STOCK MARKET WATCH, Tuesday 19 October

[ozymandius]

Tuesday October 19, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 93
DAYS UNTIL W* GETS HIS PINK SLIP 14
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 312 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 1 DAY
DAYS SINCE ENRON COLLAPSE = 1062
Number of Enron Execs in handcuffs = 19
Recent Acquisitions: Ken Lay
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

---

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

---

AT THE CLOSING BELL ON October 18, 2004

Dow... 9,956.32 +22.94 (+0.23%)
Nasdaq... 1,936.52 +25.02 (+1.31%)
S&P 500... 1,114.02 +5.82 (+0.53%)
10-Yr Bond... 4.05% UNCH (UNCH )
Gold future... 417.60 -2.20 (-0.53%)





GOLD, EURO, YEN, Dollars and Loonie

---

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

---

[UpInArms]

1. daily dollar watch

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

Last trade 86.93 Change -0.09 (-0.10%)

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=1098175083-9e32d306-16175

Forex - Dollar remains on the backfoot, sterling under pressure

LONDON (AFX) - The dollar remained on the backfoot on concerns over the burgeoning current account deficit in the US while sterling was dented by continued weakness in UK economic numbers

"The list of dollar negatives is a lengthy one - softer activity data, a widening trade deficit, weak equity portfolio flows and outflows of foreign direct investment," Steve Pearson, at HBOS enumerated

But while the dollar clearly has problems to face, other currencies are not exempt from "internal vulnerabilities". This, Pearson believes, explains why the dollar's declines have not been steeper

<snip>

Later in the day, US data will be in focus along with speeches from US Fed chief Alan Greenspan and Treasury Secretary John Snow. Core CPI is widely expected to rise 0.2 pct month-on-month in September after three straight 0.1 pct month-on-month increases, underpinned by increases in medical and housing costs

But even if the data strengthens the case for rate hikes, Fed officials may sound a little less hawkish

"Watch carefully for any softening in rhetoric," warned Pearson

...more...

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?font=Reuters&pv_noticia=MTFH47383_2004-10-19_10-47-46_L19448484

GLOBAL MARKETS-Stocks get tech boost, bonds await CPI data

LONDON, Oct 19 (Reuters) - Upbeat earnings statements from U.S. technology bellwethers and a pullback in oil prices gave flagging European and Asian stock markets a boost on Tuesday, as bonds eased ahead of key U.S. data.

Stock index futures indicated a firm start to trade on Wall Street after International Business Machines <IBM.N> said fourth-quarter results would be better than expected and Texas Instruments <TXN.N> reported strong demand for its handset and television chips.

The dollar rallied overnight but came under renewed pressure in European trade.

Government bonds softened as stocks rose, ahead of U.S. consumer price index data at 1230 GMT and a speech by Federal Reserve Chairman Alan Greenspan due around 1400 GMT.

...more...

Today's Reports:

Oct 19 8:30 AM
Building Permits Sep
report -
briefing.com anticipates 1950K
market anticipates 1950K
last report 1969K
revised -

Oct 19 8:30 AM
Core CPI Sep
report -
briefing.com anticipates 0.2%
market anticipates 0.2%
last report 0.1%
revised -

Oct 19 8:30 AM
CPI Sep
report -
briefing.com anticipates 0.2%
market anticipates 0.2%
last report 0.1%
revised -

Oct 19 8:30 AM
Housing Starts Sep
report -
briefing.com anticipates 1900K
market anticipates 1950K
last report 2000K
revised -

Meanspin spews at 10:00 EST

Have a Great Day Marketeers!

[UpInArms]

8. reports coming in

8:29am 10/19/04 U.S. SEPT. CPI UP 0.2% AS EXPECTED

8:29am 10/19/04 U.S. SEPT. CORE CPI UP 0.3% VS. 0.2% EXPECTED

8:30am 10/19/04 U.S. SEPT. HOUSING STARTS DOWN 6% TO 1.898 MLN UNITS

8:30am 10/19/04 U.S. SEPT. ENERGY PRICES FALL 0.4%

8:30am 10/19/04 U.S. SEPT. FOOD PRICES UNCHANGED

8:30am 10/19/04 U.S. SEPT. SINGLE FAMILY STARTS DOWN 8.2% TO 1.540 MLN

8:30am 10/19/04 U.S. SEPT. MEDICAL PRICES UP 0.3%

8:30am 10/19/04 BULK OF SEPT. CORE CPI GAIN DUE TO HIGHER HOTEL PRICES

8:30am 10/19/04 U.S. SEPT. HOUSING STARTS DOWN IN ALL 4 REGIONS

[UpInArms]

9. U.S. Sept. CPI up 0.2%, core CPI up 0.3%

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38279.3543865741-824030526&siteID=mktw&scid=0&doctype=806&

WASHINGTON (CBS.MW) - Despite lower energy costs, U.S. consumer price inflation accelerated in September, rising 0.2 percent, the Labor Department said Tuesday. The seasonally adjusted core consumer price index, which excludes food and energy prices, rose 0.3 percent, the most since April, largely because hotel prices soared. Economists were expecting both the CPI and the core CPI to rise 0.2 percent, according to a survey of 37 economists by CBS MarketWatch. Consumer prices are up 2.5 percent over the past 12 months. The core CPI has risen 2 percent year-over-year, breaking that key barrier for the first time in nearly two years.

[durablend]

12. CPI-W up 0.4%

Relevant as it'll determine next year's social security cost-of-living increase. Should be in the 2.6-2.7% range assuming they haven't cooked the formula.

EDIT: 2.7% confirmed...most of it likely going towards the increase in medicare.

[UpInArms]

25. hi bush_has_to_go!

glad to see you here in the SMW! :hi:

here's some more on that core inflation issue:

U.S. Core Inflation Hotter Than Expected

http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=6542279

WASHINGTON (Reuters) - U.S. consumer prices rose an as-expected 0.2 percent last month, a government report showed on Tuesday, but a sharp jump in lodging costs helped push core inflation up at its fastest pace in five months.

A separate report showed a more sluggish pace of groundbreaking for new homes in September than had been expected, but a bigger-than-anticipated gain in permits for future activity.

A 0.4 percent drop in energy prices in September, the third straight monthly decline, helped temper the rise in the consumer price index, the most widely used gauge of U.S. inflation, the Labor Department said.

While food prices held steady, the core CPI, which strips out volatile food and energy costs, climbed 0.3 percent, the biggest gain since April.

Economists on Wall Street had expected both the overall index and the core measure to advance 0.2 percent.

...more...

[54anickel]

28. Retiree benefit hike lags costs

http://money.cnn.com/2004/10/19/news/economy/social_security/index.htm

About half of cost-of-living adjustment to Social Security benefit to go to Medicare premium hike.
October 19, 2004: 9:43 AM EDT

NEW YORK (CNN/Money) - Social Security beneficiaries will see an average of nearly $25 a month more next year under a cost-of-living adjustment announced Tuesday, but almost half of that increase will be taken up by higher Medicare premiums.

The government also raised the amount of wages of working Americans subject to Social Security taxes, meaning that about 9.9 million active workers will pay more in Social Security taxes in 2005, even without an increase in the tax rate. The first $90,000 of income will now be subject to the Social Security tax, up from $87,900 subject to the tax this year.

The cost-of-living adjustment will increase benefits by 2.7 percent over the current year, the U.S. Social Security Administration announced Tuesday. The 2004 COLA, which took effect in January, was an increase of 2.1 percent, which raised the average benefit of retired workers by $19 to $922 a month.

For retirees receiving lower benefit levels, the increase would be less, even though some costs, such as medical premiums, will rise by just as much. But no beneficiary will see their benefits rise by less than the increased cost of Medicare premiums.

more...

[54anickel]

17. GLOBAL MARKETS-Bonds dip on inflation data, techs boost stocks

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?font=Reuters&pv_noticia=MTFH51155_2004-10-19_13-06-10_L19686174

LONDON, Oct 19 (Reuters) - Government bond prices fell on Tuesday after data showed U.S. core inflation rose faster than expected in September, while upbeat earnings reports and a slide in oil prices gave stock markets a boost.

The U.S. consumer price index rose a 0.2 percent, as expected, but a jump in lodging costs helped push core inflation -- which excludes volatile food and energy costs -- up 0.3 percent, the fastest in five months.

"The main thing was that the core was greater than expected. This should allay some people's fears that the Fed is going to have to pause (in raising interest rates) for a while," said Larry Brickman, interest rate and foreign exchange strategist at Bank of America in New York.

"I think the Fed is going to have to continue to raise rates. Not only because of an uptick in (the CPI) but to get rates back to neutral."

snip>

Markets now turn their attention to a speech by Federal Reserve Chairman Alan Greenspan on the mortgage market and consumer debt, due around 1400 GMT.

[UpInArms]

11. U.S. Sept. housing starts down 6% to 1.9 mln units

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38279.3544675926-824030529&siteID=mktw&scid=0&doctype=806&

WASHINGTON (CBS.MW) -- U.S. homebuilders slowed their pace of new construction in September, bringing housing starts lower by 6 percent to an annual pace of 1.898 million on a seasonally adjusted basis, the Commerce Department said Tuesday. Economists had expected a decline to 1.93 million starts, according to a survey conducted by CBS MarketWatch. New construction of single-family homes fell 8.2 percent to a 1.540 million annual rate, while starts of apartment buildings rose 4.7 percent to 328,000 units.

[UpInArms]

14. filling in the reports

Oct 19 8:30 AM
Building Permits Sep
reported 2005K
briefing.com anticipated 1950K
market anticipated 1950K
last report 1969K
revised 1952K

Oct 19 8:30 AM
Core CPI Sep
report 0.3%
briefing.com anticipated 0.2%
market anticipated 0.2%
last report 0.1%
revised -

Oct 19 8:30 AM
CPI Sep
report 0.2%
briefing.com anticipated 0.2%
market anticipated 0.2%
last report 0.1%
revised -

Oct 19 8:30 AM
Housing Starts Sep
report 1898K
briefing.com anticipated 1900K
market anticipated 1950K
last report 2020K
revised 2000K

[UpInArms]

2. Bond Sales Feed Worries

Will Foreign Interests Stop Investing in the United States?

http://www.washingtonpost.com/wp-dyn/articles/A43402-2004Oct18.html

NEW YORK -- On Sept. 9, as it must frequently do, the U.S. government turned to Wall Street to raise a little cash, and Paul Calvetti bet that demand for $9 billion worth of long-term Treasury bonds would be "huge."

But at 1 p.m., as the auction opened and the numbers began streaming across his flat-panel screens, the head of Treasury trading at Barclays Capital Inc. slumped in his chair. Foreign investors, who had been voraciously buying Treasury bonds, failed to show up. Bond prices cascaded downward, interest rates rose, and in five minutes, Calvetti, 38, who makes money by bidding on bonds at one price and hoping market demand lets him quickly resell them at a profit, had lost $1.5 million.

"It's amazing," he gasped, after the Treasury Department announced that Wall Street traders, not foreigners, had been left to buy virtually the entire auction. "I don't think I've ever seen this before."

The most recent auction of 10-year Treasury notes may have been a fluke, a momentary downturn in one aspect of the massive world market for U.S. government and private-sector bonds, stocks and other securities -- a market so large and diverse that it has long been the world's safe haven. But a rash of new data, including Treasury Department figures released yesterday showing a net sell-off by foreigners of U.S. bonds in August, has stoked debate over whether overseas investors -- private individuals, institutions and government central banks -- are growingly dangerously bearish on the U.S. economy.

It is a portentous issue. Foreign governments and individuals hold about half of the $3.7 trillion in outstanding U.S. Treasury bonds, for example, and the government has been heavily dependent on continued overseas bond purchases to finance the roughly $1 billion a day it has to borrow to pay its bills. Foreign lending and investment are also needed to finance the country's roughly $50 billion monthly trade deficit, while foreign capital has been a key prop to U.S. stock prices.

<snip>

Bond purchases by foreign central banks also dropped sharply in July, falling 76 percent, to $4.1 billion. A rebound in August brought them back to $19.1 billion. The recovery was timely: Without it, the dollar may have taken a serious hit, said Ashraf Laidi, chief currency analyst at MG Financial Group in New York, who headlined yesterday's client newsletter, "Foreign Central Banks Save Dollar From Disaster."

...more...

[UpInArms]

16. Treasurys losses lengthen on core CPI

http://cbs.marketwatch.com/news/story.asp?guid=%7B7F227F7C%2D012F%2D4E01%2DA5E9%2D317C709F279E%7D&siteid=mktw

CHICAGO (CBS.MW) - Treasurys prices extended early losses after a gauge of consumer prices climbed more than expected, indicating escalating energy costs may fuel inflation.

Yields pulled higher after the Labor Department reported U.S. consumer-price inflation accelerated in September, rising 0.2 percent. The seasonally adjusted core consumer price index, which excludes food and energy prices, rose 0.3 percent, the most since April.

Economists expected both numbers to increase 0.2 percent, according to a CBS MarketWatch survey. See Economic Report.

Nearing 9:30 a.m. Eastern, the 10-year note was off 14/32 at 101 7/32. Its yield ($TNX: news, chart, profile), which moves in the opposite direction as price, rose to 4.1 percent.

The bond market bypassed data illustrating a slowdown in new-home construction to focus on the CPI data, a concern in that inflation chips away at the value of fixed-income securities.

Inflation is also a bond market worry in that it could prompt Federal Reserve policy makers to move more rapidly in raising interest rates.

...more...

[54anickel]

23. Reaching for the tinfoil again

The recovery was timely: Without it, the dollar may have taken a serious hit...

Most of us suspected the numbers were cooked to show a recovery, but it looks like it wasn't done to favor Shrub for re-selection.

Pay no attention to that man behind the curtain. Nothing to see here - move along.

Treasury officials said such data should not be overanalyzed. Net purchases of U.S. government securities may have been low in August, at $14 billion, for example. But foreigners still bought more than $807 billion in Treasury bonds, while selling $793 billion, in a month that is usually a slow one in financial markets, said Treasury spokesman Tony Fratto.

"These movements are taking place in a huge market," he said.

So who might the mouse be?

To John Williamson, a senior fellow at the Institute for International Economics, that is cold comfort. The Chinese and Japanese central banks may maintain their huge reserves for defensive reasons, he said, but a smaller player, like Brazil or Singapore, could try to unload its dollar reserves, triggering a global sell-off. Like a mouse in a circus, even a bit player could cause the elephants to stampede.


Nice chart in there:

[ozymandius]

3. WrapUp by Jim Willie CB

DOW TRANSPORTS & GLOBALIZATION CURVEBALLS

Four major reliable concepts have changed radically from the pervasive impact global trade, and no longer obey conventional rules. Each suffers a swing and miss as globalization tosses sharp curveballs. Analysts, even in the gold community, are slow to react in their thought process. Global trade has turned many widely subscribed beliefs on their ear. The fractured altered broken business cycle is but one casualty. The common denominator influence across the skewed conventional concepts is CHINA. They are:

passing along higher production costs to end customers

currency adjustment from outsized growing trade gaps

commanding a net benefit from comparative advantages after Asian outsourcing

Dow Theory non-confirmation of the industrial with the transportation index.

A previous article Missing Parallels to the 1970 Decade developed the theme that China has prevented the “cost push” from resulting in price inflation and wage increases during the grand reflation initiative. The immediate effects are a lower USDollar, higher commodity prices, more financial speculation, but not enough price inflation to overtake debts, which are growing out of control. Higher production costs cannot easily be passed along. USGovt stimulus simply fails to work as it had in the past. Traction is difficult to find. The answer why is simpler than one might think. China is the biggest new kid on the global trade block. With its expansive import trade to the USA and emerging manufacturing offshore and service outsource from the USA, powerful limitations are placed upon finished product prices and domestic wages inside the US Economy. Prices for finished products might soon rise, but wages will be stuck in a long multi-year decline on an inflation adjusted basis. The Federal Reserve stimulates with its mammoth reflation, led by real interest rates held negative for almost two full years. However, the increase in new money matches in magnitude the increase in consumer debt extension, which also by the way matches the increase in the trade gap. So the Fed is actually stimulating Asian growth, not American.

-cut-

In my opinion, as stated in previous essays, the S&P stock index is more and more a leading indicator for the world economy, with a strong bias toward the US Economy. If not for the significant business emphasis paid to Asia by US corporations, the S&P would be trending DOWN much more than it is lately. One can go further with the argument of divergence. As production costs rise from increased prices paid for raw materials and energy, the end user suffers while the shippers benefit. Higher commodity prices enable fatter profit margins for shippers in a tight market, which often have an inadequate fleet of vessels to handle the demand. Producers of finished products see an erosion in profit margins. The victim in the process is the independent trucker, who is caught without hedges in his fuel costs. Those fuel costs both vary in the middle of the life of the delivered contract, and are infrequently written carefully into the contract. Truckers are not sophisticated, and are squeezed. Instead of employing financial hedge contracts to protect themselves, they tend to become so frustrated that they block interstate highways outside Los Angeles. Truckers and commercial airlines are low men on the totem pole. Airlines feel pressures from highest fuel costs, high pilot labor costs, broad support costs (e.g. baggage, ticketing, mechanical, security), insistence to service the entire nation, and heavy fees to lock in airport hubs and concourses.

more...

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

[UpInArms]

4. another viw on ARMs

When your neighbor is in foreclosure, you can lose, too

http://www.dallasnews.com/sharedcontent/dws/bus/columnists/ddimartino/stories/101804dnbusdimartino.c2c3e.html

As much as I've written about adjustable-rate mortgages, I may have missed the proverbial forest for the trees.

To continue with the analogy, a reader planted the seed in my mind. Peter Schiff, chief global strategist at Euro Pacific Capital, watered it.

What if, this reader suggested, the armies of new buyers taking out these risky loans never have any intention of meeting their maker? After all, with no equity in a home and the closing costs rolled into the mortgage, there's no risk whatsoever to owning. Heck, I've even heard that some buyers aren't escrowing their property taxes, because they don't have the cash to pay it every month.

As Mr. Schiff put it, "One reason that zero-down payment loans are so popular is that buyers realize that since they put nothing down, they have nothing to lose. When interest rates ultimately rise and home values decline (as they eventually must), the zero-down ARM borrower will be able to walk away from his overpriced home none the worse for wear."

Critically, owning under these circumstances is cheaper than renting a comparable home, especially when you factor in the mortgage-interest tax deduction. When something goes wrong, all the buyer need do is pick up their possessions, along with anything they can detach from the home, and walk away, leaving the lender in the lurch.

I've no sympathy for the mortgage holders who continue to buy these packaged loans from the originators. There's no way they've missed the extreme deterioration in lending standards. As always, caveat emptor.

What truly saddens me is who gets hurt the most – tradition-minded folk (such as myself!) who saved up that 20 percent down payment and took out as short a fixed-rate mortgage as possible. Call us the foreclosed-house-next-door's neighbor.

...more...

[ozymandius]

5. Good morning all.

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

It's going to be a very short day for me. So I thought it better to do things gracefully and wish you all an entertaining and stimulating day at the Casino.

We have to travel out-of-town for the day and will be departing soon.

all things good,

Ozymandius :hi:

[UpInArms]

7. Have a safe trip and a great day, Ozy!

:donut:

:hi:

[UpInArms]

6. those IBM, KRAFT and MCI reports

IBM profit flat on pension case

http://news.bbc.co.uk/1/hi/business/3754782.stm

Computer giant IBM has posted flat quarterly profits after being weighed down by a pension lawsuit settlement.

The firm, which recently agreed to pay $320m (£178m) to older staff adversely affected by a change to its pension, made a third quarter profit of $1.8bn.

This net income figure compares to $1.79bn for the same period in 2003.

IBM said it remained confident about future growth, and its share price rose in after hours trading in New York. Its turnover was up 9% to $23.4bn.

...more...

Kraft earnings drop 4% in Q3

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38278.6789583333-823963521&siteID=mktw&scid=0&doctype=806&

]CHICAGO (CBS.MW)-- Kraft earned $779 million, or 46 cents per share, in the third quarter. That is down nearly 4 percent from the $812 million and 47 cents of a year ago and includes 2 cents per share in asset-impairment charges. The average estimate of analysts polled by Thomson First Call had been for the company to earn 45 cents per share. The food giant's revenue came in at $7.8 billion, up 4.7 percent from the third quarter of 2003 and slightly ahead of the Street view. Shares of Kraft closed up 19 cents to $32.33 Monday.

MCI Planning to Write Down Phone Assets

http://www.nytimes.com/2004/10/19/business/19phone.html

MCI Inc., the long-distance provider, said yesterday that it planned to take a $3.5 billion charge in the third quarter to better reflect the loss in value of its phone and data networks.

At the same time, MCI, which was formerly WorldCom, said it would pay a dividend of 40 cents a share in the third quarter, payable on Dec. 15 to those who held shares on Dec. 1. The dividend, approved by directors in August, is part of the company's reorganization and comes from excess cash left on its balance sheet.

Advertisement



MCI's decision to write down the value of its network mirrors similar steps by the AT&T Corporation and the Sprint Corporation and comes in the wake of the government's ruling this June to allow the regional Bell companies to raise their rates for connecting calls.

As a consequence of the ruling, as well as a price war among long-distance carriers, MCI, AT&T and Sprint have said it has become increasingly expensive to offer local phone service. The companies have been retreating from the residential market as a consequence.

...more...

[ozymandius]

10. SINCLAIR STOCK MARKET WATCH

Have fun with this one. -Ozy

http://finance.yahoo.com/q?s=SBGI

Last Trade: 6.49
Trade Time: Oct 18
Change: 0.00 (0.00%)
Prev Close: 6.49

Link to chart:

http://ichart.finance.yahoo.com/b?s=SBGI

[54anickel]

48. Still falling

Last Trade: 6.39
Trade Time: 11:46AM ET
Change: 0.10 (1.54%)
Prev Close: 6.49
Open: 6.66


Sinclair to Release Third Quarter Results on November 4
http://biz.yahoo.com/prnews/041019/phtu021_1.html

BALTIMORE, Oct. 19 /PRNewswire-FirstCall/ -- Sinclair Broadcast Group, Inc. (Nasdaq: SBGI - News) will release its third quarter 2004 earnings results at 7:30 a.m. ET on Thursday, November 4, 2004, followed by a conference call to discuss the results at 8:45 a.m. ET.

The dial-in number for the earnings call is 877-407-9205.

If you plan to participate on the conference call, please call two minutes prior to the start time and tell the conference operator that the subject of the conference is the "Sinclair Earnings Conference Call."

snip>

Members of the news media will be welcome on the call in a listen-only mode. Key executives will be made available to members of the news media, time permitting, following the conference call.

Should you have any questions, please contact Lucy Rutishauser at 410-568-1500.

[UpInArms]

55. Sinclair shares hit 3 1/2 year low ($6.33)

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38279.5291319444-824050350&siteID=mktw&scid=0&doctype=806&

NEW YORK (CBS.MW) -- Shares of Sinclair Broadcasting Group (SBGI) continued to tumble on Wednesday and hit a 3 1/2 year low during the trading session. Sinclair, whose shares have dropped 15 percent since the close of trading on Oct. 8, sparked a firestorm in the media industry when it said its television stations will show a documentary that's critical of presidential John Kerry's military service during the Vietnam War. Sinclair shares declined 16 cents to $6.33 in Wednesday trading.

:evilgrin:

[54anickel]

51. Related thread - Shareholders team up with Media Matters

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x916106

Media Matters for America Underwrites Sinclair Broadcast Group Shareholder Demand
http://mediamatters.org/items/200410190004

snip>

At 10 a.m. today, a letter from Glickenhaus & Co., a Wall Street firm with clients who hold stock in Sinclair, was delivered to the CEO of Sinclair, David D. Smith, and the company's board of directors, demanding that they immediately "provide those with views opposed to the allegations in the film an equal opportunity to respond." If an answer to Glickenhaus' demand is not received by close of business today, Tuesday October 19, additional remedies, including an injunction in a court of law prior to the first scheduled airing of Stolen Honor October 21, may be sought.

"Our mission is to thwart conservative misinformation in the media and ensure that the media offer the American public fair and balanced access to news and information," explained MMFA President and CEO David Brock. "We determined a stockholder effort is the strongest remaining course of action to force Sinclair to reconsider its decision to air Stolen Honor."

Glickenhaus & Co., a Wall Street investment firm holding 6,100 shares of Sinclair stock, is taking action against Sinclair on behalf of its clients holding shares in Sinclair. General partner Jim Glickenhaus mounted the action based on Sinclair's CEO and directors having a financial obligation to shareholders.

"We are not partisan. We are investors," Glickenhaus explained today. "Sinclair's decision has caused harm to the value of our investment in Sinclair. We believe Sinclair must give equal time to an opposing point of view. Otherwise the company is placing its future and the value of our investment in jeopardy, by putting the renewal of its FCC licenses at risk, alienating local advertisers, and opening itself up to libel suits against the company."

more...

[54anickel]

59. Now a splash of insider trading is added

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x915872

http://releases.usnewswire.com/GetRelease.asp?id=38393

snip>
Famed shareholder attorney William S. Lerach will hold a news conference at 1 p.m. today to discuss insider self-dealing by officers of Sinclair Broadcasting, the Baltimore-based television chain that is forcing its affiliates to show a propaganda film that attacks presidential candidate John Kerry. He will release a set of demands aimed at making Sinclair executives disgorge millions of dollars in unjustified profits taken out of the firm when stock prices were high during the past 12 months. Yesterday the company's stock fell a further 8 percent after being down more than 50 percent from the year's beginning, as advertisers pulled back to avoid the station's self-generated political controversy. Lerach and Patrick Daniels, San Diego-based partners in Lerach Coughlin Stoia Geller Rudman Robbins, the nation's most successful securities litigation firm, will discuss actions it will take against Sinclair. Lerach Coughlin is a 140-member firm with offices in nine cities that has prosecuted hundreds of shareholder class action and derivative lawsuits, recovering more than $25 billion for clients...

[UpInArms]

62. STOCKHOLDERS IN REVOLT!

Glickenhaus objects to Sinclair-backed, anti-Kerry film

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38279.5690393519-824054710&siteID=mktw&scid=0&doctype=806&

NEW YORK (CBS.MW) -- Jim Glickenhaus, general partner of the New York-based Glickenhaus & Co. investment company, said his firm sent a letter to Sinclair Broadcasting Group (SBGI) to protest against the anti-John Kerry documentary, "Stolen Hours." Saying he was acting on behalf of clients who own the media company's stock, Glickenhaus told CBS MarketWatch that he had contacted David Smith, the chief executive of Sinclair. Glickenhaus said: "We have to protect our shareholders -- this has nothing to do with politics."

[54anickel]

63. What does it mean when they say "Coverage initiated by JP Morgan"

in the headlines section. They list them as Underweight. Why would they start coverage?

[54anickel]

73. SINCLAIR CLOSING - A wee bit of a bounce at the very end, but still a

good hit. This is the type of action the Market folks don't like you to see. Heaven forbid that the public understand how much power they will hold in Shrub's "ownership society".

Last Trade: 6.26
Trade Time: 4:00PM ET
Change: 0.23 (3.54%)
Prev Close: 6.49
Open: 6.66

Day's Range: 6.12 - 6.67


The Five Dumbest Things on Wall Street This Week
http://www.thestreet.com/_yahoo/markets/dumbestgm/10188019.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

snip>

4. Sinclair, the Moment I Met You, I Swear
Will Sinclair Broadcast Group (SBGI:Nasdaq - commentary - research) have an effect on the presidential election? Or will the presidential election have an effect on Sinclair?
Sinclair, you may recall, is the TV station operator that has told its stations to run an anti-Kerry documentary, uninterrupted, in prime time on its 62 TV stations next week.

Actually, we're not sure what Sinclair will be running, although we suspect it will not be too complimentary toward presidential candidate John Kerry. What Sinclair says on its Web site is that its "upcoming special news event" will feature "the topic of Americans held as prisoners of war in Vietnam."

What we do know is that Sinclair's desire to inform the public -- or what critics call an illegal, disguised political contribution to President Bush -- could have some unintended economic consequences. Maybe.

Some of Sinclair's critics on the left are trying to hit the company where it hurts: The wallet. The Web site www.boycottsbg.com, for example, is compiling listings of Sinclair's local and national advertisers; the idea is to pressure these companies, with the threat of an advertiser boycott, to pressure Sinclair into pulling the documentary. Another site, StopSinclair.org, has also sprung up.

Whether the pressure is working, or will work, is unknown. No one picked up the phone at Sinclair when we called Thursday. One national Sinclair advertiser, United Online (UNTD:Nasdaq - commentary - research), had no comment. Previous boycotts of media and entertainment companies, on various complaints, don't seem to have had injurious effect.

Don't buy into their crap - they know it is and will work! Power to the people :hippie:

[UpInArms]

13. pre-opening blather

briefing.com

9:18 ET S&P futures vs fair value: +2.8. Nasdaq futures vs fair value: +7.5. Cash market appears poised to begin the day on a modestly higher note as futures traders are pushing up prices in the wake of the latest batch of earnings news that was highlighted by a reassuring report from blue chip company IBM (IBM)... look for tech stocks to assume an early leadership role

8:56AM: S&P futures vs fair value: +2.7. Nasdaq futures vs fair value: +7.5. Futures fading a bit from their best levels of the morning, but still trade at levels that suggest a modestly higher start is in store for the cash market

8:34AM: S&P futures vs fair value: +3.2. Nasdaq futures vs fair value: +10.0. Upbeat tone in futures market persists following the CPI and Housing Starts data... Both were at, or near, consensus estimates and haven't triggered any meaningful concerns about either a strong increase in inflation or a noticeable slowdown in the housing market

8:10AM: S&P futures vs fair value: +3.9. Nasdaq futures vs fair value: +9.5. A positive tone in pre-market action as traders are showing a greater appreciation for recent earnings news... Supportive entities in that respect include IBM, TXN, FON, F, RSH and EMC to name a few... A further drop in oil prices (now -$0.98 at $52.69) is also acting as an underpinning factor... CPI report due at 08:30 ET; consensus estimate is +0.2%

ino.com

The December NASDAQ 100 was higher overnight as it extends Monday's rally, which led to a breaking out above the 10-day moving average crossing at 1449 thereby tempering the near-term bearish outlook in the index. Stochastics and the RSI are diverging but have turned bullish signaling that sideways to higher prices are possible near- term. If December extends yesterday's rally, the previous reaction high crossing at 1479.50 is the next upside target. The December NASDAQ 100 was up 10.00 pts. at 1467 as of 5:59 AM ET. Overnight action sets the stage for a steady to firmer opening by the NASDAQ composite index later this morning.

The December S&P 500 index was higher overnight and is poised to test resistance marked by the 10-day moving average crossing at 1119.84. Closes above the 10-day moving average would temper the near-term bearish outlook in the market. Stochastics and the RSI remain bearish signaling sideways to lower prices are possible near-term. Closes below September's low would open the door for a possible test of the 62% retracement level of the August-October rally crossing at 1092.90 later this month. Overnight action sets the stage for a steady to firmer opening when the day session begins later this morning.

[UpInArms]

15. 9:38 EST markets are open

Dow 9,990.00 +33.68 (+0.34%)
Nasdaq 1,944.17 +7.65 (+0.40%)
S&P 500 1,115.83 +1.81 (+0.16%)
10-Yr Bond 4.094% +0.041

NYSE Volume 58,493,000
Nasdaq Volume 104,916,000

[UpInArms]

18. MetLife says it paid $25M in contingent fees in 2003

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38279.4069444444-824036889&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (CBS.MW) -- MetLife (MET) said Tuesday that it paid $25 million in contingent commissions to brokers and consultants in 2003 and also pays third parties for administrative services such as data processing, billing and communication services. MetLife told New York Attorney General Eliot Spitzer on Oct. 1 that it was not aware of any "fictitious" quotes provided by it or any other company, the firm said. MetLife said Friday it had received three more subpoenas since first being subpoenaed by Spitzer's office in June.

fees for services not rendered that are rolled into the cost of insurance - gouging the consumers for the air they breathe

:nuke:

[UpInArms]

32. more regarding "incentive fees"

http://www.forbes.com/business/energy/feeds/ap/2004/10/19/ap1597298.html

The company at the center of a probe into insurance brokerage fees says it took in more than $1.2 billion in incentive payments over the past 18 months and that its decision to stop using such fees will reduce operating income.

Marsh & McLennan Companies Inc. disclosed late Monday that its Marsh Inc. insurance unit collected $845 million of such fees in 2003, and another $420 million through June 30 this year.

The fees, which are over and above ordinary commissions, have been paid by insurance companies to brokers, mainly for steering profitable clients the insurer's way. New York Attorney General Eliot Spitzer sued Marsh & McLennan last week over the fees as well as for bid rigging, and said the investigation extends to several large insurers.

Spitzer's civil suit says the "placement service agreements," also known as contingent commissions or market service agreements, had led to corporate customers not getting the best prices on property and casualty policies.

New York-based Marsh & McLennan has since ended the practice, and this week two major insurance companies named in Spitzer's probe - New York-based American International Group Inc. and Bermuda-based ACE Ltd. - said they also have stopped using such incentives.

On Tuesday MetLife Inc., which is based in New York, said it was not surprised it received subpoenas from Spitzer in the case because of its size. MetLife wrote some $9 billion in premiums in 2003.

It said that MetLife "pays both base commissions and other contingent payments" and valued the incentive fees at about $25 million in 2003. MetLife said it was conducting an internal review and that it "was not aware of any instance in which MetLife or any other company had provided a 'fictitious' quote."

...more...

[UpInArms]

36. Ace falls 8% on report execs knew about bid-rigging

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38279.456412037-824042338&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (CBS.MW) -- Ace Ltd. shares fell 8 percent Tuesday after the Wall Street Journal reported that two top executives at the insurer knew about a bid-rigging scheme that's now at the center of New York Attorney General Eliot Spitzer's investigation of the industry. In an e-mail on Nov. 3, 2003, Geoffrey Gregory, president of Ace's casualty-risk unit, warned Ace USA's president and chief executive officer, Susan Rivera, that the way bids were being arranged "could potentially be construed as simply creating the appearance of competition," the report said, adding that the firm and the two executives declined to comment. Ace shares fell $2.66, or 7.5 percent, to $32.72.

well, duh!

[Mister K]

53. Ace executive pleads in fraud probe

Ace executive pleads in fraud probe

The charge against a vice president stemmed from an inquiry by the N.Y. attorney general into the insurance industry.
By Christopher Mumma and Allan Dodds Frank
BLOOMBERG NEWS

An Ace Ltd. executive pleaded guilty yesterday to a criminal charge stemming from a fraud investigation of the insurance industry by New York Attorney General Eliot Spitzer. She was the third person to do so in the last two days.

Patricia Abrams, a vice president in Ace's casualty group, pleaded guilty to a criminal charge of attempted restraint of trade and competition, Brad Maione, a spokesman for Spitzer, said. Abrams' misdemeanor charge carries a maximum penalty of one year in prison.

"At the direction of her superiors, Patricia Abrams participated in an improper business practice," her attorney, Larry Krantz, said in an interview. "She apologizes for her conduct and wishes to put this painful matter behind her."

Ace is based in Bermuda and has its North American headquarters in Philadelphia.

Spitzer sued Marsh & McLennan Cos. Inc., the world's largest insurance brokerage, accusing it Thursday of bid rigging. Two executives of American International Group Inc. pleaded guilty Thursday to involvement in bid rigging.

Their cooperation and that of Abrams may help Spitzer develop his investigation, which he said would involve "numerous civil and criminal cases to come."

Spitzer's suit accused Marsh of steering unsuspecting corporate clients to insurers who paid the company the highest fees.

Marsh & McLennan said yesterday that it was suspending its practice of using the "market services agreements" in question.

A company statement quoted chairman and chief executive officer Jeffrey W. Greenberg as saying: "We are greatly disturbed by the allegations of wrongdoing. We take them very seriously, and we are conducting a thorough investigation."

The announcement came as shares in Marsh & McLennan, which fell 24 percent Thursday, took another beating yesterday. Shares fell $5.65, or 16.2 percent, to $29.20 on the New York Stock Exchange, extending their two-day loss to 37 percent.

Shares in companies mentioned in the suit also tumbled for a second day.

American International Group Inc. was down $2.15 at $57.85, Ace was off $1.49 at $34.98, and Hartford Financial Services Group Inc. was down $2.10 at $56.30.

Marsh is giving up fees that would have contributed $485 million, or more than one-quarter of the company's profit, next year, Jon Balkind estimated. He is an analyst with Fox-Pitt Kelton Ltd., an investment-banking unit of Swiss Reinsurance.

Spitzer's suit puts pressure on Greenberg, 53, to step down, and probably will trigger similar concessions at other brokers, said Nicholas Xie, an analyst at PNC Advisors.

Spitzer's suit alleges that Marsh took advantage of clients by seeking so-called contingent commissions from insurers such as AIG in exchange for throwing business their way. AIG, led by Jeffrey Greenberg's father, Maurice "Hank" Greenberg, 79, said yesterday that it was likely to stop paying the fees, also referred to as placement service agreements.

Spitzer bases part of his investigation on internal e-mails and memos in which he said insurance executives openly discussed actions that were aimed at maximizing Marsh's and insurance companies' revenues without regard to clients' interests.

MetLife Inc., one of the nation's largest insurers, disclosed yesterday that it had received subpoenas from Spitzer's office "seeking information regarding whether MetLife has provided or is aware of the provision of 'fictitious' or 'inflated' bids."

It said the subpoenas were in addition to two previously disclosed queries from Spitzer, and added that the company, which is based in New York, "continues to fully cooperate with these inquiries."

MetLife shares fell $2.26 to $34.99 on the New York Stock Exchange.

AIG's Hank Greenberg told a conference call with analysts yesterday that the company had launched its own investigation, using outside investigators, and was cooperating fully with Spitzer's office.

Hank Greenberg told analysts that AIG had sought guidance from New York state insurance regulators about contingent commissions long before Spitzer's investigation got under way.

He said that AIG queries in July 2002 and in October 2003 went unanswered.

He also told the analysts that placement-service agreements were negotiated "at the subsidiary-company level." He said that, to his knowledge, no one in upper management was involved.

He said AIG got between 15 percent and 20 percent of its corporate property and casualty business from Marsh & McLennan.

www.philly.com/mld/philly/business/9932564.htm

[UpInArms]

19. dollar jumping like a hot potato

Last trade 86.89 Change -0.13 (-0.15%)

Settle 87.02 Settle Time 23:35

Open 87.24 Previous Close 87.02

High 87.34 Low 86.82

Last tick: 2004-10-19 09:22:22 ET
30-min delayed quote.

[54anickel]

24. Chart looks like it's trying to get a bounce above 87, yet each bounce

up reaches a bit lower than the one before. Atleast it appears to still have a floor beneath it to bounce off of.

[54anickel]

71. Heh, compare that pic I posted with the actual Buck chart for the day

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

Wow, only thing missing is that part where it just sort of rolls along the floor. :evilgrin:

[UpInArms]

72. very ugly number on the buck

Last trade 86.80 Change -0.18 (-0.21%)

[UpInArms]

20. Any stock strength just a technical rebound: Lowry Res.

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38279.4087268518-824037088&siteID=mktw&scid=0&doctype=806&

NEW YORK (CBS.MW) -- Lowry Research technical analyst Richard Dickson thinks any near-term strength in the Dow industrials ($INDU) , Nasdaq Composite ($COMPQ) and the S&P 500 Index ($SPX) should be limited to just a technical bounce, given that most short-term indicators remain well above oversold levels. He sees resistance at 10,100 for the Dow, at 1,960 for the Nasdaq and 1,125 for the S&P 500. The Dow was last up 38 points at 9,994, the Nasdaq was 10 points better at 1,947 and the S&P 500 was adding 3 points to 1,117. "If rallies to those levels are sufficient to generate renewed short-term overbought readings, that could be the extent of a near-term rebound," Dickson said. If no overbought readings are generated when the indexes reach these levels, he said the next resistance levels would be 10,200 for the Dow, 1,975 for the Nasdaq and 1,140 for the S&P 500.

[TrogL]

67. Isn't that just a nice way of saying "dead cat bounce"?

[UpInArms]

21. Meanspin spews

10:00am 10/19/04 GREENSPAN: U.S. HOUSEHOLD FINANCES IN 'GOOD SHAPE'

10:00am 10/19/04 GREENSPAN SEES NO HOUSING BUBBLE IN U.S.

10:00am 10/19/04 GREENSPAN SAYS SHARP DROP IN U.S. HOME PRICES UNLIKELY

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38279.4169097222-824037977&siteID=mktw&scid=0&doctype=806&

Greenspan says U.S. household finances in good shape

WASHINGTON (CBS.MW) -- Fed chair Alan Greenspan said U.S. "household finances appears to be in reasonably good shape," downplaying the concerns of some analysts that the high level of debt might limit U.S. consumer spending in coming quarters. In a speech Tuesday to a banking conference, Greenspan said that some regions of the country have seen speculative price bubbles, but "a national severe price distortion seems most unlikely in the United States, given its size and diversity." The Fed chairman said a sharp drop in income or home prices could "quickly alter" this benign outlook, but said "both scenarios appear unlikely in the quarters immediately ahead."

[54anickel]

26. Bwhahaha, unlikely in the quarters ahead. Looking thru bubbles does

tend to distort the view. Sort of like a convex mirror - Objects may be closer than they appear.

Guess he and Ben can only guarantee that big printing press will keep running for a couple of quarters.

[UpInArms]

29. and the markets just lap up the koolaid

that he serves

[UpInArms]

30. Meanspin exposed

[54anickel]

39. HA! That's a great pic!!! n/t

[54anickel]

57. Full text of Greenspin's oral dysentery

http://www.federalreserve.gov/boarddocs/speeches/2004/20041019/default.htm

[UpInArms]

22. 10:07 EST numbers and blather (WHEEE!)

Dow 10,017.37 +61.05 (+0.61%)
Nasdaq 1,950.50 +13.98 (+0.72%)
S&P 500 1,117.79 +3.77 (+0.34%)
10-Yr Bond 4.086% +0.033

NYSE Volume 229,483,000
Nasdaq Volume 304,583,000

10:00AM: Indices hold very steady amongst moderate volume...SOX semiconductor index is up 2.4%, helped by the Texas Instruments earnings report... it is the third most active NYSE stocks, with IBM fifth...steel and oil stocks are weak this morning, while tech categories lead the strong sectors list...

9:40AM: Moderate up open in line with futures indications...good earnings from IBM (IBM 88.99 +3.07), Texas Instruments (TXN 22.49 +1.40), and Altria (MO 47.50 0.10) provide a boost...McDonald's (MCD 28.85 -0.35) and Wells Fargo (WFC 59.50 -0.65) reports weren't received quite as well... oil is down about $1.20...

[54anickel]

27. HEDGE FUNDS PUSHING SEC FOR NEW REG PLAN

Surprise. PPT say NO WAY!!!!

http://www.nypost.com/business/32165.htm

October 19, 2004 -- Hedge fund managers and lawyers opposed to plans to make them register as advisers are asking U.S. regulators to find other ways to increase disclosure in the traditionally secretive industry.
The industry's main U.S. lobbying group is asking the Securities and Exchange Commission to consider alternatives ranging from making it tougher to invest in hedge funds to letting investors peek at their audited financial statements.

"In light of the division within the Commission, the lack of support by the President's Working Group on Financial Markets, and the fact that no public policy cases have been made to support the proposed rule, the SEC should at the very least consider these alternatives," the Managed Funds Association wrote in a statement released yesterday.

The proposed SEC rule would require hedge funds with $25 million or more under management and 15 or more clients to register. Industry analysts estimate that nearly half of all hedge fund advisers are already registered with the SEC.

more...

[UpInArms]

34. RayGun's "magic bullet"

created after the crash of '87

http://www.archives.gov/federal_register/codification/executive_order/12631.html

Executive Order 12631--Working Group on Financial Markets

Source: The provisions of Executive Order 12631 of Mar. 18, 1988, appear at 53 FR 9421, 3 CFR, 1988 Comp., p. 559, unless otherwise noted.

By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:
Section 1. Establishment. (a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:
(1) the Secretary of the Treasury, or his designee;
(2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee;
(3) the Chairman of the Securities and Exchange Commission, or his designee; and
(4) the Chairman of the Commodity Futures Trading Commission, or her designee.
(b) The Secretary of the Treasury, or his designee, shall be the Chairman of the Working Group.
Sec. 2. Purposes and Functions. (a) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:
(1) the major issues raised by the numerous studies on the events in the financial markets surrounding October 19, 1987, and any of those recommendations that have the potential to achieve the goals noted above; and
(2) the actions, including governmental actions under existing laws and regulations (such as policy coordination and contingency planning), that are appropriate to carry out these recommendations.
(b) The Working Group shall consult, as appropriate, with representatives of the various exchanges, clearinghouses, self-regulatory bodies, and with major market participants to determine private sector solutions wherever possible.
(c) The Working Group shall report to the President initially within 60 days (and periodically thereafter) on its progress and, if appropriate, its views on any recommended legislative changes.

...more...

[54anickel]

31. Gloomy Holiday Seen for Toy Sales

http://www.latimes.com/business/la-fi-mattel19oct19,1,2417919.story?coll=la-headlines-business

With retailers wary of overstocking, Mattel and other firms forecast disappointing results.

By Melinda Fulmer, Times Staff Writer


Downbeat forecasts Monday from toy makers — including industry leader Mattel Inc. — underscored concerns that a wobbly economy and rising gasoline prices might prompt people to pare back holiday spending.

El Segundo-based Mattel, the nation's largest toy maker, and No. 2 Hasbro Inc. reported slower third-quarter sales and warned that fourth-quarter sales might be affected if what Mattel called a "challenging" environment continued. And educational toy maker LeapFrog Enterprises Inc., citing weak demand, slashed its full-year earnings outlook, sparking a sharp sell-off of its stock.

Toy makers are suffering because some retailers, worried about being stuck with excess inventory, are stocking shelves more thinly this year than last.

"It can't be good for the industry when major retailers are saying they expect sales of discretionary items like toys to lag until fuel prices come back down and we see more positive consumer attitudes," Mattel Chief Executive Robert A. Eckert said.

Analyst Felicia Kantor Hendrix of Lehman Bros. forecast a difficult season. "The business is terrible," she said.

more...

[54anickel]

33. Insurance Investigation Widens to Include Costs

http://www.nytimes.com/2004/10/19/business/19insure.html?oref=login&adxnnl=1&oref=login&adxnnlx=1098183759-Fk/uBoX7Ad5x4W8tLbTD/A

An investigation into the insurance business is expanding, investigators said yesterday, as Eliot Spitzer, the New York attorney general, increasingly turns his attention to whether American corporations and their employees are paying more for life, disability and accident insurance than they should be.

In California, John Garamendi, the state insurance commissioner, said last night that he, too, was concerned about extra costs to individuals for life, disability and accident insurance and that he was considering legal action against at least one broker and several insurance companies that sell what are known as employee benefits.

While the current focus of the New York investigation is on bid-rigging and price-fixing among commercial insurance brokers and insurance companies, investigators say Mr. Spitzer is also pursuing reports of payoffs that may increase coverage costs for tens of millions of individuals.

"Eliot Spitzer's interest is in the retail stuff, the effect on regular people,'' said David D. Brown IV, the chief of the state attorney's investment protection bureau.

more...

[54anickel]

35. Bank of Canada raises overnight rate target by 1/4 percentage point

Bank of Canada raises overnight rate target by 1/4 percentage point
to 2 1/2 per cent

http://www.bankofcanada.ca/fixed-dates/2004/rate_191004.htm

OTTAWA—The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 2 1/2 per cent. The operating band for the overnight rate is correspondingly increased, and the Bank Rate is now 2 3/4 per cent.

The Canadian economy is operating near its production capacity and continues to adjust to global economic developments. Recently, world oil prices have risen well above the Bank's earlier assumptions and the Canadian dollar has appreciated further.

Looking ahead over the period to the end of 2006, the Bank's base-case projection calls for aggregate demand for Canadian goods and services to expand, on average, at about the same rate as potential output. Given the effects of higher oil prices and the past appreciation of the Canadian dollar, the Bank projects growth to be slightly less than 3 per cent in 2005, and slightly more than 3 per cent in 2006. With the economy expected to remain near its production capacity throughout this period, core inflation is projected to move back to the 2 per cent target by the end of 2005. Reflecting higher world oil prices, total CPI inflation is projected to move well above core inflation in the first half of 2005 and fall slightly below core inflation in 2006.

bit more...

[UpInArms]

37. 11:05 EST numbers and blather

Dow 9,976.89 +20.57 (+0.21%)
Nasdaq 1,944.58 +8.06 (+0.42%)
S&P 500 1,113.01 -1.01 (-0.09%)
10-Yr Bond 4.074% +0.021

NYSE Volume 527,857,000
Nasdaq Volume 599,368,000

11:00 ET Mixed market as the S&P slips into the red, but advancers lead decliners by a decent margin, and the Russell 2000 index is up 0.4%, so there is broad support to the market...oil has come off its lows of the day, and the December crude futures contract is now -$0.44 at $52.40...steel stocks are very weak today...Steel Dynamics (STLD 31.17 -2.63) reported third quarter earnings of $2.01 a share, above the expected $1.97, but there is profit-taking in this sector... ..NYSE Adv/Dec 1702/1209. ..NASDAQ Adv/Dec 1589/1108.

10:25AM: Market gets a slight boost from some comments from Fed Chairman Greenspan that were generally upbeat on the economy...he said that household debt is not a major worry, but didn't make any particularly dramatic statements...indices have eased back in stable trade...insurance companies are getting hit hard again today after a New York Times article suggesting that Spitzer's probe of property and casualty insures might spread...NYSE Adv/Dec 1832/936, Nasdaq Adv/Dec 1694/850

[UpInArms]

42. 11:30 EST numbers and blather (rally fading rapidly)

Dow 9,950.20 -6.12 (-0.06%)
Nasdaq 1,939.91 +3.39 (+0.18%)
S&P 500 1,109.97 -4.05 (-0.36%)
10-Yr Bond 4.066% +0.013

NYSE Volume 650,482,000
Nasdaq Volume 719,369,000

11:25AM: Market slides...report of small plane crash in Atlanta may have sparked some selling, but there is no indication of anything other than an accident...still, buyers lack conviction as there has been very little resilience in the face of the modest, steady slide in the S&P 500 index...the SOX semiconductor index is still up 2.4%, providing support to the Nasdaq...NYSE Adv/Dec 1601/1372, Nasdaq Adv/Dec 1494/1270

dollar doldrums continue

Last trade 86.80 Change -0.22 (-0.25%)

[54anickel]

45. Just send 'em all out to lunch to chill for bit. n/t

[54anickel]

46. Stocks pare early gains (Oil back up over $53)

http://cbs.marketwatch.com/news/story.asp?siteid=mktw&dist=mktwsnap&guid=%7BA1AA9127-2AB1-42CD-86D3-A2E913DF2E9D%7D

NEW YORK (CBS.MW) - U.S. stocks traded higher but off their best levels Tuesday as crude-oil prices trimmed losses to climb back over $53, but solid quarterly results from IBM and Texas Instruments kept the market in positive territory.

snip>

"We're back to our old game. Oil is down, stocks are up," said Alfred Kugel, senior investment strategist at Stein Roe Investment Counsel.

"And of course we've had some good earnings reports from IBM and Texas Instruments which is helping the tech stocks."

Crude-oil futures fell below $53 a barrel, continuing Monday's sharp declines on hopes of easing supply concerns after the Organization of Petroleum Exporting Countries said its September output was the highest in 25 years.

[nolabels]

54. There is also the sublimal effect on the market

Real and imagined shortages are the same thing to day traders


Attack on pipeline halts Iraq's oil exports

October 19 2004 at 11:27AM

Beiji - An attack on a pipeline in northern Iraq has halted exports of oil via Turkey, Iraq's state oil company said on Tuesday.

A huge explosion in the early hours of Tuesday destroyed the pipeline at a refinery in Beiji, around 220km north of Baghdad, a company employee confirmed
(snip)
http://www.iol.co.za/index.php?set_id=1&click_id=123&art_id=qw1098175140651B262

[54anickel]

38. An ALchemist Spills Forth

http://www.321gold.com/editorials/mackenzie/mackenzie101904.html

Scanning the Media's Plutocratic landscape this weekend afforded me a heavy dose of "Partisan Group Think" and with it yet another lesson in the Theatre of the absurd. Having repeatedly watched John Stewart assail the Crossfire Debutantes, Tucker Carlson and Paul Begala, my inner monologue began to scream Go John! If you have not yet seen this exchange, you owe it to yourself to do so as Mr. Stewart's diatribe is as refreshing as it is compelling.

"The thing is, we need your help," Stewart said. "Right now, you're helping the politicians and the corporations and we're left out there to mow our lawns."

Stewart's efforts to unmask the simple truth surrounding a Justice Department probe into who leaked the identity of CIA operative Valerie Plame, the wife of Bush White House antagonist Joseph Wilson:

"Bob Novak could end this whole thing tomorrow," the "fake news" apostle declared at a New Yorker magazine breakfast at the Bryant Park Grill. "There's millions of dollars being spent on this investigation, and people are going to jail, but his evil is not allowed even in the darkened abyss of his soul - some would say soul."

Stewart added: "He leaked a CIA source for punitive reasons - for ugly, partisan purposes."

Eye's wide open as it were, Mr. Stewart. Thank you for being a true patriot, one that likely has Thomas Jefferson applauding. Remind me again, why I am watching all this confusion and delay.

more...

[54anickel]

40. Still issuing repos? Cupboard not quite bare yet?

http://www.321gold.com/fed/temp_bank_res.html

[UpInArms]

41. guess they are backing those

repos with the full faith in the retirement fund system :shrug:

[54anickel]

43. Borrowing from the gov't pension plan again, just like Poppy did? n/t

[54anickel]

44. Economic Puzzles

http://www.gold-eagle.com/editorials_04/oberholster101804.html

snip>

Inflation is a monetary phenomenon and will most definitely do the job, but one needs to understand that inflation is not restricted to a narrow definition of price increases in only a select group of assets. Money has no fixed address, yet everybody searches for the signs of inflation in everyday consumer goods only. Few think of inflation in terms of the true capital stock of any country. Fixed Property, Equities and Bonds are the most common long-life assets and the most representative by value. Everything is wonderful in a world of low inflation in consumer and durable goods. The new economy arrives where this type of inflation is low and long-life assets inflate wildly. Everybody gets rich, what's wrong with that? The sad truth is this, long life asset inflation has arrived and what a party it is, for a while...

The Japanese found out and this is how it turned out.

A weak currency, export driven economic policy created a persistent monetary stimulus for the economy. I'll explain in more detail later. The effect was to initially create the illusionary economic miracle of perpetual growth, which eventually led to over-investment in long life assets. Long-life assets inflated to manic proportions and crashed spectacularly. Quantitative stimulus was and is used to address the problem; it simply means that unlimited liquidity (money creation) was offered as the remedy, the very cause of the problem in the first place. The perpetuation of monetary stimulus prevented a large scale banking failure but trapped the economy in a state of perpetual stasis and long-term bankruptcy. It is 14 years later and still the Japanese Government persist with this policy, bailing out banks or via banks, bailing out corporates, retailers, exporters, in fact any of its economic institutions, the failure of which is perceived as potentially harmful to the economy. Yet, the Japanese Government considers the only true remedy untenable, that of implementing policies of liquidating the excessive debt, including the debt represented by vast amounts of money creation. This is not the Keynesian Liquidity Trap; I would call it the "Quantitative Stimulus Trap".

The lifts went up, the lifts came down and then the lifts got stuck on the ground floor. The worst is, few acknowledged the risk and fewer still are the voices that acknowledge the true reality of the Japanese problem. It is total systemic banking failure. Attributing such an outcome to monetary policies of lowering interest rates and quantitative easing would be unthinkable to any central banker. Time to take a look at a similar picture for the USA; for it surely cannot happen to the USA, the economic variables are just too different in a million and one ways!

The observation of recorded long-life asset inflation in the USA starts in the early 1990's. Equity inflation really took off from 1995 onwards and property inflation only slowly built momentum from 1997 onwards. Yet the compounding effect of property inflation has caught up with equity inflation. The FED also discovered the bountiful monetary policy of lower interest rates and quantitative easing and we say hello to long-life asset inflation in the USA. Does this remind of the early 1990 economic position of Japan?

more...

[UpInArms]

47. here's some info on the Japan bubble

http://www.eurekalert.org/pub_releases/2002-12/uoc--smc121402.php

excerpt:

"Collective behavior theory predicts robust signatures of speculative phases of financial markets, both in accelerating bubbles, as well as decelerating 'antibubbles,'" Sornette said. "These precursory patterns have been documented for essentially all crashes on developed as well as emergent stock markets."

Sornette sees a series of stages, beginning with a market or sector that is successful, with strong fundamentals. Credit expands, and money flows more easily. (Near the peak of Japan's bubble in 1990, Japan's banks were lending money for real estate purchases at more than the value of the property, expecting the value to rise quickly.) As more money is available, prices rise. More investors are drawn in, and expectations for quick profits rise. The bubble expands, and then bursts. (From the early 1970s to 2000, Hong Kong's stock market accelerated and crashed eight times -- a perfect illustration of his theory.)

"Stock market crashes are often unforeseen by most people, especially economists," Sornette added. "One reason why predicting complex systems is difficult is that we have to look at the forest rather than the trees, and almost nobody does that. Our approach tries to avoid that trap. From the tulip mania, where tulips worth tens of thousands of dollars in present U.S. dollars became worthless a few months later, to the U.S. bubble in 2000, the same patterns occur over the centuries. Today we have electronic commerce, but fear and greed remain the same. Humans are endowed with basically the same qualities today as they were in the 17th century."

and here's a chart of the DOW from 1900 to 2003(?)

[54anickel]

49. Look at the period from 64 to around 83 - Oh yeah, it sure paid to be

of the buy and hold mentality over those years! Not to mention how long it took the market to recoup the losses from 29!

Doom & gloomers speak of another crash, others try to dismiss that with talk of a long period of sideways movement - nothing to worry about. Sheesh, yeah you may be able to hold onto the value in terms of dollar amounts without suffering great losses, but what's a buck going to be worth in purchasing power?

What did inflation look like through the 64-84 period, not to mention the increases in taxes during that period. I remember the sales tax first being implemented on what were considered luxury items - my mom was in a tizzy because soap and cleaning supplies fell into that category. She was a clean freak, those were necessities!!!

[UpInArms]

60. the base year of 1962 was used until 1966

then 1966 was used as a base year for calculating inflation through 1983 -

1983 was used through 1987

1988 was used through 2002

no updates to the bls gov site document since that time :shrug:

http://64.233.167.104/search?q=cache:K123w6MjUooJ:www.bls.gov/opub/hom/pdf/ch17_appendix1.pdf+cpi+base+index+1962&hl=en

[Dogmudgeon]

50. Pardon my ignorance, but ...

... judging from the gold and foreign currency charts, it seems as if the Dollar is depreciating in value. And it's been doing that for some time now.

This can't be too good for the balance of trade.

Any comments?

--bkl

[UpInArms]

56. there are two diverging schools of thought

regarding the fall of the dollar -

one school is that the weaker the dollar the more competitive the US becomes and the more easily we can export goods to the rest of the world

the other is that there are too few things that we actually export and that the falling dollar creates an inflationary tax

the dollar was at 120 on the dxo in January 2001 - it immediately started to tumble under the policies that the *Co put in effect with the first budget submitted (it did not balance) and the tax cuts that were proposed, together with Meanspin's agressive interest rate cuts (13 in the 2001)

[54anickel]

52. 12:55 numbers

Dow 9,972.91 +16.59 (+0.17%)
Nasdaq 1,941.42 +4.90 (+0.25%)
S&P 500 1,111.15 -2.87 (-0.26%)
10-yr Bond 4.065% +0.012
30-yr Bond 4.851% +0.009
NYSE Volume 922,173,000
Nasdaq Volume 963,968,000

12:00PM : An up open gives way to a mixed market by mid-day...good earnings reports from IBM (IBM 89.17 +3.25) and Texas Instruments (TXN 22.78 +1.69) have given a boost to tech stocks and semiconductors in particular, but good reports from Altria (MO 47.59 +0.19) and McDonald's (MCD 29.19 -0.01) have had less impact on the broader market...advancers are almost exactly even with declining issues at this point, reflecting the broadly mixed nature of trading...perhaps the most supportive news is that the December crude oil futures contract is down $0.64 today after a $1.13 drop yesterday...
September CPI was as expected at a modest 0.2% increase, but the core rate was up 0.3%, which put some pressure on the bond market...the 10-year note is down 7/32 to yield 4.07%...volume has picked up a bit today, but the action overall has been tame, with a lack of resilience to the selling pressures...steel stocks are seeing heavy profit-taking, while insurance stocks are getting hit by increased concerns about NY Attorney General Spitzer's probe...there are also rumors that a probe into the derivatives market might be coming, and that has pressured brokers today...NYSE Adv/Dec 1508/1548, Nasdaq Adv/Dec 1440/1373

11:25AM : Stable action continues as indices bounce off their lows of the day, but remain in tight ranges...the S&P 500 index as this is written sits at 1,112.39, up fractionally from the end of 2003 value of 1111.92...main drags on the market today are insurance and health care, which is now off sharply...NYSE Adv/Dec 1519/1589, Nasdaq Adv/Dec 1480/1403

Advances & Declines
NYSE Nasdaq
Advances 1557 (47%) 1509 (49%)
Declines 1582 (47%) 1404 (45%)
Unchanged 172 (5%) 154 (5%)

--------------------------------------------------------------------------------

Up Vol* 371 (42%) 649 (69%)
Down Vol* 481 (55%) 259 (27%)
Unch. Vol* 16 (1%) 24 (2%)

--------------------------------------------------------------------------------

New Hi's 117 84
New Lo's 42 45

[UpInArms]

58. 1:13 EST numbers and blather (sinking)

Dow 9,958.82 +2.50 (+0.03%)
Nasdaq 1,937.48 +0.96 (+0.05%)
S&P 500 1,109.95 -4.07 (-0.37%)
10-Yr Bond 4.055% +0.002

NYSE Volume 978,039,000
Nasdaq Volume 1,013,043,000

1:05PM: Indices come off their lows of the day...insurance sector remains under pressure from concerns over Spitzer investigation, and steel stocks are off sharply...the December crude futures contract has steadied, and remains down $0.59 on the day...the 10-year note is down 5/32, mostly in reaction to the slightly higher than expected core CPI increase of 0.3%...the action is stable but there is no sign of any significant rally attempt yet...NYSE Adv/Dec 1548/1590, Nasdaq Adv/Dec 1504/1416

[54anickel]

61. Is Oil Heading For $100?

http://www.forbes.com/business/energy/2004/10/19/cx_da_1019topnews.html

NEW YORK - Yesterday, in writing about the rise in oil prices--which have roughly doubled in a year--I noted, "No one saw it coming." (See: "Oil Hits $55 Alarm; Greenspan Hits Snooze.")

As it turns out, a few people did see it. And now some of those seers are saying the recent "spike" is no spike at all, but the start of a long-term trend. It may be that the price of a barrel of oil is heading for $100, if not higher, by the end of the decade.

To be sure, the conventional wisdom is that oil prices, which fell a bit yesterday to about $53 per barrel, are going no higher and will likely fall back. That seems to be the view of Wall Street firms, most of which say as much in their research reports. Bear Stearns (nyse: BSC - news - people ), for instance, last month forecast a $25 price in 2005. Even relative "bulls" like Goldman Sachs (nyse: GS - news - people ) are talking about whether prices in the high $30 range might be sustained.

That investors as a whole see the current price jump as a blip is shown by the fact that, while prices of shares in oil companies like Exxon-Mobil (nyse: XOM - news - people ) or BP (nyse: BP - news - people ), and oil services firms, like Schlumberger (nyse: SLB - news - people ) or Transocean (nyse: RIG - news - people ) have risen, they have not risen by anything like the price of the oil they drill and sell.

"To the best of my knowledge, not once has any Wall Street firm forecast oil prices to be on a yearly uptrend," says Stephen Leeb, president of Leeb Capital Management, a New York investment manager and author of The Oil Factor (Warner Business 2004). Why has Wall Street missed it so badly? Leeb suggests that the answer lies not in economics, but in mass psychology, specifically studies of social conformity.

more...

[54anickel]

64. 1:58 and headed down as we enter the 2pm magical hour. What's it

gonna be today?

Dow 9,941.86 -14.46 (-0.15%)
Nasdaq 1,936.11 -0.41 (-0.02%)
S&P 500 1,108.97 -5.05 (-0.45%)
10-yr Bond 4.04% -0.013
30-yr Bond 4.823% -0.019
NYSE Volume 1,105,208,000
Nasdaq Volume 1,135,340,000

Edit to add blather

1:55PM: Indices break down below lows of the day as the bias to the downside breaks through...oil is still down 47 cents, so that is not the culprit...instead, the concerns about Spitzer investigations into the insurance industry may be the greatest influence today, as that sector is off sharply...the S&P has now lost most of yesterday's 5.82 point gain but the Nasdaq is still up after yesterday's 25 point surge...NYSE Adv/Dec 1437/1752, Nasdaq Adv/Dec 1425/1552

1:25PM: After the close today, the biggest earnings report is from Motorola (MOT 19.30 +0.58)...also due to report are Monster (MNST), Seagate Technology (STX), and Storage Tech (STK), but overall there are not that many key reports today...there are no big industrial, or Dow 30 type firms, which tend to report in the mornings...NYSE Adv/Dec 1497/1658, Nasdaq Adv/Dec 1398/1566

[TrogL]

65. Loonie Watch

http://www.angelfire.com/ab/trogl/looniewatch.html

Highlights.



http://www.x-rates.com/d/USD/CAD/data30.html


2004-09-20 Monday, September 20 0.772559 USD
2004-09-21 Tuesday, September 21 0.776036 USD
2004-09-22 Wednesday, September 22 0.780275 USD
2004-09-23 Thursday, September 23 0.78235 USD
2004-09-24 Friday, September 24 0.783515 USD
2004-09-27 Monday, September 27 0.785053 USD
2004-09-28 Tuesday, September 28 0.784068 USD
2004-09-29 Wednesday, September 29 0.785546 USD
2004-09-30 Thursday, September 30 0.790639 USD
2004-10-01 Friday, October 1 0.791828 USD
2004-10-04 Monday, October 4 0.785793 USD
2004-10-05 Tuesday, October 5 0.792079 USD
2004-10-06 Wednesday, October 6 0.794155 USD
2004-10-07 Thursday, October 7 0.795102 USD
2004-10-08 Friday, October 8 0.799233 USD
2004-10-12 Tuesday, October 12 0.795229 USD
2004-10-13 Wednesday, October 13 0.791139 USD
2004-10-14 Thursday, October 14 0.798212 USD
2004-10-15 Friday, October 15 0.798722 USD
2004-10-18 Monday, October 18 0.796813 USD
2004-10-19 Tuesday, October 19 0.797321 USD




The loonie's been losing a bit of ground over the last few days, but I'm chalking this up to uncertainty over the US elections more than anything else.

There was a long article in today's Edmonton Journal about the rise of the loonie. Apparently investors are hungry for the loonie and Canadian investors are dumping their foreign currencies. Due to fairly sound fiscal policy on the Canadian side and smoke and mirrors down south, they're predicting continued stability and a slight rise in Canadian interest rates.

The Conservative Party still wants a tax cut written into the throne speech - a first in Canadian politics. The Liberal finance minister has already announced that he's in favour of a tax cut. The question is going to be how much and where.

I'm expecting plenty of more jitters over the next couple of weeks.

[54anickel]

66. 2:30 - Where are those darned Pixies?

Dow 9,921.14 -35.18 (-0.35%)
Nasdaq 1,930.07 -6.45 (-0.33%)
S&P 500 1,106.75 -7.27 (-0.65%)
10-yr Bond 4.040% -0.013
30-yr Bond 4.825% -0.017
NYSE Volume 1,222,769,000
Nasdaq Volume 1,251,459,000


edit to add 2:30 blather

2:30PM: The afternoon slide continues, with still very little sign of any resilience...there are no economic releases tomorrow, and just new claims and the Philadelphia Fed index on Thursday...the focus for the rest of the week will thus still be on earnings, and oil prices...the 10-year note has now moved to +1/32 to yield 4.04% as the weakness in stocks appears to have created some demand in bonds...NYSE Adv/Dec 1294/1909, Nasdaq Adv/Dec 1290/1710


Advances & Declines
NYSE Nasdaq
Advances 1225 (36%) 1224 (38%)
Declines 1983 (58%) 1795 (56%)
Unchanged 178 (5%) 150 (4%)

--------------------------------------------------------------------------------

Up Vol* 391 (33%) 613 (50%)
Down Vol* 764 (65%) 576 (47%)
Unch. Vol* 18 (1%) 33 (2%)

--------------------------------------------------------------------------------

New Hi's 122 88
New Lo's 49 51

[54anickel]

69. DOW desparately trying to stay above 9900, S&P 1105

Look at these ranges for the day.

DOW Day's Range: 9,900.28 - 10,020.55
NAS Day's Range: 1,925.55 - 1,952.85
S&P Day's Range: 1,104.61 - 1,118.08

3:09 numbers:
Dow 9,902.41 -53.91 (-0.54%)
Nasdaq 1,928.04 -8.48 (-0.44%)
S&P 500 1,104.90 -9.12 (-0.82%)
10-yr Bond 4.041% -0.012
30-yr Bond 4.826% -0.016
NYSE Volume 1,375,726,000
Nasdaq Volume 1,389,661,000

[UpInArms]

70. 3:30 EST no pixies in sight (hanging at 9900)

Dow 9,902.04 -54.28 (-0.55%)
Nasdaq 1,927.26 -9.26 (-0.48%)
S&P 500 1,104.71 -9.31 (-0.84%)
10-Yr Bond 4.040% -0.013


NYSE Volume 1,475,093,000
Nasdaq Volume 1,473,952,000

3:30 ET Indices bounce off their lows, but negative sentiment perists...buying interest has not been sufficient to provide much resilience today, and is unlikely to do so in the final half hour...SOX semiconductor index is still up 1.5%... ..NYSE Adv/Dec 1185/2055. ..NASDAQ Adv/Dec 1241/1826.

3:00 ET Stock indices remain near their lows of the day, with the reports that NY Attorney General Spitzer will expand his probe into insurance industry practices to include health insurers getting a fair amount of the blame...and in fact, insurance and related stocks are some of the hardest hit today...with an hour to go, NYSE volume is now at 1.3 billion, on target for close to 1.5 billion, representing an above average day for volume... ..NYSE Adv/Dec 1235/1985. ..NASDAQ Adv/Dec 1252/1788.

[54anickel]

68. A Global Growth Inflexion Point?

http://www.prudentbear.com/internationalperspective.asp

We have long argued that the underlying dynamic generating global “economic growth” was an unhealthy symbiotic dance of death between the US and China. The massive dollar support operations of the Asian central banks, particularly the Bank of China, have until recently preserved low long-term U.S. rates, thereby perpetuating a credit bubble which has enabled American consumers to continue to purchase goods they can ill afford any longer, whilst concomitantly enabling China to overproduce already saturated manufacturing markets. But a changing global backdrop points to increasing signs that this dynamic may be entering its death throes

When policy steroids are removed from economies whose underlying financial structures are built on Ponzi-type financing, and an oil price spike is thrown in the mix, it should come as no surprise that economic momentum tends to peak and decay. The mighty twin peaks of growth, the US and China, are both increasingly manifesting increasing signs of economic exhaustion, as policy stimulus diminishes and monetary tightening has commenced. Many of the more troubling signs signaling slowdown have been obscured by, in the case of America, the ever increasing drama of a too-close-to-call Presidential election and, in regard to China, the ambiguous nature of the government’s own “hot and cold” pronouncements on the economy. But if one steps back from the endless array of AP, Gallop, and Zogby polls, and peers at the most recent constellation of economic data in both countries, it is becoming increasingly evident that an important inflexion point may have been reached.

In the US, the pace of manufacturing production has already halved on a 3 month annualized basis from November 2003 through August 2004, and both machinery and fabricated metal products already show a substantial decay in production activity. On a similar annualized quarterly basis, manufacturing employment growth is probably a month or two away from going negative.

True, total business sales growth is close to the prior peak y/y rates of change of the past 25 years, so we are by no means looking at a collapse. But we can see sales growth is already off the peak. And inventory growth still surging higher. In other words, all the pieces are in place for an upper turning point to develop. By year end, we are likely to have revenue growth falling down through the inventory growth rate.

Yet in a perverse echo of 2000, according to Merrill Lynch’s monthly global portfolio manager survey, industrial and material stocks are now two of the top three overweight sectors in the US market. It is surely one of the great practical jokes of Mr Market that the driving force behind much of the strength in base metals, grains, steel, might be misperceptions surrounding the staples of the Old Economy, an ironic echo of the New Economy euphoria, in which high tech and telecoms stocks spiked to speculative peaks just as business conditions were dramatically deteriorating by March 2000.

more...

[54anickel]

74. Closing - so much for that technical bounce

Dow 9,897.62 -58.70 (-0.59%)
Nasdaq 1,922.90 -13.62 (-0.70%)
S&P 500 1,103.23 -10.79 (-0.97%)
10-yr Bond 4.040% -0.013
30-yr Bond 4.824% -0.018
NYSE Volume 1,736,469,000
Nasdaq Volume 1,712,718,000

Close: Stocks opened higher on good earnings news and a decline in oil prices...the indices held their gains for most of the morning, and it was a mixed market at mid-day...then, a little after 1:00 ET, NY Attorney General Spitzer said he was widening his investigations into insurance industry practices to include the reinsurance business...whether directly or not, that pulled the rug out from under sentiment, and stocks began a slide that lasted all afternoon...at the close, insurance and health provider stocks had taken a major hit...
oil came off its lows, but the December crude futures contract still ended $0.20 lower on the day to close at $52.64...that is not a reason for the decline...the SOX semiconductor index still managed a gain of 0.9%, helped by Texas Instruments (TXN 22.40 +1.31) good earnings report, and IBM (IBM 89.18 +3.26) helped support the Dow, but the overall market suffered broad losses...bonds were up marginally higher on the day...volume was heavy, and declining issues outpaced advancers by a margin of about 3-to-2...after the close, Motorola (MOT) is the big report...NYSE Adv/Dec 1141/2130, Nasdaq Adv/Dec 1199/1896

3:30PM: Indices bounce off their lows, but negative sentiment perists...buying interest has not been sufficient to provide much resilience today, and is unlikely to do so in the final half hour...SOX semiconductor index is still up 1.5%...NYSE Adv/Dec 1185/2055, Nasdaq Adv/Dec 1241/1826

Advances & Declines
NYSE Nasdaq
Advances 1163 (33%) 1203 (37%)
Declines 2124 (61%) 1888 (58%)
Unchanged 165 (4%) 153 (4%)

--------------------------------------------------------------------------------

Up Vol* 486 (27%) 728 (42%)
Down Vol* 1211 (69%) 961 (56%)
Unch. Vol* 40 (2%) 16 (0%)

--------------------------------------------------------------------------------

New Hi's 127 92
New Lo's 68 68


Have a great evening everyone :hi: