STOCK MARKET WATCH, Thursday 30 June

[ozymandius]

Thursday June 30, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 205 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 193 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 256 DAYS
DAYS SINCE ENRON COLLAPSE = 1313
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54


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




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90

AT THE CLOSING BELL ON June 29, 2005

Dow... 10,374.48 -31.15 (-0.30%)
Nasdaq... 2,068.89 -1.00 (-0.05%)
S&P 500... 1,199.85 -1.72 (-0.14%)
10-Yr Bond... 3.99% +0.01 (+0.35%)
Gold future... 438.60 +0.90 (+0.21%)

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

[ozymandius]

1. WrapUp by Mike Hartman

Money, Money, Money

Overall market volatility has been quite low so far through today’s trading. Stocks, bonds and the dollar began the day with modest gains driven by favorable revisions to the first quarter GDP Report. On May 26th the Commerce Department estimated first quarter GDP at 3.5% growth, but today gave their final revision showing the growth rate at 3.8%. Stocks benefited from the revision to higher growth, and in like manner U.S. Treasury notes and bonds caught an early bid when the GDP price index was adjusted from an inflation rate of 3.2% down to 2.9%. The U.S. dollar has been mixed versus the major currencies with the Canadian dollar gaining ground, the yen and pound lower, and the Swiss franc and euro basically flat. After a few flurries of activity in the morning, the markets now look like they are in a coma as we wait for the rate announcement and accompanying statement from the Federal Reserve tomorrow.

It is typical to see low volatility as traders attempt to square their positions in front of the Fed’s announcement tomorrow, but I have said before (like a broken record) that we usually see very low volatility on days the U.S. Treasury is conducting debt auctions. Today the Treasury plans to sell $20 billion in two-year notes…that should say it all. In pre-auction trading the notes yielded 3.62%, which is not too bad for two-year paper when we consider the yield on ten-year Treasury debt is only 3.97%. The auction should have good demand today, but please note how the yield curve continues to flatten. The yield spread between two-year and ten-year is only 35 basis points, and I believe the spread will tighten another 10 to 20 basis points, but I don’t believe the Fed wants to invert the yield curve. The flattening yield curve clearly portends an economic slowdown, and according to Bill Gross we now have a higher probability of seeing a recession. He sees roughly a 10% chance the U.S. goes into recession this year and a 20% to 40% chance we go into recession next year.

-cut-

Quarter Ending for Stocks Tomorrow

The good news on revisions to GDP and higher than expected oil inventories helped stock prices today, but the Dow Industrials are showing signs of fading as the day progresses. Candidly, I’ve been stalking the market in search of the right entry point to short the broad stock indices. I believe stocks are being held up for window dressing to close the second quarter when tomorrow’s trading is done. I also believe the stock bulls are waiting to see if the Fed softens its stance on “measured” rate increases. If the Fed backs off tomorrow with regard to future increases, stocks could get a nice bounce. I’ll be waiting to see how the dust settles before entering my short position. The other item I will watch closely is mutual fund inflows at the first of the month, as money is typically deposited into IRA’s on regularly scheduled monthly contributions.

-cut-

For now, all we can do is wait to hear what the Fed has to say tomorrow and how the markets react to every word in the prepared text. The markets have been “largely in measured conundrum with irrational exuberance remaining equally balanced” as the Fed would say. Let’s see if tomorrow’s text introduces any new vocabulary to the American public that is sure to be regurgitated over the ensuing weeks.

more...

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

[54anickel]

2. Morning Ozy & all. Great toon again today.

I've got an hour or so here before I have to head out the door. It's been an interesting end to the first half of the year so far. How much longer can the irrational exuberance and conundrum go on?

[ozymandius]

30. Good morning 54anickel and everyone.

:donut:
I just arrived at work with just enough time to check in before rushing to do some tasks down the hall.

I'll be around a bit more today after awhile.

Ozy :hi:

[AnneD]

73. Morning Marketeers

:donut: I love Ben Sargent toons-he's great. Well, good news. The people that offered me a position and had to withdraw----hired me part time anyway. Seems my future boss was determined not to let me out the door.:party: Can't wait to pay down my bills (I am such a nerd).
It has been interesting times on WS. I did really well this time on my 403B (my emerging markets did well-among others). I am looking to put my conservative portion in a higher yield (I don't hold bonds yet).
I feel better now that I am no longer in the market other than my current accounts. I am working on that piece of mind. Happy hunting and watch out for the bears.

[54anickel]

3. China: Why Revalue when you can go on a Shopping Spree Instead?

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

Give the Chinese credit: at least they’re not using their substantial foreign exchange holdings to buy trophy properties in New York or golf courses in California, as the Japanese did during the 1980s. One might query the price they are paying, but at least there is a certain strategic logic for Beijing to acquire assets which will help to secure the country’s future voracious needs for natural resources, particularly energy.

snip>

True, CNOOC is ostensibly an entity independent from the government, but its attempted takeover of Unocal is largely being funded from government loans, and it is clear that a deal of this magnitude would not be occurring in the absence of approval from Beijing.

A deal is now therefore on the table and in dramatic fashion, China has yet again given indications that its priorities in relation to an anticipated currency revaluation timetable do not coincide with those of Washington. Unocal and China National Offshore Oil Corporation’s advisers have started to gather in the US in order to begin negotiations on the state-owned Chinese company’s landmark $20bn takeover offer for the California-based energy group, and there is nary a thought being given to currency revaluation at this juncture.

Why would there be, when the immediate effect of such a revaluation would be to devalue the very currency in which the transaction is supposed to take place, whilst simultaneously introducing a degree of potential domestic financial instability? The status quo, by contrast, offers the prospect of using those same dollars to gobble up companies which satisfy a bunch of China’s strategic needs. CNOOC is by no means the first deal of this kind, as was noted last year: “Sinopec Corp., the giant Chinese energy company, is eyeing a major investment in Alberta's oil sands,” Canada’s Globe and Mail reported last summer, “as it pushes to secure supplies for its booming home market. That push comes even as the United States increasingly looks to the oil sands as a secure source of supply for its own uses, with terrorism and other geopolitical upheaval threatening conventional oil production overseas.”

snip>

One thing is certain: China’s acquisition strategy is an economic counterpoint to America’s increasingly militaristic posture in the Middle and Far East. In both cases, the ultimate aim is to achieve energy security. As present and future superpowers, both Beijing and Washington are reluctant to accept import dependence for so vital a commodity as oil. Both are using their comparative assets: In Washington’s case, this means bullets, in the case of Beijing, dollars.

more...

[54anickel]

4. Crippling 'Wealth'

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=44331

Let us start with a quote from Friedrich von Hayek: "The means of perception employed in statistics are not the same as those employed in economic theory." American economists think far too much in statistical terms, regardless of underlying economic processes. While the statistics do, indeed, show general enrichment, in reality, there is none at all. The homeowner has zero gain in his comfort of living or income.

This perception of wealth has its true basis in nothing but the famous "greater fool theory"; that is, in the expectation that there will be a greater fool to buy the acquired house later at a higher price. Deluded by this wealth chimera, private households have run down their savings and piled up astronomic debts to be repaid with future earned income.

Where, then, are the economic benefits? The one obvious visible benefit is in the push to GDP growth from higher consumer spending, which also increases current incomes. Yes, but much of that spending on cars, furniture and houses is borrowed from the future. That is, the borrowing pulls future spending into the present, but, of course, at the expense of such spending in the future.

If you think it over, you realize that in reality, such a borrowing/spending bubble adds nothing to economic growth. It only distorts the time pattern of spending in relation to its long-term trend, as in the case of the consumer determined by the underlying rate of income growth.

more...

[UpInArms]

5. Today's Reports:

http://biz.yahoo.com/c/e.html

Jun 30	8:30 AM		Initial Claims		06/25	-	330K	325K	314K	-	
Jun 30	8:30 AM		Personal Income		May	-	0.4%	0.3%	0.7%	-	
Jun 30	8:30 AM		Personal Spending	May	-	0.1%	0.1%	0.6%	-	
Jun 30	10:00 AM	Chicago PMI		Jun	-	56.0	54.0	54.1	-	
Jun 30	10:00 AM	Help-Wanted Index	May	-	40	40	39	-	
Jun 30	2:15 PM	FOMC policy announcement	-	-	-	-	-	-

[UpInArms]

7. Reports coming in

8:30am 06/30/05 U.S. CONTINUING JOBLESS CLAIMS RISE 4,000 TO 2.6 MLN

8:30am 06/30/05 U.S. 4-WEEK AVG. JOBLESS CLAIMS FALL 10,250 TO 323,500

8:30am 06/30/05 U.S. WEEKLY JOBLESS CLAIMS LOWER THAN EXPECTED

8:30am 06/30/05 U.S. WEEKLY JOBLESS CLAIMS FALL 6,000 TO 310,000

8:30am 06/30/05 U.S. MAY REAL DISPOSABLE INCOMES RISE 0.1%

8:30am 06/30/05 U.S. MAY PERSONAL SAVINGS RATE RISES TO 0.6%

8:30am 06/30/05 U.S. APRIL SPENDING UNREVISED AT 0.6%

8:30am 06/30/05 U.S. APRIL INCOMES REVISED TO 0.6% VS. 0.7%

8:30am 06/30/05 U.S. MAY REAL SPENDING FLAT

8:30am 06/30/05 U.S. CORE PCE PRICE INDEX UP 1.6% Y-O-Y

8:30am 06/30/05 U.S. MAY CORE PCE PRICE INDEX UP 0.2%

8:30am 06/30/05 U.S. MAY CONSUMER SPENDING FLAT VS. 0.1% EXPECTED

8:30am 06/30/05 U.S. MAY PERSONAL INCOMES UP 0.2% VS. 0.4% EXPECTED

[UpInArms]

8. U.S. incomes, spending slow in May

http://www.marketwatch.com/news/newsfinder/pulseone.asp?guid={183FE67C-6999-4318-A9EE-A2E82FEF8365}&siteid=mktw

WASHINGTON (MarketWatch) - U.S. consumer spending was flat in May as personal income growth also slowed, the Commerce Department said Thursday. Nominal incomes increased 0.2% in May as wages increased just 0.1%, the slowest gain since June 2004. In April, incomes rose a downwardly revised 0.6%, compared with a 0.7% increase originally recorded. Nominal spending was unchanged in May, the weakest spending since January. Economists were expecting a stronger report, with incomes expected to grow 0.4% and spending to increase 0.1%. Inflation remained under control. The personal consumption expenditure price index was unchanged, with the core PCE index, which excludes food and energy, up 0.2%. The core PCE index has risen 1.6% year-on-year, up from 1.5% in April. It's near the middle of the Federal Reserve's comfort zone of 1% to 2%.

[UpInArms]

21. more info: U.S. incomes, spending slow in May

http://www.marketwatch.com/news/story.asp?guid=%7B51ECA68E%2D7DC5%2D4B74%2D963B%2D2FA2E0573E15%7D&siteid=mktw

excerpt:

After taxes and inflation are subtracted, real disposable incomes increased 0.1% in May, marking the third straight month of tepid income growth. Real disposable incomes are up by 3.2% year on year.

Nominal income was weaker in May from nearly every source. Proprietors' income, which had been the fastest-growing source, increased 0.4% in May after 0.7% in April. Income from assets increased 0.5%, the same as in April. Rental income fell 3.6%, while the growth of income from government transfers was cut in half to 0.5%.

Personal taxes increased 0.6% after a 2% gain in April.

Spending on services increased 0.6%, but spending on durable goods plunged 1.8% and spending on nondurable goods fell 0.4%.

...more...

[UpInArms]

9. U.S. weekly jobless claims fall 6,000 to 310,000

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38533.3542527894-837526498&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

(I guess last week's claims were adjusted to 316,000 from 314,000)

WASHINGTON (MarketWatch) -- First-time filings for state unemployment benefits fell by 6,000 to a seasonally adjusted annual rate of 310,000 the week ending June 25, the Labor Department reported Thursday. The number was lower than the 325,000 expected by economists surveyed by MarketWatch and the lowest since April 16. The four-week moving average decreased by 10,250 to 323,500, while continuing jobless claims rose 4,000 to 2.6 million.

[UpInArms]

43. U.S. Chicago June PMI DOWN to 53.6

10:01am 06/30/05 U.S. CHICAGO JUNE PMI 53.6 VS. 55 EXPECTED

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38533.4189905903-837538803&siteID=mktw&scid=0&doctype=806&

CHICAGO (MarketWatch) -- A measure of business in and around Chicago showed a slower rate of expansion in June. The Chicago Purchasing Managers Index was at 53.6% this month compared to 54.1% last month. Wall Street was expecting a reading at 55%. Readings over 50% indicate expansion. The index has been above 50% for 26 months.

[UpInArms]

46. Help-wanted ads posted in US newspapers slip in May - to 37

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-06-30T140019Z_01_NYG000001_RTRIDST_0_ECONOMY-HELPWANTED-URGENT.XML

NEW YORK, June 30 (Reuters) - The number of help-wanted ads
in U.S. newspapers slipped in May, a private research group
said on Thursday.

The Conference Board said its gauge measuring help-wanted
ad volume in the United States fell to 37 compared with 39 in
April, below expectations. It measured 39 in May last year.

"Hiring intentions have turned cautious as business
executives face the prospect of slower overall economic
activity in the second half of 2005," Ken Goldstein, Conference
Board economist said in a statement.

Help-wanted ads have been on the decline for the last three
months in the all nine U.S. regions, the Conference Board
release said. The steepest decline of 15.4 percent was recorded
in the Mountain region.

...more...

[54anickel]

58. 37 on a scale of??? This isn't another one of those stats where anything

above 50 is considered "good", is it? I mean, how does a "score" of 37 stack up? My gut tells me it's a pretty sh*tty number, but then again, I'm one of those "doom & gloomers".

"Turned Cautious" - are they polishing another turd here?

[Maeve]

61. On the other hand...trying to be fair

How important are newspaper ads in today's market? I suspect this is no longer a really meaningful stat(assuming it once was); just a decreasing piece of the puzzle left scattered on the floor.

[54anickel]

74. True, and good point. I was thinking about my own job search and how

I rarely peruse the help wanted ads in the paper. Heh, but then again my best prospect came from one of the times I did look at the ads. Seems when they post positions to various job boards or have their own online application system they are buried in applicants, while an ad in the paper now receives a rather subdued response. Guess we've come full circle in that respect. :shrug:

[AnneD]

85. I guess nurses are lucky...

we have alot of trade journals (free)that posts positions. I got responses from monster.com but took a job from a word of mouth referral.

[WhiteTara]

124. I think they are still very relevant

many people in small towns use their papers a lot. Between the paper and the local unemployement office, the papers have more real info. Not all people are computer savvy enough to navigate the want ads on the internet.

[UpInArms]

63. info on the Help Wanted Index

http://www.investopedia.com/university/conferenceboard/conferenceboard5.asp

excerpt:

The HWI was re-based to equal 100 in 1987, and is released to the public in a monthly press release. The Conference Board releases a national number for the HWI, along with regional numbers representing nine segments of the country, and a percentage number representing the proportion of the labor market with rising want-ad volume. The current HWI report can be found on the Conference Board's website.


The Chart

The top pane of the chart below exhibits the values of the Help-Wanted Index from Jan 1987 to Jan 2005. The lower pane charts the unemployment rate for the same time period.



This comparison shows how changes in the HWI are often not yet reflected in the unemployment rate. When the HWI shows movements that the unemployment rate doesn't, traders should be suspicious that a possible turn in the unemployment rate is imminent, and position their trades accordingly.


For example, there are two sharp declines on the HWI chart, which began in early 1989 and early 2000 respectively. As you can see, both sharp declines in the HWI were accompanied by sharp increases in the unemployment rate. In fact the HWI declines came one or two months ahead. This slight lead, which is evident only sometimes, can be a great advantage to traders who pay close enough attention. Traders should view any significant turns in the HWI with caution, thereby protecting profitable positions from declines caused by a later increase in the unemployment rate.

<snip>

(and for Maeve)

Finally, reductions in regions' newspapers over the years have lead to a consolidation of ads in the representative publications of the HWI. Abraham suspected that this anomaly resulted in a 1% annual drift upward between 1960 and 1985. But since 1985, the mass migration to the internet has likely resulted in downward pressure on the HWI, as employers look to fill positions via online headhunters and listings sites instead of print media.

...more...

[Maeve]

64. Thank you!

The chart is very interesting and I appreciate the addressing of my suspicions. :yourock:

[UpInArms]

66. ...

:blush:

[54anickel]

75. Thanks UIA!!!...n/t

[WhiteTara]

125. headhunters for MacDonalds?

internet ads for MacDonalds? No these are notices on the window and in the local paper.

[AnneD]

76. LOL LOL LOL

:spray: :rofl: So who gets to mount that baby. What are the characteristics of quality...colour, amount, firmness, shape, and stench. I have shellac-ed cow pies to incorporate as gifts. They were always well recieved...never use chicken poo...don't ask me how I know. I guess some constipated stool would make for some interesting beads.

[ozymandius]

93. Here. You might need this.

[UpInArms]

95. and here is something to polish with that great product

[UpInArms]

71. filling in the blanks:

http://biz.yahoo.com/c/e.html

Jun 30	8:30 AM		Initial Claims		06/25	310K	330K	325K	316K	314K	
Jun 30	8:30 AM		Personal Income		May	0.2%	0.4%	0.3%	0.6%	0.7%	
Jun 30	8:30 AM		Personal Spending	May	0.0%	0.1%	0.1%	0.6%	-	
Jun 30	10:00 AM	Chicago PMI		Jun	53.6	56.0	54.0	54.1	-	
Jun 30	10:00 AM	Help-Wanted Index	May	37	40	40	39	-

[54anickel]

6. Alan Greenspan, wizard or villain?

Guess Al needed a little pick-me-up. Maybe it's meant to coincide with the speech from Shrub's World.

http://www.msnbc.msn.com/id/8405056/

snip>

Still, Greenspan's most vehement critics go a lot further than this. They're convinced he has made a fundamental error as a monetary economist. Call it the hairshirt economists vs. the cheerleaders for growth-is-good. The hairshirts believe that for the health of the economy to be restored, the inevitable bust that follows a boom must be at least as great as the boom. Growth proponents — and there's none greater than Greenspan — believe that it's better to limit the fallout of a bust and get the economy growing again as quickly as possible.

Worst-case scenario
To the hairshirts' way of thinking, the great mistake Greenspan made was not allowing for a vicious economic and financial downturn to purge the speculative excesses built up during the heady '90s. Instead, he convinced his colleagues to drive rates to a 45-year low to limit the damage from the recession. The Fed then nurtured the recovery by keeping money policy loose (until recently, that is).

The result: today's "low saving rates, the housing bubble, high debt loads, and a runaway current account deficit," writes Stephen Roach, chief economist at Morgan Stanley, in his essay "Original Sin." The critics say Greenspan has transformed the economy into a giant bubble, concocting one even greater than the one that already burst. The longer he delays the day of reckoning, the worse the fallout will be when the bubble pops.

That's a severe indictment — but not necessarily a valid one. A problem with the anti-Greenspan mindset is that hairshirt economics was largely discredited during the Great Depression. The most infamous proponent of this point of view was Andrew Mellon, President Herbert Hoover's Treasury Secretary. He called for letting the Depression run its course without government interference: "Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate," he remarked. Doing so would "purge the rottenness out of the system."

snip>

Mainstream economists of all schools, from Keynesianism to monetarism, turned away from hairshirt economics after the Great Depression. They realized that the government could play a positive role in counteracting contractionary forces in the economy. Since then, Washington has been comfortable using the levers of fiscal and monetary policy to limit the economy's downward trajectory during recessions.

But Greenspan goes further....

[54anickel]

18. Backstopping the Economy Too Well?

Some Experts Worry Greenspan's Success Bequeaths Risky Overconfidence

http://www.washingtonpost.com/wp-dyn/content/article/2005/06/29/AR2005062902841.html

In financial markets, they call it "the Greenspan put" -- a belief that if stock or bond prices fall too much, the Federal Reserve will help prop them up with quick interest rate cuts to pump more cash into the system.

For many home buyers, it's the sense that house prices will keep going higher in a U.S. economy blessed with healthy growth, low interest rates and tame inflation -- thanks in part to Fed policies under Chairman Alan Greenspan.

For many lenders, it's the assumption that borrowers in the stable, vibrant Greenspan Economy will have no trouble repaying increasingly risky home mortgage and home-equity loans.

But according to some Fed observers, this confidence is a worrisome legacy after Greenspan's nearly 18 years helping to steer the economy through a variety of storms. As Greenspan prepares to step down early next year, they say, he leaves behind a widespread perception that people can take bigger financial risks because the chairman can and will save them if their bets go sour.

Greenspan does not lay claim to such powers. He and other Fed officials have expressed concern about increasingly risky financial behavior, stepping up their warnings about exotic investment strategies, real estate speculation and loose lending practices.

The chairman even felt compelled to state recently that he cannot foresee the future and prevent all bad things from happening. :eyes: Sure, NOW he tells us. :evilgrin:

more...

[TrogL]

118. Greenspan needs to get his nose away from the stock ticker

Every time he drops interest rates, Joe Sixpack raises the limit on his plastic and buys either yet another Chinese toy or food to put on the table (in lieu of actually having a job to pay cash). The problem is that these are consumables (yes, I consider DVD players consumables - I've got through several of them over the last few years) with a different affect on the market than stocks.

[54anickel]

84. One year on, yield puzzle obscures Fed tightening

http://www.reuters.com/newsArticle.jhtml?jsessionid=5L30JXZ5GZ2TGCRBAEZSFEY?type=reutersEdge&storyID=8927781

snip>

The persistence of cheap long-term credit has stoked consumer spending and pumped up some regional housing markets to perilous levels, boosting construction and related jobs.

Some see the prime suspect as the Fed itself, which may be paying a price for using aggressive monetary policy to keep the economy afloat over the past 5 years.

"We have the Federal Reserve itself to thank for this grand continuum and the cumulative toll it is taking on the U.S. economy," Stephen Roach, Chief Economist at Morgan Stanley, told clients this week.

"Sadly, as America lurches from bubble to bubble, the end game is looking all the more treacherous."

Monetarist economists -- including Frank Shostak at Foresight Research Solutions -- echo that theme.

They say the Fed has kept plunging more and more money into the banking system despite raising its interest rate target and that this excess liquidity has been banked in Treasuries.

more....

[UpInArms]

10. Bank of America to acquire MBNA, cut 6,000 jobs

http://www.wbir.com/news/news.aspx?storyid=26886

Bank of America is expanding its credit card operations with a 35 billion dollar cash and stock deal.

The third-largest bank by assets, Bank of America is buying MBNA, the world's top independent credit card lender.

The deal is expected to close in the 4th quarter of 2005.

Under terms of the agreement, MBNA stockholders will receive about 1/2 share of Bank of America for each of their common shares.

Also included will be about four dollars, 12 1/2 cents per share.

Bank of America says 6,000 jobs will be slashed as a result of the merger.

...more...

[54anickel]

60. Hmmm, "Slashing" 6,000 jobs. So, is this an example of a M&A based

on strength and growth, or yet another one of those desperate measures to survive?

[punpirate]

70. More likely...

... it's repatriated money from overseas (expect to see a lot of announcements of such in the next couple of quarters) that's paying for the buy-out, and BofA will cut employees because they have their own credit card processing. BofA makes out like a bandit. MBNA employees get the short end of the stick.

[UpInArms]

11. Impact from AIG probes will hit 2Q

Regulatory scrutiny only picked up at end of 1Q: analysts

http://www.marketwatch.com/news/story.asp?guid=%7B888C0F78%2D65E8%2D46ED%2D852A%2D66F1DAA784B8%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) - While applauding American International Group's better-than-expected first-quarter results on Wednesday, several analysts warned that the full effects of investigations into the giant insurer's accounting won't be seen until the second quarter.

AIG (AIG: news, chart, profile) shares rose as much as 5% on Wednesday after the company reported a 44% jump in first-quarter net income and unveiled operating earnings that topped Wall Street forecasts. See full story.

However, investigations into AIG's accounting by New York Attorney General Eliot Spitzer and the Securities and Exchange Commission weren't disclosed until halfway through the period, on February 14.

The company's longtime Chief Executive Maurice "Hank" Greenberg didn't step down until March 14 and major credit rating agencies such as Standard & Poor's didn't cut their triple-A ratings on the company unit the end of the first quarter. See full story.

Since then, AIG has restated five years of earnings and has been sued by New York Attorney General Eliot Spitzer.

...more...

[UpInArms]

12. Computer Associates restates results; discloses problem

http://www.marketwatch.com/news/story.asp?guid=%7B25E6AD39%2DD5D1%2D45C7%2DB084%2D6F2A001838D8%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) -- Computer Associates International said late Wednesday it would slightly adjust fiscal 2005 results as a result of previous restatements for fiscal 2001 through 2004, adding to the software firm's accounting woes.

<snip>

In September 2004, the firm agreed to pay $225 million to shareholders as part of a settlement that deferred prosecution of securities fraud allegations brought by the U.S. Department of Justice and the Securities and Exchange Commission.

The agreement mandated that an outside auditor monitor the firm's financial reporting for 18 months.

Also in September, former Computer Associates Chairman and Chief Executive Sanjay Kumar was charged in a 10-counts indictment that included obstruction of justice charges.

...more...

[WhiteTara]

126. maybe he'll get Scrushy's jury

n/t

[UpInArms]

13. Brookstone Inc. same-store sales fall 10.8%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38532.7814037847-837495579&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- Brookstone Inc. (BKST) said same-store sales for the eight weeks ended June 25 fell 10.8%, compared with an increase of 14.5% in the year-ago period. Total sales fell 6.5% to $62.6 million. The retailer said it now sees second-quarter same-store sales declining 10% to 11%, with a loss of 20 cents to 22 cents a share. Analysts surveyed by Thomson First Call expect the company to report a loss of 9 cents a share on revenue of $105 million. Merrimack, N.H.-based Brookstone also said it's exploring the sale of its Gardeners Eden stores. Brookstone's quarterly forecast doesn't include any one-time charges related to the Gardeners Eden divestiture.

[UpInArms]

14. daily dollar watch

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

Last trade 89.13 Change +0.02 (+0.02%)

Dollar dips on U.S. spending, jobless data

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38533.3628429514-837527342&siteID=mktw&scid=0&doctype=806&

CHICAGO (MarketWatch) -- The dollar trimmed its gain against the yen and extended its decline against the euro in the wake of weaker U.S. economic data. Personal spending was flat in the latest report, while jobless benefits applications rose. The dollar was last trading at 110.72 yen, up 0.3% from Wednesday. It was trading at around 119.78 just ahead of the report. The euro was at $1.2097, up 0.2% on the day. The shared currency had been trading at $1.2084 before the reports.

Running behind this morning :D

Daily Forex site is "temporarily down" :eyes:

Have a Great Day Marketeers!

[UpInArms]

23. Dollar hits 9-mth high before rate move

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2005-06-30T122142Z_01_L30707742_RTRIDST_0_BUSINESS-MARKETS-FOREX-DC.XML

LONDON (Reuters) - The dollar cleared a 9-month high against the yen and an 8-month peak against sterling on Thursday before an expected U.S. interest rate rise that could further boost the dollar's appeal to investors.

Sterling fell sharply on news the UK economy grew slower than first thought in the first quarter, intensifying speculation of a Bank of England rate cut.

"Yield is at play here. I don't think the market wants to miss out on any dollar move after the Fed," said Derek Halpenny, currency economist at Bank of Tokyo Mitsubishi.

The U.S. Federal Reserve is almost unanimously forecast to increase its funds rate by a quarter-percentage point to 3.25 percent and is likely to signal more credit tightening ahead.

The U.S. central bank's policy statement is due out at 1815 GMT. The prospect of a rise has added to the dollar's rate allure compared with the euro, Swiss franc and the yen.

...more...

[54anickel]

27. Sterling Falls, Market Focus Turns to FOMC Decision

http://www.forexnews.com/NA/default.asp

snip>

In lieu of fundamental data, yesterday saw the market reverse much of the dollar’s recent gains on rumors of Saudi King Fahd’s death and media leaks claiming better than expected unemployment data out of Germany. Today, however, the dollar has improved ahead of a plethora of fundamental information for the market to digest including the much anticipated rate decision by the FOMC, as well as Personal Spending, Chicago PMI and Jobless Claims.

The question confronting the markets today is not whether the FOMC will raise rates to 3.25%, but rather will the Fed focus on the economic cooling in its policy statement and hint towards a temporary halt in its tightening campaign? Or will it adopt the less obvious route of stating the need to await further data evidence to mull its policy decisions?

Apart from the FOMC meeting, the markets will also be focused on today’s release of Personal Spending, which has long been one of Greenspan’s favorite indicators of inflation, as well as the Chicago PMI. It is important to note that the Chicago PMI is often a good indicator of the ISM manufacturing survey, due out tomorrow. Whenever the ISM survey has dipped below 50, the Fed has consistently lowered interest rates. Therefore, with the ISM currently hovering just above 50 at 51.4, the market will be watching carefully to see if the Chicago PMI increases, as expected, or decreases, which could signal a further decrease of the ISM.

more...

[54anickel]

28. Fed to Raise Rates Three More Times, Bond Dealers Say

http://www.bloomberg.com/apps/news?pid=10000103&sid=aT8TKfjZSR9w&refer=us

June 30 (Bloomberg) -- The Federal Reserve will raise interest rates at least three more times this year to keep inflation in check, according to a majority of Wall Street's biggest bond dealers.

All 22 primary dealers of U.S. government securities expect Fed policy makers will increase their target rate for overnight loans between banks to 3.25 percent from 3 percent today, a survey by Bloomberg News found. Eighteen forecast a boost to 3.75 percent or higher by year-end, while half the 22 see a rate of at least 4 percent.

Reports that showed consumer confidence at a three-year high, rising home sales and accelerating economic growth bolstered expectations among economists that inflation may quicken. They differ from investors including Bill Gross, manager of the world's biggest bond fund, who see signs of a global economic slowdown and an end to rate increases.

``We're looking for 4.25 percent at the end of the year,'' said Michelle Girard, senior economist at RBS Greenwich Capital in Greenwich, Connecticut. ``The market will slowly come around to that view. We're setting the stage for a very solid second half,'' she said.

more...

[UpInArms]

38. Dollar mixed ahead of Fed outcome

http://www.marketwatch.com/news/story.asp?guid=%7B3B23BF0E%2DAC34%2D42EA%2DBC2B%2DCCD0880E227E%7D&siteid=mktw

CHICAGO (MarketWatch) - The U.S. dollar was on a split path Thursday, gaining against the yen and the pound, but declining against the euro ahead of a widely expected Federal Reserve interest-rate hike.

The dollar was last trading at 110.81 yen, up 0.4% from Wednesday, and near its highest in nearly 10 months.

The dollar fell 0.2% against the euro, which, traders said, was due to improve in the short term after falling last week to 10-month lows but holding solidly above that low since. The euro was at $1.2086 in recent trading.

Interest-rate differentials continued to dominate foreign exchange markets.

...more...

[UpInArms]

33. McCormick cuts outlook on currency

http://www.marketwatch.com/news/story.asp?guid=%7BFA7BD879%2D6A84%2D4023%2DBAAE%2DF81E52944D0F%7D&siteid=mktw

NEW YORK (MarketWatch) -While an acquisition and currency benefits helped McCormick & Co. push the sales needle a bit higher in its fiscal second quarter, the company's profits fell slightly -- and the company took down its earnings estimates for the rest of the year as well.

On Thursday morning, McCormick (MKC: news, chart, profile) said that it earned $42.79 million, or 31 cents a share. That is off a bit from the $42.85 million and 30 cents of the year ago period but a penny atop the average estimate of analysts polled by Thomson First Call.

Sales came in at $629 million, up 5%, as the company cited "new products, effective marketing programs and incremental sales from the Silvo business" for a 3% bump while favorable foreign exchange rates added 2%.

However, with the dollar no longer in such swift decline, currency benefits are drying up - one factor in the company's decision to trim its full-year profit target.

...more...

[UpInArms]

103. Rate hike modest support for dollar - analyst

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38533.6090194097-837575193&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- The dollar edged higher against the euro and yen in afternoon trading Thursday after the Federal Open Market Committee hiked the Federal Funds target rate by another quarter point. Mike Malpede, senior currency analyst at Refco, said the rate hike "might be just a very modest supportive factor for the dollar. The rate hike was as expected and they left the accommodative and measured language in. That leaves the door open for another rate hike and means we don't know yet whether we're close to the end of the tightening cycle."

[54anickel]

15. Thinking Minsky

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

(last article in last week's credit bubble bulletin)

big snip>

The brilliant Hyman Minsky viewed Capitalism as “a dynamic, evolving system… Nowhere is this dynamism more evident than in its financial structure.” He saw long periods of stability as breeding grounds for increasingly destabilizing behavior. Economic agents progressively reach for profits, risk and leverage, in the process constructing more fragile debt structures. When he died in 1996 he had spent much of his life hypothesizing as to whether the financial backdrop could reach a sufficiently fragile state where “It” (a depression) could happen again. If only he had lived another decade.



I have proposed a “Minskian” evolution from Money Manager Capitalism to “Financial Arbitrage Capitalism.” Command over the Credit system – hence the “capitalist economy” – has shifted away from “corporate boardrooms” and “institutional investors” to investment bankers, derivative players, and the “leveraged speculating community.” Moreover – and in a momentous departure from Minsky’s era – the consumer loan has become the locus for system Credit creation, supplanting business borrowing to finance capital investment. Thinking Minsky, one can confidently suggest that such historic financial system change provides monumental implications for the nature of both economic development and system stability.



The current environment is remarkable in so many ways. For one, many knowledgeable and seasoned analysts speak today of a “secular decline in volatility.” After the global tumult experienced during the second half of the nineties and the first few years of the new millennium, there is now expectation that we have commenced a period of financial and economic stability (confirmed by economic resiliency and minimal marketplace risk premiums and “implied volatilities”). Yet, Thinking Minsky, the extraordinary advance in risk-taking and debt that transpired over the past decade is much more consistent with mounting financial fragility and system instability. Indeed, one can make a strong “Minskian” case for the progression over the past decade to a perilous state of Systemic Ponzi Finance. What gives?



Evolution to Financial Arbitrage Capitalism gained significant momentum during the early nineties. A flurry of major financial innovation was well underway, with securitization, derivatives and securities-lending operations beginning to gain clout on Wall Street. This process then accelerated rapidly when the banking system’s hangover (from late-eighties excesses) provoked a remarkable response from the Greenspan Fed (Fed funds declined from 9.75% in June of ‘89 to 3% by Sept. ’92). Powered by cheap and abundant liquidity, Wall Street was willing and able to step into the Credit system void created by bank and S&L impairment. Moreover, easy money provided a bonanza for the fledgling hedge fund community, borrowing artificially cheap short-term "money" and lending long. Treasury bonds and mortgage-backed securities quickly became coveted commodities for the leveraged players. Leveraged speculator and derivative player tumult in 1994 only conditioned the Fed to approach future rate increases in a more cautious and transparent manner. An audacious symbiotic relationship was born.

snip>

Financial history had witnessed nothing remotely similar. Not only had Financial Arbitrage Capitalism ushered in a New Era of Credit Availability, the capacity for unrestrained marketable securities-based Credit expansion divorced the demand for borrowings from its cost. Instead, the price of finance was set through interplay between the Federal Reserve and the expansion of leveraged speculating community holdings. And the greater the system succumbed to speculative and leveraging excess, the more the Fed pandered to The New Capitalists. The more powerful the “arbitrageurs” the more expedient it became for the Greenspan Fed to use them as the key mechanism for stimulating/inflating the markets and economy. (I am, strangely enough, reminded of the Aaron Neville lyrics “Oh just keep on using me until you use me up.”)

snip>

Until rising rates, a dollar crisis, or some other major development exposes the acute frailty inherent in Historic Systemic Ponzi Finance, we should be on guard for fascinating developments. Sixty dollar crude is indicative of the swapping of inflating global monetary units for less abundant real things with inherent value and inflating market prices. This could prove contagious. And while the Japanese were content to trade our IOUs for Pebble Beach, Los Angelles office buildings, movie studios, and other overvalued properties, the Chinese are keen on energy, commodities, capital equipment and other resources.



Thinking Minsky, he was keen to have policymakers recognize the “flaw” in Capitalism. I am more inclined to underscore Capitalism’s “vulnerabilities.” However, the critical flaw in Financial Arbitrage Capitalism is that speculation and leveraging excess begets greater excess, with the marketplace woefully incapable of self-adjustment and central banks unwilling to risk reining in The Powerful Speculator Class. And while the leveraged speculating community may be indefinitely satisfied to expand leveraged holdings of increasingly suspect and fragile U.S. (“Ponzi”) mortgage securities and instruments, the rest of the world surely is not. Moreover, the risks associated with a higher cost of finance may have been taken out of the equation, but this only elevates the key issue of how overly abundant cheap finance is utilized in regards to economic development. A prolonged period of Systemic Ponzi Finance – with all the associated weakened debt structures and global financial and economic fragilities - ensures that “It” can happen again.

more...

[Maeve]

16. Should be an interesting day

Okay, good news on the job front w/Initial Claims...but then there are all the planned layoffs that UIA has been noting the past few days. Incomes and spending are fairly flat..Treasurys up, dollar down...and here comes the Fed!
:popcorn:

[AnneD]

77. Judy Collins...

send in the clowns....

[UpInArms]

79. don't bother, they're here

[AnneD]

86. LOL LOL LOL

UIA, I salute you:patriot:

[UpInArms]

17. unlawflcombatnt posted information in the night on the GDP

and I thought it should be brought into today's thread:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=1590842&mesg_id=1593552

It's my opinion that the GDP has overstated economic growth, and the health of our economy. Here's my own summary:


Today's published GDP figure of 3.8%, is the same as the last quarter of 2004. But this is misleading. The growth of the 2/3's of economic activity due to consumer spending is slowing. The "final sales" growth, which many consider a better indicator of "growth," has declined for the 2nd straight quarter. In addition, growth of most "investment" parameters is also slowing.

The link to these numbers can be found at Briefing.com's GDP section at:

http://www.briefing.com/Silver/Calendars/EconomicReleases/gdp.htm

As previously stated, 1st quarter GDP has now been revised upward to 3.8%. Again, this is the same as the 4th quarter of 2004. However, of the multiple factors used to compute this number, only 2 have increased significantly. The 1st of these is INVENTORIES, which increased from $47.2 billion in the 4th quarter of 2004 to $66.8 billion in the 1st quarter in 2005. This is a 42% increase over the previous quarter. The 2nd major increase was in "residential investment." (Housing & Real Estate) Here there was a 338% growth in the 1st quarter of 2005, from 3.4% in Q4, 2004 to 11.5% for Q1 of 2005.

Final sales growth declined for the 2nd straight quarter. Final sales growth decreased to 3.0% from the 4th quarter's 3.4%. This marks a 12% DECREASE. The 4th quarter's final sales also decreased from the 3rd quarter's 5.0%. Thus, GDP sales are not keeping up with the measured GDP. Ultimately, the GDP must be sold to create profits. The declining "final sales" growth, in relation to the the total GDP, suggests the GDP is overestimating economic growth.

All other measures of consumer spending declined as well. Total personal consumption spending (PCE) growth decreased to 3.6% from the 4th quarter's 4.2%. All 3 components of PCE declined as well. Durable goods sales growth decreased 54%, declining from 3.9% in the 4th quarter to 1.9% for Q1 of 2005. Nondurable goods and services also decreased.

Nonresidential investment growth also decreased 72%, from 14.5% in Q4 of 2004, to 4.1% in the 1st quarter of 2005. Not only did growth in nonresidential investment not increase, it actually decreased in Q1 of 2005. The growth rate was actually -2.4%. Growth in equipment and software investment decreased from 18.4% in Q4, to 6.1% in Q1 of 2005.

Thus, GDP growth was maintained almost exclusively from increased real estate investment and increased unsold inventories. All indexes of consumer spending growth decreased. This comes as no surprise, considering inflation-adjusted wages also decreased during that time. Decreased consumer spending power usually decreases consumer spending.

It appears the calculated GDP has again overstated actual economic growth. Goods are being produced in excess of what consumers are purchasing. Excessive goods production drives down demand for labor to produce goods. This decreases the number of employed workers, as well as wages of those who are still employed. This results in a further decrease in the aggregate consumer income necessary to purchase goods.

Growth of inventories and real estate investment are all that have increased during the 1st quarter of 2005. Does this really represent economic "growth"? Doesn't declining growth in consumer spending imply an economic slowdown? Do isolated increases in unsold goods and real estate investment truly indicate economic growth? Can unsold goods and real estate investment really be substituted for consumer spending? Can profits lost from declining goods sales be replaced by production and investment increases? How does that increase profits? Doesn't someone have to buy products for profits to be made?

Thanks unlawflcombatnt!

[54anickel]

20. Nice to see one's gut and pocketbook feelings put into numbers - most

everyone here has the feeling that all the numbers being put out are bogus. Nice to see a few figures now and again that validate the feeling. We are soooooo screwed.

[AnneD]

80. Morning 54anickel

ITA. That is why I am battening down the hatches, checking the rope, repairing the sail, and getting the supplies in. As my pastor reminded me the other day, it wasn't raining when Noah built the ark. I may not have an ark, but a dingy floats too.

[54anickel]

87. Mornin' AnneD. Wise move, and a good reminder from your

pastor as well. Excellent point about Noah. Thing is, hew knew exactly what was coming and what was needed to survive the on-coming flood. Pretty hard to know WHAT to do in preparation for the sh*t that's about to hit the fan this time around.

[BurgherHoldtheLies]

45. Thanks for putting into today's thread....

I made the suggestion yesterday that this story should be posted into the MARKET thread because some only have time to look here for economic/market news. Thanks.

And thanks to all of the regular posters in this thread. Great work!

[UpInArms]

19. BMC earnings plunge, more layoffs loom

http://www.itnews.com.au/newsstory.aspx?CIaNID=19256

BMC earnings plummeted for its fiscal fourth quarter, and executives for the US software vendor plan to continue a head-count reduction to help tighten operating expenses.

BMC reported earnings of US$15.5 million, or 7 US cents a share, on revenue of US$395.1 million for the fourth quarter of fiscal year 2005, which ended 31 March. This is a 56 percent drop compared to BMC's fourth quarter last year, when the vendor earned US$36.9 million, or 16 US cents per share, on revenue of US$400.2 million.

BMC president and CEO Bob Beauchamp said that while he was pleased with the execution of BMC's Business Service Management (BSM) strategy during the quarter, the company's financial performance "fell short of our expectations".

Beauchamp said more layoffs were on the way as BMC looks to further reduce its cost of doing business. He said operating expenses would continue to fall "as we complete the headcount reductions over the next two quarters".

In April, BMC announced a restructuring plan and laid off nearly 900 people. The vendor currently employees about 6900.

...more...

[UpInArms]

83. BMC Software rises after results

http://www.marketwatch.com/news/story.asp?guid=%7B733FDE49%2D2C6E%2D4505%2D9FA4%2D81220F4D8D51%7D&siteid=mktw

LOS ANGELES (MarketWatch) -- BMC Software Inc. shares moved higher Thursday even after the firm said its quarterly profit sank and revenue slipped, as expected.

Analysts remained largely guarded, with at least one recommending selling the stock.

BMC's stock (BMC: news, chart, profile) traded better by 47 cents, or 2.7%, at $17.84 in recent trading. The shares have ranged over the last 52 weeks from $13.70 to $20.

BMC said late Wednesday afternoon that its quarterly profit sank by more than half and revenue slipped, meeting its reduced forecast, on slowing demand for its software. The company also backed its outlook for the whole current fiscal year and said its announced restructuring is on track. See related story.

In April, BMC slashed its outlook for the just-reported period, saying it would cut 12% of its worldwide staff and refocus its efforts and resources on growth areas such as its service management business. See earlier story.

As the shares gained ground amid hopes by some investors that the company could become an acquisition target, a number of analysts found the results less than inspiring.

...more...

:crazy:

[54anickel]

22. Granville sees trouble ahead for Dow

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BD042D49D%2DA007%2D4794%2DA91C%2D53B74471BF98%7D

snip>

Over the 25 years through early 2005, when HFD discontinued coverage of Granville's recommended portfolios on the grounds that his coverage had become too vague, they suffered annualized losses so severe as to amount to a total wipeout.

Nevertheless, Granville remains highly respected among his peers. As Dow Theory Letters' Richard Russell wrote recently: "I've known Joe since 1961. Joe invented on-balance-volume, and his studies over the years have been nothing short of brilliant."

Russell noted respectfully that Granville currently expects "an ultimate move under Dow 9,700 this year, putting the market in a drastic freefall back to the March 2003 lows with no help in sight."

Why respectfully? Try this for size: Granville's market timing, according to the HFD, has outperformed the dividend-reinvested Wilshire 5000 over the last five years at a rate of 6.6% annualized vs. -0.6% annualized.

snip>

Currently, Granville's worrying about "MAJOR TROUBLE AHEAD" -- because of what he sees as a major head-and-shoulders top in the Dow.

"We are currently seen building on the right shoulder, which currently sees the Dow peaking at 10,640," he said, adding that would be "300 points below the March 4 head."

The problem is, you can't dismiss Granville out of hand.

[UpInArms]

24. New York City economic growth slows in June--NY-NAPM

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=URI:urn:newsml:reuters.com:20050630:MTFH60469_2005-06-30_13-00-03_NAT001672:1

NEW YORK, June 30 (Reuters) - Business growth in New York City
retreated in June for a second straight month as manufacturing
growth slowed, a report said on Thursday.

The National Association of Purchasing Management-New York
said its business conditions index slipped to 333.7 for June, its
lowest level in three months, from May's to 337.3.

The group blamed a broad but modest reduction in inventory for
the slowing in manufacturing growth.

"A mini inventory correction nationwide appears to have slowed
industrial activity," it said in a statement.

The survey's manufacturing sub-index jumped to 23.2 from May's
0.0, but well the below the critical 50 level. A reading below 50
means that manufacturing activity is shrinking.

...more...

[UpInArms]

25. Conagra 4th-quarter profit falls, to shut plants

http://today.reuters.com/investing/financeArticle.aspx?type=governmentFilingsNews&storyID=URI:urn:newsml:reuters.com:20050630:MTFH60301_2005-06-30_12-55-13_N30522832:1

CHICAGO, June 30 (Reuters) - Packaged food company ConAgra Foods Inc. (CAG.N: Quote, Profile, Research) on Thursday posted a 39.8 percent drop in quarterly profit on higher pork and beef costs and said it plans to shut some plants in order to cut expenses.

The company, whose brands include Eckrich meats, Butterball turkeys and Swiss Miss hot chocolate, said it expected the problems in the packaged meat business, where it has been unsuccessful in attempts to raise prices to combat higher costs, to continue into the current fiscal first quarter.

Overall, earnings in the quarter are expected to be down from a year earlier, the company said. Analysts on average forecast 25 cents a share before one-time items, down from 28 cents a share a year earlier.

The company said it plans to close some of its 150 plants to reduce costs, but did not detail specific plans, which are still being developed.

...more...

[UpInArms]

26. US Treasuries tick up after benign inflation data

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-06-30T124513Z_01_N30313691_RTRIDST_0_MARKETS-BONDS-PCE.XML

NEW YORK, June 30 (Reuters) - U.S. Treasury debt prices ticked up a bit on Thursday after an influential inflation reading came in largely as expected and quite benign in May, relieving concerns about higher inflation.

The core personal consumption expenditures index, the Federal Reserves preferred inflation measure as it considers interest rate policy, rose 0.2 percent in May, exactly what economists expected, but above April's plus 0.1 percent result.

Prices on the two-year note, the most sensitive to changes in interest rate policy, were 1/32 higher, to yield 3.64 percent, after fetching a high yield of 3.65 percent at auction on Wednesday.

...a bit more...

[UpInArms]

47. Treasurys hold gain as Chicago PMI slips

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38533.4246285764-837541682&siteID=mktw&scid=0&doctype=806&

CHICAGO (MarketWatch) -- Treasurys remained firmer in the wake of the release of a regional economic indicator that pointed to slower manufacturing growth. The Chicago Purchasing Managers Index, while still showing expansion, dipped to 53.6% from last month's 54.1% and was shy of the 55% expected. The 10-year Treasury was up 7/32 at 101 12/32, yielding ($TNX) 3.96%.

[UpInArms]

67. U.S. Treasury to sell $30 bln bills Tuesday (July 5)

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-06-30T150835Z_01_WAT003408_RTRIDST_0_ECONOMY-BILLS-URGENT.XML

WASHINGTON, June 30 (Reuters) - The U.S. Treasury Department on Thursday said it will sell $16 billion of three-month bills and $14 billion of six-month bills on Tuesday, July 5.

The bills will be issued on Thursday, July 7.

Proceeds from the sale will be used to refund an estimated $34.37 billion in publicly held bills maturing July 7 and to pay down about $4.37 billion.

The three-month bills mature on Oct. 6, while the six-month bills mature on Jan. 5, 2006.

Treasury said $5.6 billion of the three-month bills can be excluded when bidders calculate their net long positions. The net long reporting threshold for the three-month bills is $5.6 billion and for the six-month bills it is $4.9 billion.

...more...

"Chopper" Ben at the throttle?

[54anickel]

29. Falling Yields Behind New Dollar-Gold Trend

Not sure if this was ever posted - sorry if it's a repeat.

http://www.forexnews.com/AI/default.asp

The decoupling in the correlation between the price of gold and the value of the US dollar is drawing increased interest, along with differing explanations. This week, the US dollar price of gold hit 3–month highs at $441 per ounce, while the euro price of the metal surged to an all time high at EUR 361 per ounce. Unlike in "ordinary times" when the dollar showed a near perfect negative correlation with gold, today the relationship has dissipated markedly. Over the past 6 months, the dollar-gold correlation stood at -0.68. Between May and Mid June, the correlation weakened to -0.49. Over the 3-week-period ending in June 17, the correlation turned around to +0.51 as shown in the charts below).

So why is the dollar moving in tandem with gold?

Many have started pointing out the emerging growth concerns in the Eurozone and the ensuing dissent over a single EU budget as the key attributes to the euro's tumble against the metal and the greenback. More importantly, the euro's woes against the metal have been blamed on the euro's increased role as a safe haven currency, substituting the US dollar for this role. Thus, when gold rises, traders end up punishing its safe haven competitor from the Old Continent instead of that from the New World. As for the dollar's decline against gold, it's mainly a result of the deteriorating external situation in the US as we have in through the last capital flow reports, which failed to cover the trade deficit.

But the most straightforward explanation remains the decline global in yields. As interest rates—or the value of money—falls throughout, investors seek precious metals as an alternative of higher return on their investments. With US 10-year yields at 2-year lows and the spread between the 2 and 10 year yields at a 5½ year low of 30 basis points, investors see no real payoff justifying the risk factor from the additional time duration of longer maturities. The drop in 2-10 year spreads is also another way of looking at the flattening yield curve. Should the flattening of the curve begin to turn into an inversion shape, the term “recession” could become the next buzzword next to the “housing bubble”. That is because inverted yield curves have effectively presaged economic downturns. The last time we had an inverted US yield curve was between March and December 2000, just a few months prior to the short-lived recession of 2001.

As long as the low yield conundrum continues in the bond market, so will the relative decoupling between the US dollar and Gold prices. Currency traders can continue to seek the extra yield from the Commodity currencies of Australia and Canada against the Swiss Franc and to a lesser extent the British pound. The EURUSD play remains largely to the mercy of Fed policy and to a lesser extent the Budget dissent in Brussels. Back in February we held:“we continue to expect the Fed to stick to its measured tightening until the Fed funds rate reaches the 3.25%, at which point we believe increased signs of a peaking will result into a pause" (http://www.forexnews.com/AI/default.asp?f=A20050202A). As long as this possibility remains tenable, EURUSD is likely to find considerable support at $1.18. A halt in the Fed’s tightening can slow the dollar’s gains, but is unlikely to trigger any cosndierable selloff against the euro in the near term as long as the EU remains disunited.

[54anickel]

34. Here's a little article on some Mysterious Gold Order

http://www.aireview.com/index.php?act=view&catid=1&id=2145

In an environment wherein central banks are believed to be increasingly reluctant to continue piling up additional USD and euro assets –because of overly documented shaky fundamentals behind both currencies- gold should thrive.

But will it?

Renowned US based investment guru Dennis Gartman reported an
intriguing long call option trade in his newsletter last week that is believed large enough to change the course of trade for the precious metal. According to Gartman, the existence of the call has been confirmed by two "very good" sources that he has no reason to doubt.

The report states that the size of the option trade, which is believed to be a long call position with a strike at US$450/oz, is so large that that will serve as a "siren call" for gold over
the next several weeks.

[54anickel]

37. China: U.S. Dollar may not be Worth the Paper it is Printed on

http://www.merkfund.com/merk-perspective/insights/2005-06-28.html

The $18.5 billion bid by China's state-controlled Cnooc Ltd. to purchase the American energy company Unocal has created fear, anger and calls for intervention among U.S. politicians. As the U.S. trade deficit, currently around 6% of Gross Domestic Product (GDP), continues to climb, China has access to vast amounts of U.S. dollars that it has hoarded over the years. Until recently, Chinas has simply been buying U.S. Treasuries. In recent months, it has become clear that China is becoming a more active investor, showing interest in natural resources (timber, oil and gas assets) and U.S. enterprises (IBM's personal computer business and Maytag, among others).

China, already the world's largest importer of many raw materials, anticipates dramatically higher energy and natural resource requirements in the years ahead. The world's oil production capacity, according to some estimates, is approaching its peak and there will be increased global competition for natural resources. While China is securing capacity, the United States has not built additional oil refineries since the 1970s (nor have any nuclear reactors been built since).

In the meantime, the U.S. is consuming goods imported from China at a record pace. Because of the tremendous trade deficit, the Chinese are sitting on hundreds of billions of U.S. dollars. Now, as the Chinese want to use this money wisely, U.S. politicians cry foul. The Chinese must wonder whether the U.S. dollar is worth the paper it is printed on. It is acceptable to use dollars to buy consumer goods, but if they are put to use to invest in the future, red lights go off in Washington.

snip>

That is not to say that the Cnooc bid and others from China are not shocking. The culprit, however, is not the Chinese government, but the U.S. fiscal and monetary policies that foster an environment of exploding trade imbalances and abysmal domestic savings. We believe this policy puts long-term pressure on the dollar, especially as Asian countries realize that their dollar reserves will not be honored if they are used for something of value to them.

snip>

Politicians will fight over this transaction in the coming weeks and may be able to force China to open up their markets further, so that foreigners can take control of more Chinese owned firms. But much of the discussion will miss the point: China, having become a major player in the global market with deep pockets, will want to put its dollars to use. The Chinese have subsidized their currency to sell cheap goods to the U.S. In return, they have accumulated billions of dollars. Now they will find out whether these dollars are worth anything at all as they try to use them to secure their future natural resource needs. If disappointed, China and other Asian countries may accelerate their diversification out of the U.S. dollar and into a basket of hard currencies.

[UpInArms]

40. Gold trades near $439 as traders await rate decision

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38533.4060457986-837534472&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- August gold is up 10 cents at $438.70 an ounce in morning trade. Silver, palladium, and platinum are all trading modestly lower, but copper is slightly higher. Metals traders awaited the Federal Reserve's decision on interest rates, which will be announced shortly after metals futures trading in New York closes.

[UpInArms]

31. (Japan) Foreign investment hit record 4 trillion yen in '04

http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20050630a3.htm

Direct investment in Japan by foreigners jumped 90.3 percent in fiscal 2004 from the previous year to a record 4.027 trillion yen, with capital inflow from the United States swelling more than sevenfold, the Finance Ministry said Wednesday.

The surge in foreign direct investment underscored active U.S. business expansion in Japan in the fiscal year that ended March 31, including the acquisition of mobile phone service firm DDI Pocket Inc. by U.S. investment fund Carlyle Group.

The overall figure for fiscal 2004 was up from 2.116 trillion yen the previous year for the first increase in two years, apparently spurred by the sustained recovery of the world's second-largest economy, the ministry said.

The previous record was 3.125 trillion yen in fiscal 2000, it said.

Of the 4.027 trillion yen spent to purchase Japanese stocks or offered as lending, 2.620 trillion yen came from the United States, which grew 650.1 percent from the previous year, it said.

...more...

[ozymandius]

32. pre-open blather

9:00AM: S&P futures vs fair value: +3.2. Nasdaq futures vs fair value: +5.0. Futures indications improve to their best levels of the morning upon further analysis of economic data and a continued decline in oil prices, suggesting stocks may open on a higher note... It appears investors are especially embracing the tame inflation data, as evidenced in the overall PCE price index (which was flat), ahead of the Fed's policy statement, since the central bank currently sees inflation as a greater concern than slowing economic growth

[ozymandius]

35. perspective: Martin Wolf makes sense (the Economist does not)

from Brad DeLong's journal
Martin Wolf's FT column makes a number of crucial points:

1) Asia has let undervalued exchange rates (and reserve accumulation) substitute for policies to promote domestic demand. The (growing) backlash in the US toward these policies hardly should be a surprise.

"So long as exports remain competitive and trade balances strong, the need to promote domestic demand, thereby reducing the surplus of savings over investment, is diminished. Net exports support demand instead. This is modern mercantilism. The adverse reaction now seen in the US congress is predictable and understandable."

2) Continuing this system is risky.

"They generate growing protectionist pressure in the US; they force the US into monetary and fiscal policies whose consequence is growing indebtedness, both domestic and externally, they are likely to end in a brutal correction, and that correction is likely to be more brutal the longer it is delayed."

The Economist looks at a country with a current account surplus of 6-8% of GDP in the midst of an investment boom, and says its currency is NOT undervalued.

[54anickel]

39. Ewww, his puzzlement on the Fed is an interesting read as well...

snip>

Brad Setser's Web Log: How does the Fed imagine the US current account deficit will adjust?: Greenspan does not think a revaluation of the RMB would have a major impact on the US trade balance. The Fed does not think that reducing the fiscal deficit would generate a major reduction in the current account deficit. Bernanke thinks a smaller fiscal deficit would just produce a bigger housing boom. Empirically, work from the Fed staff -- work summarized by Roger Ferguson in his current account deficit speech -- suggests that changes in private savings and investment offset a rising (or falling) budget deficit, so a $1 fall in the fiscal deficit only reduces the current account deficit by 20 cents.

If you take "Houthakker-Magee" seriously... the Bush Administration's preferred solution... faster growth abroad... won't do much either.... According to Menzie Chinn, one percentage point faster growth abroad increases exports by 1.7-2%.... Given that exports have to grow something like 60% faster than imports to keep the trade deficit from expanding, faster growth abroad only works if accompanied by slower growth in the US. Remember, the world as a whole grew extremely rapidly in 2004 -- and the US current account deficit still expanded significantly.... Plus, wouldn't faster growth abroad just push up oil prices and hte US oil import bill even more?...

My own view? The US deficit is now so large in relation to the US export base that... individual action in isolation have an enormous impact.... Get rid of China's current account surplus of $120b (projected 2005) through increased US exports to China and the US current account deficit would fall from an enormous $820b (projected 2005) to an only slightly less enormous $700b. The only thing guaranteed to bring about a big adjustment fast is just what no one wants. A hard landing.

[UpInArms]

49. OUCH!

The only thing guaranteed to bring about a big adjustment fast is just what no one wants. A hard landing.

[AnneD]

82. You need to rephrase that...

the ecospin is 'soft patch'.

[ozymandius]

36. markets are open for bidness

9:33
Dow 10,386.38 +11.90 (+0.11%)
Nasdaq 2,075.00 +6.11 (+0.30%)
S&P 500 1,201.50 +1.65 (+0.14%)
10-Yr Bond 39.67 -0.23 (-0.58%)
NYSE Volume 30,482,000
Nasdaq Volume 45,477,000

9:16AM: S&P futures vs fair value: +2.8. Nasdaq futures vs fair value: +4.0. Positive bias persists in pre-marketing trading, as expectations remain set for the cash market to open higher... Even with the Fed widely expected to raise its benchmark rate by 25 basis points to 3.25% at 2:15 ET, Bank of America's $35 bln bid for MBNA, falling oil prices and further validation that inflation remains contained have underpinned an upbeat sentiment heading into the open

[ozymandius]

41. update and blather

Dow 10,407.25 +32.77 (+0.32%)
Nasdaq 2,073.10 +4.21 (+0.20%)
S&P 500 1,202.77 +2.92 (+0.24%)
10-Yr Bond 39.76 -0.14 (-0.35%)
NYSE Volume 192,087,000
Nasdaq Volume 175,535,000

9:40AM: Market opens slightly higher as investors embrace new M&A activity, another decline in oil and tame inflation data ahead of upcoming comments from the Fed... Even though May personal income rose just 0.2% (consensus +0.3%), with last month's read of 0.7% being revised lower to +0.6%, and personal spending was unchanged, investors have gotten an encouraging read on inflation, as the overall core PCE index held steady at a 1.6% year-over-year rate...

With rising prices under control, and the Fed's ongoing view of inflation as a greater risk than an economic slowdown, such data may suggest the Fed is reaching the end of its tightening process... Separately, June Chicago PMI (consensus 54.0) will be released at 10:00 ET...

[54anickel]

42. Fire! (Bill Gross)

http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2005/IO+July+2005.htm

Nero may not be fiddling, but Rome is on fire nonetheless - Rome, Georgia that is: its citizens’ homes appreciating at ten percent annually for the past five years; its local newspaper’s stock market quotes recovering smartly since October of 2002; its personal and corporate tax rates down sharply; its country’s deficit running at 4% of GDP. These are but some of the more visible cans of gasoline stoking economic growth across many American towns and cities these days. This new age Rome is conservatively located far from NYC or LA and theoretically unsingeable by speculative flames of finance center investment exuberance - but it is ablaze nonetheless. Still, ablaze is not quite the same as burning, the latter verb being indicative of decay/destruction whereas the former connotes an intensity/excitement hinting that things can get no better than this. Whether or not chemists would validate this distinction is unimportant. Chemistry is a science, but economics is a dismal science at best and I therefore take license with the supposedly immutable laws of nature to make a point: Rome is on fire and not burning, but in future years it may well be.

The origins of this fire can be traced as far back as the mid-1980s when we declared victory over accelerating inflation, and a cascade of lower Reaganesque tax rates and Volker/Greenspanesque interest rate cuts were called upon to stimulate a potentially faltering economy. Our most recent matches were struck, however, during the aftermath of the 9/11 recession when it became apparent to policymakers that a combination of American fear/malaise and accelerating globalization might inhibit a normal economic recovery. It was "decided" that in such an environment, asset appreciation - a recovering stock market, and a thriving, "frothy" housing market being the primaries - would be the vehicle of choice to engineer a recovery until domestic investment and concomitant job growth kicked in. To produce that asset appreciation, policymakers came up with logical gasoline cans or "pumps," as I’ve referred to them in recent Outlooks, to start the fire. They are displayed collectively below and their timing and stimulative trend are unmistakably correlated to the most recent U.S. recession in 2001.

snip>

This recovery is different because it was spawned and subsequently nurtured on the back of asset appreciation alone. Greenspan and company have high hopes that investment and then employment will ultimately kick in and work their self-sustaining magic one more time, but jobs and investment these days go to Asia at the margin, and domestic animal spirits have been squelched by the looming inevitability of reduced returns on risk capital in a low interest rate world. I’ll leave the Asian story for another day or let you turn on CNN at 11:00pm EST to get your fill of Lou Dobbs - the Dobbsian spectre of foreign competition on the march is undeniably real. My point in this Outlook will be an extension of the thoughts expressed over the past few months that this recovery is on fragile legs because it is asset-appreciation-based and that future asset appreciation is vulnerable based on the weakening stimulative power of interest rates. Therein lies the potential for a white hot speculative blaze turning into a destructive recessionary fire. Such an analogy inevitably suggests that in future years, Rome, Georgia, may not be on fire, but burning.

I begin with the blanket assumption, confirmed in recent speeches by Fed Governor Roger Ferguson and others, that when yields (primarily real yields) fall, asset prices rise. "Because they are interest-sensitive," Ferguson writes, "asset prices are primary components of the channels by which monetary policy is transmitted to the real economy." This logic confirms what is commonsensically known by most Americans - that if real interest rates decline, housing prices and stocks (bonds too!) go up in price.1 Greenspan’s recent "conundrum" episode is more a reflection of his fear that this process might go too far in housing markets rather than an expression of ignorance as to what’s going on. He knows, I think, why interest rates are down, he just doesn’t want them to be stoking the housing market so furiously - thus all the "conundrum" talk. But I suggest he should be careful here in raising short rates to produce his desired outcome. Raising short yields beyond 3½% nominal and 1% real risks a recessionary fire. But the fact is that despite raising nominal short rates by 200 basis points, real interest rates are still so low that additional appreciation in houses, stocks, bonds, and other assets may be difficult to engineer. It may be impossible to generate equivalent asset appreciation in future years like we’ve experienced recently, even if yields begin to fall! We may have reached the point in our asset-based economy, in other words, where the burning of Rome, Georgia, is inevitable, although the timing is uncertain.

Such an observation begins with the assumption that the policy "pumps" graphically displayed on the prior page are approaching their limits. Corporate and personal tax rates are at their nadir in my opinion and politically incapable of further downward progress. While a declining dollar is the one vehicle that can and probably will be used to attempt to keep assets - especially stocks - on an upward path (the dollar’s decline in 2003 and 2004 added an estimated 10-15% to S&P 500 corporate profits in each year) the greenback’s strength recently is certainly not a help. Most of all though - and here is where my argument succeeds or fails - interest rates that drive the economy cannot go down much further. Since they cannot, the gasoline that they have pumped onto this economy’s reflationary fire will be exhausted, assets may stop going up at a double-digit pace, the meager inflation and economic growth they have engendered to date may wither and Rome may begin to burn, not blaze.

more...

[54anickel]

44. The Endgame (Roach)

http://www.morganstanley.com/GEFdata/digests/20050627-mon.html#anchor0

There’s good growth and bad growth. The former is well supported by internal income generation and saving. The latter is driven by asset bubbles and debt. The United States, in my opinion, has been on a bad-growth binge for nearly a decade, but especially over the past five years. In a US-centric global economy, that means the rest of the world has also become overly dependent on bad growth as the sustenance of a false prosperity. The endgame is all about the transition from bad growth back to good growth. The key question is under what conditions that transition occurs.

With a saving-short US economy now hooked on an increasingly frothy property market, risks of the ultimate post-bubble shakeout are mounting. That’s because, unlike the equity bubble of the late 1990s, the housing bubble has been built on a mountain of debt (see my 24 June dispatch, “From Bubble to Bubble”). The history of asset bubbles tells us they almost always last for longer than we think. That was true with the dot-com mania and is most assuredly the case today. The bursting of bubbles remains a great mystery. Macro offers two leading possibilities -- rising interest rates or a shortfall of income growth. In my days as a bond bear, I used to think that rising interest rates would wean America from the excesses of asset bubbles once and for all -- not just piercing the housing bubble but also triggering an unwinding of “carry trades” that stoke ever-frothy fixed income markets. As a newly converted bond bull, I now believe the imminent threat of such a possibility has receded. While that buys time, it does so with one more slug of bad growth. By dodging the interest-rate bullet, the debt-intensive Asset Economy may well get another lease on life -- making for an ever more treacherous endgame.

The Fed is the swing factor in this outcome. And so far, it has swung its support repeatedly in favor the multiple bubbles of the Asset Economy. It set the stage in the late 1990s, with Alan Greenspan backtracking on his initial concerns over “irrational exuberance” and then going on to be a leading cheerleader of the New Economy and the monetary accommodation it “deserved.” The bursting of the equity bubble then forced the Fed into an aggressive mode aimed at preventing a repeat of Japan’s experience -- a 550 basis point slashing of the federal funds rate to a 46-year low of 1%. As the post-bubble US economy appeared to heal, the central bank belatedly began to normalize its policy rate. This normalization has been feeble, at best. During the five-year period since the equity bubble popped, the Fed has kept the real federal funds rate at, or below, the zero threshold. This extraordinary monetary accommodation has led to bubble after bubble. But this time, the “echo bubbles” had something the original bubble never had -- a monstrous debt wave.

The Fed remains steadfast in its insistence that all is well because it is on a “measured” path toward policy normalization. While this week’s widely expected 25 bp tightening may add some credence to that impression, it will be the policy statement that tells us if the central bank’s commitment is wavering. The latest musings of Fedspeak are more ambiguous than usual -- with one policymaker on record depicting the current monetary tightening campaign as being in the eighth inning of a nine-inning baseball game while others are suggesting there is still considerably more work to do. At present, financial markets are more supportive of the baseball analogy -- looking for only 2-3 more measured tightenings of 25 bp each, or a Fed that is basically done by this September. That would leave the nominal federal funds rate in the 3.6% to 3.7% zone -- only about 0.5 percentage point above the one-year ahead inflationary expectations of 3.2% as tallied by the May reading of the Michigan survey of consumer confidence. If the markets have it right -- and I must confess to being very sympathetic to this conclusion -- it’s hard to believe that a 0.5% real federal funds rate will do much of anything to end the madness of America’s bubble-prone Asset Economy.

more...

[54anickel]

48. Heh-heh, check out this link from Roach's article

http://www.condoflip.com/

[UpInArms]

52. do we have a "shrieking in horror" smilie icon?

AAAAAAAHHHHHWWWWWWWW!

[ozymandius]

55. That icon should be nominated for Elad's next creative batch. n/t

[54anickel]

56. Maybe we could write a screenplay and enter it into the 05 Shriekfest

http://www.shriekfest.com/index.html

[UpInArms]

50. High oil prices give G8 summit economic headache

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-06-30T140534Z_01_L30439750_RTRIDST_0_GROUP-ECONOMY.XML

PARIS, June 30 (Reuters) - With U.S. airlines losing $17,000 a minute, world leaders are under pressure to respond to record world oil prices when they discuss the state of the economy and trade at a Group of Eight (G8) summit in Scotland next week.

Ahead of the meeting, tension is simmering over British calls for a halt to farm export aid in rich nations for Africa's sake, floods of cheap Chinese exports and accusations that the United States is living dangerously beyond its means.

After oil hit a record of $60.95 a barrel this week, Canada confirmed that leaders would broach the risks of high fuel costs hurting U.S. economic growth or smothering the already sluggish economies of much of continental Europe and Japan.

U.S. Air Transport Association chief James May says American airlines are losing $17,000 a minute, which is roughly the same as one oil giant, France's Total, made in profit last year.

...lots more worth reading...

[TrogL]

117. I can understand Canada being worried

The loonie's on the rise again (see the Loonie Watch thread) and while Canada (as a oil resource exporter) will be OK, it relies heavily upon foreign investment and foreign purchase of Canadian goods to maintain the diversity of its economy. While it's nice having the US slavering at the tit for oil, we'd like to keep everybody working, not just the oilpatch.

[54anickel]

51. Deception, Denial, and Demagoguery: Bush Speech Sets A Record

http://www.antiwar.com/blog/index.php?id=P2183

How many lies can this President cram into a single speech? That question may have been answered tonight. 9/11 was invoked at least 5 times as a jusification for the invasion and conquest of Iraq.

But we now know -- some of us always knew -- that Iraq had nothing to do with 9/11. The President has even admitted it on occasion. There is no evidence that the 9/11 hijackers had any assistance from Iraq, or that Osama bin laden and Saddam Hussein were bosom buddies: quite the opposite. Ah, but now we're fighting "the terrorists" who have carved out a base of operations over there. It's a self-fulfilling prophecy that the President almost seems to relish.

It's hard to get one's mind around the debased demagoguery of the President's appeal. The insurgents, said Bush, want to attack our country "and kill us." Yet who is attacking whom? The President gloats that "we're on the offense" -- and explicitly justifies this on the grounds that we have to go after them before they go after us. Yet why it is impossible for them to attack the U.S. anyway, even while fighting American troops in Iraq, no one seems to know. Surely Al Qaeda is recruiting hand-over-fist in Iraq, these days, and how many will eventually show up on our shores is an open question. What's happening in Iraq today is that for every insurgent killed, three rise to take his place.

"Some wonder whether Iraq is a central front in the war on terror. Among the terrorists, there is no debate. Hear the words of Osama Bin Laden: 'This Third World War is raging' in Iraq. 'The whole world is watching this war.' He says it will end in 'victory and glory or misery and humiliation.'"

No doubt Osama wants us to focus on Iraq, as he outflanks us yet again and his followers show up on our shores. If only the troops preoccupied with pacifiying Iraq were put to work inspecting all the unexamined cargo coming into our ports, the threat of another 9/11 would be considerably reduced. Unfortunately, we don't have the troops to do it. We're securing Fallujah -- but not the Port of New York.

more lies from the Bush world....

[UpInArms]

53. PalmSource Reports Profitable Quarter, Job Cuts

http://www.brighthand.com/article/PalmSource_Results_Q205?site=SmartPhone

PalmSource has released the results for its most recent financial quarter.

Although the company turned a profit, this was the result of it selling its rights to the "Palm" trademark to palmOne. Without this $26.7 million, the company would have posted a loss.

<snip>

PalmSource plans to reduce its full-time head count by approximately 16 percent in the U.S. Over half of the job cuts were middle and senior management positions, including three senior vice presidents.

It expects annual salary savings of approximately $6.0 million in its current fiscal year related to these cuts.

...more...

[ozymandius]

54. 10:42

Dow 10,398.43 +23.95 (+0.23%)
Nasdaq 2,072.24 +3.35 (+0.16%)
S&P 500 1,201.66 +1.81 (+0.15%)
10-Yr Bond 39.71 -0.19 (-0.48%)
NYSE Volume 457,789,000
Nasdaq Volume 380,860,000

10:30AM: Major indices continue to hold their own and sport modest gains following more economic data... At the top of the hour, investors sifted through the latest read on regional manufacturing activity, as the June Chicago PMI fell to 53.6 (consensus 54.0)... Despite the small decline, any level above 50 reflects positive growth and, more notably, the index is consistent with the 51.5 estimate for tomorrow's national ISM report... NYSE Adv/Dec 1837/960, Nasdaq Adv/Dec 1422/1149

[ozymandius]

57. Fed Is Expected to Raise Interest Rates

By MARTIN CRUTSINGER, AP Economics Writer 2 minutes ago

WASHINGTON - Oil prices may be on a rollercoaster ride, but in terms of interest rate increases at the Federal Reserve, it has been steady as she goes. And economists expect it to remain so.

The Fed has boosted rates by a modest quarter-point at every meeting they have held for the past year — a total of eight increases so far.

Analysts believe virtually unanimously that the ninth increase will occur Thursday — that the central bank will boost its target for the federal funds rate, the interest banks charge each other, from 3 percent to 3.25 percent. And many forecast more increases to come.

"We expect the Fed to continue to raise interest rates steadily into next year to contain inflation," said Richard DeKaser, chief economist at National City Corp. in Cleveland and the chairman of the advisory committee of the American Bankers' Association.

more

[ozymandius]

59. Rates to rise as oil, housing prices up

WASHINGTON (Reuters) - Costly energy and stratospheric U.S. housing prices are probably enough to keep Federal Reserve policy-makers from signaling an end on Thursday to the rate-rise cycle they began exactly a year ago.

-cut-

The FOMC began a two-day meeting on Wednesday, which it resumed on Thursday morning shortly after the government released data showing flat consumer spending in May. However, the data also showed tame inflation that likely will be heartening for the Fed.

The price index for consumer expenditure, contained within this monthly spending and income report and which Fed Chairman Alan Greenspan is known to monitor, was unchanged after a 0.4 percent gain in April, a sign that companies were not pushing prices up aggressively.

-cut-

HOLD THE COURSE

Even with signs of softness in manufacturing, most economists felt the U.S. central bank policy-makers would restate their intention to keep raising rates at a "measured" pace, implying another rise in August to curb inflation.

more

[Maeve]

62. 11:00--oopsie!

Dow 10,386.94 +12.46 (+0.12%)
Nasdaq 2,069.40 +0.51 (+0.02%)
S&P 500 1,200.55 +0.70 (+0.06%)
10-Yr Bond 39.71 -0.19 (-0.48%)

Nasdaq in particular seems to have fallen off the past quarter-hour...

on edit--not that much in reality, but the chart looks like a dive.

[UpInArms]

65. adding blather

11:00AM: Equities continue to run in place just above the flat line, but gains remain limited before the Fed's decision on interest rates... While the Fed remains the focal point today, investors have gotten a surprise boost of confidence amid reports of a multi-billion dollar acquisition... News that Bank of America (BAC 45.81 -1.10) has agreed to acquire MBNA Corp (KRB 26.37 +5.30) for $35 bln - a roughly 31% premium to yesterday's closing price - has improved sentiment heading into this afternoon's FOMC policy statement...

With Providian (PVN 17.65 +0.16) being acquired by Washington Mutual (WM 40.90 +0.27) for $6.5 bln, two of the only independents remaining - Capital One (COF 79.66 +5.77) and Metris Cos. (MXT 14.50 +0.52) - have also surged alongside MBNA... NYSE Adv/Dec 1703/1220, Nasdaq Adv/Dec 1440/1264

and at 11:10 EST

Dow 10,376.79 +2.31 (+0.02%)
Nasdaq 2,068.21 -0.68 (-0.03%)
S&P 500 1,199.66 -0.19 (-0.02%)
10-Yr Bond 3.964 -0.26 (-0.65%)

NYSE Volume 586,319,000
Nasdaq Volume 498,397,000

[UpInArms]

68. ABB Announces Profit Warning, Job Cuts (1,300 jobs)

http://www.forbes.com/technology/ebusiness/feeds/ap/2005/06/30/ap2117688.html

ABB Ltd. announced a profit warning Thursday because of restructuring costs in its transformer business and said it would cut 1,300 jobs, or 10 percent of the unit's global work force.

The Swiss-Swedish electrical engineering company said the reorganization charges would amount to $240 million, with about half the amount booked in the second quarter of 2005 and the rest from 2006 to 2008.

ABB said it would focus on increasing productivity and operational efficiencies, closing "a small number of plants in high-cost countries" and cutting about 1,300 jobs in the transformer business.

<snip>

ABB has been recovering from nearly four years of restructuring and losses. Many brokerages recently upgraded their recommendations and increased price targets after the company reached an agreement to settle U.S. asbestos litigation, which brought ABB to the brink of bankruptcy in 2002. The asbestos litigation is expected to be completed this year.

The company is the world's largest producer of electrical transformers, which regulate the voltage in an electrical system and are used in substations, power plants or electrical locomotives.

Chief Executive Fred Kindle said the biggest problem in the transformer industry in recent years has been overcapacity, mainly the result of deregulation.

...more...

[UpInArms]

69. ABB plunges on profit warning

http://www.marketwatch.com/news/story.asp?guid=%7BD1778393%2DF4C8%2D4F4E%2DA525%2DCD9A8CA84142%7D&siteid=mktw

LONDON (MarketWatch) -- Shares of Swiss-Swedish engineering group ABB Ltd. plunged over 6% Thursday after warning that second-quarter net income will be "significantly lower" than the $199 million it made in the first quarter, due to charges it's taking to cut 10% of its workforce and as well as other costs.

ABB (ABB: news, chart, profile) (SE:ABB: news, chart, profile) unveiled a reorganization of its global transformer business that involves cutting 1,300 jobs, or 10% of the global workforce.

ABB is the world's leading producer of transformers used in substations, power plants, electrical locomotives, as well as systems to manage electricity grids and other applications.

ABB said the program, to be implemented because of overcapacity, increasing raw material costs and a regional shift in demand, will run until the end of 2008 and cost around $240 million, with $120 million to be booked as a charge to continuing operations in 2005.

...more...

[UpInArms]

72. 11:48 EST numbers and blather

Dow 10,373.10 -1.38 (-0.01%)
Nasdaq 2,067.82 -1.07 (-0.05%)
S&P 500 1,199.71 -0.14 (-0.01%)
10-Yr Bond 3.967 -0.23 (-0.58%)

NYSE Volume 737,627,000
Nasdaq Volume 637,821,000

11:30AM: Sellers show some resolve, paring early gains as oil rebounds to session highs, but the pullback is not nearly enough to make a significant change in the standings... Crude oil futures have recently turned positive and are now back over $57/bbl ($57.50/bbl +$0.24), knocking the major averages into negative territory for the first time this morning; however, the indices have shown resilience at current levels as losses remain minimal at best... NYSE Adv/Dec 1665/1339, Nasdaq Adv/Dec 1375/1396

[UpInArms]

81. 12:13 EST numbers and blather

Dow 10,372.26 -2.22 (-0.02%)
Nasdaq 2,067.98 -0.91 (-0.04%)
S&P 500 1,200.10 +0.25 (+0.02%)
10-Yr Bond 3.965 -0.25 (-0.63%)

NYSE Volume 823,287,000
Nasdaq Volume 702,335,000

12:00PM: Market trading with a tinge of caution midday as investors weigh upbeat M&A activity against mixed economic data and a rebound in oil ahead of today's FOMC meeting (2:15 ET)... While upcoming comments (2:15 ET) from the Fed remain investors' primary focus, reports that Bank of America (BAC 46.03 -0.88) has agrees to acquire MBNA Corp (KRB 26.42 +5.35) for $35 bln has helped calm some nerves heading into the Fed's decision on interest rates as sector leadership remains mixed...

The Fed is widely expected to raise the fed funds rate target to 3 1/4% from 3% this afternoon, but investors remain more concerned about the wording of the statement associated with the announcement... With regard to this morning's economic data, May personal income rose just 0.2% (consensus +0.3%), as last month's read of 0.7% was revised lower to +0.6%, while personal spending was unchanged... However, an encouraging read on inflation, as the overall core PCE index held steady at a 1.6% year-over-year rate, has provided some support, suggest the Fed - which is more concerned about rising prices than slowing growth - back off their aggressive, steady rate hikes...

Also, initial claims unexpectedly fell 6K to 310K (consensus 325K), leaving the 4-week average (324K) at its lowest since late April, while the June Chicago PMI fell to 53.6 (consensus 54.0); however, any level above 50 reflects positive growth and the index is consistent with the 51.5 estimate for tomorrow's national ISM report... Meanwhile, the Utilities sector has paced the way higher as a CSFB upgrade on Duke Energy (DUK 29.88 +0.30) and falling bond yields... The Treasury market has held onto modest gains amid benign inflation data, as the benchmark 10-year note is up 4 ticks to yield 3.96%...

[UpInArms]

78. Crude futures gain more ground on OPEC talk

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38533.5008120833-837561643&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- Crude futures gained more ground in New York after CNBC said OPEC's president has suspended discussions on raising output. OPEC's move follows a steep decline in oil prices from Monday's record high above $60. August crude is up 54 cents at $57.80 a barrel after trading as low as $56.50 earlier.

11:54am 06/30/05 OPEC PRESIDENT SUSPENDS TALK OF LIFTING OUTPUT -- CNBC

[UpInArms]

88. House Panel Approves CAFTA

12:42pm 06/30/05 HOUSE PANEL APPROVES CAFTA TRADE PACT

:banghead:

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38533.5335571181-837567863&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- The House Ways and Means Committee on Thursday voted 24-11 to favorably recommend the Central America Free Trade Agreement. The Bush administration still faces an uphill battle on the House floor amid opposition by Democrats and some Republicans from manufacturing and sugar-heavy districts. The full House is expected to vote on the pact sometime after the week-long Independence Day recess. The full Senate could vote on the trade deal as early as Thursday.

[ozymandius]

89. losses extend a bit deeper

12:47
Dow 10,364.20 -10.28 (-0.10%)
Nasdaq 2,067.95 -0.94 (-0.05%)
S&P 500 1,199.84 -0.01 (-0.00%)
10-Yr Bond 39.64 -0.26 (-0.65%)
NYSE Volume 918,483,000
Nasdaq Volume 780,172,000

12:30PM: Market still confined to a tight trading range, as both buyers and sellers continue to stick to the sidelines... The market's holding pattern has been further evidenced in the A/D line, as advancers on the NYSE hold a 17 to 13 advantage over decliners while both advancing and declining issues on the Nasdaq remain evenly matched... The ratio of up to down volumes also suggests a mixed bias... Meanwhile, the Dow, S&P and Nasdaq have all found modest support above initial resistance levels of 10345, 1198 and 2062, respectively, but will likely remain range bound until the Fed's decision... NYSE Adv/Dec 1753/1327, Nasdaq Adv/Dec 1409/1473

[Virginian]

90. So do I lock in to my mortgage interest rate today or wait?

There was an increase today because of the announcement that the Feds would meet. What is the best guess on whether the rate will go up or down next week?

[ozymandius]

92. The word on the street is that rates are going up.

Do with that info what you will. And good luck.

[Virginian]

97. Thanks.

[UpInArms]

91. Bush nominates Mosbacher to be OPIC president

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38533.5629051389-837571254&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- President Bush nominated Robert Mosbacher Jr. to be president of the Overseas Private Investment Corp., the White House announced Thursday. An energy executive for the past 20 years and a former staffer for former Senate Majority Leader Howard Baker, Mosbacher is also the son of Robert Mosbacher Sr., who served as Secretary of Commerce for George H.W. Bush.

http://opensecrets.org/indivs/search.asp?txtName=Mosbacher&NumOfThou=0&txt2004=Y&submit=Go%21

Total for this search: $130,310

MOSBACHER, ROBERT MR JR
HOUSTON,TX 77019

MOSBACHER ENERGY/CHAIRMAN

6/3/2004

$25,000

Republican National Cmte

MOSBACHER, ROBERT
HOUSTON,TX 77002

MOSBACHER PRODUCTION COMPANY

3/9/2004

$15,000

National Republican Senatorial Cmte

(and much much more)

[ozymandius]

94. snapshot

1:44
Dow 10,351.62 -22.86 (-0.22%)
Nasdaq 2,068.16 -0.73 (-0.04%)
S&P 500 1,198.53 -1.32 (-0.11%)
10-Yr Bond 39.64 -0.26 (-0.65%)
NYSE Volume 1,084,375,000
Nasdaq Volume 913,378,000

1:30PM: Little changed since the last update as the major averages continue to vacillate in roughly the same ranges... Crude oil futures have recently fallen back below $57/bbl ($56.85/bbl -$0.41), but with the FOMC policy statement hitting the wires within the next 45 minutes, the market has failed to take notice... Crude oil prices, which have continued to consolidate since hitting an all-time high of $61/bbl three days ago, are now off more than 6.0% from Monday's closing price...NYSE Adv/Dec 1815/1320, Nasdaq Adv/Dec 1470/1454

[UpInArms]

96. Bush nominates O'Brien as Treasury anti-terror chief

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38533.5707427778-837571896&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- President Bush nominated Patrick O'Brien to be the Treasury Department's assistant secretary for terrorist finance, the White House announced Thursday. O'Brien is currently senior counsel in the office of the deputy attorney general at the Department of Justice and was counsel to the director at the FBI.

Terra! Terra! Terra!

[Maeve]

98. So the Fed acts exactly as expected and the market...

Dow 10,336.83 -37.65 (-0.36%)
Nasdaq 2,068.76 -0.13 (-0.01%)
S&P 500 1,197.50 -2.35 (-0.20%)
10-Yr Bond 39.56 -0.34 (-0.85%)

Why did it tank?
:shrug:

[ozymandius]

99. Did you say 'tank'?

kerflushhhhhh....

2:34
Dow 10,321.54 -52.94 (-0.51%)
Nasdaq 2,063.79 -5.10 (-0.25%)
S&P 500 1,195.08 -4.77 (-0.40%)
10-Yr Bond 39.63 -0.27 (-0.68%)
NYSE Volume 1,318,667,000
Nasdaq Volume 1,133,655,000

2:15PM: As expected, the FOMC has raised the fed funds rate by 25 basis points to 3.25% and maintains balanced risk assessment, with declaration that it believes policy accommodation can be removed at a pace that is likely to be measured...NYSE Adv/Dec 1850/1342, Nasdaq Adv/Dec 1569/1393

[ozymandius]

101. gurgle

2:37
Dow 10,313.10 -61.38 (-0.59%)
Nasdaq 2,062.30 -6.59 (-0.32%)
S&P 500 1,195.36 -4.49 (-0.37%)
10-Yr Bond 39.80 -0.10 (-0.25%)
NYSE Volume 1,336,465,000
Nasdaq Volume 1,150,978,000

[UpInArms]

102. 2:37 and straight down

Dow 10,313.34 -61.14 (-0.59%)
Nasdaq 2,062.84 -6.05 (-0.29%)
S&P 500 1,195.36 -4.49 (-0.37%)
10-Yr Bond 3.980 -0.10 (-0.25%)

NYSE Volume 1,336,465,000
Nasdaq Volume 1,150,978,000

[Maeve]

105. Yeah, I'm confused

They do exactly what everyone said they'd do and the market acts like it's shocked.

Every time I think I have a handle on this stuff, it goes "booga!"

[UpInArms]

100. Fed hikes rates, signals more to come

http://www.marketwatch.com/news/story.asp?guid=%7BB164AB75%2DDF6D%2D4324%2DBCC5%2D29D9BBE0273F%7D&siteid=mktw

WASHINGTON (MarketWatch) - As expected, the Federal Open Market Committee boosted its target for short-term interest rates Thursday by a quarter percentage point to 3.25% and signaled further rate hikes are coming.

The Federal Reserve's policymaking committee left its post-meeting statement largely unchanged from May's statement. The committee said current rates remain "accommodative" and said once again that it believes rates can be raised at a "measured pace."

There was little immediate market reaction to the announcement. See Market Snapshot.

The FOMC said the risks of higher inflation and weaker growth would remain balanced if appropriate policies are followed. Read the full statement.

The FOMC slightly modified its assessment of the economy from the May statement, reflecting more moderate inflation data.

"Although energy prices have risen further, the expansion remains firm and labor market conditions continue to improve gradually," the committee said. "Pressures on inflation have stayed elevated, but longer-term inflation expectations remain well contained."

<snip>

Fed policy has entered a tricky phase. Rates are closer to the neutral level the central bank seeks, where policy neither stimulates growth nor holds it back. Achieving a soft landing is extremely rare, however. Typically, the Fed has overtightened and the economy has tumbled into recession.

...more...

[UpInArms]

106. Warning: "concerned about the misallocation of capital"

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38533.6118620949-837575416&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Michael Metz, chief investment strategist at Oppenheimer & Co. said the Federal Open Market Committee's decision to make no changes to the policy statement that accompanied its move to raise rates by a quarter-point to 3.25% indicates the central bank isn't finished tightening yet. "It's more of the same. It certainly does not validate those who think we're in the eighth inning," Metz said. "It's anybody's guess when they'll be through but they're not giving you any clue at all," he added. Metz believes the Fed's real intention is to cool down the hot housing market. "I think they've got to be concerned about the misallocation of capital reflected by the huge spike in speculative funds that are going into housing so my guess is that they will continue this policy until the housing market cools off," the strategist said. Stocks pulled back after the Fed's announcement. The Dow Jones Industrial Average ($INDU) was last down 0.6% at 10,313, while the Nasdaq Composite Index ($COMPQ) dropped 0.3% to 2,062 and the S&P 500 ($SPX) lost 6 points, or 0.5%, to 1,194.

Bubble popping time?

[ozymandius]

104. among other things: crude talk

1:49PM Crude Oil (56.60 -0.66) retreats to lows of day, coming down aggressively over past 10 min... intraday range $56.40-57.80

[UpInArms]

108. blather with FOMC text

2:30PM: Market spikes lower, in sympathy with a quick reversal in Treasurys; but even as bonds almost as quickly regain momentum to the upside, stocks remain under modest pressure... While the policy statement was basically left unchanged, the mere fact that the Fed will continue to raise rates has weakened demand for equities, as the Dow has hit a new session low...

The actual text of the statement reads: "The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Although energy prices have risen further, the expansion remains firm and labor market conditions continue to improve gradually. Pressures on inflation have stayed elevated, but longer-term inflation expectations remain well contained. The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal. With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability." NYSE Adv/Dec 1929/1272, Nasdaq Adv/Dec...

[TrogL]

107. Loonie Watch

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

Highlights.



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

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

Up-to-the-minute graph (http://quotes.ino.com/chart/?s=CME_CDY&v=i)

Current TSE:




2005-05-30 Monday, May 30 0.794597 USD
2005-05-31 Tuesday, May 31 0.799233 USD
2005-06-01 Wednesday, June 1 0.80186 USD
2005-06-02 Thursday, June 2 0.801732 USD
2005-06-03 Friday, June 3 0.801089 USD
2005-06-06 Monday, June 6 0.803406 USD
2005-06-07 Tuesday, June 7 0.80186 USD
2005-06-08 Wednesday, June 8 0.803859 USD
2005-06-09 Thursday, June 9 0.796876 USD
2005-06-10 Friday, June 10 0.800512 USD
2005-06-13 Monday, June 13 0.795039 USD
2005-06-14 Tuesday, June 14 0.796559 USD
2005-06-15 Wednesday, June 15 0.806647 USD
2005-06-16 Thursday, June 16 0.808016 USD
2005-06-17 Friday, June 17 0.809717 USD
2005-06-20 Monday, June 20 0.811754 USD
2005-06-21 Tuesday, June 21 0.812348 USD
2005-06-22 Wednesday, June 22 0.809651 USD
2005-06-23 Thursday, June 23 0.812282 USD
2005-06-24 Friday, June 24 0.811096 USD
2005-06-27 Monday, June 27 0.812546 USD
2005-06-28 Tuesday, June 28 0.812348 USD
2005-06-29 Wednesday, June 29 0.815461 USD
2005-06-30 Thursday, June 30 0.815927 USD




The loonie's on the rise against ALL currencies. Oil and tech stocks are up. Parliament's out with a good budget and no real economic shocks in the forecast. The controversial Gay marriage bill passed (not sure if that's an economic incentive or not - possibly to the tourist trade) with more of a whimper (from the Conservatives) than a bang. Possibly world markets think if they can pass that, they can pass anything.

The US found a mad cow with roots in Texas. Can't blame Canada for this one so maybe there's hope for getting the border open, or possibly the US's share of the international market may affected and some of those markets may already have forgiven Canada (I'm guessing here).

[UpInArms]

109. 2:57 EST numbers (still red - heading back up)

Dow 10,335.05 -39.43 (-0.38%)
Nasdaq 2,066.25 -2.64 (-0.13%)
S&P 500 1,196.72 -3.13 (-0.26%)
10-Yr Bond 3.961 -0.29 (-0.73%)

NYSE Volume 1,444,371,000
Nasdaq Volume 1,242,224,000

[UpInArms]

110. 3:15 EST update and blather

Dow 10,324.54 -49.94 (-0.48%)
Nasdaq 2,066.05 -2.84 (-0.14%)
S&P 500 1,195.79 -4.06 (-0.34%)
10-Yr Bond 3.938 -0.52 (-1.30%)

NYSE Volume 1,534,732,000
Nasdaq Volume 1,312,700,000

3:00PM: Major indices continue to weaken as investors express their displeasure with the Fed's restatement of further rate increases at a "measured" pace - providing investors with little relief that we're in the later innings of the Fed's tightening cycle... Exacerbating declines on the Dow has been a failure for the blue chip index to find initial support near 10345... Notable components turning negative within the last 30 minutes include GE, GM, HON, IBM, INTC, MRK and WMT while AXP has relinquished most of its previous 1.0% gain... NYSE Adv/Dec 1612/1599, Nasdaq Adv/Dec 1372/1633

[UpInArms]

113. 3:31 numbers - last half hour of trading - will it or won't it

stay above 10,300?

Dow 10,308.35 -66.13 (-0.64%)
Nasdaq 2,064.96 -3.93 (-0.19%)
S&P 500 1,194.08 -5.77 (-0.48%)
10-Yr Bond 3.945 -0.45 (-1.13%)

NYSE Volume 1,620,937,000
Nasdaq Volume 1,379,949,000

I guess we'll have to wait and see :evilgrin:

[ozymandius]

114. still hovering at session lows

3:36
Dow 10,311.57 -62.91 (-0.61%)
Nasdaq 2,064.03 -4.86 (-0.23%)
S&P 500 1,194.50 -5.35 (-0.45%)
10-Yr Bond 39.45 -0.45 (-1.13%)
NYSE Volume 1,662,016,000
Nasdaq Volume 1,410,053,000

[UpInArms]

111. Wells Fargo ups Prime to 6.25%

3:01pm 06/30/05 WELLS FARGO BANK UPS PRIME RATE TO 6.25% FROM 6%

[UpInArms]

112. White House: Kelliher selected to become FERC chairman

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38533.6302363657-837576968&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (MarketWatch) -- The White House announced Thursday that President Bush will elevate Joseph Kelliher to be chairman of the Federal Energy Regulatory Commission. Kelliher has served as a commissioner at FERC since November 2003 and his term expires on June 30, 2007. Kelliher will replace departing FERC Chairman Patrick Wood. The commission regulates interstate transmission of natural gas, oil, and electricity. Prior to his position at the commission, Kelliher served as an advisor to former Energy Secretary Spencer Abraham.

[ozymandius]

115. Somebody tapped it and down it went.

3:44
Dow 10,288.39 -86.09 (-0.83%)
Nasdaq 2,061.38 -7.51 (-0.36%)
S&P 500 1,193.15 -6.70 (-0.56%)
10-Yr Bond 39.45 -0.45 (-1.13%)
NYSE Volume 1,725,054,000
Nasdaq Volume 1,457,404,000

[ozymandius]

116. blather

3:30PM: Indices continue to languish near their lows of the session as buying interest remains scarce across the board... Utilities, however, continue to trade near 4-year highs, led by high-yielding utilities like PEG, EXC and CNP - which average dividend yields of 3.18%... Aside from a growing desire to own stocks that also generate income, in a falling market no less, a late-day rally in the Treasury market has also provided some support... Bonds have just closed out their best quarter since 2002, as the benchmark 10-year note finished up 11 ticks 3.93%...DJUA +0.5, NYSE Adv/Dec 1680/1547, Nasdaq Adv/Dec 1465/1530

[ozymandius]

119. The Dow looks poised to lose 100 points.

3:54
Dow 10,275.43 -99.05 (-0.95%)
Nasdaq 2,058.74 -10.15 (-0.49%)
S&P 500 1,191.34 -8.51 (-0.71%)
10-Yr Bond 39.45 -0.45 (-1.13%)
NYSE Volume 1,823,403,000
Nasdaq Volume 1,539,021,000

[Maeve]

120. good call

Dow 10,271.90 -102.58 (-0.99%)
Nasdaq 2,056.37 -12.52 (-0.61%)
S&P 500 1,190.82 -9.03 (-0.75%)
10-Yr Bond 39.45 -0.45 (-1.13%)

ooo...last second up-tick!

Dow 10,274.97 -99.51 (-0.96%)
Nasdaq 2,056.96 -11.93 (-0.58%)
S&P 500 1,191.32 -8.53 (-0.71%)
10-Yr Bond 39.45 -0.45 (-1.13%)

Whew!

[ozymandius]

121. Phew! Almost another triple-digit loss for the Dow.

Deus Ex Machina saves the day again.

[UpInArms]

122. closing blather

Close: Stocks closed out Q2 almost exactly as it began - to the downside - as new M&A activity, falling oil prices and lower bond yields failed to offset another 1/4% rate hike from and no indication as to when the Fed will cease... As expected, the Federal Reserve raised the fed funds rate by 25 basis points to 3.25% for the ninth consecutive time, maintaining a balanced risk assessment...

However, while leaving the policy statement relatively unchanged at the last few meetings eased fears of more "aggressive" Fed tightening, retaining the "measured" language this time around, when so many were hoping the Fed may provide a clearer picture as to when the tightening may come to an end, waned on sentiment heading into the holiday weekend... Sure, reports that Bank of America (BAC 45.60 -1.31) plans to buy MBNA Corp (KRB 26.14 +5.07) for $35 bln - a deal second in size only to Proctor & Gamble's pending $57 bln bid for Gillette - provided some early optimism... The fact that crude oil prices ($56.50/bbl -$0.72) fell for a third straight day and closed about 6.7% below Monday's record close of $60.54/bbl was also positive...

There was also a late-day rally in the Treasury market that left bonds with their best performance since 2002, as the benchmark 10-year note finished up 11 ticks 3.93% following mixed economic data... May personal income rose just 0.2% (consensus +0.3%), as last month's read of 0.7% was revised lower to +0.6%, while personal spending was unchanged... But within the data, the overall core PCE index held steady at a 1.6% year-over-year rate, suggesting inflation remains well contained...

[54anickel]

123. So will tomorrow be another down day as investors decide they don't

want to be holding any stocks over the weekend----again. :eyes:

Sheesh, nothing but good news all around them and they're letting a confused, befuddled, Fed get to them?

When does all that 401K payroll withholding for the month go into the funds? Might get a bit of a bump there again.