STOCK MARKET WATCH, Monday June 11

[ozymandius]

Source: DU

Monday June 11, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 588 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2350 DAYS
WHERE'S OSAMA BIN-LADEN? 2062 DAYS
DAYS SINCE ENRON COLLAPSE = 2023
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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

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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 June 8, 2007

Dow... 13,424.39 +157.66 (+1.19%)
Nasdaq... 2,573.54 +32.16 (+1.27%)
S&P 500... 1,507.67 +16.95 (+1.14%)
Gold future... 650.30 -14.90 (-2.29%)
30-Year Bond 5.22% +0.02 (+0.33%)
10-Yr Bond... 5.12% +0.02 (+0.37%)






GOLD, EURO, YEN, Loonie and Silver

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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

---

Read more: DU

[ozymandius]

1. Today's Market WrapUp

The Inflation Maize
BY BRIAN PRETTI

You know that many a Fed official has made more than a few comments recently about still being concerned about inflation. Of course these comments are disingenuous at best, given that the Fed and Treasury are indeed THE key provocateurs of these very inflationary pressures vis-à-vis ongoing monetary expansion, but you already know that and this is fodder for another discussion.

Today I want to focus specifically on potential forward ag inflation possibilities related to US ethanol policy. In many a CPI and PPI report as of late, food and energy were the culprits in terms of driving headline prices higher. In fact, at least in terms of the PPI component related to food, this has been happening for a good quarter+ now. A lot of charts lie ahead so I’ll try to keep the commentary relatively brief and to the point. It just so happens that over the recent past, we've also been experiencing the food component of CPI inflation running above the headline number itself (on a year over year rate of change basis). Hence, the acceleration in food prices is dragging reported CPI higher for now. Here's the very short term history of the difference between the year over year change in CPI numbers for food price inflation less the headline rate of change itself. Again, for now it's only been over the recent past where food prices have sped up just a bit, although we’ve seen this in the past more as a result of non-food prices softening. The important issue is what's to come and could this influence monetary policy outcomes at some point given the perceptual importance of CPI and PPI numbers?

-cut-

From a global perspective, we all know that the ongoing increase in standards of living throughout emerging economies will increase the demand for global agricultural products. Chicken, cattle and hogs being primary beneficiaries, but this global trend will clearly extend to grains, corn and soybeans as well. We've been experiencing pricing spikes in a few of these ag commodities already as of late, but not necessarily as a result of some type of rocketing forward in global food demand. That's still to come as a long term or secular trend. Short term, it's in very good measure a response to what's happening with US energy policy. As is more than clear at this point, US energy policy reaction to global crude price increases decade to date, to say nothing of increasing US dependence on energy imports, has been to showcase corn based ethanol as a possible key to future US energy independence.

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

[ozymandius]

2. no gubbermint numbers today n/t

[ozymandius]

3. Oil prices rise on OPEC minister remarks

Oil prices rose Monday after Iran's oil minister said OPEC has no plans to release more oil into the market ahead of its next policy meeting in September.

Iranian Minister of Petroleum Kazem Vaziri Hamaneh told reporters on the sidelines of a regional oil and gas conference in Kuala Lumpur that there is adequate crude oil in the market and commercial oil inventories are at a high level.

"There is sufficient crude oil in the market, there is no shortage of crude oil," he said when asked if the Organization of Petroleum Exporting Countries should increase supply to the market to ease oil prices.

Light, sweet crude for July delivery gained 43 cents to $65.19 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract plunged by more than $2 a barrel Friday.

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

[ozymandius]

15. Gas Prices Post 1st Decline Since Jan.

CAMARILLO, Calif. (AP) -- The national average price for gasoline dropped 7 cents in the last three weeks, according to a nationwide survey released Sunday that marked the first decline since January.

The U.S. average for self-serve, regular-grade gasoline was $3.11 per gallon as of Wednesday, down from $3.18 in the last national survey May 18, oil industry analyst Trilby Lundberg said.

The modest relief came thanks to a boost in imports of gasoline from foreign producers lured by record-high prices, she said.

U.S. refineries, set back by weather-related mechanical failures and scheduled upgrades, have been unable to produce gasoline fast enough for domestic consumers, causing prices until now to steadily rise.

http://biz.yahoo.com/ap/070610/gas_prices.html?.v=3

[ozymandius]

4. Yahoo CEO faces shareholder backlash

SAN FRANCISCO - Just before Google Inc. went public nearly three years ago, Yahoo Inc. (Nasdaq:YHOO - news) Chairman Terry Semel assured a roomful of securities analysts and money managers that his company would remain the Internet's brightest star. To punctuate his high hopes, Frank Sinatra's "The Best Is Yet to Come" played in the background.

Google has so thoroughly eclipsed its rival since then that a growing contingent of Yahoo shareholders believes the company would be better off without Semel, who could face a chorus of discontent when he takes the stage at Yahoo's annual shareholders meeting Tuesday.

-cut-

Shareholders are exasperated largely because Yahoo has seemed to be meandering while online search leader Google has been stampeding farther ahead.

In the last year alone, Google has trumped Yahoo in the bidding for online video pioneer YouTube Inc. and Internet display ad service DoubleClick Inc. while widening its lead in the lucrative field of search. Google has established such a commanding advantage that the Mountain View company makes more money in a single quarter than Yahoo does in an entire year.

http://news.yahoo.com/s/ap/20070610/ap_on_bi_ge/yahoo_backlash

[ozymandius]

6. Yahoo weighs in on free speech in China

HONG KONG - China should not punish people for expressing their political views on the Internet, Yahoo! Inc (Nasdaq:YHOO - news). said Monday, a day after the mother of a Chinese reporter announced she was suing the U.S. company for helping officials imprison her son.

Yahoo! criticized China in a brief statement that didn't specifically mention the case of jailed journalist Shi Tao, whose mother visited Hong Kong on Sunday. Shi was sentenced to 10 years in 2005 after sending an e-mail about Chinese media restrictions.

The company has acknowledged sharing information about Shi with Chinese authorities.

-cut-

Shi was writing for the financial publication Contemporary Business News when he circulated an e-mail with his notes about a government circular about media restrictions. He was convicted of leaking state secrets.

http://news.yahoo.com/s/ap/20070611/ap_on_bi_ge/hong_kong_yahoo_jailed_reporter

[UpInArms]

5. dollar watch

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

Last trade 82.794 Change +0.144 (+0.17%)

Dollar Yields to No One

http://www.dailyfx.com/story/strategy_pieces/trade_or_fade/Dollar_Yeilds_to_No_One_1181539624275.html

“A wild night of trade in the currency markets,” we wrote on Friday, ”as dollar was bid across the board after US 10 year yields rose to 5.24% their highest value since July 2006.” Indeed yield was the story of the week as the greenback gained 60 basis points on the euro, 70 on the pound and 50 on the franc. Only the commodity dollars, helped by their own yield stories stood up to the greenback.

The buck also received some help on the economic front, as ISM Services skyrocketed to 59.7 from 55.8 indicating that demand in the largest sector of the US economy remains healthy despite the persistent woes in housing. Finally on Friday, dollar bulls also saw a nice contraction in the Trade Deficit which shrunk to -58.5B from –63.5B initially projected. Ironically enough the buck saw little price action from that news as 10 year yields receded to 5.12% by Friday afternoon proving once again that bonds now control in both equities and FX.

Next week may prove to be more of a challenge for the greenback. The action won’t kick off until Wednesday, when Retail Sales numbers print. Initial indications are that the number may be soft – no surprise given the high cost of gasoline and flat wage growth. If however, the Retail number manages to beat expectations the rest of the week could be very friendly to dollar longs as inflation gauges are likely to run hot and talk will focus on a possible Fed rate hike in price pressures persist.– BS

...more...

Dollar vs. Dow: Plenty of Reasons for Volatility to Continue Next Week

http://www.dailyfx.com/story/bio1/Dollar_vs__Dow__Plenty_of_1181338685662.html

If you watched the stock market today, it is not hard to imagine what went on the currency market. For the past few months, we have either seen carry trades follow the ebb and tides of US stocks or the reverse (see our latest report on this relationship: EUR/JPY and the Dow – Separated at Birth?). The correlation stems from the fact that the yen has become the primary funding vehicle for investors looking to get into US stocks, making the carry trade the poster child of the risk seeking world. The 157 point rally in the Dow today has erased 79 percent of yesterday’s losses bringing carry traders back with a vengeance. The outlook for higher interest rates in countries like New Zealand has sent the NZD/USD to a fresh 25 year high. This very dynamic is what will limit the losses in carry trades even if this is the last hurrah in US stocks. The latest wave of dollar strength, which was limited to the Euro, British pound and Japanese Yen, was triggered by the intraday reversal in yields, the drop in oil prices and the stronger US trade balance. Ten year bond yields hit a high of 5.24 percent, but ended the day in negative territory. Oil prices slipped as the cyclone in the Middle East loses strength. We are also finally seeing the benefits of the weak US dollar. The trade deficit dropped significantly in the month of April as import demand subsided while export demand hit a record high. The increase in exports is the main reason why many economists including Federal Reserve Chairman Ben Bernanke are looking for stronger growth in the second half. In the week ahead, the US economic calendar is light, but US retail sales, producer prices and the Fed Beige Book report are always important. Don’t expect volatility to let up with consumer spending and inflation reports also due for release from countries like the UK and New Zealand next week.

...more...

[mojavekid]

24. Daily Pfennig 6/11/07: The Loonie Is Hot...

http://www.kitcocasey.com/displayArticle.php?id=1432

Good day... The dollar held on to last week's gains over the weekend as investors continued to remain in a defensive cash position. We don't have any data being released in the U.S. this morning, so expect the range trading we have seen overnight to continue. But we have a plethora of data releases over the remainder of the week, so we will likely see the dollar move back into its longer-term trend.

Chuck is still at home fighting an infection in his hip, but he forwarded the following to me last night:

"Well... Sitting here looking at the news stories, I can't help myself but to keep looking for stories on Canada... The Canadian economy and fundamentals have really been hot recently, and that has pushed the loonie higher and higher. Friday, we had the Canadian Trade Report give the loonie more fuel by showing the April Trade Surplus, that's right, I said Surplus, widen more than expected.

"Canada's trade surplus rose more than expected to $5.8 billion from an upwardly revised $5.1 billion in March. A large part of this printed surplus was due to slower imports... While that might raise some eyebrows of those thinking that means the economy will slow down, a look at the fact that imports are up 4.5% in the 1st QTR, will make those thoughts go away.

more...

[ozymandius]

7. Wall Street Heads Toward Flat Open

NEW YORK - Stocks headed toward a flat open Monday as markets in Europe and Asia rallied.

The move higher abroad comes after a rebound Friday in U.S. markets following pullbacks earlier in the week. Nonetheless, last week was still Wall Street's worst week in about three months. Some U.S. investors had grown concerned that the Federal Reserve was unlikely to reduce short-term interest rates.

Overseas, Japan's Nikkei stock average rose 0.31 percent and China's Shanghai Composite Index rose 2.1 percent. Britain's FTSE 100 rose 0.80 percent, Germany's DAX index rose 1.07 percent, and France's CAC-40 rose 0.73.

Dow Jones industrial futures expiring in September fell 1, or 0.01 percent, to 13,423, while Standard & Poor's 500 index futures rose 13.60, or 0.90 percent, to 1,521.50. Nasdaq 100 index futures rose 23.25, or 1.22 percent, to 1,932.25.

Little economic or earnings data were due for release Monday, so investors will be looking to moves overseas as well as data on inflation later in the week to determine whether last week's sell-off was overdone. On Thursday, the Labor Department releases its producer price index, while on Friday the consumer price index is due.

http://news.yahoo.com/s/ap/20070611/ap_on_bi_st_ma_re/wall_street

[ozymandius]

8. Wannabe buyers welcome housing slump

LOS ANGELES - Kurt Montufar isn't stressing over the housing slump. He's actually hoping things get worse. Like many wannabe homebuyers who were priced out of the market during the last boom, Montufar spends time these days scanning real estate ads and news reports to determine if it's time to take the plunge and buy.

-cut-

Indeed, the advantage is shifting to buyers in many previously high-flying housing markets, as homes take longer to sell and prices level off or begin to fall.

Modest annual declines have been seen in cities such as San Diego, Boston, Las Vegas, Phoenix and Honolulu, according to first-quarter data on existing single-family homes compiled by the National Association of Realtors.

Meanwhile, price gains of just 1.4 percent or less were reported in New York, Chicago and Washington, D.C.

http://news.yahoo.com/s/ap/20070610/ap_on_bi_ge/housing_slump_hopefuls

[ozymandius]

9. Fed's Pianalto sees little consumer hit from housing

DUBLIN (Reuters) - A slowdown in the United States' housing market may have knocked as much as one percentage point off annual growth, but does not seem to have affected consumer demand much, a top Federal Reserve official said on Monday.

Cleveland Federal Reserve President Sandra Pianalto, who votes on U.S. rates, said the fundamentals of the U.S. economy were strong and the biggest risk was inflation.

"The predominant risk we face is that inflation does not moderate as we expect it to do. And we are keeping our eye on that issue. That's our objective and that's the issue that we have to stay focused on," she told a conference in Dublin.

Since 2005, U.S. inflation had been averaging around 3 percent on a medium-term basis, which was too high, Pianalto said. By contrast she did not believe the slowest U.S. house price growth for 14 years posed a big problem yet.


http://news.yahoo.com/s/nm/20070611/bs_nm/economy_fed_pianalto_dc_2

[Roland99]

27. How's this for a snapshot of how split the classes are...

Articles on Marketwatch right now:



Taking the pulse of housing
Harvard study finds that there's still too much excess inventory, and prices haven't yet reached an affordable level.

Vacation home primer.
Seven factors to consider before making the leap and buying a vacation home.




uhhhhhh....

[UpInArms]

10. Indiania: Foreclosures have increased 20 percent a year for six years

http://www.thestarpress.com/apps/pbcs.dll/article?AID=/20070610/NEWS01/706100301/1002

excerpt:

Foreclosures spiked as many new homeowners -- some with mortgages worth as much as 125 percent of the value of their home, and many with adjustable rate mortgages -- were hit hard on two fronts: Their monthly mortgage payments jumped as their adjustable interest rates increased two years after their initial financing, and their first property tax bills came due.

"The hit after two years is a double-whammy," said Bill Sultan, president of the not-for-profit Momentive Consumer Credit Counseling. "It can add $500 a month to your housing bill."

Job losses, particularly high-paying manufacturing jobs, left many with less money for mortgage payments.

"Between 2000 and 2006, the state lost 100,000 manufacturing jobs," Sultan said. "In many cases, those have been replaced with service sector jobs that pay a lot less money.

"We'll have roughly 30,000 foreclosures in the state of Indiana this year," he added. "That's up, but not as much as between 2005 and 2006, when there was a 50-percent increase. It will be half that this year."

...more...

[ozymandius]

14. Subprime crisis: Was Greenspan remiss?

(CNNMoney.com) -- Former Federal Reserve Governor Edward Gramlich claims that former Fed Chairman Alan Greenspan blocked a proposal to crack down on subprime lending practices back in 2000, according to The Wall Street Journal.

Gramlich, who was Fed governor from 1997-2005, says he proposed the idea to Greenspan personally, The Journal reported. He suggested that the Fed send examiners into offices of lenders that were units of Fed-regulated bank holding companies. He claims Greenspan - well-known for his deregulatory practices - rejected the idea.

-cut-

Subprime lending practices - giving high-interest loans to individuals with poor credit history - became increasingly popular during the real estate boom of the last several years. But since 2006, subprime borrowers have been defaulting at alarming rates, putting downward pressure on the overall housing market.

http://money.cnn.com/2007/06/09/news/economy/Greenspan_subprime/index.htm?postversion=2007060914

Greenscam wasn't remiss. Just incompetent and hostile to consumer interests.

[shrike]

22. The new home prices in my part of Indiana are $300K and up

Which I know sounds like peanuts to those of you living in other parts of the country, but wages aren't all that high here. I've long wondered where these folks-with-money were coming from, and I assumed they were commuting from looong distances. But undoubtedly a lot of them have just maxed out everything they've got.

The cops I know in our area have told me that the people who live in these houses decorate them with card tables and deck chairs. Not an uncommon phenomenon elsewhere, I'm sure. I'll keep my little, paid-for, 1950s brick home in a safe but unfashionable neighborhood, thank you.

[ozymandius]

11. Ford hires banks to sell Jaguar, Land Rover

Ford Motor has given Goldman Sachs, Morgan Stanley and HSBC a mandate to sell Jaguar and Land Rover, its two British luxury brands.

The planned sale does not include Volvo, Ford’s third premium marque, and is said to be in its early stages.

The news follows persistent speculation that Ford, which sold the Aston Martin sports car marque to a Kuwaiti-led consortium in March, might look to unload the two brands as part of its drive to create a more streamlined and competitive volume car business.

Ford is understood to be selling the two brands jointly because of the significant overlap of their operations.

The US company, which reported a record loss of $12.7bn last year, is in the midst of its “Way Forward” restructuring plan, aimed at restoring its competitiveness and returning its core North American operation to profitability in 2009.

http://www.ft.com/cms/s/281c9ab8-1804-11dc-b736-000b5df10621.html

[UpInArms]

12. Show me the money: Ex US officials swell hedge funds' ranks

http://www.turkishpress.com/news.asp?id=180420&s=&i=&t=Show_me_the_money:_Ex_US_officials_swell_hedge_funds'_ranks

What do three former US Treasury secretaries, one time secretary of state Madeleine Albright, a former US ambassador to the United Nations and ex Spanish prime minister Jose Maria Aznar have in common?

They have all been recruited by powerful hedge funds or private equity firms since departing government, while Albright has opened her own hedge fund: Albright Capital Management.

The secrecy surrounding such investment firms and media headlines about the vast riches generated by SAC Capital Advisors, the Blackstone Group and the Carlyle Group among others have only added to their mystique.

<snip>

The last three Treasury secretaries, including two who served President George W. Bush and one who held office in the Bill Clinton administration, have all been hired by hedge funds or investment groups.

John Snow was appointed chairman of Cerberus Capital Management in October months after departing the Treasury, joining a private equity firm that already counts former US vice president Dan Quayle on its payroll. The firm announced plans to buy the Chrysler Group from German's DaimlerChrysler.

...more...

[ozymandius]

21. They forgot Greenscam. He's feeding from the trough too.

[ozymandius]

13. UPDATE: GE, Microsoft Discussed Buying Dow Jones: WSJ

SAN FRANCISCO (Dow Jones) -- General Electric Co. and Microsoft Corp. have discussed buying Dow Jones & Co. to combine it with some parts of NBC Universal but haven't been able to reach an agreement, according to a media report Sunday.

The discussions between GE (GE) and Microsoft (MSFT) were meant to head off a $5b billion unsolicited bid for Dow Jones (DJ) by News Corp.'s (NWS) Rupert Murdoch, who is planning to start a financial-news television channel that would compete with GE's CNBC, The Wall Street Journal reported in its online edition.

-cut-

Dow Jones has been exploring alternatives to. Murdoch's offer, but those efforts have yet to yield another serious bidder, The Journal said, citing unnamed people familiar with the matter.

The breakdown of the NBC-Microsoft talks is a further sign that the options for Dow Jones may be narrowing, according to the report, which added that while Dow Jones wasn't involved in the talks, the company's directors became aware of them last week.

http://money.cnn.com/news/newsfeeds/articles/djf500/200706110104DOWJONESDJONLINE000011_FORTUNE5.htm

[ozymandius]

16. Burger King Ignites Spam War With Rival

HONOLULU (AP) -- For many Americans, spam is a four-letter word for unwanted e-mail. In Hawaii, Spam is a beloved comfort food, with cans of the gelatinous pork bricks found in virtually every cupboard.

Hoping to cash in on Hawaii's love affair with the pinkish meat product, Burger King Corp. last month began offering Spam for breakfast -- going head-to-head with rival McDonald's Corp., which has been featuring Spam in the islands for years.

Burger King is offering the Spam Platter -- two slices of Spam nestled between white rice and scrambled eggs. The fast-food giant also offers the Croissanwich or Biscuit Sandwich with Spam.

http://biz.yahoo.com/ap/070611/burger_king_spam.html?.v=6

Good morning :hi:
:donut: :donut: :donut:

[trogdor]

19. No baked beans?

[fedsron2us]

30. Spam, lovely Spam, wonderful Spam

http://tinyurl.com/woobl

My favourite

Lobster thermidor aux crevettes with a Mornay sauce garnished with truffle paté, brandy and with a fried egg on top and spam

Edited to use Tinyurl because the wikipedia link wont resolve.

[ozymandius]

17. early numbers and blather

08:00 am : S&P futures vs fair value: -3.3. Nasdaq futures vs fair value: -2.8. Early indications are pointing to a lower open for the cash market. With anticipation of Monday-morning M&A activity helping the market (e.g. Dow, Nasdaq) log its 12th consecutive close to the upside last week, today marking the first Monday without a full slate of takeover talk to report leaves investors skeptical about Friday's rebound.

Oil prices rebounding from their worst one-day performance (-3.3%) in two months and bond yields back on the rise are also contributing to the negative disposition.

[ozymandius]

18. updating pre-open blather

08:30 am : S&P futures vs fair value: -1.4. Nasdaq futures vs fair value: +0.3. The futures market has strengthened since the last update and now suggests the indices will open mixed. An analyst upgrade on Dow component Johnson & Johnson (JNJ), anticipation of positive developments out of Apple (AAPL) at its Worldwide Developers Conference, and solid gains overseas are contributing the market's improvement.

However, there is little conviction on the part of buyers as this week's deluge of economic data, from retail sales to updates on inflation, won't kick off in earnest until Wednesday.

[ozymandius]

20. bidness being dealt

9:50
Dow 13,440.32 Up 15.93 (0.12%)
Nasdaq 2,575.72 Up 2.18 (0.08%)
S&P 500 1,508.98 Up 1.31 (0.09%)
10-Yr Bond 5.156% Up 0.038
NYSE Volume 190,218,000
Nasdaq Volume 144,087,000

09:40 am : As expected, stocks open slightly lower amid the absence of overwhelming evidence to support the sustainability of last Friday's rebound, especially with interest rates back on the rise. With the Dow closing higher for the 12th straight Friday, in part due to Monday mornings typically seeing a spate of M&A activity, today marking the first Monday in quite a while without a wave of notable deal-making news is contributing to the cautious tone.

ThyssenKrupp denying it is in talks to acquire U.S. Steel (X), speculation that renewed optimism for equities and was the main impetus behind Friday's afternoon rally, is also acting as an early headwind while a Q2 warning from Nucor (NUE 62.71 -3.90) further stalls enthusiasm for steel stocks, one of the market's more momentum-driven groups. Steel (-4.8%) is the worst performing S&P industry group.DJ30 -38.68 NASDAQ -5.80 SP500 -3.74 NASDAQ Vol 88 mln NYSE Vol 46 mln

[ozymandius]

23. update and blather

11:46
Dow 13,433.41 Up 9.02 (0.07%)
Nasdaq 2,575.90 Up 2.36 (0.09%)
S&P 500 1,509.83 Up 2.16 (0.14%)
10-Yr Bond 5.139% Up 0.021
NYSE Volume 813,678,000
Nasdaq Volume 615,933,000

11:30 am : Not much has changed since the last update as the major averages still languish just below the flat line. As evidenced by the Nasdaq slowly clawing its way to breakeven, Technology briefly turned positive about 15 minutes ago. However, the influential sector almost as quickly slipped back into the red as buyers remain reluctant to make any large bets ahead of this weeks's deluge of economic data.

Utilities and Energy are still the only sectors posting gains, but both areas collectively accounting for only 14% of the weighting on the S&P 500 is hardly enough to offset weakness from the remaining 86%. Earlier, Cleveland Fed President Pianalto saying she believes core inflation is still "uncomfortably high" and that there is still a risk that inflation will fail to moderate as expected has weighed on bonds and contributed to today's sluggish performance for stocks. Monthly PPI and CPI data, which will be released on Thursday and Friday, respectively, will likely help set a more definitive tone to trading. DJ30 -10.36 NASDAQ -2.13 SP500 -0.72 NASDAQ Dec/Adv/Vol 1647/1204/542 mln NYSE Dec/Adv/Vol 1801/1263/390 mln

[mojavekid]

25. Fleckenstein: Public pension funds take a risky gamble

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/PublicPensionFundsTakeARiskyGamble.aspx

I'd like to continue last week's focus on the debt market -- because, without the incomprehensible complacency in all of its sectors, we would not be seeing the lunacy now on display in the equity market. I've already discussed how the world's central banks, by printing their own money to suppress their own currencies, have wound up owning trillions of dollars' worth of U.S. Treasurys.

The nightmare in retirement dreams
This week I'll turn my attention to those who have been gullible enough to buy the sliced-and-diced mortgages that found their way into collateralized debt obligations (CDOs) and other exotica. A synopsis of what's happening in that arena was recently penned by Bloomberg writer David Evans in a story titled "Banks Sell 'Toxic Waste' CDOs to Calpers, Texas Teachers Fund."

It begins: "Bear Stearns Cos., the fifth-largest U.S. securities firm, is hawking the riskiest portions of collateralized debt obligations to public pension funds."

Evans explains: "Worldwide sales of CDOs -- which are packages of securities backed by bonds, mortgages and other loans -- have soared since 2003, reaching $503 billion last year, a fivefold increase in three years. Bankers call the bottom sections of a CDO, the ones most vulnerable to losses from bad debt, the equity tranches. They also refer to them as toxic waste because as more borrowers default on loans, these investments would be the first to take losses. The investments could be wiped out."

more...

[mojavekid]

26. Michael Panzner: Goodbye to the Good Old Days

http://www.safehaven.com/article-7742.htm

Last week, the yield on the 10-year U.S. Treasury note recorded its biggest one-day jump in years and breached the five percent level for the first time since July. Other fixed-income markets quickly followed suit, hurt not only by a nominal rise in rates but by a jump in risk spreads. One trader described the sell-off in the mortgage-backed securities market as "a good old-fashioned mortgage puke."

The ostensible reason behind the sudden jitters, following a period when yields were already drifting higher, was the decision by European and New Zealand central banks to boost short-term interest rates. What's more, a smattering of positive economic data finally convinced some investors that the Federal Reserve meant business when it said rising inflation was its main concern.

snip...

There was trouble in other quarters, too. The Wall Street Journal reported that some recent leveraged buyouts were starting to trigger alarm bells, noting that it was "striking how quickly a few of the deals have run into problems." A Federal Reserve loan officer survey indicated that lenders were not only tightening standards on subprime loans, but were beginning to closely scrutinize some prime borrowers. Another recent poll noted that corporate chief financial officers had turned pessimistic on the U.S. economy.

Elsewhere, a report revealed that analysts, in a rare move, had downgraded earnings forecasts for a number of investment banks, whose financial vitality is often seen as a leading indicator for markets as a whole. There was also growing speculation that Goldman Sachs and other bulge-bracket firms were considering a hiring freeze, which is not the sort of step that is taken lightly by revenue-hungry operators.

more...

[RUMMYisFROSTED]

28. Inflation?

I don't believe it!

[DemReadingDU]

29. What’s a CEO worth? Millions ... and then some

Compensation for America’s top CEOs has skyrocketed into the stratospheric heights of pro athletes and movie stars, as half now make more than $8.3 million a year, and some make much, much more.
.
.
A recent report by the Congressional Research Service helps to put the executive pay issue into a real-world context. CEOs make, on average, 179 times as much as rank and file workers, double the 90-to-1 ratio in 1994, according to the agency’s calculations.

Options grants and stock awards helped boost CEO pay as much as six-fold during the 1990s economic expansion, according to compensation consultant Donald Delves. Then the stock market bubble burst in 2000 — but CEO pay hasn’t come down since.

By contrast, median household income edged up only 8.6 percent from 1990 to 2005, according to U.S. Census data.


If the minimum wage had risen at the same pace as CEO pay since 1990, it would be worth $22.61 today, according to the Institute for Policy Studies. Instead, the federal minimum wage will increase to $5.85 an hour on July 24, the first increase in a decade.

full article
http://www.msnbc.msn.com/id/19079624/

[ozymandius]

31. close: almost as though it never happened

Dow 13,424.96 Up 0.57 (0.00%)
Nasdaq 2,572.15 Down 1.39 (0.05%)
S&P 500 1,509.12 Up 1.45 (0.10%)
10-Yr Bond 5.137% Up 0.019
NYSE Volume 2,526,222,000
Nasdaq Volume 1,688,354,000

4:20 pm : After stocks turned in their worst weekly performance since February last week, it wasn't surprising to see buyers step back into the market looking for bargains Monday. However, the major averages ran out of steam going into the close. They ended up finishing mixed and relatively unchanged ahead of some influential economic data later in the week that begins with Tuesday's retail sales report for May.

Since rising interest rates still act as the biggest overhang for owning equities, participants initially looked past another bump up in bond yields in hopes that low inflation numbers later in the week will cool renewed fears about a rate hike later in the year. We feel the current rate hike concerns are overblown since there is no evidence to suggest a Fed tightening anytime soon.

With anticipation of Monday-morning M&A activity helping the market (e.g. Dow, Nasdaq) log its 12th consecutive Friday close to the upside last week, the first Monday in a while without a full slate of takeover talk to report also left investors skeptical about Friday's rebound.

Of the six sectors trading lower, Materials (-0.8%) paced the way as investors lost interest in one of the market's more momentum-driven areas of late.

Steel (-5.3%), which was recently up 28% year to date, was today's worst performing S&P industry group after ThyssenKrupp denied it is in talks to acquire U.S. Steel (X 116.25 -8.80). Speculation of such a deal was the driving force behind Friday's recovery effort. A Q2 warning from Nucor (NUE 62.62 -3.99) merely gave investors an added incentive to take some money off the table.

On a positive note, Utilities (+1.1%) turned in a respectable performance, but the sector's light weighting in the S&P 500 prevented it from having a broader impact. Energy was a close second, gaining 0.7%. However, the 1.9% surge in oil prices ($65.97/bbl) also gave the bulls little to get excited about.

The rate-sensitive Financials sector shrugging of another day of rising bond yields was among the day's more remarkable performances. The sector's 0.4% advance was not enough to offset late-day reversals in Technology, Health Care and Consumer Staples.

Tech was in focus ahead of a mid-quarter update from Texas Instruments (TXN 35.75 -0.22) and Apple's (AAPL 120.19 -4.30) much anticipated Worldwide Developers Conference. Apple, though, dropped 3.5% after failing to announce any new products. BTK +0.1% DJ30 +0.57 DJTA -0.5% DJUA +0.7% DOT -0.2% NASDAQ -1.39 NQ100 -0.2% R2K -0.3% SOX -0.4% SP400 +0.1% SP500 +1.45 XOI +0.2% NASDAQ Dec/Adv/Vol 1638/1395/1.64 bln NYSE Dec/Adv/Vol 1702/1590/1.24 bln