STOCK MARKET WATCH, Friday December 1

HUI GOLD BUGS INDEX AT CRITICAL STAGE
Overbought, or the Beginning of Something Really Bullish?

The HUI Gold Bugs index is at a technically critical stage the intermediate term. The action over the next 1 to 3 of weeks will likely provide a tip-off as to whether a full force resumption of the secular bull market in gold stocks is resuming, or whether gold stocks are now simply overbought and due for yet another painful correction. The long term basis for this determination is found within both Elliott Wave theory and simple logic. In tonight’s article, I describe the simple logic behind the long term evaluation of gold bugs index, and the short term indicators that are likely to shed light on the likely short, intermediate, and long term action in gold stocks.

-see chart-

Referring to the long term weekly chart above, the simple logic that is shared with Elliott Wave theory is that bull markets occur in three distinct “up” waves that are separated by “corrections” which move against the long term up trend. These three waves are separated by three distinct types of aggressive buyers. The first group that accounts for the first of the three up waves is the one most knowledgeable in the fundamentals behind the bull market. These intelligent folks and insiders are comprised of those who fundamentally understand the justification behind the new bull market. It is these individuals that are aggressively buying while the crowd is selling. In the case of gold stocks, this Wave I began in late 2000, and lasted until December of 2004. Bull markets never go straight up and therefore, there are corrections that follow each distinct long term up wave. The corrections re-instill the bearish sentiment in the crowd that existed before the beginning of the bull market, yet some if not most of the original gains made in Wave I, still stand up in the face of this correction. In the case of the HUI bull market, this long term correction began in December of 2004 and lasted until the spring of 2005, a period of almost 1-1/2 years. While the beginning of the bull market carried the Gold Bugs index from about 35 to almost 260, the correction that followed only took the index back to about 164, thereby preserving most of the initial gains.

-cut-

Notable in today’s market are the following:

- Trading volume this week has been relatively high with little net price movement. This suggests that there is likely to be a turning point occurring soon. While there is still not adequate evidence to sell or go short, the market is probably near an important turning point. Everyone is expecting a “Santa Claus rally,” and professionals are expecting a bullish market with Wall Street bonuses at stake. Although they tend to be correct during Wave 3’s, at important turning points in the market, “the crowd” tends to be wrong.

more...

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

Still long on gold here. I predict it won't do worse than hold steady and consider it likely it will go better than that.

Hope it's all good with all you Marketeers! :hi:

Julie

:donut: and lurkers. Julie, I'm with you. Too much Shake and Bake on Wall Street. I think now is the time for tangible assets...and speaking of tangible assets

My Tale of Woe


As many of you know, I have an evil landlord, a slum lord actually. They were doing construction in front of the apartment for most of the time we have been there. It was a a hassle dealing with everything. We developed a leak in the ceiling and complained about it and was ignored (the new building took precedence). The repairman came out and said he could patch it but the roof was under warranty and a patch to the ceiling would not solve the problem. This was in May. I told the landlord that the problem had gotten worse in July and he basically blew me off. In late Oct and early Nov, the plaster peeled off and fell. We had anticipated it and were ok. We now have multiple leaks.

During the month of Nov. I payed rent (he insists on a check under the mat). He had asked me to write a letter stating that I understood the plants around the house and that we only had one parking space (forget that several tenants don't have cars and have given us the ok to use their space). I thought that he wanted the letter in 30 days-Dec).Long story short as I can make it, he refused to take the check sans letter and told me on 12th that he would start eviction. I wrote a cleverly worded letter which stated what he wanted but also said that I had attempted to pay rent, had made arrangement with other tenants about the cars, and had moved plants. I put this under the mat and lo and behold the wind must have blown it away on the 14th :sarcasm:. Well I and Hubby went to talk to him, with a witness. He lied about not picking it up til the 14th, and while we had a bad wind on the 13th, I have never seen wind that picked up just a mat, blew the check and letter away, and replaced the mat totally turned around. He was shocked that I had made copies of the letter and the missing check (guess he didn't see that coming-I didn't fall off the turnip truck yesterday and I do know my rights). The next day I made made more copies of the letter, canceled the check and handed it to one of his employees in the physical therapy building. Today, I paid rent (less the $25 for the canceled check). I hope I hear nothing more from him. One tenant has left and I overheard him being abusive to another tenant and threaten her with eviction.

What he doesn't know yet is that Hubby and I are so sick of being treated like this that we broke down and started looking and got a fantastic deal on a travel trailer (3K) have found a great place to park it ($400 per month) at a brand spanking new RV resort that is 5 minutes away from our jobs. I will be putting some things in storage, but even with that we will come out ahead. We can tough it out for 18 more months (child support ends so instead of living on my half check-I get the whole check).

It may sound crazy but I am so happy about it. That last move nearly killed me. This will be such a refreshing change. I will begin to pare my things down after Christmas by having garage sales as the weather improves and how nice just to pay lot rent, no slum lord snooping through stuff. I am not looking forward to moving at Christmas time, but this WILL be the last time for a few years.

Happy hunting and watch out for the bears.

and you will be better able to enjoy the holidays this year!


P.S. I am one of the lurkers on this thread, always interesting tidbits of information to read and digest. Thanks to everyone who contributes!

I'm sure you'll know how to enjoy the (relative) freedom.

Maybe, I'd suggest, have another look to see if you couldn't get rid of a few unnecessary encumbrances (save on storage).

Me, I love living light, leaving little, if possible only my chosen, footprint.

But there's another story... However, must go do other things again now... :hi:

what can I say. Sorry to bend some ears but I learned a lot between my court and personal experiences about documentation and the law. Sometimes the only thing that saves you butt is knowing you have some rights and exercising caution. This guy may bluff and bluster but I have documentation that will serve me well if I have to go through the legal system. That can save me money and protect my assets. And that my friends it what we need to do, protect all our assets.

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39052.4083912037-885300154&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

Gold rose to a 16-week high on Friday on further weakness in the dollar, and silver prices struck a six-month high on the dollar woes. Gold, which histrionically has the closest correlation with the dollar of all commodities, touched a intra-day high of $648.60 a troy ounce, before easing back to $645/$646 in late morning trade, down about $2 from the previous close. Bullion prices have risen about 1.2 per cent this week, as the dollar has dropped by a similar magnitude against other major currencies this week. Traders are looking at gold to test the key resistance level of $650, if gold does break through this level - it could trigger another strong upward move. Silver prices reached a intra-day high of $14 a troy ounce, the first time it has reached this level since late May.

;-)

I love being diversified, and watching my heavily conservative portfolio on the rise, and all my metals investments turn to green 3 & 4 figures. I'm about 25% General Stocks, 25% Metals, 45% Cash/Money Mkt & 5% Foreign Currency.

But I'm really hoping for another 10% in Gold by the end of this year. $700/ounce. I think it's possible, especially if interest rates & the dollar continue to decline.

I'm still feeling dollar heavy, and wonder how much worse things could get. Is it too late to diversify into foreign currencies?

diversify to foreign currencies. At the moment you can't buy as much as you could several weeks ago, but you can still feel good about diversifying.

I look upon it as throwing a ball in the air. I can't tell you how far the ball will go up or when it will begin to fall, but I can tell you when the ball is rising and when it is falling. Now apply that to any asset class and add a stop loss and voila. That is enough timing for me. I may not hunt the elephants, but I get enough little rabbits that I never go hungry.

12:00 AM Auto Sales Nov
Briefing Forecast 5.3M
Market Expects 5.2M
Prior 5.1M

12:00 AM Truck Sales Nov
Briefing Forecast 7.5M
Market Expects 7.3M
Prior 7.2M

10:00 AM Construction Spending Oct
Briefing Forecast -0.3%
Market Expects -0.4%
Prior -0.3%

10:00 AM ISM Index Nov
Briefing Forecast 52.5
Market Expects 52.0
Prior 51.2

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

http://money.cnn.com/2006/12/01/news/economy/fed_moskow.reut/index.htm?section=money_news_economy
Chicago Fed President says policy tightening may be required to bring down inflation pressure in economy.
December 1 2006: 1:48 PM EST

KENOSHA, Wis. (Reuters) -- The U.S. economy may require more monetary policy firming to bring down remaining inflationary pressures, Chicago Federal Reserve President Michael Moskow said Friday.

"Some additional firming of policy may yet be necessary to bring inflation back to a range consistent with price stability in a reasonable period of time," Moskow told the Carthage Business and Professional Coalition.

Moskow largely repeated remarks he made last month.

The Fed official, who will be a voting member of the Federal Open Market Committee in 2007, said further policy firming would depend on upcoming economic data, a view that mirrors minutes of the previous FOMC meeting.

The Fed has held benchmark interest rates steady at 5.25 percent for its past three meetings. On balance, Moskow said the risk of high inflation still outweighed the risk of economic growth being too slow.

The official also said by his standard, "inflation has been too high" and he would like to see inflation "between 1 and 2 percent." Moskow noted that the 12-month change in the price index for personal consumption expenditures excluding food and energy, also known as core PCE, has been running at or above 2 percent for 30 months. In October it was 2.4 percent.

The PCE is said to be one of the Fed's favored inflation gauges.

He expects core inflation "to come down somewhat over time," helped by recent declines in oil prices. In addition, he said the expected slowdown in economic growth will help avoid sustained price pressures.

/...

VIENNA, Austria - Oil prices retreated Friday amid profit taking and easing worries that
OPEC will significantly reduce output to boost prices.

Prices had jumped to two-month highs on Thursday on news of declining U.S. fuel inventories and the approach of the Northern Hemisphere winter, when heating fuel demand rises.

But by midday Friday in Europe, light, sweet crude for January delivery fell 42 cents to $62.71 a barrel in electronic trading on the New York Mercantile Exchange.

-cut-

Venezuelan President Hugo Chavez said Thursday that OPEC members had reached a consensus to keep oil prices at $50 a barrel. The weekly average for the OPEC basket price this week currently stands above $56 a barrel.

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

HOUSTON (Reuters) - High gasoline prices not only slowed fuel demand growth and cut sales of gas-guzzling vehicles in 2005, they also prompted Americans to drive less for the first time in 25 years, a consulting group said in a report Thursday.

The drop in driving was small -- the average American drove 13,657 miles per year in 2005, down from 13,711 miles in 2004 -- but it is more evidence that the market works and prices help control consumption, Boston-based Cambridge Energy Research Associates said.

The group's 2007 edition of "Gasoline and the American People" shows the U.S. romance with automobiles is changing, but not ending, due to tighter environmental rules, expanded fuel options, such as ethanol and biodiesel, and an aging of the population, CERA said in a news release.

U.S. motorists are currently paying up an average of $2.247 per gallon at the pump, down from a record $3.057 struck in September 2005 after Hurricane Katrina disrupted U.S. Gulf Coast refinery operations, according to AAA motor club data.

http://news.yahoo.com/s/nm/20061130/sc_nm/oil_prices_driving_dc_4

ISLAMABAD, Pakistan - The Pakistani government said Friday it has sold a 10 percent stake in the country's biggest oil company, Oil and Gas Development Co., to international investors for $813 million in a deal it said highlighted global confidence in the country.

Some 95 percent of the stake was bought by institutional investors from the United States, Britain, Asia and the Middle East, the country's Privatization Commission said in a release. Pakistani investors bought the remainder.

Oil and Gas Development is the biggest player in Pakistan's oil and gas sector and the largest company, by market value, on the country's Karachi Stock Exchange 100 index.

Its privatization marks a milestone of economic reform in South Asia, where Pakistan and India have deregulated in recent years to transform themselves into darlings of foreign investment. Pakistan's government plans to eventually sell 51 percent of the company.

http://news.yahoo.com/s/ap/20061201/ap_on_bi_ge/pakistan_oil_privatization_1

NEW YORK - Wal-Mart Stores Inc. unsettled the retail industry Thursday, reporting a sales decline for the first time in 10 years and warning that its holiday sales would be disappointing. The discounter's news, coupled with a jump in unemployment benefit claims, raised concerns about the strength of the retailing sector at a critical time of the year.

Wal-Mart's confirmation of weak November sales and its announcement that its December same-store sales gain would be no better than 1 percent came as the nation's retailers reported an overall mixed performance for the month. Same-store sales reflect business at stores open at least a year and are the industry standard for measuring a company's strength.

Wal-Mart's disappointment was a sharp contrast with results from discount rival Target Corp., which beat Wall Street forecasts, and Federated Department Stores Inc., which far exceeded expectations. Other retailers had mixed sales; J.C. Penney Co. and Costco Wholesale Corp. both fell short of Wall Street projections.

Industry analysts generally believed the world's largest retailer is struggling with its own internal problems, not an industry-wide malaise. Still, the discounter's woes raised the possibility that it would incite increasingly aggressive price wars this season that would slice into retail profits. And a Labor Department report Thursday that showed a surprising increase in claims for jobless benefits last week added uncertainty to the outlook for holiday sales.

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

to my 200 limit (I am at under 100 at the moment). I will buy some toys but I will be giving them as charitable donations so I am not counting them as Christmas. They are in big trouble if they expect me to buy more-and I am better off than some folks.

for everyone! Friends and family will be getting homemade gifts or a card.

Ya' see, I took this oil painting class... ;)

(Can you guess what the gifts are?)

NEW YORK (Reuters) - U.S. stock futures were little changed on Friday as oil prices fell and investors braced for economic data and a speech by Federal Reserve Chairman Ben Bernanke that could shed light on the interest-rate outlook.

Crude oil prices fell nearly 1 percent from recent two-month highs as traders took profits.

Shares of General Motors Corp. (NYSE:GM - news) fell 1.6 percent in European trading after a regulatory filing showed investor Kirk Kerkorian cut his stake in the company by half. The Wall Street Journal, quoting an unnamed source, said Kerkorian sold all of his stake on Thursday.

Investors were digesting a U.S. government warning that al Qaeda may be planning to attack financial online services.

http://news.yahoo.com/s/nm/20061201/bs_nm/markets_stocks_dc_63

Evidence keeps piling up that the housing sector, after fueling the American economy with its historic boom, is now in a recession.

Usually, housing downturns precede broader recessions in the whole economy. But this time, forecasters say that, for a range of reasons, the economy may continue on a path of growth.

The decline in home prices and sales volume has ripple effects, to be sure. Wednesday, the Commerce Department reported that the economy grew at a 2.2 percent annual pace in the quarter from July through September, a slower pace than earlier this year. A main reason was the slump in residential construction.

But housing and the rest of the economy may be traveling on divergent tracks. In 2001, the last time the nation was in recession, housing did well as home prices continued to climb. Now, the reverse appears to be occurring.

http://www.csmonitor.com/2006/1130/p01s04-usec.html

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

Last trade 82.99 Change +0.04 (+0.05%)

Dollar near 14-yr low vs pound on US growth worries

http://business.inq7.net/money/breakingnews/view_article.php?article_id=35817

TOKYO—(UPDATE) The dollar hovered near a 14-year low against the pound on Friday and a 20-month trough versus the euro as the US currency suffered from expectations a weakening economy will prompt the Federal Reserve to cut interest rates next year.

The yen briefly dipped against the dollar after data showed the rise in Japanese core consumer prices unexpectedly slowed in October to just 0.1 percent from a year ago, raising more doubts about how quickly the Bank of Japan can lift rates.

But the Japanese currency recovered as speculators bought back the yen after the euro fell short of posting a record high above 153.45 yen, while Japanese exporters and macro hedge funds sold the dollar at the day's highs, traders said.

"The dollar overall is very weak," said a trader at a European securities house in Tokyo.

With the pace of core inflation in Japan so tepid, analysts said the BOJ may have a tough time raising rates as soon as this month's policy meeting.

The BOJ's quarterly tankan report on business sentiment, due on Dec. 15, could be the deciding factor in whether the BOJ lifts rates to 0.5 percent from 0.25 percent in December or waits until early 2007.

...more...

US Dollar Collapses as Chicago PMI Rings Recessionary Bells

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar_Collapses_as_Chicago_1164923255777.html

US Dollar – Yesterday’s recovery in the US dollar did not last long as the greenback came under another day of severe selling pressure. Having already started the US session on a softer footing, the Chicago PMI report tipped the currency over the edge. For the first time since April 2003, Chicago PMI dipped into contractionary territory and in doing so, rang the recessionary bells along with it. Large drops were seen in nearly every component of the report including employment, production, prices paid and new orders. This means that manufacturing conditions in the Chicago region is slowing and suggests that we could see a sharp slide in the regional ISM survey tomorrow as well. The market is not taking this well because we have finally seen a solid reason that supports the meltdown in the dollar. The June Fed fund futures contracts are pricing in a 100 percent probability of a 25 basis point cut to 5.00 percent by the summer while the odds for further cuts after that have also jumped. ISM is really the key tomorrow. The trend in the market is very strong. If ISM prints weak like the Chicago PMI report, we could possibly see 1.34 in the EUR/USD and 1.9750 in the GBP/USD. There are also a number of Fed officials speaking tomorrow including Bernanke. Given that many of them have already spoken earlier in the week, we do not expect anything new from them. Aside from Chicago PMI, there were other pieces of US data that were released today, most of which were dollar bearish as well. Personal income growth slowed while personal spending saw a sharp revision to the September data that essentially offset the mild upside surprise that was reported in October. Initial jobless claims jumped significantly last week to the highest level since October 2005, which suggests that non-farm payrolls could come out weaker next week as well. There was some good news though, the core PCE and PCE deflator both came out stronger, reflecting inflationary pressures while the help index held steady at 30 in the month of October and the house price index increased by a slightly more than expected 0.9 percent in the third quarter.

...more...

New Dollar Lows On Employment, Factory Activity Surprises

http://www.dailyfx.com/story/currency/eur_news/New_Dollar_Lows_On_Employment__1164915458015.html

The anti-dollar move is relentless. Though today’s economic releases are not typically seen as the first tier market movers that some of the previous two session’s indicators are, the precarious levels of majors and unexpected changes made today’s move the biggest since Friday.

Looking to the charts, the windfall dollar selling began in earnest in the Asian session. From a level of support around 1.3140, the euro rallied 135 points through the morning hours of the New York session after state-side data threw enough fuel in the fire to push the pair through soft resistance levels. The Japanese yen was trying to overtake the dollar with tests of 115.50 support coming on a 105 point decline through the day. The same was true of the Swiss franc, which took out a weakened 1.2015 floor to carry through to 1.1960 for a 145-point slide. Finally, the British pound was once again taking the lead in the anti-dollar rally. The GBPUSD cleared all resistance levels in a 135 point run that brought the pair to 15-year highs at the 1.9700 figure.

Finally seeing the levels of volatility many traders had missed out on over last week’s extended holiday for US and Japanese markets, traders were on the move this morning as economic indicators catalyzed the greenback lower. Like the previous session, today’s news came in two waves. The first swell piqued market participants’ interest with personal income and spending, PCE-level inflation and jobless claims; but its primary roll was to build the pressure. In the usual sequence of analysis, the market honed in on personal spending and income numbers first. The typical disappointment in spending and strength in earnings reversed its roles in October. American’s spent 0.2 percent more over the month, the biggest increase in three months. At the same time, income growth slowed for the first time in six months. When the two indicators were considered together it was spending indicator that won traders’ affections as it rebuffs some of the weakness in the housing market, especially with predictions of the following month incorporating a 19 percent jump in Thanksgiving holiday sales from the same period a year ago. Printing at the same time, the PCE figures were objectively weighing in on the Fed’s consistent assurances that inflation risk is ‘primarily to the upside.’ The annual measurement of the central bank’s favored inflation gauge shirked expectations of a slight contraction to repeat September 2.4 percent pace of expansion. Usually reserving the last glance, weekly jobless claims were the biggest surprise for the hour. Initial claims for the week ending November 25 ballooned from to 353,000, the most in over a year. While at first glance this seems to set up a poor NFP read next week, it must also be taken into account that adjustment for the Thanksgiving weekend likely skewed the numbers.

Whereas the first flood of indicators built pressure in the majors, the second round triggered momentum. The Chicago Purchasing Managers and housing price index stepped up the fundamental magnitude for the day’s economic picture. Following up on the previous two sessions’ new and existing home sales reports, the third quarter price index likely drew the first look. Expectations of a modest 0.5 percent pace of growth were in place as many speculators jumped on the price components from the monthly sales reports, which have printed the biggest drop in offer prices in over three decades. However, the damage was not yet so severe as growth met a 0.9 percent pace for an eight year low.

...more...

:eyes:

:donut: :donut: :donut:

It's time for me to check out. I may be back later in the day. But just in case I'm not - please have a great day watching the PPT's juggling act. Have a great weekend too!

Ozy :hi:

This is why China will go further than India. They DO look down on cheating. Pre Mao it wasn't that way-it was as bad if not worse than India. They did manage to change the culture in that aspect. Watch those overseas investments.

(by means of the judicial application of truly just systems of justice, if other ways of instilling a sense of morality, of ethics, have never worked, no longer work, in your local culture)...

World/international law/government now/as soon as possible (also taking into account environmental factors), please?

(edited to add: "all forms of" (see eg. Sibel Edmonds below). Gotta run. Back in a while...).

>"No reasonable person would have thought..."

I certainly haven't met any lately.

I was recently involved in a court case involving "reasonable" and the parties involved all belong in the nuthouse.

too short on common sense. And I often wonder why it is call common sense-because it doesn't seem to be common anymore.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aE3ER4m0i5T8&refer=worldwide

Dec. 1 (Bloomberg) -- Hong Kong's stocks declined, leading a drop in Asian markets. PCCW, the city's biggest phone company, fell the most in four months on concern a dispute between its two largest shareholders will hamper an expansion into China.

``The fall in the share price is a reflection of the stalemate'' over the sale of assets in PCCW, said Gabriel Yap, senior dealing director at Phillip Securities Pte in Singapore.

NTT DoCoMo Inc. led gains in Japan after the nation's jobless rate slid to an almost eight-year low, supporting expansion in the region's largest economy. CSL Ltd., the world's second-biggest maker of blood products, fell after the Australian dollar climbed, damping overseas earnings in local currency terms.

The Morgan Stanley Capital International Asia-Pacific Index fell 0.3 percent to 135.90 at 6:05 p.m. in Tokyo, paring its gain this week to 2.5 percent. Hong Kong's Hang Seng Index slid 1.4 percent. The measure lost 3 percent this week, snapping an eight-week rally.

Japan's Nikkei 225 Stock Average rose 0.3 percent to 16,321.78, while Australia's S&P/ASX 200 Index fell 1 percent. Measures advanced in South Korea, Taiwan, India, Indonesia, Thailand and China. Markets were closed in the Philippines.

/...

http://asia.news.yahoo.com/061201/kyodo/d8lnthi80.html

(Kyodo) _ Tokyo stocks ended higher Friday as a slightly lower-than-expected gain in the Japanese consumer price index eased worries over the possibility of a rate hike by the Bank of Japan anytime soon.

The 225-issue Nikkei Stock Average gained 47.45 points, or 0.29 percent, to close at 16,321.78 after rising to a three-week intraday high of 16,376.30. The Tokyo Stock Price Index of all First Section issues on the Tokyo Stock Exchange rose 1.87 points, or 0.12 percent, to 1,604.90.

Early in the morning, the government said Japan's CPI rose 0.1 percent in October from a year ago, a tad below the average market projection of a 0.2 percent increase.

Tokyo shares reacted favorably to the CPI data, expanding their recent gains. But they fluctuated in a narrow range in the afternoon amid mixed currents of profit-taking and dip-buying.

"The better-than-expected CPI showing helped boost shares," said Kazuhiro Takahashi, head of the equity planning and administration department at Daiwa Securities SMBC Co.

He added, however, that trading unrelated to the economic news, such as bargain-hunting and profit-taking, accounted for the bulk of the day's deals.

/...

http://asia.news.yahoo.com/061201/ap/d8lntih00.html

Japan's economy got more good news Friday as the government said consumer prices rose for the fifth straight month and the jobless rate dropped in October.

Still, the core consumer price index, which excludes volatile fresh food prices, rose at slower than expected pace of 0.1 percent in October from a year earlier. Economists had projected a 0.2 percent gain. Core CPI had increased 0.2 percent in September and 0.3 percent in August.

Analysts were trying to size up how that modest rise in core CPI might affect the timing of the Bank of Japan's next interest rate increase, which some believe could come as early as this month. The central bank raised its benchmark interest rate for the first time in six years in July to 0.25 percent from virtually zero.

/...

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061201:MTFH85031_2006-12-01_07-10-15_T201115&type=comktNews&rpc=44

TOKYO, Dec 1 (Reuters) - Japanese government bond futures soared to a nine-month high on Friday after soft data on Japanese consumer prices dampened speculation that the Bank of Japan will lift interest rates this month.

The benchmark 10-year yield hit a nine-month low after data showed that core consumer prices rose by a narrower-than-expected 0.1 percent in October from a year earlier.

The data helped fuel expectations that the pace of rate tightening by the BOJ will be very slow after an expected rate increase in the January-March quarter, analysts said.

Such a view prompted buying of longer-dated paper as investors bet its yields may rise more slowly than yields of shorter-dated notes.

...

The word in the market is that many investors had hoped for higher yields and are now behind target.

Expectations that the BOJ will raise interest rates only gradually have prevented bond yields from rising sharply since July, when the central bank lifted the overnight call rate to 0.25 percent in its first rate increase in six years.

December futures <2JGBv1> shot up to 135.54, the highest level since early March, which was just before the BOJ ended its "quantitative easing" policy. The contract ended the regular session up 0.38 point at 135.47.

Longer maturities led the market's gains, with the 10-year yield <JP10YTN=JBTC> bumping down 4.5 basis points to 1.600 percent after touching 1.595 percent, its lowest level since March.

A large amount of government debt is due to be redeemed in December, and investors were expected to reinvest the funds in longer-dated paper, analysts said.

The 20-year yield <JP20YTN=JBTC> slid 6 basis points to an eight-month low of 2.040 percent.

The 30-year yield <JP30YTN=JBTC> plunged 7 basis points to an eight-month low of 2.250 percent.

Meanwhile, the two-year yield <JP2YTN=JBTC> was down a basis point at 0.800 percent. Limited gains in the maturity helped to squeeze the two-year/10-year spread to 80. The spread briefly narrowed to 79.5 basis points, its lowest level in 3-½ years.

The five-year yield <JP5YTN=JBTC> was down 2.5 basis points at 1.165 percent.

/...

http://www.ft.com/cms/s/6c4151d8-8124-11db-864e-0000779e2340.html

Consumer prices in Japan rose by a marginal 0.1 per cent in October, short of forecasts and the smallest increase since May this year when prices were flat.

The national core consumer price index rose 0.2 per cent year-on-year in September.

The data moderated expectations, which had been boosted on Wednesday by surprisingly strong industrial production figures for October, that the Bank of Japan would raise interest rates this month.

Although this was the fifth consecutive month the CPI has risen, the lower rate of increase highlighted the weakness of inflationary pressures in Japan’s longest post-war recovery. The gain in the CPI weakened for the second month since reaching 0.3 per cent in August.

“This is a reminder that there is very little cushion against falling prices and, given the contribution of energy to the total, there is a clear risk of the CPI going negative in the first half of next year,” says Richard Jerram, chief economist at Macquarie Securities in Tokyo.

/... So, which do you prefer: too much or too little consumer price inflation? Depends on wages/salaries/investement earnings, right? :shrug:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aV_jZo1gFf28&refer=worldwide

Dec. 1 (Bloomberg) -- European manufacturing expanded for a 17th month and unemployment declined as executives and consumers became more confident about the economy's strength.

Royal Bank of Scotland Group Plc said today its manufacturing index was at 56.6 in November after October's 57. A reading above 50 indicates growth. The unemployment rate in the euro area unexpectedly fell in October to 7.7 percent, the lowest in more than five years, a separate report showed.

The euro region's economy will start 2007 stronger than anticipated, the European Commission said yesterday. The forecast reinforced speculation that the European Central Bank will continue raising interest rates into next year after a likely increase to 3.5 percent on Dec. 7.

``We can see that growth, not only in industry, but in the whole economy, is still very good,'' said Christoph Weil, an economist at Commerzbank AG in Frankfurt. ``This fits the ECB's view that the economic outlook is good. It fits their growth projection for next year and they have no reason to change it.''

Borrowing by companies and consumers spurred money-supply growth, which the ECB uses to gauge future inflation, to close to a three-year high of 8.5 percent in October.

``We still have abundant liquidity and the recent data on money supply in no way gives us cause to relax,'' ECB Executive Board member Juergen Stark said Nov. 29. The October figures were ``significantly above our reference value.''

The Dow Jones Stoxx 600 Index gained 0.5 percent to 353.46, its second rise this week. The euro was little changed at $1.3242 at 11:39 a.m. in London, after reaching a 20-month high against the dollar yesterday. The yield on the German benchmark two-year note rose 1 basis point to 3.67 percent.

/...

http://www.bloomberg.com/apps/news?pid=20601068&sid=attGgcHHsvYs&refer=economy

Dec. 1 (Bloomberg) -- Swiss economic growth unexpectedly slowed in the third quarter to the weakest pace since the three months through March 2005, led by a drop in investments, as the central bank prepares to raise interest rates further this month.

Gross domestic product, adjusted for price changes and seasonal swings, rose 0.4 percent from the second quarter, when it gained a revised 0.6 percent, the State Secretariat for Economic Affairs in Bern said today. Economists forecast growth of 0.7 percent, according to the median of 15 estimates in a Bloomberg News survey.

The Swiss economy, headed for its strongest expansion since 2000, may become increasingly reliant on consumer spending with a European slowdown clouding the outlook for exports. The Swiss National Bank, which has signaled it's ready to raise its key rate for a fifth time over the past year this month, may find it difficult to push through further increases as growth cools.

``It's a negative surprise at the end of the day,'' said Reto Huenerwadel, an economist at UBS AG in Zurich. ``We're even below the European average, which makes it difficult for the SNB to keep on raising rates beyond this month.''

European Slowdown

The economy of the dozen nations sharing the euro, destination for about two thirds of Swiss exports, expanded at 0.5 percent in the third quarter, unchanged from the second. Germany, Europe's largest economy, cooled to 0.6 percent from 1.1 percent.

From a year earlier, GDP, the measure of all goods and services, grew 2.4 percent, down from 3 percent in the previous quarter. Economists forecast an expansion of 2.9 percent. The quarterly figure was revised down from 0.7 percent.

``The growth figures were somewhat below expectations, but the economy is still robust,'' said Marcus Hettinger, a currency strategist at Credit Suisse Group in Zurich.

Swiss growth may cool to 2.2 percent next year from 3 percent in 2006, the Paris-based OECD said in its semi-annual economic outlook this week. In comparison, the euro region may expand 2.6 percent this year and 2.2 percent in 2007, it forecast.

A 2.1 percent drop in the Swiss franc against the euro this year is making goods more competitive in Europe, the market that buys two thirds of goods sold abroad, even as growth there slows. Exports, which account for half of Swiss GDP, rose 2.8 percent in the third quarter from the second.

Exchange Rate

The Swiss franc was little changed at 1.5864 versus the euro after the report. The Swiss currency traded at $1.1956.

/...

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39052.5293171296-885308130&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

European shares, already bruised by the strong euro, fell for yet another session after weak US manufacturing data spiked fears about a “hard landing” for the US economy.

The Eurofirst shed 0.8 per cent to 1,421.17 to its third consecutive weekly loss, down 2 per cent on the week in its worst weekly loss since mid-July. Carmakers and retailers felt the squeeze as investors sold off US-exposed stocks.

Dutch Retailer Ahold slipped 3.2 per cent to €7.3 after it said it faced a “challenging” fourth quarter. Ahold derives more than 70 per cent of its turnover in the US. Carmaker Renault shed 2.4 per cent to €88.35. But EDF jumped 5.3 per cent to €50.95 after a French court ruled government-regulated tariffs on gas and electricity should be scrapped, leaving EDF free to raise its prices.

The Xetra Dax shed 1.1 per cent at 6,241.13 in Frankfurt, while France’s CAC 40 slid 1.4 per cent to 5,254.05 in Paris.

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39052.5383564815-885308615&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

London’s FTSE 100 fell half-a-per cent after weaker-than-expected US manufacturing data pushed the dollar to a fresh 14-year low against the pound. The index slipped as low as 5,985.2, the first time it has fallen below the 6,000 mark in two months, ending at 6,021.5.

Leading dollar earners were marked lower. AstraZeneca, the pharmaceutical company, fell 2.1 per cent to £28.90, Hanson, the aggregates group, lost 1.4 per cent to 719p, while Carnival dropped 1.9 per cent to £24.29. The cruise operator was also hit by a downgrade from “buy” to “hold” from Merrill Lynch, which warned of a weakness in its brand in the Caribbean.

The FTSE 250 closed up 25 points, or 0.2 per cent, at 10,698.9, up 0.2 per cent on the week.

Did somebody say, schadenfreude?

http://www.tni.org/archives/bello/friedman.htm
Walden Bello
Focus on the Global South, 25 November 2006

While economists laud the recently deceased Milton Friedman for being “a champion of freedom whose work transformed economics and changed the world,” as a full-page advertisement in the New York Times put it, people in the South will remember the University of Chicago professor as the eye of a human hurricane that cut a swath of destruction through their economies. For them, Friedman will long be associated with two things: free-market reform in Chile and “structural adjustment” in the developing world.

Soon after the coup against the government of Salvador Allende on 11 September 1973, Chilean graduates of Friedman’s economics department, who were soon dubbed the “Chicago Boys,” took over the helm of the economy and launched a program of economic transformation with doctrinal vengeance. In light of his much-quoted assertion about political freedom going hand-in-hand with free markets, the irony that in Chile a free market paradise was being imposed with the bayonets of one of Latin America’s most bloodstained dictatorships could not have escaped the guru.

Yet Friedman visited Chile during the dictatorship, anointing the radical free-market, export-oriented thrust of the regime, praising Chilean dictator General Augusto Pinochet for his commitment to a “fully free market as a matter of principle,” and delivering talks with a title “The Fragility of Freedom” that could only be ironic in the Chilean context. Even as he accused his critics of being bent on “tarring and feathering” him with the regime’s human rights abuses, Friedman took pride in his doctrinal inspiration of what he described as the “Chilean Miracle.”

/... read on. (The original 9/11 certainly not forgotten nor forgiven either in this part of the world...)

http://www.nswbc.org/Op%20Ed/Part2-FNL-Nov29-06.htm
Part 2: The Auctioning of Former Statesmen & Dime a Dozen Generals
By Sibel Edmonds

“The real rulers in Washington are invisible and exercise power from behind the scenes.”- - Justice Felix Frankfurter

It used to be the three branches - congress, the executive, and the courts - that we considered the make-up of our nation’s federal government. And some would point to the press as a possible fourth branch, due to the virtue of its influence in shaping our policies. Today, more and more people have come to view corporate and foreign lobby firms, with their preponderant clout and enormous power, as the official fourth branch of our nation’s government. Not only do I agree with them, I would even take it a step further and give it a higher status it certainly deserves.

Operating invisibly under the radar of media and public scrutiny, lobby groups and foreign agents have become the ‘epicenter’ of our government, where former statesmen and ‘dime a dozen generals’ cash in on their connections and peddle their enormous influence to the highest bidders turned clients. These groups’ activities shape our nation’s policies and determine the direction of the flow of its taxpayer driven wealth, while to them the interests of the majority are considered irrelevant, and the security of the nation is perceived as inconsequential.

/...

See also DU thread here: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x2839240

an intersting thread you might like to read...

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x2838129

the entire article. I am not a suscriber of the nyt and this is info that all should read I think.

12/1/06 Paul Krugman: Economic Storm Signals

http://economistsview.typepad.com/economistsview/2006/12/paul_krugman_ec.html

...

Luckily, we’ve got good leadership for the coming economic storm: the White House is occupied by a man who’s ideologically flexible, listens to a wide variety of views, and understands that policy has to be based on careful analysis, not gut instincts. Oh, wait.

:party:

Dow 12,194.13 Down 27.80 (0.23%)
Nasdaq 2,413.21 Down 18.56 (0.76%)
S&P 500 1,396.71 Down 3.92 (0.28%)
10-Yr Bond 4.425% Down 0.033
NYSE Volume 2,738,076,000
Nasdaq Volume 2,040,526,000

4:20 pm : According to the Stock Trader's Almanac, December has historically been the best month for the S&P 500, turning in an average 1.7% gain. However, with the broader market just a day removed from extending its winning streak to six months, and up more than 14% from its mid-July bottom, another sign of economic weakness left investors questioning whether a typical year-end rally was still possible.

It is worth noting, though, that a renewed wave of bargain hunting heading into the final stretch pared losses across every sector to at least close the indices at their best levels of the afternoon. At their lows of the session the Dow, S&P 500 and Nasdaq were down 1.08%, 1.04% and 1.60%, respectively, but finished the first day of December down just 0.2%, 0.3%, and 0.8%.

Among the biggest obstacles for the bulls to overcome Friday was the second sub-50 reading on manufacturing activity in as many sessions. At 10:00 ET, the November ISM index unexpectedly fell to 49.5 (consensus 52.0). With Thursday's disappointing Chicago PMI report already underpinning a sense of nervousness at the onset of trading, the more influential ISM Index showing contraction for the first time in more than three years gave investors the green light to take some more money off the table and acted as an overhang throughout the day.

Even though fed funds futures now price in nearly a 100% chance the Fed will cut interest rates to 5.0% by March, up from 73% likelihood before the ISM data, more proof that the manufacturing sector will not provide much boost to economic growth in the months ahead did little to attract buying interest in anything other than bonds.

In fact, of the only three sectors trading higher, the rate-sensitive Utilities sector was the day's best performer before it was eventually surpassed by Energy late in the day in sympathy with a rebound in oil prices. For the fifth straight day, oil prices closed higher; but it wasn't until late in the day that investors finally returned to the very sector -- Energy -- that has been the only notable source of support for stocks all week.

One rate-sensitive area that failed to take advantage of the decline in borrowing costs across the yield curve was Financials. The absence of its leadership was noteworthy. The yield on the 10-year note was as low as 4.40%, leaving it flat on the year, but closed at 4.43%. With investment banks hitting historic highs last month (e.g. GS, MER, BSC), the "soft landing" scenario coming into question following the disappointing ISM data prompted investors to take some profits.

As evidenced by the Nasdaq turning in the day's worst performance among the majors, Technology was the biggest thorn in the bulls' side. However, with the Nasdaq up more than 20% after bottoming out in mid July, it wasn't surprising to see investors rotate some money out of one of the best performers (tech) over the last few months. Among the sector's biggest laggards was Intel (INTC 20.93 -0.47), the day's worst performing Dow component. Be that as it may, its 2.2% pullback still leaves the stock, which is also a recommended holding in Briefing.com's Active Portfolio, up nearly 25% from its July low. DJ30 -27.80 NASDAQ -18.56 SP500 -3.91 NASDAQ Dec/Adv/Vol 1889/1165/2.02 bln NYSE Dec/Adv/Vol 1828/1481/1.76 bln

:-(

http://www.marketwatch.com/news/story/hedge-funds-off-secs-monday/story.aspx?guid=%7B1428C68F%2D5795%2D43E4%2DAF85%2D3DCA51824921%7D&siteId=





Hunh?