STOCK MARKET WATCH, Tuesday 20 January (#1)

[ozymandius]

Tuesday January 20, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 370
REICH-WING RUBBERSTAMP-Congress = DAY 000
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 39 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 91 DAYS
WHERE ARE SADDAM'S WMD? - DAY 303
DAYS SINCE ENRON COLLAPSE = 787
Number of Enron Execs in handcuffs = 17
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 53

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




AT THE CLOSING BELL ON January 16, 2004

Dow... 10,600.51 +46.66 (+0.44%)
Nasdaq... 2,140.46 +31.38 (+1.49%)
S&P 500... 1,139.83 +7.78 (+0.69%)
10-Yr Bond... 4.01% +0.04 (+1.08%)
Gold future... 407.00 -1.70 (-0.42%)

DOW..........................NASDAQ.......................S&P

||


GOLD, EURO, YEN and Dollars


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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
"How Market History Can Serve as an Important Guide

I have recently been talking about and comparing the rally out of the October 2002 low to present with the rally that occurred from November 1929 to April 1930. The reason I am making this comparison is that the rally into April 1930 served as the rally which separated the first phase of the bear market from the second phase of the bear market. Before we go any further, I want to bring up a few quotes from some of the great Dow theorists of the past.

<cut>

I hope that you can now see that history just does not support a new bull market at this time. It is highly unlikely that a rally of some 26 years and an advance of over 2,000 percent was corrected in just two short years. No, I just can’t buy it. At this time, I firmly believe that the rally out of the October 2002 low is nothing more than a very deceptive bear market rally just as described by the quotes above. This is not to say that the bearish case is cast in stone just yet. No, there are some technical hurdles that the bear must over come before he can declare victory. According to my work, these hurdles should all appear in 2004. So, this year is a very critical year for the stock market. If the technical hurdles are cleared it could slam dunk the bear. However, if these hurdles are not cleared, the bear will slam dunk the bull and if this occurs, the consequences are far reaching to say the least. So, until the evidence changes the historical odds, I must continue to side with market history.

<cut>

Let’s now go back and examine the bear market rally that occurred between November 1929 and April 1930. This rally lasted 22 weeks and it did indeed serve to separate phase one from phase two of the bear market. If we look at the current rally which began in October 2002, it has thus far run some 65 weeks. So, on the surface one may assume that the two rallies can’t be representative of the same thing when the duration’s are so different. Remember, you have to think of these bull and bear markets in proportional terms. Therefore, since the 1974 to 2000 bull market was so much bigger than the 1921 to 1929 bull market, one should expect aspects of the current bear market to be greater in time but proportionally similar.

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

[dusty64]

4. Yikes,

scary!

[loftycity]

12. Anyone read article on LibertyWhistle.us?

http://www.LibertyWhistle.us
Now that is even more scary!!

[DUreader]

2. Hey folks, be sure to check yesterdays thread again

an interesting discussion on the CPI took place into the night

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=320809&mesg_id=320809

[JNelson6563]

3. Utter brilliance Ozy

The toon today....PRICELESS! hahaha I love it and am sending it on. Wrap-up...holy cannolli Johnny I can't believe what they say sometimes! It is like they give voice to my deepest darkest concerns for the country and we the people.

I see gold making modest gains again, personally I see now as a good time for me to snap some up cause I think it's headin' up. As always though, all things in moderation. ;-)

Don't know if I'll be checking back today, hope all have a great day.

Julie

[54anickel]

6. Did you see what my Malaysian friend Mahathir was up to yesterday?

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=321463

It's slowly starting...:evilgrin:

[DUreader]

11. Venezuelan diplomats speaking with oil counterparts (OIL for GOLD not $$$)

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=321817

[JNelson6563]

15. it's coming and we saw it

dontcha love it? :toast:

Julie

[ozymandius]

7. Well, thank you Julie!

I wish that I could take credit for the cartoon's origins. I think that Luckovich is a stellar cartoonist - and local guy - so I often check in to see what his rapier sharp mind dreams up.

My time here is mitigated by my son's new early morning schedule, mitigated by my wife's new schedule. She has to be at work by 5:30am. Consequently, my schedule has changed too - at least until I find a job.

My time here is still portioned out, as is possible.

About gold:

I read two stories yesterday here at DU about oil switching to gold as its fiat denomination - setting the euro option aside. Frightening stuff when you ponder the long-term consequences that would relegate the dollar to the currency market broom closet.

[Maeve]

5. Hi, folks!

Well, how can I follow that BRILLIANT prediction yesterday? :silly:

I'm having cable trouble, so I don't know if I'll be around much today--we'll see (this is the first time I've been on long enough to post)

[ozymandius]

9. Good morning Maeve!

:donut: :donut: :donut: :donut: :donut:

Brilliant is right. Indeces stayed right where they started. Imagine!

Here's a wish that your cable problems vanish is a flash.

[54anickel]

17. Same here, my ISP was down, seems OK now.

[UpInArms]

8. daily dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 86.91 Change -0.75 (-0.86%)

and some related articles

http://www.reuters.com/financeArticle.jhtml?storyID=4165365&newsType=usDollarRpt&menuType=currencies

Euro surges higher on yen, dollar, Swissie follows

LONDON, Jan 20 (Reuters) - The euro extended gains on the yen and the dollar on Tuesday, up 1.5 percent on the day against the yen and 1.3 percent on the dollar as the market took a euro zone statement as too little to hold the euro down.

<snip>


"It's technical positioning after the dollar index failed at 88, and there was really nothing new out of the eurogroup meeting -- we need a stronger definition of excessive volatility and what they are going to do about it," said Trevor Dinmore, currency strategist at Deutsche Bank.

The dollar fell to 87.16 against an index of currencies from earlier four-week highs just short of 88.

and

http://seattletimes.nwsource.com/html/businesstechnology/2001839924_euro20.html

EU talks focus on rise of euro against dollar

BRUSSELS, Belgium — European finance ministers yesterday played down concerns that the euro's record- breaking rise against the dollar would hold back economic recovery, but they warned against continued volatility in currency markets.

"The debate is really overestimated," said Austrian Finance Minister Karl- Heinz Grasser, as he arrived for two days of European Union talks.

"We can live with the existing exchange rate, dollar versus euro," he told reporters. "What we have to take in mind is the speed of adjustment."

<snip>

His Belgian counterpart Didier Reynders praised the European Central Bank for warning last week against "brutal" exchange-rate swings and expressing concern about the euro's rate. Reynders said the euro should not get too close to $1.30 and credited the bank's comments for pulling the euro down from such levels last week.

"I'm happy the central bank intervened, moved decisively before we arrived in that dangerous zone," Reynders said. He also stressed that the strong euro was bringing advantages, notably the lowering of the price of oil imports, which are priced in dollars.

...more...

also, looking at the price of oil yesterday ...

http://www.vanguardngr.com/articles/2002/business/b120012004.html

Crude oil price rises to $34.50 a barrel

CRUDE oil prices for February delivery rose 7 cents to $34.50 a barrel on the New York Mercantile Exchange, weekend. Oil rose as high as $34.74 and fell as low as $34.12 during the seesaw session. Oil futures reached $35.20 during trading at the weekend, the highest intra-day price since March 17. Prices were 6.6 per cent higher than a year earlier.

Natural gas for February delivery rose 4.1 cents, or 0.7 per cent, to $6.37 per thousand cubic feet.

In London, the February Brent crude-oil futures contract was down 34 cents, or 1.1 per cent, at $31.03 a barrel on the International Petroleum Exchange.

Prices fell after the U.S. Energy Information Administration (EIA) reported that distillate fuel stocks, including heating oil, rose 2.8 million barrels despite recent freezing weather in the U.S. Northeast, the biggest heating oil market in the world.

“It’s very surprising after the cold weather last week to see a build in distillates, but most people will probably assume it is coming in next week’s report,” said Peter Beutel, president of energy consultant, Cameron Hanover.

The EIA appeared to agree, saying in its weekly report: “The increase in distillate fuel inventories may be more surprising, in that the Northeast and mid-Atlantic did begin to feel the effects of cold weather last week.”

It added, “But the cold weather did not really hit until Tuesday evening (January 6), leaving little time to actually impact primary storage data for the week ending January 9.”

...more...

No predictions from me today. Just waiting to see who the BFEE calls upon to pull it's golden fleece from the fire.

[ozymandius]

10. Hey UIA, did you see 54anickel's post above?

What do you think is going to happen here if our buddy, Mahathir, is successful in steering oil from the dollar to the gold standard?

[UpInArms]

13. I'm not certain that there will be

much traction for Mahathir's suggestion - but there may be a change in how OPEC values their oil - perhaps a combination of currencies as rated on an index.

I do see OPEC becoming increasingly dissatisfied with the falling dollar and their oil-dollar pricing.

It makes the actual amount received for oil less valuable (though the * administration likes a weak dollar, OPEC does not) and this makes the oil producing countries have less valuable reserves.

I also think that when you do an oil/gold psychology, you would have a tremendously negative impact on many industries. I rather like making people think about what they are putting in their gas tanks :evilgrin:

Lots of SUV drivers would really have to contemplate their reason for living :evilgrin:

[54anickel]

19. I don't see Mahathir's suggestion taking on yet either.

But he is good at wreaking havoc in the markets. Could be good for gold down the road. I think he will continue to push for the Islamic countries to begin to utilize gold between each other, sort of like the Kurds when they held out keeping the old Iraqi Dinar instead of adopting the Saddam dollar.

He sees that it is the fiat currency that gives the West much of it's power and control. He is looking for small steps to create some sort of unity - strength in numbers. Think back to when OPEC got it's start. It wasn't until those member countries were able to set aside their difference and unite, that they gained control of the oil prices.

I also see the threat of such unity for the West's motivation for much of what they do in the Mideast.

JMHO

[54anickel]

20. Dang, I was really counting on the currency markets staying

quiet for another day. Everything I was reading lead me to believe the markets would play it cool up to the G7 meeting. Today was going to be my "window of opportunity" to purchase a few "trinkets".

So, what's really driving down the buck today? Market intervention? That little say nothing statement from the EU? Or a bit of gold buying on that blurb from my buddy? How depressing. What's George gonna have to say about all this cliff jumping tonight? Oh ya, the economy sure is improving all right.

[ozymandius]

14. 9:49 numbers - Dow takes a hit

Dow 10,582.08 -18.43 (-0.17%)
Nasdaq 2,141.65 +1.19 (+0.06%)
S&P 500 1,139.99 +0.16 (+0.01%)
10-Yr Bond 4.057% +0.043

[ozymandius]

16. 10:34 and everything is bleeding

Dow 10,548.59 -51.92 (-0.49%)
Nasdaq 2,136.97 -3.49 (-0.16%)
S&P 500 1,138.04 -1.79 (-0.16%)
10-Yr Bond 4.039% +0.025

[ozymandius]

18. 11:06 and little change

Dow 10,551.48 -49.03 (-0.46%)
Nasdaq 2,137.56 -2.90 (-0.14%)
S&P 500 1,138.16 -1.67 (-0.15%)
10-Yr Bond 4.026% +0.012

[Maeve]

21. I can't leave you guys alone to watch, can I?

Sheesh...red ink everywhere! This is why we can't have nice things...

Dow 10,527.63 -72.88 (-0.69%)
Nasdaq 2,131.72 -8.74 (-0.41%)
S&P 500 1,136.09 -3.74 (-0.33%)
10-Yr Bond 4.026% +0.012


Good news and bad news--computer connection is fine, but...Eldest Son was in a car accident on his way to OSU this morning. He's fine (and fined--cited for failure to yield), but the car...looks like Mom's Taxi Service is back in action for a while. And it would be on a day when he works til midnight...

[54anickel]

23. Sorry to hear of the accident, but glad he is alright. So, is he

going to be "grounded"? Or is having Mom's Taxi Service punishment enough? :evilgrin:

[Maeve]

24. He'll pay with money--no collision on his car!

It was a junker to begin with and over 250K miles so we can't complain...much. The punishment is mine, unless the bus schedule can rescue me.

[ozymandius]

27. Jeebus Maeve! I'm sorry!

Glad to hear he is alright though.

I'm out for the rest of the day. Little one needs some sun.

best to you,

Ozy

[Frodo]

22. Very interesting day - "sell on the news" stuff??

Five Dow component stocks reported today and every one of them beat expectations (both revenue and profit) yet most are down on the day.

Additionally, more stocks are up today than down, but the indexes show a decided downward trend. Another one of those 50/50 days?

Thank good ness for diversification.

Gold/Dollar having interestnig days as well.

[54anickel]

25. Does this guy sound cocky, or am I being over sensitive today?

http://money.cnn.com/2004/01/20/markets/bondcenter/bonds/

Federal Reserve data already shows offshore central banks bought almost $15 billion of Treasurys in the week of Jan. 14, and another big rise is expected in the latest week. That flood of money is one reason yields hit three-month lows last week.

"For us, the great thing about the MOF is that it's not price sensitive -- it doesn't care how expensive Treasurys get because its main aim is to hold down the yen not make a decent return," noted a trader at a U.S. primary dealer.

"And in that sense it's also a captive investor, since if it sells its holdings the yen will surely rise. If only all our customers were this way," he added.


Sort of reminds me of that "Something We Don't Talk About" section from Friday....

http://www.forbes.com/markets/newswire/2004/01/14/rtr1210632.html

The White House stance is understandable since the flow of foreign money is making it easier to argue that budget deficits do not push up interest rates, and so justify past tax cuts.

But the Fed also has reason to be thankful.

The central bank caused a stir in markets last year by suggesting that, if deflation became a real danger, it might respond by buying long-term Treasuries directly and driving yields lower.

In the end, officials decided the proposal had too many dangers of its own and it fell from favor. But, the Fed seems to have no problem with foreign governments buying Treasuries.

"One of the great ironies of the latest events, is that for all the debate about the implications of the Fed buying Treasuries to suppress bond yields, it is foreign central banks, notably the BOJ, that is doing the job for them,"

[UpInArms]

31. am not sure that this article has

any bearing on today's currency activity, but :shrug:

http://www.theadvertiser.news.com.au/common/story_page/0,5936,8431122%255E913,00.html

NATIONAL Australia Bank admits the loss from its foreign currency trading scandal could be as high as $600 million.

<snip>

The NAB alleges David Bullen, Luke Duffy, and Vince Vacara – aided by London-based Gianni Gray – made unauthorised trades in foreign currency options.

The men were betting against the Australian dollar rising against the US greenback.

The Aussie dollar, in fact, was the top-performing currency in the world during the time period.

...more...

hmmmm....

[54anickel]

33. Ya, I think I posted this yesterday. Wonder if this is a more common

MO than we are lead to believe. All this currency trading has really got me worried. The basic principals and mechanics of the market are become irrelevant.

[Maeve]

26. 12:36 and moving up

Unusual for that to happen during lunch, but...

Dow 10,542.07 -58.44 (-0.55%)
Nasdaq 2,141.19 +0.73 (+0.03%)
S&P 500 1,138.57 -1.26 (-0.11%)
10-Yr Bond 4.018% +0.004

[54anickel]

28. Hmmm, looking like it's back down again. Perhaps Mr Wood

miscalculated the 65 weeks - this is spooky, isn't it?

[KoKo]

29. Perhaps the PPT driving it down so that it gets a boost after SOU tonight.

That would fit their plans. Do a little "profit taking," then buy back in. That seems to be the way it's been working. He will need a big boost because reports of the speech aren't looking like he's got a winner. Of course "downgrade the expectations" for the Chimp and then he promises the "chickens in every pot, and McMansions for every Mickey D's worker and he's a winner, again has been very sucessful for Rove in the past. Why break a winning streak. :eyes:

[Maeve]

30. Then they don't report that he only delivered

Mickey D's to every McMansion and the chickens haven't a pot to...you get the idea.

Minor ups and downs the past hour or so

Dow 10,537.49 -63.02 (-0.59%)
Nasdaq 2,141.16 +0.70 (+0.03%)
S&P 500 1,138.13 -1.70 (-0.15%)
10-Yr Bond 4.021% +0.007

[KoKo]

32. LOL's ......so true. Bait and Switch. Someone posted he was sounding

like a shady used car salesman lately. :D

[Petrodollar Warfare]

34. TREASURY RENEGES ON 30 YEAR BOND HOLDERS

Well, this is interesting perspective. Perhaps the realities of our fiscal situation are not leaving many options as this little crisis rolls along. Note that additional national debt is now accruing at a rate of $11.25 per household, per day. That is on top of the existing government principal debt of $55,000 per household. That also does not count the state and local government debt, private and consumer household and corporate debt also outstanding. Our nation is literally drowning in debt it has no way to pay off....any comments?

TREASURY RENEGES
ON 30 YEAR BOND HOLDERS

By: Ed Henry

The U.S. Treasury will default on contracts with investors, mostly
individuals, who loaned the government money in 1979 on the agreement
that they would receive 9.125 percent interest every year until their
bonds mature in the year 2009.

No longer will politicians and appointed bureaucrats be able to brag that the United States has never failed to live up to its obligation as the safest investment in the world. Investment is no longer guaranteed.

The Bureau of Public Debt
<http://www.uncle-scam.com/Breaking/jan-04/bpd-1-15.pdf> announcement
claims that this recall applies to about $4.6 billion in 30 year bonds
issued on May 15, 1979 and calls for their redemption by May 15, 2004.

Of course, investors holding these bonds are not forced to cash them in and can hold them until 2009 if they want, but they will no longer
receive the interest promised, the main reason for investing their money in the first place.

That means that if you loaned the government $10,000 in 1979 you will
lose $912.50 a year, $4,562.50 in the next 5 years, in interest you
would have been due from the government-before the government decided to back out of their end of the contract.

The Treasury claims that these bonds are being called "to reduce the cost of debt financing" and will result in the government saving $544 million, an amount equal to what the national debt increases every five and one-half hours or so nowadays. And just where do you think the federal government will get the $4.6 billion to buy these bonds back? They'll borrow it, of course.

At a time when the International Monetary Fund (IMF) is already warning the Bush administration about its fiscal irresponsibility, and the Treasury is selling less than half of all securities put up for auction, this action is bound to reverberate negatively through the bond market.

How long will it be before the United States loses the credit rating it has enjoyed for years and investors, particularly foreign nations that hold a significant portion of our national debt, decide it's safer to buy Euros or something else instead of loaning us money? And don't forget, those on the honest side of our national debt can cash-in their securities at any time. It's not like the bogus nonmarketable bonds the government gives us when they borrow/steal our Social Security and other dedicated entitlement money. The action taken today could very well be the tip of the iceberg on the voyage to bankruptcy.

The government has previously, under the Clinton administration, tried
to reduce the national debt by redeeming long term debt before maturity, but investors have usually refused to turn in their holdings without a settlement on the interest due. This time, it's being done by demand.

Those holding the bonds have no choice. The government has announced that it is going to stop paying interest on May 15, 2004, no ifs, ands, or buts about it.

Secretary of the Treasury John Snow and the Bush administration may be willing to risk the nation's Triple-A credit rating and its constitutionally authorized ability to borrow in order to save $544
million. A drop in the bucket considering that this is coming from the
same people who ran up the national debt more than a half trillion ($555 billion) last year, fiscal 2003, and have already accumulated another $215 billion in borrowing, stealing, and interest unfairly handed entitlement trusts during the first quarter of this year. Some people may think that 9.125 percent interest is an unfair amount to be shelling out during times when current interest is below five percent and the government cannot be blamed for refinancing or putting an end to this unfair usury.

After all, these lenders have already more than doubled their original investment and are still due the principal. It may also
be that the fine print of these contracts has a clause allowing for the "call" of these securities at a certain date with sufficient notice or even the remote chance that they are part of a "sinking fund" arrangement.

For instance, it may be perfectly legal if the contract contains wording where the government can recall these bonds five years prior to maturity, which would account for the resistance in the Clinton years, and a four month notice of such recall which would account for the January 15th to May 15th exact dates.

When these bonds were purchased, when the money was loaned, the nation was in recession and times were hard for everyone. Mortgage rates were in the 18 percent range, we had long lines at the gas pump, Iran had just revolted, and the Ayatollah Khomeini was holding our embassy people hostage until we returned the Iranian Treasury they claimed the Shah ran off with and we were keeping while sheltering that dictator. No matter how you look at it, the little old ladies, pension houses, insurance companies and others who purchase long term bonds (the 30 year bond no longer exists) are very liable to think that the federal government contracted to pay interest at 9.125 percent for 30 years and is now defaulting on that contractual agreement.

"Published originally at EtherZone.com <http://www.etherzone.com> :
republication allowed with this notice and hyperlink intact."

[htuttle]

35. Holy crap

Katy, bar the door! The dollar's going down...

Here's a direct link to the announcement at the BPD site:
http://www.publicdebt.treas.gov/com/comcall.htm

[Frodo]

36. GROSS errors in this one.

There is no way this is an accurate article. The bonds either ARE callable, in which case there is nothing surprising, illegal, unethical, or wrong in any way. The scandal would be that they hadn't been called prior to today (unless that's part of the option)... OR they are NOT callable, in which case the Federal government has no option to do something like this and will get buried in court.

I can't think of ANY middle ground. It simply isn't possible that there is a secret default going on. The dollar would collapse more than 1% if it were happening.

It would also be plain stupid.... ok I guess that's possible.

[htuttle]

38. What are you suggesting is 'grossly inaccurate'?

The article states that the bonds are probably callable. I didn't see that the author was trying to insinuate that there was anything *illegal* being done. Just that it is quite unexpected, and certainly doesn't bolster confidence in the US Treasury.

Here's another account from Newsday:
http://www.newsday.com/business/nationworld/wire/sns-ap-brf-treasury-bond-call,0,1022565.story?coll=sns-ap-business-headlines

I think that who this will hurt the most are retired people living on that interest. Sure, there was only 5 more years of it left, but when you're 80, 5 years into the future is a long time...

So now I'd imagine that they'll have to cash them in and get hit with capital gains taxes on it? Ouch...

39. Okay

They called callable bonds--but it doesn't happen very often.

[Frodo]

41. "It doesn't happen very often"

I'm pretty sure it happens about every six months as a new group of bonds comes due.

There is absolutely nothing unusual about this. To NOT do it would be crazy. When they sold the bonds 25 years ago it was explicit "if rates are much lower in 25 years we're

65. To me, every 6 months is not very often

I guess I just live faster. The real question is in a relative sense, are more calls coming than before. And even if so, I guess that would just be a result of low rates and the gap between rates and issued bills.

[Frodo]

66. OK. Let's put it this way:

"It happens just about EVERY time it's possible that it will happen"

That seem better? The thirty year T-Bond that was callable was only issued every six months (and I think not even then - there were a couple gaps back in the pre-reagan years when there wasn't as much debt).

The point, of course, is that there is NOTHING unusual or innapropriate in the actions reported in the original piece - and yet the author spins them like it's the first step of a major US default on it's obligations. It isn't.

[54anickel]

43. 30 year bonds are the exception, callable after 25

Issuers might call a bond when interest rates fall so drastically that it is worth the expense of issuing new bonds at the lower rates. U.S. government securities are not usually callable. However, 30-year Treasury bonds are an exception. They become callable after 25 years.

[54anickel]

44. From this link, looks like 2000 was the start of calling in the older

bonds. Doesn't list any before that, but that doesn't necessarily mean it didn't happen - who knows.

I do remember those old days 25 years ago when to older folks were socking it away and making good extra $ on interest on CDs, bonds, T-notes, just about anything. Back in the old days. They really started whining as the rates came down. Remember my manager telling one of them, you've had your time, now we need to let the younger ones be able to borrow money so they can afford homes. Who would have thought it would go to this extreme of debt vs savings?

BTW, Hi again Dan.

http://www.publicdebt.treas.gov/sec/seccall5.htm

OTHER BOND CALLS

November 15, 2003 . . . 8 3/4 Percent Treasury Bond of 2003-2008

August 15, 2003 . . . 8 3/8 Percent Treasury Bond of 2003-2008

November 15, 2002 . . . 7 7/8 Percent Treasury Bond of 2002-2007

February 15, 2002 . . . 7 5/8 Percent Treasury Bond of 2002-2007

May 15, 2000 . . . 8 1/4 Percent Treasury Bond of 2000-2005

[Frodo]

40. The whole premise of the article.

This is exactly why you put a callable option into a bond. It's part of the price. I can get a better rate on a bond if I give the issuer the opton of calling it later if rates go down.

This is all normal stuff. Read this link:

http://www.frbsf.org/fiservices/letters/fiscal/2000/000315.html


Did Clinton "default" in treasury obligations?
Were we sacrificing our "AAA credit rating"?

Notice also the last paragraph on your newsday link?

"The department's last bond call was announced in July, also for a crop of older high-interest rate 30-year bonds. Those bonds were to be redeemed by November."

They've been doing this ever since rates came down. As bonds become callable they call them. To do anything else would be irresponsible (ok, I admit that's expected, but SOMEBODY must know how to do their job???).

And no, There won't be any capital gains taxes on them. They haven't made any capital gains or losses. The bonds are worth exactly what they paid for them.

[54anickel]

42. Hmm, I missed the call back in July, then of course I was a bit busy

then....I WAS EMPLOYED!!!! :evilgrin:

37. I don't know enough about the bond market to render an opinion

But it certainly leaves one feeling like s/he cannot trust Uncle Sam with a loan.

Maybe it has something to do with the phony corporate accounting, phony voting machines, and phony CPI and PPI that Uncle Sam has in his back pocket of late?!?

For you that haven't followed the whole discussion, it looks like Ronnie's administration hacked the CPI back in 1983, then it has gotten progressively worse (esp.in both Bush admins) with them trying to make up for "Great Grandpa's" excess, and appetite for oil.

Turns out, the genesis of the circular "black hole" (per my article) was in 1983.

Dan

[54anickel]

45. Think we'll see a lot more of these. Last one out at 11.75 was issued in

84. I'm done digging. I agree that it does leave on with a bit less confidence is "fiscal responsibility". Then again, it would be very irresponsible to NOT call these in whenever possible.

So, where are we going again, and why am I in this handbasket?

http://www.publicdebt.treas.gov/com/combonds.htm

Maturity: We sold noncallable 30-year bonds. We may have issued an additional amount of a bond in a reopening. Until February 1985, we issued fixed-principal bonds that are callable five years prior to maturity. After providing four months' notice, we can call any callable bond on its first call date or on any semiannual interest payment date thereafter. The callable bond with the longest remaining period to maturity is the 11-3/4 percent bond of November 15, 2009-14, which was issued in November 1984.

[Frodo]

48. 11.75% !!! Those were the days, my friends.

We thought they'd never end.

I mostly remember rates from when I first got into banking in the late 80's, but "double digits"! Wow.

The shame of it is that all of this "saving" is already priced in to the budget deficit. They're already counting on calling all of the callable seurities as they come due. What's really going to hose us is the recent move to shorter term securities. If rates DO go back up, we will end up having to pay MUCH higher rates than we would have if we had "locked in" 30 year financing on the debt while things were so low.

[Petrodollar Warfare]

46. Quick comments on your "black hole" analysis re CPI

I forwarded your website to an older friend of mine to review. He has been carefully observing these types of issues for 20 years, and hence he is quite the contrarian. He thinks the expansion in money supply, massive debt and "Bush Doctine" is going to "blow down the house of cards" in the not too distant future (of course he has thought this for 20 yrs). BTW, he used to work for the gov't, but left under Reagan...somewhat disgusted with all that he had learned...

***********
"This has been known by many (that's a relative term, of course) for several years. It is understandable that you missed this because you wouldn't have been watching when all these changes were made 20 years ago. Most your age would simply accept the indexes as they are today as being valid, but they aren't. (fyi: I'm in my mid-30s, the author is around 50)

And, in fact, the same problem exists in the unemployment figures traces to David Stockman and the Reagan/Bush 1 years as well. Because Reagan/Bush set off unprecedented deficit spending during their terms they needed some way to make the economic picture look rosy. That is when the manipulation of both the CPI and unemployment figure commenced. (1983 as you have discovered)

These changes were made to core parts of the indices that hadn't been touched in decades.

The unemployment figures moved from reflecting real unemployment to a much lower figure of 'effective' unemployment. It excluded those that had stopped looking for work and included military and DOD personnel as "employees." That lowered the figures significantly and made Reagan look good. This change was vocally and broadly battled by statisticians and economists at the time, but politics won out. The continued core distortions and the fact that neither the CPI nor the unemployment figures have been adjusted to reflect the marginal changes in the economy have contributed to a building false picture of the state of the US economy over the last 20 years. All the chickens are coming home to roost."

*********
PS: If the unemployment statistics used today had been used in the early 1930s, the "reported rate" would have been only 9%, not the real 25% unemployment of 1933. Yes, it is hard to fanthom that gov't stats contain such massive distortions, but then again, that's why it's called "voodoo economics"...unfortuately Clinton did not correct these flaws in the CPI or unemployment either, but the Bush II administration simply takes "fuzzy math" to a new and dangerous level.(this stuff is only the periphery of their deceptions...)

Bush's Data Dump
The administration is hiding bad economic news. Here's how.
(July 2003)
http://slate.msn.com/id/2085481/

"There are lies,
there are damn lies,
and then there are statistics."

[54anickel]

51. Thanks GoreN4. Well Dan, there it is, an "old timer" relative term as

50's is not old to me :P backing up your assessment.

Got any plans or ideas for attempting to bring this forward as you did the e-voting issues? Seems like something our candidates should be made aware of.

52. Thanks

I did notice a whole raft of other changes made OUTSIDE the weightings in the CPI--all of which make the number lower.

So the goal must be "MAKE THE DAMN CPI NUMBER LOWER" so the stock market wiil go up, so we can eat energy, and not have to pay out Social Security

You say these problems have been known about for year. Well, sometimes, it takes years for problems to finally show themselves. I am afraid this one is starting to show itself in an ugly way.People cannot simply afford houses, regardless of the interest rate. And they just borrowed against them.

I have now gone back and pointed at one root change made by Reagan in 1983. I was just a pup them.

Dan

53. But you can only lie so much

Re:

Slate article I have never read.


Oh my. Then moving Christmas into July in the PPI was okay?

55. Interesting note: "consuming houses" (footnote 11)

(11) See BLS Manual which talks about a major Reagan change which is now leading to the circular cycle. Note that houses are indeed "consumed" when people refi cash-out against them, which is at odds with the note in the BLS manual.

From my website.

[Robbien]

58. The big holders of these bonds

Are pension plans, Japan and Arab nations.

Just thought you might be interested in knowing who we are stiffing here.

[54anickel]

47. UIA, what do you suspect is going on? Or is it just chaos in the pits

today? Buck steadily down, Euro steadily up, Yen all over the place, but overall down a wee bit from starting point. I don't get it. There was chatter last week that EU may start a bit of intervention of it's own, they were weighing the cost of that to the "image" of the Euro. Perhaps intervention by someone else on behalf of the Euro?

The charts for dollar vs euro seem to moving so gracefully together, almost tick for tick. Like Fred and Ginger.

:shrug:

[UpInArms]

54. I wish I knew what to think

but can only attempt to continue to read the tea leaves (or what passes for "news")

here's a few "well duh" moments

http://www.quicken.com/investments/news_center/story/?story=NewsStory/dowJones/20040120/ON200401201306001285.var&column=P0DFP

NEW YORK -- The dollar is extending its losses Tuesday despite more rhetoric from euro-zone officials warning against sharp currency moves -- words that dealers say seem increasingly empty unless backed up by action.


As there is no sign that is on anyone's radar screens just yet, least of all those of European Central Bank's governing council members, the dollar is giving back huge chunks of last week's sizable gains.

"There's still little to suggest they're willing to put a floor under the dollar ... a cap on the euro," said Tim Stewart, chief global currency strategist at Morgan Stanley in New York. "There's still no finger on the trigger for a monetary-policy response or direct intervention."

Ashraf Laidi, chief currency strategist at MG Financial in New York, reckons the ECB's next move in interest rates will be to increase them, not lower them.

The dollar is sharply weaker across the board Tuesday, particularly against the euro and sterling. Having cut back extended positions in the dollar's rally last week, dealers are once again selling the unit.

<snip>

The dollar's plunge Tuesday comes despite the release Monday in Brussels of the communique following a meeting of European Union finance ministers, known as Ecofin.

The Ecofin statement said: "In the present circumstances, we particularly stress stability and we are concerned about excessive exchange rate moves." That marked a significant change of wording from previous statements, which consistently mentioned the desirability of a "strong and stable" currency.

...more...

and

http://www.reuters.com/newsArticle.jhtml?type=reutersEdge&storyID=4169097

Invested in U.S. Stocks? You Just Think You Did Well

NEW YORK (Reuters) - U.S. investors, believing they did well last year with the major indexes posting their first up year since 1999, should think again.

The Standard & Poor's 500 index gained 28.7 percent in 2003, but when the dollar's decline is added into the mix, investors who bought an S&P 500 index fund made half as much as if they had converted their money to euros and invested it in Germany's DAX, for example.

In fact, according to Richard Bernstein, U.S. strategist at Merrill Lynch, in dollar terms, the S&P 500 was the worst performing index of those they follow worldwide.

"By not diversifying outside the U.S., you underperformed last year and you will probably underperform this year," said Uri Landesman, who oversees $500 million as senior portfolio manager of the International Equity Fund at Federated Investors Inc. "That's because of the dollar and because, from a general valuation standpoint, Japan, emerging markets and Europe look more appealing."

<snip>

The dollar's decline is set against the backdrop of growing U.S. budget and current-account deficits and interest rates near 45-year lows. Low rates reduce the attractiveness of U.S. fixed income securities, further reducing demand for dollars.

In a vicious cycle, concerns that the dollar may drop further on ebbing demand make all dollar-denominated securities less attractive and again push the dollar lower.

...more...

and just for a good laugh

http://www.quicken.com/investments/news_center/story/?story=NewsStory/dowJones/20040120/ON200401201446001399.var&column=P0DEC

WASHINGTON (Dow Jones)-- The Bush administration continues to support a strong U.S. dollar, Treasury spokesman Rob Nichols said Tuesday.

"There is no change in the strong dollar policy. This administration favors a strong dollar," Nichols said.

<snip>

The Bush administration can set the agenda for the February G7 meetings as the U.S. is the host country for this year's G8 summit, which President George W. Bush will attend. The G8 summit will take place this summer in Sea Island, Ga.

European and Japanese officials have expressed increasing concern that their currencies are continuing to strengthen as the dollar weakens. U.S. officials have expressed little concern about the dollar's weakness, saying its slide has been orderly and isn't a big worry.

...more...

[54anickel]

60. Confusing as heck, ain't it?

ECB to increase rates?

Chatter is loosing it's effectivness

"The verbal intervention is coming thick and fast ... but it eventually becomes worthless if it's not backed up with actual intervention," said the senior dealer at a U.S. bank in New York.

As long as U.S. monetary authorities remain relaxed about the dollar's general depreciation, verbal intervention from euro-zone officials may continue to be as ineffective as it has been Tuesday.

This from the second article is interesting - what's that last comment really trying to say?
:
Should central banks around the world cut interest rates to stem the advance of their currencies or stoke economic growth, as the Fed holds steady, the dollar should strengthen and increase the attractiveness of dollar-denominated securities even as it reduces the profits of U.S. exporters.

"Companies that derive more than half their earnings from outside the U.S. could see their profits at risk," said Jake Dollarhide, chief executive at Longbow Asset Management Co.

"Just because the euro and yen have gained tremendously against the dollar is no logic to say that the dollar could not weaken further."


That last one - HA US gets to set the agenda. "That's something we just don't talk about". :evilgrin:

The Bush administration can set the agenda for the February G7 meetings as the U.S. is the host country for this year's G8 summit, which President George W. Bush will attend. The G8 summit will take place this summer in Sea Island, Ga.

European and Japanese officials have expressed increasing concern that their currencies are continuing to strengthen as the dollar weakens. U.S. officials have expressed little concern about the dollar's weakness, saying its slide has been orderly and isn't a big worry.

[54anickel]

64. One more interesting bit. Someone should have thought before speaking

and it looks like Shrub's SOTU isn't going to help tonight either.

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1073281169318

snip>
But after the meeting, Charlie McCreevy, the Irish finance minister chairing the talks, said the group had no view on contingency plans for combating renewed euro strength.

Eurozone officials' lack of clear plans to combat the currency's strength eased market fears of intervention and sent the euro back towards its recent highs.

"If they'd left it at the previous message of being unhappy with the volatility, the market might have thought it meant there were background plans. Now, however, it looks as if the Europeans are not sure what to do," said Mark Cliffe, chief global strategist at ING Financial Markets. "The market's now thinking that if there's nothing in the way, they might as well buy euros again."

Strategists in the US said the president's State of the Union address was also weighing on sentiment towards the dollar.

"There's reason to believe the speech is going to indicate an increase in spending, which has made people think about the US twin deficits, which have been a major source of weakness for the dollar," said Tim Mazanec, currencies strategist at Investors Bank and Trust, Boston.

[54anickel]

49. Now they are pointing to Kerry's win last night for the drop.

:eyes:

http://www.forbes.com/markets/newswire/2004/01/20/rtr1218224.html

NEW YORK, Jan 20 (Reuters) - U.S. stocks fell in heavy trade on Tuesday from multiyear highs set on Friday as investors with hard-to-beat expectations waved off strong profits from Citigroup Inc. (nyse: C - news - people) and 3M Co. (nyse: C - news - people).

"We have come a long way," said Brian Pears, head of equity trading at Victory Capital Management. "I wonder how much more of an effect good news can have at this point."

Democrat John Kerry's win in Iowa's caucuses on Monday, knocking front-runner Howard Dean off stride, also dragged on the market, analysts said, as investors worried about uncertainty caused by a close-fought presidential election.

[Frodo]

50. I love that theory!

"Democrats are bad for the stock market and republicans are good for it."

So as Bush seems less and less like a "lock" the market should go down... causing fewer people to be happy with Bush and more people to be likely to vote for Dean/Kerry/Edwards/Clark... thus causing the markets to go down because Democrats are bad for the markets and...


:eyes:

[Timefortruth]

57. It is just not true either. Exactly the opposite is the reality. nt

[DifferentStrokes]

56. Oh, my goodness, investors are so delicate

aren't they?

Or financial writers are overtaxed to find acceptable reasons for big money behavior.

"investors worried about uncertainty caused by a close-fought presidential election". . .

Excuse me, but this is only the begining of the primaries.

59. HOW ABOUT INSTEAD

The "christmas push for bush" has run out of steam, now that reality has kicked in, and people have to acknowledge stuffing the fourth quarter.

"Alas, for Christmas, no jobs--just stuffing!" (I thought I would end poetically, and besides, I have to study.)

www.island.com is in a "state of dis-union"

Top 5 Top 20 Top 50 Top 100 | Regular Hours After Hours

1 RFMD NM 987,877 10.6300 16:43:05.3 284 -1.6300 -13.30
2 QQQ AM 587,448 38.5000 16:42:52.1 286 -0.1400 -0.36
3 ICGE SC 361,105 0.5010 16:40:19.1 426 +0.0010 +0.20
4 AMCC NM 278,009 7.9500 16:42:57.9 177 -0.4600 -5.47
5 PMCS NM 218,154 23.3800 16:42:57.5 113 -1.1300 -4.61
6 JDSU NM 205,517 5.6500 16:41:29.8 447 -0.0800 -1.40
7 INTC NM 128,311 32.1400 16:42:45.4 492 -0.4700 -1.44
8 MOT NY 104,061 16.8500 16:41:10.7 24 -0.2200 -1.29
9 CSCO NM 99,283 28.7300 16:42:43.3 376 -0.1300 -0.45

[Maeve]

61. Final mixed numbers

Altho the REAL action was in the conversation here today!
Dow 10,528.66 -71.85 (-0.68%)
Nasdaq 2,147.98 +7.52 (+0.35%)
S&P 500 1,138.77 -1.06 (-0.09%)
10-Yr Bond 4.057% +0.043

[54anickel]

62. And here I was just about to post, Where the heck are the closing numbers

My, the Dow took quite the beating today.
Rally tomorrow after the fearless wonder gives the SOTU :evilgrin:

[ozymandius]

63. Yowza! Here's the final numbers... and blather from me

Dow 10,528.66 -71.85 (-0.68%)
Nasdaq 2,147.98 +7.52 (+0.35%)
S&P 500 1,138.77 -1.06 (-0.09%)
10-Yr Bond 4.057% +0.043


It seems to me that the world conspired to vandalize the backdrop against which Bush will deliver his speech tonight. The "above politics" theme of the SOTU address will resonate like fingernails on the chalkboard I'll bet.