STOCK MARKET WATCH, Tuesday 16 May

[ozymandius]

Tuesday May 16, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 981 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1970 DAYS
WHERE'S OSAMA BIN-LADEN? 1670 DAYS
DAYS SINCE ENRON COLLAPSE = 1631
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 3
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 May 15, 2006

Dow... 11,428.77 +47.78 (+0.42%)
Nasdaq... 2,238.52 -5.26 (-0.23%)
S&P 500... 1,294.50 +3.26 (+0.25%)
Gold future... 685.00 -26.80 (-3.91%)
30-Year Bond 5.27% -0.03 (-0.62%)
10-Yr Bond... 5.15% -0.03 (-0.64%)






GOLD, EURO, YEN, Loonie and Silver


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

A TOUGH ACT TO FOLLOW:
A Fiat Farce

While many of us were feasting at Mother’s Day festivities, the world’s fleet footed financial floozies were formulating (or perhaps fumbling, take your pick?) a fix for their fascinating fiat follies:

IMF acts to avoid markets meltdown
Heather Stewart, economics correspondent
Sunday May 14, 2006

The International Monetary Fund is in behind-the-scenes talks with the US, China and other major powers to arrange a series of top-level meetings about tackling imbalances in the global economy, as the dollar sell-off reverberates through financial markets…….

Figuring financial failure would finally fester, the feted David Brown, chief European economist at Bear Stearns finally fancied,

“We are in meltdown mode.”

-cut-

Is anyone wondering, like me, where or how the U.K. is finding/funding their fortunes in fiat?

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

[AnneD]

32. Morning Marketeers,

:donut: and lurkers. I would like to expound on that thought "Is anyone wondering, like me, where or how the U.K. is finding/funding their fortunes in fiat?". One of the questions I find myself pondering-when I think of the UK-is what DOES Queen Elizabeth carry in that purse of hers. I mean after all she is the Queen so I don't think she has to pay for much (which may explain why she is one of the richest women in the world). So I don't think she carries much cash outside of a ten pound note for emergencies. I also suspect she has a pack of cigarettes, a give away box of matches (it's that frugal thing), and some tic tacs. Now how, you might ask would I know she has a secret cigarette habit? Well, some of you might remember years ago a man (Welsh or Irish-I can't remember) had a few too many and managed to get over then fence, past the guard and into the Queens bedroom. She kept her cool, offered the gent a cigarette, lite one up herself and they had a little chat before the Queen's bodyguards came in and hauled him off. As a foot note, this guy has never paid for a drink since-folks buy him a pint to hear the story:toast:. But getting back to the Queen's purse, I suspect she has a compact with powder, a tube of lipstick, a hankie, and a horse racing tip sheet and form. She is an avid horse person and has been known to play the ponies. Now, what does all of this have to do with British fiat? Well, as any person that has ever wagered on the tracks knows, sometime you wager a tad to much and you lose and it affects you monthly cash flow. But not to worry, you can always get a quick loan at a pawn shop. So my guess is that the Queen has been been over to Alfie's Pawn Shop off Trafalgar's and has secured a payday loan. Ridiculous you say? Might I remind you folks that America got it's start because Isabella hocked a few of her bobbles to pay for Columbus's trip to the new world. I have seen the Crown Jewles...Queen Elizabeth can afford to hock a few......

Happy hunting and watch out for the bears.

[Eugene]

2. BBC: Bubble fear sees global sell-off

Last Updated: Tuesday, 16 May 2006, 07:58 GMT 08:58 UK

Bubble fear sees global sell-off

Sharp falls in the US dollar, oil and commodities have continued on Tuesday
with many investors betting that further declines are still to come.

<snip>

Rate of worry

The global sell-off is being driven by fears of higher interest rates and inflation
in the US, driven by a weaker dollar, and the end of a price bubble in commodities,
investors said.

Oil, metal and share prices have recently powered to record levels as many people
looked to gain exposure to a recovery in the US, Europe and Japan, as well as booming
demand in developing nations such as China and India.

However, many investors are now questioning whether these levels are justified, especially
as central banks will have to keep a tight rein on inflation.

<snip>

Full article: http://news.bbc.co.uk/2/hi/business/4984884.stm

[Kolesar]

4. Has anybody at DU sorted out the "M3 money supply" issue yet?

I've seen a few threads mentioning that the US gov't is no longer announcing how much "Money" is being put into circulation. I have been looking, but cannot find any technical writing that explains what is going on.

[ozymandius]

7. Do you mean a definition of M3?

I know that M3 is an aggregate consisting of, mainly, US dollars (petro and common tender) held in foreign banks. I know why not reporting these assets are so important to the Fed. The roar of these dollars leaving foreign banks through a massive dump will be dulled to our ears if they are not accounted for.

[Kolesar]

11. Ok, so M3 is US$ held in foreign banks

I thought M3 was the "whole money supply". I am not sure what you mean with your "dulled to our ears..." clause.

[ozymandius]

13. By this I mean

If the general public does not know when foreign central banks begin dumping the dollar en masse, it will delay panic at our own banks. The goal of hiding the number of dollars held overseas is two-fold. First, it allows corporations to hide how many dollars have been expatriated. Second, this lack of information will obscure the moments when the dollar no longer holds its value as fiat trading currency. In addition - M3 is a major indicator if inflation. And we know how worried the Fed is about inflation.

And you're right - M3 is the whole money supply also consisting of these two critical forementioned elements.

Here's a simple glossary link:

http://www.freebuck.com/reference/glossary/m.htm

[Kolesar]

14. I get more hints from financial writers to diversify into foreign holdings

A decade ago, the self-assured millionaires publishing "the Motley Fool" website "had it all figured out". All one needed to do was analyze and purchase equities of US companies. The strong regulations provided by the SEC made the US the best place to invest. A year or two ago, I read that diversification means foreign holdings. The last email I got from them was details on how to buy good foreign companies and avoid the bad and/or corrupt ones, even if listed on an American stock exchange.

I have just been "diversifying" into international companies through mutual funds, btw.

I think I understand your M3 prediction. (so at last, M3 is money held in US and abroad.)

[ozymandius]

38. That is smart.

It sounds like you have a good thing going to diversify beyond U.S. holdings. You know what is a scam (and what is not) - making this the ultimate in "placing your eggs in many baskets" approach. So I'm curious: are your overseas holdings valued in euros?

[Kolesar]

61. I own international mutual funds through my US brokerage

My thesis is that the value of equities/companies will "stay ahead of inflation" (rather like the late 1970s when the stock market and real estate were the only protection from inflation). I hope that companies with non-US holdings will stay out of the trouble of a US dollar that is deflating--whether the deflation is "natural" or "by design".

I called my bank and asked them if I could buy certificates of deposit that were valued in Euros, Canadian Dollars, or anything else. The staffer thought the idea was intriguing, but she could not provide me with such a financial product.

[Roland99]

115. M3 is the amount of Repos (Repurchase Agreements)

It's the Fed buying debt from the US Gov't

[publius_jr]

75. Net effect like CPI, to understate inflation.

Each week, the Economist magazine reports the percent-change of money supply over the past year for various countries. The Federal Reserve discontinued reporting M3 on March 23, of this year. For that week, the Economist reported an 8.1% increase in the supply of dollars. In their most recent issue, they reported a 4.7% increase--astericked by "New series for broad money supply."

Nevertheless, I doubt this deceitful tactic will provide more benefit than harm over the long term, or even work to fool the average American, for that matter. First, there is likely a high correlation between changes in M2 and those in M3, although I do not know this as a fact; if so, this would allow us to estimate changes in M3 from those in M2. Second, and more important, only a fool would believe their government when it tells him it has tamed inflation, in the midst of huge increases in insurance, energy, food, etc, prices. Yet, there is an incentive for the government to pretend to be fooled by its phony (or, at least, misleading) statistics: it will allow them to justify more beyond-the-budget spending. Let us hope that the press will not aid and abet our Washingtonian theives.

[Ghost Dog]

15. World financial markets hit by flight from risk

http://news.ft.com/cms/s/57cc0a42-e442-11da-8ced-0000779e2340.html

(FT) Global marketsGlobal financial markets were buffeted by another day of instability on Monday as traders fled from higher-risk investments, bailing out of commodities and emerging markets.

<snip>

The dollar recovered from recent weakness, firming about 0.7 per cent against the euro to $1.2840, as investors retreated to safe haven assets and offloaded riskier investments. US Treasuries rallied for the same reason.

Rising volatility in many markets and growing worries over increasing global inflation and interest rates have spurred investors to pare some of the big bets they have taken in the past three years on everything from the price of copper to Indian shares. “This has further to go. There will be a lot more blood on the carpet before it’s over,” said David Bloom, currency analyst at HSBC.

Among the hardest hit currencies against the dollar, the Turkish lira slumped 6.1 per cent, the South African rand dropped 3 per cent and the Indonesian rupiah 3.7 per cent. In equities, emerging markets were headed for their worst one-day drop for two years. Among markets suffering the steepest falls, Indonesia dropped 6.3 per cent, Russia 5.1 per cent and Turkey 4.1 per cent.

<snip>

In signs of rising risk aversion in the credit markets, the price of safe haven instruments such as European government bonds rose while the price of emerging market bonds and risky corporate credit instruments fell.

Jim O’Neill, head of global economic research at Goldman Sachs, said the markets had been spooked by fears that rising US inflationary pressures would force the Federal Reserve to keep raising rates and hit by a lack of confidence in Ben Bernanke, the Fed chairman.

“The Fed’s credibility and the sustainability of low inflation premia is really what this is all about,” said Mr O’Neill.

/more...

[Ghost Dog]

20. Turkish lira rebounds after 8 percent slide

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060516:MTFH26267_2006-05-16_06-15-38_L16263534&rpc=44&search=.XU100&searchtype=symbol&norics=1
Tue May 16, 2006 2:15 AM ET

ISTANBUL, May 16 (Reuters) - The lira recovered partially on Tuesday in a correction of an 8 percent slide a day earlier, with shares and bonds set to do likewise despite persisting worries about Turkey's economic and political outlook.

The lira <IYIX=> firmed to 1.4770 against the dollar in early interbank trade. It had closed at 1.4700 but spiked in after hours trade to 1.5150.

"This movement is a correction of the (dollar's) rise over the last six days and the central bank statement may have had some impact. Whether it is lasting or not will depend on foreign trade," said Garanti Investment strategist Serdar Pazi.

The currency has lost as much as 13 percent of its value against the U.S. currency over the last week and capital flight is estimated to be around $4.5 billion to $5.5 billion.

<snip>

"But we recommend investors not to count on a sustainable bullish trend. Politics and international worries are likely to bring back the bears without delay," he said.

Factors behind the market weakness include a wide current account deficit, high inflation, political tensions and concerns that possible early elections could loosen spending discipline.

Investors have also been unsettle by the impact of high oil prices on a hefty net importer, lower tourist numbers, fears of dwindling enthusiasm for EU-sought reforms and international tensions over neighbouring Iran's nuclear programme.

/more...

[54anickel]

41. Asian financial markets hit by flight from risk

http://news.yahoo.com/s/ft/20060516/bs_ft/fto051620060245298235;_ylt=At7BcfXpvGkXw5jaVydTs5X2ULEF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA--

Asian financial markets continued their decline on Tuesday after a mixed performance by US stocks overnight failed to lift sentiments. The region's bourses did not witness a repeat of Monday's sharp falls but commodity stocks led prices lower across the board.

snip>

Heavy falls had hit Asian and European stock markets on Monday as traders fled from higher-risk investments globally, bailing out of commodities and emerging markets.

Commodity prices, which have enjoyed a vertiginous run to a series of highs in recent months, also suffered heavy profit-taking.

China, where demand for raw materials has been driving much of the rise in global commoditiy prices, on Tuesday saw copper futures in Shanghai fall for the first day in seven, according to Bloomberg.

snip>

Albert Edwards, global strategist at Dresdner Kleinwort Wasserstein, said the long-predicted correction in equity markets had become a reality. However, Henry McVey, chief US investment strategist at Morgan Stanley, said the bull market was not over. Markets were just "overdue a pause".

more...

[54anickel]

40. Moody’s warns of risk for Gulf banks

http://news.ft.com/cms/s/11333c5e-e429-11da-8ced-0000779e2340.html

Moody’s, the ratings agency, has warned of a build-up of systemic risk in banks operating in the Gulf as a result of rapid loan growth and “possible asset bubbles”.

A report by Moody’s to be released on Tuesday says the financial performance of Gulf banks has improved in recent years – and now compares favourably with those of higher-rated institutions in other parts of the world – thanks to booming economies underpinned by soaring world prices for oil and gas. In most cases this has made for a stable medium-term outlook.

However, the agency has not awarded ratings upgrades yet because of high exposure, both indirect and direct, to volatile capital markets, as well as to “certain pockets of overvalued properties and the construction sector”.

snip>

The full impact of the collapse in Gulf stock markets – Saudi Arabia’s all shares Index has halved since February – may not become clear until the end of the year when loans begin to mature. Moody’s main concern was related to lending secured by equity holdings, more than direct bank exposure to markets.

“The speculative nature of trends, the huge volumes built up and the sometimes extremely high valuations of Gulf capital markets have led us to be particularly concerned about the possibility of the build-up of an asset bubble in the region,” the report said.

more...

[ozymandius]

3. Today's Reports-a-plenty

8:30 AM Building Permits Apr
Briefing Forecast 2050K
Market Expects 2040K
Prior 2094K

8:30 AM Core PPI Apr
Briefing Forecast 0.2%
Market Expects 0.2%
Prior 0.1%

8:30 AM Housing Starts Apr
Briefing Forecast 1980K
Market Expects 1950K
Prior 1960K

8:30 AM NY Empire State Index May
Briefing Forecast NA
Market Expects NA
Prior 15.8

8:30 AM PPI Apr
Briefing Forecast 0.9%
Market Expects 0.8%
Prior 0.5%

9:15 AM Capacity Utilization Apr
Briefing Forecast 81.4%
Market Expects 81.5%
Prior 81.3%

9:15 AM Industrial Production Apr
Briefing Forecast 0.3%
Market Expects 0.5%
Prior 0.6%

[stop the bleeding]

5. thanks everyone

lets see what today brings

[UpInArms]

27. 8:30 reports tumbling in:

8:29 AM ET 5/16/06 U.S. APRIL PPI INTERMEDIATE GOODS PRICES UP 0.9%

8:29 AM ET 5/16/06 U.S. APRIL PPI CRUDE GOODS PRICES UP 1.2%

8:29 AM ET 5/16/06 U.S. CORE PPI UP 1.5% YEAR-OVER-YEAR

8:29 AM ET 5/16/06 U.S. APRIL PPI ENERGY PRICES UP 4%

8:29 AM ET 5/16/06 U.S. APRIL CORE INTERMEDIATE PPI UP 0.4%

8:29 AM ET 5/16/06 U.S. APRIL CORE PPI UP 0.1% VS. 0.2% EXPECTED

8:29 AM ET 5/16/06 U.S. APRIL PPI UP 0.9% VS. 0.8% EXPECTED

8:30 AM ET 5/16/06 U.S. APRIL BUILDING PERMITS AT LOWEST LEVEL SINCE FEB. 2004

8:30 AM ET 5/16/06 U.S. APRIL BUILDING PERMITS DOWN 5.4% TO 1.98 MLN UNITS

8:30 AM ET 5/16/06 U.S. APRIL HOUSING STARTS AT LOWEST LEVEL SINCE NOV. 2004

8:30 AM ET 5/16/06 U.S. APRIL HOUSING STARTS BELOW CONSENSUS 1.97 MLN UNITS

8:30 AM ET 5/16/06 U.S. APRIL HOUSING STARTS DOWN 7.4% TO 1.85 MLN UNITS

[UpInArms]

28. U.S. housing starts fall for 3rd straight month in April

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B44A3BFBA%2D371D%2D4845%2D855F%2D418A67293A54%7D&symbol=

WASHINGTON (MarketWatch) - In a further sign of softening in the housing sector, construction of new U.S. houses retreated for the third straight month in April, the government reported Tuesday.

Starts fell 7.4% in April to a seasonally adjusted 1.85 million annualized units. It was the largest drop in more than a year. Starts are now at their lowest level of starts since November 2004.

The last time there were three straight monthly declines in construction was the winter of 2003-2004.

The decline in housing starts in April was larger than expected. Wall Street economists had forecast housing starts to remain basically flat at 1.97 million units in April according to a MarketWatch survey. See Economic Calendar.

Federal Reserve officials have said they expect a gradual softening in the housing sector as higher mortgage rates begin to bite. But they acknowledge there is a risk of a sharper decline in activity. Officials have said they will watch the sector closely for signs of distress.

...more...

[AnneD]

94. How many months does it need to be down

before we can call it a recession. I just want to call it by its proper name and not a euphemism like, oh say...down turn.

[UpInArms]

29. April Producer Prices Show Slightly More Inflation Than Forecast

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BFB10CCB2%2DDA57%2D42AE%2D84F8%2DF0AFB1F674DD%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - Led by higher energy costs, U.S. producer prices rose a hefty 0.9% in April, but prices outside of energy were well contained, according to Labor Department data released Tuesday. Energy prices increased 4% in the month, led by a 12.3% rise in gasoline prices. The core producer price index for finished goods - which excludes food and energy prices - rose 0.1% for the second month in a row. Economists were expecting the PPI to rise 0.8% and the core to rise 0.2%. Prices of intermediate goods rose 0.9%, including a 2.8% rise in energy goods prices. The core intermediate goods PPI rose 0.4%. Prices of crude goods rose 1.2%, as energy prices rose 1.3%.

[UpInArms]

37. U.S. April industrial production rises 0.8%, beats estimates

9:15 AM ET 5/16/06 U.S. APRIL CAPACITY UTILIZATION RISES TO 81.9%

9:15 AM ET 5/16/06 U.S. APRIL INDUSTRIAL PRODUCTION RISES 0.8%, BEATS ESTIMATES

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B2E97F39C%2DE45B%2D42B7%2D8E6B%2D9F01BB37EF1E%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- Output from U.S. factories, mines and utilities rose by 0.8% in April, beating economists' estimates, the Federal Reserve said Tuesday. Capacity utilization, meanwhile, rose to 81.9%, the Fed said, also beating expectations. The rise in industrial production was led by a 1.8% jump in output of business equipment. Output of materials rose 1%. Mines led the utilization number, with 89.8%. Utilization at utilities was at 86% for the month, the Fed said. Economists were expecting industrial production to rise by 0.4% and capacity utilization to climb to 81.5%.

I guess that as soon as a plant closes and lays off all its employees, it leaves the system and is not counted as an idled factory with no production. :eyes:

[AnneD]

95. Maybe it is like those....

farm subsides that they use to give NOT to plant certain crops. They get tax breaks to maintain idle factories.

[ozymandius]

6. Oil drops to $69 on consumption worries

SEOUL (Reuters) - Oil extended recent sharp losses on Tuesday along with other commodities, on concerns that high energy and raw material costs may hit demand and slow global economic growth.

U.S. light crude oil was trading 14 cents lower at $69.27 a barrel by 0719 GMT, after hitting a low of $68.51 that followed Monday's $2.63 plunge. London Brent crude was down 25 cents to $69.42 a barrel.

Oil prices have fallen nearly 6 percent since last Thursday after reports signaled that high energy costs were hitting global fuel demand and consumer confidence.

"Prices are still reacting to statistics that are basically saying oil demand is decreasing. And Chinese oil imports decreased in April, for the first time in the year," said John Brady, an energy broker with ABN AMRO in New York.

more

[ozymandius]

8. Hedge funds play major role in gas price hikes

Oil workers in Nigeria are shot and killed by militants. Venezuelan politicians urge tighter controls of foreign oil companies. Tensions mount over Iran's fledgling nuclear program.

Meanwhile, price signs at gas stations in the Valley spin like slot-machine reels, forcing residents to dig deeper in their pockets to fill up vehicles with gasoline that costs more than $3 a gallon.

Want somebody else to blame besides major oil companies?

-cut-

Hedge funds, which are private vehicles that invest money mainly for the wealthy, see a golden opportunity in oil and other commodities. Even smaller speculators have joined the game.

"There is money to be made," said Howard Lindzon, a Phoenix hedge-fund manager with $10 million under management. "Speculators generally go where there is motion, and right now there is motion in energy."

http://www.azcentral.com/arizonarepublic/news/articles/0515biz-oil0515.html

[ozymandius]

10. Ecuador revokes Occidental oil contract

QUITO, Ecuador (Reuters) - Ecuador's Energy Minister said on Monday the government would revoke a contract held by Occidental Petroleum (NYSE:OXY - news) and strip the U.S. company of its assets in South America's fifth biggest oil producer.

"We accept the demand and petition of Petroecuador (the state oil company) and the country's attorney general and declare the annulment of the contract," Minister Ivan Rodriguez told reporters.

The long-running legal dispute with Occidental has sparked repeated protests by indigenous groups and poor Amazon regions demanding the government expel the company and introduce reforms giving the poor more benefits from oil revenues.

-cut-

Occidental is the country's largest investor and extracts 100,000 barrels of oil per day. The company said Ecuador accounts for about 7 percent of its global production and 3 percent of its proved reserves.

more

BTW - Occidental Oil was founded by Armand Hammer (as in baking soda). U.S. armed forcesd have been guarding Occidental piplines in South America for years.

[ozymandius]

12. Gas Prices Up 4 Cents a Gallon in a Week

WASHINGTON - The average U.S. retail price of gasoline jumped by 4 cents last week to $2.95 a gallon.

The federal Energy Information Administration said Monday that U.S. motorists paid $2.947 a gallon on average for regular grade last week, an increase of 3.8 cents from the previous week. Pump prices are 78.4 cents higher than a year ago.

Average retail gasoline prices peaked at $3.07 a gallon last September, reflecting the extreme tightness in the market following Hurricane Katrina, which knocked out refineries in the Gulf region as well as pipelines that deliver fuel to the East Coast and Midwest.

Gasoline prices were most expensive last week on the West Coast, averaging $3.25 per gallon, and cheapest in the Gulf Coast region, averaging $2.832 per gallon.

more

[UpInArms]

50. June Crude @ $69.65 bbl - June NatGas @ $6.26 mln btus

10:11 AM ET 5/16/06 JUNE CRUDE CLIMBS 24C TO $69.65/BRL IN EARLY NY TRADING

10:11 AM ET 5/16/06 JUNE NATURAL GAS CLIMBS 13.7C, OR 2.2%, TO $6.26/MLN BTUS

[UpInArms]

65. June Crude @ $69.75 bbl - June NatGas @ $6.26 mln btus

11:40 AM ET 5/16/06 JUNE CRUDE CLIMBS 34C TO $69.75/BRL AFTER $68.90 LOW

11:40 AM ET 5/16/06 JUNE NATURAL GAS CLIMBS 13.7C, OR 2.2%, TO $6.26/MLN BTUS

11:40 AM ET 5/16/06 JUNE HEATING OIL UP 0.9%; JUNE UNLEADED GAS FALLS 0.5%

[UpInArms]

72. June Crude @ $70.20 bbl

12:00 PM ET 5/16/06 JUNE CRUDE CLIMBS 79C TO $70.20/BRL AFTER $68.90 LOW

[ozymandius]

9. U.S. Group: China Product Piracy Growing

BEIJING - China is still doing too little to fight growing product piracy despite repeated crackdowns, causing mounting damage to legitimate producers of movies, music and other goods, a U.S. business group said Tuesday.

"The problem is growing faster than the enforcement efforts," said Charles Martin, president of the American Chamber of Commerce in China.

The group, in an annual report on business conditions, called on Beijing to increase criminal penalties and enforcement efforts for piracy that trade groups say costs legitimate producers billions of dollars a year in lost potential sales.

more

[Ghost Dog]

16. Japan's April consumer confidence hits 16-year high

http://asia.news.yahoo.com/060516/kyodo/d8hkmqq80.html
(Kyodo) _ Consumer confidence in Japan rose in April from the previous month to mark the highest level in nearly 16 years on the improvement of employment conditions and rising incomes, the government said Tuesday.

The index of confidence among households with two or more people came to an unadjusted 50.0 for April, up 2.1 points from March, the Cabinet Office said in a monthly report. A reading below 50 indicates that pessimists outnumber optimists. Consumer spending accounts for more than half of Japan's gross domestic product. The April result was the highest since the index logged 50.3 in June 1990.

<snip>

According to the April survey, the index of employment gained 2.3 points from the previous month to 55.2, the highest level since the government started the survey in June 1982. The index of wage conditions gained 2.7 points to 46.2 and that of living conditions climbed 1.9 points to 47.0. The index of durable goods purchases rose 1.6 points to 51.6.

/bit more

[Ghost Dog]

17. Nikkei falls for sixth session, energy firms down

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060516:MTFH26200_2006-05-16_06-12-14_T312600&symbol=1605.T&rpc=44

TOKYO, May 16 (Reuters) - The Nikkei average fell 1.99 percent on Tuesday, extending losses into a sixth session as energy stocks, including INPEX Holdings Inc. (1605.T: Quote, Profile, Research), fell on declining commodities prices.

<snip>

The Nikkei <.N225> was down 328.49 points at 16,158.42, its lowest close since March 16. The TOPIX index <.TOPX> was down 2.19 percent at 1,644.97.

/some more...

[Ghost Dog]

18. JGBs gain on stock slide and smooth auction

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060516:MTFH26652_2006-05-16_06-30-55_T313800&symbol=.N225&rpc=44

TOKYO, May 16 (Reuters) - Japanese government bonds posted solid gains on Tuesday, boosted by a smooth five-year note auction and safe-haven buying as Tokyo shares extended their sharp slide into a sixth straight session.

<snip>

June 10-year JGB futures <2JGBv1> climbed 0.36 point to 132.15, pulling away from a 5-1/2-year low hit last week.

The benchmark 10-year JGB yield <JP10YTN=JBTC> dipped 3 basis points to 1.960 percent but was still not far from a near seven-year high of 2.005 percent hit last week.

The yield on 20-year bonds <JP20YTN=JBTC> fell 3 basis points to 2.275 percent.

The yield on the No. 55 five-year note fell 4 basis points to 1.435 percent <JP5YTN=JBTC>, slipping further away from 1.485 percent -- the highest in the six-year life of that maturity.

The two-year yield edged down 1.5 basis points to 0.785 percent <JP2YTN=JBTC>.

A solid five-year note auction helped soothe dealers in the afternoon session. Investors were lured to the 1.5 percent coupon on the new five-year JGB, the highest since the ministry began selling the maturity in 2000.

Initial buying was fuelled by overnight gains in U.S. Treasuries as the plunge in commodity prices eased worries about inflation, pulling the 10-year yield down from a four-year peak.

/more...

[Ghost Dog]

19. FOREX-Dollar slides vs yen as gold prices recover

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060516:MTFH26182_2006-05-16_06-11-12_T265075&symbol=.CRB&rpc=44
Tue May 16, 2006 2:11 AM ET

TOKYO, May 16 (Reuters) - The yen rose on Tuesday as dollar short covering eased on a recovery in the price of gold and other commodities, and as investors awaited economic data for clues about when the Federal Reserve will stop raising interest rates.

The yen climbed to a seven-week high against the euro as traders unwound long positions that have kept the single European currency in the vicinity of a record peak against the yen and a one-year high versus the dollar.

A recovery in commodity prices, which posted their biggest one-day fall in 18 years on Monday, put pressure on the U.S. currency, dealers said, adding that the dollar could stay at the mercy of commodities in the near term.

<snip>

Few in the market believe the dollar's woes had reversed given expectations that the Fed is poised to stop tightening credit, as well as speculation that Washington may allow the dollar to fall further to help reduce its huge trade deficit.

"That is making investors hesitant to buy the dollar aggressively," said Nobuo Ibaraki, forex manager at Nomura Trust and Banking. "Sentiment for the dollar is clearly bearish."

Treasury Undersecretary Tim Adams said on Monday that the United States did not seek to manipulate its currency for competitive reasons and currency values should be set by markets and reflect fundamentals.

/more info...

[Ghost Dog]

21. European bourses turn lower in volatile trade

http://news.ft.com/cms/s/2338001a-e4a6-11da-80de-0000779e2340.html
Published: May 16 2006 07:35 | Last updated: May 16 2006 09:55

European equity markets turned lower by mid morning on Tuesday, reversing earlier gains, as falling commodity prices prompted investors to sell oil, mining and metals stocks.

Amid volatile conditions, the FTSE Eurofirst 300 was down 0.4 per cent to 1,340.08, while Frankfurt’s Xetra Dax fell 0.5 per cent to 5,827.49. The CAC 40 in Paris was 0.3 per cent lower at 5,049.36 and London’s FTSE 100 shed 0.5 per cent to 5,813.4.

/more...

ed. to restore dateline.

[Ghost Dog]

22. European bourses turn higher in volatile trade

http://news.ft.com/cms/s/2338001a-e4a6-11da-80de-0000779e2340.html
Published: May 16 2006 07:35 | Last updated: May 16 2006 12:19

Volatile trading in European equity markets drew gains by midday as the defensive nature of drugs stocks and telecoms helped offset falling oil, mining and metals stocks.

The FTSE Eurofirst 300 was up 0.1 per cent to 1,346.03 by midday, while Frankfurt’s Xetra Dax was flat at 5,854.12. The CAC 40 in Paris was 0.1 per cent higher at 5,070.45 and London’s FTSE 100 climbed 0.2 per cent to 5,850.6.

/more...

ed. see: just updating (and replacing) the earlier report. earlier report vanishes into ether. == volatile reporting w/o paper trail <g>.

[54anickel]

64. So which is it turning out to be GD? Those FT writers really need some

help in their choice of headline wording. Time to graduate from the template folks.


blank turns higher/lower in volatile trade

blank financial markets hit by flight from risk

[Ghost Dog]

113. Says here: "European shares rebound as inflation fears ease"

http://today.reuters.co.uk/investing/MarketReportArticle.aspx?type=eurMktRpt&storyID=2006-05-16T163343Z_01_L16307653_RTRIDST_0_MARKETS-EUROPE-STOCKS-UPDATE-3.XML
Tue May 16, 2006 5:34 PM BST

PARIS, May 16 (Reuters) - European shares rebounded on Tuesday as tame U.S. core inflation data eased interest rate worries, while upbeat earnings and takeover talk also helped lure investors back into a market reeling from a four-day rout.

<snip>

Pharmaceutical stocks also benefited as investors, still mindful of a less supportive economic environment, re-channelled their money into more defensive sectors.

<snip>

The FTSEurofirst 300 index <.FTEU3> of top European shares gained 0.2 percent to end unofficially at 1,348.08 points, recovering some ground after losses of more than 4 percent over the past four sessions.

The benchmark experienced its biggest two-session fall in 3-1/2 years on Monday, wiping out billions of euros from the market capitalisations of Europe's leading shares as worries about the toll of runaway oil prices on inflation and economic growth sparked a sell-off in equity and commodity markets.

But investors saw a trio of economic reports published on Tuesday as diminishing the odds of further monetary tightening in the world's biggest economy and in the euro zone.

These reports showed a smaller-than-expected rise in core producer prices and a dip in housing starts in the United States, as well as sharp fall in investor sentiment in Germany.

<snip>

Around Europe, London's FTSE 100 <.FTSE> index headed 0.1 percent higher, while Paris's CAC 40 <.FCHI> added 0.3 percent and Frankfurt's DAX <.GDAXI> was 0.1 percent lower. The Swiss Market Index <.SSMI> was up 0.4 percent in Zurich.

/more...

Back to Reuters for this. FT seems to still be out to lunch. Sorry about delay: visitors.

[Ghost Dog]

23. EU says China should set pace of financial reforms

http://yahoo.reuters.com/investing/FinanceArticle.aspx?type=economicNews&storyID=urn:newsml:reuters.com:20060516:MTFH33599_2006-05-16_11-50-48_PEK261859&rpc=44
BEIJING, May 16 (Reuters) - A European commissioner urged China on Tuesday to continue its financial reforms as further openings would naturally lead to the easing of global imbalances.

But the pace and characteristics of those reforms should be determined in Beijing, as the Chinese are the best judge as to what policies best suit the mainland, Internal Market Commissioner Charlie McCreevy told reporters.

"Don't fear competition, don't fear open markets," McCreevy said. "If you let markets operate freely, imbalances will correct themselves over time."

<snip>

McCreevy's approach is in sharp contrast to his U.S. counterparts who say the huge U.S. trade and current account deficits are due, at least partially, to China's artificially undervalued currency. The United States has been pushing China for nearly three years to move towards a more flexible currency.

<snip>

On Monday, China said it would press ahead with reform of its currency regime with the aim of making the yuan more responsive to market forces. (US$=8.01 yuan)

/more...

[UpInArms]

24. daily dollar watch

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

Last trade 84.50 Change +0.13 (+0.15%)

Dollar Shrugs off Weak Data In Favor of Commodity Slide

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/Dollar_Shrugs_off_Weak_Data_1147728798659.html

US Dollar - The US dollar starts the week on a strong footing as the market shrugs off weak economic data to focus on the deep retracement in commodity prices. Gold prices have tipped below $700 an ounce while oil prices are broke the $70 level thanks to comments from Saudi Arabia about OPEC possibly adding enough new capacity to meet demand. Fundamentals have not changed much however as the latest reports signal a gloomier outlook for the US dollar. The Empire State manufacturing survey dropped from 15.8 to 12.4, which is the weakest reading in 11 months. Unsurprisingly, the culprit is the rising costs of energy and raw materials. We have long said that it is inevitable for companies and US consumers to feel the oil pain. The Philly Fed survey which is a more closely followed report due out later this week should fall victim to the same fate. The NAHB housing market confidence index also dropped from 51 to 45 in May, the weakest reading in ten years. Home builders see the outlook for the housing market as “poor” due to higher mortgage costs, high prices crimping purchases and a withdrawal of speculators in the market. If the housing market goes, the Fed will be forced to cut short their rate hikes sooner rather than later, but it will not be until we see the inflation numbers on Tuesday or Wednesday will we get a better sense of what the Fed will do since it all boils down to which is pressures are more significant – growth or inflation. Meanwhile the much anticipated Treasury International Capital flow report came in much weaker than expected for the month of March. Foreigners purchased only $69.8 billion worth of dollar denominated securities in March, compared to the market’s forecast for a $79.9 billion rise. Even though the Fed has been raising interest rates, which should increase the attractiveness of US treasuries and the stock market rallied throughout the month of March, the depreciation in the US dollar is outweighing the possible earnings from the other markets. Most countries slowed their purchases with the exception of the UK, Caribbean based hedge funds and Mexico. The biggest red flag in the report was the major selling by Japan, the world’s largest holder of US treasuries. Central banks around the world have been cutting back their purchases. We have already talked about Sweden, Qatar, the UAE and Russia, but now with Japan selling, the pressures on the dollar are exacerbated even further. Demand from China also slowed even though they were a net buyer in March. Central bank reserve diversification is a long term factor that will plague the currency for months or even years to come. However, we can see today that the US dollar has completely ignored the report and rallied against all of the major currency pairs. Admittedly, the February figure was revised upwards from $86.9 billion to $90.5 billion, but it was not enough to negate March’s downward surprise. In addition, the TIC, though weak, was enough to cover the $62 billion trade deficit reported last week. However even so, the dollar’s rally today seems more attributed to the sharp slide in commodities as well as a correction after extreme exhaustion. Although this may last for a few days, fundamentals have yet to warrant a strong shift in trend.

...more...

US Dollar Digesting Losses

http://www.dailyfx.com/story/dailyfx_reports/daily_technicals/US_Dollar_Digesting_Losses_1147774740404.html

EUR/USD – The correction appears to be underway as evidenced by the bearish engulfing candle on the daily occurring at the confluence of the upper Bollinger band (daily) 138.2% fibo of 1.2588-1.1640 at 1.2948. Bearishness going forward is also suggested by MACD slope turning negative after yesterday’s decline. Intense rallies often see material corrections and as such the first significant support is suggested by the 23.6% fibo of 1.1640-1.2972 at 1.2658. Additional support rests at the 9/2/05 high of 1.2588. Yesterday’s 1.2970 high is immediate resistance.

<snipping charts>

USD/JPY – USD/JPY hovers around the psychological 110.00 figure after coming close to the 61.8% fibo of 101.67-121-38 at 109.22 and forming consecutive days with long lower wicks. USD/JPY has also formed an inside day close to its lower Bollinger band and this offers upside potential with little risk to the downside. In this sense, the pair looks similar to USD/CAD did last Wednesday. In the event that weakness does persist past Friday’s low at 109.29, support exists at the 9/5/2005 low of 108.75. This evening’s Tokyo high at 110.85 is resistance as is a potential resisting trendline from 4/19 just above 111.00.

<snip>

USD/CAD – USD/CAD continues to make a countertrend move – rallying the past 4 days (and currently gaining for a 5th consecutive day). 1.1156/75 (23.6% fibo of 1.1771-1.0969 / 5/2, 5/9, 5/15 highs / 20 SMA) is a resistance zone that has been tested and held over the past week but if it gives way, then a test of the 38.2% fibo at 1.1274 enters the realm of possibilities. Strengthening RSI > 50 on the hourly favors such a scenario. Initial support is at today’s low of 1.1116 with additional support at the confluence of yesterday’s low / 10 day SMA at 1.1075.

...more...

[UpInArms]

25. China Lets Currency Rise Past Key Level

http://www.nytimes.com/2006/05/16/business/worldbusiness/16yuan.html?ei=5088&en=6971de21791ae37c&ex=1305432000&adxnnl=1&partner=rssnyt&emc=rss&adxnnlx=1147749449-S19Ksl+mLXTrQip4p2fBxA

HONG KONG, May 15 — China allowed its currency to strengthen past the symbolic level of eight to the dollar Monday, rattling Asian markets already shaken by the dollar's extended slide and Friday's drop in share prices in the United States.

<snip>

The dollar — which has fallen markedly against other major currencies in recent weeks — briefly slipped to a two-year low against the euro and approached an eight-month low against the Japanese yen before recovering considerable ground late in the trading day here and in New York.

Ben Simpfendorfer, a currency strategist in Hong Kong with the Royal Bank of Scotland, said the dollar had briefly dropped so fast earlier in the day that investors became worried that a weak dollar would hurt Asian exports and make Asian shares less attractive, which in turn curbed demand for Asian currencies.

<snip>

The appreciation on Monday of the Chinese currency was the first instance of its breaching eight to the dollar since China devalued and unified a series of separate official rates in 1994 into a single exchange rate.

...more...

[54anickel]

49. China's War Time Economy

Interesting way of looking at it

http://www.321gold.com/editorials/schiff/schiff051606.html

snip>

During the War, American consumers did not receive any direct economic benefit from their hard work and economic activity. In fact, they sacrificed greatly. Because factories were producing military goods, consumer goods were in short supply. In addition, scores of common staples, such as butter, nylons and gasoline, had to be rationed, so that they or the resources needed to produce them, would be readily available for the military. Similarly, Chinese citizens now produce export goods from which they themselves derive no direct economic benefit. In effect, consumer goods are rationed in China so as to make them readably available in America.

However, when World War II ended, American factories didn't shut down, they merely retuned to consumer goods production. Soldiers didn't lose their jobs; they merely put their labor to more productive uses. Instead of being wasted on a war (which unfortunately had to be fought), resources were applied to civilian purposes, leading to a post-war economic boom.

The same would apply in China today. As Americans once sacrificed to defeat the Nazis and Imperial Japan, the Chinese now sacrifice merely to support the purchasing power of Americans. If China allowed the dollar to decline against the yuan, American purchasing power would by definition be transferred to the Chinese. In China, factors of production would therefore be reallocated as they were during post-war America. Factories would retool and labor would seek more productive employment. Instead of wasting scarce resources producing goods to export, China would instead produce goods for domestic consumption.

The time has come for China, and the rest of Asia for that matter, to redirect its vast resources to raising the standard of living of its own people rather than to propping up the living standards of Americans. As soon as the Chinese stop producing goods for Americans they can finally begin producing more for themselves.

It's time for China to declare peace. Unfortunately, as Americans are the principal profiteers in China's war, we stand to lose the most when it ends. So while peace means China's days of sacrifice, rationing, and under-consumption will soon end, it means America's are about to begin.

more...

[54anickel]

60. The people's forex liberation army

http://www.atimes.com/atimes/China_Business/HE16Cb05.html

snip>

Many observers are optimistic that the yuan could become a fully convertible currency as quickly as three years from now, which will inevitably shake up the regional and global financial markets.

Hong Kong, for instance, is now becoming even more concerned that its status as an international financial hub will be seriously challenged, if not immediately replaced, by Shanghai once the yuan becomes a hard currency. No doubt a fully convertible yuan would become a major world currency given China's strong economy and the nation's huge savings.

At a forum in Beijing on March 18, Wu Xiaoling, vice governor of the central People's Bank of China (PBoC), heralded the principal change in the foreign-exchange policy. She said China should readjust its foreign-exchange policy to curb the sharp increase of its foreign-exchange reserves. Wu said China would change its current policy of "storing foreign exchange in the state coffers" into one of "storing foreign exchange among people". In other words, the government would ease its tight grip on virtually all foreign exchange in the country and let its citizens and enterprises alike hold more foreign currency.

At the same function, Li Lianzhong, a senior official with the Policy Research Office of the Communist Party's Central Committee, said China should make better use of its huge foreign-exchange reserves, encouraging Chinese enterprises to "go abroad" to cultivate overseas markets.

more...

[54anickel]

70. I can't get UIA article re: E&Y from yesterday off my mind with this one

http://www.atimes.com/atimes/China_Business/HE16Cb05.html
The people's forex liberation army

snip>

'Storing foreign exchange among the people'
Wu's and Li's remarks suggest Beijing has found a more satisfactory solution. Less than a month after they made their remarks, China began to announce a spate of concrete measures to implement the new policy principle of "storing foreign exchange among people".

On April 12, Wu Dingfu, chairman of the China Insurance Regulatory Commission (CIRC), said in Beijing that the State Council, China's cabinet, had given the green light for Chinese insurers to invest in overseas securities markets. This signaled that China was ready to launch a qualified domestic institutional investor (QDII) scheme that would allow Chinese investors to trade in foreign stocks even while the yuan remained not fully convertible.

Two days later, the PBoC lifted its restrictions on institutions opening foreign-exchange current accounts with commercial banks, so that a company no longer had to sell any foreign exchange it earned to the government but could keep it for its own disposal.

At the same time, it also announced that individuals would be allowed to buy and hold foreign exchange freely. A person would be allowed to purchase foreign currency equivalent to a maximum of $20,000 per year. Such measures will surely boost daily trading in foreign exchange.



http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=businessNews&storyID=2006-05-15T105551Z_01_PEK303583_RTRUKOC_0_US-FINANCIAL-CHINA-REPORT.xml
Ernst & Young says probing Chinese bad loan gaffe

snip>

The gaffe could deal a blow to the firm's efforts to win or maintain lucrative business deals from Chinese clients.

Ernst & Young is the official auditor for the upcoming listing of Industrial and Commercial Bank of China <ICBC.UL>, the nation's largest bank by assets, which is expected to sell shares to the public before the end of the year.

EMBARRASSMENT

The criticism by the People's Bank of China came just weeks before the country's biggest foreign exchange lender, Bank of China <BOC.UL>, was to float shares in a $9.8 billion offering in Hong Kong on June 1.

Ernst & Young said its bad loan report, which covered markets other than China, had included unverified forecast data compiled by others as if it were historic information.

Ernst & Young said it did not wish to comment further on the specific errors it had made as it had "no desire to make this embarrassing situation even worse."

more...

[UpInArms]

74. Chinese reporters arrested for extortion: report

http://today.reuters.com/news/newsarticle.aspx?type=topNews&storyid=2006-05-16T005218Z_01_PEK307133_RTRUKOC_0_US-MEDIA-CHINA.xml&src=rss&rpc=81

BEIJING (Reuters) - Chinese authorities have arrested four newspaper reporters for extortion and called on the press to ensure such incidents do not happen again, the official Xinhua news agency said.

The journalists worked for the Economic Daily, China Food Quality Newspaper and two other publications, Xinhua said in a report issued late on Monday, citing a notice from the State Administration of Press and Publications.

The reporters extorted money from companies or institutions after learning about problems, demanding cash to ensure negative stories did not see the light of day, Xinhua said.

The reporters all worked in provincial branches of their publications, some of which had not received government permission to be set up, the report added.

<snip>

The government has sacked editors at some of China's bolder publications, and this month sees at least four journalists and Internet writers going on trial for criticizing the Communist Party or otherwise angering the authorities.

...more at link...

[54anickel]

79. Bwahaha, "damaged the reputation of the media in China". Just what

reputation is that? On the one-hand, their low-paid journalists have become Faux-like whores for the corporations....

It is not uncommon in China for low-paid journalists to earn double their salaries or more by accepting envelopes stuffed with cash from companies to ensure positive and prominent coverage.

On the other hand, they are surpressed from criticizing the authorities...

The government has sacked editors at some of China's bolder publications, and this month sees at least four journalists and Internet writers going on trial for criticizing the Communist Party or otherwise angering the authorities.

Hey, that's really not that much different than the US media, is it? :evilgrin:

[AnneD]

96. Well, actually there IS a difference,

In America, it is the government that gives journalist envelopes stuffed with cash. You need to be accurate. :rofl:

[UpInArms]

99. screen cleaning alert

:spray:

[UpInArms]

35. dollar's response to economic reports:

Last trade 84.27 Change -0.10 (-0.12%)

Settle Time 15:00 Open 84.35

Previous Close 84.37 High 84.78

Low 84.12 2006-05-16 08:41:44, 30 min delay

[54anickel]

39. Asian currencies poised to extend gains

http://www.marketwatch.com/News/Story/Story.aspx?guid={22BAE192-4732-4731-8EE5-95E1F3DE1460}&siteid=mktw&dist=

NEW YORK (MarketWatch) -- Robust regional economic growth and a weakening U.S. dollar, combined with renewed pressure on emerging markets to respond to global imbalances, are expected to drive Asian currencies to new highs.

Many have already posted impressive gains this year. The momentum accelerated recently after the Group of Seven leading nations urged faster currency gains in emerging economies, with the Korean won, the Singapore dollar, and the Malaysian ringgit all climbing to their highest levels against the dollar since the 1997-98 Asian crisis. See full story.

snip>

"When we talk about Asian currencies, there's a bit of conundrum," Gilmore said.
"The conundrum is that the G-7 is calling for Asian currency appreciation," but what they have in mind "really is China, the yuan," he said. For the rest of Asia, the message "is not so much that they don't respect the movement in their currencies today. It's just they're not happy with heavy amounts of central bank intervention."
Korea, for instance, is still accumulating huge currency reserves to keep its currency from rising, Gilmore said.

snip>

"The Chinese currency is linked to the U.S dollar. The dollar is weakening. The Chinese currency is weakening against all the rest of Asia. There's a real problem building within Asia," said FXA's Gilmore. "The currencies are becoming uncompetitive with China."

"Do not be surprised to see regional Asian central banks first try to jawbone and then possibly intervene in FX markets if the disparity in exchange rates reaches a point of pain for their exporters," said FXCM's Schlossberg.....Oh, you mean like Japan use to do while the US gave a wink-wink, nudge-nudge?

snip>

"The strongest catalyst for the Asian currency strength has been the expectation that China will be forced to ease off on" keeping the value of its currency low, said Hoeksema. "The market has been anticipating this move by buying other Asian currency pairs such as Singapore dollar and Korean won."



more... it all falls back to the devaluing of the US buck...

[54anickel]

63. The Day the World Changed

The Day the World Changed
The Impact 14 March 1968 had on Money,
Gold & Mining Shares

http://www.gold-eagle.com/editorials_05/lundeen021606.html

snip>

The Bretton Woods Accords (BWA) created a workable post war monetary regime. However the world's central banks and national governments refused to submit to the monetary restraints provided by this conference. The results, a bull market of historic proportions for precious metals in the early 21st century. The world is about to abandon the US dollar, just as the United States abandoned the Bretton Woods Accords fifty years earlier.

On the evening of 14 March 1968 the following press release was issued from Buckingham Palace, United Kingdom.

The London Gold Market will be closed today, Friday, March 15. This is at the request of the United States Government.

At a meeting of the Privy Council held this morning at Buckingham Palace, Her Majesty the Queen approved a proclamation appointing Friday, 15th March, to be observed as a Bank Holiday throughout the United Kingdom.

The banks are, however, being asked to provide their domestic customers with normal cash requirements in sterling.

The authorities are requesting that the stock exchanges also be closed.

-End-

snip>

In 1945, the government of the United States promised not to print more units of the world's reserve currency (the US dollar) than it had in gold to back those paper dollars. This was the critical check against US dollar inflation. In 1945, the quantity of paper dollars in circulation roughly matched the quantity of gold dollars held in the US gold reserves. This was not to be so for long.

The above press release issued from Buckingham Palace, marks the point in time when the British government would no longer assist the United States in maintaining the fiction of the $35 paper US dollars for an ounce of US gold held in reserve. Her Majesty's government since 1960 had assisted the United States Government in a fraud. For the past eight years the UK had redeemed its own gold to honor American gold obligations. On 14 March 1968, the United Kingdom had decided that enough was enough, and withdrew from the London Gold Pool.



Looking at my above chart, we can see the fraud in hard data. By 14 March 1968, the United States had issued 3.97 paper dollars into circulation for every one dollar in gold it possessed in its reserves. This was clearly a violation to the letter and spirit of the Bretton Woods Accords.

more...

[UpInArms]

110. dollar looking a bit pale and yuan

Last trade 84.19 Change -0.18 (-0.21%)

Settle Time 15:01 Open 84.35

Previous Close 84.37 High 84.78

Low 84.12 2006-05-16 15:45:14, 30 min delay

[UpInArms]

26. Wal-Mart sees higher gas prices impacing Q2 results

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B17FF34D2%2D6BB7%2D4FC2%2DB5EB%2D822502A3E1AA%7D&dist=newsfinder&symbol=&siteid=mktw

CHICAGO (MarketWatch) -- Wal-Mart Stores Inc. CFO Tom Schoewe said Tuesday that higher prices at the pump as well as a handful of other issues will impact the retailer's second-quarter results. "We continue to see higher gasoline and utility prices affecting our customers around the world and this could pressure our results as we move into the second quarter," he said on a recorded first-quarter earnings call. He said higher interest rates as well as the costs to fund store remodelling projects and new benefits packages for employees also will take a toll. He projected second-quarter earnings in a range of 70 cents to 74 cents a share and forecast the full-year at $2.88 to $2.95 a share. In pre-market action, shares of Wal-Mart (WMT 47.39, +0.85, +1.8% ) were off 11 cents to $47.32.

[UpInArms]

56. Home Depot sales hurt by weather, flooring (arrogance on display)

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B92FF81A3%2D381C%2D4172%2DB38B%2D113AD70755AF%7D&dist=newsfinder&symbol=&siteid=mktw

NEW YORK (MarketWatch) -- Home Depot Inc.'s (HD 39.17, -1.33, -3.3% ) Chief Executive Bob Nardelli said Tuesday he was disappointed with first-quarter retail sales, and cited unfavorable weather and weak flooring sales for the miss. On a conference call with analysts, the company said it has been offering higher-priced merchandise, particularly appliances. Home Depot said was not pricing itself out of the market and had an "infinite capacity" to drive average receipts higher. The company reaffirmed its sales and earnings growth targets for the year and through 2010.

Wow! "infinite capacity" to extract money from empty wallets????

What freakin' pigs :grr:

[Kolesar]

62. Wal*mart's aisles are no more appealing than K-Mart in the 1980s

Their displays of clothing don't jump off the rack and say "buy me". I shop closeouts, mostly from catalogs, and I shop for products that last like Patagonia and Woolrich. Eddie Bauer will set my inseam, too. I have no idea how they are going to turn around their image from a glaring fluorescent hell of dispirited employees and products that are Butt*Ugly.

[spinbaby]

30. What happened to the yen just now?

Or, rather, what happened to the dollar?

http://finance.yahoo.com/q/bc?s=USDJPY=X&t=1d&l=on&z=m&q=l&c=

[UpInArms]

31. the PPI report shows "no inflationary pressure" and the rate hike for

June has been thrown out of the picture - no rate hikes mean the dollar becomes ugly.

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BA48B72C6%2DAFCC%2D4B74%2D941C%2DDC000424316B%7D&dist=newsfinder&symbol=&siteid=mktw

NEW YORK (MarketWatch) - The dollar eased early Tuesday in the wake of a tame core wholesale inflation reading and weaker-than-expected housing starts data. "The data will move the market one step closer to ruling out a June Fed rate hike, and could remove the dollar's recent bid in a hurry," said analysts at Action Economics. U.S. producer prices rose a hefty 0.9% in April, but the core producer price index for finished goods - which excludes food and energy prices - rose 0.1%, the Labor Department said. Economists were expecting the PPI to rise 0.8% and the core to rise 0.2%. Separately, housing starts fell 7.4% in April to a seasonally adjusted 1.85 million annualized units. Economists were looking for starts to hold about steady at 1.97 million. The euro traded at $1.2847 vs. $1.2818 before data, while the dollar was at 110 yen vs. 110.24 yen before data.

[54anickel]

33. Fed Survey Boosts Forecast for Growth

53 soon to be surprised economists :eyes:

http://www.latimes.com/business/la-fi-econ16may16,1,4098837.story?coll=la-headlines-business

The U.S. economy will grow 3.4% this year, faster than previously forecast, and the labor market will strengthen, according to a Federal Reserve Bank of Philadelphia survey released Monday.

The median forecast of 53 economists in the quarterly survey is 0.2 percentage point higher than the previous forecast made three months ago. Stronger growth this year will come at the expense of slower growth in 2007. The economists revised their prediction for growth next year to 3%, compared with the 3.2% previously estimated, the report said.

The nation's unemployment rate will average 4.7% in 2006, the survey said, while inflation will remain tame. Federal Reserve policymakers have raised interest rates 16 straight times since June 2004 and have signaled they may be getting close to ending the campaign.

"Consumer spending has a lot of momentum here," said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York and one of the economists in the survey. He said Barclays expected "more Fed tightening, which leads to somewhat slower growth next year."

more...

[UpInArms]

43. Printing Press Hums: Fed adds reserves through overnight system repos

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-16T133314Z_01_N16343154_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, May 16 (Reuters) - The Federal Reserve said on Tuesday that it added temporary reserves to the banking system through overnight system repurchase agreements.

Federal funds were trading at 5 percent at the time of the operation, the Fed's current target for the benchmark overnight lending rate.

For details on the operation, see http://www.ny.frb.org/markets/omo/dmm/temp.cfm

[ozymandius]

45. Someone needs to save these figures.

So that someone can individually do the math, with other data, on the now defunct M3 reports.

[UpInArms]

47. here's website that does just that, Ozy

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

Yesterday's repos were for a grand total of $13.427 Billion

[UpInArms]

67. NY Fed head sees benefits, risks in derivatives

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-16T152325Z_01_N16403718_RTRIDST_0_MARKETS-FED-DERIVATIVES-UPDATE-2.XML

NEW YORK, May 16 (Reuters) - The rapidly growing derivatives market has benefited the global financial system, but its sheer size could also threaten stability in more turbulent times, the president of the New York Federal Reserve warned on Tuesday.

While derivatives help disperse risk, their magnitude also makes it difficult for banks to gauge potential losses, Timothy Geithner said in a speech at New York University's Stern School of Business.

"Most crises come from the unanticipated," said Geithner, adding that the increased role of non-bank financial institutions also made them potential catalysts for broader market failure.

Answering a question from a conference moderator on whether there was a danger of moral hazard arising in derivatives markets and whether the Fed's role should be to monitor for that, he said:

"What you have seen, in terms of the pace of investment infrastructure lagging the growth of the business, is typical."

...more...

[54anickel]

80. LaRouche vs. Greenspan:An 18-Year Fight Over Financial Derivatives

Yeah, I know LaRouche is a nut, but I've always admired his economics.

http://www.larouchepub.com/other/2005/3242lar_v_gspan_timeline.html

big snip to 2004>

Jan. 13: Greenspan speaks in Berlin, demanding further, radical deregulation and globalization of the world financial system. He attempts to calm European worries about the exploding U.S. trade and currency account deficits, and the collapse of the dollar. EIR's Dr. Jonathan Tennenbaum intervened, saying that Greenspan's policies were leading to "the collapse of the greatest financial bubble in modern history." Eighty percent of the U.S. population "do not see the great prosperity you talk about," Tennenbaum said. "Lyndon LaRouche has pledged to put an end to the system of independent central banking. You, Mr. Greenspan, will be the last chairman of an independent central bank in the United States. What do you say about that?"

Greenspan replies: "I can't deny the possibility that the whole system might collapse." Credit derivatives "have been quite extraordinary in being able to take a very major potential problem in finance—and I will give you one specific example—and defuse what could have been the makings of what could have been a very major financial crisis."

Elaborating on the method of "solving" one bankrupt bubble by creating another much larger one, Greenspan let some cats out of the bag: "I refer to the fact that between 1998 and 2000, world-wide and in all currencies, the equivalent of $1 trillion of debt was taken out by the telecommunications industry, a significant part of which went into default. Had we had the type of financial system which we had in the earlier postwar period, with the rigidities you referred to, because banks are largely leveraged institutions, we would have had a very major collapse in banking. In the event, however, because credit derivatives moved the risks from banks who initiated the credits, to those far less leveraged institutions, which were insurance companies, reinsurance, pension funds, etc. not a single major international financial institution was in trouble. These have been very major instruments for smoothing out the system....

"And you presume that as a consequence of all of these issues, that we are sitting on some massive financial bubble, which is going to blow up in our faces. You are not the only one who says that....

"How do we know that the total system will not collapse? Well, the answer to that question ... is that no one has the omniscience and certainty to say, without qualification, that you are wrong. I shall merely say that the evidence that most of us who evaluate the data with respect to trying to answer that question, have overwhelmingly come to the conclusion, that that is extraordinarily unlikely to happen."

more...


In '99 derivatives were Greenspin's darlings http://www.federalreserve.gov/boarddocs/speeches/1999/19990319.htm
In '05 they were risky business and too hot to touch http://www.federalreserve.gov/Boarddocs/Speeches/2005/20050505/default.htm


Here's the latest US economic policy:

[AnneD]

104. Have you noticed that ....

the latest US economic theory looks exactly like our Iraq War Plan and bears a striking resemblance to our National Security Plan.

[54anickel]

107. Yeah, they all seem to require a lot of smoke and mirrors.

[54anickel]

34. Pension Deficit, Now $500 Billion, May Clobber Corporate Bonds

http://www.bloomberg.com/apps/news?pid=10000103&sid=a8gDLCneeLM8&refer=us

May 16 (Bloomberg) -- The $500 billion deficit in U.S. company retirement plans is about to bite corporate bond investors.

Goodyear Tire & Rubber Co., Eastman Kodak Co., TRW Automotive Holdings Corp. and hundreds more companies delinquent in contributing to pensions will have to disclose more information about retirement funds and health-care costs in financial statements later this year, accounting rulemakers say. Congress is debating a new law that would force them to start plugging the gaps in their pension plans.

The rules may require companies to use cash or borrow to meet obligations to millions of pensioners. Fixing the retirement funds could cause bond losses of $24 billion, based on how investors in high-yield, high-risk debt reacted the last time concerns about pensions flared. Investors holding the $5 trillion of bonds sold by companies in America aren't prepared.

``The market is reluctant to say there's risk anywhere,'' Scott MacDonald, director of research at hedge fund Aladdin Capital Management, said in an interview this month from his office in Stamford, Connecticut. ``The view is that it's not here yet. Until it gets closer, why worry?''

Regulators and politicians made pensions a top priority after bankrupt airlines, including Elk Grove Township, Illinois- based UAL Corp.'s United Airlines, abandoned responsibilities for 121,000 pilots, flight attendants and other employees last year. The Pension Benefit Guaranty Corp., a federal insurer for companies with unfunded pensions, assumed responsibility for 120 plans with 235,000 members in the year ended Sept. 30.

Investors Rattled

more...

[ozymandius]

36. pre-open blather

09:00 am : S&P futures vs fair value: +2.0. Nasdaq futures vs fair value: -1.0. Still shaping up to be a mixed start for stocks as futures indications trade at their best levels but still vacillate around the unchanged mark. With the market very much concerned about any signs of inflation right now, the encouraging core PPI figure continues to underpin an improved sentiment. However, with more data on the horizon -- Industrial Production and Capacity Utilization at 9:15 ET and the more influential CPI report tomorrow -- the market may be stuck in neutral until more data add to the argument that the Fed should pause at the next FOMC meeting in late June.

08:33 am : S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: -2.0. Futures trade gets a boost following economic data, and suggests the indices may now open mixed. Total PPI rose a more than expected 0.9% (consensus 0.8%) in April, but the more closely watched core rate (ex-food and energy) rose a less than expected 0.1% (consensus 0.2%) and continues to reflect contained inflation. April Housing Starts fell 7.4% to 1.849 mln units (consensus 1.95 mln) while Building Permits fell to 1.984 mln units (consensus 2.04 mln). Bonds, which were flat ahead of the data, have strengthened, as the yield on the 10-yr note (+06/32) falls to 5.12%.

[UpInArms]

42. June Gold @ $689 oz - July Silver @ $13.35 oz - July Copper @ $3.724 lb

9:43 AM ET 5/16/06 JUNE GOLD CLIMBS $4 TO $689/OZ AFTER $690.50 HIGH

9:43 AM ET 5/16/06 JULY SILVER CLIMBS 1.5C TO $13.35/OZ IN MORNING TRADING

9:43 AM ET 5/16/06 JULY COPPER FALLS 2.25C, OR 0.6%, TO $3.724/LB

[54anickel]

48. Damned old gold - just as it hits my striking point, it heads back up

again. I'd have played again at $675. If I had the money, that is...B-)

[Buttercup McToots]

52. Yepee

My wee gold mining stocks are going up, and the tech and pharm stocks I sold yesterday are going down...

Whew...
Flying by the seat of my pants...

[ret5hd]

58. Read these two article back-to-back!

Huge Gold Action and Earth Shaking Change Imminent
http://www.kitco.com/ind/Laird/may162006.html

Russian Rouble to attack the $ - Exchange Controls in the U.S.?
http://www.kitco.com/ind/AuthenticMoney/may162006.html

[Buttercup McToots]

59. Bad Bad News....didn't mean to sound so cheerry...

I've been reading this also...

The Proposed Iranian Oil Bourse

Abstract: the proposed Iranian Oil Bourse will accelerate the fall of the American Empire.

By Krassimir Petrov, Ph.D.

I. Economics of Empires

The Russians have inherent economic interest in adopting the Euro - the bulk of their trade is with European countries, with oil-exporting countries, with China, and with Japan. Adoption of the Euro will immediately take care of the first two blocs, and will over time facilitate trade with China and Japan. Also, the Russians seemingly detest holding depreciating dollars, for they have recently found a new religion with gold. Russians have also revived their nationalism, and if embracing the Euro will stab the Americans, they will gladly do it and smugly watch the Americans bleed.
The Arab oil-exporting countries will eagerly adopt the Euro as a means of diversifying against rising mountains of depreciating dollars. Just like the Russians, their trade is mostly with European countries, and therefore will prefer the European currency both for its stability and for avoiding currency risk, not to mention their jihad against the Infidel Enemy.
Only the British will find themselves between a rock and a hard place. They have had a strategic partnership with the U.S. forever, but have also had their natural pull from Europe. So far, they have had many reasons to stick with the winner. However, when they see their century-old partner falling, will they firmly stand behind him or will they deliver the coup de grace? Still, we should not forget that currently the two leading oil exchanges are the New York's NYMEX and the London's International Petroleum Exchange (IPE), even though both of them are effectively owned by the Americans. It seems more likely that the British will have to go down with the sinking ship, for otherwise they will be shooting themselves in the foot by hurting their own London IPE interests. It is here noteworthy that for all the rhetoric about the reasons for the surviving British Pound, the British most likely did not adopt the Euro namely because the Americans must have pressured them not to: otherwise the London IPE would have had to switch to Euros, thus mortally wounding the dollar and their strategic partner.

At any rate, no matter what the British decide, should the Iranian Oil Bourse accelerate, the interests that matter-those of Europeans, Chinese, Japanese, Russians, and Arabs-will eagerly adopt the Euro, thus sealing the fate of the dollar. Americans cannot allow this to happen, and if necessary, will use a vast array of strategies to halt or hobble the operation's exchange:

Sabotaging the Exchange-this could be a computer virus, network, communications, or server attack, various server security breaches, or a 9-11-type attack on main and backup facilities.
Coup d'état-this is by far the best long-term strategy available to the Americans.
Negotiating Acceptable Terms & Limitations-this is another excellent solution to the Americans. Of course, a government coup is clearly the preferred strategy, for it will ensure that the exchange does not operate at all and does not threaten American interests. However, if an attempted sabotage or coup d'etat fails, then negotiation is clearly the second-best available option.
Joint U.N. War Resolution-this will be, no doubt, hard to secure given the interests of all other member-states of the Security Council. Feverish rhetoric about Iranians developing nuclear weapons undoubtedly serves to prepare this course of action.
Unilateral Nuclear Strike-this is a terrible strategic choice for all the reasons associated with the next strategy, the Unilateral Total War. The Americans will likely use Israel to do their dirty nuclear job.
Unilateral Total War-this is obviously the worst strategic choice. First, the U.S. military resources have been already depleted with two wars. Secondly, the Americans will further alienate other powerful nations. Third, major dollar-holding countries may decide to quietly retaliate by dumping their own mountains of dollars, thus preventing the U.S. from further financing its militant ambitions. Finally, Iran has strategic alliances with other powerful nations that may trigger their involvement in war; Iran reputedly has such alliance with China, India, and Russia, known as the Shanghai Cooperative Group, a.k.a. Shanghai Coop and a separate pact with Syria.

Whatever the strategic choice, from a purely economic point of view, should the Iranian Oil Bourse gain momentum, it will be eagerly embraced by major economic powers and will precipitate the demise of the dollar. The collapsing dollar will dramatically accelerate U.S. inflation and will pressure upward U.S. long-term interest rates. At this point, the Fed will find itself between Scylla and Charybdis-between deflation and hyperinflation-it will be forced fast either to take its "classical medicine" by deflating, whereby it raises interest rates, thus inducing a major economic depression, a collapse in real estate, and an implosion in bond, stock, and derivative markets, with a total financial collapse, or alternatively, to take the Weimar way out by inflating, whereby it pegs the long-bond yield, raises the Helicopters and drowns the financial system in liquidity, bailing out numerous LTCMs and hyperinflating the economy.

The Austrian theory of money, credit, and business cycles teaches us that there is no in-between Scylla and Charybdis. Sooner or later, the monetary system must swing one way or the other, forcing the Fed to make its choice. No doubt, Commander-in-Chief Ben Bernanke, a renowned scholar of the Great Depression and an adept Black Hawk pilot, will choose inflation. Helicopter Ben, oblivious to Rothbard's America's Great Depression, has nonetheless mastered the lessons of the Great Depression and the annihilating power of deflations. The Maestro has taught him the panacea of every single financial problem-to inflate, come hell or high water. He has even taught the Japanese his own ingenious unconventional ways to battle the deflationary liquidity trap. Like his mentor, he has dreamed of battling a Kondratieff Winter. To avoid deflation, he will resort to the printing presses; he will recall all helicopters from the 800 overseas U.S. military bases; and, if necessary, he will monetize everything in sight. His ultimate accomplishment will be the hyperinflationary destruction of the American currency and from its ashes will rise the next reserve currency of the world-that barbarous relic called gold.

About the Author: Krassimir Petrov ([e-mail]) has received his Ph. D. in economics from the Ohio State University and currently teaches Macroeconomics, International Finance, and Econometrics at the American University in Bulgaria. He is looking for a career in Dubai or the U. A. E.
Full story here:
http://www.informationclearinghouse.info/article11613.htm

[Ghost Dog]

78. Thinks. This gave me some pause today also:

Interest Rates Crossing Critical Threshold
http://www.financialsense.com/editorials/weiss/2006/0515.html

...but I think they maybe miss the 'helicopter' aspect of Helicopter Ben. Ie. that hyperinflation is somehow to be coped with without hyper-interestrates :crazy:

[UpInArms]

66. June Gold @ $687 oz - July Silver @ $13.28 oz

11:39 AM ET 5/16/06 JUNE GOLD UP $2 AT $687/OZ AFTER $693.80 HIGH

11:39 AM ET 5/16/06 JULY SILVER FALLS 5.5C, OR 0.4%, TO $13.28/OZ

[UpInArms]

87. June Gold closes @ $692.90 oz - July Silver @ $13.54 oz

1:58 PM ET 5/16/06 JULY SILVER SETTLES AT $13.54/OZ, UP 20.5C, OR 1.5%

1:56 PM ET 5/16/06 JUNE GOLD CLOSES AT $692.90/OZ, UP $7.90, OR 1.2%

[UpInArms]

44. 9:48 EST spinning wheels and blather

Dow 11,437.74 +8.97 (+0.08%)
Nasdaq 2,239.99 +1.48 (+0.07%)
S&P 500 1,295.54 +1.04 (+0.08%)
10-Yr Bond 5.137 -0.16 (-0.31%)

NYSE Volume 105,583,000
Nasdaq Volume 129,420,000

09:40 am : Market opens on an upbeat note, as tame inflation data at the wholesale level improve early sentiment. Total PPI was up a hefty 0.9% as energy prices surged 4.0% in April but core PPI, which excludes volatile energy prices, rose just 0.1% for a second straight month to leave the year/year increase at 1.5%. However, market gains at the onset remain modest at best as investors await tomorrow's more influential CPI report to reflect a final inflation read at the consumer level, especially since any uptick in the core rate of CPI could roil the stock market. DJ30 +12.43 NASDAQ +3.52 SP500 +2.44 NASDAQ Vol 112 mln NYSE Vol 70 mln

[54anickel]

46. Can you profit from a falling US$ by buying resource shares on non-US exch

Can you profit from a falling US$ by buying resource shares on non-US exchanges?

http://www.321gold.com/editorials/saville/saville051606.html

There's a widely held opinion that you can take advantage of a weakening US$ by buying your resource shares outside the US; in Canada, for instance. We'll put aside, for a moment, our view that the US$ is more likely to rise than to fall over the coming 6-12 months and look at why this widely held opinion is logically flawed.

First, let's consider the example of Newmont Mining, a stock that trades on several exchanges including the New York (NYSE) and Toronto (TSX) exchanges. Regardless of what happens to the CAD/USD exchange rate, a US investor who buys Newmont in Canada will not do any better or worse than one who buys it in the US because the price of the stock on each market will adjust to account for changes in the CAD/USD rate. For example, if the price of Newmont rises by 10% in Canada and the CAD rises by 10% against the USD then a US investor who buys the stock on the TSX will make 20% (10% from the price rise plus 10% from the exchange rate), but during the same period the price of NEM in the US will rise by 20% so someone who buys the stock on the NYSE will make exactly the same amount of profit. In fact, the US investor who bought the stock in the US would end up doing slightly better because he/she would avoid the currency conversion costs (the currency conversion will typically cost you about 1% on the buy and another 1% on the sell).

The inability to gain (or lose) from exchange rate changes in the example described above is illustrated on the following chart. The chart compares Newmont Mining's performance in the US, adjusted for changes in the CAD/USD rate, with its performance in Canada. There are actually two lines on the chart, but it looks like there is just one line because both lines are in exactly the same place.

Many of our readers will consider the above to be a statement of the obvious, but it's amazing how many people think their results can be improved by buying a stock in terms of a currency that happens to be appreciating rather than buying the same stock in terms of a weak currency.

But what about a resource stock that only trades in Canada? Could a US-based investor profit from an increase in the CAD/USD rate by buying such a stock?

more...

Huh? He sees the buck rising too? That's the 3rd "gold-buggy" guy I've read that says the fall in the buck is going to take a pause. Rate hikes don't seem to be in the cards anymore. Not that they were doing the buck much good anyway. But this fear factor and the sudden flight to the quality of US markets could be the start of something....Hmmm, how did that stampede and sudden risk aversion really get started?

[54anickel]

51. OT- FASCISM: ARE WE THERE YET?

http://www.etherzone.com/2006/raim051506.shtml

The lies keep coming. During the run-up to war with Iraq, we were told this administration knew for sure that Saddam had "weapons of mass destruction," and not only that, but knew exactly where they were. When no WMD turned up after the invasion, the Bushies came up with a bushel of excuses and denied ever saying that in the first place.

Oh, but don't worry – their real motive for going to war was to export "democracy" to Iraq – which, as anyone can see, is happening – so none of that matters anyway.

When it came out that the U.S. government was intercepting and listening to all overseas calls, the president himself stepped up to the plate and declared that they weren't spying on domestic calls – and now we learn that the biggest database in the world is being compiled by the National Security Agency (NSA) in which a record of every phone call made in the U.S. since 2001 is kept.

Oh, but don't fret – no one in government would ever allow this vital and potentially sensitive information to be put to unsavory purposes, such as blackmailing political opponents or similar dirty tricks. That anyone in Washington would do such a thing – why, it's unthinkable!

more...

[54anickel]

53. Court allows smokestack chasing -- for now

http://www.stateline.org/live/ViewPage.action?siteNodeId=136&languageId=1&contentId=112763

The U.S. Supreme Court on Monday preserved one of the top tools states use to lure new jobs – corporate tax incentives.

But in preserving a $281 million package of tax breaks that Ohio and Toledo gave to an automaker to rebuild a Jeep factory, the court left the door open to future challenges to such incentives.

Governors and other state officials watched the case closely after the Cincinnati-based 6th Circuit U.S. Court of Appeals struck down the Toledo incentives. Governors warned that more than 40 states would be in jeopardy if the decision were allowed to stand.

The high court’s unanimous decision Monday overturned the 6th Circuit’s decision. It ruled that taxpayers who sued Ohio had no legal standing to bring the case.

But the court didn’t address the central question of the case, which is whether the tax breaks interfered with Congress’ exclusive authority to regulate interstate commerce.

more...

[54anickel]

54. Anonymous House Earmarks

http://online.wsj.com/public/article/SB114773168116553396-nSrlWxQ2zROmiQuNI_RH3Q3t2ZU_20070516.html?mod=tff_main_tff_top

WASHINGTON -- Despite federal probes and promises to change, the Republican-controlled House continues to draft spending bills setting aside billions of dollars for home-state projects without disclosing the sponsor.

Most are relatively small: $1 million in the Environmental Protection Agency's budget to match $2.8 million from the egg industry to study emissions outside laying-hen houses. Others are bigger: $41 million for a new Homeland Security Department data center coveted by the Kentucky delegation.

House Appropriations Committee estimates show that at least $2.4 billion in such earmarks have been included in the first five bills for the fiscal year that begins Oct. 1. But as the House begins floor debate this week on 2007 appropriations, the committee says it won't reveal the sponsors until Congress enacts the new requirements.

"Nobody's instructed us to do that," said a panel spokesman. "It's sensitive enough that we can't unilaterally do that."

Failing to disclose may cause trouble for the panel, whose reputation has taken a beating in the past six months. One former member is in prison after taking bribes for inserting earmarks into bills; recent news reports have described new federal investigations.

more...:argh:

[Jemmons]

55. Russia to trade in oil, gas paid in Roubles

Putin said work on making the national currency fully convertible should be completed by July 1, almost six months ahead of the original January 1, 2007 deadline.

The president called for the establishment of a Rouble-denominated oil and natural gas stock exchange in Russia. "The Rouble must become a more widespread means of international transactions. To this end, we need to open a stock exchange in Russia to trade in oil, gas, and other goods to be paid for in Roubles," he said. Putin said this would be impossible without economic growth of over 7%, which, he said had been achieved in the past three years.

...Following China's valuation of its currency against a basket of currencies of the countries with which it trades and the proposal by Iran of a multi-currency Oil Bourse in Tehran, other than the U.S.$ as well, this move by Russia tolls the bell on oil being exclusively priced in the U.S.$.

http://www.safehaven.com/article-5181.htm

[54anickel]

57. Russian Rouble to attack the $ - Exchange Controls in the U.S.?

http://www.kitco.com/ind/AuthenticMoney/may162006.html

Russian President Vladimir Putin called for work on making the national currency convertible to be completed, oil and gas to be traded in Roubles on a domestic exchange, and an innovation-based economy.

In his annual state of the nation address before both houses of parliament, ministers and reporters, Putin said work on making the national currency fully convertible should be completed by July 1, almost six months ahead of the original January 1, 2007 deadline.

The president called for the establishment of a Rouble-denominated oil and natural gas stock exchange in Russia. "The Rouble must become a more widespread means of international transactions. To this end, we need to open a stock exchange in Russia to trade in oil, gas, and other goods to be paid for in Roubles," he said. Putin said this would be impossible without economic growth of over 7%, which, he said had been achieved in the past three years.

snip>

But the rest of the globe doing trade with the U.S. is under no illusions that the sheer volume of dollars being printed to pay the bill for this Trade deficit has forced them to accept a suspect currency. They have, of necessity, to hold these surpluses in U.S. assets. Most have found their way into highly liquid U.S. Treasury Bonds and Bills. Now is the time to attempt to slow the acquisition of new dollars into their reserves. Clearly, a lowering of the demand for the U.S.$ in international trade will lower the demand for the $ and U.S. Treasury Bonds and Bills. As the $’ role shrinks, so will the globe’s ability to absorb, not just the Trade deficit of the U.S. but also the growing volume of dollars surplus to requirements.

snip>

Many of you readers may feel these prospects are impossible, but history has precedents. At the turn of the century, the British Empire was in its heyday. Seventy years later it had to impose Exchange Controls of its own to prevent the sudden exit of foreign investments from its shores.

Next week we will look at what happened and how it is pertinent to the U.S. today! Later we will describe just how Exchange Controls work to protect a nation’s financial base and the benefits that can come with them to the U.S. but to the detriment of the global monetary system.

more...

[54anickel]

102. And to think that last Thursday we were making light of Pootie's little

delusion. Will he do it? Who knows, but this along with talk of oil for euros sure has got to make the forex pits leery on the buck.

[UpInArms]

68. WP: Rovian spin on economy not fooling the public

http://www.washingtonpost.com/wp-dyn/content/article/2006/05/15/AR2006051501201.html?referrer=email&referrer=email&referrer=email

In his speech yesterday, Rove shelved the world-historical perspective in favor of the staple issue of midterm politics, pleading with his audience to think kindly of the Bush economic record. He spoke at length about the mess the economy was in toward the end of Bill Clinton's term (though he did not mention Clinton's name), and how our economic problems were deepened by the consequences of the Sept. 11 attacks.

<snip>

There is also a rather widespread sense that the economy did very well under Clinton -- better than under Bush -- and it's doubtful that getting voters to think about the Clinton days will do Republicans much good in November 2006.

Most astonishingly, Rove tried to make the case that Bush's tax cuts actually left the rich paying more. Everyone knows the Bush cuts in levies on dividends, capital gains and inheritances overwhelmingly benefited the wealthy. But here was Rove playing class politics by arguing that the wealthy now pay a larger share of total income taxes than they did before Bush.

This is statistical flimflam, of course. It leaves out payroll taxes, which hit most Americans the hardest. And the wealthy are paying more of the total share of income taxes, even though their rates are much lower, because their share of national income has gone up. Rove's numbers actually prove the rich are getting richer. But the fact that Rove tried to sound like William Jennings Bryan is the surest indicator that the administration is worried about its image as protector of the privileged.

[UpInArms]

69. WP: The Return Of Voodoo Economics - GOP Ignores Their Experts on Tax Cuts

http://www.washingtonpost.com/wp-dyn/content/article/2006/05/14/AR2006051400806.html

Nobody serious believes that tax cuts pay for themselves, as I noted last week. But most senior Republicans flunk this test of seriousness.

In January, George W. Bush declared that, "by cutting the taxes on the American people, this economy is strong, and the overall tax revenues have hit at record levels." Regrettably, this endorsement of what his dad called voodoo economics was not a one-time oversight. The next month, Bush told a New Hampshire audience, "You cut taxes and the tax revenues increase."

<snip>

Okay, so let's review this issue with the help of some experts. I'd like to cite Richard Kogan of the Center on Budget and Policy Priorities, because his work inspired this column. But to win over reasonable conservatives, I'm going to choose N. Gregory Mankiw of Harvard, a proponent of tax cuts who chaired the Council of Economic Advisers in the Bush White House. Mankiw is a top-notch economist hired by Bush and Cheney to advise them. And last year he published a paper on how far tax cuts pay for themselves, reporting enthusiastically that this self-financing effect is "surprisingly large."

How large, exactly? Mankiw reckons that over the long run (the long run being generous to his argument), cuts on capital taxes generate enough extra growth to pay for half of the lost revenue. Hello, Mr. President, that means that the other half of the lost revenue translates into bigger deficits. Mankiw also calculates that the comparable figure for cuts in taxes on wages is 17 percent. Yes, Mr. President, that means every $1 trillion in tax cuts is going to add $830 billion to the national debt.

Let's engage in what Bush might call the soft bigotry of low expectations and cut Republicans some slack. Hey, maybe they just overlooked that Mankiw paper? Or maybe, despite hiring Mankiw to head the Council of Economic Advisers, they later acquired reasons to doubt his judgment? In that case they should at least have listened to Douglas Holtz-Eakin, another conservative economist who worked in the Bush White House and who went on to run the Congressional Budget Office.

...more...

[54anickel]

77. GOP needs to revive Reagan coalition (Heh-heh, since you brought it up)

Puker warning....



Broad, populist conservatism is still a political winner

What's a neocon? A liberal with a teenage daughter.

In the salons of Washington, the politicos and assorted hangers-on have spent inordinate time trying to divine the difference between conservatives and neoconservatives, who the people are in each camp and what offices they hold. For my money, the above quip contains sufficient truth to conclude the discussion.

After exercising hegemony over political thought and policy from Franklin D. Roosevelt through Jimmy Carter, the liberal establishment showed itself bankrupt with the American people when Ronald Reagan won the presidency by a landslide in 1980. He increased his majority in 1984, defeating Walter Mondale in 49 of 50 states.

Reagan succeeded by contrasting American common sense with the embedded liberal ethos. He emphasized a few key issues of the day: the long-running threat of Communism and the Soviet Union, coddled by softheaded U.S. policymakers since FDR, including the architects of Nixon's "détente"; excessive taxation and regulation by the federal government, contributing to an economy characterized by stagflation; unchecked welfare programs, perennially abused by con artists; the importance of religion and traditional values like hard work, individual enterprise, neighborhood schools and the right to life of unborn babies; and American strength and confidence instead of weakness and malaise.

Lure of Reagan's message

more...

[UpInArms]

81. gag attack!

the only good thing about that post was that you left the link off :evilgrin:

:hi:

(note: you don't have to include it for my benefit (dubious word there)

:pals:

[54anickel]

83. Damn!!! I haven't done that in a while. Here it is just for you. I'd

hate for you to miss the full effect. You only gagged, it's a real puker!!!

http://www.charlotte.com/mld/observer/news/opinion/14570027.htm

[UpInArms]

101. SnowJob LIES: Low taxes 'necessary condition' to achieve budget goal

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B5BD5A212%2D1929%2D4BF9%2D85FC%2DABD87CB68D1B%7D&dist=newsfinder&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- A day before President Bush is to sign $70 billion in tax cuts into law, Treasury Secretary John Snow touted the administration's latest tax cut on Tuesday as a "necessary condition" to achieving its goal of reducing the federal budget deficit. Snow said the growth of revenues since 2003 shows that lower taxes on investments do lead to a stronger economy, which in turn leads to more tax revenue. Snow wouldn't say that the tax cuts create more revenue than they lose, but he did say he'd "vote every time" for strong growth and low taxes over the late 1990s version of strong growth and higher taxes. This year the government will borrow about $300 billion, but the budget was balanced in the late 1990s.

Unbalanced thinking leads to unbalanced budgets.

[54anickel]

103. Supply-side, tinkle-down fantasy is alive and well, I see. n/t

[AnneD]

106. It begs the question....

what are the budget goals. If the goal is to totally bankrupt the country and wipe out the middle class, then I say yes, tax cuts are essential. I just want to get that cleared up.;)

[UpInArms]

108. Well, as I understand it, they want to drown it in a bathtub

but they are going to have to dismember it first to make it fit through the doorway. That is why you see them destroy parts at a time, i.e. California (the enron scam) NYC (9/11), military (eternal war), NOLA (FEMA failure) - ad nauseum.

[AnneD]

114. I guess we are pretty screwed ....

here in Houston.

[Kolesar]

73. "payroll taxes" is such a confusing term

Don't rich people earn wages or salaries? Not all of them live off of earnings. Or, are the writers hinting that Rove's analysis makes no account of Social Security and Medicare payroll deductions??

[UpInArms]

76. I believe it is the latter - not taking into account the FICA/Medicare

taxes that are payroll deductions - jmho

[54anickel]

84. I liked it better when Rove was in that little hidy-hole under a rock

somewhere. What coaxed him out anyway? Did Fitz cut him some slack, or are the Repukes so desperate for a message they are willing to risk his ugly puss back in the limelight?

[UpInArms]

85. jmho - but it is the equivalent of Tom DeLay grinning for his mug shot

These people disgust me.

They have no shame, no remorse, no conscience, no morality, no ethics.

[UpInArms]

71. U.S. online help-wanted ads down in April -report

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-16T160413Z_01_N16428552_RTRIDST_0_ECONOMY-HELPWANTED-ONLINE.XML

NEW YORK, May 16 (Reuters) - New online help-wanted postings on major U.S.-based Internet job boards fell in April, a private research group said on Tuesday.

The Conference Board said its measure of online help-wanted advertising volume slipped to nearly 2.26 million last month from about 2.40 million in March. There were about 1.99 million online job postings in February.

"This rate of change is in line with growth rates of other vacancy measures during periods of economic expansion," said Gad Levanon, economist at The Conference Board in a statement. ( :wtf: )

<snip>

Online job ads decreased during April in all nine census regions. The largest decline was in the Middle Atlantic region, comprised of New Jersey, New York, and Pennsylvania, where online job postings fell 10 percent.

...more...

[54anickel]

105. Phfft! Big moves up or down are a good thing - it means we're in a

period of economic expansion. Yeah, whatever Gad. It's got to be those extremely under-employed engineer-types moving from flipping burgers to running computerized cash registers and teller machines. Now they are only somewhat under-employed.

See, it's all good news.

[UpInArms]

82. Derivatives group says court decision may roil mkt

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-16T172139Z_01_N16424948_RTRIDST_0_MARKETS-DERIVATIVES-ISDA.XML

NEW YORK, May 16 (Reuters) - A decision by a U.S. District Court has the potential to undermine the $17 trillion credit derivatives market because it changes the terms of a credit default swap contract, according to a derivatives trade association.

The International Swaps and Derivatives Association, in support of an appeal of the decision by a U.S. District Court in New York, said it shows an "obvious misunderstanding of the mechanics and operation of credit default swaps."

"If this decision is left to stand, it will result in a lack of confidence in credit default swaps and cause tremendous legal uncertainty," the association said.

<snip>

Credit default swaps are insurance-like contracts that protect against a borrower defaulting on its debt. When a borrower defaults, sellers of protection reimburse the protection buyer the full amount insured, in exchange for receiving the defaulted debt.

...more...

[54anickel]

86. NO!!! Not that wire!!!!...

Anyone remember that TV series? Longstreet

[clar8130]

90. Longstreet

LOL, 54anickle -- the blind detective defusing a bomb! At least he was portrayed as having a brain!

As I remember, his dog was named Pax.

[54anickel]

92. Hi Clar8130!!! You're absolutely correct! I'm glad you caught

my rather warpped and dated sense of humor. :hi:

That was a great show, though. I loved Pax, such a beautiful dog. Franciscus wasn't too bad looking either.

[54anickel]

89. The dollar's evil twin: Exploring the Bush bureaucracy's private monetary

system :evilgrin:

http://www.opednews.com/articles/opedne_jane_sti_060516_the_dollar_s_evil_tw.htm

snip>

And economists are predicting another economic crash like the one in 1929. "The crisis won't come immediately," stated Paul Krugman back in 2003. "For a few years, America will still be able to borrow freely, simply because lenders assume that things will somehow work out. But at a certain point we'll have a Wile E. Coyote moment.... Mr. Coyote had a habit of running off cliffs and taking several steps on thin air before noticing that there was nothing underneath his feet. Only then would he plunge."

I put all these facts into my brain, stirred them up and added a few more facts that I stole off of Google. "America's total national income is approximately $2,100 billion a year but our debt is approximately $8 TRILLION." That means that we taxpayers are only making enough salary to pay off less than one percent of our debt. And yet our economy hasn't crashed?

What does THAT mean?

What IS keeping our economy together?

Is there some secret underground world of money that we average Americans know nothing about? Is there some private monetary system that really runs the economy -- and has nothing to do with the "dollar"?

more...

[clar8130]

98. Remember Cheney's remark

He said some years back that "deficits don't matter." He was so cavalier about it. I wondered then, and many times since, just what the hell is going on that we no nothing about.

[54anickel]

100. Guess he'll need to change that remark a bit. Deficits don't matter -

until they do. Of course by then it's too late for us peons and the chickenhawks will just poop on our shoes. :P

[UpInArms]

88. US says examining possible risks from hedge funds

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-05-16T180601Z_01_WAT005567_RTRIDST_0_ECONOMY-TREASURY-HEDGEFUNDS-URGENT.XML

WASHINGTON, May 16 (Reuters) - The U.S. Treasury is studying potential risks to markets or financial institutions that may be posed by the recent growth of hedge funds, Treasury Undersecretary Randal Quarles said on Tuesday.

"While hedge funds provide certain benefits to the financial markets, they can also put stresses on it that need attention," Quarles said in testimony prepared for delivery to a Senate banking panel.

Quarles said hedge funds provide a steady flow of funds to many marketplaces and help spread risks.

But as hedge funds have grown to an estimated more than $1 trillion in assets, they pose risks by using high amounts of leverage or by concentrating their investments in certain areas, Quarles said.

[54anickel]

91. Real worries are forex and hedge funds (We on the same wave-length

this afternoon or what?)


http://www.smh.com.au/news/business/real-worries-are-forex-and-hedge-funds/2006/05/16/1147545325520.html

THIS week's correction is overdue and unsurprising. The only issues of any moment are whether it's very dangerous and whether the fundamentals are still OK. And that leads to two further questions: what are the odds of a hedge fund accident, and has the US dollar's long term decline resumed after a 12 month pause, and will it accelerate?

There is now five times as much invested with hedge funds as when Long-Term Capital Management went bust in 1998 - a bit more than $US800 billion ($1.04 trillion) according to Ray Dalio and Jason Rotenberg at Bridgewater Associates. In 1998 the hedge fund losses totalled about 10 per cent; a similar problem in 2006 would cost about $US80 billion.

If this was the extent of the problem and it was isolated to hedge funds, it would be rocky but not a wreck. However, if it was associated with other problems, such as a mortgage crisis in the US sparked by a housing crunch, that would be a different matter

Between March 1 and May 11 the price of copper rose 80 per cent, which is extremely silly. It was the largest of a collection of commodity price blow-offs driven by hedge funds and speculative long-only funds panic-buying in anticipation of a big upsurge in investor demand for metals on the back of the growth of exchange trade funds. Gold rose 40 per cent, zinc 75, nickel 45, aluminium 38 and tin 20.

Presumably these commodities, along with the prices of Australian resources stocks, are in the process of heading back to long term trend growth, which would see copper, for example, back below $US3 a pound. The damage caused by a generalised 25 per cent commodity price correction, or more, would depend to some extent on the leverage of those funds caught long, and given the secrecy in which the hedge fund industry generally is shrouded it is impossible to know until the flag goes up.

more...

[UpInArms]

93. those exotic financial instruments of death hold a special wavelength

[54anickel]

97. Government to track gold price on the hour (Thailand)

http://www.nationmultimedia.com/2006/05/17/business/business_30004187.php

The Internal Trade Department plans to set up a system to announce the price of gold every hour, using the Hong Kong gold market as a benchmark, to protect consumers from speculation.

Siripol Yodmuangcharoen, director-general of the department, yesterday called a meeting with the Office of the Consumer Protection Board (OCPB) and the Gold Traders' Association (GTA) to seek their cooperation.

The GTA has said it would discuss with its members how to initiate an hourly announcement, keeping in mind it also has to inform gold traders upcountry as well as the ITD.

The ITD together with the OCPB have also agreed to command all gold shops to use a two-digit weight measure instead of the current one-digit system, starting from early next year.

snip>

"The gold price will climb higher than $800 per ounce this year but will not exceed $1,000 per ounce," predicted Jitti Tangsithpakdi, GTA president. A weak US dollar and high speculation in the world's gold market have caused gold prices to jump, according to Jitti. This environment has led many countries to stock up on gold instead of US dollars.

The expectation of inflation in the long run has prompted the gold price to soar. As a result, consumers and investors should buy gold as a long-term investment rather than for speculation, according to Jitti.

more...

[TrogL]

109. Loonie Watch

(see below)

Highlights

Current:



30-day and 90-day vs greenback:



30-day vs. Euro, Yen, UK Pound and Swiss Franc




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

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

Up-to-the-minute graph: http://quotes.ino.com/chart/?s=CME_CD.H06&v=s

Current TSE



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

2006-04-17 Monday, April 17 0.87321 USD
2006-04-18 Tuesday, April 18 0.87558 USD
2006-04-19 Wednesday, April 19 0.87974 USD
2006-04-20 Thursday, April 20 0.878272 USD
2006-04-21 Friday, April 21 0.879353 USD
2006-04-24 Monday, April 24 0.879275 USD
2006-04-25 Tuesday, April 25 0.883626 USD
2006-04-26 Wednesday, April 26 0.887233 USD
2006-04-27 Thursday, April 27 0.890076 USD
2006-04-28 Friday, April 28 0.892618 USD
2006-05-01 Monday, May 1 0.898473 USD
2006-05-02 Tuesday, May 2 0.903424 USD
2006-05-03 Wednesday, May 3 0.903179 USD
2006-05-04 Thursday, May 4 0.903669 USD
2006-05-05 Friday, May 5 0.903261 USD
2006-05-08 Monday, May 8 0.899604 USD
2006-05-09 Tuesday, May 9 0.907276 USD
2006-05-10 Wednesday, May 10 0.908678 USD
2006-05-11 Thursday, May 11 0.910001 USD
2006-05-12 Friday, May 12 0.90212 USD
2006-05-15 Monday, May 15 0.897505 USD
2006-05-16 Tuesday, May 16 0.899928 USD

Current values

Last trade 0.9036 Change +0.0049 (+0.55%)
Previous Close 0.8986 Open 0.8991
Low 0.8990 High 0.9043


Blather (from http://quotes.ino.com/exchanges/?r=CME_CD)

The June Canadian Dollar was slightly lower overnight as it extends the decline off last week’s high. Stochastics and the RSI have turned bearish signaling that a short-term top might be in or is near. Closes below the 20- day moving average crossing at .8963 are needed to confirm that a short- term top has been posted. Overnight action sets the stage or a steady to lower opening in early-day session trading.


Analysis

Vacation's over.

The loonie dropped a bit compared to all currencies but today's it's on the rise. I've added some new graphs to the top because the situation has become so complicated that simple comparisons to the greenback don't do the situation justice.

I got all panicky about the state of the US economy and what it might do to the Canadian economy and stock market, in particular some stock that I own, so I had a chat with someone in the business who must remain nameless.

He said that the Canadian economy's fundamentals are based primarily upon commodities at the moment, especially oil and other natural resources and is sufficiently diverse to weather most problems down south. He said my particular stock would be fine even though it's in another industry.

When I asked about the US economy, he just shuddered and looked ill.

[54anickel]

112. Bwahahaha! "Just shuddered and looked ill". Yep, that sounds like

the common and proper response to the question of the US economy.

[UpInArms]

111. 3:50 EST heading for the close and the door

Dow 11,410.76 -18.01 (-0.16%)
Nasdaq 2,228.15 -10.37 (-0.46%)
S&P 500 1,291.93 -2.57 (-0.20%)
10-Yr Bond 5.105 -0.48 (-0.93%)

NYSE Volume 2,166,312,000
Nasdaq Volume 1,867,428,000

3:30 pm : Market continues to weaken heading into the closing bell, spearheaded by a 1.1% decline in Technology. Hardware (-2.9%) continues to the biggest thorn in tech's side, led by a 2.2% decline in Hewlett-Packard (HPQ 30.92 -2.24) ahead of a Q2 (Apr) earnings report a week removed from rival Dell's (DELL 23.79 -0.56) disappointing guidance. Semiconductor is also under pressure, but not on account of uncertainty ahead of Applied Materials' (AMAT 17.70 unch) report after the bell as expectations for bookings appear to be skewed toward the high end of AMAT's previous 15-20% guidance.DJ30 -6.47 NASDAQ -9.53 SOX -0.6% SP500 -1.93 NASDAQ Dec/Adv/Vol 1447/1582/1.73 bln NYSE Dec/Adv/Vol 1468/1737/1.44 bln

3:00 pm : Stocks continue to trade near afternoon lows, albeit around the unchanged mark, as investors remain cautious ahead of tomorrow's CPI report. Economists are currently forecasting the core CPI to rise 0.2%, but should April's data show a gain similar to the 0.3% in March, the financial markets could sell off. Meanwhile, Treasuries continue to trade as if core inflation remains well contained, since the yield on the 10-yr note (+12/32) is still near session lows around 5.10% going into the close.DJ30 -4.80 NASDAQ -6.17 SP500 -1.16 NASDAQ Dec/Adv/Vol 1378/1619/1.57 bln NYSE Dec/Adv/Vol 1424/1722/1.31 bln