Economic News

[Spaf]

The Kingdom of TSP



--NEWS--


The Economy and Fundamentals
Bulls vs Bears
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MARKET DATA: Economic Calendar

Link ---> http://www.bloomberg.com/markets/ecalendar/index.html

Link ---> http://www.briefing.com/Silver/Calendars/EconomicCalendar.htm


BEA: Economic Analysis

Link ---> http://www.bea.doc.gov/beahome.html (http://www.bea.doc.gov/beahome.html)


Index of economic and market indicators

Link ---> http://www.bullandbearwise.com/ (http://www.bullandbearwise.com/)


Briefings: Stock Market Analysis. Updated: Each weekday before the opening bell.

Link ---> http://www.briefing.com/Silver/InBrief/PageOne.htm (http://www.briefing.com/Silver/InBrief/PageOne.htm)


Economis news and comments

Economy and Politics: Link ---> http://tinyurl.com/cnl3e

Latest Economic Report: Link ---> http://tinyurl.com/8kmpu

[coolhand]

I've not posted a whole lot in the past few weeks, but I haven't stopped trying to gain more perspective on the market (read global) during this time. It has been a tough year to say the least (for just about everyone).

While I do not have any articles to post at the moment, but I would like to comment on what I see going forward to the end of the year.

Currently, I donot see a catalyst to propel this market significantly higher.

While inflation is "supposedly" under control it is obvious the market has its radar on for any data that can be used to gauge the true picture. The marketis ona constant inflation watch (stox and bonds) for good reason...energy prices.The CPI is usedas a measure of what consumers are paying for goods minus food and energy. But it is no secret that food and energy costs are taking their toll.

Specifically, energy has been high profile in the media. Gasoline costs have soared and even though they have abated to a lesser degree there is no hard evidence that prices will drop significantly in the next few months. AG said recently that we will probably have to get used to these high prices. This is coming fromthe fed chair, but I have not seen too many folks willing to argue the point. Winter is not far off and those folks living in the colder climates are more than likely going to get hit with much higher costs to keep their homes heated than they have historically paid. No matter how I look at this it isn't pretty.

Supposedly, Joe Sixpac has been keeping our own domestic market afloat. How has he been doing this? We've been led to believe in large measure he's been tapping his home equity. And while I would not deny that I also believe there is another reason....low interest rates. We've also been told that the US savings rate is at an all time low. Gee, do you suppose it's all the cheap money? For the last several years savings account rates have been in the dirt. For quite a while it was less than 1%. LESS THAN 1%!!! Does this sound like a prescription for incentivizing savings??? And don't forget, we have to pay tax on all that savings too. Let's see, earn a paltry 1% or so on my savings or mount a HD plasma set onthe wall. Guess I'll get that plasma HD set. It'll make me feel a whole lot better.

How about the twin deficits? They haven't gotten any better lately. In fact this hurricane season has practically guaranteed it's getting worse. Remember last year how the twin deficits were one of the main reasons that the dollar was tanking? Wonder why that hasn't played this year? Interesting.

I've noticed, as many of you have I'm sure, that the 10-year note has been moving higher. It's 4.57% as of last Friday. Now I don't know where it's headed, but that means mortgage rates are moving higher too. Not enough to put a serious damper on the housing market, but something to keep an eye on. But since I've mentioned the housing market let me restate the fact that Joe Sixpac has been tapping his equity and fueling our economy. If housing finally cools off that cash flow stops. It's only a matter of time asprices can't keep moving higher without at least pausing at some point in time. While the cost of housing has many variables I found it very interesting recently to read that San Diego, CA has priced out all but 9% of folks living in the area. Scary.

Hey, it's the end of the year. Doesn't that mean a Santa Clause rally? I keep hearing we will rally to eoy like it's a given. Yeah, like this market's been following any kind of script this year...LOL.

I know this has all been negative comments about the economy, and before I get off that bent let me just throw it a few more quick jabs before I move on.

The current CIA leak probe (don't think Libby is the end of this), dollar uncertainty, Iran sabre rattling, Iraq war, Afghanistan, avian flu scare, terrorism. Boy, Ben's got his work cut out for him.

Okay, did I miss anything?

Dennis, I'll let you cover the positives...LOL.

While everything I've covered casts a negative light on the markets, I am not necessarily bearish. All this stuff creates fear and fear is what we need to drive the markets higher. I don't know how we're gonna get there, but I'm waiting for that catalyst. It may be China. It may be a global shift that sees the US savings rate turn higher while the savings glut in European and Asian markets begins to get spent.I don't know, but I sure hope it comes soon.

[Birchtree]

Coolhand,

Not really very negative - the market can survive. The blessing going forward will be the manufacturing sector regaining momentum. American manufacturers, in a pleasant surprise, said business turned up in September, despite Hurricanes Katrina and Rita, and the jump in energy prices, a suggestion that the storms didn't do significant damage to the economy outside of the ravaged Gulf Coast.

The Institute for Supply Management reported its monthly index jumped to 59.4% in September from 53.6% in August, a 13-month high. A reading above 50 indicates the manufacturing sector is expanding. Many analysts had expected the September reading to decline. The consensus reading to be released on Nov. 1 is a drop to 57.5%. My bet is the index holds or increases in value.

The across the board improvement in orders, production, employment, and exports confirm that manufacturing outside the Gulf Coast region was not hurt by the hurricane disruptions. The ISM employment measure inched up to 53.1% in Sept. from 52.6% in August. Its index of new orders leaped to 63.8% in Sept. from 56.4% in August. Everything seems to be in place for a continued expansion with a resumption of the bull market. The new home owner sitting on his new porch will be left behind - but the bull doesn't want him along for the ride anyway - he made his choice so let him enjoy his new home fully slammed out.

[Spaf]

[copied post]

Researched by: TheTechnician

US Economic Events & Analysis (10/28/05):

Simple Economics [Link] http://tinyurl.com/8jtg9

[Spaf]

The Kingdom of TSP

The Constable Files

NEWS: While we haven't arrested Horseman Krude. He was last seen riding out of town!

[The_Technician]

FOMC: hikes borrowing and saving rates




Short Take - November 2, 2005



Evelina M. Tainer, Chief Economist, Econoday




The FOMC voted unanimously to raise its federal funds rate target by 25 basis points, bringing the target rate to 4 percent, a rate we haven't seen since June 2001. While we don't yet have figures for October, it is unlikely that inflation will suddenly accelerate from the pattern we've seen over the past few months. With core inflation at roughly a 2 percent rate, and the fed funds rate target at 4 percent, it implies that the real fed funds rate is currently 2 percent. Also, it is important to keep in mind that core inflation is at the top end of the 1-to-2 percent range that appears acceptable to most Fed officials. Even if the core inflation rate remains at 2 percent, the Fed will want to raise rates further so that core inflation falls from the top end of the range.
The post-meeting statement was hardly changed from the September 20 statement. It basically reflected the fact that everyone has a better handle on the state of affairs reflecting the damaged Gulf Coast area. (In fact, FDIC chairman Donald E. Powell was named on Tuesday as the coordinator of the relief effort in the Gulf Coast region.) Fed officials continue to believe that the risks are balanced with respect to growth and inflation even though they do mention the possibility that "the cumulative rise in energy and other costs have the potential to add to inflation pressures." Nevertheless, the Fed remains "measured" in its approach. Most likely, the Fed will raise the funds rate target an additional 25 basis points in December and January - as is the consensus among Wall Street economists these days.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_shorttake/year/2005/weekly/45/chart-1.gif

So what does this mean for consumers?
The 2-year Treasury note yield has risen in tandem with the fed funds rate target, although not by the same magnitude each month. Yields did rise 31 basis points in October from the September average. Even though we have finally seen some increases in long term yields, these haven't been as large as increases in short term yields. The 10-year note yield did jump 26 basis points in October to 4.46 percent from the September average. At the same time, the average yield on 30-year fixed rate mortgage loans increased 30 basis points to 6.07 percent. Market rates move along with expectations of Fed rate changes, so Treasury yields and mortgage rates will probably continue to rise after today's rate hike, but only because investors are now expecting the Fed to raise the target rate again in December and January.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_shorttake/year/2005/weekly/45/chart-2.gif

Some consumer rates don't float freely in the market, but are determined by banks, which in turn depend on the Fed. For instance, banks' corporate base rate, also known as the prime rate, move in lockstep with the Fed. Given the 300 basis point spread, Tuesday's rate hike will push the prime rate up to 7 percent. Typically, banks tie their home equity loans as well as credit card rates to the prime rate.
Home equity loans are quite popular in that they remain (until the next tax reform) tax-deductible. While some homeowners refinanced their home loans to cash out equity, some may simply have used lines of credit to borrow against their home equity. Each measured increased in the fed funds rate target - and subsequently home equity loan rates - hurts consumers just a little bit more. We are taught in Econ 101 that all decisions are made at the margin. This means that each 25 basis point increase in the fed funds rate tightens the screws on one or two or three more homeowners.
In a similar fashion, credit card rates that are tied to banks' prime rate see incremental increases in the interest rate. For those consumers that maintain balances, the incremental 25 basis point hike will make a difference. Particularly now that consumer regulations are forcing credit card companies to double the minimum payments on consumers credit cards.
While the measured increases in the fed funds rate target are tightening the screws on consumers who borrow, they are also boosting interest income for savers. For several years, bank rates on savings accounts, including certificates of deposit, have been miserable. Finally, banks are offering rates (generally in line with Treasury yields) that make it reasonable to save again. Indeed, interest income payments on savings accounts are once again noticeable. While rising interest rates are generally viewed in a negative fashion by equity investors, small savers who do not invest in the stock market will be happy to see their savings account grow.
Bottom Line
To no one's surprise, the Federal Reserve raised the fed funds rate target by 25 basis points to 4 percent. As this rate gets filtered through the banking system, borrowers will find their costs increasing, but savers will find some extra money in their accounts. Higher borrowing costs will eventually choke off some spending, and while the higher interest rates for savings aren't likely to induce extra savings, regular savers will benefit from some extra income!

[Spaf]

The Kingdom of TSP

The market and the economy: Q4

"Every year the past five years, the talk has started out that it will be a disappointing year. Then, it ultimately turns out just fine. This year will be similar. "
--Dick Green, Briefing.com

Rgds, and be careful! :) Spaf

[Spaf]

The Kingdom and Krude

http://i21.photobucket.com/albums/b296/Spaf/Pumper.jpg

November 3, 2005


ENERGIES: December crude oil closed up $2.03 at $61.78 a barrel today. Prices closed near the session high today on a strong short-covering bounce from recent losses. But the downtrend from the late-August high of $71.57 remains in place.

[Spaf]

The Kingdom of TSP - Economic News

November 4, 2005

Where's the Pizza? Ans: The Creature from the Cartel keeps raiding the Pizza vans!

Mark Cotton of MarketWatch had this to say: "You have the classic dichotomy where you have a strong economy, but you also have the Fed in a tightening phase, raising interest rates to slow it down."

Elsewhere:
Natural gas loses nearly 13% for the week
Oil loses 1% for week on mild weather, higher Gulf output
By Myra P. Saefong,MarketWatch

SAN FRANCISCO (MarketWatch) -- Natural-gas futures closed Friday at their lowest level since August, down almost 13% for the week, while crude-oil futures fell over $1 a barrel to end the week with a loss of 1%.

Light sweet crude for December delivery closed at $60.58 a barrel, down $1.20 for the session and down 64 cents for the week. The contract climbed by more than $2 on Thursday.

Oil and natural-gas production in the Gulf following Hurricanes Katrina and Rita continued to recover.

Sounds like good news to me! :) Spaf

[coolhand]

This article makes a good point about the dollars chances to keep gaining strength...or not.

AG also had some words in the past few days about our govmnts uncontrolled and unsustainable spending. Once rate hikes stop, the dollar will probably turn.

http://tinyurl.com/8wngq

[Spaf]

Economic Preview

Higher prices, slower spending
Data to show upside, downside risks to economy

ByRex Nutting, MarketWatch

Article link ----> http://tinyurl.com/cp6xe

[Spaf]

The Kingdom of TSP

The Constable Files

NEWS: While the damage may have been done. It appears that Krude is on the run!

[Spaf]

An Economic Look

November 17, 2005

Economic Insight, November 17, 2005. by Timothy E Rogers at Briefing.com

See article at link ----> http://tinyurl.com/cr3b4


Rgds:) Spaf

[Spaf]

The Kingdom of TSP

The Constable Files December 5, 2005

News: Uh oh, It appears that Krude is back in the territory! Maybe a seasonal thing?

[The_Technician]

http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/header.gif

http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-1.gif
2005 winds down
Econoday International Perspective - Monday, December 19, 2005

By Anne D. Picker, International Economist
International Perspective will be taking off next week. IP will return on January 3, 2006.
Happy New Year from all of us at Econoday!

Both the Bank of Japan and the Federal Reserve held policy meetings last week. The Fed continued to increase U.S. rates by 25 basis points - the fed funds rate is now 4.25 percent. As can be seen on the graph below, the spread between U.S. and British rates has now narrowed to only 25 basis points and with Australia to 125 basis points. In contrast, the spread between European and U.S. rates, which momentarily narrowed to 175 basis points, is now 200 basis points again. And with Japan the spread gets ever wider as the BoJ extends its super easy policy of zero interest rates.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-2.gif
The Bank of Japan, amid a good deal of political rhetoric and speculation by bank watchers, left its monetary policy unchanged. Interest rates remain near zero and the Bank will continue to flood the market with cash as it has for 4½ years in its fight against deflation. The BoJ kept the reserve target at between ¥30 trillion ($258 billion) and ¥35 trillion. In his post-meeting press conference, Bank of Japan Governor Toshihiko Fukui said that the Monetary Policy Board was close to ending its deflation fighting policy. The MPB thinks that the economy is achieving a well-balanced recovery which is steadily spreading throughout the economy. The Bank, he said, is also watching to see if core consumer prices (which excludes fresh food but includes energy) can achieve stable gains.
While an interest rate policy change may be on the horizon, its timing is at the center of a dispute between the BoJ and the government. Prime Minister Junichiro Koizumi has repeatedly insisted that deflation persists and it is too soon to stop fighting it. The government is concerned that a policy change may prompt investors to dump bonds, raising yields and the cost of servicing the nation's debt, which is projected to reach ¥774 trillion or 151 percent of gross domestic product by March.
The bank had raised rates in August 2000 in the face of government opposition, saying the economy had recovered sufficiently to cope with higher borrowing costs. Then seven months later in March 2001, it was forced to cut rates and adopt the quantitative easing policy again when global growth slumped after the Internet technology bubble burst. The BoJ has lifted the reserve target sevenfold since it adopted the policy. It has set three conditions that must be met for a change - core consumer prices stop falling for at least a few months; policy makers are sure they won't resume sliding; and the Bank is confident about the overall strength of the economy.
Ruling Liberal Democratic Party legislators have set up a committee to discuss the central bank's policy. The panel will urge the central bank to set joint economic policy goals with the government, with an aim to achieve a certain growth target. Kozo Yamamoto, the panel's chairman, told reporters yesterday the government and central bank should coordinate policies to achieve nominal economic growth of between 3.5 percent and 4 percent. The government has projected Japan's nominal growth at 1.3 percent this fiscal year (ending March 31, 2006). Fukui and other policy makers have said the bank will probably hold interest rates near zero even after it starts to reduce the amount of cash it injects into the banking system because prices won't likely rise quickly.
Now that the FOMC meeting is over...
Stocks became increasingly volatile as the end of year/holiday season drew closer. The yen continued its sharp rebound while interest in stocks in the major markets seemed to fade. Japanese stocks fell on concern that the higher yen would depress exporters' sales and profits. U.S. data were positive - that is, with the exception of the merchandise trade deficit which continued to burgeon. But the good data brought with it worries of future U.S. interest rate hikes. On the week, most indexes were up with the exception of the two Japanese indexes and the Nasdaq.
Global Stock Market Recap

http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-3.gif
Europe and the UK
Stocks in Europe and the UK closed the week on a positive note. German stocks benefited from utility stocks as well as the improving sentiment as evidenced by the ZEW and Ifo indexes. Friday's triple witching prompted greater volatility in indexes as investors adjusted their holdings of underlying assets. German stocks on Friday benefited from a better-than-expected reading in the Ifo confidence index as export-driven growth fueled spending at home.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-4.gif
Earlier in week, European stocks fell from four-year highs as the dollar dropped to its lowest level in more than a month against the euro, reducing the value of companies' U.S. sales. The euro's rise is adverse for exporters as prices for their goods go up. On the week, the FTSE was up 0.3 percent while its European counterparts, the CAC and DAX, were up 0.9 percent and 1.4 percent respectively.
Asia/Pacific
The yen's strength was not good news for Japanese exporters, and helped bring down the Nikkei and Topix last week. The Nikkei lost 1.5 percent while the Topix, 0.7 percent. The immediate cause was government plans to scrap income tax breaks adopted in 1999 to reduce the budget deficit. The ruling Liberal Democratic and New Komeito parties yesterday said Japan should abolish tax concessions for individuals and businesses by 2007. A possible end to the breaks could lead to a burden of ¥3.3 trillion ($28 billion) for taxpayers. Retailers' stocks sank on concern rising tax payments would hinder consumer spending. The concessions were introduced in 1999 as a temporary measure to spur consumer spending and help prop up stagnating economic growth. Japan's parliament passed a bill in March to halve the rebate to 10 percent in January.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-5.gif
Exporters such as carmakers and tech manufacturers were hit by the dollar's slide to its lowest level against the yen in a month. Most domestic sectors performed little better, as investors continued to show skepticism about recent market rises in the wake of Wednesday's weaker-than-expected Tankan survey. Sea transport - the most export-dependent sector - dropped.
Currencies
After drifting lower against the dollar, the yen did an abrupt about face and soared. The reasons are numerous including the possibility that the Federal Reserve may stop increasing U.S. interest rates. Other reasons abound including the continued improvement in the Japanese economy as evidenced in the Tankan survey for the fourth quarter (even though key numbers were below the optimistic consensus) and the Bank of Japan's upbeat forecast for the cessation of deflation and growth. But the Ministry of Finance is not shy about intervening if they find the currency too strong - and they have already warned that they are monitoring the situation.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-6.gif
The euro also gained on the dollar last week. Improved sentiment combined with easing inflation helped improve the currency. Sentiment now has turned on the ECB's 25-basis-point increase on December first. The consensus seems to feel that the move would not hurt the fledgling recovery.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-7.gif
Indicator scoreboard
EMU - November harmonized index of consumer prices was down 0.2 percent but up 2.3 percent when compared with last year. The monthly decline was due to the decline in fuel prices. Core HICP which excludes energy and unprocessed food was up 0.1 percent and 1.5 percent on the year. Prices for clothing were up 0.5 percent and for food by 0.3 percent. Eurostat will change the HICP base year to 2005 from 1996 effective with January 2006 data.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-8.gif
Germany - December ZEW economic sentiment index soared to a reading of 61.6 from 38.7 in November. Contributing to the gain was stronger equity markets, a weaker euro, lower oil prices as well as the apparent willingness of companies to invest. The monthly survey is conducted by the Mannheim-based Center for European Economic Research (ZEW). ZEW surveyed 317 German financial experts for their opinions on current economic conditions and the economic outlook for major industrial economies between November 28th and December 12th.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-9.gif
December Ifo business climate index jumped to 99.6 from 97.8 in November. The index showed that business confidence increased to the highest in more than five years. The confidence index is derived from a monthly survey of 7,000 executives.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-10.gif
France - October merchandise trade deficit widened to €2.463 billion from a deficit of €1.534 billion in September. Exports dropped 3.0 percent after a 1.5 percent gain in September. The ministry said the decline in exports was particularly noticeable in capital goods and automobiles. In contrast, exports of unfinished goods, consumer goods and energy products remained strong. Imports were virtually unchanged in October. A modest increase in unfinished goods, consumer goods and capital goods imports were largely offset by a drop in purchases of foreign automobiles.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-11.gif
Italy - October workday and seasonally adjusted industrial output sank 0.9 percent and was down 2.7 percent when compared with the same month a year ago. The declines were everywhere. Consumer goods dropped 1.2 percent, investment goods declined 0.7 percent, intermediate goods sank 1.4 percent and energy goods were down 1.0 percent.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-12.gif
October world merchandise trade deficit was €261 million, significantly smaller than September's deficit of €2.4 billion. In October 2004, the trade balance had a surplus of €199 million. Exports were up 3.3 percent but imports soared by 5.1 percent primarily driven by energy and consumer goods purchases. Istat said that much of the 2005 deficit was due to increased energy costs.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-13.gif
Britain - November producer output prices were down 0.2 percent and up 2.3 percent when compared with last year. Excluding food, beverages, tobacco and petroleum, output prices edged up 0.1 percent and 1.3 percent on the year. Food prices were up 0.5 percent and chemical products were up 0.7 percent but petroleum products were down 3.3 percent on the month. Producer input prices were up 1.4 percent and 12.7 percent on the year. Core input prices were up 1.6 percent and 8.7 percent on the year. Crude oil prices were down 3.1 percent but all other categories were up on the month.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-14.gif
November consumer price index was unchanged and up 2.1 percent when compared with the same month a year ago. Transport prices - such as those for airfares and gasoline - declined. Retail price index excluding mortgage interest payments was up 0.1 percent on the month and up 2.3 percent on the year. The CPI is used primarily for monetary policy purposes while the retail price index is used as a parameter for things such as wage increases and the like.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-15.gif
Average earnings growth for the three months to October slowed to 3.6 percent from 4.1 percent when compared with the same three months a year ago. Excluding bonuses, average earnings dropped to 3.9 percent in October from 4.0 percent in September. Private sector earnings dropped to 3.5 percent from 4.1 percent, while public sector earnings dipped to 4.1 percent from 4.2 percent.
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November claimant count unemployment was up by 10,500 and the claimant count unemployment rate remained at 2.9 percent for the second month. For the three months through October, the International Labour Organisation measure of unemployment was up 72,000 on the previous three months. The ILO unemployment rate jumped to 4.9 percent from 4.7 percent in the previous three months.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-17.gif
November retail sales were up 0.7 percent and 2.1 percent when compared with last year. Food store sales were up 0.5 percent and 2.8 percent on the year while non-food sales were up 0.8 percent and 1.8 percent on the year. Non-store retailing was up 1.2 percent.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-18.gif
Asia
Japan - November corporate goods price index was unchanged on the month and up 1.9 percent when compared with last year. Prices for nonferrous metals and iron and steel scrap were up while gasoline prices were down.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-19.gif
Fourth quarter large manufacturers Tankan survey climbed to 21 from 19 in the third quarter. Sentiment about major oil refiners and nonferrous metal makers showed a marked improvement in light of high crude oil and commodities prices while large wholesalers, retailers and food and beverage sectors reported sagging sentiment. The index for small manufacturers was 7, up from 3 in the previous quarter. The Tankan, which means short-term economic outlook, surveys more than 10,000 companies and is the most closely watched index of business confidence in Japan. It asks companies about their outlook for business including sales, profits, spending and employment. Companies were surveyed between November 10th and December 13th.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-20.gif
Americas
Canada - October merchandise trade surplus was C$7.2 billion, virtually unchanged from September. The surplus with the United States increased from C$10.7 billion to C$11.1 billion but remained below the January 2001 record high of C$11.3 billion. Exports to the U.S. soared by 2.3 percent while imports from the U.S. were up 1.5 percent. The deficit with countries other than the United States widened from C$3.5 billion to a record high C$3.9 billion. Exports were up 1 percent while imports increased by 1.2 percent. Natural gas exports were the main contributor to rising exports while shipments of lumber and sawmill products, passenger vehicles, and live cattle also registered gains. Exports to other trading partners fell 4.5 percent while imports edged up 0.7 percent.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-21.gif
October manufacturing shipments were up 0.9 percent and 3.4 percent when compared with last year. The transportation equipment sector was again the key mover as a sizable jump in motor vehicle manufacturing boosted total shipments by 0.9 percent. Excluding the volatile motor vehicle and parts industries, total manufacturing shipments remained unchanged from September's level. Increased shipments were concentrated in 10 of the 21 manufacturing industries accounting for 57 percent of the total. Unfilled orders rose 1.4 percent to $42.5 billion in October, the eighth increase so far in 2005. Orders now stand at the highest level since December 2002. New contracts in the aerospace industry led to a 1.4 percent surge in unfilled orders. Excluding the aerospace products and parts industry, unfilled orders edged up 0.2 percent for the month. New orders were up 2.3 percent, more than offsetting September's 1.9 percent decline. Increases in aerospace and motor vehicle industries were responsible for October's surge in new orders. Excluding the transportation equipment sector, new orders declined 0.3 percent.
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Bottom line
As attention switches full time to end-of-year festivities, markets tend to become volatile primarily due to thin volume. There will be some important data releases in Europe such as M3 money supply and the unemployment rates for both France and Italy. The usual end-of-month deluge of Japanese data will be closely watched by those that are not on vacation.
Investors should be in a cheery mood as we enter the holiday season. Overseas equities have had a very prosperous year, far outperforming U.S. stock indexes. And most gains will be in double digits. With the prospect of more countries participating in world growth finally becoming a reality, investors' choices will multiply.
Looking Ahead: December 19 through December 23, 2005

http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_international/year/2005/weekly/52/chart-23.gif
Looking Ahead: December 26 through December 30, 2005

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[oldschool]

Durable Goods up 4.4%, mostly airplanes. Above the expected 1.1%. Soft housing landing offset by capital expenditures from business sector? Pundits have been saying that for a long time, but maybe it is actually happening....

[The_Technician]

Redbook reported a big drop in same-store sales for the key Dec. 31 week, at a 2.6% year-on-year rate compared with 4.5% in the prior week. The report said the month ended below plan and that post-Christmas sales, hurt in part by heavy weather in sections of the country, lost momentum. The report confirms similar results this morning from ICSC-UBS's tally as well as disappointing news over the weekend from giant discount chain Wal-Mart.

High gas and home fuel prices appear to have limited consumer spending and shopping trips in what appears to have been a weak holiday season for the nation's retailers, which will offer their own results tomorrow. There was no immediate reaction in the markets to Redbook or ICSC-UBS, but they may support bonds through the day and may weigh on the dollar and stocks. Note that share prices of retailers have been soft in recent sessions.

[The_Technician]

Holiday sales are proving soft as ICSC-UBS reports a 2.9% year-on-year same-store sales rate in the Dec. 31 week, well below last week's 3.9% rate. Week-to-week, sales were down 0.8%.

The report said heavy post-holiday discounting cut into sales totals. For December as a whole, ICSC-UBS expects sales to rise a moderate 3.0% to 3.5%. Chain stores will report monthly results on Thursday. Redbook's tally for the latest week is up later this morning.

[The_Technician]

The Institute For Supply Management's manufacturing index fell sharply in December, to 54.2 vs. 58.1 in November. The reading follows three months of sharp gains but still points to acceleration in the nation's manufacturing sector.

But order readings, which point to future business activity, were a disappointment. New orders fell to 55.5 vs. 59.8 in November and mark one of the lowest readings of the year. New export orders also fell, to 54.3 following November's big spike to 59.2 that came despite strength in the dollar. Backlog orders showed the most weakness, falling to 49.5 from 53.0. Readings below 50 indicate that a greater proportion of the sample's roughly 250 respondents reported month-to-month declines than gains.

The report's prices paid index offered good news, falling to 63.0 from 74.0. The index was all over the map in 2005, showing 60 and 70 readings in the first half of the year tied to rising energy prices before posting a big dip below 50 just before September's hurricanes. Hurricane dislocations then drove the index to over 80. The current reading suggests that month-to-month price pressures have eased in line with steady though still high energy prices.

Employment was also weak, down to 52.7 from 56.6. This reading may temper expectations for factory payrolls on Friday. Disruptions in supplier deliveries appeared to ease in line with slowing growth, as the index fell to 53.5 from 58.3. The decline suggests that rail and truck snags may be lifting. Respondents once again reported a month-to-month contraction in inventories, at 47.2 vs. 49.3.

The report points to slowing growth in an otherwise still very healthy manufacturing sector. Bonds, benefiting from both lower prices and slower growth, rose in initial reaction to the report while the dollar fell. The report may weigh on the stock market through the day.
Market Consensus Before Announcement
The ISM manufacturing index declined one point in November to 58.1 from October's level of 59.1. The New York Fed's business outlook survey showed improvement in December, as did the Philadelphia Fed survey.

ISM manufacturing index Consensus Forecast for Dec 05: 57.5
Range: 56.3 to 61.5
Trends
http://www.nasdaq.com/econoday/reports/US/EN/New_York/napm/year/2006/yearly/01/chart.gif The ISM manufacturing index (formerly known as the NAPM Survey) is constructed so that any level at 50 or above signifies growth in the manufacturing sector. A level above 43 or so, but below 50, indicates that the U.S. economy is still growing even though the manufacturing sector is contracting. Any level below 43 indicates that the economy is in recession.

[The_Technician]

Construction spending inched up 0.2 percent in November after posting stronger gains in the past several months. For the first time in many months, residential construction spending dipped 0.1 percent, although nonresidential spending increased 0.5 percent for the month. Among the nonresidential component, several of the categories posted declines. However, large increases were posted for commercial buildings, communication, and sewage & waste disposal. As the residential sector begins to moderate, construction expenditures may still post gains as investors move to the nonresidential sector of the economy.
Market Consensus Before Announcement
Construction spending increased 0.7 percent in October after a downward revised gain of 0.2 percent in September. As housing construction moderates, we could see some smaller gains in the next few months - unless nonresidential construction spending posts robust gains.

Construction spending Consensus Forecast for Nov 05: 0.7 percent
Range: 0.5 to 1.2 percent
Trends
http://www.nasdaq.com/econoday/reports/US/EN/New_York/construction_spending/year/2006/yearly/01/chart.gif Construction spending has moderated significantly over the past year despite strenth in the housing market. Residential construction is not growing as rapidly as it did even though current levels are high. Nonresidential construction has begun to improve, but gains are still modest.

[Spaf]

Fundamentals: Watching market behavior

What goes up must come down, is true for the economy as it is for physical objects. When peaks are reached doesn't mean that anything is wrong. Conditions may be that stocks are just overbought and need to come back down. A Trough is the opposite of a peak and is generally associated with oversold conditions.

However, economic indicators have to be understood as the key to various cycles in the market. The most popular indicators track employment, rates, housing, production and other factors that tell us how the economy is doing.

My major 4 indicators are the Four Horsemen:

http://i21.photobucket.com/albums/b296/Spaf/4Htoon.jpg

From left to right are Earnie [earnings], Krude [energy], Rats [rates], and Inflat [inflation]. Money is not a Horseman, but he is a factor. The Federal Reserve board is the Cartel. The Cartel gives kickbacks to certain Horsemen in order to control Inflat; the really bad Horseman.

My strategy is very simple. When the Horsemen appear: run for the G-Fund. When they leave the territory it's ok to invest. However, one or two of the Horsemen always seem to be around. That's what makes the game interesting!

Rgds, and be careful! :cool: :confused: :) Spaf

[Birchtree]

From TWSJ:

Bond-market participants are naturally inclined toward pessimism on the economy while stock-market investors have an optimistic bent. They're especially at odds right now.

Over in the bond market, yields on two-year and 10-year Treasury notes flit around the same level. Usually, the 10 year yields more than the two year, because investors demand a higher return for locking their money up in a longer-term instrument. When the 10 year yields the same, or less than, the two tear, it is often a sign that bond traders think the economy is about to slow or even contract, and the Federal Reserve will be cutting rates.

The traders in the bond market, for the most part, don't think the U.S. economy is in dire shape. Other factors, like heavy investment from abroad, have helped make the 10-year note's yield unnaturally low. Still, the 10-year yield has gone from 0.86 of a percentage point above the two-year yield a year ago to 0.02 of a percentage point below the two-year yield yesterday, hardly a sign of great confidence in the economic outlook.

Meantime, over in stock land, the view on the economy is relatively positive. An analysis by Goldman Sachs analyst tells the story. Goldman's equity trading-strategy group argues that the strong performance of growth sensitive stocks relative to the rest of the market suggests investors believe that the U.S. gross domestic product will expand at an annual rate of more than 4% over the next two years. That would be much better than the 1.1% growth registered in the fourth quarter and better than the average growth rate of 3.5% over the past two years.

To some extent, stocks may be taking their cues from strong rconomic growth in developing countries. Companies with big overseas divisions, like Caterpillar Inc., have been raking in overseas profits. But Goldman's analysis suggests expectations of strong foreign sales don't explain all of investors' ebullience.

The upshot: In the months ahead, either bond investors are likely to be proven too pessimistic or stock investors are likely to be proven too optimistic. Take your bets now - porridge anyone?

[Wizard]

(1) Bond market is saying there is no value in stocks.

(2) CAT has been going up because of this great plan to have farmers grow our energy and the jerk on my avator has been pumping it for a month. You know that plan that 24 hours after the State of the Union - was just an example. Sorry Saudi Arabia did not mean to offend you. Wink, wink.

CAT is now very toppy. RSI has turned down and it is starting to labor:

http://stockcharts.com/def/servlet/SC.web?c=cat

Besides Komatsu is a much major stronger company and builds better heavy equipment. If they ever get an ADR and trade on the NYSE - CAT is toast. :p If you every got off your couch and travel you would see their equipment all over Asia. :cool:

[Wizard]

Birchy you need to step back and think. You are still reading the idiots "professionals" that burnt you the last time.

GS Chief Investment ANALyst is Abbey Joesph Cohen - who never went bullish. Rode it down the whole way. My price target on the NASDAQ is 7500for 2000. This is the bottom, this is the bottom...ok this is really the bottom. :eek:

How she still has a job is one point but the creme does not rise at the top at that organization.

If they are pumping it that means they are all ready in the stock. They do not make money by writing a free report to you.

Guess who worked there? The jerk on my avatar. That should tell you something.

[Oldcoin]

This is an excerpt from an article I received on line today. Most of what they say deals with the difference between the tax collected and what should be collect, this is referred to as the “Tax Gap”. I thought it was interesting that the GAO seems to be saying the same thing that Tech has been saying all along.


Published by Tax AnalystsTM

United States Government Accountability Office

GAO
Testimony Before the Committee on Budget, U.S. Senate

TAX GAP

Statement of David M. Walker
Comptroller General of the United States

Wednesday, February 15, 2006

GAO-06-453T

What GAO Found

Our nation's fiscal policy is on an imprudent and unsustainable course. As long-term budget simulations by GAO show, over the long term we face a large and growing structural deficit due primarily to known demographic trends, rising health care costs, and lower federal revenues as a percentage of the economy. GAO's simulations indicate that the long-term fiscal challenge is too big to be solved by economic growth alone or by making modest changes to existing spending and tax policies. Rather, a fundamental reexamination of major policies and priorities will be important to recapture our future fiscal flexibility.

Underreporting of income by businesses and individuals accounted for most of the estimated $ 345 billion tax gap for 2001, with individual income tax underreporting alone accounting for $ 197 billion, or over half of the total gap. Corporate income tax and employment tax underreporting accounted for an additional $ 84 billion of the gap.

[The_Technician]

to me Oldboy.....If so I'm honored...;)

OUr economics has been broken in a planned way by entities who wanted to make monies overseas....the only way to do that is to "break" our economic engine....and they have been doing that since the 70's....starting with taxes that just put a hamper on everything we know of.....spending that is extravagant, and give aways to foreign countries when we need to keep that money at home paying off the deficit.....:mad:

Who holding the tiller has done a very poor job and you and my kids will suffer for it......we're just a money pot for those who bill they govt taxes......:(

[Oldcoin]

[QUOTE=The_Technician]to me Oldboy.....If so I'm honored...;)

Yes Technician, it was a reference to you. Keep up the good post. Thanks

[Fivetears]

Underreporting of income by businesses and individuals accounted for most of the estimated $ 345 billion tax gap for 2001, with individual income tax underreporting alone accounting for $ 197 billion, or over half of the total gap. Corporate income tax and employment tax underreporting accounted for an additional $ 84 billion of the gap.
Who in this fine U.S. of A. would ever work "under-the-table" to get out of paying more income taxes?

The Government better check their 6; The people are being financially forced to do things like this to survive.

They're also getting tired of funding "Pork Barrel" Politics.

[The_Technician]

to me Oldboy.....If so I'm honored...;)

OUr economics has been broken in a planned way by entities who wanted to make monies overseas....the only way to do that is to "break" our economic engine....and they have been doing that since the 70's....starting with taxes that just put a hamper on everything we know of.....spending that is extravagant, and give aways to foreign countries when we need to keep that money at home paying off the deficit.....:mad:

Who holding the tiller has done a very poor job and you and my kids will suffer for it......we're just a money pot for those who bill they govt taxes......:(


I wish I would read what I type.....don't you.....


I should have typed...


OUr economics has been broken in a planned way by entities who wanted to make monies overseas....the only way to do that is to "break" our economic engine....and they have been doing that since the 70's....starting with taxes that just put a hamper on everything we know of,.....spending that is extravagant, and giveaways to foreign countries when we need to keep that money at home paying off the deficit.....

Whoever is holding the tiller during the last 30 years has done a very poor job and you, yours, me and my kids will suffer for it......we're just a money pot for those who bill the govt taxes......

[cowboy]

LOL!!! I think there is a lot of "under the table" stuff going on just ask "BILLY" Clinton!! I do believe though that the accounting systems are going to get worse as the preparer of your tax information has no accountability in what they do. I do believe the individual is mainly liable but I have seen accountants getting very imaginative with these forms and the loopholes are larger also.

[Oldcoin]

I met a man who had to work and get paid "under the table" to pay his taxes that he owed from his day job. Kinda like a dog chasing his tail.

[oldschool]

Here's a link to an interview with Robert Schiller on housing prices. Makes some interesting observations on the likely views of the new Fed Chairman.

http://news.ft.com/cms/s/b343303a-9eb0-11da-ba48-0000779e2340.html

[oldschool]

From an interview yesterday discussing housing prices on the Financial Times website:

Alan Greenspan was praised for his handling of the economy during his interminable run as head of the Fed; in particular for his rapid cuts in interest rates to keep the economy afloat after the last stock market crash.

Yet this has pumped up the housing bubble even more. I want to provoke mild-mannered Shiller into a little criticism. What, exactly, can Ben Bernanke, Greenspan’s successor, do to rescue the US economy if the property market crashes? Has the Fed already used up its one silver bullet - that of interest rate cuts?

“Bernanke thinks there is no housing bubble,” says Shiller. “According to the White House website, he said recently that the fundamentals explained house price movements except in some speculative markets.” The new chairman of the Fed is a “brilliant man”, Shiller continues, but he has not shown any interest in behavioural economics.

And this is where he has underestimated the danger posed by real estate speculation. “He is not attuned to one of the great innovations of our time, that is, bringing psychology back into economics.”

Here we come to the crux of Shiller’s theories about asset bubbles, whether tulips, shares or property: people get excited as they see the price of an asset rising, so they buy more, which pushes the prices up further until they are unsustainable. “The bubble is made by a ‘story’, by excitement and glamour,” he says. And then, once a market loses that momentum, it will experience negative feedback, where people rush to sell before things worsen further.

[oldschool]

China has again said it won't have a faster acceleration of its currency - rather it wants to continue its policy of “gradualism” so that businesses can learn to adjust to currency movements.

A statement published on the website of the central bank, the People’s Bank of China, part of its quarterly survey of the economy, said Beijing would maintain a “basically stable” renminbi.

[The_Technician]

China has again said it won't have a faster acceleration of its currency - rather it wants to continue its policy of “gradualism” so that businesses can learn to adjust to currency movements.

A statement published on the website of the central bank, the People’s Bank of China, part of its quarterly survey of the economy, said Beijing would maintain a “basically stable” renminbi.

its going to become a problem, does China expect the rest of the world to succumb to their way of economic control..........I think not...I would be looking for some sort of trade barricade world wide on this point.

[The_Technician]

Recap of US Markets
STOCKS



Equity investors are facing a dilemma. A solid economic growth path bodes well for corporate profits, but it also means that inflationary pressures are more likely to accelerate unless the Fed raises rates further. Slower economic growth means that the Fed could stop raising rates sooner, but it portends a slower profit stream. So equity investors sometimes react well to growth and sometimes they react well to sluggish activity. Notice that daily trends in the various indexes are mixed. On the whole, the Nasdaq composite and the Russell 2000 performed best this week.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_domestic/year/2006/weekly/14/chart-2.gif








Equity prices continue to show healthy gains from year-end levels. The Dow is up 5.2 percent, surpassing increases in the S&P 500 (+4.4 percent) and the Nasdaq composite (+4.9 percent). It is matching the year-to-date gain in the Wilshire 5000. The small cap sector is outperforming the rest of the market by a wide margin with the Russell 2000 up 12 percent from year-end levels.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_domestic/year/2006/weekly/14/chart-3.gif





BONDS
Fed Chairman Ben Bernanke addressed the Economics Club of New York on Monday night giving his thoughts on the yield curve and monetary policy. In my view, the speech was covered in an academic fashion - giving several sides to the story. The bottom line was that Bernanke didn't believe that the flat or inverted yield curve that we are currently experiencing is signaling an upcoming recession. He also debunked, to some extent, the view that long-term U.S. security yields have been dampened by strong foreign demand for our securities since long term rates appear to be low globally. After all was said and done, he suggested that whether the yield curve is signaling recession - or is inverted because of special factors - will depend on what other economic indicators tell us.
Many market players were upset by Bernanke's comments because he did not signal that the Fed would soon stop raising rates. In fact, Wall Street economists have not really changed their views about Fed policy after hearing the new Fed chairman. Among the 22 U.S. primary dealers, everyone believes that the Fed will raise the fed funds rate target to 4.75 percent next week. The majority of primary dealers (with only a few dissenters) believe the FOMC will raise rates to 5 percent at the May 10 meeting. Only a couple of economists among this group believe the Fed will raise the target rate to 5.25 percent at the June 29 meeting. But among those economists who believe the Fed will pause in June, some still expect the target to rise further and peak at 5.5 percent this year.



Last week the yield curve was slightly normal in that long rates were higher than short rates (although the middle of the curve was lower than either long end or the short end). This week, the curve flattened again with the 2-year note yield higher than both the 10-year and 30-year yields. After Bernanke's speech on Monday, bond investors became more jittery in advance of the upcoming FOMC meeting.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_domestic/year/2006/weekly/14/chart-4.gif





Markets at a Glance

http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_domestic/year/2006/weekly/14/chart-5.gif

Weekly percent change column reflects percent changes for all components except interest rates. Interest rate changes are reflected in simple differences.

[The_Technician]

The Economy
PARTIAL RECOVERY IN DURABLE GOODS ORDERS
New orders for manufacturers' durable goods rose 2.6 percent in February - which sounds solid until one considers that new orders plunged 8.9 percent in January. However, even the revised January figure is less dire than the initial report which showed a 10.2 percent drop. Faithful readers of this column can surmise that aircraft orders are the culprit. These rose nearly 60 percent in February after plunging roughly 80 percent in January. But what about the rest of the durable goods sector?
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_domestic/year/2006/weekly/14/chart-6.gif


Once again, the bulk of manufacturers' orders are concentrated in transportation and computers & electronics. Total transportation orders (which includes motor vehicles and ships in addition to aircraft) jumped 13.4 percent in February but averaged monthly gains of 1.5 percent over the past six months. Over the past three months, transportation orders averaged monthly declines of 4.1 percent. New orders for computers & electronics jumped 4.2 percent in February, although the six-month average for these orders was a negative 0.4 percent. Over the past three months, however, these orders have averaged monthly gains of 1.3 percent. All other durable goods sectors were down in February.
Primary metals fell 2.5 percent in February, are showing no growth over six months, and are averaging monthly declines of 1.8 percent over the past three months. Fabricated metals declined 1.9 percent in February but are posting average monthly gains of 0.3 percent over the past six months and average monthly gains of 1 percent over the past three months. Machinery orders dropped 6.3 percent in February. Over the past six months, machinery orders have averaged monthly gains of 0.2 percent but averaged monthly decreases of 0.2 percent over the past three months. Electrical equipment fell 3.2 percent in February, but averaged monthly gains of 0.6 percent over the past six months and 1.7 percent hikes over the past three months.
The sectors with average monthly increases over three months and six months show more promise (fabricated metals and electrical machinery). Otherwise, the bulk of the durable manufacturing sector is hardly growing.
HOME SALES RISE IN FEBRUARY
Sales of new single-family homes plunged 10.5 percent in February after posting a revised 5.3 percent drop in January. February new home sales fell in the South and West, although they rose in the Northeast and Midwest. In contrast, January sales fell in the Northeast, Midwest and South, but rose in the West. Sales of new homes were 13.4 percent lower than a year ago.
Sales of existing homes surprised market players with a 5.2 percent rise in February. Since sales are counted at closing, this means that most of these sales were generated in January when unseasonably warm weather had boosted housing starts as well. Since existing home sales are a much larger share of the housing market than new home sales, total single-family homes increased 2.7 percent in February. This brought sales almost, but not quite, back to December levels.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_domestic/year/2006/weekly/14/chart-7.gif


Rather than focus on February sales alone, it's best to look at the trend in the housing market. And the trend is decidedly down. Home sales peaked in June and have edged down slowly but surely ever since. A more dramatic decline is evident in the MBA purchase index, which also appears to have peaked during the summer. From time to time this index did post gains in the fall and winter, but generally, the trend was down.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_domestic/year/2006/weekly/14/chart-8.gif


Refinance activity is somewhat more stable than home purchases. But refinance activity is down from this summer as well. Given that mortgage rates are roughly 75 basis points higher than they were in June when home sales peaked, it makes sense that refinance activity has diminished. A slower pace of refinance activity means that consumers will have to satisfy themselves by spending within their income - and not use their homes to enhance their cash flow. Perhaps the saving rate will rise in this environment. Borrowing is less desirable, after all.
PPI SHOWS MIXED VIEW ON INFLATION
The PPI plunged 1.4 percent in February as energy and food prices both fell sharply during the month. Energy prices fell 4.7 percent while food prices dropped 2.7 percent; both had been steady in January. Excluding these two volatile components, the so-called core PPI increased 0.3 percent in February, just a bit less than last month's 0.4 percent hike. On a year-over-year basis, the PPI rose 3.7 percent in February, showing steady improvement from the peak inflation rate of 6.6 percent seen last September. The core PPI is up 1.7 percent from a year ago, a slight acceleration from the past month. It too is down from the peak core rate of 2.8 percent registered last July. Over the past 10 years, the core PPI approached 3 percent only once - in 2005.
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_domestic/year/2006/weekly/14/chart-9.gif

[The_Technician]

The Fed monitors all inflation indicators. They surely have models how inflation rates in one index might affect inflation rates in other indexes. The chart below depicts the core PPI relative to the core CPI. Notice that consumer price inflation is generally, although not always, higher than producer price inflation. This occurs because the CPI is primarily made up of service prices, while the PPI is primarily goods prices. Prices for goods are more sensitive to the business cycle than prices for services. While it is likely that a downward trend in the core PPI will lead to a downward trend in the core CPI, there does not appear to be a rule of thumb relationship (one to one, two to one, etc.).
http://www.nasdaq.com/econoday/reports/US/EN/New_York/resource_domestic/year/2006/weekly/14/chart-10.gif



The Bottom Line
Market players focused on Ben Bernanke's speech this week and probably over interpreted his remarks. Most likely this occurred because: 1) Bernanke is new and market players need to learn to interpret his remarks, like they did for Greenspan. The general conclusion thus far is that he appears to speak clearly, but like an economist, he gives all sides of the issue. (Hey, what's wrong with that?) But market players are beginning to think that he may prove as difficult to decipher as Greenspan. Well, perhaps that will be true. But let's cut him some slack - he hasn't even presided over his first FOMC meeting yet. That comes next week. 2) Market players focused on Bernanke because economic news releases were slim and they had nothing else to talk about during most of the week.
Durable goods orders are weak - and these will have to improve if we expect better manufacturing activity in the next several months. As I've said before, aircraft alone can't keep this economy afloat. The housing figures are somewhat mixed in that home sales are generally showing much more moderation than housing starts (which were still rising on trend through February). This could set us up for a sharp reversal in the housing market if real estate developers are stuck with new houses - and fewer buyers. Yes, housing is very location specific, so not all regions of the country will face the same housing misallocations, but there will be some shakeout.
Economic indicators will be slight again next week, but everyone will of course focus on the Fed. Investors are all expecting a rate hike, but the post-meeting statement will get even more attention than usual. Will Bernanke use this occasion to change the tenor of the statement, or will the changes be more gradual?
Looking Ahead: Week of March 27 to March 31

Tuesday
The Conference Board's consumer confidence index declined 5 percentage points in February to 101.7. The University of Michigan's consumer sentiment index remained unchanged in early March and this suggests that The Conference Board's attitude survey might also stop falling. However, these two surveys can be at odds with one another.
Consumer confidence Consensus Forecast for Mar 06: 102
Range: 99.8 to 105.0
The Fed is not likely to surprise market players on Tuesday when they announce a rate hike of 25 basis points in the federal funds rate target at the end of their FOMC Meeting. While the rate hike will probably not surprise investors, Ben Bernanke could set some new communication trends and market players around the globe will anxiously await the post-meeting statement.
Fed funds rate target Consensus Forecast for Mar 28, 06: 4.75 percent (+0.25 pct)
Range: None
Thursday
New jobless claims fell 11,000 in the week ended March 18 to 302,000, bringing the 4-week moving average up to 303,500. This was the first drop in four weeks and the third straight week for a level over the 300,000 mark.
Jobless Claims Consensus Forecast for 3/25/06: 305,000
Range: 300,000 to 315,000
The Commerce Department's preliminary estimate revealed that real GDP expanded at a sluggish 1.6 percent rate in the fourth quarter of 2005 with weakness in consumption expenditures and investment spending. While a large revision between the advance and preliminary estimates is not unusual, a large revision between the preliminary and final estimates is not likely.
Real GDP Consensus Forecast for Q4 05: 1.7 percent annual rate
Range: 1.4 to 1.9 percent annual rate
GDP deflator Consensus Forecast for Q4 05: 3.3 percent annual rate
Range: 3.2 to 3.3 percent annual rate
Friday
Personal income increased 0.7 percent in January, faster than recent monthly gains. Look for a similar gain in February based on the employment situation. Personal consumption expenditures rose 0.9 percent in January boosted by durable and nondurable goods spending. The retail sales report showed that consumption expenditures plunged in February.
Personal income Consensus Forecast for Feb 06: 0.4 percent
Range: 0.3 to 0.6 percent
Personal consumption expenditures Consensus Forecast for Feb 06: 0.0 percent
Range: -0.3 to 0.4 percent
At the mid-March reading, the University of Michigan's consumer sentiment index remained unchanged at 86.7. While labor market conditions remain healthy, consumers may be feeling the pinch of higher energy costs for their cars and homes.
Consumer sentiment Consensus Forecast for Mar 06: 87.0
Range: 85.5 to 88
Factory orders decreased 4.5 percent in January, but look for a reversal in February. Durable goods orders rose 2.6 percent during the month, primarily due to increased aircraft orders. Manufacturers' durable goods outside the aircraft sector have not been very strong, but perhaps the nondurable goods sector will perform better.
Factory orders Consensus Forecast for Feb 06: 1.4 percent
Range: 0.2 to 2.2 percent
The NAPM-Chicago's business barometer fell 3.6 percentage points in February to 54.9. This index, which measures both manufacturing and non-manufacturing activity in the Chicago region, is often considered a leading indicator for the ISM manufacturing index. The New York Fed survey was higher in March than in February, although the Philadelphia Fed survey dipped slightly during the month. NAPM-Chicago Consensus Forecast for Mar 06: 56.5
Range: 52.5 to 60

[The_Technician]

Recent research indicates that the the M3 has increased 100% since 1997, thats double fold of currency printed in 9 years.....do you wonder why it costs so much more to do things of late???? Everything should costs twice as much and your income is worth about half if you haven't had a raise since '97....your labor is cheap........

[Spaf]

The Kingdom of TSP
The Economy
April 14, 2006

Is it doom and gloom or a bed of roses. The past has indicators that interest rates and energy are major concerns (worries and woes). However, on the other hand, the economy appears to be resilient and in good shape. On [$SPX] the 50 day moving average has established a nicely increasing trend:

http://stockcharts.com

Can the consumer withstand oil at $70 a barrel? Will it go above 70? Will the Fed cease the rate increases? All, good concerns, but we can take it too far and worry our selves to death. The psychological concerns can hide some good information, such as:

Industrial output rose 0.6% in March Posted 4/14/2006 9:45 AM ET

WASHINGTON (Reuters) — http://www.usatoday.com/money/economy/production/2006-04-14-ind-prod-march_x.htm

So it's not doom, nor is it rosy. Looks like a good day for a picnic....Happy Easter!......:)

[Spaf]

The Kingdom of TSP
The Economy
May 3, 2006


The Horsemen are back! Krude is leading the pac!


http://i21.photobucket.com/albums/b296/Spaf/Crude0503.gif

[The_Technician]

See how the REAL INFLATION is affecting those around the country...
http://www.washingtonpost.com/wp-dyn/content/article/2006/05/06/AR2006050601343.html

wonder what happens when citizens quit buying.....profits tank...

[Quips]

May. 16, 2006
5:06 amBig Money Tips Its Hand
TOPICSPrivate Equity, Hedge Funds
INDUSTRIESEnergy/Utilities, Financial Services
It is the season of Form 13F, that quarterly filing with the Securities and Exchange Commission that offers a look at where some of the biggest institutional money managers are putting their money (or cashing out).


Berkshire Hathaway, the holding company run by legendary investor Warren Buffett, revealed on Monday that as of March 31, it held a 1.1 percent stake in oil major ConocoPhillips, worth more than $1.1 billion at current prices. The disclosure is notable for two reasons. For one thing, it suggests that, despite the recent run-up in energy prices, Mr. Buffett expects oil prices to stay high or go even higher. For another, it marks the first time that Mr. Buffett has revealed his ConocoPhillips holding, even though his company first made the investment in 2005. That is because Mr. Buffett has been allowed to keep some of his investments confidential under an exemption from the S.E.C.

Meanwhile, the investment vehicle of billionaire financier Carl Icahn on Monday reported taking stakes in several companies, including 3.7 percent of BJ’s Wholesale Club, a discount retailer, and 3.9 percent of film studio Lionsgate Entertainment.

SAC Capital, the massive hedge fund run by Steve Cohen, also filed a Form 13F on Monday. Among the fund’s many positions is a much-enlarged stake in aluminum giant Alcoa. SAC’s Alcoa holdings went from 348,000 shares on Dec. 31 to about 3.87 million shares on March 31.

The fund run by George Soros also revealed many holdings large and small, but we noticed at least one interesting change in the past three months. Whereas on Dec. 31, Soros Fund Management held about 320,000 shares of Apple Computer, on March 31 that position had changed to put options — a bearish position that pays off if the stock declines — on about 222,000 Apple shares.

[nnuut]

Very Intresting!:sick:

Q&A: Turmoil on world markets; Inflationary pressures have caused market turbulence worldwide



Stock markets around the World have been falling sharply, as fears grow over the prospect of higher US interest rates.

The market upheaval has also pushed down the price of commodities such as oil and gold. Some analysts fear the volatility could be a forerunner to more serious turmoil, with a sharp turnaround in expectations about the future course of inflation.

http://news.bbc.co.uk/2/hi/business/4993292.stm

[The_Technician]

Some new views that is interesting....isn't options due this Friday......if so, this could make a favorable mix to the market results this week.....

http://www.nasdaq.com/asp/EconodayFrame.asp

[Pilgrim]

Some new views that is interesting....isn't options due this Friday......if so, this could make a favorable mix to the market results this week.....
I have never been able to figure out (in advance, always easy in hindsight) how important these things are, e.g. options expirations. It seems in general, that if everything else were quiet these cyclic sort of things would drive the market, but in practice they are usually overwhelmed by news and economic reports.

Barring a major news event (such as terrorism, etc,) Friday will be dominated by the employment report - little else will have as big an impact.

[Birchtree]

We have a potential new Treasury Secretary on the way that admires the benefits of a weak dollar. Like myself - where are the dollar bashers today anyway? I see where this month exports jumped 13.8% to $76.5 billion in March, compared with a year ago. April's drop in capital goods orders of 4.8% was largely as payback for the large jump in March. Overall, capital spending remains on anm upward trend. In this year's first four months, core capital goods orders were up 9.7% over the same period last year. If you smooth out the vagaries of month to month flows, what emerges is a pattern that is wholly consistent with the Fed's belief of how the economy is going to unfold this year. Foreign producers now have to invest to boost capacity, and they're also boosting demand - and prices - for the kind of capital goods that the U.S. makes. Gotta be bullish.

[Pilgrim]

Marketwatch 6/15


The Empire State Index (http://money.cnn.com/2006/06/15/news/economy/empire.reut/index.htm) rose to 29.0 in June from a 12.9 reading in May. The New York Fed's report on manufacturing activity in its territory is one of the most current readings on economic activity. Economists surveyed by Briefing.com had forecast the index would slip to 11.0.


Weekly initial jobless claims (http://money.cnn.com/2006/06/15/markets/jobless.reut/index.htm) fell to 295,000 the week ending June 10, from a revised 303,000 level the previous week, when economists had expected it to climb to 320,000.


The stronger economic readings could be a bit of a negative for the markets, as a weaker economy could constrain the Fed from hiking rates further after its June 29 meeting.


At 9:15 a.m. ET come reports on capacity utilization and industrial production in May, with economists looking for little change in activity at the nation's factories.

[mlk_man]

At 9:15 a.m. ET come reports on capacity utilization and industrial production in May, with economists looking for little change in activity at the nation's factories.

Both lightly down. Might help offset a little bit.

[Fivetears]

Ford, Chrysler June auto sales down; Toyota up 14%
Ford Motor Co. and Daimler Chrysler reported lower June sales, citing high gasoline prices and slower sales of trucks and sport utility vehicles, signaling a weak start to the summer season. Sales for Toyota Motor Corp, which has eclipsed DaimlerChrysler to become the third-largest player in the U.S. auto market, shot up 14 percent.
http://news.yahoo.com/s/nm/20060703/bs_nm/auto_sales_dc_1

[Fivetears]

GM US June sales down 25.9 percent
General Motors Corp. said its U.S. sales fell 25.9 percent in June, a sharp decline from last year's incentive-boosted results and in line with the company's cautionary forecast.
http://news.yahoo.com/s/nm/20060703/bs_nm/autos_gm_sales_dc_2

[The_Technician]

GM US June sales down 25.9 percent
General Motors Corp. said its U.S. sales fell 25.9 percent in June, a sharp decline from last year's incentive-boosted results and in line with the company's cautionary forecast.
http://news.yahoo.com/s/nm/20060703/bs_nm/autos_gm_sales_dc_2


You know the saying "As goes GM, so goes the country"...or something of the sort......I wouldn't want to be in the market after the 4th.....

Got ole Trigger saddled up and ready.....

[Fivetears]

I don't know Tech, I'm going at a full speed run though the I Fund pit tomorro at 0900EST; providing my IFT found its way between my PC... and TSP @ 1058CST.
You know the saying "As goes GM, so goes the country"...or something of the sort......I wouldn't want to be in the market after the 4th.....

Got ole Trigger saddled up and ready.....

[Fivetears]

Retailers post lackluster June sales
Wal-Mart Stores Inc. and other top U.S. retailers posted disappointing June sales on Thursday as soaring energy prices and record-breaking rains in the Northeast curbed consumer spending.
http://news.yahoo.com/i/580

[Birchtree]

What can take the place of the lower consumer spending to maintain overall aggregate demand? The key to maintaining aggregate demand, i.e., the key to our continued expansion if consumer spending slows, must be a shift in our trade balance - increases exports, lower imports and more spending on goods and services produced in the U.S. For this, the dollar must decline to make U.S. goods and services more attractive. We're getting to the point in the cycle where slowing growth takes over as the main concern. The primary reason for wanting the dollar to become more competitive in the near future is that we may need an improved trade-balance over the next few years to sustain the economy's expansion. A sharp slowdown in consumer spending could cause an economic downturn - exports to the rescue.

[Fivetears]

You've voiced many important points here Birchtree. A shift in our trade balance - increased exports, lower imports and more spending on goods and services produced in the U.S. would be the perfect solution. With absolutely no disrespect intended Sir, the only problem I view with this solution being viable, is the US has too many greedy CEO's and corporate associate investors cashing out of the US business community, by selling out (exporting) US born business ventures to the third world, and its workers. The US Economy is being taken to the Pawn Shop. You are so very correct in your assessment of the required direction of the US dollar; it must deflate (decline) to compete and survive. If it were not for the US jobs and equipment leaving US soil, we wouldn't have to deal with the "slowing growth" issue.

We are being sold out Birchtree; sold out. The saddest thing about it; Corporate Pride, Greed, Sloth and Envy will blind us from any chance of an American short term recovery. :worried:
What can take the place of the lower consumer spending to maintain overall aggregate demand? The key to maintaining aggregate demand, i.e., the key to our continued expansion if consumer spending slows, must be a shift in our trade balance - increases exports, lower imports and more spending on goods and services produced in the U.S. For this, the dollar must decline to make U.S. goods and services more attractive. We're getting to the point in the cycle where slowing growth takes over as the main concern. The primary reason for wanting the dollar to become more competitive in the near future is that we may need an improved trade-balance over the next few years to sustain the economy's expansion. A sharp slowdown in consumer spending could cause an economic downturn - exports to the rescue.

[Fivetears]

11:14 pm ET Delphi Posts $2.4 Billion Loss for 2005
Delphi Corp., General Motors Corp.'s largest parts supplier, reported a $2.4 billion loss for 2005 in a delayed annual report filed Tuesday with the Securities and Exchange Commission.
http://biz.yahoo.com/ap/060711/earns_delphi.html?.v=10

[Fivetears]

Small Business Optimism Waning
Owners of small business are losing faith in the U.S. economy as they scale back plans to hire workers and make capital expenditures, a small business survey released on Tuesday showed. The National Federation of Independent Business index of small business optimism fell 1.8 points in June to 96.7 on the back of weaker job creation plans, declining inventories and fading hopes for the expansion. "Sixty percent of the decline from the May reading came from souring expectations for real sales growth and confidence that the current period is a good time to expand substantially," said William Dunkelberg, NFIB chief economist. A cutback in hiring plans accounted for another 25 percent and a reduction in plans to add to inventories another 15 percent, NFIB said. Small business owners expect job growth to slow in the months ahead on expectations the economy will slow during the second half of 2006, the survey said. Just 13 percent of small business owners polled expect higher real sales in the coming months, down from 20 percent in the prior survey. Meanwhile, none of the firms surveyed plan to boost inventories, consistent with views of slowing sales in the latter half of this year, NFIB said.
http://www.foxnews.com/story/0,2933,202907,00.html?sPage=business.foxnews/economy

[Fivetears]

July 12 12:50 AM EST - US Army to End Halliburton Deal
The U.S. Army will discontinue its multi-billion dollar contract with oil services giant Halliburton Co. to provide logistical support to U.S. troops worldwide, The Washington Post reported on Wednesday. Halliburton, formerly run by Vice President Dick Cheney, has drawn scrutiny for its work in Iraq from auditors, congressional Democrats and the Justice Department, which is investigating potential overcharges for fuel, dining and laundry services. Texas-based Halliburton is the world's second-largest oil services company and the U.S. military's biggest contractor in Iraq. The logistical support is performed by Halliburton engineering and construction unit Kellogg Brown & Root. Last year, the Army paid the company more than $7 billion under the contract, the Post said. Army officials defended the company's performance but said Pentagon leaders decided multiple contractors would give them better prices, more accountability and greater protection if a one contractor fails to perform, the newspaper said.
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=OBR&Date=20060712&ID=5859749

[Fivetears]

GM delays shutdown of Portugal van factory.
General Motors rejected appeals from government and trade unions to save its Portuguese van factory but delayed the shutdown by three months as a sop to workers who mounted angry protests across Europe against the US carmaker. GM said on Tuesday its plant at Azambuja, north of Lisbon, would close in December, in spite of a last-minute plea by José Sócrates, Portugal's prime minister.

The factory employs 1,100 people and made 73,800 vans last year.

The closure has raised fears that GM is joining other carmakers in shifting production from western Europe to the east and to Asia, something it denies.
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=FT&Date=20060711&ID=5858588

[Fivetears]

Chinese Company Intends to Build MG’s in Oklahoma
That’s the bet by Nanjing Automobile Group, which plans to resurrect the fabled MG marque in a tricontinental demonstration of how truly global the automotive industry has become. Nanjing, which purchased the assets of the bankrupt MG Rover Group last year, aims to be the first Chinese carmaker to open a factory in the United States. The company has scheduled a news conference for Wednesday in Oklahoma to announce plans to build a newly designed MG TF Coupe there, starting in 2008. It said the coupe would compete with cars like the Mazda Miata, which sells for $20,000 to $25,000. It also will assemble a convertible TF Roadster version at MG’s now-shuttered factory in Longbridge, England, and three sedan models in China. American and European operations for MG Motors will be based in Oklahoma City, 90 miles north of the new factory in Ardmore, Okla.
http://www.nytimes.com/2006/07/12/business/worldbusiness/12auto.html?ex=1310356800&en=8c4f1451beee2c4d&ei=5089&partner=rssyahoo&emc=rss

[Fivetears]

Experts Say High Gasoline Prices May Dent Economic Growth, but Not Consumers' Fuel Appetite
High gasoline prices may dent economic growth, but consumers' fuel appetite is still strong. Those trends are likely to persist, experts said, as average nationwide pump prices approach $3 a gallon -- a threshold once feared to be disastrous for motorists and potentially the economy. Economists say neither gasoline demand nor the economy have cratered in the face of soaring fuel prices because energy costs are only a small percentage of the average U.S. household budget. Consumers have been helped by relatively low interest rates and low core inflation, though both of these indicators are rising -- trends that could augur further weakness in the economy.
http://biz.yahoo.com/ap/060712/gas_prices.html?.v=8

[Fivetears]

America’s trade deficit widens in May
Imported oil price rises by largest amount in some 16 years
A record jump in the price of imported oil pushed the trade deficit to $63.8 billion in May, offsetting robust overseas sales gains by American companies. On Wall Street, stocks dropped sharply after a separate report showed that weekly oil inventories fell to their lowest level since early March. That raised the prospect that the U.S. will have to import even more oil. The price of foreign oil jumped by the largest amount since the run-up to the first U.S.-Iraq war in 1990, and America’s trade imbalance rose 0.8 percent from a revised April deficit of $63.3 billion, the Commerce Department said Wednesday. The trade deficit is running at an annual rate of $763 billion, 6.5 percent higher than last year’s record of $716.7 billion. President Bush’s critics blame the dwelling deficits on unfair trade practices in China and elsewhere, and say they have contributed to the loss of nearly 3 million manufacturing jobs since Bush took office.
http://www.msnbc.msn.com/id/13826182/

[Fivetears]

Intel Cuts 1,000 Managers in Shake-up
SAN FRANCISCO - Intel Corp. said on Thursday it will lay off 1,000 managers, or about 1 percent of its work force, as it seeks to tries to restart profit growth amid heated competition with rival Advanced Micro Devices Inc. "This action is designed to both reduce costs and improve communications and decision-making across the company," Intel spokesman Chuck Mulloy, adding that employees were being notified this week.
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=OBR&Date=20060713&ID=5866413

[Fivetears]

Mortgage Rates Decline for First Time in Five Weeks
WASHINGTON — Rates on 30-year mortgages declined this week for the first time in five weeks amid expectations that the Federal Reserve won't push interest rates much higher.
http://www.foxnews.com/story/0,2933,203361,00.html

[Fivetears]

Tyson Foods to Eliminate 850 Positions
SPRINGDALE, Ark. — Tyson Foods Inc., the world's largest meat company, said Thursday it would cut 850 positions to help trim $200 million in costs as it tries to boost profit amid slower sales of beef, chicken and pork. The savings goal is up from the $110 million pledged in May by new Chief Executive Richard L. Bond. The company said 420 jobs, mainly managers, will be slashed. Another 430 positions that are currently unfilled will also be eliminated. The job cuts include 90 in Dakota Dunes, S.D., and Dakota City, Neb. Other positions being cut are scattered throughout the company, which employs 114,000 worldwide. Forty outside consultants will also be eliminated. The company said hourly workers at its meat plants will not be laid off.
http://www.foxnews.com/wires/2006Jul13/0,4670,TysonLayoffs,00.html

[Fivetears]

Ford Halves Dividend, Board Member Fees
DETROIT — Ford Motor Co. on Thursday cut its dividend in half to 5 cents a share, a move expected to save the struggling automaker about $92 million per quarter. Its shares dropped more than 4 percent. The board of directors of the nation's second biggest automaker also voted to halve its members' own fees. "Our directors are well aware of the difficulties and sacrifices involved in turning around our company,"Chairman and Chief Executive Bill Ford said in a statement. "They have underscored this by voting to reduce their own compensation." Dearborn-based Ford is almost six months into a turnaround plan that calls for cutting 30,000 jobs and closing 14 facilities by 2012.
http://www.foxnews.com/wires/2006Jul13/0,4670,FordDividend,00.html

[Fivetears]

Claims for Jobless Benefits Up to 332,000
WASHINGTON — The number of people filing new claims for unemployment benefits jumped last week, apparently reflecting the spring slowdown in the economy. The Labor Department said Thursday applications for jobless benefits totaled 332,000 last week, an increase of 19,000 from the previous week that exceeded market expectations. Economists had forecast a rise of 7,000. The level of unemployment claims was near a high of 337,000 in late May, a time of markedly weak job growth. The latest weekly figure included some 4,000 claims for jobless benefits filed by workers in New Jersey during the weeklong state government shutdown there.
http://www.foxnews.com/wires/2006Jul13/0,4670,Economy,00.html

[Fivetears]

Wal-Mart Shares Hit Nine-Month Low After Downgrade
Wal-Mart Stores Inc. shares slumped to a nine-month low on Thursday after Merrill Lynch lowered its rating on the stock, citing concerns over slowing sales and a tough economic outlook. Analyst Virginia Genereux said that historically, Wal-Mart's sales outperform other retailers in slower economic times, but that may not happen now because its core lower-income customers are grappling with a troubling mix of steep energy prices, rising interest rates, and stricter credit card payment terms. Nearly one-half of Wal-Mart's sales come from households earning $30,000 a year or less, Genereux noted. The average household spent $4,600 on energy in 2005, and costs have continued to rise this year, taking up a hefty chunk of the budgets for lower-income families.
http://www.foxnews.com/story/0,2933,203325,00.html

[Fivetears]

GM's future in balance at Detroit meeting of CEOs
DETROIT - The chief executives of General Motors Corp and Renault-Nissan are scheduled to meet on Friday in Detroit, a formal first step in complex talks that could change the face of the global auto industry. Analysts remain divided about whether the tie-up would produce the cost-savings Kerkorian has suggested or threaten to distract both CEOs at crucial times for their respective companies. In a move that could ease potential union opposition to a deal, Ghosn also suggested Nissan could take over some of the excess production capacity GM is planning to shed in North America. Analysts have said GM competes heavily with Renault in Europe and that in the United States, non-unionized Nissan would be wary of retaining unionized GM workers.
http://news.yahoo.com/s/nm/20060714/bs_nm/autos_gm_nissan_meeting_dc_1

[Fivetears]

Dell Plans Broad Cutback in Promotions
Dell Inc. on Thursday said it planned to sharply cut the number of mail-in rebates on products and services, moving to simplify its pricing structure. Dell said the "net price" that customers pay for PCs will remain the same. Shares of Dell were down 34 cents, or 1.5 percent, at $22.04 in afternoon Nasdaq trading. Plans to cut back on promotions and simplify prices come as the Round Rock, Texas, company is spending $100 million to improve customer relations, including adding more sales and support staff and expanding its call center network.
http://news.yahoo.com/s/nm/20060713/bs_nm/dell_dc;_ylt=AkiOpi3aaNV4D4axe74Z8W6b.HQA;_ylu=X3o DMTA4MHNjNWZuBHNlYwMxNjk0

[Fivetears]

Stock Investors Hope GE Brings Good Words to Light
Rattled investors will look for soothing words on the economy from General Electric Co. Friday morning, giving the stock market bellwether as much credence as most macroeconomic indicators. If GE says nothing about the strength of orders or the broader economy -- or CEO Jeffrey Immelt dons rose-colored glasses to discuss such topics -- investors may use that as another excuse to sell stocks and buy bonds. GE disappointed stock investors in January when it did not boost its forecasts for the year, even though the company reported a 14 percent rise in first-quarter profits that matched analysts' expectations.
http://news.yahoo.com/s/nm/20060713/bs_nm/markets_earnings_ge_dc_1

[Fivetears]

Despite the Lure of Renewed Trade With Japan, Thousands of U.S. Beef Plants Opt Out
When Japan banned U.S. beef in 2003 because of mad cow fears, the industry braced for a big financial hit, with job losses spilling into Midwest feedlots, supply companies and retail businesses. So when the Japanese agreed to lift the ban -- contingent on Japanese checks of U.S. beef plants -- it was easy to assume that the inspectors would be welcomed everywhere with open arms. But while 35 American beef processing plants are submitting to the inspections, thousands of other plants have opted out, deciding not to bother with exporting.
http://biz.yahoo.com/ap/060714/us_beef_japan.html?.v=2

[Fivetears]

Low-Cost Carriers Expand Routes in Effort to Obtain More of the Airline Industry Pie
Low-cost carriers are extending their push into the territory of their bigger competitors, with JetBlue Airlines Corp. announcing Thursday that it will expand to Ohio and Southwest Airlines Co. ready to debut in Washington, D.C. The New York-based JetBlue said it will begin providing daily nonstop flights in October between Port Columbus International Airport and New York and Boston, offering introductory one-way fares as low as $69. Dallas-based Southwest on Thursday announced one-way fares as low as $79 for new daily nonstop flights between Washington Dulles International Airport and four cities. JetBlue's expansion efforts come as it posted its second consecutive quarterly loss in April. The airline said high fuel costs drove it to a first-quarter loss of $32 million, versus a year-ago profit of $6 million.
http://biz.yahoo.com/ap/060714/low_cost_airlines.html?.v=2

[Fivetears]

Retail Sales Unexpectedly Fall 0.1%
Sales at U.S. retail stores unexpectedly shrank 0.1 percent in June, the first decline since February, pulled down by weaker sales of cars and building material, government data showed on Friday. Wall Street analysts had expected a 0.4 percent rise in retail sales compared with a 0.1 percent increase in May. Consumer spending accounts for about two-thirds of U.S. economic activity and analysts worry that higher energy prices, which act as a tax on household budgets, could crimp spending. Weakening underlying retail sales might also persuade the Federal Reserve that growth was slowing enough to keep inflationary pressures in check as it considers halting a two year campaign of raising interest rates.
http://news.yahoo.com/s/nm/20060714/bs_nm/economy_retail_dc_2

[Fivetears]

Consumer morale dips, worries over growth
Surging energy prices helped cause unexpected drops in U.S. retail sales in June and consumer sentiment in July, reports on Friday showed, raising the prospects the Federal Reserve may be close to halting its campaign of hiking interest rates. The University of Michigan's preliminary reading on consumer sentiment in July was 83.0, down from June's final 84.9 reading, said sources who saw the subscription-only report. The median forecast of Wall Street economists polled by Reuters was for a reading of 85.5. This data, coupled with news from the Commerce Department that June retail sales fell 0.1 percent -- the first decline since February -- raised concerns of a economic slowdown. Economists had forecast retail sales to rise 0.4 percent. Consumer spending accounts for about two-thirds of U.S. economic activity, but in recent years confidence measures have been a weak guide to actual spending. Consumer spending accounts for about two-thirds of U.S. economic activity and analysts worry that higher energy prices, which act as a tax on household budgets, could crimp spending. Weakening retail sales might also persuade the Fed that growth was slowing enough to keep inflationary pressures in check.
http://news.yahoo.com/s/nm/20060714/bs_nm/economy_retail_dc_5

[Fivetears]

California Agency OKs Changes to Insurance Law
SACRAMENTO - A state administrative office on Friday approved changes to the state's insurance law, clearing the way for regulations that will force insurers to base premiums on drivers' records instead of their address. The action should result in lower premiums for many drivers, said Insurance Commissioner John Garamendi. However, some of the state's largest insurers said they would consider filing a lawsuit to stop the rules from taking effect. The regulations, approved by the California Office of Administrative Law, will force insurance companies to comply with an initiative passed by voters in 1988, Garamendi said. The initiative required rates primarily to be tied to a person's driving record, number of years licensed and miles driven annually, rather than the ZIP code where a vehicle is registered.
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=AP&Date=20060715&ID=5868897

[Fivetears]

Northwest flight attendants protest
Northwest Airlines flight attendants picketed Friday in Minneapolis and Detroit in an effort to bring pressure on management, which could soon void their contract. "We need to help management understand how angry we are," said Sara Nelson, a spokeswoman for the Association of Flight Attendants (AFA). "I think a strike would be a last resort." The AFA took over last week as the union for the Eagan, Minn.-based airline's 9,300 flight attendants, and began talks with Northwest (Pink Sheets: NWACQ) on Tuesday. Northwest, which is seeking $195 million in cost savings from flight attendants, has received permission from a bankruptcy court to impose new terms on the workers if the two parties fail to reach a deal by Monday. The court said Northwest could impose the terms of a contract offer that union members soundly rejected last month.

[FundSurfer]

Core inflation up just 0.2 percent in June (http://tinyurl.com/zkeuj)

WASHINGTON - Wholesale prices rose by a larger-than-expected 0.5 percent in June but core inflation, excluding food and energy, edged up just 0.2 percent.

The Labor Department also reported Tuesday that wholesale food prices increased 1.4 percent last month, with prices for processed chickens jumping 12.1 percent and increases marked by eggs, fresh fruit and dairy products. Wholesale energy prices rose 0.7 percent.

For wholesale prices overall, analysts had been expecting an increase in June of 0.3 percent. Core inflation was in line with expectations.

The 0.5 percent increase followed rises of 0.2 percent in May and 0.9 percent in April.

Concern has permeated the markets that higher inflation will prompt further interest rate hikes by the Federal Reserve and contribute to a more severe economic slowdown.

[Fivetears]

Housing Starts Fall By 5.3 Percent
Economists had expected June housing starts to decline to 1.90 million units from May's originally reported 1.957 million unit pace. Permits for future groundbreaking, an indicator of builder confidence, fell 4.3 percent to a 1.862 million unit pace, the slowest since May 2003. Economists polled by Reuters had expected June permits to fall to 1.920 million units after an upwardly revised 1.946 million units, originally reported as 1.932 million. U.S. single-family housing starts fell 6.5 percent to an annual pace of 1.486 million units, the slowest since November 2004.
http://www.foxnews.com/story/0,2933,204353,00.html?sPage=fnc.business/economy

[Fivetears]

Commerce Dept: Consumer Prices Rise 0.2% in June; Core Up 0.3%
Consumer inflation slowed in June, helped by a temporary drop in energy prices. But the improvement was expected to be short-lived with a new crisis in the Middle East pushing crude oil to record highs. The overall increase was in line with expectations although core inflation, which excludes energy and food, rose by 0.3 percent in June, higher than the 0.2 percent Wall Street had been expecting. That increase left core inflation rising for the past three months at an annual rate of 3.6 percent, far above the Federal Reserve comfort zone of 2 percent or less.
http://www.foxnews.com/story/0,2933,204347,00.html?sPage=fnc.business/economy

[Fivetears]

Federal Reserve Chairman Ben Bernanke: Record Oil Prices Need Watching
Federal Reserve Chairman Ben Bernanke told Congress on Wednesday that record high oil prices are a concern, but that a slowing economy should moderate inflation down the road. Still, he didn't close the door to further interest rate increases. Delivering his second economic report to Capitol Hill, Bernanke also stressed that these are difficult and uncertain times for Fed policy-makers, saying the climate of slowing growth and rising inflation puts the Fed in a tricky spot in terms of setting interest rates. The economy which grew in the first quarter at a 5.6 percent pace, the fastest spurt in 2 1/2 years, is expected to slow to a pace of around 3 percent or less in the second half of this year.
http://www.foxnews.com/story/0,2933,204358,00.html

[Fivetears]

Tower Reaches Tentative Deal With Unions
DETROIT - Auto-parts supplier Tower Automotive Inc. on Wednesday announced it has reached a tentative agreement with its two largest unions, possibly preventing a strike. The preliminary agreement with the United Auto Workers and United Steelworkers of America covers about 2,100 of Tower's 3,000 hourly employees. Terms of the agreement were not released by the company. The deal must be approved by the union membership as well as the U.S. Bankruptcy Court in Manhattan. Tower supplies several auto makers, including Ford Motor Co., General Motors Corp. DaimlerChrysler AG's Chrysler Group, Toyota Motor Co. and Honda Motor Co. Tower's unions had authorized a strike if the company received court approval on a motion to throw out its labor contracts.
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=AP&Date=20060719&ID=5880423

[Fivetears]

Fed chief says inflation expected to fall
The US Federal Reserve expects inflation to retreat from its recent highs, but it could still raise interest rates further to guard against the risk of a costly inflation surprise, Ben Bernanke, the Fed chairman, told Congress on Wednesday. His testimony, which gave stong boost to US and European share prices and Treasury bonds, came as the Fed released forecasts suggesting that it is prepared to bring US inflation down gradually, to minimise the damage to the real economy. The forecasts in the Economic Report to Congress show Fed policymakers are willing to tolerate an inflation rate on its core measure of 2 per cent or slightly above this year and next, providing it is heading in the right direction. The Fed officials think this approach will allow the economy to grow at close to its trend rate over this year and next.
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=FT&Date=20060719&ID=5880384

[Fivetears]

Insurance for 154,000 to Be Canceled
AUSTIN - About 154,000 Texas homeowners must find a new insurance carrier after regulators started shutting down Texas Select Lloyds, the state's sixth-largest home insurer. Texas Select did not have the ability to protect its policyholders and so their policies will be canceled by Aug. 23, according to the Texas Department of Insurance.
http://news.moneycentral.msn.com/category/topicarticle.asp?feed=AP&Date=20060719&ID=5879874&topic=TOPIC_ECONOMIC_INDICATORS&iSub=3

[Fivetears]

Wisconsin Farmers Talking Drought
WAUSAU - A dreaded word in farm country is starting to be heard in parts of northern Wisconsin -- drought. Little rain, coupled with steamy temperatures and south winds, is "just drying everything right up," said Randy Knapp, University of Wisconsin-Extension farm agent in Chippewa County on the western side of the state. Corn crops are burning up and pastures are brown, already prompting some farmers to sell their cows because of a lack of feed or to use forage stored for use in the winter, Knapp said. The last time conditions were this dry in his area was 1988, Knapp said. "I guess we finally determined that we are in a drought, an official drought." Gov. Jim Doyle on Wednesday issued an executive order declaring a state of emergency because of the drought conditions, making it easier for farmers to apply for temporary irrigation permits from streams and rivers. "Some farmers are experiencing drought conditions at a critical point in the growing season," Doyle said in a statement issued in Madison. "If this continues, farmers could see significant damage to their crops and severe economic losses."
http://news.moneycentral.msn.com/category/topicarticle.asp?feed=AP&Date=20060719&ID=5879674&topic=TOPIC_ECONOMIC_INDICATORS&iSub=3

[Fivetears]

Parking costs up 10%, survey finds
CHICAGO - If the rising cost of gas isn' t incentive enough to leave the car at home, maybe the increases in parking fees will do the trick. The cost to park in most major U.S. cities increased for the third consecutive year in 2006, according to a survey released on Tuesday by real estate services firm Colliers International. Daily parking is up 10.1% over the year, with the median cost for a space averaging $15.28 in U.S. cities, according to Colliers. The median cost for daily parking is $40 in Midtown Manhattan and $6 in Memphis, Tenn ., according to the study. Monthly unreserved parking spaces rose 4.4% over the year, with the median cost for a space averaging $153.19 per month. Monthly reserved parking spaces ( which guarantee customers the same space every day) also rose: They' re now up 3.8% over the year, with an average cost of $180.68 per month.
http://money.cnn.com/2006/07/19/news/economy/update_parking.dj/index.htm

[Fivetears]

Back-to-school spending to leap
NEW YORK - Back-to-school spending will see a big leap this year, with the biggest growth in electronics and apparel purchases, according to a new study. The average family is likely to spend $527.08 this year, up from $443.77 in 2005. Total spending is estimated to reach $17.6 billion, up from $13.4 billion last year, according to the National Retail Federation. Electronics and computer-related purchases are expected to jump by $1.5 billion from last year, after a sharp decline in 2005.
http://money.cnn.com/2006/07/18/news/economy/retail_school/index.htm

[Fivetears]

Verizon: Computer overcharged 11,000 customers
WASHINGTON - A computer error in its billing system led Verizon to overcharge some 11,000 customers in the mid-Atlantic region in June, the company announced Wednesday. The programming error led to overcharges ranging from $200 to several thousand dollars for some customers in Washington, D.C., Maryland, Virginia and West Virginia, according to Verizon spokesman Harry Mitchell. The company sends out 5.3 million bills a month in that region. Verizon discovered the error June 26, one week after the problems began. The company said it will credit affected customers in the next billing cycle.
http://money.cnn.com/2006/07/19/technology/verizon/index.htm

[FundSurfer]

Didn't you say you were on vacation? I think you need to check yourself into the Betty Ford clinic for internet addiction.

[Fivetears]

Yes Sir. But ya gotta admit... these markets are sure exciting to keep up with; even on vacation. AND... 107 degrees is too hot for man and beast. Just figured I'd share my afternoon surfing adventures with all. Hope some find them useful. :)
Didn't you say you were on vacation? I think you need to check yourself into the Betty Ford clinic for internet addiction.

[Fivetears]

Rising rents push up consumer prices in June, but energy prices ease.
Consumer prices rose in June as costs for housing, fruit, airfares and other items more than offset a decline in energy costs, the government said Wednesday in a report that strengthened inflation worries. Housing prices rose 0.4% in June, up 0.3% from May. The CPI measures housing prices based on how much consumers would pay to rent their homes. But rents are increasing while home sales and prices are slowing, leading to a possible distortion in the numbers. Energy prices fell in June for the first time in four months as a decline in prices for gasoline and natural gas more than offset an increase in electricity and heating oil costs. Despite the decline, energy prices are up 22.8% at an annualized pace in 2006. If the trend continues, energy prices will increase this year at the fastest pace since 1979.
http://www.usatoday.com/money/economy/inflation/2006-07-19-cpi-starts_x.htm

[Fivetears]

Judge overturns state law requiring Wal-Mart to spend more on heath care.
BALTIMORE — A federal judge on Wednesday overturned a Maryland law that would have required Wal-Mart Stores to spend more on employee health care, arguing the retail giant "faces threatened injury" from the law's spending requirement. The state law would have required large employers to spend at least 8% of payroll on health care or pay the difference in state taxes. Only Wal-Mart would have been affected by Maryland's law. U.S. District Judge J. Frederick Motz concluded that the law would have hurt Wal-Mart by requiring it to track and allocate benefits for its Maryland employees in a different way from how it keeps track of employee benefits in other states. Motz wrote that the law "imposes legally cognizable injury upon Wal-Mart."
http://www.usatoday.com/money/industries/retail/2006-07-19-walmart-healthcare_x.htm

[Fivetears]

Retail analysts expect pinched consumers to get stingy.
Higher gas prices. Middle East unrest. Sagging home prices. New federal guidelines that allow credit card companies to increase minimum payments. All may combine to put a damper on consumer spending as retailers enter the crucial back-to-school sales season, analysts say. "People are going to have to stretch their dollars as hard as they can," says Wendy Liebmann of WSL Strategic Retail. "The (stock) market has dropped 400 points, who the heck knows what's going on in the Middle East, and gas just keeps going up, up, up." Monday, Target lowered its forecast for same-store sales growth in July to 3%-4%, compared with a recent forecast of 4%-6%. Last week, Merrill Lynch downgraded Wal-Mart stock to neutral from buy. And Tuesday, A.G. Edwards retail analyst Bob Buchanan downgraded the entire retail group from "even weight" to "underweight." Still, the National Retail Federation said Tuesday that it expects back-to-school spending to increase to $17.6 billion, up from $13.4 billion last year, according to its survey of 9,032 consumers. But Buchanan says same-store sales are "in the process of decelerating." He predicts they'll grow by 1% to 2% year-over-year in July and August, vs. increases of 3% to 4% for the previous five quarters. "If Mommy and Daddy don't feel as flush because their houses aren't worth as much as last year, well they won't be willing to spend as much," he says.
http://www.usatoday.com/money/industries/retail/2006-07-18-retail-usat_x.htm

[Fivetears]

Disney confirms staff, movie reductions
Updated 7/19/2006 10:25 AM ET
LOS ANGELES — The Walt Disney is restructuring its studio division to emphasize blockbuster franchise films over more adult fare, a move that will mean slashing 650 jobs worldwide, the company announced Tuesday. The restructuring will cut Disney's film output from about 18 a year to about a dozen. Of those, about 10 will be released under the Walt Disney Pictures banner, a proven family friendly brand that includes the successful Pirates of the Caribbean franchise. Disney's Touchstone label, which is responsible for more esoteric fare by artists like Joel and Ethan Coen of Fargo fame, will be cut back to only two or three releases a year. Recent Touchstone films have included the box-office flops The Alamo and The Ladykillers. The shift, the company explained, will allow Disney films to bolster the resources of other divisions. A hit like Pirates of the Caribbean, for example, can spawn video games, action figures, cable TV shows and, in the case of Pirates, give new life to an old Disney theme park attraction.
http://www.usatoday.com/money/media/2006-07-19-disney-changes_x.htm

[Fivetears]

Southwest Airlines 2Q profit more than doubles
DALLAS — Southwest Airlines said Wednesday its second-quarter profit more than doubled, driven by an increase in traffic, higher fares and its use of options to buy fuel at lower prices. Excluding gains from hedging its fuel purchases, the company said, it earned $273 million, or 33 cents per share in the most-recent quarter. Southwest said its jets averaged occupancy rates of 78%, up from 72.5% in the same stretch of 2005. Southwest benefited again from a decision several years ago — when oil was relatively cheap — to buy most of its fuel at set prices, which have turned out to be a bargain. Southwest estimated that this hedging saved it $225 million cash in the second quarter. The airline has options to buy 73% of its fuel for the rest of 2006 at the equivalent of $36 per barrel oil — about half the going rate.
http://www.usatoday.com/money/biztravel/2006-07-19-southwest-profit_x.htm

[Fivetears]

US Airways to place ads on air sickness bags
US Airways wants to make the most out of a nauseating situation. The Tempe, Ariz.-based airline plans to sell advertisements on its air-sickness bags — those pint-sized expandable envelopes tucked between the in-flight magazines and safety cards. "They're in every back seat pocket," said US Airways Group Inc. spokesman Phil Gee. "We figure while it's there, why don't we make it multipurpose?" Passengers should see the new, commercialized sickness bags in September, he said. The ads are just the latest initiative the company has used to squeeze out a bigger profit. America West, which combined with US Airways last year, had the first advertisements in the industry on tray tables, the first airline gift cards and the first in-flight meals for sale. "Little things like that work," said Michael Boyd, president of the Boyd Group, an aviation consulting group in Evergreen, Colo. "Barf bags have a lot of shelf life — people aren't barfing as much in planes as they used to."
http://www.usatoday.com/money/biztravel/2006-07-19-bag_advertisements_x.htm

[Fivetears]

High Gas Prices Fueling Bike, Moped Sales
With gasoline above $3 a gallon in many parts of the country, fears of continued energy spikes are fueling sales of motorcycles, mopeds, and bicycles, leading bike associations said. Motorists are paying an average of $2.97 for a gallon of regular gasoline at the pump, up 66 cents from last year and less than 10 cents away from the $3.06 record retail price hit in September, September, according to travel and motorist group AAA's survey of 85,000 gas stations. With crude oil prices breaking records near $80 a barrel, motorists could see record pump prices soon, AAA has said. Scooter sales surged 17.5 percent in 2005, climbing 65 percent in the third quarter in top brands such as Suzuki , Honda and Vespa, the MIC said. "The trend is definitely still on the rise, and we're feeling pretty good for this year," van Hooydonk said. The $23.3 billion market for motorcycles and mopeds saw increased sales in the first quarter of this year, with on-highway motorcycle sales up 8.6 percent, and scooters up 2.1 percent.
http://www.foxnews.com/story/0,2933,204154,00.html

[Fivetears]

N.J. Businesses Prepare for Sudden Tax Increase
Following a state budget dispute that temporarily shut down the government, New Jersey businesses are now bracing for a tax increase that some say will disrupt their operations and cut into the bottom line. Under the budget deal, the Garden State's sales and use tax rate will increase from 6 percent to 7 percent on July 15. The new legislation also raised the Atlantic City luxury tax from 12 percent to 13 percent, as well as the Cape May County tourism sales tax. Businesses in the Wildwood area will now collect a 2 percent tourism tax combined with the 7 percent sales tax, for a combined rate of 9 percent tax on tourism-related sales. Businesses across the state are expected to feel a crunch, as many had not anticipated such a quick enactment to the sales-tax increase. Initially, the hike was scheduled for Oct. 15, but the date was moved up during budget negotiations.
http://www.foxnews.com/story/0,2933,204149,00.html

[Fivetears]

Ford posts quarterly loss
DETROIT - Ford Motor Co., which has been working to slash costs and stem market-share losses, on Thursday posted an unexpected second-quarter loss as sales of large sport utility vehicles slumped on higher U.S. gasoline prices and it took charges for employee buyouts. The No. 2 U.S. automaker cut its third-quarter production target in North America, and Ford Chairman and Chief Executive Bill Ford Jr. said the company will accelerate its turnaround efforts. "Within the next 60 days, we'll be in a position to discuss the additional actions we will be taking," he said in a statement. Ford's restructuring program already includes closing 14 plants and cutting up to 30,000 factory jobs in North America. Some analysts had cautioned that Ford's current turnaround efforts, which hinge on job cuts and plant closings, were too slow-moving to have any real effect on financial results until at least 2007.
http://news.yahoo.com/s/nm/20060720/bs_nm/autos_ford_earns_dc_3

[Fivetears]

Cingular posts higher net income, revenue
NEW YORK - Cingular Wireless, the No. 1 U.S. mobile service provider, said on Thursday second-quarter net income and revenue rose as it added new subscribers at a rate that was better than expected. Cingular said it added 1.5 million customers in the quarter, compared with an average estimate of 1.2 million from six analysts contacted by Reuters. Overall monthly subscriber churn, which measures cancellations, fell to a record-low 1.7 percent, an improvement of half a percentage point from a year earlier.
AT&T's plan to buy BellSouth would give it full ownership of Cingular later this year.
http://news.yahoo.com/s/nm/20060720/bs_nm/telecoms_cingular_earns_dc_2

[Fivetears]

Safeway second-quarter profit jumps
NEW YORK - Safeway Inc., the third-largest U.S. grocery chain, posted a jump in second-quarter profit on Thursday, aided by strong sales of gasoline and a benefit related to a tax refund.
http://news.yahoo.com/s/nm/20060720/bs_nm/retail_safeway_earns_dc_1

[Fivetears]

Higher Housing Costs Pushed Consumer Prices Up in June
A closely watched barometer of inflation grew at a strong pace in June but shed little light on whether the Federal Reserve would increase interest rates again next month. While the Labor Department reported yesterday that core consumer prices had the largest sustained rise since 1995, Ben S. Bernanke, the Fed chairman, sounded a less-than-hawkish tone on inflation in testimony on Capitol Hill. Without a more declarative position from Mr. Bernanke, economists were left to speculate whether the Fed may pause when it meets next month or approve its 18th consecutive increase in interest rates. The Labor Department reported that the core Consumer Price Index, which does not include food and energy prices, rose by 0.3 percent in June, its fourth consecutive increase. That was a larger increase than economists expected, and represented the longest period of high inflation in the core rate since the first four months of 1995. Over all, consumer prices rose 0.2 last month, a more moderate pace than the 0.4 percent rise reported in May. A retreat in energy prices in June helped hold down the number. Energy prices declined 0.9 percent last month, the first time since February they dropped. But with crude oil prices once again near record highs, the June decline may be short-lived. “The reality is that inflation continues to accelerate,” Joel L. Naroff, chief economist at Naroff Economic Advisors, wrote in a report yesterday. “Excluding energy, retail costs rose at a pace that cannot make anyone on the F.O.M.C. comfortable,” he said, referring to the Federal Open Market Committee, the group at the Fed that sets interest rates. A major contributor to the increase in consumer prices last month was the cost of housing. The indexes for rent and its equivalents in the consumer price calculation climbed 0.4 percent. Prices for medical care, education and tobacco also went up. With prices over the next several months expected to be higher because of record oil prices and rising rents, many economists say they believe the current inflationary trends are likely to become the norm. “What this suggests is a broad-based rise in core inflation, and this has been happening over the past several months,” said Dean Maki, chief United States economist at Barclays Capital. “This is the trend.” Simon Hayley, senior international economist with Capital Economics in London, said, “This is not a temporary blip.” Still, investors appeared to shrug off the concerns raised by the numbers and to focus instead on remarks by Mr. Bernanke in Senate testimony. Mr. Bernanke said that while inflation was still on the rise, he believed that the impact of the Fed’s past interest rate tightening had yet to be fully felt. Investors also largely ignored another government report yesterday with more signs the housing market was slowing. Building permits fell to a three-year low and new residential construction fell by 5.3 in June, the slowest pace in a year and a half.
http://www.nytimes.com/2006/07/20/business/20econ.html?ex=1311048000&en=d521ca4ae0266b7b&ei=5089&partner=rssyahoo&emc=rss

[Fivetears]

National Pension Deal Closer, but Hurdles Exist
Congressional negotiators have reached a preliminary oral agreement on a long-awaited package of amendments to overhaul the nation’s pension system, the chairman of the negotiating group said yesterday. The chairman, Senator Michael B. Enzi, Republican of Wyoming, left a session yesterday afternoon saying that he thought “everything is resolved, pending getting the exact wording.” Mr. Enzi declined to give details, but he said the negotiators would be working today on a written draft. The legislation is meant to keep more pension plans from failing and being taken over by the federal government. "Probably this will be our last chance," said Jerry Fisher, a retired truck driver in Asheville, N.C., who is traveling to Washington to fight a provision of the bill that would reduce the benefits of people who take early retirement in certain types of plans. Failed airline plans have long been a problem for the pension guarantor and are the source of some of its biggest losses. Already this summer, Delta has begun the process of terminating its pilots’ pension plan. The idea of relief for the airlines has been popular in Congress, although outside Washington many financial analysts say that delaying pension contributions in any industry is a bad idea, because the plans are likely to be terminated later and will only be further behind. But the prospect of pension relief for the airlines is causing concern in other industries. Companies that expect to have to contribute more to their pension plans under the coming amendments have been asking why they should pay more when the airlines will be paying less. The questions of fairness appear to be one issue keeping negotiators at the table. Some of the greatest unhappiness appears to involve changes in how companies are allowed to get credit when they make pension contributions that are larger than needed. Currently, companies may keep a running balance of their excess contributions, year after year, and in years when they do not put in the required amount, they can make up the difference by using some of their credit balance from previous years.
http://www.nytimes.com/2006/07/20/business/20pension.html?ex=1311048000&en=4d78f195c44c8b2b&ei=5089&partner=rssyahoo&emc=rss

[Fivetears]

Flat-panel TVs get less pricey faster
Lower-than-expected demand for flat-panel TVs is spurring makers to cut prices — setting the stage for a bargain-filled back-to-school and holiday shopping season. A year ago, a 37-inch flat-panel model typically cost about $4,000. Now, some can be found for as little as $1,100, says television analyst Rosemary Abowd at Pacific Media Associates. From January to May, the most recent data available, average flat-panel prices tumbled more than 12%, she says. Expect prices to fall even more in coming months, Abowd says. TV makers generally offer discounts during the busy fall and winter shopping seasons. Prices "are good and are only going to get better," says television analyst Chris Connery at researcher DisplaySearch. Why the glut? Optimistic TV makers overestimated demand.
http://www.usatoday.com/money/industries/technology/2006-07-18-flat-tv_x.htm

[Fivetears]

Layoffs improve, reflecting fewer layoffs in auto industry
WASHINGTON — The number of Americans filing new claims for unemployment benefits posted a big decline last week, reflecting fewer layoffs in the auto industry. The Labor Department reported that 304,000 newly laid off workers filed applications for benefits, a drop of 30,000 from the previous week, when claims had surged by 20,000. The big swings over the past two weeks reflected the normal layoffs that occur when the auto industry shuts down production lines for model changeovers. Looking past that volatility, the claims figures have been flashing signals that growth in the labor market is slowing as a result of the slowing economy. Employers added a disappointing 121,000 jobs last month, below the 175,000 job increase that economists had expected.
http://www.usatoday.com/money/economy/employment/2006-07-20-jobless_x.htm

[Fivetears]

Leading economic indicators rise in June, pointing to slow growth
WASHINGTON — A widely watched gauge of economic activity increased slightly in June, suggesting continued economic growth, though at a slow to moderate rate for the time being, a research group said Thursday. The Conference Board, an industry-backed research group based in New York, said its index of leading economic indicators rose 0.1% to 138.1 in June after declining 0.6% in May and 0.1% in April. The June figure was slightly below the 0.2% gain analysts expected. The index is watched closely because it's designed to predict economic activity three to six months in the future. Six of the ten indicators that comprise the leading index rose in June — the biggest positive contributor was a decline in average weekly initial claims for unemployment insurance, followed by the index of consumer expectations, real money supply, average weekly manufacturing hours, interest rate spread and manufacturers' new orders for new non-defense capital goods.
http://www.usatoday.com/money/economy/2006-07-20-lei_x.htm

[Fivetears]

Thousands in New York powerless as blackout problem persists
NEW YORK (AP) — A mysterious electrical problem blamed for subway delays, flight cancellations and power outages on the hottest days of the year persisted for a fifth day Friday, leaving 25,000 customers without power. Power company Con Edison initially said that only 2,500 customers were effected, but it increased that number tenfold Friday morning. The blackouts started Monday evening in a handful of neighborhoods in Queens. Two LaGuardia Aiport terminals lost power Tuesday, hundreds of businesses have been idle, and the city's jail complex on Rikers Island had to operate on backup generators. "This is outrageous," City Councilman Peter F. Vallone Jr. said. "When is this going to be fixed? If it's going to be days, they should tell people it is going to be days." The blackouts were at their worst on Wednesday, when 10 of the 22 feeder cables that supply the area with power were down simultaneously. The temperature had hit 100 degrees in the neighborhood the day before. Consolidated Edison spokesman Chris Olert said the power company was making every effort to get the situation fixed but couldn't estimate when that might happen. He said the company didn't know why things went wrong.
http://www.usatoday.com/news/nation/2006-07-21-newyork-electricity_x.htm

[Fivetears]

Rates on 30-year mortgages are highest since 2002
Rates on 30-year mortgages rose this week to the highest level since the spring of 2002. Freddie Mac, the mortgage company, says rates on 30-year, fixed-rate mortgages increased to a nationwide average of 6.80%, from 6.74% last week.A year ago, 30-year mortgages averaged 5.73%, 15-year mortgages stood at 5.32%, one-year ARMs were at 4.42% and five-year ARMs averaged 5.26%. Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, increased to an average of 6.41% this week, from 6.37% last week.
http://www.usatoday.com/money/perfi/housing/2006-07-21-mortgage-rates_x.htm

[Fivetears]

Housing downturn 'appears orderly'
Softening in the housing market has been gradual and has been marked by little increase in mortgage delinquencies or home foreclosures, Federal Reserve Chairman Ben Bernanke said Thursday. "The downturn in the housing market so far appears orderly," Bernanke told members of the House Financial Services Committee. "The level of (housing) activity is still relatively high on a historical basis." When asked if higher interest rates could cause a more rapid deterioration in housing as those with adjustable-rate mortgages would likely see their rates, and payments, head higher, Bernanke said the Fed estimates that 20% of outstanding mortgages have variable rates. Half of those are set to change interest rates this year, he said. "So there will be some effect on variable-rate mortgages," Bernanke said. "But it should be a relatively slow process that would provide some cushion."
http://www.usatoday.com/money/economy/fed/2006-07-20-bernanke-housing_x.htm

[Fivetears]

Study: Medication errors harm 1.5M a year
Medication errors are among the most common medical errors, harming at least 1.5 million people every year. The problem is so serious that, on average, a hospital patient is subject to at least one medication error per day. These are among the findings in a report released Thursday by the Institute of Medicine, chartered by Congress to advise the government on science and medical issues. The extra costs of treating medication-related injuries occurring in hospitals alone conservatively amount to $3.5 billion a year, the report states. The IOM panel estimates that at least a quarter of these injuries are preventable.
http://www.usatoday.com/money/industries/health/2006-07-20-drug-errors_x.htm

[Fivetears]

Next Week's U.S. economic releases
July 25 Consumer confidence
July 25 Existing home sales
July 26 Fed beige book
July 27 Durable goods orders
July 27 Help wanted index
July 27 New home sales
July 28 Employment cost index 2Q
July 28 Gross domestic product 2Q
July 28 Consumer sentiment

[Fivetears]

Army Cuts Expenses Not Essential to War
The Army, bearing most of the cost for the wars in Iraq and Afghanistan, said Thursday its money crunch has gotten so bad it is clamping down on spending for travel, civilian hiring and other expenses not essential to the war mission. A statement outlining the cutbacks did not say how much money the Army expects to save, but senior officials have said the cost of replacing worn equipment in Iraq and Afghanistan is rising at a quickening pace. The Army chief said there is too little money available to keep up with equipment repairs. He said the Army's five major repair depots are operating at only 50 percent of capacity, resulting in a backlog of 1,000 Humvee utility vehicles awaiting attention at the Red River Army Depot in Texas and 500 tanks at a depot in Alabama. The Army's 2006 budget is $98.2 billion, and the 2007 budget request not yet approved by Congress seeks $111 billion for the Army.
http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=AP&Date=20060721&ID=5884239

[Fivetears]

Gauge of economy flat in latest week
A gauge of U.S. economic growth was unchanged in the latest week due to higher commodity prices and lower jobless claims, a report showed on Friday. The moves were partly offset by lower housing activity. The Economic Cycle Research Institute, an independent forecasting group, said its weekly leading index was flat at 136.9 in the week ended July 14. "Despite the latest uptick in the annualized growth rate, the weekly leading index's growth remains in a clear cyclical downtrend," said Melinda Hubman, a research associate at ECRI. The downtrend points to dimming U.S. economic growth prospects, Hubman said.
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=OBR&Date=20060721&ID=5885809

[Fivetears]

BellSouth Shareholders Approve Sale to AT&T
BellSouth Corp. shareholders approved Friday the proposed sale of their company to AT&T Inc. for $67 billion in stock, a deal that would expand the reach of the nation's largest telecommunications provider and put the two companies' wireless joint venture under one roof. The vote during a special meeting in Atlanta was 97 percent in favor of the deal, which was announced March 5 and is expected to close by the end of the year. AT&T shareholders were scheduled to vote later Friday in San Antonio on whether to issue new stock in the combined company. In papers filed with the government, AT&T and BellSouth have said that allowing the parent companies of Atlanta-based Cingular Wireless LLC to merge will help eliminate challenges they now face in managing the nation's largest cell phone provider.
Federal and state regulators also must approve the deal.
http://www.foxnews.com/story/0,2933,204946,00.html

[Fivetears]

Heat subsides in St. Louis, power outages rise with 2nd storm
ST. LOUIS — Heavy rains and tree-toppling winds pummeled St. Louis again Friday, adding more power outages to hundreds of thousands of homes and businesses already without electricity. The St. Louis region, already crippled by vast power outages Wednesday, came under a severe thunderstorm warning for the second time in three days. Friday morning, before the storm, 320,000 homes and business were still without power from Wednesday night's 80 mph winds and heavy rain. Progress with restoration was being made, and more than 200,000 customers had power back on within 36 hours. The power company has said it could take four days before power is restored, but now it could take longer. Ameren Corp. has called the outage the worst in its 100-plus year history. As many as 500,000 customers lost power from the storm, which was followed by another day of near-triple-digit-heat. More than 500 people spent Thursday night in two Red-Cross shelters, and a third shelter was scheduled to open Friday afternoon to take in people who could not stay in their hot homes.
http://www.usatoday.com/weather/storms/2006-07-20-st-louis-storms_x.htm

[Fivetears]

2006 Back-to-School Tax Holiday Schedules
Thirteen states and the District of Columbia are offering shoppers sales tax holidays this year, most on the first weekend of August. Florida started yesterday. They are listed below:
http://www.bankrate.com/smm/itax/news/20050804b1.asp

[Fivetears]

Where is Robin Hood when you need him?
The federal minimum wage hasn't budged in almost a decade. Gas prices at $3 a gallon are crushing the working poor. So what is Congress doing? It's working hard — not to raise the minimum wage for millions of the poorest working Americans, but to repeal or reduce the estate tax for a tiny sliver of America's wealthiest. This seems perverse, unless you understand the corrosive influence of money in politics. Running for office requires hundreds of thousands of dollars, sometimes millions. This money comes from wealthy donors and business interests — the people most interested in scrapping the inheritance tax and keeping wages low. Minimum-wage earners, meanwhile, don't make big campaign contributions or underwrite junkets, and they don't have as loud a voice on Capitol Hill. At a time when the gap between rich and poor is widening, the skewed economic priorities of the Republican-controlled Congress are increasingly indefensible.
http://www.usatoday.com/news/opinion/editorials/2006-07-23-our-view_x.htm

[Fivetears]

How to really help the poor.
Everyone agrees we should do everything we can to help poor Americans earn more. But one of the worst ways for Congress to attempt to do that is, paradoxically, one of the most popular: raising the minimum wage. There are several reasons why minimum-wage hikes don't achieve all their objectives:

• Most workers who earn the minimum wage — generally teenagers — don't come from low-income households. Indeed, the average household income for such a worker is $45,000 a year, and many workers with incomes close to the minimum wage come from households earning more than $80,000 annually.

• Minimum-wage jobs are nearly always entry-level positions, usually filled by new workers who, as they gain experience and become more productive, see their incomes rise without government help. About two out of every three workers hired at the minimum wage, in fact, are earning more within a year.

• Minimum-wage hikes increase labor costs, prompting businesses to create fewer entry-level positions. Employers forced to pay more to new workers naturally prefer to hire more experienced workers who require less training. Who loses out? Ironically, less-skilled workers who are poor.

Such workers are no better served by calls to retain the estate tax because this tax directly undermines job creation. The federal estate tax alone is responsible for the loss of 170,000 to 250,000 potential jobs each year, Heritage Foundation economists estimate. This additional employment never appears in the economy because the investments that would have brought higher employment aren't made.
http://www.usatoday.com/news/opinion/editorials/2006-07-23-oppose_x.htm

[Fivetears]

Global Trade Talks Collapse As Top Powers Fail to Reach Breakthrough
GENEVA - Global commerce talks at the World Trade Organization collapsed Monday as top powers failed to agree on steps toward liberalizing trade in farm and manufactured goods. Indian Trade Minister Kamal Nath said the talks had been suspended and added that "it could take anywhere from months to years," to restart the negotiations. "This is a serious setback, a major setback," said Brazilian Foreign Minister Celso Amorim. EU trade chief Peter Mandelson blamed the failure on the United States.
http://biz.yahoo.com/ap/060724/wto_trade_talks.html?.v=8

[Fivetears]

UPS battered by retail weakness
Shares in UPS plunged nearly 16 per cent in early trading on Tuesday after the package delivery group reported disappointing second-quarter earnings and warned of a worsening economic outlook for the remainder of the year. UPS and other express delivery groups are viewed as important economic bellwethers because of their increasingly central role in global supply chains. Express delivery groups such as UPS and FedEx have enjoyed several years of rapid expansion on the back of soaring global trade and increasing demand for just-in-time services. But Tuesday's results and guidance from UPS triggered a sell-off throughout the US freight transportation sector in expectation of slower growth.
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=FT&Date=20060725&ID=5893459

[Fivetears]

Consumer Confidence Inches Up
WASHINGTON - The mood of U.S. consumers improved slightly in July, the Conference Board said Tuesday. The consumer confidence index rose moderately to 106.5 in July from a revised 105.4 in June. The rise was unexpected. Economists had forecast the index to slip to 103.9 from the initial June reading of 105.7, according to a survey conducted by MarketWatch.
http://foxnews.smartmoney.com/bn/ON/index.cfm?story=ON-20060725-000624-1137

[Fivetears]

Existing Home Sales Take Modest Dip
WASHINGTON -Sales of existing homes in the U.S. decreased in June, the National Association of Realtors said Tuesday. Home resales fell to a 6.62 million annual rate, a 1.3% decline from May's revised 6.71 million annual pace. May resales were originally seen at 6.67 million. NAR chief economist David Lereah said the housing market is flattening out. The median home price increased to $231,000, compared with a revised $229,000 in May. Existing home sales were mixed in the four regions of the U.S. Demand fell 2.3% in the South and 3.5% in the Northeast. Sales were flat in the Midwest and in the west.
http://foxnews.smartmoney.com/bn/ON/index.cfm?story=ON-20060725-000520-1029

[Fivetears]

Number of Americans Working on Vacation Doubles
NEW YORK — The number of Americans who work during their vacations has nearly doubled in the last decade, with the laptop computer replacing the cellular phone as the most useful tool for working on holiday. Some 43 percent of office workers said they work on vacation, compared with 23 percent in a survey taken in 1995, said the poll conducted for Grand Rapids, Michigan-based Steelcase Inc., a designer and maker of office furniture. Overall, roughly one in four employees said they spent three or more hours working during vacation. Most said they were committed to the job or had a pressing assignment, while 10 percent cited an inability to relax until things were taken care of.
http://www.foxnews.com/story/0,2933,205518,00.html

[Fivetears]

S&P / Case-Shiller Indices Show Average U.S. Home Prices Continuing to Rise
NEW YORK - Data released today by Standard & Poor's for its S&P/Case-Shiller(R) Home Price Indices, the leading measure of U.S. home prices in the United States, shows a continuing increase in average home prices from April to May, despite fears of a slowing residential real estate market. According to Standard & Poor's data, U.S. home prices rose an average of 0.4% from April to May, making its year-over-year gain 9.7% from May 2005.
http://news.moneycentral.msn.com/category/topicarticle.asp?feed=PR&Date=20060725&ID=5894486&topic=TOPIC_ECONOMIC_INDICATORS&iSub=3

[Fivetears]

Survey: Inflation May Eat Up Gains in Pay
NEW YORK — The bad news: this year will be another year of modest pay increases. The worse news: inflation might eat up those gains. The only good news may be that workplace standouts might eke out bonuses and other cash incentives from employers. Companies are relying less on salary increases and more on incentives like year-end bonuses to retain employees without boosting fixed costs, a new survey said Thursday. U.S. employers are planning to increase base salaries by 3.7 percent this year, just a bit higher than the average 3.6 percent rise they granted in 2005, according to a survey by Mercer Human Resource Consulting.
http://www.foxnews.com/story/0,2933,205975,00.html

[Fivetears]

Sales of New Homes Decline in June
WASHINGTON - Sales of new homes fell in June for the first time in four months, and the government also lowered figures for May, providing further evidence the high-flying housing market is losing altitude. The Commerce Department reported Thursday that new home sales dropped by 3 percent last month to a seasonally adjusted annual sales pace of 1.131 million units. It was the first decline since an 11.5 percent drop in February. The government also marked down sales activity in May to a pace of 1.166 million units, substantially below its initial estimate of 1.234 million units. Analysts pointed to the drop in sales last month and the downward revision for May as fresh evidence that housing was slowing considerably from the impact of higher mortgage rates.
http://biz.yahoo.com/ap/060728/economy.html?.v=2

[Fivetears]

Home sellers sweeten deals
The proportion of home builders who are dangling goodies to buyers — from free swimming pools to granite kitchen counters to vacations — is the highest in at least seven years. The reason was made vividly clear Thursday, when the Commerce Department said new-home sales fell a sharp 3% from May to June. To drive sales, 75% of builders are now offering some kind of incentives to attract buyers, up from 50% who did so last year, according to the National Association of Home Builders. "These builder-developers understand the solution to the slowdown to the market is to quickly liquidate their inventory," says Ron Peltier, CEO of HomeServices of America. Now the incentive war among builders is spilling into the market for existing homes. In what may be a nascent trend, a few homeowners are starting to lure buyers with the promise of exotic trips, new cars and higher commissions for their agents.

• In Newport Beach, Calif., Paul and Sandra Findly cut the price of their home by $41,000, to $1,549,000, but they still weren't getting offers. So Paul Findly decided to offer two round-trip tickets to Hawaii to the buyer and two tickets to the buyer's agent.

http://www.usatoday.com/money/economy/housing/2006-07-27-new-homes_x.htm

[Fivetears]

Airfares soar as planes fill up
Soaring jet fuel prices and rising traveler demand are driving high airfares even higher. Fares for flights departing in the USA rose a record 10.3% in the first quarter of 2006 from a year ago, according to data released by the Department of Transportation on Wednesday. And Delta Air Lines — in a move likely to accelerate the trend — raised most domestic fares by $5 one way, bringing the highest coach seat price in its simplified fare structure to $504, and $704 for first class. "It's not good for consumers," says Ray Neidl, an analyst at Calyon Securities. But it's better than "if you've got a bunch of bankrupt airlines."
http://www.usatoday.com/money/biztravel/2006-07-26-airfares-usat_x.htm

[Fivetears]

Chicago City Council approves living wage for big-box retail
CHICAGO — The City Council brushed aside warnings from Wal-Mart to approve an ordinance that makes Chicago the biggest city in the nation to require big-box retailers to pay a living wage. The ordinance, which passed 35-14 Wednesday after three hours of impassioned debate, requires mega-retailers to pay wages of at least $10 an hour plus $3 in fringe benefits by mid-2010. It would only apply to companies with more than $1 billion in annual sales and stores of at least 90,000 square feet. The minimum wage in Illinois is $6.50 an hour and the federal minimum is $5.15.
http://www.usatoday.com/money/industries/retail/2006-07-27-chicago-bigbox_x.htm

[Fivetears]

Aging grids cited in blackouts
The nation's power system may be showing its age. Recent heat wave-related blackouts in California and New York are at least partly being blamed on creaky transformers, circuit breakers and cables. And smaller outages in cities such as Detroit, Chicago and Houston will be investigated to see if aging parts played a role, says Stan Johnson of the North American Electric Reliability Council. Low investment in interstate transmission lines could lead to more regional blackouts, such as the one that hit the Northeast in August 2003. The trends show the need to pump more money into the power grid to meet demand, federal officials say. That would mean higher consumer rates. "There is a need to spend more," says Gerry Cauley, vice president of standards for the reliability council. Southern California Edison already planned to spend $7 billion by 2011 on upgrades, and may seek further rate increases for extra transformers, Senior Vice President Ron Litzinger says. New rules allowing utilities higher returns should spur construction. Yet, local regulators may be loath to clear rate increases for other upgrades with rates in some states soaring, Johnson says.
http://www.usatoday.com/money/industries/energy/2006-07-27-power-grid-usat_x.htm

[Fivetears]

Growth slows, prices up in second quarter
WASHINGTON - U.S. economic growth slowed abruptly during the second quarter to less than half the pace seen at the beginning of the year, while a key gauge of inflation accelerated, the Commerce Department said on Friday. The sharp slowdown raised expectations that the Federal Reserve might halt its two-year-old campaign of interest-rate rises, and fueled a broad-based rise in bond prices on hopes a rate rise pause was near. Slower consumer spending, especially on costly durable goods like new cars, was a key reason. But export growth also slowed, government spending was weaker and housing investment turned down.
http://news.yahoo.com/s/nm/20060728/bs_nm/economy_dc_1

[Fivetears]

U.S. Economy Slows; Inflation Heats Up
WASHINGTON - The economy's growth slowed sharply in the second quarter, logging just a 2.5 percent pace as consumers tightened their belts and spending on home building suffered its deepest cut in nearly six years. Inflation, however, shot up. The latest snapshot of gross domestic product released by the Commerce Department on Friday showed that the overall pace of economic activity in the April-to-June quarter was about half that of the January-to-March quarter, when the economy zipped along at a 5.6 percent annual rate, the fastest in 2 1/2 years. The 2.5 percent pace was the slowest since a 1.8 percent growth rate in final quarter of 2005, when the economy was suffering fallout from the devastating Gulf Coast hurricanes. An inflation gauge closely watched by the Federal Reserve showed that core prices -- excluding food and energy -- jumped by 2.9 percent in the second quarter -- far outside the Fed's comfort zone. That was up from a 2.1 percent increase in the first quarter and marked the highest inflation reading since the third quarter of 1994, when core inflation rose by 3.2 percent. The inflation reading was taken before the latest run-up in energy prices. Oil prices hit a record closing high of $77.03 a barrel on July 14. Gasoline prices also have marched higher, topping $3 a gallon in many areas. Although Federal Reserve Chairman Ben Bernanke said he is concerned about rising inflation, he told Congress last week that the Fed believes moderating economic activity will eventually lessen inflation pressures.
http://www.nytimes.com/aponline/business/AP-Economy.html?ref=business

That means... when we stop buying stuff, stores will have to lowers prices to move goods.
Mr. Bernanke, kind Sir; This hasn't worked since the day I was born; July 28, 1962.

x 1962
• Average Income - $5,556.00
• New Home - $12,550.00
• New Car – $2,924.00
• Gallon of Milk - $1.04
• Gallon of Gas - $0.28
• Loaf of Bread - $0.21

[Wheels]

Happy Birthday FT.

Dave
<><

[nnuut]

Hey, FT Happy Birthday. :D This is my brothers Birthday except he was born in 1948.:worried:

[Fivetears]

Thanks Guy's. :)

[Fivetears]

House vote raises minimum wage
WASHINGTON - The House of Representatives voted on Saturday to give some of the lowest-paid American workers their first raise in nearly a decade, while also handing a big tax cut to some of the wealthiest. The House in the early hours voted 230-180 to raise the $5.15-per-hour minimum wage in three 70-cent steps until it reaches $7.25 in mid-2009.
http://news.yahoo.com/s/nm/20060729/bs_nm/congress_wage_taxes_dc_7

[Fivetears]

More States Add Sales Tax Holidays
Thirteen states and Washington, D.C., have sales tax holidays pegged to back-to-school shopping. Tennessee, Alabama and Virginia are new this year, and Maryland is offering a tax break again for the first time since 2001. The other sales tax holiday states are Connecticut, Florida, Georgia, Iowa, Missouri, New Mexico, North Carolina, South Carolina and Texas. New York, the first state to offer a sales tax holiday in 1997, ultimately made a sales tax exemption on clothing and shoes under $110 permanent in April.
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=AP&Date=20060729&ID=5906673

[Fivetears]

This week's heavy economic agenda

On Monday - a reading of regional manufacturing activity known as the Chicago PMI. The National Association of Purchasing Management-Chicago's index, or the Chicago PMI, is expected to show that business activity in the U.S. Midwest expanded again, but at a slower pace, according to economists polled by Reuters. They see the July index at 56 vs. 56.5 in June.

On Tuesday June data on personal income and personal consumption, or spending, will be released. The Reuters forecast: Personal income, up 0.6 percent in June, and personal consumption, up 0.4 percent in June. All eyes will be on the core Personal Consumption Expenditures Index, known as the core PCE Index, which is one of the Fed's most closely watched inflation measures. The core PCE Index is seen up 0.2 percent in June, according to the Reuters poll. The core reading excludes volatile food and energy prices. The Fed and the markets "will be looking at core PCE and the average hourly earnings component of the payrolls report," said Chan of JPMorgan.

Also on Tuesday - U.S. domestic car and truck sales for July, as well as the Institute for Supply Management's July index of U.S. manufacturing activity.

On Thursday -ISM's July index of U.S. non-manufacturing, or services, activity, and June factory orders.

On Friday - U.S. nonfarm payrolls report for July. The U.S. economy likely added 150,000 jobs in July, up from 121,000 in June, according to economists polled by Reuters. The unemployment rate is pegged at 4.6 percent in July, the same as in June. Average hourly earnings probably rose 0.3 percent in July, the Reuters poll showed, after a 0.5 percent gain in June.
http://news.yahoo.com/s/nm/20060730/bs_nm/column_stocks_outlook_dc_1

[Fivetears]

U.S. Economy Cools As Consumers Pull Back
The U.S. economy slowed sharply in the three months ended in June, expanding at less than half its pace earlier this year, as consumers and businesses hunkered down in response to climbing inflation and interest rates. Consumers spent more on gasoline while pulling back on purchases of houses, automobiles and many other items. Businesses slashed their spending on housing construction and on equipment and software, while hiring more cautiously at a time of uncertainty over how much the economy will cool.
http://www.washingtonpost.com/wp-dyn/content/article/2006/07/28/AR2006072800408.html

[Fivetears]

Oil price and dollar plunge as American growth stalls
Oil prices plunged and the dollar fell sharply last night amid fears that the US economy is buckling under the weight of rising interest rates and the threefold increase in oil prices. Wall Street was urging the Federal Reserve to hold back from an expected rise in interest rates next month after the commerce department in Washington reported that the growth rate in the world's biggest economy more than halved in the second quarter of 2006.
http://business.guardian.co.uk/story/0,,1832845,00.html

[Fivetears]

Spending Less? You're Helping Slow the Economy.
Belt-tightening by consumers is a key reason the U.S. economy is slowing. Inflation-adjusted economic growth fell to a surprisingly sluggish 2.5% in the second quarter from 5.6% in the previous three months, largely because of slower consumer spending, the Commerce Department reported Friday. The economy's latest growth rate was below the expected 3%, which is average for an economic expansion. It triggered a rally in stock and bond markets as investors boosted their expectations that the Federal Reserve will soon halt its anti-inflation campaign to raise interest rates. Consumers — accustomed in recent years to spending more than they earn, saving little and tapping home equity to pay the bills — have clearly been hit by $3-plus gasoline prices. Whether that and other worries prompt consumers to scale back even more will largely determine whether the economy can maintain a slower but steady "soft landing" or veer toward recession, economists say.
http://www.latimes.com/business/la-fi-econ29jul29,1,7768865.story?coll=la-headlines-business&ctrack=1&cset=true

[Fivetears]

IMF: Fed must hold careful economic course.
WASHINGTON - The Federal Reserve has a difficult task ahead as it seeks to put the U.S. economy on an even keel, the International Monetary Fund said Friday. In its annual review of the economy, the institution observed that the Fed "will need to steer an especially delicate course" that limits downside risks to economic activity while ensuring that investors' expectations about inflation are kept in check. To fend off inflation, the Fed has boosted interest rates 17 times since June 2004. Wall Street is hoping the Fed will take a break in its credit-tightening campaign at its next meeting on Aug. 8. But some economists believe another rate increase will be needed to fight inflation.
http://news.yahoo.com/s/ap/20060728/ap_on_bi_ge/imf_us_economy_1;_ylt=As8ulYaDscoSHO9l8gtld5nqxQcB ;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

[Fivetears]

Core inflation edges higher in June
WASHINGTON - Core U.S. consumer prices rose a moderate 0.2 percent in June for a third straight month, but the year-on-year rate hit a nearly four-year high, keeping financial markets on edge over a possible Federal Reserve interest-rate hike. In the same report, the Commerce Department said on Tuesday personal income rose 0.6 percent in June, with nominal spending up 0.4 percent.
http://news.yahoo.com/s/nm/20060801/bs_nm/economy_usa_dc_1

[Fivetears]

Stocks fall as reports fuel rate concerns
Investors worry that higher interest rates would slow economic growth and dent consumer spending, a key driver of corporate profits. Fed policy-makers will meet next Tuesday to decide on interest rates. Investors worry that higher interest rates would slow economic growth and dent consumer spending, a key driver of corporate profits. Fed policy-makers will meet next Tuesday to decide on interest rates.
http://news.yahoo.com/s/nm/20060801/bs_nm/markets_stocks_dc_21

[Fivetears]

Eastman Kodak Posts Seventh Consecutive Quarterly Loss, Moves to Eliminate 2,000 More Jobs
N.Y. - Eastman Kodak Co., scrambling to squeeze bigger profits from digital photography, posted its seventh quarterly loss in a row Tuesday and moved to axe 2,000 more jobs as it navigates a historic shift away from its waning film business. Its shares tumbled nearly 14 percent to their lowest close in 15 years. Kodak said Tuesday it is shifting manufacturing of digital cameras to Flextronics International Ltd. and transferring 550 employees to the Singapore-based company. Those will be among 2,000 jobs that Kodak is aiming to eliminate by the end of next year -- on top of 22,000 to 25,000 jobs already targeted since January 2004.
http://biz.yahoo.com/ap/060801/earns_kodak.html?.v=10

[Fivetears]

Natural gas prices soar with demand for electricity
WASHINGTON — Natural gas prices jumped to their highest in nearly six months Monday as hot weather across much of the USA led to increased demand for natural-gas-generated electricity. Natural gas trading for future delivery rose $1.027, or 14%, to $8.211 per thousand cubic feet as investors fretted about natural gas supplies. That was the biggest increase since December and the highest close since Feb. 3. The increase came as hot weather spread across the USA, leading to elevated demand for electricity. Pepco, which provides electricity to 745,000 customers in Washington, D.C., and Maryland, warned demand could hit records this week in the area, where temperatures were in the mid-90s Monday. Natural gas is a key source of electricity generation. When demand for air conditioning, and thus electricity, rises, natural gas supplies can decline if they are not replenished. This week's heat wave came after the Energy Department last week reported an unexpected decline in natural gas inventories.
http://www.usatoday.com/money/industries/energy/2006-07-31-natural-gas-usat_x.htm

[Fivetears]

Consumers cut spending in June
WASHINGTON — The economy is cooling but not folding. Consumer spending was more subdued in June while inflation lurked, but construction and manufacturing activity were solid and personal income was up, according to government and private data Tuesday. Also Tuesday, new Treasury Secretary Henry Paulson, in his maiden speech in office, told a New York audience that recent data show the economy "transitioning to a more sustainable rate of growth, similar to the pattern we saw in the mid-1990s." Paulson, former CEO of Goldman Sachs, called the forecast growth of Medicare and Social Security the main economic threat and said it must be faced. He also acknowledged many Americans were seeing wage gains "eaten up by high energy prices and rising health care costs, among others."
http://www.usatoday.com/money/economy/income/2006-08-01-consumer-june_x.htm

[Fivetears]

Disney World raises ticket prices
Florida - Walt Disney World is hiking ticket prices for the second time in 2006, raising the cost of a basic one-day, one-park admission to $67, according to a pricing chart posted on the company's media Web site. The $4 price increase takes effect on Sunday. "We're doing this to meet the production needs of the travel industry," Disney spokeswoman Jacquee Polak said on Saturday.
http://news.yahoo.com/s/nm/20060806/bs_nm/leisure_disney_dc_1

[Fivetears]

Price Checkers Comb Store Aisles to Assemble Government's Closely Watched Inflation Barometer
SILVER SPRING, Md. - Caren Gaffney would be the perfect contestant on "The Price is Right." She moves from store to store, meticulously combing the aisles and taking down prices. A head of Boston butterhead lettuce. A bottle of Advil. Car inspection. Diamond bracelet. Eyeglasses. A 50-foot black TV cable. Washing machine. It's an eclectic shopping list that comes from her employer, the U.S. government. The items that she prices -- and thousands of others -- are reflected in the government's most closely watched inflation barometer. The Consumer Price Index measures the prices shoppers pay for a market basket of goods and services. Gaffney is one of about 450 people who check prices on 96,000 items from thousands of merchants for the monthly reports assembled by the Labor Department's Bureau of Labor Statistics. "We price everything from condoms to cremations," says Katie Gollannek, branch chief in the bureau's division of price programs. The price collectors do what they have to do to get the job done. Crawl on floors. Paw through racks. Scale shelves. During busy times, Gaffney, an economic assistant who works part time, has visited about 45 stores in a 10-day period to get prices on 150 items.
http://biz.yahoo.com/ap/060806/price_patrol.html?.v=5

[Fivetears]

Consumer borrowing rises sharply in June
WASHINGTON - Americans increased their borrowing in June at a much faster pace than expected, with the rise led by higher credit card debt. The Federal Reserve reported Monday that consumer borrowing rose at an annual rate of 5.7 percent in June, up sharply from a 3.3 percent increase in May. The June advance reflected a rise in consumer debt of $10.27 billion at an annual rate, much larger than the $3.7 billion increase economists had been expecting. Analysts are expecting consumer borrowing to slow in coming months, reflecting the slowdown that has already occurred in consumer spending.
http://news.yahoo.com/s/ap/20060807/ap_on_bi_go_ec_fi/consumer_credit;_ylt=AoOjIXTafyvS0jZw7.kYaNuyBhIF; _ylu=X3oDMTA0cDJlYmhvBHNlYwM-

[Fivetears]

Fed may pause rate rises
WASHINGTON - U.S. Federal Reserve policy-makers on Tuesday may break the chain of interest-rate rises they began two years ago but economists say this won't necessarily mean they are laying down arms against inflation. The U.S. central bank faces a multi-pronged dilemma, trying to calibrate the eventual impact of past policy actions on a slowing economy that is simultaneously under pressure from rising energy and labor costs.
http://news.yahoo.com/s/nm/20060808/bs_nm/economy_fed_dc;_ylt=AjtcC5JbSILShMQ3PQElLHyyBhIF;_ ylu=X3oDMTA0cDJlYmhvBHNlYwM-

[Fivetears]

Wal-Mart increases starting pay, adds wage caps
Wal-Mart Stores is raising starting pay at a third of its nearly 4,000 U.S. stores an average 6% and introducing wage caps for the first time on each type of job in all stores, the company said Monday. The nation's largest private employer said the changes would help it remain competitive with other retailers and meet a need for workers and managers as it continues to expand. Wal-Mart has more than 1.3 million U.S. employees, who it refers to as associates. The retailer's pay and benefits have been under fire from union-backed critics, who call them skimpy. Wal-Mart has defended its average full-time hourly wage of $10.11 and launched lower cost health plans this year with premiums as low as $11 a month in some areas. The retailer did not specify the new starting rates or give examples for the new pay caps. Simley said the numbers vary too much by local market conditions across the country to provide an accurate average figure.
http://www.usatoday.com/money/industries/retail/2006-08-07-walmart-pay_x.htm

[Fivetears]

Productivity growth slows in the spring
WASHINGTON - The efficiency of American workers slowed sharply in the spring while a key gauge of labor costs rose at the fastest rate since late 2004. The Labor Department reported that productivity — the amount of output per hour of work — slowed to an annual rate of increase of 1.1 percent in the April-June quarter, down from a 4.3 percent rate of increase in the first three months of the year. Productivity is the key factor determining rising living standards. Strong growth in output allows businesses to pay their workers more without having to raise the cost of their products, which fuels inflation. The growth in productivity is often cited by the Federal Reserve as a reason that inflation pressures have been contained. But the combination of slowing productivity and rising labor costs is a recipe for rising inflation pressures down the road.
http://news.yahoo.com/s/ap/20060808/ap_on_bi_go_ec_fi/economy;_ylt=AhnNPerdO1kGEU2xls8VGIayBhIF;_ylu=X3o DMTA2Z2szazkxBHNlYwN0bQ--

[Pilgrim]

I think the data released this morning on slowing productivity and rising labor costs was available to the Fed at the start of their meeting yesterday. It greatly increases the chances that an announcement of a "pause" will be accompanied by harsh inflation rhetoric. Wish I had stayed all G for today.

[Fivetears]

Gas Prices Inch Up to Hit Another High
CAMARILLO, Calif. - Nationwide gas prices hit yet another record in the last three weeks, rising just over one cent to nearly $3.03 per gallon, according to a survey released Sunday. The national average for self-serve regular stood at $3.025 a gallon Friday, up 1.06 cents since July 21, according to the Lundberg Survey of 7,000 gas stations across the country.
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=AP&Date=20060813&ID=5943142

[Fivetears]

Wall Street is back on inflation watch
NEW YORK - Investors got their long-awaited pause in interest rate hikes from the Federal Reserve last week. But perhaps they should've looked up the definition of the word "pause" before wishing so hard. In reality, they were looking for a stop. The Fed, didn't give Wall Street the sense of finality it was looking for. There are still inflationary pressures in the market, according to the Fed. If they increase, then the pause could last just five more weeks, until September's Fed meeting. While it's now more likely that the Fed will hold off, never underestimate Fed Chairman Ben Bernanke's fervor in trying to quash inflation. Investors are back on inflation watch, parsing each day's economic data in an attempt, vain as it likely will be, to predict the Fed's next move. Unfortunately, that's likely to mean more up-and-down trading and a market trapped in the same trading range it's been in all summer.
http://news.yahoo.com/s/ap/20060813/ap_on_bi_ge/wall_street_week_ahead;_ylt=Ap0GtxMJnBAnPzyKS1kOTO eyBhIF;_ylu=X3oDMTA2Z2szazkxBHNlYwN0bQ--

[Fivetears]

Homeowners say "Downsize Me!"
NEW YORK - Americans are carrying a lot of excess weight and desperately want to slim down. No, not their waistlines -- in the size of their homes. "Steeply deteriorating." "Hard landing." "Kaput." These are some of the terms used by analysts to describe the slowing of the U.S. housing market. And with the glory days of home-price appreciation now over, some homeowners are declaring, "Downsize Me!" A huge gap between the supply of homes for sale and demand for housing means prices are leveling off -- and could tumble.
http://news.yahoo.com/s/nm/20060813/bs_nm/bizfeature_downsize_dc;_ylt=AhUxtehLAp7tncx5QyC71J CyBhIF;_ylu=X3oDMTA0cDJlYmhvBHNlYwM-

[Fivetears]

Alaska Remains Heavily Dependent on Oil
BP PLC's decision last week to shut down part of the nation's largest oil field shows just how dependent the state has grown on oil, and how much it has to lose if the industry slips up. Alaska receives 89 percent of its income from oil revenue, and the state has no state sales tax and no personal income tax. Economist Patrick Burden also estimates that about a third of the state's overall economy is fueled by the oil industry. Another third is powered by state government, while the rest comes from other industries. Experts say the net effect of the oil industry on the large, sparsely populated state is huge. The industry, which drew workers here decades ago to build the massive trans-Alaskan pipeline, has continued to supply high-paying jobs that, in turn, feed spending in the service economy and other areas. Without oil, Alaska "would be a very, very small economy with limited infrastructure and vastly fewer people," said Burden, who is president of Northern Economics. Alaskans got a taste of what life without oil might look like last week, when Gov. Frank Murkowski instituted a state hiring freeze just days after BP said it would have to shut down the Prudhoe Bay oil field it operates because it had discovered leaks and severe corrosion in oil pipelines there.
http://biz.yahoo.com/ap/060813/oil_field_economy.html?.v=5

[Fivetears]

Economic Calendar
Aug 15
ICSC-UBS Store Sales (wk8/12 , 2006)
NY Empire State Index (Aug , 2006)
Producer Price Index (Jul , 2006)
Redbook (wk8/12 , 2006)
Treasury International Capital (Jun , 2006)
NAHB-WF Housing Market Index (Aug , 2006)
Aug 16
MBA Purchase Applications (wk8/11 , 2006)
Housing Starts (Jul , 2006)
Consumer Price Index (Jul , 2006)
Industrial Production (Jul , 2006)
Full list: http://money.cnn.com/markets/IRC/

[Fivetears]

Producer prices barely rise in July
WASHINGTON - U.S. producer prices barely edged up in July, kept in check by lower prices for new cars and trucks and for many food items, according to a Labor Department report on Tuesday showing muted inflation at the wholesale level. The department's producer price index -- a gauge of prices received by farms, factories and refineries - rose 0.1 percent following a 0.5 percent jump in June. So-called core producer prices, which exclude volatile food and energy items, declined 0.3 percent last month after a 0.2 percent June gain. The figures came in well below Wall Street analysts' forecasts for a 0.4 percent climb in wholesale prices and for a 0.2 percent gain excluding food and energy items.
http://news.yahoo.com/s/nm/20060815/bs_nm/economy_prices_dc_2

[Fivetears]

Inflation rises on wholesale level
WASHINGTON - Inflation at the wholesale level edged up by the smallest amount in five months in July as falling food prices helped offset another rise in energy costs. The Labor Department reported that wholesale prices increased a slight 0.1 percent in July, far below the 0.5 percent jump in June. The improvement reflected a retreat in food prices, which fell by 0.3 percent in July, after having surged by 1.4 percent in June, which had been the biggest increase in nearly
http://news.yahoo.com/s/ap/20060815/ap_on_bi_go_ec_fi/economy_3

[Fivetears]

Retail earnings mixed
NEW YORK - Wal-Mart Stores Inc. and BJ's Wholesale Club Inc. posted lower quarterly profits on Tuesday, and Home Depot Inc. gave a disappointing forecast, reigniting worries about a spending slowdown in the face of higher energy prices. Wal-Mart, the world's biggest retailer, reported a 26 percent drop in quarterly profit -- its first earnings decline in more than 10 years -- because of a charge for selling its German stores to a rival. The company also forecast a third-quarter profit that could fall below Wall Street expectations. Home Depot Inc., the world's largest home improvement retailer, posted a 5 percent rise in second-quarter profit, but softened its sales and earnings growth outlook for this year, as the U.S. housing market cools.
http://news.yahoo.com/s/nm/20060815/bs_nm/retail_earnings_dc_1

[Fivetears]

Inflation Gives Signs of Slowing
The government’s latest report on consumer prices, issued yesterday, suggests that inflation is slowing. The overall rise came to a seasonally adjusted 0.4 percent in July, mainly because of a surge in gasoline prices and in the monthly cost of renting a home, even as the housing market itself deteriorated. Nothing else went up very much, the government reported, and apparel prices plunged because of deep discounts in women’s summer clothing as retailers sought to work down inventories.
http://www.nytimes.com/2006/08/17/business/17price.html?ex=1313467200&en=880cdde42b2e7625&ei=5089&partner=rssyahoo&emc=rss

[Fivetears]

U.S. housing starts fall 2.5% in July
Housing starts, tracking the nation's rate of construction on new homes, fell 2.5% last month to 1.8 million on a seasonally adjusted annual basis, the Commerce Department said Wednesday. This marked the fifth decline in housing starts in the last six months. It's the lowest level since November 2004. Economists surveyed by MarketWatch had been looking for a smaller decline, to about 1.82 million starts in July. Meanwhile, building permits -- an indicator that foreshadows future construction activity -- plunged 6.5% to 1.75 million annual units for July. This was the sixth straight monthly decline and the largest drop seen since September 1999. Permits are at their lowest level since August 2002.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BB29F8B8D%2DC526%2D44CC%2D9D27%2 DB4D4B1CFBD22%7D&siteid=yhoo&dist=

[Fivetears]

Top 10 areas at risk for mortgage-rate shock
"The Impending Rate Shock: A study of home mortgages in 130 American cities," the top 10 areas most at risk for "rate adjustment shock" include Detroit and Flint, Mich.; Memphis, Tenn.; Jackson, Miss.; McAllen, El Paso, Laredo and Brownsville, Texas; Springfield, Ill.; and Birmingham, Ala. ACORN is an acronym for Association of Community Organizations for Reform Now and it advocates for low- and moderate-income families. High-cost loans represented more than two of every five home-purchase and refinance loans in the 10 communities most at risk, ACORN said in a news release. Adjustable-rate mortgages account for 24% of all home loans nationwide, according to the report, but ARMs made up three-fourths of all subprime home loans in 2005. In 1999, half of all subprime loans were ARMs. Subprime loans are those made to borrowers with blemished credit records and often come with high rates and fees.
http://www.marketwatch.com/News/Story/3fJNX2VCspJ4mWFPwLqRvBZ?siteid=yhoo&dist=TNMostRead

[Fivetears]

Utility output growth more than doubles in July
Utilities increased their output to cool the nation's homes and businesses in July, boosting overall industrial output by 0.4%, the Federal Reserve said Wednesday. Output at U.S. factories increased 0.1%. The report, combined with data about core consumer inflation and housing starts, lessened the likelihood that the Federal Reserve will raise interest rates at their September meeting.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B945DC10B%2D8F4D%2D4B31%2D802B%2 D6F24C8C43A1F%7D&siteid=yhoo&dist=

[Fivetears]

Jobless claims fell in latest week
WASHINGTON - The number of U.S. workers seeking first-time jobless aid fell by 10,000 last week, a government report on Thursday showed, signaling a relatively healthy job market. The Labor Department said the number of initial jobless claims declined to 312,000 in the week ended August 12 from a revised 322,000 in the prior week. That was moderately lower than the 315,000 claims that analysts had forecast in a Reuters poll.
http://news.yahoo.com/s/nm/20060817/bs_nm/economy_dc_6

[Fivetears]

Todays Economic Calendar
Jobless Claims (wk8/12 , 2006)
Leading Indicators (Jul , 2006)
EIA Natual Gas Report (wk8/12 , 2006)
Philadelphia Fed Survey (Aug , 2006)
Money Supply (wk8/7 , 2006)

[Fivetears]

Index of economic indicators falls
NEW YORK - An indicator of future economic activity dipped in July, a private research group reported Thursday, in the latest sign that economic growth is cooling off. The Conference Board, an industry-backed research group based in New York, said its index of Leading Economic Indicators fell 0.1 percent in July from June, following an increase of 0.1 percent in June and a 0.5 percent decline in May. Analysts had expected an increase of 0.1 percent. The index, which is aimed at forecasting economic activity for the following three to six months, stood at 138.1, below its high so far this year of 139.1 in January.
http://news.yahoo.com/s/ap/20060817/ap_on_bi_ge/economy

[Fivetears]

Costly textbooks get a closer look
Concerns over spiraling college textbook prices have prompted state legislators to introduce more than 40 bills and resolutions in 15 states this year. And other states have looked into making textbooks more affordable, the National Association of College Stores says. In June, Congress asked a federal advisory panel to "shed light on this issue." Hearings begin next month; a report is due in May. A report last August by the Government Accountability Office said students could spend as much as $900 a year on new textbooks and supplies. It blames publishers for driving up costs by "bundling" workbooks or CD-ROMs and by making unnecessary updates. Publishers say the report is flawed.
http://www.usatoday.com/news/education/2006-08-16-textbooks-college_x.htm

[Fivetears]

CBO says deficit will drop then climb
WASHINGTON — The Congressional Budget Office on Thursday estimated that the federal deficit will decline to $260 billion this year but will increase to $286 billion next year with total deficits over the next decade put at $1.7 trillion. The $260 billion forecast for the current budget year, which the CBO previewed earlier this month, would represent an improvement from last year's actual deficit of $319 billion. However, the detailed CBO report released Thursday showed that the improvement will be temporary with deficit expected to swell to $1.7 trillion over the next decade.
http://www.usatoday.com/news/washington/2006-08-17-deficit_x.htm

[Fivetears]

Job losses lead to drop in home prices
The loss of manufacturing jobs helped drive down home prices in 26 metro areas between April and June compared with the same period last year, the National Association of Realtors said Tuesday. That's 10 more areas than in the first quarter, and it spotlights how joblessness in industrial states such as Illinois, Michigan, Ohio and Indiana is rippling through housing markets. The hardest-hit this year: Danville, Ill., where prices at which existing homes were sold fell 11% in the second quarter after a 12% drop in the first quarter. The exodus of auto, textile and other factory jobs has a direct effect on home prices. People leave town to look for work, boosting the supply of homes for sale. Others sell their homes because they can't keep up with the mortgage. At the same time, foreclosure rates in these cities are among the highest in the country, and banks are quick to cut prices to get the homes off their books.
http://www.usatoday.com/money/economy/housing/2006-08-15-q2-home-sales_x.htm

[Fivetears]

Data point to slowing economy
WASHINGTON - A weakening U.S. housing market and a steady flow of Americans seeking jobless benefits will help lead to a slowed economy over the coming months, data released on Thursday showed. A key gauge of future economic activity fell unexpectedly for the fourth time this year amid signs of a stalling housing market. Meanwhile, the coincident index -- a measure of current economic activity -- rose 0.2 percent last month, building on a 0.2 percent gain a month earlier. So far this year, this index has logged monthly gains. The leading index measures a basket of economic indicators ranging from unemployment benefit claims to building permits and is intended to forecast economic trends up to six months ahead. According to the Conference Board, half of the 10 indicators that make up the leading index increased in July, but it was mainly a decline in building permits and a steady number of weekly claims for jobless benefits that drove down the index.
http://news.yahoo.com/s/nm/20060817/bs_nm/economy_dc_7

[Pilgrim]

How bad does the immediate future look to Washington insiders if W himself is getting involved? Or do you suppose this is just meaningless election year posturing?

Bush, advisers seek ways to sustain growth - White House eyes slowing economy, mulls strategy, options.

http://money.cnn.com/2006/08/18/news/economy/bc.bush.economy.reut/index.htm

[FundSurfer]

How bad does the immediate future look to Washington insiders if W himself is getting involved? Or do you suppose this is just meaningless election year posturing?

Bush, advisers seek ways to sustain growth - White House eyes slowing economy, mulls strategy, options.

http://money.cnn.com/2006/08/18/news/economy/bc.bush.economy.reut/index.htm

They want a boost to get them through the elections. They want a slow down, just one that starts in January.

[Fivetears]

Best factory growth in 16 months in Philly region
The Philly Fed index rose from 6.0 in July to 18.5 in August, the highest since April 2005. Economists were looking for a slight gain to 7.8 in August, according to a survey conducted by MarketWatch. "Given ongoing strength in the factory sentiment measures into August, and sustained strength in the mix of factory workweek, employment, and overtime data, there is yet little evidence that this sector is responding to the widely assumed '"slowdown,'" said Mike Englund, chief economist for Action Economics.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B01624E30%2D24EC%2D45A9%2DB7F7%2 D34CCB6FE3482%7D&siteid=yhoo&dist=

[Fivetears]

Consumer sentiment fell in early August
NEW YORK - U.S. consumer sentiment dropped more than expected in early August, a report showed on Friday, as consumers' view of current and future conditions declined. The University of Michigan's preliminary reading of consumer sentiment in August was 78.7, down from July's final reading of 84.7, said sources who saw the subscription-only report. The median forecast of Wall Street economists polled by Reuters was for a reading of 83.6. The survey's index of current conditions declined to 100.8 in August from 103.5 in July, while consumer expectations slipped to 64.5 from 72.5 in July. Consumer spending accounts for about two-thirds of U.S. economic activity, but in recent years confidence measures have been a weak guide to actual spending. Consumers' expectations for increased inflation rose in August the report said, according to the sources.
http://news.yahoo.com/s/nm/20060818/bs_nm/economy_consumers_sentiment_dc_1

[Fivetears]

Bush huddles with economic team as growth slows
WASHINGTON - President George W. Bush will wrap up conferring with his economic team on Friday on ways to keep the economy growing against a backdrop of higher interest rates, mixed data and fears of rising inflation. His closed-door meetings with new Treasury Secretary Henry Paulson, Commerce Secretary Carlos Gutierrez and Director of the National Economic Council Allan Hubbard, began on Thursday evening at the Camp David presidential retreat. "The President and his economic team will be talking about the general macroeconomic picture and job growth," White House spokeswoman Dana Perino said. "They will discuss the budget both as a short-term and as a long-term entitlement spending issue," she said. "And they will focus on financial markets and pro-growth tax policy."
Bush is scheduled to speak with reporters at 11:15 a.m. EDT on Friday.
http://news.yahoo.com/s/nm/20060818/bs_nm/bush_economy_dc_1

[Fivetears]

Todays Economic Calendar
Consumer Sentiment
9:50 AM Mich Sentiment-Prel.

[Fivetears]

Next Weeks Economic Calendar
Aug 23 10:00 AM Existing Home Sales Jul
Aug 23 10:30 AM Crude Inventories
Aug 24 8:30 AM Durable Orders Jul
Aug 24 8:30 AM Initial Jobless Claims
Aug 24 10:00 AM New Home Sales

[Fivetears]

Consumer sentiment falls below expectations
NEW YORK - U.S. consumer sentiment dropped more than expected in early August, registering its lowest reading since the aftermath of Hurricane Katrina, a report showed on Friday, as inflation expectations rose. The University of Michigan's preliminary reading of consumer sentiment in August was 78.7, down from July's final reading of 84.7, said sources who saw the subscription-only report. The median forecast of Wall Street economists polled by Reuters was 83.6. U.S. stocks fell while government debt prices rose after the data. The dollar fell against the euro and the yen.
http://news.yahoo.com/s/nm/20060818/bs_nm/economy_consumers_sentiment_dc_2

[The_Technician]

Moskow of the Fed thinks.... rates have room to rise in Sept........
http://money.cnn.com/2006/08/22/news/economy/moskow.reut/index.htm

[Oldcoin]

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1fJS2KdMZWU&refer=home

U.S. Existing Home Sales Fall 4.1% in July to 6.33 Mln Rate

No surprise here, all I have to do is walk around my neighborhood. Lots of houses up for sale and no buyers.

[Fivetears]

The slum lords are buying in Texas; turning formerly decent middle class communities into rental havens. Very sad. :(

[qibovin]

The United States is headed for a recession that will be "much nastier, deeper and more protracted" than the 2001 recession, says Nouriel Roubini, president of Roubini Global Economics.:worried:

"This is the biggest housing slump in the last four or five decades: every housing indictor is in free fall, including now housing prices.":rolleyes:
---

Fed watcher Tim Duy called Roubini the "the current archetypical Eeyore.":D

http://www.marketwatch.com/News/Story/9mQrL6tbQK62XTQ1VjX5zm9?siteid=google&dist=TNMostRead

I came across this article today and thought this would be a great opportunity to try posting a link.

[Fivetears]

Where is Wizard? :nuts:

[Oldcoin]

The slum lords are buying in Texas; turning formerly decent middle class communities into rental havens. Very sad. :(

Yeah, rentals ruin a neighborhood. I don’t understand how someone would not maintain an asset with so much value. But they just let tenants run them into the ground. Go figure!

[CountryBoy]

Hopefully this falls under the “standard 'fair use' is permitted” option for imported posts :confused: , since it is a subscription magazine and a link wouldn’t help. If I’m wrong just let me know and whack this post. And I won't do it again. :D

Below are a few Journal of Commerce quotes from an August 21, 2006 article that I thought might be of interest. Some of this may be old news or maybe even worthless editorializing by the author.

“U.S. economic growth is slowing … cooling housing sector… rising gasoline prices constrain consumer spending. The rest of the global economy, however, remains very solid, with growth likely to pick up a notch this year.”

“… during the first quarter, real GDP grew by a less-than-expected 2.5 percent at a seasonally adjusted annualized rate. … the numbers were even weaker, with final sales up 2.1 percent and final domestic sales rising just 1.6 percent. Overall GDP growth was boosted by exports and non-farm private inventories.”

“On the inflation front, the core PCE deflator - the Fed's favored inflation measure - accelerated to 2.9 percent from 2.1 percent in the first quarter.”

“Robust business spending and improving net exports will help offset the expected drop in residential investment and the slowdown in consumer spending.”

“U.S. export performance has been strong, buoyed by vigorous economic growth abroad and the lagged impact of the dollar's depreciation from 2002 to 2004. With global growth forecast to stay very firm and the dollar expected to resume its downward trend, U.S. exports should remain buoyant. And with import growth declining along with the U.S. slowdown, net exports should add to real GDP growth.”

My thoughts: Strong US exports, I would think, benefits the C and S funds, though probably more just a selected few stocks than the overall fund, but the expected continued downward trend of the US dollar should benefit the I fund. Or maybe this is why the market is kinda schizoid?

Just an engineer speaking here, trying to swim thru these financial waters and probably showing his ignorance in mentioning my thougths. :nuts:

CB

[Show-me]

U.S. housing bust raises odds of recession

bank: 40% chance of 'U.S. hard landing,' National Bank says

Eric Beauchesne, CanWest News Service

Published: Saturday, August 26, 2006
OTTAWA - The odds of a U.S. recession have increased dramatically, economists at a Canadian bank are warning.
And if the United States were to go under, it would require a shift in policies here by governments and the Bank of Canada to keep the Canadian economy from going under too, the National Bank of Canada's chief economist said yesterday.

http://tinyurl.com/gmqpz

[Show-me]

That would require income-tax cuts by the federal and other levels of government and interest-rate cuts by the Bank of Canada, Clement Gignac said after the bank announced that the odds of a U.S. recession have nearly doubled to 40% from the 25% it estimated in the spring.
:blink: :sick: :worried: :blink:

Patricia Croft, chief economist with Phillips, Hager and North Investment Management Ltd., agreed the slump in the U.S. housing market is increasing the risks of a U.S. recession, which would sink Canada's economy as well.
"It's the single biggest risk to the U.S. economy and ... we haven't seen the bottom yet," she said. "There may be a bit of a lag, but if the U.S. goes down we're going down with them."

Ewwwwwwwww.

[pyriel]

Wow, reading from most of these posts, it seems like there will be a housing bubble. Economy will sink taking other countries with it. After all, since our economy is interrelated, if one falls, the other should follow.

My biggest mistake during 2000-2004 when our economy sunk is that I wasn't ready to take the opportunity presented before my eyes. Yes, I made some real estate acquisition but it was nothing compared to other seasoned real estate investors.

My suggestion is for everyone to start monitoring real estate data within your area. Just like stocks they do go up and down. Know when to buy at the lowest and know if the market will be able to sustain growth including the fact that they built too many houses.

Here on Guam, I am in dillema, projection for real estate is scarce for the next five years so everything is going up. This is due to 10k maraines and 15k family members who will relocating here for the next 7-8 years. As you can see, i put down five years because after five years, building housing here will be in full scale and we will start to see housing catching up with the demand.

Now, lets go out there and start studying your real estate market. You do it with your stocks and TSP so it shouldn't be too hard for you to do real estate as well. Good luck everyone and I hope that the economy goes down so that i can purchase more properties for cheaper prices.

PS.... On April, DOD will decide where to station an additional aircraft carrier in the pacific. There are two choices; Guam or Hawaii.... ;-) Kaching!!!!

[Oldcoin]

Very busy week ahead, lots of reports due out.

http://www.marketcenter.com/stocks/rssItem.action?Feed=schaeffer_observations&Id=17214

Some of the more important:

Consumer Confidence Monday at 10:00am,
Crude Inventories and FOMC Minutes Tuesday,
Factory Orders Wednesday,
Durable Orders, Initial Claims and New Home Sales Thursday and
Auto and Truck Sales, Nonfarm Payroll and Unemployment Rate Friday.

Whew!

[Oldcoin]

Another discussion of this weeks events and if we are headed into a recession.

http://www.marketcenter.com/news/story.action?id=RTT608260533000005

[Fivetears]

Economic Slowdown? Not For Earnings
Despite growing talk of an economic slowdown, Wall Street analysts remain bullish about corporate profits. Reports of plunging home sales fanned fears of a major impact on consumer spending. Lowe's, Williams-Sonoma and other chains stoked those concerns by forecasting weak second-half outlooks. Retail stocks sold off. But the overall market suffered modest losses. S&P 500 companies' profits are expected to rise 14.7% in the third quarter vs. a year ago, the 13th straight double-digit gain.
http://news.yahoo.com/s/ibd/20060828/bs_ibd_ibd/2006828general

[Oldcoin]

I just checked the two links above and they are not working. Sad thing is….I don’t know how to make them work. So if you didn’t get to the site yesterday, well I don’t think you’re going to. I’ll have to work on this.

[grandma]

I just checked the two links above and they are not working. Sad thing is….I don’t know how to make them work. So if you didn’t get to the site yesterday, well I don’t think you’re going to. I’ll have to work on this.

Are you sure the second one is a complete address? It gives the appearance of something wrong at the last 1/3rd.

The first one worked for me this morning.

[Oldcoin]

Are you sure the second one is a complete address? It gives the appearance of something wrong at the last 1/3rd.

The first one worked for me this morning.

I always test them after I post, and a day later. After that it’s old news. Both worked on the day I posted. The second one did work, but didn’t go to the same place. I think that web site changes the links or something. I don’t think I’ll post from their site anymore.

[Oldcoin]

Okay, I'm going to try again,

GDP released at 8:30 shows the economy slowing. Futures popped up after the release.

http://www.bloomberg.com/apps/news?pid=20601087&sid=agTimGCLVx3s&refer=home

Gee, I hope that works!

[Oldcoin]

Yellers' remarks today.

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

[mayday]

Why is the price of gas going down? Could it be that big oil thought that the little guy would just go about his merry way and not change his driving habits or trade in his hoopty for a more efficient vehicle. How does this trickle down and effect big oils bottom line? Anybody have any thoughts about how this will effect the market? US car industry? Salaries?Unemployment? Mayday

[Spaf]

We are leaving the summer driving season. The US is very vulnerable to the energy sector, markets, cars, etc. We feel better when we stop hitting ourselves!.........:embarrest:


Why is the price of gas going down? Could it be that big oil thought that the little guy would just go about his merry way and not change his driving habits or trade in his hoopty for a more efficient vehicle. How does this trickle down and effect big oils bottom line? Anybody have any thoughts about how this will effect the market? US car industry? Salaries?Unemployment? Mayday

[mayday]

Cheap gas is good for the economy shipping is cheaper. Goods tend to follow. But has the damage been done to the auto industry like FORD GM lay-offs shifts eliminated. What about the cities where these plants are located the people layed off the housing market in those areas. Can it turn around? Is it too late. Or is the damage beyond a fix. I'm wondering if gas prices are in the political arena.Mayday

[Spaf]

The small business were hurting by rising transportation costs. Car-makers have to vision fuel efficiency. And, housing was in a mortgage bubble!

The market/economy is like a train. The train is ready, tracks are still clear, but the engineer has a hang-over!


Cheap gas is good for the economy shipping is cheaper. Goods tend to follow. But has the damage been done to the auto industry like FORD GM lay-offs shifts eliminated. What about the cities where these plants are located the people layed off the housing market in those areas. Can it turn around? Is it too late. Or is the damage beyond a fix. I'm wondering if gas prices are in the political arena.Mayday

[mayday]

So who stands to gain and who to lose? The oil companies want us to buy a lot of gas. So they drop the price so we can buy a hummer. The goverment wants us to buy a lot of gas so they can pocket the tax. More revenue on 8 miles a gallon. But the average joe is'nt buying the big guzzeler anymore. Big oil loses government loses. US automakers lose Japan wins. The blue-coller worker loses. Tax base in cities with plant lose that cities housing market tanks.What can save us from ourselves?

[Birchtree]

Iran is now in the car making business. As a selling point they will be offering to the young and upcoming Jihadist a built in push button models that will on demand blow his young a$$ straight to Allah or Satan. Great marketing potential.

[mayday]

Birchtree You got a belly laugh out of me. There is a reason for my rant. I live in Louisville KY. where two Ford plants employing 8900 people currently opporate. The announcement is today that will determine which two plants in the US will shut down. We are on the table and I have friends who are at risk of the pink slip. I do like your sence of humor thou. Mayday

[Fivetears]

CPI, output data point to moderating inflation
WASHINGTON - Data released on Friday showed the U.S. economy slowing with inflation in check last month, providing further support for the Federal Reserve to hold interest rates steady when it meets next week. The Labor Department said prices at the consumer level rose a slight 0.2 percent in August. The core rate, excluding often-volatile food and energy costs, also rose 0.2 percent. Another report showed industrial output fell unexpectedly last month for the first time since January, providing fresh evidence of a cooling economy. In addition, a consumer sentiment survey showed moderating inflation expectations ahead of the Fed's policy meeting on Wednesday. The data reinforced expectations in financial markets that the central bank would hold benchmark borrowing costs steady next week and through the end of the year.
http://news.yahoo.com/s/nm/20060915/bs_nm/economy_dc_3

[Fivetears]

Stocks surge near 2006 highs after tamer CPI
NEW YORK - Stocks rallied on Friday, with the Dow and the S&P 500 closing near 2006 highs, as investors bet that the Federal Reserve won't raise interest rates next week following tamer August inflation data and the recent drop in crude oil prices. Shares of economic bellwethers such as diversified manufacturers United Technologies Corp. and 3M Co. and aerospace and industrial conglomerate Honeywell International Inc. led the Dow higher on expectations that if the Fed holds rates steady, borrowing costs will fall and underpin economic growth and profits.
http://news.yahoo.com/s/nm/20060915/bs_nm/markets_stocks_dc_31

[Fivetears]

Consumer sentiment picks up in September
UMich survey rose to 84.4 vs 82.0 in previous month
The initial September reading of the UMich consumer sentiment index rose to 84.4 from 82.0 in August. Sentiment had picked up in the last part of August as gasoline prices declined. The improvement was larger than expected. Economists were expecting the index to rise to about 83.6, according to a survey conducted by MarketWatch. All of the improvement came in consumers' expectations six months ahead. The expectations index rose to 77.1 from 68.0. This is the highest level since January. The current conditions index fell to 95.7 from 103.8 in August. This is the lowest level since October. Long-term inflation expectations fell. The five-year inflation expectation fell to 2.9% in September from 3.2% in August. In other reports released Friday, the Labor Department said core inflation rose 0.2% in August. The Federal Reserve also released industrial production data for August, which showed a 0.1% decline.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BC2D7897D%2DB066%2D4862%2DBBC0%2 DBAFF5575737E%7D&siteid=yhoo&dist=

[Fivetears]

Economic Calendar for 18 - 21 September
Monday
Sep 18 8:30 AM Current Account
Sep 18 9:00 AM Net Foreign Purchases

Tuesday
Sep 19 8:30 AM Building Permits
Sep 19 8:30 AM Core PPI
Sep 19 8:30 AM Housing Starts
Sep 19 8:30 AM PPI

Wednesday
Sep 20 10:30 AM Crude Inventories
Sep 20 2:15 PM FOMC Policy Statement

Thursday
Sep 21 8:30 AM Initial Claims
Sep 21 10:00 AM Leading Indicators
Sep 21 12:00 PM Philadelphia Fed

Friday
Open

[Fivetears]

California jobless rate rises to 4.9 percent
OAKLAND - California's unemployment rate rose slightly in August to 4.9 percent, but the state also added 37,000 non-farm jobs, leading Gov. Arnold Schwarzenegger to boast on Friday that his economic policies are working. The August jobless rate compared with 4.8 percent in July, and 5.2 percent a year earlier, according to the state's Employment Development Department. Despite the monthly rise, unemployment in the most populous U.S. state has steadily fallen since peaking at 6.9 percent in October 2003 --just before Schwarzenegger, a Hollywood superstar, became governor in an unprecedented election that recalled his predecessor midterm.
http://news.yahoo.com/s/nm/20060915/bs_nm/economy_california_dc

[Fivetears]

Home Depot Is Hiring 1,000 New Employees As Part of Store Reinvestment Program
ATLANTA - The Home Depot Inc., the nation's largest home improvement store chain, says it is hiring more than 1,000 new employees across the country as part of its latest effort to improve its stores. The Atlanta-based company said in a hiring advisory it issued Monday that it is seeking in particular applicants with specialty, skilled trades and professional contracting backgrounds for full-time and part-time jobs in numerous departments. The hiring is part of Home Depot's plan to invest another $350 million in its stores during the second half of this year, as it tries to improve customer service amid a slowing economy.
http://biz.yahoo.com/ap/060918/home_depot_jobs.html?.v=3

[Fivetears]

Current Account Trade Deficit Climbs to 2nd Highest Level in History
WASHINGTON - America's deficit in the broadest measure of foreign trade increased in the spring to the second highest level in history, reflecting a big jump in payments for foreign oil. The Commerce Department reported Monday that the deficit in the current account rose to $218.4 billion in the April-June quarter, an increase of 2.4 percent over the deficit in the first three months of the year. The current account is the broadest measure of foreign trade because it covers not only trade in goods and services but also investment flows between countries. The deficit represents the amount the United States must borrow from foreigners to cover the shortfall between exports and imports.
http://biz.yahoo.com/ap/060918/economy.html?.v=3

[Fivetears]

Understanding Economic Data: Current Account
Investors are constantly deluged by releases of new economic data. Although many market commentaries refer to these releases as though they explain why the stock market rose or fell on that particular day, few of them explain what the releases mean in and of themselves. Many professional economists make predictions about what they believe a particular release of economic data will indicate, and journalists point to the fact that a particular number was better or worse than expected as a major factor in the market's movement. New information does give investors guidance in evaluating their strategies, so it makes sense that any new data may move market prices. However, it's important to understand the implications that a set of new economic data has on the overall economy. For instance, today's release of the U.S. current account figures for the second quarter of 2006 will undoubtedly find its way into many news stories. To understand more clearly what the current account figures indicate about the U.S. economy, on the other hand, you have to go beyond the news stories and learn about what the figures themselves mean.
http://biz.yahoo.com/fool/060918/115858576701.html?.v=1

[Fivetears]

CEOs see slowing economic growth: survey
BOSTON - High energy prices and interest rates have dimmed U.S. chief executive officers' view of the economy, according to a quarterly survey released by the Business Roundtable on Monday. The survey found that top CEO's expectations for economic growth over the next six months have dipped to their lowest level in three years. Its CEO Economic Outlook Index dropped sharply to 82.4 in September from the second-quarter reading of 98.6, for a second consecutive quarterly decline. The survey pool includes Roundtable members -- CEOs from large U.S. companies. Any number higher than 50 indicates economic expansion.
http://news.yahoo.com/s/nm/20060918/bs_nm/economy_businessroundtable_dc_3

[Fivetears]

Costly oil pushes up US deficit
Record oil import costs have pushed the US current account deficit to $218.4 billion in the second quarter, a 2.4% increase on the previous period. The deficit is the broadest measure of US global trade, including investment flows and trade in goods and services. With world oil prices above $70 a barrel for much of this year, the cost of buying oil pushed import values up 2% to $463.4bn between April and June. The deficit is equivalent to 6% of total US economic output.
http://news.bbc.co.uk/2/hi/business/5356942.stm

[Fivetears]

Lower gas prices may jump-start economy, force Fed to raise rates
WASHINGTON — The recent, sharp decline in gasoline prices may help consumers, but it also may stoke inflationary fires, perhaps forcing the Federal Reserve to raise interest rates again later this year, according to some economists, such as those at Merrill Lynch and the Bank of Tokyo-Mitsubishi. The argument: If consumers spend the cash in their wallets left over after filling up their gas tanks, the economy may speed up and businesses will have greater power to raise prices. That could lead to higher inflation — not lower as some may expect — and renewed action from the Fed.
http://www.usatoday.com/money/economy/fed/rates/2006-09-18-gas-fed_x.htm?csp=N008

[Fivetears]

Housing construction down 6 pct. in Aug.
WASHINGTON - Housing construction plunged in August, falling to the lowest level in more than three years as the once-booming industry showed further signs of a dramatic slowdown. The Commerce Department reported Tuesday that construction of new homes and apartments fell by 6 percent, the third consecutive decline and a much bigger setback than analysts had been forecasting.
http://news.yahoo.com/s/ap/20060919/ap_on_bi_go_ec_fi/economy

[Fivetears]

Economists wary of falling energy prices
WASHINGTON - It should only be this simple: Oil prices plunge 20 percent, leading businesses and consumers to ramp up their spending, which gives a nice jolt to the economy. That seems to be the conventional wisdom on Wall Street right now, where the pullback in energy prices is being cheered by investors. But some contrarians think that view could be missing the point. While the decline in prices will provide some relief to motorists, it also reflects the country's weakening economic outlook. In other words, any benefit from falling pump prices may be outweighed by higher interest rates and a stagnating real-estate market.
http://news.yahoo.com/s/ap/20060919/ap_on_bi_ge/energy_economy

[Fivetears]

Household wealth up, debt growth slows
WASHINGTON - The net wealth of U.S. households rose in the second quarter but domestic debt grew at the slowest pace since the first quarter of 2002 as household mortgage and business debt growth moderated, the Federal Reserve said.
http://news.yahoo.com/s/nm/20060919/bs_nm/economy_wealth_dc

[Fivetears]

Dismal Philly Fed survey darkens economic view
NEW YORK - A surprise drop in regional factory activity reported on Thursday suggested that the U.S. economy may be losing momentum faster than most economists anticipated, stunning financial markets on the view that the Federal Reserve may soon have to cut interest rates to avoid a downturn. The sluggishness was also seen in a forward-looking economic gauge released early in the day, which hit its lowest level in nearly a year, sending fears of an economic slowdown through financial markets. In the regional factory report, the Philadelphia Federal Reserve Bank said its business activity index tumbled to -0.4 in September from 18.5 in August, far below Wall Street economists' consensus forecast for a reading of 14.8. It was the first time the index had fallen below zero since April 2003. When the index turns negative, it means manufacturing is declining.
http://news.yahoo.com/s/nm/20060921/bs_nm/economy_dc_5

[Pilgrim]

From Marketwatch late this morning:

http://www.marketwatch.com/news/story/story.aspx?guid=%7B41E5E86A-D270-45E1-B576-9E6B9B8EDBEE%7D

"The bond market is screaming that the economic slowdown will be a lot worse than a soft landing," said Barry Hyman, equity market strategist at EKN Financial Services.
"If the slowdown turns out worse than expected, Hyman said, corporate earnings would be negatively impacted."

I love understatement, it is always the best way to make a point. "negatively impacted"?? I suppose it will be that and then some.

[Fivetears]

Stocks fall on economic worries, but H-P up late
NEW YORK - Stocks fell on Friday as investors worried that the economy will slow more sharply than expected, prompting them to sell shares of big industrial companies such as heavy equipment maker Caterpillar Inc. Among the top negative influences on the Dow were large manufacturers Caterpillar and Honeywell International Inc. The anxiety triggered by the Philadelphia Federal Reserve Bank report on Thursday, which showed surprising weakness in the mid-Atlantic region's factory activity, increased investors' concerns about the health of the economy and corporate profits. After the close, Hewlett-Packard Co said Chairman Patricia Dunn has resigned, effective immediately, and its stock rose 1 percent to $35.46 in electronic trading.
http://news.yahoo.com/s/nm/20060922/bs_nm/markets_stocks_dc_65

[Fivetears]

Dow ends down 25 on economic pessimism.
The market was caught off guard Thursday by a report from the Federal Reserve Bank of Philadelphia that showed regional manufacturing activity fell to a negative reading for the first time in more than three years. Prior to the manufacturing data, the Dow Jones industrial average had been within 100 points of its January 2000 high of 11,722.98 following the Fed's widely expected decision on short-term interest rates. "I think the markets are all of a sudden worried about slower growth," said Dean Junkans, chief investment officer for Wells Fargo Private Client Services. "I wouldn't put as much emphasis on one number as the market seems to have done in the last couple days," he said, referring to the Philadelphia Fed figure.
http://news.yahoo.com/s/ap/20060922/ap_on_bi_st_ma_re/wall_street;_ylt=AlgWKQYW2ezx2_H5IQrDekeyBhIF;_ylu =X3oDMTA2Z2szazkxBHNlYwN0bQ--

[Fivetears]

Treasuries rise amid US growth fears.
US Treasuries rallied on Friday for a second consecutive session and yields fell to fresh six-month low points on evidence that a slowdown in the US economy was gathering pace. A dramatic fall in an important regional sentiment survey published on Thursday prompted investors to buy bonds amid heightened expectations that the US Federal Reserve could begin cutting interest rates early next year.
http://news.yahoo.com/s/ft/20060922/bs_ft/fto092220061736588359;_ylt=ApuJ5T_W161C4idmCsE2Koi yBhIF;_ylu=X3oDMTA0cDJlYmhvBHNlYwM-

[Fivetears]

Home sales edge down, prices drop
WASHINGTON - The pace of existing home sales in the United States fell for a fifth straight month in August and prices dropped from year-ago levels for the first time in 11 years, a U.S. realtors group said on Monday. Still, some economists said they saw signs the housing market was beginning to stabilize as the decline in sales showed some signs of leveling off. The National Association of Realtors said existing homes sales slipped to an annual rate of 6.30 million units from 6.33 million in July.
http://news.yahoo.com/s/nm/20060925/bs_nm/economy_homes_dc_7

[Fivetears]

Fed's Fisher says economy solid, wary on prices
MONTERREY, Mexico (Reuters) - A top U.S. Federal Reserve official said on Monday the economy is doing well but inflation remains a concern, in remarks that challenge views the central bank will cut interest rates early next year. "Inflation remains elevated and leaves us small choice but to remain vigilant," Federal Reserve Bank of Dallas President Richard Fisher told a pubic forum here, hosted jointly by his institution and the Banco de Mexico. "It is my considered judgment that the recent tempering of U.S. economic growth to a more sustainable rate, combined with the lagged effects of our 17 prior quarter-(percentage-)point rate increases, should act to lower the inflation rate over time. However, if this proves not to be the case, appropriate action will have to be taken," he said. Fisher is not a voting member of the Fed's policy-setting committee this year or next.
http://news.yahoo.com/s/nm/20060925/bs_nm/economy_fed_fisher_dc;_ylt=AolYvNyl69IyPxo8WHQIpaO yBhIF;_ylu=X3oDMTA0cDJlYmhvBHNlYwM-

[Fivetears]

Dow ends up 68 on Fed official's remarks
NEW YORK - Stocks rose smartly Monday after Dallas Federal Reserve President Richard Fisher suggested inflation would be dampened by a slowing economy and said that while the housing and auto sectors are economic weak points, the rest of the U.S. economy is doing "extremely well."
http://news.yahoo.com/s/ap/20060925/ap_on_bi_st_ma_re/wall_street;_ylt=At4LEP1VFsT6PwoD8tTN7_WyBhIF;_ylu =X3oDMTA2Z2szazkxBHNlYwN0bQ--

[Fivetears]

Construction job market's still robust
WASHINGTON — Though new-home sales have plummeted 20% from a year ago, U.S. construction employment is still up 3%. But the solid jobs news might not last. More than 7.52 million U.S. workers were employed in construction in August on a seasonally adjusted basis, up from 7.31 million in August 2005 and 7.46 million in January, according to the Labor Department. Construction employment is a million above 1999. The job market is being supported, in part, by a surge in commercial and public works projects. But residential construction hiring also rose in July and August. The national numbers obscure regional differences. In California, where the housing market is slowing, construction employment slid by about 4,000 in August. Still, in Arizona, where the housing market is also cooling, employment is up.
http://www.usatoday.com/money/economy/employment/2006-09-24-jobs-usat_x.htm?csp=N009

[Fivetears]

Existing-Homes Sales Data Show Welcome Correction or Burst Bubble?
Sales of previously owned homes in the U.S. fell less than expected in August to a 6.30 million annual rate, a 0.5% decrease from July's unrevised 6.33 million annual pace, as prices fell compared with a year earlier, the National Association of Realtors said. The median home price was $225,000 in August, compared with a revised $230,000 in July. Last month marked the first year-to-year median price decline since April 1995, and it was the second biggest in the survey's 38-year history. Inventories of unsold homes rose to 3.92 million, a 7.5-month supply at the August sales pace, the most since April 1993. Economists weigh in on whether the housing slowdown is coming to a close or just beginning.
http://online.wsj.com/public/article/SB115919845097273143-sZ1cwZvNFXPFyy63RK_7ekWY5fM_20070925.html?mod=tff_ main_tff_top

[Fivetears]

Economic Mythology
There's an enduring modern myth among investors that the economy is about to collapse because consumers are going to stop spending. Like all myths, this one starts with a grain or two of truth, and then embellishes that grain until it's a preposterous mountain. These mythical mountains are dangerous only if you believe them.
http://foxnews.smartmoney.com/aheadofthecurve/index.cfm?story=20060922

[Fivetears]

Economic Calendar for 25 - 29 September

Monday
Sep 25 10:00 AM Existing Home Sales

Tuesday
Sep 26 10:00 AM Consumer Confidence

Wednesday
Sep 27 8:30 AM Durable Orders
Sep 27 10:00 AM New Home Sales
Sep 27 10:30 AM Crude Inventories

Thursday
Sep 28 8:30 AM Chain Deflator-Final
Sep 28 8:30 AM GDP-Final
Sep 28 8:30 AM Initial Claims
Sep 28 10:00 AM Help-Wanted Index

Friday
Sep 29 8:30 AM Personal Income
Sep 29 8:30 AM Personal Spending
Sep 29 9:50 AM Mich Sentiment-Rev.
Sep 29 10:00 AM Chicago PMI

[Fivetears]

Survey Says U.S. Down in Competitiveness
GENEVA - U.S. economic competitiveness fell significantly over the last year, as high budget and trade deficits hurt America's business environment, according to a survey released Tuesday by the World Economic Forum. The disappointing response to Hurricane Katrina, government corruption and a decreasing talent pool for employment due to immigration restrictions were other factors cited by the forum, which moved the United States to sixth in its "global competitiveness index" from the top spot a year ago.
http://biz.yahoo.com/ap/060926/global_economic_competitiveness.html?.v=4

[Fivetears]

Consumer Confidence Higher Than Expected
NEW YORK - Falling gasoline prices helped brighten the mood of American shoppers in September, sending a gauge of consumer sentiment higher than analysts expected. The New York-based Conference Board said Tuesday that its consumer confidence index rose to 104.5 from a revised reading of 100.2. in August. Analysts had expected the index to rise to 103. The reading, the highest since July's 107, followed a big dip in August, when employment worries dragged down consumer sentiment. The private research group's Present Situation Index, which measures how shoppers feel now about economic conditions, rose to 127.7 from 123.9. Its Expectations Index, which measures consumers' outlook over the next six months, rose to 89.0 from 84.4 last month.
http://biz.yahoo.com/ap/060926/economy.html?.v=10

[Fivetears]

New worry: A hard 'soft landing'
NEW YORK - Economists agree: It's time to shut off electronic devices, put up tray tables and return your seat to an upright position. And some say it might not be a bad idea to put your head down between your legs. The economy is coming in for a landing. Optimists say it will be the much sought after "soft landing" when the economy slows but doesn't skid into recession. But some economists now are forecasting a bumpy landing, or even worse. The risk of an outright recession is rising due to the sharp slowdown in the housing market and a downturn in auto sales - two key sectors that may already be in recession themselves. Thursday's government report on gross domestic product, the broadest measure of the economy, showed growth slowed to a 2.6 percent rate in the second quarter, down from the 2.9 percent rate estimated a month ago and 5.6 percent in the first quarter. More weakness in housing, coupled with reduced corporate profits, especially for smaller businesses, were the key reasons for the downward revision. But the lower GDP reading isn't the only sign the economy is facing tougher times ahead.
http://money.cnn.com/2006/09/28/news/economy/bumpy_landing/index.htm

[Fivetears]

GDP softens in second quarter
WASHINGTON - Pace of U.S. economic growth falls short of expectations to revised annual rate of 2.6%, hurt by weakened corporate profits. A cooling housing market helped slow GDP growth in the second quarter more than earlier estimated, the government reported on Thursday, and may curb economic expansion for the rest of the year. With November congressional elections on the horizon, a top White House official played down worry about a lasting broad-based economic slowdown. However, some analysts said weaker home sales, prices and building cast a shadow over longer-term prospects.
http://money.cnn.com/2006/09/28/news/economy/gdp.reut/index.htm

[Fivetears]

Economic Calendar for 02 - 06 October

Monday
Oct 2 10:00 AM Construction Spending
Oct 2 10:00 AM ISM Index

Tuesday
Oct 3 12:00 AM Auto Sales
Oct 3 12:00 AM Truck Sales

Wednesday
Oct 4 10:00 AM Factory Orders
Oct 4 10:00 AM ISM Services
Oct 4 10:30 AM Crude Inventories

Thursday
Oct 5 8:30 AM Initial Jobless Claims

Friday
Oct 6 8:30 AM Average Workweek
Oct 6 8:30 AM Hourly Earnings
Oct 6 8:30 AM Nonfarm Payrolls
Oct 6 8:30 AM Unemployment Rate
Oct 6 3:00 PM Consumer Credit

[Show-me]

AP
Bernanke: Baby Boomers Will Strain U.S.
Wednesday October 4, 7:34 pm ET
By Jeannine Aversa, AP Economics Writer Fed Chairman Ben Bernanke: Baby Boomers Retirement Will Place Massive Strains on U.S.
WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke said Wednesday the burden from retiring baby boomers will strain the nation's budget and economy, unless Social Security and Medicare are revamped.

"Reform of our unsustainable entitlement programs" should be a priority, Bernanke told the Washington Economic Club. "The imperative to undertake reform earlier rather than later is great."
It was his strongest warning yet about the potential perils and tough decisions that will confront the United States with the looming retirement of 78 million baby boomers. Bernanke did not recommend any specific changes, however, that Congress and the Bush administration could make to entitlement programs.

http://biz.yahoo.com/ap/061004/bernanke.html?.v=17

[nnuut]

OK, now they are going to cop-out on the obligations they have made to us Baby Bloomers, after we made so much money for the country? MY Butt!:mad: Sorry for the language, i'm a Moderator ya know!:o

[Elgallo]

I guess they feel that spending the SS$ and leaving IOU's, along with allowing all the good WELL PAYING jobs to exit the US, had absolutly no bearing what so ever on the existing situation!!

[Fivetears]

Economic Calendar for Week of October 9, 2006

Monday
Oct 09 HOLIDAY :)

Tuesday
Oct 10 12:00 AM Treasury Budget - http://www.fms.treas.gov/mts/index.html.
Oct 10 10:00 AM Wholesale Inventories

Wednesday
Oct 11 10:30 AM Crude Inventories
Oct 11 2:00 PM FOMC Minutes

Thursday
Oct 12 8:30 AM Initial Jobless Claims - http://www.dol.gov/opa/media/press/eta/main.htm.
Oct 12 8:30 AM Trade Balance - http://www.census.gov/foreign-trade/www/press.html.
Oct 12 2:00 PM Fed's Beige Book

Friday
Oct 13 8:30 AM Export Prices ex-ag. - http://www.census.gov/foreign-trade/www/press.html.
Oct 13 8:30 AM Import Prices ex-oil - http://www.census.gov/foreign-trade/www/press.html.
Oct 13 8:30 AM Retail Sales -
Oct 13 9:50 AM Mich Sentiment-Preliminary.
Oct 13 10:00 AM Business Inventories

[robo]

Dollar rallied Friday and Bonds went down! Will we get more of the same next week? The CNBC crew keep shouting Goldilocks Economy. Does it feel like a Goldilocks Economy to you. Maybe it is, but I'm still not sure.





The Inflation of Expectations
by John Mauldin


This week we had two more Federal Reserve members repeat what has become the theme for their chorus, but not one the market seems to be paying much attention to. It should be. The market believes the Fed will soon start to cut rates, perhaps as early as first quarter of next year. It is not altogether clear that this will be the case.

http://www.safehaven.com/article-6038.htm

Bernanke Has It Right

Bernanke spoke to the Economics Club of Washington. There was no mention of helicopters, but he used the stage to highlight what is the #1 economic problem facing this country, which both parties are ignoring in the political season. Much easier to focus on sex scandals than on the real scandal that is a true threat to our economic well-being.

What scandal? The willingness of Congress to ignore the coming crisis in Social Security and Medicare funding. "Reform of our unsustainable entitlement programs" should be a priority. "The imperative to undertake reform earlier rather than later is great." Let's look at a few quotes (you can read the very clear speech at

http://www.federalreserve.gov/boarddocs/speeches/2006/20061004/default.htm

[mayday]

Our fearless leaders on capital hill do not have the guts to legislate on social security to cut benefits would be suicide for their political careers. Staying in office is more important than tackeling real issues. Whats another trillion $ in the hole.

[Show-me]

Simple, to the point, and true.:(


Our fearless leaders on capital hill do not have the guts to legislate on social security to cut benefits would be suicide for their political careers. Staying in office is more important than tackeling real issues. Whats another trillion $ in the hole.

[nnuut]

Hey Boys and girls, if we can afford to have a war we can afford to take care of our old folks, I think!!:D If not it's revolution time, don't mess with us hippies!! Were old but were bad! :nuts: :nuts: :nuts:

[Oldcoin]

http://news.yahoo.com/s/nm/20061011/bs_nm/economy_fed_minutes_dc_1

WASHINGTON (Reuters) - U.S.

Federal Reserve policy-makers remained "quite concerned" about inflation risks when they met in September, but decided to keep rates on hold for a second straight time while renewing their commitment to ratcheting down inflation pressures

[Oldcoin]

Fed's Poole says inflation risk fading

http://today.reuters.com/news/articlenews.aspx?type=reutersEdge&storyID=2006-10-13T132707Z_01_N12339650_RTRUKOC_0_US-ECONOMY-FED-POOLE.xml&from=business&src=101306_1224_INVESTING_comment_n_analysis

[ebbnflow]

MONDAY, OCTOBER 9, 2006

Last Woman Standing

By JONATHAN R. LAING

...As regulators turned the heat up on the sex industry, Parasol diversified into online gambling in 1997. Her venture, Starluck Casino (now PartyGaming), was strictly small potatoes until she teamed up with a bright young Indian computer programmer, Anurag Dikshit, who devised the software for online poker players to join remotely in games involving literally thousands of other players. Internet poker exploded in popularity, creating a tidal wave of demand that the company has ridden ever since. Click here to read article (http://online.barrons.com/public/article/SB116018480631785723-E7nqJqKei44PIzfxJ_qCG7gnerk_20061106.html?mod=mktw ).

Anurag Dikshit is the father of Internet poker gambling? :cheesy:

[ebbnflow]

Bush signs anti-Internet gambling law

By Robert Schroeder, MarketWatch
Last Update: 1:58 PM ET Oct 13, 2006

WASHINGTON (MarketWatch) -- President Bush signed a law on Friday banning U.S.-based banks or credit card companies from processing payments for Internet gambling activities that are illegal in the United States. Click here to read article (http://www.marketwatch.com/news/story/Story.aspx?guid=%7B360A428B%2D8A80%2D42F8%2DA28F%2 D25725941C8DA%7D&siteid=).

And just when I was ready to go Internet sports gambling with Detroit, New Orleans, Seattle, Washington and the Jets. Anyways, this bill should be good for the economy, stopping or slowing down billions of dollars from migrating overseas. :D