STOCK MARKET WATCH, Friday 7 May

Greenspan Fed Fails (Or Do They?)
Buffett Supports Kerry - Significant

I would like to examine a success story and a failure story tonight. I’m no economist, however, I enjoy the economic commentary on this site as well as others not influenced by the Wall Street rhetoric. Rather than go where I don’t belong (discussing economics), I will stay in the safe and objective world of charts and statistics. What is the Federal Reserve’s assigned objective? The primary objective of the Fed is, “to pursue both maximum employment and stable prices.“ Let’s view the price stability of Nasdaq stock market and a typical homebuilder, Ryland, since 1986, the beginning of Greenspan’s Chairmanship.



It is accurately stated that in the short run the stock market is a voting machine and in the long term it is a weighing machine. The chart above is a long-term depiction of the Fed’s failure at maintaining “stable prices”. While today, we are not at the silly level where news reporters scouted Mr. Greenspan to see if papers were sticking out of his briefcase the day of a federal open market committee (FOMC) meeting, we’re not far. The press and stock market speculators still hang on whether this guy will say, “Considerable Period”, “Can Be Patient”, or (this is the best one!), “Is Likely to be Measured”. If the chart above represents the Fed’s maintenance of “price stability”, then one can only wonder what he means when he said at Tuesday’s FOMC meeting, “Although incoming inflation data have moved somewhat higher, long-term inflation expectations appear to have remained well contained.” What exactly does “well contained” mean? If the Fed is as successful in keeping inflation “well contained” as they were in maintaining Nasdaq and real estate price stability, then I’m afraid that well contained can mean “a considerable amount of inflation”. Of course a considerable amount can “be measured” as easily as the relative Nasdaq price stability can be measured above. I believe that the price stability of the Nasdaq from the appointment of Greenspan as Fed Chairman to the Nasdaq peak has been measured to be almost 1,500 percent. I know; I measured it (and you can too!)

-cut-

By any means the chart above is a story depicting failure. This is the kind of failure that inspires resignations, not hero status. Yet, the public hangs on Mr. Greenspan’s every word. Only in America!

-cut-

Buffett Supports Kerry

I am a fan of Warren Buffett. If I didn’t already have plans for NYC last weekend, I probably would have went to Omaha for the annual shareholder’s meeting of Berkshire Hathaway. I think that it is notable that Warren Buffett is supporting John Kerry for president. I’ve talked to people who suggest that Buffett is being self-serving in his support of Kerry. I never met Warren Buffett, but I have read several books about Buffett and his investing style. I think that if you read The Essays of Warren Buffett: Lessons for Corporate America, you will be able to form an intelligent opinion of the significance of Buffet’s support of Kerry, and Buffett’s possible motives. It is a short and enjoyable read. My opinion is that Warren Buffett is acting in good faith and is not being self-serving when he gives his support to John Kerry. At the least Mr. Buffett is a man that is successful in his job of building shareholder value. See the chart below, which is the 20-year stock performance of Berkshire Hathaway “A” shares. The lower line is that of our beloved Nasdaq.



http://www.financialsense.com/Market/wrapup.htm">more...

My brain must have slipped a gear.

report will be cooked this month?



Stocks Seen Weaker Ahead of Jobs Report




Friday May 7, 8:00 AM EDT

NEW YORK (Reuters) - U.S. stocks are poised for a weak open on Friday, as investors brace for April's crucial employment report, which is excepted to provide more clues as to when and how much the Federal Reserve will raise interest rates.

In corporate news, Krispy Kreme Doughnuts Inc. shares fell sharply before the open, after it issued its first-ever profit warning since it went public four years ago.

Shares of Krispy Kreme fell to $29.41 on the INET electronic brokerage, down from their Thursday close of $31.80 on the New York Stock Exchange. The doughnut chain cut its earnings forecast by 10 percent, as the popularity of low-carbohydrate diets hurt demand for its doughnuts.

April's jobs growth will not likely be as impressive as it was in March, but economists believe the strengthening U.S. economy still created a respectable number of new jobs.

http://money.excite.com/ht/nw/bus/20040507/hle_bus-n0772201.html

The Australian take on Greenspin.

I remember reading in quite a few different articles that in his younger days Greenspin was quoted as saying he would like to be chairman during a K-winter. Looks like he may be getting his wish.

http://www.smh.com.au/articles/2004/04/25/1082831434429.html

If you're an employer, lock your staff into three-year employment contracts and set your future buying prices now.

If you own bonds, cut your losses from last month and get rid of them.

If you're about to buy property, then that's your fault, but at least think about locking in your mortgage rates.

Because a fortnight ago the world's most successful central banker, Ian Macfarlane, came as close as any governor has probably ever come to saying Alan Greenspan has fluffed it.

Macfarlane's indictment of Greenspan went something like this, after boiling away the qualifications and taking some literary licence: half the world sets their currencies to the greenback, which means Greenspan effectively sets monetary policy for much of the world. The world is entering a third consecutive year of accelerating growth and yet its monetary and fiscal policies are more expansionary than at any time since World War II. This torrent of money has primed commodity prices and frothed East Asian financial markets into a frenzy that looks suspiciously like 1997. If Greenspan doesn't take his foot off the pedal very soon he'll put the world at risk.

Incredibly, Macfarlane's searing public critique of American policy is almost pallid compared with the views that are apparently being expressed each month behind the Reserve Bank's boardroom doors.

more...

The liquidity that Greenspan exported to East Asia via their pegged exchange rates will return to the US as an inflation problem. It won't wait until after the November election. Economists such as Princeton's Paul Krugman expect Greenspan will be forced to jam on the monetary brakes and send US rates to jump 3 per cent before too long.

This will affect the real estate market no doubt.

And then there's this stinging rebuke:
While Macfarlane and his board have guided Australia's unemployment rate to its lowest mark in a generation, Greenspan has presided over the greatest obliteration of American jobs since the Great Depression. There are 2.7 million less American jobs than there were three years ago and about 6 million less than could be expected after population growth.

Greenspan has probably seen this statistic since he is addicted to numbers. So I wonder how he is able to say before Congress that America has "the highest standard of living in the world"?

when speaking of "the highest standard of living in the world":

http://www.nccp.org/pub_cpf03.html

Low-Income Children in the United States (2003)

The United States’ child poverty rate is substantially higher—often two-to- three times higher—than that of most other major Western industrialized nations.(1) While the child poverty rate has been reduced by more than one quarter since it peaked in 1993, the decline stalled in 2001. With the recent economic downturn, there is a risk the United States will abandon the policies that helped families in the 1990s create better lives for themselves. Currently:

The federal poverty level for a family of four (2003) is $18,400.(2)

16% of American children—almost 12 million—lived in poverty in 2001, meaning their parents' income was at or below the federal poverty level. This is about the same number of children who lived in poverty in 1980.

7% of American children—5 million—lived in extreme poverty. This was a 17% increase from 2000. The parents of these children made half the federal poverty level.

...more...

behind China getting most favored status? The perfect market to export our previous inflation to?

We have seen a dramatic upswing in commodity prices, including oil, and are watching them flow through the supply chain. Crucially, the one thing above all others that cured inflation in the world through the 1990s - the cranking up of Chinese factories ahead of demand - is now over.

Chinese deflation turned to inflation at the beginning of last year and has now hit 3 per cent. Chinese producers are facing soaring energy and commodity costs and rising wages and it's only a matter of time before these production costs are passed offshore.

If the last economic decade was shaped by the Chinese producer, this one belongs to its 1.2 billion consumers.

http://www.reuters.co.uk/newsPackageArticle.jhtml?jsessionid=NV3MN42AO5JKOCRBAEZSFEY?type=businessNews&storyID=506686§ion=finance

NEW YORK (Reuters) - U.S. crude oil futures jumped to $40 (22.3 pounds) a barrel today, their highest level in 13-1/2 years, on widespread worries that supply will be disrupted from an increasingly violent Middle East.

Resuming a rally after prices sagged on Thursday on profit-taking, NYMEX June crude's new peak surpassed on Friday the $39.99 high hit on February 27, 2003. That is the loftiest level since prices reached an all-time high of $41.15 on October 10, 1990, two months after Iraq invaded Kuwait and amid the build-up that led to the first Gulf war.

...a bit more...

elaborate energy plan. Sort of like that market manipulation in CA. :evilgrin:

March revised upwards to 337,000 and April comes in above any estimates (even a wisper 200-250k) at 288,000.

Time to change the spin (and watch for a drop in gold)

http://stats.bls.gov/news.release/empsit.nr0.htm

The number of persons unemployed for 27 weeks or longer declined by 188,000 to 1.8 million in April. These long-term unemployed persons accounted for 22.1 percent of the total unemployed. (See table A-9.)


It's about time

The number of persons unemployed for 27 weeks or longer declined by 188,000

Right below that in the summary, (http://www.bls.gov/news.release/empsit.nr0.htm) it shows 116,000 increase in the "not in the labor force" number. Does that have anything to do with the 188,000?

must have jumped. Not showing on Ino yet, though.


?s=NYBOT_DXY0&t=f&w=5&a=2&v=s

http://www.forbes.com/personalfinance/funds/newswire/2004/05/07/rtr1363553.html

U.S. employment surged for a second straight month during April, adding another 288,000 to payrolls, as jobs were created in nearly every sector at a pace that handily outstripped expectations, a Labor Department report on Friday said.

Adding to evidence a revitalized labor market may take some sizzle from the jobs issue ahead of November presidential elections, the government revised up its estimates for job creation in both February and March. Labor said 83,000 jobs were added in February and 337,000 in March instead of 46,000 and 308,000 respectively it had previously reported.

The back-to-back monthly gains in March and April were the strongest in four years, the department said.

In addition to the surprisingly robust job growth, the unemployment rate dipped to 5.6 percent. Wall Street economists had forecast 173,000 new jobs would be created in April and the unemployment rate would be unchanged at 5.7 percent.

more...

...the 10-year note plunging 34 points and bringing the yield to 4.74%.

"The overseas markets have also taken a hit off the report with the European indices down 0.5-1.3%."

From the following article which initiated a thread on LBN:

<http://money.cnn.com/2004/05/07/news/economy/jobless/index.htm>

...and my response in that thread was as follows:

<http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=537579&mesg_id=538308&page=>


Not quite as "strong" as the NeoCon Junta would have us believe. In fact, it's pretty darn weak.

http://www.nytimes.com/2004/05/07/business/07fed.html

snip>

In a speech that ranged from Americans' household debt to the nation's huge foreign debt, Mr. Greenspan said he was optimistic that most financial imbalances could be reduced smoothly through the effect of normal market forces.

"But that is certainly not the case for our yawning fiscal deficit," he told a conference at the Federal Reserve Bank of Chicago. "Our fiscal prospects are, in my judgment, a significant obstacle to long-term stability because the budget deficit is not readily subject to correction by market forces."

snip>

In his speech, Mr. Greenspan appeared to be defending the kind of consumer debt that Federal Reserve policies have encouraged while criticizing the budget deficits that are outside its control.

The central bank's prolonged policy of very low interest rates has fueled a surge in consumer borrowing over the last several years - most of that in the form of bigger home mortgages and home equity loans, but some in the form of higher credit card debt.

snip>

While noting that "a free lunch has still to be invented," the Fed's chairman said globalization and technological innovation had made it much easier for the United States to attract a major share of the world's savings without dire consequences.

The changes, he said, have created "a paradigm somewhat different from that which fit much of our earlier post-World War II experience."

snip>

Though Mr. Greenspan said his outlook for the next few years had "brightened," he was gloomier about the long-term outlook, which he described as "opaque."

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

Last trade 90.51 Change +0.63 (+0.70%)

Settle 89.88 Settle Time 23:36

Open 90.09 Previous Close 89.88

High 90.73 Low 89.58

related articles:

http://www.fxstreet.com/nou/content/2115/content.asp?menu=market&dia=752004

Dollar Gains Upper Hand Before Payrolls

<snip>

The dollar pared recent losses ahead of today’s US non farm payrolls report for April, rising to a session high of 1.2030 against the euro and 110.76 against the yen. Traders locked in recent profits following a strong 4-cent decline against the euro as the euro bounced from a two-year old trendline support but ran into resistance ahead of the key 1.22 level, which marks the 38.2% retracement of the decline from 1.2925 to 1.1760. So far the moves have been mainly technical, but today’s data should provide a strong incentive to traders who have taken to the sidelines.

Weekly jobless claims tumbled to their lowest level in 3 ½ years to 315,000, indicating that the cost cutting measures by employers are well behind us. In addition, the employment index for the services ISM survey showed another gain, allowing some economists to raise their estimate for today’s payrolls to above 200,00. This morning’s Reuters consensus estimate stands at 173k. Markets will also scrutinize whether manufacturing will finally register an increase, which would be the first time in 44 months.

Market on Edge Before Payrolls Data
Markets have shown extreme volatility to the past two payrolls reports. Recall that the February report was widely estimated to be above 150k but showed a mere 21k, which forced down estimates for the March survey, which showed an increase of 308k. The dollar is at a critical juncture against the majors having just broke below uptrend support this week. Recall that the dollar fell 2.5 cents on the February payroll disappointment after having rallied 9 cents in two weeks from its all time low of 1.2925. The dollar was in a similar position last month when we wrote on April 2 that “If ever there was an event that could spark a dollar rally, a plus 100k jobs report would likely do it because this would be the first time since February 2001 that payrolls surpassed the 100k threshold. Technically, the dollar is primed for a rally as it has fallen for 15 of the past 20 days against the yen and 4 consecutive days against the euro, its worst performance since last December.” The surprise 308k figure sparked a 6-cent rally against the euro.

Today’s payroll number comes just as the dollar has retreated from its 2-year long downtrend resistance line after rallying nearly 12 cents from its all time low of 1.2925. 10-year yields are also testing last year’s high of 4.7% and a break above there would be technically bullish and likely lead to more gains in the dollar.

But the strong run in both yields and the dollar ahead of today’s report indicates that payrolls will have to print a plus 200k figure to incite further gains in yields and the dollar, while a figure as expected or below expectation would likely lead to further selling pressure in the dollar and the 10-year yield.

...more...

http://money.cnn.com/2004/05/07/news/economy/jobless/index.htm

Job growth strong
Strong April report cuts unemployment rate to 5.6%; March report revised higher

NEW YORK (CNN/Money) - U.S. employers added more jobs than expected in April, signaling a continuing economic recovery but also adding to expectations that interest rates will be rising soon.

The 288,000 job growth reported Friday by the Labor Department was above the 173,000 jobs anticipated in a survey of economists by Reuters; it was even above the high end of the 60,000- 250,000 range of individual estimates.

The March number was revised up to 337,000 jobs from the 308,000 reported last month.

The Labor Department report said the unemployment rate eased to 5.6 percent. Economists had been looking for unemployment to hold steady at March's 5.7 percent rate.

The job growth was widespread. Even the manufacturing sector, which had been losing jobs as other sectors showed signs of growth, added 21,000 jobs in the month. Construction added 42,000 jobs and retail added 23,000 jobs, while the business and professional services gained 123,000.



...more...

IMHO - the dollar's strength may wane if Meanspin does not raise rates soon - so the pressure will be there.

state a target inflation rate and let them know price stability is off the list of objectives.

http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2004/05/07/financial0520EDT0015.DTL

The right-hand man to the Japanese prime minister resigned Friday after admitting he failed to make mandatory payments into the national pension fund, fueling a government scandal just two months before parliamentary elections.

The decision by Chief Cabinet Secretary Yasuo Fukuda -- so influential he was known as the "shadow foreign minister" -- surprised many lawmakers and raised questions about whether his absence would weaken Prime Minister Junichiro Koizumi.

"We were a good team," said Koizumi, who was notified of Fukuda's decision the night before. "I couldn't do without him, but he has made up his mind. It is too bad."

Koizumi has been struggling to salvage Japan's financially strapped pension system as the nation's society rapidly ages. Many fear the smaller work force of the future will not generate enough payments to supply pensions to the growing ranks of retired.

...more...

up. You'd never see that in the good old USofA, instead they'd be scapegoating their administrative assistant for not paying.

Do they have to wait for the June meeting or can they raise interest rates whenever they like?

They can chage things whenever they want.

What most people miss is that they already HAVE. Very little business takes place around those Fed rates. Mortgages and so much commercial lending revolve around Treasury rates. The benchmark 10 yr Treasury is now a full percentage point (perhap 1.25%) above where it was just a couple months ago. Rates have already moved up.


And there isn't much of an emergency need right now. Fed rate changes take MONTHS to filter through the system (a common estimate is 6 months). you don't go changing them mid-cycle based on a great jobs report. Tehre isn't any reason they couldn't do it a month from now.

I wasn't sure. I was thinking of the effect on savings rates more than mortgage rates.

Interest earned on savings won't be going up much for awhile. If you're willing to look at a mid-long term CD things have been getting better... and some money market portfolios will improve shortly, but if you're talking about interest on your checking and savings you're going to have to wait awhile. They stopped falling some time ago (even though loan rates kept going down) because they had essentially hit zero. The Fed doesn't control those rates, but there is some connection..... But loans are going to go up a fair bit before your savings needle moves off of "E".

Maybe because we have so many retirees here in Florida, it's a bigger issue than other places. The low rates are killing some of these people.

CDs have been improving, but not much at the shorter end.

If you have a need, I recommend considering some sort of "step-up" CD that has a rising rate provision or "laddering" the maturities of longer-term CDs. It's too early to jump out and put it all in five-year CDs because the rates are higher than you've seen for awhile. You would be taking a big risk that rates will be quite a bit higher 2-3 years from now and you'll be locked in.

But you won't need too much patience. Things will be getting better for those investors pretty soon. At least from a return standpoint (increased inflation is likely to net them out to about where they are now).

savings rates to be effected by a rate change? Savings are treated as a "bottom feeder", no?

Espectially this time around. Bank interest margins are as squeezed as I've seen them. Lending rates will be more elastic this year and next than deposit rates will be until some of that compression is cleared out.

That having been said, the anticipation of higher rates on the horizon does mean that longer-term CDs have started to price in that expectation.

Dow 10,226.57 -14.69 (-0.14%)
Nasdaq 1,946.99 +9.25 (+0.48%)
S&P 500 1,111.66 -2.33 (-0.21%)
10-Yr Bond 4.752% +0.150

10:00AM: Indices make little headway from the unchanged mark as buyers remain tentative in the wake of the better than expected April jobs report... Decliners are claiming a 3-to-1 lead over advancers at the NYSE, and down volume is leading up volume by a similar margin... At the Nasdaq, things are somewhat better for the bulls as a positive semiconductor sector has provided a floor of support for the Composite... Names ATMI (ATMI 25.05 +1.13), Amkor (AMKR 9.17 +0.47), and Kulicke & Soffa (KLIC 10.91 +0.66) were upgraded by CSFB, and that has contributed to the upward bias...

Elsewhere, the second report of the day - March Wholesale Inventories - was just released and came in at 0.6% (consensus of 0.5%)... So far, the market has had little reaction to the data...SOX +1.1, NYSE Adv/Dec 768/1839, Nasdaq Adv/Dec 1568/909

so I was doing some research on my 401k with JP Morgan. Of the top ten holdings of the aggressive fund, the first at 5.5% was the fund company itself(JP Morgan)! can you say conflict of interest. :argh:
so the management company gets the fees and props its stock price up with its clients money. Needless to say I tranfered all my money to a money-market account. The return on the money-market is only a 1% difference over the last 5 years than all the other funds. Im sitting this one out. this economy is going down enron style, you cant believe any of the numbers anymore.

funds. Each fund holds a huge amount of, you guessed it another Bank One fund. Takes a lot of digging around to finally get down to what actual holdings you have! A fun exercise if you like working on find a word puzzles and mazes.

Personally, I don't like tracking my hard earned money filling in for puzzles on a cold snowy/rainy night in front of the fireplace.

with this M&A

http://money.cnn.com/2004/01/14/news/deals/jpmorgan_bankone/

$58B bank deal set
J.P. Morgan agrees to buy Bank One in a deal that would combine two of the nation's biggest banks.
January 15, 2004: 11:07 AM EST


NEW YORK (CNN/Money) - J.P. Morgan Chase & Co. has agreed to

buy Bank One Corp. for about $58 billion in a merger that will combine two of the biggest banks in the United States, the companies announced Wednesday.

The merged entity would rank as the nation's No. 2 bank behind Citigroup, with assets of $1.1 trillion and 2,300 branches in seventeen states.

On its own, J.P. Morgan would have fallen to No. 3 after Bank of America Corp.'s $47 billion deal to buy FleetBoston Financial Corp. is completed. Bank One currently ranks No. 6.

The deal for Chicago-based Bank One will extend J.P. Morgan's reach through the Midwest and the Southwest, and lessen its dependence on investment banking and trading, analysts said.

J.P. Morgan also gets a strong retail and credit card presence with Bank One, the world's largest Visa card issuer.

...more...

http://www.forbes.com/business/services/newswire/2004/05/05/rtr1359971.html

Bank One said readying $600 mln credit card bond

NEW YORK, May 5 (Reuters) - Bank One Corp. (nyse: ONE - news - people) is readying a $600 million asset-backed bond pooling credit card debt, market sources said on Wednesday.

The deal, Bank One Issuance Trust (BOIT) 2004-A3, is a 10-year issue and early price guidance on the offering is one month Libor plus 17 basis points.

The issue is being managed by Banc One Capital Markets and JP Morgan Chase.

talking about a few weeks ago.

I suspect it's as part of the JPMChase/BankOne merger. Chase has been doing it for some time - I thinl it's new for BankOne.

There was one I posted a while back stating one of the reasons was to give JP Morgan more exposure to retail banking as well. Haven't found that one yet.

http://quote.bloomberg.com/apps/news?pid=10000006&sid=a367gVmQZT2k&refer=home

April 21 (Bloomberg) -- J.P. Morgan Chase & Co., the third- biggest U.S. bank, said first-quarter profit rose 38 percent, fueled by gains in stock and bond underwriting.

Net income increased to $1.93 billion, or 92 cents a share, from $1.4 billion, or 69 cents, a year earlier, the bank said in a statement issued on Business Wire. Analysts surveyed by Thomson Financial had an average forecast of 87 cents a share for the quarter.

J.P. Morgan Chief Executive Officer William Harrison, 60, is trying to bolster consumer banking by buying Bank One Corp. and its 1,800 branches for $55 billion to make earnings more predictable. Harrison engineered Chase Manhattan Corp.'s $32 billion purchase of J.P. Morgan & Co. in 2000, helping the company enter the top ranks of investment banking.


more...


http://www.insightmag.com/news/2004/05/11/Politics/Political.Notebookfed.Wizards.Policies.Not.Economic.Magic-670115.shtml

snip>

Though the most recent warnings of Greenspan are welcome and indeed overdue, it is worth noting that the Fed under his leadership has encouraged the creation of gigantic institutions that pose just as great a "systemic risk" to the U.S. financial system as do Fannie or Freddie, several close observers of the Fed say. Since the last U.S. banking crisis in 1991, it has been the policy of the Fed to encourage big banks to merge and embrace derivatives as a primary source of profitability, not just for risk reduction.

Of the 575 U.S. bank holding companies and single-unit institutions active in the derivatives market in the fall of 2003, 138 held notional value positions in excess of their weighted risk-based capital (RBCW), as reported to the Federal Deposit Insurance Corp (FDIC). At the top of the pile was J.P. Morgan Chase (JPM) with $34.3 trillion in notional contracts outstanding, some 49.8 percent of total positions held by banking institutions. JPM is also the least profitable - a relatively small realized loss in the notional position, a mere 15 basis points, would create a loss equivalent to JPM's entire RBCW. Significantly, the Top 20 institutions represent 97.6 percent of the notional contracts held by banks involved in derivatives, some $67.2 trillion out of the total $68.8 trillion reported by domestic banks.

JPM is said to have in excess of 800 derivatives traders, a tribute to a business that for a decade grew several times faster than the economy or even the cash markets. There is an inverse relationship between the size of the derivatives business and profitability. The apparent margin in basis points reported by the banks to the FDIC reminds us of financial author Martin Mayer, who observed that 1) there are no economies of scale in banking and 2) the derivatives market is about shifting the risk to the dumbest guy in the room.

Now half the total market, JPM seems to fit that pair of shoes. Credit Greenspan and the mandarins at the Federal Reserve Board for encouraging the formation of a single bank that is effectively counterparty to every derivative contract traded on Wall Street. It is not that JPM controls the derivatives market; rather, the trillion-dollar total asset institution is the derivatives market. Because of the poor profitability of many large banks, mergers are the only way for them to show revenue and earnings growth. JPM currently is set to merge with Banc One of Ohio, creating a gigantic financial company that hopes to rival market leader Citigroup.

more...

Dow 10,225.43 -15.83 (-0.15%)
Nasdaq 1,945.65 +7.91 (+0.41%)
S&P 500 1,110.56 -3.43 (-0.31%)
10-yr Bond 4.735% +0.133
30-yr Bond 5.464% +0.089

NYSE Volume 350,907,000
Nasdaq Volume 429,546,000

10:30AM: Stocks weaken off their opening levels as the Nasdaq continues to surrender its opening gains... The Composite is nearing the flat line, which marks the Nasdaq's 200-day simple moving average... Released at the top of the hour, March wholesale inventories is proving to be a rather inconsequential economic release - particularly on the heels of the April employment report... Wholesale inventories did rise 0.6% thanks to a 2.7% surge in sales...
The net effect is a drop in the inventory to sale ratio to a new record low - signaling that inventory rebuilding could ramp over the next couple of quarters... This would be a huge positive for the Industrials, of which Briefing.com has an Overweight rating on (please see our Sector View page)...NYSE Adv/Dec 658/2371, Nasdaq Adv/Dec 1117/1570

http://biz.yahoo.com/rm/040507/markets_gold_forecast_3.html

LONDON, May 7 (Reuters) - Gold's 4-1/2-year bull trend may be over as investors begin to turn their back on commodities, leaving the precious metal vulnerable to otherwise weak fundamentals, analysts at Barclays Capital said on Friday.

In a special report, precious metals analyst Kamal Naqvi said the end of the "reflation trade", where investors put cash into commodities as they believed these markets would benefit from low interest rates, money supply growth and a weak U.S. dollar, was over.

Bullion prices (XAU=) touched 15-year highs in January and again in April at $430 a troy ounce, but have since tumbled by some 10 percent to trade around $386 on Friday.

"Gold prices would have fallen further had it not been for the current level of geo-political concern and the high, rising price of oil," Naqvi said.

"Speculators who remain long are now looking to sell into price strength and we see current support above $380 as extremely vulnerable."

more...


http://www.vnagency.com.vn/newsA.asp?LANGUAGE_ID=2&CATEGORY_ID=30&NEWS_ID=98282

Gold prices fall dramatically


Ha Noi, May 7 (VNA) - The gold price in the domestic market fell dramatically by 40,000-60,000 VND per tael due to a sharp decrease of 6 USD per ounce in the world market on Friday.

snip>

Economists predicted the gold price in the world market will continue to decline in 2005 as the US dollar's value recovers its strength.

posting my "I told you so" thread in the Economics forum?

:-)

"Economists predicted the gold price in the world market will continue to decline in 2005 as the US dollar's value recovers its strength."

And Frodo had them beat by four months.

Whatever happened to that fanatical gold cheerleader and the "flight to quality?"

continue to rally and be strong in the face of the largest deficits on record and the geopolitical mess this maladmin has created? There are too many forex traders and economists still calling for the continuation of the long term downward trend in the buck.

10% or more in gold recently.

two years is 24%

from 120 on the dollar index to a current of 91

and carrying them in their pockets

From 120 on the index to about 84-85 and now back up to 91. There's a difference between saying what it HAS done and what it IS doing right now.

from then to now - didn't go into the how much you would have lost to 85 and then how much you would have gained from 85 to 91

Only if you had bought at the top, which I'm sure you did not. Doesn't matter, gold will continue to drop as the job outlook continues to improve in the US and the Fed is forced to raise interets rates.

But not in total dollar amounts. Only as a percentage of GDP. And it isn't noticibly worse than the economies it's being compared to in Europe and Japan but it's growing much faster.

You can't look at it in a vacuum and say "how can it go up with these ugly numbers?" The answer is "because it went way DOWN already on those ugly numebrs and the other guy's numbers are now worse".

Holding tight and taking advantage of this opportunity to convert some more paper to metal.

My reasons for doing so are no less valid today than they were a month ago. Now, it may well be that the Grand Economic Machinators might find a way to keep metals down, but in this environment I'd rather lose 20% and still have something of tradable value should the dollar tank as I and others fear it will.

We all have our strategies. Mine isn't to make profit, but to cover my ass.

hmmm... Grand Economic Machinators (the GEMs) - I think I'll keep that....

Yes, I'm hoping for a continued rally in the buck for a bit as well.

the direction of the various markets will be more apparent. I would not get too hasty - too many variables are still in play.

We'll either hold on these support levels and have a chance for some upward movement... or it's all over for gold this cycle. And I think we'll know by the end of the third Quarter. If we fall below about $345 by then I think we've seen the end of it.

But what's the fun in gloating when it's all over? (perhaps gloating isn't the right term since some people undoubtedly took the advice to "invest" in gold before it REALLY ran up and I'm thinking more of a friendly rivalry bet)

kind of like when back in Feb of 2002, I said that *Co would go to war first on Iraq and then attempt to enlarge the conflict -

I really wanted to be wrong - should I "gloat" that I was right?

difference. But we've had that discussion several times here.

I don't believe anyone here has pushed the idea of speculating in the gold market to make a killing. It's been more of a diversify a small percentage of your holdings, sort of like those glossy ads telling you to diverify you 401K holdings between stocks and bonds based on the idea that if one is doing well, the other is usually down. Now that the buck has become volatile again, a bit of diversification into foreign currencies and gold can come into play when the dollar goes down.

You are correct that hardly anyone "here" has pushed the idea of speculating in gold.

I HAVE seen plenty of recommendations to "buy gold" over there. And I've had lots of arguments about the place of gold in a portfolio. I don't consider it an "investment" at all so much as a hedge position.

It's role as a hedge against inflation will increase somewhat in the coming months, but the opposing effect of the strengthening dollar will more than offset it. (JMNSHO)

JMNSHO - What's the NS, assuming the JMHO is the standard acronym?

:wink:

nutty stupid?

naturally slow?

nimbly simple?

:D

against a prediction I made re: Gold and Silver. I wavered and was called a chicken ;-)

Good thing too, I'd have lost on gold, but I was only a month early on silver price.

Bet you thought I'd forgotten, didn't you Frodo! End of day though, you were right I was wrong.

I'm still buggy on gold though, here's hoping you're wrong about $345!

I was thinking of someone else.

We'll just let it ride for Sept 30 ok? :-)


Edit - Oh, and as a diclaimer. I'm "hoping" I'm right because my money IS in the market. A big jump in gold is likely to go along with further...um... "weakness" in my portfolio.

But I hope we ALL make some money. Best of luck!

http://quote.bloomberg.com/apps/news?pid=10000102&sid=aab3lIeD5kJU&refer=uk

May 7 (Bloomberg) -- The pound headed for a weekly gain versus the euro and dollar after the Bank of England yesterday raised its benchmark interest rate and suggested gains in the currency won't stop it from raising rates further this year.

Yesterday's quarter-point increase in the benchmark rate to 4.25 percent was the third move in six months. The bank also said ``inflationary pressures are likely to build despite a higher level of sterling than at the beginning of the year.'' The pound is up 1 percent against the dollar for the week and 0.3 percent versus the euro.

``Everybody was expecting a rate rise and they got it,'' said Chris Furness, senior currency strategist at 4Cast Ltd., a London-based economic consultancy. ``What they also got was a slightly more hawkish statement from the Bank of England and that pushed the euro down against sterling.''

...more...

Dow 10,217.34 -23.92 (-0.23%)
Nasdaq 1,947.43 +9.69 (+0.50%)
S&P 500 1,110.06 -3.93 (-0.35%)
10-Yr Bond 4.742% +0.140

11:00AM: Major indices move off their morning lows but stay within the day's tight trading range... Despite its bullish implications for the economy, the April jobs report has had bearish ramifications for the stock market... The FOMC is likely to raise interest rates as early as the June meeting, and its effects on forward P/E multiples (i.e. contracting the present value of future earnings) will diminish some of the attractiveness of investing in stocks...

Certain sectors have been slammed off the increase in interest rates today - homebuilding, REITs, and mortgage financiers, although the latter is more the result of news that the Office of Federal Housing Enterprise Oversight ordered Fannie Mae (FNM 67.18 -1.70) to revamp some of its accounting practices......NYSE Adv/Dec 599/2571, Nasdaq Adv/Dec 1376/1428

Bargain hunters so close to a crucial technical point (200DMA)?

http://www.wesh.com/money/3279542/detail.html

Move Comes After Intensifying Scrutiny Into Mortgage Giant

POSTED: 9:31 a.m. EDT May 7, 2004
WASHINGTON -- Federal regulators are directing Fannie Mae to revamp its accounting to more closely reflect losses on some investments. The government says the mortgage giant's accounting has violated standard principles in some instances. "Fannie Mae improperly accounted for these assets in a way that fails to reflect losses," said Armando Falcon Jr., director of the Office of Federal Housing Enterprise Oversight. "As safety and soundness regulator, we will take the necessary steps to correct this."


The sharp action by the OFHEO may force the government- sponsored company to restate its earnings. The move caps a period of intensifying scrutiny by regulators of Fannie Mae following an accounting scandal that erupted at smaller rival Freddie Mac last spring.

...more...

derivative losses yet?

Dow 10,211.74 -29.52 (-0.29%)
Nasdaq 1,947.54 +9.80 (+0.51%)
S&P 500 1,109.54 -4.45 (-0.40%)
10-Yr Bond 4.755% +0.153


My condolences to the bond traders.

I will be out for the rest of the day. Have a great weekend!

Ozy :hi:

EDIT: html

http://www.forbes.com/business/2004/05/07/cx_da_0507topnews.html

WTF, setting the final stage to kill the beast?

NEW YORK - Federal Reserve Chairman Alan Greenspan yesterday, speaking via satellite to bankers in Chicago, warned that America's soaring federal budget deficits were a threat to long-term U.S. economic stability even though interest rates remain at historic lows.

Greenspan said he wasn't worried about the short term, but he was concerned about the long term. That's a stark contrast to three years ago, when Greenspan said he was worried about the short term yet confident about the long term. Greenspan was, of course, right to be worried in 2001, but it was also obvious as recession trends were under way and the stock market crash was in full bloom.

But when the deficit problem was starting, Greenspan was nowhere. He blessed the tax cuts saying that surpluses were a problem, albeit with plenty of caution. The "probability of dropping back into deficit as a consequence of imprudent fiscal policies is not negligible," said the Chairman in January 2001.

Recently, though, the Fed chairman has warned about the federal budget deficits. In February he issued similar warnings and suggested some solutions. He was for maintaining tax cuts, even making present tax-cut plans permanent. But he was also for cutting the growth of Social Security, perhaps by raising the retirement age, and for cutting Medicare. Politicians hurried to reject the solution, though some agreed with the problem.

Yesterday, Greenspan reiterated the problem, but, cautious fellow that he is, he didn't have much to say about the solution. He warned that the absence of higher interest rates and of a steep fall in the value of the dollar--so far--has made Americans complacent about the deficit.

more...

http://www.nytimes.com/2004/05/07/business/07CND-JOBS.html?ex=1084593600&en=4aa43051f74f8770&ei=5062&partner=GOOGLE

snip>
The biggest job increases in April came in the service sector, with hotels, restaurants, trucking companies, movie studios, building-supply stores, insurance firms, and doctor's offices all adding workers at a solid rate. Federal employment remained flat, while state and local agencies added a modest number of workers, according to the Labor Department, which adjusts its numbers to take typical seasonal changes into account.

Employment at temporary-help agencies rose by 35,000, the largest increase in two years.

snip>
Still, economists do not expect job growth to get much better, and many predict it is likely to grow a little more slowly over the next year than it did in the last two months or during much of the 1980's and 1990's. Many companies have used new technology and new strategies to become more efficient than they once were, able to produce more goods with fewer employees, and some jobs also continue to move to countries with lower wages.

For now, the hiring surge seems to have forced employers to raise pay, with hourly wages increasing 5 cents last month to $15.59 for the roughly 80 percent of the workforce that falls into a category the Labor Department calls "production or non-supervisory workers."

Over the last year, weekly wages have risen 2.2 percent, while inflation has been 1.7 percent. Both have accelerated in recent months.

In other signs of the labor market's turnaround, the number of people working part-time because they could not find full-time work declined, and the average length of unemployment became shorter.

At 130.9 million jobs, total employment rose above its level in November 2001, when the economy began growing again after an eight-month recession, for the first time last month. There were 1.1 million more jobs in the economy in April than there had been at last summer's low point but still 1.6 million fewer jobs than in February 2001, when employment peaked.

Dow 10,226.57 -14.69 (-0.14%)
Nasdaq 1,949.41 +11.67 (+0.60%)
S&P 500 1,111.05 -2.94 (-0.26%)
10-Yr Bond 4.779% +0.177

1:00PM: Indices improve their trade ever so slightly but continue to stick close to the flat line... The Nasdaq continues to outperform the blue chip averages by a wide margin as traders pick up stocks in the beaten down tech area... Financial - another influential group in terms of sector leadership - has spent most of the day on the defensive as investors have taken profits following the employment report... Brokerage firm calls have also influenced trading there - Citigroup (C 47.00 -0.51), for instance, was started at an Underperform rating at Bear Stearns...

The firm said its primary concern was that the company would find it more difficult to make accretive acquisitions in the future than it has in the past, which may slow earnings growth...NYSE Adv/Dec 521/2823, Nasdaq Adv/Dec 1251/1723

12:30PM: Market remains stuck in a rut as buyers and sellers alike remain reluctant to make big moves... Volume levels started off fairly strong, but have dropped off as more traders head out for the weekend... This week has been a big one for headlines - with the FOMC's meeting on Tuesday and the removal of the 'patient' stipulation from the policy directive, and the April employment report today... The price of crude oil has also been making headlines, rising over supply concerns...

Today, the price touched $40/bbl as more investors worried about slim US gasoline inventories during the high-demand summer months... This move, however, has not translated into gains for the energy group... In fact, oil stocks are down for the day, in part to further selling pressure off Wednesday's Banc of America downgrade of the Oil Services sector to Underweight from Overweight...

to continue playing the M&A game and that will slow earnings growth. Doesn't that sort of mean they haven't really been DOING anything that creates earnings, they just keep buying the earnings of others?

http://www.gold-eagle.com/editorials_04/tustain050604.html

snip>
Per capita deficits

The effect on an average family of the famous twin deficits - trade and budget - is simpler to express than the strings of zeros in government statistics.

The US government borrows $5,000 a year on behalf of each US family (which it dares not tax). It spends it keeping itself popular, and Americans in work, and that $5,000 buys foreign goods, giving the foreign supplier $5,000. So the foreign supplier lends it back to the government by buying $5,000 in bonds, which the US government promises will eventually be paid back by taxing that American family at some time in the future.

The current four year period will end having increased the average family's future tax debt by about $18,000. The family's total accumulated tax debt is approaching $70,000, most of which has been built up since 1990. That $70,000 is the visible tip of a much larger iceberg of debt, because that same family believes itself entitled to future welfare provided by government. This is the "generational debt" - so called because it's what the next generation owes to us in welfare we've financed for the previous one through our taxes. It has been calculated by the widely respected Economist magazine at $44,000,000,000,000 - or about $440,000 per family, and unlike the requirements of US law for corporations this government liability is currently not provided for in public accounts.

All this debt has been the fuel which has consistently heated the US economy and kept us voting for the retention of a social market economy system.

snip>
More evidence - this time from the markets

Hard evidence can be found in financial figures. The world bond market, i.e. debt which has been issued in the form of traded bonds, grew from $800bn in 1970 to over $35,000bn in 2001. This is 43 times.

But even this newly colossal bond market is a runt next to derivatives, which caught the prevailing wind of off-balance-sheet accounting and exploded out of control.

The BIS estimated the main financial derivatives markets at $1,100bn in 1986. The figure for 2001 for the exchange traded contracts monitored by the BIS was $150,000bn. A further $98,800bn in Over The Counter (OTC) derivatives have to be added as well. In 15 years the notional sum of derivatives outstanding has grown by nearly 250 times.

Yet in the minds of investment bankers every cent of these derivative exposures is secure.

more...

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

Last trade 91.17 Change +1.29 (+1.44%)

High 91.27 Low 89.58

Edit for blather
The June Dollar was higher overnight due to light short covering as it consolidates below broken support marked by the 10-day moving average crossing at 90.53. Multiple closes below the 40-day moving average crossing at 89.68 would open the door for a possible test of this year's uptrend line crossing near 89.00 later this month. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

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

EURUSD: Slow Fed Can Delay Dollar's Yield Grab

Another surprisingly strong US payroll report should further improve chances of a Fed June rate hike. Our April forecast for a lower euro was based on improving US jobs and elevated expectations of higher interest rates in contrast with non-inspiring data from the Eurozone. But as the Fed's accommodative policy starts to interfere with its preemptive duty to combat inflation, coupled with this week's inflation reference from the ECB, the dollar's yield grab could be delayed. This week, the FOMC communicated to markets its intention to move at a pace "that is likely to be measured". While the Fed's tightening may be sufficiently "gradual" for the stock market, it may not be perceived to be so by the bond market when inflation measures are overwhelming pointing to the upside.

Should the Fed hold until August, there exists the possibility of letting inflation and payrolls rise further in the inflation and payrolls reports for April (due in May), May (due in June) and June (due in July) reports, which could lead to further erosion in the US real yield differential relative to the Eurozone and other higher yielding currencies. In this case, rate hikes tend to become insufficient to make up for the twin deficits and pressure could revert against the dollar on the basis of its structural imbalances.

We think the Fed should raise interest rates in June and could very well do so after the yield on the two-year treasury note soared to 2.60% today from 1.80% prior to this week's FOMC announcement. Such a jump in short-term yields forces the Fed tightening as early as June. Failure to act in June should punish the dollar.

Technically speaking, Tuesday's breakout above the 10-week trend line resistance is a promising development for the euro, especially after having held well above its 2-year trend line support and lifted off its 200-day MA. The pair now has the fundamental and technical allure to reach past the $1.23 level, after which it should encounter preliminary pressure around $1.2335, which is the 50% retracement of the decline from the all time high to the year's low. Whether the pair accumulates further gains depends on the unfolding signals from the Fed regarding a June tightening. As we move in time, the trend line supports elevates the floor for the euro from $1.1750 to $1.19.


USDJPY: Capital Flows to Stem Yen's Tide

The dollar's 5-week long rise against the yen has been played out and should now revert to its overall downtrend established last August. This is founded upon two fundamental reasons: 1) Japanese equities remain predominantly favored relative to their US and European counterparts, to the extent where both institutional and US investors are seeking exchange-traded funds on Japan stocks. 2) Persistently strong Chinese demand for Japanese products, should combine with rising US demand for Japanese exports, sustaining a boon for Japanese jobs. Despite surfacing talk of a potential cooling in China, Japan's trade deficit with China was cut by more than a fifth last year. And with Japanese unemployment falling to 5.5% from last year's high of 5.0%, coupled with easing deflationary pressures, capital flows should continue to seek the more appropriately valued Japanese recovery story.

Combining these factors with the Bank of Japan's curtailed yen selling interventions, the Japanese currency should regain momentum. Last week, the Fed reported that the weekly flow of Treasury securities held at its custody for foreign official accounts fell for the second time in a month. This could well reflect the Bank of Japan's reduced purchases of US securities.

We expect the dollar to top out at around 112, which will be followed by a reversal towards the 108 territory. The decline will be slowed as it encounters the various retracement levels of the 103.59-111.00 move. Selling should pickup momentum later in the month, extending the pull below 107

http://www.forexnews.com/AI/default.asp (Articles & Ideas section)

Following the breakdown of fixed exchange rates in 1971, the quasi gold standard was replaced by a floating system but still relied on the world's premier reserve currency, the dollar. Oil, the most actively traded commodity in the world is priced almost exclusively in dollars and since the international monetary system moved away from fixed exchange rates, a weak dollar has often meant strong oil prices and vice versa.

While the dollar cycle does not necessarily lead the commodity cycle, the fact is that commodity prices are a reflection of both supply and demand fundamentals for the goods and the currency in which they are priced. Since 1971, commodities priced in dollars have seen enormous volatility within the confines of a long-term uptrend, reflecting the enduring weakness in the dollar.

snip>

Oil reached a new 13-year high today as it closes in on its all time peak of $41.15. From a technical standpoint a new high would confirm the long-term bull market trend in place. Then again, it could also just confirm the long-term bear trend in the dollar.

Oil prices should stabilize around the $42 to $45 level this year as interest rates begin to rise over the coming year and quell the enormous surge in global reflation. But the long-term trend remains firmly in place and will likely lead to higher interest rates over the next decade.

snip>

Adjusted for inflation, government statistics show no real change since the late 1980s. But the difference between the price paid at the pump and the inflation-adjusted level is at an all time high of $1.35, indicating that it is the declining value of the dollar that is the main driver of price inflation.

snip>

This is a dangerous development for the US and countries linked to its currency. A long-term bull market in oil and bear market in the dollar will likely result in an enormous "cost push" effect on inflation for countries using the US dollar. The result will be dramatically higher interest rates over the coming decade.


more with interesting charts...

I feel like I'm in a submarine movie!

Could the DOW go below 10,000 this week?

I have no incisive and informed commentary like the rest of the folks on this thread - which is why I rarely post on it (though I always read it). Just couldn't help but note the steep fall off after about 1 PM. Any ideas what happened to send it down so precipitously??

Dow 10,165.39 -75.87 (-0.74%)
Nasdaq 1,932.84 -4.90 (-0.25%)
S&P 500 1,103.65 -10.34 (-0.93%)
10-Yr Bond 4.783% +0.181

and a side of blather:

2:00PM: Blue chip averages take a hit - setting new session lows - and take the Nasdaq lower with them... The majority of blue chip groups have fallen today, and few areas have been able to buck the trend - offering no floor to the selling pressure... Banking, retail, energy, and transportation have all chalked up substantial losses and led the S&P 500 lower over the course of the day... The auto parts sector is one of the weakest of the latter, owing in part to CSFB's downgrade of the group to Underweight from Market Weight...

The firm cites the double threat of Big 3 production cuts and the inevitable rise in short-term interest rates...NYSE Adv/Dec 491/2884, Nasdaq Adv/Dec 1183/1876

1:30PM: Today's action remains constrained as buyers (for the most part) continue to be content on the sidelines... The second half of 2004 is - from a fundamental perspective - not as bright as 1H04 owing to the more difficult growth comparisons and the prospects for an interest rate hike... That, along with a geopolitical situation that can still be dubbed shaky (e.g. another audiotape message from bin Laden yesterday), has prompted investors to lay off investing in equities...

Briefing.com would contend that a conservative approach would be appropriate in this environment, with a portfolio overweighted in health care, consumer staples, and industrials - as well as basic material and energy...NYSE Adv/Dec 557/2804, Nasdaq Adv/Dec 1323/ 1702

slowing down as investor's headed out for the weekend, according to earlier blather. Seems like another attempt to find a headline to match the movement.
Speaking of headlines, wonder how Rummy faired today.

The averages were wandering around like a drunk walking home, then suddenly WHAM! Must have tripped over the curb or something. It's not like any of the stuff in that "blather" just happened in the last hour or so...

:shrug: I guess that's why they call it gambling. Oh wait, no they don't. But they should!

edit: tyop

Watch for the invisible hand :evilgrin:

Dow 10,146.65 -94.61 (-0.92%)
Nasdaq 1,933.10 -4.64 (-0.24%)
S&P 500 1,101.77 -12.22 (-1.10%)
10-yr Bond 4.789% +0.187
30-yr Bond 5.479% +0.104

NYSE Volume 1,172,229,000
Nasdaq Volume 1,182,200,000

2:30PM: The bears exert their influence on Wall Street and drive the indices to their worst levels of the day... The market's inability to recover from its earlier weakness has only exacerbated the negative bias, and sent the market steadily lower... The Nasdaq is now trading below its 200-day simple moving average, although the S&P 500 has stabilized around its psychologically-significant 1100 level... Should the S&P be able to hold above this point, the market should be able to stave off the efforts of future sellers...
Elsewhere, the treasury market has also succumbed to selling pressure, the 10-year note tumbling 45 ticks and bringing its yield to 4.79% - a level not seen since 2002...NYSE Adv/Dec 353/3053, Nasdaq Adv/Dec 917/2162

Possible bin Laden tape offers gold for slaying of U.S. officials

http://www.dailynews.com/Stories/0,1413,200~20954~2132546,00.html

CAIRO, Egypt -- An audio recording attributed to Osama bin Laden offered rewards in gold Thursday for the killing of top U.S. and U.N. officials in Iraq or of the citizens of any nation fighting there.

The 20-minute recording, dated Thursday, appeared on two Web sites known for militant Islamic messages. The voice sounded like that of bin Laden and the words were laden with Quranic verse, but the authenticity of the recording could not immediately be verified.

The CIA is looking into the statement, a spokesman said. Bin Laden had never been known to offer rewards for missions he had described as followers' religious duty to carry out.

"You know that America promised big rewards for those who kill mujahedeen (holy warriors)," the speaker said. "We in al-Qaida organization will guarantee, God willing, 10,000 grams of gold to whoever kills the occupier Bremer, or the American chief commander or his deputy in Iraq."

He was referring to L. Paul Bremer, the chief U.S. administrator in Iraq, and top military officials.

more...

I saw the bounty but missed it was in gold.

Now there's a good reason for Malaysia's Gold Dinar - bounty payments!
(tongue-in-cheek comment, and arguably in poor taste, I know)

at 2:41 EST

Dow 10,132.10 -109.16 (-1.07%)
Nasdaq 1,929.20 -8.54 (-0.44%)
S&P 500 1,101.00 -12.99 (-1.17%)
10-Yr Bond 4.791% +0.189

2:30PM: The bears exert their influence on Wall Street and drive the indices to their worst levels of the day... The market's inability to recover from its earlier weakness has only exacerbated the negative bias, and sent the market steadily lower... The Nasdaq is now trading below its 200-day simple moving average, although the S&P 500 has stabilized around its psychologically- significant 1100 level... Should the S&P be able to hold above this point, the market should be able to stave off the efforts of future sellers...

Elsewhere, the treasury market has also succumbed to selling pressure, the 10-year note tumbling 45 ticks and bringing its yield to 4.79% - a level not seen since 2002...NYSE Adv/ Dec 353/3053, Nasdaq Adv/Dec 917/2162

http://www.forbes.com/personalfinance/funds/newswire/2004/05/07/rtr1363538.html

NEW YORK, May 7 (Reuters) - U.S. junk bond mutual funds saw a $201 million outflow in the week ended Wednesday, the fourth straight week of outflows from the funds, according to AMG Data Services.

The outflows, reported late on Thursday, followed a $246 million outflow the prior week.

...more...

Those intrepid explorers who prowl suburban streets for yard sales every weekend could probably explain it to you. I'm not one of them, so I don't see the appeal either.

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1083180352298

Merck, the pharmaceutical group, could owe more than $2bn in back taxes and penalties in a dispute with US tax authorities over a funding vehicle partnership set up in 1993.

According to a quarterly regulatory filing on Friday, the Internal Revenue Service disagrees with the US drugmaker's treatment of tax allowances for certain royalties and expenses. The IRS notice for back taxes is expected to cover 1993-1999, and comes as it nears completion of a review of Merck's tax returns.

Merck said it "vigorously disagrees" and plans to "aggressively contest" the ruling with the IRS, if necessary in court. If the IRS were to win, Merck estimated it would owe the government $970m in taxes for 1993-1999, and $490m in interest.

Merck also expects the IRS to make similar claims for years after 1999. Using the formula for years before that, Merck said it could owe $540m in back taxes and $40m in interest for 1999 up to the present.

more...

this quote out.

``Consumer surveys are picking up that jobs are easier to get, and this new confidence is giving consumers the confidence to make even more purchases with credit,'' Christopher Rupkey, senior financial economist at Bank of Tokyo-Mitsubishi Ltd. in New York, said before the report. :crazy:

http://quote.bloomberg.com/apps/news?pid=10000103&sid=aWDZOAEXQwzs&refer=us

Last time I paid attention (Monday?) the Dow was around $10,400 - suddenly it's 300 lower.

Did I miss something?

It closed Monday around 10,400. The last two days it has been crashing, mostly because of the Greenspan comments. I think that was yesterday morning sometime.

BTW: It is an index, so the units are not actually dollars.

Just about the time Rumsfeld stopped talking. Looks like torture isn't good for bidness. Wonder if the fatcats who wanted Stupidhead in the White House are having a twinge of buyer's remorse?

Finance saying things were okay because the "Market had factored in an interest rate hike?" Now they are saying quote:

Top Stories
U.S. stocks balk at strong jobs report
Fri 3:32pm ET - CBS MarketWatch
U.S. stocks sold off late Friday as Wall Street balked at a report of strong job growth in April and began bracing for an interest rate hike, possibly as early as next month.

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

Who can make sense out of all this doublespeak? :crazy:

Dow 10,121.39 -119.87 (-1.17%)
Nasdaq 1,925.24 -12.50 (-0.65%)
S&P 500 1,100.07 -13.92 (-1.25%)
10-yr Bond 4.766% +0.164
30-yr Bond 5.464% +0.089

NYSE Volume 1,379,133,000
Nasdaq Volume 1,358,102,000

3:30PM: Stock market takes another dive amid sector leadership heavily weighted towards the downside... Semiconductor is the only group showing gains at this juncture, although its gains have been lopped off significantly... Market internals reflect the bearishness with decliners leading advancers at the NYSE by a nearly 10-to-1 ratio... Strikingly, more shares have exchanged hands at the Big Board than at the Nasdaq today - a rare occurrence... Worries over a Fed tightening have prompted investors to lighten positions in interest-rate sensitive stocks...

Next week, the market will not have as much economic data to key off of, although it will have a few earnings reports of note... Cisco Systems (CSCO 21.85 +0.35) on Tuesday and Dell (DELL 35.91 +0.43) on Thursday stand out as the most market-moving...SOX +1.0, NYSE Adv/Dec 322/3102, Nasdaq Adv/Dec 915/2217

Nonetheless, it cannot be argued that buyers have been particularly active in today's session as the better than expected April employment report has kept them away...

http://finance.yahoo.com/mo

I must get a new edition of the Newspeak Dictionary.

good is bad, war is peace -

am working on the part past the primer area :D

Too bad the gold market's closed, huh?

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x538611

"I've said today that there are a lot more photographs and videos that exist. If these are released to the public, obviously it's going to make matters worse. That's just a fact," Rumsfeld said.

"I mean I looked at them last night and they're hard to believe," he said. "And if they're sent to some news organization and taken out of the criminal prosecution

channels that they're in, that's where we'll be. And it's not a pretty picture."

The photographs published so far have shown naked Iraqi prisoners piled on top of each other. One prisoner is shown with a leash around his neck held by a female American soldier, and one has women's underwear over his head.

Sen. Lindsey Graham, a South Carolina Republican, asked Rumsfeld during the hearing whether he had seen the video. Rumsfeld said he had not seen it.

"Apparently the worst is yet to come potentially in terms of disturbing events," Graham said.

snip you posted says "if they are taken out of criminal prosecution.."

:scared: Does that mean Asscroft can confiscate the remaining stuff under the Patriot Act, to keep them locked up?

One give immunity to any contractors working for the oil companies for something like 4 years. The other was to block any US citizens or troops being tried in an international court system (Hague).

These were just discussed in LBN this week, if you like I can try to find the links.

they are now part of a criminal investigation. Although, I'm not sure that Sy Hersh wouldn't just release them anyway. But, if that's the case I wonder why Myers didn't just tell Asscroft to block CBS from exposing the first batch. If he knew about them for two weeks, it would seem odd he wouldn't have used a court order to stop it.

It's as curious as the Market News today!

there is usually a method to their madness, everything happens for some other ulterior motive. In the end, we're all screwed anyway.

NOW is the chance for someone to show there is decency left in the world. Type your message below to the French embassy, or call the German embassy--

>>>Tell them to cut off relations with the US Bush Administration, to protest the Iraq tortures!

French embassy:

http://www.info-france-usa.org/comment.asp

German Embassy
4645 Reservoir Road NW
Washington, DC, 20007-1998
(202) 298-4000
 

S&P when they broke below the technicals. :shrug:

Dow 10,117.34 -123.92 (-1.21%)
Nasdaq 1,917.96 -19.78 (-1.02%)
S&P 500 1,098.70 -15.29 (-1.37%)
10-yr Bond 4.766% +0.164
30-yr Bond 5.464% +0.089

NYSE Volume 1,651,845,000
Nasdaq Volume 1,635,045,000

Close Dow -123.92 at 10117.34, S&P -15.30 at 1098.69, Nasdaq -19.78 at 1917.96: Stocks took a pounding today off what seemed like (initially) an unlikely source - the better than expected April employment report... The surge in nonfarm payrolls (to 288K versus the consensus of +165K) along with the upward revision to March nonfarm payrolls (to 337K from 308K) left little doubt the labor market was expanding at a good clip...

The encouraging economic news, however, was a big negative for interest rates - as the yield on the 10-year note zoomed higher to 4.77% and the Fed fund futures contract began pricing in an 88% likelihood of a 25 basis point increase at the June FOMC meeting... The idea that the Fed could tighten sooner, rather than later, kept a lid on buying interest and led to a sharp sell-off in the afternoon session when a morning reversal failed to materialize... Interest-rate sensitive stocks were hardest hit, with homebuilding, mortgage lender, banking, and REIT chalking up the largest losses... Transportation, basic material, and energy also led the market progressively lower - the latter's move being particularly striking in the face of crude oil's climb to over $40/bbl today as supply concerns during the summer months persisted...

Growth-oriented areas such as technology performed a bit better in whole, but they too gave way to selling pressure in late-day trading...SOX +1.0, NYSE Adv/Dec 275/3161, Nasdaq Adv/Dec 822/2342