STOCK MARKET WATCH, Tuesday 13 December

[ozymandius]

Tuesday December 13, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 40 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1818 DAYS
WHERE'S OSAMA BIN-LADEN? 1517 DAYS
DAYS SINCE ENRON COLLAPSE = 1479
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
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON December 12, 2005

Dow... 10,767.77 -10.81 (-0.10%)
Nasdaq... 2,260.95 +4.22 (+0.19%)
S&P 500... 1,260.43 +1.06 (+0.08%)
10-Yr Bond... 4.55% +0.01 (+0.22%)
Gold future... 531.50 +1.30 (+0.24%)






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 Rob Kirby

WEIRD GOINGS-ON IN THE GOLD MARKET

To say that the price of gold has been behaving somewhat strangely lately – is perhaps a bit of an understatement. In fact, the steady (bordering on dramatic) rise in the price of gold is becoming almost impossible to ignore. Consider, if you would, the following:

For the past few years at least, gold has been mostly portrayed in the greater mainstream financial press as being the ‘anti dollar’ – generally exhibiting strength when the dollar has shown any sign of weakness and vise versa on the slightest sniff of weakness. This previously adhered-to axiom has changed markedly in the past few months – seemingly confounding so many of the “experts” that our responsible mainstream media trots out every other day to explain the machinations of today’s gold market.

-cut-

The long and short of what this all means folks, is this:

The dudes who formerly shorted gold futures with ‘reckless abandon’ now appear (statistical evidence – COT data - supports this contention) to want no part of the same. In fact, it would appear that already in December – alarmingly, better than ¼ of all gold stocks held at COMEX warehouses has changed ownership with no substantial or meaningful decrease in the aggregate shorts. These same folks now appear to be ‘trapped short’ with no way to buy their positions back without sending the price of gold to the moon.

more...

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

[UpInArms]

33. Feb Gold @ $526.40 oz

9:41am 12/13/05 FEB GOLD HEADS LOWER FOR THE FIRST TIME IN NINE SESSIONS

9:41am 12/13/05 FEB GOLD FALLS $5.10 TO $526.40/OZ IN MORNING TRADING

9:41am 12/13/05 MARCH COPPER CLIMBS 4.6C, OR 2.3%, TO $2.032/LB

[54anickel]

103. Gold Falls From 24-Year High on Sales After Five-Week Rally

http://www.bloomberg.com/apps/news?pid=10000081&sid=anRUYRYMG9Jw&refer=australia

Dec. 13 (Bloomberg) -- Gold prices in New York fell from the highest in 24 years on sales by some investors after prices rallied 16 percent in the past five weeks.

Hedge funds and other large speculators have more than tripled their net-long positions, or bets prices will gain, in New York gold futures since the end of July. Before today, gold had climbed every day this month, as investors sought alternatives to U.S. stocks, bonds and currencies. Gold reached $544.50 an ounce yesterday, the highest since April 1981.

``The gold speculation boat simply was tipped too far to one side and needed to tip to the other,'' said Dennis Gartman, economist and editor of Suffolk, Virginia-based Gartman Letter. He advises buying gold should prices fall to $450 $470.

snip>

Higher rates in the U.S. are pushing the dollar toward its first annual gain in four years against the euro and yen. The European Central Bank this month raised its benchmark rate to 2.25 percent. The Bank of Japan this week will keep borrowing costs at zero, according to economists surveyed by Bloomberg.

``I see higher interest rates continuing to point to lower gold,'' said Ronald Goodis, retail trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. :eyes:

more...

[ozymandius]

2. Oil hovers around $61 on OPEC, US cold

NEW DELHI (Reuters) - Oil held near $61 on Tuesday after OPEC paved the way for a production cut early next year and forecasters predicted more cold weather in the northeast United States, the world's biggest heating oil market.

Oil raced three percent higher on Monday after OPEC moved to pull output within an official 28 million barrels per day limit and said an offer to sell all its spare oil would lapse.

-cut-

OPEC, which supplies a third of the world's crude, also said it would meet again on January, earlier than expected, with a view to cutting output in spring when demand normally eases.

"Basically, we had an unexpected rally after the OPEC meeting yesterday as OPEC took a stronger stand than people expected," said Deborah White, senior energy analyst with SG Commodities in Paris. "The market is realising that the change is so small to be materially insignificant."

more...

[54anickel]

6. Is it just me, or is that article confusing. Maybe it's too early for my

brain to function.

...the change is so small to be materially insignificant." :wtf: kind of Greenspinism is that?

OPEC moved up their next meeting, to discuss cutting back the extra output they added when prices sky rocketed (due in a large part to speculators) to over $70 per bbl.

OPEC expects the usual spring drop in demand, seems reasonable if speculators are basing the current price on that cold weather for the NE (flashbacks to last winter where it was all about the weather). But the IEA counters that with a 2006 forecast for higher demand in China and India which would keep demand exactly where OPEC's output is at today. Yet today's increased OPEC output is based on the speculator's rise to $70-plus. :shrug: Someone is yankin' someone elses chain here.

Oil raced three percent higher on Monday after OPEC moved to pull output within an official 28 million barrels per day limit and said an offer to sell all its spare oil would lapse.

snip>

OPEC states excluding Iraq have been producing around 200,000 bpd above the group's ceiling...... in response to prices that hit a record $70.85 in August.

snip>

The International Energy Agency raised its 2006 oil demand growth forecast by 130,000 bpd to 1.79 million bpd, reflecting strong buying from China and India. The agency, adviser to 26 industrialised nations, also raised its projection for 2006 demand for OPEC oil by 200,000 bpd to 28.5 million.

[54anickel]

7. Oil Little Changed After `Over-Reacting' to OPEC, Qatari Says

http://www.bloomberg.com/apps/news?pid=10000103&sid=aT5svozfXPPg&refer=us

Dec. 13 (Bloomberg) -- Crude oil was little changed after jumping to its highest level in a month yesterday when OPEC ministers agreed to review production quotas in January.

The Organization of Petroleum Exporting countries said it would keep production close to a 25-year high until it meets in Vienna on January 31. Prices jumped more than 3 percent.

``It's an over-reaction,'' Qatar's oil minister, Abdullah bin Hamad al-Attiyah, said today in Kuwait, where OPEC met yesterday. ``Prices will go down.''

snip>

``What they're saying is that they may cut back and introduce quotas, but we're not doing it yet,'' said Peter Luxton, an oil analyst with Informa Global Markets in London. ``There is plenty of evidence that there is plenty of crude sloshing around. The market went into a sort of panic.''

snip>

``The market still recognizes that it has plenty of oil,'' said Sam Tilley, an oil analyst with Sucden U.K. Ltd., a London futures brokerage. ``There are too many heating oil and crude stocks to support any major price move above $60'' a barrel.

more chain yankin'...

[54anickel]

14. Ships, trains could solve US energy crisis

http://today.reuters.com/news/NewsArticle.aspx?type=reutersEdge&storyID=uri:2005-12-12T185901Z_01_KWA265320_RTRUKOC_0_US-ENERGY-US-TRANSPORT.xml&pageNumber=0&summit=

NEW YORK (Reuters) - Forget futuristic hybrid cars and solar-powered homes. The trains and river barges that drove the industrial age may be the key to stemming a U.S. energy crisis, according to one sector expert.

Americans have faced rolling blackouts and record fuel prices in recent years as the nation's aged and overtaxed energy network strained to meet growing demand -- and policy makers have had little luck finding solutions.

A simple return to the past may be what is needed to derail the growing U.S. energy problem, banker Matthew Simmons of Simmons and Company International told Reuters in an interview. Shipping goods by train and riverways instead of by truck, for example, could drastically cut fuel use.

"It's actually pretty simple, but implementation is not simple. You go on a massive switch from the way we transport goods over long distances by truck," said Simmons.

snip>


more...

[punpirate]

80. Unfortunately, the current economic system won't permit...

... this sort of reverse technology implementation. Railroads are a high capitalization business and the demands for high profits on investment have caused a boom and bust cycle in rail. I can remember back around 1991 when Tom Peters was praising some railroads because they were competing successfully with UPS ground for cross-country delivery. It was only a few years later that profit-taking had created the same kind of disarray in rail that was commonplace throughout the `70s and `80s. When rail had a monopoly on transportation, over a hundred years ago, it made lots of money for its owners, but not now.

The other thing that has hurt chances for a renascence of rail is the abandonment of many routes. In some cases, the railroads sold their rights-of-way to increase profits, and in others, let tracks fall into disrepair. The costs of regaining that capacity is enormous. Many stations along existing routes have been closed or sold and are used in some other capacity now.

It's instructive to see how Amtrak has been run--just enough money allotted to keep trains moving in the densely-populated Northeast Corridor--with continuing restrictions in service or abandonment of routes elsewhere--and it's now the clear desire of the Bushies to kill it entirely and sell it off to Snow's erstwhile employers. There's not been any desire to actually invest in it or expand service to keep it competitive. It's amazing how many smaller cities in the country, as a result, are served by neither a major airline nor rail.

That said, Simmons is right about energy use. Rail is among the most efficient means of transportation available, next to pipeline (according to the texts I used when teaching energy courses in the `70s). Delivery by truck is among the least fuel-efficient.

I should add, on edit, that the ramifications of returning to rail would have far-reaching consequences for the way manufacturing business is done, too. Most larger manufacturers would have to modify or abandon their JIT expectations, if only because of the need to coordinate long-distance rail and local truck delivery--you'd be surprised at how many manufacturers today are totally dependent upon trucks for parts/raw materials deliveries these days and have no direct access to rail.

[amandabeech]

105. To be fair, one must compare the costs of moving to less energy

intensive transportation means and large warehouses to the cost of securing energy supplies by military force.

Admittedly, the cost of the military is hidden somewhat because it is paid for in part by taxes and in part by governmental borrowing, which itself may end up increasing costs by increasing interest rates.

However, should diesel prices rise again, the cost picture may look differently.

Simmons is not optimistic about reducing the 9 million barrels a day of gasoline that we consume because it takes a considerable amount of time to turn over our gas-guzzling private vehicle fleet. However, I think that he misses the possibility that each vehicle may carry more passengers as fuel prices rise, and that existing public transit will experience increased ridership. That doesn't take into account an increase in the bus fleet, which may be easier to expand than passenger rail.

[punpirate]

108. I'm not arguing that there are hidden costs...

... all I'm saying is that transportation is largely private in this country, and is, for that reason, investment-driven. And investors don't put large amounts of money into a system without the promise of high returns, which rail, at present, doesn't provide.

We have an economic system which encourages consumption, and the sort of changes required to change modes of consumption means changes to that economic system. If anything, that economic system is even more out of control than in the past--demanding higher and higher rates of return on capital investment--so, it's even more difficult to turn that system to another course.

As for bus production, that's in decline (because it's almost entirely dependent upon federal subsidy), and is increasingly foreign-owned (so they have their own notions of what's required in the US market, which is not always accurate). Trust me on that one--I spent thirteen years in the bus business.

Cheers.

[cosmicdot]

106. Deal reached for light rail segment in Norfolk, VA

that's one small step ...



Deal reached for light rail segment in Norfolk
By DEBBIE MESSINA, The Virginian-Pilot
© December 2, 2005

NORFOLK — The city has reached an agreement with Norfolk Southern Corp. to buy a five-mile segment of unused freight track for a proposed starter light rail line.

The purchase is the last of several tasks the Federal Transit Administration required of the city and Hampton Roads Transit, clearing the way for possible federal funding to build the 7.5-mile rail system.

The city will pay Norfolk Southern $5 million and will extend a discounted parking plan in a city garage next to the railroad’s downtown headquarters. The parking discount is worth an additional $2.6 million .

“This really is a significant day for the development of the Norfolk light rail line,” Mayor Paul D. Fraim said Thursday . “The acquisition of the tracks sends a strong message to the FTA that Norfolk is willing and committed to taking the necessary steps to insure the development of the light rail system.”

The route would go from Eastern Virginia Medical Center through downtown to Newtown and Kempsville roads. About 12,000 daily riders are projected.

In October , the FTA endorsed the $203.7 million project with several conditions, including the track purchase. The endorsement, which city and transit officials sought for years, usually all but guarantees that a project will be built.

Other conditions also have been met. The city adopted a new parking policy that limits future spaces downtown so that motorists would be encouraged to leave their cars home and take public transit. Plus, a review of the project’s capital costs is complete.

~snip~

http://home.hamptonroads.com/stories/story.cfm?story=96274&ran=105630

[UpInArms]

41. Jan Crude @ $61.55 bbl - Jan NatGas @ $15.38 mln btus

10:03am 12/13/05 JAN CRUDE CLIMBS 25C TO $61.55/BRL IN EARLY NY TRADING

10:03am 12/13/05 JAN NATURAL GAS RISES TO A MORE THAN 2-MONTH HIGH OF $15.60

10:03am 12/13/05 JAN NATURAL GAS LAST UP 3.6% AT $15.38/MLN BTUS

[UpInArms]

67. Jan Crude @ $61.35 bbl - Jan NatGas @ $15.42 mln btus

12:06pm 12/13/05 JAN CRUDE RISES 5C TO $61.35/BRL, BUT TRADES OFF $61.80 HIGH

12:06pm 12/13/05 JAN NATURAL GAS TACKED ON 55.9C, OR 3.9%, TO $15.42/MLN BTUS

[54anickel]

78. Speculators stepping back into the game? Wonder if the upcoming

final shipment for EU is playing into this?

I think it was Punpirate that posted about that a couple of weeks ago. The additional reserves that Europe agreed to send us to get us over the hump from Katrina was coming to and end very soon.

[UpInArms]

91. Jan Crude closes @ $61.37 bbl - Jan NatGas @ $15.378 mln btus

2:59pm 12/13/05 JAN NATURAL GAS UP 3.6%, ENDS AT $15.378 AFTER RECORD $15.78

2:59pm 12/13/05 JAN HEATING OIL CLOSES AT $1.8365/GAL, UP 6.4C

2:59pm 12/13/05 JAN CRUDE UP 7C TO CLOSE AT 5-WK HIGH OF $61.37/BRL

[54anickel]

59. Deals in energy field set to get even hotter

http://www.iht.com/articles/2005/12/13/business/energy.php#

The ConocoPhillips acquisition of the natural gas producer Burlington Resources for $35.6 billion caps what has already been a frothy year for energy deals.

Even before the deal, which was approved by the boards of the two companies Monday night, Chevron bought Unocal, Chinese and Russian companies cut deals from Venezuela to Kazakhstan, and even Warren Buffet, the famed value investor, bought a power company.

But this year may be a warm-up. Bankers and analysts specializing in energy say that deal volume in 2006 could rival records set during the previous fervor of mergers in the late 1990s. The reason, they say, is that the battles over the world's energy resources show no sign of easing.

Next year, high energy prices and a hunger for such assets could push the value of announced deals above $383 billion, the record set in 1999, according to PricewaterhouseCoopers. This year, that figure is expected to hit $367 billion, including the Burlington deal, according to Thomson Financial data.

This time around, though, the combinations are less likely to look like Exxon's $80 billion merger with Mobil, or BP's $62 billion deal for Amoco, deals that created the largest global players.

Instead, bankers say they expect a flurry of smaller but still influential mergers. Demand for energy is increasing with the rapid industrialization of China and India, at the same time that easy-to-extract supplies of natural resources like oil and gas are dwindling. Governments, concerned that the world's energy resources are rapidly shrinking, but wary of pouring huge amounts of money into long-term investments, are hunting for operations already producing the energy.

more...

[54anickel]

64. Oil prices projected to remain above $50 a barrel for decades

http://www.azcentral.com/arizonarepublic/business/articles/1213biz-talker13.html

Oil prices are projected to remain well above $50 a barrel for years to come, resulting in a greater shift to more fuel efficient cars and alternative energy sources, according to an analysis released Monday by the Energy Department.

The analysis reflected a sharp change from the department's projections a year ago when it predicted oil prices in constant dollars, not counting normal inflation, would decline to $31 a barrel by 2025.

The report by the department's Energy Information Administration now projects oil will cost an average $54 a barrel in 2025 and $57 a barrel in 2030 before inflation. Crude oil prices have been hovering around $60 a barrel, briefly soaring as high as $70 earlier this year.

:rofl: 2025? Weren't they originally calling for oil to drop back to $31 a helluvalot sooner than that? Cripes, they were calling for a drop back down to $30 "anyday now" way back when we originally hit $45

[UpInArms]

76. Exxon Mobil says world will need 60% more energy in 2030

http://www.marketwatch.com/news/print_story.asp?print=1&guid={E5200CDF-86E9-4E26-9399-7FF1ABB4069B}&siteid=mktw

HOUSTON (MarketWatch) -- Global energy consumption will soar 60% over the next 25 years, Exxon Mobil Corp. (XOM) forecast Tuesday in its annual energy outlook.

Energy demand will grow to 334 million barrels of oil equivalent a day in 2030, up from 205 million boe/d in 2000, Jaime Spellings, head of ExxonMobil's corporate planning, said during a webcast of the outlook's presentation.

Oil consumption will grow 1.4% annually, and gas will grow 1.8% per year. Oil and gas will account for 60% of the world's energy needs, the same share they hold today, according to Spellings.

Most of the growth will occur in developing countries, he said.

The Organization of Petroleum Producing Countries will have a progressively larger share of the world's oil production as non-OPEC output growth flattens around 2010, Spellings said.

To satisfy growing crude oil thirst, OPEC will have to produce more than 47 million barrels a day by 2030, a 40% increase over current levels, Spellings said.

...more...

hmmmm....

Have these people completely discounted peak oil?

[54anickel]

79. Ewww, and that supposedly factors in efficiency improvements...

Technology and efficiency improvements, expected to dampen demand, are already factored in the ExxonMobil outlook, Spellings said.

[UpInArms]

77. Oil prices enter "super-spike" phase

http://money.cnn.com/2005/12/13/news/international/goldman_superspike.reut/

LONDON (Reuters) - Already sky-high oil prices have entered a "super spike" phase that could last for four more years as global demand booms and supply growth slows, Goldman Sachs analysts said Tuesday.

"We disagree with what appears to be a growing consensus that crude oil prices reached their peak levels earlier in 2005," said the firm's Global Investment Research.

The analysts said oil demand remained resilient and supply growth lackluster, prompting them to keep their average U.S. crude price forecast for next year unchanged at $68 a barrel.

Oil futures on the New York Mercantile Exchange have averaged $56.59 so far this year.

The group also predicted oil prices could see 1970s-style price surges to as high as $105 a barrel during this period.

...more...

[ozymandius]

3. Fed set to raise US rates, outlook hazier

WASHINGTON (Reuters) - The Federal Reserve looks set to lift U.S. interest rates for a 13th straight time on Tuesday and may inaugurate a new phase in its 1-1/2 year credit tightening campaign in which future moves become less certain.

The U.S. central bank is widely expected to bump up overnight borrowing costs by a quarter-percentage point to 4.25 percent. It also may alter long-standing language in its post-meeting statement offering guidance on its policy path.

Members of the policy-setting Federal Open Market Committee are scheduled to gather at 9 a.m. EST (1400 GMT) for the penultimate meeting of Fed Chairman Alan Greenspan's 18-year tenure. They are expected to announce their decision on rates at 2:15 p.m. EST (1715 GMT).

more...

[54anickel]

60. Payment-option loans due for new rules

Moving to another method to remove the "froth" from the housing market (since rate increases haven't really done the trick as well as expected)? :shrug:



http://www.freep.com/apps/pbcs.dll/article?AID=/20051211/BUSINESS04/512110323/1017/BUSINESS

WASHINGTON -- Federal financial regulators appear to be on the verge of reining in one of the most popular so-called affordable mortgages in hot housing markets -- loans that allow 1% to 2% payment rates leading to "negative amortization."

In a speech he made before the Consumer Federation of America on Dec. 1, Comptroller of the Currency John C. Dugan hinted strongly that in 2006, banks and their mortgage subsidiaries can expect significantly toughened rules governing "payment-option" home loans.

Payment-option mortgages have accounted for roughly one-third of all the new home loans some major lenders made this year. They are especially popular in high-price, high-appreciation markets on the West and East coasts because their low payments permit buyers to purchase costly properties they wouldn't be able to afford otherwise.

Typically, payment-option mortgages carry 30-year terms but allow up to five years of reduced rates as one of several payment plans. Two options allow interest-only monthly payments or fully amortizing payments that include principal reduction. Approximately 70% of homebuyers choose the minimum payment option, according to mortgage securities research.

more...

[54anickel]

63. The Coming Bernanke Bust

The incoming Fed chairman is going to suffer a housing slump and a recession. The place not to be: those now-hot foreign stocks.

http://www.forbes.com/forbes/2005/1226/138_print.html

snip>

Greenspan, blessed with plain old good luck, reigned while inflation was unwinding, so he spent most of his time lowering rates. Easy money makes people happy. After he took over in August 1987, Greenspan enjoyed an expanding U.S. economy that had just two recessions, both mild. The strong economy helped him surmount his first test, the October 1987 market crash. Buoyed by growing earnings, stocks quickly recovered. :spray:

His strategy has been not to prick bubbles but to wait until they break, then clean up the mess. Greenspan did nothing to curb the stock speculation building in the late 1990s. Massive monetary ease before and after Sept. 11 kept speculation alive despite the bear market. Aided by non-Fed actions like exploding government spending, speculation simply shifted from stocks to real estate.

The cruel irony is that Greenspan deserves a lot of the blame for the impending housing debacle, yet Bernanke will take the heat. The bursting of the housing bubble that's now beginning will bring a painful U.S. recession. Like King Louis XV, Greenspan's attitude may well be: Après moi, le déluge.

Coming after earlier stock losses, house depreciation will leave consumers with no piggy bank with which to support their consumption habits. Their 25-year borrowing-and-spending binge will be replaced by a saving spree. The big losers will be foreign lands that depend on American consumers to buy their surplus goods and services.

This scenario is beginning to unfold just as U.S. investors are stampeding to foreign stock markets, chasing the rallies that overseas bourses have lately been relishing. Some U.S. advisers are recommending a 33% allocation to foreign stocks, up from 20% two months ago. At current rates U.S. investors in 2005 will put $100 billion into mutual funds offering foreign stocks. Such a sum is equal to the flow into U.S.-only funds, which last year got twice what international funds did.

more...

[ozymandius]

4. Today's Reports

8:30 AM Retail Sales for Nov
Briefing Forecast 0.7%
Market Expects 0.4%
Prior -0.1%

8:30 AM Retail Sales ex-auto for Nov
Briefing Forecast -0.2%
Market Expects 0.0%
Prior 0.9%

10:00 AM Business Inventories for Oct
Briefing Forecast 0.5%
Market Expects 0.5%
Prior 0.5%

2:15 PM FOMC policy announcement

[UpInArms]

13. 8:30 Reports in:

8:30am 12/13/05 U.S. RETAIL SALES UP 6.3% YEAR-OVER-YEAR

8:30am 12/13/05 U.S. Nov. retail sales rise 0.3% on rebound in autos - Rex Nutting

8:30am 12/13/05 U.S. NOV. GENERAL MERCHANDISE SALES UP 0.1%

8:30am 12/13/05 U.S. NOV. RETAIL SALES EX-AUTOS, EX-GAS UP 0.5%

8:30am 12/13/05 U.S. NOV. RETAIL AUTO SALES UP 2.6%

8:30am 12/13/05 U.S. NOV. GASOLINE STATION SALES DOWN 5.9%

8:30am 12/13/05 U.S. NOV. RETAIL SALES EX-GAS UP 1%

8:30am 12/13/05 U.S. OCT. RETAIL SALES REVISED TO 0.3% GAIN VS -0.1% EARLIER

8:30am 12/13/05 U.S. NOV. RETAIL SALES EX-AUTOS FALL 0.3% VS. -0.1% EXPECTED

8:30am 12/13/05 U.S. NOV. RETAIL SALES UP 0.3% VS. 0.5% EXPECTED

[UpInArms]

15. U.S. Nov. retail sales rise 0.3% on rebound in autos

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38699.3542532986-854198297&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) - U.S. retail sales increased a modest 0.3% for the third straight month in November, as a rebound in auto sales offset a big decline in gasoline, the Commerce Department said Tuesday. Including the upward revision to October's sales, November's total was a bit higher than economists' expectations of a 0.5% increase. Retail sales increased 6.3% year-over-year. Auto sales rose 2.6% in November after sinking 1.3% in October. Excluding autos, retail sales fell 0.3%, the biggest decline in 19 months. Gasoline sales plunged 5.9% in November as the pump price fell. Excluding gasoline, retail sales rose 1%, the largest increase since July. Excluding both autos and gas, retail sales increased 0.5%.

[54anickel]

16. What the heck are we buying and how are we paying for it? 6.3%

Y-o-Y seems like a pretty good jump doesn't it?

[AnneD]

29. Morning Marketeers,

:party: Some time in the last two weeks I passed a mile marker...1000 posts. Most of it was on this thread I am sure.

54anickle, I can't figure those numbers out, esp auto sales. The car lots are filled here and not much is moving. When they have to give you a 10yr extended warranty and 1 yr of free gas to sell you a car, that doesn't mean they were selling like hot cakes BEFORE the offers. Can they rig sales numbers?

Maybe we are fiscally conservative here in Houston, but I don't see those numbers here. It is not a recession here, but it is tight.

Happy Hunting, and watch out for the bears.

[UpInArms]

37. Inventories report in:

10:00am 12/13/05 U.S. OCT. RETAIL AUTO INVENTORIES UP 0.7%

10:00am 12/13/05 U.S. OCT. RETAIL INVENTORIES UP 0.1%

10:00am 12/13/05 U.S. OCT. INVENTORY-SALES RATIO STAYS AT RECORD LOW 1.25

10:00am 12/13/05 U.S. OCT. SALES UP 0.8%, BIGGEST GAIN SINCE JULY

10:00am 12/13/05 U.S. OCT. INVENTORIES UP 0.3% VS. 0.5% EXPECTED

[UpInArms]

38. U.S. Oct. inventories rise 0.3%, still very tight

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38699.4167745949-854204582&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) - Inventories at U.S. businesses remained very tight in October, the Commerce Department said Tuesday. Inventories increased 0.3% in October, while sales grew by 0.8%, the largest gain since July. As a result, the inventory-to-sales ratio remained at a record low 1.25, giving companies a strong incentive to increase production and hiring. Imports are also likely to increase. Economists surveyed by MarketWatch had expected inventories to rise 0.5% in October, matching September's increase.

[UpInArms]

82. FOMC hikes rate to 4.25%, makes major changes to statement

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38699.5930132292-854222938&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) - The Federal Open Market Committee increased its target for overnight interest rates by a quarter percentage point to 4.25% Tuesday. This is the 13th straight meeting with a quarter-point rate hike. The increase in the federal funds rate was expected by traders and economists on Wall Street. The vote was unanimous. The committee made major changes to the explanatory statement, but signaled that more rates are needed. The Fed dropped the referense that rates are accommodative, or spurring growth. The committee said "further measured policy firming is likely to be needed."

2:13pm 12/13/05 FOMC SAYS ECONOMY SOLID DESPITE HURRICANES, ENERGY

2:13pm 12/13/05 FOMC SAYS 'SOME FURTHER MEASURED POLICY FIRMING LIKELY'

2:13pm 12/13/05 FOMC TAKES ACCOMMODATIVE PHRASE OUT OF STATEMENT

2:13pm 12/13/05 MAJOR CHANGES MADE TO FOMC STATEMENT

2:13pm 12/13/05 FOMC HIKES RATES BY QUARTER POINT TO 4.25%

[UpInArms]

84. Text of FOMC statement

http://www.marketwatch.com/news/print_story.asp?print=1&guid={EFA4AE91-B786-45BB-B14E-6257E62445FB}&siteid=mktw

WASHINGTON (MarketWatch0 - The Federal Reserve raises interest rates by a quarter percentage point Tuesday. Here is the text of their statement.

For immediate release

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 4-1/4 percent.

Despite elevated energy prices and hurricane-related disruptions, the expansion in economic activity appears solid. Core inflation has stayed relatively low in recent months and longer-term inflation expectations remain contained. Nevertheless, possible increases in resource utilization as well as elevated energy prices have the potential to add to inflation pressures.

The Committee judges that some further measured policy firming is likely to be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance. In any event, the Committee will respond to changes in economic prospects as needed to foster these objectives.

...more...

[UpInArms]

89. CHRONOLOGY-Fed funds rate changes since 1990

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-12-13T193251Z_01_N13354154_RTRIDST_0_ECONOMY-FED-CHRONOLOGY.XML

Moves are measured in basis points (bps), each of which
equals one-hundredth of a percentage point:
2005

Dec 13             Raised 25 bps  to  4.25 pct
Nov 1              Raised 25 bps  to  4.00 pct
Sept 20            Raised 25 bps  to  3.75 pct
Aug 9              Raised 25 bps  to  3.50 pct
June 30            Raised 25 bps  to  3.25 pct
May 3              Raised 25 bps  to  3.00 pct
March 22           Raised 25 bps  to  2.75 pct
Feb 2              Raised 25 bps  to  2.50 pct
2004
Dec 14             Raised 25 bps  to  2.25 pct
Nov 10             Raised 25 bps  to  2.00 pct
Sept 21            Raised 25 bps  to  1.75 pct
Aug 10             Raised 25 bps  to  1.50 pct
June 30            Raised 25 bps  to  1.25 pct
2003
June 25            Cut 25 bps     to  1.00 pct
2002
Nov 6              Cut 50 bps     to  1.25 pct
2001
Dec 12             Cut 25 bps     to  1.75 pct
Nov 6              Cut 50 bps     to  2.00 pct
Oct 2              Cut 50 bps     to  2.50 pct
Sept 17            Cut 50 bps     to  3.00 pct
Aug 21             Cut 25 bps     to  3.50 pct
June 27            Cut 25 bps     to  3.75 pct
May 15             Cut 50 bps     to  4.00 pct
April 18           Cut 50 bps     to  4.50 pct
March 20           Cut 50 bps     to  5.00 pct
Jan 31             Cut 50 bps     to  5.50 pct
Jan 3              Cut 50 bps     to  6.00 pct

...more...

[ozymandius]

5. S&P: GM bankruptcy not 'far-fetched'

NEW YORK (Reuters) - A bankruptcy by General Motors Corp. is not a "far-fetched possibility" if current trends at the world's largest automaker persist, Standard & Poor's analyst Scott Sprinzen said Monday.

Speaking on a conference call after downgrading GM's ratings deep into speculative territory, Sprinzen said the rating agency felt it needed to be very direct about the risks its rating reflects.

more...

[54anickel]

17. S.& P. Cuts G.M. Rating to Lowest in 52 Years

http://www.nytimes.com/2005/12/13/business/13auto.html?adxnnl=1&adxnnlx=1134481286-c7bPm6HirhUiFiz3gJjK4Q

DETROIT, Dec. 12 - Standard & Poor's Ratings Services cut its rating on General Motors' debt two more notches into junk status on Monday, putting the automaker at the lowest level in the 52 years that S.& P. has been assessing its creditworthiness.

snip>

G.M., the world's biggest auto company, reiterated Monday that it had no intention of seeking Chapter 11 bankruptcy protection. A G.M. spokesman, Jerry Dubrowski, said G.M. has "an aggressive and well-thought-out strategy to turn around our North American business," which has lost more than $4 billion this year.

Nonetheless, the S.& P. ratings cut and bankruptcy warning threw fuel on the smoldering speculation that G.M. would be forced to seek court protection. Although other industry analysts have warned that the possibility exists, the debt-rating agency is privy to confidential G.M. information, which it uses to assess the company's risk of default.

snip>

The B rating is the lowest since 1953, when S.& P. gave its first rating of AAA to the company's debt. The downgrade marks the third ratings cut in the last year for G.M., and its second descent into speculative grade. The rating is below those G.M. held during its fiscal crisis in the early 1990's.

snip>

Mr. Dubrowski at G.M. said the company was making some progress in its turnaround efforts, noting that G.M. had reached agreement with the United Automobile Workers union on historic, though modest, savings on its annual health care costs. He added that G.M.'s plan was "not a short-term strategy."

more...

[UpInArms]

39. GM jitters send shares down more than 3%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38699.4142879977-854204370&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- General Motors (GM) shares lost 3.2% to $22.31 on Tuesday after Standard & Poor's analysts stirred up bankruptcy fears and downgraded the automaker's debt deeper into junk a day earlier. Ford Motor Co. (F) and DaimlerChrysler (DCX) both fell less than 1% in morning trade while the Japanese manufacturers all moved fractionally higher.

[54anickel]

62. Derivatives Bet on GM, GMAC Threatens to Unravel

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_gilbert&sid=aFjM26AM_LfE

Dec. 13 (Bloomberg) -- ``Auto accessory for sale,'' the advertisement might read. ``One careless owner. Price reduced. Please call Rick Wagoner at 1-800-FIRE-SALE.''

General Motors Corp. seems to be struggling to sell General Motors Acceptance Corp. Since GM said in October a controlling stake in the unit was up for grabs, not a single prospective buyer has come out and said, ``Yep, we'd like a piece of that action.'' Bank of America Corp. isn't interested. Neither is Wells Fargo & Co. Nor is HSBC Holdings Plc. An already short list of potential buyers seems to shrink almost daily.

That's creating a rollercoaster ride for traders and investors in the derivatives market who have made big bets that GM will find a safe new berth for GMAC. The gamble is that Standard & Poor's might reassign an investment-grade assessment once the finance company is freed, even as its auto-making parent slides deeper into the junk basement of the credit ratings scale.

At the start of the year, it cost about $200,000 annually to insure $10 million of GMAC debt for five years using credit-default swaps. That soared to more than $750,000 in May, after S&P cut General Motors and its affiliates to junk. The higher the cost of the swaps, the riskier the borrower is deemed to be.

Wild Ride

more...

[UpInArms]

70. Diverse interest in GMAC as Monday deadline looms

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-12-13T172315Z_01_N09248143_RTRIDST_0_FINANCIAL-GMAC-DEADLINE-REPEAT.XML

NEW YORK, Dec 9 (Reuters) - Bids to buy a controlling stake or smaller parts of GMAC, the financial services unit of General Motors Corp. (GM.N: Quote, Profile, Research), are expected from a diverse group of players before a deadline for initial bids expires on Monday.

The world's largest automaker is auctioning off a 51 percent stake in its lucrative financing unit, General Motors Acceptance Corp., after losing nearly $4 billion this year as it struggles with high costs, declining market share to foreign rivals and slumping sales of cash-generating sport utility vehicles.

GM has said it would prefer to sell a majority stake in GMAC -- which analysts estimate could fetch up to $10 billion -- to a strategic partner to restore GMAC's credit rating to investment-grade status.

But sources said some of the bidders that emerge may not want to buy a majority stake but instead acquire GMAC's residential mortgage business ResCap or other businesses of GMAC. It is unclear if this would help GMAC's credit ratings.

...more...

[54anickel]

8. Federal deficit record for a November

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B5AD24890%2D85B5%2D4D75%2D9E29%2DA76AEE8447AB%7D

WASHINGTON (MarketWatch) -- The U.S. federal budget deficit widened as expected to $83.1 billion in November, the largest deficit of any November, the Treasury Department said Monday.

A year ago, the deficit was $57.9 billion.

Earlier, the Congressional Budget Office had estimated the deficit would rise to $82 billion.

more...

[fasttense]

9. A 25.2 billion dollar increase in the US deficit in one year and

"Individual income tax receipts rose by 9.1% year-to-date to $133.6 billion. Corporate income tax payments fell 10.1% to $9.4 billion."

So who is going to pay for the deficit? Not the corporations with record profits. Corporations' contribution to the US in taxes is 6.5% of the total while they get 10.1% of the tax decreases. Don't you just love free trade.

[54anickel]

10. Cocktail-bar calculations (from August when the WH was touting the

great strides they were making on cutting the deficit.

http://www.economist.com/printedition/displayStory.cfm?story_id=4299097&fsrc=RSS

Are George Bush's tax cuts paying for themselves?

NOT many economists find fame in a cocktail lounge. But it was in just such a venue that Arthur Laffer in 1974 drew the “Laffer curve” on the back of a convenient napkin. The sketch, still more popular with politicians than economists, illustrated how lower tax rates, by spurring growth, might leave tax revenues undiminished. Tax cuts might pay for themselves.

None of the weighty studies produced by the Congressional Budget Office (CBO) would fit on the back of a napkin. But the latest projections from the legislature's non-partisan budget-watcher have excited a few of Mr Laffer's fans. The federal budget deficit, the CBO reckons, will narrow to $331 billion this fiscal year (which ends on September 30th), from $412 billion the year before. Tom DeLay, the Republican majority leader in the House of Representatives, was quick to offer a Laffer-like explanation: “Lower taxes and spending discipline spur economic growth, which in turn cuts the deficit,” he opined.

In fact, spending discipline is still rather lacking. Government outlays will increase by $181 billion (or 8%) this year, a figure that does not include the cost of the pork-stuffed highway bill, signed by the president on August 10th. The fall in the deficit owes rather more to the other side of the ledger: tax revenues are set to grow by $262 billion, or 14% this year. They will increase as a share of GDP for the first time under this tax-cutting president.

snip>

The White House, according to its latest forecast in July, now expects to leave a deficit of $162 billion by the time the president leaves office in 2009. But it assumes (absurdly) that Congress will not add a single dollar to its discretionary spending on anything except defence and homeland security from 2006 to 2010. It also leaves out of its projections any extra money for Iraq, Afghanistan or the war on terror.

The CBO makes the opposite assumption. It assumes that by 2009, all of these missions will remain far from accomplished, costing the American taxpayer the same amount, in real terms, as they do today. Partly as a result, the CBO shows Mr Bush bequeathing a deficit of $321 billion to his successor.

Though the CBO's outlook is substantially worse than the White House's over a five-year horizon, it improves dramatically over ten years. This is not because of some long-run Laffer curve; but because the CBO assumes that Mr Bush's tax cuts will expire, as scheduled (the bulk of them in December 2010). That looks extremely unlikely: no politician would allow it and Mr Bush is already trying to make them permanent. If that happens, it would add $349 billion to the deficit in 2015, plus an extra $83 billion in debt service costs.

The CBO's job, says Douglas Holtz-Eakin, its director, is to forecast the economy and the budget, not Congress. It is required by law to assume that Congress will carry on doing what it currently does, adjusted only for inflation. “Everything we have presented today is going to be wrong,” he confidently predicted as he unveiled his report. The same, of course, could be said of Mr Bush's projections.

more...



Bush really is aiming for that Military-Industrial complex Eisenhower warned about. No spending outside of the military and DHS. Cut taxes, cut domestic spending, starve the beast.


From January: http://www.bloomberg.com/apps/news?pid=10000087&sid=aTKbEVQ2Geqw&refer=top_world_news

Jan. 26 (Bloomberg) -- President George W. Bush's release of a record deficit forecast may give him an edge in his effort to limit congressional spending in the fiscal year 2006 budget.

The White House released its $427 billion budget deficit forecast for this year two weeks before it is to present its 2006 budget proposal to Congress on Feb. 7. The Congressional Budget Office yesterday projected a lower deficit of $368 billion.

``There's an advantage to projecting a higher number, because it gives you more leverage with Congress if you want to press for tighter spending,'' said Robert Hormats, a vice chairman at Goldman Sachs International in New York.

Bush and his aides have been promising strict limits on all discretionary federal spending except for national defense and security programs. The deficit forecasts ``show the need to continue exercising spending restraint,'' White House spokesman Scott McClellan said yesterday.



From January of '04: Will the President’s 2005 Budget Really Cut the Deficit in Half ...(title shown in google) http://www.cbpp.org/1-26-04bud.htm

CBO FIGURES INDICATE LOWER REVENUES, NOT HIGHER SPENDING, ACCOUNT FOR THE LARGE DEFICIT

The Congressional Budget Office’s new report on the federal budget demonstrates that the return of large budget deficits is more a reflection of diminished revenues than, as some have recently implied, of increased spending. CBO estimates that revenues in 2004 will drop to historically low levels, their lowest level as a share of the economy since the Truman Administration. Spending, in contrast, will not be at a particularly high level. As a share of the economy, spending will be lower in 2004 than it was in every year from 1975 through 1996.

On the revenue side:

CBO projects that revenues will fall to 15.8 percent of the economy in 2004. This is the lowest level since 1950. (The figures in this analysis focus on revenues and spending as a share of the Gross Domestic Product, labeled here as the “economy.” The Gross Domestic Product is the basic measure of the size of the economy. Measuring spending and revenues as a share of the economy is the standard way that economists and budget analysts examine changes in the levels of revenues and spending over time.)
CBO projects that income tax revenues (including both the individual and corporate income tax) will equal 8.0 percent of the economy in 2004. This is the lowest level since 1942.
Without the tax cuts enacted in recent years — which will reduce revenues by $264 billion in 2004, according to Joint Committee on Taxation estimates — revenues as a share of the economy would not be close to a historically low level.

On the spending side:

CBO estimates that spending will constitute 20.0 percent of the economy in 2004, a lower level than in any year from 1975 through 1996.
If the nation were devoting the same share of the economy to government expenditures in 2004 as it has, on average, since 1980, expenditures would be $120 billion higher this year.
The large majority of the spending increases that have resulted from legislation enacted since the beginning of 2001 have come in the areas of defense and homeland security.

more...

[AnneD]

32. Well isn't that just peachy,

our economic plan was designed by someone in a bar and written on a cocktail napkin. Well that explains why it has favour among politicians and why no sober economist buys it. That also explains Dubya's fixation with it. Actually, it explains so much. I feel so much more secure now:sarcasm: The plan seems to be working ON PAPER --- COCKTAIL NAPKIN.

[54anickel]

40. Oh yeah, didn't you ever hear that one before? I had an econ professor

who made a point of bringing that up constantly whenever there was a discussion about supply-side economics. He wrote several papers on the subject. I tried to find one real quickly, but no luck. The opening paragraphs at Wikipedia almost reads like it could have come from him.

http://en.wikipedia.org/wiki/Laffer_curve

The Laffer curve, popularized and promoted by economist Arthur Laffer and often used to justify tax cuts, is intended to show that government can maximize tax revenue by setting a tax rate at the peak of this curve and that raising taxes further actually decreases revenue. The idea is clearest at both extremes of taxation—zero percent and one-hundred percent—where the government collects no revenue. At one extreme, a 0% tax rate means the government's revenue is, of course, zero. At the other, where there is a 100% tax rate, the government collects zero revenue because (in a "rational" economic model) taxpayers have no incentive to work or they avoid taxes, and the government collects 100% of nothing. Somewhere between 0% and 100%, therefore, lies a tax rate percentage that will maximize revenue.

The point at which the curve achieves its maximum will vary from one economy to the next and is subject to much theoretical speculation. Another contentious issue is whether a government should try to maximize its revenue in the first place.

The Laffer-curve concept is central to the supply side economics theory, and the term was reportedly coined by Jude Wanniski (a writer for the Wall Street Journal) after a 1974 afternoon meeting between Laffer, Wanniski, Dick Cheney, and his deputy press secretary Grace-Marie Arnett (Wanninski, 2005; Laffer, 2004). In this meeting, Laffer reportedly sketched the curve on a napkin to illustrate the concept, which immediately caught the imaginations of those present. Laffer himself professes no recollection of this napkin, but writes, "I used the so-called Laffer Curve all the time in my classes and with anyone else who would listen to me" (Laffer, 2004). Laffer also does not claim to have invented the concept, attributing it to 14th century Islamic scholar Ibn Khaldun and, more recently, to John Maynard Keynes.

[AnneD]

46. Why is it that every time the middle class gets screwed...

Dick Cheney is near by? I tend to think more favourably on JK Gailbraith anyway.

[54anickel]

50. Speaking of Galbraith - The Plutocrats Go Wild (from 2004)

http://www.washingtonmonthly.com/features/2004/0409.galbraith.html

snip>

Bush's top economic priority has always been to cut taxes on the wealthy; as he famously said, the "have-mores" are his political base. The marginal income-tax rate, the estate tax, the tax on dividends, and the proceeds of the profits tax all fell sharply in his first term. His second term could finish the job, shifting the tax base to consumption, perhaps even abolishing the income tax for a value-added tax (as Republican Speaker Dennis Hastert now suggests). Virtually the whole tax burden will then fall on the middle class, on working Americans, and on the poor.

As revenues fall, spending programs will come under new attack. But not defense spending: The Pentagon's budget will remain inviolate. Indeed, the military may demand still more spending, as the true costs of stabilizing Iraq gradually become clear. New arms races--with North Korea over missiles and missile defense--and new conflicts, perhaps with Iran or China, may come into view. We will need many more soldiers and much more money if such conflicts occur. And so, given the budget deficits ahead, the battle royal will be fought over what remains of federal social spending. With Alan Greenspan at his side, Bush will challenge Congress to slice, dice, and eviscerate. The privatization of Social Security--an invisible issue right now--will surely resurface once the votes are safely cast in November.

snip>

Bush's second term may see a crisis of the dollar, now heavily reliant on reserve-asset stockpiling by China and Japan, which own a huge proportion of our debt paper. In effect, those countries are sending us cheap goods in return for expensive paper, working hard for no current material reward. Will they continue this odd behavior for four more years, even if tensions erupt over Korea or Taiwan? Or will China, especially, diversify into euros, or perhaps into commodities, aggravating global inflation? Will the neglected states of Latin America, increasingly alienated from the United States, set off a banking crisis with debt defaults? We'll see. The dangers are real, and we are totally unprepared.

All of this brings to mind the late 19th century, a time of budding empires, rapacious trusts, Social Darwinism, and populist upheaval; when economic battles raged over plutocracy and consumption taxes, chronic unemployment, rising poverty, and financing wars of conquest; and when the world economy was dominated by financial panics and the commodity cycle. George Bush and his allies have been modeling themselves on William McKinley, the champion of vested interests in the Gilded Age.

Fortunately for America, McKinley was succeeded by Teddy Roosevelt, a progressive Republican who fought the monopolies and favored the environment, and then by Woodrow Wilson, a Democrat who brought us the income tax and inspired the search for a global system of collective security. True, it took another generation to break finally with rule by the corporate rich. But eventually, there did come the Great Depression and Franklin Roosevelt, who gave us public works, Social Security, the National Labor Relations Act, and the SEC.

The cozy plutocracy of McKinley and his successors--Taft, Harding, Coolidge, Hoover--could not stand before the needs of the modern world. It can't be brought back now. Bush's effort to do so will bring misery for many, perhaps for many years. But the final outcome is not in doubt. Bush's second term, if it comes, will fail, and America will thereafter change course; democracy and common sense will assert themselves in the end. I hope he's correct!

more...

[AnneD]

51. From your lips..

to God's ear.

[54anickel]

68. While I do not relish the chaos, pain and hardship the failure will

bring about to the public, it appears to be the only way for the U.S. to correct it's course these days. The GOP/Corporatist/Plutocracy propaganda engine has become impossible to fight. Then there's the Diebold vote fudge factor added for good measure. Bushco has lit the self-destruct fuse and there are few options and little time left to safely defuse the sucker. Let's hope for the best while preparing for the worst.

[punpirate]

87. Too bad the Laffer economists...

... don't know shit about history--even recent history. When Jimmy Carter left office in 1980, the national debt stood at $980 billion, and that's after paying for the Revolutionary War, the Civil War, the Spanish-American War, WWI, the deficit spending during the Great Depression, WWII, the Korean War and the war in Vietnam.

The largest portion of our now $8 trillion national debt has come in two periods--the Reagan-Bush years and the Bush II years. Both periods have two things in common: massive tax cuts for the wealthy and an unrealistic and unwarranted increase in defense spending.

I would love to know how anyone can project reductions in deficit spending with those two economic principles firmly in place without massive cuts in social spending and in the normal operation of the non-defense side of government, especially when there are continuing tax cuts, subsidies and tax rebates offered to corporate business, at a time when the share of federal general tax receipts paid by corporations has declined by almost 85% since 1970.

Laffer's prescription has always been intended to do one thing (and this was admitted by people in Reagan's administration): transfer wealth upwards via the tax system.

Why there are still people talking about it in any terms other than these, I don't know.

[AnneD]

49. So exactly where does this increased deficit fall...

on the Laffer curve. Perhaps this visual aid will help.

<//////////[]
.......L>you are here.

[54anickel]

11. Survey: Hiring plans pick up

http://money.cnn.com/2005/12/13/news/economy/jobs_manpowersurvey/

NEW YORK (CNNMoney.com) - U.S. employers expect to continue to add to payrolls in the first quarter of 2006, according to a closely watched survey released Tuesday by Manpower, the temporary staffing firm.

The Manpower quarterly survey of 16,000 employers found 23 percent of them expect to add to staff in the first quarter, while only 10 percent expect to trim their work force.

"U.S. businesses are not aggressively seeking to increase staff levels as they enter the new year. Instead, they are looking back over the past several quarters and are concluding that hiring is still on target with their operational needs," said a statement from Manpower CEO Jeffrey Joerres.

snip>

Employers in six out of 10 industry sectors told the survey they expect minimal changes in hiring activity in the new year, including durable and non-durable goods manufacturing, wholesale and retail trade, education, public administration and the finance-insurance and real estate sector.

Somewhat surprisingly, the Manpower survey found construction employers are forging ahead with their most optimistic job forecast in 27 years, even with signs of a cooling real estate and home building market, and a separate survey showing declining confidence among home builders.

more...

[UpInArms]

26. New year job market bleak

http://www.newsday.com/business/ny-bzman134550081dec13,0,6546482.story?coll=ny-business-headlines

Waiting for January to find a new job?

It might not happen even then.

Hiring across the region is most likely to remain weak in the first quarter of 2006, according to the latest survey by Manpower Inc., a global staffing firm.

Manpower, which has offices in Uniondale and Manhattan, said that less than a fifth of Long Island companies said they planned to hire more employees from January through March. Making matters worse, almost a quarter of those surveyed on LI said they planned to reduce staffing, Manpower said.

Most area businesses, however, are likely to just maintain the status quo, the survey found.

"Historically, the first quarter is usually the slowest of the year," said Diane Kelly, Manpower's regional director for the New York metropolitan area. The numbers, she said, are "a slight surprise because we're having a very strong fourth quarter."

...more...

[54anickel]

47. Heh-heh, can you tell which headline writer had a background in

marketing? Both articles reporting on the same Manpower survey.

The head of the marketing department where I worked was so damned good he could make a root canal sound like fun.

I find it rather odd that Newsday would have the gloomier headline - then again they are taking a regional approach and actually taking the perspective of folks on Main Street.

[UpInArms]

69. Manpower predicts hiring dip (view from Wisconsin)

http://www.greenbaypressgazette.com/apps/pbcs.dll/article?AID=/20051213/GPG03/512130477/1247/GPGbusiness

Sorry to interrupt the holiday cheer, but a less than rosy employment outlook is being forecast for the first quarter of 2006.

The Manpower Employment Outlook Survey released today is predicting continued job instability for the Green Bay area in the first three months of the coming year.

Only three percent of the companies surveyed expect to add to their work force between January and March. However, seven percent anticipate reducing their payrolls.

Ninety percent of companies expect to maintain their current staff levels.

"The Green Bay area employment outlook is softer than the fourth quarter (2005) forecast, when 17 percent of the companies interviewed predicted an increase in hiring activity, and 10 percent planned to decrease their hiring pace," said Manpower representative Lisa Ellis.

...more...

Green Bay employment outlook


Increase work force: 3 percent

No Change: 90 percent

Decrease work force: 7 percent

[54anickel]

12. The Global Capex Arbitrage (Roach)

http://www.morganstanley.com/GEFdata/digests/20051212-mon.html#anchor0

Capex is the rage. As I meet with investors around the world, they are virtually unanimous in their conviction that a sustained upsurge in global capital spending is at hand. It was a clear bet at our Lyford Cay roundtable this year. The capex play also is one of the three themes that drive stock selection in our own Global Focus List. And our strategists tell me that most equity markets are now paying up for the big spenders -- companies willing to expand the organic way. Rare is a consensus bet so powerful. Could it be wrong?

For starters, the analytics of the capex call are dated. Most still believe that a rise in domestic cash flows and operating rates is sufficient to spark an expansion in domestic productive capacity. This misses one of the critical implications of globalization -- that closed-economy models must now be opened up to the cross-border arbitrage of both labor and capital. Given the rapid expansion of global trade in goods and in once nontradable services, it is critical to view investment in plant and equipment as a globally fungible decision. GM is closing plants in the US and expanding facilities in China for a reason: The efficiency solutions of global competition push production platforms into low-cost economies. Today’s open-economy models of globalization treat the capex decision very differently than the closed-economy models of yesteryear.

snip>

Moreover, there’s another worrisome aspect of this sharp recent upturn in the global capex cycle -- a narrowly based underpinning of demand support. At work is the persistence of a US-centric global consumption dynamic, with the American consumer spending to excess at the same time consumption is lagging in most other segments of the world. That’s very much the conclusion that emerges from a comparable calculation of a “global consumption proxy” -- consumption-to-GDP ratios for the G-5 plus China. While US consumption ratio has surged to 71% of GDP over the past three years from a 67% norm prevailing over the preceding 25 years, consumption shares in the non-US portion of our global proxy have been essentially unchanged at 57% over the past decade. The one-consumer world, a central feature of the world’s unprecedented imbalances, has important implications for the global capital spending cycle.

There is a distinct asymmetry to the global capex and consumption stories. On the supply side, emphasis on capex is increasingly widespread, while on the demand side, the world remains overly dependent on the American consumer. That points to the growing risk of a potential imbalance between aggregate supply and demand. With our global capex proxy now exceeding the bubble-induced investment share of 2000, that risk cannot be taken lightly. That stock markets, which normally punish the heavy capex spenders as being reckless on cost control, are now rewarding capital spenders is another classic sign of a cycle having gone to excess. Historically, the capex play has had a fleeting existence in financial markets. Is there a compelling reason to believe it’s different this time?

more...

[UpInArms]

18. daily dollar watch

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

Last trade 90.55 Change +0.20 (+0.22%)

Greenback Hammered Against Majors

http://www.dailyfx.com/story/dailyfx_reports/top_fx_market_movers/5446_greenback_hammered_against.html

USDJPY

Positive Yen Data Bolsters Dip
A cornucopia of positive data for Yen bulls on the session as the majority shifted sentiment ahead of the Federal Reserve announcement tomorrow. First on the docket, the current account surplus grew to slightly above estimates. Although narrower than the previous month’s figure, the figures continue to retain a positive bias as opposed to the growing U.S. deficit. In additon, consumer confidence rose on the month at a 48.2 reading versus the previous 47.9. Approaching ever closer to expansion suggestions, the turn in sentiment is reflective in the better than expected household spending figures seen previously. Finally, but most importantly, domestic wholesales prices rose on the annualized comparison. Although unchanged on the monthly figure, the annualized print remains suggestive that prices are rising on the wholesale level. Subsequently, last month’s figure was revised higher to 2 percent.

Technically Speaking
Yen command of the USDJPY pair is coming to another level of support, on which dollar bulls can once again jump in. After breaking the former short-term support level at 119.95, a run on the rising trendline established on November 1st, currently at 119.60.50 was rendered unsuccessful. If yen interest can take this level, there is a cluster of levels below it to be concerned about. A 38.2 fib of the month long dollar rally at 118.80/5 is a net just north of the strong, three-year 50.0 fib level at 118.45. Keeping a potential dollar rally contained will be loose yen bidding at 119.95, while the most pressure would be put on the pair when the newly formed two-and-a-half year high stands at 121.40.

<snip>

USDCHF

Dollar’s Down Day
Expected to raise rates another 25 basis points to 4.25 percent, Federal Reserve policy officials continue their attempts in curbing inflationary pressures. However, in light of recent economic data, further rate hikes may not be as immediately needed as previously established. Mainly, increases in inflationary pressures have been minimal compared to gains in output and productivity. Manufacturing remains steadfast as does consumer demand and consumption. However, with core consumer prices remaining tepidly hovering 2 percent, albeit disregarding the temporal surge in September, inflation seems well contained. Sparking speculation of looser monetary policy going into the new year were statements following the last meeting by central bankers. Afterwards, policy officials emphasized concern over the rate at which the benchmark was rising and further stated a need for continued confirmation of higher rates through hard figures.

Technically Speaking
What started out as a slow turn in the Swiss Franc's favor has evolved into a strong rally. However, that rally is hitting a few significant levels. A confluence between a three month rising trendline and a 73.6 fib of the dollar rally from the beginning of November made 1.2850/5 the imbreachable level into day's price action. If the swissie stays in control through this level, a move to the 50.0 fib of the 3 month dollar rally from September at 1.2765 will be the next level for the bidding war. Resistance isn't in short supply either. Initially, the 61.8 fib will hold back a rally at 1.2921, but the nearest significant level is at 1.2991 - the 50.0 fib and former range low for most of the month of November.

...more...

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92. buck not impressed with FOMC

Last trade 90.30 Change -0.05 (-0.06%)

Settle 90.35 Settle Time 23:39

Open 90.31 Previous Close 90.35

High 90.68 Low 90.20

Last tick: 2005-12-13 14:36:18 ET
30-min delayed quote.

[UpInArms]

19. Treasuries hold gains as retail sales disappoint

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-12-13T133906Z_01_N06318341_RTRIDST_0_MARKETS-BONDS-RETAIL-URGENT.XML

NEW YORK, Dec 13 (Reuters) - Treasury debt prices were firmer on Tuesday, supported by a smaller-than-expected increase in U.S. retail sales during November.

But the market's rise was moderated by a looming interest rate decision from the Federal Reserve, expected around 2:15 p.m. (1915 GMT). A 13th straight 1/4 percentage point increase in the federal funds rate is widely expected after the central bank meeting.

Retail sales climbed 0.3 percent when economists had been looking for a 0.5 percent gain. October's results were revised up to a 0.3 percent gains from a previously reported a 0.1 percent dip.

Sales excluding autos slipped 0.3 percent, also a disappointment considering analysts had been looking for a 0.1 percent increase.

...more...

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34. Printing Press Report:Fed adds temporary reserves via 3-day system repos

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-12-13T143613Z_01_N13344914_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, Dec 13 (Reuters) - The Federal Reserve said on Tuesday it added temporary reserves to the U.S. banking system through three-day system repurchase agreements.

The benchmark federal funds rate last traded at 4.25 percent, above the Fed's current 4.00 percent target for the overnight lending rate,

The bond market has been anticipating that the Fed is expected to raise its fed funds target to 4.25 percent later Tuesday.

...more...

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73. Treasuries firm on hopes for kind words from Fed

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-12-13T165711Z_01_N13414108_RTRIDST_0_MARKETS-BONDS-UPDATE-1.XML

NEW YORK, Dec 13 (Reuters) - Treasury debt prices climbed modestly as investors hoped the Federal Reserve's statement at the end of Tuesday's policy meeting would signal an imminent end to monetary tightening.

Bonds also garnered support from U.S. retail sales data for November, which showed that the holiday shopping season got off to a less than spectacular start.

Benchmark 10-year notes were up 5/32 for a yield of 4.53 percent, compared with 4.55 percent on Monday. Two-year note yields eased to 4.42 percent from 4.45 percent.

Because investors have generally factored in an interest rate increase at Tuesday's Fed meeting, they are much more concerned with seeing how policy-makers describe the state of monetary policy and the state of the economy in their post-meeting statement.

Analysts will be hunting for clues in the Fed's every turn of phrase for the future course of policy.

Some are predicting a two-step process, where the central bank first acknowledges that policy has become less stimulative now that interest rates have risen substantially from their trough, only to signal an imminent pause in its January statement.

...more...

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20. US chain store sales rise in the latest week-ICSC

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-12-13T124539Z_01_NAT001915_RTRIDST_0_ECONOMY-RETAIL-ICSC-URGENT.XML

NEW YORK, Dec 13 (Reuters) - U.S. chain store retail sales rose in the latest week, as consumers stepped up their shopping with just under two weeks left before the holidays arrive, a retail report said on Tuesday.

Sales rose 0.9 percent in the week ended Dec. 10, compared with a 3.1 percent fall the previous week, the International Council of Shopping Centers and UBS said in a joint report.

Compared with the same week a year ago, sales rose to 3.2 percent, after a 3.5 percent rise the preceding week.

"Although some retailers increased their store promotions this past week, most promotions seemed close to plan," said Michael P. Niemira, ICSC's chief economist and director of research.

"With only 13 percent of holiday shopping totally completed, the final push will come over the next few weeks. So far, sales for the month and the holiday season remain on track for an increase of 3.0 percent to 3.5 percent, on a year-over-year basis," Niemira added.

...more...

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22. U.S. chain store sales fall in latest week-Redbook

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-12-13T135546Z_01_NAT001916_RTRIDST_0_ECONOMY-RETAIL-REDBOOK.XML

NEW YORK, Dec 13 (Reuters) - U.S. chain store sales fell in the second week of December, as customer traffic remained slow partly due to snowstorms in many parts of the country, a report said on Tuesday.

Sales in December to date were down 0.3 percent compared with the same period in November, while sales at major retailers rose by 3.4 percent on a year-over-year basis for the week ended Dec. 10, Redbook Research, an independent company said.

"Seasonal business remains below expectations. As a result, sales growth at discount stores continued to be strongest in basic consumables and food, rather than clothing," Redbook said.

"An early-December lull was factored into most sales plans for the month, so retailers remained cautiously optimistic as they continued to sit out the pre-Christmas wait," Redbook added.

...more...

[54anickel]

43. Could be up, could be down. It's all in how you look at the stats I guess.

That's what I loved about Business Statistics class. We were taught how to make the numbers support whatever we wanted them to. I loved that instructor.

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21. Whirlpool to lay off 730 at Ark. plant

http://seattlepi.nwsource.com/business/1310AP_Whirlpool_Jobs.html

FORT SMITH, Ark. -- Appliance maker Whirlpool Corp. announced Monday it plans to lay off 730 workers at its refrigerator plant in Fort Smith, Ark.

Whirlpool said the workers would lose their jobs next October as the company opens a new plant in Ramos Arizpe, Mexico. Many of the layoffs would be voluntary and many workers are expected to be recalled within 18 months to fill openings that come about through attrition, the company said.

<snip>

"We continue to strengthen and extend our manufacturing base in North America, specifically in the U.S. and Mexico, to better improve our operating platform and to continue to remain competitive," Whirlpool executive vice president for the North America region David L. Swift said in a news release.

Whirlpool served notice about two years ago that changes would come to the Fort Smith plant, saying some production would shift to Mexico. A year ago, Whirlpool reversed a plan to move ice-maker assembly - and 80 jobs - from Fort Smith to China.

...more...

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23. Krispy Kreme sees bigger hit from restatement

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-12-13T135241Z_01_WEN6135_RTRIDST_0_LEISURE-KRISPYKREME-URGENT.XML

CHICAGO, Dec 13 (Reuters) - Krispy Kreme Doughnuts Inc. (KKD.N: Quote, Profile, Research) on Tuesday said it expects financial restatements to reduce pretax income by $35.1 million through the third quarter of fiscal 2005, up from its previous estimate of $25.6 million.

The company, which is restating its financial statements going back to 2001, also said it amended its credit facilities.

...short blurb...

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24. pre-opening blather

9:00AM: S&P futures vs fair value: flat. Nasdaq futures vs fair value: flat. No real change in sentiment as futures indications hovering around fair value suggest stocks will open on a relatively flat note. Perhaps also adding to the hesitation ahead of the Fed has been mixed earnings news. Lehman Brothers (LEH) beat forecasts by $0.14, which may already be priced into the stock, while Best Buy (BBY) missed expectations by $0.02 and guided FY06 EPS below consensus.

8:33AM: S&P futures vs fair value: flat. Nasdaq futures vs fair value: +0.5. Futures trade holds relatively steady following economic data but now indicate a lackluster open for the indices. Nov. retail sales rose 0.3% (consensus +0.4%) amid a 2.6% rebound in autos; but sales, ex autos, which were expected to come in flat, fell 0.3%. Bonds have also held steady, as the 10-yr note is up 5 ticks to yield 4.52%.

8:01AM: S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: +2.0. Futures market versus fair value suggesting a slightly higher open for the cash market. So far investors are weighing Procter & Gamble's (PG) upside Q2 guidance, Pfizer's (PFE) increased dividend and confirmation ConocoPhillips (COP) will buy Burlington Resources (BR) against reports that S&P downgraded General Motors' (GM) debt further into junk status. Overall, though, action is rather subdued ahead of an FOMC meeting which could result in a modified policy directive. Separately, Nov. retail sales will be released at 8:30 ET.

[UpInArms]

25. M/I Homes sees weakness in Midwest housing markets

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38699.3879136806-854201584&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

BOSTON (MarketWatch) -- M/I Homes Inc. (MHO) before the opening bell Tuesday said that while home deliveries and backlog increased in October and November, it is "disappointed in our new contract activity for the two-month period." Although the homebuilder sees weakness in its three Midwest markets, where new contracts were down 58% from last year, activity increased 47% in its Florida markets and 34% in its North Carolina and Washington, D.C. markets. Overall for the two-month period, homes delivered jumped 20% from last year, backing units gained 10%, but new contracts fell 16%. Shares of the Columbus, Ohio-based company gained 23 cents to $43.65 on Monday.

[UpInArms]

28. M/I Homes says hurt by Midwest housing slowdown

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-12-13T142348Z_01_WEN6138_RTRIDST_0_CONSTRUCTION-MIHOMES-URGENT.XML

PHILADELPHIA, Dec 13 (Reuters) - Home builder M/I Homes Inc. (MHO.N: Quote, Profile, Research) on Tuesday said it delivered 20 percent more homes this October and November compared with a year before, but a housing slowdown in the midwestern United States helped shrink its total number of new housing contracts by 16 percent.

M/I Homes said new contracts in its three Midwest markets were down 58 percent during October and November compared with the same period last year. Business was strong outside that region, though, with new contracts up 47 percent in Florida and up 34 percent in North Carolina and Washington, D.C.

...a bit more...

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27. China Overtakes US as IT Exporter

http://www.lightreading.com/document.asp?doc_id=85480&WT.svl=wire1_2

PARIS -- China overtook the United States in 2004 to become the world’s leading exporter of information and communications technology (ICT) goods such as mobile phones, laptop computers and digital cameras, according to OECD data.

China exported USD 180 billion worth of ICT goods in 2004, compared with U.S. exports in the same category valued at USD 149 billion. In 2003, the U.S. led with exports of ICT goods worth USD 137 billion, followed by China with USD 123 billion.

China’s share of total world trade in ICT goods, including both imports and exports, rose to USD 329 billion in 2004, up from USD 234 billion in 2003 and USD 35 billion in 1996. By comparison, the U.S. share of total world trade stood at USD 375 billion in 2004, USD 301 billion in 2003 and USD 230 billion in 1996.

The data show a shift towards more trade between China and other Asian countries, with a corresponding decline in ICT imports to this region from the European Union and the U.S. To manufacture laptops and advanced mobile phones, China previously relied on electronic components, such as computer chips, imported from the EU and U.S. These are now also being increasingly sourced from other Asian countries, including Japan (18% of China’s ICT imports), Chinese Taipei (16%), Korea (13%) and Malaysia (8%).

...more...

[54anickel]

31. Asia Craves EU-Style Integration, Lacks Clarity

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_mukherjee&sid=aLLYigVOi0WA

Dec. 13 (Bloomberg) -- Expectations are running high for the first-ever East Asia summit, which convenes in the Malaysian capital of Kuala Lumpur tomorrow.

The hype is about how the summit will pave the way for the birth of a new regional trade alliance and cause ``a fundamental split between East Asia and the U.S.,'' says C. Fred Bergsten, a former U.S. Treasury undersecretary now at the Institute for International Economics in Washington.

snip>

Whether Japan and China will one day, like France and Germany, be able to set aside their past animosity and share a single currency is a question for 2025, if then. The immediate hurdle is: how to define East Asia.

snip>

An organization dominated by China that restricts its membership to Asean Plus Three nations will have the power, if not the intention, to act as a counterbalance to U.S. influence in Asia -- something Washington may not like very much.

Within Asean Plus Three, countries such as Singapore, Thailand, the Philippines and Korea, which have close economic and security ties with the U.S., may be uncomfortable being part of a group that the U.S. perceives as hostile to its interests.

A broader East Asia community, which includes Australia, New Zealand and India -- and also Russia, which is keen to join -- may even be encouraged by the U.S. Such a group could then become a precursor to an Asia-Pacific free trade area, with the U.S. playing a leading role in its establishment.

more...

[AnneD]

35. Wonder how much of this IT

was hacked out of US computer systems.

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30. 9:36 EST markets are open for bidness

Dow 10,764.49 -3.28 (-0.03%)
Nasdaq 2,255.93 -5.02 (-0.22%)
S&P 500 1,259.51 -0.92 (-0.07%)
10-Yr Bond 4.521 -0.26 (-0.57%)

NYSE Volume 73,949,000
Nasdaq Volume 84,876,000

[54anickel]

36. Saudi Arabia Looks Past Oil in Attempt to Diversify

http://www.nytimes.com/2005/12/13/business/worldbusiness/13saudiecon.html?pagewanted=1

RIYADH, Saudi Arabia - The ultimate oil state is seeking to shift its economy away from oil.

Saudi Arabia may be experiencing its third oil boom in three decades but it is also undergoing an economic revolution that its leaders hope will finally insulate it from the oil producer's curse: the next price collapse.

The Saudi kingdom remains the 600-pound gorilla of the global oil market. Given its vast reserves, Saudi Arabia can keep pumping oil for the next 70 years. Oil, along with Islam's holy cities, Mecca and Medina, provides the country's rulers with wealth, power and influence. Oil sales account for 40 percent of the economy and about 90 percent of government revenue. But that reliance on a volatile commodity - with big booms but also big busts - is also a problem that the royal family is determined to overcome.

The nation's leaders, of course, have made similar vows before to translate their vast oil wealth into a more diversified economy. Will this time really be different?

There are signs that it may be. Unnoticed by many outsiders, the Saudi private sector has flourished in recent years, thanks to structural changes started by King Abdullah in the late 1990's when he was crown prince and oil prices were at $10 a barrel.

more...

Gee, do you think some of the reports of SA reaching peak oil might also play a part in the decision to diversify? So they plan to dominate the world's fertilizer business instead? I ain't even touchin' that one! ;-)

[54anickel]

42. Saudi Arabia announces record budget surplus

http://news.yahoo.com/s/afp/20051212/bs_afp/saudieconomybudget_051212184733;_ylt=ArkL2LtdCxy57rbijzXmMKKmOrgF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

RIYADH (AFP) - Oil powerhouse Saudi Arabia said it will post a record budget surplus of 57 billion dollars in 2005 on the back of surging crude prices, and forecast its biggest-ever spending plans for next year.

Revenues by the end of 2005 will reach 555 billion riyals (148 billion dollars), while net expenditure will be 341 billion riyals (90.94 billion dollars), the finance ministry said in a statement on its website.

Saudi Arabia had initially projected a expected a balanced budget for 2005 with revenues and expenditure both set at 280 billion riyals (74.66 billion dollars).

The Saudi government usually uses a conservative oil price of 17 dollars a barrel when planning its budget, which explains the wide gap between budgeted and actual revenues in the past few years when prices rocketed to 70 dollars.

However, this year's actual oil receipts which represent about 75 percent of income in the world's largest oil-producing nation, have not yet been revealed.

more...

Check out the picture of the Kingdom Tower. Wonder if they had to build that to store all those greenbacks! ;-)

[wordpix]

I wonder how much of that $$$ is BushCo's share

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44. The Financial Locusts Plead For 'Fair Treatment'

http://www.larouchepub.com/other/2005/3248carlyle_locusts.html

Franz Müntefering, the former chairman of the German Social Democratic Party (SPD), told a party conference in April that private equity funds and hedge funds had descended upon German industry like "swarms of locusts," draining corporations of their productive wealth and labor for short term gain, with great harm to the nation's interests. "Some financial investors don't waste any thoughts on the people whose jobs they destroy," said Müntefering. "They remain anonymous, have no face, fall like a plague of locusts over our companies, devour everything, then fly on to the next one."

On Dec. 7, David Rubinstein, the founder of one of the leading "locusts," the Carlyle Group, spoke before the prestigious Institute for International Economics (IIE) in Washington, D.C., calling upon the great powers of Wall Street and the U.S. government to join forces to demand "fair play" for these multi-billion dollar speculators, against foes such as Müntefering. None of the assembled financiers and investors appeared to appreciate the irony of Rubinstein's protestations.
'We're Taking Over the World'

Rubinstein was not shy about extolling the incredible power of the private equity funds he was speaking for. He bragged that the funds are "taking over the world," that "equity funds now dominate Wall Street," and that "mergers and acquititions are now almost entirely done by private equity funds."

The combined private funds now manage over $770 billion, provided by the world's richest people, leveraging that amount five-fold, by borrowing about 80% of the money used for their corporate buyouts. They provide returns of 30% a year and more to their clients, while reaping huge fortunes for themselves.

...more...

[54anickel]

55. Wah! What a whiner, not very becoming for a "corporatists". Gotta

love this Rubinstein fellow...:eyes:

...Rubinstein complained that he had been picketed at a speech he gave recently in Germany, where posters portrayed him as the "head locust." "They complain that we are shutting down factories and eliminating jobs," he said, but they don't appreciate that "we are bringing the concept of shareholder value to Europe's inefficient social state policies," and thus helping them become more efficient. He added that Japan is also causing problems, by imposing a 20% "withholding tax" on foreign equity funds which come to buy out their industries. Rubinstein noted that this "withholding" is effectively a real tax, since "none of the equity funds want to file the disclosures required to retrieve the withheld funds."

"The U.S. government must do something to make sure U.S. capital is treated fairly overseas,"...

They are running out of "looties" in the US, they need to be able to suck the life blood out of the foreign markets before the US runs completely dry. :grr:

[UpInArms]

56. They are just fancy pickpockets

roaming the streets of the globe.

[UpInArms]

45. Barclays Eyes Derivatives Launch In China

http://www.institutionalinvestor.com/default.asp?page=1&SID=601801&ISS=21027&type=7

Barclays Capital is planning to launch a G-7 derivatives business onshore in China in the first quarter as it expects to open its first branch on the mainland within coming weeks. "Following our day-one products including G-7 spot, money market, loans and advisory, we will begin the application process for G-7 derivatives," said Paul Scanlon, spokesman in Hong Kong.

The firm is anticipating the Shanghai branch will get the stamp of approval from regulators and then it will apply for a G-7 derivatives license. However, as a newer entrant in the derivatives market, it will be some time, perhaps a year or so, before Barclays can move into the renminbi-denominated derivatives market, which has been opened to only a handful of foreign houses for FX forwards (DW, 9/16).

...more...

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48. Enron Ruling Could Harm Liquidity Of Bankruptcy Claims

http://www.institutionalinvestor.com/default.asp?page=1&SID=602947&ISS=21027&type=9

Three industry trade groups have banded together to protest a recent ruling that subordinates claims of Enron debt holders who bought loans from parties the company said committed fraud. The Loan Syndications and Trading Association, the Bond Market Association and the International Swaps and Derivatives Association have filed amicus brief to support an appeal that is being filed on behalf of the investors.

Elliot Ganz, executive v.p., president and general counsel of the LSTA said the ruling is "tantamount to saying the claims have no value." Enron claims some of its banks committed fraud in their dealings with the company. Judge Arthur Gonzalez ruled that debt bought from those banks should come below all other loans. Summing up his argument, the judge argued that this would ease the administrative burden on the debtor by allowing him to subordinate claims rather than sue those alleged of wrongdoing to recover losses. He also argued it would prevent wrongdoers from avoiding having their claims subordinated by trading the claims away.

The court showed little sympathy to those who bought Enron bankruptcy claims for value, arguing they should be aware of the risks and uncertainties of buying claims associated with post-petition debtors, including the possibility of claims being subordinated.

<snip>

The BMA is concerned that the judge's decision will harm the liquidity of bonds of bankrupt companies. "It raises the question of how vulture investors will value these securities," said Marjorie Gross, senior v.p. and regulatory counsel for the BMA. "It will definitely affect what people are willing to pay for bonds of bankrupt companies." She added that many buyers of bonds do not know the identity of the person they are buying from because many transactions are done through dealers.

...more...

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102. 40 Ex-Enron Traders Must Return Bonuses

http://news.yahoo.com/news?tmpl=story&cid=509&e=20&u=/ap/20051213/ap_on_bi_ge/enron_bonuses

HOUSTON - About 40 former Enron traders have been ordered by a Texas bankruptcy judge to return $20 million of bonuses they received just before the company went bankrupt.

The money will go to employees fired around the same time.

On Monday it was made public that U.S. Bankruptcy Judge Robert McGuire, a Dallas-based judge sitting in Houston for this case, ordered Friday that the bonuses in question were fraudulent and improperly preferential.

"That doesn't mean it was fraud on the part of the individuals who accepted the bonuses — those are just bankruptcy terms," said Richard Rathvon, a former Enron employee who helped form the committee that sued for the money.

"But it does mean that we were right all along. These monies that went out the door 48 hours before the bankruptcy will now be put back in the hands of those who were thrown out the door."

Enron paid out $105 million in bonuses to favored trading personnel just before it declared Chapter 11 bankruptcy in December 2001.

...more...

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52. Diebold chairman/CEO quits under pressure from board

http://www.wkyc.com/akron/akron_article.aspx?storyid=44630

NORTH CANTON -- The chairman and CEO of North Canton's Diebold Corporation, whose voting machine systems came under fire from critics during last year's election, quit Monday.
The company says the resignation of Walden O'Dell was initiated by the board of directors. The company says the board felt the resignation for personal reasons was in the best interests of all parties.

President Thomas Swidarski has been named CEO. Director John Lauer has been elected non-executive chairman of the board.

...short blurb...

http://www.cbsnews.com/stories/2004/07/28/sunday/main632436.shtml

E-Voting: Is The Fix In?

Aug.8, 2004

(CBS) To avoid a fiasco in this fall's election, Congress offered the states $3.9 billion to buy modern voting equipment, reports David Pogue, technology editor of The New York Times.

<snip>

"We found all kinds of problems in the code," he said. "A computer scientist can look at program and immediately tell you if it was written by professional programmers who know how to do software engineering or if it was just put together by a bunch of hacks. And, upon looking at the source code for Diebold, it was pretty clear that this was a real amateur job."

<snip>

A Diebold plot to rig the elections? Where did that idea come from? The rumors began with this letter from Diebold's CEO, Wally Odell, who was moonlighting as a Republican fundraiser. In his invitation to a benefit for Bush last August, he wrote, "I am committed to helping Ohio deliver its electoral votes to the president."

...more...

[UpInArms]

53. The Facts: Congress and the Budget

http://blogs.washingtonpost.com/thedebate/2005/12/piggy_facts.html#more

This week, the Debate will be on Congress's handling of the budget. Last month, the House approved $50 billion in spending cuts, largely from programs aimed at the poor, and just last week, members of Congress cancelled out their own efforts at deficit reduction by passing nearly $95 billion in tax cuts. The tax cuts include some necessary items like another temporary fix for the increasingly misdirected Alternative Minimum Tax, plus tax breaks for certain businesses in the Gulf Coast region. The latest tax bill to pass, costing $56 billion, boasted as its centerpiece extensions of reduced tax rates for capital gains and dividends.

CNN summarizes some of the provisions in the latest tax bills. The Congressional Budget Office provided this estimate of how the $50 billion in spending cuts would break down. The CBO's August 2005 (pre-Katrina) Budget and Economic Outlook is worth a peek, even if only to read the summary. It should be noted that the CBO does these estimates based on current law, so it projects a dramatic decrease in the deficit in later parts of the decade, after the tax cuts were set to expire. Some of those cuts have already been extended through 2010 (and the president and many Republicans in Congress want to make the tax cuts permanent); understand that the extensions significantly change those CBO projections.

For a centrist perspective on general budgetary concerns, see Centrists.org's issue summary. Also in the middle of the spectrum is the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute, offering a useful database of tax facts.

<snip>

Speaking of excessive appropriations, a terrific resource on pork is this searchable database of nearly 14,000 projects as compiled by Citizens Against Government Waste. (For a laugh -- of the forehead-slapping variety -- check out CAGW's 2005 Oinker Awards.) Taxpayers for Common Sense provide a comprehensive view of the bloated transportation bill passed earlier this year, packed with an unprecedented amount of pork.

...more with good link embedded...

[54anickel]

66. So that explains last Friday's discussion on why the rush to extend

the breaks that don't expire for another 2 years. Just yet another political ploy to effect the CBO projections before the elections. And here I was hoping the GOP was pushing in case they weren't in power when the expiration time came around.

But now the projected dramatic decrease in the deficit will be pushed back, right? So do they want the deficit to look even worse so they can push even more spending cuts? Kill the beast once and for all? I'm even more confused now. :crazy:

[UpInArms]

54. Chase Investment fined by NASD over (deceptive) market timing (hedge fund)

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38699.4457783218-854207626&siteID=mktw&scid=0&doctype=806&

BOSTON (MarketWatch) -- Securities regulator NASD on Tuesday said it has ordered Chase Investment Services, a unit of JP Morgan Chase & Co. (JPM) , to pay a fine of $150,000 and over $140,000 in restitution for "failing to have an adequate supervisory system and controls in place to prevent deceptive market timing by one of its hedge fund clients." Market timing, or moving in and out of mutual funds rapidly, can lower the returns of long-term shareholders and is prohibited in the prospectuses of many funds. Chase settled the action without admitting or denying the allegations, the NASD said.

[UpInArms]

57. Collins & Aikman to close Michigan tooling plant (140 jobs) in March 2006

11:05am 12/13/05 COLLINS & AIKMAN: PREMIER TOOLING PLANT EMPLOYS 140 PEOPLE

11:03am 12/13/05 COLLINS & AIKMAN TO CLOSE PREMIER TOOLING OPS IN MICHIGAN

11:04am 12/13/05 COLLINS & AIKMAN TO CLOSE PREMIER TOOLING OPS BY MARCH 31

[AnneD]

61. Thirty thousands jobs here,

80,000, there, 700 over there, 20,000 over yonder and pretty soon it has to add up. Wonder when we will see the honest numbers. We are currently at 5.8 unemployment in Texas. How about your neck of the woods?

[UpInArms]

58. 11:13 EST numbers and blather

Dow 10,766.59 -1.18 (-0.01%)
Nasdaq 2,256.71 -4.24 (-0.19%)
S&P 500 1,260.89 +0.46 (+0.04%)
10-Yr Bond 4.525 -0.22 (-0.48%)

NYSE Volume 707,647,000
Nasdaq Volume 566,351,000

11:00AM: Major indices continue to trade in split fashion, with the Nasdaq trailing its blue chip counterparts. Analyst downgrades on ORCL, CHRW, EXPD and SIRI, coupled with weakness in software (i.e. ADBE, ADSK), continue to weigh on the Composite while the broader market has found much of what little strength it has shown from Pfizer (PFE 21.67 +0.73) and Altria (MO 73.86 +1.35) -- the S&P 500's sixth and ninth most influential components, respectively. Altria has surged ahead of a likely favorable court decision on Thursday. NYSE Adv/Dec 1435/1547, Nasdaq Adv/Dec 1178/1550

10:30AM: Market rebounds but not enough to make a significant change whatsoever in the standings. Turnarounds in Boeing (BA 70.28 +0.09) and J.P. Morgan (JPM 39.25 +0.10), and further upside momentum in Exxon Mobil (XOM 59.53 +0.67), have helped the Dow inch into positive territory; but the overall market tone remains one of apprehension ahead of the Fed. NYSE Adv/Dec 1487/1401, Nasdaq Adv/Dec 1203/1393

10:00AM: Market continues to trade just below the unchanged mark as sector leadership remains mixed. Consumer Discretionary paces the way lower following Best Buy's (BBY 44.87 -4.97) Q3 disappointment and yesterday's report that S&P downgraded General Motors' (GM 22.39 -0.66) debt further into junk status. Tech has also been under pressure, after Hewlett-Packard (HPQ 28.96 -1.01) merely reaffirmed its FY06 outlook and Citigroup said IBM's (IBM 84.32 -1.64) Q4, FY06 and FY07 revenues are likely to be materially below consensus. Energy, however, has traded higher in sympathy with a rise in oil prices while Health Care has gotten a boost after Pfizer (PFE 21.44 +0.50) increased its dividend last night.NYSE Adv/Dec 1252/1413, Nasdaq Adv/Dec 1047/1318

[54anickel]

65. Foreign buying of U.S. assets continues in Q3

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=49440

Summary

The latest batch of scary investment numbers regarding our friends abroad has arrived! Per the latest flow-of-funds data, released yesterday by the Federal Reserve, US financial assets held by foreign investors registered a sizable increase of $212 billion during this year's third quarter. As of 9/30, total holdings were reported at an enormous $10.681 trillion. Also as of 9/30, net foreign financial claims against the United States stood at $5.473 trillion, a very, very sizable jump of almost $637 billion during the September quarter, and an increase of a remarkable $1.25 trillion from a year earlier. It was roughly a mere 20 years ago that the United States was still a net creditor nation!
_____

Introduction

Yesterday, the Federal Reserved released the latest edition of its publication "Z.1," "Flow of Funds Accounts of the United States." The most recent data are through the quarter ended 9/30/05.

Before moving on to an examination of how foreign investors behaved during the third quarter, I want to freshen up some numbers from full-year 2004. They have been revised slightly in the latest report, but they continue to go a long way towards explaining Alan Greenspan's Treasury yield and yield curve "conundrum," as do some of the results for this year.

snip>

* During the third quarter, there was a large increase in foreign purchases of US equities, almost $40 billion during the quarter, versus $61.9 billion for all of last year. Moreover, the Treasury's "TIC" report for September indicated foreign stock purchases during that month were roughly $25 billion, which represented a major portion of foreign stock purchases for the entire quarter. Is it possible that this was "hot" money flowing into our equity market to "front-run" the late-year rally that was/is so heavily anticipated? If so, would this money bolt from our market if looked like the rally was over, and the market was rolling over to the downside?

more...

[UpInArms]

71. Robert Reich: 'The new rich-rich gap'

http://www.commondreams.org/views05/1212-20.htm

Almost 15 years ago, in "The Work of Nations," I described a three-tiered work force found in most advanced economies. At the bottom were workers who offer personal service, mainly in retail outlets, restaurants, hotels and hospitals. In the middle were production workers in factories or offices, performing simple, repetitive tasks. At the top were "symbolic analysts," like engineers or lawyers, who manipulate information to solve problems. Educated to think critically, almost all have university degrees. They were the knowledge workers of the new economy.

I predicted that advances in technology, and globalization, would widen the gaps in income and opportunity between these tiers. I was, sadly, prescient. In recent years, the top fifth of American workers has held 85 percent of the country's wealth. What I didn't predict was that the three tiers would change shape so dramatically.

The top and bottom tiers are growing, and the middle shrinking, much faster than I expected. Symbolic analysts now make up more than a fifth of all jobs in advanced economies, up from about 15 percent 15 years ago. Their incomes in developing economies are soaring, relative to other workers'. In China, the wealthiest 5 percent now control half of all bank deposits. India's symbolic analysts are becoming a new national elite.

<snip>

The growing number of symbolic analysts is also helping fuel the growth in the lowest tier, the personal-service workers. It used to be that about a third of the work forces in advanced economies were in person-to-person jobs; now, close to half are. Today, more Americans work in laundries and dry cleaners than in steel mills; more in hospitals and nursing homes than in banks and insurance companies. More work for Wal-Mart than for the entire U.S. automobile industry.

This is happening because busy households are "outsourcing" more housework, because populations of advanced economies are aging, raising demand for elder care, and because the richest 10th have so much discretionary income they can afford lots of pampering. They're hiring coaches, masseurs, drivers, gardeners, cooks and therapists of all kinds. Yet the supply of service workers is increasing faster than demand, due to a flood of new immigrants, and of workers no longer needed in routine production. As a result, the pay for these jobs is low and falling.

...more...

[54anickel]

75. Well that paints a cheery picture, doesn't it? eom

[AnneD]

86. The joke around nursing home circles....

is that we will have to lock up the depends to keep the staff from stealing it for personal use (and the humour gets darker from there).

[54anickel]

72. The Rainwater Prophecy

Richard Rainwater made billions by knowing how to profit from a crisis. Now he foresees the biggest one yet.

http://www.fortune.com/fortune/investing/articles/0,15114,1139979,00.html

snip>

The next blowup, however, looms so large that it scares and confuses him. For the past few months he's been holed up in hard-core research mode—reading books, academic studies, and, yes, blogs. Every morning he rises before dawn at one of his houses in Texas or South Carolina or California (he actually owns a piece of Pebble Beach Resorts) and spends four or five hours reading sites like LifeAftertheOilCrash.net or DieOff.org, obsessively following links and sifting through data. How worried is he? He has some $500 million of his $2.5 billion fortune in cash, more than ever before. "I'm long oil and I'm liquid," he says. "I've put myself in a position that if the end of the world came tomorrow I'd kind of be prepared." He's also ready to move fast if he spots an opening.

His instincts tell him that another enormous moneymaking opportunity is about to present itself, what he calls a "slow pitch down the middle." But, at 61, wealthier and happier than ever before, Rainwater finds himself reacting differently this time. He's focused more on staying rich than on getting richer. But there's something else too: a sort of billionaire-style civic duty he feels to get a conversation started. Why couldn't energy prices skyrocket, with grave repercussions, not just economic but political? As industry analysts debate whether the world's oil production is destined to decline, the prospect makes him itchy.

"This is a nonrecurring event," he says. "The 100-year flood in Houston real estate was one, the ability to buy oil and gas really cheap was another, and now there's the opportunity to do something based on a shortage of natural resources. Can you make money? Well, yeah. One way is to just stay long domestic oil. But there may be something more important than making money. This is the first scenario I've seen where I question the survivability of mankind. I don't want the world to wake up one day and say, 'How come some doofus billionaire in Texas made all this money by being aware of this, and why didn't someone tell us?'"

snip>

Rainwater sides with the imminent peak crowd, and can rattle off facts to back up his argument. "In 1988 there were 15 million barrels a day of shut-in production"—meaning surplus that could be tapped—"and the world was using about 55 million barrels of oil. Today the world is using over 80 million, and there's no shut-in production left. We've used it up, through the combination of depletion and growth." In other words, the spigot can't be opened any wider.

What concerns him most is the conflict that he thinks an oil shortage will precipitate. What happens when people get blindsided by prices rocketing past any level they have contemplated—especially when you factor in other challenges America faces? "We've got a lot of things going on simultaneously," he says. "The world as we know it is unwinding with respect to Social Security, pensions, Medicare. We're going to have dramatically increased taxes in the U.S. I believe we're going into a world where there's going to be more hostility. More people are going to be asking, 'Why did God do this to us?' Whatever God they worship. Alfred Sloan said it a long time ago at General Motors, that we're giving these things during good times. What happens in bad times? We're going to have to take them back, and then everybody will riot.' And he's right."

more...

[UpInArms]

74. Goldman Sachs Thinks More Job Cuts on the Way (in publishing)

http://www.mediainfo.com/eandp/news/article_display.jsp?vnu_content_id=1001659282

NEW YORK Last week's dueling media conferences in New York did not affirm that things would pick up in 2006. If anything, publishers only reinforced the cautious stance that many financial analysts have taken on the sector in the last year.

Goldman Sachs analyst Peter Appert's report recapping the confabs stated that revenue trends will remain challenging and earning estimates continue to move lower in the next year -- which means more staff cuts are likely on the way in 2006.

Like Merrill Lynch, Goldman Sachs thinks that publishers were too confident with their forecasts for ad growth. Most companies estimated an increase between 3% and 5%, versus approximately 3.3% growth in 2005. "An expectation that we think is probably on the optimistic side," the report said.

Since ad revenue is expected to be soft, publishers will probably rely on cost cutting to control margins. The research firm anticipates "continued attrition and the full year impact of 2005 staff cuts will likely translate into a 2% reduction in industry employment in 2006."

...more...

[UpInArms]

81. 2:06 EST numbers and blather before the FOMC

Dow 10,775.37 +7.60 (+0.07%)
Nasdaq 2,255.39 -5.56 (-0.25%)
S&P 500 1,261.34 +0.91 (+0.07%)
10-Yr Bond 4.549 +0.02 (+0.04%)

NYSE Volume 1,411,175,000
Nasdaq Volume 1,106,950,000

2:00PM: Range-bound trading persists as stocks continue to trade sideways ahead of the Fed's upcoming decision regarding monetary policy. The FOMC's policy statement, which will be released in roughly 15 minutes, really remains the only unknown with regards to the Fed's action today, as a 25 bp hike in the fed funds rate to 4.25% is widely anticipated and will bring the FOMC yet another step closer to its neutral target - a rate which neither stimulates nor restricts economic growth. To that end, we at Briefing.com expect that the Fed is highly likely to change the language in the policy statement; however, we don't believe any such amendment conclusively signals the imminent end of this round of tightening. NYSE Adv/Dec 1542/1694, Nasdaq Adv/Dec 1282/1672

1:30PM: More of the same for the market as stocks continue to trade with little conviction on either the bullish or bearish side of the aisle. Even though chip stocks have turned around within the last 30 minutes, the move has been too small to act as a deciding catalyst to lift the tech-heavy Nasdaq into positive territory. After hitting an intraday 52-week high (2278.2) just seven days ago, the Composite has relinquished about a quarter of its 3.8% year-to-date gain, which has largely been supported by the PHLX Semi Index's 15.4% surge in 2005. SOX +0.1, NYSE Adv/Dec 1528/1687, Nasdaq Adv/Dec 1271/1664

[UpInArms]

83. 2:17 EST markets spike upward on rate hike - excited about future hikes

Dow 10,803.47 +35.70 (+0.33%)
Nasdaq 2,258.28 -2.67 (-0.12%)
S&P 500 1,263.72 +3.29 (+0.26%)
10-Yr Bond 4.549 +0.02 (+0.04%)

NYSE Volume 1,474,019,000
Nasdaq Volume 1,159,925,000

[UpInArms]

85. 2:21 EST aiming for the moon

Dow 10,829.72 +61.95 (+0.58%)
Nasdaq 2,267.01 +6.06 (+0.27%)
S&P 500 1,267.25 +6.82 (+0.54%)
10-Yr Bond 4.549 +0.02 (+0.04%)

NYSE Volume 1,512,233,000
Nasdaq Volume 1,190,946,000

[punpirate]

95. The 2 pm fairies must have gotten...

... hernias carrying all that dust....

[54anickel]

97. They must like the new wording and are taking it to mean the Fed is

nearly done. The buck sure had a knee-jerk reaction, seems to be recovering though.

Last trade 90.41 Change +0.02 (+0.02%)

Settle 90.35 Settle Time 23:39

Open 90.31 Previous Close 90.35

High 90.68 Low 90.17

[UpInArms]

88. Epix to cut 50% of workforce, take $1.7M charge

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38699.6141312269-854225245&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- Epix Pharmaceuticals Inc. (EPIX) said Tuesday that it will eliminate 50% of its workforce in January. The Cambridge, Mass.-based company said the job cuts come following its receipt of a second approvable letter from the Food and Drug Administration regarding Vasovist. The letter indicated that at least one additional clinical trial and a re-read of images obtained in certain of the previously completed Phase III clinical trials will be necessary before the FDA could approve Vasovist, the company's blood-pool contrast agent. Following the completion of the reduction, the company expects that it will have 48 employees. The workforce reduction will result in a one-time charge of $1.2 million, which will be taken in the fourth quarter. The staff reductions are expected to reduce the company's projected cash burn in 2006 by 30%, or $7 million. Separately, Epix said its board has exercised its option to extend the contract of interim Chief Executive Michael Astrue for two additional months.

[UpInArms]

90. 3:01 EST partying all over the floor

Dow 10,859.28 +91.51 (+0.85%)
Nasdaq 2,270.04 +9.09 (+0.40%)
S&P 500 1,270.90 +10.47 (+0.83%)
10-Yr Bond 4.531 -0.16 (-0.35%)

NYSE Volume 1,811,354,000
Nasdaq Volume 1,455,313,000

Hurrah! Those year-end bonuses are back in sight!

[54anickel]

99. Stocks rise as Fed hints rates near peak

http://biz.yahoo.com/rb/051213/markets_stocks.html?.v=9

NEW YORK (Reuters) - U.S. stocks jumped, with blue chips rising more than 100 points, on Tuesday after the Federal Reserve lifted interest rates but hinted that its rate-raising campaign is nearing an end.

Financial services stocks climbed, with the Philadelphia KBW index of bank stocks (AMEX:^BKX - News) up 1.6 percent. Banks often find it easier to make money when interest rates stabilize. Shares of Citigroup Inc. (NYSE:C - News) rose 2 percent to $49.62 on the New York Stock Exchange.

snip>

What caught Wall Street's attention was the FOMC's statement announcing its decision, in which the Fed dropped its long-standing characterization of monetary policy as "accommodative" or stimulating the economy -- a recognition that rates have risen to a more normal level from a 1958 low of 1 percent hit in mid-2003, during the tepid economic recovery.

"The rate increase was the expected part," said Ned Riley, chief executive of Riley Asset Management in Boston.

"As for the language, some questions have been answered -- they kept the word 'measured' in the statement, but they dropped 'accommodative,' which would imply that we are closer to the end game of Fed tightening than many had anticipated."

more...

[UpInArms]

93. So Where's the Economy Going Now?

http://www.businessweek.com/bwdaily/dnflash/dec2005/nf20051213_7801_db042.htm

With the Dec. 13 quarter-point rate increase by the Fed, we've reached a difficult and puzzling fork in the economic road. In one direction lies the ugly prospect of a housing bust, leading to a collapse in consumer spending and ultimately a recession. In the other direction is the much more appealing vision of continued strong growth, driven by a steadily improving labor market.

If you're an investor, of course, you want to know which path seems more likely. Unfortunately, there's no map, no set of directions to tell us which way the economy is going to go. Economists are split about which path seems more likely, and not even outgoing Fed Chairman Alan Greenspan or his successor Ben Bernanke have the answers.

FLATTER CURVE. It's a moment of what I call "fundamental uncertainty," where conventional economic forecasting simply breaks down. The numbers keep rolling in, but they offer few, if any, clues about what will happen next. For example, Manpower released its quarterly employment survey on Dec. 13, asking employers whether they plan to add or reduce workers in the first quarter of 2006. The result: Its "Net Employment Outlook" index is 20.

Is that good or bad news? Well, the index was at roughly the same level in 1998 and 1999, during the boom years of the 1990s. Most American workers wouldn't mind a repeat of those years. However, the Manpower index was also about 20 in early 1989, when a decent labor market very rapidly turned sluggish, setting the stage for the recession of 1990-91 (see BW Online, 11/29/05, "Is the Job Market Really 'Buoyant'?").

Other indicators are equally ambiguous. The yield curve is flattening out, so that the long-term rate on 10-year Treasury bonds, at 4.5%, isn't much higher than the new 4.25% fed funds rate. That sort of flat yield curve is often a sign of trouble ahead -- but not always.

...more...

Bottom line: Hope for the best, plan for the worst. (sound familiar 54anickel?)

[54anickel]

98. Heh, yep, goes hand in hand with that 50/50 chance...eom

[UpInArms]

94. Wells Fargo raises prime rate to 7.25 percent

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-12-13T200641Z_01_WEN6177_RTRIDST_0_FINANCIAL-WELLSFARGO-PRIMERATE-URGENT.XML

NEW YORK, Dec 13 (Reuters) - Wells Fargo Bank, a unit of Wells Fargo & Co. (WFC.N: Quote, Profile, Research) said on Tuesday it was raising the prime rate, the borrowing rate it charges its best customers and which serves as a benchmark for consumer loans, to 7.25 percent from 7 percent.

The increase, effective immediately, came after the Federal Reserve raised its key federal funds rate for the 13th straight time to 4.25 percent.

and all the rest will follow :eyes:

[UpInArms]

96. Institutional investors say U.S. execs are overpaid

http://www.marketwatch.com/news/story.asp?guid=%7B3E7AC6CF%2DD34D%2D4DDA%2D9770%2D6352AAEF5279%7D&symbol=&siteid=mktw

SAN FRANCISCO (MarketWatch) -- A majority of institutional investors say U.S. chief executives are overpaid, and companies should do a better job of disclosing pay packages, according to a new survey by Watson Wyatt, the financial-management consulting firm.

Ninety percent of institutional investors said U.S. firms' current pay model results in some executives being "dramatically overpaid," according to the survey of 55 institutions which manage a total of $800 billion in assets.

Sixty-three percent said the current pay model is an example of poor corporate governance, and 64% said companies should do a better job disclosing pay packages, the survey found.

Institutional investors "don't like the executive pay model," said Ira Kay, an executive compensation consultant with Watson Wyatt. Kay is in New York, and Watson Wyatt is based in Washington.

These investors are particularly bothered by the steep severance packages firms award to many business leaders, and they'd like to see pay more closely tied to specific financial measures, such as earnings-per-share growth or revenue growth, Kay said.

<snip>

Institutional investors would also like to see changes made to severance packages, Kay said.

"They'd like to see nothing be paid for failure. Unfortunately, I think they're going to be disappointed on that front, because basically to recruit an executive ... you must provide downside protection," Kay said.

...more...

[AnneD]

100. Interesting Pension info

Protect Yourself from Frozen Pensions

Across the country, workers are shivering, and it's not because their cost-conscious office managers have dialed down the thermostat. The chill is coming from their pension plans, which have been put on ice.

Last week, Verizon Communications said it's freezing pensions covering 50,000 managers. Verizon's announcement was striking because, unlike many other companies that have frozen or terminated their pension plans, it's financially healthy.


<snip>

When your pension is frozen, you get to keep the pension benefits you've already earned. But even if you've accumulated a sizable pension, a freeze can dramatically reduce the amount of money you will receive when you stop working.


http://www.usatoday.com/money/perfi/columnist/block/2005-12-13-pension_x.htm

Yet another way to be screwed :eyes:...look for this to be popular. It may be harder to sue if they do this...Any lawyers in the house?

[54anickel]

104. I've pretty much determined that I will need to work until the day I croak

Won't be much if anything for SS, hubby's pension was robbed back in the Raygun years and that 401K money I rolled over isn't exactly working for me these days - no place to get a decent enough return to keep up with inflation. Hell, just look at Ozy's opening post to see where the markets were when the usurper blew into the WH. They've gone no where fast in 5 years.

[54anickel]

101. US MONEY PRINTING TO CONTINUE!

http://www.financialsense.com/editorials/faber/2005/1212.html

snip>

Tight money policies, which would depress asset prices such as stocks and home prices is simply not an option the Fed will consider. As a result, inflation will continue, whereby I am using here inflation as defined by a loss of the purchasing power of paper money. At times, such as in the 1970s, this loss of purchasing power of money is brought about by rapidly rising consumer prices, while at other times, such as in recent years, the purchasing power of money diminishes because real estate, stock, art and bond prices increase significantly. In both cases, under consumer price or asset price inflation, your dollar today can only buy a fraction of what it bought ten or twenty years ago (see figure 2)

snip>

Now, considering that Household Net Worth is at an all time high and that rising home, and equity prices in the last twenty years or so drove the US economy up and the household saving rate down (now negative), Mr. Bernanke will under no circumstance allow asset prices to decline much (see figure 3)

Just imagine what the Fed’s reaction would be if both the Dow Jones and housing prices dropped by 10%! Money printing would be back in earnest because the Fed believes (erroneously, I may add) that it has the power to indefinitely postpone recessionary periods.

snip>

Now, you may think that I have become insane. That is partially true because I am convinced that the US Fed’s monetary policies will lead to exponentially widening wealth inequity and impoverish the majority of US households, which will then lead to social strive, protectionism, war, and the breakdown of the capitalistic system. However, if one considers that in 1932 and in 1980 (see figure 5) one could indeed buy one Dow Jones Industrial Average with just one ounce of gold, then maybe my views are rather conservative. Possibly one will be able to buy, sometime in future, one Dow Jones with just half an ounce of gold!

more...

[54anickel]

107. Looks like the big rally petered out before the close

Dow 10,823.72 +55.95 (+0.52%)
Nasdaq 2,265.00 +4.05 (+0.18%)
S&P 500 1,267.43 +7.00 (+0.56%)
10-Yr Bond 45.35 -0.12 (-0.26%)
NYSE Volume 2,389,148,000
Nasdaq Volume 1,915,061,000

The year-end rally got back on track Tuesday, at least for blue chips, as a change to the FOMC policy statement's wording -- the removal of "policy accommodation" -- reignited widespread buying that closed eight of ten economic sectors in positive territory. As expected the central bank raised the fed funds rate 1/4% for the 13th consecutive time (to 4.25%). Nonetheless, the item of most interest to both stock and bond investors was the altered language in the accompanying policy directive which, while officials will continue to watch the economic data for policy direction, provides the opportunity for the Fed to stop raising rates if it so chooses. To wit, the rate-sensitive Financial sector provided the most upside leadership, benefiting from strength in Treasuries after the Fed said, "Core inflation has stayed relatively low in recent months and longer-term inflation expectations remain contained." The 10-yr note closed up 5 ticks to yield 4.52%. Providing an extra source of relief was a turnaround in shares of Lehman Brothers (LEH 128.50 +0.33), which consolidated early on as investors had become so accustomed to the broker blowing out even the highest of Wall Street's expectations. While closing off session highs, Health Care was another influential leader to sport a gain of more than 1.0%, as a 26% dividend increase from Pfizer (PFE 22.31 +1.37) helped the drug maker bounce off yesterday's 52-week low. Consumer Staples was also strong, as upside Q2 (Dec) EPS and sales guidance from Procter & Gamble (PG 58.51 +1.60) played into Briefing.com's Market Weight rating on the sector, while a likely favorable court decision for Altria (MO 74.03 +1.52) also provided a source of sector support. Despite weakness in autos, after S&P downgraded General Motors' (GM 22.30 -0.75) debt last night, coupled with a disappointing Q3 report from Best Buy (BBY 43.94 -5.90) and the largest decline in Nov. retail sales (ex autos) since April 2004, Consumer Discretionary found some support from select retailers like Home Depot (HD 42.27 +0.95) and McDonald's (MCD 35.27 +0.80) -- a suggested holding in Briefing.com's portfolio for active investors. Technology, however, failed to hold onto afternoon gains and providing the biggest drag on the Nasdaq. Hardware lost ground after Hewlett-Packard (HPQ 29.07 -0.90) merely reaffirmed its FY06 guidance and Citigroup said IBM's (IBM 83.71 -2.25) Q4, FY06 and FY07 revenues are likely to be materially below consensus while a 1.2% slide in Microsoft (MSFT 27.13 -0.32) also weighed on the sector. Energy also lost ground as crude oil prices finishing near session lows overshadowed a 3.6% surge in natural gas, which closed at a new all-time high. The sector provided early leadership as confirmation of ConocoPhillips' (COP 58.20 -3.05) decision to buy Burlington Resources (BR 86.07 +3.57) for $35.6 bln placed a number of other gas companies on the radar screen as potential acquisition candidates but succumbed to late-day consolidation efforts. Separately, Oct business inventories rose just 0.3% as retail inventories (the only unknown) rose just 0.1%; however, the report was largely ignored ahead of the Fed and Thursday's influential CPI data. DJTA -0.1, DJUA +1.2, DOT -0.2, Nasdaq 100 +0.4, Russell 2000 -0.1, SOX +0.5, S&P Midcap 400 +0.1, XOI +0.3, NYSE Adv/Dec 1792/1506, Nasdaq Adv/Dec 1487/1575

3:30PM : Equities continue to trade at improved levels although the recent recovery effort seems to have stalled. Be that as it may, market internals turning positive suggest that buyers remain in control of the action. As reflected in the A/D line, advancers outpace decliners by a 19-to-13 margin while advancing issues on the Nasdaq hold an 8-to-7 edge. While not one of the Top 25 losers weighing on the latter, a 1.2% loss in ADC Telecom (ADCT 21.00 -0.25) -- tonight's only notable earnings report -- has been partly responsible for Technology slipping back into the red. NYSE Adv/Dec 1946/1319, Nasdaq Adv/Dec 1618/1402

3:00PM : Stocks continue to strengthen heading into the final hour of trading as all ten economic sectors now trade in positive territory. Leading the charge have been gains of more than 1.0% from Financial, Health Care, Consumer Staples, Energy, Utilities and Materials. Even Technology, the day's biggest drag, has turned around, as a 1.1% surge in semiconductor currently has the influential sector clinging to 0.02% advance. NYSE Adv/Dec 1821/1444, Nasdaq Adv/Dec 1530/1475

2:30PM : Market extends its reach to the upside as the Fed finally changed the wording of the policy statement, lifting the Nasdaq into positive territory for the first time today and spiking the blue chip averages to session highs. Treasuries have also taken notice of tempered inflation concerns, as the yield (4.51%) on the 10-yr note (+7/32) has retraced morning lows and provided additional support for stocks. The actual text of the statement reads: "Despite elevated energy prices and hurricane-related disruptions, the expansion in economic activity appears solid. Core inflation has stayed relatively low in recent months and longer-term inflation expectations remain contained. Nevertheless, possible increases in resource utilization as well as elevated energy prices have the potential to add to inflation pressures... The Committee judges that some further measured policy firming is likely to be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance. In any event, the Committee will respond to changes in economic prospects as needed to foster these objectives." NYSE Adv/Dec 1457/1786, Nasdaq Adv/Dec 1243/1718

[Zynx]

109. I did unusually well today thanks largely to P&G.

I had a total of a 1.68% gain for the day which just kicks the hell out of the S&P 500 by a margin of nearly 3:1. However, the overall weakness in towards the end concerned me because we should have had a much bigger rally than what we had today given what news we had.