STOCK MARKET WATCH, Monday 18 July

[ozymandius]

Monday July 18, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 187 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 210 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 274 DAYS
DAYS SINCE ENRON COLLAPSE = 1331
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 July 15, 2005

Dow... 10,640.83 +11.94 (+0.11%)
Nasdaq... 2,156.78 +3.96 (+0.18%)
S&P 500... 1,227.92 +1.42 (+0.12%)
10-Yr Bond... 4.18% -0.01 (-0.12%)
Gold future... 421.30 +1.10 (+0.26%)

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 Tim W. Wood

THE DOW REPORT
The Market Without a Return

The Dow Jones Industrial Average is currently at the same level that it was in April 1999. This level is represented by the blue line on the chart below. Since April 1999 the market topped out with the bull market top in 2000. The top produced a Primary Dow theory sell signal that still remains valid today. Then, the market declined into the Phase I bear market low, which occurred in October 2002. From that low the rally separating Phase I from Phase II was born. This rally has brought the market back to the same levels of some 6 years ago. So, if one were invested in the DJIA from April 1999 to present, they would basically be at breakeven.



Now, I want to look at the most recent 20 month period. This period is defined by the red boundary lines on the chart above. In 2004 the Industrials made three false breaks below this lower boundary line and one false break above it. In March of this year the Industrials also made a false break above the upper boundary line. In April of this year the averages produced a “Secondary” Dow theory sell signal which served to realign the Primary trend with the Secondary trend. Since that signal the market is up some 2%. Furthermore, during this 20 month period, which I believe is a distribution top, the market has made numerous shorter-term false breaks in both directions. This chopping process has served to frustrate both the bulls and the bears.

Anyone trying to invest on the long side would have had a very difficult time sitting through the declines that have continuously occurred during this 20-month period. Furthermore, being long in this environment would not have been advisable simply because of the risk due to the overriding bearish Dow theory implications. However, the short side has also been met with false breaks as well. Therefore, the market has presented an environment that has been virtually impossible for the position trader or the intermediate to long term investor to deal with. No one has been able to win on this time horizon. The market has and continues to wear down, frustrate and confuse both the bulls and the bears.

more...

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

[54anickel]

53. Natural vs. unnatural forces

snip>

I continue to believe that the sideways action seen over the last 20 months is pretty much a direct result of two opposing forces. We have the natural forces of the market that are, no doubt, negative. For example, the Dow theory work continues to be negative as does the cycles work and a number of other long-term technical disciplines. But then we have the unnatural forces that are trying to hold things together. The net result has been a sideways market that continues to chop back and forth yielding no return.

[ozymandius]

2. Greenspan, at end of era, to signal more rate rises

WASHINGTON (Reuters) -
Federal Reserve Chairman Alan Greenspan, in probably his last semi-annual testimony to Congress this week, will paint an upbeat picture of growth but drop no hint the Fed is ready to pause raising interest rates.

Greenspan, due to retire on Jan. 31 2006, will address Congress on Wednesday and Thursday. He may also air his views over the country's rampant housing market and the "conundrum" of low, long-bond yields.

But the performance will be most closely watched for clues of whether the U.S. central bank is weighing an end to its yearlong policy tightening campaign.

Economists think Greenspan will do no such thing.

more...

[ozymandius]

3. Good Economic News May Not Boost Stocks

NEW YORK - Companies are more productive and more people have jobs. Corporate earnings growth is strong. And while oil prices remain near historic highs, the economy is showing great resilience. Even inflation is a non-issue. But don't expect a huge surge in stocks.

Last week's good economic and earnings news came at the tail end of an impressive weeklong rally. And that's the last place you want to see it. Had the economic reports come out the previous week, when the indexes were 3 percent lower, Wall Street might have seen more of a jump.

The past week's rally was already looking tired by Thursday, when the Labor Department surprised the market with a very benign inflation report. And with the bulk of earnings seasons still to come, another hurricane threatening oil producing and refining in the Gulf of Mexico, and the Federal Reserve meeting in just over three weeks, there are more opportunities for the market to sell off than there are for a sustained push higher.

-cut-

EARNINGS

The bulk of earning reports will be released over the next two weeks. Sixteen of the 30 Dow industrials are reporting this week, including Microsoft Corp., Citigroup, Altria Group Inc. and Pfizer Inc. Two Dow components, however, will likely garner intense scrutiny.

more

[MARALE]

4. Maytag's shares vault on Whirlpool bid

http://www.marketwatch.com/news/story.asp?guid=%7BEB67F595%2D419C%2D4E67%2D80BB%2DB092024CCFA7%7D&siteid=mktw

Whirlpool will offer $17 for each Maytag share, equal to $2.3 billion in cash, stock and $969 million in assumed debt. At least half of the offer will be in cash, Whirlpool said.

The bid won't be submitted until a due-diligence review; Whirlpool said it needs to perform such a review by Aug. 9.

...

n addition to the Haier offer, a private-equity consortium led by Ripplewood Holdings has offered $14 a share.

All bidders would assume Maytag's $969 million in debt.

Maytag reiterated that its board recommends the Ripplewood-led transaction

<more>

Interesting, Maytag being bought out will be good for the company, but whirlpool? I know some people that work there and I am worried that they will loose their job.

[54anickel]

21. Probably not the best move for the manufacturing workers at Whirlpool

since Maytag's been opening facilities in Mexico (and I'm pretty sure China) in the search for reduced labor costs.

Interesting that Maytag's board would prefer the lower bid of the "venture capital" group over Whirlpools. Probably figure they'd have more control and autonomy under the VC group.

[UpInArms]

5. daily dollar watch

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

Last trade 89.66 Change -0.06 (-0.07%)

Dollar Rallies as Data Supports Upbeat Comments from Greenspan Next Week

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2255&Itemid=39

US Dollar
The dollar gained ground against the Euro thanks to a number of positive economic data released this morning. The biggest change was in the Empire State manufacturing survey which leaped 12.21 points to 23.91. Although this index is fairly volatile, having only dipped to
-11.06 back in May, its rapid recovery has certainly given dollar bulls a good reason to cheer once again. Yet it wasn’t only the Empire State survey that gave them cause for optimism, industrial production also increased 0.9% in June with capacity utilization at the highest level since December 2000; Consumer confidence edged up from 96.0 to 96.5. For the most part, forecasters had predicted most of these indexes to deteriorate reflecting slower growth in the US. Today’s positive data on the other hand has everyone talking about the end of the soft patch that the US economy slipped into at the beginning of the year. Whether this is true still remains to be seen but since most of these indicators reflected activity for the month of June, it suggests that US consumers and businesses have been surprisingly resilient in the face of rising oil prices. Not all news were good news today for dollar bulls. Like consumer prices, producer prices also fell short of expectations. Excluding the more volatile food and energy prices, producer prices actually contracted 0.1 percent in the month of June. Including the volatile components, prices remained unchanged. This week’s data gives us pretty good insight into the tone of Greenspan’s speech next week. He is expected to remain upbeat on the economy but with inflationary pressures biased to the upside and data yet to reflect that, the Federal Reserve has good reason to continue on with their measured pace of tightening. However even before Greenspan’s speeches next week, we have the Treasury International Capital flow data slated for release Monday morning. After the previous month’s significant shortfall in funding needs, traders will be closely watching the report to see if we will be able to meet the funding needs of the trade deficit in the month of May. If the number rebounds strongly, it could be the catalyst that dollar bulls are waiting for to take the EURUSD back below

...more...

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2263&Itemid=39

Economic Releases: Will Foreign Interest In U.S. Assets Continue

U.S. Net Foreign Security Purchases (MAY) (13:00 GMT, 9:00 EDT)
Consensus: N/A
Previous: $47.4B

Outlook: There is no Bloomberg economists’ estimate for May’s TIC data. This shouldn’t make too much of a difference; over the past few months, the estimate has been wrong in the direction the data will move in and way off in terms of magnitude. Looking at the numbers, one factor that could boost May’s net foreign security purchases is the rebound in the equity markets after what happened in March and April. The NASDAQ gained over 7.6% over the month while the Dow Jones Industrial Average and the S&P 500 achieved an average increase of 2.75%. However, 10-year Treasuries fell about 19 basis points over the month. Caribbean hedge funds will probably play another big part in this release as the monthly fluctuations in their net US holdings have been over $10 billion in each of the past five months. Another low number will definitely be disappointing for the US and further fuel the concern over the US current account deficit.

Previous: In April, TIC data came in far below expectations of $70 billion to land at a measly $47.4 billion. This came after the $40.6 billion net securities bought by foreigners in March. This sort of consecutive low performance hasn’t been seen since September and October of 2003. A big contributor to the disappointing figure is the fact that Caribbean hedge funds reduced holdings by $12.6 billion, which was almost perfectly offset by the increase in the combined holdings of Japan and China. The decrease also has a great deal to do with market performance over the month. The US stock indices had an average decline of about 3% in April while 10-year Treasuries fell 28 basis points over the month. The US capital markets are still the most liquid, and therefore attractive, in the world. However, until foreign participants start realizing positive returns again on dollar denominated assets, the TIC data may continually be disappointing.

...more...

Have a Great Day Marketeers!

[UpInArms]

28. Dollar eases against rivals

http://www.marketwatch.com/news/story.asp?guid=%7B023E5304%2D0FA0%2D4155%2D94E4%2D61E386BAC938%7D&siteid=mktw

excerpt:

The Treasury Department reported that foreign capital inflows to the United States increased to $60 billion in May, the strongest inflow since February's $79.6 billion.

Analysts said that inflows more than covered the $55.3 billion trade deficit recorded for the month, which is good news for the dollar, although the market reaction was muted.

Foreign purchases of U.S. assets had fallen short of covering the trade deficit for the 2 previous months.

In April, purchases of U.S. assets stood at $47.4 billion, lower than the $57 billion trade deficit recorded that month.

The dollar had gained ground against most foreign-exchange rivals Friday after a barrage of solid economic data reinforced expectations that the U.S. economy's on solid footing.

...more...

[54anickel]

6. Yet to be squeezed

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

snip>

Once upon a time, people in a distant village thought it was a good idea to save money and avoid debt as if it were a video clip of a Tom Cruise interview. But then one day, a wizard named Al sneaked into the town with a silver goblet (Al was so over his infatuation with gold) and placed it in the middle of the village, right next door to the local mortgage company. Of course, the owner of the mortgage company was the first one to notice the goblet. So he picked it up, and while most people probably wouldn’t drink out of something they stumbled upon on the way into work, the mortgage banker drank from the cup, and when he did he suddenly realized that all those adjustable rate home equity loans he’d been making would adjust higher one day, and he was sure glad that he’d sold them all off to investors.

snip>

Americans are so gaga over this mortgage flexibility that 63% of mortgage loans originated in the second half of 2004 were adjustable in some way or other, according to a May 22 story in the Chicago Tribune. And 11% of all mortgage loans were interest-only loans. But that was last year. After tallying the results of a more recent survey, the National Mortgage News concluded that interest-only loans now account for 21% of loan production.

snip>

And they will adjust if interest rates do change. A person visiting Freddie Mac’s website could learn that the going rate for a 1-Year adjustable rate mortgage is now about 4.56%. That means ARM rates today are higher than comparable ARM rates going all the way to mid-2002. And that means that people who bought houses with ARMs over the last year or so ought to be feeling a little squeeze from the adjusting process, teaser or no teaser.

But how much of a squeeze can there be, given the zeal for furniture, including the unassembled kind sold in those IKEA stores the size of Delaware that keep popping up all over the place?

Maybe not much. There certainly is not much of squeeze yet from teaser rates bumping up to prevailing rates according to research by Deutsche Bank. Their study, as reported by the New York Times, figures that only 1% of mortgage debt outstanding will adjust from teaser to adjustable rates this year. But next year the figure could jump to $300 billion, and by 2007, a whopping $1 trillion of mortgage debt (about 12% of the estimated total) will become more expensive to service.

more...

[UpInArms]

7. Citigroup profit jumps, misses estimates

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2005-07-18T122746Z_01_N18164687_RTRIDST_0_BUSINESS-FINANCIAL-CITIGROUP-EARNS-DC.XML

NEW YORK (Reuters) - Citigroup Inc. (C.N: Quote, Profile, Research) on Monday said second-quarter net profit more than quadrupled as legal costs fell, but earnings missed analysts' estimates as revenue from fixed-income trading plunged.

<snip>

Year-earlier results included a charge for legal costs tied to WorldCom Inc., Enron Corp. and other corporate scandals, and a gain from the sale of a stake in Saudi bank Samba Financial Group. Excluding these items, profit fell 5 percent.

<snip>

Chief Executive Charles Prince called the capital markets environment "one of the worst we have seen in years."

Capital markets and banking profit fell 31 percent to $1.04 billion. Fixed-income revenue declined 28 percent, hurt by lower trading results in interest rate and credit products, while investment banking revenue fell 1 percent.

Several banks, including Goldman Sachs Group Inc. (GS.N: Quote, Profile, Research) and Morgan Stanley (MWD.N: Quote, Profile, Research), have reported recent weakness in fixed-income trading as the gap between short- and long-term interest rates narrowed.

...more...

[UpInArms]

8. Treasury prices lower ahead of TICS data

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38551.3582178356-838786897&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) - Treaury prices were lower early Monday, sending yields higher, as the market awaited the latest monthly Treasury International Capital Systems figures. The report tracks the amount of purchases of U.S. assets by foreign buyers. In recent trades, the yield on the benchmark Treasury 10-year note ($TNX) rose to 4.186% from 4.175% late Friday.

[UpInArms]

9. DIARY-U.S. Treasuries, Monday, July 18

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-18T122843Z_01_N18305262_RTRIDST_0_DIARY-U-S-TREASURIES.XML

ALL TIMES EDT/GMT

TREASURY DEPARTMENT:

Treasury Department announces weekly sale of 4-week bills, 11 a.m. (1500 GMT)

Treasury Department's weekly sale of 3-, 6-month bills, approximately 1 p.m. (1700 GMT)

FEDERAL RESERVE:

No events are scheduled

ECONOMIC INDICATORS:

Treasury Department releases its May Treasury International Capital (TIC) report. In May Net Capital Inflows were $47.4 billion and Foreign Treasury Buys was $24.66 billion.

The National Association of Home Builders releases its July Housing Market Index, 1 p.m. (1700 GMT). Economists in a Reuters survey expect a median rise to 72 compared with 71 in June.

[UpInArms]

12. Capital inflows to U.S. step up in May (barely covered daily spending)

http://www.marketwatch.com/news/story.asp?guid=%7BDCE42559%2DD079%2D4AC2%2D8661%2DFEA51F5888BE%7D&siteid=mktw

WASHINGTON (MarketWatch) - Foreign capital inflows to the United States increased to $60 billion in May, the Treasury Department reported Monday.

It was the strongest inflow since February's $79.6 billion. Inflows totaled $40.5 billion in March and $47.8 billion in April.

Capital inflows are a prime method of financing the growing U.S. current account deficit. The United States must borrow about $2 billion a day to cover the current account deficit.

Purchases of U.S. bonds and notes have helped keep U.S. interest rates lower than they would otherwise be.

Foreign central banks purchased $13.2 billion in long-term U.S. assets in May, up from $11.5 billion in April and net sales of $14.4 billion in March. Central banks bought $6.8 billion in U.S. Treasury bonds and notes, about half of April's $13.9 billion.

<snip>

Private foreign individuals and firms bought $57.4 billion in U.S. assets in May, up from $42.6 billion in April.

...more...

Pirates of the Carribean?

9:00am 07/18/05 FOREIGN CENTRAL BANKS BUY $6.8 BLN IN TREASURYS MAY

9:00am 07/18/05 FOREIGN CENTRAL BANKS BUY $13.2 BLN IN U.S. ASSETS MAY

[UpInArms]

20. more info - foreigners were Net SELLERS

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-07-18T131159Z_01_WBT003466_RTRIDST_0_ECONOMY-CAPITAL-URGENT.XML

excerpt:

Analysts had expected inflows of between $60 billion and $70 billion.

Financial markets watch the report as a measure of foreign investors' appetite for U.S. assets. However, the Treasury Department says the report does not fully reflect whether the United States is funding its trade deficit because the data does not include direct investment or bank accounts.

Foreigners became net sellers of U.S. stocks, shedding $72 million in May after buying net $4.67 billion the previous month. It was the first time foreigners were net sellers of U.S. equities since September 2004.

...more...

[54anickel]

22. 1st time since Sept? Was it really that long ago? I remember reading

about foreigners being net sellers, but I swear it was more recently than that. :shrug:

[UpInArms]

23. I think what you are remembering is that

China was a Net SELLER - they are referring to individuals here - not Central Banks of Foreign countries (jmho)

:hi:

[54anickel]

26. Could be...I do remember when it was a big deal when CBs were

making up for investor's as a sort of buyer of last resort. Sheez, now it's just a common occurence. They have to buy such huge amounts to recycle all them bucks.

edit to add: Could just be the fact that I've a bad concept of time - just seems to go by faster the older I get. Gee, ain't it funny, how time slips away

[UpInArms]

25. Dollar and Treasuries dip after U.S. data

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-18T132731Z_01_L1899997_RTRIDST_0_MARKETS-GLOBAL-WRAPUP-4.XML

LONDON, July 18 (Reuters) - The dollar and U.S. Treasury prices dipped after capital flows data on Monday threw the spotlight back on the U.S. current account deficit, but stock futures came off their lows as the figures showed foreigners were still prepared to bridge the funding gap.

The dollar, which gained last week on upbeat U.S. economic data, dropped about 0.20 cents against the euro immediately after the data before stabilising at around $1.2054, in the middle of the day's trading range.

The yield on 10-year U.S. Treasuries ticked up to 4.189 percent from 4.179 percent before the news.

<snip>

Late last year the dollar struck record lows against the euro due to concerns the United States may find it difficult to bring in the cash it needs to offset outflows in its current account.

...more...

[UpInArms]

36. Treasurys weaker after TICS report

http://www.marketwatch.com/news/story.asp?guid=%7BB16A6131%2D9047%2D4421%2DAD90%2D11F3C98D29A9%7D&siteid=mktw

NEW YORK (MarketWatch) -- Prices of Treasurys weakened Monday, sending yields higher, due to investor nervousness ahead of Federal Reserve Chairman Alan Greenspan's congressional testimony later in the week.

In recent dealings, the yield on the benchmark 10-year Treasury bond ($TNX: news, chart, profile) was 4.187%, up from 4.175% late Friday.

Analysts said Treasury prices were undermined by worries that Greenspan will send strong new signals that the Fed plans to keep hiking rates.

Recent remarks by Fed officials have made clear that the central bank considers the economy strong enough to keep in place its current program of steady, quarter-point increases.

...more...

[UpInArms]

39. US Treasury to sell $14 bln 4-week bills Tuesday

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-18T150209Z_01_WAT003547_RTRIDST_0_ECONOMY-BILLS-ANNOUNCEMENT-URGENT.XML

WASHINGTON, July 18 (Reuters) - The U.S. Treasury Department said on Monday it will sell $14.00 billion of four-week bills on Tuesday, July 19.

The bills will be issued on July 21.

Proceeds from the sale will be used to refund approximately $8.00 billion of publicly held notes maturing on July 21 and to raise new cash of approximately $6.00 billion.

The four-week bills announced on Monday mature August 18. Treasury said the net long position reporting threshold is $4.90 billion.

...more...

more check kiting?

[UpInArms]

10. Lifting the Lid: Riches keep on coming for CEOs

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-07-15T180444Z_01_N15149672_RTRIDST_0_PICKS-COLUMN-LIFTING-DC.XML

NEW YORK (Reuters) - Fraud may have put some executives behind bars and led to tough corporate reforms, but it has done next to nothing to stop company chiefs from reaping fatter and fatter paychecks.

When the scandals at companies such as Enron and WorldCom were first uncovered, corporate governance advocates, investors and some politicians pointed to runaway executive compensation as a key underlying problem.

Yet more than three years later, experts say little has improved. These days, heads of public companies can even argue they are underpaid when compared to high-flying managers at loosely regulated hedge funds, who often earn much, much more.

"There doesn't seem to be any indication that compensation is being really seriously reined in," said Paul Hodgson, a pay expert at the Corporate Library research group. "It's a monolith that has a great deal of momentum, and it's going to be very difficult to slow it down and particularly to turn it around."

Experts say boards of directors reward CEOs generously in boom times -- as well as in bad -- and need to show restraint. They point to payouts like the $113 million severance package awarded to former Morgan Stanley CEO Philip Purcell. That breaks down to about $10,300 a day for the next 30 years.

Minnesota Congressman Martin Sabo -- just as he has eight times since 1991 -- introduced a bill this week to try to curb exorbitant executive pay. Companies are allowed tax deductions for "reasonable" employee compensation, and Sabo's bill would define reasonable executive pay as equal to 25 times what a company's lowest paid employee earns.

...more...

[UpInArms]

15. 11,000 years for minimum wage worker to earn same pay as CEO

Heads of major companies today earn about 300 times what the average U.S. worker makes, compared with 85 times the average worker's pay in 1990 and 42 times in 1980, according to the AFL-CIO, a federation of U.S. labor unions.

By one calculation, it would take someone earning the minimum wage more than 11,000 years to pull in what the top-earning U.S. CEO, Yahoo Inc.'s Terry Semel, was awarded last year. Semel snagged $109.3 million in total pay in 2004, almost entirely from stock options.

{edited subject line)

[54anickel]

11. Good Economic News May Not Boost Stocks

http://news.yahoo.com/s/ap/20050718/ap_on_bi_ge/wall_street_week_ahead;_ylt=ApiO9UhDnKc0t_DJLPpIlyyyBhIF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

NEW YORK - Companies are more productive and more people have jobs. Corporate earnings growth is strong. And while oil prices remain near historic highs, the economy is showing great resilience. Even inflation is a non-issue. But don't expect a huge surge in stocks.

Last week's good economic and earnings news came at the tail end of an impressive weeklong rally. And that's the last place you want to see it. Had the economic reports come out the previous week, when the indexes were 3 percent lower, Wall Street might have seen more of a jump.

The past week's rally was already looking tired by Thursday, when the Labor Department surprised the market with a very benign inflation report. And with the bulk of earnings seasons still to come, another hurricane threatening oil producing and refining in the Gulf of Mexico, and the Federal Reserve meeting in just over three weeks, there are more opportunities for the market to sell off than there are for a sustained push higher.

Stocks posted their third straight week of gains last week, thanks to the confluence of earnings, economic data and lower oil prices. For the week, the Dow Jones industrial average rose 1.83 percent, the Standard & Poor's 500 index added 1.33 percent and the Nasdaq composite index gained 2.08 percent.

ECONOMIC DATA

When there's little economic news, investors can have a hard time coming up with the confidence needed to buy stock. The week ahead carries few reports likely to move the markets, which means investors will have to rely on earnings to extend last week's rally.

more...

[54anickel]

13. New 'Dutch disease' has lessons for U.S. housing

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-07-15T132819Z_01_L06164265_RTRIDST_0_PICKS-ECONOMY-DUTCH-HOUSING-DC.XML

AMSTERDAM (Reuters) - U.S. and British policy makers concerned about house prices falling need only look at the Netherlands to see how even a soft landing can dampen growth.

With the Dutch economy in the fifth year of a slowdown, persistently low consumer spending led the daily Volkskrant to diagnose a "new Dutch disease," and the NRC Handelsblad said the economy was "hostage to the housing market."

snip>

"People don't feel that they are automatically getting richer any more," ABN AMRO economist Charles Kalshoven said, adding Dutch welfare reforms had also created uncertainty, another reason for people consuming less and saving more.

The term "Dutch disease" refers to the 1960s, when the discovery of natural gas in the Netherlands led to a sharp rise in exports, driving up the currency and hurting export-oriented manufacturers.

snip>

Rising asset prices allowed Dutch pension funds to keep premiums low, and house prices, which rose by a half from 1997 until 2000, stimulated consumption further as owners borrowed --and spent -- against the higher value of their homes.

The Dutch central bank estimated in 2003 that spending on consumer goods, electronics and holidays financed by cheap mortgages boosted gross domestic product by as much as 1 percentage point in 1999 and 2000.

RECESSION

more...

[UpInArms]

14. S&P says S&P 500 pensions underfunded in 2004

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38551.3797348148-838789688&siteID=mktw&scid=0&doctype=806&

BOSTON (MarketWatch) -- Standard & Poor's said Monday that the overall position of the 369 companies in the S&P 500 index (SPX) offering defined-benefit pensions was $164 billion underfunded in 2004 compared with $165 billion the previous year. "With expected below average market returns and modest increases in interest rates for 2005, funding should improve slightly, but still remain underfunded in the $140 to 150 billion range," said David Blitzer, chairman of the index committee at S&P. "The major factor affecting pension underfunding in 2005 will be interest rates, and we expect them to increase, but not sufficiently enough to alleviate the funding shortage."

[UpInArms]

37. Bear market, low rates hit outlook for funding status: S&P

(I thought this was a "bull market"?)

http://www.marketwatch.com/news/story.asp?guid=%7B3AB61781%2DE620%2D44DE%2DACA1%2D830C6FD2455E%7D&siteid=mktw

BOSTON (MarketWatch) -- Standard & Poor's said Monday that S&P 500 companies that offer defined-benefit pensions showed little underfunding improvement in 2004 compared with the previous year, with only minor progress expected in 2005.

"With expected below-average market returns and modest increases in interest rates for 2005, funding should improve slightly, but still remain underfunded," said David Blitzer, chairman of the index committee at S&P, in a statement.

"The major factor affecting pension underfunding in 2005 will be interest rates, and we expect them to increase, but not sufficiently enough to alleviate the funding shortage," he added.

<snip>

In defined-benefit programs such as pension plans, the company pays workers a fixed amount during retirement. In so-called defined-contributions plans such as 401(k)s, more risk is switched to employees from the company, with workers picking their investments and the company contributing a certain amount to the plan in the form of matching contributions or stock options, for example.

Underfunding levels have increased since 2000 after a bear market for U.S. stocks, lower interest rates and higher liabilities, S&P said.

...more...

[UpInArms]

16. Infineon executive quits amid probe

http://www.marketwatch.com/news/story.asp?guid=%7B599437DA%2D459F%2D4D9A%2D94AD%2DFC312A8B62CC%7D&siteid=mktw

CHICAGO (MarketWatch) -- A top executive at Infineon Technologies has stepped down in the wake of "severe allegations" related to sponsorship payments, the semiconductor company said Sunday.

Andreas von Zitzewitz, who was in charge of Infineon's (IFX: news, chart, profile) (DE:623100: news, chart, profile) memory products business, is being probed "in context with payments made for contracts regarding motorsport sponsoring."

The company added that it is not under investigation "and cooperates fully with the authorities," but declined to comment beyond that.

...more...

Huh?

[UpInArms]

17. Firmer oil undermines shares, dollar eases

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-07-18T111144Z_01_L18095609_RTRIDST_0_MARKETS-GLOBAL-WRAPUP-3.XML

LONDON, July 18 (Reuters) - European shares eased in response to firmer oil prices on Monday after a hurricane shut down oil fields in the Gulf of Mexico, while the dollar slipped on nervousness ahead of data which will show whether the U.S. is attracting enough foreign capital to cover its trade deficit.

U.S. light crude oil futures rose as high as $58.98 after Hurricane Emily forced the shut-down of some Mexican offshore oil fields. The hurricane bypassed the U.S. section of the Gulf.

Oil majors rose in response with BP (BP.L: Quote, Profile, Research) up 0.65 percent but the high cost of oil was an overall depressant on equities. By 1037 GMT, the FTSEurofirst 300 index of pan-European blue chips was 0.16 percent lower at 1,161.65 points.

U.S. stock futures pointed to a lower Wall Street opening as investors worried about corporate profits after Dow Jones index component Citigroup Inc. (C.N: Quote, Profile, Research) reported second-quarter earnings that lagged Wall Street expectations.

<snip>

Late last year the dollar struck record lows against the euro due to concerns the U.S. may find it difficult to bring in the cash it requires to offet outflows in its current account.

...more...

[54anickel]

18. Asset-backed Securities

(Last entry in the Credit Bubble Bulletin page)

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

The term “Asset-backed Securities” (ABS) represents different things to different people. Traditionally, ABS referred to securitizations backed by pools of non-mortgage collateral (held in trusts), particularly consumer loans and trade receivables. It is now commonplace to include (as Lehman does in their tallies noted above) home equity loan securitizations while excluding whole loan mortgages and conduits (“MBS”). The Federal Reserve categorizes ABS as basically all securitizations with collateral not backed by mortgages guaranteed by the government-sponsored enterprises (which they categorize as “MBS”). The Fed’s methodology suits me fine.

The ABS market (from “flow of funds” data) expanded $481.5 billion annualized during the first quarter to $2.685 Trillion. To put this growth into some perspective, the ABS market expanded on average $122 billion annually during the nineties. ABS grew $173 billion during 2000, $243 billion during 2001, $195 billion during 2002, $226 billion during 2003, and jumped to a record $309 billion last year. After beginning the nineties at $210 billion, the "ABS" marketplace has expanded almost 13-fold.

There are good reasons the ABS market deserves special analytical attention (it receives virtually none). For one, with the recent slowdown in GSE asset growth and agency securitizations (MBS), the ABS marketplace now plays a crucial role in filling a major risk intermediation void. It is a Fact of Bubble Life that during the late stages of Bubble excess - with escalating Credit creation requirements – any “void” is potentially terminal. Instead, ballooning ABS has thus far sustained the Mortgage Finance Bubble, the key mechanism continuing to provide the liquidity for seemingly all things: from purchasing homes, to consuming imported goods, to paying for crude oil, to providing the cashflow for company stock repurchases.

snip>

The GSE debt Bubble has some defining characteristics. Despite the explosion of agency debt and MBS guarantees (not to mention accounting irregularities), the marketplace perceives little risk in agency obligations. Understandably, market participants fully expect the U.S. government to stand firmly behind the GSEs. This moral hazard was certainly emboldened by Fed governor Bernanke’s 2002 market promises that the Fed would take all steps necessary – including “helicopter money” and other “unconventional measures”! – to ensure that deflationary forces would never be allowed to take hold. This was the “all’s clear” signal that the Fed was fully behind the GSE and Wall Street finance liquidity juggernaut (liquidity juggernaut safeguarded…then buy junk, stocks, emerging markets, commodities…!)

But the GSEs became too powerful and too corrupt, bringing this historic Credit and liquidity-creating mechanism to at least a temporary impasse. This would have been a major systemic blow had GSE problems materialized in, say, the late-nineties. But by 2003 Mortgage Finance Bubble dynamics were well-entrenched. Several years of unrelenting mortgage lending excess and collapsing interest-rates had imparted a strong inflationary bias throughout real estate finance. Home prices had risen significantly in most regions which, along with the ease of refinancing and equity extraction, had fostered an environment of reduced foreclosures and minimal charge-offs. Lenders were printing money.

From years of experience Wall Street mastered the art of catering its instruments and “structures” to changing environments - and was well-prepared to take full advantage. The Mortgage Finance Bubble was in full bloom, while the ballooning leveraged speculating community was in desperate search for sufficient quantities of instruments to leverage (no easy task!). Huge amounts of asset-backed securities without GSE backing would have been a hard sell during the nineties. Such was definitely no longer the case in the frenetic “post-Bernanke” environment.

While this view is open to debate, I do believe that the Greenspan Fed was (is) very concerned about GSE exposure to rising rates and interest-rate derivatives (especially considering their major accounting irregularities). It was Greenspan’s intention to countenance the flight of households into variable-rate mortgages, in the process shifting problematic interest-rate risk away from the GSEs, banks, and the ambiguous derivatives marketplace. Holding short-term interest rates significantly below long-term yields - with “real” after-tax borrowing costs a fraction of housing inflation - incited a stampede into ARMs and myriad variable rate mortgages. And perhaps Mr. Greenspan was intent upon having the system primed to assure a seamless transition away from the troubled GSEs, institutions and market processes that had grown to so dominate the Credit system. Whether the Fed planned it this way is unknown, but what transpired evolved into a major financial system development. :think: That's what the ARM push was all about!?!?

more...

[UpInArms]

19. pre-opening blather

9:00AM: S&P futures vs fair value: -2.1. Nasdaq futures vs fair value: -4.0. Negative bias persists in pre-market trading, setting the stage for stocks to open on a downbeat note... Aside from financial stocks making headlines, following Q2 earnings from C, BAC, KRB and SCH, falling oil prices, a Q2 earnings miss from Noble Corp (NE) and downgrades on MRO, OXY, and VLO at Smith Barney could weigh on the Energy sector... Consumer discretionary should also be in focus as investors weigh reports of Whirlpool's (WHR) $1.3 bln bid for Maytag (MYG) against mixed results from HAS and MAT

8:30AM: S&P futures vs fair value: -2.1. Nasdaq futures vs fair value: -3.0. Still shaping up to be a lower start for the cash market as futures indications trade below fair value... With no notable economic data scheduled for today and only five releases on the docket all week, the spotlight remains fixed on earnings reports... So far, it appears Citigroup's disappointment may be providing the impetus to lock in some recent gains following performances on the Dow, S&P and Nasdaq of 3.2%, 2.8% and 4.8%, respectively, over the last two weeks

8:00AM: S&P futures vs fair value: -1.9. Nasdaq futures vs fair value: -3.5. Futures market versus fair value suggesting a lower open for the cash market as a mixed batch of earnings reports prompts some widespread consolidation following noticeable market gains... Second-quarter profits at Citigroup (C) more than quadrupled, but earnings of $0.97 have missed analysts' expectations by $0.04 on lighter than expected revenues...

[UpInArms]

24. 9:33 EST markets are open and down

Dow 10,617.82 -23.01 (-0.22%)
Nasdaq 2,152.17 -4.61 (-0.21%)
S&P 500 1,225.14 -2.78 (-0.23%)
10-Yr Bond 4.180 +0.05 (+0.12%)

NYSE Volume 36,131,000
Nasdaq Volume 48,242,000

[54anickel]

27. Stocks rebound, but pensions haven't

http://www.usatoday.com/money/perfi/retirement/2005-07-17-under-funded_x.htm

Stocks improved last year, which you might think would help solve Corporate America's pension problem. The trouble is, it has barely made a dent.
A vast majority of pension plans still face massive cash shortfalls, according to statistics to be released Sunday by Standard & Poor's.

While that may worry retirees, it's primarily a concern for investors, because if something doesn't change, companies will need to divert cash into their pension plans rather than do such shareholder-friendly things as buying back stock or increasing dividends.

snip>

The shortfalls are staggering, especially considering that the pensions are invested partially in the stock market. The market, measured by the S&P 500, gained 10.9% and 28.7% in 2004 and 2003, respectively, with dividends reinvested. But even with those gains, pension plans are still:

snip>

Silverblatt says the shortages aren't so much of a concern for employees and retirees, in most cases. After all, the industrial companies alone in the S&P 500 are sitting on $634 billion in cash. That's easily enough to cover the $164.3 billion shortfall they face. "They could make up the underfunding right now by just writing out a check," he says.

But investors may be assuming that cash was coming to them in the form of dividends, says David Zion, accounting analyst at Credit Suisse. What's more, some plans for pension reform would force companies to contribute $41 billion to their pension plans for 2005, which is 28% more than companies were expecting, he says.

more...

Well they have definitely succeeded in pushing the risk down to the little guy

[54anickel]

29. Dude, You're Getting a Loan

http://www.nytimes.com/2005/07/17/business/yourmoney/17gret.html?8dpc=&adxnnl=1&adxnnlx=1121695259-PdPZXSOFnk0fBNxrH4VZFQ

ON any list of tech-stock hotties, Dell Inc. would certainly rank right up there. Dell, the computer powerhouse, reported revenue of $13.4 billion in the quarter that ended April 29, up 16 percent from a year earlier, and net income of $934 million, a 28 percent jump. Although its shares are down 2.8 percent this year, at $40.96, Dell is trading at a ritzy price-to-earnings ratio of 30, well above the average of 18 for the Standard & Poor's 500-stock index.

One of the fastest-growing elements of Dell's smashing direct-sales model is its financing business. Loans or leases from Dell Financial Services to Dell customers have soared 36 percent, on average, in each of the last six years and are now growing at twice the rate of Dell's overall revenue.

This business is a natural for Dell, which has flourished by eliminating middlemen wherever it can. Its financing operation is a joint venture with CIT Group Inc., a financial services concern, and generated revenue of $1.5 billion for Dell in the most recent quarter. In the 2005 fiscal year, which ended last January, Dell Financial Services made $5.6 billion in loans and leases. Dell owns 70 percent of the venture.

For years, Dell profited only on finder's fees it received when it referred a borrower to the joint venture. But now the company is expanding its role: it has set up a special-purpose entity that will profit by packaging and selling one-quarter of the loans or leases originated at Dell Financial in the current fiscal year. And it recently revised its deal with CIT. Now Dell has the right to buy the venture outright in three years.

To some degree, Dell's foray into financing is just another example of its quest for profit growth. But as one respected analyst has noted, Dell's financing business brings with it the potential for greater risks. While Dell has rarely disappointed its investors over the years, they should nevertheless be alert to the risks that captive financing units present to nonfinance companies.

more...

[54anickel]

30. Buyout, hedge funds coping with flood of cash

http://www.chron.com/cs/CDA/ssistory.mpl/business/3268795

NEW YORK - Top performers in the private equity industry are faced with a problem many companies wish they had — too much money.

ADVERTISEMENT

With surging investor demand for hedge funds, buyout funds and venture capital firms, some funds are slamming the door to new investors, industry experts said at a New York conference last week.

Some complain the industry has gotten too crowded to generate the double-digit returns they seek.

"It's pretty dismal out there," said Thane Ritchie, chief executive of Ritchie Capital Management, a $3 billion hedge and buyout firm near Chicago. "The opportunities are too few, and there is way too much money chasing them."

Institutional investment into alternative assets, including hedge funds, buyout funds, venture capital and real estate, is well established in the United States. But many Asian and European pension funds are now looking to boost their allocations to the asset class as stock and bond returns lag. That's creating a surge of new cash for the industry, experts said.

more...

[UpInArms]

31. Amex sees options trading decline first half of 2005

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38551.4179921065-838798252&siteID=mktw&scid=0&doctype=806&

BOSTON (MarketWatch) -- The American Stock Exchange said for the first half of 2005, its equity options market share was 15.6% compared with 18.5% during the year-ago period. The exchange said options volume during the first six months of 2005 was down to 786,017 from 810,046 in 2004. The Amex said it is developing technological improvements in a bid to boost trading in options, including a system of remote quoting and a price improvement auction.

[54anickel]

32. Health costs force no-win situations at work

http://www.freep.com/money/business/healthcost18e_20050718.htm

Employees are facing a double whammy when it comes to health care costs: Many companies are likely to ask workers to pay more for their insurance while rising health care costs means companies may dole out lower raises.

Half of large U.S. companies said increased health care costs have contributed to slower profit growth and as a result more than 75% may ask employees to bear a greater share of the cost, according to a study by PricewaterhouseCoopers to be released today.

Twenty-five percent of the companies said double-digit health care cost increases may force them to lower wage hikes for employees and one in five expects to slow hiring of new permanent workers in the year ahead. Executives at the 150 companies surveyed said per-employee health care costs had risen 12% over the last year and were expecting an 11% increase in the coming year if no changes are made to the plans.

While various indicators may point to improvement in the economy, health care costs are squeezing companies' ability to hire more workers and raise pay, said PricewaterhouseCoopers consultant Barry Barnett. Right now, he said between 12% and 15% of companies' payroll costs stem from health care, up from around 8% five years ago.

more...

[UpInArms]

33. 10:23 EST numbers and blather

Dow 10,610.48 -30.35 (-0.29%)
Nasdaq 2,149.55 -7.23 (-0.34%)
S&P 500 1,223.59 -4.33 (-0.35%)
10-Yr Bond 4.178 +0.03 (+0.07%)

NYSE Volume 317,259,000
Nasdaq Volume 296,583,000

10:00AM: Equities still on the defensive as the bulk of sector leadership remains negative... Energy has paced the way lower following a Q2 disappointment from Noble Corp (NE 60.15 -1.15), analyst downgrades on MRO, OXY, and VLO and falling oil prices... Financial has been under pressure, as better than expected Q2 earnings from Charles Schwab Corp (SCH 13.19 +0.45) have failed to offset Citigroup's discouraging report... Technology has been weak across the board, led by consolidation in chip stocks after the PHLX Semi Index hit a 52-week high last week...

The Utilities sector, however, has shown relative strength as investors seek out some protection in a declining market...DJTA -0.2, DJUA +0.1, DOT -0.3, Nasdaq 100 -0.4, Russell 2000 -0.1, SOX -0.9, S&P Midcap 400 -0.2, XOI -0.6, NYSE Adv/Dec 1212/1342, Nasdaq Adv/Dec 972/1475

9:40AM: Market opens to the downside, in line with futures indications, as an earnings disappointment from Citigroup stalls follow-through buying efforts... Citigroup (C 45.42 -1.00), in the wake of one of the worst capital markets environments it has seen in years, has missed analysts' Q2 forecasts by $0.04, prompting investors to consolidate recent market gains... The major indices - with the S&P at a four-year high and the Nasdaq at its best levels since Dec. 2004 - have averaged gains of 3.6% so far in July...

[UpInArms]

34. Morgan Stanley calls for more cost-cutting at Schwab

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38551.4497895139-838808757&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Charles Schwab Corp.'s (SCH) latest earnings report was encouraging, Morgan Stanley said in a note to clients on Monday. The brokerage praised Schwab for "progress...in reasserting competitive positioning" but cited a drag on trading revenue, net account losses and concluded that "more still need to be done on the cost-cutting front." Shares of Charles Schwab rose 62 cents to $13.36 on Monday.

I wonder how many jobs need to be cut to satisfy the shareholders?

[UpInArms]

35. What Kind of Country Destroys the Job Market for Its Own Citizens?

http://counterpunch.org/roberts07162005.html

The June payroll jobs report did not receive much attention due to the July 4 holiday, but the depressing 21st century job performance of the US economy continues unabated.

o Only 144,000 private sector jobs were created, each one of which was in domestic services.

o 56,000 jobs were created in professional and business services, about half of which are in administrative and waste services.

o 38,000 jobs were created in education and health services, almost all of which are in health care and social assistance.

o 19,000 jobs were created in leisure and hospitality, almost all of which are waitresses and bartenders.

o Membership associations and organizations created 10,000 jobs and repair and maintenance created 4,000 jobs.

o Financial activities created 16,000 jobs.

This most certainly is not the labor market profile of a first world country, much less a superpower.

...more...

[Media_Lies_Daily]

44. One that is governed by a fascist elite; one that wishes to break....

...the power of the middle class, and destroy all organized labor organizations.

12 warning signs of fascism
<http://www.bigrob66.info/blog/archives/000121.html>

QUOTE:

1. Exuberant nationalism

Fascist regimes tend to make constant use of patriotic images, slogans and symbols - National flags are seen everywhere in public display. Territorial aggression is explained to be mere destiny -- an unbidden greatness thrust upon the nation by history.

It is this burden of unique responsibility that now raises the fascist state above all previous constraint, no longer bound by international obligations, treaties or law.

2. Enemies Identified

This national cause is identified as unity against enemies - The people are rallied around a unifying patriotism directed against some common threat: communists, liberals, a racial, ethnic or religious minority, intellectuals, homosexuals, terrorists, etc.

The state's message is sometimes couched in an easily recognized religious theme. Amazingly, this language is used even when the full context of the teaching shows the meaning to be diametrically opposed. Any dissent is "siding with the enemy", and therefor treasonous.

3. Rights Disappear

Disdain for human and political rights - Fascist regimes foster an artificial climate of fear by intentionally amplifying stress and anxiety. Citizens naturally feel a strong need for security and are easily persuaded to ignore abuses in the name of safety. The few still willing to question are met with bullying and smear campaigns of intimidation.

Legislative bodies, if still in existence at all, are cowed into rubber-stamp submission with occasional ceremonial opposition. The judiciary tends to become activist in support of state views. The public often looks away, or even enthusiastically approves as rights are stripped away.

The concept of the individual inevitably yields ground, exchanged for the promised safety of the all-powerful state.

4. Secrecy Demanded

Obsession with secrecy and national security - The workings of government become increasingly hidden. Questioning of authority is discouraged at all levels of society. From office talk at the water cooler up through the entire apparatus of rule, guarded speech and secrecy become ends in themselves.

Troubling questions are muted and entire areas of scrutiny are placed out of bounds by simply invoking "national security".

5. Military Glorified

Supremacy of the military - The military establishment receives a disproportionate share of government resources, even as pressing domestic needs are neglected. Individual soldiers and military culture are glamorized and made constantly visible.

This provides both an object for public glorification, as well as sharp warning to possibly restless citizens that the power of the state stands close at hand, ready to use its great potential for violence.

6. Corporations Shielded

Corporate power is protected - Typically, a segment of the business elite plays a major role in bringing fascists to national leadership, often from an unsavory obscurity. This marriage of big money and raw violence is often considered by historians to be the hallmark and backbone of fascism.

As these business-government-military interests meld, the significant threat of organized labor is clearly recognized. Labor unions and their support organizations are either co-opted successfully or ruthlessly suppressed and eliminated as soon as possible.

7. Corruption Unchecked

Rampant cronyism and corruption - Fascist states maintain power through this relatively small group of associates, mutually appointing each other to interlocking and rotating positions in government, business and the military.

With this degree of control, they make full use of both official secrecy and the ready threat of state violence to insulate themselves from any meaningful criticism. They are not accountable and are shielded from scrutiny in a way unthinkable in a democratic society.

8. Media Controlled

Controlled mass media - Sometimes the media are controlled directly by clumsy government functionaries. At other times, sympathetic corporate media insiders shape the themes indirectly, and therefor more skillfully. Image regularly trumps content as the "news" is presented breathlessly and with flashy stage effects.

A practiced formula of tenacious repetition brings even the most absurd lie into acceptance over time. By design, the very language itself and the coloration employed will push alternate views "out of the mainstream".

The terms of any remaining debate are narrowly defined to the state's advantage, making it easy to marginalize a truly differing perspective. Censorship and "self-censorship", especially in wartime, is common.

9. Rampant Sexism

Rampant sexism - Governments of fascist states tend to be almost exclusively male-dominated. Traditional gender roles are made even more rigid and exaggerated. Condemnation of abortion and a virulent homophobia are commonly built into broad policy.

10. Intellectual Bullying

Disdain for intellectuals - Fascist society tends to create an environment of extreme hostility to critical thought in general, and to academics in particular.

Ideologically driven "science" is elevated and lavishly funded, while any expression not in line with the state view is at first ignored, then challenged, then ridiculed and finally stamped out.

It is not uncommon for academics to be pressured to attack the work of their insufficiently patriotic peers. Writings are censored; teachers are fired and arrested. Free artistic expression in new works is openly attacked, and existing works deemed unpatriotic are often publicly destroyed.


11. Militarized Police

Obsession with crime and punishment - Fascist society is often willing to overlook police abuses and forego civil liberties in the name of patriotism. Long jail sentences for clearly political offenses, torture and then assassination are at first uncomfortably tolerated, and then start to pile up to become the norm.

Often a national police force is given virtually unlimited power to snoop through the civilian population. Networks of surveillance and informers are employed, both for actual intelligence gathering and also as a means to keep neighbors and co-workers isolated and mistrustful of each other.

12. Elections Stolen

Fraudulent elections - In the disordered time as fascists are rising to power, the electoral arena becomes increasingly confusing, corrupted, and manipulated.

There is rising public cynicism and distrust over what are widely believed to be phony elections manipulated by moneyed influence, obvious media bias, smear campaigns, ballot tampering, judicial interference, intimidation, or outright assassination of potential opposition. Fascists in power have been known to use this disorder as the rationale to delay elections indefinitely.

Any of that sound familiar?

[54anickel]

48. Thanks MLD. It's been a while since I've seen one of those lists.

Even scarier now than the first time I saw it.

In several essays, David Neiwert has explored the rise of what he calls "Pseudo-Fascism." He concedes that "American democracy has not yet reached the genuine stage of crisis required for full-blown fascism to take root" and thus " the current phenomenon cannot properly be labeled 'fascism.' But he warns:

But what is so deeply disturbing about the current state of the conservative movement is that it has otherwise plainly adopted not only many of the cosmetic traits of fascism, its larger architecture -- derived from its core impulses -- now almost exactly replicates that by which fascists came to power in Italy and Germany in the 1920s and '30s.

It is in this sense that I call it Pseudo Fascism. Unlike the genuine article, it presents itself under a normative, rather than a revolutionary, guise; and rather than openly exulting in violence, it pays lip service to law and order. Moreover, even in the areas where it resembles real fascism, the similarities are often more familial than exact. It is, in essence, less virulent and less violent, and thus more likely to gain broad acceptance within a longtime stable democratic system like that of the United States.
And even in the key areas of difference, it is not difficult to discern that those dissimilarities are gradually shrinking, and in danger of disappearing.

That this is happening should not be a great surprise. After all, as I've already explored in great detail, the mainstream conservative movement has increasingly had contact with the genuine American proto-fascists of the extremist right over the past decade or more, particularly in the trafficking of ideas, agendas and the memes that propel them.

http://en.wikipedia.org/wiki/Neo-fascism

There's also a link to the series of 7 essays:

http://dneiwert.blogspot.com/2004/11/holiday-break.html

[UpInArms]

50. They Thought They Were Free

http://www.polarbearandco.com/thought.html

excerpt:

"What no one seemed to notice," said a colleague of mine, a philologist, "was the ever widening gap, after 1933, between the government and the people. Just think how very wide this gap was to begin with, here in Germany. And it became always wider. You know it doesn't make people close to their government to be told that this is a people's government, a true democracy, or to be enrolled in civilian defense, or even to vote. All this has little, really nothing to do with knowing one is governing.

What happened here was the gradual habituation of the people, little by little, to being governed by surprise; to receiving decisions deliberated in secret; to believing that the situation was so complicated that the government had to act on information which the people could not understand, or so dangerous that, even if he people could understand it, it could not be released because of national security. And their sense of identification with Hitler, their trust in him, made it easier to widen this gap and reassured those who would otherwise have worried about it.

"This separation of government from people, this widening of the gap, took place so gradually and so insensibly, each step disguised (perhaps not even intentionally) as a temporary emergency measure or associated with true patriotic allegiance or with real social purposes. And all the crises and reforms (real reforms, too) so occupied the people that they did not see the slow motion underneath, of the whole process of government growing remoter and remoter.

"You will understand me when I say that my Middle High German was my life. It was all I cared about. I was a scholar, a specialist. Then, suddenly, I was plunged into all the new activity, as the universe was drawn into the new situation; meetings, conferences, interviews, ceremonies, and, above all, papers to be filled out, reports, bibliographies, lists, questionnaires. And on top of that were the demands in the community, the things in which one had to, was "expected to" participate that had not been there or had not been important before. It was all rigmarole, of course, but it consumed all one's energies, coming on top of the work one really wanted to do. You can see how easy it was, then, not to think about fundamental things. One had no time."

"Those," I said, "are the words of my friend the baker. "One had no time to think. There was so much going on."

...more...

[54anickel]

52. Thanks UIA, interesting read in context with some of the news articles

making the news with references to Hitler and Nazi's from all sides of the political spectrum lately.

[UpInArms]

38. 11:17 EST numbers and blather (heading up)

Dow 10,633.74 -7.09 (-0.07%)
Nasdaq 2,150.33 -6.45 (-0.30%)
S&P 500 1,225.51 -2.41 (-0.20%)
10-Yr Bond 4.183 +0.08 (+0.19%)

NYSE Volume 534,174,000
Nasdaq Volume 488,747,000

11:00AM: Major indices still chalk up modest losses as widespread consolidation, in the absence of market-moving economic reports, continues to weigh on the proceedings... While last week's string of very positive economic data showed that the economy is strong enough to withstand a continued environment of rising interest rates and higher energy costs, the lack of any significant new data scheduled for today to help convince any remaining doubters has merely left the door open for sellers to lock in recent market gains... NYSE Adv/Dec 1197/1698, Nasdaq Adv/Dec 1050/1696

10:30AM: Market improves its stance, as oil prices spike to session lows... Within the last 15 minutes, crude oil futures ($56.90/bbl -$1.19) have slipped below $57/bbl after OPEC lowered its demand growth forecast by 150K barrels per day... While the decline in oil has improved overall sentiment, the market's bound has not been enough to lift the indices above the flat line...NYSE Adv/Dec 1116/1684, Nasdaq Adv/Dec 994/1648

[54anickel]

40. Marc Faber And The Crisis Of Confidence

http://www.aireview.com/index.php?act=view&catid=6&id=2238

snip>

Strength in the US dollar and diminished worries about consumer price inflation, which propelled bond prices to their February 2005 highs, also contributed to an improvement in sentiment. In this respect, says Faber, it should be noted that by late April, investors’ sentiment had become rather gloomy. There were rumors about problems at several hedge funds and, following the dismal performance of the first quarter, and the inability of the
stock market to rally in the usually seasonally strong month of April, investors were about to give up on equities.

So, suggests Faber, given the perceived problems in the hedge fund industry and the slowdown in global economic growth, investors figured that the Federal Reserve Board would shortly stop raising the Fed Fund rate and, if there was indeed a problem with some
financial institution, the Fed would do what it had always done in the past, which is to ease and to print money. Each time the Fed tightened monetary conditions, something "bad" occurred. But equally, each time a crisis occurred, the response was swift and massive easing, followed by rate cuts.

Needless to say, says Faber, the "maestro" at repeatedly printing money in the wake of crises - and particularly since 1997 - was none other than Mr. Greenspan. In other words, investors now perceive that an economic slowdown, or a crisis at one or several hedge
funds, will induce the Fed to refrain from raising rates further and once again to turn on the money printing press.

After all, MZM has been growing recently at its lowest rate in ten years, Faber notes. MZM stands for "money of zero maturity" and is another money supply measure used by the Fed alongside the traditional money supply measures of M1, M2 etc.

Faber believes the low growth of MZM is indicating currently much tighter monetary policies and, therefore, it is leaving ample room for renewed easing at the first sign of any problem for the economy or the financial system. And since investors have been conditioned over the last 20 years or so to buy into crises, because following each crisis the market has soared, they are now buying in expectation of a crisis, which would force the Fed to ease. Says
Faber, "The present investment environment must therefore be described as bizarre!"

[UpInArms]

41. PIEHOLE ALERT

11:24am 07/18/05 BUSH: "THOROUGH" VETTING UNDERWAY ON SUPREME COURT PICK

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38551.4876027431-838823052&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (MarketWatch) -- President Bush said a thorough vetting process was underway behind the scenes at the White House over the choice for the Supreme Court vacancy. "I am going to take my time and be thorough and deliberate," Bush told reporters at the White House. Bush said he would meet with only some candidates face-to-face. Bush gave no hint about the timing of the announcement of his choice.

(edited to add link and blurb)

[UpInArms]

57. more from "Who Cares What You Think"

2:16pm 07/18/05 BUSH THREATENS VETO OF STATE DEPT. SPENDING BILL

[54anickel]

63. HA! Idle threat. Has this guy vetoed ANYTHING during his tenure as

"squatter" in the WH?

[UpInArms]

64. no vetoes - just threats (as you said) to keep his rightwingnuts

quivering in their (Rove-paid-for) boots.

[54anickel]

42. China is testing our 'values'

http://pittsburghlive.com/x/tribune-review/opinion/columnists/guests/s_353867.html

snip>

"The Chinese people and government are learning from the U.S.," Fu told The Los Angeles Times. "We are adopting the free-trade system very quickly. ... We are using U.S. bankers, advisers, exactly meeting the processes of U.S. market requirements" for mergers and acquisitions. Recently, China's foreign ministry warned U.S. politicians to "stop interfering in the normal commercial exchanges between enterprises of the two countries."

Now, there's a statement of American values for our time. And we may even forgive the Chinese just a bit if they are confused over which values we Americans take seriously. Freedom of religion? Speech? Assembly? If those really matter to Americans, why are all these American companies building factories in China to take advantage of workers whose labor comes cheap partly because they lack the freedom to better their lot?

Priorities

If nothing else, CNOOC's bid for Unocal is forcing us to prioritize our conflicting ideals. The offer pits traditional nationalism against the conservative belief in free trade and laissez-faire capitalism. It comes as a fire bell in the night for the pure free-traders, what with communist China en route to becoming our chief capitalist rival. Surely there must be some companies -- Boeing Co., say, or Intel Corp. -- whose sale to the Chinese government even the Wall Street Journal editorial board would oppose.

However extensive China's involvement in our economy, our involvement in China's will surely pose further challenges to our values. Already a number of American businesses there, Wal-Mart first and foremost, are moving their contractors' factories from China's more developed southern coast to even lower-wage and less-regulated inland regions. (It may help to think of these corporations as new-age versions of the legendary hooligans of the Old West: When the law comes to Dodge, they strike out for the next boomtown where there's still no sheriff.)

But China is home to more labor strife than any other country in the world. What will happen when these illegal strikes grow even more widespread, when workers demand democracy and the right to form unions? In the next iteration of Tiananmen Square, will American business and its apologists side with the tanks or the man standing in the street to block them?

more...

[UpInArms]

43. House panel changes date of CNOOC, Unocal hearing

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38551.4711075694-838817060&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- The House Energy and Commerce Committee on Monday switched the timing of a hearing on the $18.5 billion bid by Chinese state-owned CNOOC (CEO) for Calif.-based Unocal Corp. (UCL) , saying it will now be held on Friday rather than Tuesday. The witness list has not yet been finalized yet. The chairman of the committee, Rep. Joe Barton, R-Texas, is opposed to the merger and has said he does not believe U.S. interests are served by selling a U.S. oil company to a company that is 70 percent owned by the Chinese Communist government.

[54anickel]

45. Computer crime now all grown up

http://www.ajc.com/business/content/news/stories/0705/17phish.html

snip>

This is more than just computer hackers turning to crime. Established organized crime syndicates have added theft by computer to their repertoire.

Their weapon of choice is a "phisher" site — a fake Internet site that's designed to persuade you to give up personal information that cyber crooks can use to clean out your bank account or take out loans in your name.

Phishers prey on home computer users, who lose millions of dollars each year to cyber crooks who use a combination of con artist skills and sophisticated computer technology.

Technology consultants the Gartner Group report that phishing attacks cost 1.2 million consumers $929 million in the year ending in May.

And that's just the cost to consumers. The toll is higher for banks and credit card issuers, who bear much of the cost. An earlier Gartner survey found that identity theft cost credit card issuers and banks $1.2 billion in direct losses in 2004.

snip>

"One of the reasons that banks don't say anything is that they don't want the bad publicity," said Orson Swindle, one of five commissioners at the Federal Trade Commission, a primary agency in dealing with consumer complaints about Internet fraud.

more...

[54anickel]

46. Real estate investment clubs are thriving

In Manhattan, novice investors unfazed by talk of a bubble

http://www.msnbc.msn.com/id/8391749/

snip>

With the giddy days of the high-tech investment bubble a fading memory and home prices in some of the hottest housing markets up 100 percent over the past few years, America’s housing boom is providing investors with a tempting new chance to grab a slice of the fortunes now being made on the streets of many towns and cities.

New York’s Ultimate Investors Real Estate Club, for example, is one of 178 in the National Real Estate Investors Association, up from slightly more than 40 in late 2002. The association now counts some 35,000 individual investors as members.

One of about a dozen real estate investment clubs in the New York area, Ultimate Investors has seen its membership mushroom to nearly 300 over the past few years, says Barney. The club offers paid members the opportunity to network with other investors and industry specialists at monthly meetings, go on field trips to scope out housing markets and attend educational workshops. Members, who pay $189 in annual dues, also get a newsletter on real estate investing.

snip>

Scott and her husband joined the club in November looking for a way to make extra cash outside the volatile stock market. She hopes to gain the expertise to one day specialize in tax liens, buying homes seized from delinquent taxpayers and sold at government auctions.

snip>

Like many Americans skittish about investing in stocks after the market’s sharp decline from 2000 to 2002, Scott sees real estate as a good alternative.

more...

Heh, remember all the "clubs" during the dotcom frenzy?

[UpInArms]

47. 12:11 EST numbers and blather

Dow 10,616.07 -24.76 (-0.23%)
Nasdaq 2,145.99 -10.79 (-0.50%)
S&P 500 1,223.04 -4.88 (-0.40%)
10-Yr Bond 4.181 +0.06 (+0.14%)

NYSE Volume 704,399,000
Nasdaq Volume 635,991,000

12:00PM: Market still under modest pressure midday as an earnings disappointment from Citigroup provides investors with an opportunity to lock in recent profits... Citigroup (C 45.40 -1.02), the most influential component within the most highly weighted economic sector (financial), has lost more than $5.0 in market cap after missing analysts' Q2 expectations...

While investors have become more optimistic about corporate profit growth, unsatisfactory results from such a bellwether has weighed on stocks across the board, prompting investors to consolidate gains following strong performances on the Dow, S&P and Nasdaq of 3.2%, 2.8% and 4.8%, respectively, over the last two weeks... The absence of notable economic data today to further validate last week's string of very positive economic data has also left the door open for those doubting the sustainability of continued economic expansion in the face of a rising interest rate environment... Benchmark yields continue to trade at their highest levels in two months ahead of Fed Chairman Greenspan's testimony later in the week, as the 10-year note is off 4 ticks to yield 4.17%...

With regard to sector strength, Financial continues to pace the way lower, as Citigroup's discouraging report has raised questions about Bank of America (BAC 45.27 -0.71) and MBNA's (KRB 25.86 -0.36) better than expected earnings... Minimizing losses, however, has been a 4.4% surge in shares of Charles Schwab (SCH 13.30 +0.56), which posted a 65% increase in Q2 profits... Also providing leadership to the downside has been Technology, as a sense of nervousness heading into IBM's (IBM 82.27 -0.11) report after the close has also sparked some sector-wide consolidation...

and a peek at the buck

Last trade 89.43 Change -0.29 (-0.32%)

Settle 89.72 Settle Time 23:36

Open 89.71 Previous Close 89.72

High 89.84 Low 89.40

Last tick: 2005-07-18 11:43:15 ET
30-min delayed quote.

[54anickel]

49. Mid-Year Forecast - More See-Saw Fed

http://www.321gold.com/editorials/mauldin/mauldin071605.html

snip>

First, it is not altogether clear that raising short-term rates will have any real effect on long-term rates, and thus on mortgage rates. It certainly hasn't had much of an effect so far. As I noted last January, I don't think the Fed wants to create an inverted yield curve by purposely raising short-term rates above the 10-year note.

And there are questions about the real strength of the economy. Unemployment may not be as good as it sounds. The current low U.S. unemployment rate probably understates the true level of joblessness by 1 to 3 percentage points, says Katharine Bradbury, the senior economist at the Boston Federal Reserve. Millions of potential workers who dropped out of the labor force during the recession four years ago have not returned as expected and are thus not counted in the official unemployment statistics. (http://www.bos.frb.org/economic/ppb/2005/ppb052.pdf)

Inflation is low, which is a good thing, unless you have a recession. Core inflation is below 2%. If you look at the personal consumption price index, core inflation is only 1.5% and that is the index the Fed generally prefers to look at.

There are many observers who think the economy will soften in the latter half of this year. I agree. But please note that soften is not a recession. But raising rates while the economy is in the process of softening can help bring about a recession. And a recession today (or an economy only growing 1-2%) with inflation so low would almost certainly bring back the deflationary scares of 2002. The 10-year note could drop to 3% and mortgages would go to 4%. What such a scenario would mean is open for debate, because I can argue at least three scenarios forcefully, and another 2-3 that might be of interest. It would create a lot of uncertainty. Markets HATE uncertainty.

There are other suggestions that the economy is softening. The ISM manufacturing index is in a downtrend that is worrisome. The May new job numbers came in much lower than expected, with many of the new jobs in low-end services and a guesstimate as to new businesses formed, which was the bulk of the new jobs. Making Fed policy on bureaucratic guesstimates is not the best course. The index of leading economic indicators from the Conference Board has been dropping and is suggesting the economy will slow in the next 2-4 quarters.

more...

[54anickel]

51. Material-Weakness Reports Skyrocket

http://www.cfo.com/article.cfm/4193977?f=home_breakingnews

A total of 586 companies reported material weaknesses through early May of this year, compared with 313 for all of 2004, according to shareholder-advisory firm Glass, Lewis & Co.

The new analysis by the independent research firm is another confirmation that audit firms have increased their scrutiny of clients to ensure compliance with Section 404 of the Sarbanes-Oxley Act. Section 404, which requires an independent auditor to attest to a company's internal controls, became effective for many public companies beginning with their first fiscal year ending after November 15, 2004.

Glass, Lewis also found that clients of Big Four firms PricewaterhouseCoopers, Ernst & Young, KPMG, and Deloitte & Touche, as well as Grant Thornton and BDO Seidman, all have disclosed material weaknesses more frequently this year than last. Deloitte & Touche had the largest yearly difference; last year, only 2 percent of its clients made such a disclosure, compared with 6.5 percent through early May of this year.

Those results prompted Glass, Lewis to question how vigorously accounting firms required clients to disclose weaknesses in the past. "We think it's fair to say that most of the weaknesses disclosed in 2005 did not develop overnight, especially those related to a company's overall control environment," the report noted. Before Section 404 became effective, companies were required to disclose deficiencies only in the case of an auditor's termination, Glass, Lewis added.

more...

[UpInArms]

54. U.S. July housing market index slips

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38551.5552470602-838833670&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- U.S. homebuilders remained optimistic about the housing market in July, an industry trade group said Monday. The National Association of Home Builders-Wells Fargo housing market index slipped to 70 in July from a six-year high of 72 in June. Two of the three components of the index declined in June: The index of current single-family home sales fell to 75 in July from 77 in June, while prospective sales fell to 77 from 80. Buyers' traffic was steady at 55. Readings over 50 indicate more good responses than poor ones. On Tuesday, the Commerce Department will report on housing starts for June. Economists expect new construction to rise to 2.07 million annual units from 2.01 million in May.

[54anickel]

55. 2:13 and headed down

Dow 10,605.96 -34.87 (-0.33%)
Nasdaq 2,148.73 -8.05 (-0.37%)
S&P 500 1,223.95 -3.97 (-0.32%)
10-Yr Bond 41.92 +0.17 (+0.41%)
NYSE Volume 1,040,708,000
Nasdaq Volume 904,782,000


2:00PM : Range-bound trading persists for the major indices as sellers remain in control of the action... Recently turning positive, however, have been the Utilities and Materials sectors... But as two of the three least influential economic sectors with a combined weighting of less than 7.0% on the S&P, buying efforts will have to be much more aggressive in order to offset any of the weakness being felt throughout Financial - the most influential sector accounting for about 20% of the S&P's total weighting...NYSE Adv/Dec 1375/1807, Nasdaq Adv/Dec 1196/1757
1:30PM : More of the same for stocks as virtually every sector continues to relinquish recent gains... Aside from Financial and Utilities losing ground, another interest-rate sensitive area under pressure has been Homebuilding...Up roughly 17% on the year and about 20% above mid-April lows, the PHLX Housing Sector Index (HGX 564.73 -0.97) should become even more of a focal point tomorrow upon the 8:30 ET release of June housing starts (consensus 2050K) and building permits (consensus 2085K)... NYSE Adv/Dec 1238/1902, Nasdaq Adv/Dec 1109/1827

1:00PM : Little changed since the last update as the major averages continue to vacillate in roughly the same ranges... Bonds, however, have recently slipped to session lows as corporate credit market continues to attract buyers... While additional corporate issuance, which totaled $21.2 bln last week, has weighed on the Treasury market, traders have seen particular interest today in General Motors (GM 37.46 +0.72) securities ahead of the auto maker's Q2 report on Wednesday...

While yields on GM's long bond are well off their mid-May high of 12%, it appears a yield of 9.6% remains more attractive than a benchmark rate of 4.18% on the 10-year note (-6/32), especially amid more optimism that GM's incentive program will turn profits and sentiment around...NYSE Adv/Dec 1229/1903, Nasdaq Adv/Dec 1105/1818

12:30PM : While larger-cap stocks remain the focal point today, as Citigroup's inadequate quarter provides a catalyst for the S&P to catch its breath following its longest winning streak since last November, small caps continue to realize the brunt of the selling pressure... The Russell 2000, which nearly doubled the S&P's strong 9.0% performance last year, has outpaced the broader market again this year with a gain of 1.9% versus the S&P's slightly smaller 1.3% gain... But by the end of today's session, the two indices could be neck and neck... Russell 2000 -0.7, NYSE Adv/Dec 1174/1930, Nasdaq Adv/Dec 1054/1848

[UpInArms]

59. 2:50 EST numbers and blather (getting redder)

Dow 10,595.61 -45.22 (-0.42%)
Nasdaq 2,148.52 -8.26 (-0.38%)
S&P 500 1,223.48 -4.44 (-0.36%)
10-Yr Bond 4.196 +0.21 (+0.50%)

NYSE Volume 1,156,268,000
Nasdaq Volume 993,828,000

2:30PM: Market continues to trade sideways in afternoon trading as market internals still indicate a slightly bearish bias... Decliners on the NYSE hold a 17 to 13 advantage over advancers while declining issues on the Nasdaq outpace advancing issues by a 17 to 11 margin... The ratio of down to up volumes on the Big Board and the Composite also suggests a sense of nervousness among investors, but the Dow, S&P and Nasdaq continue to find modest support near key techical levels of 10605, 1224 and 2148, respectively...NYSE Adv/Dec 1394/1792, Nasdaq Adv/Dec 1189/1770

[54anickel]

61. Guess that splash of blather was penned before support was breeched..n/t

[UpInArms]

66. 3:09 EST numbers and fresh blather

Dow 10,592.65 -48.18 (-0.45%)
Nasdaq 2,149.74 -7.04 (-0.33%)
S&P 500 1,222.97 -4.95 (-0.40%)
10-Yr Bond 4.206 +0.31 (+0.74%)

NYSE Volume 1,229,830,000
Nasdaq Volume 1,053,667,000

3:00 ET Indices extend their reach into negative territory, taking a negative cue from renewed selling interest in the Treasury market... With a flattening yield curve - signs of a more restrictive lending policy - being cited as a main catalyst behind Citigroup's (C 45.14 -1.28) Q2 disappointment this morning, further deterioration in bonds (and subsequent increases in benchmark yields) has recently contributed to Citigroup shares hitting their worst level in three months... The 10-year note is now off 14 ticks to yield 4.21%... ..NYSE Adv/Dec 1411/1792. ..NASDAQ Adv/Dec 1231/1745.

[UpInArms]

68. 3:45 EST numbers and blather (red into the homestretch)

Dow 10,587.81 -53.02 (-0.50%)
Nasdaq 2,148.18 -8.60 (-0.40%)
S&P 500 1,222.70 -5.22 (-0.43%)
10-Yr Bond 4.223 +0.48 (+1.15%)

NYSE Volume 1,396,693,000
Nasdaq Volume 1,181,351,000

3:30PM: Stocks continue to post widespread losses ahead of IBM's earnings report after the bell...While no longer the primary indicator it once was for technology, IBM's (IBM 82.11 -0.27) 6% weighting in the influential Technology sector (behind only MSFT and INTC - both of which also report this week) could still play a key role in after-hours trading, especially following Citigroup's disappointment and the impact it has had on overall sentiment... NYSE Adv/Dec 1341/1883, Nasdaq Adv/Dec 1258/1738

[54anickel]

56. A Few Thoughts On The Inflation/Deflation Conundrum

http://www.321gold.com/editorials/captainhook/captainhook071805.html

snip>

Opening this vein a little further, we find more disturbing trends developing in key measures of future growth potential, such as the growing absence of cash in the system as measured by Money At Zero Maturity (MZM), which is the official measure of large denomination liquid deposits. Here, growth rates are already threatening to enter a 'deflationary' state, which is perhaps a result of higher living costs associated with growing debt service ratios and commodity / input prices. (See Figure 3)

Further to this, we have little doubt consumers and corporations are feeling the pinch in both of the aforementioned respects, as in spite of a modestly recovering economy over the past few years, money market fund growth rates have been unable to regain pre-stock market bubble crash levels seen prior to 2000. In fact, and as you will see bellow, balances continue to contract, which is evidence macro-degree 'deflation' is a very real possibility as time passes. Lest we forget money market funds are key elements of 'high-powered money', and if this trend persists, our suspicions mentioned above will become a reality, meaning deflation will grip the macro. (See Figure 4)

Central to the problem of decelerating money supply growth rates is the American consumer's inability to meaningfully increase aggregate debt levels much past current thresholds. America is up to it's eyeballs in debt, its population is aging, and trends in debt accumulation could be set to reverse. Can you blame people? Never mind servicing all the debt out there right now must be a growing hardship for growing numbers, especially as they age. I don't know about your views, but the less debt one has in retirement the better in my opinion. Central Bankers would have you take on more debt such that you can never afford to retire. They do this because they know no good measure of work themselves and prefer to keep a stupefied populous enslaved in usury. (See Figure 5)

Their most recent campaign of excessively accommodative monetary conditions have blown real estate values up into a speculative bubble, one where participants not only view appreciation potential as a source of retirement income, but where in fact many immediately spend any new equity provided by rising prices. Charles Ponzi would not believe his eyes today, and would undoubtedly bow to Alan Greenspan as his maestro. As you may know however, once any Ponzi scheme runs out of fools ready to surrender their hard earned money, the game collapses. We find it humorous so many so-called 'professionals' in a wide variety of concerned enterprise / fields seem to think there is no problem in this regard right now, and that even if prices are too high, they will deflate slowly. There is only one problem with this view, all bubbles in past experience have ended with a bang once popped, and to think this one will not once momentum in the opposite direction is established is loose thinking. Of course there is a lot of loose thinking going on out there these days, but as I say, that should change when momentum indicated in the chart below reverses, which could be any time now. (See Figure 6)

more...

[UpInArms]

58. Has-Been Partisan Hack Spews BFEE "economy is great - Crude Prices Okay!"

Greenspan upbeat about economy ahead of testimony

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38551.6032243056-838837030&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- In a possible preview of his testimony to Congress later this week, Fed chief Alan Greenspan was upbeat about the U.S. economy's ability to shrug off higher oil prices. "The U.S. economy seems to be coping pretty well with the run-up in crude oil prices," Greenspan said. His comments came in a series of written answers to questions released by the Joint Economic Committee of Congress on Monday. The questions were submitted after Greenspan's June 9 testimony. Greenspan will appear before the House Financial Services panel on Wednesday to deliver a report on monetary policy. Greenspan also told the JEC that statistical models indicate the current slope of the yield curve project continued moderate GDP growth for the foreseeable future.

This is the lying sack of shit that said in 2000 that gasoline at $1.35 would negatively impact the economy. :grr:

:banghead:

:nuke:

:argh:

[54anickel]

60. Heh-heh, but that was 2000, this is now and the new asset-based economy

we can afford ANY price for anything - so long as the value of our assets keep rising. Pull a little equity from the homestead, take a bit of profit off the top of stocks. It's all just peachy-keen, dontcha know. :eyes:

[UpInArms]

62. so long as those CEOs can knock back $10,000 a day

everything is hunky-dory!

[54anickel]

65. When the Bills Come Due, Then What?

http://online.wsj.com/public/article/0,,SB112154542153387582,00.html?mod=sunday%5Fjournal%5Fprimary%5Fhs

snip>

Nearly half of all consumer debt and 26% of all mortgage debt is now adjustable, estimates Joe Abate, senior economist at Lehman Brothers. That's a stark change from the early 1980s when nearly all debt had fixed rates. Other estimates peg adjustable-rate debt at closer to 20% of all consumer debt.

Adjustable-Rate Crunch

"When all these mortgages reset soon, some of these people are going to see their monthly payments rise by a few hundred dollars a month," Mr. Abate says. "That's a real significant bump for all those people complaining now that gas prices have risen over $2 a gallon."

And recent data suggest the debt burden on households is growing heavier, despite low interest rates. The "debt service ratio," the Federal Reserve's estimate of the ratio of debt payments to after-tax income, hit 13.4% in the first quarter of this year, an all-time high since the Fed began tracking it in 1980. The financial obligations ratio, which adds automobile lease and rent payments, homeowners insurance and property-tax payments to the debt service ratio, was 18.45% last quarter, near the record high of 18.84% in late 2002.

snip>

'We'll Probably Regret It'

"It was a good strategy in that we needed something to boost the economy in the economic downturn," says Dean Baker, founder of the Washington think tank Center for Economic and Policy Research. "But it sets us up for an even worse crash when housing" cools. "In the long term, we'll probably regret it."

What's more, consumers' attitude about debt is changing, says Robert D. Manning, a finance professor at Rochester Institute of Technology. While older generations are more debt-averse and cut spending during economic downturns, younger generations rely on debt for spending money. "What we're seeing here is really a deferral of the financial responsibility and consequences," Mr. Manning says. "We may be heading into a very gut-wrenching period."

more...

[UpInArms]

67. oh but the Meanie-Greenie says it's OKAY!

Everything is COMING UP ROSES! The economy is HEALTHY!

To that I say:

LIAR!

[UpInArms]

69. closing numbers and blather

Dow 10,574.99 -65.84 (-0.62%)
Nasdaq 2,144.87 -11.91 (-0.55%)
S&P 500 1,221.13 -6.79 (-0.55%)
10-Yr Bond 4.223 +0.48 (+1.15%)

NYSE Volume 1,582,049,000
Nasdaq Volume 1,332,692,000

Close: With earnings season now in full swing, and the first of 17 quarterly reports - Citigroup - from Dow components scheduled this week missing analysts' expectations, investors were prompted to consolidate recent market gains... Before the bell, Citigroup (C 45.10 -1.32) - the most influential component within the most highly weighted economic sector (financial) - reported Q2 earnings of $0.97 per share, which were $0.06 shy of analysts' forecasts due primarily to sluggish fixed-income revenues...

With the markets having already factored in a lot of positive earnings news, as evidenced in a two-week rally that lifted the S&P (+2.8%) back into positive territory for the year and to its best levels since July 2001, Citigroup's disappointment became the catalyst that left participants little choice but to lock in some hefty profits... A lack of notable economic data today to further validate the plethora of very bullish economic reports over the last two weeks (i.e. inflation, job growth and retail sales) placed even more emphasis on today's mixed batch of earnings, as all ten economic sectors closed in negative territory...

Providing the bulk of leadership to the downside was Financial, as Citigroup's discouraging report damaged the perception of financial stocks across the board, in particular, Bank of America (BAC 45.23 -0.75) and MBNA's (KRB 25.83 -0.39) - both of which posted better than expected results... The lone exception was Brokerage, which benefited from a 65% increase in Q2 profits from Charles Schwab (SCH 13.40 +0.66), but gains were also minimized by a late-day surge in benchmark yields... The 10-year note finished off 14 ticks to yield 4.21% as traders squared positions ahead of upcoming Greenspan testimony...

See you all tomorrow (I hope) :hi:

[loudsue]

70. Fire-engine red day at the casino!

Not as bad as it could be, but what do you expect when we have a pie-hole alert!

:kick::kick::kick: