STOCK MARKET WATCH, Monday 9 February (#1)

[ozymandius]

Monday February 9, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 350
REICH-WING RUBBERSTAMP-Congress = DAY...
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 59 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 111 DAYS
WHERE ARE SADDAM'S WMD? - DAY 323
DAYS SINCE ENRON COLLAPSE = 807
Number of Enron Execs in handcuffs = 17
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 53

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




AT THE CLOSING BELL ON February 6, 2004

Dow... 10,593.03 +97.48 (+0.93%)
Nasdaq... 2,064.01 +44.45 (+2.20%)
S&P 500... 1,142.76 +14.17 (+1.26%)
10-Yr Bond... 4.09% -0.09 (-2.04%)
Gold future... 404.20 +5.40 (+1.35%)

DOW..........................NASDAQ.......................S&P

||


GOLD, EURO, YEN and Dollars


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

[ozymandius]

1. WrapUp by Tim W. Wood

THE DOW REPORT
"A Brief Technical Review"

The current technical setup of the Dow Jones Industrial Average remains uncertain and at a crossroads. The sell off in the Dow Jones Transportation Average has now brought it down below the November lows. This break down did a lot of technical damage to this market and is thereby suggesting that we have now seen an intermediate term reversal in the Transports.

<cut>
I am still suspect that we are making a top of significance. At this time, this suspicion can only be confirmed in the Dow Jones Transportation Average and is only beginning to be confirmed in the other indexes. Therefore, it appears that this decline is now being lead by the Transports, followed by the NASDAQ indexes with the Industrials thus far failing to confirm. We are now in wait and see mode. The technical deterioration is beginning. We now have to sit tight and observe to see if further weakness materializes. If so, we could be in for a nasty decline. But, if this decline remains limited, as the longer-term technical indicators work off their overbought condition, we could see another advance. The bottom line is that we now just have to see what transpires over the next week or so.

Beating the Dow Part II

[JNelson6563]

6. further weakness

Hmmm....

I think there is weakness and what is in question here is whether market weakness will catch up with the existing weaknesses.

Very interesting Wrap-up, as usual. :-)

Julie

[ozymandius]

2. Gold climbs as dollar falls after G7 meeting

Gold prices moved higher on Monday as the US dollar sank to a two-week low against the euro following the weekend's G7 meeting and doubts over whether any action would be taken to stem the volatility in the currency market.

After a choppy session on Friday bullion prices opened lower on Monday. But dollar weakness presented buying opportunities, traders said, after the G7 statement warned against exchange rate volatility, but stressed the need for currencies to reflect economic fundamentals.

"With the risks of concerted action to slow the fall of the dollar out of the way, and substantial capacity for speculators to rebuild long gold positions, we believe that nothing stands in the way of gold moving materially higher in weeks and months to come," said John Reade, precious metals strategist at UBS.

Alan Williamson at HSBC agreed

[JNelson6563]

7. Long on gold baby!

I'm tellin' ya I can feel it in my bones. This is going to be a good year for gold. Democrats too. :toast:

Julie

[ozymandius]

3. Sluggish Job Growth May Threaten Recovery

WASHINGTON (Reuters) - Another month of disappointing job growth in America has sown a seed of worry among analysts that the fragile economic rebound may not be strong enough to last.

For months now, economists have been forecasting an improvement in employment. Each month, they've been disappointed, and the news from January was no different.

it just gets thicker

[ozymandius]

4. Bush Defends Economic Record

WASHINGTON (Reuters) - President Bush (news - web sites) on Sunday defended his tax-cutting economic record, saying the economy has begun to recover after "tremendous stress" caused by war in Iraq (news - web sites), terror and confidence-sapping corporate scandals.

While blaming much of the economic difficulties on his campaign against terror and the war in Iraq, Bush ruled out raising taxes to pay the war bill, as other wartime presidents have done. He also refused to say he would not call for more tax cuts until the budget is balanced.

<cut>
"I think this economy is coming around just right, frankly," added Bush, who characterized himself as a "war president."

more here

By his standards: millions of unemployed and under-employed with little or no recourse are "just right".

[JNelson6563]

8. We've got them on the defense

let's keep them there.

I think the economy is going to be a very good issue for us this election. Bush looked like a crazy man on Meet the Depressed yesterday and I do not see improvement for his situation anytime soon. He will become unable to continue the charade convincingly even to his most brain-washed supporters among the masses IMO.

Julie

[jamesinca]

19. Let us not forget this little gem from that interview

He did say that it is a problem inherited from the Clinton administration. Remember the markets started to slow a year before the recession started so it is not his fault. Does anybody remember his taking credit for the economy when the thing hit 8+ at the end of the quarter last fall? Now it is back to Clinton's peni, oops, Clinton's fault for the economy.

[UpInArms]

5. daily dollar watch

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

Last trade 85.69 Change -0.33 (-0.38%)

related articles:

http://www.forbes.com/personalfinance/retirement/newswire/2004/02/08/rtr1251126.html

Dollar hits 2-week low vs euro, G7 impact short- lived

TOKYO, Feb 9 (Reuters) - The dollar hit a two-week low against the euro on Monday, losing early gains as the market decided the Group of Seven's warning against "excess volatility" in rates did not herald action to support the greenback.

The dollar jumped nearly one percent against the single currency at the start of trade as dealers initially took the G7 statement as a sign that Washington had paid heed to European and Japanese concerns about the U.S. currency's sharp fall.

But it quickly reversed course and fell to a low of $1.2727 per euro by 0248 GMT on the growing perception that the G7 warning was little more than lip service and that any coordinated action to stop the dollar's two-year- long decline was unlikely.

<snip>

"I think the current trend of a gradual decline in the dollar remains unchanged since the statement is not aimed at stopping the weakening of the dollar."

<snip>

Many analysts said the G7 statement -- issued after a two-day meeting in the Florida resort of Boca Raton -- would offer only temporary relief for the dollar, under pressure from a huge U.S. current account deficit and speculation that Washington tacitly wanted a weaker dollar to shore up the economy.

<snip>

"Still, this G7 won't change international fund flows, which are not heading to the U.S.," he added.

...more...

and

http://www.nytimes.com/2004/02/09/international/09GROU.html

How Main St. and Wall St. Will Feel as the Dollar Plunges

ASHINGTON, Feb. 8 — Treasury Secretary John W. Snow has tacitly but unmistakably abandoned Washington's longstanding support for a strong dollar in favor of a weak dollar that is getting weaker, though he continues to insist there has been no change in policy,

Stripped of the code words and elliptical references to "excessive volatility" in exchange rates, the message that Mr. Snow delivered this weekend to finance ministers from Europe and Japan was that the dollar's plunge against the euro is just fine and that the dollar should now decline more rapidly against Asian currencies as well.

In so doing, the Bush administration has made a calculated economic and political choice. By condoning and even encouraging a cheap dollar, the administration is providing a big push to American exporters by making their products less expensive in foreign markets.

That should encourage more hiring and lower unemployment leading up to the election. The only immediate losers are exporters in Europe and Asia who have to choose between cutting prices or losing market share in the United States.

But the long-term risks are substantial. At some point, a weaker dollar will inevitably lead to higher prices for imported goods — almost all consumer electronics bought by Americans, most of their clothing, many of their cars and much of the oil that provides the fuel to drive them.

A much bigger risk is that a plunging dollar could contribute to a rise in interest rates, as foreign investors demand fatter risk premiums before agreeing to buy hundreds of billions of dollars worth of Treasury securities to finance America's high levels of indebtedness.

The United States needs to attract $1.5 billion a day in net capital inflows from abroad — $500 billion a year more than it sends out — which means that the world is being flooded by American I.O.U.'s at levels never seen before. The administration's huge budget deficits could increase that need for foreign capital even more, and higher interest rates would add billions of dollars to those deficits.

...more...

Well folks, I guess yet another generation will get to see what happens when out governmental policies go mad. For those of you who remember what happened when Raygun actively sought a weak dollar policy (more debt, inflation, lack of jobs, bank failures, high interest rates).

I suppose that the only question remaining is how long it will take for this to all happen. That will depend on how long the markets stay up - because the people in this mal-administration feel that as long as the curtain doesn't fall on the market, the dollar doesn't matter.

I will have to laugh at the line in the NYT that says that employment should start to increase - does anyone remember how those jobs did not appear during Raygun's reign?

Have a Great Day Marketeers!

[JNelson6563]

9. These people think the future is Wednesday

They have no concept of the long term when it comes to domestic policies, most notably on the economy. All they consider is the next election and they don't think for a moment about the good of the nation.

The dollar's fall will help their supporters in the sectors who will benefit from exporting but it won't do the masses much good. Sure it may result in stemming the bleeding of jobs, it may even create a few. Key word; few. The reason I believe this is that productivity is so high in spite of so many fewer workers. It is an employer's market and they can drive the work force very hard. They have the upper hand and will exploit the situation as much as possible.

We must oust Team Bush this year. Their economic strategies will prove disastrous for our country.


Julie

[UpInArms]

12. the reason that the future is Wednesday

is because too many reports come out on Thursday :D

here's a bit more regarding the BoJ

http://www.fxstreet.com/nou/content/102610/content.asp?menu=technicalanalysis&dia=922004

Above the Yen 106 level, the pressure from medium and long term downward players against the cross is so big, that no level of reasonable intervention seems able to counter it. In this situation the normal outcome is for the B.O.J. to give up and retake dollar defense under 103 . This is now the most probable scenary , and Yeneticus will act accordingly. The constant danger for our short positions : new interventions .

[54anickel]

15. What gets me is that they keep touting a lower dollar will help to

reduce the trade deficit, yet it widened again last month. As more production is shipped out, those goods become imports. So think of just appliances alone. Maytag, Whirlpool and one or two others moved to Mexico. Much of the raw materials and components of durable goods are being imported.
I don't see how the drop in the dollar is going to help shrink that trade balance as more and more of our products become imports. Looks more like one step forward, two steps back. :shrug:

On edit add:
Widening trade gap - Projected http://www.hindustantimes.com/news/181_563514,00020002.htm

But Friday will bring some numbers worth noting: On tap are the December international trade deficit, projected to widen to $39.45 billion from $38.01 billion in November, and the University of Michigan's preliminary February reading on consumer sentiment, forecast to dip to 103.3 from January's final reading of 103.8, according to economists polled by Reuters

[54anickel]

10. Raygun - don't forget the real estate markets and the M&A craze

those policies gave us. Oh yeah, those were GRAND times - not. :eyes:

[UpInArms]

14. the grand ole' times

of foreclosures and personal bankruptcies.

What fond memories we all have (NOT!)

:hi:

[ozymandius]

11. I came "of age" in the Reagan era.

The people who were hit most were the independent farmers. Then there were success stories crystalized in the likes of slick swindlers Ivan Boesky and Michael Milken. Then there was Robert Bork. Ahhh! What a time!

By the way UIA - do you see a value point from which the dollar will drop that willburden it with a colossal challenge to regain strength?

[UpInArms]

13. Hi Ozy!

Ah yes, Milken, Penn Square, the S & L failures (and their subsequent absorption by the Bush cronies).

The point where the dollar will suffer the greatest - and possibly face the point of no return - will be when the euro values at 1.40 and the yen at 100

This is just my uneducated guess, but at those levels it will show that the world has truly lost "full faith and confidence" in our fiat currency.

[54anickel]

16. Wonder if this guy will be changing his tune?

He offers a worrisome picture and then totally negates it at the end of the article. :shrug:

http://money.cnn.com/2003/11/20/commentary/bidask/bidask/

snip>
A relatively new asset class, buying TIPS makes sense if you are worried over the prospect of a rise in inflation; if you expect falling inflation or, worse still, deflation, TIPS are not a good bet. The Fed is worried about the latter scenario but some big investors are more worried about the former. Bill Gross, the bond manager who overseas PIMCO's more-than $250 billion portfolio, has said he is an active buyer of TIPS.

At the same time, however, the yield on the 10-year Treasury, at 4.2 percent, is actually quite low. That suggests a forecast of a less than robust economic environment in the years to come -- one where the Federal Reserve will not see fit to raise rates by all that much.

Put the rising TIPS spread and low Treasury yields together and what do you get? That's right: a forecast of stagflation.snip>
More troubling, some investors worry that China may scuttle some of its vast U.S. Treasury holdings in retaliation, a move that could hurt Treasury prices and the dollar badly. A falling dollar, because it lowers U.S. purchasing power, is inflationary.

snip>
Before the recent recession, you have to go all the way back to 1983 to find a period when capacity use was so low. If the United States was a closed economy, one would view this as an environment that would create little growth and little inflation. But since the U.S. economy is open to the world, and open to inflationary pressures from abroad, maybe what we get is stagflation.

All very frightening, right?

Let's take a step back. Much of the reason there's been so much interest in TIPS lately may have nothing to do with worries about inflation. Rather, as an emerging asset class, big investors are just figuring out how to play the securities into their asset mix. A big pension fund goes from not using TIPS to, say, a 3 percent position and things move. What superficially looks like a stagflation forecast may, in fact, be something very different.

[54anickel]

17. Interesting article on the economy in the campaign.

http://www.jsonline.com/news/gen/feb04/206147.asp

snip>
In 2004, those seeking the White House continue to feel their way slowly along in a newly globalized world that moves with digital speed. The challenge confronting any politician is to lure voters without demanding new sacrifices at a time when conventional 20th-century policies no longer fit a radically changed terrain.

"Given this administration's inaction, American manufacturers can be excused for feeling like economic roadkill," Massachusetts Sen. John Kerry declared earlier in the primary season.

The velocity of change in the world's biggest economy has been so rapid that the implications for jobs, taxes and trade have yet to sink in with many voters, posits Ed Kilgore, policy director at the Democratic Leadership Council, an influential group of self-described centrist Democrats.

"One of the challenges that Democrats face is explaining all this to voters," Kilgore said.

snip>
Under the new paradigm, the U.S. no longer appears to dictate the rules of globalization. Growth and profits often lie abroad. The nation's economy can "recover" and corporate profits can rise, lifting Wall Street with them - all without creating jobs at home. Those with paychecks often see their benefits shrivel. Even as growth registers a statistical expansion, suffocating federal deficits stifle retraining, education and welfare programs.

In theory, such unforgiving times should give strong voter appeal to the Democratic Party. Contenders for the party's presidential nomination have lost no time in thrusting taxes and trade into the forefront of their campaigns to distinguish themselves from President Bush

snip>
Calling the tax cuts "a dangerous and deceitful experiment," Kilgore said Democrats want voters to recognize the economic perils of such aggressive revenue cuts at a time when the nation already is borrowing heavily for a world war on terrorism, homeland protection and Bush's new domestic programs.

The federal deficit denies future generations funds for their needs because they will pay later for the tax cuts that allow Americans to spend now, Democrats charge. The shortfall is officially projected at a record $521 billion this year. In 2002, Bush had predicted just a $14 billion shortfall in 2004.

snip>
Like Bush, Democratic contenders Kerry, Clark and Edwards support liberalized trade. "America cannot and must not flee from global competition," Clark says.

They constitute the "mainstream internationally minded Democrats," in the words of Ed Gresser, trade analyst with the Progressive Policy Institute in Washington.

Each backs U.S. membership in the World Trade Organization - a 146-nation group that seeks ever-lower trade barriers - at a time when a growing number of trade unions and some manufacturing coalitions are urging the U.S. to get out.

Dean set himself apart with a bold promise to renegotiate the North American Free Trade Agreement with Mexico and Canada. "We need to negotiate a 'New Deal' with Mexico," Dean has argued. And Edwards, whose home state of North Carolina has bled jobs in textiles, apparel and furniture, has announced that he "campaigned against NAFTA."

Significantly, Clark, Edwards, Kerry and Dean all back unfettered trade ties with China. Because China ranks as the world's fastest-growing venue for industrial "outsourcing," it has become a political free-trade litmus test.

more...

[ozymandius]

18. 10:04 update and blather

Dow 10,582.74 -10.29 (-0.10%)
Nasdaq 2,067.21 +3.20 (+0.16%)
S&P 500 1,142.17 -0.59 (-0.05%)
10-Yr Bond 4.066% -0.023

Mixed open for U.S. stocks

NEW YORK (CBS.MW) - U.S. stocks were mixed early Monday as investors reviewed the latest earnings releases and a $4 billion deal by Juniper Networks.

A number of blue chips were making news Monday.

Eastman Kodak (NYSE:EK - News) agreed to sell its remote sensing systems business to ITT Industries (NYSE:ITT - News) for $725 million. The remote sensing systems business has 1,800 employees, and it generated revenue of roughly $425 million in 2003.

more...

[UpInArms]

20. YeeHaw!!! Inventories Went Up! Great News!!!

Huh?

http://www.forbes.com/markets/bonds/newswire/2004/02/09/rtr1251861.html

U.S. Dec wholesale inventories rise 0.6 percent

WASHINGTON (Reuters) - Inventories at U.S. wholesalers posted their largest rise in a year in December, the Commerce Department said Monday, indicating that U.S. businesses were gearing up for strong growth ahead.

Commerce said wholesale stocks of goods rose 0.6 percent, versus a gain of 0.5 percent in November and ahead of Wall Street expectations for a 0.4 percent gain. This was the largest rise since December 2002's 0.8 percent.

One of the larger rises was recorded by automobile inventories, up 3.0 percent in the biggest monthly advance since December 1998's 3.5 percent gain.

...more...

[Frodo]

21. Question: What's the "Huh?" for?

[UpInArms]

22. Hi Frodo!

Glad you asked.

Here's your history question for today (and a link in which to find the answer): During what year did the "inventories rise as consumption fell?

http://mirrors.korpios.org/resurgent/Timeline.htm

[Frodo]

23. Whoa boy! Back up the truck.

Let's think through this again. "Inventories rise" is NOT the same thing as what you have posted for 1929. What are you using to demostrate "consumtion falls"???

Here's a pretty simple measure. It's calles the "Inventory to Sales ratio", which would be a measure of current inventory levels by comparison to a pretty solid measure of consumption (sales). For you "inventories rise while consumption falls" example, you would have to see a pretty big I/S number, right?

Well let's look at reality:




By YOUR measure we're about as far from a collapse as it's possible to get, right? Is that your point?

And from the analysis:

0.6% rise in inventories is the strongest in a year. Followed 0.5% gains in Oct and Nov.
Strong sales growth continued. 1% rise matches 1.2% average pace over the Sep-Dec period.
Result is a new record low inventory to sales ratio of 1.17 months.
Lack of available supply argues for strong inventory rebuilding and a lift in early 2004 production already boosted by demand.


If sales are growing faster than inventory, how do you measure "consumption falls"???


Why is this not a big deal? Because wholesale inventories is one of the worst measures of economic health. Almost nobody looks at it - but it's all we have to discuss for a few days.

[UpInArms]

25. let's see

from what do I base my assumption that consumption falls:

Let's look at what we are consuming - imported goods - as we produce fewer and fewer goods and manufacturing falls (you will probably want to dispute that one, too - but if you lose 2+ million jobs in the manufacturing sector, how can production actually increase?

What is the "increase" based on if the factories are closed?

Oh, that's right, they are based only on the number from the month earlier so we can have charts that go up and up and up, but never reflect the actuality that there are fewer goods produced.

There was a lovely article that I posted over the weekend -

http://www.marionstar.com/news/stories/20040208/localnews/379686.html

Of more than 3 million jobs lost in the past three years, about 2.8 million were in manufacturing. Roughly 83 percent of all garments sold in the United States today are made offshore, as are 80 percent of the toys, 90 percent of the sporting goods and 95 percent of the shoes.

<snip>

Raymond Seaford, a shipping supervisor and a 40-year veteran of Pillowtex, saw the end coming three years ago.

"We started seeing boxes of our finished product arriving from Pakistan, India and Turkey with our labels," he said.

At first, Seaford's workers repackaged the towels and sheets into boxes stamped "Kannapolis," then trucked them to retail outlets. Eventually, so many imported boxes came in that they gave up the pretense.

...more...

Okay, Frodo - where are we exporting good and what goods are we exporting?

We may be "consuming more" - but where do the dollars go? Not into the US - but into imported goods -

{b]That does not stabilize our economy. (imho)

So when you see an increase of inventory, you need to see if there are other issues that may be tied to it.

[Frodo]

27. Those are fine points...

... but how do they bear on 1929?

Your comparison was consumption to inventories.

The measurement I gave you was Inventories at US wholesalers and Sales at US wholesalers. "Consumption" isn't down.

I'm aware of what's been happening to jobs in manufacturing. I'm in one of the hardest-hit areas and see it every day. The pillowtex factory is just a couple districts over.

But you're talking about two different things. If a US company resells a indian towel, there is at least a US company making a profit (not that it helps Raymond). In the case where inventories explode while consumption is actually falling, you have businesses closing their doors. People get laid off, not because their job went overseas, but because there WAS no job - the company was gone.

You are correctly identifying a significant problem... but today's inventory numbers don't fit into it.

[UpInArms]

34. well Frodo

you just said it:

In the case where inventories explode while consumption is actually falling, you have businesses closing their doors. People get laid off, not because their job went overseas, but because there WAS no job - the company was gone.

so the doors are closing and the jobs are gone - there are no jobs for those people. Ergo - consumption falls.

[Frodo]

35. Not quite.

Consumption is close to record highs (if not AT record highs). The companies aren't (largely) closing their doors, they're replacing production with foreign production. That's not at all the same thing - though there's no question that for the individuals involved it FEELS like the same thing.

In the case described, inventories skyrocket precisely because people stoped buying things because they didn't have jobs, and more people lost jobs because there was no point in producing something you had tons of inventory of and nobody buying. You can look at the numbers from any angle you want, but there is nothing indicating that people have stopped buying things ... there's also no indication that lost production from job cuts has ot been MORE than offset (production wise) in other areas since GDP has continued to climb well above inflation rates. Sales of items produced solely in the US are rising, not falling. Unemployment is the economy's achilles heel, but it isn't anything like the depression, it strikingly similar to 1995/1996. The fact that we went way up from there and have come way back down means we've gone far off course, but it doesn't mean we're six inches from financial ruin.

There's jsut no way to look at a "better than expected" inventory report and say "gee that looks like 1929". It doesn't.

[54anickel]

29. Here is a decent article discussing the theory of free trade. Seems

that perhaps the entire premise of comparative vs absolute advantage has been over looked.
http://www.mises.org/fullarticle.asp?control=1420&id=65

snip>
The case for free trade is based on David Ricardo’s principle of comparative advantage. Ricardo addressed the question how trade could take place between country A and country B (England and Portugal in his example) if country B was more efficient in the production of tradable goods (cloth and wine in his example) than A.

In other words, if Portugal could produce both cloth and wine at lower cost than England, how could trade between the countries benefit each?

Ricardo found the answer in relative or comparative advantage. He said that if Portugal specialized in wine, where its absolute advantage was greatest, and England specialized in cloth, where its disadvantage was least, total output would be higher than if both countries achieved self-sufficiency by producing both products. The higher productivity from specialization would result in mutual gains from trade.

For comparative advantage to reign, two conditions are necessary:

One is that capital and labor must be mobile within each country so that the capital and labor employed in England in the production of wine can flow into the production of cloth, where England’s trade advantage lies. In Portugal capital and labor must be able to flow from cloth to wine where Portugal’s advantage is greatest.

The other necessary condition is that capital and labor (factors of production) cannot be internationally mobile. If the factors of production are internationally mobile, capital and labor would move from England to Portugal, where both commodities can be produced the cheapest. Both wine and cloth would be produced in Portugal. Portugal would gain and England would lose.

Ricardo makes it clear that for trade to make both countries better off, trade must be based on comparative advantage. Ricardo gives reasons why, in his time, factors of production are internationally immobile.

more..
................................

And a rebuttal from The WA Post (only one I could find)

http://www.washingtonpost.com/ac2/wp-dyn?pagename=article&node=&contentId=A1985-2004Jan8¬Found=true

snip>
The joint byline on the New York Times op-ed page Jan. 6 -- "By Charles Schumer and Paul Craig Roberts" -- certainly was a shocker. Schumer is a liberal Democratic senator from New York; Roberts is one of the wildest of the bug-eyed supply-side conservative economists. Schumer's connections to the financial establishment and Roberts's free-market ranting make their message surprising as well: They have turned against free trade. But two people can be just as wrong as one.

snip>
The core of free-trade theory is the concept of "comparative advantage." Schumer and Roberts make the classic college-student mistake of confusing comparative advantage with absolute advantage. Nations trade because for each one, there are goods or services it is more efficient to buy from abroad than to produce at home. If there is nothing America can offer the world that is either uniquely desirable or cheaper than elsewhere, the world will not buy anything from America. And after a while, the world won't sell anything to America either, because we won't have the foreign currency to pay for it. So even in this extreme case, there is no need to restrict trade, because trade will restrict itself. But in fact, as Ricardo demonstrated, there will always be something worth trading. Even if Nation A can produce both apples and oranges more efficiently than Nation B, it will still make sense to concentrate on producing one fruit and import the other. And Nation B will make itself poorer, not richer, by keeping out fruit from Nation A. If Nation A retaliates by keeping out fruit from Nation B -- and why shouldn't it? -- Nation B will be doubly punished.

That's the theory. It's pretty rock-solid. You can reject it in its entirety -- as, for example, Dick Gephardt, the most protectionist of the leading Democratic presidential candidates, pretty much does. But most critics don't have the guts to defy reality or conventional wisdom (take your pick) to that extent. Schumer and Roberts cling to the free-trade label and endorse the general principle, while claiming it no longer applies because "the factors of production can relocate to wherever they are most productive." In fact, that makes the theory even more compelling. If the factors of production become more productive, the whole world becomes richer. If there is some explanation of how a society can get richer by denying itself the fruits of this process (and most likely curtailing the whole process itself, as others misguidedly retaliate), Schumer and Roberts do not offer or even hint at it.

Traditionally, the most troublesome thing about free trade -- apart from the difficulty of convincing people that it works -- is the unequal distribution of its benefits. The whole country is better off, but there are winners and losers. Generally, the losers are lower-income workers, whose jobs are the easiest to duplicate in less developed countries. It seems misguided to me to avoid a policy that makes the whole nation richer because it makes some individuals poorer. With more to play with, it ought to be easy to ease the burden on free trade's losers. Of course, under a Republican administration, we don't do nearly enough of that

more...

[54anickel]

36. Some rather unnerving parallels in that story for the years leading

up to the Great Depression. Huge federal spending, tax cuts, decline of organized labor, "Technological UE", M&As, high productivity, rich getting richer, etc.

Gotta love this Coolidge quote, "The business of America is business."

[54anickel]

26. Look for more auto incentives

http://www.just-auto.com/news_detail.asp?art=43482
snip>
Reuters noted that company officials said last month that the mantra inside GM is "Fast Start in '04," but last week, the carmaker reported a surprisingly weak drop of 2% in US sales while high inventories of unsold vehicles led many analysts to conclude that GM would add more incentives.

Citing dealers, the news agency said GM has also offered other incentives recently to boost sales, including a "combination" programme offering buyers interest-free financing for loans of up to 48 months and cash rebates of up to $US2,000 on select models in some regions of the country.

GM has also sent employees coupons to use or give to friends offering thousands of dollars off the price of a new vehicle in a programme that runs until the end of March, Reuters added.
..........................................


Back on 1/22 the big 3 were predicting a cut in incentives:

http://www.delawareonline.com/newsjournal/business/2004/01/22automakerscutti.html
snip>
Automakers are pushing to curb runaway incentive costs after spending a record $44 billion in 2003 on cash rebates and cut-rate financing.

While the deals have kept car and truck factories humming during tough economic times, they've also left the Big Three with paper-thin profit margins and a customer base that expects deeper and deeper discounts.

Now the companies are counting on an economic recovery, revamped product lineups and improved quality to help wean buyers from discounts.

They're also quietly raising sticker prices and rolling out an unprecedented wave of innovative offers to woo incentive-hungry consumers.
..................................

I saw an article last week discussing the morphing of auto companies into finance companies. I remember for GM, their finance arm was much larger than the auto manufacturing side of the business.

[54anickel]

30. They are hoping for increased demands. There's that 50/50 chance

again. Although with all of the layoff notices of late and the increasing media articles disputing the official UE figures, along that with the fact that we are coming out of the holiday season and gift card redemptions, I'd place my bets on declining demand. Probably won't show in January consumer spending numbers, but will definitely be in February's.

Edit: oops, forgot link, and add - don't forget the dollar's fall has now been blessed, import prices (the majority of consumer spending) will begin to rise.


http://www.mcall.com/business/local/all-weekahead-cfeb09,0,5298296.story?coll=all-businesslocal-hed

snip>
Total retail sales were probably little changed last month, tempered by a drop in auto sales, after a 0.5 percent increase in December.

Carmakers sold 16.1 million light vehicles at an annual rate in January, down from 18 million the previous month, industry figures this month showed.

Businesses are boosting inventories to ensure they have enough supplies in stock to accommodate improving demand.

Retailers, wholesalers and factories probably added 0.3 percent more goods to their stockpiles in December, matching the previous month's rise and the fourth consecutive increase, the median forecast expects a Commerce Department to show Thursday.

Wholesale inventories, which account for 25 percent of the total, probably rose 0.3 percent in the last month of 2003, following a 0.5 percent increase in November, Commerce is forecast to report tomorrow.

Restocking will probably contribute to economy growth this quarter.

snip>
Businesses are probably importing more goods from abroad to help boost inventories and meet demand.

The nation's trade deficit may have widened to $40 billion in December from $38 billion as imports swelled, according to the survey.

The jump would boost the trade gap for all of 2003 to a record.

[JNelson6563]

24. 11:16 update

Hey all--

This is my first glance at the markets since open. Here's what they look like right now:


Dow 10,575.70 -17.33 (-0.16%)
Nasdaq 2,067.95 +3.94 (+0.19%)
S&P 500 1,141.12 -1.64 (-0.14%)
10-Yr Bond 4.081% -0.008

Not a whole lot of action. Yet.

Julie

[Coventina]

28. The "I Ching" on today's market

Happy Monday everyone!

Today's reading is GRACE changing to MEDITATION. Seems like a very quiet and gentle reading! Here is the changing line from GRACE: "Move forward under your own power and avoid false appearances or dubious shortcuts. It is most important now that you rely upon your own worth."

Yeah, 'cuz we all know that there is certainly nothing else to depend on out there! Our gov't is certainly NOT looking out for our interests!

Here is a quote from Meditation: "Because of the external complexities in worldly matters, it is of great importance to achieve inner peace. This will allow you to act in harmony with the times, rather than reacting with impulsiveness. Hold your thoughts to the present and attempt an unprejudiced view of the situation. Actions that spring from this attitude will be appropriate and well regarded."

I predict a quiet day in the markets.
For myself, I am going to take Ching's advice and focus on my inner peace for today.
Have a great day everyone!
:hi:

[ozymandius]

31. Have a great day folks!

Sorry that my participation has been scant. Lots to do at home today.

See you in the morning! :hi:

Ozymandius

[54anickel]

32. It's Clintons fault ...

US recession began before Bush took office-W.House

http://www.forbes.com/home_asia/newswire/2004/02/09/rtr1252185.html

WASHINGTON, Feb 9 (Reuters) - The U.S. recession began before President George W. Bush took office, the White House said on Monday, contradicting the arbiter of U.S. business cycles, which has said the slump began on Bush's watch.

In the annual Economic Report of the President, the White House said economic activity peaked in the fourth quarter of 2000, several months earlier than the March 2001 recession start cited by the National Bureau of Economic Research.

"While some arbitrariness in determining the date on which a recession began is inevitable, revisions since the NBER made its decision for the most recent recession strongly suggest that the business-cycle peak was before March 2001," the Bush administration said in the report.

Bush's economic team has long argued he inherited the recession from the Clinton administration. Some 2.2 million jobs have been lost since Bush took office in January 2001, and the jobs issue looms large in Bush's quest to be re-elected in November.

more...

[54anickel]

33. Looks like we just looked at this last July

http://budget.senate.gov/democratic/press/2003/fs_bushrecession073103.pdf

Bush Administration Tries to Deflect Blame for Failure of Economic
Policies by Falsely Claiming That Recession Began Before President
Took Office

Despite widespread agreement that the nation’s economy went into recession in March 2001, two months after President Bush was sworn in, the President and other administration officials have
repeatedly claimed that the country was already in recession when they took office. Their claims are clearly designed to absolve the President of responsibility for the economy’s continuing weakness and for the millions of jobs that have been lost under the President’s watch.

Recession Actually Started Two Months After President Bush Took Office
On many occasions, the Bush administration has claimed that the recession began before it took office. The following quotes represent just a few examples of the Bush administration’s deliberate campaign to shift blame for the weak economy away from the President and his failed tax cut policies.

more...

[54anickel]

37. 3:36 numbers & blather

Dow 10,576.59 -16.44 (-0.16%)
Nasdaq 2,061.46 -2.55 (-0.12%)
S&P 500 1,139.75 -3.01 (-0.26%)
10-Yr Bond 4.065% -0.024

3:30PM: Equities pare their losses some from their pullback at the top of the hour, but continue to trade just below the unchanged mark... Today's trade has been relatively listless with the major indices confined to extremely narrow ranges... The unwillingness of investors to make large changes to their positions rests with several factors, the most significant being the market's comeback in Friday's session after having been down for more than two weeks - throwing a wrench in some market talk that called for another week of losses...
Tomorrow's market also does not have a ton to take its cue from as there are no economic reports on the calendar, and only a few earnings reports from a wide-range of companies...NYSE Adv/Dec 1849/1410, Nasdaq Adv/Dec 1768/1413

[54anickel]

38. Closing numbers

Dow 10,579.03 -14.00 (-0.13%)
Nasdaq 2,060.57 -3.44 (-0.17%)
S&P 500 1,139.81 -2.95 (-0.26%)
10-Yr Bond 4.065% -0.024