STOCK MARKET WATCH, Monday 26 April

[ozymandius]

Monday April 26, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 273
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 136 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 189 DAYS
WHERE ARE SADDAM'S WMD? - DAY 403
DAYS SINCE ENRON COLLAPSE = 885
Number of Enron Execs in handcuffs = 18
Recent Acquisitions: Skilling
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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




AT THE CLOSING BELL ON April 23, 2004

Dow... 10,472.84 +11.64 (+0.11%)
Nasdaq... 2,049.77 +16.86 (+0.83%)
S&P 500... 1,140.60 +0.67 (+0.06%)
10-Yr Bond... 4.45% +0.08 (+1.85%)
Gold future... 395.70 +1.80 (+0.46%)

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
A Brief Technical Assessment

Let’s begin with a look the markets from a Dow theory perspective. On February 11, 2004 the Industrials topped out at 10,737.70. Please see the daily chart below. The Transports topped out the month before on January 22, 2004 at 3,080.32. This non-confirmation set the stage for the decline into the March lows. The Transports bottomed on March 22, 2004 at 2,750.80 and the Industrials bottomed on March 24, 2004 at 10,048.20. From this low the current advance began. On April 6, 2004 both indexes made minor highs. The high occurred at 10,570.80 on the Industrials and 2,974.84 on the Transports. The Transports have now bettered their April 6th high. The Industrials are thus far lagging. This has setup a minor non-confirmation. If this minor non-confirmation is corrected it will open the door for new highs. Should we see the non-confirmation corrected, a retest of the March 1, 2004 high at 10,678.10 would be the next resistance level. If this level is violated we could then very well see new highs.

-cut-

Below is a chart of the Banking index. I have marked the March 24, 2004 low with a horizontal red line. This low corresponds with the low seen in the Industrials and the Transports. Notice that once the short term cycle advance was over price quickly violated the March 24, 2004 low. This is a significant development because it carried price down below the March 24, 2004 low. This is significant because the March 24, 2004 low was a low of intermediate degree. So, given that the advance out of this intermediate term low failed to advance above the March high and then was followed by a decline below the March low is very negative. Based on this chart it appears that the averages could very well have trouble ahead. Given the price structure of this chart today, it would take an advance above the April high or a higher short-term cycle low to turn this setup positive.

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

[54anickel]

2. There will be no US$ meltdown, so stop saying that! (Fed)

http://cbs.marketwatch.com/news/story.asp?guid=%7B9A5CE282-60F1-4501-82BC-7C1D35EF9C5C%7D&siteid=google&dist=google#start%20copy%20build

Fed's Ferguson says deficit not a risk
He dismisses IMF's 'apocalyptic' scenarios

snip>

In its latest report on the global economy, released earlier this week, the IMF warned that an abrupt fall in the dollar, triggered by worries that the current account deficit was unsustainable, remained one of the major downside risks facing the global economy. See full story.

The U.S. is now running a current account deficit equal to about 5 percent of gross domestic product.

Ferguson, in a speech to the Washington-based European Institute, agreed some narrowing of the U.S. deficit was "inevitable," but said the correction "need not lead to undue distress."

"Of course, the financial press frequently points to less-favorable scenarios, including the so-called disorderly correction, that is, a rapid fall in the dollar that engenders a steep falloff in U.S. bond and equity prices and that perhaps disrupts other national markets as well," Ferguson said.

snip>
Larson said he feared the Fed was being complacent about one of the major risks facing the global economy.

Larson said foreign capital flows into the U.S. funding the deficit might be financing productive investments. He said the funds might be allowing consumers to spend more money than they should be, especially in light of low levels of savings.

more...:eyes:


Russia - we were just kidding?

Kudrin: US dollar to remain main reserve currency for long
http://www.itar-tass.com/eng/level2.html?NewsID=745461&PageNum=0

WASHINGTON, April 26 (Itar-Tass) - The US dollar will long remain a main reserve currency of the world with a weight incomparable with all other money, Russian Finance Minister Alexei Kudrin told reporters in Washington on Monday.

He leads a Russian delegation to a session of chiefs of the World Bank and the International Monetary Fund.

Kudrin and the Bank of Russia’s chairman Sergei Ignatyev met American Secretary of Finance John Snow and Federal Reserve chief Alan Greenspan on Sunday.

Asked whether dollar instruments drained into those denominated in other currencies in Russia, Kudrin admitted that “over the past year, the policy of the U.S. where it concerns the currently rate has made all seriously think about a greater diversification of reserves”.

“I think this policy is double-edged. It is good for keeping short-term and medium-term tempo of economic growth, but it can lose in a long-term, undermining trust in the dollar as a reserve world currency”.

more...

[54anickel]

5. Here's another link to the Russian Euro/US$ decision

http://www.mosnews.com/money/2004/04/26/dollarreserve.shtml

While in Washington, Alexei Kudrin, Russia’s finance minister spoke to journalists and expressed the opinion that the U.S. dollar will remain the world’s main reserve currency, “unrivalled” by other currencies for quite a long time.

Kudrin is leading the Russian delegation at a session of management bodies at the International Monetary Fund (IMF) and World Bank. On April 25 Kudrin along with the Russian Central Bank chief Sergei Igranyev held a working meeting with U.S. Treasury Secretary John Snow and Federal Reserve Board chairman Alan Greenspan.

Asked by the Russian Itar-Tass news agency if the Central Bank was switching from the dollar to other currencies to maintain the country’s international currency reserves, Kudrin said that “the U.S. exchange policy forced everyone to think of greater diversification of their reserves in the past year.” He went on to express an opinion that “this policy is double-edged. It is good for bolstering short-term and medium-term growth, but it may lose in the long term by denting confidence in the dollar as a world reserve currency.”

However, Kudrin said, currently it is too early to draw any conclusions about the future fate of the dollar as a reserve currency because no “radical changes” had taken place in the balance of forces in the global economic and financial sphere, BBC reported. “Centers of economic power have not seriously changed and have not gone through a diversification process,” said the Russian finance minister adding that “the European Union economy has not become stronger than the U.S. one” and that Europeans “have their own problems”.



Other links to this article at the bottom:

Central Bank to Unite Dollar and Euro
http://www.mosnews.com/money/2004/04/13/rubledollareuro.shtml

The Russian Central Bank will soon start quoting the ruble against a dollar/euro basket. “This will happen in the next few weeks or months,” CB’s Deputy Chairman Konstantin Korischenko told the reporters on Tuesday, April 13.

The first stage of the introduction of a new index will see European currency’s share in the basket at 10-20 percent. But in the future the basket will be split evenly between the euro and the U.S. dollar.

This move will increase exchange rate volatility, Korischenko admitted, and will make it less predictable. Such changes may cause unhappiness both for the Russian population at large and for the market participants who are used to making a lot of their decisions based on the dollar/ruble exchange rate.

However, as MosNews already wrote, quoting then-Deputy Chairman of Central Bank Oleg Vyugin, “binding the ruble only to the dollar may lead to inflation”. Therefore a choice has to be made between exchange rate volatility and out-of-control inflation.

more...

Russian President Putin advises his compatriots to keep their savings in rubles
Created: 27.02.2004
http://www.mosnews.com/money/2004/02/27/putinruble.shtml

Russian President Vladimir Putin thinks that the best way to protect personal savings from inflation is to keep them in ruble-denominated bank deposits. He shared this thought with the students of the Siberian State Technological University.

The topic came up when one of the students asked him what the exchange rate of the dollar is going to be in the near future. Putin answered that “even the Chairman of the U.S. Federal Reserve system does not know this”. Russian President also pointed out that “certain analysts believe that US administration has chosen a very egotistical position, lowering the dollar exchange rate on purpose, and certain clues point to the fact that the rate may fall lower still”.

Meanwhile in Russia the opposite processes are in place. The national currency, the ruble, is constantly being strengthened, and as Vladimir Putin said “everything is being done to keep this process going”. Russian President also pointed out that the government will “strive to make the ruble fully convertible on par with other world currencies”.

[54anickel]

3. Not out of the woods yet

http://www.theglobeandmail.com/servlet/story/RTGAM.20040426.wxrbestbet26/BNStory/Business/

The U.S. stock market has staged an impressive cyclical rally from its March, 2003, low, but fund manager Eric Sprott isn't convinced that the bear has been banished.

"We still believe that the odds favour the continuation of a secular bear market," said the president of Toronto-based Sprott Asset Management Inc.

"There are two things that kill stock markets: Interest rates going up and oil prices going up, and we have them both," he said. Oil prices have risen significantly and interest rates are starting to break their "almost 20-year downtrend."

But it isn't just those factors that lead him to believe that the market will go back into a secular bear phase. It is the imbalances in the system that worry him, particularly those that arose from the fact that the U.S. Federal Reserve Board and the U.S. government "threw everything" in terms of stimulus at the economy to help it and yet they "didn't get that great of an economic recovery." The stimulus included dividend tax credits, a falling U.S. dollar, tax cuts, changes in pension legislation and uncommonly low interest rates. And after all that stimulus, "everybody ultimately is probably worse off than before" in the sense that both individuals and the government have taken on more debt and the budgetary deficit has worsened, he said.

more...

[UpInArms]

4. daily dollar watch

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

Last trade 90.64 Change -0.44 (-0.48%)

related articles:

"Crazy Ivan"

In order to avoid any misunderstandig - we do know that we are standing with our backs to the wall with a gun to our heads. Should the present action continue on the dollar we will be forced into trend reversing in an unprecedented way so far. For most of our USD-positions a monthly close on Friday at the present levels will force us into changing the dollar downtrend into new uptrends.

Realizing though that currency trading often is nothing but one big strategic game play, we will not hesitate to employ the famous Russian submarine strategy called "crazy Ivan", should we be forced into changing the dollar-downtrend to a new dollar-uptrend. When haunted the Russian submarine can choose to employ the "crazy Ivan" strategy meaning that the haunted becomes the haunter. The Russian submarine simply turns the spot 180 degrees and starts sailing head on the enemy submarine.

In currency terms that means we will not hesitate too long before planning on establishing a new net long position in EUR/USD. The present EUR/USD correction has come a long way and technical analysis indicates that the correction in about to run out of steam very soon. The question, however, is whether or not we will be able to survive above 118 on a daily close basis. Picture is looking very bleak at the moment, but we do not see any substantial change in our long-term bearish view on the dollar. Corrections often are a question of either life or death - this one is no different from the others.

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=200404260335MKTNEWS_MAINWIRE_9C3C_4726

Press: BBK's Stark Expects Weaker Med-term Dlr Due US C/A Def

FRANKFURT( MktNews) - The US dollar will depreciate against the euro in the medium-term due to the large US current account deficit and the necessary unwinding of global economic imbalances, Bundesbank Vice President Juergen Stark said in interviews published Monday in the German dailies Handelsblatt and Frankfurter Allgemeine Zeitung (FAZ).

Against this backdrop, the dollar's recent rise is "temporary," Handelsblatt quoted Stark as saying.

Both interviews took place in Washington on the sidelines of the spring meetings of the International Monetary Fund (IMF) and World Bank.

"The dismantling of global imbalances - especially the high US current account deficit - will partly proceed through exchange rates. We must therefore expect a medium-term weakening of the dollar," said Stark, who is acting president of the German central bank pending the formal appointment of Axel Weber to succeed the resigned Ernst Welteke.

A strong appreciation of the euro against the dollar due to investors' nervousness about the U.S. twin deficits is not to be expected in the short- term, not least because of the strength of the US economy relative to Europe, Stark told the FAZ. However, the necessary dismantling of the US current account deficit cannot be expected at the current exchange rate of around $1.20, he insisted.

Stark called on the US government to take more energetic steps to reduce its budget deficits, warning that without "serious consolidation" of its fiscal position, Washington was unlikely to achieve its stated goal of cutting the deficit in half over the next five years.

Stark highlighted the risk that the US budgetary situation and the abundance of available liquidity could lead to capital market turmoil, saying a sharp rise in bond yields could not be ruled out.

...more...

[54anickel]

8. I can't argue with Stark's logic in this one -

snip>

In the Handelsblatt interview, Stark said eurozone growth is being dampened mainly by a lack of consumer and investor confidence - due to uncertainties caused by the economic reform process - and not by the current level of short-term interest rates.

"Short-term financial conditions are not the problem (for EMU growth)," Stark said. "The problem is overcoming consumers' and investors' uncertainties. The key to improving confidence is additional economic reforms."

snip>
Stark also rejected the call by the IMF for a cut in ECB rates.

"The IMF makes the mistake of using American monetary policy of the Federal Reserve as a measure for the ECB. But in the US, monetary policy has a different effect on the economy than in the euro area," he said.

According to Stark, US private consumption can be steered to some extent via short-term interest rates, whereas in the eurozone, long-term rates are more important. However, the latter cannot be directly controlled by monetary policy.

[ze_dscherman]

17. Mentality here is very different

Europe has seen much more hardship in the last centuries than the U.S. had. We remember wars, hunger, inflation and austerity from not more than half a century ago. I do think this is a good reason why people are not that easy going when it comes to debt, especially when times are getting more difficult. Debt, if not needed for real investment like housing or education, is something to be avoided. Being indebted just for consuming is still odious to many (like me).

Also, there's a fear factor. Unemployment is rising, workers rights are being demolished, the global scenario is looking much worse - why should people that feal their future threatened suddenly start to rejoice in throwing their cash out for consumer goods? They prefer to save something for times of need.

As well, "stock culture" is very underdeveloped here. Just after owning stocks became fashionable, the dot.com.rot started, and many people lost much money. So, people are very cautious on stocks nowadays.

Lowering interest rates even more would not change these underlying sentiments.

[54anickel]

20. Thanks, Ze_dscherman! Americans used to avoid unnecessary debt.

I'm not sure when or how we lost that value. :shrug:

[54anickel]

6. 9:58

Dow 10,506.26 +33.42 (+0.32%)
Nasdaq 2,058.65 +8.88 (+0.43%)
S&P 500 1,144.80 +4.20 (+0.37%)
10-yr Bond 4.438% -0.014
30-yr Bond 5.226% -0.021

NYSE Volume 134,843,000
Nasdaq Volume 227,392,000

9:40AM: The cash market is off to a favorable open, although the major averages are only little changed... This week is another heavy one for earnings, which continue to flow in better than expected, with exceptional top-line growth, suggesting that the economy has legs... Nevertheless, the stock market continues to be undermined by concerns over rising interest rates and accelerating inflation... There were no economic reports in the pre-open, but the New Home Sales report for March will be released at 10ET... The consensus estimate is for a reading of 1168K on the heels of last month's 1163K...

[Maeve]

11. But 10:31 and....

Dow 10,464.33 -8.51 (-0.08%)
Nasdaq 2,042.72 -7.05 (-0.34%)
S&P 500 1,138.38 -2.22 (-0.19%)
10-Yr Bond 4.434% -0.018

[54anickel]

12. What? They didn't like those home sales figures? Or does Iraq have

them a bit on edge now? :shrug:

[Maeve]

13. Well...I do seem to remember SOMEONE suggesting last week

That we might see a sell-off THIS week....

Back to painting the kitchen.

[54anickel]

14. But, but, they should be BUYING! According to this anyway -

http://biz.yahoo.com/cbsm/040426/3dfc25e096464e1bb92f69d4907c0823_1.html

Sell on the rumor, buy on the news

ANNANDALE, Va. (CBS.MW) - Investors continually need to be reminded that the stock market is a discounting mechanism.
Especially now, in light of their obsession with the date on which the Federal Reserve will raise interest rates.

Because the stock market does such a good job of discounting the future, it is rarely taken by surprise. Except for external shocks such as Sept. 11, the market will at least to some extent have anticipated almost any thing that happens.

Yet, because they fail to appreciate the market's discounting, most investors assume that the market will not react until an event finally comes to pass, and then react in a big way.

More often than not, of course, it is not the market, but investors themselves, who end up being surprised. Because the market will have continuously discounted an event's precursors in the weeks and months in advance, that event's actual arrival usually will be anti-climactic.

snip>
And when the news is bad, just the reverse often is good advice: Sell on the rumor, buy on the news.

[54anickel]

29. Ahhh yes, the great see-er. Another reason why I miss you so much.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=503020#503834

[54anickel]

7. Press believes Rato has IMF job in bag

http://news.bbc.co.uk/1/hi/world/europe/3659457.stm

Leading Spanish newspapers are in no doubt that the former Spanish Finance Minister Rodrigo Rato will be the new managing director of the International Monetary Fund.

There is a widespread feeling that the support Mr Rato enjoys among Latin American countries will allow him to overcome the sense of grievance many developing countries have over their perceived lack of influence in international organisations like the IMF and the World Bank.

"The appointment of Rodrigo Rato is practically certain," says ABC, "in spite of pressure to end the tradition of reserving the leadership of the Fund for Europe and that of the World Bank for the United States."

That makes no sense - "in spite of" should that be "due to"? :crazy:

"The support from the block of Latin American countries will have played a significant role in favour of the Spanish candidate's credentials in the third world."

[Frodo]

9. Very interesting home sale numbers.

New home sales came in well above expectations at (I believe) a record 1.228Million homes (expected 1.17). Obviously a very solid number that implies the housing industry is still going strong (though it would appear obvious to everyone that things have to slow down soon with rates going up).

But last months number was revised downward from 1.163Million to 1.128Million. A 35,000 unit drop off that represents more than half the amount this month exceeded expectations.
So total (new) homes sold over the last two months is about 20,000 more than people thought.

[54anickel]

10. Biggest jump in home sales in 9 months

http://www.baltimoresun.com/business/realestate/bal-econ0426,0,3272300.story?coll=bal-business-headlines

WASHINGTON -- Sales of new homes surged by 8.9 percent in March, the largest monthly increase in nine months, as mortgage rates bottomed out for the year before a recent, steady ascent.

The increase pushed sales of new, single family houses to a record seasonally adjusted annual rate of 1.228 million last month. That was up from 1.128 in February, the Commerce Department reported Monday.

The monthly increase of 8.9 percent was the highest since June 2003.

snip>
Nationwide, the median sales price of a new home in March dropped to $201,400 from a revised $210,000 in February. The median price is the point at which half sell for more and half sell for less.

Last month's sales increases were powered by record-low mortgage interest rates, with 30-year, fixed rates falling to a record low for the year of 5.38 percent the week ending March 18.

Home buyers scrambled to take advantage of those low rates before they disappeared.

[KoKo]

30. A last gasp frenzy of "Irrational Exhuberance" in Housing? Folks worried

they will miss their last chance of owning that new McMansion? They are selling strongly in my area. But the number of "existing" houses for Sale is up, too. And, they seem to be selling also. Trade ups are still going on, so I can believe those numbers. At least in a high growth area like mine.

[54anickel]

15. The US$ Short Position

http://205.232.90.194/editorials/saville/saville042604.html

We've recently received several e-mails from subscribers asking for our take on the idea that the huge amount of debt in the US represents a massive US$ short position. The idea, which is explained in detail by George Paulos and Sol Palha in their article, is that the US$ has the potential to move sharply higher at some point in the not-too-distant future as US$ debtors -- primarily those with large home mortgages -- scramble for dollars in order to meet the obligations to their creditors.

The aforementioned article is well thought-out and its central theme deserves consideration. Furthermore, one of the conclusions of the article meshes with something we've been emphasising over the past few months -- that now is a good time to be 'cashed up'. However, if US household debt represents a short position on the US$ it is a short position that will never be covered. And nor will there ever be a serious attempt to cover. That's because the SURVIVAL of the current monetary system relies on the continuing expansion of credit, that is, it relies on the continuing EXPANSION of the US$ short position.

Why the above is so can be gleaned by looking at a few figures. Total US debt (private + public) is presently about US$32 trillion, but the total supply of US dollars is only about $9 trillion. This means that if every US dollar in existence was put towards the repayment of debt the average creditor would only receive about 28c on the dollar. Also, if we assume an average interest rate of 6% on the $32T of debt then the annual interest bill is about US$1,900 billion. However, the increase in the total US money supply over the past 12 months was 'only' $420 billion. In a nutshell: there is nowhere near enough money in existence to pay-off the current debt and there is nowhere near enough new money created each year to even pay the interest on the debt.

But isn't the above an argument for massive deflation?

more...

[Frodo]

18. So can someone tell me which it's going to be???

Massive inflation or massive deflation??

And I already know your answer 54anickel. :-)

[Kadie]

16. Toy maker stumbles

Toy maker stumbles

By MICHAEL LIEDTKE
THE ASSOCIATED PRESS


Last Updated: April 26, 2004, 06:28:18 AM PDT


SAN FRANCISCO -- In six months, educational toy maker LeapFrog Enterprises Inc. has gone from an industry leader to a Wall Street loser.
A startling first-quarter sales decline has investors and analysts worrying that management has lost its handle on the company.

"They have lost a lot of credibility," said Pacific Growth Equities' Natalie Walrond. She is among several industry analysts who have soured on the Emeryville-based maker of LeapPad, a top-selling line of electronic books that help children learn to read.

The company's troubles prompted Bear, Stearns & Co. analyst Jennifer Childe to send a note of exasperation to investors last month: "We are throwing in the towel on shares of LeapFrog."

So have many investors -- LeapFrog's stock has lost half its value since peaking at $47.30 in late October


more... http://modbee.com/business/story/8489601p-9333236c.html


Hi all, just wanted to thank you for this thread everyday. I always check in and see how things are going. :hi:

[54anickel]

19. Will They Raise or Will They Stay?

http://www.gold-eagle.com/editorials_04/mauldin042504.html

Will They Stay or Will They Raise?

Last week, I noticed a graphic on CNBC while Jim Bianco was speaking, which said he expected the Federal Reserve to raise the discount rate at their June meeting. I quickly flipped on the sound and got the tail of his interview, but missed the first part.

Long-time readers know I am on record as to not thinking the Fed will raise rates before the election, for a number of reasons. I still hold that view, although the markets are decidedly disagreeing with me. And they may have some cause, as Greenspan's latest testimony seems to indicate they are preparing the way for rate hikes. As always the question has been when and not if they will raise rates. I still think the "bet" is for after the elections, but the facts could change forcing a rate hike earlier, and we should look at that possibility and the consequences which would come from a rate hike this summer.

To set the table for this discussion, here is the paragraph I wrote (rather flippantly, in hindsight) at the end of last week's letter:

"Jim Bianco said today he thinks they will raise rates at the June meeting. Jim, my friend, I will take that bet. In fact, I will raise and say not even in August. Next week we look at my reasoning. And it does make a difference as to how you position yourself."

The next morning I got a reply from Jim, noting that is not exactly what he said. I am going to give you his letter without editing so you can understand his reasoning. I readily admit that he could very well be right. He has been on the bandwagon for a more transparent Fed policy for quite some time, which I am in full agreement with. He also feels the Fed should let the market set rates rather than so clearly manipulate them. Again, I am in agreement. However, I think the Federal Reserve governing board does not share that thinking, and it is their view that counts as to when they will actually raise rates. It is normally not good for your track record to disagree with someone as smart as Jim, and he does make a strong case for the Fed raising rates in June. (I mentioned this to trading wizard Dennis Gartman this morning, before I told him I was going to disagree. He said something to the effect, "Disagreeing with Bianco is generally a career ending move." He just laughed when I said I was going to do it anyway.) Ok, let's jump in with Jim's letter:

more...

[54anickel]

21. World: IMF, World Bank Say UN Poverty Reduction Plan At Risk

http://www.rferl.org/featuresarticle/2004/4/939BB01F-1F11-42BE-8441-694BDF96F148.html

The report noted that two developing countries that account for around a third of the world's population -- China and India -- have made great progress in recent years in reducing poverty. This has helped bring down the number of people around the world living in extreme hardship from 40 percent in 1981 to 21 percent in 2001.

The economies of both China and India have rapidly liberalized in the past decade and both countries have become centers of international trade and manufacturing, enabling them to profit from globalization. The most dramatic statistics illustrating this change come from China, where gross domestic product (GDP) has risen 500 percent since 1981.

snip>
Romilly Greenhill, of Action Aid -- one of Britain's largest overseas development organizations -- tells RFE/RL from London that in this context, the IMF and World Bank's continued insistence on the unquestioned benefits of privatization in poor countries can sometimes do more harm than good. Aside from agriculture, she cites the example of basic public services, where privatization has often brought higher costs and few tangible benefits to ordinary people.

"The IMF and the World Bank are still funding a very large proportion of countries' budgets and they have huge power over those countries. And we think that they continue to abuse that power. In particular, the IMF and the World Bank are using their aid to push unproven economic reforms such as the privatization of basic services. And these reforms simply aren't delivering for poor people," Greenhill says.

snip>

"The key point is that there's no 'one-size-fits-all' policy. Each country must be free to develop their own policies, based on their own needs. And the IMF and the World Bank at the moment are simply not allowing them to do that," Greenhill says.

[54anickel]

22. 1:11 update

Dow 10,484.33 +11.49 (+0.11%)
Nasdaq 2,045.96 -3.81 (-0.19%)
S&P 500 1,139.98 -0.62 (-0.05%)
10-yr Bond 4.444% -0.008
30-yr Bond 5.230% -0.017

1:00PM: Little changed since the last update, the major averages continue trading within a short reach of the flat line... The Dow is outperforming the S&P 500 and the Nasdaq on a relative basis... Small-cap issues are outperforming their large-cap counterparts on a relative basis, with the Russell 2000 up 0.3% for the day... On a year-to-date basis, the Russell 2000 is also leading the major averages with gains of 6.4% versus gains of 0.2%, 2.4%, and 2.0% for the Dow, S&P 500, and Nasdaq, respectively...
Note that small-cap companies tend to be more affected by rising interest rates than large-caps... Accordingly, small-cap stocks are more prone to valuation concerns in a rising interest rate environment...NYSE Adv/Dec 1486/1716, Nasdaq Adv/Dec 1467/1558

[JNelson6563]

23. Howdy 54 and Marketeers!

Yet another day with an info packed SWT! How I just love you guys!!

So things are looking good/bad and we're worried about inflation/deflation. Okey-dokey!

Thank bob the grown-ups are in charge and I don't have to worry about a thing!

Just wanted to pop in with a howdy, read the daily happenings and send out some good vibes to all my fellow Marketeers! :hi:

Julie

[54anickel]

24. Thanks for popping in and the good vibes, Julie. Could use them today!

Hard to focus on the economic picture and SMW with so much hitting the LBN pages today. Seems the markets have become immune to the geopolitical risks these days though. Guess all that matters is interest rates these days for the markets.

So far as inflation/deflation who knows, at this point who cares, they both suck but not as much as perpetual war which is the one thing seeming certain these days.

[54anickel]

25. Speaking of war - Waterloo

http://www.gold-eagle.com/editorials_04/chuhran042504.html

Politicians are fleas! They're just an annoyance. At least that's the way it is to the World's bankers. I used to be politically passionate with many deep rooted convictions about freedom, liberty, democracy, and the rights and wrongs regarding the interpretations of the US Constitution. As a matter of fact, I was so passionate I spent seven and a half years in the military willing to make the ultimate sacrifice in defense of our flag. Don't get me wrong, I still believe, because the framers intentions were clear. They were escaping tyranny, not attempting to create it.

Unfortunately, even good intentions need to be financed and the graveyards are full of penniless, well intentioned men. Money rules the World. If you have the power to control the money supply, you control the World. That's just reality. Many passionate, elected politicians, who've stood for this or that, must have had a rude awakening when they were told how things really work. Sure, they're allowed to keep a pet project or two, because nobody really wants to starve school kids or leave anybody behind. Regardless of political persuasions, they all succumb to the powers that be in lieu of standing on their cherished principles. Once initiated, the options become clear, either expose the ruse and commit suicide while potentially collapsing the economy and harming your constituents, or play the bankers' game by the bankers' rules and accept the few bones thrown your way while affecting the outcome the best way you can.

The politicians are the puppets not the puppet masters.

It's all about fear and greed. That's nothing new and we all know those are the forces that control the market place. What most don't know is that much of that fear and greed is controlled and manipulated. Greed can be profitable, especially if you have the power to move the markets, but front-running fear is the ultimate profit maker. If fear does not naturally and predictably occur, well then the bankers just manufacture it.

From the must read book by G. Edward Griffin, The Creature from Jekyll Island:

"The rise of the House of Rothschild in Europe; the tradition among financiers of profiting from both sides of armed conflict; the formula by which war is converted into debt and debt converted back into war." 1

more...

[54anickel]

26. One more - A Dangerous Form of Outsourcing

http://www.mises.org/fullstory.asp?control=1497

snip>
The troubles of outsourcing

What conclusions can one glean from this tale of Central Asia, nuclear weapons proliferation and the enlistment of local strongmen in the pursuit of American national security objectives? For one, this ongoing saga underscores the gross hypocrisy, inconsistencies and failures of the professed aims of Washington's foreign policy.

Democractization of failed, unruly or despotic regimes? Whatever the merits of democracy, and despite talk of imposing this political structure on the Middle East and Afghanistan, Washington scarcely objects to Pakistan's ruling military junta (although the country elects a nominally significant parliament).

Rather, American policy makers welcome democratic decisions only when they reaffirm fealty to the world's hegemon. Otherwise, as in the case of Spain, where voters chose to oust a pro-Washington government that deliberately mislead the public about the likely source of the horrific train bombings of March 11, the exercise of the franchise is ridiculed as foolhardy.

How about promoting human dignity and enhancing the welfare of populaces systematically victimized by regional tyrants? Just as Washington insists on entitling the inhabitants of Iraq and Afghanistan to a plethora of civil liberties (in rhetoric) it also props up abusive rulers like Uzbekistan's Islam Karimov, the ex-Soviet despot whose unsavory depredations against his subjects go largely unreported in the West.

Whereas dodgy intelligence and prior acts were sufficient grounds to invade a sanctions-stricken Iraq, America lavishes billions of dollars of aid on a country that not allegedly but actually sold the technology and expertise requisite to produce nuclear weapons to Iran, North Korea and Libya well after the inauguration of the so-called "War on Terror." With friends like Pakistan, who needs enemies?


more...

[KoKo]

28. "54" did you find this article confusing? Have you come across any

other articles about the Rothshild's decision? I'm still puzzled by it.

I could almost conclude that the Rothschilds might be financing Osama and suicide bombers just to keep their theory of "backing both sides"in war from my read of this article. And, I may have misinterpreted this, but it sounds like the article is either complaining by saying the Rothschilds took the lid off the gold market (stopped hedging) because there isn't any gold left to build a standard on because it's all been sold off which means there isn't enough left to return to gold standard which is bad... or,since all the gold has been sold off it's inevitable that new investing in mines to produce more gold will have be the result
thereby making gold investing more profitable in the future. ???? :crazy:

Now if the gold was sold off, where does it reside now? Is it in a Rothschild Vault which means they still control it, but don't have to bother with dickering over prices because they have the only keys to the vault? In that case it would seem foolish for us average folks to invest in gold because what would be the point? They would be like the DeBeer's diamond cartel. One doesn't mess with those folks by using competition.

Monetary policy is very hard for me to fathom when one gets into derivatives, hedging all the rest. I have to slog through the articles picking out the bits that make connections to something I already know about. I like those Company stocks much better. :D

It's all too confusing and makes my head hurt. So does the stock market lately....:-(

[54anickel]

31. Sorry about making your head hurt KoKo. It is a bit confusing. I mainly

found the article interesting because it brings about the speculation of the idea of "suits" making most of the big political decisions. I would tend to dismiss "gold-buggy" parts of articles that begin to speculate that all the gold is somehow gone. That part is pure speculation.

I did find a few articles on Rothschild getting out of the gold hedging. Some are more "gold-buggy" than others. JMHO, I tend to agree with the ones that state hedging was no longer profitable, as that is true in these days of rising commodity costs. The market demand has gone up for jewelry (due to emerging markets in India, China, etc.) and industrial use so gold miners (for the time being anyway) can make a profit on selling gold to reinvest into their mining operations without the use of hedging. Supply and demand is making hedging much less profitable. That seems to be the reasonable explanation and no tinfoil is required.

Would a huge drop in the price bring hedging back into vogue? Maybe. If this price increase was just some temporary phenomena, would a bank such as Rothschild get out? I sort of doubt it, I don't think they'd make decisions based on short-term movements. That's not to say I believe there will be some huge push up in gold to thousands of dollars, but it would seem supply and demand will allow the markets to be self-sustaining and profitable without having to revert to hedging.

Question is, with Rothschild getting out, what's JP Morgan gonna do?

Let me see if I can dig up some of those articles on Rothschild.

[KoKo]

33. Thanks "54." It's not your posting of the articles making head hurt it's

all the confusion of where we are headed. It seems as though even he "experts" have some confusion these days. Up is Down and Down is Up. Except for the Bushie economists, that is. They believe all is just peachy and there's not a cloud in the sky in "The Recovery."

Sorry if I sounded cranky. Being over here at Market Watch is treat given what's out there in LBN. Much rather read about the Rothschilds than what's going on in Iraq, anytime.

[54anickel]

35. Nope, you didn't sound cranky at all. And yes, everything does seem to

be turning upside-down and inside-out.

[54anickel]

34. Couple of articles on Rothschild

http://www.minesite.com/archives/features_archive/2003/Nov-2003/dehedging111103.htm

Date : November 11, 2003
Investment Takes Up Torch From De –Hedging As Price Booster For Gold.


http://www.aig.asn.au/aigjournal/pdf/Hedging%20Basics.pdf
HEDGING AT ITS MOST BASIC


http://www.lewrockwell.com/north/north268.html
From Rothschild to Wong


http://servihoo.com/channels/kinews/v3news_details.php?id=39272&CategoryID=47
Wanted: new chairman for exclusive gold fixing club

For some, the decision by such a long-standing gold bug to exit trading of the metal is a symptom of the dwindling importance of gold as an investment and as a reserve asset for central banks.

"The fetishisation of shiny yellow metal, decades after it ceased to be used as the anchor of the international monetary system, is a lingering anomaly in modern financial markets," the Financial Times said in an editorial comment.

"Perhaps Rothschild's last service to the bullion market could be to keep a live gold trader on display behind glass as a reminder of a bygone age..."

But others are more bullish on the outlook for gold: precious metals consultancy GFMS Limited said last week that gold could reach 450 dollars this year as investors seek cover from a plunging dollar and terrorism.



:shrug:
So KoKo, I don't know what's up. Perhaps it's an effort to try to slap Gold back down to commodity status. The CBs certainly do NOT like it looking like an alternative currency.

[KoKo]

37. Thanks again, 54. I've bookmarked to go through later tonight.

:-)'s

[54anickel]

38. Here's one more for you. Not related to Rothschild, but to the discussion

we've had here in the past on reserve currencies. Hoepfully I'll remember to repost it in tomorrows SMW thread. This is a bit interesting. Makes me ask why did Issing fell he needed to bring it up at all to deny it.

Euro's role as reserve growing: Issing
http://cbs.marketwatch.com/news/story.asp?guid=%7B1B67CE63-4EF0-49C6-A358-ED0BB953288E%7D&siteid=google&dist=google

CHICAGO (CBS.MW) -- The euro's growing role as a global reserve currency is "unavoidable," the European Central Bank's Otmar Issing said Monday.

The ECB is "neither impeding and neither fostering" the euro's opportunity to gain against the U.S. dollar as a global benchmark currency, said Issing, a member of the ECB's executive board.

Issing made the remarks as part of a conference on the euro held at the Chicago branch of the U.S. Federal Reserve.

The bank plays a "neutral" role in this process, he said, and the markets will determine the pecking order of the world's currencies.

Issing did not directly address current economic conditions or ECB interest-rate policy in his remarks, nor in comments to audience members. He declined to speak with reporters after the event.

[54anickel]

27. Why The Fed Can't Raise Rates

http://www.dailyreckoning.com/home.cfm?loc=/body_headline.cfm&qs=id=3891

snip>
But the Fed's response to this CANNOT be to raise rates until the final piece of the inflation puzzle is in place: rising consumer incomes. Until that happens, rising prices will simply make consumers cut back on spending. Throw in rising interest rates and energy prices, and you have two more factors which lead to slower consumer spending and economic growth.

Bottom line: the economy can't grow until the consumer can spend more. And the consumer can't spend more when prices and interest rates are rising. If consumer incomes don't inflate, inflation in producer prices or consumer prices won't matter. Until consumer incomes rise, the Fed stands pat.

And here's a prediction for you, the Fed will become so concerned with the market pricing in rising rates (and pushing mortgage rates up) that it will cut rates by 25 basis points at its May 4th or June 30th meeting.

That's not to say that the Fed will be effective in stopping the sell-off in bonds and in interest-rate-sensitive stocks (REITS, for example). But it is to say the Fed still considers deflation its sworn enemy. And until consumers incomes pick up, rising rates are likely to lead to much lower consumer borrowing and spending... which, in the last fifty years, has been very bad for American GDP.

It's pretty simple: consumer prices won't rise much if consumers don't have money to spend.

[54anickel]

32. 3:45 update

Dow 10,436.73 -36.11 (-0.34%)
Nasdaq 2,033.77 -16.00 (-0.78%)
S&P 500 1,134.33 -6.27 (-0.55%)
10-yr Bond 4.433% -0.019
30-yr Bond 5.223% -0.024

NYSE Volume 1,157,565,000
Nasdaq Volume 1,551,450,000

3:30PM: Having set new session lows in the last half an hour, the major averages continue to vacillate near their respective session lows, with the Nasdaq underperforming its blue-chip counterparts on a relative basis... The major averages' totals are little changed for the session, which is in tune with the range-bound trade seen through most of the year thus far... Although many participants were looking for an earnings rally during the Q1 earnings season, buying efforts have been dampened by concerns over rising interest rates... Earnings reports, in the meantime, have been quite strong...
After the market closes, look for earnings from EDS, PHM, SLAB, and VRST... Tomorrow morning, reporters of note include AGR.A, BJS, BP, DD, JNY, LMT, QLTI, RJR, X, and VZ...NYSE Adv/Dec 1237/2054, Nasdaq Adv/Dec 1249/1880

3:00PM: The major averages have stabilized near their respective session lows, which is to say in negative territory... In the commodities market, prices of crude oil and gold are little changed, with the price of gold up $0.90 at $396.60/oz and the price of crude oil up $0.49 at $36.95/bbl... Note that the oil services and gold sectors are among today's leaders to the upside, the the latter higher on the heels of an upgrade from Goldman Sachs... Separately, the euro is slightly lower versus the dollar...

The G7/World Bank meeting, which took place over the weekend, drew little attention from the trading community...NYSE Adv/Dec 1240/2038, Nasdaq Adv/Dec 1290/1822

[54anickel]

36. Closing

Dow 10,444.73 -28.11 (-0.27%)
Nasdaq 2,036.77 -13.00 (-0.63%)
S&P 500 1,135.53 -5.07 (-0.44%)
10-yr Bond 4.433% -0.019
30-yr Bond 5.223% -0.024

NYSE Volume 1,289,416,000
Nasdaq Volume 1,727,682,000

Close: Despite a higher open, the major averages spent the entirety of the session drifting with a slight negative bias... Like through most of the past two weeks, this morning's generally upbeat earnings and guidance reports were ignored, while the stronger than expected New Home Sales report at 1.228 mln (consensus 1.168 mln) was used as an excuse to take some money off the table, as it re-fueled concerns over rising interest rates and accelerating inflation... Looking at sector action, the bulk of the groups closed in the red...
Among the laggards of note were the hardware, networking, semiconductor, computer storage, wood products, and personal services sectors... Leaders to the upside were harder to come by, but included the biotech sector, which surged on speculation surrounding the news that OSI Pharmaceuticals (OSIP 91.10 +52.96) and Genentech (DNA 131.86 +13.64) reported that Tarceva extended survival of patients with relapsed non-small cell lung cancer... Elsewhere, the bond market was little changed, with the 10-year note up 4/32, bringing its yield down to 4.44%...NYSE Adv/Dec 1186/2127, Nasdaq Adv/Dec 1325/1828