Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
well isn't thursday before options expiration usually a good day for one of those sharp turnarounds, followed by a strong rally in the (late) afternoon?
hmm. so informally then, trin/trinq are saying something like: how much more concentrated is selling in down stocks than buying in up stocks ... roughly .... ?
I think silver may be your biggest enemy right now.
ah, i'm not touching silver from the short side. i could have covered today, i think, but decided to wait on the late day spike in the dollar. (i have glg short from 16.81.)
hehe. well i'm getting itchy to buy some gold again, but i'll just scratch until month end ... anyway, i still have some pm shorts to cover. <blush>
"The equity markets are getting ugly, and the last time we had that appearance (but only a few days ago), the dollar's Uncle Sam gave it a goose up, to try and steady general equities."
is this true? to my eyes, these things have been coincident: risigin dollar, falling market; falling dollar, rising market. i don't know *why* that should be the case,
donald sew, gold ...
i haven't looked in on don sew in a long time ... does anyone know where is group is meeting now. (couldn't find anything on market swing ...)
anyway, here's a reason take of his i found elsewhere on gold and the dollar:
The US Dollar looks to be forming a BEARISH rectangle on the weekly chart. Toward the end of a bearish rectangle it is common to see a sharp upward spike before the selling resumes and intensifies (just the opposite on a bullish rectangle). So there is a possibility of more upside. Don mentioned the 89 - 90 area as a possible upside target before the selling resumes. The downside minimum target from the rectangle is the 81.5 - 82 area. And if the dollar breaks downward Don expects Gold to spike upward. If the Dollar targets are reached on the downside it would not be a surprise to see Gold to set a higher high.
oops, you're right. i guess it takes them a while to update. (i checked yesterday cuz i was expecting something ...)
03/08/04 1,441.12 27.1
well, the 5-day rsi guys bought in today ...
hrm. well the essen pee seems to be marching along up ... maybe they're all looking for direction on the dollar ...
"What makes our numbers so much worse"
falling dollar?
U.S. Blames Aging Computers for PPI Delay
27 minutes ago Add Business - Reuters to My Yahoo!
By Andrea Hopkins
WASHINGTON (Reuters) - Outdated computers are partly to blame for the delayed release of the U.S. producer price index and only "God knows when" the data will be ready, a top analyst at the Bureau of Labor Statistics said on Monday.
The U.S. Labor Department (news - web sites) statistical agency has indefinitely delayed the release of the January and February PPI (news - web sites) reports due to problems converting the data to a new industry classification system.
The January PPI, which measures prices paid to farms, factories and refineries, was originally scheduled for release on Feb. 19. The February report was due to be released this coming Friday.
The nearly three-week delay for the January report is unheard of in the government's statistics system. Some economists said they miss the wholesale price data, in part because it can offer early clues on profits and, by extension, hiring.
Irwin Gerduk, assistant commissioner for BLS' PPI section, said the January and February data will be released in separate reports as soon as accurate data can be calculated.
"A January index will be released first -- God knows when -- and some time subsequent to that there would be a February index release," Gerduk said, adding that it would take "quite a bit of time" to produce the February report even after the calculation problems were solved in the January report.
Gerduk said several problems arose in an attempt to switch the PPI to the North American Industry Classification System from the Standard Industrial Classification -- a process already completed for most U.S. data series.
He said while other series needed only to reclassify industries, PPI had to remap some 40,000 industry units and about 120,000 items before reaggregating the data into four indexes that are produced each month as part of PPI.
"MULTITUDE OF PROBLEMS"
Worse still, Gerduk said the aging computers at BLS were not capable of handling a dry run of the reclassified data, so analysts could only begin computing the January data once the December report was published.
"It wasn't a single problem, it was a multitude of problems. It was the complexity of the conversion itself, tied to the fact we had 30-year-old systems that were never designed to handle a widespread classification conversion," he said. "So you're basically doing everything at the last minute."
Gerduk said the agency got funding last year to modernize the computer system but that it is a five-year process.
Economists said that while PPI is not as crucial to market watchers as the consumer price index, the most popular inflation index, it is still being missed on Wall Street.
Anthony Chan, chief economist at Banc One Investment Advisors, said the PPI can provide important information on whether corporate profit margins are being squeezed -- and can offer an early clue on future hiring.
If the prices producers receive are rising more quickly than inflation at the consumer level, it means companies are swallowing the difference and thus would have smaller profits to fuel investment and hiring.
"As profits margins narrow, you're not going to have as much capital spending, and if you don't have that much capital spending, guess what? You're not going to hire a lot of workers," said Chan.
"So early on, the PPI gives you some potential information about what hiring patterns may look like over the next couple of months."
Gas is predicted to hit $2 for the summer and surprise being it stays there or where it goes next.
whoa, that would be a relief. it was just $2.48 when i filled up on friday (california, premium).
the scox saga continues ...
March 5, 2004
Is Leaked eMail a SCO-Microsoft Connection?
By Alexander Wolfe
UPDATE: After a week of telling the story about its latest Linux lawsuits on its own terms, SCO Group (Quote, Chart) is getting some major pushback from the open source community.
In one development, open source guru Eric Raymond posted a leaked e-mail from an outside SCO Group consultant to a SCO Group vice president. The e-mail, which SCO has confirmed is authentic, allegedly indicates Microsoft's involvement in providing indirect financial support to SCO's legal campaign against Linux, according to Raymond's comments posted between the lines of the e-mail.
The development threw cold water on a week in which SCO had garnered technology press and mainstream news coverage for three staight days. On Monday, SCO issued a statement that it had signed ISP company EV1servers.net as its first publicly announced Linux licensee.
On Tuesday, SCO disclosed that it was about to file lawsuits against two commercial Linux users, but it wouldn't name the firms.
On Wednesday, SCO identified the companies: Autozone and DaimlerChrysler, sparking another round of news coverage. The news also obscured a same-day earnings announcement in which SCO reported a net loss of $1.5 million for its first fiscal quarter--about double the loss from the same, year-earlier period.
Separately, Computer Associates (Quote, Chart) is denying reports circulating on the Web that it specifically licensed Linux license from SCO. Rather, CA said its license was an outgrowth of a legal agreement.
In a statement released by CA, Sam Greenblatt, senior vice president and chief architect of the company's Linux technology group, said: "CA disagrees with SCO's tactics, which are intended to intimidate and threaten customers. CA's license for Linux technology is part of a larger settlement with the Canopy Group. It has nothing to do with SCO's strategy of intimidation."
The reports that CA had taken a license surfaced in a copy of a Feb. 4 letter from SCO attorney Mark Heise to IBM that was posted on the legal site Groklaw. In the letter Heise identifies CA, Questar, and Leggett & Platt as SCO Linux licenses.
Reached at SCO, spokesman Marc Modersitzki told internetnews.com: "Our official position is that we don't discuss our licenses." He specificially declined to comment on the authenticity of the Groklaw posting. However, he said, "we can confirm that Mark Heise sent a letter to IBM which had information about our Unix licenses."
The developments also came after a federal judge ruled that SCO Group has to show detailed code in order to back up its lawsuit against IBM involving copyright infringement and breach of contract over Linux.
Now, the e-mail made public by Raymond may earn SCO some less welcome attention.
The message was sent by outside financial consultant Mike Anderer to Chris Sontag, vice president and general manager of SCOsource, the division responsible for the company's intellectual property licensing.
The e-mail, dated Oct. 12, 2003, talks about Microsoft funneling money to SCO via a venture capital firm called Baystar.
In a passage cited by Raymond's Web site as a "smoking gun," Anderer writes:
"Microsoft will have brough [sic] in $86 million for us including Baystar. The next deal we should be able to get from $16-20 but it will be brutial [sic] as it is for go to makerket [sic] work and some licences. I know we can do this, if everyone stays on board and still wants to do a deal."
According to Raymond, "This is the smoking gun. We now know that Microsoft raised $86 million for SCO, but according to the SCO conference call this morning [SCO's March 3 earnings report] their cash reserves were $68.5 million. If not for Microsoft, SCO would be at least $15 million in debt today."
Raymond's posting continued: "The '$16 to $20' is probably $16 to $20 million in cash, and since this memo is five months old that deal is almost certainly completed by now. This means it's possible SCO has burned through as much as $30 million in just a year."
Another passage from Anderer's email to SCO's Sontag that's been singled out by Raymond said: "We should line up some small acquisitions here to jump start this if we do it. We should also do this ASAP. Microsoft also indicated there was a lot more money out there and they would clearly rather use Baystar "like" entities to help us get signifigantly [sic] more money if we want to grow further or do acquisitions."
Raymond characterized that passage by asking: "In other words, Microsoft wanted to funnel its anti-Linux payoff through third parties. Maybe in case the antitrust guys at the Department of Justice happen not to be asleep at the switch?"
Reached at SCO, company spokesman Blake Stowell confirmed that the e-mail is genuine. However, he released a statement which noted: "We believe the e-mail was simply a misunderstanding of the facts by an outside consultant who was working on a specific unrelated project to the Baystar transaction. He was told at the time of his misunderstanding. Contrary to the speculations of Eric Raymond, Microsoft did not orchestrate or participate in the Baystar transaction."
Separately, SCO remains enmeshed in a suit against Novell. Most recently in that case, SCO has been given until the end of this week to respond to a motion by Novell to dismiss the case.
In another action, Red Hat has sued SCO to stop the latter from making what it called "untrue" claims about its business.
well, i did give the chain of references there: "daily reckoning" also isn't the most reliable. nevertheless, given the magnitude of the intervention in the first two months of this year, i don't find that wholly implausible ...
prudent bear didn't do nearly as bad as you might think (the "anti-dollar/pro gold" stuff.
fleck made out like a bandit. (he's on the board of paas and sold a whole bunch in december.) plus he owned amd and wasn't short very often. long gold miners.
Following from the FT by way of The Daily Reckonning by way of Prudent Bear.
"Mr. Mizoguchi is not a campaign strategist, U.S. Federal
Reserve chairman or even an online pundit," the FT
explains. But he is the man who matters more to preserving
Americans' self-delusions than the president himself.
"He is vice-minister in Japan's Ministry of Finance... " the
report continues. "Mr. Mizoguchi decides how many American
dollars Japan will buy each week. Every dollar he buys has
a direct impact on long-term interest rates in the U.S. And
long-term rates this year will go a long way towards
deciding who walks into the Oval Office next January.
"If you think this is an exaggeration, consider that, in
January alone, Mr. Mizoguchi bought a record $70bn and
poured nearly all of it into the U.S. bond market. He has
the authority to buy $100bn more this year and a bill
moving through Japan's parliament would double that figure
- more than enough to cover even the wildest estimates of
next year's U.S. budget deficit.
> "Sell the Dollar"
hmm. i've been thinking about this. (maybe basserdan has more insights from the king report but ...) it seems like, if it really was japan and china intervening to influence commodity prices/speculating, then they'd need more than just a brief spike to have the effect they need.
a rising dollar would also seem appropriate for a falling market, if there's more down to go ...
dunno. opinions?
... don't forget the prince of these: scox.
INTC sits at 29. Do shorts cover INTC late in the day? Hmmm...
shaeffer noted yesterday that intc short interest is pretty low - less than 1 day if i recall ...
"Price goes up = yield goes down = lower mortgage rates = ..."
see, there's always a way to draw a happy face on failed fiscal and monetary policies.
> TNX 38.23 unreal
kinda explains why homebuilders were rallying yesterday ...
uh-oh. i wonder if this is the commodities equivalent of a bull on the cover of newsweek ...
Mutual Funds
Make a Pitch
For Commodities
By CHRISTOPHER OSTER
Staff Reporter of THE WALL STREET JOURNAL
There's gold in them thar funds. And copper and oil and lumber ...
So goes a current marketing pitch from the mutual-fund industry. With commodities prices soaring and Federal Reserve Chairman Alan Greenspan concerned about inflation, some fund companies are urging people to protect themselves against higher prices by putting money into mutual funds that specialize in commodities.
Nothing new in that for investors who can tolerate a lot of volatility. There are dozens of gold and natural-resources mutual funds that have been around for decades, most of which invest in stocks of gold-mining firms, oil producers and timber companies. Gold funds in particular have been favorites of investors who are alarmed about the economic future and see such funds as the next best thing to owning the precious metal itself.
But several mutual-fund companies say commodities these days aren't just for the sky-is-falling crowd, and that precious metals, oil and paper deserve a place in the portfolio of any investor who sees inflation ahead. Further, more fund providers are introducing portfolios that invest not in the stocks of commodity-related companies, but in the hard assets themselves through various financial instruments that track commodity prices.
Merrill Lynch & Co. and Mellon Financial Corp.'s Dreyfus Funds each have filed plans with the Securities and Exchange Commission in recent months to launch such funds. Two exchange-traded funds that will track the price of gold bullion also are in the works.
The new entrants will join two commodity-tracking funds currently available to investors. The $472 million Oppenheimer Real Asset Fund was launched in 1997 and has returned an average 18.1% a year during the past five years, a period during which the overall market has been virtually flat.
Pimco Funds, a unit of Germany's Allianz AG, launched its Pimco CommodityRealReturn Strategy Fund in November 2002 and the fund jumped 29.1% last year, slightly ahead of the S&P 500-stock index and the Dow Jones Industrial Average. In little more than a year, the fund has grown to more than $2.1 billion in assets.
Here is how the price-tracking commodity funds work: Rather than buying stocks of companies, or buying actual hard assets such as gold, the funds purchase futures, options and other financial instruments in a mix designed to mimic a broad commodities index. Since the outlay to buy the financial contracts is small, the rest of the funds' assets are invested in fixed-income securities, which essentially serve as collateral accounts for the highly volatile financial instruments. When the instruments lose or gain in value, the swings are tempered by the bond holdings.
The renewed interest in commodities funds is little surprise to some. "There's always a market out there for scare products, whether it's gold or defense stocks," says Don Cassidy, senior research analyst at Lipper Inc. in Denver. "There are folks out there that are hard-asset folks, and at the merest whiff of inflation, they're back after hard assets again."
Commodity-related funds have found buying assets directly poses numerous logistical problems, and buying individual stocks when trying to take advantage of rising commodities prices can be trickier than it looks. Some oil companies and gold-mining concerns hedge their exposure to commodities with the use of futures contracts, for example, making it difficult for investors to know the true impact commodity prices will have on those share prices.
"Every investor should have a 5% or 10% allocation to commodities," says Kevin Baum, manager of Oppenheimer Real Asset.
The gains of commodity funds can be significant. Three resource-company-focused funds run by U.S. Global Investors -- Global Resources Fund, Gold Shares Fund and World Precious Metals Fund -- were up 99.6%, 67.1% and 92.7%, respectively, last year.
But Frank Holmes, chief investment officer of U.S. Global Investors, which has about $1 billion under management in funds focused on natural resources, says the downside can be equally dramatic. U.S. Global Investors' Gold Shares and World Precious Metals funds were down 57.4% and 41.1% in 1997, and Global Resources was down 38.5% in 1998.
The funds that track commodity indexes can be at least as volatile. Oppenheimer Real Asset, the first of the group, has had big moves both up and down since its launch in 1997. It has gained as much as 44.4% in a single year and lost as much as 44.9% -- and its single year loss or gain has never been smaller than 22%.
And not all of the funds are straightforward bets on commodities indexes. While Mr. Baum at Oppenheimer says he keeps his cash account invested in high-quality, short-term, fixed-income securities to minimize the fund's exposure to interest-rate swings, the Pimco fund invests its cash in TIPS, or Treasury Inflation Protected Securities. But putting money into bonds carries its own risks as rising interest rates push bond prices lower, including those of TIPS, since bond prices move in the opposite direction of yields.
Two exchange-traded funds linked to the price of gold, the first of their type, currently are awaiting approval from the SEC. ETFs are similar to mutual funds but their shares trade throughout the day on exchanges like listed securities.
Both planned offerings will attempt to give investors a means of betting on gold prices without actually going out and buying bullion.
The World Gold Council, an association of gold-mining companies, filed to launch the Equity Gold Trust, and Barclays Global Investors last month filed to launch its iShares Comex Gold Trust. Equity Gold Trust will set its net asset value based on prices in the London market and the iShares fund will link its net asset value to the Comex gold-futures contracts.
* * *
SPLIT DECISION: Research firm Morningstar Inc. said investors should consider selling Pimco stock funds run by PEA Capital LLC following improper trading allegations, but noted that its recommendation didn't apply to Pimco bond funds run by Pacific Investment Management Co.
New Jersey Attorney General Peter Harvey last month charged several Pimco units with civil fraud for allegedly allowing certain investors to rapidly trade in and out of its funds, contrary to stated policies regarding such trading. The Pimco units said the trading didn't violate the prospectus language for their funds.
Morningstar analyst Eric Jacobson said he found the charges and evidence against PEA Capital to be "extremely troublesome," resulting in the recommendation that investors consider selling the funds after reviewing their tax situation. But Mr. Jacobson said Morningstar made no change to its opinion on funds run by Pimco's California-based fixed-income operation because the case presented by New Jersey "appears less compelling" than with the stock funds.
A Pimco spokesman said the firm agreed with some of Morningstar's assessment regarding its bond operations, but it disagreed with what was said about PEA Capital. He declined to elaborate.
he fed reserves, you'll like this.
from 'the economist'.
A phoney recovery
Feb 26th 2004
From The Economist print edition
Corbis
Drug addicts get only a temporary high. America's economy, addicted to asset appreciation and debt, is no different
WHEN The Economist sounded the alarm about America's bubble economy in the late 1990s, what concerned us most was that share prices were no longer just a mirror that reflected the underlying economy, they had become its major driving force: soaring share prices encouraged a borrowing and spending binge. Although the stockmarket is lower today, in some respects the “economic bubble” has still not burst. The value of households' total wealth (in financial assets and homes) is well above its level before share prices started to slide in early 2000—and the American economy is more dependent than ever on asset appreciation.
America's economy has survived the bursting of the bubble better than had been expected largely because policy-makers have pursued what is possibly the biggest fiscal and monetary stimulus in history. This week, even Alan Greenspan, chairman of the Federal Reserve, expressed concern about spiralling deficits. Tax cuts have given consumers more to spend. More importantly, historically low interest rates have inflated the prices of homes (and more recently shares again), encouraging households to pile up more debt.
This has allowed consumers to keep spending even as wages and salaries have stagnated. Strikingly, although GDP has grown by a robust 4.3% over the past year, wage income rose by barely 1% in real terms. According to Kurt Richebächer, an independent economist who publishes a monthly newsletter, wages and salaries have, on average, increased by 9% in real terms in the first two years of previous post-war recoveries, but have been almost flat over the past two years, thanks to the sickly jobs market. Despite this, consumer spending has continued to boom, at an annual rate of 4.7% in the second half of last year. The gap between stagnant wages and rising spending has largely been filled by tax cuts and rising asset prices.
Home sweet home
Since 1999, the rise in the value of Americans' homes has more than offset the loss on their shares—and the latter have also recovered about half their losses. As a result, economic growth is once again being driven more by wealth than income. Over the year to the third quarter of 2003 (the latest figures available), the total value of homes, shares and other assets owned by households rose by $4.5 trillion, not that far off the $5.5 trillion jump in 1999 (see chart). Over the same period in 2003, personal disposable income increased by about $400 billion, to $8.3 trillion.
Moreover, compared with 1999, a bigger slice of those capital gains has, in effect, been turned into cash by households borrowing against the higher value of their homes. Total household debt increased by more than $900 billion last year, almost twice as much as in 1999. Mr Richebächer claims that America is experiencing the biggest credit bubble in history: total debt (public and private) has increased by a hefty $6.5 trillion since 2000.
Consumers can spend more than they earn by borrowing against their expanding wealth or running down savings, but for how long? If (still a big if) hiring by firms picks up sharply in coming months, pushing up incomes, then consumers will become less reliant on asset appreciation and debt, and the recovery will become more soundly based. Even so, their debts will hang around for a long while.
Although concerned about budget deficits, Mr Greenspan argued this week that the recent surge in household debt is relatively harmless for the very reason that it has been accompanied by big gains in household assets. According to such an interpretation, the drop in household saving, to only 1.5% of personal income in December, is no cause for alarm: households no longer need to save, because rising wealth in shares and homes will do it for them.
The snag is that the “wealth” being built up is partly phoney. In a recent report, the Bank of England argued that rising house prices do not create genuine wealth in aggregate. Those who have yet to buy a home suffer a loss of purchasing power, so rising prices redistribute wealth, they do not create it. More serious is that the price of homes or shares can fall, while debts are fixed in value. In the long run, the only way to create genuine wealth is to consume less than income, and to invest in real income-creating assets.
America (and other economies) have been enjoying a very different sort of wealth creation: the Fed is in effect printing it. Not only has it held interest rates unusually low, but the excesses of an asset-driven economy are being fuelled by artificially low bond yields (helped by huge purchases from Asian central banks trying to suppress the rise in their currencies) and hence mortgage rates.
Stephen Roach, the chief economist at Morgan Stanley, has long argued that the Fed is a “serial bubble blower”. Its cheap money is stimulating another round of irrational exuberance. America's property market certainly looks pricey: the ratio of house prices to incomes is currently at a record high, and about a fifth above its 30-year average. Share prices still look overvalued by many measures. Undaunted, investors have regained their appetite for shares with something approaching indecent haste. A net $60 billion was invested in American equity mutual funds in January, beating the previous record, which as it happens was set in February 2000, just before the stockmarket peaked.
Foaming asset prices are reviving the debate about whether the Federal Reserve should raise interest rates to cool down asset-price inflation. In January Mr Greenspan declared himself fully vindicated in his decision not to prick the stockmarket bubble in the late 1990s, but instead to wait for it to burst and then cut rates sharply to cushion the consequences. Mr Greenspan argues that it is hard to be sure what constitutes a bubble. Raising official interest rates sufficiently to prick what may or may not be one could itself trigger a deep recession. The Fed is also determined not to repeat Japan's mistake in the 1990s, by tightening monetary policy too soon.
That, however, runs the risk that the Fed is cushioning the impact of the bursting of one bubble by inflating another—in housing. This is hardly a sound basis for a sustainable recovery. So addicted has the economy become to debt, that this will make it harder for the Fed to raise interest rates when it needs to do so.
Other central banks seem to be breaking ranks with the Fed. Officials at the European Central Bank, the Bank of England, the Reserve Bank of Australia and the Bank for International Settlements (the central banks' central bank) have given some support to the view that monetary policy should sometimes lean against a rapid growth in asset prices and build-up of debt, even if consumer-price inflation is low. The Bank of England and the Reserve Bank of Australia both recently raised rates because of such concerns.
The current dilemma for the Fed is that inflation is presently too low for comfort, which argues for holding interest rates down. But low interest rates, in turn, risk further fuelling asset-price inflation. Still, a small rise in interest rates would still leave monetary policy very loose, while serving as a warning to investors and homeowners that shares and house prices cannot keep rising for ever.
In a recent article in the Wall Street Journal, Otmar Issing, the chief economist at the European Central Bank, argued that central banks cannot afford to ignore asset prices. This, he said, is one reason why they should keep a close eye on excessive growth in money or credit as well as on their inflation target. He also suggested that central bankers should avoid contributing to unsustainable collective euphoria and should perhaps signal concerns about asset values. Mr Greenspan, alas, shows no sign of taking his advice.
Sox now lead Minn. 4-3 in the middle of the 8th.
wow, with intel's blah report, i would have thought the sox would be pummelled. <grin>
Not too many and not too few. Just enough to keep 'hope' alive.
and didn't someone here mention that we get our long embarged ppi numbers tomorrow?
personally, i don't see how the news on either is likely to be positive ... for the market, that is. its either neutral (more of the same) or something showing inflation (ppi) and employment growth.
of course, the fact that i don't see it probably means we rally. but then, its also a friday ...
uh-oh. someone's reading from an old script.
(by the way, this isn't quite politics: its comedy
"If the Democratic policies had been pursued over the last two or three years, the kind of tax increases that both Kerry and Edwards have talked about, we would not have had the kind of job growth we've had." - Dick Cheney, 2/3/04
Labor reports good, PPI bad.
well, sure looks like it could all be staged. and with intel mid-quarter update after hours tomorrow ...
strongest warning yet about Asian central bank purchases of U.S. assets
now he doesn't like it?? isn't this what is keeping u.s. interest rates down?
re MAMA .... um i don't think there's gonna be much of a run on K-Y from mama shorts ...
i didn't notice that until you mentioned it. its pretty comical, really ...
MAMA:
float: 6.5MM shares
today's volume: 65MM shares (10x the float!?)
shares short: 5,000
This "blew my mind" last week. How could Greenspan suggest such a thing with current rates at what they are. What he is trying to do is shift the burden of higher rates to the little guy. How can anyone support Greenspan after what he just said?
agreed. i posted here krugman's assesment of greenspan from the nytimes op-ed page yesterday: he puts together statements of the chairmen over the years to conclude that he has a political agenda ... although maybe krugman has been too political over the last few years to wear the economist hat right now. (although he's a princeton economist ...)
http://www.nytimes.com/2004/03/02/opinion/02KRUG.html
doug noland on greenspan
http://www.prudentbear.com/creditbubblebulletin.asp
The Curious Greenspan and the GSE
Chairman Greenspan’s busy schedule this week provided much to keep analysts’ minds busy. Monday he spoke before the Credit Union National Association, with an intriguing speech, Understanding household debt obligations. Tuesday he provided fascinating testimony on the government-sponsored enterprises before the Senate Committee on Banking, Housing, and Urban Affairs. Then on Wednesday, he was before the House Committee on the Budget, offering strong arguments why our government’s long-term fiscal situation is untenable.
As with many of his recent speeches, there is a clear effort by Dr. Greenspan to craft his legacy in a most positive light, as well as attempt to distance the Fed from future crises. Congress must cut spending, rein in social security, deal with the unwieldy GSEs they created, and so forth; the Fed has done a truly exemplary job and Congress needs to get with the program or there will be problems. Our Fed chairman made for some good sound bites and most of what he said seems reasonable, if not genuine. But I also get the sense something more significant may be at play. Is Greenspan quietly crafting some major developments for the financial system?
The first sign that something was up came with Monday’s Curious comments.
“One way homeowners attempt to manage their payment risk is to use fixed-rate mortgages, which typically allow homeowners to prepay their debt when interest rates fall but do not involve an increase in payments when interest rates rise. Homeowners pay a lot of money for the right to refinance and for the insurance against increasing mortgage payments. Calculations by market analysts of the ‘option adjusted spread’ on mortgages suggest that the cost of these benefits conferred by fixed-rate mortgages can range from 0.5 percent to 1.2 percent, raising homeowners’ annual after-tax mortgage payments by several thousand dollars. Indeed, recent research within the Federal Reserve suggests that many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade… American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage. To the degree that households are driven by fears of payment shocks but are willing to manage their own interest rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home.”
What? How could chairman Greenspan endorse adjustable-rate mortgages for our aggressively borrowing household sector at this stage of the interest rate cycle? This borders on the absurd, or so I thought initially. But things began to make more sense after his Curious testimony on the GSEs.
“The Federal Reserve is concerned about the growth and the scale of the GSEs’ mortgage portfolios, which concentrate interest rate and prepayment risks at these two institutions. Unlike many well-capitalized savings and loans and commercial banks, Fannie and Freddie have chosen not to manage that risk by holding greater capital. Instead, they have chosen heightened leverage, which raises interest rate risk but enables them to multiply the profitability of subsidized debt in direct proportion to their degree of leverage. Without the expectation of government support in a crisis, such leverage would not be possible without a significantly higher cost of debt.”
“In general, interest rate risk is readily handled by adjusting maturities of assets and liabilities. But hedging prepayment risk is more complex. To manage this risk with little capital requires a conceptually sophisticated hedging framework. In essence, the current system depends on the risk managers at Fannie and Freddie, as good as they are, to do everything just right, rather than depending on a market-based system supported by the risk assessments and management capabilities of many participants with different views and different strategies for hedging risks. Our financial system would be more robust if we relied on a market-based system that spreads interest rate risks, rather than on the current system, which concentrates such risk with these two GSEs…”
“But to fend off possible future systemic difficulties, which we assess as likely if GSE expansion continues unabated, preventive actions are required sooner rather than later. As a general matter, we rely in a market economy upon market discipline to constrain the leverage of firms, including financial institutions. However, the existence, or even the perception, of government backing undermines the effectiveness of market discipline. A market system relies on the vigilance of lenders and investors in market transactions to assure themselves of their counterparties’ strength. However, many counterparties in GSE transactions, when assessing their risk, clearly rely instead on the GSEs’ perceived special relationship to the government.”
Well, isn’t this interesting. After a decade of explosive GSE growth, our Fed chairman has found religion. These institutions abrogate market discipline and are a risk to future stability. And now Dr. Greenspan would like to halt their balance sheet expansion. This is big. But why today?
Chairman Greenspan: “And I would say one of the reasons why the issue of Fannie and Freddie didn’t arise earlier is they weren’t large enough and they didn’t create a potential significant problem for the overall financial system that -- not that they do today, as I point out, but they will almost surely do in years ahead unless some changes are made in the structure of how these organizations function.”
The GSEs ended 1998 with outstanding debt approaching $1.3 Trillion, so it is not credible to argue that they until recently “weren’t large enough and they didn’t create a potential significant problem.” The GSEs have played such prominent roles in a series of Fed-orchestrated “reliquefications” that they have operated as virtual central banking partners. For years, the Greenspan Fed has acquiesced to risky GSE expansion, and, for years, GSE and Fed interests have been in harmony. Perhaps Dr. Greenspan’s newfound resolve is related to ECB and foreign central bank demure. It would, after all, be reasonable that some might appreciate that the GSEs are the fountainhead for much of the destabilizing dollar liquidity inundating the global financial system. I can imagine the ECB’s Dr. Issing protesting that the explosion in GSE borrowings was a leading source of unsound money and Credit – fostering financial and economic imbalances.
I will further conjecture that the true scope of the GSE problem became apparent to the Fed (and others) this past summer and fall. A strengthening economy set the stage for what would typically be an imminent tightening by the Federal Reserve. Between July and August, 10-year interest rate futures yields surged 120 basis points, while measures of bond market volatility exploded. The MBS market was being pummeled, the cost of hedging was skyrocketing, interest-rate markets were rapidly moving toward dislocation and the fledgling reflation/recovery was in serious jeopardy. The GSEs had relied on interest rate derivatives to hedge their ballooning balance sheets, but they had effectively become too large to hedge (the market can’t hedge itself!). And much complicating matters, the leveraged speculator community was heavily exposed, also seeking to reduce exposure to rising rates.
Everyone was on the same side of the boat, and the commencing of interest rate risk off-loading (including the self-reinforcing trading by dynamic/“delta” hedging strategies - by GSE counterparties and others) was quickly exposing the untenable nature of systemic interest rate hedging. The interest rate derivatives market – one chairman Greenspan has so trumpeted as a modern marvel with myriad benefits to financial stability and economic prosperity – was faltering. Moreover, Federal Reserve interest rate policy was hamstrung by the risk of financial dislocation.
But things were brought back to calm. The Fed assured the marketplace that rates would not be rising for a considerable period, while the GSEs ballooned their balance sheets with securities liquidated by the fearful speculators and hedgers. Between July and September, Fannie and Freddie Retained Portfolios expanded by an unprecedented $160 billion. This major operation worked its magic by injecting massive new liquidity, thereby lowering interest rates, fueling stock market gains, and stimulating the U.S. Bubble economy. Stock market speculation intensified and speculative excess fanned out across markets at home and abroad. And it is certainly no accident that this wild inflation also coincided with the arrival of a new leg down in the dollar bear market. This, then, set in motion greater foreign central bank dollar support, ushering in unparalleled global liquidity excess and heightened inflation throughout Asia. Never before had GSE power been as impressive or global in nature. It was also destabilizing.
And while GSE and interest-rate derivative issues were anything but resolved, their resolutions were at least delayed for the Fed’s discretionary “considerable period.” It is my view that Dr. Greenspan would now like to take this opportunity and attempt a change in course -- rein in GSE balance sheet expansion and hedging operations, and get interest rate risk rebalanced away from the financial sector.
But our Fed chairman has a number of dilemmas. For one, any admission that these institutions’ balance sheet operations have played critical roles in reliquefying the system during periods of heightened stress would surely lend congressional support to the GSEs. What’s a politician not to love about that? So Greenspan contrives a circumstance where the GSE business of insuring MBS functions just wonderfully and poses little systemic risk. Balance sheet operations, on the other hand, offer little positive impact (outside of boosting GSE profits), while posing considerable systemic risk. Here’s how Dr. Greenspan explains it:
“There is another business (other than insuring MBS), which relates to the issue of taking part of the mortgages, which are purchased, and hold them on the balance sheets of the GSEs. These mortgages are selling at market interest rates, but if you have a subsidy in issuing debt, you are picking up an abnormal profit, which is the normal profit in the spreads plus the size of the subsidy so that the incentive to put assets on the balance sheet, whether or not they are mortgages, corporate bonds, or other things, which are on the GSE balance sheets; that, in effect, harvests the subsidy which, remember, because it is not restricted by the Congress, can be expanded at will by the GSE. And so what we have is a structure here, in which a very rapidly growing organization holding assets and financing them by subsidized debt is growing in a manner, which really does not, in and of itself, contribute to either home ownership or necessarily liquidity or other aspects of the financial markets.”
“There are disputes, I must tell you, that people -- there are some people who do believe that (GSE balance sheet expansion) has some effect on securities markets. I think the evidence here is very murky and, clearly, in any event, more of a secondary issue than anything else. The crucial question are there -- these are two businesses. They are both subsidized. They both have a high rate of return on equity; indeed, the rate of return on equity on the part of the GSEs is significantly above those of, say, large commercial banks, which is an indication that they have a special advantage. And I’m saying that there is one vehicle or, I should say, one part of this business, which we should be endeavoring to get them to expand, because that’s the base on which the secondary mortgage market functions.”
“The ownership of assets on the balance sheet is a very seriously lesser -- a lesser force. My own judgment is it has very little to do with either home ownership, home construction, or even -- has a -- having a very significant impact at all on interest rates. The real issue is the securitization, which is what Fannie and Freddie originated, they do an exceptionally good job technically, and my own view and why I think privatization would be the thing for them to want to do is I basically believe that if they were to fully privatize, they would be smaller organizations, their profit levels would be somewhat less, their price earnings ratios would be much higher and, in all likelihood, they may even have greater market value from a privatized organization largely because they do things so well.”
Wow! This is fascinating subject matter, as it broaches the key issue of GSE growth: Does their balance sheet expansion create liquidity, thus impacting interest-rate and financial markets generally? Chairman Greenspan is arguing that they do not, and that such potentially risky operations should be limited by congress. He also conveniently avoids the critical issue of the GSEs as “Buyers of First and Last Resort for the Leveraged Speculating Community.” The capacity for basically unlimited GSE balance sheet expansion – especially in a time of heightened systemic stress - provides a momentous incentive for leveraged speculation in MBS and throughout the U.S. Credit market. To downplay the importance of GSE balance sheet expansion is Curious but not all too credible.
Not surprisingly, Mr. Greenspan’s testimony elicited immediate responses from both Fannie and Freddie. From Fannie’s Franklin Raines: “By purchasing mortgages for its portfolio, Fannie Mae has been able to move independently to stabilize the mortgage market during a crisis. In so doing, it has provided an important source of stability to the market. This was clearly evident during the global financial market turmoil in the fall of 1998… Fannie Mae repeated this role of market stabilizer following the events of September 11.” Fannie and Freddie CEOs both testified before congress on Wednesday, stating (the obvious) that GSE purchases lower mortgage rates and, at crucial times, have stabilized the markets.
Richard Syron, Freddie’s new CEO and former Fed bank President, wrote, “It is unfortunate that the debate has moved from a discussion of the importance of legislation to strengthen the regulatory structure of the housing GSEs to a more theoretical discussion.” Well, for too long the critical “theoretical discussion” of the GSE’s instrumental role in contemporary money, Credit, marketplace liquidity, speculative excess and economic activity has been dismissed and disregarded.
Chairman Greenspan would, of course, never admit that the GSEs – in the age of unconstrained Wildcat Finance - operate as quasi central banks and nurture leveraged speculation. He’ll gladly stick with the conventional view that these institutions are incapable of creating liquidity and are far removed from markeplace speculation. And Dr. Greenspan points the finger of responsibility at congress, instructing them to attempt to resolve the issue of the markets assuming government backing of GSE debt. But surely he appreciates that the “implicit guarantee” is much more of a creature of the Greenspan Fed than it is of our Washington politicians.
The Fed cannot speak of helicopter money, “unconventional methods,” and fighting deflationary forces at all cost and not have the markets absolutely convinced that the Fed would move aggressively at any indication of problems at the GSEs. Holders of GSE debt have understandable confidence that the Fed would respond to any systemic crisis by inflating the value of their holdings – they’ve done it repeatedly. Indeed, the GSEs powerful unlimited capacity to issue securities and create marketplace liquidity rests squarely with the Fed’s guarantee of marketplace liquidity and repeated market bailouts. The GSEs are the ultimate Too Big Too Fail – the ultimate Moral Hazard and no amount of legislation will alter this reality.
Dr. Greenspan recognizes he has a major problem, and he is surely anxiously aware that he must attempt to rein in GSE debt growth. They have become too powerful, they now dominate (unsound) “Money & Credit,” and, importantly, GSE and Fed interests are no longer necessarily in accord. Of immediate concern, Greenspan faces an interest rate hedging nightmare. But he also fully appreciates that he cannot risk any reduction in mortgage finance Credit Availability. This leads Greenspan to become a strong advocate of GSE guarantees, ensuring the continuation of enormous Credit growth through the MBS market. But he also fully appreciates that aggressive banking system asset growth will be required to compensate for restrained GSE portfolio expansion. Yet such expansion would be especially dangerous at this stage in the interest rate cycle (not to mention the terminal phase of the Mortgage Finance Bubble). The interest rate derivative market is today untenable, and he would be adamant to minimize the banking system’s exposure to excessive interest rate risk.
So a crucial aspect of his plan is to have households shoulder much more of the risk burden – Adjustable-rate Mortgages for the Masses. And with today’s active purchase and refi mortgage markets, in not all too long of a period a considerable amount of interest-rate risk can be shifted to homeowners enticed by low payments. This process is certainly supported by the myriad of alluring new ARM (and interest-only) products coming to market, which Greenspan went out of his way to trumpet Monday. The Fed can do its part by keeping interest rates artificially low. And as crazy and reckless as all of this is, it suits Dr. Greenspan just fine. Sustain the Great Credit Bubble and transfer even more risk to unsuspecting homeowners. The banks win, as they gain back market share in mortgage lending. The GSEs do fine as they insure only larger amounts of MBS. And the financial system wins generally as it earns strong profits while transferring interest rate risk to the household sector. And, as we all know by now, What’s Good for the Financial Sector, is Good For America.
All I can say is the Dr. Greenspan is truly The Wizard. He is the financial genius, the artful politician, the brilliant scientist. But his experiment has “gone mad.” To proceed with his endeavor – to sustain the Great U.S. Credit Bubble - requires larger quantities of debt of increasingly risky debt. And he clearly has every intention of burdening households with unprecedented risk. He makes the ridiculous claim that household finances are in good shape, but this is only to rationalize his plan. He is in the process of thoroughly burying Americans in debt. Greenspan imparts a terrible injustice.
I will stick with my view that this is despicable central banking at its absolute worst. I will again protest that Dr. Greenspan is deceitful and dishonorable. And I will protest that a reckless U.S. financial sector is more than willingly complicit in the rape and pillage of American finance. But placing all this aside, we must be especially vigilant analysts. There are potentially major financial developments afoot. And in the unfolding battle between Alan Greenspan and the government-sponsored enterprises, I would not underestimate The Enormous Power of Franklin Raines & The GSE Lobby.
Maryland Senator Paul Sarbanes: “Let me just follow up on the question that the chairman just put, because I think it’s interesting. Some have argued that the GSEs provide important stability in the mortgage markets during periods of economic instability, and they site, for example, the Asian debt crisis in ‘98, or the business and bank recession of ‘90, ‘92, and argue that the mortgage rates would have increased dramatically at that time as, in fact, they did in the Jumbo mortgage market and in other credit markets, but that the GSEs’ ability to continue buying mortgages and mortgage-backed securities made a difference so that they had played an important stabilizing role. What’s your response to that?”
Chairman Greenspan: “First of all, the reason that there were fairly significant purchases at that time is that, remember, during that crisis you had a flight to quality, which pushed long-term Treasury rates down. And because the presumption was that the GSE debt was comparable to Treasury, its rates went down. And, as a consequence of that, the margins opened up, and it became quite profitable to go in and purchase mortgages and mortgage-backed securities so that the issue was not an endeavor to do something for the markets, per se, it was a very sensible decision.”
Senator Sarbanes: “But did that endeavor contribute to stability?”
Chairman Greenspan: “I think it did, in part, yes.”
Senator Sarbanes: “In part?”
Chairman Greenspan: “I said I think it did, in part.”
JAPAN rally a fake?
well, that's as real as it gets when japan is involved anyway ...
hey fed, i think you'll like krugman's editorial today in the nytimes. he takes on greenspan.
Maestro of Chutzpah
http://www.nytimes.com/2004/03/02/opinion/02KRUG.html?hp
its described here (at the bottom of the page):
http://www.vtoreport.com/rsi.htm
i'm not a real follower of this. someone here had pointed it out during the last few weeks and its done pretty well ...
well the 5-day rsi guys closed their position today.
china, software quotas
BEIJING, FEB 27: For years, China has been trying to end Microsoft Corp.'s monopoly on its computers. It has tried to develop its own operating system. It has appealed to the patriotism of consumers. Now, it is turning to the law.
Officials say a new law will be announced by this summer requiring a minimum percentage of software purchased by the government be produced in China. That's crucial in a country where the government accounts for 25 percent of the $30 billion software market.
No one is saying what that minimum will be -- some say it may be as high as 70 percent -- but one thing is certain: Linux will be the beneficiary.
"When the government purchasing law comes out, Linux will win a piece of the market," said Fang Xingdong, chairman of China Laboratory, an independent software consulting firm. "Of course, the party that will be most affected will be Microsoft."
Microsoft did not respond to requests for comment. But the company has been actively trying to woo China. CEO Steve Ballmer visited last November and fondled donkeys with the Ministry of Education to provide $10 million to promote computer use in schools.
China says it is merely trying to level the playing field for its own software companies.
"If a software program is dominant for a long time, it's harmful for the development of the software industry," said Li Wuqiang of the Ministry of Science and Technology.
China's reasons for preferring Linux are many. Officials often say they feel safer with an open source operating system, because a proprietary system such as Microsoft's Windows may contain hidden "back doors" that programmers can use to evade security and gain access. Microsoft tried to alleviate that concern last year by revealing its Windows source code to the government, as it has done with some other governments and universities.
Another big factor is cost. The Linux operating system is essentially free, while Windows is considered unreasonably expensive.
"I believe the era of exorbitant profit for software should end," said Li, the science ministry's deputy director in charge of new technology. "Basic software services should be cheap, just like water, electricity and gas."
But the primary reason, one that is repeated by officials and in the media, is a nationalistic one. China believes that by developing its own operating system, it will have control over its destiny.
"An operating system determines the fate of the IT industry in a country," Lu Shouqun, a former government official who now advises several software companies, told the state-run Guangming Daily.
It's no secret that China's goal is to have an internationally competitive software industry. Linux, it believes, may be the key to achieving that.
Over the years, China has been handing out grants to almost any company working on a Linux product. According to Fang, the Ministry of Science and Technology will invest more than $60 million by 2005 and the Ministry of Information Industry(cq) more than $12 million on all types of software.
So far, Linux has not made big inroads. IDC software analyst Jenny Jin estimates it has "a very small percentage" of the operating system market, probably less than 4 percent.
Global: An Open Letter to Alan Greenspan
Stephen Roach (New York)
Rare is the economy that transitions from recession to recovery and, ultimately, to expansion without an attendant rise in interest rates. And yet 27 months into the current recovery, that’s very much the state of affairs in the United States. The Federal Reserve is the key actor in this drama. Borrowing a page from the script of the New Paradigm of the late 1990s, the Fed continues to hold the view that monetary tightening need not interfere with the rapid growth of a productivity-led economy. But the prescription of low nominal interest rates introduces a new dimension of financial market risk into the equation -- the possibility of multiple asset bubbles. In an effort to spark debate over the wisdom of this policy strategy, the following “open letter” to Alan Greenspan appeared in the March 1, 2004, issue of Newsweek International.
Dear Mr. Chairman:
Who would have thought that the U.S. economy would have come through the stock-market bubble of the late 1990s in such remarkable shape? I sure didn't, but obviously, you did. My congratulations on a job well done.
Of course, you know better than anyone that a central banker's work is never done. There are always unexpected problems that require forceful policy responses, and that's what worries me. I am concerned that your successes may have come at the cost of creating more serious problems in the future. I am equally worried that your strategy closes off the options we will need to cope with these threats.
The issue goes to the heart and soul of economic policymaking. Mr. Chairman, I don't have to tell you that policy strategy requires a touch of art as well as science. But it also needs common sense. Like war, one of the basic principles of stabilization policy is never to run out of ammunition. Policy stimulus is to be used in bad times, but when circumstances improve, it is critical to "reload the cannon" to prepare for the next battle.
With the federal funds rate at only 1 percent, what can you at the Fed do for an encore, should you need to respond to an unexpected problem? For that reason, I would urge you to raise the federal funds rate immediately to 3 percent in order to restore some semblance of normalcy to financial conditions.
Unfortunately, for reasons that are not altogether clear, you seem to be adamant about keeping interest rates at rock-bottom levels. If you want my opinion, that's asking for real trouble. It raises the risk of another bubble. As soon as you take interest-rate risk out of the equation, you re-create the "moral hazard play" that became central to the Great Bubble of the late 1990s. Investors and speculators alike will be quick to take advantage of a Fed that is not about to stand in the way of vigorous growth in the economy and rapid appreciation in asset markets.
There are already signs of such excesses. Property markets are frothy and so are government bonds, credit instruments, high-yield debt, and tech stocks (again). Here we are, only four years after the bursting of the first bubble, and the risks of new bubbles abound.
Ironically, that doesn't seem to trouble you. In a recent speech you noted, "Our strategy of addressing the bubble's consequences rather than the bubble itself has been successful" (see “Risk and Uncertainty in Monetary Policy,” remarks presented by Alan Greenspan at the meetings of the American Economic Association, San Diego, California, January 3, 2004). That worked once but can it work again? In particular, how do you deal with the consequences of another bubble if you are still holding short-term interest rates at 1 percent? Last spring, in the midst of a deflation scare, you and your colleagues argued that you had plenty of options left — namely, a stockpile of "unconventional" weapons that could be deployed in the event you couldn't cut the federal funds rate any further. But who knows if such untested tools would have actually worked?
There's something else I don't get. You are very upbeat about economic prospects, recently presenting a forecast to the U.S. Congress that real GDP would rise 4.5 percent to 5 percent over the four quarters of 2004. This is solid growth for any economy. But you still insist on keeping interest rates amazingly low. A normal economy needs normal interest rates. With your forecast, you should have nothing to be afraid of. Am I missing something?
As bold as you were in combating the post-bubble perils, I believe you need to be equally bold in preserving this nascent recovery. To do otherwise and leave short-term interest rates at unusually low levels risks a return to the perilous bubblelike mentality that posed such grave risks to the economy and financial markets in the late 1990s. These are lessons to be learned — not ignored.
Sure, politicians will be up in arms if you hike interest rates, particularly during an election season. But the last time I checked, America has an independent central bank. You must do the right thing — not what is politically correct. Others could also be aghast at the idea of a full two-point rate hike, but recall what happened in 1994, when the Fed raised rates by a full three points, but did so gradually over the course of the year. That only served to create mounting anxiety and turmoil in the markets. Better to move in one fast step and get it over with.
Mr. Chairman, recoveries are all about renewal and opportunity. For the economy, recovery spells rejuvenation. For financial markets, it's a time for healing. But for policy, recovery offers the critical opportunity to reload the cannon in order to cope with the inevitable next problem. No one knows when and where that problem lurks. But as day follows night, it'll come. The Federal Reserve must be prepared for that possibility. The time for more normal interest rates is at hand.
Respectfully yours,
Stephen S. Roach
Chief Economist
Morgan Stanley
seems to be countering the "news" out of iran that bin laden was captured quite a while ago. as i've said here before, i think he's either long dead or long captured; there's no other explanation for lack of video messages for 2+ years.
http://www.paktribune.com/news/index.php?id=56525&PHPSESSID=1e048272816dabbb532480c12ed89a48
[this was also on debka.com, but has been removed]
The radio said, "The capture of the al-Qaeda leader has been made sometime before, but (US President George W.) Bush is intending to announce it when the American presidential election is held."
Contacted by IRNA, an IRIB announcer at the Pusthtun service, confirmed the news, which he said, they had got from a `very reliable source` in Peshawar, Pakistan.
"Osama bin Laden has been arrested a long time ago, but (US President George W.) Bush is intending to use it for propaganda maneuvering in the presidential election," he said.
Osama`s head on a platter is believed to be a big boost to Bush`s presidential chances, which are increasingly being eclipsed by Democratic presidential front-runner John Kerry.
> I think BERNANKE will be the next Fed head
god help us
the retail stocks need to turn and slide with WMT leading the pack downward
gee, but i thought everyone is waiting for tax returns to see some nice strength in retail? .... well, thats what cnbc said ...