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Jobless benefits to expire on Dec. 28
House, Senate couldn't agree on federal program
By Rex Nutting, CBS.MarketWatch.com
WASHINGTON (CBS.MW) - Congressional Democrats urged President Bush on Thursday to pressure House Republican leaders to approve a stop-gap extension of federal unemployment benefits for around 800,000 workers on Dec. 28.
"It is clear to us that your personal intervention on behalf of these families would be dispositive if you choose to exercise it. Since November 5, Republicans in Congress have demonstrated their willingness to defer to you on issues you deem important," House Minority Leader Dick Gephardt, D-Mo., and Senate Majority Leader Tom Daschle, D-S.D., wrote in a letter to Bush.
Both the House and Senate had approved separate versions of bills last week that would have extended the federal benefits, but no action was taken in the final days of the lame-duck congressional session to bridge the gaps between the Republican and Democratic versions.
House Republican leaders have said their plan, which was approved first, should have been adopted by the Senate. The House has not officially adjourned; its final session is on Friday.
"This is an utter failure of White House leadership," said Wendell Primus, an economist with the Center for Budget and Policy Priorities. "It's very unfortunate that the White House didn't step in to the resolve the differences."
"I'm holding out hope" that the House would approve the Senate's 13-week extension on Friday, Primus said.
Most observers believe an extension of benefits will ultimately be approved.
The new Congress returns to Washington on Jan. 3.
"We're going to have to address it early next year," said Senate Republican Leader Trent Lott, R-Miss. "And I don't like that. I wanted to clear the decks."
"I'd guess it would be extended for an additional 13 weeks," said Ed Potter of the Employment Policy Foundation, an employer-funded policy group.
Lott said he had spoken with Republican leaders in the House about passing a temporary extension, but they had refused to budge.
Daschle said early Wednesday that he hoped the Senate could agree to the House's limited five-week extension on the last day of the session, but those efforts failed.
The inaction on unemployment was "greatest disappointment to many of us," Daschle said Wednesday in a swan song news conference.
Through Dec. 28, a maximum of 13 weeks of federal benefits will be available to workers who have exhausted their 26 weeks of state unemployment benefits and are still unable to find a job. In three states, workers are now eligible for up to 26 weeks of unemployment checks.
Unemployment benefits are provided by the states to many but not all workers who lose their jobs through no fault of their own. Workers fund the state programs through payroll taxes levied on their employers. The trust fund contains some $24 billion.
The most recent data show that 3.14 million workers were receiving state unemployment benefits and 798,000 were receiving extended federal benefits. The unemployment rate was 5.7 percent in October, with 8.21 million Americans officially classified as unemployed, including 1.66 million who have been unemployed for longer than 26 weeks.
The two parties have been arguing about the facts for months.
Democrats have argued that the government programs are providing less money to fewer people than in previous recessions.
"Some $23 billion would sit unused amidst an economic slump while several million jobless workers go without benefits," said Isaac Shapiro of the Center on Budget and Policy Priorities. He argues that jobless benefits are among the most effective ways to stimulate the economy.
"This is one of the fundamental purposes for which these trust funds were established," he said.
The Republicans say 8.2 million unemployed people isn't that high compared with the 11.5 million in 1983 or the 10 million in 1992. They also argue that jobless benefits just encourage people to be lazy.
Job growth has been weaker coming out of this recession than the previous two recessions, says Larry Mishel, president of the Economic Policy Institute.
Payrolls are down 1.6 percent from their peak 25 months ago, worse than the 1.5 percent decline at this stage in the early 1990s recovery and far below the 1.7 percent increase in payroll at this stage of the early 1980s recovery, Mishel said.
Rex Nutting is Washington bureau chief of CBS.MarketWatch.com.
It's Christmas. The economy needs a good Christmas here and nothing like a good stock market to raise consumer confidence. Christmas season is already short 6 days so the Fed is helping to try to get things off with a boost. A bad Christmas would almost assure a recession in 1Q and possibly longer.
Joe
RIMM - Halted news eom
HD- I would stay away from HD unles you are hjust trying to catch scalps. I'm in this business. IMO HD is going to have to cut back new store openings soon. That will be one negative. If the cut back store openings watch their Gross profit suffer. Why? In this industry many vendors give you the opening order for a new store free to buy the shelf space. For HD that amounts to about $3 mil per store as I see from their 10Q. 200 stores and that is $600 mil per year to bring down the cost of goods. Of course that won't hit the bottom line over night but over time it will.
Just athought. Joe
If you like BRKS short you may want to look at AEIS, PLAB, and MKSI also. I got my eye on this group for when the music stops.
BTW, AMAT seems to have sat out the last dance to new highs.
Joe
Pssst! EP- Please don't tell anyone that this is not a semi-conductor stock but it's acting like one. One of the few longs I have.
Joe
Very strong volume on the Nas as it is already up to 1.3 bil at 12;30.
Joe
From the Philly Fed report:
The Philadelphia Fed's new orders and employment indexes showed a mixed picture. The November new orders index jumped to 11.0 from -1.3 the prior month. Meanwhile, the employment index continued to mirror the soggy national employment situation, and indicated further job losses at a reading of -0.2. Still, it was better than the -5.1 reported in October.
Meanwhile, price pressures seen by Philadelphia manufacturers continued to mount. That marks a similar trend seen in other regional and national manufacturing indexes, although those price increases are still failing to translate into pressure in the government's major inflation indexes.
The Philadelphia Fed's prices paid index stood at 13.0 for the month versus 14.3 in October, indicating a modest slowdown in the pace of increases. Meanwhile, the prices received index moved to -8.6 in November from -7.5 the prior month.
The tepid activity seen in the Philadelphia Fed report is consistent with a modest economic rebound currently being turned in by the U.S. economy. Earlier this month the Fed cut interest rates to 40-year lows, in an action it said was bent on helping the economy through what it deemed a soft spot.
>>>The Philadelphia Stock Exchange's Semiconductor Index, or SOX, was recently up 28.07 or 8.3%, to 366.15. That industry benchmark is up nearly 75% from the Oct. 8 intraday low of 209.35, its lowest level in about four years. <<
Amazing!
Heads up- Philly Fed out at noon. Projected to show an improvement over last month. Could add fule to the fire.
Joe
Isn't this the first lower low of the day on the nas? Amazing. Bet we close in the RED! LOL! A fella can dream, can't he?
Joe
DJ H-P Seen Meeting 4Q Views, To Offer Cautious Outlook >HPQ
By Donna Fuscaldo Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Thanks mainly to Hewlett-Packard Co.'s (HPQ) strong printing and imaging unit, analysts widely expect the company to meet earnings expectations when it reports fiscal fourth quarter results later Wednesday.
As for its enterprise systems business, which includes servers and storage, industry watchers aren't bracing for much growth.
"We expect an in-line quarter from H-P this evening, marked by weakness in the enterprise segment and strength in the imaging segment," wrote Mark Specker, an analyst at SoundView Technology Group, in a research report Wednesday.
H-P's imagining unit will likely have "abnormally" high margins, which will counterbalance "abnormally" low margins in its enterprise segment, he said.
According to the analyst, who is calling for H-P to report earnings of 23 cents a share and sales of $17.4 billion, the key for H-P in fiscal 2003 is a recovery in profitability in its enterprise unit.
Specker said his full-year fiscal 2003 estimate of $1.22 a share is predicated on a recovery in its enterprise segment to near break-even.
Specker does not own shares of H-P; SoundView doesn't have an investment banking relationship with H-P.
Analysts, according to Thomson First Call, have the Palo Alto, Calif., computer hardware and software maker weighing in with earnings of 22 cents a share on sales of $17.29 billion. In the year ago fourth quarter, H-P reported earnings of 8 cents a share and sales of $18.16 billion.
AXL -*DJ Auto Parts Makers Dn; BoA Lowers Its Auto Sales Outlook
>>Waiting for 2:15 (2:22?) reversal period<<<
I'll be broke by then. 8-(
Could it BE??? I run an 8 min average on the Nas chart. I think right now is the first time today that it went under. Amazing.
Shorted some QQQ, CSCO and INTC. Tight stops.
Joe
AXL- Doing some gear grinding today. Good short op IMO for a position play. Sells axles mostly to GM. Downgrade today.
JOe
DYN- I think DYN will be fine longer term. I don't see BK. I think RRI is a much better buy and really cheap. I don't see things looking up for another 6 months to a year so I would only buy if you want to hold long term.
JOe
"Governments, including central banks...have the responsibility to prevent major financial market disruptions through development and enforcement of prudent regulatory standards and, if necessary in rare circumstances, through direct intervention in market events."
Covered both CSCO and QQQ for small loses. Probably wait until after noon to get back in.
Joe
Nas tick just bouncing along the lows of the day. Big money distrubuting their shares to the little people as the nas remains near it's highs. Sure would like to see 1394 go. I don't like the tick being so negative and the nas still so high. Whoops! there goes a good bearish move. Nope, back up again. Shat!
Joe
Pull up Quote.com - http://finance.lycos.com/home/livecharts/default.asp
Put the symbol in as tick.nq and change the time frame to 1 minute to get the one minute nas tick. Don't usually see the nas run some high on that type of tick action. Nas trin (trin.nq)is extremely low.
Joe
CSCO- Short too at 14.14. eom
QQQ- Try again @ 26.15 with hopes that 1400 is solid resistance. Would love to see a break of 1397. Tick did not confirm this last high. Bonds still flat.
Joe
CELL- Look at this chart. Buyinf spec that I mentioned about two weeks ago. Resolved most of it's floorless convertible issues and buyers have taken notice. Only 8 mil shares now after a reverse split. I got out way too early but may be of interest on a pullback. The pullback I keep waiting for that never comes. .
Joe
QQQ- Out with a 6 cent loss. Didn't want to see that new HOD.
Joe
QQQ-Short @ 26.00. eom
It has been seen. Thanks, Joe
The Nas NMS tick and the treasuries sure are not confirming this rally. JS
>>Soundview raises price targets for select semi equipment stocks
Soundview believes that more evidence is mounting that Q1 could be the turn in the order picture for the semi capital equipment industry; <<<
I guess these folks haven't been listening to the conference calls. "More evidence is mounting" ? Could they explain that!
Of course I'm short AMAT!
Joe
Weekly Mortgage Survey- If anyone sees these numbers, please pass them on to me. The Mortgage Bankers Association won't post them to their website until tomorrow. They come out Wed am. Also, if anyone knows were I can access these numbers when they come out I would appreciate it. MarketWatch does occassionally but not every week.
TIA, Joe
MHK- Got close to 3 points on short position. Moving my stop down to try to lock in 2 of those. HomeBuilder report came out highest in 2 years today. That says tomorrows reports should be could. I can't see it. I amazed that a company like CTX can come out and raise guidance for the next two years when we just went through several record years. Weekly Mortgage survey report out tomorrow am too although I don't think many watch it.
Joe
C- Short at 36.42. Position trade. eom
Raise your hand if you would like 1374 taken out. <VBG>
RSTO- Reports tomorrow. Nov 7th they said this.http://biz.yahoo.com/prnews/021107/sfth015_1.html
>>The Company expects a loss of approximately $0.08 per share for the third quarter. This compares to the Company's prior guidance of a loss of $0.05 to $0.06 per share, and a loss of $0.36 per share in the same period a year ago. The variance is due to lower than expected merchandise margins resulting from better than expected customer acceptance of the Company's recently introduced private label credit card, which was marketed with a "10% off first purchase" offer.<<
I don't expect much from these folks and I see possible BK down the road. Been short since 12, over several months ago. Possible buy out rumors...I don't think so but something to think about. Cash was very lean last time they reported. I have to imagine that their balance sheet won't be very pretty. Just an idea.
A bunch of insider "planned sales" this year. 10% of float is short.
Joe
FEderal Reserve, I see we got an MSP today. I think a couple weeks ago Option Investor article said that they only had seen one of those this year at the time. Any idea what an MSP at this time would represent?
From OI.
>>The reverse of a repo is called a matched sale-purchase
transactions (MSP's), whereby securities are sold to the dealers
for cash, and then repurchased from the dealers upon maturity.
Both Repos (RP's) and matched sale-purchase transactions (MSP's)
are temporary open market operations. Sometimes the Fed will
sell securities to or purchase securities from the dealers
outright, which affects the dealers' reserves on a permanent
basis.
If you're all still awake, or haven't yet dashed off to apply for
jobs with the Fed, here's the kicker. The effect of these OMO's
on the 22 dealers' reserves has a direct influence on the level
of liquidity in the markets, just as we saw in Livermore's 1907
example. When the dealers have excess reserves, they are free to
play with those funds until such time as the funds must be
returned. This liquidity finds its way into the markets,
purchasing securities. On days when reserves are drained, the
liquidity finds its way out of the market. During the past
months, there has been a tendency to see market strength on days
when large repos of 5-10B have been announced. When these repos
expire, if they are not replaced with new repos, we often see
market weakness. This year, because we are in the grip of a bear
market, the tendency has been to see repos. I have only seen one
instance of an MSP this year, although I've only been following
the Fed for the past few months.<<<
Thanks, Joe
>>Which direction were you suppose to look?<< Up? <VBG>
My wife got out too in the Atlanta area but just couldn't see anything. We are on the south side. too many clouds.
Joe
DJ Home Depot CEO: 'Cautious' On 2003; No Specific Guidance
The CPI report showed medical care is showing fairly strong inflation. Looking out ahead it appears to me that medical care is one of the few sectors that has pricing power. This from today's report from OptionInvestor.com:
>> Medical care- Prices rose 0.6% in
October, bringing the year-over-year increase to 4.8%. Hospital
services rose 0.9%, drug prices increased 0.5% and doctors'
services rose 0.6%. Hospital services prices are up 9.3% in the
past 12 months.
Any thought on last week's options expiration. Many calls expired in the money. Probably one of the least painful expiry that I have seen. Much stock in weak hands?
Joe
These "sell" ratings are a big switch from what we had seen in the past. Last year and before they would let them run and then drop substantially before downgrading. Now they are downgrading on they way up. I think it is a good thing. Not because I'm bearish but more that it brings more trust into the system. Downgrading on valuations - who would have thunk!
Joe