STOCK MARKET WATCH, Friday 13 February (#1)

[ozymandius]

Friday February 13, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 346
REICH-WING RUBBERSTAMP-Congress = DAY...
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 63 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 115 DAYS
WHERE ARE SADDAM'S WMD? - DAY 327
DAYS SINCE ENRON COLLAPSE = 811
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 12, 2004

Dow... 10,694.07 -43.63 (-0.41%)
Nasdaq... 2,073.61 -16.05 (-0.77%)
S&P 500... 1,152.11 -5.65 (-0.49%)
10-Yr Bond... 4.06% +0.04 (+0.92%)
Gold future... 414.20 +3.50 (+0.85%)

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 Martin Goldberg

"Presidential Election Conspiracy Theory"

I have received much e-mail in the fall suggesting that there are interventional forces acting to keep the market going up or at least prevent a meaningful correction from occurring until after the presidential election. When I first read these e-mails, my initial reaction was to dismiss them as reflecting the opinions of a generally bearish FSO readership. However recently, I have also seen some of this same presidential election rationale routinely used in some mainstream publications such as the Barron’s Roundtable, and quarterly newsletters of major brokerages. Basically, these publications suggest that Fed policy will be accommodative of the stock market until the election and that these policies will be successful in supporting the stock market until the election. In addition, I have found that this “presidential election” support theory is prevalent at many pubs and water coolers around town. It almost seems to be common knowledge that the market will not fall because of the organized support that is anticipated to remain until the November election.

Whatever the specifics of the interventional forces (or Plunge Protection Team (PPT)) used in this conspiracy theory, if it is real, then we may have a timing tool for an overdue stock market drop. Since the market is a “discounting mechanism,” it’s obvious to me that the market should be hit with a wave of selling before the election. Why before? Do you believe that anyone holding stock based on the presidential election rationale would be foolish enough to hold his or her stock until after the election? How do you think that would that play out? Would the PPT allow all widows and orphans to sell on the Wednesday after the election at the closing price of Election Day? Would they then allow all momentum players and day traders sell on Thursday, and mutual fund investors on Friday, all at Tuesday’s closing prices? I don’t think so! Such privileges to sell at yesterday’s close were only allowed by some mutual funds for their hedge fund customers. That is, before these people got caught cheating. If you feel that interventional forces are supporting the stock market, then you may want to consider selling in advance of the presidential election. Actually, even if there is only significant belief of organized support (and no actual support), that could also precipitate a stock market drop in the early fall. Show me the person that will buy stocks after the November election because he feels that the Fed (or whatever the form or organized support) is going to support the stock market before the election.

My point is that if you believe there is a PPT, then you should look for a stock market drop before the election since the stock market is a discounting mechanism. And the pre-election drop could actually affect the election results in just the opposite way as was intended.

<cut>
Greenspan Testimony

I was at home sick the last couple of days, and on some painkillers. That is probably the best way to watch CNBC - in a state of half-consciousness. Watching the Greenspan testimony yesterday, I think he said that new jobs were just around the corner; but he couldn’t answer the question of what industries the jobs were going to be in. He seemed to tell young people to learn how to read and write, and the jobs would come from American innovation, from some as yet, undefined industries/functions. Yet today, he sited the failure of our education system. So what would make the jobs happen? “It’s always been that way before in the US”, said Greenspan. Not much for young people to go on here. In any case, the stock market loved Tuesday’s testimony, and was neutral on today's.

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

[54anickel]

11. Hmmm, PPT?

Back to yesterday's news (I've got to stop this repetition)

:tinfoilhat: :tinfoilhat: :tinfoilhat: :tinfoilhat: :tinfoilhat:

http://www.forbes.com/markets/bonds/newswire/2004/02/12/rtr1258714.html

Greenspan-No need for hedge fund SEC registration
Reuters, 02.12.04, 12:46 PM ET

WASHINGTON, Feb 12 (Reuters) - Federal Reserve Chairman Alan Greenspan said on Thursday he did not believe hedge fund advisers should be registered by the Securities and Exchange Commission.

"I think that hedge funds -- which I would define as financial institutions in which investors are only of high-income levels -- the value of these institutions is to create a very significant amount of liquidity in our system," Greenspan said.

"And I think that while they have a reputation as being a sort of peculiar type of financial group, I think they've been very helpful to liquidity and hence internal flexibility of our financial system," he said in response to a question from the Senate Banking Committee.

He said while "we have to be careful" hedge funds do not become an investment vehicle for people of lower and moderate incomes -- which appropriately requires SEC oversight -- it did not necessarily follow that SEC registration was needed.

more...

[54anickel]

20. Here's the SEC's "response" to Greenspin

http://www.forbes.com/markets/newswire/2004/02/12/rtr1259532.html

WASHINGTON, Feb 12 (Reuters) - Hedge funds have played a major role in recent mutual fund scandals, a federal official said on Thursday in response to Fed Chairman Alan Greenspan questioning the need to register the fast-growing investment pools.

"Hedge funds were willing participants in more than half of the recent mutual fund cases the SEC has brought," said Laura Cox, a senior adviser to Securities and Exchange Commission Chairman William Donaldson.

Donaldson is "very concerned" about hedge fund involvement in many of the improper market timing and illegal late trading scandals that recently hit the mutual fund business, Cox said.

In September, the SEC staff recommended that hedge fund managers be required to register with the SEC. Hedge funds -- the fast-growing investment pools favored by the rich and large investment institutions -- are only loosely regulated now.

more...

[UpInArms]

21. why would the SEC

care if there were signs of impropriety?

Greenspin knows that godless capitalism should reign supreme - those that have all that money deserve the opportunities that should be afforded to the monied elite.

Laura Cox needs to make sure she doesn't fly on any small planes in the near future.

(my cynicism runneth over)

[UpInArms]

2. daily dollar watch

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

Last trade 85.16 Change -0.13 (-0.15%)

related articles:

http://www.forbes.com/business/newswire/2004/02/13/rtr1259944.html

Dollar still sickly, markets await growth data

LONDON, Feb 13 (Reuters) - The dollar edged down and stock and bond markets in Europe trod water on Friday ahead of data that will give a snapshot of the U.S. and euro zone economies, while markets continued digesting firm signs that U.S. rates are on hold.

<snip>

But a surprise rise in U.S. weekly jobless figures on Thursday reined in stock rises in the U.S. and Europe.

On Friday, markets were waiting for fresh impetus from U.S. trade data due at 1330 GMT, University of Michigan consumer sentiment at 1445 GMT and a first estimate of euro zone fourth quarter growth at 1100 GMT.

The dollar inched lower against the euro to stand within a cent of its record low. It also hit its weakest level in seven years versus the Australian dollar and hovered around an 11-year nadir against sterling and a three-year trough on the yen.

"Greenspan's comments are still reverberating," said Steven Pearson, chief currency strategist at Halifax Bank of Scotland Treasury Services.

"The underlying idea still is that U.S. rates will be on hold and the fiscal position is worrisome."

"Today's focus would be on trade numbers...In the short term, it might not be particularly positive for the dollar."

...more...

and

http://www.reuters.com/financeArticle.jhtml?storyID=4350792&newsType=usDollarRpt&menuType=currencies

Dollar drifts as market casts wary eye on BOJ

TOKYO, Feb 13 (Reuters) - The dollar was nearly unchanged against its major counterparts on Friday, hemmed in versus the yen by fear of Japanese intervention and a heightened sensitivity to possible coordinated central bank action.

In mid-afternoon Tokyo trade, the Australian dollar extended slightly to a fresh seven-year high against the U.S. dollar around US$0.7913 .

While market trade was relatively quiet, the underlying theme of dollar selling remained firmly entrenched.

Investors continue to dump the dollar in search of assets with currencies bringing higher yields, such as Australia where the benchmark interest rate is 5.25 percent versus 1.0 percent in the United States.

...more...

an unrelated article (but interesting in its own way

http://www.denverpost.com/Stories/0,1413,36~53~1953268,00.html

CSU animal hospital forced into layoffs

Colorado State University's Veterinary Teaching Hospital in Fort Collins will be forced to lay off up to 10 percent of its staff next week, according to Dr. David Lee, the hospital's director for the past nine months.

Lee said the prestigious vet school, like many businesses and nonprofits, is suffering because of the past few years' poor economy.

<snip>

The economy affects an animal hospital when referrals from veterinarians slow down, Lee said.

"Animal owners become less able to provide the same level of care or to go for some surgeries, so local vet practices are down," said Lee. "If they don't refer to us, we're at the end of the whip."

...more...

I don't think I can make any comments that readers of this thread don't already know - the powers that are manipulating our money have determined that the dollar is a worthless piece of paper and that is a good thing.

They have determined that offshoring and outsourcing the jobs from this country are good things.

They have determined that the Social Security Trust Fund is not a good thing and therefore must be destroyed.

So sad :(

[ozymandius]

3. Goood morning Marketeers!

:donut: :donut: :donut: :donut: :donut: :donut:

This is also goodbye. Family and I have a day planned that will keep
me from the numbers and the message boards.

Martin Goldberg luxuriously indulges the PPT conspiracy theory. I wonder if he has read the WaPo story from 1998 and subsequent articles on the PPT mechanisms. Also to bear in mind - 54anikel and UIA, do you know anything new on that USDJPY genetic algorithms? What do they do? Who controls them?

Kudos to 54anikel and UIA for carrying the weight of this thread with consistent and lonely updates throughout the past few days. So many of the regulars have been called away to other duties. This thread is one of the most popular on DU. Feel free to contribute anything to the discussion - either question or opinion or statement of fact. If your tendency is to lurk, please know that this thread thrives on interaction from its fans.

I think we all were lurkers once.

Have a great day! See you next time.

Ozymandius :hi:

[UpInArms]

4. 'Bye Ozy! Have a Great Day!

we'll miss you but we're glad that you are keeping your priorities (family) intact :)

:hi:

[54anickel]

7. Have a great day and weekend Ozy!

[UpInArms]

5. U.S. Dec. trade gap widens dramatically

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?guid={1724F1EF-413B-4207-A127-03485104817A}&siteid=mktw&dist=bnb

WASHINGTON (CBS.MW) -- The U.S. trade deficit widened by 10.8 percent in December to $42.5 billion, the Commerce Department said. The trade deficit was well above the consensus forecast of Wall Street economists of a deficit of $39.6 billion. Imports rose while exports slipped in December. Imports rose 3.0 percent to a record $132.8 billion. Exports fell 0.2 percent to $90.4 billion. The trade deficit set a new annual record. For all of 2003, the trade deficit totaled $489.4 billion, up 17.1 percent from the previous record of $418 billion set in 2002. The U.S. trade deficit with China widened to $9.9 billion in December from $9.6 billion in the same month one year ago.

[54anickel]

8. Pht-t-t! Whodathunk?

But, but Mr Greenspin said a crashing, I mean declining, dollar would increase our exports as they become more competitive.

No aircraft to export this time around? Oh, that's right those lastest manufacturing jobs that were off-shored to China - those are imports now, aren't they. I suppose they'll fix this by tinkering with the definitions of Domestic in the GDP and imports/exports for multinational corporations. Yep, that'll fix how it all comes out - On paper anyway. :eyes:

[UpInArms]

9. I expect Greenspin

is creaming his pants right now -

the dollar is thumping and bumping and grinding downward

Last trade 84.85 Change -0.44 (-0.52%)

[54anickel]

10. Ewwww. Finally broke below 85. Now the question is where will it stop?

Down and down and down she goes,
Where she'll stop?
Greenspin don't know!

[54anickel]

6. Good Morning Ozy, UIA and all

I posted this article in the Economic Forum, but thought I would link it here as well. Again sorry for the redundancy.

I think the idea that old policies and theories are no longer working is getting more play in the media. There was also the article I posted here yesterday regarding Senator Schumer and Craig Roberts NYT piece. Caught Lou Dobbs on GMA this morning so the idea is getting out there. It's getting slapped down, but it's getting out.

Here's the link to the discussion:
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=114&topic_id=5744

Here's a direct link to the article:
http://www.azcentral.com/arizonarepublic/business/articles/0212talton12.html

[UpInArms]

12. and the markets just

loooove the Greenspin man!

Dow 10,717.25 +23.18 (+0.22%)
Nasdaq 2,085.45 +11.84 (+0.57%)
S&P 500 1,155.15 +3.04 (+0.26%)
10-Yr Bond 4.033% -0.025

[54anickel]

13. Have to wait and see what MI Consumer Sentiment has to say

9:11AM: S&P futures vs fair value: +2.0. Nasdaq futures vs fair value: +0.5. Looks like an incrementally higher open for the cash market as the futures trade holds onto its slim gains... The last economic report of the day - the preliminary February reading for Michigan Consumer Sentiment - will come out at 9:45 ET and the market looks for a slight decline to 103.3.

[UpInArms]

14. here's the Michigan Sentiment number

Feb 13 9:45 AM
Mich Sentiment-Prel. Feb
reported 93.1
forecasted 100.0
market anticipated 103.3
last month 103.8

and the market shakes it off

9:58 a.m.

Dow 10,717.03 +22.96 (+0.21%)
Nasdaq 2,081.52 +7.91 (+0.38%)
S&P 500 1,155.08 +2.97 (+0.26%)
10-Yr Bond 4.041% -0.017

and the dollar (as of 30 minutes ago)

Last trade 84.88 Change -0.41 (-0.48%)

[54anickel]

15. Shakes it off? Didn't it rally on that itty bitty higher number last time

out?

:wtf:

[UpInArms]

16. you haven't been reading your

"memos" 54anickel.

Mine read "The market is not to pay attention to pesky numbers that want to affect the overall trend of the bulls. Any negative numbers are now to be interpreted as positive occurrences and anyone deviating from this scenario will have to report to Yeneticus at the scenery." - well, I can't swear to that because as soon as I had finished reading it, it was consumed in flames that sprang from a burning bush. :D

and now for the miniskirted blather:


10:05AM: Indices initially back off their opening gains in response to the Michigan Consumer Sentiment index, but then retrace their losses and move to new highs... The headline associated with the report was negative (missing the consensus estimate of 103.3 and coming in at 93.1) and thus prompted some knee jerk-selling at the time of the release... However, the market resumed its positive trade in recognition of the fact that January's number was quite high - at 103.8 - and that 93.1 is still a fairly good read for an economy in the midst of an upturn...

Additionally, the correlation between consumer sentiment and consumer spending is quite weak, and this has helped quiet the efforts of sellers...NYSE Adv/Dec 1653/986, Nasdaq Adv/Dec 1309/1153

9:40AM: Stock market starts the day with incremental gains in a bit of a rebound effort from yesterday's losses... Dell (DELL 34.97 +1.40) topped the consensus EPS estimate by a penny in its Q4 (Jan) report last night, and also guided in line for Q1 (Apr)... This has helped place a bid in the tech stocks, positioning the Nasdaq ahead of the blue chip averages in the early action...

Investors were relatively unfazed by this morning's wider than expected December Trade Balance - at -$42.5 bln versus the consensus of -$40.0 bln, but the preliminary February Michigan Consumer sentiment report could prove differently should it miss the consensus estimate of 103.3... The report is due out at 9:45 ET...

[54anickel]

18. What a difference 25 minutes makes - Bi-polar, that's the only

explanation I can come up with these days.

Funny, last time out the correlation between consumer sentiment and spending was strong.

I never got the memo. Think it was re-routed along with some of Shrubs NG records.

[JNelson6563]

17. Mornin' Everybody!

Well, well, well, what an interesting week, eh? The last two days have been the epitome of counter-intuitive and it seems to me the "rally" we saw the other day was artificially inseminated. ;-)

The dollar is bleeding badly, doesn't anyone care? The week dollar doesn't seem to be doing anything to help the trade deficit.

It's been a nice week for gold and, in spite of Mr. Toad's Wild Ride in the Treasury market, we seem to be pretty much where we started out when Greenspin opened up his pie-hole.

It's just getting curiouser and curiouser.

I'm off to play political operative but I'll chack back in later. Thanks to 54anickel, UpInArms and our beloved Ozy for posting all the great stuff! After I breeze through here I am up to date and in the know. You guys rock! :toast:

Julie

[54anickel]

19. Wow, look at that weird, sudden drop in gold and the market.

[NoKingGeorge]

22. Drop in Gold, rise in Euro and Yen at 1030 est

What happened about 1030 est? Gold dropped a dollar, the Euro bgan a strong rise from a staedy decline AND the Yen jumped up after drifting down all morning... Any ideas?





edited to correct time from 1100 to 1030.

Gold falling...

[UpInArms]

23. if I were a gambler

I would bet that there was a bit of intervention by the BoE, the EU and the BoJ in a simultaneous manner.

Currency market manipulation? Well, didn't the Greenspin say he would find out how serious the G7 actually was in their "hands off" policy?

[54anickel]

27. Looks like profit taking in Euros....

http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20040213&ID=3392952

CHICAGO (Reuters) - The dollar rebounded on Friday on a wave of profit taking in euros after it had fallen steeply on a report of a widened trade deficit in December.

A heavy build-up of long euro positions ahead of U.S. data left the market very vulnerable to a pullback once the euro failed to break to new record highs in the wake of those reports, traders in New York said.

``We had two doses of bad U.S. numbers and the euro's failure to push above $1.29 has prompted some profit taking,'' said one New York-based trader. The market was very long euros going into the data, the trader said.

Earlier in the U.S session, the dollar had fallen sharply under the weight of a trade deficit that grew nearly 11 percent in December to $42.48 billion, more than a median analyst forecast for $40 billion. Then news of a steep decline in consumer sentiment sent the euro a little higher, before it was repelled just below its lifetime high of $1.2898.

Analysts linked the hardest thrust higher for the euro directly to the trade deficit.

``The data are suggesting the decline we've seen in the dollar over the last couple of years is not having an impact,'' said Gary Thayer, chief economist at AG Edwards & Sons in St. Louis. ``It suggests the dollar may still need to fall to help narrow the trade deficit.''

more.....

I won't even bother to comment on that last line up there. :eyes:

[54anickel]

24. 11:33 Update - some powder found?

Dow 10,652.07 -42.00 (-0.39%)
Nasdaq 2,060.83 -12.78 (-0.62%)
S&P 500 1,148.06 -4.05 (-0.35%)
10-Yr Bond 4.054% -0.004

10:55AM: Market takes a sharp dive into negative territory on the heels of reports that suspicious powder was found at a post office in New Jersey... Traders have used the news as an excuse to sell into the week's gains as the indices move to their worst levels of the day... As a result of this move, the Nasdaq is now poised to finish the week lower, while the Dow and S&P 500 are set for incremental gains... Investors have rotated out of technology issues in favor of areas that have trailed the stock market's rally in 2003...
Basic material and energy have been this week's winning groups - two areas Briefing.com predicted would outperform the market...SOX -1.4, NYSE Adv/Dec 1487/1400, Nasdaq Adv/Dec 1104/1636

[UpInArms]

25. suspicious powder?

that story happened two days ago :shakesheadjabsfingersineyes:

http://www.newsday.com/news/nationworld/nation/wire/sns-ap-post-office-evacuation,0,7489967.story?coll=sns-ap-nation-headlines

Officials: Powder Scare Likely False Alarm

By GEOFF MULVIHILL
Associated Press Writer

February 11, 2004, 8:05 PM EST

MONROE TOWNSHIP, N.J. -- No evidence of poison has been found on the

clothing of a postal worker who said she became sick after touching a suspicious powder, and the scare was probably a false alarm, authorities said Wednesday.

The female postal worker is among two employees at the Williamstown Post Office who were taken to a hospital for evaluation Tuesday after complaining that they felt ill. Six others chose to go to the hospital as a precaution, authorities said.

[54anickel]

26. SNARF! Better late than never. Volume is expected to be light

due to the Holiday weekend.

http://money.cnn.com/2004/02/13/markets/markets_newyork/

snip>
The weak consumer sentiment index and some rumors about a suspicious powder found at a post office in New Jersey were providing the excuse for a selloff, said Peter Green, a market analyst at MKM Partners. But on a broader level, "the market is essentially taking a breather today," he said. "But I don't expect much downside because volume is pretty light."

Volume is likely to be light throughout the session and trade choppy due in part to the three-day holiday weekend. Equity and bond markets are closed Monday in honor of the President's Day holiday.

[54anickel]

28. Why must we always turn to the foreign press for a realistic view of

what's going on with the dollar?

http://www.canada.com/montreal/specials/business/story.html?id=F126EC14-0104-46E6-871A-3CF6D17C74D1

Currency intervention is subsidizing U.S. debt
Flow unsustainable, experts warn. If not for Japan, consumers in the U.S. would be facing higher interest rates

AUDREY McAVOY
AP

Friday, February 13, 2004

Japan is on an unprecedented spending spree, all focused on the same product: the U.S. dollar.

Tokyo bought an astounding $172 billion U.S. last year to keep the yen from strengthening too much against the greenback. The push only accelerated in January, when Japan snapped up another $67 billion.

That Japan's government is buying dollars to prevent a stronger yen from smothering a feeble economic recovery at home is not new. But the scale of the current round is far beyond its earlier interventions.

The purchases are so large they are effectively subsidizing record U.S. budget and trade deficits, keeping American interest rates low and worrying some experts that a painful shock will hit if the spending spree stops.

more....

[54anickel]

29. Snow vs China - Who's got who by the short hairs here?

http://www.forbes.com/home_europe/newswire/2004/02/13/rtr1260416.html

WASHINGTON, Feb 13 (Reuters) - U.S. Treasury Secretary John Snow said on Friday that U.S. calls for China to allow its yuan currency to float freely were leading to progress, but added he wanted to continue to hold Beijing's "feet to the fire."

"I think we're making some good progress with the Chinese on that subject," Snow told the Senate Budget Committee during lawmaker questions after testimony on the fiscal 2005 budget.

He cited frequent meetings between President George W. Bush's economic team and Chinese officials in China and Washington on China's tight currency peg to the U.S. dollar.

"We were straight with them. We said, this system doesn't hold together. It doesn't work. It's not right for the world economy. It's not right for the world trading system and you need to move to a flexible sort of exchange rate that allows the market to set the value rather than having you arbitrarily establish the value," Snow said.

more....

Interesting, ain't it? Seems like the rest of the world's trading system is holding up quite well. I think they'd pretty much be off to the races if it wasn't for that dollar albatross around their necks. JMHO, of course.

[htuttle]

32. LOL! When I read Snow 'threatening' China with the collapse of the US...

...economy, I'm reminded of the scene in Blazing Saddles where Sheriff Bart (Cleavon Little) makes his escape from a room of hostile cowboys by taking himself hostage by holding a gun to his OWN head and backing out of the room....

[54anickel]

33. Perfect Visual! Thanks, I'm still snickering.

[54anickel]

30. 1:00 pm numbers and blather (wish they'd make up their minds)

Dow 10,630.52 -63.55 (-0.59%)
Nasdaq 2,054.24 -19.37 (-0.93%)
S&P 500 1,145.37 -6.74 (-0.59%)
30-yr Bond 4.909% -0.030


U.S. stocks in mid-day slump after sentiment reading
Fri 12:36pm ET - CBS MarketWatch
U.S. stocks losses deepened Friday afternoon as investors reacted a much worse-than-expected drop in consumer sentiment.

http://biz.yahoo.com/cbsm-top/040213/14eb5d21fa41589fe6ed526bea7b1654_1.html

[DU GrovelBot]

31. ## Support Democratic Underground! ##

RUN C:\GROVELBOT.EXE
 
This week is our first quarter 2004 fund drive.
Please take a moment to donate to DU. Thank you
for your support.
 
- An automated message from the DU GrovelBot

Click here to donate.

[54anickel]

34. Another Analyst, wearing the moniker of economist, claiming to be

in a majority, touting the virtues of free trade that was "cast in the holy tablets" of economic theory.

OK, maybe I'm being too hard on the guy and cynical.

http://www.morganstanley.com/GEFdata/digests/latest-digest.html

It’s economics versus politics. The free-trade theory of globalization embraces the cross-border transfer of jobs. Political systems do not — especially as election cycles heat up. That heat is now being turned up in Washington, as incumbent politicians in both parties come face to face with the angst of America’s jobless recovery. Jobs could well be the “hot button” in Campaign 2004. And offshoring — the transfer of high-wage US jobs to the low-wage developing world — could quite conceivably be the most contentious aspect of this debate and one of greatest risk factors for ever-complacent financial markets.

Like most economists, I worship at the high altar of free-market competition and the trade liberalization that drives it. But that doesn’t mean putting a positive spin on the painful dislocations that trade competition can spawn. Unfortunately, that was the mistake made recently by the Bush administration’s chief economist, Gregory Mankiw, in his dismissive assessment of white-collar job losses due to offshoring. Like most economic theories, the optimal outcomes cited by Mankiw pertain to that ever-elusive long run. Over that timeframe, the basic conclusion of the theory of free trade is inarguable: International competition lowers costs and prices, thereby boosting the purchasing power and standard of living of consumers around the world. The practical problem in this case — as it is with most theories — is the concept of the long run. Sure, over a long enough timeframe, things will eventually work out according to this theoretical script. But the key word here is “eventually” — the stumbling block in presuming that academic theories map neatly into the shorter time horizons of financial markets and politics. Lord Keynes put it best in his 1923 Tract on Monetary Reform, cautioning, “In the long run, we’re all dead.”

History, of course, tells us that a lot can happen between now and that ever-elusive long run. That’s precisely the risk in the great offshoring debate, in my view. As always, context defines the issues of contention. And in this case, the context is America’s jobless recovery — an unprecedented hiring shortfall in the first 26 months of this “recovery” that has left private nonfarm payrolls fully 8 million workers below the path of the typical hiring upturn.

This is where the offshoring debate enters the equation. One of the pillars of trade theory is that wealthy industrial economies like America’s can be broken down into two basic segments of activity — tradables and nontradables. International competition has long been confined to the tradable goods, or manufacturing sector. By contrast, the nontradables sector was largely shielded from tough competitive pressures, thereby providing shelter to the 80% of America’s private sector workforce that toil in services. Consequently, as competitive pressures drove down prices in tradable goods, the bulk of the economy and its workforce benefited from the resulting expansion of purchasing power. Advanced, knowledge-based economies thrive on this distinction between tradables and nontradables — manufacturing and services.

more...

[54anickel]

35. 2:00 numbers

Dow 10,627.77 -66.30 (-0.62%)
Nasdaq 2,054.98 -18.63 (-0.90%)
S&P 500 1,145.82 -6.29 (-0.55%)
30-yr Bond 4.922% -0.017

[54anickel]

36. Yenetics update

http://www.fxstreet.com/nou/content/1112/content.asp?menu=forecasts

:shrug:

Daily Forecast 13 Feb 2004:
week end moves will be volatile - distress higher level short covering will be followed by lower level long liquidation.....watch and trade....
You can take short positions during their quick firming up moves and buy during correction as swing trade

Early Japanese session - USD will be high volatile with spike*
Late Japanese session - highly volatile with spike* (00:30 - 07:30 GMT)

Early European session - USD will become highly volatile
Late European session highly volatile with spike (08:00 - 14:00 GMT)

Early US session - USD will become highly volatile
Late US session highly volatile with spike (14:30 - 22:30 GMT)

each session is of 7 hrs and 30 duration and they can be divided as early,mid and late each of 2hrs and 30 min

more...

[54anickel]

37. 3:09 numbers and blather

Dow 10,621.55 -72.52 (-0.68%)
Nasdaq 2,054.57 -19.04 (-0.92%)
S&P 500 1,145.11 -7.00 (-0.61%)
30-yr Bond 4.922% -0.017

3:00PM: Major indices continue to rise and fall in negative territory, basically running in place below the unchanged mark... This week, the market has taken its cue from several relevant events - the G7 and OPEC meetings, Fed Chairman Greenspan's delivery of the semi-annual monetary report to Congress, and earnings reports from the likes of Dell (DELL 34.65 +1.08)... Next week, there won't be quite as much for the market to take its cue from...
Monday the market will be closed in observation of President's Day, and the rest of the week has the usual assortment of earnings and economic reports on the calendar... For a preview of this, visit Briefing.com's Looking Ahead column...NYSE Adv/Dec 1246/1993, Nasdaq Adv/Dec 1078/2011

[54anickel]

38. Gold down on session, but up on week

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BA944993A%2D92AE%2D4BC9%2DB148%2D68EB6A3F2E3E%7D

SAN FRANCISCO (CBS.MW) -- Gold futures fell from their one-month highs Friday as an upward reversal in the U.S. dollar brought selling to the precious metals market, though prices still managed to end the week with a gain of nearly $7 an ounce.

Gold for April delivery closed at $410.80 an ounce on the New York Mercantile Exchange -- down $3.40 for the session, but up $6.60 from last week's close.

Metals trading on the exchange closed by 12:10 p.m. Eastern time Friday ahead of the President's Day holiday Monday. Regular trading will resume Tuesday.

Prices fell Friday from the session high of $418 -- the highest intraday level since Jan. 15. "Traders taking money off the table" ahead of the three-day Presidents Day holiday, said John Person, head financial analyst at Infinity Brokerage Services.

The euro tumbled against the dollar after failing to break through the $1.29 barrier. Rumor swirled through the markets that the European Central Bank or another European national bank had sold euros to drive the Continent's currency lower, but analysts said it was more likely private traders selling large positions as options expired.....

more...

[54anickel]

39. Beijing will revalue the Yuan

http://www.asianews.it/view_p.php?l=en&art=252

Over the course of the next trimester China will revalue its currency, the yuan, with respect to the dollar, as stated in the financial news bulletin published by one the world’s largest financial investment companies, Goldman Sachs.

In order to bring the yuan to an “adequate” exchange rate, the American company believes that a 10% revaluation might be necessary. Goldman Sachs predicts China will revalue its currency only by 2.5%, as a first prudent step toward system of more flexible exchange rates. The yuan’s accumulated appreciation over the next twelve months could then be at 5%.

Currently the Chinese currency is not exchanged freely and the rate is set by the government monetary authority based on a fixed counter-rate with respect to the dollar (1 dollar = 8 yuan).

According to the Goldman Sach’s report, China will set the exchange rate not only based on the American dollar, but also on a basket of other currencies reflecting the current commercial flow of merchandise. The dollar would be valued at no more than 63% of such a basket. The euro and yen would make up the remainder. Goldman Sachs states that it based its predictions on financial summaries found in Chinese newspapers, according to which authorities are said to be studying for a reform which would link the yuan to 11 foreign currencies.

a bit more...

on edit add:

Another related story on the Yuan revaluation

http://www.reed-electronics.com/electronicnews/index.asp?layout=document&doc_id=131074&spacedesc=news

snip>
China’s plan was to ignore demands from its trade partners for revaluation and use growing export earnings to finance new export industry jobs for its vast army of unemployed and underemployed workers. Recent actions may be an acknowledgement that his plan is not working. Chinese officials have been unable to keep export receipts from being diverted to luxury consumer exports, speculation in real estate and unneeded factory capacity that will not yield more jobs.

There may be a new plan to vent some pressure with a small revaluation, perhaps about 5 percent, and use the international currency market to reduce the conspicuous consumption and speculation that are draining the capital intended for job creating investments. Maybe the Chinese are better capitalists than we thought they were.

Revaluation is now a high probability for the next few months. Currency hedging might be wise. Marking up expected supply costs for second half of the year and identifying the next cheapest source after China should also be considered.

Any macroeconomic impact on the United States would not be felt until late in the year. It is not clear whether it would be negative or positive but it would not be large.



And one more, points out China will move at their own pace and has some "internal" problems to deal with rather than worry about what the US/G7 thinks.

more...

http://www.forbes.com/home_europe/newswire/2004/02/12/rtr1257943.html

snip>
China has said that while it was working towards freeing up its exchange rate, internal stability was its priority. The banking system has massive levels of bad loans and the reform of state-owned enterprises has caused unemployment.

And the risks of an overheating economy and the signs of rising inflation were of greater concern than G7 complaints.

"China isn't going to respond to any pressure," said Hans Redeker, chief foreign exchange strategist for BNP Paribas in London.

"They're focusing on the privatisation of their banking industry and they've propped up the banking sector with capital to make it attractive for IPOs, seeking foreign investors."

more..

[54anickel]

40. An interesting translation of the last Greenspin

Rather long article

http://www.321gold.com/editorials/chuhran/chuhran021304.html

[54anickel]

41. An interesting take on the Euro/Dollar war

It's a bit "gold-buggy" but the Euro theory is interesting.

http://www.321gold.com/editorials/wheeler/wheeler021204.html

snip>
In 1999, the United States stood supremely as the world's sole superpower; unchallenged militarily, politically, or financially. While it held a large debt of around $5.6 trillion, at that time its finances seemed in very good shape. The budget was running a surplus and even the off-budget expenditures weren't sending it too far into the red each year.

In 1999, the U.S. stock markets were booming. Interest rates were moderately low and a Pax Americana had descended over the entire world. Or so it seemed.

Since the end of WWII, the U.S. dollar had stood as the center of the global economy. Every country had to hold dollars, to buy oil with, if nothing else. The dollar was as good as gold.

The Emergence of a United Europe
But countries around the world saw that this dollar supremacy gave the U.S. an unfair economic advantage at their expense. The U.S. had been inflating the number of dollars because this gave it more wealth and more power. Other countries paid for the inflation.

[54anickel]

42. Closing numbers and blather

Dow 10,627.85 -66.22 (-0.62%)
Nasdaq 2,053.56 -20.05 (-0.97%)
S&P 500 1,145.81 -6.30 (-0.55%)
30-yr Bond 4.922% -0.017

Close: The market turned south today under the weight of several items that implied negative implications for the economy... The Trade Balance widened to -$42.5 bln (consensus of -$40.0 bln) - its second largest in a year - as exports fell 0.2% in December... The University of Michigan Consumer Sentiment Index for February also fell short of market expectations - falling to 93.1 in its preliminary reading (consensus of 103.3) - and threw cold water over the indices' initial attempts at rallying at the open...
Although the latter development wasn't that disturbing - considering the weak link between consumer spending and sentiment, it was enough to incite a broad-based pullback in stocks... Other developments also prompted traders to lighten positions ahead of the three-day weekend... Reports of a 'mysterious powder' at a New Jersey post office (which later tested negative) and a fire alarm at a Senate Building (prompted by a burnt bagel) were enough for traders to take some profits from the week's strength... As a result, the Nasdaq finished the week with slight losses, and the Dow and S&P 500 ended the week with slight gains...

Today's sector action mimicked the trend of the week, with healthcare showing relative strength, and technology falling deep into negative territory...

[CaptainClark23]

43. Hell of a job today

50/50-4anickel.

Thanks for keeping tabs, its greatly appreciated. Have a great weekend.

[54anickel]

44. Hello again Captain.

You should try to stop by a bit more often. It can get a bit lonely out here these days.

You have a great weekend as well. :hi: