STOCK MARKET WATCH, Friday October 27

[ozymandius]

Friday October 27, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 815 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2130 DAYS
WHERE'S OSAMA BIN-LADEN? 1836 DAYS
DAYS SINCE ENRON COLLAPSE = 1797
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 6
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54


U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON October 26, 2006

Dow... 12,163.66 +28.98 (+0.24%)
Nasdaq... 2,379.10 +22.51 (+0.96%)
S&P 500... 1,389.08 +6.86 (+0.50%)
Gold future... 599.80 +9.00 (+1.50%)
30-Year Bond 4.84% -0.06 (-1.14%)
10-Yr Bond... 4.72% -0.05 (-1.09%)






GOLD, EURO, YEN, Loonie and Silver


PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Chris Puplava

HOUSING & ENERGY ECONOMIC REVIEW

In yesterday's Market WrapUp Mike Hartman commented on the housing and energy news that came out, and I wanted to add a few more details, charts, and include today’s housing data as well.

Last week the National Association of Homebuilders (NAHB) released its Housing Market Index (HMI) which was up 1 point to 31 after falling for eight consecutive months, and the Census Bureau released housing starts data for September, which showed a 5.9% increase over August. The news releases and the financial media started talking about a bottom after just a few pieces of positive information, hardly a definitive conclusion to be made as no discernable positive trend has been established. The one point up tick is barely discernable when looking at the HMI figure below (lower right corner), and several minor up ticks in the index were seen in the slide from 1989 to the bottom seen in late 1990.

-chart-

The housing data showed that this trend for sales and prices is still down. Existing homes sales came out yesterday, showing that for the third quarter, total sales were down by an annualized 23% from the second quarter. This performance is the worst since the early 1990s. The greatest decline seen in the September report was in the west which showed nearly a 25% drop in sales over last year while the national decline was less than 15%.

-cut-

Further evidence that the housing downturn has more room to go came on Tuesday as Countrywide, the largest U.S. mortgage lender, third-quarter profit rose only 2%, which was less than analysts expected. Its pretax loan servicing profit fell 52 percent to $123 million, despite a 19 percent growth in its servicing portfolio to $1.24 trillion. To offset its negative performance and slowing industry, the company announced its plans to lay off more than 2,500 employees, roughly 4% of its workforce, to support the bottom line and buy back $2.5 billion of stock to support the share price and EPS.

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

[NC_Nurse]

2. LOL

Great toon.

Unfortunately, there's no cure for Rush. His narcissism is complete.

[ozymandius]

3. Today's reports

8:30 AM Chain Deflator-Adv. Q3
Briefing Forecast 3.0%
Market Expects 2.9%
Prior 3.3%

8:30 AM GDP-Adv. Q3
Briefing Forecast 2.0%
Market Expects 2.1%
Prior 2.6%

8:30 AM Chain Deflator-Adv. Q3
Briefing Forecast 2.8%
Market Expects 2.8%
Prior 3.3%

9:50 AM Mich Sentiment-Rev. Oct
Briefing Forecast 92.3
Market Expects 92.5
Prior 92.3

http://biz.yahoo.com/c/e.html

[UpInArms]

13. 8:30 reports:

U.S. GDP up 2.9% year-over-year (8:30 AM ET, Oct 27, 2006 - 34 minutes ago)

U.S. Q3 housing investment subtracts 1.1% from GDP (8:30 AM ET, Oct 27, 2006 - 34 minutes ago)

U.S. Q3 core PCE index up 2.4% yr-on-yr, fastest since '95 (8:30 AM ET, Oct 27, 2006 - 34 minutes ago)

U.S. Q3 core PCE index slows to 2.3% from 2.7% in Q2 (8:30 AM ET, Oct 27, 2006 - 34 minutes ago)

U.S. Q3 GDP slowest growth rate since Q1 2003 (8:30 AM ET, Oct 27, 2006 - 34 minutes ago)

U.S. Q3 GDP below forecasts of 2.0% growth rate (8:30 AM ET, Oct 27, 2006 - 34 minutes ago)

U.S. Q3 GDP slows to 1.6% from 2.6% in Q2 (8:30 AM ET, Oct 27, 2006 - 34 minutes ago)

Gaaaa! A new and icky format to deal with :(

[UpInArms]

14. U.S. GDP slows to 1.6% rate in quarter -Growth rate weakest since first quarter of 2003

http://www.marketwatch.com/news/story/story.aspx?siteid=mktw&guid=%7BF2EB8343-955F-4D8A-A9D7-598F4106258A%7D

WASHINGTON (MarketWatch) -- U.S. economic growth slowed sharply in the third quarter, increasing at a real seasonally adjusted annual rate of 1.6% after a 2.6% increase in the second quarter, the Commerce Department said Friday.

The growth rate was below the 2.0% growth rate expected by economists polled in the MarketWatch survey and the slowest since the first three months of 2003.
Residential investment had the largest negative impact on third-quarter growth. Read full government report.

Investments in housing fell 17.4% in the third quarter, the largest decline since the first quarter of 1991. Housing subtracted 1.1 percentage points from third-quarter growth.

The consumer sector held up well, with consumer spending accelerating compared with the previous quarter.

<snip>

Inflation at the consumer level eased in the July-through-September period. The personal consumption expenditure price index increased at a 2.5% annual rate, down from 4.0% in the second quarter. The core PCE price index - which removes food and energy costs - increased at a 2.3% rate, down from 2.7% in the second quarter.

But the core PCE price index has increased 2.4% in the past year, up from 2.2% year-over-year growth in the second quarter. This is the fastest pace since the second quarter of 1995.

...more...

[UpInArms]

24. Oct Final UMich says you are so freakin' happy you can't stand it!

Oct. final UMich 93.6, ahead of 92.3 expectations (10:01 AM ET, Oct 27, 2006 - 2 minutes ago)

Oct. final UMich consumer sentiment 93.6 vs. 85.4: reports (10:00 AM ET, Oct 27, 2006 - 3 minutes ago)

[54anickel]

31. Uneffinbelievable!!!

Must just be happy they aren't living like this - yet




Wonder what percentage of the average American's gross income is going to food, shelter and clothing these days? Do people even bother to figure that sort of stuff out anymore or is budgeting outdated?

[AnneD]

46. Guess most folks figure

if they pay the bill and have a few dollars left-they are happy. That might explain the lack of savings and retirement.

[ozymandius]

4. Oil prices slip below $60 a barrel

LONDON - Crude oil futures retreated back under $60 a barrel Friday as traders took profits for a second day after a runup earlier in the week.

Light, sweet crude for December on the New York Mercantile Exchange fell 48 cents to $59.88 a barrel in electronic trading by midday in Europe. Brent crude fell 42 cents to $60.35 a barrel at London's ICE Futures exchange.

-cut-

Traders said prices could climb with winter demand for heating oil and natural gas expected to buoy energy prices in coming months. Cold weather increases demand for both natural gas and heating oil. Heating oil is most prevalent in the U.S. Northeast, where nearly one-third of households use it as their primary heating fuel.

But November heating oil slipped 1.5 cents to $1.6852 a gallon, while unleaded gasoline rose 0.13 cent to $1.5650 per gallon. Natural gas dropped 2.2 cents to $7.459 per 1,000 cubic feet.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

5. Baker Hughes profit up 62 percent

NEW YORK (Reuters) - Oil industry services group Baker Hughes International (NYSE:BHI - news) reported a 62 percent rise in its third-quarter profit on Friday, boosted by strength in its drilling and evaluation businesses.

Net income for the quarter rose to $358.6 million, or $1.09 per share from $221.9 million, or 65 cents per share, in the same period last year.

http://news.yahoo.com/s/nm/20061027/bs_nm/energy_bakerhughes_dc_1

[ozymandius]

7. Exxon posts huge profit on high prices, output

NEW YORK (Reuters) - Exxon Mobil Corp. (NYSE:XOM - news) said on Thursday earnings rose 6 percent to $10.5 billion, the second-largest quarterly operating profit ever by a U.S. company, boosted by robust oil production, as crude prices hovered near record levels.

The better-than-expected third-quarter profit pushed the company's Big Board shares to an all-time high of $72.33 on Thursday morning, before they closed at $71.62, a 0.9 percent increase.

-cut-

Production at the world's largest public company rose about 7 percent to about 4 million barrels of oil equivalent per day.

"Anything over 3 percent (production growth) is good, and anything over 5 percent is outstanding," said Gene Pisasale, senior energy analyst at Mercantile Trust. "For a company like Exxon to perform at that level is really superb."

http://news.yahoo.com/s/nm/20061026/bs_nm/energy_exxonmobil_earns_dc_7


CEO Lee Raymond with stuffing

[54anickel]

47. I just can't get over the resemblance....

A loathsome slug of a gangster, LeeJabba the Raymond was the preeminent kingpin of crime in the Oil Rig Territories. Basing his operations out of Exxon, the Raymond had his pudgy fingers in a number of lucrative and unsavory rackets -- slavery, lobbying, profiteering, secret energy councils, extortion and more.

To spread his influence and business across the Oil Rig Territories, LeeJabba employed a number of Republicans and lobbyists boost his illicit booty. One of the best players on his payroll was a old NeoCon named Go F-yerself Cheney.

[AnneD]

52. OMG....

twins separated at birth....good catch 54anickel.

[UpInArms]

57. Exxon Continues to Hoard Tens of Billions Rather Than Invest in Refineries and Oil Alternatives

http://releases.usnewswire.com/GetRelease.asp?id=75146

SANTA MONICA, Oct. 26 /U.S. Newswire/ -- In announcing its $10.5 billion third-quarter profit, ExxonMobil casually noted that it spent $8.4 billion for the quarter, and $21.2 billion in the first three quarters, on buying up its own stock. That expenditure does nothing but boost the stock price and provide a "bank" for windfall profits, said the Foundation for Taxpayer and Consumer Rights. It also has tens of billions of dollars of cash on hand.

The stock buyback comes to far more than the company has spent on exploration and production, which at least has the possibility of boosting oil supplies, said the nonprofit, nonpartisan FTCR. And Exxon has spent virtually nothing on alternative energy, less than one-hundredth of one percent of total profits.

"Every time a busy mother puts her hand on a pump to fill the family minivan, she should understand that she has no practical alternative to paying whatever the oil companies choose to charge at the moment," said Judy Dugan, research director of the nonprofit, nonpartisan FTCR. "Exxon, more than any other oil company, is intent on ensuring that she continue to have no alternative."

Exxon's enormous cash hoard, $37 billion, is more than the yearly gross domestic product of Kuwait or Lithuania. "That $37 billion would allow it to gobble up, at any price, any company that developed a process or product that threatened to become an economically viable, well-marketed alternative to oil," said Dugan. "It can also buy up smaller oil companies at will, further concentrating its power in the petroleum market."

Another use for the cash hoards of Exxon and the other major oil companies is in political influence. Government reports through June show the industry contributing $13.6 million to federal parties and candidates in the 2004-06 election cycle-83% of it to Republicans, according election watchdogs at the Center for Responsive Politics. See http://www.opensecrets.org/industries/indus.asp?Ind=E01&cycle=2006

...more...

Gack! 54anickel - that graphic made my belly churn (even more than usual).

[54anickel]

62. Heh, guess LeeJabba the Raymond needs to buy more friends in

high places. What's good for ExxonMobil is good for LeeJabba, especially now that he's retired.

[UpInArms]

15. Chevron third-quarter earnings $5.02 bln vs $3.59 bln

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B615DE38B%2D05CE%2D4B42%2D95BA%2D4D8047ED0511%7D&siteid=mktw&dateid=39017%2E3646387616%2D883707704

NEW YORK (MarketWatch) -- Chevron Corp. (CVX : 67.50, -0.08, -0.1% ) Friday reported third-quarter earnings of $5.02 billion, or $2.29 a share, up from a year-ago profit of $3.59 billion, or $1.64 a share. Total revenue, including the contribution from equity affiliates and other income, reached $54.21 billion in the latest three months, down slightly from a year-ago equivalent total of $54.46 billion. Sales and other operating revenue dipped in the quarter to $52.98 billion from $53.43 billion last year. The average estimate of analysts polled by Thomson First Call was for a profit of $2.03 per share in the September period. The company said its upstream earnings, reflecting exploration and production activities, reached $3.5 billion in the quarter, while downstream earnings, including refining, marketing and transportation, totaled $1.44 billion in the period. The stock closed Thursday at $67.50, down 8 cents.

[54anickel]

36. TV show confirms warnings given BP - 60 Minutes examines blast in Texas City

http://www.chron.com/disp/story.mpl/business/4291154.html

A segment to air Sunday on 60 Minutes confirms reporting by the Houston Chronicle that BP executives knew there were serious safety concerns about the company's Texas City refinery in advance of the 2005 explosion that killed 15 and injured scores more.

The basis of CBS reporter Ed Bradley's story is an examination of BP internal documents that show that John Manzoni, BP executive in charge of refineries, was repeatedly warned about safety problems.

Brent Coon, a lawyer representing the daughter of a couple killed in the blast, said Thursday the documents show that plant manager Don Parus "personally briefed" Manzoni and BP Vice President of Refining Mike Hoffman "on numerous occasions about the state of the union at Texas City."

Indeed, evidence gathered so far in a federal investigation as well as in civil litigation shows that Parus and other plant officials were well aware of the safety risk in Texas City.

A survey of employees conducted by an outside consultant and given to management two months before the blast showed that workers believed management put production and profits ahead of safety.

more...

[barb162]

40. The oil companies have typically been loosy-goosy on safety

[wakeme2008]

6. ozymandius do you have the opening and closing bells for Clintons

8 years

TIA

[ozymandius]

8. I'll look it up. n/t

[ozymandius]

9. Dow, Nasdaq and S&P

Dow
19-Jan-01 close at 10,587.59

20-Jan-93 close at 3,241.95

Nasdaq
19-Jan-01 close at 2,770.38

20-Jan-93 close at 697.44

S&P
19-Jan-01 close at 1,342.54

20-Jan-93 close at 433.37

[wakeme2008]

10. thanks

:)

[ozymandius]

11. NYSE, Tokyo bourse mull possible alliance: WSJ

HONG KONG (MarketWatch) -- The Tokyo Stock Exchange is holding talks with the NYSE Group about a potential tie up, according to reports.

Few details of the possible business alliance were made available, but the talks between the two stock exchanges were ongoing, according to the Wall Street Journal, which cited an unnamed spokesman from the Tokyo Stock Exchange.

The NYSE operator of the New York Stock Exchange, has expressed an interest in working with the Tokyo exchange in a possible alliance that would unite the world's two largest stock market exchanges by market value.

The move follows a global trend of consolidation among major exchanges, including the recent $8 billion merger between the Chicago Mercantile Exchange and Chicago Board of Trade.

The Tokyo Stock Exchange is unlikely to be bought outright, but analysts say the two exchanges could cooperate in areas of technology sharing and joint listings.

http://www.marketwatch.com/news/story/story.aspx?siteid=mktw&guid=%7BAA802104-996A-449D-81A8-AEFBFE1E95DD%7D

[ozymandius]

12. Good morning everyone!

:donut: :donut: :donut:
I will be gone for most of the day. There is a chance that I'll be back by the close. Have fun watching the Casino.

Ozy :hi:

[AnneD]

20. Morning Marketeers......

:donut: and lurkers. Have a great day Ozy.:hi: Thanks to Ozy, UIA, 54anickle, ghostdog, and all those regular posters that believe that Democracy, Democratic principles, and sound economic and business principles are not mutually exclusive.:party:

I hope folks do not get lulled because of the polls and skip voting. Yes, DEM's have a lead, but we can't be complacent. Please help turn out the vote. Offer rides, reminders, phone bank. Treat this like a Presidential election-because it is a referendum. If we can't win in these conditions-we just as well turn of the lights at party headquarters.

I am paranoid but I want to vote early so I have more time to campaign, but that's just me. Support your candidates and let's make it happen.


Happy hunting and watch out for the bears.

[UpInArms]

16. daily dollar watch

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

Last trade 85.76 Change -0.15 (-0.17%)

Deja vu? Just Like the Old Days, Greenspan Sends the Dollar Tumbling

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/Deja_vu__Just_Like_the_1161898404148.html

US Dollar – It is all about the details these days. Even though the headline durable goods and new home sales numbers printed much stronger than expected, the details of both reports suggest weakness in the US economy and not strength. Excluding transportation orders, demand for big ticket items increased by only 0.1 percent as nearly every single ex-transportation component saw declines in the month of September. The biggest drop was in semiconductors, which is basically the technology sector. This is right in line with what we predicted yesterday, which is that even though consumer demand for small retail goods is still strong, Americans’ appetite for big ticket items such as electronics and appliances are not. As for new home sales, even though the number of units sold is increasing, house prices dropped by the largest amount in 36 years. With oil prices back above $60 a barrel and the paper wealth of homeowners dwindling, the future of US consumer spending is still at risk. Going into the third quarter GDP release tomorrow, a weak number should have a far more lasting impact on the markets than a strong one. GDP is a backward looking indicator and not a significant market mover, but should the numbers disappoint, it would mean that not only is growth expected to be weak in the months to come, but it was also weak in the past few months. Strong numbers on the other hand will most likely be shrugged off as traders assess the risks facing the economy in the months ahead. Even the labor market had its share of problems today. Help wanted ads held at a 45 year low in the month of September, after having been revised downwards the previous month. With a number of indicators at multi decade points, it is no surprise that the US dollar has completely collapsed today. Although we could see a bounce after the day’s sharp moves, any rallies in the US dollar will probably be short-lived.

...more...


US Slowdown How Severe a Slump?

http://www.dailyfx.com/story/special_report/special_reports/US_Slowdown_How_Severe_a_1161943521522.html

Today’s GDP report expected to print at an anemic 2.0% (the lowest reading since Katrina ravaged 1.8% result for Q4 of 2005) should confirm the fact thatUS economy is decelerating rapidly. After a gangbuster Q1 reading of 5.6% the falloff in the pace of US economic activity has been dramatic this year compressing 300 basis points to 2.6% in Q2 and even further to the anticipated 2% rate in Q3. The most recent economic data from the disappointing Philly and Richmond Fed numbers to the lackluster rebound in September Durables Goods which rose only 0.1% ex- transportation to the 16 month low set by ISM Manufacturing report all points to further weakness ahead.

What are the key macro drivers behind this dynamic? The twin pillars of oil and housing continue to impact US economic growth and the future performance of those two sectors may well determine if the US economy and in turn the US dollar will experience a soft landing or a hard crash as we head towards 2007.

Oil – No More Downside?

Undoubtedly, the remarkable decline in oil prices from their peak of nearly $78/bbl in early August to their most recent low of $57/bbl in late October has been a tremendous boost for theUS consumer. The even greater decline in gasoline prices from over $3.30/gallon to just $2/gallon put billions of discretionary dollars back into the pockets of US commuters. Yet despite the tremendous stimulus – akin to a massive tax cut for most Americans – US consumer spending has merely tread water. The latest results from the total Retail Sales figures for September showed a decrease of -0.4% on a seasonably adjusted basis. While US consumers buoyed by lower energy costs, gladly spent money in department stores on clothing and general merchandise, they curbed their purchases of larger items such as flat panel TVs, furniture and household appliances. Faced with record debt services ratio of 13.55% of their income consumers simply did not generate enough in wages to propel additional growth in spending. Furthermore, as OPEC makes concerted efforts to halt the slide of crude at the $60/bbl level by cutting back production and unseasonably cool weather settles over the Northeast most of the benefits from the sharp drop in crude may have already been delivered. At best it appears that prices will stabilize at current levels having a neutral impact on future economic growth. However, should geo-political or nature-driven events send prices higher, the depressive effect of higher energy costs could slow consumer spending even more in the upcoming months

Housing – the 2 Trillion Dollar Question?

While the decline in oil has been a tremendous positive for US growth in Q3 of 2006, the decline in housing values has had the exact opposite effect. Although still buoyant in the Southeast, housing in all other geographic regions of US is in the midst of a major contraction. Latest Existing Home Sales figures once again missed analysts estimates and registered their lowest reading in well over 3 years. While New Home Sales increased from the month prior as present day buyers clearly preferred the steep discounts and repair-free attraction of new housing stock even those numbers were off by nearly 20% from the year prior.

...more...

Dollar drops after weaker GDP data

http://www.marketwatch.com/News/Story/Story.aspx?guid=8b93fa8b-0c33-46e5-925f-5bae8f142e0b&siteid=mktw&dist=MorePulse

NEW YORK (MarketWatch) -- The dollar fell early Friday after a government report showed the U.S. economy grew less than expected in the third-quarter. The Commerce Department said the gross domestic product grew at a real 1.6% seasonally adjusted annual rate after a 2.6% pace in the second quarter. Economists were expecting GDP to increase 2.0% in the third quarter. Meanwhile, core consumer prices increased at a 2.3% rate in the quarter, raising the year-over-year increase to 2.4% from 2.2% in the second quarter. "The dollar should remain under pressure today and there is the potential for further losses to 1.2770 (per euro) and 117.50 yen," said traders at Forex.com. The euro was last up 0.2% at $1.2709, as the dollar was down 0.2% at 118.25 yen.

[54anickel]

25. Ewww, did ya catch this one in LBN?

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2581733

Dollar Declines as New Home Prices Fall the Most Since 1970

http://www.bloomberg.com/apps/news?pid=20601103&sid=a4JEYmwdsD4M&refer=us

Oct. 26 (Bloomberg) -- The dollar fell against the euro for a third consecutive day, its longest losing streak in more than a month, and weakened versus the yen after a report showed the U.S. median price for new homes declined the most since 1970.

The U.S. currency also weakened against the South African rand, South Korean won and Swiss franc as further evidence of a cooling housing market supported the Federal Reserve's decision yesterday to keep borrowing costs unchanged.

``The numbers suggest the market is not deteriorating rapidly, but it's not improving,'' said Brian Dolan, research director at Forex.com, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey, which has about $250 million worth of funds under management. ``It means there's very little impetus for the dollar to recover.''

snip>

Traders had placed pre-set orders to sell dollars at $1.2660 per euro, which ``acted like a magnet,'' as the U.S. currency fell through that level, said Firas Askari, head currency trader at BMO Nesbitt Burns in Toronto. He said there are no other important levels until the dollar breaks through $1.28 per euro, the weaker end of its present range.

Traders trimmed bets in the interest-rate futures market that the Fed will raise interest rates in January. Prices now indicate traders place a 4 percent probability that the Fed will boost rates at the Jan. 30-31 meeting to 5.5 percent, down from 16 percent before the Fed's announcement yesterday.

more...

[UpInArms]

27. it certainly does appear that they have

overloaded the sticks on the camel's back and it is all about to fall apart.

This "booming" economy that is more like the loud "boom" of an impoding bomb.

I do hope that everyone out there has done there best to minimize their exposure to losses that cannot be sustained.

[EVDebs]

29. Ave person's rent/mortgage used to be 1/4th income; now 1/2

and that's now 'family income' to include the working spouse. Soon they'll be adding kid's income and bring back child labor and debtor's prisons. The "March of Republican Progress" continues !

[TrogL]

53. The housing bubble is OVER

Glad I bought when I did, before all this got started.

I pity the people who bought high, with zero down, six months from now when the bank re-negotiates their mortgage based upon the new, lower, realistic value of their house. Actually, I can't see a downside from walking away except you'll have to move and goodbye credit rating.

Banks are gonna take a hit.

[54anickel]

55. Hey TrogL! Long time, no read. Howz things up north these days?

Yeah, those folks might get hit as the ARMs come due next year, but then again, with the PPT and Paulson at the wheel you never know. Rates might come down for a bit to give them a chance to lock in. They'll still be higher than the teaser rate they got suckered into but might be manageable. The people that end up upside-down are gonna be hurting big time though.

The Feds have a few tricks left. I find it interesting that China's been buying up more GSEs and now corp bonds instead of Treasuries. I think they're all trying to find a way out of this mess. I'm not too optimistic, but I wish them luck.

[54anickel]

28. Imbalances pose real risk to global system: Summers

http://today.reuters.com/news/articlebusiness.aspx?type=ousiv&storyID=2006-10-27T060412Z_01_N26418967_RTRIDST_0_BUSINESSPRO-ECONOMY-IMBALANCES-SUMMERS-DC.XML&from=business

NEW YORK (Reuters) - World leaders need to resolve massive imbalances in international trade to avoid the risk of global financial market and economic instability, former U.S. Treasury Secretary Lawrence Summers said on Thursday.

"These imbalances have had people crying 'Wolf' for several years. They stand as a real risk," Summers said in a speech.

snip>

The global imbalances he referred to are effectively a U.S. current account deficit with the rest of the world of more than 6 percent of gross domestic product and countervailing surpluses and reserve stockpiles in emerging Asia and oil exporters.

snip>

The concern is that foreign countries who finance the massive U.S. current account deficit -- a rough measure of the country's trade and investment flows -- could at some point refrain from amassing more U.S. assets, spurring a dollar fall and soaring U.S. long-term interest rates.

snip>

"Globalization is a fantastic thing and offers the most fantastic opportunity for those whose standards of living will rise from the edge of subsistence to a hundred times higher," Summers said, citing those with special skills matching up with people with substantial capital assets.

But he pointed to a "vast world of people" that could be displaced.

more...

[UpInArms]

17. Housing's collapsed, but consumers, businesses keep doing their thing

http://www.marketwatch.com/news/story/story.aspx?siteid=mktw&guid=%7B2D843FFC-1308-4F81-B6D7-E6A0F131CC7A%7D

WASHINGTON (MarketWatch) -- This is what an economic soft landing looks and feels like. This is what the Federal Reserve has been working for.
The economy downshifted to its slowest growth in three years during the third quarter, expanding at a tepid 1.6% annual rate, the Commerce Department said. It's about half the growth rate that most economists think is sustainable. See full story.

But it's still moving forward.

Consumer price inflation ticked higher during the quarter and is now growing at an uncomfortable 2.4%, the fastest pace since 1995 -- which, not so coincidentally, was the last time the Fed managed to slow the economy without crashing it.

Fed policymakers figure a few more quarters of moderate growth should reduce inflationary pressures just enough to forestall further increases in interest rates. Job growth would slow but not collapse. Consumers and businesses would keep doing what they do: Spending, selling and producing.

A few more quarters of moderate growth was just what the Fed predicted after its meeting on Wednesday -- in other words, a soft landing. See full story.

For consumers, it was pretty much business as usual in the third quarter. Consumption grew 3.2%, thanks to more giveaways by the automakers. Real disposable incomes grew even faster, up 3.7%. The savings rate improved marginally, to a negative 0.5%.

...more...

[54anickel]

23. Hmmm, "the pause that refreshes"? Under the "See full story" link

U.S. GDP slows to 1.6% rate in quarter
Growth rate weakest since first quarter of 2003

http://www.marketwatch.com/news/story/Story.aspx?guid={F2EB8343-955F-4D8A-A9D7-598F4106258A}&siteId=mktw

snip>

The annual inflation rate is above the Federal Reserve's 1.5% to 2% comfort zone.

Fed officials have stressed their discomfort with the high inflation rate, but have said they expect inflation to gradually ease as the economy continues to grow at a moderate pace in coming quarters.

Economists said the Fed is watching closely to see whether the slowdown gathers momentum or if the third quarter was the pause that refreshes growth.

So far, the Fed should be pleased with the soft landing they've achieved. Read Capitol Report.

more...

[54anickel]

33. Apartment Rent, Demand Is Soaring

AP Centerpiece: Renters Scramble to Afford Apartments As Demand Soars Across Country

http://biz.yahoo.com/ap/061026/bidding_on_apartments.html?.v=3

snip>

Apartment rents and demand are soaring nationwide as the economy produces good jobs and people who might have bought homes a year ago settle for apartments while they wait for housing prices to tumble.

In addition, the supply of rental housing tightened in the past year as many apartments were converted into condominiums in places like Florida and Southern California. Some of those units are now returning to rental markets at high prices as owners struggle to sell them.

In the quarter ended Sept. 30, the average advertised rent reached $978, up 3.9 percent over the year-ago period, according to an analysis of 75 markets by real estate research firm Reis Inc. in New York. Some of the biggest increases were seen in Florida and Southern California.

Meanwhile, the nationwide vacancy rate for rental housing dropped to 5.4 percent during the quarter from 6.7 percent in the same period of 2004.

"The market is strong enough that landlords are able to reduce the concessions that they're offering to new tenants," said Sam Chandan, Reis' chief economist. "Even more important, vacancies continue to fall."

more...

There goes the inflation rate. Wonder when they'll change the formula to put houses back in instead of rentals.

[AnneD]

49. I don't know about you guys....

but $978 is way out of my price range. I can only afford $450 and that will only get us a small, cramped one bedroom. Once I retire all my debts, I'll be able to afford $1,200-so how much house do you think I'll get.

[54anickel]

50. I don't think you could get anything in this area for $450 anymore.

Of course, I'm in one of those rich Republican counties....they took over the county a while ago. Now they're heading out this way and becoming my neighbors!!!

[AnneD]

54. Let me put it this way....

Our 98 Honda Accord is the newer car in the lot and there is defiantly some structural problems (roof leaks). And when I say small I mean it is so small that hubby and I accidentally had sex when we passed each other in the bathroom and sink area.:wow: It's so small, I have to step outside the bedroom to open the chest of drawers. But the neighbors are nice and quiet. We can't beat the location-it is so close to our jobs. I can go a month now on a tank of gas and it is close to the transit lines if I need it.

[54anickel]

56. Bwahahaha, careful with that accidental copulation stuff if you think it's

crowded now?

Got ya beat on the vehicle though - 96 Eagle Talon and just the other night my window got stuck in the open position - of course it's been raining ever since. :-(

[AnneD]

58. To quote Rosanna Rosannadanna...

"It's always something..."
We will have to put the baby in a shoe box under the bed.

[54anickel]

34. Auctions' appeal grows with builders' inventory

http://www.latimes.com/business/la-fi-auction27oct27,1,4503618.story?coll=la-headlines-business

snip>

Last in vogue during Southern California's previous real estate downturn in the early 1990s, auctions at new-home communities are gaining steam again as builders look for ways to move their merchandise quickly in a sluggish market.

For buyers like Kern, these auctions are indeed often an opportunity to get a deal. Yet the auctions also can benefit real estate developers struggling to close deals with buyers the conventional way.

More often associated with foreclosed properties, auctions tend to draw ready, willing and able buyers who delight at the chance to snap up what they believe will be a bargain.

"If you want to stimulate the marketplace, that's what an auction does," said Todd Wohl, vice president of Premiere Estates Auction Co. in Manhattan Beach.

snip>

These auctions are well suited for developers of new-home communities because a surge in unsold new-home inventories is one of the chief earmarks of the current housing slowdown. The supply of unsold homes in all stages of construction has tripled in the last year, data show.

For developers, getting saddled with unsold units drags down the bottom line. So selling off a slew of units at once makes sense, even if it cuts profit margins in the short term.

more...

See, nothing to worry about! That housing collapse is gonna disappear in no time. :evilgrin:

[54anickel]

44. Don't Believe the Real Estate Hype

http://www.321gold.com/editorials/pento/pento102706.html

The Federal Reserve's pause in its rate hiking campaign has dovetailed with the decline in energy prices and interest rates sending the Dow Jones to record territory. It is now universally accepted by the market that the slowdown in housing and the economy will result in a soft landing, one that keeps the Fed on hold and G.D.P. at trend growth or slightly below. These market cheerleaders have embraced this perfect scenario and the recidivism to their behavior prior to the equity collapse of 2000 may be to the downfall of investors. What is being overlooked by most pundits is that the unraveling of the housing bubble will be much longer lasting and more damaging to the consumer than anticipated.

During 2007, approximately $1trillion of the $9 trillion in outstanding mortgages will reset. The increase in these adjustable rates will send consumers' monthly payments hundreds of dollars higher and cause many more foreclosure homes to enter into this already saturated market. According to the Indymac bank of California (the 7th largest mortgage originator in the nation), up to 4% of home owners might lose their home in the next few months. That's four times the average rate of borrowers who normally default on their loan!

Remember the axiom that as goes the housing market, so goes the economy. One has to look beyond home equity extraction which has reached a total of $600 billion per year. When you account for the durable goods, commodities and labor that are supported by the housing market you begin to realize the expanse of the spectrum related to this part of the economy. What is difficult to factor into the equation is consumer's response to flat or declining home values. It is reasonable to assume that their current negative savings rate (it was negative for only two other years 1932-1933) will again turn positive as consumption declines.

snip>

What appears evident is that the economy is slowly weakening due to housing and the decrease in money supply and credit (inflation). Since the Fed mistakenly measures inflation as growth, we can predict that G.D.P. rates will be declining for at least the next two quarters. And the equity markets are not pricing in the shortfall in earnings which should accompany the slowing economy. Keep an eye out for an unusually weak Durable goods number on Thursday or G.D.P. number on Friday; any crack in the soft landing mantra would prove damaging for stocks, especially after this huge rally. This leads me to present the best play in the market today: invest in the stocks of balloon companies-you know, the ones you tie "For Sale" signs onto.

more...

[AnneD]

60. And are we suprised?????

Not on the SWT. Just more suprised eCONomist.:eyes:

[UpInArms]

18. Foreclosure USA

http://www.opednews.com/articles/opedne_joel_s___061026_foreclosure_usa.htm

We the people once owned our democracy. We elected "representatives" to run it for US. Have you noticed? Somewhere along the way we lost our democracy.

It was foreclosed by wealthy and power elites that corrupted our "representatives" who literally sold us out. Our homeland was foreclosed right in plain sight. Sure, we citizens still reside in the USA, but we no longer own our democracy. We pay rent through our taxes. But we no longer have any equity. Our democracy is owned by the rich, and their partner foreign elites and governments, which is why in a strict sense it no longer is a democracy, but rather a plutocracy.

Modern day aristocrats – an apt terms considering the many political dynasties in our ruling class - maintain the charade that America is still a democracy by letting us vote. They also give us many freedoms to distract us from our dire political conditions. They're smart, so they limit our choices to the main parties that constitute the two-party duopoly. Even smarter, they convert consumer spending (that they spur) into economic inequality, making them, the rich, even richer and everyone else, all of us, poorer.

<snip>

But something much worse is happening and accelerating in virtually every community in all the states. In a delusional democracy with delusional prosperity we now are witnessing the proof that the ownership society is also delusional. Apparently no one has told George W. Bush.

Up to 4 percent of America's mortgaged homeowners might lose their homes to foreclosure in coming months, one of the nation's largest lenders predicted recently, as those homeowners find themselves trapped by heavy debt and the housing slump. That's four times worse than the historical average of 1 in 100 mortgaged homeowners who fail to keep up payments. First American Loan Performance, a mortgage-data company based in San Francisco, says overall the national foreclosure rate has climbed 27% from a year ago with an estimated $110 billion worth of homes expected to go into foreclosure. Rick Sharga, a vice-president at RealtyTrac, said recently "Over a trillion dollars is going to readjust in the next 15 months. We had almost 850,000 foreclosures last year and we are at 913,000 through September." He predicted that national foreclosures could hit 1.2 million to 1.3 million by the end of this year. Guess George W. Bush has not heard about this, only about great economic growth.

...more...

[UpInArms]

19. Coventry First sued for fraud on insurance payouts

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-10-27T130355Z_01_N27283919_RTRIDST_0_FINANCIAL-INSURANCE-SETTLEMENT.XML

Eliot Spitzer has sued Coventry First LLC, which pays insurance policy owners up front for the right to collect death benefits later, alleging it paid kickbacks to brokers and defrauded insurance holders.

In a suit filed in N.Y. State Supreme Court in Manhattan onThursday, Spitzer claimed Coventry of Fort Washington, Pennsylvania, made secret payments or "co-brokering fees" to life-settlement brokers.

In exchange, the brokers would suppress bids from other life settlement companies, the suit alleged.

"Too many industry players are cheating policy owners to maximize profits for themselves and their firms," Spitzer said in a statement.

...more...

[UpInArms]

21. 9:36 EST Markets Behave like rocks

Dow 12,114.27 49.39 (0.41%)
Nasdaq 2,370.81 8.29 (0.35%)
S&P 500 1,384.15 4.93 (0.35%)
10-Yr Bond 4.675% 0.046

NYSE Volume 92,568,000
Nasdaq Volume 99,325,000

09:15 am : S&P futures vs fair value: -4.8. Nasdaq futures vs fair value: -5.5.

09:00 am : S&P futures vs fair value: -4.7. Nasdaq futures vs fair value: -5.2. Still shaping up to be a negative start for the cash market but futures trade is off its worst levels as another rally in bonds pushing yields even lower acts as an offset to concerns about the pace of economic growth. In fact, further analysis of the GDP report shows that a larger than expected 17% drop in residential construction activity lopped 1.1% off the GDP gain, which Fed Chairman forewarned on Oct. 4 when he said the U.S. housing market is in a "substantial correction." Chevron (CVX) handily beating expectations on strong Q3 earnings is also offering more optimism about corporate profit growth, but the market still looks like it will take a breather following this quarter's busiest week of earnings.

08:35 am : S&P futures vs fair value: -5.2. Nasdaq futures vs fair value: -6.8. Futures indications pull back following a weak GDP report, suggesting an even lower start stocks. An advance read on GDP showed that the economy grew at a slower than expected 1.6% pace in Q3 (consensus 2.1%); but the chain deflator -- a key inflation measure -- came in at a lower than expected 1.8% (consensus 2.8%), lending support for a soft landing. Bonds, which were up slightly ahead of the data, have strengthened; the 10-yr note is now up 9 ticks to yield 4.66%.

08:00 am : S&P futures vs fair value: -4.0. Nasdaq futures vs fair value: -4.0. Even though it's no secret that economic growth has slowed over the course of the year, buyers are sitting on the sidelines in pre-market action waiting to see just how slow the economy grew from July to September. Economists are expecting GDP (8:30 ET) to have decelerated to 2.1% in Q3 from 2.6% in Q2. With the Dow sitting at another record high, a sense that stocks are overbought on a short-term basis amid a mixed batch of earnings reports is also acting as an overhang.

[UpInArms]

22. OT: Abramoff footnote goes to jail

http://villagevoice.com/news/0643,gardiner,74814,6.html

On Monday, Adam Kidan began serving a 70-month sentence for a bank fraud scheme he cooked up with Jack Abramoff, the former high-powered Washington lobbyist turned convicted felon, in buying a fleet of gambling boats from a Florida business tycoon named Gus Boulis.

"I wish I had never met Jack," Kidan lamented last December.

But while Abramoff will undoubtedly, and deservedly, go down as one of Washington's most dastardly villains of recent vintage (no one will ever forget the black hat and trench coat he wore when pleading guilty in January, a fashion mistake likely not to be repeated when he goes to jail next month), he might well say the same thing about Kidan.

<snip>

The "cruise to nowhere"—as SunCruz was dubbed because its ships ventured out to international waters then back—was targeted by Florida politicians who thought Boulis was flouting anti-gambling laws. Boulis, who wasn't a U.S. citizen when he bought his first SunCruz ship, agreed to sell in three years, and the government agreed to keep it a secret so he could recoup fair market value. That fall, Boulis called one of his attorneys and asked him to find a buyer. That attorney turned to one of his firm's lobbyists, Jack Abramoff, who took one look and realized he knew the perfect buyer—himself. Too busy to run things alone, he recruited two friends, Waldman and Kidan, then passing himself off as a wunderkind with $26 million from Dial-a-Mattress in his pocket.

But Kidan and Abramoff didn't have the down payment to secure a loan, so they committed bank fraud to achieve their ambitious ends.

Instead of demanding the $23 million down payment in cash, a stipulation of the loan, Boulis agreed to allow Kidan and Abramoff to sign promissory notes for the money. In return, he secretly (and illegally) kept 10 percent of SunCruz through a shell company. The three forged a wire transfer purporting that Abramoff and Kidan had paid the millions to Boulis and faxed a copy of it to the financing company. The loan went through.

...more...

[UpInArms]

26. 10:09 EST numbers, blather and bye!

Dow 12,120.35 43.31 (0.36%)
Nasdaq 2,372.93 6.17 (0.26%)
S&P 500 1,382.96 6.12 (0.44%)
10-Yr Bond 4.671% 0.05

NYSE Volume 371,113,000
Nasdaq Volume 351,753,000

10:00 am : Equities are still on the defensive as nine out of 10 sectors remain negative. Pacing the way lower is Industrials, as the weaker than expected GDP report raises concerns about the pace of economic growth. Ingersoll-Rand (IR 36.00 -2.90) missing analysts' expectations and issuing downside guidance is also weighing on sector sentiment. Telecom is another weak spot as Wireless Services ranks as this morning's biggest laggard (-2.2%) after Alltel (AT 53.81 -4.37) missed forecasts. Not even a 1.4% surge to a new 52-week high on Microsoft (MSFT 28.74 +0.39), the third most influential constituent on the S&P 500, has been able to renew enthusiasm for tech stocks, let alone the broader market. Last night, Microsoft topped Wall Street estimates and issued guidance that added to optimism heading into the new product cycle ramp, underscoring our Overweight rating on Technology. DJ30 -50.12 NASDAQ -8.02 SP500 -5.85 NASDAQ Dec/Adv/Vol 1721/694/206 mln NYSE Dec/Adv/Vol 1711/902/94 mln

See you all later - :hi:

[54anickel]

30. Finally, Greenspan can speak his mind

http://www.msnbc.msn.com/id/15428994/

WASHINGTON - Freed from the burden of potentially moving financial markets worldwide with his every utterance, Alan Greenspan cut loose on the economy, the Iraq war, construction of a fence along the U.S.-Mexico border and a host of other topics.

snip>

On homeland security — including that at airports — Greenspan weighed in saying: “Well, I’m not one who is overly impressed with a lot of the things that we are doing.” He went on to say, “It is not clear to me whether any of that stuff works,” a remark that provoked laughter from the audience. “In fact, I’m reasonably sure it doesn’t,” he added.

Discussing the strain of entitlement programs on the nation’s long-term fiscal health, Greenspan said Medicare is much more of a problem and harder to deal with than Social Security.

“If you get beyond the political rhetoric” and assembled a group to solve Social Security, “it would take them 15 minutes. It would take them 15 minutes only because 10 minutes was used for pleasantries,” he quipped. The audience — people attending the Commercial Finance Association meeting — erupted in laughter.

He also discussed the shrinking importance of manufacturing to the country’s economic might. “Manufacturing is something we were terrific at 50 years ago,” Greenspan said, adding that it “is essentially a 19th and 20th century technology.”

more...

[54anickel]

32. SEC Will Be Investigated in Probe Sought by Grassley (Update1)

http://www.bloomberg.com/apps/news?pid=20601103&sid=aXgW0d3iRVYw&refer=us

Oct. 26 (Bloomberg) -- The U.S. Securities and Exchange Commission, criticized by Congress for its handling of a trading probe that entangled Morgan Stanley Chief Executive Officer John Mack, faces a broad review by government auditors of its management and methods for policing the financial markets.

The Government Accountability Office agreed last week to investigate the SEC's enforcement division and compliance department after requests by Senator Charles Grassley, an Iowa Republican who questioned whether the agency gave Mack special treatment. Grassley asked the GAO to examine the SEC's ``planning, oversight, control and other management processes'' and gauge whether the agency does enough to oversee regulators at the New York Stock Exchange and NASD.

``Based upon allegations I have received over the past few months, I have become increasingly concerned regarding the operations of the SEC, and whether the SEC is faithfully adhering to its mission'' to protect investors, Grassley, the chairman of the Senate Finance Committee, wrote in one of two Sept. 19 letters to GAO Comptroller General David Walker.

The review ratchets up the heaviest political pressure the SEC has faced since Christopher Cox, a California Republican, took over as its chairman in August 2005. Grassley's requests target units run by SEC enforcement chief Linda Thomsen and Lori Richards, head of the Office of Compliance, Inspections and Examinations.

Drain on Resources

``The GAO has been given a wide-ranging license to investigate here, and they'll certainly work very hard to justify the time they spend on it,'' said Mark Radke, a former SEC lawyer who's a partner at LeBoeuf, Lamb, Greene & MacRae LLP in Washington. ``From the perspective of people running the agency, when the GAO comes in to do one of these things, it's inevitably a drain on scarce resources.''

Senators including Grassley are concerned that the SEC shielded Mack from a probe of insider trading at Pequot Capital Management Inc., which runs $7 billion in hedge funds. Gary Aguirre, a former SEC investigator, told the Senate Judiciary Committee in June that he was blocked from questioning Mack because of the Morgan Stanley CEO's political clout. New York- based Morgan Stanley is one of Wall Street's two biggest securities firms.

more...

[54anickel]

35. Treasury's Paulson Plays With the Plunge Protectors

http://www.nypost.com/seven/10262006/business/treasurys_paulson_plays_with_the_plunge_protectors_business_john_crudele.htm

October 26, 2006 -- PAY attention!

Someone - and I don't know who - wants us all to know that since July Henry Paulson, the new secretary of the U.S. Treasury, has spent a lot of time on a little known Washington operation called the President's Working Group on Financial Markets.

That was the major message in a prominent piece this past Monday in The Wall Street Journal.

The big mystery is why do these people want us to know this? And why now? I wrote about the Working Group on Financial Markets back in June when Paulson left Wall Street powerhouse Goldman Sachs to accept the top job at Treasury.

snip>

"Since taking the reins in July, the Wall Street veteran has reinvigorated the President's Working Group on Financial markets, which had languished." The article went on to say that before Paulson's arrival, the group met every few months, and sometimes only once a quarter. Now Paulson is insisting that it meet every six weeks.

Among other things, Paulson and the Plunge Protection gang discuss the problems that might occur with hedge funds and derivatives, plus the "government's ability to respond to a financial crisis," according to a source quoted by the paper.

Since the Federal Reserve is the group that would lower interest rates in an emergency, the Plunge Protectors would probably be the ones who'd fix the problem. In other words, they'd throw money at it.

Stocks have been moving steadily upward since July, when Paulson took over the Plunge Protection Team (and the Treasury). And one of the reasons could be that - as I mentioned back then - there is less risk in stocks if the government is providing a safety net.

more...

[54anickel]

37. Who wants to be a trillionaire? Not China's central bank

http://www.economist.com/finance/displaystory.cfm?story_id=8083036

snip>

There are two simple ways to stop reserves rising. China could set free its exchange rate or it could relax restrictions on capital outflows and allow private citizens to hold foreign assets. Significant moves of either kind seem unlikely in the near future. So long as China runs a large external surplus (the natural result of its high saving rate) and refuses to set its currency free, its stash of foreign currency will probably continue to mount.

How that money is invested has big implications for the world economy, not just for China. Brad Setser, head of global research at Roubini Global Economics, estimates that about 70% of it is invested in dollars, mainly Treasury securities. This has propped up the dollar and reduced American bond yields—by up to 1.5 percentage points according to some estimates. A big shift out of dollars could therefore push up bond yields and hence mortgage rates, damaging America's already crumbling housing market.

China's central bank is thought to be switching from Treasury bonds to American mortgage-backed securities and corporate bonds in an attempt to earn higher yields. Chinese officials have also discussed in private the need to diversify reserves out of dollars in order to reduce exposure to a big drop in the greenback. The bank may be putting a bigger slice of any increase in reserves into euros and emerging Asian currencies, but so far there is little sign of a shift out of its existing stock of dollars. One problem is that China's investments are so big that they move markets. Shifting money into euros would push down the dollar. China would then not only suffer a capital loss on its remaining dollar reserves, but it could also be forced to buy yet more reserves to hold its currency down against a weaker dollar.

Fear of a capital loss, and dissatisfaction with unrewarding yields, have triggered a flurry of ideas on how to put the money to better use. One popular idea is to use some of China's reserves to buy oil and other commodities. The snag is that stockpiling oil would push up prices, yet absorb only a tiny proportion of the sums at China's disposal. Buying the equivalent of six-months' oil consumption, as has been suggested, would take only 8% of total reserves at current prices, but the extra oil bought would amount to three times the growth in global oil demand this year. Buying gold would have similar results: if China invested just 5% of its reserves in gold, it could buy the world's entire annual mine production.

Another proposal is to spend more money on infrastructure investment, which would yield a much higher return than American bonds. However, since China's investment already accounts for 40% of GDP, it is not clear that China needs more. Writing off banks' non-performing loans might seem more sensible. In 2004 and 2005 the People's Bank of China did indeed shift $60 billion to state banks. The remaining stock of bad loans is now around $250 billion, according to UBS.

more...

[54anickel]

38. Shares in China's ICBC Take Off in IPO

Shares in ICBC -- World's Biggest IPO -- Soar in Hong Kong, Disappoint in Shanghai

http://biz.yahoo.com/ap/061027/china_icbc_ipo.html?.v=7

SHANGHAI, China (AP) -- With the bang of a gong, China's biggest bank kicked off the world's biggest initial public offering of stock on Friday, a milestone for the country's financial markets.

Industrial & Commercial Bank of China's shares surged 14.6 percent in Hong Kong from their IPO price but gained only 5 percent in Shanghai, below analysts' forecasts for at least a 10 percent gain in the opening session.

ICBC made history by simultaneously conducting its IPO in Shanghai and Hong Kong in parallel listings that enabled both domestic and foreign investors to participate. The key benchmarks in both stock markets fell, contrary to expectations.

ICBC raised a minimum of $19.1 billion, but it was expected to soon increase its offering to $21.9 billion by exercising the so-called greenshoe option to meet extra demand. That beat the previous record $18.4 billion IPO staged by NTT DoCoMo Inc. in 1998.

Investors snapped up the stocks because they viewed Chinese bank IPOs to be good ways to profit off of the nation's roaring economic growth, analysts said.

more...

[54anickel]

39. New York Isn’t the World’s Undisputed Financial Capital

http://www.nytimes.com/2006/10/27/business/worldbusiness/27london.html?_r=1&adxnnl=1&oref=slogin&ref=business&adxnnlx=1161973202-GzwtzOwJJZolpgWV6+qX+g

snip>

Even as the Dow Jones industrial average reaches new highs and Wall Street companies report robust profits, by some measures New York’s long-held crown as the financial capital of the world may be slipping.

London, whose lord mayor, David Brewer, made the summertime boast at the city’s annual merchants and bankers dinner, has had a heady resurgence in banking and lending. In recent years, its stock market has attracted a growing number of companies that once would have sought to list in the United States. And London is drawing an increasing tide of hedge fund assets.

Other financial centers are growing, too: Chicago will be the home of the world’s largest derivatives market when the Chicago Mercantile Exchange and the Chicago Board of Trade merge, while Hong Kong is poised to be the biggest market for initial public offerings this year, with today’s pricing of the huge offering of the Industrial and Commercial Bank of China.

The possibility that New York is losing ground has raised alarms in Washington and in Mr. Bloomberg’s office.

“There’s a genuine recognition that we need to make some changes,” said Laure Aubuchon, head of international business development for the New York City Economic Development Corporation. Winning financial business is “so important to New York City,” she said. The financial services industry makes up 9 percent of the city’s work force and provides 31 percent of the tax base, she said.

more....

Hmmmm, agriculture - gone, manufacturing - gone, financing - going....going....going....What's a banana republic to do

[54anickel]

41. 2:26 numbers and yada

Dow 12,090.26 -73.40 (0.60%)
Nasdaq 2,354.08 -25.02 (1.05%)
S&P 500 1,378.53 -10.55 (0.76%)
10-yr Bond 4.6750% - 0.0460
30-yr Bond 4.7950% - 0.0460
NYSE Volume 1,665,478,000
Nasdaq Volume 1,564,831,000

2:00 pm : Selling continues to intensify as the indices extend their reach into negative territory. Adding to the market's recent struggles has been the inability by the Dow, S&P 500 and Nasdaq to find support above key technical levels of 12120, 1382 and 2359, respectively. The tech-heavy Composite continues to feel the brunt of the selling pressure and is now down 1.0%, which is understandable since it is leading the majors in October with a 5.4% advance. As of yesterday's close, the Dow and S&P 500 were up 4.0% each this month.DJ30 -48.11 NASDAQ -22.50 SP500 -8.19 NASDAQ Dec/Adv/Vol 1710/1201/1.38 bln NYSE Dec/Adv/Vol 1808/1398/894 mln

1:30 pm : Albeit not trading sharply lower, a renewed wave of selling interest within the last 10 minutes has pushed the indices to afternoon lows. A reversal in the hardware group now has Technology pacing the way to the downside (-0.8%) among the eight sectors posting losses. A similar pullback in the Dow Jones Transportation Average now has the Industrials sector -- another influential sector -- ranking second among today's laggards.DJ30 -33.30 DJTA -0.3% NASDAQ -11.79 SP500 -6.19 NASDAQ Dec/Adv/Vol 1569/1308/1.21 bln NYSE Dec/Adv/Vol 1635/1545/802 mln

1:00 pm : Little changed since the last update as the major averages settle into a narrow trading range. The market's holding pattern has been further evidenced in the A/D line, as advancers and decliners on the NYSE are now evenly matched while declining issues only hold a slim 15-to-13 margin over advancing issues on the Nasdaq. Like yesterday's action, above average volume is lending some added credibility behind trading efforts, as the Nasdaq eclipsed the 1.0 bln share mark an hour ago. This time around, however, sellers have the upper hand. DJ30 -17.56 NASDAQ -4.02 SP500 -3.71 NASDAQ Dec/Adv/Vol 1541/1310/1.15 bln NYSE Dec/Adv/Vol 1548/1598/734 mln

12:30 pm : Market remains in negative territory but stocks are kicking off the afternoon session at their best levels of the day. However, investors now find themselves weighing a rebound in oil prices and the commodity's inflationary characteristics against subsequent leadership in the Energy sector. DJ30 -14.81 NASDAQ -3.48 SP500 -3.50 XOI +0.6% NASDAQ Dec/Adv/Vol 1620/1214/1.03 bln NYSE Dec/Adv/Vol 1654/1482/668 mln

12:00 pm : After sifting through earnings reports from roughly one-third of the S&P 500 this week, with more than 70% beating expectations, and digesting another Fed decision, stocks look tired midday, especially after the Dow yesterday hit a record high for the 13th time in 18 tries. Market losses, however, are modest at best.

Today's excuse for taking some money off the table following a three-month rally has been a weaker than expected GDP report. At 8:30 ET, the Commerce Dept. reported that GDP rose only 1.6% (consensus 2.1%) in Q3 after checking in with a 2.6% rise for Q2. While the data have raised concerns about whether or not companies can continue to grow earnings at a double-digit rate, the data, which will be revised two more times, was still encouraging overall. After all, the report also showed that consumer spending picked up and that inflation, as reflected in a lower than expected 1.8% rise on the chain deflator, remains contained.

Nonetheless, the absence of leadership from eight economic sectors, especially Financials, is preventing buyers from extending recent gains. An earnings shortfall from Genworth Financial (GNW 34.10 -2.14) and discouraging comments about underwriting profits out of Hartford Financial (HIG 87.91 -3.30) are overshadowing another day of falling bond yields and weighing on the rate-sensitive sector.

The Industrials sector has been another laggard. A weaker than expected GDP report questioning the pace of economic growth has not helped matters while Ingersoll-Rand (IR 37.26 -1.64) missing analysts' expectations and issuing downside guidance has added insult to injury.

Not even new 52-weeks high on Microsoft (MSFT 28.62 +0.27) and Sun Microsystems (SUNW 5.57 +0.21) have been able to renew enthusiasm for tech stocks, let alone the broader market. Last night, Microsoft topped Wall Street estimates and issued guidance that added to optimism heading into the new product cycle ramp, underscoring our Overweight rating on Technology. Sun posted a narrower than expected Q1 loss.

Energy is clinging to a small gain, after Chevron (CVX 68.09 +0.59) handily beat expectations on strong Q3 earnings; but oil prices slipping toward $60/bbl and a warning from Baker Hughes (BHI 71.73 -3.02) have stalled recently renewed enthusiasm for oil stocks.DJ30 -22.81 NASDAQ -4.67 SP500 -4.24 NASDAQ Dec/Adv/Vol 1617/1182/926 mln NYSE Dec/Adv/Vol 1646/1488/590 mln

11:30 am : Market continues to pare its losses as sellers struggle to convincingly prove that stocks are overextended at current levels. Not surprisingly, the Dow, S&P 500 and Nasdaq up 14%, 13% and 18%, respectively, since bottoming out in mid July has left the door open for some profit taking. Nonetheless, the fear of missing out on more traction to the upside has some investors second-guessing their short positions going into the weekend, especially in an environment where interest rates are falling, commodity prices continue to weaken and earnings growth remains robust. DJ30 -15.85 NASDAQ -4.62 SP500 -3.60 NASDAQ Dec/Adv/Vol 1601/1172/788 mln NYSE Dec/Adv/Vol 1570/1502/490 mln

11:00 am : Market improves its stance but not nearly enough to make a significant change in the standings. A turnaround in Materials, led by Construction Materials -- today's second performing S&P industry group (+2.2%) -- has been the most noticeable reason behind the market's recovery attempt. Diversified Metals & Mining (+1.9%) and Aluminum (+1.4%) breaking into the top ten, as evidenced by fresh session highs on Phelps Dodge (PD 100.77 +2.07) and Alcoa (AA 28.00 +0.39), in sympathy with further deterioration in the dollar on weak GDP data, are lending additional sector support. However, Materials' placement as the least heavily weighted of the S&P sectors is having minimal impact overall.DJ30 -36.52 NASDAQ -6.99 SP500 -5.58 NASDAQ Dec/Adv/Vol 1593/1087/599 mln NYSE Dec/Adv/Vol 1542/1456/358 mln

[54anickel]

42. And a peek at the buck - found a ledge on the cliff

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

Last trade 85.57 Change -0.34 (-0.40%)

Settle Time 15:00 Open 85.91

Previous Close 85.91 High 86.07

Low 85.43 2006-10-27 13:56:56, 30 min delay

52wk High 92.63 52wk High Date 2005-11-16

52wk Low 83.6 52wk Low Date 2006-05-15

[54anickel]

43. Bulls bask, but bears and bugs regrouping (yesterday's news)

http://custom.marketwatch.com/custom/earthlink-net/mw-news.asp?guid={8C8FB303-1702-4F0B-A094-854A0CF5DE10}

By Peter Brimelow, MarketWatch
Last Update: 12:01 AM ET Oct 26, 2006

NEW YORK (MarketWatch) -- Don R Hays of the respected Hays Advisory institutional service was his superbullish self Wednesday, and that's before the Dow Jones Industrial Average made a third successive record high close as the Fed again declined to tighten.

Hays wrote: "NEVER, NEVER, NEVER in my 37-year career have the secular signs been more exciting than they are today. Let me say that again. This is not a flamboyant statement ... We believe the stock market's rally will prove in time to have known the Fed despite their Open Mouth Committee statements was opening the spigot. Over the last two months the growth rate of MZM and M2 (money supply measures) is 7.4% and 6.9% respectively, and that is very, very good news IF it continues. We believe it will..."

Hays even interprets that fact that the stock market is overbought according to some indicators as bullish: "In truth, this is bad news ... or good news. In strong bull markets an overbought condition that reaches very overbought levels is a very good sign of buying power ... if confirmed by psychology readings showing the buying power coming from the smart side of the aisle."

Hays argues this is now the case. This is his asset allocation: "We are 90% bullish and have 10% cash, just in case the market gives us that more acceptable and easier time to buy new stock positions on a pull-back."

In contrast, I've recently begun checking with a radical gold bug site www.Lemetropolecafe.com. See Oct. 12 column

Proprietor Bill Murphy was totally unimpressed with the stock market, which he believes is being groomed prior to the Nov. 7 federal election: "This joke of a U.S. stock market goes on and on. For most of the day the Dow was down, while the S&P and DOG (Murphy's nickname for the Nasdaq) were slightly higher. After the Fed announcement, the Dow rallied above unchanged, sunk back down to near its lows once again, and then made its usual late charge to end up on the day to give us another all-time high, following President Bush's press conference this morning."

more...

[54anickel]

45. OT - ABOUT DAYLIGHT SAVING TIME FIVE THINGS

http://www.freep.com/apps/pbcs.dll/article?AID=/20061027/NEWS07/610270373/1009

At 2 a.m. Sunday, it'll be time to fall back an hour. And remember to change your smoke detector batteries!

CLOCK IT

The idea of saving daylight in America dates as far back as 1784, when Ben Franklin wrote a paper extolling the virtues of making the most of daylight to conserve candles.

snip>

TIME SHIFT

Starting in 2007, U.S. daylight saving time will begin at 2 a.m. on the second Sunday in March and end at 2 a.m. on the first Sunday of November. That'll mean an extra hour of daylight next Halloween. :wtf: Nobody asked my opinion on that!! :evilfrown:

FOILED

According to webexhibits.org/daylightsaving/e.html, which has a wealth of info on daylight saving time, lives were saved in September 1999 when a bomb attack didn't go off as planned. The bombers set their devices according to West Bank time, an hour different from Israel time, where the bombs were intended to hit two buses. When the bombs went off an hour early, the three bombers were killed.

DETROIT TRIVIA

Before there was U.S. standard time, cities could follow their own local times. Around the turn of the century, there were as many as 27 local times in Michigan.

more...

[54anickel]

48. Jeebus, healthy volumes today!

Dow 12,088.34 75.32 (0.62%)
Nasdaq 2,350.26 28.84 (1.21%)
S&P 500 1,377.00 12.08 (0.87%)
10-Yr Bond 4.6750% 0.0460
NYSE Volume 2,319,629,000
Nasdaq Volume 2,175,271,000


Advances & Declines
NYSE NASDAQ
Advances 1,193 (35%) 1,017 (32%)
Declines 2,077 (61%) 1,996 (63%)
Unchanged 126 (4%) 138 (4%)
Up Vol* 534 (25%) 612 (30%)
Down Vol* 1,544 (73%) 1,324 (66%)
Unch. Vol* 23 (1%) 72 (4%)
New Hi's 253 163
New Lo's 18 35

[54anickel]

51. Closing time...suspended animation most of the afternoon

Dow 12,090.26 73.40 (0.60%)
Nasdaq 2,350.62 28.48 (1.20%)
S&P 500 1,377.34 11.74 (0.85%)
10-yr Bond 4.6750% 0.0460
30-yr Bond 4.7960% 0.0450
NYSE Volume 2,384,861,000
Nasdaq Volume 2,268,945,000

4:20 pm : After several failed attempts to lock in some of the market's impressive gains of late, sellers finally finished what they started, closing stocks lower across the board.

With the Dow just a day removed from hitting its 13th record high in 18 days, a sense that stocks were overbought on a short-term basis left the market looking tired and vulnerable in pre-market action. Also acting as a constraint before the opening bell even sounded was a weaker than expected GDP report.

At 8:30 ET, the Commerce Dept. reported that Q3 GDP rose only 1.6% (consensus 2.1%) in Q3, the slowest pace in three years, due primarily to a huge 17% drop in residential construction activity which shaved 1.1% off the GDP gain. That wasn't all that surprising, though, since Fed Chairman Bernanke said on October 4th that the U.S. housing market is in a "substantial correction,'' which will lop about one percentage point off economic growth in the second half of the year.

The GDP report also showed that consumer spending picked up and that inflation, as reflected in a lower than expected 1.8% rise on the chain deflator, remains contained, indicative of a soft landing. Be that as it may, the weak GDP headline left investors questioning the sustainability of the recent advance, which opened the door for anything negative to push stocks even lower.

Then, as it appeared the bulls might simply surrender a modest pullback to some characteristic consolidation following such a huge run-up, sellers wrapped their arms around a negative research note and ran wit hit. Between 1:00 and 2:00 ET, it was reported that Goldman Sachs is cutting its growth forecast for motherboard shipments. After the broker reportedly said motherboard demand is "falling off a cliff," tech stocks did just that, selling off and removing notable sector leadership that took a toll on overall sentiment.

Better than expected reports from blue chips like Microsoft (MSFT 28.34 -0.01) and Chevron (CVX 67.64 +0.14) were all but forgotten. DJ30 -73.40 NASDAQ -28.48 SP500 -11.74 NASDAQ Dec/Adv/Vol 2023/1004/2.24 bln NYSE Dec/Adv/Vol 2116/1162/1.55 bln

3:30 pm : The major averages continue to languish near their worst levels of the day as the bulk of industry leadership remains negative. Should losses hold going into the close, today's sell-off snaps a four-day winning streak for the Dow and S&P 500. On a positive note, the S&P 500 is still on track for its best monthly performance (+3.2%) since last November and aggregate operating earnings for Q3 are on pace to grow a stronger than expected 18%. DJ30 -72.20 NASDAQ -27.19 SP500 -11.23 NASDAQ Dec/Adv/Vol 1932/1048/1.89 bln NYSE Dec/Adv/Vol 2038/1208/1.22 bln

3:00 pm : Selling remains the name of the game as a reversal in Materials now leaves all 10 sectors in the red. Technology (-1.8%), though, continues to be the biggest drag on sentiment. To wit, the sector now accounts for six of today's worst performing S&P industry groups: Semiconductor Equipment (-3.3%), Semiconductors (-2.9%), Computer Storage (-2.3%), Application Software (-2.3%), Communication Equipment (-2.0%) and Internet Software & Services (-1.8%). DJ30 -77.40 DOT -1.1% NASDAQ -28.15 SOX -2.2% SP500 -11.61 NASDAQ Dec/Adv/Vol 1939/1020/1.70 bln NYSE Dec/Adv/Vol 2010/1230/1.09 bln

2:30 pm : The bottom continues to fall out of the market as losses continue to mount in the absence of spirited leadership from a number of blue chips. Of the 21 Dow components under pressure, Intel (INTC 21.12 -0.65) and Hewlett-Packard (HPQ 38.60 -0.57) are pacing the way lower following reports that Goldman Sachs is out with a negative call on motherboard shipments saying demand has fallen quickly in October, prompting them to cut forecasts. Other tech names selling off include AMD (-1.7%), MU (-2.8%), AMAT (-2.3%), KLAC (-2.8%), NVLS (-2.1%), TER (-1.9%), and DELL (-1.3%). DJ30 -73.24 NASDAQ -27.37 SOX -1.5% SP500 -11.30 NASDAQ Dec/Adv/Vol 1811/1124/1.53 bln NYSE Dec/Adv/Vol 1853/1362/982 mln

2:00 pm : Selling continues to intensify as the indices extend their reach into negative territory. Adding to the market's recent struggles has been the inability by the Dow, S&P 500 and Nasdaq to find support above key technical levels of 12120, 1382 and 2359, respectively. The tech-heavy Composite continues to feel the brunt of the selling pressure and is now down 1.0%, which is understandable since it is leading the majors in October with a 5.4% advance. As of yesterday's close, the Dow and S&P 500 were up 4.0% each this month.DJ30 -48.11 NASDAQ -22.50 SP500 -8.19 NASDAQ Dec/Adv/Vol 1710/1201/1.38 bln NYSE Dec/Adv/Vol 1808/1398/894 mln

1:30 pm : Albeit not trading sharply lower, a renewed wave of selling interest within the last 10 minutes has pushed the indices to afternoon lows. A reversal in the hardware group now has Technology pacing the way to the downside (-0.8%) among the eight sectors posting losses. A similar pullback in the Dow Jones Transportation Average now has the Industrials sector -- another influential sector -- ranking second among today's laggards.DJ30 -33.30 DJTA -0.3% NASDAQ -11.79 SP500 -6.19 NASDAQ Dec/Adv/Vol 1569/1308/1.21 bln NYSE Dec/Adv/Vol 1635/1545/802 mln

1:00 pm : Little changed since the last update as the major averages settle into a narrow trading range. The market's holding pattern has been further evidenced in the A/D line, as advancers and decliners on the NYSE are now evenly matched while declining issues only hold a slim 15-to-13 margin over advancing issues on the Nasdaq. Like yesterday's action, above average volume is lending some added credibility behind trading efforts, as the Nasdaq eclipsed the 1.0 bln share mark an hour ago. This time around, however, sellers have the upper hand. DJ30 -17.56 NASDAQ -4.02 SP500 -3.71 NASDAQ Dec/Adv/Vol 1541/1310/1.15 bln NYSE Dec/Adv/Vol 1548/1598/734 mln

12:30 pm : Market remains in negative territory but stocks are kicking off the afternoon session at their best levels of the day. However, investors now find themselves weighing a rebound in oil prices and the commodity's inflationary characteristics against subsequent leadership in the Energy sector. DJ30 -14.81 NASDAQ -3.48 SP500 -3.50 XOI +0.6% NASDAQ Dec/Adv/Vol 1620/1214/1.03 bln NYSE Dec/Adv/Vol 1654/1482/668 mln


Have a great weekend! :hi:

[Squatch]

59. Stay away from this thread

Link

[54anickel]

61. Iossif brought that up in Tuesdays wrap up

http://www.financialsense.com/Market/daily/tuesday.htm

snip>

SUMMARY

Last week we said, "The message from all of our technical indicators is one in the same; at this point the SP is vulnerable to a sudden 40 point decline, and likewise, NASDAQ is vulnerable to a sudden 80-100 point decline. The question is "what price level is going to trigger the decline?" The chart patterns and the technical readings lead us to believe that the odds favoring the zone between resistance and the first upside targets, are better than even. Next week is OPEX. OPEX weeks tend to have bullish bias, thus, the indices may continue to remain in a state of suspended animation throughout next week. However, if they penetrate the "trigger zone" next week, then we would expect a reaction by no later than the following one."

This week the indices remained in a "state of suspended animation" during OPEX week--as we had suspected. For this week the odds favor a retreat, but we won't have confirmation of it until we have a close below 1357 for the SP, and below 2325 for NASDAQ. Look out for an advance on Monday followed by a shallow day on Tuesday. Such action the first two days of the week will increase the odds of a retreat later on.

end snip<

He tends to be fairly accurate, I'd give him 70-75% of the time, though his timing is sometimes a week or 2 off. My guess is it's because there are so many chartists and trading programs that use the same chartist logic that it gives the PPT a decent heads-up to try and stay a step ahead of the game. Sometimes they manage to head off the chartist types completely causing a reverse of the expected (short squeezes come to mind). Other times they manage to just postpone the expected fall which tends to soften it a bit. Problem here is (as I replied to Weds post) when's "later on"? Later in the week, month, year? If it can be postponed long enough for the traditional Santa Rally and year end pouring in of managed funds to kick in, then what should be a big drop will end up being a much smaller one.

Markets are normally trading on future events, so they've more or less already priced in what they believe the election results will bring. I really don't think they much give a rats ass who's in charge (everyone has their price). Just my guess, but from the record number of corps going private the last quarter, I'd say they're betting on a Dem victory - more investigations, possibly more regulations, time to take the "bad apples" off the market and under the wing of private-equity firms and hedge funds. They took a bunch private back in 2000 just to turn around and slap them back on the market after the crooks moved into the WH. But, that's just my two cents worth and probably somewhat biased by wishful thinking. ;-)

Posted this one earlier this week on the buyout frenzy:
http://money.cnn.com/magazines/fortune/fortune_archive/2006/10/30/8391804/index.htm?postversion=2006102408

As far as the linked dire post, I really don't know what to say. Short selling, especially naked shorts have been rampant in this market for the past few years. McToots posted an excellent link regarding those here and elsewhere at DU a couple of months back. This ain't your father's market anymore and the little "buy and hold" guy doesn't stand much of a chance. We've been saying this market isn't for the amateur or faint-hearted in this thread for quite a while, but no one has a crystal ball and there are a lot of rich and powerful people willing to prop this Ponzi scheme for a long time. If/when they loose their grip it's gonna be an ugly ride down. :shrug:

JMO and worth exactly what you pay for it...zilch, nada, nil, zip-po.