STOCK MARKET WATCH, Monday December 18

[ozymandius]

Monday December 18, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 763 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2182 DAYS
WHERE'S OSAMA BIN-LADEN? 1888 DAYS
DAYS SINCE ENRON COLLAPSE = 1849
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 7
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 December 15, 2006

Dow... 12,445.52 +28.76 (+0.23%)
Nasdaq... 2,457.20 +3.35 (+0.14%)
S&P 500... 1,427.09 +1.60 (+0.11%)
Gold future... 619.10 -11.80 (-1.91%)
30-Year Bond 4.72% +0.00 (+0.04%)
10-Yr Bond... 4.60% +0.00 (+0.04%)






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 Tim W. Wood

THE DOW REPORT
Still Up, Still Positive and Still Pressing into the 4-Year Cycle Top

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

--more navel gazing--

[ozymandius]

2. Today's Report

8:30 AM Current Account Q3
Briefing Forecast -$225.0B
Market Expects -$225.0B
Prior -$218.4

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

[Ghost Dog]

9. 08:30 Current Account Q3

Dec 18 8:30 AM Current Account Q3 Actual -$225.6B Briefing -$225.0B Expected -$225.0B Prior -$217.1 Revised from -$218.4

[Ghost Dog]

10. U.S. Current-Account Gap Widens to Record $225.6 Bln

http://www.bloomberg.com/apps/news?pid=20601087&sid=a349xJXiRK00&refer=worldwide

Dec. 18 (Bloomberg) -- The U.S. current-account deficit widened to a record $225.6 billion last quarter as the trade gap grew and the country paid more interest to overseas investors.

The shortfall in the current account, the broadest measure of trade because it includes transfer payments and investment income, followed a revised $217.1 billion second-quarter gap, the Commerce Department said today in Washington.

The trade deficit ballooned last quarter when oil prices surged and imports from China flooded in. Stronger economies abroad and a weakening dollar suggest exports will strengthen and the trade balance will improve in coming months, lessening the risk foreign investors turn their backs on U.S. assets.

...

The deficit in trade, which accounts for about 90 percent of the total current-account imbalance, widened to $200.3 billion last quarter from $193.1 billion in the second quarter.

U.S. investors received less income on their holdings of overseas investments than foreigners received here. That helped to widen the overall current-account deficit.

Income on overseas assets held by U.S. investors rose to $160.8 billion from $156 billion. Foreign earnings on U.S. assets, including wages and other compensation, rose to $164.6 billion in the third quarter from $158.2 billion in the previous three months. That left $3.8 billion deficit on income payments, the largest ever, compared with a $2.2 billion shortfall in the second quarter.

U.S. government payments to foreigners and other private transfers abroad registered a $21.5 billion deficit, compared with the $21.9 billion deficit in the prior quarter.

A growing deficit would pose a risk to the economy should investors sour on U.S. assets and diversify to other countries because it may precipitate a sharp weakening of the dollar and push interest rates higher.

/...

[ozymandius]

3. Oil prices retreat from last week's gain

SINGAPORE - Oil prices retreated from highs last week but stayed above $63 a barrel in early Monday trading.

Prices rose steadily last week on renewed supply concerns as U.S. inventories fell and
OPEC decided to cut output in February.

In midafternoon Asian electronic trading on the New York Mercantile Exchange, light sweet crude for January delivery fell 29 cents to $63.14 as traders cashed in on last week's gains.

February Brent at London's ICE Futures exchange gave up 24 cents to trade at $63.25 a barrel.

Some analysts have suggested the post-OPEC announcement surge could be the impetus that brings oil prices back above $70 a barrel. In mid-July, crude briefly surpassed $78 a barrel, but dropped sharply. The contract has been trading between $58 and $64 a barrel since early October.

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

[ozymandius]

4. Norwegian oil companies plan merger

OSLO, Norway - Norwegian oil companies Statoil ASA and Norsk Hydro ASA announced plans Monday to merge their offshore oil and natural gas units in a deal they said would create the world's largest offshore oil operator.

The Norwegian government, which owns 71 percent of Statoil and 44 percent of Norsk Hydro, reacted positively to the announcement, which sent Hydro shares soaring almost 25 percent. The government would hold 62.5 percent of the merged company.

Statoil is already the key operator on the offshore fields that make Norway the world's third largest oil exporter, and Norsk Hydro is also a major player.

"The new company will be a highly competent and financially strong Norwegian-based energy champion, well-positioned to ensure continued domestic excellence and pursue international business opportunities for long-term growth," the two company boards said in a joint statement.

http://news.yahoo.com/s/ap/20061218/ap_on_bi_ge/norway_oil_merger_2

[Ghost Dog]

13. Westinghouse deal kicks off Chinese nuclear energy drive

http://www.afp.com/english/news/stories/061218100720.qm870pp2.html

BEIJING (AFP) - China's decision to buy four nuclear power reactors from US-based Westinghouse represents a major step in an ambitious drive to boost atomic energy production.

In March this year, China's cabinet approved blueprints to bring nuclear energy capacity from its current level of about 9,600 megawatts to 40,000 megawatts by 2020, or about four percent of its overall energy production.

The deal for the third-generation 1,000 megawatt reactors marks only the beginning of the production drive to wean the country away from dependency of polluting fossil fuels. "The target will require China to build some 32 nuclear power units, each capable of generating at least one gigawatt (1,000 megawatts), over the next 15 years," Xinhua news agency quoted Zhang Guobao, vice minister in charge of the National Development and Reform Commission (NDRC), as saying at the time.

China currently has nine nuclear energy reactors in commercial operation with two more Russian-made units expected to go on line by the end of March 2007. France has built four nuclear reactors in China, while Canada has built two atomic power units.

The four Westinghouse reactors will be constructed in nuclear power stations in Yangjiang in south China's Guangdong province and in Sanmen, in Zhejiang province along the nation's east coastline.

The multi-billion dollar deal was announced on Saturday and comes after years of intense competition with France's Areva and Russia's AtomStroyExport. According to the Chinese government, Westinghouse won the bid on technical merits, with insiders saying the American-based, but Japanese-owned company, was willing to transfer more technology than their French rivals.

The deal for the Westinghouse AP 1000 reactors was valued at between 5.5 billion dollars and 8.0 billion dollars, the insiders said. Westinghouse said the deal will create up to 5,000 jobs in the United States.

/...

[Roland99]

33. So, oil dropped over a dollar today? Why did gas go up $0.15 here?

Now $2.39 citywide

[ozymandius]

5. Housing slowdown hits Black & Decker

Black & Decker warned on Friday that the weakening US housing market would cut sales of its power tools in the current quarter, and said it faced "significant challenges" in the first half of next year which were likely to be felt by rivals.

The US group is the global market leader and sells a third of its power tools and accessories through Home Depot and Lowes (NYSE:LOW - news), which have both warned that falling new and existing home sales would hit revenues.

Retailers have responded by reducing inventories, while Black & Decker said it had also lost sales by not matching the deep discounting of some rivals in favour of maintaining its premium pricing, and continuing increases to pass on rising raw material costs.

Black & Decker's warning - which saw it cut its earnings forecast for the third time this year - is the latest evidence of how the housing slowdown is affecting corporate America.

http://news.yahoo.com/s/ft/20061215/bs_ft/fto121520061148128438

[ozymandius]

6. FTSE hovers at near 6-year high

The FTSE 100 hovered close to a six-year high on Monday thanks to sharp gains for Smith & Nephew shares.

The medical devices maker was the leading blue-chip gainer, up 5.8 per cent to 510¼p, amid reports that it could be beaten in its attempt to buy Biomet (NASDAQ:BMET - news) of the US.

According to US news sources, private equity groups are still in the running to buy the US orthopaedic company.

Failure to complete the Biomet deal would leave S&N vulnerable to a takeover.

http://news.yahoo.com/s/ft/20061218/bs_ft/fto121820060720058594

[Ghost Dog]

11. Hong Kong H-shares hit record with insurers, blue chips up

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061218:MTFH64224_2006-12-18_09-24-58_HKG76157&type=comktNews&rpc=44

HONG KONG, Dec 18 (Reuters) - Hong Kong-listed Chinese stocks surged on Monday on strong buying in Chinese insurance companies, propelling the H-share index <.HSCE> up 2.77 percent to a record close of 9,238.12.

The benchmark Hang Seng index <.HSI> closed up 0.43 percent at 19,192.91, supported by strong regional markets and led by a 1.9 percent gain in China Mobile (0941.HK: Quote, Profile , Research).

Turnover was HK$49.2 billion (US$6.3 billion), down 22 percent from Friday's HK$63.2 billion.

"The H-shares outperformed the blue chips, principally driven by insurance and banks," said Alex Tang, research director of Core Pacific-Yamaichi International (HK) Ltd.

"There is strong buying interest on the back of anticipation of further renminbi revaluation," Tang added.

/...

[Ghost Dog]

12. Tokyo stocks rise on gains in U.S. shares, strong dollar

http://asia.news.yahoo.com/061218/kyodo/d8m37pag0.html

Japan's key Nikkei stock index ended within sight of the psychologically important 17,000 mark Monday on gains in U.S. shares and buying of export-oriented shares on the U.S. dollar's rise against the yen.

The 225-issue Nikkei Stock Average gained 47.80 points, or 0.28 percent, to 16,962.11, the highest close since May 9 when it ended at 17,190.91. The Tokyo Stock Price Index of all First Section issues on the Tokyo Stock Exchange advanced 7.92 points, or 0.48 percent, to 1,665.32.

...

"Stocks were sandwiched between selling by some investors, who were worried about risks of market overheating as the Nikkei index approached the 17,000 line, and buying on dips," said Hiroichi Nishi, equities chief at Nikko Cordial Securities Inc.

Some investors opted to wait for results of the Bank of Japan's two-day rate-setting meeting that ends Tuesday as well as what BOJ Governor Toshihiko Fukui will say at a press conference after the meeting.

"Investors are paying close attention to how Mr. Fukui will explain the decision" in order to get an idea of how the central bank is assessing the future course of the Japanese economy, Nishi said.

"Although the market has taken on board the fact there will be no rate hike decision tomorrow, stocks may move sharply if Mr. Fukui would hint at the news conference about a possible rate hike in January," said Kazuhiro Takahashi, head of the equity planning and administration department at Daiwa Securities SMBC Co.

...

Trading volume on the main section decreased to 1,600.97 million shares from Friday's 1,659.30 million shares.

The TSE's Second Section index rose 5.19 points, or 0.12 percent, to 4,180.32 on a volume of 49.58 million shares. On the Osaka Securities Exchange, the near-term March Nikkei 225 index futures contract rose 50 points to 16,960.

[Ghost Dog]

14. Big growth gap between EU member states

http://www.khaleejtimes.ae/DisplayArticleNew.asp?xfile=data/theworld/2006/December/theworld_December459.xml§ion=theworld&col=

(AFP) BRUSSELS - Wide disparities persist among the EU’s 25 member state economies, according to figures published Monday, with Luxembourg’s GDP per head over twice the bloc-wide norm, while Latvia and others languish far behind.

The statistics, released by the EU’s Eurostat data agency, show that gross domestic product -- the market value of all goods and services produced within a country -- per inhabitant in Luxembourg stood at 251 percent of the EU norm, which was 23,500 euros (30,780 dollars at current conversion rate) in 2005.

The Latvian figure stood at just 48 percent of the average.

Norway came second on the list at 169 percent with Ireland on 140 percent.

Keeping Latvia company at the bottom of the GDP per capita league are Lithuania (52 percent) and Poland (50 percent).

In comparison the United States would figure well in the poll at 150 percent, with Japan on 110 percent of the EU average.

Bulgaria and Romania will bring the average down when they join the EU next month. Their 2005 GDP per capita figures stood at 33 percent and 34 percent of the EU average respectively.

Those figures look positively healthy compared to EU-hopeful Turkey’s 28 percent.

The Netherlands, Austria, Denmark, Belgium, Britain and Sweden were all estimated to be 15-25 percent above the EU norm while France (108 percent), Germany (110 percent) and Finland (111 percent) flirted with the average,

/...

[ozymandius]

7. Futures up on private equity buying spree

NEW YORK (Reuters) - U.S. stock index futures pointed to higher market open on Monday amid a flurry of takeover activity that may stir demand for equities and help indexes end the year at new highs.

Pharmacy benefits manager Express Scripts Inc. (Nasdaq:ESRX - news) said on Monday it was offering to buy rival Caremark RX (NYSE:CMX - news) for about $26 billion, threatening to disrupt a deal brokered last month with drugstore chain CVS Corp.

Realogy Corp. (NYSE:H - news), the owner of the Coldwell Banker franchise, said it agreed to be bought out by private equity firm Apollo Group for about $6.65 billion.

-cut-

S&P 500 futures were up 3.1 points, well above fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures rose 21 points, and Nasdaq 100 futures up 5.75 points.

http://news.yahoo.com/s/nm/markets_stocks_dc

[Roland99]

8. So, is it just institutional buying (maybe funded by the Fed?) that's keeping the markets up?

[Ghost Dog]

15. Gold futures head for a third loss

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B583ACA70%2D4CC6%2D485C%2DB965%2DAF6EA4E0EE0A%7D&siteid=bigcharts&dist=news

SAN FRANCISCO (MarketWatch) -- Gold futures fell Monday morning, ready to mark their third straight losing session as silver prices fell as much as 3% to touch a six-week low.

"With dollar sentiment improving and fund players still positioned long ahead of year-end, and the market set to thin-out over the next two-weeks over the Christmas/New Year holiday period, the market remains at most risk to further long liquidation," said James Moore, an analyst at TheBullionDesk.com, in a note to clients.

Gold for February delivery was down $11.80 at $619.10 an ounce on the New York Mercantile Exchange after falling to $616.30, its weakest intraday level since Oct. 31. The contract has tallied a loss of $13.30 over the past two sessions. March silver dropped 25 cents, or 1.9%, to stand at $12.73 an ounce following a low of $12.59. The contract hasn't traded at a level this low since Nov. 3.

...

Elsewhere in metals trading, March copper prices in New York traded at $3.01 a pound, down 0.65 cent. On Friday, it fell under $3 to its lowest level in six months as traders gauged supply and demand. January platinum fell $6.50 to trade at $1,098 an ounce and March palladium lost $1.75 to stand at $322.50 an ounce.

On the supply side, gold inventories were down 21,138 troy ounces at 7.47 million troy ounces as of late Friday, according to Nymex data. Silver supplies climbed 133,451 troy ounces to 110.1 million troy ounces and copper supplies rose by 27 short tons to 31,752 short tons.

In equities Monday, most metals-mining shares fell, ready to extend the weakness from the previous trading session.

/..

[Ghost Dog]

16. London bullion market gold turnover set to rise by 33% in 2006

http://www.finfacts.com/irelandbusinessnews/publish/article_10008486.shtml

London is by far the largest global centre for over-the-counter (OTC) trading of gold and silver according to IFSL’s Bullion Markets report.

The OTC market accounts for the bulk of activity and has been behind the rise in precious metals trading over the past two years. IFSL (International Financial Services London) estimates that turnover of gold on the OTC market in 2006 is set to rise by 33% to 16.5bn ounces, while silver turnover is expected to increase by 40% to 116bn ounces.

/..

[Ghost Dog]

17. Dollar Gains Versus Euro, Yen on View U.S. Economy Is Resilient

http://www.bloomberg.com/apps/news?pid=20601083&sid=akPgAIf_Posk&refer=currency

Dec. 18 (Bloomberg) -- The dollar gained against the euro and pared a loss versus the yen on the view the U.S. economic growth will lead the Federal Reserve to hold interest rates at their current level for a longer stretch.

The U.S. currency fell earlier after a report showed a record deficit in the nation's current account, the broadest measure of international trade.

The dollar advanced to $1.3058 per euro at 10:33 a.m. in New York from $1.3080 late on Dec. 15. It traded at 117.89 yen from 118.17 on Dec. 15.

/...

Also:

[Ghost Dog]

19. Iran to replace dollar with euro

http://english.aljazeera.net/NR/exeres/57E17F90-F717-45AF-B56E-87235A4BD8B6.htm

The Iranian central bank is to convert the state's foreign dollar assets into euros and use the euro for foreign transactions.

"The government has ordered the central bank to replace the dollar with the euro to limit the problems of the executive organs in commercial transactions," said Gholam Hossein Elham, a government spokesman, on Monday. "We will also employ this change for Iranian assets (in dollars) held abroad."

Elham added that Iran's budget would in future be calculated in euros. "Until now the budget has been calculated according to revenues in dollars but this calculation will now change," he said.

...

Elham implied that the move to the euro would also apply to Iran's oil revenues. "Foreign income sources and oil revenues will be calculated in euros and we will receive them in euros in order to put an end to our dependence on the dollar," Elham said.

Bankers in Iran have said it has become difficult to receive Iranian-held money denominated in dollars from European bank accounts. They said that this was because of US pressure on European banking giants not to allow dollar-denominated funds to be sent into, or out of, the Islamic republic.

/..

[mnhtnbb]

20. Could this be the start of other countries deciding to do the same?

[Ghost Dog]

21. Already started, it seems,

with most others being far more subtle about it.

[Ghost Dog]

22. (BTW) Tax Leads Americans Abroad to Renounce U.S.

http://www.nytimes.com/2006/12/18/world/18expat.html?ei=5090&en=5655d020c1763b3f&ex=1324098000&partner=rssuserland&emc=rss&pagewanted=print

PARIS, Dec. 17 — She is a former marine, a native Californian and, now, an ex-American who prefers to remain discreet about abandoning her citizenship. After 10 years of warily considering options, she turned in her United States passport last month without ceremony, becoming an alien in the view of her homeland. “It’s a really hard thing to do,” said the woman, a 16-year resident of Geneva who had tired of the cost and time of filing yearly United States tax returns on top of her Swiss taxes. “I just kept putting this off. But it’s my kids and the estate tax. I don’t care if I die with only one Swiss franc to my name, but the U.S. shouldn’t get money I earned here when I die.”

Historically, small numbers of Americans have turned in their passports every year for political and economic reasons, with the numbers reaching a high of about 2,000 during the Vietnam War in the early 1970s. But after Congress sharply raised taxes this year for many Americans living abroad, some international tax lawyers say they detect rising demand from citizens to renounce ties with the United States, the only developed country that taxes it citizens while they live overseas. Americans abroad are also taxed in the countries where they live.

...

Andy Sundberg, a director of the Geneva-based American Citizens Abroad, has been tracking renunciations dating back to the 1960s through annual Treasury Department figures. He considers the numbers low compared with some stretches in the past, like the early 1970s. But he has also noticed a recent increase in interest among Americans in renouncing their citizenship. “I think the cup is boiling over for a number of people living abroad,” Mr. Sundberg said. “With the Internet and the speed and the ubiquity of information, people are more aware of what’s happening.” With the changes in the tax laws, he said, some Americans living abroad fear “they’re heading toward a real storm.”

...

Concern about taxes among Americans living abroad has surged since President Bush signed into law a bill that sharply raises tax rates for those with incomes of more than $82,400 a year. The legislation also increases taxes on employer-provided benefits like housing allowances. The changes, enacted in May, apply retroactively to Jan. 1, 2006.

Matthew Ledvina, an international tax lawyer in Geneva, said demand for legal counsel on the citizenship issue was coming largely from American citizens who held second passports and who had minimal ties to the United States. “There are incentives to do it before the end of the year so that you can minimize your future reporting,” he said. Mr. Ledvina said the waiting period for appointments at the American Embassy in London had increased from a few days to more than three and a half months. He said he had recently approached embassies in Vienna, Bern, London, Paris and Brussels before finally getting an appointment in Amsterdam for a client’s renunciation application.

The legal ritual of renunciation is largely unique to the United States because other countries base taxation on residency, not citizenship, according to Ingmar Dörr, a tax lawyer with Lovells in Munich.

...

For some Americans abroad, motivations for renunciation are mixed and complex, involving social concerns, political displeasure with their government and other reasons. But it is clear that taxation plays a large role for many, even though few are willing to admit that because of penalties enacted a decade ago.

In 1996, Congress tried to address a wave of tax-driven expatriation by the wealthy by requiring former citizens to file tax returns for a decade and forbidding Americans who renounced their passports for tax reasons from visiting the United States. But in practice, the government is mainly interested in wealthier ex-citizens with a net worth of more than $2 million — few of whom pay further United States taxes because they generally avoid making American financial investments after giving up citizenship, Mr. Ledvina said. As for the rule barring entry to tax refugees, he said, it has not been enforced by the authorities.

Still, that possibility prompts ex-citizens to tread carefully and remain discreet about their choices.

/...

[mnhtnbb]

23. Hubby pointed this out to me today at lunch. We're building a retirement home in Panama

but getting a Panamanian passport is costly. It may end up being less expensive to qualify for the Panamanian passport and renouce our US citizenship. On the other hand, we may be able to organize our income to
come in under the threshold mentioned in the article, which will go a very long way in Panama.

[Ghost Dog]

25. Good luck there, mnhtnbb.

(Y espero que entendeis español...!)

[mnhtnbb]

27. Panama is booming. Expansion of the canal should only

contribute to its growth.

This is the development where our house is under construction--hoping for a January closing.
www.redfrogbeach.com

We've seen the price on the basic model we chose go up 66% since we contracted 20 months ago. And the least expensive lot is 81% more than we paid. All on paper, of course. We couldn't afford to buy there now.

And, yes, we will have to brush up on our Spanish. After not using much since we moved from L.A. 18 years ago, I understand better than I speak, read it better than I can write. Due to the American presence for so many years because of the Canal, though, a lot of English is spoken, especially in Panama City and tourist areas.

[Ghost Dog]

24. THE UNITED STATES IS INSOLVENT

http://financialsense.com/fsu/editorials/martenson/2006/1217.html
by Dr. Chris Martenson
The End of Money
December 17, 2006

Prepare to be shocked.

The US is insolvent. There is simply no way for our national bills to be paid under current levels of taxation and promised benefits. Our federal deficits alone now total more than 400% of GDP.

That is the conclusion of a recent Treasury/OMB report entitled Financial Report of the United States Government that was quietly slipped out on a Friday (12/15/06), deep in the holiday season, with little fanfare. Sometimes I wonder why the Treasury Department doesn’t just pay somebody to come in at 4:30 am Christmas morning to release the report. Additionally, I’ve yet to read a single account of this report in any of the major news media outlets but that is another matter.

But, hey, I understand. A report is this bad requires all the muffling it can get.

In his accompanying statement to the report, David Walker, Comptroller of the US, warmed up his audience by stating that the GAO had found so many significant material deficiencies in the government’s accounting systems that the GAO was “unable to express an opinion” on the financial statements. Ha ha! He really knows how to play an audience!

...

Then Walker went on to deliver the really bad news:

Despite improvement in both the fiscal year 2006 reported net operating cost and the cash-based budget deficit, the U.S. government’s total reported liabilities, net social insurance commitments, and other fiscal exposures continue to grow and now total approximately $50 trillion, representing approximately four times the Nation’s total output (GDP) in fiscal year 2006, up from about $20 trillion, or two times GDP in fiscal year 2000.

As this long-term fiscal imbalance continues to grow, the retirement of the “baby boom” generation is closer to becoming a reality with the first wave of boomers eligible for early retirement under Social Security in 2008.

Given these and other factors, it seems clear that the nation’s current fiscal path is unsustainable and that tough choices by the President and the Congress are necessary in order to address the nation’s large and growing long-term fiscal imbalance.

Wow! I know David Walker’s been vocal lately about his concern over our economic future but it seems almost impossible to ignore the implications of his statements above. From $20 trillion in fiscal exposures in 2000 to over $50 trillion in only six years? What shall we do for an encore…shoot for $100 trillion?

And how about the fact that boomers begin retiring in 2008…that always seemed to be waaaay out in the future. However, beginning January 1st we can start referring to 2008 as ‘next year’ instead of ‘some point in the future too distant to get concerned about now’. Our economic problems need to be classified as growing, imminent, and unsustainable.

And let me clarify something. The $53 trillion shortfall is expressed as a ‘net present value’. That means that in order to make the shortfall disappear we’d have to have that amount of cash in the bank – today - earning interest (the GAO uses 5.7% & 5.8% as the assumed long-term rate of return). I’ll say it again - $53 trillion, in the bank, today. Heck, I don’t even know how much a trillion is let alone fifty-three of ‘em.

...

Perhaps the reason US bonds and the dollar have held up so well is that we are far from alone in our predicament. In a recent article detailing why the UK Pound Sterling may fall, we read this horrifying evidence:

Officially, public sector net debt stands at £486.7bn. That's equal to US$953.9bn and represents a little under 38% of annual GDP. Add the state's "off balance sheet" debt, however – including its pension promises to state-paid employees – and the total shoots nearly three times higher. Research by the Centre for Policy Studies in London says it would put UK government deficits at a staggering 103% of GDP.

If we perform the same calculations for the US, however, we find that the official debt stands at $8.507 trillion or 65% of (nominal) GDP but when we add in our “off balance sheet” items the national debt stands at $53 trillion or 403% of GDP.

/read on...

[Ghost Dog]

26. cf. also here:

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53413
Real U.S. shortfall: $4.6 trillion in red

By Jerome R. Corsi
© 2006 WorldNetDaily.com

The real 2006 federal budget deficit was $4.6 trillion, not a previously reported $248.2 billion, according to the 2006 Financial Report of the United States Government as released by the Treasury Department Friday.

"The 2006 federal budget deficit of $4.6 trillion is $1.1 trillion more than the 2005 federal budget deficit," econometrician John Williams, who publishes the website Shadow Government Statistics, told WND. "The Bush administration is in an untenable situation with a budget deficit this dramatic. Taxing 100 percent of all wages, salaries, and corporate profits would not eliminate a deficit of this magnitude, and cutting Social Security and Medicare spending is politically impossible."

/...

[Roland99]

18. 12:27pm - back to those ol' mexed missages

DJIA 12,452.41 +6.89 +0.06%
Nasdaq 2,447.11 -10.09 -0.41%
S&P 500 1,425.39 -1.70 -0.12%

[nitpicker]

29. The markets don't like the charging of the 3 Fannie Maers

AP has just reported that Frankliln Raines and two other former Fannie Mae execs have been charged in civil court.

[Ghost Dog]

30. Hmm. Ex-Fannie Mae CEO, others charged with manipulating earnings

http://www.marketwatch.com/news/story/ex-fannie-mae-ceo-others-charged/story.aspx?guid=%7B6F42BD44%2D3752%2D4B7B%2D9BB5%2D76485DA1DD94%7D

NEW YORK (MarketWatch) -- Federal regulators said Monday they have filed charges against three former Fannie Mae (FNM : FNM 59.96, -0.31, -0.5% ) executives, former Chairman and CEO Franklin Raines, former Vice Chairman and Chief Financial Officer J. Timothy Howard, and former Senior Vice President and Controller Leanne G. Spencer. The Office of Federal Housing Enterprise Oversight (OFHEO)said the charges, "reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public." OFHEO said it will seek civil penalties of up to $100 million from the former executives, and the return of bonuses totaling up to $115 million from the three.

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Thanks nitpicker & welcome :hi:

[Ghost Dog]

28. 15:00 Bending, not yet broken...

Dow 12,447.12 Up 1.60 (0.01%)
Nasdaq 2,435.88 Down 21.32 (0.87%)
S&P 500 1,422.49 Down 4.60 (0.32%)
10-Yr Bond 4.5930% Down 0.0040
NYSE Volume 1,928,109,000
Nasdaq Volume 1,464,591,000

http://finance.yahoo.com/marketupdate/update

3:00 pm : The indices have hit an air pocket with the Nasdaq leading the way. At the time of our last report, we noted the Nasdaq's weakness was largely a result of selling interest among small-cap issues. Now, however, the large-cap stocks have succumbed to selling activity that has taken the Nasdaq 100 down 1.22% after being down just 0.30% at the bottom of the hour.

...

2:25 pm : The standing of the major indices remains mixed as the Dow, underpinned by continued strength in Citigroup (C 55.20, +1.13) and General Electric (GE 37.90, +0.54), is refusing to enter negative territory.

Not surprisingly, the outperformance of those two mega caps is providing support for the S&P 500, which is trading with a negligible loss. The Nasdaq is the biggest laggard of the bunch, but that is owed primarily to weakness in the small-cap stocks that shows up in an A/D line that favors decliners by nearly a 2-to-1 margin. DJ30 +23.15 NASDAQ -9.70 SP500 -1.01 NASDAQ Dec/Adv/Vol 1964/1039/1.25 bln NYSE Dec/Adv/Vol 2393/1506/980 mln

2:00 pm : The market has bent today, but it has not broken as the outperformance of the financial sector and a spate of M&A activity - which speaks to the idea good value can still be found at current prices - have acted as strong sources of support.

On the latter front, it has been recently reported by Dow Jones Newswire that, according to "a source," Harrah's (HET 82.25, +2.75) accepted a $90 per share buyout offer from private equity buyers. If confirmed, that would bring the total of today's deals to roughly $70 billion. It is no wonder, then, that the investment bank group is among today's winning standouts.DJ30 +27.16 NASDAQ -8.08 SP500 -0.28 NASDAQ Dec/Adv/Vol 1947/1049/1.17 bln NYSE Dec/Adv/Vol 2389/1405/827 mln

1:30 pm : Market continues to hold its own in the face of selling interest. In the past half hour, the National Association of Home Builders released a survey showing the housing market index at 32.0. A number below 50 is meant to signal that most respondents view conditions as "poor."

...

1:00 pm : The major indices appear mixed as profit taking activity has curbed some of the enthusiasm seen earlier in the wake of another round of M&A activity. Although it is reasonable to expect a period of consolidation for the market after its heady run of late, the relative strength of the financial sector (+0.62%) today has been a strong source of support for the broader market.

In turn, the recognition that underlying fundamentals remain sound (low interest rates, solid earnings growth, moderating inflation) has also kept participants interested in buying stocks on dips.DJ30 +8.73 NASDAQ -10.68 SP500 -1.79 NASDAQ Dec/Adv/Vol 1876/1089/996 mln NYSE Dec/Adv/Vol 2272/1448/776 mln

12:30 pm : The major indices have succumbed to some profit taking efforts that have tipped the S&P and Nasdaq into negative territory while eliminating the bulk of the Dow's earlier gains. Technology (-0.25%) and energy (-2.10%) shares are pacing the slide.

...

12:00 pm : Mondays are known for merger activity and today has ben no exception. Altogether there has been approximately $50 billion worth of confirmed deals today, and if speculation proves correct that two private equity groups are near a deal to acquire Harrah's Entertainment (HET 81.88, +2.38) for close to $17 billion, we could be pushing $70 billion by day's end.

...

As one might expect, the M&A activity put a bullish bid in the market to begin the day. The financial sector, bolstered by a Merrill Lynch upgrade of Citigroup (C 55.10, +1.03) to Buy from Neutral, paced the early gains.

Strikingly, though, there has been a lack of follow through from buyers, and as a result, the major indices have seen their gains pared in recent trading.

A factor that has contributed to the lack of follow-through is a sense that the market is overbought on a short-term basis and due for a period of consolidation. With Citigroup up 13% from its December 1 low and General Electric (GE 37.85, +0.49) up 7.2% in the last five sessions, it is easy to see why that concern exists.

Today's leadership groups from an industry perspective are mostly those that are being impacted by M&A activity. Energy (-1.83%), on the other hand, is the market's main pocket of weakness as it is following crude prices lower (-$0.98 at $63.11).DJ30 +2.64 NASDAQ -4.07 SP500 -1.50 NASDAQ Dec/Adv/Vol 1580/1332/750 mln NYSE Dec/Adv/Vol 1725/1769/425 mln

11:30 am : There has been a lack of follow through buying interest following the opening M&A-related bid. Understandably, concerns that the market is overbought on a short-term basis are acting as an impediment.

For now, though, the leadership of the financial sector is helping to keep profit taking efforts in check. That leadership has been grounded in the outperformance of Citigroup (C 55.21, +1.14), but frankly, there isn't a great deal of concerted leadership to the upside from a sector standpoint as winning areas, excluding financial, are up approximately 0.20%.DJ30 +23.84 NASDAQ +3.41 SP500 +1.16 NASDAQ Dec/Adv/Vol 1455/1421/628 mln NYSE Dec/Adv/Vol 1586/1818/424 mln

11:00 am : The indices have slipped from their best levels of the day, but remain in positive territory helped by an outperforming financial sector (+0.61%). One area of the market that is noticeably weak today is Energy (-1.53%), which is sliding in conjunction with crude futures (-$0.83 at $63.26).

...

10:25 am : Buyers have maintained control of the market as the indices have yet to hit any noticeable air pockets. The upward move is being paced by the financial (+0.62%) and technology (+0.55%) sectors, but like Friday, we're also witnessing good participation from the industrial sector (+0.59%).

Citigroup (C 55.09, +1.02) is an early standout thanks to a Merrill Lynch upgrade to Buy from Neutral. Including today's gain, Citigroup is now up 13% from its December 1 low. Its outperformance is remarkable, but also serves as a focal point of why there is some underlying concern that the broader market is due for a period of consolidation.DJ30 +36.21 NASDAQ +8.36 SP500 +3.01 NASDAQ Dec/Adv/Vol 1155/1561/338 mln NYSE Dec/Adv/Vol 1209/1775/163 mln

09:55 am : There has been ample conviction on the part of companies/private equity groups in other companies today, but the conviction on the part of market participants has been limited thus far. Nonetheless, the indices are sporting modest gains that have pushed the Dow further into record territory.

...

09:40 am : The cash market got a boost at the open, but buyers are showing some reserve. As one might expect, areas impacted by M&A news, namely real estate management development (Realogy), healthcare services (Caremark) and casinos (Harrah's), are among the leadership pack.DJ30 +8.89 NASDAQ +5.26 SP500 +1.43

[Roland99]

31. Dec way outpacing the Adv

[ozymandius]

32. Let's put the cat out.

Dow 12,441.27 Down 4.25 (0.03%)
Nasdaq 2,435.57 Down 21.63 (0.88%)
S&P 500 1,422.48 Down 4.61 (0.32%)
10-Yr Bond 4.587% Down 0.01
NYSE Volume 2,568,136,000
Nasdaq Volume 1,966,774,000

4:05 pm : A day of deal-making on Wall Street got stocks off to a good start, but an underlying sense that the market is overbought on a short-term basis created a wall of resistance for the major indices.

The Nasdaq was the hardest hit among the major averages, as a wave of profit taking in large-cap issues in the afternoon session sparked a noticeable pullback that ultimately dragged down the broader market.

A weak energy sector (-2.68%) was also to blame as it took a dive in conjunction with crude prices (-$1.28 to $62.81) and brokerage downgrades of sector heavyweights ExxonMobil (XOM 75.51, -1.79) and Schlumberger (SLB 65.07, -2.48).

The outperformance of the financial sector (+0.46%), which was bolstered by a Merrill Lynch upgrade of Citigroup (C 55.44, +1.37) to Buy from Neutral and gains in the investment banks that followed a spate of M&A activity, proved instrumental in keeping the broader market's losses in check. General Electric (GE 38.00, +0.64) hitting a new-52-week high also helped in that respect.

The M&A highlights today included a $26 billion offer from Express Scripts (ESRX 69.97, +1.31) to acquire Caremark (CMX 55.58, +5.28), a $10.9 billion private equity bid to purchase Biomet (BMET 41.59, -0.41), and a near $9.0 billion offer from Apollo Management to buy Realogy (H). It was also reported that Harrah's Entertainment (HET 82.18, +2.68) is ready to strike a deal with a private equity group for approximately $17 billion or $90 per share.

As an aside, Caremark previously signed a definitive merger agreement with CVS Corp. (CVS 30.01, -0.51), so the Express Scripts bid promises to make things interesting for those companies, and their shareholders, in the coming weeks.

Looking to Tuesday, the trading action is expected to be shaped by the fiscal second earnings report from Oracle (ORCL 17.91, +0.23) and the Housing Starts and PPI data that will be released at 08:30 ET.DJ30 -4.25 NASDAQ -21.63 NQ100 -0.97% SP500 -4.61 NASDAQ Dec/Adv/Vol 2170/898/1.80 bln NYSE Dec/Adv/Vol 2932/1283/1.36 bln