STOCK MARKET WATCH, Tuesday 26 October 2004

[ozymandius]

Tuesday October 26, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 86
DAYS UNTIL W* GETS HIS PINK SLIP 7
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 319 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 8 DAYS
DAYS SINCE ENRON COLLAPSE = 1069
Number of Enron Execs in handcuffs = 19
Recent Acquisitions: Ken Lay
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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

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AT THE CLOSING BELL ON October 25, 2004

Dow... 9,749.99 -7.82 (-0.08%)
Nasdaq... 1,914.04 -1.10 (-0.06%)
S&P 500... 1,094.81 -0.93 (-0.08%)
10-Yr Bond... 3.97% -0.01 (-0.30%)
Gold future... 429.90 +4.00 (+0.93%)





GOLD, EURO, YEN, Dollars and Loonie

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PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

---

[UpInArms]

1. daily dollar watch

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

Last trade 85.05 Change +0.08 (+0.09%)

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=1098767117-9e32d306-06676

Forex - US dollar weaker vs yen, euro in afternoon Tokyo trade

The US unit was lower against the euro in Asia, after falling sharply to an eight-month low of 1.2830 usd in New York overnight, they said. At 1.00 pm in Tokyo (0400 GMT), the dollar was at 106.61 yen, down from 106.84 in Sydney and from 106.85 in late New York trade. The US unit has traded in a range of 106.58-92 yen so far in Tokyo

The euro was at 1.2829 usd, up from 1.2788 in Sydney and 1.2807 in late New York, and at 136.79 yen. The euro has moved in a range of 1.2772-1.2842 usd and 135.73-136.81 yen

Market analysts said the US currency could weaken further against the euro on fears that foreign investors may not provide sufficient capital to finance the US current-account and fiscal deficits, along with doubts over the strength of the US economy

Uncertainties over the US presidential election next week, along with rising oil prices, are also contributing to the dollar's bearishness, traders said. "(Speculators) may test the (euro's) upside further as few ECB (European Central Bank) officials have expressed concerns over the rising euro (against the dollar)," Harry Ida, a senior currency analyst at IFR Forex Watch, a unit of Thomson Financial, said

Last Friday, the ECB's Jose Manuel Gonzalez Paramo of Spain reportedly said he is not concerned over the possible impact of a rising euro on the euro-zone economies

Dealers said the market is divided over the direction of the yen going forward, with dollar-bulls speculating caution over possible intervention by the Bank of Japan (BoJ) and uncertainty over the US election. But Ida said few market players are cautious about any possible move by the bank, particularly because exports -- one of the main drivers of Japan's economy -- are not being damaged at current dollar-yen levels. The quarterly BoJ Tankan survey of business sentiment released Oct 1 showed major Japanese manufacturers forecast an average exchange rate of 106.12 yen against the dollar for the second half to March

...more...

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=latestnews&pv_noticia=1098795279-9e32d306-30364

U.S. dollar stabilizes at multimonth lows

CHICAGO (AFX) -- The U.S. dollar recovered some ground against its major rivals Tuesday after falling to multimonth lows. But analysts said the greenback would likely decline again, amid high oil prices and U.S. economic uncertainty. In early morning U.S. trading, the dollar was quoted at 106.76 yen, a gain of 0.1 percent from late Monday. The greenback gained 0.2 percent against the euro; one euro would buy $1.2782. The dollar also nosed up 0.2 percent against the British pound; one pound would buy $1.8373

Today's report:

Oct 26 10:00 AM
Consumer Confidence Oct
report -
briefing.com anticipates 94.0
market anticipates 94.0
last report 96.8
revised -

Have a Great Day Marketeeters!

[54anickel]

6. Hey UIA, here's a tidbit from the 18th that I must have missed.

http://www.forexnews.com/AI/defaultnew.asp?f=A20041018A&cm=&cy=&ad=&cd=

snip>

Foreign central banks to the rescue

The 35% drop in foreign net purchases of US treasuries to an 11- month low would have been significantly worse had it not been for the $19 billion in purchases from official investors (foreign central banks), which accounted for 130% of net total foreign Treasury purchases. The 130% stems from the fact that private investors (asset managers and hedge funds) were net sellers of treasuries at $5.1 billion. This was the first time private investors were net sellers since October 2003.

Asian nations stepped up their buying of US treasuries, led by Japan’s $722 billion in holdings, up 3.8% from July. This was the highest percentage increase since the 5% monthy increases in March and February when the Bank of Japan intervened at record rates to purchase dollars for yen. Similarly, Mainland China’s official purchases rose 3.2% to $172 billion, the highest percentage inrease sicne December of last year.





The above chart clearly exposes the waning rate at which net monthly foreign inflows have been covering the swelling trade deficit. Optimists might well point to the fact that year to date (Jan to Aug) net inflows have totaled $594 billion, well over the $394 billion trade deficit. Nonetheless, this was mainly due to soaring net inflows seen in Q1, which averaged $85 billion when Asian central banks stepped up their dollar-buying interventions. The monthly average of net inflows in Q2, then fell to $71.6 billion, while the Jul-Aug averaged at $61.5 billion. This contrasts with the trade deficit, whose upward pace is outpacing net inflows. This is well highlighted by the fact that the ratio of monthly foreign inflows to the monthly trade deficit has fallen to 1.1 from 2.2 in November.

snip>

In addition to Thursday’s Philly Fed Index, watch the release of the leading indicators index. The Index is expected to have a marked dollar impact since it is expected to show the 4th consecutive monthly decline, the first of such pattern since summer-fall 2002, when escalating market volatility and distressed US equities weighed on economic activity.

[UpInArms]

7. thanks 54anickle, I missed that one also

and those charts are definitely interesting - look at those sharp spikes in March of 2002 and 2003 - not followed in 2004. hmmmmm...

the dollar is dipping down again

Last trade 84.95 Change -0.02 (-0.02%)

[54anickel]

15. Guess that's our biggest clue to why the Fed insists on continuing the

rate increases. They have got to intice the private sector back into buying, or at the very least, stop them from dumping.

[UpInArms]

2. £1m an hour profit for BP

http://www.guardian.co.uk/oil/story/0,11319,1336183,00.html

Oil giant BP today posted record profits of $3.94bn (£2.14bn) after fuel prices hit new highs.

The third quarter performance of Britain's biggest listed company came as oil prices rose to an average of almost $50 a barrel.

Because of the importance of refining and marketing, high oil prices do not always guarantee BP huge profits. Today the firm thanked "strong global demand" for refinery products such as petrol and diesel. Marketing profits were also up.

BP said the loss of production in the United States following Hurricane Ivan, low inventories and limited spare capacity had underpinned the rising price of crude oil.

The profits figure for the period between July and September - which amounts to around £1m an hour - includes exceptional costs of $401m, linked to environmental clean-up and other charges.

BP said profits in the first nine months of the year were 26% higher than a year ago at $12.56bn.

...more...

[UpInArms]

21. Crude futures reverse course, head higher ($54.70 bbl)

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38286.4658217593-824747058&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (CBS.MW) -- Crude futures headed higher in late morning trading, with uncertainty ahead of Wednesday's U.S. petroleum supply updates providing some support despite easing concerns over Norway's production. December crude is up 16 cents at $54.70 a barrel after falling as low as $53.85 earlier. November natural gas is also up 17 cents at $8.06 per million British thermal units.

[UpInArms]

54. Crude futures match Friday's record close ($55.17 bbl)

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38286.6217824074-824765015&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (CBS.MW) -- Crude futures matched Friday's record close amid ongoing concerns about winter heating-oil supplies. Updates on U.S. inventories are due Wednesday morning. December crude rose 63 cents to close at $55.17 a barrel in New York, in line with Friday's all-time record close for futures. On an intraday basis, however, the day's high of $55.25 is still below Friday's $55.50 peak.

Market thinks that is grand! Lousy Consumer Confidence, Sky-High Crude Oil - GREAT! Let's play Shoot-the-Moon!

:shakesheadsadly:

[54anickel]

3. Weird, no charts at the AM mMarket Call site today? Overseas markets

were all up though, and look at that buck take off this morning. I think it may be a good day. B-)

[UpInArms]

4. pre-opening blather

briefing.com

9:17AM: S&P futures vs fair value: +2.8. Nasdaq futures vs fair value: +1.0. Enthusiasm in the futures market has tapered off, but cash market looks set to start the session on no worse than a relatively flat note... Trading action for the morning session should have a better-defined pace and tone following the release of the Consumer Confidence report at 10:00 ET

9:00AM: S&P futures vs fair value: +3.2. Nasdaq futures vs fair value: +3.5.

8:34AM: S&P futures vs fair value: +3.8. Nasdaq futures vs fair value: +4.0. Positive bias in the futures market remains intact... accordingly, the cash market remains poised to start the day on a positive note... Early buying efforts, however, are likely to be tempered by the recognition that the October Consumer Confidence report will be released at 10:00 ET; the consensus estimate is 94.0, which is below the prior month's reading of 96.8

8:12AM: S&P futures vs fair value: +3.4. Nasdaq futures vs fair value: +3.0. Positive bias in futures market shold translate into a modestly higher start for the cash market.... A dip in oil prices, a rebound in insurance-related names following Greenberg's resignation at MMC, increased guidance from NVIDIA (NVDA), and a non-troublesome batch of earnings news this morning have contributed to the favorable disposition

ino.com

The December NASDAQ 100 was steady overnight as it consolidates some of Monday's loss but remains below initial support marked by the 10-day moving average crossing at 1444.80. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below this month's low crossing at 1419 would confirm a breakout below the August-September uptrend line thereby signaling that a double top has been posted. Closes above last week's high crossing at 1482.50 are needed to keep the rally off August's low alive. The December NASDAQ 100 was steady at 1435 as of 5:55 AM ET. Overnight action sets the stage for a steady opening by the NASDAQ composite index later this morning.

The December S&P 500 index was slightly higher overnight as it consolidates some of Monday's decline, which spiked below the 62% retracement level of the August-October rally crossing at 1092.90. Stochastics and the RSI are bearish signaling sideways to lower prices are possible near-term. If December extends this month's decline, a test of the 75% retracement level of the August-October rally crossing at 1080.90 later this fall. Closes above the 10-day moving average crossing at 1103.67 would signal that a short-term low has been posted. The December S&P 500 Index was up 0.50 pts. at 1095.90 as of 5:58 AM ET. Overnight action sets the stage for a steady to firmer opening when the day session begins later this morning.

[UpInArms]

5. 9:36 EST markets are open and happy!

Dow 9,771.45 +21.46 (+0.22%)
Nasdaq 1,914.77 +0.73 (+0.04%)
S&P 500 1,096.92 +2.12 (+0.19%)
10-Yr Bond 3.966% -0.006

NYSE Volume 43,076,000
Nasdaq Volume 83,709,000

[UpInArms]

8. U.S. Oct. consumer confidence sinks to 92.8 vs. 96.7

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?guid={0A91C3BC-530A-41E8-939B-4FD7FACBBE3D}&siteid=mktw

WASHINGTON (CBS.MW) - The U.S. consumer confidence index fell to 92.8 in October from a revised 96.7 in September, the third decline in a row, the Conference Board said Tuesday. It's the lowest level since March. Economists surveyed by CBS MarketWatch were expecting the index to fall to 93.4. Most of the decline in attitudes came in expectations. The expectations index fell from 97.7 to 92.0, also the lowest since March. The present situation index dipped to 94.2 from 95.3.

[Media_Lies_Daily]

10. That's a big drop.

[UpInArms]

12. and that futures expectations drop was HUGE

10:00am 10/26/04 U.S. OCT. EXPECTATIONS INDEX 92.0 VS. 97.7

but what the hell! Let's Rally! It's a freakin' party! :party:

[54anickel]

16. Set your expectations low enough so you can be pleasantly surprised!

[UpInArms]

9. Venture investing dives 57% in N.E.

http://www.boston.com/business/articles/2004/10/26/venture_investing_dives_5737_in_ne/

Venture capital investing, a key barometer of the entreprenerial economy, unexpectedly tumbled 26 percent to 4.3 billion nationally in the third quarter, from $5.8 billion in the second quarter, according to the latest Money- Tree survey scheduled to be released today.

The decline was especially sharp in New England, the second-largest center for venture-backed start-ups after Silicon Valley. Venture outlays here plunged 57 percent to $426.6 million in the three months ended Sept. 30, from 953.9 million in the previous quarter.

While venture investing typically dips in the July-to-September period due to summer vacations, the size of this year's drop surprised some in the venture capital business. Among the explanations they offered were the struggling stock market, geopolitical uncertainties stemming from the US election and the war in Iraq, and increased financial discipline demanded of the companies being funded.

"You're seeing drives for capital efficiency and smaller fund sizes," said Dave Furneaux, managing general partner at Kodiak Venture Partners in Waltham. "With these trends, the same number of companies might be getting funded for less money."

...more...

and

Venture capital flat from a year ago

Survey says investments of $4.3 billion flow into 601 companies; average funding at $4.6 million.

http://money.cnn.com/2004/10/26/news/economy/venture_cap.reut/

SAN FRANCISCO (Reuters) - U.S. venture capital investing dipped in the seasonally soft third quarter but was flat from the year-ago period, with investments of $4.3 billion going into 601 companies, according to survey results released late Monday.

The result came in below the second quarter's level of $5.9 billion, according to PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association, which conducted the MoneyTree Survey.

"The results are pretty much in line with our expectations," said John Taylor, vice president of research at NVCA.

A total of 181 early-stage companies received $840 million, nearly one-third of all deals and 19 percent of all dollars -- results consistent with the prior quarter. Average funding per company was $4.6 million, also unchanged from the prior quarter.

Expansion funding totaled $2.1 billion in 267 deals, amounting to 49 percent of all dollars and 44 percent of all deals -- consistent with historical norms. Average funding per company was $8 million, in line with the average of the prior four quarters.

...more...

[UpInArms]

20. Fed's Ferguson sees solid increases in capital spending

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38286.4688425926-824747464&siteID=mktw&scid=0&doctype=806&

WASHINGTON (CBS.MW) -- U.S. businesses are discarding their earlier caution and investing more in capital goods and structures, Federal Reserve Vice Chairman Roger Ferguson said Tuesday in a speech in South Carolina. "The fundamental features of the current U.S. economy argue for solid increases in capital expenditures needed to produce and facilitate sales," he said in prepared remarks. "With steady contributions from business investment, GDP growth is likely to continue expanding at a good pace, leading to further job gains and increases in family incomes." Ferguson said he believes the expiration of a favorable tax provision on expensing could damp capital spending early next year.

Do these jokers ever look at reality?

[UpInArms]

23. hahahahahahaha

11:15am 10/26/04 FED'S FERGUSON SEES SOLID INCREASES IN CAPITAL SPENDING

11:15am 10/26/04 FERGUSON: U.S. GDP LIKELY TO EXPAND AT 'GOOD PACE'

11:15am 10/26/04 FERGUSON SEES NO INVENTORY OVERHANG IN U.S.

11:15am 10/26/04 FERGUSON: TAX PROVISION BOOSTS CAPITAL SPENDING IN '04

I want some of what this guy's smokin'!

[UpInArms]

25. Dollar improves vs. euro after Ferguson comments

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38286.4783564815-824748494&siteID=mktw&scid=0&doctype=806&

CHICAGO (CBS.MW) -- The dollar gained more ground on the euro after Federal Reserve Vice Chairman Roger Ferguson said, "with steady contributions from business investment, GDP growth is likely to continue expanding at a good pace..." The euro was quoted at $1.2757 vs. $1.2780 before Ferguson's speech. The dollar is up 0.4 percent on the euro compared to Monday, when the euro rose to an eight-month high above $1.28.

[UpInArms]

56. Dangers of a diving dollar

http://www.thisislondon.co.uk/news/business/articles/timid83948

WITH a week to polling in the American election the dollar is looking extremely sick. In latest trading the currency fell to within one cent of its lowest-ever point against the euro which stood at $1.28. It also hit lows against the yen and other Asian currencies.

As for the pound it is trading at an eight-month high against the dollar at $1.84 and is holding its own against the euro, despite hints from the Bank of England that British interest rates may have reached their peak. Former FT editor Richard Lambert, now elevated to the Monetary Policy Committee, argues that the commentators who believe that the new consumer prices index is giving a false impression on inflation are wrong.

So why then is the dollar coming under such pressure? A big part of the weakness arises because of America's current account deficit, now heading for 6% of gross domestic product. This is seen by the former US Treasury Secretary Lawrence Summers as too high.

...more...

[54anickel]

70. Oh for cripes-sake! Does this Jen fellow only see a crisis if the Dems

win? What a moron. It really doesn't matter who wins the election - we are on the brink, the cusp, of a currency crisis - period. Greenspin has been taking us down this path for almost 10 years now, Shrub just exasperated it with his idiotic policies of tax cuts, deficit spending like there's no tomorrow (in his mind there isn't - the Rapture is due any day now), and war, war, war.

[UpInArms]

11. 10:14 EST numbers and blather (RALLY! RALLY! RALLY!)

Dow 9,791.28 +41.29 (+0.42%)
Nasdaq 1,915.21 +1.17 (+0.06%)
S&P 500 1,099.37 +4.57 (+0.42%)
10-Yr Bond 3.959% -0.013

NYSE Volume 254,684,000
Nasdaq Volume 355,237,000

10:00AM: Indices settle near unchanged amidst lack of enthusiasm...SOX semiconductor index is down 0.9% and a factor in the Nasdaq weakness...Flextronics (FLEX 11.12 -1.42) is down after warning of lower than expected profits in the fourth quarter despite hitting third quarter estimates, and is on the actives list...American Insurance Group (AIG 58.71 +2.61) is up as insurance stocks bounce...

9:45AM: Market opens up very much in line with futures indications...slightly lower oil prices and a slew of decent earnings reports provide modest support...the 10-year note continues to rally, and is up 2/32 this morning to push the yield down to just 3.96%...DuPont (DD 41.92 -0.26) and Lockheed Martin (LMT 53.52 -0.02) two of the larger companies to report this morning...

[UpInArms]

13. 10:23 EST and depression buying continues

Dow 9,803.45 +53.46 (+0.55%)
Nasdaq 1,917.30 +3.26 (+0.17%)
S&P 500 1,100.41 +5.61 (+0.51%)
10-Yr Bond 3.961% -0.011

NYSE Volume 304,337,000
Nasdaq Volume 408,962,000

[UpInArms]

14. The buck drops here Commentary: U.S. economy needs a weaker dollar

http://cbs.marketwatch.com/news/story.asp?guid=%7B615E1729%2D1B6D%2D4A39%2D9A81%2D31D1AB8DCED5%7D&siteid=mktw

HEMPSTEAD, N.Y. (CBS.MW) -- The drop in the value of the dollar in world financial markets may turn out to be just what the doctor ordered.

No, I'm not putting a happy face on the inevitable. I really mean it, here's why.

Our current account deficit, at 5.7 percent of our gross domestic product and growing, is simply too large. It is now just barely covered by inflows of cash into U.S. stocks and bonds from private investors. See the data.

With these inflows already declining, the U.S. is increasingly dependent on foreign central banks to fund this deficit. Their appetites may be satisfied, too, since purchases of U.S. bonds by these institutions have recently fallen. See the data.

Our current account is in the red because of our huge deficit in foreign trade. This year it will reach nearly $600 billion - up from $519 billion last year and $472 billion the year before. Our struggling economy can ill afford this much demand leaking out of the country.

If the dollar does no more than come to rest at today's levels, it will help U.S. companies and their employees in several ways.

...more...

[54anickel]

17. Ummmm, yeah, right. Sounds reasonable to me. Uh, what exactly

do we make here again that's not dependent on a LOT of foreign made parts? Outside of financial instruments that is. Didn't we become a Service based economy in recent years - that "new economy" miracle they've been touting, I'm pretty sure that was Service based. :eyes:

[TrogL]

34. I was listening to an economics rant last night

Someone was talking about his father's economy. He worked for GM, had good job security, health benefits and made enough to own his own home and put his kids through college without staggering student loans. At the time that's what a typical guy could aspire towards and have a halfways reasonable expectation of getting close to the mark.

We now live in the "Wallmart economy". Wallmart far outpaces GM in sales and infrastructure ownership worldwide. Wallmart employees...oh hell, don't get me started. I've got a daughter about to graduate high school and her friends are jealous because she's working at Harveys. She aspires to be a teacher and it'll probably happen for her because my sister married well and my partner's brother-in-law would probably kick so cash in but she talks about the fear in her classmates' eyes. They'll probably do OK because Canada still has its resource based economy and the government still has the wherewithall to throw R&D money around.

I remember when I was graduating the kids in my stream who weren't going the University route had a fair chance of getting decent work in manufacturing but that's all gone now.

Didn't somebody once say something like "you can't keep an economy going by taking each other's laundry in"?

[54anickel]

48. Wrigley Profits Rise on Weak Dollar (See, it's working!!!)

http://www.starbanner.com/apps/pbcs.dll/article?AID=/20041026/APF/410260814

Wm. Wrigley Jr. Co., the world's biggest chewing gum maker, reported an 11 percent increase in third-quarter earnings Tuesday, boosted by continuing steady improvement in sales volume and the weak dollar.

Net earnings for the three months ended Sept. 30 were $125.8 million, or 56 cents a share, up from $113 million, or 50 cents a share, a year earlier. The results were a penny per share higher than the consensus estimate of analysts surveyed by Thomson First Call.

Revenues rose 17 percent to $917 million from $783 million.

The company credited the growth to higher sales volumes - especially in China, Russia, Britain and Ukraine - along with strong foreign currencies and its recent acquisition of the Joyco Group confectionery businesses abroad. Sales rose 25 percent in its European region, 23 percent in Asia and 6 percent in North America, where the company cited the continuing success of its sugar-free Orbit gum and Eclipse breath strips.

[ozymandius]

18. WrapUp by Jim Willie CB

LAST ACID TEST ON ANALYTIC VIEWS



Two weeks ago, the essay which appeared on this website reviewed several important economic beliefs and policies, which in my analysis, are totally backwards, counter-productive, and even destructive. The path of folly continues unabated. In August of 2003, a series of articles entitled “Ass-Backward Economics” summarized my entire position, published in part I, part II, part III, and part IV. The irreverent banner was indicative of my disdain for economic directives which have been backwards, ever since Greenspan departed from responsible banking policy in 1996. The price of becoming a folk hero for our myopic Fed Chairman has been cancer through inflation and speculation, erosion of our productive capacity for real wealth generation, and lost competitive nature of the US Economy.

-cut-

In the past year, the practice of central bank monetization has thoroughly gone amok. An explosion in Bank of Japan purchase of US Treasury bonds took place early this year in 2004. They increased their welfare support magnificent style. However, a noteworthy absence in Asian bond support has been detected since this summer. The US Fed may be going it alone much more than ever. Since the article was scribed over a year ago, strange evidence can be pointed to. The M2 money supply figures strangely zoomed over $400 billion higher this summer. Analysts and pundits alike scrambled to determine the root cause. They lost patience in their hot pursuit after a few hours, only to turn to the next Martha Stewart story. If truth be known, the Federal Reserve and Dept of Treasury, with a 97.33% probability <G>, are engaged in the largest monetization sanitization neutralization effort in modern mankind. They are “making good” a ton of JPMorgan bond derivatives, and an equal weight of Fanny Mae mortgage derivatives. Of course, we hear of Greenspan braggadocio that leveraged derivatives have successfully offloaded and offset risk. This is pure heresy, silly speak, and shallow pep talk in an attempt to soothe frayed nerves and endangered confidence in the monetary and financial system. When it comes to Chairman Greenspan, note his topic and ignore his words. His topic identifies the next crisis area. Be amused by his denial, based in ignorance, incompetence, or outright deception.

-cut-

Commodity prices have enjoyed a break, but not across the board. Copper never retreated in price. Higher prices of certain items like cement resulted in outright critical shortages, which in Florida halted for a time all large construction projects this summer. Steel and cement were in heavy demand for building Summer Olympic venues in Athens. Pricing power remains rather weak, as China continues to send their industrial output to our shores. China has essentially enforced a tight ceiling on the ability of US firms to raise prices for the past year. Service costs do rise, but under the threat of certain functions being dispatched to Asia via outsourcing. Outside health care, restaurants, car repair, and home maintenance and remodeling, almost all service functions are vulnerable to Asian outsourcing. So wages are also bound by an Asian ceiling. Essentially, Asia is exporting price and wage deflation, even as US production costs rise from a declining USDollar. A high-pressure, low-pressure differential continues to build. Asia continues to act as the “boot heel” on US pricing which extends to the labor market.

So much more...

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

[KoKo]

39. Willie addresses two puzzling observations of mine since I've been here on

"Marketeers," and closely watched our economy in the past years. Observation #1 of mine: Here in my area of the country I've seen a building boom of new shopping centers springing up attacting new stores in the last three years, but in the last few months many of the new shops attracted to the sites have gone out of business. Also new Commercial Office Space Real Estate has been in a boom, yet there are "For Lease" signs out in front of almost every new building. I wondered where the money was coming from for investors to indulge in this "Commercial Space" building boom. And, what the hope for filling the space was in a struggling economy.

Observtion #2: Was that everything I remember from history and Econ 101 was that no country could survive without a strong manufacturing base to fall back on in hard times. And yet, I've seen America move away from that basic principle with WTO and NAFTA... Willie addresses both of my observations in this article, plus explaining alot more puzzling observations that all of us here comment on day after day. The article is a fascinating read. But, disturbing in that what we here have figured out, is probably the TRUTH..and that's very worrysome.

ANOTHER SNIP from Willie with highlights:

As for business equipment, the flood of new money has resulted in flush corporate balance sheets, which my analysis did not foresee. Corporations are indeed in better shape with their balance sheets than my past position expected. That healthier cash situation has not resulted in any substantial increase in business investment inside the USA. Our corporate executives continue to see greater blue sky opportunity in Asia. Stock share buybacks and expanded dividend grants are far more prevalent than new investment and hiring. It was reported earlier this year that fully two thirds of all foreign direct investment inside China came from US firms. The problems with the US Economy have been viewed as fixable with low interest rates and ample credit supply. We continue to misdiagnose the structural problems inside our economy. A transferred, absent, abandoned manufacturing base is the real problem, aggravated by high labor costs and attached health care costs. Low rates and easy finance terms fail to address the need to improve conditions whereby making things in the USA with domestic workers is a profitable venture. The new money directed at our financial and economic system has found its destination in various locations such as residential real estate, bonds of all types, commodities, and a mountain of additional household debt. The destination has so far not been in new production bases, wherein legitimate wealth generation would take place. More “Big Box” superstores, expanded retail shopping malls, and additional mortgage agency store fronts, these are a part of the sickness, not solution. The result of Greenspan’s policies is totally upside down. Refinanced mortgages and yield carry trade do not qualify as sustaining legitimate sources of spending and wealth, respectively.

-snip-

Global trade continues to be a managed hemorrhage of capital and jobs, a 16-lane highway in one direction, hardly offset by a 2-lane highway in the other direction. Imports into the US Economy grow at a rapid pace, while exports are growing anemically if at all. The lack of success with the North American Free Trade Agreement was so deep, that we have broadened it to the Central American Free Trade Agreement, icing on a rotten cake. Since January 2003, exports have grown at 21.6% versus import growth at 17.1% despite a substantial decline in the USDollar exchange rates. In this 2004 years alone, export growth outpaces import growth at 11.9% versus 8.0% to date. With an absent US manufacturing base, a structural problem stares at experts, who fail to recognize it. This failure to rectify the trade imbalance via currency shift was a principal forecast of mine two years ago. It was met with ridicule.

[ozymandius]

65. Hi KoKo. I have a response to the first observation.

The same building phenomenon has happened here in Atlanta over the past three years. I asked the same question of a friend who is a real estate agent.

The construction contracts and building permits are dealt and signed usually at least two years before construction begins. So the money raised for these ventures was negotiated under fairer economic weather. Forward thinking is a rare strength among developers. If the property stays empty, the owner can take a tax write-off from the loss. The sticking point here is that insurance rates on an unoccupied building are sky high.

[KoKo]

73. Thanks Ozy...I had also heard what you did from a RE Agent...it it kind of

made sense a year and a half ago...but I wonder if part of it isn't the "Depretiation Kick Bush gave to business equipment (computer and furniture sales) and it expires at the end of this year.

But, Willie's article seemed to say that "the money" that should have gone into business expansion to create jobs instead went into Real Estate.

Now, I know from where I am here in "Research Triangle" of the NC Boom area as you do in the "New South" Boom Atlanta Area that Real Estate interests run the show. After all...how many farmers sold their land to the "Real Estate Developers" and are now maybe close to being on the Forbes 500 list because they got "buy outs" for their tobacco farms or it was a "consortium of family owners who moved away" and they sold and made money because a "developer from the North" (carpetbagger) came and offered Big $$$$'s for their land if they could get their many relatives to sell?????

Whatever, I was so glad to see your post and that you had noticed what I have here in Boomtown, NC...

I think Willie cut to the heart of all of this in that some kinds of huge tax breaks have been given to the Real Estate folks but at what cost to the rest of us?
My real estate friend verified what you say that these "transactions" and "development" have been on the books for at least 2 years...But, Heck...the Chimp has been P-Resident for almost 4 years...so when does the blame for all this Real Estate Hype land on his doorstep??

I don't know...but thanks, Ozy!

[54anickel]

19. U.S. stocks climb on insurance group rally - WHAT?!? No Charges!

Edit from dupe of Market wrap up

http://biz.yahoo.com/cbsm-top/041026/7c6528d11e48daca1af5594b33307101_1.html

NEW YORK (CBS.MW) - American International Group lifted blue chips Tuesday morning as insurance stocks rallied on news no criminal charges would be filed against Marsh & McLennan in connection with a probe of industry practices.

"It certainly improves psychology short-term by lifting a real cause of concern that had been weighing on the market," said Michael Metz, chief investment strategist at Oppenheimer & Co.

snip>

American International Group (NYSE:AIG - News) was the best performer on the Dow, surging 6.4 percent as insurance stocks spiked after New York State Attorney General Eliot Spitzer said it would not file criminal charges against Marsh & McLennan.

Marsh (NYSE:MMC - News) on Tuesday said it will stop receiving contingent commissions from insurers as part of a series of reforms targeting practices uncovered by Spitzer's probe of the insurance industry.

Marsh's CEO Jeffrey Greenberg resigned Monday and was replaced with Michael Cherkasky. See related story.

more...

[54anickel]

33. Insurance mess may ignite bigger problems (Hmm, was that some sort

of under the table deal Spitzer had to make to avoid a crash and burn in the insurance industry, with a domino effect on the markets?

http://moneycentral.msn.com/content/P92950.asp

The insurance scandal is another strong signal that our financial system is vulnerable to serious disruptions. The next 18 months could be dangerous ones.

By Bill Fleckenstein

When future historians look back on this period, with all its attendant dangers and warning lights flashing in neon, they will scratch their heads as to why everyone was so complacent and so supremely confident right before the financial hurricane hit.

Last July, I talked about the potential for a market dislocation in my column "Odds of a crash are higher than you think.” Once again, I want to reiterate that it's a low-probability event. But whatever the probabilities were when I laid them out a few months ago, they can only be higher now.

A watchdog smells a rat

Marsh & McLennan (MMC, news, msgs), the subject of a continuing investigation by New York Attorney General Eliot Spitzer, demonstrates the problem that could happen in many other arenas. As Gretchen Morgenson of The New York Times pointed out last Wednesday in "Investors Are Losing Ground As Insurance Inquiries Expand:"

snip>

. . . and derivatives dominoes
The probability of a dislocation may also have increased due to the location of the ticking time bomb known as derivatives. American International Group (AIG, news, msgs), another target of Eliot Spitzer's investigation, is very active in the derivatives market. If the company -- one of the few AAA credits left in America -- has a problem of any magnitude that impacts their perceived credit quality or credibility, it would in all likelihood wreak havoc in the derivatives market. (As Warren Buffett said last July, "We have trillions of dollars of derivatives, of which we have no knowledge of how they might work in a market meltdown.")

Think about this from the perspective of foreigners. They now look at Fannie Mae (FNM, news, msgs), MarshMac, AIG and Merck (MRK, news, msgs) and observe a black cloud hanging over what have been deemed to be some of the best corporations in America. It's just another psychological negative for the dollar, in my opinion, and a reason for foreigners not to want to own our stocks. (Editor’s note: the euro is up 4% against the dollar in the last month.)

Trouble is so close you can taste it....

more...

[KoKo]

44. I think you're correct "54"...a Deal had to be made, consequences were

too grave. But, how many more deals can be made to cover up the "rot" underneath. I think Jim Willie's article today confirms your observation, too. Our "propped" economic numbers and shenanigans in the back rooms are being covered over to the detriment of our being able to deal with the real problems and work our way back to some financial solvency and economic growth.

I've always trusted Bill Fleckenstein's observations, too. One of the "truth tellers" when we have so few these days.

One wonders how fast they are spinning those plates these days and how many are still up in the air waiting to come down....Ugh.

[54anickel]

22. Is Electoral Uncertainty Adding To The Dollar’s Woes?

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

snip>

To be sure, the conditions for a financial/dollar crisis have been in place for several months (years?), which is why we examine the possibility of a highly litigated electoral outcome bringing to the fore these longstanding, albeit latent, concerns on the part of the markets. One normally does not associate rising political risk premiums with the country long deemed to be the ultimate safe haven in times of global crisis, but it does increasingly appear as if next month’s US Presidential elections will do little to bring closure to the traditional uncertainties that often afflict investors in advance of a tightly contested election.

In an echo of the last election, Florida again will likely remain a center of attention for the lawyers. Corrine Brown, Democratic congresswoman from Duval County in Florida, where 27,000 ballots were discarded in 2000, said there was widespread concern about voter intimidation, voting irregularities and a replay of the outcome four years ago. An AP/Ipsos poll on Friday showed Mr Kerry had pulled three points ahead among likely voters, after a Gallup poll at the beginning of the week said that Mr Bush had an eight point lead. Moves of that magnitude indicate something of the unpredictable nature of the outcome in the country as a whole.

snip>

By the time this election is over, the Florida debacle of 2000 might represent halcyon days to many. One important difference, however, is that the previous election, which resulted in a 36-day ordeal of litigation and vote counting, occurred against a backdrop of reasonable global calm and comparatively benign US financial conditions. The futile collaboration between profligate U.S. consumers, US Ponzi finance institutions, the GSEs and the Fed have brought about two years of an imbalanced recovery in the economy and stock market, but this has occurred only through massive injections of debt. Stock valuations are very high and the market as a whole has been driven by a fringe of speculation. Leveraged speculation has come back. Market participants are short term traders counting on a Greenspan/Bernanke put to keep aloft stocks they fully well understand have no intrinsic investment merit. The economy as a whole bears the legacy of a now debilitating debt condition. And the external backdrop is also far worse: Al Qaeda was on nobody’s radar screen in 2000; Gary Condit, and his alleged transgressions with a murdered intern were.

We know both conventional fiscal and monetary policy have been set on a full court press for the past couple of years. We know policy makers remain acutely aware of the sensitive dependence of the US reacceleration to US financial asset prices and US financial market conditions. We cannot presume they would entertain an uncontrolled dollar decline by declaring it the will of the free market given this orientation. But who will be pulling the levers after next week? What kind of a consensus can be built for radical policy action if the very legitimacy of the incumbent is called into question by repeated legal challenges? Regardless whether one agrees with his agenda, there is little doubt that Mr Bush’s Presidency has proved exceptionally polarizing, within the US (as well as outside), so the effects of long-term litigation against the backdrop of a highly divided electorate and a political system coping with mounting financial fragility, could prove to be the straw that breaks the camel’s back in the eyes of the country’s growing foreign creditors. For the sake of the reduced market turmoil, one can only hope that a reasonably decisive victory by one candidate or the other moves the country away from this scenario. We shall know more by next Wednesday morning (one hopes).

more...

I'm not liking the sound of this. So will the elections be extremely close again? Will the markets begin to tank and some sort of "for the good of the country" mantra be brought out again to stop the litigations? Will the markets and the economy play a big role in a possible re-selection by the usurper?

[UpInArms]

24. 11:23 EST numbers and blather (WHEE!!!)

Dow 9,817.76 +67.77 (+0.70%)
Nasdaq 1,916.19 +2.15 (+0.11%)
S&P 500 1,101.51 +6.71 (+0.61%)
10-Yr Bond 3.968% -0.004

NYSE Volume 545,484,000
Nasdaq Volume 679,453,000

11:00AM: Market holds on to spike higher...oil prices are well off their lows and only down slightly, and the consumer confidence number released at 10:00 ET was lower than expected, so holding the gains is seen by many as good resilience this morning...volume is moderate, and the advance-decline ratios are about as to be expected given the change in the indices...Delta (DAL 4.54 +0.76) is on the actives list after getting additional financing...NYSE Adv/Dec 1721/1196, Nasdaq Adv/Dec 1299/1365

10:30AM: Indices spike higher...no particular news, so the typical buy program explanation might be valid...Dow was near the lowest levels of the year, and may have found some support as a result...S&P 500 Index is trading close to the 200-day exponential moving average of 1100.60, as chartists seem to be having influence this morning...oil is down 34 cents...NYSE Adv/Dec 1386/1409, Nasdaq Adv/Dec 1072/1484

[UpInArms]

28. 12:13 EST numbers and blather (YEEHAW!!!!)

Dow 9,840.18 +90.19 (+0.93%)
Nasdaq 1,918.11 +4.07 (+0.21%)
S&P 500 1,103.92 +9.12 (+0.83%)
10-Yr Bond 3.970% -0.002

NYSE Volume 701,335,000
Nasdaq Volume 859,324,000

12:00PM: A mixed market today with stocks showing resilience given the recent weakness...stocks opened near unchanged and stayed that way until a mid-morning spike that may have been spurred by a program trade and chart considerations...the S&P and Dow have held on to the gains despite oil prices reversing early declines to reach mid-day up 6 cents, and a weak October consumer confidence number...earnings reports this morning were mixed without any dramatic impact...DuPont (DD 41.28 -0.90) and Lockheed Martin (LMT 53.98 +0.48) were notable...

the insurance sector is up as broker Marsh & McLennan (MMC 27.88 +1.46) appointed a new CEO, which may help the company address issues with the New York Attorney General...the 10-year note continues strong, and is +1/32 to yield 3.97%...stock volume is moderate...NYSE Adv/Dec 1688/1360, Nasdaq Adv/Dec 1281/1517

11:25AM: A rebound in insurance stocks is helping boost the financial sector...the BKX bank stock index is also up 0.75...insurance stocks are up on the news of a new CEO at Marsh & McLennan (MMC 27.59 +1.17) that may help ease tensions with the New York Attorney General...oil is now near flat...so far, market is showing good resilience to dips...NYSE Adv/Dec 1657/1347, Nasdaq Adv/Dec 1189/1540

Wowie! Zowie! Look at it climb straight up!

[UpInArms]

26. Corning plant announces layoffs

http://news10now.com/content/all_news/?ArID=30218&SecID=83

A decreased demand for glass used to manufacture computer chips has prompted the layoff of twenty production workers at the Corning plant in Canton.

The plant has offered the workers a voluntary layoff. This will allow senior level employees to take the layoff in place of newer employees. The layoffs are scheduled to last until January. The news serves as yet another blow to an already depressed North Country economy.

"Statistically speaking, the unemployment rate here is higher than in most parts of the state. It's 6.5% which is lower relatively than it's been over the past decade or so. Typically we've been in the 8% range. However, that statistical analysis doesn't do anything for somebody who's just been told that they're going to be out of work," said Patrick Kelly, SLC Industrial Development Agency.

...more...

although 20 jobs is not a large number, this article shows that Ohio is definitely way over the 5.5% unemployment statistic

[bill]

35. wrong Canton

This is the plant in Canton, NY, a small town in northern NY about 20 mi from the seaway. Canton is the home of St. Lawrence Univ. and not much else at this point.

[UpInArms]

36. sorry bill, I thought it was

Canton, Ohio

Thanks for the correction :)

:hi:

[54anickel]

27. Fewer workers needed as tech era expands

http://www.myrtlebeachonline.com/mld/myrtlebeachonline/business/10002600.htm

Automation and the resulting job reductions, some in layoffs and others through attrition, have boosted America's productivity to an unprecedented level in recent years. They have also reshaped the workplace.

This surge may be a central reason for the anemic job growth during this economic recovery, economists say. Businesses can be reluctant to hire when they can get more work done with as many or fewer workers. The U.S. economy had 821,000 fewer jobs in September than it did at the start of the recession in 2001.

Measured by dividing the nation's total output by each hour of work, productivity has grown at an annual average rate of 3.55 percent from 2000 to 2003. That is a full percentage point higher than the average from 1948 to 2003. It is also greater than the average for any decade in the last 50 years.

"It's a fundamental transformation of the economy," said W. Michael Cox, chief economist and senior vice president at the Federal Reserve Bank of Dallas.

snip>

Cox credits the Internet and related technologies with remaking the American economy, just as the railroads did in the 1800s by allowing the free flow of goods.

"The Internet is like the train: It's the world's first experience with free trade of information," he said.

Another Fed head preaching the myth of lost jobs and gains in productivity were due to advances in technology alone. Let's simply ignore the fact that globalization in the search for cheap labor and reduced regulations made an even larger contribution. Technology's part had more to do with enabling globalization than it did with replacing workers and automating their jobs. It's been a double whammy this time around. :eyes:

[54anickel]

29. Cuba bans US dollar transactions

http://news.bbc.co.uk/1/hi/world/americas/3953291.stm

Cuba says it is to ban commercial transactions in dollars from 8 November in response to tighter US sanctions.

Dollars were made legal tender in 1993 following an economic crisis sparked by the collapse of the Soviet Union.

But dollars will no longer be accepted in shops and other businesses, and tourists and Cubans exchanging dollars will have to pay a 10% commission.

snip>

In his message, Mr Castro urged Cubans to tell relatives to send money in other currencies, such as euros, British pounds or Swiss francs.

more...

[TrogL]

30. I was listening to the CBC market watch yesterday

and the analyst spent most of his time simply throwing up.

I was moving so no loonie watch yesterday but apparently it hit 91.80 or some ridiculous number like that and there's rumblings about a dollar loonie.

[54anickel]

31. Government Debt- The Greatest Threat to National Security

http://www.house.gov/paul/tst/tst2004/tst102504.htm

snip>

Federal law limits the amount of debt the U.S. Treasury may carry, and the current amount-- a whopping $7.4 trillion-- has been reached once again by a spendthrift federal government. Total federal spending, which now exceeds $2 trillion annually, once took more than 100 years to double. Today it doubles in less than a decade, and the rate is accelerating. When President Reagan entered office in 1981 facing a federal debt of $1 trillion that had piled up over the decades, he declared that figure “incomprehensible.” At its present rate of spending, the federal government will soon amass $1 trillion of new debt in just one year.

Government debt carries absolutely no stigma for politicians in Washington. The original idea behind the debt limit law was to shine a light on government spending, by forcing lawmakers to vote publicly for debt increases. Over time, however, the increases have become so commonplace that the media scarcely reports them-- and there are no political consequences for those who vote for more red ink. It’s far more risky for politicians to vote against special interest spending

snip>

The federal government issues U.S. Treasury bonds to finance its deficit spending. The largest holders of those Treasury notes-- our largest creditors-- are foreign governments and foreign individuals. Asian central banks and investors in particular, especially China, have been happy to buy U.S. dollars over the past decade. But foreign governments will not prop up our spending habits forever. Already, Asian central banks are favoring Euro-denominated assets over U.S. dollars, reflecting their belief that the American economy is headed for trouble. It’s akin to a credit-card company cutting off a borrower who has exceeded his credit limit one too many times.

Debt destroys U.S. sovereignty, because the American economy now depends on the actions of foreign governments. While we brag about our role as world superpower in international affairs, we are in truth the world’s greatest debtor. Like all debtors, we are not truly free. China and other foreign government creditors could in essence wage economic war against us simply by dumping their huge holdings of U.S. dollars, driving the value of those dollars sharply downward and severely damaging our economy. Desmond Lachman, an economist at the American Enterprise Institute, states that foreign central banks “Now have considerable ability to disrupt U.S. financial markets by simply deciding to refrain from buying further U.S. government paper.” Former Treasury secretary Lawrence Summers warns about “A kind of global balance of financial terror,” noting our dependency on “the discretionary acts of what are inevitably political entities in other countries.”

more...

[54anickel]

32. Check out last night's and today's repos. Is that what's flowing into

the markets again today just to keep them afloat? Yesterday's must have gone out fairly late in the day, I checked one last time before heading out the door in the afternoon.

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

[UpInArms]

37. China lashes out at US decision to put quota on sock imports

http://news.xinhuanet.com/english/2004-10/26/content_2142184.htm

BEIJING, Oct. 26 (Xinhuanet) -- China on Tuesday lashed out a US decision to limit imports of socks made in China, saying China will "retain the right to take further actions" within the World Trade Organization framework, according to a Ministry of Commerce spokesman.

The US Committee for the Implementation of Textile Agreements, an interagency group chaired by the US Department of Commerce, said in a statement issued on Monday that the United States will impose a quota on imports of Chinese socks to limit growth of the country's market share.

Such Chinese goods have "disrupted" the US market, and "there is a threat of further disruption due to imports from China," the statement said.

The quota will be imposed following US government talks with China on the issue. If the talks fail to reach an agreement, the quota will last for one year.

...more...

[nolabels]

41. Sounds like somebody's is really putting their foot down

Do orangutans wear shoes


http://www.monkeytime.org/archive/June2003.html

[54anickel]

38. A Pragmatic Look at the financial effects of the War on Terror (Gold-buggy

http://www.chaos-onomics.com/321_1.htm

snip>

There are, in my experience, and from the perspective of institutional money, two phases to a market, uncommitted and committed. Uncommitted markets are those in which the ideals of opposing forces of supply and demand are evident, i.e. there are big money buyers and sellers. Committed markets are those in which the institutions' interests are more aligned in one direction. By institutional money I mean to refer to the "slower" funds, e.g. public sector pensions, that adopt a more buy and hold strategy, not the "quicker" hedge funds, such as Tudor, Quantum or Moore Capital. When George Soros argues that his trading strategy is to "find the trend whose premise is false and bet against it" I think he means to identify markets which are committed to an invalid or unsustainable view. Then, as a "free thinking" investor with big pockets (as I like to think of the quality hedge funds) your job is to bet when the institutional guys are going to start to blink.

If that description makes it sound as if institutional trading is a high stakes game of chicken, it is, at least when the institutional money is all lined up the wrong way. Remember the Nasdaq run from Q4 1999 through March of 2000 as return comparison fears forced many institutions to both stay in and increase exposure to what was clearly a rich market. Perhaps more appropriate for our purposes, the Asian currency crisis and the ERM currency crisis were both examples of committed markets waiting for someone to blink or, as tends to happen, for someone to force the issue. I prefer the currency crisis comparison as in each case the crisis was formed by institutions whose portfolios were aligned with a hoped for official sector bias. In the case of the Asian crisis, institutional money was betting that the dollar pegs would hold while in the case of the ERM crisis, institutions were betting that the fluctuation bands would hold. How institutional money aligns with official interests I will leave for another day but I think we can safely assume that the interests do align from time to time.

snip>

Consider this; if I would have told a group of institutional money managers back in Q1 2003 that the Iraq War would be going in full force 6 quarters later, financed almost entirely by the US with no end in sight and oil prices would spike and hold above $50, do you think they would have kept their US credit and equity market exposure? More germane to the spirit of the Connery quote, and essentially what I was trying to impart with my self-indulgent exposition on the Middle Ages, the cost of territorial expansion or retention via armed conflict as Bastiat's analogy of the broken window makes clear, is enormous. Investment in destruction is an oxymoron and a sure way to bankrupt the Treasury. As the world runs on an elastic money system, that cost tends to manifest most clearly in the sinking value of the US$, the stock of the United States. The US$ has been sliding and Gold has been rising ever since the summer of 2001. These trends are well established and in my view soon to be accelerating. Please note that Gold right now is just under the 16 year peak of $430.

snip>

I'll close with the timing of the election cycle and a speculation of the probability of a hedge fund (or funds) pushing the issue. One of the analogies I have used to get a sense of the current situation is the past Nixon administration. The graph below compares the Dow Gold ratio over the two administrations.

I find the analogy fitting not only because many of the players are the same, but also because in both cases, large scale investment in destruction was ongoing. The Nixon era polices might have been a bit more overt, wage and price controls rather than the current labor market arbitrage but the effects have been similar. Once the election is past, as happened in 1972, there will be little reason to endure the expense of maintaining the false front. Should Kerry win and manage to pass his domestic policy options of minimum wage hikes and corporate tax changes to curtail outsourcing, the Fed's hand, in my view, will be forced anyway.

more...

[54anickel]

40. How the U.S. played into the terrorist’s plan

Long, interesting article linked to 321gold

http://amconmag.com/2004_10_25/feature.html

George W. Bush’s re-election campaign rests on three claims, distinct but always run together: that the United States is at war against terror, that it is winning the war, and that it can ultimately achieve victory but only under his leadership.

The second and third propositions are hotly debated. Critics of Bush contend that the U.S. is losing the struggle against terror on the most important fronts and that only new leadership can bring victory, but except for a few radicals, no one denies that the struggle against international terrorism in general and groups like al-Qaeda in particular constitutes a real war. The question comes up in the campaign only when Republicans such as Vice President Cheney charge that Democrats view terrorists as mere criminals and do not recognize that the country is at war. The charge, though false—no Democratic leader would commit political suicide by even hinting this—is effective politically.

Some experts on international law and foreign policy object to calling the struggle against terrorism a war, pointing for example to the legal problem of whether under international law a state can declare war on a non-state movement and claim the rights of war, or arguing that terrorism constitutes a tactic and that no one declares war against a tactic. Both arguments indicate the sloppy thinking that pervades the rhetoric of the War on Terror. The first point, moreover, has important practical consequences for such questions as the treatment of detainees at Abu Ghraib, Guantanamo Bay, and elsewhere, and for our relations with allies, other states, and the UN. Yet these kinds of arguments seem too academic to matter. The general public can hardly understand them, much less let them influence their votes.

Other reasons, however—different, more powerful, highly practical, and astonishingly overlooked—argue against conceiving of the struggle as a war and, more important still, waging it as such. The reasons and the logic behind them are somewhat complicated, but the overall conclusion is simple: by conceiving of the struggle against international terrorism as a war, loudly proclaiming it as such, and waging it as one, we have given our enemies the war they wanted and aimed to provoke but could not get unless the United States gave it to them.

more...

[UpInArms]

42. 1:08 EST numbers and blather (still flying high!)

Dow 9,866.94 +116.95 (+1.20%)
Nasdaq 1,921.57 +7.53 (+0.39%)
S&P 500 1,107.28 +12.48 (+1.14%)
10-Yr Bond 3.978% +0.006

NYSE Volume 873,301,000
Nasdaq Volume 1,035,796,000

1:00PM: The market's hold their gains even though oil is now up 12 cents on the day...it is a rare day that the Nasdaq is underperforming on an up day, but the SOX semiconductor index is down 0.1%, and it is the insurance sector leading on the up side...the DRG drug stocks index also reflects a bounce in that sector, as it is up 0.8%...largest gainers in the Dow are American International Group (AIG) and Home Depot (HD 39.55 +0.88) as the Dow hits triple digit gains...NYSE Adv/Dec 1929/1193, Nasdaq Adv/Dec 1516/1394

12:30PM: Market retains its momentum, and some traders are suggesting that a little stability was all that was need to get back to the trading range mentality...the improvement in the insurance sector was the catalyst...after the close today, the two largest firms due to report happen to be in the insurance business: Chubb (CB) and AFLAC (AFL)...NYSE Adv/Dec 1772/1317, Nasdaq Adv/Dec 1296/1567

dollar climbing

Last trade 85.30 Change +0.33 (+0.39%)

Good grief! If having a dreadful Consumer Confidence report can boost the markets and the dollar this much, I can only hope that the readings descend to Zero!

:shakesheadindisgust:

[KoKo]

45. Eyes spinning in my head in disbelief....who do these people write for????

:crazy: The inmates of the asylum writing to each other...

[54anickel]

46. Who says that pigs can't fly! n/t

[54anickel]

43. Foxy Central Bankers & Gold Bullion

http://www.gold-eagle.com/editorials_04/oberholster102504.html

Money has a lot of functions. The two most important traditional functions of money are; money as a means of exchange to settle transactions; and money as a store of value.

Many commentaries have dealt with the problems of fiat money, money not backed by anything but an implied government promise. Money as a single unit has been used throughout history and right up to our current modern economies, concurrently for both purposes. It is a mistake that we are all going to pay dearly for and it is a mistake that we will need to fix some time in the future.

We need fiat money for transaction settlement, no matter how much we may dislike the fiat money system. The sheer volumes of transactions conducted each second in the world have made commodity-backed currencies redundant, forever. It is of no practical use to hunker for a return to a gold standard or any similar standard for money backed by commodities. The time has arrived to realise that we need to devise a system whereby we can separate these two functions of settlement and a store of value.

The mistake that we made was to entrust governments and central banks with both these functions of money. Government and central banks have proved themselves worthy of the task to manage the orderly settlement of transactions. Never in history right up to today have governments been able to resist the temptation not to diminish the value of money through excessive money creation or debasement. Entrusting governments and central banks with the task of protecting money as a store of value is paramount to trusting the fox to watch over the chickens. When the fox watches over your chickens expect lots of losses.

more...

[54anickel]

47. Halliburton Posts Loss on Asbestos Charge

Nothing a few more gov't contracts and higher oil prices can't fix.

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=6614279

HOUSTON (Reuters) - Halliburton Co. (HAL.N: Quote, Profile, Research) , the world's No. 2 oil field services company, on Tuesday posted a quarterly loss as gains in its energy business were outweighed by $230 million in charges to fund its asbestos settlement.

The Houston-based company, formerly headed by Vice President Dick Cheney, said its net loss in the third quarter totaled $44 million, or 9 cents per share, compared with net income of $58 million, or 13 cents per share, in the same year-earlier quarter.

Halliburton shares moved higher in early trade, helped by the stronger-than-expected performance in the oil well production optimization business, which benefited from the record high oil and gas prices.

"This is much better than expected," said Kevin Wood, analyst with Susquehanna Financial Group, citing the brisk drilling activity by oil companies.

more...

[54anickel]

49. Flu prompts delay in Enron barge trial

You don't think.....Nah, that's way out there in tinfoil turf - but funny none the less. :evilgrin:

http://www.kltv.com/Global/story.asp?S=2481943

HOUSTON A flu-like virus has again prompted a delay in the fraud and conspiracy trial of four former Merrill Lynch officials and two former Enron executives.

Closing arguments scheduled for today in a Houston federal court have been pushed back to tomorrow.

The trial was interrupted for two days last week when the bug hit U-S District Judge Ewing Werlein. Today, he delayed closing arguments to accommodate a bug-stricken defense attorney for one of the four Merrill defendants.

[54anickel]

50. SEC: Hedge Fund Advisers Must Register (Uh-oh)

http://olympics.reuters.com/newsArticle.jhtml?type=businessNews&storyID=6616651

WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission voted 3-2 on Tuesday to adopt a rule that for the first time will require hedge fund advisers to register with the agency and submit to SEC examinations.

Coming amid scandals in the mutual fund industry in which hedge funds were deeply involved, the registration rule was opposed by much of the $1-trillion hedge fund industry.

But it won the votes of SEC Chairman William Donaldson and SEC Commissioners Harvey Goldschmid and Roel Campos. Commissioners Paul Atkins and Cynthia Glassman opposed it.

snip>

The rule will take effect in February 2006.

Well that leaves plenty of time to continue this ponzi scheme. :eyes:

[KoKo]

51. Nice of them to leave some "wiggle time" to get their act together...still

if it serves as a warning, let's hope it works. Might deter some of the
more sinister criminal element from coming in to share the spoils already on the table. Gives them time to clean their plates, wash a few dishes and sweep up the crumbs.

[54anickel]

52. 2:30 update - the blue light special shopping continues

Dow 9,846.30 +96.31 (+0.99%)
Nasdaq 1,916.69 +2.65 (+0.14%)
S&P 500 1,105.92 +11.12 (+1.02%)
10-yr Bond 3.987% +0.015
30-yr Bond 4.763% +0.009
NYSE Volume 1,116,358,000
Nasdaq Volume 1,293,419,000

2:00PM: Insurance and retail remain the market leaders, while only computer networking as a sector is down more than 1%...the SOX semiconductor is still down 0.6% and the lack of carryover into the tech sector has many assuming that today's action represents more of a bounce in oversold sectors than the start of a sustainable rally...there is a full slate of earnings still to come this week, and the calendar remains heavy next week...NYSE Adv/Dec 2067/1131, Nasdaq Adv/Dec 1489/1492
1:35PM: Indices come off their highs but little sign of selling pressure...volume has picked up and could approach 1.5 billion shares on the NYSE...the advance-decline line is fairly positive, particularly on the NYSE...the SEC has voted to hedge fund advisors to register and submit to examinations...NYSE Adv/Dec 2081/1103, Nasdaq Adv/Dec 1538/1413

1:00PM: The market's hold their gains even though oil is now up 12 cents on the day...it is a rare day that the Nasdaq is underperforming on an up day, but the SOX semiconductor index is down 0.1%, and it is the insurance sector leading on the up side...the DRG drug stocks index also reflects a bounce in that sector, as it is up 0.8%...largest gainers in the Dow are American International Group (AIG) and Home Depot (HD 39.55 +0.88) as the Dow hits triple digit gains...NYSE Adv/Dec 1929/1193, Nasdaq Adv/Dec 1516/1394

Advances & Declines
NYSE Nasdaq
Advances 2108 (62%) 1478 (46%)
Declines 1093 (32%) 1527 (48%)
Unchanged 176 (5%) 155 (4%)

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

Up Vol* 787 (74%) 608 (48%)
Down Vol* 252 (23%) 621 (49%)
Unch. Vol* 16 (1%) 19 (1%)

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

New Hi's 99 78
New Lo's 32 67

[UpInArms]

55. 3:01 EST numbers and blather (still flying)

Dow 9,862.89 +112.90 (+1.16%)
Nasdaq 1,920.43 +6.39 (+0.33%)
S&P 500 1,107.76 +12.96 (+1.18%)
10-Yr Bond 3.989% +0.017

NYSE Volume 1,223,227,000
Nasdaq Volume 1,398,679,000

2:55PM: Stock market continues to trade near its highs of the day as buying remains widespread across the indices... Brokerage, biotech, homebuilding, drug, oil service, utility, cyclical, and airline continue to command gains of 1% or more and keep the market's rally intact... There continues to be slight selling in technology, but computer hardware, semiconductor, disk drive, and networking are only down slightly... Weakness there stems from profit-taking activity following those groups' strong performances over the past week... Gold is similarly lower today after nearing a 15-year high yesterday...NYSE Adv/Dec 2091/1129, Nasdaq Adv/Dec 1489/1517

2:30PM: Oil is now up 65 cents, and garnering a lot of headlines, but the stock market is managing to ignore it for now...the first read on the third quarter GDP is due on Friday, and is also starting to get a fair amount of attention...most economists expect a growth rate near 4% to 4 1/2%, but there is talk of a 5% plus number as well...a pickup in auto sales during the quarter (despite high gas prices) and an improved trade situation, along with continued strong business investment, are factors contributing to a likely strong number...NYSE Adv/Dec 2089/1115, Nasdaq Adv/Dec 1499/1494

These buyers must be on crack.

[54anickel]

53. Gold futures close with a more than $2 loss

http://www.iii.co.uk/uknews/?articleid=5103820&action=article

SAN FRANCISCO (AFX) -- December gold closed at $427.60 an ounce in New York, down $2.30 for the session. Prices had gained more than $12 an ounce in four of the last five sessions. December silver also closed down 4 cents at $7.34 an ounce. This story was supplied by CBSMarketWatch. For further information see www.cbsmarketwatch.com.



Barrick Gold Corp. reports Q3 profit of $32M US, down from $35M US year ago

http://www.stockhouse.ca/news/news.asp?tick=ABX&newsid=2500652

Barrick Gold Corp.'s quarterly profit dropped by an expected nine per cent due to lower production and sales during what president and chief executive Greg Wilkins characterized as a "trough year" during which the company focused on ramping up fu
ture projects.

"Even at my age I am kind of wishing my way into 2005 because we do have some very exciting things coming along through the projects," Wilkins said in a conference call Tuesday morning.

"But the results for the quarter were steady, they were pretty much as expected, and we're staying on track to meet our plan for the year both on a cost side and a production side."

Quarterly costs were up due to increased prices for commodities such as steel, which Barrick uses for mining, ammonium nitrate, which is used for explosives, concrete and crude oil. But the company said its forward contracts for those supplies should protect it from price shocks in the future.

"We've actually hedged about 50 per cent of our global diesel fuel requirements for 2005 and 2006 at attractive prices and we continue to look at forms of hedging for propane and other of our energy-related expenses," Wilkins said.

more...

[UpInArms]

57. Consumer Confidence Slips on Job Worries

http://www.forbes.com/work/feeds/ap/2004/10/26/ap1611320.html

Worries about job prospects sent consumer confidence to a seven-month low in October and its third consecutive monthly decline. The steeper-than-expected drop raised questions about whether consumers will be in the mood to spend during the critical holiday shopping season.

The Consumer Confidence Index dropped 3.9 points to 92.8, down from a revised 96.7 in September, according to a report Tuesday from The Conference Board, a private research group. Analysts had expected a reading of 94.

The October figure is the lowest since March, when the reading was 88.5. The index had been rising since April, before falling 3 points to 98.7 in August and another 2 points in September.

"Subdued expectations, as opposed to eroding present-day conditions, were the major cause behind October's decline in consumer confidence," said Lynn Franco, director of The Conference Board's Consumer Research Center. "And, while consumers' assessment of the labor market this month showed a moderate improvement, the gain was not sufficient to ease concerns about job growth in the months ahead."

Economists closely track consumer confidence because consumer spending accounts for two-thirds of all U.S. economic activity.

...more...

[UpInArms]

58. Crude Prices Rise Above $55 a Barrel

http://www.forbes.com/business/feeds/ap/2004/10/26/ap1611299.html

Oil futures surpassed $55 a barrel Tuesday as traders focused on the government's upcoming petroleum supply report, which is expected to show only a modest build in heating oil inventories.

Crude for December delivery was 64 cents higher at $55.18 a barrel in late afternoon trade on the New York Mercantile Exchange, where November heating oil was up 0.47 cent at $1.57 per gallon.

Traders were cautious ahead of Wednesday's scheduled release of U.S. petroleum supply crude data, which has shown five weeks of falling inventories of distillate fuel, which includes heating oil. Analysts said Tuesday's late-day oil-price surge was also the result of a rally in natural gas futures.

Natural gas for November delivery surged 44 cents to $8.33 per 1,000 cubic feet. Natural gas futures are now about 84 percent higher than a year ago, even though analysts agree that supplies of this mostly-domestic fuel are ample.

...more...

[UpInArms]

59. five minutes left in trading and up 124 points

Dow 9,874.25 +124.26 (+1.27%)
Nasdaq 1,923.58 +9.54 (+0.50%)
S&P 500 1,109.04 +14.24 (+1.30%)
10-Yr Bond 3.989% +0.017

NYSE Volume 1,514,034,000
Nasdaq Volume 1,691,620,000

3:30PM: Indices are all pushing near their highs for the day as the steady uptrend continues...volume is running slightly above average...after the close, Atmel, Chubb, AFLAC, UTStarcom, Veritas Software, and Career Education are among the companies due to report...NYSE Adv/Dec 2252/1005, Nasdaq Adv/Dec 1648/1398

Looks like a sucker's rally to me :crazy:

[T Roosevelt]

60. How is it the DOW finishes up almost 140 pts?

When two of the top stories are:

Consumer Confidence at 7-Month Low in Oct

and

Oil Ends Above $55 on Winter Supply Fears

[UpInArms]

61. investor optimism?

you tell me and we'll both know :eyes:

[Pegleg Thd]

62. Market is being

inflated by PNAC or RNC. There is no rational reason for such a jump with the country in the mess it is in.:nuke: :nuke: :nuke: :nuke: :nuke:

[NewYorkerfromMass]

63. It's called profit taking.

there's been a dip and there are some "cheap" stocks.

[UpInArms]

64. closing numbers and blather

Dow 9,888.48 +138.49 (+1.42%)
Nasdaq 1,928.79 +14.75 (+0.77%)
S&P 500 1,111.09 +16.29 (+1.49%)
10-Yr Bond 3.989% +0.017

NYSE Volume 1,687,562,000
Nasdaq Volume 1,813,668,000

Close: The stock market received what could have been interpreted as simply a minor boost - the naming of a new CEO for insurance broker Marsh & McLennan (MMC )...that was seen as likely to reduce the pressure on the industry by New York Attorney General Spitzer...that in turn lead to a rebound in insurance and health care stocks...which was was enough to bring dormant buyers out of the woodwork and led to a broad, steady rally today...this occurred even though oil prices rebounded 68 cents today after falling 63 cents yesterday, and the October consumer confidence report was weaker than expected...

the earnings reports this morning from DuPont (DD 41.40 -0.78), Lockheed Martin (LMT 54.38 +0.88), Omincom (OMC 79.44 +6.72), and Flextronics (FLEX 11.67 -0.87), among others, were moderately positive, but not seen as particularly good or particularly worrisome...the gains were broad based, but the action was widely seen as a bounce from oversold conditions, as some of the excessive pessimism was wrung from the market...volume was above average...the S&P closed less than 1 point below the starting point for the year...NYSE Adv/Dec 2289/985, Nasdaq Adv/Dec 1801/1274

[ozymandius]

66. But does this mean that Spitzer will cool the investigation?

Somehow I doubt it. But I wonder what a new name and face mean for the company-at-large and the investigation.

[UpInArms]

68. I don't think that Spitzer will stop

investigating the insurance industry and I believe the corrupt practices go through every part and particle of it.

Perhaps investors (?) saw the replacement of one Greenberg as a "good sacrifice" and hope that it will pacify the need for real blood.

:shrug:

[54anickel]

67. Baa-baa black sheep, have you any wool?

I smell a fleecing coming on later in the week, possibly held off until after the election - but I doubt they can hang on that long.

[UpInArms]

69. ...

[54anickel]

71. Feel that way somedays, do ya UIA?

[54anickel]

72. Not a bad day for the buck either -

Last trade 85.21 Change +0.22 (+0.26%)

Settle 85.21 Settle Time 16:33

Open 84.81 Previous Close 84.97

High 85.34 Low 84.73