STOCK MARKET WATCH, Monday September 24

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday September 24, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 484 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2453 DAYS
WHERE'S OSAMA BIN-LADEN? 2165 DAYS
DAYS SINCE ENRON COLLAPSE = 2126
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
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 September 21, 2007

Dow... 13,820.19 +53.49 (+0.39%)
Nasdaq... 2,671.22 +16.93 (+0.64%)
S&P 500... 1,525.75 +7.00 (+0.46%)
Gold future... 738.90 -1.00 (-0.14%)
30-Year Bond 4.89% -0.05 (-1.07%)
10-Yr Bond... 4.63% -0.04 (-0.86%)






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

---

Read more: du

[ozymandius]

1. Market WrapUp

Did the Fed Fix the Problem,
or are Their Actions a Sign of a Bigger Problem?
BY TIM W. WOOD

I have said before in my newsletters that the Fed’s biggest fear is deflation and I believe that the move earlier this week proves that point. As the stock market began to decline in August, the Fed began extending the discount window, encouraged banks to come to the discount window, and cut the discount rate. I reported here in the September 7th WrapUp that, based upon the 3-month T-bill rate and my Trend Indicator, we have entered into an environment in which lower short-term rates should prevail. So the fact that a cut was made came as no surprise. But the shock was that the Fed cut both the Discount rate and the Fed funds rate by a half point. In my opinion, this was a drastic measure and it serves to show the Fed’s true colors, and it absolutely confirms that they are scared to death of deflation.

The message is that the Fed will create even more monetary inflation. They would obviously rather see $100 plus oil and gold sitting on the moon than to allow the markets to make a very normal and natural correction. Technically, many asset classes have been trying to form tops. Gold as an example had been rather soft and sloppy for all of 2007, as has silver. The stock markets around the world are still operating within one of the longest 4-year cycle advances in stock market history. This cycle has been stretched because of the constant manipulative efforts to prevent its natural tendency to correct. The reason the Fed continues to try to inflate is simply because they know the consequences when -- not if, but when -- the house of cards that they have helped to create folds. These actions send a very clear message. The reason they are afraid of even a 5 to 10 percent correction in the stock market is because they fear that any such decline will be the straw to ultimately collapse this house of cards.

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

[ozymandius]

2. no goobermint reports today n/t

[ozymandius]

3. Oil prices fall in Asian trading

SINGAPORE - Oil prices fell Monday after a tropical depression in the Gulf of Mexico dissipated without causing damage to key oil and gas infrastructure.

Light, sweet crude for November delivery lost 60 cents to $81.02 a barrel in Asian electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract fell 16 cents to settle at $81.62 a barrel Friday amid profit taking.

November crude became the benchmark front-month contract after the October contract expired Thursday at a record close of $83.32. Prices for October reached $83.90 in intraday trading, also a record.

-cut-

Interest rates and their role in pulling the dollar lower are drawing fresh investment into energy markets, analysts say. Oil and other commodities are priced in dollars, and they still appear inexpensive to overseas investors, whose currencies have strengthened against the greenback.

November Brent crude dropped 48 cents to $78.82 a barrel on the ICE futures exchange in London.

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

[ozymandius]

4. Gas prices drop 2 cents in past 2 weeks

CAMARILLO, Calif. - The average price of gasoline in the U.S. dropped about 2 cents over the last two weeks, according to a survey released Sunday.

The average price of regular gasoline on Friday was $2.79 a gallon, mid-grade was $2.91 and premium was $3.03, oil industry analyst Trilby Lundberg said.

very short

[ozymandius]

8. Oil Falls a Second Day as Production Rises in Gulf of Mexico

Sept. 24 (Bloomberg) -- Crude oil fell for a second day as workers returned to rigs and platforms in the Gulf of Mexico after a storm threat passed.

BP Plc, Royal Dutch Shell Plc and other oil companies sent workers back to the Gulf after a tropical depression made landfall without becoming a storm. Crude output in the region has increased by 161,989 barrels a day since Sept. 22, the U.S. Minerals Management Service said yesterday.

-cut-

New York prices have gained 10 percent this month. The October contract reached a record $83.90 when it expired on Sept. 20, as storms threatened output in the Gulf of Mexico, the source of about a quarter of U.S. production. Declining stockpiles in the U.S. added to concern supplies may not meet peak demand next quarter.

Brent crude oil for November settlement fell 65 cents, or 0.8 percent, to $78.65 on the ICE Futures Europe exchange at 10:45 a.m. in London. It rose 21 cents, or 0.3 percent, to $79.30 on Sept. 21, the highest since the contract was introduced in 1989.

-cut-

Hedge-fund managers and other speculators increased their net- long position in New York crude-oil futures in the week ended Sep. 18, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 54,172 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 9,932 contracts, or 22 percent, from a week earlier.

http://www.bloomberg.com/apps/news?pid=20601101&sid=aUxQ9e_Rlqj0&refer=japan

[ozymandius]

5. UAW union threatens strike against GM

DETROIT - After 20 straight days of negotiations, the United Auto Workers union said it would strike General Motors Corp. Monday morning if a new contract agreement isn't reached, citing the automaker's failure to address job security and other concerns.

"We're shocked and disappointed that General Motors has failed to recognize and appreciate what our membership has contributed during the past four years," UAW President Ron Gettelfinger said in a statement early Monday.

Gettelfinger didn't offer specifics, but the UAW had been expected to ask GM for guarantees of future production at U.S. plants as part of the negotiations.

The union set the strike deadline for 11 a.m. EDT Monday. Cal Rapson, the UAW's chief GM negotiator, said the union will remain at the bargaining table until the deadline. He said GM has failed to meet the needs and concerns of the UAW's members.

-cut-

The UAW hasn't called a nationwide strike during contract negotiations since 1976, when Ford Motor Co. plants were shut down. There were strikes at two GM plants during contract negotiations in 1996.

http://news.yahoo.com/s/ap/20070924/ap_on_bi_ge/auto_talks

[ozymandius]

6. Investors eye elevated inflation signs

NEW YORK - Last Tuesday, Wall Street got exactly what it was angling for: a half-point reduction in interest rates. Now it wants to make sure rates will stay low.

This week, investors will be looking for signs that inflation is under control. If prices accelerate, the Federal Reserve may bump rates back up. The market is also hoping that readings on durable goods demand, the housing market and consumer spending power will show that the economy isn't heading for recession.

The risk of inflation is why the Fed didn't cut rates for four years. Last week, it finally lowered the target fed funds rate by half a percentage point "to forestall some of the adverse effects on the broader economy" of recent housing, credit and stock market turmoil, and "to promote moderate growth over time." The Fed added, "it will continue to monitor inflation developments carefully," however.

Tuesday's rate cut, along with some strong corporate earnings reports, fueled a 2.9 percent rise in the Dow Jones industrial average last week, a 2.8 percent jump in the Standard & Poor's 500 index and a 2.7 percent gain in the Nasdaq composite index.

It also sent gold prices soaring, crude oil to new record heights, and the dollar plunging. The U.S. currency reached all-time lows against the euro and is now equal to the Canadian dollar for the first time in more than 30 years. A weak dollar benefits U.S. exporters and companies who pull in revenue from overseas, but it can make imports more expensive and dollar assets, like U.S. Treasurys, less attractive to foreign investors.

http://news.yahoo.com/s/ap/20070923/ap_on_bi_ge/wall_street_week_ahead

[ozymandius]

7. Stock futures edge higher, GM in spotlight

LONDON (Reuters) - Stock futures indicated a strong market open on Monday, extending the previous week's gains, with General Motors (GM.N) in focus as the struggling automaker faces the prospect of its first strike in almost a decade.

The United Auto Workers union set a firm Monday morning deadline to reach a contract deal with the company and threatened to send 73,000 GM factory workers on strike if no deal is reached.

By 0945 GMT, Dow futures were up 0.2 percent and both S&P and Nasdaq futures rose 0.3 percent.

Mining stocks might head up as copper and gold prices got a boost from a weak dollar. European stocks were higher on Monday.

Banks could come under pressure after sources familiar with the situation told Reuters quarterly profit at Deutsche Bank (DBKGn.DE) could be hit by up to 1.7 billion euros because loans have lost value due to the credit market crisis.

http://news.yahoo.com/s/nm/20070924/bs_nm/markets_stocks_dc

[Buttercup McToots]

9. USD $78.38 @ 7:05 am and this rumor...

Will try to find verification...not sure if it is true...Anybody hear anything?


Just satire...Floating around but probably not real...

Israel is demanding payment of its $3 billion yearly grant from the US in EURO. The won't accept the USD any longer because of its declining value.

:donut:

[ozymandius]

10. Euroshares open flat, financials in focus, lack of direction

LONDON, Sep. 24, 2007 (Thomson Financial delivered by Newstex) -- Europe's leading exchanges opened flat this morning in the absence of major economic news and markets in Tokyo closed for a public holiday.

Financials remain in focus with investors looking for further reassurance that the subprime crisis is nearing an end, while Northern Rock shed more than 15 pct earlier this morning.

At 8.09 am, the Dow Jones STOXX (OOTC:DJSFF) 50 fell 5.39 points or 0.14 pct to 3,817.55, while the STOXX 600 lost 0.24 points or 0.06 pct to 376.50.

http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-19771756.htm

[fedsron2us]

11. Rocks, Hard Places and Pricing Models

The issuance of such enormous amounts of structured debt to finance ever-riskier mortgages and LBOs and thus pump asset prices higher would have been impossible without the massive expansion of the CDS market, which kept marking the price of risk lower and lower.

All of these elements resulted in a sort of malignant "virtuous cycle". Less risk signaled by the CDS market meant that more and more risky loans could be pooled together and securitized into bigger tranches of nominally AAA-A CDOs. At some point during 2004-06 the driving forces even reversed: instead of loan demand driving CDO issuance, it was the CDO issuers' demand for "product" to package that drove loan origination. The low interest rate environment created enormous speculative demand for anything that paid a spread over Treasurys or LIBOR (i.e. CDOs, etc.) and the high fees involved in securitizations made the whole business extremely lucrative. Predictably, loans of dubious provenance were originated by a vast network of fly-by-night mortgage boiler rooms. Again, this did not happen in the US only.

The exact same process occurred in the more rarefied (in image only) world of LBOs, where ghosts of junk past were suddenly alive once more. Absurd prices were bid for second tier companies not because the takeover entities could run them more efficiently (which would at least produce some economic productivity benefits), but because they could get them done with cheap money and thus earn large transaction fees. The number of private equity funds multiplied fast, including some in impossibly unlikely places, run by newly-minted "financiers" with zero experience in operating real economy businesses. As soon as cheap financing disappeared the deals immediately started falling apart - because there were no fundamental reasons to undertake them, in the first place.

Which finally brings us to the subject of the pricing models used to issue and mark-to-model all those structured finance securities. It is quite obvious that the primary variable in all pricing models is their sensitivity to credit risk, i.e. the risk of default. During the "virtuous" cycle, when credit risk goes down, such models indicated higher prices, which were used to issue structured finance securities at higher prices and with higher proportions of readily salable AAA-A merchandise. But as the cycle turned "vicious" those models started throwing out lower prices - and when the credit risks signaled by the CDSs jumped suddenly and substantially, as happened in August, those model-calculated prices moved radically down, causing havoc in the balance sheets of existing CDO holders such as banks, SIVs and hedge funds. The trouble was further enhanced by the fact that many holders were highly leveraged, i.e. they had borrowed heavily through ABCPs and prime-bank margin to buy those securities. Judging by market action quite a lot of margin came from the yen carry tactic. Live by the sword, die by the sword...



http://suddendebt.blogspot.com/2007/09/rocks-hard-places-and-pricing-models.html

Interesting piece on the Sudden Debt site which explains why the 'mark to model' method of pricing credit derivatives which inflated values on the way up may cause them to self destruct on the way down. It also may explain in part why the Fed cut rates by more than some people expected.

[UpInArms]

12. dollar watch

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

Last trade 78.448 Change -0.136 (-0.17%)

Settle Time 15:00 Open 78.552

Previous Close 78.584 High 78.637

Low 78.313 2007-09-24 07:30:16, 30 min delay

52wk High 87.3 52wk High Date 2006-10-13

52wk Low 78.398 52wk Low Date 2007-09-21

Fed Throws Dollar To The Dogs - 1.45 Next?

http://www.dailyfx.com/story/topheadline/Fed_Throws_Dollar_To_The_1190611357398.html

After weeks of consolidation during which the EURUSD churned between 1.33-1.38 dollar bears finally had their day as the pair broke through the key psychologically important 1.40 level aided in no small part by Fed’s decision to cut rates by 50bp rather than the market consensus 25bp. Clearly FOMC members took a calculated risk to err on the side of higher inflation rather than lower economic growth. With credit markets still fragile and housing markets continuing to contract, the Fed decided that simulative action was necessary even if it further weakened the greenback.

Despite record highs in oil and gold, the core CPI rate remained relatively low at 0.2% month over month gain and for the time being the Fed’s action looked wise as the yield curve steepenned and equity markets rallied to within striking distance of all time highs. After all a weaker dollar helps US exports which should contribute positively to GDP growth in Q3. However, the Fed’s strategy carries one great danger. If low interest rates markedly decrease the flow capital to US, the dollar becomes vulnerable to a panic sell off. With near 1 Trillion Current Account deficit US is highly depended on foreign capital flows to finance its consumption and growth. Last week’s shocking decline in TICS data may have been the first sign that foreigners are losing appetite for US debt. While one month does not make a trend, the TICS could become much more important in the upcoming months if the dollar remains under assault.

Next week, markets will focus on the latest housing data as well as consumer sentiment, but perhaps the most important event risk will take place on Wednesday as traders await he Durable Goods report. If Durables surprise to the upside the dollar may catch a break as the bleakest of forecasts regarding US economic demand will prove premature. However, should the data show yet another disappointing result the dollar may weaken further as traders will begin pricing in yet another rate cut before year end. -BS



...more...

Can Carry Trades Continue to Rise?

http://www.dailyfx.com/story/dailyfx_reports/cross_markets_data_reaction/Can_Carry_Trades_Continue_to_1190411051859.html

How Will the Markets React?

There are no major economic releases on the calendar Monday so we are diverging from the usual style of the Cross Markets Data report and will instead take a look at what the other markets are signaling for carry trades in the week ahead. With the exception of GBP/JPY and USD/JPY, the other Japanese yen crosses have performed extremely well over the past few trading days. In fact just today, the Yen weakened to a monthly low against currencies like the Euro, Swiss Franc, Australian, New Zealand and Canadian dollars. The primary reason why these currency pairs have performed so well is because the Dow Jones Industrial has rallied 400 points this week, bringing some risk appetite back into the markets. However given the big moves that we have seen thus far, it is unclear whether this strength will continue, so let’s take a look at what the other markets may be suggesting:

Bonds – 10 Year US Treasury Note Futures

Treasury bond prices are up on the day which is actually quite interesting since the stock market and carry trades are both higher. Usually, when the stock market rallies bond prices fall and yields rise because it reflects better business conditions or less of a need to lower interest rates. However a closer look at the following chart indicates that the rally is simply a mild recovery from recent weakness. In fact, 10 year Treasury notes have rebounded to an important resistance level which means that a downtrend could resume. If bond prices are expected to move lower, that suggests that traders are moving out of US bonds and into riskier assets in which case, carry trades could continue to rise.



Volatility – VIX Index

Carry trades usually perform well in periods of lower volatility. The following chart of the CBOE Volatility Index indicates that not only has volatility fallen over the past 24 hours, but it appears poised to move back to June levels. The outlook for lower volatility in the week to come also suggests that the rebound in carry trades could continue.

...more...

[mojavekid]

19. Daily Pfennig 9/24/07: The Loonie Hits Parity!

Friday was a strange day in that most of the day, we saw profit taking in euros... But the last hour of the day saw the euro mount a rally... And close near the 1.41 level once more. There was no data on Friday, so we saw the currency markets just drift around for most of the day. Except... The Canadian loonie, which hit parity with the dollar... And for most of the day on Friday, traded above the greenback! WOW! Who'd a thunk back about 5 years ago, when the loonie was trading at 65 cents, that it would hit parity with the greenback? Or last year, when the Gov't changed the taxation on the Royal Energy Trusts that threw the loonie for a loop?

I got a huge kick out of the loonie hitting parity... For loonie lovers/holders, I'm sure they got one too! The Canadian Finance Minister held a press conference on Thursday night to discuss the loonie's looming parity... I was half expecting some jawboning down of the currency to keep it from reaching parity... But I was wrong... Canadian Finance Minister Flaherty said late yesterday that he sees parity as a sign of Canada's domestic economic strength and largely U.S. dollar weakness, but added that he is growing increasingly worried about U.S. economic weakness.

snip...

Let's not blow off the housing data... After a 50 BPS rate cut last week, and the dollar's fall vs. the euro, I think the housing data will be very important. We'll want to see just how this all works its way into an already melting-down housing sector. Oh, and I almost forgot, because I almost always disagree with this data... Consumer Confidence will print this week too... If we don’t see a fall in Consumer Confidence this time, I'm going to throw the data in the same "stupid data" bucket where CPI now takes up residence!

The euro did trade above 1.41 Thursday night, setting a new record, and as I said in my taped interview on Friday, I still expect the euro to trade to 1.45... But with the Fed Rate cut last Tuesday, that thought may well proved to be a very conservative one! Last night, the euro set another new record of 1.4130!

more...

[DemReadingDU]

13. Mike Whitney: Correction and Rewrite

9/21/07 The Era of Global Financial Instability

Correction and Rewrite: Information clearinghouse regular, Cruxpuppy, pointed out the glaring weaknesses in yesterday's article. I thought this criticism was fair, well-argued, principled and accurate. He was right and I was wrong. I have rewritten the article which, I believe, shows how I really feel about the Federal Reserve. I agree, it must be abolished. Thanks for the criticism, cruxpuppy. I found it very constructive. Mike Whitney

http://www.informationclearinghouse.info/article18437.htm

[DemReadingDU]

14. Debt based monetary system deleted from wikipedia

For those who have been following the information about the Debt based monetary system, the entry has been deleted from wikipedia:
This page was last modified 21:33, 21 September 2007.
http://en.wikipedia.org/wiki/Debt-based_monetary_system


But if you are interested in what it said, you can see it posted in sections in the comments of Mike Whitney's column from 9/21/07 by someone known as GoingAfterTheBankers
http://www.informationclearinghouse.info/article18437.htm


P.S. The entry has now been deleted from google cache, but is still available in yahoo cache:
This page was last modified 22:12, 4 September 2007
http://216.109.125.130/search/cache?ei=UTF-8&p=debt+based+monetary+system&fr=yfp-t-312&u=en.wikipedia.org/wiki/Debt-based_monetary_system&w=debt+based+monetary+system+systems&d=HNQ1av4-Pb0U&icp=1&.intl=us

[Buttercup McToots]

15. Why Dem?

What does that mean?

[DemReadingDU]

16. I'm not sure, I don't know enough financial business

But it's odd that the entire entry is gone, rather than just modifying some of the paragraphs. Who would delete it?

I finally watched the video, Money as Debt, 47 minutes
http://video.google.com/videosearch?q=money+as+debt

Then I was reading the column by Mike Whitney, and its comments, and people there started talking about money as debt, and that the topic was deleted from wikipedia. Very odd.

[Roland99]

17. WTF?! Here it is from archive.org >>>>>

Debt-based monetary system
From Wikipedia, the free encyclopedia
Jump to: navigation, search

A debt-based monetary system is an economic system where money is supplied to an economy primarily by private banks, using the fractional reserve banking system.

This form of money is called "debt-based" because as a condition of its creation it is required to be paid back at some point in the future.

In contrast to "debt-based" money, government-issued currency (or fiat currency) is not issued by private banks and is not required to be returned to the government at a fixed point in the future. Similarly, gold and silver and other precious metals have in the past been used as money and their injection into the monetary system is not debt-based, as no obligation for their return is required as a condition of their creation.

Some economists and political commentators believe that the over-reliance of debt-based money in the modern economy has inevitably created fundamental instability in financial markets, with waves of booms and bust occurring due to the credit cycle, where banks lend and subsequently force the return of money from the economy.

Michael Rowbotham, in his book "The Grip of Death", argues that the prevalence of debt-based money is systematically concentrating real wealth in the hands of the private banks, as the populace is periodically dispossessed of its accumulated wealth during periods of static or negative credit growth.

[DemReadingDU]

20. The article in the cache is much longer than in the archive

yahoo cache
http://216.109.125.130/search/cache?ei=UTF-8&p=debt+based+monetary+system&fr=yfp-t-312&u=en.wikipedia.org/wiki/Debt-based_monetary_system&w=debt+based+monetary+system+systems&d=HNQ1av4-Pb0U&icp=1&.intl=us


archive.org



I don't know if this is important or not, just it does seem odd that somebody deleted the expanded version from wikipedia.

:shrug:

[Roland99]

22. Very strange. If you search Google for "debt based monetary system"....

there *is* an article at Wikipedia but it's like 2 sentences.

[DemReadingDU]

23. exactly, somebody deleted the longer expanded version

The wiki entry was in google cache yesterday, and it was long! about 8 pages. You can still find the long version in yahoo cache
http://216.109.125.130/search/cache?ei=UTF-8&p=debt+based+monetary+system&fr=yfp-t-312&u=en.wikipedia.org/wiki/Debt-based_monetary_system&w=debt+based+monetary+system+systems&d=HNQ1av4-Pb0U&icp=1&.intl=us

It's almost like somebody updated the entry early this month to be in sync with the 'Money as Debt' video, then somebody else had the entire entry deleted. Why not put the entry back to its original version from 2006?

[Roland99]

24. Check out the HISTORY of changes. Quite a bit of debate going on >>>>>>>

http://en.wikipedia.org/w/index.php?title=Debt-based_monetary_system&action=history

[DemReadingDU]

25. thanks, I was wondering how to find out who was doing revisions

I was fascinated by the video, Money as Debt, then was reading about this same topic in Mike Whitney's column's comments.

Something to think about this afternoon.

:think:

[Hugin]

28. They've discovered...

*cough* censorship *cough* over at the Wiki...

It's a very disturbing trend. It's a leap back toward the theory of "cloistered virtue".

"If we don't write about it, it doesn't exist.", type mentality.

[AnneD]

31. We ought to run that program ...

and see who 'corrected' that entry.

[mojavekid]

18. Jim Willie: Monetary Doves at Point of Gun

http://www.kitco.com/ind/Willie/sep212007.html

WOW! What an interesting couple weeks. A lousy August Jobs Report, even though it exaggerated job growth the upside! The Birth-Death Modlel actually added 120 thousand mythical jobs, including construction jobs and financial sector jobs, both clearly in retreat, a blatant deception. The US Federal Reserve finally was given the smoking gun they needed on a platter to cut interest rates. Martin Feldstein gave the USFed considerable political cover, urging cuts, claiming they were already 100 basis points too high. So gold is breaking out, crude oil is breaking out, the euro is breaking out, the Canadian looney dollar is breaking out, the HUI stock index of miners is breaking out, and the USDollar is breaking down. HATS OFF TO THE CANADIAN DOLLAR, WHICH HIT PARITY, A LONGSTANDING FORECAST OF MINE!!! MAY CANADIAN STOCKS BENEFIT FROM US INVESTORS SEEKING REFUGE!!! The USFed showed wisdom, if not veiled desperation in a rate cut of 50 basis points not only for the Fed Funds rate target, but also for the discount rate. The floodgates are open for monetary stimulus, monetary inflation, and higher commodity prices. Central bankers have given inflation full endorsement and approval, sufficient for a gold breakout to extend to wild levels, like $1000 before mid-2008. Nothing can stop it, because central bankers are held hostage to the crippled US financial system. They have become fast conversions to monetary doves. By the way, the USFed denies they have begun an entirely new easing cycle. This is of course nonsense, as usual. With the disconnect between S&P stocks and mining stocks, any shock wave to mainstream stocks might be beneficial to the gold community.

The key commodities remain gold as a financial meter and crude oil as a commercial meter. My thesis here is a parallel concept, of vital importance to gold (silver too) and its investment arenas. The central banks have a gun at their heads, which dictates that they continue to flood money into the system without rising interest rates further. The extreme banking, bond, and growing economic distress in the United States prevents further rate hikes widely broadcasted by the Europeans, British, and Japanese. They, together with the US, form the core of Western world banking. Rising monetary inflation as directed intended policy, coupled with lower rates in the United States, and stalled rates in Europe and Japan, constitute a near perfect whirlwind for gold. The implications to the USDollar are dire. The fact that a USDX index falling below 79 has not generated much alarm tells us that it must descend closer to 70 than 75 before the alarms are sounded. What alarms are those? Clearly here, the threat is systemic cost inflation in the USEconomy NOT matched by rising wage income. The import of price inflation through the FOREX back door from a weaker USDollar exchange rate will soon become a big topic. Next on the table is bank runs, first in Countrywide, now in England’s Northern Rock, and much more to come!!!

GOLD ON NOTICE TO LAUNCH

Gold, even as it breaks out above the 730 old highs, continues to be misunderstood. Sure, it catches the attention of network anchors, but their explanations and those from interviewed guests fall short of adequately assessment. At the same time, denials persist on the huge damage to be doled out by the USDollar decline. They have noticed the breakout above 700 and cited gold’s favorable technical chart. They have identified gold as an commodity play in the same vein as crude oil and copper, which have all risen in the last couple years. They have mentioned that gold is approaching its beneficial season, as the annual holiday season invites jewelry shopping in the Western world. Nowhere is the monetary reason cited in connection with gold breakout above 700. Stories do appear that the USEconomy should not tumble terribly, since the central banks have reacted responsibly to the banking and bond problems plaguing the system. They report a 20% global money supply growth rate as the proper remedy, but fail to recognize that is precisely why gold is rising. Gold reacts to monetary debasement.

more....

[TrogL]

21. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



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




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

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

Up-to-the-minute graph: http://quotes.ino.com/chart/?s=CME_CD.Y%24%24&v=s&w=5&t=l&a=1

Historical values http://www.x-rates.com/d/USD/CAD/data30.html (remember, these are closing numbers)

2007-08-21 Tuesday, August 21 0.943307 USD
2007-08-22 Wednesday, August 22 0.94162 USD
2007-08-23 Thursday, August 23 0.946432 USD
2007-08-24 Friday, August 24 0.950119 USD
2007-08-27 Monday, August 27 0.951022 USD
2007-08-28 Tuesday, August 28 0.941974 USD
2007-08-29 Wednesday, August 29 0.944109 USD
2007-08-30 Thursday, August 30 0.946342 USD
2007-08-31 Friday, August 31 0.94697 USD
2007-09-03 Monday, September 3 0.94697 USD
2007-09-04 Tuesday, September 4 0.953016 USD
2007-09-05 Wednesday, September 5 0.951656 USD
2007-09-06 Thursday, September 6 0.949307 USD
2007-09-07 Friday, September 7 0.948227 USD
2007-09-10 Monday, September 10 0.949487 USD
2007-09-11 Tuesday, September 11 0.958773 USD
2007-09-12 Wednesday, September 12 0.964134 USD
2007-09-13 Thursday, September 13 0.968617 USD
2007-09-14 Friday, September 14 0.971628 USD
2007-09-17 Monday, September 17 0.970214 USD
2007-09-18 Tuesday, September 18 0.977135 USD
2007-09-19 Wednesday, September 19 0.985513 USD
2007-09-20 Thursday, September 20 0.998901 USD
2007-09-21 Friday, September 21 0.999201 USD


Current values

Loonie: Dec 2007 (CME:CD.Z07)(http://quotes.ino.com/chart/?s=CME_CD.Z07&v=s)

Last trade 0.9990 Change -0.0011 (-0.11%)
Previous Close 1.0000 Open 1.0004
Low 0.9990 High 1.0008


Loonie: Cash (CME:CD.Y$$)(http://quotes.ino.com/chart/?s=CME_CD.Y$$)

Last trade 0.9989 Change -0.0016 (-0.16%)
Previous Close 1.0005 Open 0.9986
Low 0.9986 High 0.9989


Other combinations: (I emailed imo asking them to fix up the quotes page and it appears to have done some good so I'll be quoting more numbers than last week)

AU.Z07 AUSTRALIAN $/US$ Dec (NYBOT) 0.86255 +0.00075
HY.Z07 CANADIAN $/JAPANESE YEN Dec (NYBOT) 114.240 +0.925
GB.Z07 EURO/BRITISH POUND Dec (NYBOT) 0.6999 +0.0001
EP.Z07 EURO/CANADIAN $ Dec (NYBOT) 1.40915 -0.00070
EJ.Z07 EURO/JAPANESE YEN Sep (NYBOT) 160.88 -0.10
EU.Z07 EURO/US$ (LARGE) Sep (NYBOT) 1.41005 +0.00000


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

The December Canadian Dollar was steady to slightly higher overnight as it extends this month's rally. At the same time, stochastics and the RSI are overbought, diverging and are neutral signaling that a short-term top might be in or is near. Closes below the 10-day moving average crossing at .9815 would confirm that a short-term top has been posted. Overnight action sets the stage for a steady to higher opening in early-day session trading.

Analysis

Those of you who spent last week in a coma, on a desert island or otherwise occupied may want to take a gander at the little gif at the top and see the magic number 1.00000. Yes, the loonie's bouncing around par and we're still picking up the mess from the :party:. :bounce: guy's got a hangover the size of the US deficit.

The bot's playing its cards close to its chest - c'mon, one number, but I don't entirely blame it 'cause it spent most of last week saying :wtf:.

You may remember me saying last week that the loonie breaking prime would cause an effect in the market due to market bots primed with the psychological barrier of breaking par - sort of a self-fulfilling prophecy. That may account for some of the instability today. I'm calling for that to continue for the next few days until the US consumer confidence report is released. If that's as bad as I think it's going to be, I predict another flight from the greenback to other currencies. I think the Euro is just plain too hot right now (although it's a bit off today), and even the ozzie is making the news so safe money may end up in the loonie just to stay close to home.

[TrogL]

32. Looks like the party's over

Blather

The December Canadian dollar closed down 4 points at .9997 today. Prices closed near the session low today on mild
profit-taking pressure after hitting a fresh contract and 30-year high on Friday. Bulls still have solid upside
technical momentum. However, the market is still short-term overdone on the upside and due for at least a corrective
pullback very soon.

We'll see if. If it rises against prediction, then I'm claiming I'm right and there's a new relationship between investors, the loonie and the greenback in the air.

[AnneD]

26. Morning Marketeers.....

:donut: and lurkers. This proved to be an interesting, enlightening, and productive weekend. I finished the first draft of an article on cancer in men. B-it will soon be winging it's way to you soon. Writing (esp translating med-talk into human speak)has all the labour of child birth but the advantage is you don't have to tend it for 18-21 years. :spray:

I also became acquainted with the work of Cenk Uygar of the Young Turks. I was watching this clip and was blown away by it that I started looking at all the youtube clips. This is a real up and coming political commentator-funny, biting, and intelligent. I give him an enthusiastic :thumbsup:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=385&topic_id=56494&mesg_id=56494

Hubby finally made it in, but most if his luggage remained in Frankfurt. Lufthansa will be delivering that to us-thank you very much. Some things he did carry on like my saris, my daughter's copy of the latest Harry Potter book (English edition but Indian price tag 995R). She now has the complete set printed in England-2 of which are hardbound. We will try to get the others in hardbound if possible as we travel. He told me that he and his brother actually were out at the park where the terrorist bombing happened earlier in the day. They left at 11am and the bomb went off in the evening. He said that more people were killed than they were reporting. He said he thought it was around 500 killed. He said everyone stayed indoors for a while. He promised to e-mail and call next time.

I watched the CBS interview with Ahmadinejah. First, I was angry. But my anger was not at Ahmadinejah-it was at the reporter. I was angry that this kind of tough questioning was not asked of our commander and chief. Why, if we question the head of another nation in such a manner, do we not ask these questions of our leaders, ESPECIALLY since they are OUR leaders.

Ahmadinejah parses words like a fish vendor in the market place and tap danced around questions and issues as any politician would, but he was honest about some things and I hope this was not lost on Americans. He was truthful in some things, esp. when he said that we made Saddam. We intentionally did that to get back at Iran and it back fired. Things were done in Iran in our names via the CIA that to this day provokes anger and we should acknowledged and apologize for these actions. We should have an even hand in our dealings in the Middle East. We were seen as an honest broker but that has now evaporated. We need to get back to that goal. I see this visit as an olive branch. Do I trust him-no, I'll count my fingers and check my wallet as I take the olive branch....but I will take the olive branch and start a dialog. We need to include all sides. It won't be easy but it has the chance for better results than another war.

Would I let him see the WTC and pay his respects-Yes I would.....but there would be no press there and it would be strictly enforced. It would be private (thus taking politics and political gain out of the equation). But I think Americans need to see this for what it is, an olive branch and act accordingly.

However, I think it will be used by Bush as another rallying point to prop up his failed policy.:eyes:

Happy hunting and watch out for the bears.

[UpInArms]

33. hiya AnneD!

am looking forward to reading your "baby" :D - and I'm certain that others are also!

great insightful post (as usual)

just saw a bit of the questioning of Ahmadinejah and I was just annoyed by questioner never having asked one hard question of the current mis-leader.

oh well, am way too tired to get wound up today

later,

UIA

[AnneD]

27. Some food for thought.....

The hard truth: College isn't always worth it

Does it pay to go to college?

<snip>
If you check www.collegeboard.com, you'll find a reassuring study showing that education really does pay. Without considering the intangibles, the study shows that each additional level of education draws a higher lifetime income.

<snip>
According to the College Board, it takes 14 long years before the college grad's income, net of loan payments, starts to beat what the high school grad earns. During all those 14 years, college doesn't pay. High school pays.

<snip>

So, ignoring risk issues, college, even a private college, pays — but the lifetime gain is more like 10 percent than 59 percent. The hard part is the risk factor.

If college pays for the median-income worker, it may not pay as well for all graduates. Worse, if you earn less than the median, the burden of your college loans will weigh very heavily. They could, in fact, exceed your earnings gain.

Bottom line: College, particularly an expensive private college, is a high-risk investment that, for many, won't pay.

http://www.chron.com/disp/story.mpl/business/5155814.html


I have been round and round with my daughter and at least she will not be taking 80K to get a Degree in social work-but still, this shows how education, and skilled trades is really not valued in this country. I'd take it even further and say workers aren't appreciated-but that may be a little more truth than some folks could handle.

[Hugin]

29. Well, they'd better get to valuing them because...

They're who 'add value' to the economy. All the rest are just paper pushers. IMHO...

[AnneD]

30. Just wait til the workers....

can no longer add value to the economy! You think Wal-Mart has problems now?...Back when I was a little sprout (when the government stats really meant something)-I remember when a company announced layoffs-the stock would hit the toilet-because that meant it was poorly managed. Any job loss caused worries about recession. But over my lifetime, the joblessness rate and importance of workers workers (other than as a cash trough) has been trivialized and minimized. It seems like the longer the Bull Market became and the further away from the Great Depression we got, the more of our lessons learned has been forgotten. I am afraid we will soon get a 'Crash' course.

[ozymandius]

34. at long last... the close

Dow 13,759.06 Down 61.13 (0.44%)
Nasdaq 2,667.95 Down 3.27 (0.12%)
S&P 500 1,517.73 Down 8.02 (0.53%)
10-Yr Bond 4.624% Down 0.008
NYSE Volume 3,160,224,000
Nasdaq Volume 1,924,463,000

4:20 pm : The stock market made an effort Monday to extend last week's big gains. It scored some success early on, but buyers eventually backed off and the major indices closed the session with modest losses.

The technology sector (+0.3%) provided the early leadership. Brokerage upgrades of Motorola (MOT 18.05, +0.16) and EMC Corp. (EMC 20.51, +1.48), and the outperformance of Microsoft (MSFT 29.08, +0.43) ahead of tonight's release of the popular "Halo 3" videogame and amid media reports that it is interested in taking a stake in social-networking startup Facebook, helped drive the upside.

The tech sector eventually lost some steam as leading names saw larger gains get pared in conjunction with a broader market pullback that followed after news hit the wires at 11:00 ET that the UAW launched a nationwide strike at General Motors (GM 34.74, -0.20) plants for the first time in 37 years.

The GM-UAW divide was the story of the session. Although prior reports had indicated substantive progress had been made in their negotiations, a newsconference held by the UAW to discuss the strike cast serious doubt on those reports.

GM, which was up 3.9% early in the session on the expectation an agreement would be reached ahead of an 11:00 ET strike deadline, finished the day down 0.6%.

Not surprisingly, the auto parts makers comprised a pocket of weakness in the broader market. Homebuilders and airlines did, too. The former traded lower after Standard Pacific (SPF 7.05, -1.05) said it eliminated its quarterly dividend as part of a plan to reduce debt.

Falling crude prices (-$1.03 to $80.59) weren't much help to the airlines, which got clipped after AMR Corp. (AMR 20.77, -3.49) provided disappointing revenue guidance for the third quarter. The dip in crude prices came after a storm threat in the Gulf of Mexico over the weekend was averted.

Overall, the financial sector (-1.2%) was the biggest drag on the market following a Reuters report Deutsche Bank (DB 126.34, -2.94) might have to take a big writedown of its leveraged loan commitments.

The Treasury market was essentially flat ahead of some key economic data tomorrow that includes the Existing Home Sales and Consumer Confidence reports. The dollar, meanwhile, continued to languish, showing no real improvement against a basket of other major world currencies.DJ30 -61.13 NASDAQ -3.27 SP500 -8.02 NASDAQ Dec/Adv/Vol 1854/1148/1.88 bln NYSE Dec/Adv/Vol 2008/1278/1.35 bln