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B4 The Bell Tuezelday October 5


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#1 Hiding Bear

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Posted 05 October 2004 - 07:09 AM

:D Welcome to B4 the Bell! :D

Inflationary pressures are building up like lava under the dome of Mount Saint Helens, but Fed officials say "don't worry, be happy". They even suggested a target of up to 3% inflation - excluding energy.

A bunch of US Federal Reserve officials made speeches on Monday, most notably Federal Reserve Board Governors Susan Schmidt Bies and Ben Bernanke, along with Anthony Santomero, who is the president of the Federal Reserve Bank of Philadelphia and rotates into a voting position on the Federal Open Market Committee next year.

The theme of their comments was familiar - the economy is moving slowly out of its summer slowdown, hampered but not crippled by the high price of oil, and that there is scope for interest rates to rise further.

Later today (Tuesday), Federal Reserve chairman Alan Greenspan will make a speech titled ´Banking´. Although the topic is not the economy or monetary policy, investors will be combing through his comments in the (probably misplaced) hope of some guidance.


http://www.fxstreet....pnew20041053525



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Good trading! ;)

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#2 DrStool

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Posted 05 October 2004 - 07:30 AM

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#3 Madame Wrecked Him

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Posted 05 October 2004 - 07:38 AM

I wonder what Greenspan thinks about those comments he made a couple of months back regarding the transitory nature of energy price increases... is he going to start backing off that stance now, or is he going to stubbornly stick with it, the way Bushco so steadfastly stuck to the Iraq-WMD line?

Written 2 months ago, I think this piece is quite revealing:
How Transitory Are Mr. Greenspan's 'Transitory Factors'?

According to IMF calculations, a sustained US$5 a barrel increase in international oil prices adds 0.3 percent to US core inflation and subtracts around 0.4 percent from US GDP growth. This could well mean that if oil prices were to remain at US$42 a barrel, US growth in the second half of the year would be around 0.8 percent below the level that it might otherwise have attained.


And if they go above $50??????

Evidently Mr. Greenspan believes that international oil prices will decline fairly steadily in the second half of the year.


He doesn't have much time left; we getting close to the home stretch now with just 87 days to go....

#4 machinehead

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Posted 05 October 2004 - 07:40 AM

Crude earl is up about 50 cents to $50.40. I guess Crapvision won't be reading the "crude oil under $50" script this morning ... though ya never know, maybe they will just openly lie. :lol:

NOW they tell us that 480,000 bbl/day of production in the Gulf of Mexico is still shut in after the hurricane. Plus some huge quantity of natgas that I didn't quite catch (66 billion cubic ft a day? It's like counting in Turkish lira). Ergo, the rising natgas chart that HB posted above.

Yet, 'they' foresee no big change in crude inventories this week. Yeah, sounds reasonable to me. ;)

Wall Street continues whistling past the graveyard. But like a chronic wasting disease, Oil Shock III is eating away at the foundations of the economy. The longer it lasts, the more cumulative damage is done. Plus, as long as the experts keep scoffing at it and calling it 'transitory,' it will likely get worse ($60/bbl?).
"GOLD -- it's not just for misers anymore."

"Dollahs -- fire-starters for the K-wave winter." - Drano

"Three humps and a dump." - anotherone, 21 SEP 2004

"No gold was harmed in the making of this movie." - Bizarro Greenspan

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- our jickiss

#5 Lock Limit Down

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Posted 05 October 2004 - 07:44 AM

Oil shock III
50.54 ATHs
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"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." --- Thomas Jefferson

#6 Guest_yobob1_*

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Posted 05 October 2004 - 07:48 AM

And deflationary pressures are like an icy wind cooling and hardening that lava before it gets a chance to erupt. :lol:

Easy Al's actions may me think of guy sitting in a car with his foot to the floor and quickly shifting between reverse and drive. Lots of tire smoke and noise, going nowhere and you just know if you do it for too long something will blow up. In Als case I think it's the transmission that let's go; in fact I think the tranny blew a few months back. The engine will still be screaming but nothing will happen for a while until the crank breaks or a rod pops out the side of a block and the resulting pool of oil under the car catches fire. I still think there's a remote possibility that Al has planned this all along and has been working to make sure there isn't a fire extinguisher within miles. Then he sits back and says " See I told you in 1966 we needed a gold standard and you didn't believe me. Do you believe me now punk?"

If you didn't read that Contrary Investor link, you should have. The GSE's aren't going to fail anytime soon, but what will and probably is already happening is their ability to create money out of thin air is getting the axe. If you follow Nolan at all you would have pretty good idea that when that happens the true source of liquidity will be gone. Bernake's printing presses are puny by comparison. The fed is mostly bluster and posturing. If it weren't, what need would they have for their non stop barage of fed-speak? I say put up or shut up.

I think the Wiley E. Coyote that the economy has been doing for a while is just about over. The ribs of the umbrella are about to invert and then it's just one long ride to the bottom of the canyon with the killer boulder hovering a few feet over our heads.

They may hold the "data" and markets together for the elections, but beyond that the reality is going to be hard to hide. The POR is soon upon us.

#7 DrStool

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Posted 05 October 2004 - 08:09 AM

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#8 machinehead

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Posted 05 October 2004 - 08:18 AM

They may hold the "data" and markets together for the elections

... or they may decide that 'unconventional measures' are required, even before then, to remind us that only the incumbent administration can defend our safety from a hostile world that hates us for our freedom ... :lol: :mellow: :o
"GOLD -- it's not just for misers anymore."

"Dollahs -- fire-starters for the K-wave winter." - Drano

"Three humps and a dump." - anotherone, 21 SEP 2004

"No gold was harmed in the making of this movie." - Bizarro Greenspan

[i]"Da Track. Da place where Morons bet on Animals Controlled by Criminals."
- our jickiss

#9 traderfromhell

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Posted 05 October 2004 - 08:34 AM

Soybeans birthday today. Expecting a turning point low today.
Don't steal. The government hates competition.

#10 Hiding Bear

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Posted 05 October 2004 - 08:51 AM

No doubt that some prices will fall, vehicles for example, while energy rises. The impact of rise in energy prices has yet to be felt as most of the country is in a sweet spot of not needing cooling or heating. In another month or so, you will see a lot of screaming demanding that Congress do something about high energy prices. Not that they will be able to do anything about it now.

Outside of a very few in Congress, most will not make the connection between inflation and its roots - deficit spending and the prior expansion of the monetary base by the Fed.

#11 machinehead

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Posted 05 October 2004 - 08:51 AM

A Lord Abbett borker narrates a sensational DMT hallucination:

If the S&P 500 were merely to recover to 1,550 by the end of the '00s, it would post about a 6.2 percent annualized return over the next 5 1/4 years.         

"In other words, stocks represent a buying opportunity even if all they manage to do is recapture their old highs by decade's end,'' says Milton Ezrati, senior economic strategist at Lord Abbett & Co., a Jersey City, New Jersey manager of $81 billion in mutual funds and other accounts.         

"Such tests show how implausible many popular projections are,'' Ezrati says, "and why historic secular equity returns of 8 percent to 10 percent look entirely feasible, maybe even too subdued.''


Baby Bull on Acid
"GOLD -- it's not just for misers anymore."

"Dollahs -- fire-starters for the K-wave winter." - Drano

"Three humps and a dump." - anotherone, 21 SEP 2004

"No gold was harmed in the making of this movie." - Bizarro Greenspan

[i]"Da Track. Da place where Morons bet on Animals Controlled by Criminals."
- our jickiss

#12 Lock Limit Down

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Posted 05 October 2004 - 08:59 AM

United's pension woes: sign of bigger issue

Ailing airline may end all of its pension plans, creating the biggest default in US history and forcing a possible bailout....


http://www.csmonitor...02s01-usec.html

This Little fire will NOT be conveniently extinguished.


On another note
Air Canada successfully emerged from CCAA {chapter 11} yesterday under a new issue ticker ACErv.TO. Offering priced at 20 Cdn was warmly received as it bolted to 26.40 and closed at 24.76. It has been a painful restructuring for the most part quite successful with one exception. What put the old Air Canada into receivership has not been addressed. The unions refused to discuss defined benefit pensions and so they stand. Not to be forgotten is that is what pushed Air Canada into CCAA in the first place.... DB pensions. Air Canada was able to negotiate an extension of the pension liability from 5 years to 10. The government had no option. Canada has no paper promise Pension Guarantee entity. As always the mantra "the stock market will bail us out" lives. I expect corporate Canada with similar looming pension liabilities to ask for and receive the same let. What seems to be lost in the frenzied demand for the new AC stock is the fact we are one stock market "event" away from seeing the new AC back in CCAA. Pension exposure to equities is between 70 and 80%. The balance sheet looks good if one ignores DB pension liability. However I think it is a screaming short. 50 dollar oil and such susceptibility to the stock market makes this one and accident in waiting. Timing of course is key. The airline sector is going nowhere and ACE will not be an exception.
Posted Image
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." --- Thomas Jefferson

#13 rog

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Posted 05 October 2004 - 09:05 AM

A Lord Abbett borker narrates a sensational DMT hallucination:

If the S&P 500 were merely to recover to 1,550 by the end of the '00s, it would post about a 6.2 percent annualized return over the next 5 1/4 years.         

"In other words, stocks represent a buying opportunity even if all they manage to do is recapture their old highs by decade's end,'' says Milton Ezrati, senior economic strategist at Lord Abbett & Co., a Jersey City, New Jersey manager of $81 billion in mutual funds and other accounts.         

"Such tests show how implausible many popular projections are,'' Ezrati says, "and why historic secular equity returns of 8 percent to 10 percent look entirely feasible, maybe even too subdued.''


Baby Bull on Acid

Dear milton,

If you were one of the long-term investors who bought the S&P in the late 90's or early 00s then even if the S&P "merely returns to the 1550 by the end of the 00s" you would have a return of 0% over 10yrs. Should we include inflation in your projection? How about a compounded real anuual return over a decade of -25% using the creative at best govt stats for inflation.

#14 Tchaikofsky

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Posted 05 October 2004 - 09:07 AM

9:05am 10/05/04 U.S. Chamber urges Congress to increase worker visas By Rex Nutting
WASHINGTON (CBS.MW) -- Congress should immediately increase the number of visas available to foreign workers and students under the H-1B program, the U.S. Chamber of Commerce said Tuesday. The government said on Friday that the maximum number of available visas -- 65,000 -- was reached on the very first day of the fiscal year. "The ability to obtain visas for highly educated foreign nationals is crucial to U.S. competitiveness and helps keep jobs in America," said Randel Johnson, a vice president of the business lobbying group.

:huh: :blink:

#15 PeakOil

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Posted 05 October 2004 - 09:08 AM

Cousin Earl $50.91 and rising...





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