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IDS World Markets Wed 12th October 05


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#1

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Posted 11 October 2005 - 10:05 PM

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#2

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Posted 11 October 2005 - 10:10 PM

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http://money.cnn.com...s/morning_call/


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http://www.kitco.com

Energy futures

#3

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Posted 11 October 2005 - 10:24 PM

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A reasonable jump on All Ords today, +0.7%, but somehow it's looking more like a wander in the wilderness actionwise. The Energy sector way out in front, +2% and Materials is not far behind, +1.4% and it seems those two sectors are carrying the market at this stage. The only red sector is Healthcare, -1.8%.

In the miners, BHP is doing well, +2.2% but the others are marking time, up slightly. Oils way up there but volume not fantastic.

Asia a mix ..

#4

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Posted 11 October 2005 - 10:39 PM

Consumer glooms grows

AUSTRALIAN consumer sentiment fell to a two-and-a-half year low in October, weighed down by sharp share market falls and stubbornly high petrol prices, a survey has found.

The Westpac-Melbourne Institute index of consumer sentiment fell 1.6 per cent to 98.7 in October from 100.3 in September.

An index below 100 indicates pessimistic sentiment outweighs optimistic sentiment.

The October index is the lowest reading since March 2003, having only fallen below the 100 level on two occasions in the past four years.

#5 Hiding Bear

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Posted 11 October 2005 - 11:13 PM

The piper must be paid for the federal spending spree, and passing this tax bill would bury the housing bubble:

Bush Tax Panel Targets Mortgages

By ROBERT GUY MATTHEWS
Staff Reporter of THE WALL STREET JOURNAL
October 12, 2005

President Bush's tax-overhaul commission is close to recommending limits on popular tax breaks on home mortgages and employer-provided health insurance.

That plan, however, is likely to meet strong opposition from taxpayers and lawmakers. Americans already are worried about escalating health-care costs, and homeowners regard mortgage tax breaks as sacrosanct.

While details are still being worked out, the bipartisan panel is leaning toward lowering the cap for mortgage deductions to about $300,000, more closely aligned with the Federal Housing Administration's maximum insurance on loans. Currently, the deduction cap is $1 million. The median price for a home in August was about $220,000, according to the National Association of Realtors.

Panel members said at a meeting yesterday that scaling back the deductions for mortgages and employer health-insurance costs would better distribute tax breaks across all income levels, since both disproportionately benefit upper-income earners.


http://online.wsj.co...e_whats_news_us

I don't think either Congress nor the Fed has the will to fight when the going gets tough, but they may believe the economy is in better fundemental shape than it really is.

#6 Hiding Bear

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Posted 11 October 2005 - 11:50 PM

The Fed minutes seem to say the economy will do well because of deficit spending, but deficit spending will cause inflation.

It doesn't seem to have occurred to them that the inflation they envision could reduce real income, and cause the economy to do poorly. Also they presume the Gulf will rise again, but how will those devastated by casualty losses pay for new homes?

With regard to fiscal policy, meeting participants noted that federal outlays would increase sharply in order to assist with recovery and reconstruction efforts in the aftermath of the hurricane. The eventual size of the increment to federal outlays was unclear, but it was likely to be quite large. The substantial step-up in government spending would add to federal deficits that were already large and underscored the worrisome loss of fiscal discipline evident in recent years. The expansion of federal spending implied an increase in fiscal stimulus at a time when the margin of unutilized resources in the overall economy was probably thin.


http://www.federalre...es/20050920.htm

#7 LeeWhee

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Posted 12 October 2005 - 01:22 AM

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A reasonable jump on All Ords today, +0.7%, but somehow it's looking more like a wander in the wilderness actionwise.  The Energy sector way out in front, +2% and Materials is not far behind, +1.4% and it seems those two sectors are carrying the market at this stage.  The only red sector is Healthcare, -1.8%.

In the miners, BHP is doing well, +2.2% but the others are marking time, up slightly.  Oils way up there but volume not fantastic.

Asia a mix ..

<{POST_SNAPBACK}>


Looks like the Ords are setting up for another plungeroo. We'll see what happens after that.

Longer-term, I still feel that---at minimum---the 3444 breakout level will be revisited sooner or later. That's now over 20% in the rear view mirror.

Since 1982, the beginning of our current experiment with fiat flooding, every major world index has crashed at one time or another. And by crash, I mean fall by at least 35-50% in a relatively concentrated period of time. The Nikkei crashed. The US markets have crashed twice. Europe crashed. China crashed. The other Asian indices crashed. Even Canada crashed.

But Oz has yet to crash.

Most of these crashes occurred following some sort of parabolic move that took the individual indices up 400-600%, to as high as 1,500% for the Nasdaq from 1990-2000, 1,740% for the Hang Seng from 1990-2000, 2,145% for the Shanghai from 1991-2001, and 2,400% for Russia from 1998-present.

For comparison purposes, the great Nikkei run of the '80s was 420% from 1982-1990. The great SPX run was 605% from 1982-2000 and 425% from 1990-2000. And the great Dow run of the 1920s was a comparative piker at 493% from 1921-1929.

So far, the biggest peak-to-trough decline for the Ords has been 23% from 1994-1995 and again from 2002-2003. At the same time, the Ords haven't really gone parabolic either. The entire move from the 1990 low to the 2002 high was a meager 186%. And the move from 1990 to the 2005 high has only been 284%.

Given these figures, IMO, the strongest candidates for future 1,000%+ parabolic moves look to be India (323% since 2002), Brazil (289% since 2002), Chile (228% since 1999), Mexico (372% since 1998), Austria/Emerging Europe (247% since 2002), and Korea (333% since 1998.)

I suppose there's no law that says the Ords must crash someday, as every other major index has. But it is curious that the Ords have been uniquely exempt from this phenomenon.

That said, the Ords certainly are due a breather if nothing else. The current rally off the 2003 lows has moved the index up 73% from trough to peak. This exactly matches their previous largest post-1990 rally from 1994-1995 which moved 73% as well...and was followed by a -23% decline over the following 14 months. If the Ords were to fall back to the 3444 breakout level, it would represent a 25% decline from the late Sept '05 highs, pretty much in line with previous declines since 1990.

If there is a crash in the Ords future, it could conceivably occur now. But more likely, it will occur following a parabolic run that may still lie ahead.

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"I'm not a real estate bum. I wear diamonds and Rolexes. I'm a classy Realtorô."--- Liz "Flaming Orange" Seither, Clearwater, FL, who owes lenders millions of dollars in debts.

"Men do not desire to be rich, but to be richer than other men."---John Stuart Mill (1806-1873)

"When the music stops, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing..."---Citigroup CEO Chucky "Master of Timing" Prince, 7/9/07

"Wall Street is a graveyard of geniuses."---Chriss Street, Treasurer, Orange County, CA, 7/27/07

"It was never my thinking that made big money for me. It was my sitting. Men who can be both right and sit tight are uncommon. I found it one of the hardest things to learn."---Jesse Livermore

"You can kill a sheep just once, but you can fleece him 100 times."---Jeff Macke

"Stocks are no longer the weather glass of fortune, but a part of the mask employed to disguise the nation's own face to itself." ---Horace Walpole, 1782

#8

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Posted 12 October 2005 - 03:05 AM

If there is a crash in the Ords future, it could conceivably occur now. But more likely, it will occur following a parabolic run that may still lie ahead.

<{POST_SNAPBACK}>


dmm, thank you for the EXCELLENT writeup on All Ords.

I concur with your views regarding a possible parabolic run yet to come. I do, however, think it will be narrowly based and that it will be on PMs, notably gold. Other minerals and possibly natural gas may also help out but I have the strongest feeling that gold is where it will be at. I have no idea of what fundamentals may cause gold to be The One but then I don't really need to know being as I'm primarily a chartist (but enjoy discussing fundamentals).

With regard to lack of crashes: Aussies are primarily investors, they buy, they hold, they pass their stocks onto their kids along with the furniture. The dividends paid by Oz blue chip stocks are excellent and most of them are franked, ie tax free, so investors are not bothered if the stocks do a dip as long as they get 2 dividend cheques a year.

In addition, every worker has to contribute part of their pay to a superannuation fund which goes primarily into stocks and that investment can't be touched until the worker retires. You can imagine how much money is pouring into the funds on a weekly basis and how it has put a floor under the market.

Another factor is that the Oz market is not a major one so only attracts limited overseas investment but this could change and indeed be a cause of a parabolic run followed by a crash as investors sell.

Traders are generally a rare breed here although in the late 90s every man and his dog was on board. People left their jobs to trade full time, it was sheer insanity, I can even remember a GP in my chat room who traded between patients but they all drifted back to their normal jobs once Naz crashed. Trouble is there's barely enough traders to keep the market liquid in the spec side of things without some sort of feeding frenzy so I'm hoping gold specs bring back the traders.

And this time I won't be a newbie ;)

#9

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Posted 12 October 2005 - 03:29 AM

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Hmmm looks like All Ords may have found some support so I wouldn't be surprised to see tomorrow up. Today the index closed +0.8% which wasn't a bad effort, all things considered. Another sector reshuffle which saw Telecom swing into the lead, +2% and Healthcare remained stuck at the bottom, -1.8%.

Miners closed up in general and oils kept their gains. The Energy index closed +1.7%, down a touch from the morning.

Over in Asia, Sth Korea did a bit of a plummet, -2.2% and Taiwan not so hot either, -1.3%.

No jam on US futures and Europe in the red:

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#10 Hiding Bear

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Posted 12 October 2005 - 07:23 AM

Mortgage bubble continues to deflate:

U.S. MBA's Mortgage Applications Index Fell 2.6% Last Week

Oct. 12 (Bloomberg) -- U.S. mortgage applications fell last week to the lowest level since April as higher interest rates slowed both refinancing and home purchases, according to a private group's survey released today.

The Mortgage Bankers Association's gauge of applications declined 2.6 percent to 694.8 in the week ended Oct. 7 from 713.5 the previous week. The last time the index was as low was April 15, when it was 672.6.

The average 30-year fixed mortgage increased to 5.98 percent, the highest since the end of March and the fifth straight rise, according to the bankers group. Higher borrowing costs have caused purchase applications to decline in each of the last four weeks, suggesting home sales are starting to cool. The National Association of Realtors forecasts slower sales in 2006 after a record this year.


http://www.bloomberg...nma3Bo&refer=us

#11 Bearman

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Posted 12 October 2005 - 08:02 AM

mk mover? Greensin live on Crapvision 8:30 est today

#12 GregFokker

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Posted 12 October 2005 - 08:14 AM

Is there a way to participate in the All Ords via options? I see that there are no options on the EWA Aussie I-Share.

...A declining spenglerian carnival of Colossaalism united with Inflation where the numbers one through 10 are forever banished as worthless arithmetical detritus from a bygone age... - Beardrech

Naturally we believe the govt numbers... and Boobus Americanus sleepwalks off the edge of the energy-crisis cliff clutching his shares of "Crisco", Yoohoo and GooGah munching on his Yum Yums and Ho Hos. Future historians will have a hell of a time figuring out what the hell Americanus neanderthalus was thinking and exactly what brought on his sudden demise... - Henny Penny

Well, good night everyone. I gotta go lube up for tomorrow's regular end-of-week Gold Slapdown and Stock Index Bear Punishment Rally Weekend Greenprint. ...Probably another Shock-and-Awe Gap-Up-Open and Wire-to-Wire Meltup Runaway Bull Charge Mo-Mo Spike to Fresh New All-Time Lifetime Highs, culminating in a 4:15 yelping scalded dog runoff with panic short-covering and legal not-held bad double fills due to fast market conditions, plus quote system freeze-ups and trading platform lock-outs along the way. *yawn* typical gov't Friday. - Shorty


#13 Drano

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Posted 12 October 2005 - 08:22 AM

APOL share buyback.

No story, no link, but :o
Of course I'm caustic!

#14 Drano

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Posted 12 October 2005 - 08:24 AM

"MGIC Investment net income beats target†(MTG)†By Steve Gelsi
NEW YORK (MarketWatch) -- MGIC Investment (MTG) on Wednesday reported third-quarter net income of $142.4 million, or $1.55 a share, up from $134 million, or $1.36 a share, in the year-ago period. The Milwaukee-based provider of private mortgage insurance was expected to earn $140.3 million, or $1.51 a share, according to a survey of anal cysts by Thomson First Call. Shares closed at $59.67 on Tuesday. "

http://www.marketwat.....A1EE51E5BB4}
Of course I'm caustic!

#15 Drano

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Posted 12 October 2005 - 08:29 AM

:o :o :o :o :o

"Intel rating, price target cut at Prudential By Tomi Kilgore
NEW YORK (MarketWatch) -- Intel (INTC: news, chart, profile) was downgraded to underweight from neutral weight at Prudential, as concerns that a number of challenges will lead to disappointing revenue and margin performance over the next 2 to 4 quarters offsets favorable relative valuation. anal cyst Mark Lipacis cut his stock price target to $20 from $31 and lowered his 2006 earnings estimate to $1.45 a share from $1.67. Lipacis expects revenue growth to decelerate, gross margin pressure to increase from rival Advanced Micro Devices and from accelerating growth of low-end products, a chipset shortage and risks associated with a transition of chip manufacturing in 2006. "

http://www.marketwat...=bigcharts&mp=1
Of course I'm caustic!





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