label on it. There’s something wrong. Well, we have to measure that. If we’re not going to measure that, then we’re not going to put some sort of brakes on layoffs. Again, I do not want to say that we can stop the layoffs, but I do think that if we measured the damage we would begin to say, “Well, is there a way to lay off five people instead of ten. Are there ways to make people feel better if we lay them off? Are there social ways to deal with this problem?”

[UpInArms]

82. Workshop assists educators facing layoff

http://www.mlive.com/news/sanews/index.ssf?/base/news-19/1149081683320480.xml&coll=9

During her decades-long career in education, Helene Lusa faced layoffs more times than she cared to count.

"I stopped at 10," said the assistant professor of educational leadership at Saginaw Valley State University. "After that, I stopped counting. I figured it was a meaningless number."

In the early 1980s, officials in one metro Detroit district placed Lusa on layoff just weeks before the start of school. She didn't return to full-time teaching until 4 1/2 years later.

<snip>

Union leadership in Saginaw hopes to know more by next week about the status of their 130-plus teachers who remain laid off.

"Educators have a number of skills that (employers) look for, like education," Lusa said, but most teachers seek work in parochial or charter schools before switching career paths.

...more...

[UpInArms]

33. Interesting Commentary: More tests of support due Wednesday

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B838CD389%2D89BB%2D4D20%2DA872%2D3AC592AEFDCF%7D&symbol=

NEW YORK (MarketWatch) -- Henry Hill used to say that every once in a while, everyone's gotta take a beating. While he was talking about wise guys and fancy rides, he might as well have been discussing the tape. Few industries allow for open-ended growth and none, perhaps, are as enticing as the financial markets. Folk lore is flush with stories about secretaries with seven figure stock options and taxi drivers turned day traders. Those are the best of times. Those, my friends, are the sirens that lure fast fingers towards flickering ticks and the promises they hold.

Lost in translation is the simple fact that profiting is a privilege rather than a right. The month of May reminded us that no reward arrives without risk as investors revisited the crimson tide of a downside ride after years of relative calm. As emerging markets took it on the chin, the carry trade got carried out and hedge fund traders, many of whom still think LTCM is an over-the-counter telecom play, were awash in losses. That's a problem in a globally intertwined, derivative-laden financial fabric. And that's a problem when the collective mindset has been conditioned to buy dips.

Through a pure trading lens, the bounce last week was textbook. With the market oversold on a short-term basis, volatility levels up an eye-popping 65% in a month and a slew of leadership sectors approaching massive support zones, the late-to-the-party pressers were reminded that nobody makes money in a bear market -- not even the bears. The tell-tale sign that a massive decline wasn't ripe for the picking were the financial stocks (BKX : , , ) after they held 108 and steadied the market when it needed it most. Not surprisingly, on the heels of the intuitive but equally painful retest, the bovine are again relying on that level to steady the broader tape.

The brief but widely-embraced late week rally carried the market back to the precise technical pivot point of S&P (SPX : 0.00, 0.00, 0.0% ) 1280, where the tape broke to begin with. Alas, the sellers reclaimed control as the dust settled after the Memorial Day weekend and the bears turned the screws anew. The supply side of the equation was again provoked by a growing concern that the era of free money is coming to an end, an unavoidable fact that isn't lost on the ever-dwindling middle class. Indeed, as the growing chasm between the "haves" and "have nots" trickles into the collective consciousness, the burden of upside proof is being shouldered by an increasingly narrow swatch of mainstream America.

...more...

[54anickel]

34. Flour Prices Rise as Wheat Costs Increase

http://www.latimes.com/business/la-fi-flour31may31,1,1048515.story?coll=la-headlines-business

CHICAGO — The price of flour and bread at U.S. grocery stores is rising, pushed higher in part by wheat prices nearing a 10-year high, bakers and industry sources said.

"It's been a slow rise since the beginning of the year, but the last month to six weeks is when it's really escalated," said Michael Marcucci, chief executive of Alpha Baking Co. in Chicago. "We're raising prices where we can."

A winter drought in the Plains and a warm spring have caused wheat prices to skyrocket on fears that farmers will harvest a smaller-than-normal crop of the primary wheat used to make bread and rolls.

Combines have just started to harvest fields, but already bulk bakers' flour has hit a 10-year high at 14.3 cents a pound, up from 13.1 cents earlier this month and 10.9 cents a year ago, according to weekly industry publication Milling & Baking News.

Flour prices at grocery stores have not risen nearly as much because of competition and retailer sales and promotions, industry sources said.


more...surprised there's nothing about the effects of rising fuel costs

[UpInArms]

37. pre-opening blather

09:15 am : S&P futures vs fair value: +3.1. Nasdaq futures vs fair value: +2.0.

09:01 am : S&P futures vs fair value: +3.1. Nasdaq futures vs fair value: +2.5. Stage remains set for the cash market to open on an upbeat note as futures trade still holds a positive bias. However, with the market still reeling ever since the Fed last raised interest rates and investors still focused more on the negatives than the positives of late, it remains to be seen if early gains will be sustainable since the likelihood of conflicting statements in the minutes could result in a bearish reaction.

08:31 am : S&P futures vs fair value: +3.4. Nasdaq futures vs fair value: +3.0. Futures indications remain above fair value, suggesting a slightly higher open for equities. Aside from some end-of-the month portfolio rebalancing by fund managers contributing to early recovery efforts, an improvement in Treasuries and oil prices slipping back below $72 a barrel are also lending some early support since there is little in the way of any notable corporate news to digest.

08:00 am : S&P futures vs fair value: +3.0. Nasdaq futures vs fair value: +1.5. Futures versus fair value suggest stocks may rebound following yesterday's sell-off amid a sense that weakness throughout the month of May, which has knocked the three major indices down an average of 4.4%, was overdone. However, pre-market buying efforts are modest at best as investors hope to glean insight into the duration of the current tightening cycle when the minutes from the FOMC's May 10 meeting are released at 2:00 ET.

[UpInArms]

38. Treasurys higher; FOMC minutes ahead

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B2F232832%2DE471%2D4E8C%2DAC63%2DB113A29944F7%7D&dist=newsfinder&symbol=&siteid=mktw

NEW YORK (MarketWatch) - Treasury prices were higher in the early going Wednesday, pressuring yields a bit, as investors hoped that the minutes from the latest Federal Open Market Committee will provide insight into the confusing rates outlook. The meeting notes are due out at 2 p.m. Eastern. The benchmark 10-year Treasury note last was up 4/32 at 100-15/32 with a yield ($TNX : 50.64, -0.22, -0.4% ) of 5.064%, down from 5.086% at Tuesday's close. At 10 a.m. Eastern investors will view the Chicago purchasing managers report for May. The MarketWatch forecast, based on a poll of economists, is a reading of 56.1%, down from 57.2% in April. Weakness in the manufacturing sector would help stimulate safe-haven interest in bonds. The generally weak state of the stock market this month also has benefitted the fixed-income market.

[UpInArms]

43. Fed's Geithner-Hedge fund risk "inherent" in economy

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-31T132450Z_01_NYH000200_RTRIDST_0_ECONOMY-FED-GEITHNER-RISK-URGENT.XML

NEW YORK, May 31 (Reuters) - The risks associated with hedge funds is "inherent" within the economy and the best way to manage it is for counterparties to provide prudent and manageable financing, New York Federal Reserve President Timothy Geithner said on Wednesday.

"Hedge funds play a very significant role" in financial markets, Geithner said in a question and answer session following a speech.

"But of course they present some risks. We think the best way to deal with those risks is to try to make sure that counterparties that finance hedge funds and determine how much leverage they can take are appropriate, prudent and conservative in the terms of ... financing."

...more crap at link...

[UpInArms]

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

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-31T133226Z_01_N31342899_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, May 31 (Reuters) - The Federal Reserve said on Wednesday that it was adding temporary reserves to the banking system through overnight system repurchase agreements.

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

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

[UpInArms]

59. Printing Presses Overheating: Fed buying coupons OUTRIGHT

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-31T144444Z_01_N31217529_RTRIDST_0_MARKETS-FED-COUPON-URGENT.XML

NEW YORK, May 31 (Reuters) - The Federal Reserve on Wednesday said that it was buying coupons outright, adding permanent reserves to the banking system.

The Fed bought coupons with maturities ranging from Jan. 15, 2010 to Oct. 15, 2010.

The close time for the operation is 11 a.m. (1500 GMT). The settlement date is June 1, 2006.

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

Earlier, the Fed added temporary reserves to the system through overnight system repurchase agreements.

[UpInArms]

60. Treasuries turn negative as Chicago factories boom

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-31T141020Z_01_N31211619_RTRIDST_0_MARKETS-BONDS-UPDATE-1-URGENT.XML

NEW YORK, May 31 (Reuters) - U.S. Treasury debt prices turned softer on Wednesday after May data on Midwest manufacturers suggested the industrial side of the economy was still robust.

The Chicago Purchasing Managers business conditions index spiked to 61.5 in May from 57.2 in April, well above forecasts around 56.0.

Preventing further losses, the surveys' prices paid component inched back slightly, albeit to still historically lofty levels.

...more...

[UpInArms]

91. Chances of June Fed hike spike on hawkish minutes

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-31T181304Z_01_CHB000182_RTRIDST_0_MARKETS-FEDFUNDS-FOMC-URGENT.XML

CHICAGO, May 31 (Reuters) - Prospects for the Federal Reserve to raise interest rates at its June meeting rose sharply after the release on Wednesday of minutes from the central bank's May meeting.

Fed funds futures <FFN6> show as much as a 70 percent chance of a 17th consecutive rate increase from the Federal Open Market Committee in June, up from 58 percent on Tuesday and the highest since late April.

Minutes from the May 10 FOMC meeting showed the Fed was split on the monetary policy outlook but worried enough about inflation to suggest it would continue to raise rates.

[stop the bleeding]

42. It's on like donkey kong

lets see what happens today:)

[UpInArms]

44. 9:35 EST Out of the Gate with Happy Feet!

Dow 11,130.85 +36.42 (+0.33%)
Nasdaq 2,174.15 +9.41 (+0.43%)
S&P 500 1,264.63 +4.79 (+0.38%)
10-Yr Bond 5.064 -0.22 (-0.43%)

NYSE Volume 68,583,000
Nasdaq Volume 80,740,000

[UpInArms]

47. August Gold @ $664.50 oz - July Silver @ $13.02 oz - July Copper @ $3.739

9:46 AM ET 5/31/06 AUGUST GOLD CLIMBS $4 TO $664.50/OZ IN MORNING TRADING

9:46 AM ET 5/31/06 JULY SILVER FALLS 5 CENTS, OR 0.4%, TO $13.02/OZ

9:46 AM ET 5/31/06 JULY COPPER ADDS 6.5 CENTS, OR 1.8%, TO $3.739/LB

[54anickel]

51. Fibrillated Silver Bull Flag (Willie)

http://www.321gold.com/editorials/willie/willie053106.html

Technical chart analysis is called an art form, highly subjective, given to experienced interpretation, and not the least a hard science. With all the hubbub over the noticeable price corrections in gold, silver, copper, a fire has lit under my seat to address the chart pattern flashing bull in silver. Such a signal is not immediately obvious. It is debatable whether the silver pattern is from the textbook. Some see a top pattern instead in the silver chart, especially since upon retest, the 14.50 previous high gave way to a 15.0 high. My conclusion (losing fuzziness each week) is that silver is consolidating before another earth-shattering move up toward the 20 level. It has found support at the 50-day moving average. There is no rounded top, no head & shoulders reversal, no exhaustion top, none of these in evidence. Only a serious pullback with some stair stepping. In fact, it looks "fibrillated" much like a person experiencing a heart attack, except the heart attack victims are primary market dealers and perma-bull economic forecasters.

A garden variety "bull flag" was nailed solid by this here analyst in gold over two months ago. It was like straight out of a textbook, oozing and screaming in a shrill but beautiful golden tone. Gold did break out upside in a powerful move. Find the chart below in "A Walk Down Currency Lane" from March 2006.

As we know, gold rose past 725 in early May, so as to confirm the bull flag identified. For almost a year, gold wrestled inside above the 400 level. Its flag in pause was bound by an interval centered at the 550 level. In a nearly symmetric extension, gold topped 700, only to climb higher. The Gold Train was only resting, dropping off "infidels" and taking onboard "new converts" instead. The quality of the passengers on the bull locomotive improved. They sensed a worldwide monetary revolution among officials, revulsion by bankers, and a reversion to real money in lieu of garbage toilet paper currency. My belief is that the inauguration of Ben Bernanke is far more significant than recognized to date. He is an avowed inflation advocate, a man who boasts of low-cost money printing operations, mocked with helicopter analogies of his own coinage, and suitable for the label of "Weimar Bernanke" in absolutely shocking disrespect. The man has no business experience, no banking experience, no financial market experience, yet is named to the most important central bank post on earth. Gold is the refuge, as fiat money has a master inflationary engineer at the helm on powerful and overused machinery, whose controls are hidden under the darkness of a discontinued M3 money supply statistic. Ben is expected to print money to monetize every asset class under the sun, sure to put the USDollar at risk. IT IS NOT POSSIBLE TO PRINT THE WORLD RESERVE CURRENCY WITH ABANDON, AND AVOID A MONETARY CRISIS. The rest of the world comprehends this basic notion. US-based economists and financial mavens seem not to understand this fact at all.

snip>

DISTILLED INFERENCES
The last year, especially the last few months, have seen critical changes to the mortgage finance sector, the derivatives world, and the silver market. Some things we know for certain, others left for guesswork. A wise mental approach has served me well. Look at the facts. Look at the past. Look at the forces. Look for what is not reported, which must be but which can only be distilled from facts and forces. Lastly, think like a thief and harbor deep suspicions. There are no grand coincidences, not when big money is involved. For instance, an easy one is that Fanny Mae is in unofficial bankruptcy receivership. Why? How can one know this? Because they boasted of "convexity" when interest rates fell. Refinance proceeds were used to buy bonds and leveraged bond futures contracts, which pulled interest rates even lower and triggered a new round of refinances. Now that interest rates are rising, we hear nothing about "convexity" on the dark side, as rates are rising, delinquencies mount, defaults pile up, and refinances are denied. Conclusion: Fanny Mae is kaput, news suppressed. Their hedge book and investment book must be working through laundry cycles by the great protectors of the housing bubble, all for the greater good. Over a thousand accountants are busily cleaning up the mess, not making re-statements of any kind, as they convert Fanny's giant portfolio, and receive huge monetized assistance from deep within the shadows.

Another distilled conclusion pertains to the upside down pyramid morass that is the derivatives market. JPMorgan is well known to own the lion's share of the bond derivatives. Interest rates have risen in the last year, as have mortgage rates. Up till now not a peep on quarterly statements for JPM on massive writedowns. Why? My inference is that JPMorgan has been integrated into the US Federal Reserve, with certain operations on that side of the wall, other operations on this side of the wall. Worse still, JPM merged with Japanese giant Sumitomo bank, complete with a $1400 million dowry delivered over two years ago. The belief that the USFed and Bank of Japan are a unified conglomerate entity is inescapable.

Back to the silver world, where yet another suspicion can be distilled. Warren Buffett might have bought his way out of legal trouble. He at Berkshire Hathaway sold prematurely the 129 million oz of silver. Why? Cannot this financial genius read the gold tea leaves? Cannot this legendary investor comprehend the monetary earthquake shaking the central bank paper pillboxes? Buffett was in hot water with buddy Hank Greenberg and the AIG fraud investigation. You see, the icons and powerful people often do not live under the same rules as little people, nor laws. My conclusion is that he possibly lent a helpful hand to Barclays in London, sold way too early his silver hoard. Records show the silver exchange fund run by Barclays might not have bought all that much physical silver in the open market. In return, the dogs might have been called off on Buffett investigations. After all, Warren is one of the good guys. We must draw the line on scandals, you see. Maybe my suspicions are too contrived. It could be that Buffett simply exited his silver trade early, bagged the still sizeable profit, offset his huge loss on the USDollar short currency position, then washed his hands of commodities and currencys. He gambled against the USDollar almost precisely at the intermediate bottom, in the last months of 2004. He misinterpreted the effect on the USDollar from the USFed tightening cycle, as did many in the gold community. Warren don't know currencys.

more...

[UpInArms]

68. Aug Gold @ $648 oz - July Silver @ $12.55 oz - July Copper @ $3.63 lb

11:37 AM ET 5/31/06 AUGUST GOLD DROPS $12.50, OR 1.9%, TO $648/OZ IN NY

11:37 AM ET 5/31/06 JULY SILVER FALLS 53 CENTS, OR 4.1%, TO $12.55/OZ

11:37 AM ET 5/31/06 JULY COPPER LOSES 4.4 CENTS, OR 1.2%, TO $3.63/LB

[UpInArms]

69. Gold seen reaching $850 an ounce - analyst

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B83DE87EA%2D62B8%2D47B8%2D92BA%2D3E616829E1E1%7D&dist=newsfinder&symbol=&siteid=mktw

NEW YORK (MarketWatch) - Gold futures should reach the $850 an ounce level sometime this year, propelled by dollar weakness and the need of foreign governments to diversify away from the U.S. currency, James Turkey, chairman and founder of GoldMoney.com, said Wednesday. Gold futures peaked at a closing high of $721.50 an ounce on May 11 and have been trending lower since then. However, Turk characterized the weakness seen this month as a correction, and predicted further gains for gold. Prior to this month's market action, many analysts had expected gold futures to top $1,000 sometime this year. Turk now expects to see gold above $1,000 in 2007.

[54anickel]

79. Gold, Inflation, And... Austria?

http://www.kitco.com/ind/crovelli/may312006.html

snip>

The Austrian Theory of the Business-Cycle

The Austrian explanation for the business-cycle is simple and comprehensive.

What causes the business-cycle, according to the Austrian School, is tampering with the rate of interest by the government (specifically, the Federal Reserve in the United States). The Federal Reserve instigates the boom-phase with its “easy credit policy” by reducing the rate of interest below what would be established on the free-market. This lowering of the interest rate tricks business owners into believing that further investment in their productive capabilities would be profitable, and they borrow more capital than they would have at the higher free-market rate of interest. The capital that is loaned out, moreover, is not backed by any real savings (as it would be under a gold standard)—it is simply created out of thin air by the fractional reserve banks in collaboration with the Fed.

The inexorable effect of this artificial lowering of the interest rate is a boom-phase, during which capital is invested in lines of production that would not have occurred at the market rate of interest. (The market rate of interest is determined by the amount of actual savings in the economy, and the rate at which people prefer goods today versus more goods in the future. The more people prefer goods today versus goods in the future, the higher the market rate of interest, and vice versa).

The boom-phase cannot go on forever. At some point, the business owners who have increased their productive capacities in areas that are not really desired by consumers (because they have been tricked by the low rate of interest), come to recognize that they have over-invested, (because they are not earning a return on their investment that is sufficient to cover their loans), and they must liquidate this overinvestment.

This is the beginning of the bust-phase, or the crisis phase.

The bust-phase of the business-cycle is the period in which the malinvested capital from the boom-phase is liquidated and moved to more productive uses.

more...

[UpInArms]

50. 10:04 EST numbers and blather

Dow 11,124.77 +30.34 (+0.27%)
Nasdaq 2,171.95 +7.21 (+0.33%)
S&P 500 1,264.48 +4.64 (+0.37%)
10-Yr Bond 5.064 -0.22 (-0.43%)

NYSE Volume 274,419,000
Nasdaq Volume 258,634,000

10:00 am : Equities are still on the offensive as all 10 economic sectors trade higher. Per usual, today's best performing sector -- Materials (+1.3%) -- was yesterday's worst performer. Also recovering some noticeable ground in the wake of Tuesday's sell-off are Utilities (+1.1%), as falling bond yields make dividend-paying stocks more attractive, and Energy (+1.0%), which is well off its 2006 highs but is again expected to contribute the bulk of profit growth on the SnP 500. Even Technology and Health Care -- the two worst performing sectors this year -- are regaining some upward momentum. BTK +1.0% DJ30 +38.34 NASDAQ +10.53 SOX +0.8% SP500 +5.92 XOI +1.0% NASDAQ Dec/Adv/Vol 861/1585/226 mln NYSE Dec/Adv/Vol 655/2033/170 mln

09:40 am : Market bounces back from yesterday's drubbing, but early gains pale in comparison to the considerable losses endured Tuesday which left the SnP 500 on pace to record its worst monthly performance since December 2002. While a sense that widespread selling efforts sparked by the May 10 Fed meeting are overdone attracts some early bargain hunting interest, it could take a while for the overall outlook to improve as investors wait to gain some insight on the possible course of action at the next Fed meeting on June 28-29 from the 2:00 ET release of the FOMC minutes.DJ30 +37.48 NASDAQ +8.82 SP500 +4.96 NASDAQ Vol 102 mln NYSE Vol 64 mln

[54anickel]

53. Houston's Wealthy Compete for Mansions as Oil Buoys Real Estate

http://www.bloomberg.com/apps/news?pid=10000103&sid=agQL9qJSGK6U&refer=us

May 31 (Bloomberg) -- Emily Burguieres and her fiance started house-hunting in Houston's most expensive neighborhood during December, expecting an easy search. What they found was a market where buyers must move fast.

``We made an offer on one that we were really excited about, but it was priced at a point where it had four other offers in one day,'' Burguieres, 32, said of a $1.5 million house in the city's River Oaks area. ``Our realtor told us it went over the asking price.''

As housing prices slow in much of the U.S., homes in River Oaks are selling faster, in larger numbers and at higher prices than a year ago. Growing demand at the top end reflects strength throughout the Houston market, which is getting a lift from soaring oil prices. The fourth-largest U.S. city is known as the world's energy capital.

``The energy business is making a lot of people wealthy,'' said Mike Inselmann, president of Houston-based researcher Metrostudy. ``Business is good for those folks, and they're spending money.''

First-quarter home sales in River Oaks rose 28 percent from a year earlier, and the value of homes sold jumped 55 percent to $32.3 million, according to local real estate firm Greenwood King Properties. The median selling price was $1.2 million, up from $940,000.

Burguieres, a financial analyst, and her husband-to-be, an energy trader, finally closed on a $1 million River Oaks home last week.

more...

[wordpix2]

55. 10:30 numbers, lookin good

Dow 11,134.45 +40.02
Nasdaq 2,172.89 +8.15
S&P 1,265.38 +5.54
10-Yr Note 100.47 +0.13

[UpInArms]

57. Premium Standard Farms net, sales fall on meat glut

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B9531AF69%2DB77D%2D4D39%2D9D99%2DE054C19BEF6F%7D&symbol=

NEW YORK (MarketWatch) -- Pork producer Premium Standard Farms Inc. said Wednesday that fourth-quarter income and sales declined, hurt by an oversupply of meat in the market that depressed selling prices and margins.

Premium Standard Farms (PORK : 16.62, -0.58, -3.4% ) , of Kansas City, Mo., said profit fell to $11.8 million, or 37 cents a share, from $23.4 million, or 75 cents, a year ago. On an adjusted basis, earnings would have been 24 cents a share.
Sales for the three months ended March 25 declined to $218.1 million from $249.9 million in last year's fourth quarter.

Analysts polled by Thomson First Call, on average, forecast earnings of 19 cents a share on sales $216.3 million.

"During the fourth quarter, we experienced a sharp decline in pork price levels compared to last year, primarily due to higher overall protein production in the USA," John Meyer, chief executive, said in a news release.

Producers of chicken, beef and pork have seen their sales and profits hit hard by an overabundance of meat in the marketplace, in part because fears of avian flu overseas have depressed demand for exported chicken.

...more...

[UpInArms]

62. US SEC charges $13 in penalties to brokers in auction rate market case

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-31T140636Z_01_WBT005456_RTRIDST_0_FINANCIAL-SEC-AUCTION-URGENT.XML

WASHINGTON, May 31 (Reuters) - The U.S. Securities and Exchange Commission on Wednesday said 15 brokerage firms had agreed to pay more than $13 million in combined penalties to settle charges of violations in the auction rate securities market for municipal and corporate bonds.

The SEC said it had censured and penalized the firms in varying amounts. It said its investigation was continuing.

The firms included Bear Stearns Cos. (BSC.N: Quote, Profile, Research), Citigroup Global Markets Inc. (C.N: Quote, Profile, Research), Goldman Sachs Group Inc. (GS.N: Quote, Profile, Research) and J.P. Morgan Securities Inc. (JPM.N: Quote, Profile, Research)

I wonder if Paulson was in charge of those Goldman Sachs brokers? :eyes:

http://www.theage.com.au/news/business/bush-picks-wall-street-man-to-head-treasury/2006/05/31/1148956417104.html

PRESIDENT Bush has named Goldman Sachs chairman Henry Paulson as Treasury secretary, turning to the highly respected Wall Street insider to lead his economic team and become the chief promoter of his Administration's fiscal policies.

...more...

[UpInArms]

66. more info:

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-31T143829Z_01_N31206092_RTRIDST_0_FINANCIAL-SEC-AUCTION-UPDATE-1.XML

excerpt:

Fines of $1.5 million each were levied against Bear Stearns Cos. (BSC.N: Quote, Profile, Research), Citigroup Global Markets Inc. (C.N: Quote, Profile, Research), Goldman Sachs Group Inc. (GS.N: Quote, Profile, Research), J.P. Morgan Securities Inc. (JPM.N: Quote, Profile, Research), Lehman Brothers (LEH.N: Quote, Profile, Research), Merrill Lynch (MER.N: Quote, Profile, Research), Morgan Stanley (MS.N: Quote, Profile, Research) and RBC Dain Rauscher (RY.TO: Quote, Profile, Research), the SEC said.

The firms agreed to be censured and to pay the penalties without admitting or denying wrongdoing, the SEC said.

The SEC said that between January 2003 and June 2004, each firm engaged in a variety of violations involving placement and manipulation of orders in auction rate markets.

The markets set interest rates and dividend yields for certain bonds and for some types of preferred stocks using Dutch auctions, in which the price of an item is gradually reduced until it meets a responsive bid and is sold.

Beyond order misconduct, the SEC said firms also provided certain customers with information that gave them an advantage over other customers in determining what rate to bid.

...more...

[54anickel]

63. 11:23and flyin' high on the drop in oil - who needs the Fed minutes!

Dow 11,181.52 +87.09 (+0.78%)
Nasdaq 2,183.64 +18.90 (+0.87%)
S&P 500 1,269.13 +9.29 (+0.74%)
10-yr Bond 50.72 -0.14 (-0.28%)
30-yr Bond 51.71 -0.18 (-0.35%)
NYSE Volume 741,970,000
Nasdaq Volume 671,010,000

11:00 am : Stocks spike higher since the last update as continued deterioration in oil prices offers investors some relief on the inflation front. Not only have crude futures fallen as much as 2.5% so far and are close to pushing through the psychological $70 a barrel level, but Energy's ability to actually regain some momentum and provide upside leadership lends credence to the idea that the market is oversold on a short-term basis. Also, volume picking up over the last 30 minutes, indicative of some end-of-the month portfolio rebalancing by fund managers, lends additional conviction behind today's recovery efforts. DJ30 +73.80 NASDAQ +15.74 SP500 +9.00 XOI +0.6% NASDAQ Dec/Adv/Vol 994/1738/568 mln NYSE Dec/Adv/Vol 752/2256/434 mln

10:30 am : Indices are off their best levels amid a reversal in Energy, but still post modest gains. Within the last 30 minutes, oil prices have slipped below $71 a barrel and are now off 1.5% ahead of tomorrow's inventories data and OPEC meeting, pushing the Energy sector into the red and removing some of the leadership supporting stronger market gains. Separately, investors just sifted through the day's lone economic report. At the top of the hour, the May Chicago Purchasing Manager's Index came in at 61.5, up from 57.2 in April and above expectations of about 56, suggesting that tomorrow's national manufacturing survey (ISM index) will also be strong. However, given the report's regional focus and investors still waiting for the FOMC minutes, the PMI data have had little impact on the broader market.DJ30 +25.85 NASDAQ +3.45 SP500 +3.71 NASDAQ Dec/Adv/Vol 1145/1500/402 mln NYSE Dec/Adv/Vol 964/1969/306 mln

[54anickel]

72. Looks like Condi has put the market in a good mood as well...Maybe

there's a limit to the "war is good for the economy" train of thought after all. :sarcasm:

11:30 am : Market extends its reach to the upside, getting additional support from encouraging commentary from Secretary of State Condoleezza Rice about Iran's nuclear ambitions. While it remains to be seen if the Iran regime will alter its present course of enriching uranium, Rice saying that the U.S. is making every effort to achieve a successful diplomatic outcome alleviates some of the ongoing nervousness.DJ30 +88.04 NASDAQ +20.59 SP500 +10.21 NASDAQ Dec/Adv/Vol 1029/1783/696 mln NYSE Dec/Adv/Vol 799/2268/542 mln

[Roland99]

77. Well, just wait until the Iran refuses to drop uranium enrichment or

the US puts some other condition on the talks.

Iran's been trying for 3 years to talk directly with the BoyGeorge but keeps getting shunned.

[OrangeCountyDemocrat]

88. You Read My Mind

As I was listening to her spew garbage this morning, I again realize why it's so stupid to pay any attention to stuff that comes out of their Fraudulent mouths.

Yeah....sure.....they'll talk. And I got a bridge to sell you, real cheap.

Iran is not going to stop their enrichment practices, and we're not going to stop our march towards war. There'll be a diplomatic solution as soon as faries start flying out of my ass!

[Roland99]

106. Lo and Behold! Iran rebuffs US

%26cap%3DU.S.%2520President%2520George%2520W.%2520Bush%2520speaks%2520about%2520immigration%2520reform%2520at%2520the%2520U.S.%2520Chamber%2520of%2520Commerce%2520in%2520Washington%2520June%25201%2C%25202006.%2520%2520%2520REUTERS/Larry%2520Downing%2520%2520%28UNITED%2520STATES%29&cid=1106928178

[54anickel]

64. World Markets about to Crash Together?

http://www.321gold.com/editorials/laird/laird053106.html

Recent stock headlines include a collapsed India stock market, collapsed not just dropping. Collapsed Middle East stock markets on the order of 50%. Dropping European markets, and US markets. Very weak Japanese stocks, probably looking to crash like the Middle East and India markets because the Nikkei is/was up 50% in a year.

Very weak Chinese stocks, rapidly weakening 'emerging' markets because of a slowing commodities bull. Weak Russian markets. In short, the whole world is just about to fall into a synchronized stock cascade.

Here is a typical headline, one of many these last weeks:

European sell-off continues after U.S., Asia falls
Autos, miners among decliners following steep Wall Street fall

LONDON (MarketWatch) -- European markets dropped sharply Wednesday morning, extending the week's losses and taking their cue from a steep fall in the U.S. on the back of rising oil prices and falling consumer confidence.

I offered a theory in World Speculation Dominoes that the world financial markets are all synchronized and will crash together. It appears that we are very near such an event right now.

The causes

I have written several articles with 'stock crash alert' in the title this year. One of the major impetuses was the imminent unwinding of the Japanese Yen carry trade. In that ten year old free money spree, Japan allowed financiers world wide to borrow Yen for a literally zero interest rate and then invest that money in world stock markets and to buy other nations bonds for about a 3% interest rate premium. The amount of borrowed Yen invested in the world's financial markets is astounding. We are talking trillions of dollars value in Yen that has found its way into every major financial market in the world.

The US is considering a pause in its interest rate hikes of late. The interest rate differential the US holds over Japan and Europe is as much as 3%. If that differential is not maintained, trillions of dollars of US denominated financial investments are going to be unloaded on the world markets. A combination of unwinding the Yen carry trade and a serious drop in the value of the USD will just simply pull the rug out from under every major financial market that has benefited from the cheap USD and Yen.

more...

[54anickel]

65. The Big Glut

http://online.barrons.com/public/article/SB114868496819064730-4JadzA4hIPO_MSVKyYzDHvt_cXc_20060627.html?mod=9_0002_b_free_features

IT WOULD SEEM TO HAVE IT ALL: four bedrooms, a guest house, a pool and a rock waterfall. But the vacation home in Naples, Fla., hasn't been drawing much interest from buyers, so the seller recently threw in that most modern of amenities: the $1 million price cut. That's brought the asking price down a full 25%. "If you want to sell, you've got to go back to '04 prices," says Chip Harris of Coldwell Banker Previews International, which is handling the property.

The market for second homes could use a second wind. After a long string of double-digit annual price increases, a number of second-home meccas across the country are suddenly suffering from plunging sales volume and burgeoning inventories of unsold homes. Result: Naples-style discounting is starting to spread. It hit the town of Pocasset, on Massachusetts' Cape Cod, just as retired executive Jack Reen was trying to sell his four-acre, six-bedroom beachfront home. He cut the price several times, for a total of 42% off the listing price, before striking a deal at $3.95 million. Reen takes a philosophical view of the experience, noting that the original price was set at the top of the market. "Calling the tops and bottoms is impossible," he says.

Though the official figures on sales prices have yet to reflect the current round of cuts, interviews with real- estate pros and others strongly suggest that the averages are deteriorating in a number of key markets. Just look at green and hilly Litchfield, Conn., about a two-hour drive from New York City. It was a magnet for Wall Streeters during the past five years, and prices climbed accordingly. But in the past 10 months, prices in the lower end of Litchfield's market -- homes of $300,000 to $600,000 -- are down 12%-14%, and volume is falling at the next level up, says Stephen Drezen of the local Portfolio Properties Group.

IT'S ALL A BIG CHANGE from the seemingly endless rises in prices. For more than a decade, baby boomers have been flocking to the second-homes market and lifting prices, just as they'd earlier lifted the market for primary residences (See Barron's "Eden for Sale," July 3, 1995). The market barreled ahead during the past few years ("Paradise Found," May 31, 2004), and the demographics -- 75 million boomers -- still bode well for long-term growth. But first, the market has some correcting to tend to.

While pundits debate when the bubble might burst in the primary-housing market, the air already is whooshing out of parts of the second-homes market. Naples, on the sun-drenched edge of the Gulf of Mexico in Southwest Florida, is perhaps the most striking example.

more...

[Roland99]

70. The rich have trouble selling their *2nd* homes? Excuse me while I

don't give a fuck.

[54anickel]

71. Stop the NAIS (Ron Paul)

http://www.house.gov/paul/tst/tst2006/tst052906.htm

The House of Representatives recently passed funding for a new federal mandate that threatens to put thousands of small farmers and ranchers out of business. The National Animal Identification System, known as NAIS, is an expensive and unnecessary federal program that requires owners of livestock-- cattle, dairy, poultry, and even horses-- to tag animals with electronic tracking devices. The intrusive monitoring system amounts to nothing more than a tax on livestock owners, allowing the federal government access to detailed information about their private property.

In typical Washington-speak, NAIS is “voluntary”—provided USDA bureaucrats are satisfied with the level of cooperation. Trust me, NAIS will be mandatory within a few years. When was the last time a new federal program did not expand once implemented?

As usual, Congress is spending millions of dollars creating a complex non-solution to a very simple problem. NAIS will cost taxpayers at least $33 million for starters.

Agribusiness giants support NAIS, because they want the federal government to create a livestock database and provide free industry data. But small and independent livestock owners face a costly mandate if NAIS becomes law.

Larger livestock operations will be able to tag whole groups of animals with one ID device. Smaller ranchers and farmers, however, will be forced to tag each individual animal, at a cost of anywhere from $3 to $20 per head. And NAIS applies to anyone with a single horse, pig, chicken, or goat in the backyard—no exceptions. NAIS applies to children in 4-H or FFA. Once NAIS becomes mandatory, any failure to report and tag an animal subjects the owner to $1,000 per day fines.

more...

OK, so the corporate "farms" will be able to use a single tag for an entire herd while th small "farmers" will have to tag each critter. :wtf: is that about? I know that around here, small beef farmers have been doing great business - I see more and more signs advertising range fed, home grown beef popping up around here. Heck, you can go out into the pasture and hand pick your "beefer" if you want to buy an entire "cow's worth". Sure beats that frozen, boxed stuff they thaw and repackage at the big chain grocery stores. You've got no idea where that comes from. And some of our small, local slaughter houses that were nearly run out of business by the corporate types like Tyson, are benefiting as well. Decent jobs, wages, safety practices, etc. All the things slaughter houses used to have are making a comeback.

This seems like a corporate welfare program for the "big guys" to me. :shrug:

[54anickel]

73. Optimist, or Doorknob?

http://www.321gold.com/editorials/ackerman/current.html

snip>

Amateur Scavengers

Speaking of real estate, I received a flurry of letters from a lurker, Frank P., who seems determined to convince me that all things connected with the economy and the housing market are simply hunk-dory. Coincidentally, a front page story in the Wall Street Journal yesterday described how amateurs are starting to move in on bankrupt homeowners, scavenging for bargains just as they’ve been inspired to do by those get-rich-quick infomercials that run every night, all night long. How comforting it is to think that these enterprising bottom-fishers, many of whom could not have qualified for a CETA job, are cushioning the U.S. economy against the onslaught of a deflationary juggernaut that has been accreting strength for the last 20 years. Wish them well, since they may actually be our last line of defense when Bernanke discovers that getting the credit spigot to gush anew will require breathtaking sums of new borrowing by you and me.

$210Tr Virtual Economy

None of which is going to convince our irrationally exuberant friend Frank that maybe, just maybe, things are not quite as rosy as they are cracked up to be by CNBC’s talking heads. “Frank,” I wrote, “consider that a global economy in goods and services amounting to $54Tr last year was just a small piece of a market in leveraged financial instruments with an aggregate notional value of $210Tr (per BIS data). As Crosscurrents’ Alan Newman likes to point out, the business of the U.S. and the rest of the world is no longer business, but financial speculation. For years, Alan has tracked the dollar value of stock-market transactions each day, at one point identifying a dot-com climax in trading activity that in dollars was equal to nearly four times America’s daily GDP.

“When we speak of ‘turning on the money/credit spigots,’ it implies that large amounts of additional borrowing must take place to ‘actualize’ the expansion of liquid money. The process in practice requires that some asset class be inflated to collateralize the new borrowing. Housing has served in this role, and the securitized debt that lies downstream of mortgage-payment receivables is a big piece of that $210Tr of securitized, leveraged borrowing.

Questioning Greenspan

“The bottom-line, Frank, is that it would take no more than a small downtick in real estate values to catalyze the deleveraging of a $210TR credit edifice. And just what, one might ask, have the huge amounts of borrowing that have taken place over the last five years gotten us? Answer: The weakest economic recovery of the postwar period. If you want a credible source to corroborate this, try Richebacher, a buddy of Paul Volcker’s and an economist from the old school. He asks the sort of simple questions that make Greenspan and his banking cronies look like either liars or dolts. Such as: How can the Fed Chairman speak of a capital investment boom at a time when household savings growth was negative? Or: How can the inflated value of our homes be considered ‘wealth?’ Etc., etc.”

snip>

“The following question greatly oversimplifies things, but I would ask it again, since you ignored it the first time around: Why does a global economy that produces $54Tr in goods and services need a $210Tr financial economy to support it? And for that matter, what is so ‘analytically myopic’ about Alan Newman’s observation? If the dollar value of stocks traded each day on the NYSE has indeed been nearly four times the daily GDP, what else might we infer other than that financial speculation has become the main business of America?”

more...

[UpInArms]

74. Check out the Variance in Earnings for DataRam

12:22pm 05/31/06 Dataram shares slide almost 11% to $5.05 - MarketWatch.com

12:22pm 05/31/06 Dataram shares fall following Q4 financial report - MarketWatch.com

12:22pm 05/31/06 Dataram Q4 earns $83,000 vs $3.9M - MarketWatch.com

12:22pm 05/31/06 Dataram year-ago Q4 incl. income tax benefit of $2.9M - MarketWatch.com

12:22pm 05/31/06 Dataram year-ago Q4 incl. severance charges of $460,000 - MarketWatch.com

12:22pm 05/31/06 Dataram Q4 revenue $8.8M vs $15.1M - MarketWatch.com

Profile:

Dataram Corporation Website Annual Report
P.O. Box 7528 Phone: [phone]
Princeton NJ 08543-7528

Fax: [phone]


Developer, manufacturer and marketer of large capacity memory products primarily used in high performance network servers and workstations and provides customized memory solutions for original equipment manufacturers and compatible memory for computers.

[Roland99]

75. Ouch! WTF are their expenses?

[stop the bleeding]

80. good question -

their ROE is at 30% so they seem to be managing that portion ok, they have no Debt to Equity - so where is all of the money going?

R and D?

[Roland99]

96. Embezzlement? Prostitutes, limos, and poker?

:evilgrin:

[54anickel]

78. America in Dangerous Financial Waters

http://www.americanfreepress.net/html/dangerous_financial_waters.html

A recent article in a Washington magazine paints a stark picture of the ongoing decline of the U.S. dollar. The dollar has lost 5% against a blend of
worldwide currencies just since April, falling to a 12-month low against the euro and an 8-month low against the Japanese yen. Overall, the dollar fell 28% against other currencies between 2002 and 2004. It then rebounded slightly, but even the cheerleaders in the American financial press cannot shrug off this latest decline.

Of course the real measure of just how far the dollar has fallen can be found in the price of gold, which has reached a 25-year high of more than $700 per ounce. It’s much more accurate to measure the dollar against a stable store of value like gold, rather than against other fiat currencies. Gold has nearly tripled against the dollar since 2001, when the price was $250 per ounce. By this measure the dollar is losing value at an alarming rate.

Remember, gold is static. Gold isn’t going up, the dollar is going down. And it’s going to continue until the American people demand an end to deficit spending by Congress and unrestrained creation of new dollars by the Federal Reserve and Treasury Department.

A sharply rising gold price is really a vote of “no confidence” in Congress’ ability to control the budget, the Fed’s ability to control the money supply, and the administration’s ability to bring stability to the Middle East.

NO CHOICE BUT TO RAISE RATES

more...

[TrogL]

81. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



30-day vs. Euro, Yen, UK Pound and Swiss Franc




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

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

Up-to-the-minute graph: http://quotes.ino.com/chart/?s=CME_CD.H06&v=s

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

2006-05-01 Monday, May 1 0.898473 USD
2006-05-02 Tuesday, May 2 0.903424 USD
2006-05-03 Wednesday, May 3 0.903179 USD
2006-05-04 Thursday, May 4 0.903669 USD
2006-05-05 Friday, May 5 0.903261 USD
2006-05-08 Monday, May 8 0.899604 USD
2006-05-09 Tuesday, May 9 0.907276 USD
2006-05-10 Wednesday, May 10 0.908678 USD
2006-05-11 Thursday, May 11 0.910001 USD
2006-05-12 Friday, May 12 0.90212 USD
2006-05-15 Monday, May 15 0.897505 USD
2006-05-16 Tuesday, May 16 0.899928 USD
2006-05-17 Wednesday, May 17 0.899604 USD
2006-05-18 Thursday, May 18 0.89214 USD
2006-05-19 Friday, May 19 0.890313 USD
2006-05-22 Monday, May 22 0.893336 USD
2006-05-23 Tuesday, May 23 0.894935 USD
2006-05-24 Wednesday, May 24 0.890631 USD
2006-05-25 Thursday, May 25 0.903179 USD
2006-05-26 Friday, May 26 0.903179 USD
2006-05-29 Monday, May 29 0.903179 USD
2006-05-30 Tuesday, May 30 0.909504 USD


Current values

Last trade 0.9075 Change -0.0035 (-0.38%)
Previous Close 0.9107 Open 0.9131
Low 0.9070 High 0.9140


Blather (from http://quotes.ino.com/exchanges/?r=CME_CD)

The June Canadian Dollar was higher overnight as it extends this spring’s rally and is trading above the early-May high crossing at .9122. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Closes above the early-May high crossing at .9122 are needed to confirm a breakout of this month’s trading range thereby renewing this spring’s rally. Overnight action sets the stage for a higher opening in early-day session trading.


Analysis

I dunno what happened. The CBC morning show's economics guy was crowing about the possibility of a par loonie but apparently he pissed in somebody's cornflakes because it's been sinking ever since.

He had some really nasty things to say about the US economy but noted Canada's month end numbers were particularly solid except perhaps for Bombardier.

[stop the bleeding]

83. is everyone ready for the May 10th minutes?

looks like the market is ready

all of the intradays on the DOW, Nasdaq and S&P are showing good buy signals right now with the MA's, Stoch, MACD ect.. is there some kind of pre-anouncement anticipation?

[UpInArms]

84. 1:53 EST Pre-FOMC check-in with blather

Dow 11,150.96 +56.53 (+0.51%)
Nasdaq 2,180.43 +15.69 (+0.72%)
S&P 500 1,267.15 +7.31 (+0.58%)
10-Yr Bond 5.113 +0.27 (+0.53%)

NYSE Volume 1,299,955,000
Nasdaq Volume 1,142,962,000

1:30 pm : Stocks continue to weaken ever so slightly in sympathy with nervousness in Treasuries heading into the release of the FOMC minutes. While equity investors have been somewhat optimistic throughout the session about the Fed's comments discussing a possible pause with its tightening efforts, bond traders have been less enthusiastic about what Fed officials had to say about inflation pressures and the need for rate hikes, as the yield on the 10-yr note has crept up 6 basis points to 5.11% from its lowest level of the session at 5.056%.DJ30 +53.96 NASDAQ +14.57 SP500 +6.19 NASDAQ Dec/Adv/Vol 1041/1908/1.06 bln NYSE Dec/Adv/Vol 870/2319/852 mln

1:00 pm : More of the same for stocks as market internals still suggest a bullish bias. As reflected in the A/D line, advancers outpace decliners on both the NYSE and Nasdaq by at least a 2-to-1 margin. Even though New Low's hold a slight edge over New High's, a 3-to-1 margin in favor of up volumes suggests an even more positive tone to trading.DJ30 +70.12 NASDAQ +17.03 SP500 +7.63 NASDAQ Dec/Adv/Vol 980/1963/960 mln NYSE Dec/Adv/Vol 808/2367/774 mln

12:30 pm : Indices are off their best levels as the afternoon session gets underway but buying remains widespread across most areas. In contrast to yesterday, which only left five of the 147 SnP industry groups trading higher, today's broad-based action has left only five groups trading lower. Three of them -- Internet Retail, Home Entertainment Software, and Homebuilding -- are also among the 10 worst performers for the year. DJ30 +76.90 NASDAQ +17.80 SP500 +8.12 NASDAQ Dec/Adv/Vol 1007/1887/880 mln NYSE Dec/Adv/Vol 842/2305/706 mln

[UpInArms]

86. 2:05 EST Knees Jerking with FOMC blather

Dow 11,129.25 +34.82 (+0.31%)
Nasdaq 2,174.31 +9.57 (+0.44%)
S&P 500 1,264.44 +4.60 (+0.37%)
10-Yr Bond 5.108 +0.22 (+0.43%)

NYSE Volume 1,377,440,000
Nasdaq Volume 1,225,259,000

2:00 pm : Market continues to pare some of its gains as investors anxiously wait to see what the FOMC minutes, which are due out momentarily, say about inflation and the direction of Fed policy. Traders will be looking for indications about whether central bankers sense that one more 25-basis point hike will be necessary to stave off inflation or pause when the Fed next meets on June 28-29. With oil prices in focus throughout most of the session, the commodity could take a back seat as one of the day's primary drivers in the event the FOMC minutes offer some surprises with respect to the Fed's thinking on the pace of its tightening activity. DJ30 +45.38 NASDAQ +11.90 SP500 +5.72 NASDAQ Dec/Adv/Vol 1050/1931/1.16 bln NYSE Dec/Adv/Vol 913/2287/940 mln

[UpInArms]

90. 2:14 EST flopping on the deck like the little Kittner boy

Dow 11,116.28 +21.85 (+0.20%)
Nasdaq 2,171.85 +7.11 (+0.33%)
S&P 500 1,263.37 +3.53 (+0.28%)
10-Yr Bond 5.104 +0.18 (+0.35%)

NYSE Volume 1,441,758,000
Nasdaq Volume 1,282,198,000

[UpInArms]

92. WTF? Have Freddie and Fannie be destroying records?

2:11 PM ET 5/31/06 REGULATOR PROPOSES FANNIE, FREDDIE RETAIN RECORDS

If they have not be destroying records, why would someone propose they retain them?

:wtf:

added on edit:

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-31T182548Z_01_N31238781_RTRIDST_0_FINANCIAL-GSES.XML

WASHINGTON, May 31 (Reuters) - A U.S. regulator on Wednesday proposed a new rule that would set minimum requirements for Fannie Mae and Freddie Mac to retain records that could be useful for supervisory purposes.

Under the proposal from the Office of Federal Housing Enterprise Oversight, the government-sponsored mortgage finance companies would be required to set up and maintain a record retention program.

<snip>

"Under the proposal, the Enterprises will have an obligation to maintain and promptly produce records useful in regulatory examinations and other proceedings. It will also help the Enterprises by bringing consistency to their own internal management of information," he said.

The proposal comes days after OFHEO released a report on Fannie Mae's $11 billion accounting scandal. It also comes as the regulatory agency considers remedial actions for Freddie as that company fixes internal controls following its 2003 accounting problems.

...more...

What in the world! Freddie and Fannie have no freakin' internal controls or record keeping?!?!?!?!

Now I have definitely heard everything. :crazy:

[stop the bleeding]

95. Uhhhh - why all of the buying and black volume in the last

half hour of trading? - is there something that I missed or our people just throwing money away in the hopes of Thursday being an up day even though there is the Domestic Auto Report due out then.

What gives????

[Roland99]

98. Probably this sentiment from the May 10 minutes >>>>>>

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B0E53FC80%2D68B7%2D4181%2DA7A8%2DFFC828104556%7D&siteid=mktw&dist=

After discussion, it was finally agreed that the FOMC statement should continue to say that inflation expectations were "contained."

[specimenfred1984]

99. Fed Speaks, Fed Pumps

Via their corporate rigging partners Goldman and Morgan. The problem is they always dump, maybe tomorrow after noon or maybe after Friday's reports.

This has been going on regularly since May 04. Nobody really knows if it's to keep all their derivatives propped up or what but, it does happen all the time.

I see it in the mini S&P as huge volume spikes, usually 20K+ in 2 minutes or less. These big fascist firms can push the markets around however and whenever they want to. There is no exact formula for when they will do it however, when the Fed speaks the Fed pumps.

[stop the bleeding]

100. I was thinking some kind of market

manipulation as well or just some kind of mental hope for Thursday and Friday

[JNelson6563]

104. It took all day to print the money

to buy the stocks with. :toast:

[Roland99]

97. S&P 500 looking at worst May performance in more than 20 years

http://www.marketwatch.com/News/Story/Story.aspx?column=Market+Snapshot&siteid=mktw&dist=

NEW YORK (MarketWatch) -- U.S. stocks rallied into the close Wednesday in a bid to end a down month on a positive note, but the S&P 500 is still looking at its worst May performance in 22 years, after concern over inflation, slowing economic growth as well as uncertainty over the outlook for interest rates plagued the market for much of the month.

The Nasdaq Composite is set to put in its worst May showing since 2000.

The Dow Jones Industrial Average ($INDU11,168.15, +73.72, +0.7% ) was last up 60 points at 11,154 after briefly turning negative following the release of the minutes. The benchmark index was off a session high of 11,183.04. Of the 30 Dow stocks, 27 contributed to gains. Check Performance of Dow Stocks. The Dow is looking at a loss for May of around 1.9%.

The Nasdaq Composite Index ($COMPQ2,178.88, +14.14, +0.7% ) rose 11 points to 2,175. For May, the tech-rich index is facing a loss close to 6.5%, its worst performance for the month since May 2000 when it tumbled 11.9%.

[UpInArms]

101. closing numbers and yada

Dow 11,168.31 +73.88 (+0.67%)
Nasdaq 2,178.88 +14.14 (+0.65%)
S&P 500 1,270.09 +10.25 (+0.81%)
10-Yr Bond 5.113 +0.27 (+0.53%)

NYSE Volume 2,606,542,000
Nasdaq Volume 2,206,302,000

Despite the FOMC minutes offering little clarity on the interest rate outlook, a sense that the market is oversold on a short-term basis, as evidenced by some end-of-the month portfolio rebalancing, helped the major averages close near session highs. However, it remains to seen if today's reflex rally will be sustainable as the axiom "sell in May and go away" held true as stocks bounced back following Tuesday's drubbing but still turned in one of their worst monthly performances in years.

With the market still reeling since the Fed last raised interest rates on May 10th, investors were somewhat optimistic throughout the session about the Fed's comments discussing a possible pause with its tightening. Nevertheless, since the minutes clearly reflected uncertainty and disagreement on the part of members as to what the future will bring, as the range of discussion bordered a possible no hike to as much as a 50-basis point increase, the slightly higher degree of concern about inflation raises the risks that the Fed will find the need to keep raising rates.

To wit, fed funds futures are now pricing in more than a 70% chance for the first time since late April of a 1/4% rate hike in late June. Bond traders were also less optimistic about what Fed officials had to say about inflation pressures and a potential pause, as the yield on the 10-yr note crept up 6 basis points from session lows to 5.11% -- the highest closing level since mid-May.

Aside from oversold conditions attracting bargain hunters, Secretary of State Condoleezza Rice referencing a move toward diplomatic talks between the U.S. and Iran helped alleviate some of the ongoing nervousness about Iran's nuclear ambitions and subsequently weighed on oil prices. Crude oil futures were off as much as 2.5% at one point and almost pushed through the psychological $70 a barrel level; but crude rallying into the close to finish off just 1.0% at $71.15 a barrel helped Energy regain some momentum, provide some influential leadership as the day's best performing sector (+2.0%) and lent credence to the idea that recent consolidation was overdone.

Further questioning the leadership and sustainability behind today's bounce, though, was the fact that the other strong performances came from the least influential sectors like Materials, Utilities and Telecom. Financials and Technology -- the two largest contributors to the total weighing on the SnP 500 -- were negative with an hour left to go before regaining enough momentum to close modestly higher.DJ30 +73.88 NASDAQ +14.14 SP500 +10.25 NASDAQ Dec/Adv/Vol 1067/1985/2.17 bln NYSE Dec/Adv/Vol 879/2387/1.98 bln

:hi:

[54anickel]

102. Derivatives, Not Bonds, Show What Pimco, TIAA-CREF Really Think

Yeah, I know it's a late entry, but I can't get that article from a couple of months back out of my head. The one that said they needed to calm us "peon" investors about the "new stuff" that would be understood by the finance professionals. I've tried to find that one a couple of times but haven't been able to track it down. Shoulda bookmarked it.

http://quote.bloomberg.com/apps/news?pid=10000103&sid=aE6mQtSp402w&refer=news_index

May 31 (Bloomberg) -- When Mark Kiesel, who manages $50 billion at Pacific Investment Management Co., decided this month that corporate bonds were about to slump, he bought credit default swaps.

Louise Herrle, treasurer of mortgage lender Residential Capital Corp., measures investor demand for debt by looking at credit default swap prices before she decides to sell a bond.

Gery Sampere, who helps oversee $2.5 billion at hedge fund BlueMountain Capital Management, trades credit default swaps almost exclusively because his bets are easier to complete.

Such derivatives, contracts that insure investors against defaults, are displacing trading of corporate debt as the surest way to gauge a company's health. The market totals $17 trillion, more than three times the amount of U.S. company bonds.

``The credit default swap market is now the dog as opposed to the tail that wags the dog,'' said John Burger, managing director and head of investment-grade credit trading at Merrill Lynch & Co.'s Plainsboro, New Jersey-based investment management unit. The change to credit derivatives happened in the last 18 months, he said.

snip>

``We strongly believe that today, the credit derivatives market is fast becoming a precursor to the cash market,'' Jayesh Bhansali, head of derivatives strategy and trading at TIAA-CREF, said in an interview from his New York office last week. ``This market is a very sensitive barometer.'' TIAA-CREF, the largest U.S. manager of retirement funds for university and college employees, manages $380 billion.

snip>

``Credit default swaps are becoming the most important instrument I've seen in decades,'' Former Federal Reserve Chairman Alan Greenspan said May 18 at a Bond Market Association conference in New York. ``For decades we used to have monetary crises because banks'' would periodically ``freeze up.'' Credit default swaps ``lay off all of these loans.''

more...

[54anickel]

103. Default Risks in Brazil, Mexico, Peru Rising in Credit Markets

http://quote.bloomberg.com/apps/news?pid=10000086&sid=a1I.CgqiccdM&refer=news_index

May 30 (Bloomberg) -- In Mexico, where socialist Andres Manuel Lopez Obrador is running neck-and-neck with the governing party's presidential candidate Felipe Calderon, the specter of the country defaulting on its debt is no longer unthinkable.

In Peru, the d-word already is being bandied about because the leading candidate is remembered for halting debt payments in the 1980s. Even in Brazil, where President Luiz Inacio Lula da Silva trimmed the budget deficit and cut inflation by more than half since taking office in 2003, concerns are growing.

snip>

``You have the potential for populist candidates and all immediately get concerned this may be the next Chavez,'' said Dario Pedrajo, 55, who this year founded Kapax Investment Advisers, a Miami-based emerging-market bond fund for wealthy individuals. Pedrajo says he helped start the emerging market debt trading groups at Citigroup Inc. and Merrill Lynch & Co. in the mid-1980s.

snip>

Emerging-market bonds have tumbled in the past two weeks on concerns accelerating inflation in the U.S. will prompt the Federal Reserve to continue its two-year campaign of raising rates. The decline caused the yield spread for Latin American bonds to widen to 2.36 percentage points, according to indexes compiled by JPMorgan Chase & Co.

Investors also turned to credit-default swaps. The market for such contracts has grown eightfold since 2002 to $17 trillion. Michael Fuhrman, head of electronic trading at the GFI Group, the leading inter-dealer broker in the over-the-counter derivatives market, said it's difficult to estimate how much Latin America accounts for of the market.

`Nervous Investors'

The annual cost to insure $10 million of Brazilian debt surged as much as $83,500 this month to $205,762. Prices to insure a comparable amount of Mexican bonds for five years jumped to $88,182 a year from $63,821 at the beginning of the month. Brazilian credit-default swaps have become the third-most active contracts after General Motors Acceptance Corp. and Ford Motor Credit Co.

more...