STOCK MARKET WATCH, Wednesday February 7

[ozymandius]

Wednesday February 7, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 712 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2235 DAYS
WHERE'S OSAMA BIN-LADEN? 1939 DAYS
DAYS SINCE ENRON COLLAPSE = 1899
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 7
Enron execs conveniently deceased = 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 February 6, 2007

Dow... 12,666.31 +4.57 (+0.04%)
Nasdaq... 2,471.49 +0.89 (+0.04%)
S&P 500... 1,448.00 +1.01 (+0.07%)
Gold future... 658.70 +2.60 (+0.39%)
30-Year Bond 4.87% -0.04 (-0.81%)
10-Yr Bond... 4.77% -0.04 (-0.89%)






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. Today's Market WrapUp

The Home Builders
BY FRANK BARBERA, CMT

“Ready for the Next Leg Down in the Great Bear”

In last week's update, we spent a great deal of time discussing the Financial Sector and what appears to be signs of trouble brewing just below the surface. Sub-prime lenders, the brokerage stocks, these are two areas that speak volumes about the recent cycle. To be sure, the growth in credit that has been accelerating at an increasingly exponential rate and has been THE key driver in creating the perceived wall of endless liquidity responsible in small part for underpinning the rapid ascent in global financial markets. Yet, there are other places to look for clues.

In today’s report, we turn our attention to the recent rally in Home Building stocks to see what messages they could be sending. Of course, few sectors had a better run in recent years than the high flying homebuilders where, despite a recent rally, the fundamental news still sounds bleak. Just this week, the largest US homebuilder, DR Horton (DHI) said that net sales order in January continued to fall compared to a year ago, and that the cancellation rate, at 33%, was about the same as the prior horrific December quarter. As it stands right now, sales cancellations and inventories of unsold new homes are at record levels while at the same time, there is building evidence of spreading price declines. Back in December, the national Median Home Price was reported at $235,000 for a single family home, down 8.56% from its peak in February 2006 at $250,800. In addition, there is little substantive evidence to report at this point in time that would argue any kind of compelling case for a potential low in Housing. Historically, the housing market has been very sector cyclical, often recording important bottoms on a number of indicators at roughly the same levels. For example, Building Permits, New Housing Starts, the Ratio of Residential Fixed Investment to GDP, all of these have bottomed in the same zone during each of the last 6 or 7 recessions. Are any of them at those levels now? Absolutely not. Another good measure, an inventory gauge called “The Ratio of Houses For Sale to Houses Sold,” is spiking up sharply, indicating a housing recession underway.

-cut-

What’s more, the primary trend charts for the Housing sector do not look promising. Let’s look at perennial high flier, NVR Corp (NVR) whose business is centered around two divisions, one in homebuilding, the other in mortgage banking. As is plainly evident in the chart below, between December of 2004 and May 2006 the stock constructed a massive Head and Shoulder Reversal Top with a neckline at the $715 level. For those unfamiliar with these kinds of patterns, by far and away the majority, feature the distinctive “neckline” overshoot coming down on the right side of the head. This is a classic portrait of a major reversal top, and following the completion of the pattern, prices broke down violently. Since then, prices have been in recovery mode, snapping back up to the zone of the former neckline, a major resistance area.

-cut-

Another piece of technical evidence which is quite striking is the miserable “relative performance” the group as a whole has shown in the face of a very robust stock market. In the next chart, I show my own Index of Homebuilding stocks in the top clip, and in the bottom clip, the Relative Strength Ratio of Homebuilders to the S&P. Time and time again, we have heard one Wall Street stooge after another come out and tell us that the “housing market has already hit bottom,” that an improvement is “right around the corner” etc… OK, if that is true, how come Wall Street fund managers haven’t piled back into these depressed stocks? How come the relative strength ratio line for homebuilders versus the S&P is dead flat during one of the most powerful stock market rallies in recent years? Why? – Aha!!! – The only answer that comes to mind on this score is that Wall Street doesn’t even believe its own rhetoric where homebuilders are concerned, fair warning to the rest of us to stay away, -- far, far, far away.

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

[ozymandius]

2. Today's Reports

8:30 AM Productivity-Prel Q4
Briefing Forecast 1.5%
Market Expects 2.0%
Prior 0.2%

10:30 AM Crude Inventories 02/02
Briefing Forecast NA
Market Expects NA
Prior 2684K

3:00 PM Consumer Credit Dec
Briefing Forecast $8.0B
Market Expects $6.5B
Prior $12.3B

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

[UpInArms]

11. productivity numbers (check out the revision to prior number)

12. U.S. Q3 productivity revised to -0.1% vs. 0.2 previously
8:30 AM ET, Feb 07, 2007 - 11 minutes ago

13. U.S. Q4 manufacturing productivity up 2.2%
8:30 AM ET, Feb 07, 2007 - 11 minutes ago

14. U.S. 2006 productivity up 2.1%, unit labor costs up 3.2%
8:30 AM ET, Feb 07, 2007 - 11 minutes ago

15. U.S. Q4 real hourly compensation up 7.1% as prices fall 2.2%
8:30 AM ET, Feb 07, 2007 - 11 minutes ago

16. U.S. Q4 unit labor costs up 1.7% vs. 2.0% expected
8:30 AM ET, Feb 07, 2007 - 11 minutes ago

17. U.S. Q4 productivity up 3.0% vs. 2.4% expected
8:30 AM ET, Feb 07, 2007 - 11 minutes ago

[54anickel]

24. U.S. Productivity Increase 3%; Labor Costs Rise 1.7% (Update1)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aHJ2jpe93WMg&refer=home

Feb. 7 (Bloomberg) -- U.S. worker productivity accelerated more than forecast last quarter and labor costs grew at a slower pace, suggesting wages may pose less of an inflation threat.

The 3 percent gain in productivity, a measure of how much an employee produces for each hour of work, followed a revised 0.1 percent decline in the third quarter, the Labor Department said today in Washington. A measure of labor costs increased at a 1.7 percent pace after rising at a 3.2 percent rate.

The data make it easier for the Federal Reserve to keep interest rates unchanged in coming months after policy makers said inflation remains the biggest threat to the expansion. Gains in efficiency take some of the pressure off businesses to raise prices to cushion higher labor expenses that account for two-thirds of their costs.

``The Fed must be very happy because this is very good news on the inflation front,'' said Nariman Behravesh, chief economist at Global Insight Inc. in Lexington, Massachusetts. ``Employment growth was strong and productivity was strong, and on top of that we had a fairly modest increase in labor costs.''

snip>

Some Fed policy makers say productivity is still strong enough to contain inflation as wages rise. In the 1990s, former Fed Chairman Alan Greenspan championed the idea that higher productivity rates would keep a lid on inflation even as the U.S. economy was gaining strength and unemployment was low.

There are ``pressures on productivity, but I think businesses, because of their strong profits, can absorb some of that,'' Fed Bank of Kansas City President Thomas Hoenig said in a speech last month in Kansas City, Missouri. ``As productivity improves, the economy will move forward.'' :eyes:

more...

[54anickel]

23. Oil edges up as US distillate stocks and crude inventories decline

http://www.forbes.com/business/feeds/afx/2007/02/07/afx3403867.html

LONDON (AFX) - Oil prices edged up after government data showed US distillate stocks, which include the key winter heating oil fuel, declined by more than expected last week.

Distillate stocks dropped by 3.7 mln barrels against analysts' expectations for a 3.2 mln barrel fall.

The weekly government report also showed that crude oil inventories declined by 400,000 mln barrels against expectations of a 1.4 mln-barrel gain.

bit more...

[ozymandius]

3. Oil prices rise

VIENNA, Austria - Oil prices rose Wednesday as bitter winter weather in the U.S. Northeast persisted ahead of a weekly U.S. petroleum inventories report.

-cut-

Light, sweet crude for March delivery rose 30 cents to $59.18 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. Nymex crude rose as high as $59.99 a barrel on Tuesday before settling below $59 on the Nymex.

Brent crude rose 35 cents to $58.94 at midday Wednesday on London's ICE commodities exchange.

-cut-

Strong winter demand for heating fuels is expected to show a decline of 2.9 million barrels of distillate stocks on average in U.S. Department of Energy figures, according to a Dow Jones Newswires survey of energy analysts.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

4. BP profit drops 22% in the fourth quarter

LONDON (MarketWatch) -- BP on Tuesday posted a 22% profit decline in the fourth quarter and scaled back its production outlook for the coming years as it operates more slowly in an effort to avoid deadly accidents.

Excluding the effects of energy price changes on unsold inventory, and its profit would've dropped 12% to $3.895 billion. It also recorded $152 million in charges. Analysts were expecting an adjusted profit of around $3.9 billion.

For the year, BP's adjusted profit rose 15% to $22.25 billion, a company record in a year with two oil spills in Alaska, a delay in opening a key Gulf of Mexico operation and allegations of improper trading in the U.S.

It's going to pay a dividend of 61.95 cents per U.S. share, up 10% from a year ago, though that's down for U.K. investors who get the payment in sterling. The company has repurchased $1 billion in shares since the start of 2007.

http://www.marketwatch.com/news/story/bp-posts-22-profit-decline/story.aspx?guid=%7BDC690CCE%2D0913%2D4664%2D9C58%2D79D626643868%7D

[ozymandius]

5. Gasoline prices up in most of U.S.

Pump prices headed higher across most of the country over the last week, with costs jumping the most in the Midwest and along the West Coast, a government survey showed Monday.

The nation's average retail cost of gasoline marked its first increase of the year, rising to $2.191 on Monday for a gallon of self-serve regular, up 2.6 cents from the previous week, according to the Energy Department's weekly survey.

In California, the average rose 4.4 cents to $2.535 a gallon Monday, ending a three-week string of declines.

Among the larger increases: Cleveland, where the average pump price climbed 13.5 cents to $2.229 a gallon, and Chicago, where the average spurted up 9.5 cents to $2.256. The average cost of gasoline in Los Angeles increased 6.1 cents to $2.499, while San Francisco saw a 5.2-cent boost to $2.662. In Seattle, the average pump price jumped 5.4 cents to $2.449.

http://www.latimes.com/business/printedition/la-fi-gas6feb06,1,2514801.story

[ozymandius]

6. European panel plans limits on emissions

The European Commission on Wednesday proposed binding rules to force car makers to cut carbon-dioxide emissions from new cars sold in the European Union by 2012.

The plan, which faces strong opposition from the car industry, foresees the drafting of lower emissions limits -- of 130 grams of CO2 per kilometer -- for new cars sold or imported into the EU by 2012.

It also calls for increasing the use of biofuels and cleaner fossil fuels, meant to tackle global warming.

New rules would be introduced to cut red tape and simplify safety and technical rules for car manufacturers, including new pro-environment rules on developing cleaner engines, minimum standards on air conditioning units and better traffic management rules by EU member states, according to the plan.

http://www.businessweek.com/ap/financialnews/D8N4RR886.htm

[ozymandius]

8. Bids too low, oil assets off block

CALGARY–In a clear sign that undeveloped oil-sands leases are no longer fetching record-shattering prices, Petro-Canada pulled its suite of non-core properties off the market yesterday.

Calgary-based Petro-Canada said the five properties up for sale attracted "considerable attention," from North American and offshore companies, but the bids weren't high enough.

"These are high quality oil-sands assets. We put a high value on them, which was not met by the market," Neil Camarta, Petro-Canada's senior vice-president of oil sands, said in a release.

-cut-

Petro-Canada put the leases up for sale in November, hiring British-based Harrison Lovegrove to manage the auction process – a move that suggested the company was hoping to spark wide international interest.

http://www.thestar.com/Business/article/178871

[ozymandius]

7. Hasbro Recalls Easy Bake Oven

It’s not a self-destructing laptop battery, but it’s enough to cause a stir in the toy community and disrupt Hasbro stock.

Hasbro, purveyor of the ages-old Easy Bake oven, announced the recall of 985,000 of the electric ranges, sold between last May and this month, on reports that children were getting their fingers or hands caught in the product, including five reports of burns.

In midday trading Tuesday, shares of the Pawtucket, R.I.-based toy company fell 1.1%, or 32 cents, to $28.51.

The Easy Bake ovens sold at Toys R Us, Wal-Mart, Target, KB Toys and other retailers nationwide from May 2006 through February 2007 are part of the recall.

http://www.forbes.com/markets/2007/02/06/hasbro-recall-oven-markets-equity-cx_mk_0206markets19.html

[AnneD]

13. Morning Marketeers....

:donut: and lurkers. I got many Christmas gifts that were ok-but the one I really wanted but never got was an easy bake oven. But by the age of 7 I was using the real thing it became a mute point in our house. Mom was of the mind to give you the real thing and do the real work-therefore pretending to play house did not have the same charm of me as it might for other girls.

I did love to pretend to be a Nurse. Sadly, my daughter felt the same way about Nursing as I did playing house. She will admit, however, that I did the best Halloween makeup and wounds (when you have access to resources.....). She also thinks Nursing warps your humour and makes you a bit less sympathetic to kids routine injuries. I could do an entire thread about that one and so could she. I have to agree with her on that. She has to really be sick to get sympathy. But as bad as that may seem-when she is sick....I'm the first one she calls-so I guess I must not be so bad.

I guess Hasbro stocks will be flambeed for a while. I hope investors don't get burned by the law suits, but this quarters profits are up in smoke at any rate...

Happy hunting and watch out for the bears....

[Roland99]

47. Sell ya one, cheap! :-)

:rofl:

[Roland99]

46. Just got off of the phone with them.....

Went thru the automated system and recorded my name and address. Got a message at the end that the kit is on back-order.


Wheeee!!

[AnneD]

53. Any one for...

Baked Alaska...Holy global warming.

[ozymandius]

9. Budget Would Halt Some Land Conservation

SIOUX FALLS, S.D. (AP) -- President Bush's proposed budget would put a land conservation program that protects some 35 million acres on hold in favor of boosting corn production to meet the growing demand for ethanol.

While the proposal might help lessen the country's dependence on oil, a pheasant hunting and conservation group was quick to criticize the trade-off and a state biologist said the loss of the program could put some farmers in a financial bind.

Agriculture Secretary Mike Johanns said his agency would offer no new Conservation Reserve Program enrollments in 2007 and 2008.

-cut-

Dave Nomsen, vice president of governmental affairs for Pheasants Forever, said he understands that $4-a-bushel corn is a cause for concern, but he argued that putting to use land that would otherwise be set aside for conservation is not the answer.

http://biz.yahoo.com/ap/070207/ethanol_conservation.html?.v=2

[texpatriot2004]

10. K & R nm

[UpInArms]

12. dollar watch

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

Last trade 84.80 Change +0.03 (+0.04%)

US Dollar Put Into Motion On Paulson Comments, Bernanke Mum On Policy

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar_Put_Into_Motion_1170805239292.html

US Dollar
With no US data on tap, the dollar did not have enough momentum to extend its strength against the Euro and British pound. Federal Reserve President Bernanke spoke primarily about income inequality today and did not make any comments on monetary policy. Instead US Treasury Secretary Paulson’s was the one who moved markets. This is an interesting departure from the time when Alan Greenspan’s words would trigger currency movements while John Snow’s comments didn’t. Paulson was open and direct this morning when he said that the yen is traded in an open and competitive market place and even though some do not like where the Yen is trading, it is the US’ job to fight for free competitive markets. This is a clear indication that the US will not support official criticism of yen weakness. The Japanese Yen has sold off against nearly all of the high yielders except for the US dollar where we continue to see profit taking. For more on how the G7 meeting could impact the Yen, check out our Special Report. Meanwhile the EUR/USD continues to range trade and we do not expect any breakout movements before the ECB monetary policy meeting on Thursday. US productivity, unit labor costs and consumer credit could provide for some mild dollar driven market activity tomorrow. Productivity and labor costs are expected to increase strongly while consumer credit is expected to contract.

...more...

[Ghost Dog]

15. Yen softens after Paulson comments

http://asia.news.yahoo.com/070207/afp/070207125409eco.html

LONDON (AFP) - The yen pared recent gains against the dollar after US Treasury Secretary Henry Paulson signalled that he would not pressure Japan to bolster its currency.

The euro meanwhile edged closer to 1.30 dollars ahead of Thursday's interest rate decision from the European Central Bank (ECB).

The euro firmed to 1.2985 dollars in early European trading Wednesday from 1.2979 dollars late in New York on Tuesday. The dollar climbed to 120.46 yen from 120.09 yen on Tuesday.

The Japanese currency has rebounded from last week's four-year lows against the dollar on concerns that world finance chiefs might seek to talk up the value of the yen at the weekend G7 meeting starting Friday.

Paulson told Congress there was no evidence of Japanese intervention to unfairly depress the yen's value and that the currency was traded on competitive markets. While Paulson reiterated concerns about the value of the yen and the Chinese yuan, he suggested no particular course of action to address the issues.

Dealers said the yen's recent rally was therefore likely to be only temporary.

"There is a widespread consensus now expecting no reference to the yen following the repeated comments from US Treasury Secretary Paulson that the yen is a free-floating currency," said Derek Halpenny, senior currency economist at The Bank of Tokyo-Mitsubishi.

In the run-up to the meeting, much debate has been focused on the declining value of the yen, which penalises eurozone exports. And the European members of the G7 have been pushing for the matter to be discussed. But the US has indicated that it would not take part in any concerted effort to drive the yen higher.

Elsewhere, the ECB was widely forecast to leave eurozone borrowing costs unchanged at 3.50 percent on Thursday. Bank of England policymakers also reveal their latest monetary policy decision on Thursday and are expected to keep rates at 5.25 percent -- the same level as US borrowing costs.

/...

[Ghost Dog]

16. Tempers could fray over weak yen at G7

http://asia.news.yahoo.com/070207/afp/070207121835eco.html

FRANKFURT (AFP) - Tempers could fray in the palatial Villa Huegel mansion in Essen, Germany this weekend, venue of a G7 finance meeting, as the world's three major economic blocs fail to agree on a common line on the weakness of the Japanese yen.

...

But in the run-up to the meeting, it has been the declining value of the yen that has dominated the headlines, with Europe pressing for a way to orchestrateg a rise in the Japanese currency, while the US and Japan insist that the weak yen is not a problem.

Europe suspects Tokyo of deliberately keeping its currency weak via low interest rates so as to make Japanese exports more competitive.

The yen has fallen by 10 percent against the euro in the past year. And in a new study, economists at Societe Generale calculate that the euro has risen by 50 percent against the yen since 2002, a development the analysts described as "unsustainable."

...

Another point of friction in Essen could be Germany's campaign for greater transparency in so-called hedge funds, an issue the United States and Britain have so far been reluctant to act on.

Lehman Brothers analyst Michael Hume said that while the credibility of the G7 would be damaged by simply an empty expression of concern about the yen's weakness, hedge funds was certainly an issue where the body could come up with concrete policy action.

"This is an area where the G7 has the capacity to act -- in global markets it reigns supreme," the analyst said. "But, as with currencies, coordinated policy action would appear unlikely at this stage," he concluded.

/...

[54anickel]

36. G7 ministers to scrutinise hedge funds

http://www.ft.com/cms/s/3db4a4e4-b650-11db-9eea-0000779e2340.html

Germany has put hedge funds at the top of its agenda for this week’s meeting of the Group of Seven finance ministers in Essen, a senior finance ministry official said yesterday, though he stressed Berlin wanted more transparency, not more regulation, of the sector.

Germany, which holds the Group of Eight presidency this year, wants to start a debate about how to improve regulators’ knowledge of hedge fund activities, which it thinks present a potential threat to the stability of the international financial system.

“We want to put the facts on the table, see whether we all agree on them, how the participants weigh the possible risks and start a discussion on how we want to go ahead,” Thomas Mirow, deputy German finance minister said.

While Berlin originally hoped to reach an agreement this year on instruments to improve regulators’ monitoring of the opaque sector, it has considerably lowered its ambitions in the face of US and UK misgivings about regulating hedge fund activities, as reported by the FT late last year.

snip>

A senior US official said Washington is less inclined than Berlin to focus on hedge funds per se. "We tend to define this topic more broadly as an issue of monitoring global capital flows and better understanding systemic risk," he said, adding: "A hedge fund is just a business model."

The official said the US has not changed its view on hedge fund regulation. "We continue to believe that market discipline and working through counterparts is the best way to think about and address systemic risk," he said.

However, he also suggested the US does keep an open mind on hedge fund- related issues, constantly evaluating its position, for instance, through the high-level president's working group on financial regulation. "We will continue to look at this issue . . . and share views and share notes where appropriate," he said.

more...

[Ghost Dog]

17. Dollar rallies in lower 120 yen as G-7 speculation droops

http://asia.news.yahoo.com/070207/kyodo/d8n4p5lo0.html

(Kyodo) _ The U.S. dollar made a late rally after fluctuating in a narrow range at the lower 120 yen level Wednesday in Tokyo as investors increasingly believed that the upcoming Group of Seven financial meeting would not make an official reference to the weak yen.

...

European officials have repeatedly claimed the meeting of G-7 finance ministers and central bank governors from advanced economies should express concerns over the recent weakness of the yen. This has pushed the yen to its highest levels in a month at around 120.00 to the dollar and 155.40 to the euro.

But the yen limited its gains during the day following Tuesday's comments by U.S. Treasury Secretary Henry Paulson, who indicated that the weak yen would not be a key agenda item of the G-7 meeting on Friday and Saturday in Germany.

"I understand some people might not like where (the yen is) trading," Paulson said in testimony before the House Ways and Means Committee. "But it's my job to fight for open competitive markets and I believe the yen is trading in an open competitive market based on underlying economic fundamentals."

Yuichiro Harada, senior currency trader at Mizuho Corporate Bank, said, "Market participants now price it in by 80 to 90 percent that the meeting will discuss the weak yen but not put it in its statement."

He said the market is rather shifting its focus to whether the dollar will end Japan's current fiscal year through March above or below 120 yen. If the dollar finishes above the level, the market may increasingly expect an acceleration of yen-selling over the rest of this year, he said.

/...

[Ghost Dog]

19. Sterling down vs euro before BoE rate decision

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=ukPoundRpt&storyID=2007-02-07T154135Z_01_L07472405_RTRIDST_0_MARKETS-STERLING-CLOSE.XML

LONDON, Feb 7 (Reuters) - Sterling edged lower against the euro on Wednesday, following weaker-than-forecast industrial output data and ahead of the Bank of England's interest rate decision on Thursday.

UK industrial output unexpectedly contracted in December as mild weather and increased imports dented domestic gas production, though analysts said this was unlikely to affect the outlook for monetary policy.

The BoE's Monetary Policy Committee is widely expected to leave rates on hold at 5.25 percent on Thursday but after being wrong footed by its rate increase last month, traders are not entirely dismissing the MPC's ability to surprise again. Recent data, including inflation and retail sales figures, suggest interest rates may go up again and markets are pricing in two further interest rate hikes this year. Analysts say these expectations leave sterling vulnerable to a correction. "If next week's quarterly inflation report from the Bank of England in any way hints that two rate hikes are unrealistic, the market would have to move to price the rises out which would be sterling negative," said Naeem Wahid, currency strategist at Halifax Bank of Scotland.

However, others take the view that the environment will continue to be sterling positive. "Rate hike expectations are going to remain in place ... and overall, the picture is very supportive -- flow-wise too, with talk of merger and acquisition activity," said Ian Stannard, senior currency strategist at BNP Paribas.

BNP expects sterling to move above the psychologically key $2 mark for the first time in 14 years in coming weeks.

At 1528 GMT, the euro was up 0.3 percent at 66.04 pence <EURGBP=>. The pound was steady on the day at $1.9694 <GBP=>.

/..

[54anickel]

20. More rate hikes may be needed, Plosser says

'Too soon to declare victory,' according to Philly Fed chief

http://www.marketwatch.com/news/story/more-rate-hikes-may-needed/story.aspx?guid=%7BBCD24FDE%2DB517%2D422E%2D8D4A%2DB999EC18B5C8%7D&siteid=yhoo&dist=yhoo

WASHINGTON (MarketWatch) -- The Federal Reserve may have to hike short-term interest rates in coming months to ensure that inflation continues to decline, said Charles Plosser, the president of the Federal Reserve Bank of Philadelphia.

Late last year, Plosser said he thought the current federal funds rate of 5.25% might be sufficient to keep inflation in check.

But as the economy has strengthened in recent weeks, "that scenario becomes less likely," Plosser said in a speech prepared for delivery to the Greater Philadelphia Chamber of Commerce.

"Additional monetary policy action may be needed to keep us moving along the path to price stability," Plosser said. Read full speech.

snip>

"My best guess is that the economy will continue to perform well in 2007," Plosser said.

Plosser also said he expects gradual improvement in the housing sector over 2007.

more...

[Ghost Dog]

21. Swiss franc near 4-wk high vs euro on SNB comment

http://asia.news.yahoo.com/070207/3/2x2ga.html

ZURICH, Feb 7 (Reuters) - The Swiss franc maintained most of its recent gains versus the euro on Wednesday after the Swiss National Bank warned against possible inflation from the weak currency, triggering speculation about a more aggressive tightening ahead.

...

The franc has been under pressure as investors use the franc to fund investments in higher-yielding currencies as Switzerland's interest rates are among the lowest in the world.

Markets expect the SNB to continue its campaign of 25 basis point rate hikes but recent comments have raised doubts. "The risk of a 50 basis points hike in March has increased recently as the comments from the SNB seem to have less of an effect on the franc compared to last year, but our main scenario is still a 25 basis points hike", Thomas Herrmann from Credit Suisse said.

After the franc slipped to an 8-year low against the euro at 1.6262 late in January the SNB has stepped up its rethoric and Hildebrand added another warning to markets. "I regard it as my duty to remind export firms that we're not living in a fixed foreign exchange rate environment," Hildebrand said in the interview. "If the economy continues to develop in a robust manner, we think further steps to normalise interest rates are needed," Hildebrand said.

A further decline of the seasonal adjusted Swiss unemployment rate to 3 percent added to an overall favourable picture of the Swiss economy.

/..

[54anickel]

28. Today's Pfenning - Rate Talk Drives $ Down

http://www.kitcocasey.com/displayArticle.php?id=1212

snip>

You see, dear reader, it simply comes down to whether the central bank has a desire to provide price stability or not... Obviously, we can draw a line in the sand on this one, eh? The central banks of the European Union, U.K., Sweden, Norway, Switzerland, Australia and New Zealand all stand on the side of the line that designates "PROVIDING PRICE STABILITY"... And the Fed and Treasury stand on the other side of the line!

Someone asked me about Iceland yesterday... And I admit to being somewhat remiss in talking about Iceland lately... My bad! However, it wasn't as though I was hiding "bad news"! No! The Icelandic kroner has been stealth-like recently, but all good! Here are my thoughts on whether the kroner can maintain this strength...

As long as the Emerging Markets don't go into a meltdown... And the carry trade continues to push buyers into the high-yielding currencies like kroner and kiwi, the kroner should remain well bid... Of course this is not to say this is a one-way trade... Or that owning kroner is without risk...

Get out the hand-held mirror and put it up against the Icelandic kroner and you'll see Japanese yen in the mirror's reflection... As long as the carry trade exists... Yen will be offered, and that's what keeps the yen weak... Of course the Bank of Japan could go a long way toward removing the yen's weakness by raising interest rates... But that just doesn't look as though it is going to happen anytime soon...

Today, we'll see the color of the latest U.S. Productivity report... Longtime readers know how much I dislike this report, because of the nature of the report... It basically implies that workers work harder for the same pay when productivity is strong. Productivity was down in the 3rd QTR... So, I expect it to have rebounded in the 4th QTR... When productivity is strong, the Fed uses the result as an indication of no wage pressures in the pipeline... So... A strong productivity would actually be dollar negative... But who knows which way the traders end up taking this one!!

more...

[54anickel]

37. Tense times ahead as central banks end easy money

http://today.reuters.com/news/articlenews.aspx?type=reutersEdge&storyID=2007-02-07T123454Z_01_EDW584385_RTRUKOC_0_US-ECONOMY-MONETARY.xml&from=business

PARIS (Reuters) - Life is likely to become a lot tougher for financial markets as central bankers press ahead with weaning the world economy off rock bottom interest rates.

Central bankers are trying to persuade the world that inflation remains a danger and this campaign has provoked conflict with politicians, especially in the euro zone and Japan.

For a long time central bankers were heroes who revived the financial system with shots of liquidity after a series of shocks including the dot-com collapse, the 2001 attacks on the United States and the bursting of Japan's bubble economy.

snip>

Globalization and the emergence of a vast pool of low-cost labor has made things more sensitive too. Central bank calls for workers to refrain from demanding big pay rises in the name of inflation-control do not go down easily with politicians and their electorates, notes Posen.

snip>

When share prices touched new highs this week, some people in the financial markets were wary.

We've got to think: what's next?" said Teun Drasisma, an equity strategist at Morgan Stanley. "And what's next is, I think, there is upward rate pressure. We think it's quite a dangerous period in the next six months."

more...

[Ghost Dog]

14. Tokyo stocks fall, led by selling of exporters on a lull in yen fall

http://asia.news.yahoo.com/070207/kyodo/d8n4oh180.html

(Kyodo) Tokyo stocks fell Wednesday, led by selling of export-oriented issues in response to the recent lull in the yen's depreciation against the U.S. dollar.

The 225-issue Nikkei Stock Average lost 114.54 points, or 0.66 percent, to 17,292.32. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 4.06 points, or 0.23 percent, to 1,728.36.

The market performed poorly from the outset of trading as export-led high-tech issues, such as Canon and Kyocera, came under selling as the yen's fall against the dollar had come to a lull.

The dollar, which hit a four-year high of 122.20 yen on Jan. 29, has been trading at the lower 120 yen levels in recent trading.

In addition, transactions related to Nikkei index futures affected the market as futures trading is active ahead of the monthly settlement of options contracts Friday, brokers said.

...

Brokers said investors refrained from actively purchasing stocks ahead of potentially market moving events such as December Japanese machinery orders, due out Friday, and a meeting of Group of Seven financial leaders Friday and Saturday in Germany.

/...

[54anickel]

18. Market Mania in Crude Oil, Base Metals, Tokyo Gold, and the Yen

http://www.sirchartsalot.com/article.php?id=52

The name “Einstein” is synonymous with great intelligence and genius. Albert Einstein was named Time magazine’s "Man of the Century,” because he transformed humankind’s understanding of nature on every scale, from the smallest to that of the cosmos. Einstein’s theory of relativity is embodied in all motion throughout the universe, and the nature of energy, matter, motion, time, and space.

Unfortunately, Einstein didn’t take a fancy to studying the daily motion of commodity and stock markets, where wild and erratic gyrations often seem to have no logical explanation. Why did the zinc market soar nearly 400% due to fast shrinking supplies, only to surrender a third of its gains, over the past two months? How do some copper miners defy the laws of gravity and climb to record highs, even after the price of copper has dropped by almost 50% below its all time highs?

Newtonian physics might explain the 35% slide in crude oil to as low as $50 /barrel since July 2006. But how did oil prices bounce by $10 /barrel towards $60 /barrel over the past two weeks? The DJI hasn’t suffered a 2% correction since July, its longest such streak of resiliency since 1965. How does the Dow Jones Industrials (DJI) defy the law of gravity? How did Tokyo gold prices rise by 75% from 18-months ago, if Japan’s official CPI is only 0.3% higher from a year ago?

Answers to these questions, that can withstand the test of time, are tough to figure out. Fortunately, Einstein did leave behind a treasure chest of insightful quotes and wisdom that can help traders to cope with the schizophrenia of commodities and the mania of global stock markets. When trying to understand the mood of the markets on any given day, remember some of Einstein’s pearls of wisdom!

“Education is what remains after one has forgotten everything he learned in school,” said Einstein.

Crude oil has been on a wild rollercoaster ride for the past 18-months. Climbing in an orderly fashion from around $50 per barrel until the spot price of West Texas Sweet peaked at a record high of $78.40 per barrel on July 14th. Then over the next six months, crude oil began a 35% slide, which might have made sense to students of physics, who believe that what goes up, must eventually come down.

But the recent behavior the crude oil market doesn’t conform to the classic laws of supply and demand. Crude oil traders focus a lot of their attention each week on the amount of oil held in storage by Big-Oil for clues about the future direction of oil prices. Yet since October 2005, crude oil prices have been acting counter-intuitively, climbing higher when crude oil supplies were rising to 8-year highs of 347 million barrels, then tumbling lower when supplies were shrinking.

Thus, students of Economics 101 should not trade crude oil based on the Law of Supply and Demand taught in college. Instead, in order to trade profitably in the brave new world of the crude oil markets, economists must switch to psycho-analysis to predict future prices. Don’t hesitate to make the change-over. “Anyone who has never made a mistake has never tried anything new,” Einstein said.

more...

[54anickel]

22. 11:14 and everybody's happy

Dow 12,692.19 25.88 (0.20%)
Nasdaq 2,493.41 21.92 (0.89%)
S&P 500 1,451.90 3.90 (0.27%)
10-yr Bond 4.7510% 0.0140
30-yr Bond 4.8600% 0.0100
NYSE Volume 848,973,000
Nasdaq Volume 774,291,000

11:00 am : The indices are extending their reach to the upside as oil prices briefly turn negative following bearish inventories data. With oil creeping toward $60/bbl just 30 minutes ago, oil's recent pullback has made transportation stocks more attractive. That in turn has contributed to a turnaround in the Industrials sector. However, the Tech sector now up more than 1.0% and within reach of erasing its year-to-date decline continues to be the biggest source of market support. DJ30 +29.88 NASDAQ +21.96 SOX +1.7% SP500 +4.37 NASDAQ Dec/Adv/Vol 1041/1700/600 mln NYSE Dec/Adv/Vol 1149/1778/342 mln

10:30 am : Recent attempts to lock in some early gains are short lived as buying efforts get back on track. Aside from strength in Technology, which is now benefiting from a turnaround in hardware stocks, the Energy sector is also providing some notable leadership to the upside. However, not too much should be read into the recent upturn in stocks since oil prices making another run at $60/bbl, with weekly inventories out momentarily, still pose a concern for the bulls. DJ30 +19.15 NASDAQ +12.37 SP500 +3.07 XOI +0.6% NASDAQ Dec/Adv/Vol 1247/1439/412 mln NYSE Dec/Adv/Vol 1313/1505/220 mln

10:00 am : The major averages are now mixed as split industry leadership dictates this morning's action. Of the five sectors trading higher, Technology (+0.6%) is not only pacing the way but appears to be the only space convincingly attracting buyers. Cisco's (CSCO 28.20 +0.92) upbeat guidance has renewed optimism throughout the beaten-down sector, sparking a wave of bargain-hunting interest; but some early profit taking in the stock leaves Cisco near session lows. The nine remaining S&P sectors are only posting gains/losses of between 0.1% and 0.2%.DJ30 -1.60 NASDAQ +5.60 SP500 +1.56 NASDAQ Dec/Adv/Vol 1112/1329/190 mln NYSE Dec/Adv/Vol 1285/1215/72 mln

09:40 am : With the Tech sector's growth prospects under the microscope, as guidance has come down noticeably of late, bellwether Cisco Systems (CSCO 28.74 +1.46) following up a 40% rise in Q2 profits by raising its sales guidance for the next two quarters have helped calm the worst of those fears. Cisco, a suggested holding in the Briefing.com Active Portfolio, is surging 5.4% and within reach of a multi-year high.

Today's strong Q4 productivity growth pushing unit labor costs lower is also contributing to the positive disposition as the declining trend help alleviate wage-based inflation worries. As a reminder, the tight labor market condition is the key item the Fed was referring to in its policy statement when it asserted "the high level of resource utilization has the potential to sustain inflation pressures." DJ30 +3.81 NASDAQ +10.51 SP500 +1.44 NASDAQ Vol 112 mln NYSE Vol 48 mln

09:15 am : S&P futures vs fair value: +3.4. Nasdaq futures vs fair value: +9.2.

09:00 am : S&P futures vs fair value: +3.5. Nasdaq futures vs fair value: +9.0. Still shaping up to be higher open for equities as futures trade holds steady above fair value. Technology still looks to be the driving force behind today's buying efforts as Cisco extends its guidance-induced gains heading into the opening bell. Investors are also embracing a stronger than expected productivity figure which, by pushing unit labor costs lower, makes it easier for central bankers to at worst keep interest rates unchanged in coming months.

08:33 am : S&P futures vs fair value: +3.0. Nasdaq futures vs fair value: +8.5. Futures indications improve following this morning's productivity data, now signaling an even stronger start for stocks. A preliminary read on Q4 productivity just came in at a stronger than expected 3.0% (consensus 2.0%), as unit labor costs rose 1.7%, temporarily sidelining wage-based inflation worries. Bonds, which were off slightly ahead of the report, are now relatively unchanged; the 10-yr note is flat to yield 4.76%.

08:00 am : S&P futures vs fair value: +2.5. Nasdaq futures vs fair value: +8.0. With growth prospects under scrutiny throughout the Tech sector, as guidance has come down noticeably of late, bellwether Cisco Systems (CSCO) posting a 40% rise in Q2 profits and raising its quarterly sales guidance have helped calm the worst of those fears. However, while a nearly 5.0% pre-market advance in Cisco shares positions the tech-heavy Nasdaq for a solid start, S&P 500 futures only suggest a slightly higher open as investors are also showing some reserve ahead of a preliminary read on Q4 Productivity (8:30 ET). Special emphasis will be placed on how unit labor costs will factor into the Fed's thinking on inflationary pressures.

06:21 am : S&P futures vs fair value: +1.6. Nasdaq futures vs fair value: +6.3.

[54anickel]

25. Where have all the Boy Scouts gone?

http://www.prudentbear.com/articles/show/344

The economists, whoever THEY are, got it right in December. Incomes rose 0.5%, just as predicted. And spending rose by 0.7%, just as predicted. So, based on those numbers, consumers spent more than they earned, just as predicted.

A person might think correctly forecasting that an entire nation would spend more than it earned shows incredible foresight. But really the economists did nothing more than what they do best. And no, that does not mean eating a free lunch in a fancy hotel while predicting that GDP will grow 3% next year. Rather than taking a shot in the dark, they extrapolated a trend. There was a trend to extrapolate because December was the 21st month in a row that the savings rate came in negative.

snip>

But two years of negative savings (or “extra-positive spending” as McTeer might have put it) shows impressive consumer resiliency. However, while the stats are noteworthy, they are not unprecedented. There are two other years when consumers spent more than they saved. But those years were 1932 and 1933, way back in the Depression when it was much easier not to save, particularly if you were the one of the one in four people out of a job. Consumers are far bolder today. Those Depression Era years should get an asterisk in the record books.

There are those, of course, who think consumers are acting rationally by spending more than they’re saving. “Behold,” the optimists say (who else would use the word “behold”?), “consumer wealth has been rising like a rocket. Why shouldn’t Americans leave behind them a trail of credit card receipts as long as a Ford Expedition?”

Well, if you are accumulating wealth by growing your business it can make perfect sense to spend more than you make. Or if your portfolio of municipal bonds is churning out an income stream wider than the Ohio River, it might be okay to outspend your wages. That the market value of a residence has increased, however, is not necessarily a compelling reason to buy a flat screen TV. That’s because unless you sell out and move to a hut in the Amazon forest, there’s no monetary windfall to justify more spending or debt service. Still, that’s how the optimists justify the plunging savings rate. In economic jargon, the argument goes like this: The price of your house is going up! You will have to pay more property taxes and insurance! Go spend some money! Yeah!

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[Roland99]

27. 21 straight months negative savings rate?! WHEEEEEEEE!!!!

[AnneD]

65. Hey 54....

this continued consumer spending greater than earnings and negative savings continues to make me anxious. What are they counting as savings. I keep my little pass book savings for an emergencies but anything gives a better interest rate and I keep it for easy access. Now how many folks keep their spare change in a money market account because of interest. Is that included as savings-or investing. What do they count as savings.

I can see folks being stretched to pay increase property tax. ins., etc.on top of daily expenses. Some folks are spending their nest eggs.

[54anickel]

69. A money market deposit account (at a bank) is savings, a money market fund

(which you can now also get through a bank) is an asset/investment purchase. The deposit account is savings, it's also covered by FDIC, the fund is an investment.

Hope that helps. Someone raised a similar question, I think last Friday, as to how 401K's are counted - short answer is that's on the income side of the ledger.


http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=2713700#2715890

[AnneD]

75. That helps....

so even though I am saving in a 401...it is not a savings, so it looks like I am spending-even when I am not.

[54anickel]

76. Well sort of. They're overstating the amount of money available to you to

spend by considering your 401K contribution as part of your "take-home" income. It's not really available, is it? (let's hope it is in the future - but that's a different story). So you're "pocket change" is actually less than the gubbermint is figuring you have. But they like to call this the "wealth effect".

From the linked 2002 Fed explanation: The 3rd makes the most sense to me.

One explanation involves the "wealth effect," in which increases in the real value of assets stimulate consumption (see, for example, Dynan and Maki 2001 and Maki and Polumbo 2001). For example, in Figure 1, the steep rise in the financial wealth of households beginning in the mid-1990s--which was principally due to the soaring stock market--is almost a mirror image of the falloff in the personal saving rate. Some argue that capital gains should be added to personal income, thus raising household savings and increasing the measured saving rate (see Gale and Sabelhaus 1999). Households' wealth also includes tangible real assets, which constitute about one-third of their total asset holdings. The principal component of tangible assets is real estate, representing approximately 80% of the total. Like the stock market, housing prices also have appreciated, thus adding to household net worth and contributing to the decline in the personal saving rate. However, unlike the stock market, housing prices have not experienced sharp declines since the stock market peaked in April 2000, and this has mitigated to some extent the drop in household net worth that accompanied the subsequent stock market decline. From 2000:Q2 to 2001:Q3, total assets held by households (financial and tangible) fell 7%, while total net worth declined by 10%. The largest contributing factor to these declines was a 15% fall in the market value of the financial assets of households. During this period, the personal saving rate ceased its sharp decline but did not reverse course. This suggests that, while all of the dynamics of the wealth effect on consumption have yet to play out, other factors also may have contributed to the low personal saving rate.

Another explanation for the sharp decline in the saving rate is associated with the coincident rise in labor productivity in the latter half of the 1990s. If households perceive that the higher labor income associated with this rise in productivity will continue into the future, then their permanent income, or the present value of future expected income, has increased, thus mitigating the need for additional saving out of current income. This argument would be consistent with the continued strength in aggregate productivity that has been in evidence in the data even during the current economic slowdown, when productivity improvements generally tend to fall off.

A third explanation is that financial innovation has relaxed liquidity constraints that many households had been facing by increasing their access to the credit markets. This argument is consistent with the observed increase in consumer credit relative to GDP that has accompanied the consumption boom. While this could be a significant contributing factor, the evidence put forward does not indicate that this is the principal factor propelling the consumption boom (see Parker 1999).

http://www.frbsf.org/publications/economics/letter/2002/el2002-09.html#subhead2

[54anickel]

26. The IMF Doesn't Want to Take its Own Advice (Mogambo)

http://www.kitco.com/ind/Daughty/feb072007.html

I remember the old days when a jump in Total Fed Credit of $7 billion in a week, like the one we had last week, would have sent me to the emergency room; heart exploding, brain bleeding and my Loud Mogambo Mouth (LMM) screaming in mortal fear and vowing bloody revenge for the price inflation that will surely follow such outrageous monetary inflation.

But now I am just kind of, I dunno, numb, as this economic outrage is so consistent, week after week, month after month, year after year, especially since 1997, when the execrable Alan Greenspan and his loathsome Federal Reserve started creating excess money and credit like never, ever before.

And speaking of Alan Greenspan, his forthcoming book is reportedly to be titled "The Age of Turbulence". Given my extreme contempt for him, his catastrophic chairmanship of the Federal Reserve that created bubble after bubble, who immediately resorted to lying about price inflation, and who created the economic horror for which we will pay a terrible, terrible inflationary price. And so it seemed natural that the word "turbulence" brought to my mind a scene of him farting in the bathtub. I dunno why.

snip>

But crude and infantile bathroom humor aside, and back to the current situation, the stacks and stacks of American government and agency debt soaked up by foreigners and stashed at the Fed ballooned by another $10 billion last week, too, taking their total holdings to $1.8 trillion, meaning that at an average of only a miniscule 4% yield, we will be paying foreigners $72 billion a year in interest payments alone!

snip>

From the Richebächer Letter we read the good doctor saying "Private households in the United States embarked on their greatest borrowing binge of all time, fostered and facilitated by the rampant house price inflation and a most aggressive financial system. Over the five recovery years since the end of 2001, their overall indebtedness surged by 66%." Yikes! Increased debt loads by two-thirds? Like I said, "Yikes!"

For a lesson in very dry humor, Dr. Richebächer, writing at DailyReckoning.com, wryly juxtaposes Ben Bernanke, the chairman of the Federal Reserve, saying "there is little evidence that the weakness in housing markets is spilling over more broadly to consumer spending or aggregate employment" against the published fact that "private households have drastically curbed their mortgage borrowing. It amounted to $672.7 billion in the third quarter 2006, sharply down from $1,223.6 billion in the same quarter of last year. Mortgage equity withdrawal peaked at an annual rate of about $730 billion, or 8.1% of GDP, in the third quarter 2005. One year later, in the third quarter 2006, it was sharply down to $214 billion."

So roughly $500 billion has been taken out of the growth in spending from borrowing? How can this NOT spill over "more broadly to consumer spending or aggregate employment"?

more...

[Demeter]

39. Did Greenspan Inflate So That the Bubble Could Power the Election?

Maybe I ought to invest in tinfoil....

[54anickel]

29. Gold futures firm near $660 an ounce

http://www.marketwatch.com/news/story/gold-futures-hold-firm-near/story.aspx?guid=%7BC68BB088%2DD81A%2D47D6%2DB4D4%2D7DD630B40D4A%7D&dist=moreover

SAN FRANCISCO (MarketWatch) -- Gold futures barely budged Wednesday morning, holding their ground near $660 an ounce with traders reluctant to move prices in either direction after a two-session winning streak, but the metal's safe-haven appeal is expected to underpin prices.

The market sees the need "of maintaining $655 for as many days as possible ... before a move to higher ground is undertaken with confidence," said Jon Nadler, an investment-products analyst at bullion dealers Kitco.com, in e-mailed commentary.

Gold for April delivery was last up 10 cents at $658.80 an ounce on the New York Mercantile Exchange.

In the previous session, the contract closed up $2.60 at $658.70 an ounce, after reaching a high of $663.70. It's up $6.70 from Friday's closing level, but the contract remains below Thursday's close of $663, which marked its loftiest in nearly six months.

"Expectations of more favorable U.S. dollar/oil movements, coupled with the ongoing unrest in Iraq and continued defiance by Iran and North Korea to halt their nuclear-development programs, will draw investors toward gold properties both as a hedge against inflation and a safe haven," said James Moore, an analyst at TheBullionDesk.com, in a note to clients.

more...

[54anickel]

32. Gold Price Manipulation

http://www.kitco.com/ind/maund/feb062007.html

There has been more talk in recent weeks on the subject of gold price manipulation. The purpose of this article is not to attempt to go into the details of whether or not there is manipulation, or how much there is, or who is doing it or why, because all of this is has been raked over by other writers in considerable detail. The purpose of this article is to examine what difference it makes to us as investors and traders, and how best to live with it.

The first point to make clear is that to whatever degree there is gold price manipulation/suppression, there is nothing much the ordinary investor can do about it - you are going to have to live with it, like taxation - so there’s no point in losing any sleep over it.

The next point to grasp is that there is a “might is right” issue here. The plutocratic network responsible for gold price suppression knows that even if they are outed, they can simply brazen it out with an attitude of “Tough luck - there’s nothing you can do about it”. When you understand this point you realize that those who have worked tirelessly for some years to expose what is going on will probably only ever achieve a Pyrrhic victory.

Now here is the fundamental point to grasp, which is the central message of this article. Even if it is proven beyond all doubt that there is a powerful conspiracy to restrain the price of gold, and even if, despite being dragged out into the light of day and branded, those responsible brazenly continue their operations, they will nevertheless be rendered increasingly irrelevant by unstoppable market forces. Take a look at the following chart, which shows the price of gold in Swiss Francs, and you will see that this is already happening, and the picture against the Euro is very similar. They have already lost control, even if they had it - as we can clearly see on this chart, they lost it in mid-2005. All that is left to them now is to fiddle about on the edges trying to fleece traders by creating false breakouts etc and engage in their ritualistic Friday gold bashing.

more...

I'm a lot more concerned with the fudging going on with the currencies, liquidity, derivatives and inflation number these days but then again, it's all related. Seems like nothing more than a house of cards.

[54anickel]

30. How the Fed Lost Control of Money Supply

http://www.kitcocasey.com/displayArticle.php?id=1210

The world is awash in money. This money has flown into all asset classes, from stocks to bonds, from real estate to commodities. In a world priced for perfection, should we enjoy the boom or prepare for a bust? Let us listen to Wall Street’s adage and “follow the money.”

After the tech bubble burst in 2000, policy makers in the U.S. and Asia set a train in motion they have now lost control over. In an effort to preserve U.S. consumer spending, the Federal Reserve (Fed) lowered interest rates; the Administration lowered taxes; and Asian policymakers kept their currencies artificially weak to subsidize exports to American consumers.

These policies have lead to one of the longest booms in consumer spending ever – U.S. consumer growth has not been negative since the early 1990s. However, it was credit expansion, rather than increased purchasing power, that has fueled the growth. Until about a year ago, consumers took advantage of abnormally low interest rates to print their own money by taking equity out of their homes. This source of money is drying up as home prices no longer rise and sub-prime lenders (those providing loans to financially weak consumers) are facing difficulties. More prudent homeowners have not yet been affected as they buy their home based on longer-term interest rates; until December these interest rates have stayed abnormally low. In recent weeks, these rates have ticked up significantly, and we may see the next and more severe round of pressure being exerted on the housing market. In this phase, we will see monetary contraction: money that has subsidized not only the real estate market, but also consumer spending, stocks, bonds and commodities may dissipate.

Why is it that asset prices have continued to soar despite the stall in home prices? Consumers have not been the only source of money creation. Corporate America is creating its share of money as cash flow positive businesses are piling up cash; but corporate CEOs seem to prefer to invest abroad, providing only limited stimulus to domestic money supply.

A massive source of money supply growth is purely of financial nature, it is volatility, or better: the lack thereof. Volatility in major markets was at or near record lows last year. With volatility low, risk premiums are low; when risk premiums are low, investors have an incentive employ more leverage to be within their risk comfort zone. What may seem like an abstract concept has propelled financial markets to the stratosphere.

Two groups that have been most aggressive at taking advantage of this are hedge funds and the issuers of credit derivatives. Take as an example, a report from the Financial Times last December: the paper reported that Citadel Investment Group, a manager of hedge funds, had $5.5 billion in interest expense on assets of only $13 billion. The hedge fund group routinely borrows as much as $100 billion. Note that this is only the leverage visible on the financial reports; the instruments invested in may themselves carry yet further leverage.

more...

[54anickel]

33. Let's hope the Asian bank keeps on lending us cash

http://www.chron.com/disp/story.mpl/business/steffy/4532255.html

Dear citizens of China and Japan: On behalf of all my fellow Americans, let me say thank you.

Thanks to your willingness to buy our debt, we can finance our budget deficit without raising interest rates. We can have our tax cuts, finance a war and still feel no compunction to save.

Our president, George Bush, unveiled his budget proposal this week. It's an annual ritual that combines financial fantasy and high-wire acrobatics, like Cirque du Soleil performed by economists.

Bush plans to spend $2.9 trillion while taking in $2.7 trillion in revenue. Nevertheless, his budget calls for extending existing tax cuts and beefing up defense spending while cutting health care, education and the environment.

This formula, Bush argues, will balance the budget in five years without raising taxes.

That's where the acrobatics come in.

more...

[54anickel]

31. I've gotta share this conversation I had last night. Is my thinking all wrong?

I was talking to this group of men last night and somehow we got onto the subject of GE's management style. You know, rating employees on a bell curve and constantly replacing those that are pigeon-holed into the low end. I say pigeon holed since your percentages have to come out to match the curve. Only one guy had read Welch, and he disagreed with the concept. Another guy, who's in management of a retail shop, blurts out "continuous improvement" and agrees with the premise. Same for another who owns a repair business, though he didn't use the buzz phrase. He says he's always looking for new talent and has someone in mind that he would remove to make room for the new guy. Is it just me? That just seems so wrong. I used to be on the lookout for who to invest in to get that improvement. Who would gain the most from additional training and also be able and willing to share that new knowledge with the others?

Maybe it's just my background, having worked in "flat" organizations that are reliant on "teams". I just don't see how the concept works in that environment. It damages the cohesion of the team, where everyone tends to want to make themselves look good at the expense of someone else - gotta avoid that forced low-end evaluation at all costs. So the synergy of the team, where the whole is greater than the sum of it's parts, is lost.

I'm all for getting rid of any actual dead weight in an organization, but when you're forced to define an equal number of losers to winners, while having the greatest majority coming in as average...well I don't know - is that really how you achieve 'continuous improvement"? Is this thinking THAT prevalent out there these days? I've been avoiding returning to "Korporate Merika". Now I find small mom and pop businesses are thinking this way. I was really disheartened and disgusted by that whole conversation. It's been bugging A LOT this morning. Am I wrong? Is this really "the way"?

[54anickel]

71. OK, so I guess I'm alone on this one. Now I've got Tull on the brain....

Living In The Past
Happy, and I'm smiling, walk a mile to drink your water.
You know I'd love to love you, and above you there's no other
We'll go walking out while others shout of war's disaster.
Oh, be forgiving, let's go living in the past.

Once I'd used to join in every boy and girl was my friend.
Now there's revolution but they don't know what they're fighting.
Let us close out eyes. Outside their lives go on much faster
Oh, be forgiving, we'll keep living in the past.

Oh, be forgiving, let's go living in the past.
Oh, no, no, be forgiving, let's go living in the past.

[AnneD]

72. I have seen and lived though...

different management techniques, teaching styles, etc. Everyone wants to reinvent the wheel, write the book, sell 'em, and make a ton of money.

It boils down to your view of workers. Are they cogs or are they potted plants. If a cog, then you replace them. In my mind, this is a top down, hierarchal management style that has been our model since the beginnings of the Industrial Revolution.

Now if you view workers as potted plants, you realize that with some adjusting of food, water, and light, you can realize even greater results than you thought. This is a more coach/athlete teamwork approach.

The problem is (to my mind) not all workers come with no assembly required. I think most guys fall into the Welch style and most women fall into the coach/teamwork model.I know that is a broad brush but I think it is a hard wire thing.

I actually think teamwork is more effective and more reality based in the end. In survival situations-you have to rely on each other. Some people will be better fishermen, some weave better baskets, etc. You don't vote a basket weaver off the island just because they don't fish-a basket can store your grain and hold your fish.

Mom and Pop business' will copy this management style at their peril. They can't/don't have the resources to give the best perks or pay. If you just hire for talent, you may find them moving on if they don't get the rewards they. I think folks that you cultivate tend to stay around longer and you never know just what unknown benefits you can get. But that is just me. I work with kids-I see miraculous growth on a daily basis.

[54anickel]

77. Thanks AnneD. I'm not sure it's hard wired based on gender, I've had

plenty of men say the Welch style is BS, of course they tend to be of a bit more progressive mindset too. Maybe it's a cultural thing, or that "It's all about me" craze. "I've got mine, go get your own; by the way, great job yesterday - what have you done for me today?"

Oh well, it must be working, productivity is up again! MORE WITH LESS!!!! :eyes:

[54anickel]

34. Premiums on emerging debt approach lows

http://www.ft.com/cms/s/134e5ccc-b650-11db-9eea-0000779e2340.html

Risk premiums on emerging market bonds yesterday were close to record lows as hopes of a credit rating upgrade for Brazil spurred another round of buying.

As bond prices rose, the risk premium on emerging market bonds, as measured by JPMorgan's EMBI+ index, a market barometer, touched an intraday low of just 164 basis points over US Treasuries during trading. The lowest close for the index - 165bp over US Treasuries - was reached on Friday.

Fitch Ratings on Monday night revised the outlook for Brazil's BB external credit rating from stable to positive, bringing it in line with Standard & Poor's outlook on the country. The move helped compress risk premiums for the bonds of Brazil, a benchmark credit, fuelling bullish sentiment across the emerging market debt market.

snip>

Philip Poole, head of emerging markets research at HSBC, said the rating agency's move made sense. "Despite residual concerns about the quality of the fiscal adjustment, Brazil is well on track for an upgrade. This is overall positive for emerging markets. Brazil is still the touchstone for the market."

Despite jitters in the market last month as oil prices retreated, investor appetite for emerging market debt has remained robust since the beginning of the year when the EMBI+ index was at 169bp over US Treasuries.

snip>

However, risk premiums are expected to continue heading lower this year. Yield-hungry investors are pouring money into emerging market assets at a time when the supply of sovereign paper is on the decline. Financially stronger governments are issuing less debt while buying back old bonds. And investors are scooping up bonds of emerging market companies and banks instead, among the fastest growing segments in emerging markets.

In recent weeks, there has been particularly heavy issuance of bonds by companies from the former Soviet Union and the Middle East. "The new issue machine is rolling along," said Jim Croft, an emerging markets debt trader at Commerzbank.

more...

[54anickel]

35. Senate Probing Gas Trading at Time of Amaranth Blowup (Update2)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aRgksMIqrZHc&refer=home

Feb. 7 (Bloomberg) -- The U.S. Senate energy committee is investigating anomalies in natural gas futures trading around the time last year when hedge fund Amaranth Advisors LLC collapsed with at least $6 billion in losses.

The committee is asking the Commodity Futures Trading Commission and the Federal Energy Regulatory Commission to explain how they monitor gas futures trading on the New York Mercantile Exchange and on Intercontinental Exchange Inc.'s electronic system, according to letters to the agencies from the panel's chairman, Senator Jeff Bingaman, a New Mexico Democrat.

Lawmakers and energy consumers have complained that hedge funds might be increasing energy costs. The Washington-based Industrial Energy Consumers of America, representing energy users such as U.S. Steel Corp., International Paper Co. and Dow Chemical Co., in October asked for a probe of whether Amaranth was able to manipulate prices.

``No one knows if the market is being manipulated because there is no transparency,'' said Paul Cicio, president of the consumers group. ``Not even the CFTC knows if there is market manipulation going on because they don't see the volumes of large traders in the over-the-counter market.''

Amaranth shut down after its two main funds fell as much as 70 percent in September because of losing bets on the direction of natural-gas prices. It was the most costly collapse ever for hedge-fund investors.

more...

[54anickel]

38. Billions given away in Baghdad free-for-all

http://www.ft.com/cms/s/14127620-b650-11db-9eea-0000779e2340.html

The Bush administration went on a $5bn spending spree in Iraq in 2004 just six weeks before returning control of the government to Iraqis, according to a Democratic lawmaker investigating the payments.

Huge sums were doled out, sometimes in dollar bills from the back of pick-up trucks, it was alleged.

In a hearing before the chief House oversight committee, Democrats yesterday demanded answers from Paul Bremer, who headed the Coalition Provisional Authority, Iraq's first post-occupation government, and oversaw the disbursement of $12bn in cash in reconstruction funds in the months after the invasion.

In his first appearance before Congress since leaving Iraq, Mr Bremer admitted making mistakes during his 13-month tenure. However, he emphasised that Iraq was in a "desperate situation" in May 2003 and that the CPA could not have waited to install a "modern financial system" before beginning the process of getting the defunct Iraqi government and various ministries reinstated.

The payments in question comprised of Iraqi funds that had been held by the Federal Reserve Bank in New York before the invasion and consisted of a fund that succeeded the United Nations Oil for Food programme and seized Iraqi assets.

more...

[54anickel]

40. Filings to foreclose set record (Massachusetts)

With 19,487 cases, state has worst year since '90s recession

http://www.boston.com/business/personalfinance/articles/2007/02/07/filings_to_foreclose_set_record/

Mortgage lenders submitted a record 19,487 foreclosure filings in Massachusetts last year, leaving more homeowners in danger of losing their homes than at any time since the real estate recession of the 1990s.

Housing advocates have said the foreclosure crisis is reaching alarming levels in some areas. The biggest increase in last year's filings occurred in Barnstable County, where Cape Cod's vacation-home market is in a severe slump. Filings in Barnstable County rose 91 percent, to 934 in 2006, according to ForeclosuresMass.com, which released its report yesterday of filings in the state's Land Court.

But the greatest number of filings was in Worcester County -- 2,987, up 76 percent -- followed by Middlesex County. Statewide, filings rose nearly 70 percent, from 11,493 in 2005, with the pace quickening at year end.

Jeremy Shapiro, president of ForeclosuresMass.com, said the data are a clear indication of widespread financial distress. "At the end of the day, we're still talking about over 19,000 people in 2006 whose homes are going into foreclosure," he said.

bit more...

[54anickel]

41. Late property taxes grow

Share of skipped payments at highest level since 1996

http://www.ocregister.com/ocregister/money/article_1564034.php

snip>

It means that 5.32 percent of the slightly more than $2 billion tax dollars due went unpaid. Late bills haven't taken that big of a slice from the tax pie since 1996.

The two-year surge in late payments is a turnabout from years of falling delinquencies that paralleled the county's hot housing market. Increasing frequency of tax delinquencies fits a pattern seen elsewhere in the now chilled housing market: Some folks simply can't afford their property.

Last year, market watcher DataQuick found that bankers sent out 5,865 notices of mortgage defaults to O.C. property owners, 88 percent more than the year before. It was the largest year for these notices – the first official step toward foreclosure – since 1999.

The local economy still churns out new jobs. So you can eliminate unemployment as a key culprit in the late payment surge. I'd blame some shoppers' appetite for homes exceeding the girth of their budgets.

Most long-time property owners are protected from tax surges by Prop. 13. Recent buyers, though, can get hit with property-tax sticker shock if they didn't do all their homework during their shopping process.

Chriss Street, the county's new tax collector who was previously a private investor and corporate turnaround manager, wasn't horribly concerned about the uptick in late payments.

snip>

Mortgage defaults last peaked in 1996 at levels more than triple last year's total. And tardy tax payments topped out in that ugly 1990s real estate debacle in 1993 at a pace one-third faster than 2006.

Street, the tax collector, isn't convinced we'll get back to those kind of sad days: "I just don't feel it, from the conversations I'm having. Not yet."

With late payers' share of all bills now running above the county average since 1990, I don't completely share his optimism.

more...

[54anickel]

42. Bush budget surplus may vanish amid war, tax costs

http://today.reuters.com/news/articlenews.aspx?type=reutersEdge&storyID=2007-02-06T133548Z_01_N05433577_RTRUKOC_0_US-USA-BUDGET-CREDIBILITY.xml&from=business

WASHINGTON (Reuters) - President George W. Bush's budget proposal promises shrinking deficits and a $61 billion surplus by 2012, but the plan reflects estimated war costs that could prove to be too low, and spending cuts and revenue assumptions that may be unrealistic.

The $2.9 trillion budget plan Bush unveiled on Monday assumes that Congress approve all of his proposals and that tax cuts due to expire at the end of 2010 are extended.

It includes a combined $245 billion in funding requests for wars in Iraq and Afghanistan and other anti-terror spending for fiscal years 2007 and 2008, dropping to $50 billion for fiscal 2009 and to zero in subsequent years.

"We call it an allowance. We believe there will still be war costs in 2009, but we have no idea what those costs will be," White House budget director Rob Portman said.

An extended troop commitment in Iraq could easily push deficits in the 2009 and 2010 fiscal years back up to the 2006 level of $248 billion and dash hopes of a surplus by 2012.

Senate Finance Committee Chairman Max Baucus said the White House needed a "truer assessment" of deficit spending over the next five years.

more...

[54anickel]

43. Technology widens income gap, says Bernanke

http://www.ft.com/cms/s/ec01d9be-b64f-11db-9eea-0000779e2340.html

snip>

The Federal Reserve chairman admitted that it was not possible to attribute all the rise in inequality over several decades to technological change.

He said globalisation "may also have been a factor in the rise of inequality" but argued that it was probably far less significant than technology.

snip>

The Fed chairman suggested policymakers should focus instead on policies to improve education and retraining while making health and pension benefits more portable between jobs.

The Fed chairman said the "better approach for policy" was to allow growth-enhancing forces to work, but "try to cushion the effects of any resulting dislocations".

Mr Bernanke avoided offering any specific policy recommendations.

However, he said "policies that reduce the cost to workers of changing jobs - for example by improving the portability of health and pension benefits to employers" would "help to maintain economic flexibility and reduce the costs that individuals and families bear as a result of economic change".

White House officials claim that President George W. Bush's plan to offer the same health insurance tax break to all workers, regardless of whether they have an employer-backed plan, falls into this category.

While offering a robust defence of free trade and deregulated markets, Mr Bernanke was careful to acknowledge that much remained unknown about the recent period of relative stagnation in middle-class wages.

He noted that in recent years wages at the reasonably well-educated middle of the income distribution had grown more slowly than wages at the less well educated bottom - a phenomenon that runs against the grain of skill-biased technological change.

And he admitted that most of the academic studies of the effects of trade on income distribution - based on data from the 1980s and 1990s - predated the post-2000 period in which the middle had done relatively poorly.

more...

[54anickel]

44. The Surprising Borrowing Habits of the Rich

http://finance.yahoo.com/loans/article/102370/the_surprising_borrowing_habits_of_the_rich

snip>

According to the Federal Reserve Board's Surveys of Consumer Finance, the nation's richest 1% loaded up on $342 billion in new debt between 1998 and 2004, the latest year for which data are available. (The 1% represents households with net worths, including primary residence, of at least $6 million.) Economists say that debt number has probably continued to grow since 2004, because interest rates remain low by historical standards.

Disproportionate Shares


Just as the rich control a disproportionate share of national wealth, they also account for a disproportionate share of debt. The richest 1% now hold 7% of the nation's debt, with a total of $650 billion in borrowings, up from 5% in 1998.

Debt for this group grew faster than for any other group in the Fed survey. Total debt held by the top 1% increased 150% between 1998 and 2004, compared with growth of about 100% for those in the 50th-to-90th percentile wealth range. The rich, in short, have joined the great American borrowing binge. Call them the leveraged elite.

snip>

This "strategic debt" involves taking out a loan at, say 7%, and investing the money in the financial markets for a return of, say, 10%. Debt may be a necessity for the middle class, but the wealthy are "making a sophisticated economic decision," says Arthur Kennickell, an economist with the Federal Reserve.

And on the whole, their balance sheets remain healthy. According to the Fed, the debt held by the top 1% amounted to only 3.7% of their total wealth. That compares with 24% for Americans ranked in the 50%-to-90% groups.

Today's rich are more comfortable with risk. In a world awash in cash, many of today's wealthy made their fortunes by leveraging and making big bets with their businesses. They're applying the same principles to their personal wealth.

snip>

With some measures showing prices for high-end goods outpacing the broader inflation rate, the wealthy are increasingly looking beyond mortgages to use debt for buying beachfront homes, yachts, cars and other collectibles. Private bankers say loans for jets are among the most popular.

In fact, some sociologists and economists say the rise in wealthy people's debt stems in large part from the growing pressure among the elite to keep up with richer peers. The biggest disparities in wealth today are among the rich, with mere millionaires getting shoved aside by decamillionaires, centimillionaires and billionaires.

So the haves are borrowing more to keep up with the have-mores....

more...

[54anickel]

45. 2:40 and mixed

Dow 12,638.35 27.96 (0.22%)
Nasdaq 2,484.13 12.64 (0.51%)
S&P 500 1,447.32 0.68 (0.05%)
10-yr Bond 4.7510% 0.0140
30-yr Bond 4.86% 0.01
NYSE Volume 1,881,090,000
Nasdaq Volume 1,656,238,000

2:30 pm : After briefly slipping into negative for the first time this afternoon, the Dow is still struggling to find its footing. Not only are half of its 30 components now trading lower, but many of its highest priced stocks (e.g. BA, JNJ, MO, PG and XOM) are among today's laggards. In fact, if not for a 2% surge in Caterpillar (CAT 65.78 +1.36), which accounts for an 11-point move on the Dow, the price-weighted index would likely stay in the red until the close, especially since Exxon Mobil (XOM 74.76 -0.38) is unlikely to recoup much in the way of its recent reversal with oil prices closing at session lows.DJ30 +1.36 NASDAQ +16.38 SP500 +1.17 XOI -0.8% NASDAQ Dec/Adv/Vol 1266/1717/1.53 bln NYSE Dec/Adv/Vol 1347/1845/952 mln

2:00 pm : Buyers remain in control of the action, but the Dow now finds itself struggling to hold onto gains. Earlier, the blue-chip index eclipsed the 12700 mark for the first time ever. However, one of its highest priced stocks -- Exxon Mobil (XOM 75.20 +0.06) -- has relinquished almost all of its intraday 1.0% advance in sympathy with oil's technical downturn (-1.7%). Exxon's pullback has removed what little steam the Dow was getting since most of today's momentum still resides in tech.DJ30 +10.54 NASDAQ +20.45 SP500 +3.34 XOI -0.3% NASDAQ Dec/Adv/Vol 1198/1752/1.42 bln NYSE Dec/Adv/Vol 1248/1926/880 mln

1:30 pm : More of the same for stocks as plunging oil becomes the latest catalyst to keep buying efforts intact. Further deterioration in crude now leaves the March contract down 1.7% below $58/bbl and nearly 3.5% off its intraday highs. Since oil has the potential to sustain inflation pressures and curb spending, retailers are taking notice. The S&P Retail Index is at a new all-time high and up nearly 6% year to date ahead of tomorrow's closely-watched batch of monthly same-store sales figures.DJ30 +28.36 NASDAQ +22.72 SP500 +4.48 NASDAQ Dec/Adv/Vol 1134/1820/1.32 bln NYSE Dec/Adv/Vol 1213/1926/800 mln

1:00 pm : Oil prices recently slipping into negative territory are making stocks look even more attractive at current levels. With crude making another run at $60/bbl earlier, which if eclipsed would be bearish for equities, another technical breakdown in the commodity leaves all three major indices trading at afternoon highs. Crude for March delivery is now down 1.0% near $58.20/bbl; but a subsequent reversal in the Energy sector removing some key leadership is preventing an even more aggressive push to the upside.DJ30 +26.31 NASDAQ +22.76 SP500 +4.52 NASDAQ Dec/Adv/Vol 1140/1783/1.20 bln NYSE Dec/Adv/Vol 1188/1924/718 mln

12:30 pm : Equities are still on the offensive as the afternoon session gets underway. Sector leadership is now evenly mixed, but since Technology accounts for the second heaviest weighting on the S&P 500, it's 1.0% advance is more than offsetting average declines of 0.1% from other influential areas likes Health Care, Industrials and Consumer Staples. DJ30 +20.79 NASDAQ +20.32 SOX +2.2% SP500 +3.88 NASDAQ Dec/Adv/Vol 1098/1760/1.08 bln NYSE Dec/Adv/Vol 1186/1902/640 mln

12:00 pm : Stocks are holding onto the bulk of their gains midday as investors rally around renewed optimism about Technology's growth prospects and encouraging economic data. The Dow is currently 14 points above its record close; the Nasdaq is now up more than 3.0% year to date.

Kicking things off on a positive note was Cisco Systems (CSCO 28.41 +1.13). A suggested holding in the Briefing.com Active Portfolio, the bellwether topped Wall Street expectations last night with a 40% rise in Q2 profits. However, with several tech companies lowering guidance of late, Cisco also raising its Q3 and Q4 sales outlook above prior forecasts has sparked a wave of bargain-hunting interest throughout the beaten-down sector.

Aside from strength in Tech, Consumer Discretionary now ranking second among today's best performing sectors is also providing notable leadership. News Corp (NWS 24.68 +0.53), another suggested holding, is surging 2.0% to multi-year highs after posting double digit revenue and operating income. DirecTV Group (DTV 25.49 +1.52), another S&P 500 constituent putting up solid earnings growth even as overall growth slows, is at an all-time high after nearly tripling Q4 profits.

With the Fed asserting in its latest policy statement that "the high level of resource utilization has the potential to sustain inflation pressures," today's preliminary read on Q4 productivity is also helping to underpin a floor of buying support.

At 8:30 ET, the Labor Dept. showed that productivity rose a stronger than expected 3.0% in Q4. Unit labor costs rose just 1.7%, after rising at a 3.2% rate in Q3, pushing the year-over-year increase to 2.8%. That follows a 2.9% rate in Q3 and 3.0% rate in Q2, a declining trend that won't necessarily put to rest concerns at the Fed about the implications of a tight labor market, but it is easing the worst of fears that wage-based inflation pressures are building.

With bond traders also embracing the tame inflation data, pushing bond yields lower across the curve, the rate-sensitive Financials sector is also acting as a source of support for the broader market. DJ30 +21.93 NASDAQ +19.67 SOX +2.1% SP500 +3.98 NASDAQ Dec/Adv/Vol 1069/1794/960 mln NYSE Dec/Adv/Vol 1160/1911/560 mln

[citizen snips]

48. Stocks Narrowly Mixed As Oil Falls

NEW YORK (AP) -- Stocks turned mixed Wednesday after falling oil prices hurt energy stocks and overshadowed a stronger-than-expected productivity reading. A Federal Reserve official's comments on interest rates also soured the market's early mood.

A robust sales forecast from Cisco Systems Inc. gave a boost to technology stocks, however. The Labor Department's productivity figures were stronger than expected for the fourth quarter, but failed to offset concerns about falling oil prices.

"Crude hasn't been able to get above $60 for three days so the energy names are weak," said Neil Massa, equity trader at John Hancock Funds. He suggested some investors are simply taking profits.

In late afternoon trading, the Dow fell 15.30, or 0.12 percent, to 12,651.01. Earlier in the session the Dow moved past 12,700 for the first time, trading as high as 12,700.28. The previous trading record of 12,683.93 was set Friday.

more...
http://biz.yahoo.com/ap/070207/wall_street.html?.v=44

[citizen snips]

49. Nike Shares Rise on Growth Plan

NEW YORK (AP) -- Shares of Nike Inc. rose for the second straight session on Wednesday, a day after the maker of athletic footwear and apparel outlined an ambitious five-year growth plan to reach $23 billion in sales by 2011 and expand its retail presence.

The Beaverton, Ore.-based company said during an analyst conference Tuesday that it wants to add 100 new company stores worldwide over the next three years and take a more personalized approach to individual customers.

Shares rose 1.8 percent on Tuesday. On Wednesday, shares rose $1.73 to $102.90 during afternoon trading on the New York Stock Exchange. Earlier, shares set a new 52-week high of $103. The stock's previous 52-week high of $101.42 was set earlier this month.

Analysts for the most part approved of the strategy.

more...
http://biz.yahoo.com/ap/070207/nike_mover.html?.v=1

[citizen snips]

50. Soybeans Advance, Grains Mixed

CHICAGO (AP) -- Soybean futures advanced while grains finished mixed Wednesday on the Chicago Board of Trade.

Wheat for March delivery rose 1 cent to $4.52 a bushel; March corn fell 4 1/4 cents to $3.92 1/4 a bushel; March oats fell 4 cents to $2.50 a bushel; March soybeans rose 2 1/4 cents to $7.41 a bushel.

Beef futures increased and pork futures decreased on the Chicago Mercantile Exchange.

April live cattle rose .30 cent to 95.75 cents a pound; March feeder cattle rose .33 cent to 99.35 cents a pound; April lean hogs fell .52 cent to 66.80 cents a pound; March pork bellies fell 1.27 cent to $1.0270 a pound.

http://biz.yahoo.com/ap/070207/board_of_trade.html?.v=3

[citizen snips]

51. Chips Snap: Infineon, Broadcom Shares Up

NEW YORK (AP) -- Semiconductor stocks jumped in Wednesday's trading, with some of the biggest gains posted by Infineon Technologies AG, which announced a supply agreement with mobile phone maker Nokia Corp.

The deal may be to the detriment of Texas Instruments Inc., which counts Nokia as one of its biggest customers.

Shares of Infineon were up $1.61, or 11.4 percent, at $15.72 in afternoon trading on the New York Stock Exchange, while Texas Instruments shares were down 27 cents at $30.94 on the NYSE.

Another gainer, communications chip maker Broadcom Corp., got a boost after Morgan Stanley analyst Mark Edelstone lifted his rating on the stock to "Overweight" from "Equal Weight." Edelstone said the upgrade was based on the belief that there is potential for positive earnings surprises.

more...
http://biz.yahoo.com/ap/070207/semiconductors_sector_snap.html?.v=1

[citizen snips]

52. Sector Snap: Airline Stocks Dip

NEW YORK (AP) -- Airline shares dipped slightly Wednesday, as crude oil prices oscillated and Prudential Securities trimmed earnings estimates for JetBlue Airways Corp.

The Amex Airline Index fell less than 1 percent in afternoon trading, with 8 of its 11 component stocks declining. Most percentage movement was slight, less than 1 percent

After earlier climbing as high as $59.85, crude prices fell back to $57.86 in afternoon trading on the New York Mercantile Exchange, down $1.02. Jet fuel is one of airlines' biggest costs.

Prudential analyst Bob McAdoo trimmed his 2007 earnings estimates for low-fare carrier JetBlue on expectations of rising unit costs outside fuel. JetBlue's plan to add eight to 10 new cities to its route network in 2007 is also more than McAdoo expected, he wrote in a research note. JetBlue has been pursuing slower growth recently in its plan to return to profitability.

more...
http://biz.yahoo.com/ap/070207/airlines_sector_snap.html?.v=1

[citizen snips]

54. Sector Snap: Digital Media Stocks Mixed

NEW YORK (AP) -- News that Amazon.com Inc. and TiVo Inc. will soon let customers download movies from the Web to their set-top boxes shook up the digital video sector Wednesday, while comments from Apple Inc.'s CEO about digital rights management sent tremors through the online music world.

Shares of digital video recording service TiVo and Web retailer Amazon.com both gained ground after the companies announced a partnership that will roll out in full later this year.

The service, Amazon Unbox on TiVo, advances existing offerings from Microsoft Corp. and Apple Inc. that stream downloaded video and music on computers or portable media players. Apple's new set-top box moves downloaded content from the computer to the living room, but TiVo users will be able to skip the extra step with the new service.

TiVo's stock rose 46 cents, or 8.4 percent, to $5.94 in afternoon trading, while shares of Amazon.com climbed 68 cents, or about 2 percent, to $38.95.

more...
http://biz.yahoo.com/ap/070207/internet_sector_snap.html?.v=1

[citizen snips]

55. Sector Snap: Networking Equipment Makers

NEW YORK (AP) -- Network equipment makers benefited Wednesday from Cisco Systems Inc.'s better-than-expected fiscal second-quarter profits, lifted by demand for technology supporting video downloads.

Tuesday afternoon, Cisco reported a 40 percent increase in profit, to $1.9 billion, or 31 cents per share. Excluding charges, profit was 33 cents per share. The company said sales improved 27 percent and raised its forecast for the coming quarter.

Cisco shares added $1.11, or 4.1 percent, to $28.39 in afternoon Nasdaq trading.

Juniper Networks Inc. was among the companies Morgan Keegan analyst Simon Leopold said would be helped by Cisco's news.

more...
http://biz.yahoo.com/ap/070207/sector_snap_network_equip_makers.html?.v=2

[citizen snips]

56. Dow Ends Up 1, Nasdaq Closes Up 19

NEW YORK (AP) -- Wall Street ended a fractious session slightly higher Wednesday after falling oil prices hurt energy stocks and overshadowed a stronger-than-expected productivity reading. A Federal Reserve official's comments on interest rates also soured the market's early good mood.

A robust sales forecast from Cisco Systems Inc. gave a boost to technology stocks, however. The Labor Department's productivity figures for the fourth quarter were nearly double what had been expected, but failed to offset concerns about falling oil prices.

"Crude hasn't been able to get above $60 for three days so the energy names are weak," said Neil Massa, equity trader at John Hancock Funds. He suggested some investors were simply taking profits.

According to preliminary calculations, the Dow was essentially flat, inching up 0.56, or less than 0.01 percent, to 12,666.87. The Dow moved past 12,700 for the first time in the session, trading as high as 12,700.28. The previous trading record of 12,683.93 was set Friday.

more...
http://biz.yahoo.com/ap/070207/wall_street.html?.v=49

[54anickel]

59. DOW up 1 thanks to rounding. Bwahahaha!!!! n/t

[citizen snips]

61. 0.56

oh well its good enough for me.

[citizen snips]

57. Regeneration Tech Rises Despite 4Q Loss

NEW YORK (AP) -- Regeneration Technologies Inc. shares gained Wednesday after investors saw a brighter future for the company, which makes orthopedic implants using human tissue, despite its wider fourth-quarter loss.

Earlier, the Alachua, Fla., company recorded a loss of $6.7 million, or 22 cents per share, nearly four times its loss of $1.7 million, or 6 cents per share, in the year-ago quarter. Revenue decreased 5 percent, to $19.1 million from $20.1 million.

For the year, Regeneration reported a loss of $11.1 million, or 37 cents per share, nearly double the 2005 loss of $5.5 million, or 20 cents per share. Revenue slipped to $74 million from $75.2 million in 2005.

The company said revenue was hurt during the fourth quarter and full year by inadequate supplies of available tissue to meet customer demand for spinal implants, and a decline in orders for lumbar grafts. The supply problems resulted in a 10 percent decline in spinal construct volumes, Regeneration said.

more...
http://biz.yahoo.com/ap/070207/regeneration_technologies_mover.html?.v=1

[citizen snips]

58. Medical Action Shares Up on 3Q Profit

NEW YORK (AP) -- Shares of Medical Action Industries Inc. soared on Wednesday after the maker of disposable medical devices reported a rise in third-quarter profit on sharply higher sales.

Medical Action gained $4.83, or 15 percent, at $37.78 and hit a new 52-week high of $37.86 earlier in the session.

For the three months ending Dec. 31, profit rose 32 percent to $4.2 million, or 38 cents per share, from $3.1 million, or 30 cents per share, a year earlier.

The Hauppauge, N.Y.-based company said sales rose 69 percent to $66.7 million from $39.4 million, helped by the acquisition of Medegen Medical Products LLC.

Last year, Medical Action bought Medegen Medical Products for $80 million in cash.

http://biz.yahoo.com/ap/070207/earns_medical_action_industries.html?.v=1

[citizen snips]

60. Intevac Shares Jump After 4Q Report

NEW YORK (AP) -- Intevac Inc. stock soared Wednesday after the company, which makes equipment used to manufacture disk drives, said surging sales led to a doubled fourth-quarter profit.

The results beat the consensus Wall Street estimate. Intevac offered forecasts for the first quarter and 2007 that were above analyst expectations, too.

Needham analyst Richard Kugele upgraded Intevac stock to "Buy" from "Hold." Kugele said lower manufacturing costs enabled the company to keep its expenses lower than he expected, and the improved margins allowed it to make stronger earnings predictions.

Intevac stock gained $6.31, or 28 percent, to $28.88 in afternoon trading on the Nasdaq at 10 times its average trading volume. The stock has ranged from $30.90 to $14.65 over the past year.

http://biz.yahoo.com/ap/070207/intevac_mover.html?.v=1

[citizen snips]

62. Nasdaq 100 Leaders & Laggards: APOL MEDI

NEW YORK (AP) -- Apollo Group Inc. reported a lower first-quarter profit but still topped Wall Street expectations, and helped lift the Nasdaq 100 to a higher close Wednesday.

The Nasdaq 100 added 17.89 to close at 1,810.95. The broader Nasdaq composite index rose 19.01 to end at 2,490.50.

Apollo Group shares added $4.03, or 9.5 percent, to finish at $46.27.

Broadcom Corp. also finished higher, piggybacking on strong results from telecommunications equipment maker Cisco Systems Inc.

more...
http://biz.yahoo.com/ap/070207/nasdaq_100_leaders_close.html?.v=1

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63. Disney Earnings More Than Double

LOS ANGELES (AP) -- The Walt Disney Co. blew past Wall Street expectations Wednesday, reporting strong first quarter earnings on gains from the sale of its shares in US Weekly magazine and the E! Entertainment channel.

Even without the one-time gains, which boosted earnings by 29 cents per share, the media conglomerate beat analyst forecasts by 11 cents per share on strong performance from sales of DVDs, including "Pirates of the Caribbean: Dead Man's Chest."

Results were also helped by a strong ratings performance at its ABC network and cable channels, including ESPN.

Net income for the quarter ended Dec. 31 more than doubled to $1.701 billion, or 79 cents per share, compared to $734 million, or 37 cents per share in the same period last year.

more...
http://biz.yahoo.com/ap/070207/earns_disney.html?.v=2

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64. Treasuries Rise Fourth Straight Day as New 10-Year Debt Is Sold

Feb. 7 (Bloomberg) -- U.S. Treasuries rose for a fourth straight day, pushing the benchmark 10-year note's yield to the lowest in more than two weeks, as the government sold new 10-year securities in a quarterly auction.

The auction's yield was close to where the securities were trading shortly before the bidding deadline, indicating demand met dealer expectations. Investor appetite in an auction of three-year notes yesterday was stronger than expected.

``We've rallied about 15 basis points over the past few days and yet the auction still went well,'' said Theodore Ake, head of U.S. government bond trading in New York at Mizuho Securities USA Inc., one of the 22 primary U.S. government securities dealers required to participate in Treasury auctions. ``It's hard at this point to be real negative.''

The 10-year note's yield fell almost 2 basis points, or 0.02 percentage point, to 4.75 percent, at 4:09 p.m. in New York, according to bond broker Cantor Fitzgerald LP. Earlier it touched 4.74 percent, the lowest since Jan. 19. The price of the 4 5/8 percent security due in November 2016 rose 1/8, or $1.25 per $1,000 face amount, to 99 2/32.

more...
http://www.bloomberg.com/apps/news?pid=20601009&sid=a6k1vqKRyasQ&refer=bond

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66. Gold Falls, Erasing Earlier Gains, on Decline in Price of Oil

Feb. 7 (Bloomberg) -- Gold fell in New York, erasing earlier gains, after a decline in the cost of oil reduced the appeal of the precious metal as a hedge against inflation.

Gold sometimes moves in the same direction as the price of crude oil, which fell today after jumping 15 percent in the past three weeks. Gold reached a 26-year high of $732 an ounce in May, and oil climbed to a record in July.

``The failure of oil to get past $60 a barrel is a big factor,'' said Marty McNeill, a trader at R.F. Lafferty Inc. in New York. ``The price of oil came off and that put pressure on gold.''

Gold futures for April delivery fell $1.70 or 0.3 percent, to $657 an ounce at 1:22 p.m. on the Comex division of the New York Mercantile Exchange. Prices earlier reached $662. Crude oil for March delivery fell $1, or 1.7 percent, at $57.88 a barrel on Nymex.

more...
http://www.bloomberg.com/apps/news?pid=20601012&sid=a2XMciDPtDoU&refer=commodities

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67. DJIA Leaders & Laggards: CAT Alcoa

NEW YORK (AP) -- Caterpillar Inc. was the biggest gainer Wednesday in the Dow Jones Industrial Average and helped lift the index to a higher close.

Shares of the Peoria, Ill.-based heavy equipment maker rose $1.22, or 2 percent, to $65.64 on the New York Stock Exchange, rebounding from Tuesday's losses. Earlier Wednesday, Stifel Nicolaus analyst Barry Bannister raised his target price on the company's stock to $81 from $75.

The index was up 0.56, ending at 12,666.87.

American Express Co. added 62 cents to finish at $58.68 on the NYSE.

Walt Disney Co. also ended higher as the company prepared to release first-quarter results after the market close. Shares gained 29 cents at $35.48 on the Big Board.

more...
http://biz.yahoo.com/ap/070207/apfn_djia_leaders_close.html?.v=1

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68. Cisco Among Wall Street's Big Movers

NEW YORK (AP) -- Stocks that were moving substantially or trading heavily Wednesday on the New York Stock Exchange and Nasdaq Stock Market:

NYSE

News Corp., up 55 cents at $24.70.

The media conglomerate's fiscal second-quarter earnings fell from those of a year ago, which had benefited from a gain on an asset sale. The company's box office earnings rose on several hits including the "Borat" movie.

DirecTV Group Inc., up $1.38 at $25.35.

The satellite television operator's fourth-quarter profit more than doubled after its subscriber base grew and it changed its accounting for set-top boxes. Shares of the company reached a 52-week high of $26.09 during trading.

more...
http://biz.yahoo.com/ap/070207/wall_street_stocks.html?.v=3

[54anickel]

70. Closing "stuff" everyone made a "bit 'o money". Some a smaller bit than others. ; )

Dow 12,666.87 0.56 (0.00%)
Nasdaq 2,490.50 19.01 (0.77%)
S&P 500 1,450.02 2.02 (0.14%)
10-yr Bond 4.7450% 0.0200
30-yr Bond 4.85% 0.02
NYSE Volume 2,618,817,000
Nasdaq Volume 2,243,096,000

4:20 pm : The major averages closed in positive territory again; but the blue-chip indices saw little conviction on the part of buyers since much of the market's attention was directed at the tech-heavy Nasdaq. Investors weighed upbeat news in the recently beaten-down Tech sector and tame inflation data against an underlying sense that the market is still overbought on short-term basis.

The day's biggest headliner was Cisco Systems (CSCO 28.09 +0.81). The tech bellwether, which is also a suggested holding in the Briefing.com Active Portfolio, kicked things off in fine fashion last night after topping Wall Street expectations with a 40% rise in Q2 profits. More notably, Cisco also raising its Q3 and Q4 sales guidance renewed optimism in the sector's growth prospects, especially since several tech companies have lowered guidance of late.

However, while Cisco's news had a ripple effect throughout the market early in the session, so much so that the bulls pushed the Dow into unchartered territory, concerns over overbought conditions crept back into the market late in the day to close the Dow and S&P 500 just barely in the green.

Just before 11:00 ET, the Dow eclipsed the 12,700 level for the first time ever, actually benefiting from a reversal in crude futures following a bearish oil inventories data. The commodity was up as much as 1.6% and making another run at $60/bbl ahead of the report. However, after failing to break above the psychological $60/bbl barrier for a third straight session, crude for March delivery plunged 2% and closed 3.6% off its intraday highs at $57.71/bbl.

Albeit only accounting for a 10% weighting on the S&P 500, the Energy sector tumbling in sympathy with the sell-off in oil, without much evidence of investment dollars rotating into other areas, exacerbated this week's already underlying cautious tone going into the close.

Fortunately for the bulls, one of the other sectors attracting buyers was also the most influential of all, Financials. REITs were among the day's best performers again, this time after Equity Office (EOP 55.45 -0.60) shareholders approved Blackstone's sweetened takeover bid. Vornado Realty Trust (VNO 135.59 +8.59) was the sector's best performer (+6.8%) as its shareholders applauded Vornado's decision to withdraw its riskier offer just hours before the vote.

Lincoln National Corp. (LNC 70.41 +2.01) posting a 69% rise in Q4 profits as revenue nearly doubled further supported our Overweight rating on a rate-sensitive Financials that got an added boost from falling bond yields.

With the Fed asserting in its latest policy statement that "the high level of resource utilization has the potential to sustain inflation pressures," today's preliminary read on Q4 productivity was also reassuring, even for bond traders.

At 8:30 ET, the Labor Dept. showed that productivity rose a stronger than expected 3.0% in Q4. Unit labor costs rose just 1.7%, after rising at a 3.2% rate in Q3, pushing the year-over-year increase to 2.8%. That follows a 2.9% rate in Q3 and 3.0% rate in Q2, a declining trend that won't necessarily put to rest concerns at the Fed about the implications of a tight labor market, but it eased the worst of fears that wage-based inflation pressures are building. DJ30 +0.56 DJTA +0.3% DOT +1.0% NASDAQ +19.01 NQ100 +1.0% R2K +0.7% SOX +1.6% SP400 +0.4% SP500 +2.02 XOI -0.5% NASDAQ Dec/Adv/Vol 1167/1866/2.20 bln NYSE Dec/Adv/Vol 1385/1861/1.40 bln

3:30 pm : The indices are bouncing off session lows going into the close, but barely enough the inch the S&P 500 back into positive territory. Only four sectors are trading higher, but respectable gains from the S&P's two most heavily-weighted areas -- Technology and Financials -- are currently providing a floor of support.DJ30 -19.23 NASDAQ +14.90 SP500 +0.55 NASDAQ Dec/Adv/Vol 1286/1726/1.86 bln NYSE Dec/Adv/Vol 1473/1757/1.17 bln

3:00 pm : The blue-chip indices and the Nasdaq now trade in opposing directions as sector leadership continues to deteriorate. Albeit only accounting for a 10% weighting on the S&P 500, the Energy sector now down more than 1.0%, without any evidence of investment dollars rotating into other areas, is exacerbating the market's weakening sentiment. For instance, the beaten-down Tech sector is now trading at afternoon lows and has seen its gains from intraday highs more than halved even though lower energy prices are bullish for equities. DJ30 -28.60 NASDAQ +11.77 SP500 -0.71 NASDAQ Dec/Adv/Vol 1369/1632/1.69 bln NYSE Dec/Adv/Vol 1479/1725/1.06 bln

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73. Dollar Falls Against Euro

UNDATED (AP) -- The dollar fell against the euro on Wednesday, while the yen backtracked from earlier gains on mounting speculation that Group of Seven finance chiefs will not issue a strong warning on the weakness of the yen when they meet later this week.

The 13-nation euro bought $1.3006 in afternoon New York trading, up from $1.2978 in New York late Tuesday, as traders waited to see if the European Central Bank would set the stage for an interest rate increase in March when it meets Thursday.

The euro was helped by a U.S. report that showed productivity, the most important ingredient in rising standards of living, increased in 2006 at the slowest rate in nine years while labor costs shot up at the fastest rate in six years.

The British pound slipped to $1.9692 from $1.9704 on new sentiment that the Bank of England was likely to keep its interest rate unchanged at 5.25 percent when it also meets Thursday. On Tuesday, there were some expectations that the bank might surprise the markets with another hike after British retail sales for January came in stronger than expected

more...
http://biz.yahoo.com/ap/070207/dollar.html?.v=3

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74. Activision 3Q Profit Soars

SANTA MONICA, Calif. (AP) -- Video game publisher Activision Inc. said Wednesday preliminary results show its fiscal third-quarter profit soared 84 percent, driven by solid performance of its titles across all console platforms.

For the quarter ended Dec. 31, the company said it expects to report profit of $124.8 million, or 41 cents per share, up from $67.9 million, or 23 cents per share, during the same period in the previous year. Excluding stock options costs, profit is seen at 42 cents per share.

Sales inched up less than a percent to $822.8 million from $816.2 million.

Analysts, on average, were expecting earnings of 40 cents per share on sales of $797 million, according to a poll by Thomson Financial.

more...
http://biz.yahoo.com/ap/070207/earns_activision.html?.v=1