STOCK MARKET WATCH, Wednesday 12 May

[ozymandius]

Wednesday May 12, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 257
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 152 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 205 DAYS
WHERE ARE SADDAM'S WMD? - DAY 419
DAYS SINCE ENRON COLLAPSE = 901
Number of Enron Execs in handcuffs = 18
Recent Acquisitions: Jeff Skilling
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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




AT THE CLOSING BELL ON May 11, 2004

Dow... 10,019.47 +29.45 (+0.29%)
Nasdaq... 1,931.35 +35.28 (+1.86%)
S&P 500... 1,095.45 +8.33 (+0.77%)
10-Yr Bond... 4.77% -0.01 (-0.27%)
Gold future... 377.20 -1.50 (-0.40%)

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 Ike Iossif - "Another Buying Opportunity?"

Since January, the McClellan Oscillator has been in the -200 area six times, yet the equity markets are below their January, February, and March highs. The reason for the market's inability to embark on a sustainable rally can be found in the persistent weak internals which were in full display last week in terms of breadth and up/down volume. People fail to realize that "deeply oversold" conditions are responsible for igniting rallies; improving internals are responsible for sustaining the rally, because they provide the fuel that the rally consumes in order to keep on going. If your vehicle is running out of gas and it stalls, you can get it started by using a starter fluid, but unless you get some gas in the tank, the starter fluid won't get you where you need to go.

We have received lately many inquiries with regard to whether the market is approaching another important intermediate term "buying" opportunity. Thus, I would like to address this issue before I talk about my expectations for this week. Since January, breadth has been constantly deteriorating, new lows have been expanding, volume has been contracting on up days, and expanding on down days. Under these circumstances, rallies can't last regardless of how oversold the markets get. Thus, no intermediate term "buying opportunity" can be expected to be found in this type of market environment.

Moreover, given all the cross-currents that are currently exerting pressure on the markets from opposite ends, good earnings, improving economy, geopolitical uncertainty, political uncertainty, rising interest rates, rising oil prices, etc., it is an exercise in futility to attempt to determine in advance--with any degree of reasonable certainty--when the prevailing market conditions will change. Instead, by focusing on identifying the conditions that are currently in play, we can then determine with a high degree of certainty what can be expected of the markets right now, and what we ought to be doing accordingly. For example, we can determine with a high degree of certainty, that as long as breadth continues to deteriorate, new lows continue to expand, and volume continues to contract on up days/ expand on down days, it will be very difficult--if not impossible--for the markets to make any progress, and for investors to earn a return that adequately compensates them for the market risk they're taking.

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

[jamesinca]

2. good morning

I guess the economy can grow, there are enough things in Iraq that are keeping the Bush administration in check that the stock market and economy won't help him anymore. $100,000,000.00 spent in one month and he did not move in the poles. It is safe to have the economy back.

[ozymandius]

4. Hi James. It really depends on whose economy you mean.

The real economy that most people live in - or the invented economy from our friends in the US government. It is both tragic and just plain bizarre that the Labor department was caught making the new job numbers up - more a product of statistical wishful thinking rather than hard numbers.

So I would not cede the economy to Bush just yet. The negatives are piling up faster than Bushco can shovel.

[jamesinca]

6. True, we should not give on any issue until Nov. is safe

Ok, maybe just a few things can go wrong still and that would be good. I was really ready to have some good news for once in the last 3+ years.

[ozymandius]

3. Good morning Marketeers!

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

I am stepping out for awhile and will try to be back later this morning if time allows. Another job prospect will bring me back to the computer to prepare my candidacy.

In any case, have a great day at the Casino. Maybe 10,000 will be propped up by yet another "large anonymous buyer".

Ozy :hi:

[Frodo]

5. Overly large trade deficit report (will likely impact GDP).

The GDP estimate released last week anticipated a record $44Billion trade deficit for March. The actual number came it at a record-walloping $46Billion (Consensus $43B).

That's enough to revise GDP growth for Q1 downward a tad. All else being equal (which it never is).

[54anickel]

7. Bit o' Blather on the futures before the opening bets

9:15AM: S&P futures vs fair value: -3.4. Nasdaq futures vs fair value: -8.0. Off its worst levels of the morning, the futures market continues to point to a lower open for the cash market.
8:55AM: S&P futures vs fair value: -4.5. Nasdaq futures vs fair value: -8.5. Expectations remain set for a lower open in the cash market, as futures indications slip to their worst levels of the morning. Despite higher than anticipated earnings from CSCO and upward guidance from QCOM, technology sectors are looking to underperform the broader market at the open on the heels of yesterday's sweeping gains for the Nasdaq, which advanced 1.9%.

8:32AM: S&P futures vs fair value: -4.2. Nasdaq futures vs fair value: -6.0. A slightly negative reaction to the Trade Balance and Export/Import Prices reports, with S&P futures dropping 0.6 points and Nasdaq futures slipping 2 points. Based on futures indications, the cash market remains set for a lower open.

8:25AM: S&P futures vs fair value: -3.6. Nasdaq futures vs fair value: -4.0. Several economic reports will be released at 8:30 ET. The Trade Balance report for March is expected to come in at-$43.0 bln on the heels of last month's -$42.1 bln. Separately, the Export and Import Prices reports for April will be announced. Last month, Export Prices (ex-agriculture) rose 0.6%, while Import Prices (ex-oil) rose 0.2%.

[54anickel]

8. U.S. March Trade Gap Widens to Record $46 Bln as Imports Surge

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aRGC_fwDByFM&refer=home

May 12 (Bloomberg) -- The U.S. trade deficit grew in March to a record $46 billion as the highest oil prices in more than two decades and increased consumer spending boosted the value of imports, the Commerce Department reported in Washington.

The gap in goods and services trade comes after a deficit of $42.1 billion in February. Imports and exports surged to all-time highs, and the deficit with the Organization of Petroleum Exporting Countries was the biggest ever.

Concern over supplies drove up the price of crude oil in March, while tax refunds, low interest rates and an improved labor market helped lift demand for cars, electronic goods and other products made outside the U.S. Accelerating global growth and a weaker dollar contributed to a rise in U.S. exports, which kept the deficit from widening further, economists said.

``We're sucking in a lot more expensive commodities,'' Kevin Harris, an economist at MCM in New York, said before the report. ``Our economy is thundering along'' and growing faster than the rest of the world.

more...

[54anickel]

9. China's foreign trade to reach US$1 trillion

http://www.atimes.com/atimes/China/FE11Ad02.html

GUANGZHOU - China's foreign trade this year is forecast to reach US$1 trillion, up 17 percent on a year-on-year basis, according to a report released recently by China's Ministry of Commerce and the International Trade Economic Cooperation Institution.

The report predicted that the country's exports will reach $505 billion, up 15 percent, while imports will reach $495 billion, up 20 percent.

The report said that there is room for rapid development of the country's exports, as the world economy is expected to keep its upward momentum. The World Trade Organization predicted a 7.5 percent growth rate in world trade volume this year, 3 percentage points higher than in 2003.

Besides, the problem of tariff refunds for export companies has been solved, easing their funding strain, said Li Rongcan, an official with the ministry.

more...

[UpInArms]

10. daily dollar watch

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

Last trade 91.20 Change -0.46 (-0.50%)

related article:

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1084366780-9e32d306-30898

Dollar stays lower after U.S. trade data

CHICAGO (AFX) -- The dollar remained lower against its major counterparts in the wake of U.S. trade data. The euro was quoted at $1.1890 vs. $1.1865 Tuesday. The British pound rose to $1.7752. The dollar was fetching 113.11 yen. The U.S. trade deficit widened by 9.1 percent in March to a record $46.0 billion, the Commerce Department said. The trade deficit was well above the consensus forecast of Wall Street economists for a deficit of $43.0 billion. Imports rose faster than exports in March, in large part as oil prices jumped. Imports rose 4.6 percent to a record $140.7 billion. This is the largest monthly surge in imports since March 1993. The dollar fell to multiyear lows earlier this year amid concerns the United States would be unable to attract enough foreign capital to offset its goods trade deficit. More recently, expectations for rising U.S. rates, which would attract foreign capital, have lifted the dollar against its major rivals.

...more...

Good Morning Marketeers!

[UpInArms]

11. Market Numbers at 9:49 EST

Dow 9,959.64 -59.83 (-0.60%)
Nasdaq 1,914.13 -17.22 (-0.89%)
S&P 500 1,089.27 -6.18 (-0.56%)
10-Yr Bond 4.759% -0.009

[54anickel]

12. Forex News & Analysis

http://www.forexnews.com/NA/default.asp

Dollar and Yields Ease Off Highs, Fed Calms Rate Fears by Jes Black

At 8:30:00 AM US Mar Trade Balance (exp $-42.6 bln, prev $-42.09 bln) CAN Apr Trade Balance (Canada) (exp C$5.7 bln, prev C$5.67 bln)

The dollar fell from its overnight highs as it flirts with its 2-year downtrend crossing at 0.9150. Yesterday’s close above this marker, at a new 5-month high of 92.05 is encouraging to the broader view of a large dollar relief rally. But the dollar was rejected from its equivalent trendline resistance against the euro yesterday morning at 1.18. As long as these resistance levels hold, we cannot rule out a further consolidation in the market.

Fed Tries To Calm Rate Fears

Adding to the more cautious outlook for the dollar (following the sharp spike on Friday’s surprise payroll number) was Fed Gov Santomero who reminded markets overnight that the Fed’s rate tightening cycle would be gradual and will depend on both inflation and employment numbers. 10-year yields slipped to 4.75%, down from a high of 4.8% after last Friday's surprise payroll number led to a technical breakout in the 10-year yield above its 4-year trendline resistance and previous high at 4.7%.

Today’s US data include the March trade deficit, expected to rise to 42.6 bln from 42.09. The enormous cost of funding both trade and budget deficits should keep the dollar in a protracted decline over the coming years. And the rise in oil prices will likely play a significant role in the March figure. But with the market focusing almost exclusively on interest rate differentials, today's number may only move markets if there is a large surprise in one direction or the other. Higher deficits do not play into the Fed's equation, but a sharp decline in the US trade deficit would add to hopes that a recovery was in place and that interest rates will have to rise to quell inflationary pressures in the US. Alternatively, rising oil prices feeding into higher inflation and deficits may lead to bond vigilantes calling for rising rates as well.

more...

[54anickel]

13. 10:09 update and blather

Dow 9,953.96 -65.51 (-0.65%)
Nasdaq 1,906.73 -24.62 (-1.27%)
S&P 500 1,087.71 -7.74 (-0.71%)
10-yr Bond 4.763% -0.005
30-yr Bond 5.469% +0.002

NYSE Volume 211,204,000
Nasdaq Volume 276,426,000

10:00AM: The market extends its losses in the early going, with the Nasdaq spearheading the decline... The bulk of the sectors are supporting the pullback and are trading in the red... Among the laggards of note are the internet, semiconductor, computer services, retail, and chemical groups... Leaders to the upside are harder to come by, but include the gold sector... Also posting gains are the healthcare and oil services groups... Note that in its decline, the Dow has pulled below the psychologically-significant 10,000 mark, as well as its 200-day simple moving average at 10,013...
While the bulk of this morning's corporate and earnings announcements were generally favorable, the market remains hostage to concerns associated with the rising interest rates...NYSE Adv/Dec 1053/1530, Nasdaq Adv/Dec 731/1702

[jamesinca]

14. The 10:33 update, or should I say downdate

DOW -90.62 9928.85
NASDAQ -35.29 1896.06
S&P -10.93 1084.52

[UpInArms]

15. getting bloodier by the minute

Dow 9,916.06 -103.41 (-1.03%)
Nasdaq 1,894.00 -37.35 (-1.93%)
S&P 500 1,084.05 -11.40 (-1.04%)
10-Yr Bond 4.774% +0.006

[UpInArms]

16. Dean Foods announces layoffs

http://www.dallasnews.com/sharedcontent/dws/bus/stories/051204dnbusdean.73083.html

$9.4 million accounting charge, plant closures disclosed in SEC report

11:12 PM CDT on Tuesday, May 11, 2004

By KAREN ROBINSON-JACOBS / The Dallas
Morning News

Dallas-based Dean Foods Co. expects to incur $9.4 million in one-time charges related to plant closings, a workforce reduction and a company restructuring, the dairy giant said in a report filed this week with the Securities and Exchange Commission.

Plant shutdown costs account for $6 million of the charges, and $900,000 settles lease obligations. Dean didn't reveal how many people were losing their jobs, but the employee reductions would account for $2.5 million, according to the report filed Monday.

The charges come in addition to $7.6 million in plant-closing charges incurred in the first quarter.

<snip>

Dean also disclosed that it is in settlement talks with the SEC over allegations that it helped Fleming Cos. improperly book revenue.

Dean was notified last November that the agency planned to recommend a civil action against the company. Kraft Foods Inc. and Frito-Lay Inc. had also disclosed that the SEC was considering civil actions against them related to their dealings with Fleming, which said earlier this month it's moving closer to emerging from bankruptcy reorganization.

...more...

[UpInArms]

17. Market Numbers at 11:33 EST

Dow 9,897.26 -122.21 (-1.22%)
Nasdaq 1,885.73 -45.62 (-2.36%)
S&P 500 1,080.73 -14.72 (-1.34%)
10-Yr Bond 4.787% +0.019

under 9,900? oops!

[SteveG]

18. Shall we say, another bad day....

Dow down 116 at 11:35

[bill]

19. 11:58 - waiting for the noon bump

Dow 9,905.42 -114.05 (-1.14%)
Nasdaq 1,887.63 -43.72 (-2.26%)
S&P 500 1,081.54 -13.91 (-1.27%)

[UpInArms]

20. I think that "bump" was a push further down

at 12:00 EST

Dow 9,862.48 -156.99 (-1.57%)
Nasdaq 1,880.74 -50.61 (-2.62%)
S&P 500 1,078.12 -17.33 (-1.58%)
10-Yr Bond 4.782% +0.014

[Doosh]

22. shit, that's pretty bad

I wonder where the market will be come election day?

don't they say the movement of the market is a good indicator of future economic news? doesn't look like the news will be too good if you look at what's happened the past month or so.

[On the Road]

21. There Are So Many Momentum Traders, Day Traders, Technicians, and Programs

controlling so much money that a break below the 200-day moving average is bound to cause an avalanche of selling. Surprised it's taken so long.

Breaking the 200-day moving average is very significant, and usually separates a long-term uptrend from a long-term downtrend. The break is not really decisive yet. The S&P, where 3/4 of the money is, really hasn't broken at all yet. But another day or so should be conclusive. Especially if the indexes bump up against the average and start to fall again.

[Beetwasher]

23. Phase II of the Bear?

I had read an excellent analysis, though I forget by whom, that bears come in two phases and that the rebound was merely the lull before phase II. The article was terrifically sourced with historical data to back up the thesis. I'll see if I can find it.

[ozone_man]

27. Yes, a continuance of the bear.

It will take a while for the market pumpers to acknowledge that, but it is clear in my mind that the next phase down is in progress and has been since late February.

[On the Road]

28. I'd Like to See That

I've been expecting the other shoe to drop for some time now. May-Oct is the perfect time for it to happen.



Nothing before the last few years supports the current valuations -- they're still about twice historical averages.



And bear markets have always bottomed out at much lower evaluations.



Note that the recent "bottom" was in Oct 2002. The fact that it's so much higher than the other suggests that it is a false bottom and that there's more to come.

[Beetwasher]

30. Can't Find It

:-(

Pretty sure it was posted on DU, but for the life of me I can't remember who the author was...Sorry.

[Maeve]

31. It might be at financial sense online

You may be thinking of one of Tim Wood's columns, maybe from last September--try looking here:

http://www.financialsense.com/Market/wood/main.htm

Another drive-by posting between coats of paint...

[Beetwasher]

33. Yes! That's the Guy!

He predicted this...

Thanks Maeve! You're the best!

[54anickel]

May be this one, or one of the links he had to it

http://www.financialsense.com/Market/wood/2004/0116.html

[Beetwasher]

41. He's the Guy, But The Article I Was Referring To

Was much more comprehensive than any of the one's listed in the archives on that site.

But you can get the essential idea from reading the one you posted and numerous others listed there.

[fishnfla]

24. Hi marketeers, a little help please

I cant seem to click my way for shit today. Does anyone have a link which shows what the overseas markets are doing?

Thanks in advance

[CaptainClark23]

26. yahoo's link

http://finance.yahoo.com/m2?u

[TrogL]

25. OMFG - the CBC said it might be bad

but not this bad.

It looks like it's beyond -x/(y*y) which puts it past "free fall".

[hunter]

29. Well, thank you for that nightmare...

All the drains are open, and I'm getting dizzy.

[UpInArms]

32. Numbers at 1:55 EST

Dow 9,855.03 -164.44 (-1.64%)
Nasdaq 1,879.16 -52.19 (-2.70%)
S&P 500 1,076.39 -19.06 (-1.74%)
10-Yr Bond 4.779% +0.011

1:30PM: The major averages have stabilized within a short reach of their respective session lows, but off their worst levels of the morning... Buyers remain hesitant despite the market's broad losses over the past couple of weeks... Keeping a lid on buyers' enthusiasm are concerns over rising interest rates, which have made stocks relatively less attractive by compressing the current value of future earnings, as well as fears of accelerating inflation... Tomorrow's PPI report will shed some light on the pace of inflation in April...

The consensus estimate is for a reading of 0.3%, or 0.2% excluding food and energy... Other economic reports tomorrow include the Initial Claims report, which will provide evidence regarding the pace of lay-offs in the week of 5/8, as well as Retail Sales report for April, which will be telling of the strength of the consumer...NYSE Adv/Dec 852/2419, Nasdaq Adv/Dec 547/2537

1:00PM: The S&P 500 held above its 200-day simple moving average at 1078, leading to a slight rebound in the broader market... While the major averages are still engulfed in the red, the rebound effort is encouraging considering the fact that the entirety of the morning was spent with the major averages on a track of new session lows, with little in terms of leadership to the upside or rebound efforts...

Currently, leadership to the upside remains illusive, but it's notable that after staying on the sidelines for most of the session, buyers have started nibbling on stocks for the first time in today's session...NYSE Adv/Dec 837/2425, Nasdaq Adv/Dec 511/2561

[nolabels]

34. Man the torpedo's, were going under

&imgrefurl=http://www.csp.navy.mil/othboats.htm&h=410&w=602&sz=102&tbnid=uvl6CaYH53MJ:&tbnh=90&tbnw=132&start=59&prev=/images%3Fq%3Dsubmarine%2Bdive%26start%3D40%26hl%3Den%26lr%3D%26sa%3DN

[UpInArms]

35. got the dramamine? must be a "buying opportunity" :)

at 2:52 EST

Dow 9,929.76 -89.71 (-0.90%)
Nasdaq 1,899.93 -31.42 (-1.63%)
S&P 500 1,085.18 -10.27 (-0.94%)
10-Yr Bond 4.780% +0.012

[TrogL]

36. PPT putting an appearance?

Seems a bit early for them.

[UpInArms]

38. Wheeee! Up Up and Away

from those nasty snarling bears!

Dow 9,978.09 -41.38 (-0.41%)
Nasdaq 1,908.35 -23.00 (-1.19%)
S&P 500 1,087.76 -7.69 (-0.70%)
10-Yr Bond 4.794% +0.026

3:00PM: After vacillating along their respective session lows for most of the past two hours, the major averages are improving their standing... Notably, the influential banking sector, which has traded with losses for most of the session, but hasn't been exceptionally weak, has traded into positive territory since the last update... The banking sector is important in determining market direction and its ability to pull into positive territory is likely to limit losses in the blue-chip averages... Also, keep in mind that the banking sector has a tendency to lead the broader market...

Accordingly, the group's relative strength (if sustained) may incite broader buying interest, as well as a feeling that the market has come to be oversold... NYSE Adv/Dec 915/2407, Nasdaq Adv/Dec 603/2547

[54anickel]

40. There's that simulpost again!

[nolabels]

57. Well at least everybody made it back alive, how about some cake

10,000th dive cake on the Control Room chart table.

http://www.usstorsk.org/photoalbum/tpic651.htm

[DU GrovelBot]

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[54anickel]

39. 3:18 All is well again, Grasshopper

Dow 9,981.07 -38.40 (-0.38%)
Nasdaq 1,908.13 -23.22 (-1.20%)
S&P 500 1,087.10 -8.35 (-0.76%)
10-yr Bond 4.790% +0.022
30-yr Bond 5.505% +0.038

NYSE Volume 1,349,164,000
Nasdaq Volume 1,497,683,000


3:00PM: After vacillating along their respective session lows for most of the past two hours, the major averages are improving their standing... Notably, the influential banking sector, which has traded with losses for most of the session, but hasn't been exceptionally weak, has traded into positive territory since the last update... The banking sector is important in determining market direction and its ability to pull into positive territory is likely to limit losses in the blue-chip averages... Also, keep in mind that the banking sector has a tendency to lead the broader market...
Accordingly, the group's relative strength (if sustained) may incite broader buying interest, as well as a feeling that the market has come to be oversold... NYSE Adv/Dec 915/2407, Nasdaq Adv/Dec 603/2547

2:30PM: The major averages are vacillating around their respective session lows... The S&P 500 continues to flirt with its 200-day simple moving average at 1078, but its ability to stay above the technically-significant level thus far has limited selling efforts in the broader market... In contrast to yesterday's activity, the Dow is outperforming the S&P 500 and the Nasdaq on a relative basis, despite the fact that all 30 of its components are trading in the red...

Four issues are showing losses of more than a point, including Altria (MO 49.31 -4.09), IBM (IBM 85.63 -1.50), American Intl Group (AIG 69.42 -1.15), and Procter & Gamble (PG 104.97 -1.11)... MO continues to struggle in the aftermath in an unfavorable Florida court ruling... Also weighing on the Dow is DuPont (DD 41.02 -0.85) after saying its Q2 EPS would be approximately $0.78 (consensus $0.80), while FY04 EPS should be $2.10-2.30 (consensus $2.34)...

[UpInArms]

42. almost back in the black at 3:27 EST

Dow 10,010.81 -8.66 (-0.09%)
Nasdaq 1,916.68 -14.67 (-0.76%)
S&P 500 1,092.56 -2.89 (-0.26%)
10-Yr Bond 4.797% +0.029

[Coventina]

43. It's that Grovelbot magic!

[spotbird]

44. DOW 3:36:14 PM 9,986.89 -32.58

Impressive rebound.

[54anickel]

45. Hey, Alan, the teddy bear's upside down

The rantings of Mogambo, again

http://www.321gold.com/editorials/daughty/daughty051204.html

He continues "By the end of 1970's, bonds had been dubbed 'certificates of confiscation' and being bullish on America was hazardous to one's financial health. The idea that stocks could provide positive investment returns was radical and socially risqué at the proverbial cocktail party." As those witty wags at the Daily Reckoning say "Stocks do not go up over the long run; they go nowhere. Up. Down. Sideways. Nowhere."

snip>
The statistics are pretty grim. After inflation and taxes, investment returns over the long term are almost zero. The correct interpretation of this surprising result is that you are merely getting back your own money. Admittedly, you get back MORE dollars than you put in, but each of those dollars is worth less. So you saved fifty cents when you were working, which was the price of a loaf of bread back then, and you got back a dollar in retirement now, which is the current price of a loaf of bread.

Mark Thornton at Mises.com commented on this in his essay, "The 'New Economists' and the Great Depression of the 1070's." He writes, "The experiments of the new economists also resulted in higher price inflation, as would be expected from the 'stimulating' fiscal and monetary policy of the 1960s. From the beginning of 1946 to the beginning of 1965 the consumer price index increased by 71.4%, but then increased 20% by the end of the decade. From 1965-when the experiment began in earnest-to the end of 1980 the CPI increased by 176.6%. The experiment had tripled the rate of inflation experienced by consumers."

Do you know of an investment that provided those kinds of returns? No. Nobody does. Therefore, everybody lost purchasing power, because prices went up faster than their profits.

snip>
He goes on, "Debt is by nature deflationary. Debt is the raw material from which fiat money is manufactured. Therefore, all attempts to outrun deflation by printing an ever-accelerating amount of money are doomed to fail because as debt grows much more rapidly than nature's limits allow income to grow, reversing the inflation of the money supply to a deflation is inevitable."

I am looking at the strength of the dollar, and I say to nobody in particular "Yow! A dollar that gets stronger?"

snip>
So I get out my crayons and my calculator, and I note that the budget deficit is $550 billion a year now, and that is using wildly optimistic assumptions that never work out in real life, like, for instance, that the budget will only compound by 4% per year for the next five years. So that means by the time this hypothetical John Snow's Miracle Five Year Plan is done with, which ought to be about, oh, say five years from now, so mark your calendars, we will be ANOTHER $3.3 trillion more in debt! And we will STILL have a freaking budget deficit of $351 billion a damn year! This is GOOD news? This is the damned GOOD news with? Just the interest ALONE, at a measly 6%, on this new debt will eat up $198 billion of tax revenues! So am I supposed to think that this is something that I want to call up my kids about, waking them up at 3 a.m., so I can tell them the wonderful freaking news that in five years we are going to be another $3.3 TRILLION dollars in debt? And this is just the blangity-blang, dangity ding dong damned OPTIMISTIC plan? This is the BEST that he, and all his little playmates in government, can figure out? This is the gooooooooood news? And here is where the Mogambo steps back from the microphone, his voice trailing away until the echoes die down in the misty distance, and then there is only silence. He spreads his arms, or better yet make that "spreads his muscular and manly arms with muscles that rippled in a manly way." The audience is hushed, and they lean forward in their seats, straining their ears towards the stage upon which the Mogambo now stands, his manly and powerful jaw thrust defiantly forward. The Mogambo opens his mouth and says "And this - this! - is a country that is going to have a currency that gets stronger? Hahahahaha!"

snip>
To show you the utter insanity of Alan Greenspan, we have this. "We have, I believe, a reasonably good understanding of why Americans have been able to reach farther into global markets, incur significant increases in debt, and yet fail to produce the disruptions so often observed as a consequence." Well, well, well! For the first time in history, somebody has figured out how to amass crushing debts and NOT have it destroy the economy! And not only that, but he has a GOOD understanding of it! And the answer is, give me a drum roll please, market forces! He rhetorically asks "Can market forces incrementally defuse a buildup in a nation's current account deficit and net external debt before a crisis more abruptly does so?"

After spending his entire freaking career providing more money and credit so as to finance the world's all-time record-setting bubbles of debt in every market that you can name, NOW he takes the time to ask if market forces can take care of debt? Hahaha!

I see you raising your hand, wanting me to call on you so you can ask me a question that I probably can't answer and then I get all embarrassed. But instead of calling on you, I close my eyes,and Mogambo the Mentalist will read your mind! I close my eyes, and concentrate concentrate concentrate. You want to know how can "market forces" perform this miracle, this towering achievement that has eluded every other dirtbag government and every other dirtbag economist and every other dirtbag central bank in the entire history of the world? The answer is "market flexibility!" You heard me! He actually says "The answer seems to lie with the degree of market flexibility." Market flexibility! Of course! Market flexibility!

Greenspan goes on to say, and I know that he is hard to hear over my insane laughing and hooting in utter contempt and I keep making these rude sounds like I am having severe digestive-tract distress and am passing large quantities of gas, "In a world economy that is sufficiently flexible, as debt projections rise, product and equity prices, interest rates, and exchange rates presumably would change to reestablish global balance" My God! Why didn't I see it before? I slap my forehead in wonder! It all seems so simple when he explains it! In every other instance of the build-up of huge, bankrupting debt, we did not have, let me check that list again, product and equity prices! And interest rates were, of course, completely absent! And let's not forget that exchange rates were always completely non-existent! So NATURALLY "global balance" was not restored in those bad old days!

more...

[54anickel]

46. 3:46 and the patient is making a miraculous recovery - Divine Intervention

one almost may say. :evilgrin:

Dow 10,032.32 +12.85 (+0.13%)
Nasdaq 1,925.40 -5.95 (-0.31%)
S&P 500 1,096.65 +1.20 (+0.11%)
10-yr Bond 4.797% +0.029
30-yr Bond 5.510% +0.043

NYSE Volume 1,538,082,000
Nasdaq Volume 1,708,056,000


Advances & Declines
NYSE Nasdaq
Advances 1415 (40%) 1156 (35%)
Declines 1890 (54%) 1991 (60%)
Unchanged 175 (5%) 145 (4%)

--------------------------------------------------------------------------------

Up Vol* 525 (37%) 370 (23%)
Down Vol* 847 (60%) 1207 (75%)
Unch. Vol* 25 (1%) 14 (0%)

[JNelson6563]

47. PPT working miracles again

anything to save the usurper! ;-)

Julie

[54anickel]

51. It's getting rather old now though. So, tomorrow being Maeve Day,

there will be sunshine up the butt on UE, but toned down on wages, the market will rally, setting up for profit taking on Friday.

[54anickel]

48. Small US banks strong, need looser rules--Treasury

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5119780

WASHINGTON, May 12 (Reuters) - U.S. small banks have strong capital positions but lag larger institutions in profitability and would benefit from an easing of regulations, a senior administration official said on Wednesday.
"A significant challenge to small banking institutions arises from the burden that regulations impose on their ability to compete effectively with larger bank and nonbank companies," Assistant Treasury Secretary Wayne Abernathy said in comments prepared for delivery to a House of Representatives Financial Services panel.

Abernathy urged repeal of a ban on paying interest on business checking accounts. Removal of the prohibition would eliminate "a needless government price control" and increase efficiency, he said.

more...

[spotbird]

49. DOW 3:57:06 PM 10,034.72 +15.25

A close in the black? who would have thought?

[54anickel]

50. Some See Emerging Bond Bargains Amid Price Carnage

http://www.reuters.com/newsArticle.jhtml?type=reutersEdge&storyID=5122972

NEW YORK (Reuters) - Emerging market bond prices have plummeted in recent sessions as the specter of a U.S. rate hike looms, but some experts say that with country fundamentals still strong, it could be time to pick up some bargains.

"I think there is clear value beginning to come back," said Hari Hariharan, chairman of NWI management, a hedge fund that manages about $1 billion in emerging market debt.

"There is fantastic value to be found in things like Russia," he said. "Likewise I think Venezuelan bonds are very, very, cheap given the way oil prices are."

Emerging market debt prices tumbled last week and on Monday, pushing down total returns on the JP Morgan Emerging Market Bond Index Plus more than 7 percent this year after 30 percent total returns in a massive 2003 rally.

more...

[aneerkoinos]

52. Holy Cow!

So, should anyone really take NYSE seriously, anymore?

More importantly, are players taking PPT seriously, can they hold the 10K line?

And, so the 30y bonds went over 5,5. Was something big supposed to happen now?

[54anickel]

53. Most US agency spreads narrow as buyers return

http://www.forbes.com/markets/bonds/newswire/2004/05/12/rtr1369245.html

NEW YORK, May 12 (Reuters) - Buyers reentered the U.S.
agency market at recently widened yield spreads, pushing
spreads over Treasuries to narrow on Wednesday for the second
straight session.

Spreads had gaped wider, with some knocking against 52-week
wides, in sympathy with swap spreads on mounting fears that
economic and inflation growth would trigger Federal Reserve
interest rate hikes as soon as June.

"We built in too many Fed tightenings," Andy Brenner, head
of institutional fixed income at Investec US, said of the bond
markets' recent pounding. Brenner expects the federal funds
rate to rise 1/2 percentage point from its 1958 low of 1
percent this year and thinks the markets have factored in a
full point.

Treasuries, meantime, extended recent losses after the
second leg of the government's $54 billion quarterly
refunding.

snip>
The market next must navigate the Treasury's remaining note
auction of 10-year securities on Thursday, as well as two key
inflation readings over the next two days.

Further signs of inflation pressure could escalate fears of
a more aggressive Fed tightening, yanking yields even higher.

[54anickel]

54. Brazil Real Tumbles 4th Day in 5; Chile Falls: Latin Currencies

http://quote.bloomberg.com/apps/news?pid=10000086&sid=akCdxrSIHEfs&refer=latin_america

May 12 (Bloomberg) -- Brazil's real tumbled for the fourth day in five after a record U.S. trade deficit in March fueled speculation the Federal Reserve will boost lending rates in June, draining investment and slowing Brazil's economy.

The real extended its 6.7 percent May decline as the U.S. trade report accelerated investors' purchases of dollars and futures to replace $707 million of dollar-indexed debt and swap contracts expiring tomorrow which Brazil won't refinance. Investors seeking to maintain their dollar investments had to buy dollars or dollar futures, said Flavio Farah, head of the Treasury desk at WestLB, a German bank, in Sao Paulo.

``We have already seen the real weaken to a new level and now you have the expiring swaps and dollar-indexed debt,'' Farah said. ``With the real weakening so quickly, more investors will take the opportunity to get into or stay in dollars.''

snip>
Rates, Costs

The U.S. Commerce Department today said the country's trade deficit grew in March to a record $46 billion, after a $42.1 billion gap in February, and was more than the $43 billion forecast by economists in a Bloomberg News survey.

The report added to concerns the U.S. won't be able attract the $1.5 billion a day in foreign money needed to finance the current account gap, and might push Fed policy makers to push borrowing rates up faster than investors previously expected.

more...

[54anickel]

55. U.S. budget deficit $281.8 billion for first 7 months of fiscal year

http://www.tucsoncitizen.com/breaking/051204_federal_deficit.html

WASHINGTON - The government ran a deficit of $281.8 billion in the first seven months of the 2004 budget year, according to the latest snapshot of the nation's balance sheets.
The data released by the Treasury Department on Wednesday showed more red ink than the $202.1 billion shortfall recorded for the corresponding period last year.

For the 2004 budget year that began Oct. 1, spending has totaled $1.35 trillion, 7.5 percent more than the same period a year ago. Revenues came to $1.07 trillion - a 1.3 percent increase from a year ago.

So far this budget year, the biggest spending categories were programs from the Health and Human Services Department, including Medicare and Medicaid, $316.5 billion; Social Security, $306.8 billion; military, $253.7 billion; and interest on the public debt, $170 billion.

On the revenue side, individual income tax payments came to $471.3 billion for the first seven months of the 2004 budget year, a 4.5 percent drop for the corresponding period a year ago. Corporate income tax payments totaled $90.8 billion so far this year, a 44.5 percent increase.

more...

[54anickel]

56. Former Enron workers to get pension settlement

http://www.forbes.com/work/newswire/2004/05/12/rtr1369194.html

HOUSTON, May 12 (Reuters) - Former employees of bankrupt energy trader Enron Corp. <ENRNQ.PK> reached a tentative $85 million settlement to cover lost retirement packages, the Enron employees' lawyer said on Wednesday.

The settlement, which would be the largest ever recovered for stock losses in retirement plans, was negotiated with Enron's human resources committee and outside directors who acted as fiduciaries for the employees' stock plans, the lawyer for the former workers, Lynn Sarko, told Reuters.

The settlement represents a fraction of the value of the employees' retirement packages that was lost when Enron imploded in 2001 amid charges of bogus accounting practices.

more...

[54anickel]

58. Closing numbers & blather (Heh-heh, bet ya thought I'd forget)

The futures have been drifting downward throughout the evening again as well. We'll have to wait to see what the morning sunshine brings forth.

Dow 10,045.16 +25.69 (+0.26%)
Nasdaq 1,925.59 -5.76 (-0.30%)
S&P 500 1,097.28 +1.83 (+0.17%)
10-yr Bond 4.797% +0.029
30-yr Bond 5.510% +0.043

NYSE Volume 1,694,885,000
Nasdaq Volume 1,892,357,000

Close Dow +25.69 at 10,045.16, S&P +1.81 at 1,097.26, Nasdaq -5.76 at 1,925.59: What started out as yet another exercise in futility, with the major averages plummeting by 1.6-2.4% at their lows, ended with the market paring its losses in a significant fashion and the blue-chip averages closing in positive territory... The initial negative sentiment was largely the result of the market's continued obsession with rising interest rates and accelerating inflation, which led to excessive hesitation from buyers, particularly ahead of tomorrow's PPI report and in view of new multi-year highs realized by the price of crude oil...

The early weakness was especially notable in the face of Cisco's (CSCO 21.71 -0.54) better than expected Q3 earnings report and Qualcomm's (QCOM 63.32 -1.40) upward guidance, which failed to incite buying interest... In its decline, the Dow slipped below its 200-day simple moving average at 10,013, as well as the psychologically-significant 10K mark... Yet, the ability of the S&P 500 to maintain its standing above its 200-day simple moving average at 1078, put a halt to the earlier selling, inciting mild buying efforts... These efforts found added fuel in the banking sector, which is influential in determining market direction...

Specifically, the interest-rate-sensitive banking group, which had been in the red through the morning managed to start paring its losses in the afternoon, turning positive in the last hour of trade and inciting buying efforts in the broader market, as participants came to view the market to be oversold... Aside from the banking sector, leaders to the upside included the biotech, broker/dealer, oil services, and insurance groups... Among the laggards of note at the close were the semiconductor, gold, tobacco, personal services, and chemicals sectors...

Elsewhere, the bond market closed the session near its lows of the day, with the 10-year note down 11/32, bringing its yield up to 4.80%...NYSE Adv/Dec 1732/1589, Nasdaq Adv/Dec 1427/1737