Non-business Updates

(12-29-06) Stocks drop still only modestly relative to reality with suckers bear market rally still intact as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 38 S&P fell 6 ,and NASDAQ fell 10 , all very commissionable on heavy volume, as in final pre-election result push for bush, which fell very short but has provided the same pump-priming of the market as most recently seen in 1999 which ended quite badly even without the exacerbating effects of huge unsustainable and debilitating debt/deficits deferring/delaying/prolonging the inevitable reality even as entire domestic u.s. industries are rendered what is tantamount to defunct and with corporate welfare unwisely spent (war crimes, etc.). More reports in defiance of reality, oil prices up, Dollar Slides...,every intelligent analyst/economist knows that the new home sales number from the government is a total lie that will be revised downward later, that the options scandals are pervasive in fraudulent america (100 investigations just tip of the iceberg), oil stocks continue to rally on lower oil prices, as previously on pipeline explosion in Nigeria, spill in Gulf, and sanctions for Iran, and sharp FALL in oil prices.....riiiiight!.....predictions of disappointing retail sales even with fire-sale discounted prices,..... Highest increase (2%) in 30 years for the wholesale price index, and as well, the core ppi (1.3%), GDP growth less than expected at 2%, dollar sharply lower, oil prices up, building permits down, all unexpectedly bad but great news in the fraudulent alice-in-wonderland lunatic world of wall street. New Record Quarterly Trade Deficit initially spurred lunatic market rally along with obfuscating but very commissionable merger activity. Core inflation a very unexpected unchanged .....riiiiight!.....spurs superstitious, devoid of reality, santa rally. Investment Banks Post Record 2006 Profit .....daaaaah! Churning and earning on worthless paper, where is that commission dollar coming from even as america has ceded solvency/leadership in every economic measure. Even at the lofty record numbers the indices are worth roughly half their value based on precipitous fall of the dollar in only 5 years with further downside to go. Superstitious ‘Santa Claus rally’.....riiiiight! High oil price rally.....riiiiight! Total bulls**t ! Retail sales up a very unexpected 1%, riiiiight, at the same time inventories of such goods rising substantially (do you think they’re booking sales to ‘straw men/companies’.....I do!) and oil inventories down. Fake employment numbers (from the government.....riiiiight!) the impetus for previous b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $61; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(12-28-06) Stocks drop still only modestly relative to reality with suckers bear market rally still intact as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 9.05, S&P fell 2.11 ,and NASDAQ fell 5.65 , all very commissionable on heavy volume, as in final pre-election result push for bush, which fell very short but has provided the same pump-priming of the market as most recently seen in 1999 which ended quite badly even without the exacerbating effects of huge unsustainable and debilitating debt/deficits deferring/delaying/prolonging the inevitable reality even as entire domestic u.s. industries are rendered what is tantamount to defunct and with corporate welfare unwisely spent (war crimes, etc.). More reports in defiance of reality, oil prices up, Dollar Slides...,every intelligent analyst/economist knows that the new home sales number from the government is a total lie that will be revised downward later, that the options scandals are pervasive in fraudulent america (100 investigations just tip of the iceberg), oil stocks continue to rally on lower oil prices, as previously on pipeline explosion in Nigeria, spill in Gulf, and sanctions for Iran, and sharp FALL in oil prices.....riiiiight!.....predictions of disappointing retail sales even with fire-sale discounted prices,..... Highest increase (2%) in 30 years for the wholesale price index, and as well, the core ppi (1.3%), GDP growth less than expected at 2%, dollar sharply lower, oil prices up, building permits down, all unexpectedly bad but great news in the fraudulent alice-in-wonderland lunatic world of wall street. New Record Quarterly Trade Deficit initially spurred lunatic market rally along with obfuscating but very commissionable merger activity. Core inflation a very unexpected unchanged .....riiiiight!.....spurs superstitious, devoid of reality, santa rally. Investment Banks Post Record 2006 Profit .....daaaaah! Churning and earning on worthless paper, where is that commission dollar coming from even as america has ceded solvency/leadership in every economic measure. Even at the lofty record numbers the indices are worth roughly half their value based on precipitous fall of the dollar in only 5 years with further downside to go. Superstitious ‘Santa Claus rally’.....riiiiight! High oil price rally.....riiiiight! Total bulls**t ! Retail sales up a very unexpected 1%, riiiiight, at the same time inventories of such goods rising substantially (do you think they’re booking sales to ‘straw men/companies’.....I do!) and oil inventories down. Fake employment numbers (from the government.....riiiiight!) the impetus for previous b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $60; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-27-06) Roaring suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 102, Standard & Poor's 500 index up 9, and the Nasdaq composite index up 17, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short, but has provided the same pump-priming of the market as most recently seen in 1999 which ended quite badly even without the exacerbating effects of huge unsustainable and debilitating debt/deficits deferring/delaying/prolonging the inevitable reality even as entire domestic u.s. industries are rendered defunct and with corporate welfare unwisely spent (war crimes, etc.). Every intelligent analyst/economist knows that the new home sales number from the government is a total lie that will be revised downward later (permits down, inventories up, etc.), that the options scandals are pervasive in fraudulent america (100 investigations just tip of the iceberg), oil stocks continue to rally on lower oil prices, as previously on pipeline explosion in Nigeria, spill in Gulf, and sanctions for Iran, and sharp FALL in oil prices.....riiiiight!.....predictions of disappointing retail sales even with fire-sale discounted prices,..... Highest increase (2%) in 30 years for the wholesale price index, and as well, the core ppi (1.3%), GDP growth less than expected at 2%, dollar sharply lower, oil prices up, building permits down, all unexpectedly bad but great news in the fraudulent alice-in-wonderland lunatic world of wall street. New Record Quarterly Trade Deficit initially spurred lunatic market rally along with obfuscating but very commissionable merger activity. Core inflation a very unexpected unchanged .....riiiiight!.....spurs superstitious, devoid of reality, santa rally. Investment Banks Post Record 2006 Profit .....daaaaah! Churning and earning on worthless paper, where is that commission dollar coming from even as america has ceded solvency/leadership in every economic measure. Even at the lofty record numbers the indices are worth roughly half their value based on precipitous fall of the dollar in only 5 years with further downside to go. Superstitious ‘Santa Claus rally’.....riiiiight! High oil price rally.....riiiiight! Total bulls**t ! Retail sales up a very unexpected 1%, riiiiight, at the same time inventories of such goods rising substantially (do you think they’re booking sales to ‘straw men/companies’.....I do!) and oil inventories down. Fake employment numbers (from the government.....riiiiight!) the impetus for previous b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $60; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-26-06) Roaring suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 64, Standard & Poor's 500 index up 6, and the Nasdaq composite index up 12, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short, but has provided the same pump-priming of the market as most recently in 1999 which ended quite badly even without the exacerbating effects of huge unsustainable and debilitating debt/deficits deferring/prolonging the inevitable reality even as entire domestic u.s. industries are rendered defunct and with corporate welfare unwisely spent (war crimes, etc.). Oil stocks rally on pipeline explosion in Nigeria, spill in Gulf, and sanctions for Iran, and sharp FALL in oil prices.....riiiiight!.....predictions of disappointing retail sales even with fire-sale discounted prices..... Highest increase (2%) in 30 years for the wholesale price index, and as well, the core ppi (1.3%), GDP growth less than expected at 2%, dollar sharply lower, oil prices up, building permits down, all unexpectedly bad but great news in the fraudulent alice-in-wonderland lunatic world of wall street. New Record Quarterly Trade Deficit initially spurred lunatic market rally along with obfuscating but very commissionable merger activity. Core inflation a very unexpected unchanged .....riiiiight!.....spurs superstitious, devoid of reality, santa rally. Investment Banks Post Record 2006 Profit .....daaaaah! Churning and earning on worthless paper, where is that commission dollar coming from even as america has ceded solvency/leadership in every economic measure. Even at the lofty record numbers the indices are worth roughly half their value based on precipitous fall of the dollar in only 5 years with further downside to go. Superstitious ‘Santa Claus rally’.....riiiiight! High oil price rally.....riiiiight! Total bulls**t ! Retail sales up a very unexpected 1%, riiiiight, at the same time inventories of such goods rising substantially (do you think they’re booking sales to ‘straw men/companies’.....I do!) and oil inventories down. Fake employment numbers (from the government.....riiiiight!) the impetus for previous b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-22-06) Stocks drop still only modestly relative to reality with suckers bear market rally still intact as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 78.03, S&P fell 7.54 ,and NASDAQ fell 14.67 , all very commissionable on heavy volume, as in final pre-election result push for bush, which fell very short. Highest increase (2%) in 30 years for the wholesale price index, and as well, the core ppi (1.3%), GDP growth less than expected at 2%, dollar sharply lower, oil prices up, building permits down, all unexpectedly bad but great news in the fraudulent alice-in-wonderland lunatic world of wall street. New Record Quarterly Trade Deficit initially spurred lunatic market rally along with obfuscating but very commissionable merger activity. Core inflation a very unexpected unchanged .....riiiiight!.....spurs superstitious, devoid of reality, santa rally. Investment Banks Post Record 2006 Profit .....daaaaah! Churning and earning on worthless paper, where is that commission dollar coming from even as america has ceded solvency/leadership in every economic measure. Even at the lofty record numbers the indices are worth roughly half their value based on precipitous fall of the dollar in only 5 years with further downside to go. Superstitious ‘Santa Claus rally’.....riiiiight! High oil price rally.....riiiiight! Total bulls**t ! Retail sales up a very unexpected 1%, riiiiight, at the same time inventories of such goods rising substantially (do you think they’re booking sales to ‘straw men/companies’.....I do!) and oil inventories down. Fake employment numbers (from the government.....riiiiight!) the impetus for previous b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $63; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

12-21-06) Stocks drop still only modestly relative to reality with suckers bear market rally still intact as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 42.62, S&P fell 5.22 ,and NASDAQ fell 11.76 , all very commissionable on heavy volume, as in final pre-election result push for bush, which fell very short. Highest increase (2%) in 30 years for the wholesale price index, and as well, the core ppi (1.3%), GDP growth less than expected at 2%, dollar sharply lower, oil prices up, building permits down, all unexpectedly bad but great news in the fraudulent alice-in-wonderland lunatic world of wall street. New Record Quarterly Trade Deficit initially spurred lunatic market rally along with obfuscating but very commissionable merger activity. Core inflation a very unexpected unchanged .....riiiiight!.....spurs superstitious, devoid of reality, santa rally. Investment Banks Post Record 2006 Profit .....daaaaah! Churning and earning on worthless paper, where is that commission dollar coming from even as america has ceded solvency/leadership in every economic measure. Even at the lofty record numbers the indices are worth roughly half their value based on precipitous fall of the dollar in only 5 years with further downside to go. Superstitious ‘Santa Claus rally’.....riiiiight! High oil price rally.....riiiiight! Total bulls**t ! Retail sales up a very unexpected 1%, riiiiight, at the same time inventories of such goods rising substantially (do you think they’re booking sales to ‘straw men/companies’.....I do!) and oil inventories down. Fake employment numbers (from the government.....riiiiight!) the impetus for previous b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $63; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

12-20-06) Stocks drop still only modestly relative to reality with suckers bear market rally still intact as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 7.45, S&P fell 2.02 ,and NASDAQ fell 1.94 , all very commissionable on heavy volume, as in final pre-election result push for bush, which fell very short. Highest increase (2%) in 30 years for the wholesale price index, and as well, the core ppi (1.3%), dollar sharply lower, oil prices up, building permits down, all unexpectedly bad but great news in the fraudulent alice-in-wonderland lunatic world of wall street. New Record Quarterly Trade Deficit initially spurred lunatic market rally along with obfuscating but very commissionable merger activity. Core inflation a very unexpected unchanged .....riiiiight!.....spurs superstitious, devoid of reality, santa rally. Investment Banks Post Record 2006 Profit .....daaaaah! Churning and earning on worthless paper, where is that commission dollar coming from even as america has ceded solvency/leadership in every economic measure. Even at the lofty record numbers the indices are worth roughly half their value based on precipitous fall of the dollar in only 5 years with further downside to go. Superstitious ‘Santa Claus rally’.....riiiiight! High oil price rally.....riiiiight! Total bulls**t ! Retail sales up a very unexpected 1%, riiiiight, at the same time inventories of such goods rising substantially (do you think they’re booking sales to ‘straw men/companies’.....I do!) and oil inventories down. Fake employment numbers (from the government.....riiiiight!) the impetus for previous b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $63; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-19-06) Stocks drop still only modestly relative to reality with suckers bear market rally into the close to end mixed as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average up 30, S&P up 3,and NASDAQ fell 6, all very commissionable on heavy volume, as in final pre-election result push for bush, which fell very short. Highest increase (2%) in 30 years for the wholesale price index, and as well, the core ppi (1.3%), dollar sharply lower, oil prices up, building permits down, all unexpectedly bad but great news in the fraudulent alice-in-wonderland lunatic world of wall street. New Record Quarterly Trade Deficit initially spurred lunatic market rally along with obfuscating but very commissionable merger activity. Core inflation a very unexpected unchanged .....riiiiight!.....spurs superstitious, devoid of reality, santa rally. Investment Banks Post Record 2006 Profit .....daaaaah! Churning and earning on worthless paper, where is that commission dollar coming from even as america has ceded solvency/leadership in every economic measure. Even at the lofty record numbers the indices are worth roughly half their value based on precipitous fall of the dollar in only 5 years with further downside to go. Superstitious ‘Santa Claus rally’.....riiiiight! High oil price rally.....riiiiight! Total bulls**t ! Retail sales up a very unexpected 1%, riiiiight, at the same time inventories of such goods rising substantially (do you think they’re booking sales to ‘straw men/companies’.....I do!) and oil inventories down. Fake employment numbers (from the government.....riiiiight!) the impetus for previous b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $63; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-18-06) Stocks drop still only modestly relative to reality with suckers bear market rally still intact as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 4.25, S&P fell 4.61 ,and NASDAQ fell 21.63, all very commissionable on heavy volume, as in final pre-election result push for bush, which fell very short. New Record Quarterly Trade Deficit initially spurs lunatic market rally along with obfuscating but very commissionable merger activity. Core inflation a very unexpected unchanged .....riiiiight!.....spurs superstitious, devoid of reality, santa rally. Investment Banks Post Record 2006 Profit .....daaaaah! Churning and earning on worthless paper, where is that commission dollar coming from even as america has ceded solvency/leadership in every economic measure. Even at the lofty record numbers the indices are worth roughly half their value based on precipitous fall of the dollar in only 5 years with further downside to go. Superstitious ‘Santa Claus rally’.....riiiiight! High oil price rally.....riiiiight! Total bulls**t ! Retail sales up a very unexpected 1%, riiiiight, at the same time inventories of such goods rising substantially (do you think they’re booking sales to ‘straw men/companies’.....I do!) and oil inventories down. Fake employment numbers (from the government.....riiiiight!) the impetus for previous b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Oracle 2Q Earnings Climb 21 Percent
AP - Oracle Corp.'s strongest earnings streak since the dot-com boom may be losing its vigor. At least that's how it appeared to investors late Monday after the business software maker reported fiscal second-quarter earnings that merely matched analyst estimates -- a letdown that overshadowed the latest gains that the business software maker has reaped from a two-year shopping spree that has bolstered its product line.

NYSE-Euronext Wins Crucial Support AP
T.M.X. Elmo Was Developed in Secrecy AP
EBay to Open Chinese Web Site in Shift AP
Dow Ends Down 4 After Barrage of Buyouts AP

A day of deal-making on Wall Street got stocks off to a good start, but an underlying sense that the market is overbought on a short-term basis created a wall of resistance for the major indices.The Nasdaq was the hardest hit among the major averages, as a wave of profit taking in large-cap issues in the afternoon session sparked a noticeable pullback that ultimately dragged down the broader market.A weak energy sector (-2.68%) was also to blame as it took a dive in conjunction with crude prices (-$1.28 to $62.81) and brokerage downgrades of sector heavyweights ExxonMobil (XOM 75.51, -1.79) and Schlumberger (SLB 65.07, -2.48).The outperformance of the financial sector (+0.46%), which was bolstered by a Merrill Lynch upgrade of Citigroup (C 55.44, +1.37) to Buy from Neutral and gains in the investment banks that followed a spate of M&A activity, proved instrumental in keeping the broader market's losses in check. General Electric (GE 38.00, +0.64) hitting a new-52-week high also helped in that respect.The M&A highlights today included a $26 billion offer from Express Scripts (ESRX 69.97, +1.31) to acquire Caremark (CMX 55.58, +5.28), a $10.9 billion private equity bid to purchase Biomet (BMET 41.59, -0.41), and a near $9.0 billion offer from Apollo Management to buy Realogy (H). It was also reported that Harrah's Entertainment (HET 82.18, +2.68) is ready to strike a deal with a private equity group for approximately $17 billion or $90 per share.As an aside, Caremark previously signed a definitive merger agreement with CVS Corp. (CVS 30.01, -0.51), so the Express Scripts bid promises to make things interesting for those companies, and their shareholders, in the coming weeks.Looking to Tuesday, the trading action is expected to be shaped by the fiscal second earnings report from Oracle (ORCL 17.91, +0.23) and the Housing Starts and PPI data that will be released at 08:30 ET.DJ30 -4.25 NASDAQ -21.63 NQ100 -0.97% SP500 -4.61 NASDAQ Dec/Adv/Vol 2170/898/1.80 bln NYSE Dec/Adv/Vol 2932/1283/1.36 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $62; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-15-06) Suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 28.76, Standard & Poor's 500 index up 1.60, and the Nasdaq composite index up 3.35, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. Core inflation a very unexpected unchanged .....riiiiight!.....spurs superstitious, devoid of reality, santa rally. Investment Banks Post Record 2006 Profit .....daaaaah! Churning and earning on worthless paper, where is that commission dollar coming from even as america has ceded solvency/leadership in every economic measure. Even at the lofty record numbers the indices are worth roughly half their value based on precipitous fall of the dollar in only 5 years with further downside to go. Superstitious ‘Santa Claus rally’.....riiiiight! High oil price rally.....riiiiight! Total bulls**t ! Retail sales up a very unexpected 1%, riiiiight, at the same time inventories of such goods rising substantially (do you think they’re booking sales to ‘straw men/companies’.....I do!) and oil inventories down. Fake employment numbers (from the government.....riiiiight!) the impetus for previous b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Investors Get More Info on Executive Pay
AP - Investors are getting access to clearer and more detailed information from public companies on their top executives' pay packages and perks under new federal rules that took effect on Friday.

Phone, Cable Companies to Battle in 2007 AP
R&D Shale Oil Extraction Leases Granted AP
Morgan Stanley CEO Gets $40M 2006 Bonus AP
3 Senior Execs Said to Be Leaving AOL AP

Stock prices inflated at the open after it became known by way of the November CPI report that inflation is being contained. Specifically, both total and core-CPI, which excludes food and energy, were unchanged last month. The market had been expecting 0.2% increases at both levels, so there was no mistaking that the unchanged readings were good news, particularly since the year-over-year rate in core-CPI slipped to 2.6% from 2.7% as a result. In recognition of the encouraging trend, both stock and bond prices rallied in the early-going on the idea that today's data enhanced the possibility of a rate cut from the Fed occurring sooner rather than later. The industrial production report, which showed a 0.2% increase in the month of November, didn't do anything to alter that belief as the production trend of late has fit neatly with the Fed's soft landing scenario. As one might expect, then, stocks started the day on an upbeat note drawing added support from a noticeable drop in market rates and healthy leadership from the financial, technology and industrial sectors. Earnings warnings from Black & Decker (BDK 78.26, -8.66) and Illinois Tool Works (ITW 46.80, -1.12), a continued uptick in oil prices, a lack of participation by the energy sector, and a sense that the stock market is overbought on a short-term basis, were among the limiting factors that kept the early gains in check on this quadruple witching options expiration Friday. Although the stock market maintained a position in positive territory throughout the session, it spent a good part of the day seeing the early gains get pared on profit taking efforts. However, the outperformance of influential blue chip components like General Electric (GE 37.36, +1.15), Honeywell (HON 43.62, +0.93), Procter & Gamble (PG 64.11, +0.76), Citigroup (C 54.07, +0.96) and Cisco (CSCO 27.56, +0.25) kept selling efforts in check and the indices above the unchanged mark. At the end of the day there weren't a lot of big movers from a sector standpoint, with the exception of Energy (-1.24%) which happened to be the prior day's biggest gainer. Decliners actually outpaced advancers at the NYSE and Nasdaq, but the buying interest in large cap issues proved to be the difference that kept the indices from sporting negative signs at the closing bell. Volume was heavier than usual which was a function of the increased trading that took place with the expiration of stock options, index options, index futures and single stock futures.DJ30 +28.76 NASDAQ +3.35 SP500 +1.60 NASDAQ Dec/Adv/Vol 1616/1456/2.16 bln NYSE Dec/Adv/Vol 1756/1491/1.72 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $63; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-14-06) Suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 99, Standard & Poor's 500 index up 12, and the Nasdaq composite index up 21, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. Investment Banks Post Record 2006 Profit .....daaaaah! Churning and earning on worthless paper, where is that commission dollar coming from even as america has ceded solvency/leadership in every economic measure. Even at the lofty record numbers the indices are worth roughly half their value based on precipitous fall of the dollar in only 5 years with further downside to go. Superstitious ‘Santa Claus rally’.....riiiiight! High oil price rally.....riiiiight! Total bulls**t ! Retail sales up a very unexpected 1%, riiiiight, at the same time inventories of such goods rising substantially (do you think they’re booking sales to ‘straw men/companies’.....I do!) and oil inventories down. Fake employment numbers (from the government.....riiiiight!) the impetus for previous b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Investment Banks Post Record 2006 Profit
AP - Wall Street on Thursday when announcing 2006 results -- the word "record" appears a combined 37 times in their earnings reports.
Immigration Raids May Affect Meat Prices AP
Engineer Indicted for Alleged Espionage AP
Adobe Systems Faces Challenging New Year AP
Reports of Produce Outbreaks on the Rise AP

A market that was looking tired yesterday looked as if it had a caffeine fix today for there was no shortage of buying interest. Catalysts for the advance were plentiful and they touched on both technical and fundamental developments. Specifically, buyers were called back into action by a batch of reassuring earnings news, better than expected economic data, and the S&P's ability to clear resistance at the 1420 level. The momentum factor isn't to be dismissed either as the surprising show of strength undoubtedly prompted some short-covering activity and attracted sidelined money that feared missing out on any year-end rally effort. The end result is that the Dow established a new record high while the S&P 500 climbed to a 6-year high on the back of broad-based participation that saw all ten economic sectors finish with a gain. The energy sector (+1.81%) was the pacesetter, rallying in the wake of a controversial decision by OPEC to cut production by another 500K barrels per day starting Feb. 1. That news, and a report of a larger than expected drawdown in natural gas inventories, lit a match under crude prices which advanced $1.18 to $63.35 per barrel. Airlines, as one might expect, hit an air pocket on the move in crude prices and were among a short list of industry laggards that included wireless services, coal & consumable fuel, and steel. The latter group got clipped on news that the ITC agreed to eliminate duties on steel imports from Australia, Canada, France and Japan. The bump in oil prices, though, did little to dissuade market bulls who cheered an affirmation of earnings guidance from several Dow components, including Procter & Gamble (PG 63.35, -0.05) and Honeywell (HON 42.69, +0.83), and solid earnings reports from Bear Stearns (BSC 159.96, +4.07), Lehman Bros. (LEH 76.08, -0.29), Ciena (CIEN 27.83, +2.87) and Costco (COST 54.11, +0.97). Outside of energy, other sector standouts included technology (+1.06%), which was powered by Adv. Micro Devices (AMD 22.71, +2.54) and a hot semiconductor group, and consumer discretionary (+1.09%), which rode the coattails of a strong showing from the retailers. On the economic front, weekly initial claims were lower than expected at 304K (consensus 320K) while the Empire State Index rose to a stronger than expected level of 23.1 (consensus 18.0) that helped assuage some concerns about the slowdown in the manufacturing sector that were piqued when the national ISM Index slipped below 50.0. The Empire index wasn't due out until tomorrow, but it was released early after being inadvertently posted to the New York Fed's website.DJ30 +99.26 NASDAQ +21.44 SOX +1.90% SP500 +12.28 NASDAQ Dec/Adv/Vol 1246/1815/1.84 bln NYSE Dec/Adv/Vol 1152/2157/1.43 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $62; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-13-06) Suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 1, Standard & Poor's 500 index up 1, and the Nasdaq composite index up 1, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. Retail sales up a very unexpected 1%, riiiiight, at the same time inventories of such goods rising substantially (do you think they’re booking sales to ‘straw men/companies’.....I do!) and oil inventories down. Fake employment numbers (from the government.....riiiiight!) the impetus for previous b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Qantas Accepts $8.64B Takeover Offer
AP - Qantas Airways said Thursday it had accepted an 11.1 billion Australian dollar takeover offer from a private equity consortium including Australia's Macquarie Bank and the Texas Pacific Group -- one of the biggest corporate buyouts in Australian history.

Airline Mergers Could Raise Fares in '07 AP
Nearly 450 AOL Employees Are Laid Off AP
Boston Globe Union Approves New Contract AP
Taco Bell Sales Hit by E. Coli Outbreak AP

Even though stocks closed in positive territory, the market struggled to find much direction all afternoon as five months of gains continued to leave the major averages looking tired. Before the bell, the stage was set for the underlying bullish tone to resurface following Tuesday's breather after a surprisingly strong retail sales report boosted investor confidence about the strength of the U.S. economy. With consumers taking advantage of holiday discounts, retail sales in November posted their largest gain (1.0%) since July (consensus 0.2%), as strength in 11 of 13 categories eased concerns about weakness in the housing market curtailing consumption. Also indicative of good underlying growth in consumer spending was an even better 1.1% rise in sales excluding autos. That was the largest increase since January. Not surprisingly, the biggest beneficiary was Consumer Discretionary. The sector found some support from a 1.0% gain in one of its biggest constituents, and Dow component, Home Depot (HD 39.08 +0.38), which confirmed expansion efforts into China by acquiring The Home Way. Other deal making today included reports that UAL Corp (UAUA 45.24 +2.01) is in talks to merge with Continental Airlines (CAL 44.72 +1.84). Such a combination would make it the world's largest carrier measured by passenger traffic, eclipsing American Airlines. The latter is owned by AMR Corp (AMR 32.60 +0.60), a suggested holding in the Briefing.com Active Portfolio. More evidence of industry consolidation lit a fire under Airlines - today's best performing S&P industry group (+2.8%). However, a number of analyst downgrades (e.g. CSX -4.4%, JBHT -2.5%, YRCW -2.1%) and rising oil prices weighed on transportation stocks, removing leadership from Industrials - today's worst performing sector. In fact, Energy was the only sector exhibiting any conviction on the part of buyers. Nonetheless, its advance was largely attributed to crude oil futures closing higher for the first time in four days, which in turn removed some of the enthusiasm behind what today's strong retail sales data say about consumer spending. Had it not been for the sector's leadership as a major contributor to profit growth on the S&P 500, stocks would have finished lower. Aside from rising oil prices, a sell-off in Treasuries also left investors questioning the sustainability of the five-month rally in equities. The 10-year note plunged 21 ticks, lifting the yield to 4.57%, after strong retail sales growth diminished hopes of an interest rate cut in early 2007. As a reminder, the Dow and S&P 500 are up more than 15% from their summer lows and the Nasdaq is up nearly 21% since mid July. Such impressive performances, though, have been supported in part by lower oil prices and a decline in borrowing costs. DJ30 +1.92 NASDAQ +0.81 SP500 +1.66 NASDAQ Dec/Adv/Vol 1540/1525/1.81 bln NYSE Dec/Adv/Vol 1584/1731/1.42 bln.

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $62; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-12-06) Stocks drop still only modestly relative to reality with suckers bear market rally into the close as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 12.90, S&P fell 5.68 ,and NASDAQ fell 11.26 , all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. Fake employment numbers (from the government.....riiiiight!) the impetus for b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Skilling Ordered to Prison Immediately
AP - It was a brief respite for Jeffrey Skilling. One day after a federal appellate court ruled that the former Enron chief executive could remain free until it decided on his request for bail pending appeal of his sentence for conspiracy, fraud and insider trading, the judge in the cased rejected the request.

Talks May Signal Airlines' Consolidation AP
E. Coli Outbreak Said Not Tied to Onions AP
Google to Open New Stock Option Market AP
SEC Easing Key Control Rules for Firms AP

Stocks snapped a two-day winning streak Tuesday as policy makers failing to back down on their inflation concerns and mixed corporate news left investors questioning the sustainability of a 4 1/2-month rally. Per usual, all eyes were fixed on today's FOMC meeting. With much of the market's Q4 rally predicated on the possibility of the Fed easing no later than March, investors were especially interested to see whether policy makers would reveal any clues pertaining to the timing of an eventual cut in interest rates. However, there were almost no changes in the wording of the policy directive, and thus, no evidence to support the market's optimism that rate cuts are on the way.The inclusion of the word "substantial" in the statement to describe the cooling of the housing market garnered some added attention, but that modifier only seemed to excite bond traders as stocks languished in the red all afternoon. Fortunately for the bulls, the ensuing rally in Treasuries that pushed the yield on the 10-year note (+07/32) down three basis points to 4.49% provided enough of a floor for rate-sensitive bank stocks to help offset profit taking in two of the Financials sector's biggest names.With Citigroup (C 52.24 -0.64) up more than 4% over the last two days, the Dow component merely naming a new COO, but stating there will be no other management changes, prompted investors to take some money off the table. As expected, Goldman Sachs (GS 200.19 -2.33) handily topped analysts' expectations for a fourth straight time. However, the stock succumbed to some profit taking after having been bid up to the tune of 37% from its September lows in anticipation of another record quarter.With Financials finishing flat, that left the second most influential sector in focus -- Technology. As evidenced by the Nasdaq turning in the day's worst performance among the majors, the absence of tech leadership weighed on sentiment throughout the session. The biggest drag on the sector was Apple Computer (AAPL 86.16 -2.59), which dropped nearly 3% after a report suggested iTunes sales are collapsing. Texas Instruments (TXN 29.77 +0.47) was another focal point as its lowered Q4 guidance was viewed as benign and even garnered an analyst upgrade. Yet, it's 1.6% advance was no match for consolidation across the sector. Consumer Discretionary was another weak spot. Best Buy (BBY 51.29 -2.63), which missed analysts' earnings expectations, led the way with a 5% decline while Federated Department Stores (FD 38.00 -1.50) tacking on a 3.8% decline to yesterday's 2.2% downgrade-induced drop placed additional pressure on retailers. DJ30 -12.90 NASDAQ -11.26 SP500 -1.48 NASDAQ Dec/Adv/Vol 1900/1146/1.95 bln NYSE Dec/Adv/Vol 1865/1412/1.46 bln.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-11-06) Waning full moon and roaring suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 20, Standard & Poor's 500 index up 3, and the Nasdaq composite index up 5, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. Fake employment numbers (from the government.....riiiiight!) the impetus for b.s. rally despite falling sentiment and uptick in unemployment. Can you imagine that a member of congress actually said that the social security surplus (actually usurped funds used in the general fund and never really extent) has been wiped out, particularly owing to allocations for funding (corporate welfare/profiteering) the illegal Iraq war.....daaaaah! Where do they get these frauds/dummies? The ISM services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling...,all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Ex-Enron CEO Skilling Gets Prison Delay
AP - The former Enron chief who once resided in a $4.7 million, Mediterranean-style mansion in Houston's toniest neighborhood will get a bit of a reprieve before he must report to prison, where he would likely have three roommates in a converted college dorm room.

Nissan: No Need to Merge With New Partner AP
Drought Keeps Cotton Crop Down AP
Dow Ends Up 21 As Investors Wait for Fed AP
Mortgage Delinquencies a Rising Threat AP

4:20 post meridian : The major averages picked up where they left off Friday, trading higher, as possible deal making and key sector leadership helped investors kick off what is expected to be this month's busiest week of earnings and economic data. However, market gains were modest at best as participants prepared to turn their focus to Tuesday's closely-watched FOMC meeting. While it is a foregone conclusion policy makers will leave rates unchanged for a fourth straight time tomorrow afternoon, uncertainty as to the wording of the policy directive and whether it will reveal any clues pertaining to the timing of an eventual cut in interest rates acted as a bit of an overhang. Helping the bulls temporarily shrug off early Fed-related nervousness and extend Friday's gains was follow-through buying in Friday's best performing Dow component -- Citigroup (C 52.83 +0.98). After surging 2.3% amid speculation of a management change and a possible break-up, the bellwether bank hit a new 2 1/2-year high after tacking on another 1.9% to pace the way higher on the price-weighted index. Bank of America (BAC 52.17 +0.51) more than erasing the 1.6% lost a day earlier, an analyst upgrade on JP Morgan Chase (JPM 47.56 +0.80) and a nearly 1.0% gain for fellow Dow component American International Group (AIG 71.00 +0.65), which agreed to buy some Dubai port operations, provided additional sector support. Other potential deals providing a vote of confidence about future growth included reports that Sabre Holdings (TSG 30.44 +2.12) is on the auction block and that Smith & Nephew (SNN 48.32 +0.75) is close to bidding about $11 bln for Biomet (BMET 41.56 +1.66). Telecom was the day's other big gainer, extending its year-to-date gain to more than 30% after the FCC's top lawyer authorized a commission member to vote on the proposed multi-billion dollar AT&T (T 35.23 +0.26) and BellSouth (BLS 46.23 +0.37) deal. DJ30 +20.99 NASDAQ +5.50 SP500 +3.20 NASDAQ Dec/Adv/Vol 1493/1556/1.83 bln NYSE Dec/Adv/Vol 1346/1936/1.25 bln
3:30 post meridian : Range-bound trading persists in stocks as trading enters the final stretch. Seven out of 10 sectors are posting gains, but turnarounds in Energy and Health Care barely qualify as gains since they're basically unchanged. Fortunately for the bulls, the bulk of leadership continues to come from the two most influential S&P sectors -- Financials and Technology; but it remains to be seen if both can continue to lend enough support going into the close with uncertainty tied to tomorrow's policy directive still looming.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-08-06) Waning full moon and hence, roaring suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 29, Standard & Poor's 500 index up 2, and the Nasdaq composite index up 5, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. Fake employment numbers (from the government.....riiiiight!) the impetus for b.s. rally despite falling sentiment and uptick in unemployment. Can you imagine that a member of congress actually said that the social security surplus (actually usurped funds used in the general fund and never really extent) has been wiped out, particularly owing to allocations for funding (corporate welfare/profiteering) the illegal Iraq war.....daaaaah! Where do they get these frauds/dummies? The ISM services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling...,all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

FCC: McDowell Can Vote on AT&T-Bellsouth
AP - The Federal Communications Commission's top lawyer on Friday authorized one of its members to vote on the proposed buyout of BellSouth Corp. by AT&T Inc., despite an apparent conflict of interest.
American Proposes Chicago-Beijing Route AP
More Jobs in Nov., Unemployment Up Too AP
EU Opens Universal-BMG Antitrust Probe AP
Bank of America May Buy Barclays AP
After a choppy start to end the week, investors eventually garnered enough notable leadership in some key sectors to finally embrace a strong November jobs report and snap a two-day losing streak for stocks. Given the Fed's increased policy guidance from "incoming" data, today's employment report -- the last key piece of data policy makers will get their hands on before they meet next Tuesday -- garnered added attention. Before the bell, the Labor Dept. showed that nonfarm payrolls rose 132K in November (consensus 105K) while payrolls figures for October and September were upwardly revised to account for a net gain of 42K new jobs. With investors concerned about the pace of economic growth, continued payroll gains will keep consumer spending rising at a decent clip against moderate wage growth. Hourly earnings rose just 0.2%, below the 0.3% economists were anticipating, providing additional evidence of the Fed's sought after soft landing.With all of the S&P 500's impressive 13% year-to-date advance occurring over the last four months, however, concerns that the market has gone up too far too fast initially left investors questioning whether today's solid employment data had already been priced into equities. Fortunately for the bulls, early trepidation about overbought conditions was put to rest as the morning played out. After briefly using an unexpected decline in consumer sentiment as the latest excuse to take some money off the table, Citigroup (C 51.87 +1.16) spiking to a new 2 1/2-year high helped lift the indices into the green for good. The Dow component surged 2.3% amid speculation of a management change and a possible break-up. Perhaps giving Citigroup an added boost was some rotation out of rival Bank of America (BAC 51.58 -0.91), which Merrill Lynch believes is interested in acquiring Barclays (BCS 58.53 +2.74). Investors bidding up shares of investment banks in anticipation that several Wall Street firms (e.g. GS +2.5%, LEH +1.3%, and BSC +1.0%) will post record earnings results next week provided additional support for the most influential of S&P sectors -- Financials. U.S. Treasury Secretary Henry Paulson later praising the payrolls number and saying the economy is growing at a sustainable clip during a CNBC interview offered investors an additional vote of confidence. Of the seven other economic sectors trading higher, Technology was another influential leader to the upside. Two days of profit taking sparked some bargain hunting interest and helped investors look past some warnings in the chip space. Xilinx (XLNX 24.83 -1.61) plunged 5.3% after lowering its Q3 sales forecasts. A 1.9% surge in the sector's largest component -- Microsoft (MSFT 29.40 +0.55) -- was the biggest reason behind the sector's outperformance. Investors also applauded a late-day reversal in oil prices. Crude for January delivery, which was up nearly 2.0% earlier at two-month highs, closed down 0.6% near $62/bbl. Forecasts of milder weather conditions trumped concerns earlier in the day about potential supply disruptions tied to unrest in Nigeria. However, removal of key leadership from the Energy sector tarnished the earnings potential of a key contributor to profit growth for the S&P 500 and acted as somewhat of an offset. DJ30 +29.08 NASDAQ +9.67 SP500 +2.55 NASDAQ Dec/Adv/Vol 1507/1546/1.81 bln NYSE Dec/Adv/Vol 1653/1602/1.28 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $62; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-07-06) Stocks drop still only modestly relative to reality with suckers bear market rally still intact as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 30.84, S&P fell 5.61 ,and NASDAQ fell 18.71 , all very commissionable on heavy volume, as in final pre-election result push for bush, which fell very short. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

HP Investors Unmoved by Spying Suit Deal
AP - Investors have largely shrugged off Hewlett-Packard Co.'s boardroom spying scandal, dismissing the brouhaha surrounding the company as immaterial to its day-to-day operations and stellar earnings growth in recent months.

Monsanto Makes Moves in Seed Wars AP
Bidders Vie for Singapore Casino Deal AP
E. Coli Could Hurt Taco Bell Sales AP
Factory Blast May Affect Gear Supply AP

As is typically the case heading into the closely-watched monthly employment report, market breadth throughout most of the session reflected a sense of nervousness and prevented the bulls from stepping back in following yesterday's breather. With Fed Chairman Bernanke recently acknowledging that extra attentiveness will be placed on incoming employment data (i.e. rising wages), worries that Friday's jobs report won't provide enough conviction to support the soft landing scenario that has been priced into stocks since July left investors questioning the sustainability of recent market gains. As a result, the best performing sectors over the last 4 1/2 months were among the hardest hit today. With the Nasdaq outpacing its blue chip counterparts since the summer, it wasn't all that surprising to see profit taking in everything from semiconductors to software to leave Technology as today's biggest laggard. Adding insult to injury was a 3.0% sell-off in one of the sector's biggest names -- Apple Computer (AAPL 87.03 -2.80). CIBC World Markets said Apple's highly anticipated iPhone rollout may be delayed. Following three straight days of declines, some short covering in crude oil futures heading into the close of trading on the NYMEX also kept buyers sidelined. Crude for January delivery closed up 0.5% near $62.50/bbl. More notably was the inability by refiners, drillers and explorers to take notice as the Energy sector was still among today's poorest performers. Consumer Discretionary was also a focal point Thursday, especially after an internal investigation showed that Home Depot (HD 38.93 -0.99), the day's worst performing Dow component, understated stock option expense by $200 mln. The sector was also under pressure as valuation concerns prompted Credit Suisse to downgrade the homebuilding group. One of the sector's only bright spots was News Corp (NWS 22.36 +0.62). The stock, which is also a suggested holding in our Active Portfolio, surged nearly 3% amid reports that it is close to finalizing a deal to swap its interest in DirecTV for Liberty Media's $11 bln stake in NWS. DJ30 -30.84 NASDAQ -18.17 SP500 -5.61 NASDAQ Dec/Adv/Vol 1888/1181/2.07 bln NYSE Dec/Adv/Vol 1941/1312/1.37 bln

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-06-06) Stocks drop still only modestly relative to reality with suckers bear market rally still intact as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 22.35, S&P fell 1.86 ,and NASDAQ fell 6.52 , all very commissionable on heavy volume, as in final pre-election result push for bush, which fell very short. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Fannie Mae Erases $6.3 Billion in Profit

AP - Fannie Mae erased $6.3 billion in profit in a long-awaited restatement Wednesday capping the accounting scandal that stunned financial markets and brought the ouster of top executives and a record fine against the government-sponsored mortgage leader.

Dow Closes Down 22, Nasdaq Closes Down 7 AP

Yahoo Makes Major Organizational Changes AP

Home Depot Finds $200M in Option Expense AP

Must-Have Holiday Gifts Not Easy to Find AP

With the S&P 500 closing at a fresh six-year high a day earlier and the Dow turning in a two-day gain nearly equivalent to last month's 1.2% performance, stocks struggled to get over the hump Wednesday. Contributing to the sense of lethargy that kept stocks in a relatively tight trading range throughout the session was simply a lack of market-moving data to keep the bulls on the buying track. With drug companies a focal point of late, and the absence of any scheduled economic reports placing even more emphasis on corporate news, the biggest announcement today came from Merck (MRK 44.62 -0.39). However, with investors bidding up shares of the Dow component to the tune of 45% this year in anticipation of improving fundamentals, merely reaffirming its full-year EPS outlook and guiding fiscal 2007 in line with Wall Street forecasts gave investors little to get excited about. Another notable headline was a management shake-up at Yahoo! (YHOO 26.85 -0.58). However, since the surprise resignation of three executives and promotion of its CFO added to uncertainty already surrounding the tech laggard, investors didn't exactly applaud that news either. Adding insult to injury within the Technology sector was a 5% sell-off in another one of its most influential components -- Oracle (ORCL 17.85 -1.01). After hitting a new 52-week high three weeks ago, Lehman Brothers told investors to take some profits. Even though oil prices only closed slightly lower, Energy pacing with way to the downside among the six sectors losing ground removed some notable leadership as well. Not to mention, the sector's biggest disappointment happened to be the largest U.S. company by market capitalization -- Exxon Mobil (XOM 76.34 -1.72). The Dow component's 2.2% decline accounted for roughly two-thirds of the price-weighted index's 22-point pullback. DJ30 -22.35 DJTA -0.8% DJUA -0.7% DOT -0.6% NASDAQ -6.52 SOX +0.4% SP500 -1.86 NASDAQ Dec/Adv/Vol 1627/1395/1.91 bln NYSE Dec/Adv/Vol 1840/1454/1.47 bln

(12-05-06) Blazing full moon and hence, roaring suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 47, Standard & Poor's 500 index up 5, and the Nasdaq composite index up 3, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy)of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Stocks End Up on Service Sector Activity
AP - Wall Street rallied for a second straight session Tuesday after easing wage pressures and stronger-than-expected service sector activity raised prospects that the economy could cool gradually and leave room for the Federal Reserve to lower interest rates next year.

Productivity Up 0.2 Percent in 3rd Qtr. AP
U.S. Service Economy Expands in November AP
Oil Prices Steady As Market Eyes OPEC AP
GM to Make Rollover Protection Standard AP

While paling in comparison to Monday's impressive rally, more evidence that the U.S. economy is on pace for a soft landing provided a floor of modest buying support from the opening bell to the close of trading. Albeit not a major economic report, today's ISM services data attracted more attention than usual since the ISM manufacturing index turned in a sub-50 reading last Friday for the first time in more than three years. So, when the Institute of Supply Management at 10:00 ET said its services index in November unexpectedly rose to 58.9 -- the highest level since May -- stocks spiked to their best levels of the morning. Another economic release that seldom has a significant impact on the market but helped provide a floor of support for stocks Tuesday was the revision to Q3 productivity. With Fed Chairman Bernanke saying last week there is a risk that rising wages could feed inflation as businesses pass on higher costs to customers, unit labor costs rising just 2.3% (consensus 3.2%) from a prior read of 3.8% removed some of that concern. As a reminder, the Fed reconvenes one week from today. This morning's "incoming" data lent more support for policy makers to remain on hold. Also helping to keep the month of December's reputation intact as the best month of the year for the S&P 500 was solid industry leadership across the board. Of the 10 sectors trading higher, Consumer Discretionary paced the way. Comcast Corp. (CMCSA 41.92 +1.09) hit a new 52-week and was among the sector's most influential movers (+2.6%) after saying last night it expects to post solid Q4 earnings. Dow component and suggested holding in the Briefing.com Active Portfolio, Walt Disney (DIS 34.15 +0.71), was another bright spot. The stock surged 2.2% to a new multi-year high following "very bullish" CFO commentary about growth prospects in 2007. Homebuilders provided additional sector support after Toll Brothers' (TOL 32.86 +0.95) hinted that a floor is forming in some housing markets. Restaurants also attracted buyers, getting a lift following an analyst upgrade on Starbucks (SBUX 36.81 +1.06) and after J.P. Morgan affirmed McDonald's (MCD 42.81 +0.31), another suggested holding in the Briefing.com Active Portfolio, as its top large-cap pick. The Consumer Staples sector ranked second on the day in terms of performance. Coca-Cola (KO 47.97 +1.14) was the day's best performing Dow component (+2.4%) after Merrill Lynch raised its stock price target on the beverage giant to $51 from $48. Aside from strength in Beverages, the Food Retail group got a boost after Kroger (KR 23.44 +1.11) raised its earnings growth guidance for fiscal 2006 to 8-10% from 6-8%.Even though consolidation throughout Treasuries lifted borrowing costs across the yield curve, the rate-sensitive Financials sector garnered enough strength from some key components to extend its year-to-date gain to more than 13%. Aside from continued momentum in brokers and banks, among the most notable individual winners was an insurance giant. Prudential Financial (PRU 84.24 +2.00) hit a new 52-week high after issuing an encouraging outlook for 2007, which plays into our Overweight rating on the sector. BTK +0.1% DJ30 +47.75 DJTA +1.0% DJUA +0.3% NASDAQ +3.99 NQ100 +0.3% R2K +0.2% SOX +0.8% SP400 +0.2% SP500 +5.64 XOI +0.8% NASDAQ Dec/Adv/Vol1490/1607/1.97bln NYSE Dec/Adv/V1222/2031/1.43 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $62; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-05-06) Blazing full moon and hence, roaring suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 47, Standard & Poor's 500 index up 5, and the Nasdaq composite index up 3, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper even assuming, arguendo, the verity of the numbers which is a stretch) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy)of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Stocks End Up on Service Sector Activity
AP - Wall Street rallied for a second straight session Tuesday after easing wage pressures and stronger-than-expected service sector activity raised prospects that the economy could cool gradually and leave room for the Federal Reserve to lower interest rates next year.

Productivity Up 0.2 Percent in 3rd Qtr. AP
U.S. Service Economy Expands in November AP
Oil Prices Steady As Market Eyes OPEC AP
GM to Make Rollover Protection Standard AP

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $62; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-04-06) Blazing full moon and hence, roaring suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 89.72, Standard & Poor's 500 index up 12.41, and the Nasdaq composite index up 35.18, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. The obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy)of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

FCC Chair Moves to Break AT&T Deadlock
AP - Declaring an "impasse" on AT&T Inc.'s proposed acquisition of BellSouth Corp., Federal Communications Chairman Kevin Martin cleared the way Friday for a commissioner who had disqualified himself from the deliberations to break the deadlock.

Stocks Falter After Downbeat ISM Report AP
Manufacturing Sector Shrinks in November AP
EADS Board Approves Mid-Sized Airbus AP
Bank of America CFO De Molina to Resign AP

According to the Stock Trader's Almanac, December has historically been the best month for the S&P 500, turning in an average 1.7% gain. However, with the broader market just a day removed from extending its winning streak to six months, and up more than 14% from its mid-July bottom, another sign of economic weakness left investors questioning whether a typical year-end rally was still possible. It is worth noting, though, that a renewed wave of bargain hunting heading into the final stretch pared losses across every sector to at least close the indices at their best levels of the afternoon. At their lows of the session the Dow, S&P 500 and Nasdaq were down 1.08%, 1.04% and 1.60%, respectively, but finished the first day of December down just 0.2%, 0.3%, and 0.8%. Among the biggest obstacles for the bulls to overcome Friday was the second sub-50 reading on manufacturing activity in as many sessions. At 10:00 ET, the November ISM index unexpectedly fell to 49.5 (consensus 52.0). With Thursday's disappointing Chicago PMI report already underpinning a sense of nervousness at the onset of trading, the more influential ISM Index showing contraction for the first time in more than three years gave investors the green light to take some more money off the table and acted as an overhang throughout the day. Even though fed funds futures now price in nearly a 100% chance the Fed will cut interest rates to 5.0% by March, up from 73% likelihood before the ISM data, more proof that the manufacturing sector will not provide much boost to economic growth in the months ahead did little to attract buying interest in anything other than bonds. In fact, of the only three sectors trading higher, the rate-sensitive Utilities sector was the day's best performer before it was eventually surpassed by Energy late in the day in sympathy with a rebound in oil prices. For the fifth straight day, oil prices closed higher; but it wasn't until late in the day that investors finally returned to the very sector -- Energy -- that has been the only notable source of support for stocks all week. One rate-sensitive area that failed to take advantage of the decline in borrowing costs across the yield curve was Financials. The absence of its leadership was noteworthy. The yield on the 10-year note was as low as 4.40%, leaving it flat on the year, but closed at 4.43%. With investment banks hitting historic highs last month (e.g. GS, MER, BSC), the "soft landing" scenario coming into question following the disappointing ISM data prompted investors to take some profits. As evidenced by the Nasdaq turning in the day's worst performance among the majors, Technology was the biggest thorn in the bulls' side. However, with the Nasdaq up more than 20% after bottoming out in mid July, it wasn't surprising to see investors rotate some money out of one of the best performers (tech) over the last few months. Among the sector's biggest laggards was Intel (INTC 20.93 -0.47), the day's worst performing Dow component. Be that as it may, its 2.2% pullback still leaves the stock, which is also a recommended holding in Briefing.com's Active Portfolio, up nearly 25% from its July low. DJ30 -27.80 NASDAQ -18.56 SP500 -3.91 NASDAQ Dec/Adv/Vol 1889/1165/2.02 bln NYSE Dec/Adv/Vol 1828/1481/1.76 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $62; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-01-06) Stocks drop still only modestly relative to reality and rally into the close to end lower as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 27.80, Standard & Poor's 500 index down 3.92 and the Nasdaq composite index down 18.56, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. The closely-watched core-PCE deflator rose a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy)of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

FCC Chair Moves to Break AT&T Deadlock
AP - Declaring an "impasse" on AT&T Inc.'s proposed acquisition of BellSouth Corp., Federal Communications Chairman Kevin Martin cleared the way Friday for a commissioner who had disqualified himself from the deliberations to break the deadlock.

Stocks Falter After Downbeat ISM Report AP
Manufacturing Sector Shrinks in November AP
EADS Board Approves Mid-Sized Airbus AP
Bank of America CFO De Molina to Resign AP

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $63; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(11-30-06) Stocks drop still only modestly relative to reality and rally into the close to end mixed as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 4, Standard & Poor's 500 index up 1, and the Nasdaq composite index down .46,all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. The closely-watched core-PCE deflator rose a more than expected 0.2%, Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy)of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Report: Kerkorian Sells Full Stake in GM
AP - General Motors' Corp.'s painful process of reinventing itself apparently will continue without Kirk Kerkorian, whose ownership of almost 10 percent of the world's largest automaker failed to become a lever for the changes he sought.

Study: U.S. Workers Prefer PPOs, HMOs AP
S.Korea Finds Bones in U.S. Beef Order AP
Philly Papers, Union to Continue Talks AP
Oil Prices Fall Under $63 a Barrel AP

The market garnered some afternoon bargain-hunting interest and enjoyed leadership from some key sectors to lift stocks to session highs late in the day. Two straight sessions of recouping some of Monday's widespread sell-off, however, left stocks looking lethargic as all three major averages finished relatively unchanged. Before the bell, the Commerce Dept. showed that the closely-watched core-PCE deflator rose 0.2%. That was a bit disappointing since only a 0.1% increase was expected. Given the report's ability to influence the market's mentality on consumer spending activity and the Fed's thinking on monetary policy, a higher than expected read on the central bank's favored inflation gauge left the year/year increase at an "uncomfortably high" rate of 2.4%. Throw in the fact that oil prices were eclipsing $63/bbl, November same-store sales were rather disappointing, and a discouraging update on regional manufacturing activity, and it was little surprise to see that the market lost the momentum it showed at the onset of trading. The Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction in the Midwest region. Since the PMI has the highest correlation with the most influential of all the manufacturing surveys -- tomorrow's national ISM Index -- the lowest PMI reading in more than three years renewed concerns that manufacturing may be entering a downturn. Meanwhile, Treasuries rallied on the report as it provided more evidence of an economic slowdown. However, even though the yield on the 10-yr note closed below 4.5% (at 4.45%) for the first time since January, the inability of the rate-sensitive Financials sector to take advantage also acted as an overhang throughout the session. Of the seven sectors closing higher, Energy was again the main reason stocks were doing as well as they were late in the day since the sector's leadership as a profit engine for the S&P 500 temporarily helped investors look beyond crude oil's potential inflationary characteristics. As was the case yesterday, Exxon Mobil (XOM 76.81 +0.78) and Chevron (CVX 72.32 +1.27) hitting new historic highs acted as the biggest sources of support for the broader market. Crude for January delivery, up as much as 2.1% at $63.75/bbl, closed up about 0.9% at two-month highs near $63/bbl amid reports of cold weather sweeping across the country.Health Care also provided some notable leadership, getting its biggest lift from a 1.6% surge in the sector's most influential constituent, and Dow component, Pfizer (PFE 27.50 +0.43). The drug giant raised its fiscal 2006 EPS outlook. Strength in HMOs and Distributors, two of today's top five performing S&P industry groups, lent some additional sector support.With investors focused on how well the holiday shopping period is developing, the Consumer Discretionary was also in focus Thursday as investors sifted through a plethora of November same-store sales figures. The majority of retailers missing analysts' expectations underpinned some nervousness about the health of the consumer. Among the biggest names tumbling after coming up short of Wall Street's forecasts were Kohl's (KSS 69.54 -1.14), JC Penney (JCP 77.41 -2.19), Gap (GPS 18.74 -0.33) and Nordstrom (JWN 49.00 -1.41).Dow component Wal-Mart (WMT 46.08 -0.81) also lost ground after it confirmed a 0.1% decrease in Nov. comps, the first decline in a decade, and said Dec. comps will be flat to up 1.0%. It is worth noting that Wal-Mart is actually a constituent of Consumer Staples, which turned in the day's worst performance. DJ30 -4.80 NASDAQ -0.46 SP500 +1.15 NASDAQ Dec/Adv/Vol 1425/1626/2.09 bln NYSE Dec/Adv/Vol 1202/2084/1.93 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $63; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(11-29-06) Suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 90, Standard & Poor's 500 index up 12, and the Nasdaq composite index up 19, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy)of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Ford Says 38,000 Accepted Buyout Offers

AP - Ford's hourly work force is shrinking to half its current size, following the announcement Wednesday that 38,000 hourly workers have agreed to accept early retirement or buyout packages this year.

Stocks End Higher on Positive GDP Report AP

TiVo Posts Narrower Loss, Beating Views AP

Economy Expands by 2.2 Percent in 3Q AP

Oil Prices Fall Slightly in Asia AP

For a second straight day, the bulls returned to recoup some of the extensive losses that stocks endured on Monday, closing the major averages near session highs. Today's anecdote for another recovery consisted of a stronger than expected upward revision to Q3 GDP growth, and some upbeat corporate news as well as strong leadership from all 10 economic sectors.With investors still preoccupied with the pace of economic growth, the Commerce Dept. showed the U.S. economy grew at a faster than expected 2.2% pace (consensus 1.8%), up from an advance read of 1.6%, without stoking inflation. A measure of inflation watched by the Fed was revised lower to 2.2% from 2.3%. Since the GDP data support Fed Chairman Bernanke's upbeat comments a day earlier on the economy and offer more evidence that the soft landing is on track, the underlying bullish tone responsible for lifting stocks virtually unabated since mid July resurfaced. Advancers on the NYSE enjoyed a nearly 4-to-1 margin over decliners while those on the Nasdaq held a 2-to-1 advantage.From a sector standpoint, Energy (+2.9%) again provided the bulk of market support, as its potential to generate strong profit growth for the S&P 500 helped investors look past oil's potential inflationary characteristics. Crude for January delivery closed up 2.4% at $62.46/bbl following unexpected declines in weekly distillate and gasoline inventories. Exxon Mobil (XOM 76.06 +1.90) and Chevron (CVX 71.49 +1.61) surged to new historic highs.The Consumer Discretionary sector also provided some notable leadership, getting a lift from several areas. Publishers advanced amid reports that billionaire and former AIG CEO Maurice Greenberg is eyeing a takeover of New York Times (NYT 24.74 +1.71). Another one of the day's best performers on the S&P 500 was Tiffany & Co. (TIF 38.20 +2.27), which surged more than 6% after topping Wall Street expectations and issuing upside EPS guidance for fiscal 2007. With a plethora of November same-store sales reports hitting the wires tomorrow morning, Tiffany's solid report provided some comfort. Homebuilders also provided sector support as investors looked past a 3.2% decline in new home sales and focused more on the fact that median prices rose 1.9% in October after falling sharply in September.Separately, the Beige Book to be used at the Fed's December 12 policy meeting showed that consumer spending in most districts increased during October and early November and that the retail sales outlook for the holiday season was "cautiously optimistic." While the report initially had little impact on stocks, most districts reporting continued moderate growth without evidence of growing inflation pressures eventually helped provide a floor of support for investors dealing with oil prices closing above $62/bbl for the first time in two months.As a reminder, Fed Chairman Bernanke noted Tuesday that some of the factors that pushed up core inflation in the recent past -- in particular, energy prices -- "appear likely to be more neutral in the coming year, and inflation expectations remain contained." DJ30 +90.28 NASDAQ +19.62 SP500 +12.76 NASDAQ Dec/Adv/Vol 994/1998/1.83 bln NYSE Dec/Adv/Vol 704/2602/1.44 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $62; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(11-28-06) Suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 14, Standard & Poor's 500 index up 4, and the Nasdaq composite index up 6, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy)of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Pfizer to Cut U.S. Sales Force 20 Pct.
AP - Pfizer Inc. said Tuesday it will cut its U.S. sales force by 20 percent, or 2,200 people, as part of a cost-cutting program to transform the company into a more nimble organization as it struggles with sluggish sales.

San Diego to Ban Wal-Mart Supercenters AP
AWB Expresses Regret at Iraq Kickbacks AP
EU to Decide Carbon Emissions Trade Plan AP
Bernanke: Interest Rate Cuts Unlikely AP

After selling off in noticeable fashion yesterday, stocks garnered just enough bargain-hunting interest and leadership from some key sectors to finish on an upbeat note amid a mixed batch of economic data, hawkish Fed speak and rising oil prices.With nothing of note on the earnings calendar and a lack of evidence to justify follow-through selling interest on the heels of Monday's drubbing, the market on Tuesday turned to economic releases and afternoon commentary from Fed Chairman Bernanke to set a more definitive tone for trading.Before the bell, the Commerce Dept. showed that demand for U.S.-made durable goods fell a larger than expected 8.3% in October, marking the biggest decline in more than six years. Core capital goods, which provide a clearer read on underlying business capital investment, fell for the first time in six months. Since business investment has been strong for several years, providing significant support to GDP growth, evidence of an easing reinforced the possibility that real GDP forecasts for Q4 and early 2007 may have to be revised to below 2%. That, in turn, prompted even more consolidation in the economically-sensitive Industrials sector. Nonetheless, with Fed officials noting at their last meeting that "housing activity is likely to remain a substantial drag on economic growth over the next few quarters," a report showing that sales of existing U.S. homes rose for the first time since February offered some relief as it plays into the soft landing scenario. In fact, with Bernanke saying today that "the effects of the housing correction on real economic activity are likely to persist into next year," the surprising 0.5% increase in existing home sales to a 6.24 mln annual rate suggests that the market may indeed be bottoming now that mortgage rates have leveled off.Of the eight sectors closing in positive territory, Energy provided the bulk of market support. Its 1.9% advance in sympathy with a 1.1% rise in oil prices toward $61/bbl left investors more focused on the sector's history of generating strong profit growth for the S&P 500 than the adverse impact higher oil prices can have on consumer sentiment. That was especially important given the festering concerns about a soft holiday shopping season and after investors also got wind earlier of an unexpected decline in consumer confidence.Technology also provided some notable upside leadership. The sector got its biggest boost as a sense that yesterday's 3.9% sell-off in Cisco Systems (CSCO 27.03 +1.23), a suggested holding in the Briefing.com Active Portfolio, was overdone prompted a rebound to the tune of 4.8%. Apple Computer (AAPL 91.81 +2.27) surging 2.5%, after UBS raised its price target on the stock to $108 from $95, was another source of sector support. DJ30 +14.74 NASDAQ +6.69 SP500 +4.82 NASDAQ Dec/Adv/V1478/1611/1.98bln NYSE Dec/Adv/Vol1160/2128/1.50 bln

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(11-27-06) Stocks drop still only modestly relative to reality with suckers bear market rally still intact as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 158.46, S&P fell 19.05 ,and NASDAQ fell 54.34 , all very commissionable on heavy volume, as in final pre-election result push for bush, which fell very short. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Online Shopping Season Begins With Deals

AP - After jamming malls on Friday for discounted flat-screen TVs and toys, shoppers clicked onto their computers at work Monday as retailers ushered in the start of the online shopping season with bargains and marketing hype.

Wall Street Has Worst Day in 4 Months AP

Ford to Get About $18B in Financing Help AP

Alaska to Cut Point Thompson Oil Leases AP

Wal-Mart to Open Its Own Bank in Mexico AP

Bulls have had their share of good days since mid-July. Today wasn't one of them. The major indices sold off in noticeable fashion, pressured by a lack of upside leadership and a prevailing sense that the market is overdue for a correction.The popular reasons cited for the poor showing included concerns about the dollar's weakness and a disappointing same-store sales update from Wal-Mart (WMT 46.61, -1.29). Both reasons, frankly, were overplayed as catalysts for the reversal of fortune. Briefing.com's belief in that respect is owed to the understanding that a weaker dollar is good for multinational profit growth while Wal-Mart is known to have company-specific problems. If the dollar concerns were as pronounced as they were made out to be the Treasury market would have been hit hard as well. That wasn't the case as the 10-year note recouped early losses and traded up five ticks to bring its yield down to 4.53%. Meanwhile, Wal-Mart's report that November same-store sales are now estimated to decline approximately 0.1% versus a prior estimate for sales to be flat contradicted communications from industry sources, such as the National Retail Federation and ShopperTrak, that suggested the holiday selling season got off to a solid start for retailers in general.The most practical explanation for the weakness today is that it was overdue considering the market has run virtually unabated from its low in mid-July. It can't go up in a straight line forever. With so much emphasis being placed on the positives lately, and some market indicators like the Volatility Index ("VIX") flashing signs of complacency, it was not unusual to see the market latch on to some incrementally negative news (eg., dollar weakness) as an excuse to take profits.Separately, the S&P's failure to hold above the 1400 level and a forecast from Goldman Sachs that put the S&P 500 only 4.0% higher from Friday's close by September 2007 were added sparks for the profit-taking move. The selling activity was broad-based, and fittingly, was concentrated among the market's better-performing areas of late. To that end, the Technology sector (-2.50%) was the loss leader; but it had ample company with the Financial sector (-1.60%), Materials sector (-1.50%) and Consumer Discretionary sector (-1.40%) trailing in its wake.The Energy sector (-0.30%) was a pocket of relative strength, garnering support from talk of a potential OPEC production cut in December and a forecast for cooler temperatures to arrive soon that lifted crude futures back above $60 per barrel. In a reflection of the broad-based nature of today's retreat, all ten economic sectors posted a loss and only four S&P industry groups managed a gain, the largest of which was posted by the gold group (+0.20%) whose strength stemmed from inflationary concerns brought on by the weaker dollar and the understanding that a weaker dollar makes the yellow metal more affordable for foreign buyers.DJ30 -158.38 NASDAQ -54.34 NQ100 -2.20%% R2K -2.60%% SP400 -2.00%% SP500 -19.00 NASDAQ Dec/Adv/Vol 2440/585/1.87 bln NYSE Dec/Adv/Vol 2697/624/1.46 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $60; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Not good.

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(11-24-06) Stocks drop still only modestly relative to reality with suckers bear market rally still intact in shortened session as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 46, S&P fell 5 ,and NASDAQ fell 5 , all very commissionable on heavy volume, as in final pre-election result push for bush, which fell very short. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Expanded Hours, Discounts Lure Shoppers
AP - It was cold, it was dark and in some places it was foggy. None of that would stop millions of bargain-seekers from climbing into their cars for a pre-dawn raid on their local malls, electronics retailers and discounters for the official start to the holiday season.

            Stocks Drop As Dollar Declines AP
            USDA OKs Genetically Engineered Rice AP
            Microsoft Hoping for Business Upgrades AP
            Wal-Mart's Site Stalls on Black Friday AP

It was a very quiet day in the stock market. The indices all opened significantly lower. The dollar dropped sharply in European trading. That knocked European stocks lower and produced a negative tone for the US open. There were no economic releases or earnings reports, and virtually no corporate news. The markets began to claw their way back through the day, reflecting the resilience that has been apparent in recent weeks. The S&P and Nasdaq went briefly positive, but then got knocked back on talk of another round of OPEC oil production cuts in December. That pushed oil back above $60 a barrel and stock indices retreated to post modest losses on the day. There was also a quick bout of selling at the close, a relatively uncommon event in recent sessions. Volume was understandably light today, but there was not much associated volatility. There were few stocks that were caught up in day trading pushes, and the most active lists ended with few surprised or big movers.Gold stocks were the biggest gainers today, benefitting from the weak dollar. Commodities in general fared well. Amongst the S&P sectors, utilities were up 0.14% and materials 0.07%. Those were the only two up sectors. Retail stocks were weak, perhaps on concerns that it will be a mixed season for holiday shopping. Early reports today focused on discounting from major retailers. Wal-Mart (47.90 -0.13 ) and Target (57.35 -1.07 ) ended the day lower. Among the S&P sectors, healthcare at -0.48% was weakest, followed by consumer discretionary at -0.43% due to the retailers. Energy, although oil stocks were up early, ended with a decline of 0.28%. The consumer staples sector ended -0.29%, information technology -0.22%, financials -0.26%, industrials -0.31%, and telecommunications -0.01%. There were few major market movers in the sectors. DJ30 -46.78 NASDAQ -5.72 R2K -0.08%% SOX -0.39%% SP500 -5.14 NASDAQ Dec/Adv/Vol 658.8/1278/658.7 NYSE Dec/Adv/Vol 1312/1753/831.1

U.S. HOUSING SLUMP DEEPENS, SPREADS
BARRIE MCKENNA Washington — First, Americans quit buying homes. Now, they may have stopped fixing and furnishing them too. Home Depot Inc. reported a 3-per-cent drop in profit in the three months that ended in October, amid mounting evidence that the U.S. housing slump is getting worse. “I don't think we've seen the bottom yet, and I don't see anything that says it's going to get significantly better in 2007,” said Bob Nardelli, Home Depot's chairman and chief executive officer. Mr. Nardelli said job losses in the home construction market are the worst he's seen in 35 years, and the pain is starting to spread to the home renovation market. “The loss of jobs ... in the home construction market is at unprecedented levels,” Mr. Nardelli told analysts on a conference call Tuesday. “Home builders [are] basically writing off earnest money and liquidating land. We're starting to see a lot of that unemployment find its way over to the small repair and remodel contractors.” Problems in the housing sector have also begun to affect how consumers spend their money. In October, U.S. retail sales fell at an annual rate of 0.2 per cent — the third consecutive monthly decline, according to a U.S. Commerce Department report Tuesday. The decline was heavily influenced by lower gasoline prices, which resulted in less revenue for gas stations. But there were also sharp declines in building materials (down 0.3 per cent), furniture (down 0.7 per cent) and department store sales (down 0.7 per cent). Over the past three months, sales of building materials have plunged at an annual rate of 10.6 per cent. “The housing slowdown left its grimy fingerprints all over this report,” BMO Nesbitt Burns economist Douglas Porter said in a note to clients. Lower gasoline prices don't seem to be causing consumers to spend elsewhere, as many economists had predicted. Even if you strip out volatile gas, food and auto sales, all other retail sales rose a meagre 0.1 per cent October. “People are being very cautious,” said Ian Shepherdson, chief North American economist at High Frequency Economics. “The housing crunch is now hurting.” At least two other bellwether U.S. retailers — Wal-Mart Stores Inc. and Target Corp. — reported Tuesday that their sales and profit remain strong, in spite of the problems in the housing sector. But executives at Wal-Mart, the world's largest retailer, acknowledged that sales in the third quarter were disappointing and it is already vowing its biggest-ever discounting binge on items such as toys and electronics to keep cash registers ringing this Christmas. “This season, no one will doubt Wal-Mart's leadership on price and value,” Wal-Mart CEO Lee Scott said. Wal-Mart's profit rose to $2.65-billion (U.S.) or 63 cents a share in the third quarter that ended Oct. 31, up from $2.37-billion or 57 cents a year earlier. That was slightly below what analysts had expected, according to Reuters. Sales were up 12 per cent to $83.5-billion. But those figures include sales at newly opened stores and foreign stores. Sales at U.S. stores that have been open at least a year were up just 1.5 per cent, and Mr. Scott said fourth-quarter sales would rise just 1 to 2 per cent.

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $59; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-22-06) Suckers bear market rally into the close is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 5, Standard & Poor's 500 index up 3, and the Nasdaq composite index up 11, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Kerkorian to Sell 14 Million GM Shares

AP - Billionaire investor Kirk Kerkorian may have decided that casinos are a better bet than cars. The dissident General Motors Corp. shareholder said Wednesday that he will slash his stake in the troubled automaker by selling 14 million shares for about $462 million.

Stocks Little Changed After Dell Earns AP

Disney Says E! Sale Worth $800 Million AP

Judge: No Federal Class in Vioxx Suits AP

Unemployment Claims Rising Faster AP

As expected, trading action in the market appeared as if the tryptophan-induced comas that typically accompany the consumption of Thanksgiving Day turkey came a day early as trading among the majority of large-cap names looked a bit sedated.The Dow fluctuated around the flat line, as investors weighed another restructuring at Alcoa (AA 30.43 +1.24) against confirmation that Kirk Kerkorian's Tracinda Corp sold 14 mln shares of General Motors (GM 31.09 -1.52) this week. The underlying bullish tone responsible for lifting blue chips nearly 10% over the last four months resurfaced late in the day, however, to sideline the bears just enough to inch the Dow into the green.The S&P 500 was also a bit sluggish all day, having posting gains in 10 out of the last 12 sessions. The S&P 500 traded essentially in a two-point range all day, but a late-day turnaround in the influential Financials sector helped the broader market to more than merely ride the coattails of a 9% surge in shares of Dell (DELL 27.13 +2.31) into another winning session.Last night, Dell topped Wall Street estimates, garnering multiple analyst upgrades and price target increases and helping the Nasdaq continue its outperformance. Since the tech bellwether was a source of concern for investors after delaying its report last week, its Q3 surprise provided some additional comfort since growth concerns within the sector had left some questioning the sustainability of tech valuations. Some upbeat analyst commentary boosting shares of Yahoo! (YHOO 28.53 +1.39) 5.1% and renewed enthusiasm in chip stocks gave the Technology sector an additional boost.With AAA expecting 38.3 mln Americans to travel 50 miles or more over the Thanksgiving holiday, and millions more expected to preserve Black Friday's reputation as one of the busiest retail shopping days of the year, falling oil prices were another focal point Wednesday. Crude for January delivery fell 1.5% to $59.27/bbl after the EIA reported a large increase in weekly crude supplies and a surprise build in gasoline inventories.Fortunately for investors initially struggling to look past an unexpected decline in consumer sentiment, oil's decline eventually helped participants look past the absence of leadership from one of the biggest contributors to earnings growth on the S&P 500 over the last several quarters -- Energy. DJ30 +5.36 NASDAQ +11.14 SP500 +3.28 NAS DAQ Dec/Adv/Vol 1502/1502/1.58 bln NYSE Dec/Adv/Vol 1262/1987/1.28 bln

U.S. HOUSING SLUMP DEEPENS, SPREADS
BARRIE MCKENNA Washington — First, Americans quit buying homes. Now, they may have stopped fixing and furnishing them too. Home Depot Inc. reported a 3-per-cent drop in profit in the three months that ended in October, amid mounting evidence that the U.S. housing slump is getting worse. “I don't think we've seen the bottom yet, and I don't see anything that says it's going to get significantly better in 2007,” said Bob Nardelli, Home Depot's chairman and chief executive officer. Mr. Nardelli said job losses in the home construction market are the worst he's seen in 35 years, and the pain is starting to spread to the home renovation market. “The loss of jobs ... in the home construction market is at unprecedented levels,” Mr. Nardelli told analysts on a conference call Tuesday. “Home builders [are] basically writing off earnest money and liquidating land. We're starting to see a lot of that unemployment find its way over to the small repair and remodel contractors.” Problems in the housing sector have also begun to affect how consumers spend their money. In October, U.S. retail sales fell at an annual rate of 0.2 per cent — the third consecutive monthly decline, according to a U.S. Commerce Department report Tuesday. The decline was heavily influenced by lower gasoline prices, which resulted in less revenue for gas stations. But there were also sharp declines in building materials (down 0.3 per cent), furniture (down 0.7 per cent) and department store sales (down 0.7 per cent). Over the past three months, sales of building materials have plunged at an annual rate of 10.6 per cent. “The housing slowdown left its grimy fingerprints all over this report,” BMO Nesbitt Burns economist Douglas Porter said in a note to clients. Lower gasoline prices don't seem to be causing consumers to spend elsewhere, as many economists had predicted. Even if you strip out volatile gas, food and auto sales, all other retail sales rose a meagre 0.1 per cent October. “People are being very cautious,” said Ian Shepherdson, chief North American economist at High Frequency Economics. “The housing crunch is now hurting.” At least two other bellwether U.S. retailers — Wal-Mart Stores Inc. and Target Corp. — reported Tuesday that their sales and profit remain strong, in spite of the problems in the housing sector. But executives at Wal-Mart, the world's largest retailer, acknowledged that sales in the third quarter were disappointing and it is already vowing its biggest-ever discounting binge on items such as toys and electronics to keep cash registers ringing this Christmas. “This season, no one will doubt Wal-Mart's leadership on price and value,” Wal-Mart CEO Lee Scott said. Wal-Mart's profit rose to $2.65-billion (U.S.) or 63 cents a share in the third quarter that ended Oct. 31, up from $2.37-billion or 57 cents a year earlier. That was slightly below what analysts had expected, according to Reuters. Sales were up 12 per cent to $83.5-billion. But those figures include sales at newly opened stores and foreign stores. Sales at U.S. stores that have been open at least a year were up just 1.5 per cent, and Mr. Scott said fourth-quarter sales would rise just 1 to 2 per cent.

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $59; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-21-06) Suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 5, Standard & Poor's 500 index up 2, and the Nasdaq composite index up 2, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. Indeed, the housing bubble busting with ie., unexpected 14% decline in starts, etc., leads to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Dell Posts Gain in Delayed 3Q Results
AP - Dell Inc. beat analysts' expectations in delayed earnings posted Tuesday, but the computer maker warned the results were preliminary and could change due to an intensifying federal investigation into the company's accounting and financial reporting.

Alcoa Plans to Cut 6,700 Jobs Worldwide AP
Comcast, Disney Ink Video-On-Demand Deal AP
Qantas Approached Amid Takeover Rumors AP
Oil Prices Fall to $59.86 a Barrel AP

If your life was in need of some excitement ahead of a long holiday weekend, Wall Street wasn't the place to look today. The major averages traded in very narrow ranges throughout the session, making modest moves on either side of the unchanged mark as investors lack notable catalysts to more aggressively keep buying efforts intact.For a second straight day there was nothing on the economic calendar to either support or to counter the possibility of a soft landing scenario, leaving investors to weigh a batch of generally good earnings news against a rebound in oil prices. Crude for January delivery closed above $60/bbl, surging 2.3% amid reports that restrictions imposed on the Trans-Alaska Pipeline System due to high winds will cut capacity by 25%.Fortunately for the bulls, strong leadership from the profit engine that is Energy helped to offset some of the commodity's potential inflationary characteristics. To wit, Energy surged 1.8%, by far and away leading the charge among the five other S&P 500 sectors trading higher but only averaging a gain of just 0.2%.Of the five sectors attracting buyers, Industrials provided the most influential leadership. Boeing (BA 90.08 +0.96) soared to a new all-time high after inking an order from Korean Air worth $5.5 bln at list prices. The sector's best performer, though, was Deere & Co. (DE 95.04 +5.63). Despite warning that fiscal 2007 sales are expected to get off to a slow start, Q4 profits handily topping analysts' expectations helped propel the stock more than 6.0% to a record high.Medtronic (MDT 53.67 +4.72) was another surprise, climbing nearly 10% after key market share gains contributed to a better than expected Q2 earnings report. However, consolidation throughout the drug and biotech groups offset strength in the medical equipment space and prevented Health Care from offering any leadership to the upside.Also keeping market gains in check was the absence of leadership from Financials, Consumer Staples and Technology. While the latter eventually inched into the green, as Google (GOOG 509.65 +14.60) eclipsing the $500 level for the first time ever helped offset analyst downgrades in the semiconductor space (e.g. LRCX -2.5%, NVLS -2.5%), the others were unable to recover much ground. BTK -0.9% DJ30 +5.05 DJTA +0.3% DJUA +0.2% DOT +0.4% NASDAQ +2.12 NQ100 +0.3% R2K +0.2% SOX -1.1% SP400 +0.2% SP500 +2.31 XOI +1.7% NASDAQ Dec/Adv/Vol 1503/1516/1.69 bln NYSE Dec/Adv/Vol 1262/2022/1.48 bln

U.S. HOUSING SLUMP DEEPENS, SPREADS
BARRIE MCKENNA Washington — First, Americans quit buying homes. Now, they may have stopped fixing and furnishing them too. Home Depot Inc. reported a 3-per-cent drop in profit in the three months that ended in October, amid mounting evidence that the U.S. housing slump is getting worse. “I don't think we've seen the bottom yet, and I don't see anything that says it's going to get significantly better in 2007,” said Bob Nardelli, Home Depot's chairman and chief executive officer. Mr. Nardelli said job losses in the home construction market are the worst he's seen in 35 years, and the pain is starting to spread to the home renovation market. “The loss of jobs ... in the home construction market is at unprecedented levels,” Mr. Nardelli told analysts on a conference call Tuesday. “Home builders [are] basically writing off earnest money and liquidating land. We're starting to see a lot of that unemployment find its way over to the small repair and remodel contractors.” Problems in the housing sector have also begun to affect how consumers spend their money. In October, U.S. retail sales fell at an annual rate of 0.2 per cent — the third consecutive monthly decline, according to a U.S. Commerce Department report Tuesday. The decline was heavily influenced by lower gasoline prices, which resulted in less revenue for gas stations. But there were also sharp declines in building materials (down 0.3 per cent), furniture (down 0.7 per cent) and department store sales (down 0.7 per cent). Over the past three months, sales of building materials have plunged at an annual rate of 10.6 per cent. “The housing slowdown left its grimy fingerprints all over this report,” BMO Nesbitt Burns economist Douglas Porter said in a note to clients. Lower gasoline prices don't seem to be causing consumers to spend elsewhere, as many economists had predicted. Even if you strip out volatile gas, food and auto sales, all other retail sales rose a meagre 0.1 per cent October. “People are being very cautious,” said Ian Shepherdson, chief North American economist at High Frequency Economics. “The housing crunch is now hurting.” At least two other bellwether U.S. retailers — Wal-Mart Stores Inc. and Target Corp. — reported Tuesday that their sales and profit remain strong, in spite of the problems in the housing sector. But executives at Wal-Mart, the world's largest retailer, acknowledged that sales in the third quarter were disappointing and it is already vowing its biggest-ever discounting binge on items such as toys and electronics to keep cash registers ringing this Christmas. “This season, no one will doubt Wal-Mart's leadership on price and value,” Wal-Mart CEO Lee Scott said. Wal-Mart's profit rose to $2.65-billion (U.S.) or 63 cents a share in the third quarter that ended Oct. 31, up from $2.37-billion or 57 cents a year earlier. That was slightly below what analysts had expected, according to Reuters. Sales were up 12 per cent to $83.5-billion. But those figures include sales at newly opened stores and foreign stores. Sales at U.S. stores that have been open at least a year were up just 1.5 per cent, and Mr. Scott said fourth-quarter sales would rise just 1 to 2 per cent.

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $59; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-20-06) Suckers bear market rally into the close to end mixed is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average down 26.02, Standard & Poor's 500 index down 1, and the Nasdaq composite index up 6, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. Indeed, the housing bubble busting with ie., unexpected 14% decline in starts, etc., leads to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Dow Closes Down 26, Nasdaq Finishes Up 7

AP - Wall Street was mixed in an erratic session Monday after a flurry of merger news failed to erase investors' concerns that a recent run-up has left stocks overbought.

Nasdaq Shrugs Off Rejection From LSE AP

Home Sales Plummet in 38 States in 3Q AP

Yahoo, Papers Sign Internet Revenue Deal AP

Acquisitions Made in 2006 Set New Record AP

Stocks looked tired as investors kicked off a holiday-shortened week weighing concerns about overbought market conditions against a wave of M&A activity.After closing in record territory 18 times since the beginning of October, a sense the Dow was due for some consolidation after being up every day last week eventually took hold. The Nasdaq, in contrast, built on last week's impressive 2.3% surge; but decliners outpacing advancers throughout the afternoon lent even less conviction behind its modest 0.3% advance.With nothing of note on the economic calendar to either support or to counter the possibility of a soft landing scenario, the market's attention turned to a spate of new deals totaling more than $50 bln. Among the day's biggest deals giving investors an added vote of confidence was Freeport-McMoRan's (FCX 55.63 -1.77) $26 bln bid for Phelps Dodge (PD 120.47 +25.45), which marked the day's largest deal.That proposed transaction, coupled with Evraz Group's $2.3 bln bid for Oregon Steel Mills (OS 63.77 +4.81), renewed speculation about other potential takeover targets throughout the Materials sector, which was by far and away today's best performing sector. However, as the least influential of the 10 sectors on the S&P 500 and one of only three sectors closing in positive territory, the lack of widespread leadership left the window open for some profit taking.Of the other two sectors closing higher, Financials was in focus following The Blackstone Group's $20 bln bid for Equity Office Properties Trust (EOP 48.15 +3.43). As the largest private equity deal in history, including debt ($36 bln), investors began buying any and every REIT they could get their hands on. To wit, six of the day's top seven S&P industry groups were tied to REITs. Other deals in the sector garnering attention were Bank of America's (BAC 54.90 +0.05) $3.3 bln bid for Charles Schwab's (SCHW 18.94 +0.38) U.S. Trust division and the NASDAQ Stock Market (NDAQ 37.71 +1.14) announcing its intention to acquire the more than 70% of the London Stock Exchange it doesn't already own for $5.1 bln.Technology was the only other sector to finish in the green. Aside from continued momentum across the semiconductor group, Microsoft (MSFT 29.89 +0.49) surging 1.7% to a fresh 52-week high after it was upgraded at Credit Suisse was the biggest reason behind the tech-heavy Nasdaq's ability to hold onto a small gain. BTK -0.8% DJ30 -26.02 DJTA -0.2% DJUA -0.4% DOT -0.2% NASDAQ +6.86 NQ100 +0.2% R2K +0.3% SOX +1.8% SP400 +0.2% SP500 -0.70 XOI -0.6% NASDAQ Dec/Adv/Vol 1525/1516/1.71 bln NYSE Dec/Adv/Vol 1641/1620/1.44 bln

U.S. HOUSING SLUMP DEEPENS, SPREADS
BARRIE MCKENNA Washington — First, Americans quit buying homes. Now, they may have stopped fixing and furnishing them too. Home Depot Inc. reported a 3-per-cent drop in profit in the three months that ended in October, amid mounting evidence that the U.S. housing slump is getting worse. “I don't think we've seen the bottom yet, and I don't see anything that says it's going to get significantly better in 2007,” said Bob Nardelli, Home Depot's chairman and chief executive officer. Mr. Nardelli said job losses in the home construction market are the worst he's seen in 35 years, and the pain is starting to spread to the home renovation market. “The loss of jobs ... in the home construction market is at unprecedented levels,” Mr. Nardelli told analysts on a conference call Tuesday. “Home builders [are] basically writing off earnest money and liquidating land. We're starting to see a lot of that unemployment find its way over to the small repair and remodel contractors.” Problems in the housing sector have also begun to affect how consumers spend their money. In October, U.S. retail sales fell at an annual rate of 0.2 per cent — the third consecutive monthly decline, according to a U.S. Commerce Department report Tuesday. The decline was heavily influenced by lower gasoline prices, which resulted in less revenue for gas stations. But there were also sharp declines in building materials (down 0.3 per cent), furniture (down 0.7 per cent) and department store sales (down 0.7 per cent). Over the past three months, sales of building materials have plunged at an annual rate of 10.6 per cent. “The housing slowdown left its grimy fingerprints all over this report,” BMO Nesbitt Burns economist Douglas Porter said in a note to clients. Lower gasoline prices don't seem to be causing consumers to spend elsewhere, as many economists had predicted. Even if you strip out volatile gas, food and auto sales, all other retail sales rose a meagre 0.1 per cent October. “People are being very cautious,” said Ian Shepherdson, chief North American economist at High Frequency Economics. “The housing crunch is now hurting.” At least two other bellwether U.S. retailers — Wal-Mart Stores Inc. and Target Corp. — reported Tuesday that their sales and profit remain strong, in spite of the problems in the housing sector. But executives at Wal-Mart, the world's largest retailer, acknowledged that sales in the third quarter were disappointing and it is already vowing its biggest-ever discounting binge on items such as toys and electronics to keep cash registers ringing this Christmas. “This season, no one will doubt Wal-Mart's leadership on price and value,” Wal-Mart CEO Lee Scott said. Wal-Mart's profit rose to $2.65-billion (U.S.) or 63 cents a share in the third quarter that ended Oct. 31, up from $2.37-billion or 57 cents a year earlier. That was slightly below what analysts had expected, according to Reuters. Sales were up 12 per cent to $83.5-billion. But those figures include sales at newly opened stores and foreign stores. Sales at U.S. stores that have been open at least a year were up just 1.5 per cent, and Mr. Scott said fourth-quarter sales would rise just 1 to 2 per cent.

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $55; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-17-06) Suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 36, Standard & Poor's 500 index up 1, and the Nasdaq composite index down 3, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. Indeed, the housing bubble busting with ie., unexpected 14% decline in starts, etc., leads to rally in the fraudulent alice-in-wonderland world of wall street. More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Bush OKs $11.8B Lucent Sale to Alcatel
AP - President Bush has approved the proposed $11.8 billion takeover of Lucent Technologies Inc. by French-owned Alcatel, saying the merger of the two telecommunications equipment companies does not present any major national security concerns.

About 3,000 Protest Outside G20 Meeting AP
Rice: Countries Should Follow Vietnam AP
Del Monte Halting Hawaii Operations AP
Airbus A380 Lands in Hong Kong AP

The major averages finished mixed Friday as uncertainty about the pace of economic growth acted as an overhang on stocks throughout the session. The Dow garnered just enough of a gain to close at a new record high while the S&P 500 inched above the flat line into the finish, leaving the Nasdaq eyeing next week to possibly begin a new winning streak.With Fed officials noting in Wednesday's release of the FOMC minutes that housing activity was likely to remain a substantial drag on economic growth over the next few quarters, investors keyed in on the latest economic data to see just how much of a problem housing really is and what sort of impact continued weakness will have on consumption patterns (if any) heading into the all-important holiday shopping season. Before the bell the Commerce Dept. showed that Housing Starts plunged a larger than expected 14.6% in October to 1.49 mln units. That is a six year low and the lowest level since July 2000. Building Permits fell 6.3% to an annual rate of 1.54 mln units, the lowest level since December 1997.Since declines in the data were anticipated following such a surprising increase in September starts, and there is still no sign that an ongoing slowdown in the housing sector is causing significant weakness in consumer spending, an ensuing rally in Treasuries that sent bond yields tumbling across the curve served as a reminder that things probably aren't all that bad.After all, declines in housing activity are a necessary consequence of the soft landing the Fed is trying to successfully engineer. As a result, further proof that rising interest rates have taken some steam out of the economy renewed enthusiasm for bonds after yesterday's pullback and eventually helped the underlying bullish tone responsible for four straight months of gains to resurface.Unfortunately for the bulls, the only rate-sensitive sector providing leadership to the upside was Utilities, which is also among the least influential of the 10 S&P 500 sectors. Nonetheless, weakness in Financials was minimal while leadership in areas like Energy, Health Care and Consumer Staples was enough to keep buyers interested in blue chips.Technology closed modestly lower, but was the biggest obstacle for the bulls to overcome. To wit, Intel (INTC 22.10 -0.23) was among the biggest disappointments on the Dow as a weak sales forecast from Marvell Technology Group (MRVL 19.05 -0.57) brought the valuation of other chip makers into question.Hewlett-Packard (HPQ 39.74 -0.39) was the other notable laggard on the Dow. While HP supported our Overweight rating on the tech sector, having nearly quadrupled Q4 profits and issuing upside guidance, reports that the SEC has elevated its informal probe to a formal investigation provided an excuse to consolidate some of the stock's impressive 40% year-to-date advance.The absence of leadership was also witnessed in Consumer Discretionary. The sector's biggest nemesis was Starbucks (SBUX 37.42 -2.01), which tumbled 5.0% after it failed to live up to Wall Street's high expectation by merely matching analysts' forecasts last night and posting its first profit decline since 2001. DJ30 +36.74 NASDAQ -3.20 SP500 +1.44 NASDAQ Dec/Adv/Vol 1743/1280/1.77 bln NYSE Dec/Adv/Vol 1736/1509/1.65 bln

U.S. HOUSING SLUMP DEEPENS, SPREADS
BARRIE MCKENNA Washington — First, Americans quit buying homes. Now, they may have stopped fixing and furnishing them too. Home Depot Inc. reported a 3-per-cent drop in profit in the three months that ended in October, amid mounting evidence that the U.S. housing slump is getting worse. “I don't think we've seen the bottom yet, and I don't see anything that says it's going to get significantly better in 2007,” said Bob Nardelli, Home Depot's chairman and chief executive officer. Mr. Nardelli said job losses in the home construction market are the worst he's seen in 35 years, and the pain is starting to spread to the home renovation market. “The loss of jobs ... in the home construction market is at unprecedented levels,” Mr. Nardelli told analysts on a conference call Tuesday. “Home builders [are] basically writing off earnest money and liquidating land. We're starting to see a lot of that unemployment find its way over to the small repair and remodel contractors.” Problems in the housing sector have also begun to affect how consumers spend their money. In October, U.S. retail sales fell at an annual rate of 0.2 per cent — the third consecutive monthly decline, according to a U.S. Commerce Department report Tuesday. The decline was heavily influenced by lower gasoline prices, which resulted in less revenue for gas stations. But there were also sharp declines in building materials (down 0.3 per cent), furniture (down 0.7 per cent) and department store sales (down 0.7 per cent). Over the past three months, sales of building materials have plunged at an annual rate of 10.6 per cent. “The housing slowdown left its grimy fingerprints all over this report,” BMO Nesbitt Burns economist Douglas Porter said in a note to clients. Lower gasoline prices don't seem to be causing consumers to spend elsewhere, as many economists had predicted. Even if you strip out volatile gas, food and auto sales, all other retail sales rose a meagre 0.1 per cent October. “People are being very cautious,” said Ian Shepherdson, chief North American economist at High Frequency Economics. “The housing crunch is now hurting.” At least two other bellwether U.S. retailers — Wal-Mart Stores Inc. and Target Corp. — reported Tuesday that their sales and profit remain strong, in spite of the problems in the housing sector. But executives at Wal-Mart, the world's largest retailer, acknowledged that sales in the third quarter were disappointing and it is already vowing its biggest-ever discounting binge on items such as toys and electronics to keep cash registers ringing this Christmas. “This season, no one will doubt Wal-Mart's leadership on price and value,” Wal-Mart CEO Lee Scott said. Wal-Mart's profit rose to $2.65-billion (U.S.) or 63 cents a share in the third quarter that ended Oct. 31, up from $2.37-billion or 57 cents a year earlier. That was slightly below what analysts had expected, according to Reuters. Sales were up 12 per cent to $83.5-billion. But those figures include sales at newly opened stores and foreign stores. Sales at U.S. stores that have been open at least a year were up just 1.5 per cent, and Mr. Scott said fourth-quarter sales would rise just 1 to 2 per cent.

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $55; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-16-06) Waning full Moon and lunatic suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 54, Standard & Poor's 500 index up 3, and the Nasdaq composite index up 6, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

HP Shares Slip Despite Surging 4Q Profit
AP - Hewlett-Packard Co. shares slipped after the company said fiscal fourth-quarter earnings quadrupled but the Securities and Exchange Commission had ordered a formal probe of its boardroom spying scandal.
2 Ex-Enron Execs to Be Sentenced AP
N.Korea, Trade to Dominate APEC Summit AP
Oil Sinks $2.50 for Lowest Level in Year AP
Gap Dims Outlook After 3Q Profit Falls AP

The major averages extended their winning streak to five as investors rallied around encouraging economic data, most notably a benign read on consumer inflation, and oil prices plunging to their lowest level of the year. The Dow topped the 12,300 level for the first time ever and closed at another record high.Before the bell, the Labor Dept. reported that core CPI rose just 0.1%, the slowest pace in eight months, lending further evidence the economy is on pace for a soft landing. Economists were expecting a fourth straight rise of 0.2%. Even though the year-over-year core rate is 2.7%, which is still higher than the Fed would like, the data confirm that the recent uptrend is moderating. The improved inflation outlook checks in a day after it became known that nearly every Fed official views the current rates of core inflation as uncomfortably high. In fact, such concerns were echoed by Chicago Fed President Moskow and St. Louis Fed President William Poole earlier in the session, which contributed to the midday reversal in Treasuries. Moskow said that, although inflation "is moving in the right direction," it is "premature" to declare an end to the inflation threat. Poole said the Fed is not being "cavalier" regarding the inverted curve and that, while inflation may be dissipating, they are "not out of the woods yet."Be that as it may, the rate-sensitive Financials sector's ability to look beyond the havoc an inverted yield curve can have on net interest margins was also reassuring. The spread between the 2-year and 10-year notes slipped deeper into inversion as the hawkish Fed speak and a rebound on Philly Fed offset the tame read on core CPI, at least in the bond pits. The Financials sector instead found support from the brokers, which were in focus as two potential blockbusters (e.g. KBR and HTZ) went public. The AMEX Securities Broker/Dealer Index hit an all-time high as did one of its most influential components, Goldman Sachs (GS 196.70 +3.59).Given the market's preoccupation with the pace of economic growth, a rebound in the Philly Fed index lent some confirmation to yesterday's unexpected rise in the NY Empire State Index, serving as a reminder that manufacturing activity is holding up well. That provided an additional layer of support for the Industrials sector, which was among the eight sectors posting respectable gains.Among the other seven sectors trading higher, Consumer Discretionary turned in the best performance. The sector was initially in focus after Clear Channel Communications (CCU 35.33 +1.21) agreed to be taken private for $19 bln but got an extra vote of consumer confidence as the bottom fell out of the price of oil late in the day.Crude for December delivery began its initial descent following the first build in natural gas inventories in three weeks. However, with the December contract expiring tomorrow and some conflicting reports about oil tanker traffic exacerbating uncertainty about OPEC members living up to their production cut agreements, crude futures tumbled. Oil's 4.3% decline was its biggest one-day decline since August 2005, closing at $56.26/bbl and taking a toll on the Energy sector.With Dell (DELL 25.10 -0.65) delaying the release of its Q3 report and a Q1 profit warning from Applied Materials (AMAT 17.98 -0.67), the lack of leadership within the influential tech sector left the Nasdaq relatively flat and kept market gains at a minimum midday. However, continued enthusiasm for other bellwethers like Microsoft (MSFT 29.47 +0.35), which hit a fresh two-year high, and Cisco Systems (CSCO 27.15 +0.55), which increased its share buyback program by $7 bln, eventually carried enough weight to keep the sector in positive territory. BTK +0.9% DJ30 +54.11 DJTA +1.1% DJUA +0.3% DOT +0.8% NASDAQ +6.31 NQ100 +0.5% R2K -0.2% SOX +0.4% SP500 +3.19 XOI -2.5% NASDAQ Dec/Adv/Vol 1514/1526/2.07 bln NYSE Dec/Adv/Vol 1535/1734/1.60 bln

U.S. HOUSING SLUMP DEEPENS, SPREADS
BARRIE MCKENNA Washington — First, Americans quit buying homes. Now, they may have stopped fixing and furnishing them too. Home Depot Inc. reported a 3-per-cent drop in profit in the three months that ended in October, amid mounting evidence that the U.S. housing slump is getting worse. “I don't think we've seen the bottom yet, and I don't see anything that says it's going to get significantly better in 2007,” said Bob Nardelli, Home Depot's chairman and chief executive officer. Mr. Nardelli said job losses in the home construction market are the worst he's seen in 35 years, and the pain is starting to spread to the home renovation market. “The loss of jobs ... in the home construction market is at unprecedented levels,” Mr. Nardelli told analysts on a conference call Tuesday. “Home builders [are] basically writing off earnest money and liquidating land. We're starting to see a lot of that unemployment find its way over to the small repair and remodel contractors.” Problems in the housing sector have also begun to affect how consumers spend their money. In October, U.S. retail sales fell at an annual rate of 0.2 per cent — the third consecutive monthly decline, according to a U.S. Commerce Department report Tuesday. The decline was heavily influenced by lower gasoline prices, which resulted in less revenue for gas stations. But there were also sharp declines in building materials (down 0.3 per cent), furniture (down 0.7 per cent) and department store sales (down 0.7 per cent). Over the past three months, sales of building materials have plunged at an annual rate of 10.6 per cent. “The housing slowdown left its grimy fingerprints all over this report,” BMO Nesbitt Burns economist Douglas Porter said in a note to clients. Lower gasoline prices don't seem to be causing consumers to spend elsewhere, as many economists had predicted. Even if you strip out volatile gas, food and auto sales, all other retail sales rose a meagre 0.1 per cent October. “People are being very cautious,” said Ian Shepherdson, chief North American economist at High Frequency Economics. “The housing crunch is now hurting.” At least two other bellwether U.S. retailers — Wal-Mart Stores Inc. and Target Corp. — reported Tuesday that their sales and profit remain strong, in spite of the problems in the housing sector. But executives at Wal-Mart, the world's largest retailer, acknowledged that sales in the third quarter were disappointing and it is already vowing its biggest-ever discounting binge on items such as toys and electronics to keep cash registers ringing this Christmas. “This season, no one will doubt Wal-Mart's leadership on price and value,” Wal-Mart CEO Lee Scott said. Wal-Mart's profit rose to $2.65-billion (U.S.) or 63 cents a share in the third quarter that ended Oct. 31, up from $2.37-billion or 57 cents a year earlier. That was slightly below what analysts had expected, according to Reuters. Sales were up 12 per cent to $83.5-billion. But those figures include sales at newly opened stores and foreign stores. Sales at U.S. stores that have been open at least a year were up just 1.5 per cent, and Mr. Scott said fourth-quarter sales would rise just 1 to 2 per cent.

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $56; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-15-06) Waning full Moon and lunatic suckers bear market is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 33, Standard & Poor's 500 index up 3, and the Nasdaq composite index up 12, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. Unexpected rise in that global hub of manufacturing activity, New York …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

US Airways Makes Hostile Offer for Delta

AP - US Airways made a hostile $8 billion bid for Delta Air Lines on Wednesday, ignoring Delta's repeated statements that it isn't interested in a merger. The move could start a stampede of competing bids in a long-predicted industry consolidation.

Dow Finishes at New High on Fed Minutes AP

Dell Says SEC Has Started Formal Probe AP

NBC Exec Named New Chairman, CEO of AOL AP

Dunn Pleads Not Guilty in HP Spy Scandal AP

The underlying bullish trend was again the market's friend Wednesday as investors rallied around more data suggesting the much-desired soft landing remains on track and a resurgence in merger activity. For a second straight day, the Dow and Russell 2000 closed at new all-time highs.Given the market's preoccupation with the pace of economic growth, an unexpected rise in the NY Empire State Index served as a reminder that the manufacturing sector is still holding up reasonably well. That stronger than expected early read on November manufacturing conditions, coupled with US Airways' (LCC 59.50 +8.57) proposed $8 bln merger with Delta Air Lines, and Boeing (BA 87.06 +1.32) reportedly poised to receive more than $10 bln worth of additional business, provided a floor of support for the Industrials sector.In fact, the possibility of more M&A deals waiting in the wings for air carriers helped the majority of airline stocks, which are typically sensitive to oil prices, completely look past a rebound in energy prices. The AMEX Airlines Index surged 5.2% to a new 52-week high.After logging its biggest three-day decline since mid-September, crude for December delivery closed up 0.8% at $58.76/bbl following larger than expected declines in weekly distillate and gasoline supplies. Fortunately for the bulls, the Energy sector took full advantage and provided enough notable leadership as today's best performing sector to help offset the commodity's waning inflationary influence.To wit, the minutes from the October 24-25 FOMC meeting noted that, "with energy prices well off the highs reached earlier in the year, members felt that it was no longer appropriate to note that the high level of energy prices had the potential to sustain inflation pressures." Perhaps most noteworthy with regard to this afternoon's report was the fact that it brought few surprises. In particular, there was no mention about concern that a recession might be developing.Sure, "all members agreed that the risks to achieving the anticipated reduction in inflation remained of greatest concern." Also, nearly all participants viewed the current rates of core inflation as "uncomfortably high," which contributed to some late-day choppiness since tomorrow morning brings the all-important October core-CPI number (8:30 ET). Nonetheless, Fed officials also noting that the "upside risks to inflation had declined" and showing that many participants "drew some comfort" from the fact that the housing market problems "did not seem to be spilling over into consumer spending," and that "investment spending also appeared to be holding up well" kept buyers in control of the action into the close. Preventing an even stronger rally, though, was a lack of leadership from the rate-sensitive Financials sector. While today's M&A plays into our favorable outlook on the investment banks, the spread between the 2-year and 10-year notes slipping deeper into inversion weighed on the banks. Treasuries sold off after a stronger than expected read on manufacturing conditions diminished hopes the economy is slowing enough to justify a possible interest rate cut anytime soon.BTK +0.9% DJ30 +33.70 DJTA +1.4% DJUA -0.4% DOT +0.6% NASDAQ +12.09 NQ100 +0.4% R2K +0.9% SOX +0.4% SP400 +0.6% SP500 +3.35 XOI +0.5% NASDAQDec/Adv/Vol 1191/1862/2.15bln NYSE Dec/Adv/V1240/2018/1.62 bln

U.S. HOUSING SLUMP DEEPENS, SPREADS
BARRIE MCKENNA Washington — First, Americans quit buying homes. Now, they may have stopped fixing and furnishing them too. Home Depot Inc. reported a 3-per-cent drop in profit in the three months that ended in October, amid mounting evidence that the U.S. housing slump is getting worse. “I don't think we've seen the bottom yet, and I don't see anything that says it's going to get significantly better in 2007,” said Bob Nardelli, Home Depot's chairman and chief executive officer. Mr. Nardelli said job losses in the home construction market are the worst he's seen in 35 years, and the pain is starting to spread to the home renovation market. “The loss of jobs ... in the home construction market is at unprecedented levels,” Mr. Nardelli told analysts on a conference call Tuesday. “Home builders [are] basically writing off earnest money and liquidating land. We're starting to see a lot of that unemployment find its way over to the small repair and remodel contractors.” Problems in the housing sector have also begun to affect how consumers spend their money. In October, U.S. retail sales fell at an annual rate of 0.2 per cent — the third consecutive monthly decline, according to a U.S. Commerce Department report Tuesday. The decline was heavily influenced by lower gasoline prices, which resulted in less revenue for gas stations. But there were also sharp declines in building materials (down 0.3 per cent), furniture (down 0.7 per cent) and department store sales (down 0.7 per cent). Over the past three months, sales of building materials have plunged at an annual rate of 10.6 per cent. “The housing slowdown left its grimy fingerprints all over this report,” BMO Nesbitt Burns economist Douglas Porter said in a note to clients. Lower gasoline prices don't seem to be causing consumers to spend elsewhere, as many economists had predicted. Even if you strip out volatile gas, food and auto sales, all other retail sales rose a meagre 0.1 per cent October. “People are being very cautious,” said Ian Shepherdson, chief North American economist at High Frequency Economics. “The housing crunch is now hurting.” At least two other bellwether U.S. retailers — Wal-Mart Stores Inc. and Target Corp. — reported Tuesday that their sales and profit remain strong, in spite of the problems in the housing sector. But executives at Wal-Mart, the world's largest retailer, acknowledged that sales in the third quarter were disappointing and it is already vowing its biggest-ever discounting binge on items such as toys and electronics to keep cash registers ringing this Christmas. “This season, no one will doubt Wal-Mart's leadership on price and value,” Wal-Mart CEO Lee Scott said. Wal-Mart's profit rose to $2.65-billion (U.S.) or 63 cents a share in the third quarter that ended Oct. 31, up from $2.37-billion or 57 cents a year earlier. That was slightly below what analysts had expected, according to Reuters. Sales were up 12 per cent to $83.5-billion. But those figures include sales at newly opened stores and foreign stores. Sales at U.S. stores that have been open at least a year were up just 1.5 per cent, and Mr. Scott said fourth-quarter sales would rise just 1 to 2 per cent.

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $58; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-14-06) Suckers bear market is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 86, Standard & Poor's 500 index up 8, and the Nasdaq composite index up 24, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent ciminal americans say. They are printing worthless dollars like mad. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Stocks Surge on Fed Officials' Comments AP - Wall Street barreled higher Tuesday, with the Dow Jones industrials surging further into record territory after a Federal Reserve official indicated the Fed will maintain its policy of stable interest rates.

Comair Flight Attendants Approve Cuts AP
Bush: Automakers Face 'Tough Choices' AP
Wal-Mart, Target Start Holiday Price War AP
Wholesale Inflation Drops Record Amount AP

After middling around the flat line throughout most of the session, a technical bounce late in the day vaulted stocks to their best levels of the session.What was shaping up to be a rather lackluster session amid a tug-o-war about whether or not today's economic data suggested a soft or hard landing for the economy turned out favorably for the bulls when the S&P 500 broke through its six-year high of 1389 around 2:45 ET. Eclipsing that technical barrier, on no specific news, prompted a surge in buy orders for the S&P 500 futures contract, which in turn lit a fire under stocks across the board. In fact, all three of the major indices initially surging higher and logging roughly the same percentage gains lent further evidence that program trading was behind the late-day rally. Of the nine sectors trading higher, Consumer Discretionary and Technology turned in the best performances, each surging 1.1%. As the second most influential sector, Tech's advance provided the bulk of leadership, as evidenced by the Nasdaq outpacing its blue chip counterparts to the upside. Intel Corp (INTC 21.86 +0.86) more than doubled yesterday's impressive 2.0% advance amid more upbeat analyst commentary and the early rollout of its new quad-core processors. Intel is a suggested holding in the Briefing.com Active Portfolio.Also helping the Dow close at a new all-time high was discretionary component Home Depot (HD 37.26 +0.86). The stock was down as much as 1.7% after it missed expectations and cut its full-year outlook, renewing concerns about the impact a weak housing market is having on the overall economy. That was eventually put to rest as it became apparent that much of the bad news may have already been priced into the stock. Also mitigating some of the housing worries was DR Horton (DHI 24.11 +1.73), which soared 9.3% after handily topping Wall Street expectations on both the top and bottom lines. Homebuilding was today's best performing S&P industry group.The discretionary sector was actually in focus before the market even opened as investors waited to get an update about the health of the consumer and inflation. The Commerce Dept. showed that retail sales fell a less than expected 0.2% in October. More notably, retail sales, excluding a drop in gasoline sales - which is good for the economy - rose 0.4%.That was consistent with a moderate upward trend in consumer spending that was also evidenced by a batch of better than expected earnings reports from a plethora of retailers. Wal-Mart (WMT 47.66 +1.34) beat by a penny while Target (TGT 59.16 +1.40), BJ's Wholesale (BJ 29.69 +1.08), Saks (SKS 20.40 +0.51) and Dillard's (DDS 35.59 +6.38) also topped expectations. With policy makers focused on inflation risks, a surprising drop in the October core-PPI that showed inflationary pressures at the wholesale level remain contained provided additional support. To wit, bond traders began pricing in a possible Fed easing, pushing the yield on the 10-year note (+12/32) to a seven-month low (4.56%). Core-PPI unexpectedly fell 0.9%, the biggest decline since August 1993, while total PPI plunged 1.6%, matching the steepest decline on record. DJ30 +86.13 NASDAQ +24.29 SP500 +8.80 NASDAQ Dec/Adv/Vol 1017/2039/1.97 bln NYSE Dec/Adv/Vol 883/2388/1.71 bln

U.S. HOUSING SLUMP DEEPENS, SPREADS
BARRIE MCKENNA Washington — First, Americans quit buying homes. Now, they may have stopped fixing and furnishing them too. Home Depot Inc. reported a 3-per-cent drop in profit in the three months that ended in October, amid mounting evidence that the U.S. housing slump is getting worse. “I don't think we've seen the bottom yet, and I don't see anything that says it's going to get significantly better in 2007,” said Bob Nardelli, Home Depot's chairman and chief executive officer. Mr. Nardelli said job losses in the home construction market are the worst he's seen in 35 years, and the pain is starting to spread to the home renovation market. “The loss of jobs ... in the home construction market is at unprecedented levels,” Mr. Nardelli told analysts on a conference call Tuesday. “Home builders [are] basically writing off earnest money and liquidating land. We're starting to see a lot of that unemployment find its way over to the small repair and remodel contractors.” Problems in the housing sector have also begun to affect how consumers spend their money. In October, U.S. retail sales fell at an annual rate of 0.2 per cent — the third consecutive monthly decline, according to a U.S. Commerce Department report Tuesday. The decline was heavily influenced by lower gasoline prices, which resulted in less revenue for gas stations. But there were also sharp declines in building materials (down 0.3 per cent), furniture (down 0.7 per cent) and department store sales (down 0.7 per cent). Over the past three months, sales of building materials have plunged at an annual rate of 10.6 per cent. “The housing slowdown left its grimy fingerprints all over this report,” BMO Nesbitt Burns economist Douglas Porter said in a note to clients. Lower gasoline prices don't seem to be causing consumers to spend elsewhere, as many economists had predicted. Even if you strip out volatile gas, food and auto sales, all other retail sales rose a meagre 0.1 per cent October. “People are being very cautious,” said Ian Shepherdson, chief North American economist at High Frequency Economics. “The housing crunch is now hurting.” At least two other bellwether U.S. retailers — Wal-Mart Stores Inc. and Target Corp. — reported Tuesday that their sales and profit remain strong, in spite of the problems in the housing sector. But executives at Wal-Mart, the world's largest retailer, acknowledged that sales in the third quarter were disappointing and it is already vowing its biggest-ever discounting binge on items such as toys and electronics to keep cash registers ringing this Christmas. “This season, no one will doubt Wal-Mart's leadership on price and value,” Wal-Mart CEO Lee Scott said. Wal-Mart's profit rose to $2.65-billion (U.S.) or 63 cents a share in the third quarter that ended Oct. 31, up from $2.37-billion or 57 cents a year earlier. That was slightly below what analysts had expected, according to Reuters. Sales were up 12 per cent to $83.5-billion. But those figures include sales at newly opened stores and foreign stores. Sales at U.S. stores that have been open at least a year were up just 1.5 per cent, and Mr. Scott said fourth-quarter sales would rise just 1 to 2 per cent.

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $58; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-13-06) Waning full Moon and lunatic suckers bear market is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 23, Standard & Poor's 500 index up 3, and the Nasdaq composite index up 16, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Dow Closes Up 23, Nasdaq Finishes Up 17

AP - Wall Street extended its November rally into a new week Monday, betting that an upcoming series of economic reports will show strength in the overall economy with inflation contained.

·                                                         Oil Prices Settle Below $59 a Barrel AP

·                                                         Gasoline Prices Rise 3 Cents to $2.23 AP

·                                                         Tribune Stock Up Amid Reports of Bidding AP

·                                                         Tyson Foods Posts Third Consecutive Loss AP

Stocks stumbled out of the gate Monday, but the bears again failed to prevent the market's underlying bullish tone from resurfacing to extend last week's solid gains. Since there were no earnings or economic reports of note scheduled until Tuesday, investors benefited from upbeat analyst commentary, plunging oil prices and some reassuring Fed speak. With the S&P 500 Semiconductors Index still ranked as one of this year's biggest laggards, Citigroup upgrading the group to Overweight helped Technology provide a floor of support for all three of the major averages. Intel (INTC 21.00 +0.42), a suggested holding in the Briefing.com Active Portfolio and today's best performing Dow component, surged 2.0% after it was added to Citigroup's Recommended List. Qualcomm (QCOM 36.21 +0.97) climbing 2.8%, after Motorola (MOT 21.13 -0.25) said it will use Qualcomm chips in its new 3G handsets, and Dell (DELL 25.49 +0.60) surging 2.4% after Deutsche Bank raised its price target to $28 provided additional sector support.Among the other seven sectors trading higher, Industrials also provided some notable leadership. Aside from oil's pullback making transportation stocks more attractive, the Industrials sector got an additional lift after Citigroup added General Electric (GE 35.39 +0.22) to its Recommended List Extending Friday's 2.6% sell-off, crude for December delivery fell 1.7% to $58.58/bbl amid concerns that warm-weather forecasts for the week will curb demand for heating fuel. More notably, though, was the Energy sector's resilience in the face of oil's decline.With this week earmarked as the second biggest for IPOs this year, investment banks generated some additional buying interest and helped the rate-sensitive Financials sector shrug off rising interest rates. Among all 12 of the components in the AMEX Securities Broker/Dealer Index gaining ground, Lehman Brothers (LEH 73.44 +1.38) was among the best performers, which was understandable since it is the only underwriter involved in all three of this week's potential blockbuster deals: Hertz Global Holdings (HTZ), Nymex Holdings (NMX), and KBR Inc. (KBR).Consumer Discretionary was also in focus. Homebuilders recouped some of its year-to-date losses as investors applauded the surprise resignation of KB Home's (KBH 44.72 +0.90) CEO amid an options backdating investigation. Publishers were an even brighter spot amid reports that Gannett (GCI 59.87 +0.71) has become interested in bidding for Tribune Co. (TRB 32.45 +0.42).Also, with investors questioning the degree to which consumer spending will hold up during the upcoming holiday season and whether inflation remains under control, notably hawkish Dallas Fed President Richard Fisher saying that the U.S. economy is growing "forcefully" offered investors an additional vote of confidence. DJ30 +23.45 DJTA +0.9% DOT +0.9% NASDAQ +16.66 NQ100 +1.0% R2K +0.4% SOX +1.5% SP400 +0.2% SP500 +3.52 NASDAQ Dec/Adv/Vol 1302/1758/1.71 bln NYSE Dec/Adv/Vol 1512/1777/1.33 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $58; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-10-06) Waning full Moon and lunatical suckers bear market rally into the close is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 5, Standard & Poor's 500 index up 2, and the Nasdaq composite index up 13, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits were saying the up move without any rational basis was predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even goldman token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Wal-Mart Tries to Improve Fashion Trends
AP - This holiday season, a big challenge at Wal-Mart is convincing shoppers like Portia Goodman and Karen Wade to buy fashion instead of just basics.

·         Enron's Fastow Assigned to La. Prison AP

·         Merck Submits New Data for Arcoxia AP

·         Russia Moves Closer to WTO Membership AP

·         Qwest Execs Cash in Stock Options AP

Stocks bounced back Friday following Thursday's modest pullback, but blue chip gains were modest at best with the Nasdaq again turning in a session of outperformance.With no scheduled economic data to potentially rattle the market, the market refocused its attention on earnings. Better than expected quarterly reports from two Dow components -- Walt Disney (DIS 32.36 -1.22) and American International Group (AIG 69.76 +1.72) -- were the headliners during an otherwise quiet day of trading. In fact, volume was below average due in part to the observance of Veterans Day while all three of the major averages traded in a relatively narrow range throughout the session.Last night, AIG topped Wall Street forecasts and surged 2.5% after Q3 profits more than doubled. Fortunately for the bulls, AIG's strong quarter helped provide a floor of support for Financials, which got an additional boost from a decline in borrowing costs.Another rate-sensitive area benefiting from falling bond yields was Homebuilding, which as the day's best performing S&P industry group helped the Consumer Discretionary sector shrug off a 3.6% drubbing in shares of Disney. A suggested holding in the Briefing.com Active Portfolio, Disney also beat analysts' expectations after the close on Thursday. However, as this year's second best performing Dow component (behind GM), and up 5.3% already this week in anticipation of strong results, the stock sold off on the news and amid uncertainty about fiscal 2007 growth prospects.Retailers were another focal point Friday. The group got a boost following a strong earnings report from Kohl's (KSS 73.71 +0.77) and a better than feared report from recommended holding Pacific Sunwear (PSUN 18.55 +1.28). An analyst upgrade on Nordstrom (JWN 46.75 +1.21), along with falling oil prices heading into the holiday shopping season, provided additional support for the Discretionary sector.The 2.6% sell-off in crude oil prices did not bode well for Energy, however, which turned in the day's worst performance. Crude oil for December delivery closed $60/bbl after the International Energy Agency cut its 2006 global demand forecast for a third consecutive month.Meanwhile, after falling 4.0% over the last two sessions, Health Care rebounded to offer some support. Technology also provided some modest leadership to the upside, garnering just enough buying interest to push its year-to-date gain above 7%. BTK +0.8% DJ30 +5.13 DJTA +1.2% DJUA +0.5% DOT +0.7% NASDAQ +13.71 NQ100 +0.6% R2K +0.9% SOX +1.0% SP400 +0.7% SP500 +2.57 XOI -0.5% NASDAQ Dec/Adv/Vol 1195/1820/1.69 bln NYSE Dec/Adv/Vol 1142/2106/1.33 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $59; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-9-06)Waning full moon and Stocks drop still only modestly relative to reality and suckers bear market rally to end lower as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 73.24, Standard & Poor's 500 index down 7.39, and the Nasdaq composite index down 8.93, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits were saying the up move without any rational basis was predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even goldman token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

U.S. Cars Rise in Reliability Ratings
AP - Ford's new Fusion model earned high marks from both Consumer Reports testers and consumers who rated its reliability, the magazine said in its 2007 new car preview, showing that U.S. automakers may be making strides in initial quality.

·         Sands Casino to Close After 26 Years AP

·         Disney Reports Higher 4Q, Yearly Profit AP

·         Delta Air Lines Posts $52M Profit in 3Q AP

·         Oil Prices Stabilize After Election Jump AP

Stocks snapped a three-day winning streak Thursday as growing anxiety about possible drug concessions and surging oil prices overshadowed a blow out quarter from Cisco Systems.Health Care, already this year's poorest performing S&P sector, became even more unfavorable today. Albeit still up modestly on the year, the sector extended its underperformance for a second straight day as investors fretted over whether a Democratic-controlled Congress will make a push to change the Medicare Prescription Drug benefit in order to lower drug prices. Such fears called into question the valuations of several drug companies recently hitting 52-week highs. To wit, Pfizer (PFE 25.82 -0.80), Merck (MRK 42.92 -1.42) and Johnson & Johnson (JNJ 66.17 -1.82) were among today's worst performing Dow components.The absence of leadership Financials and Industrials also weighed on sentiment that the University of Michigan showed earlier in the session was already eroding. Telecom, this year's best performing S&P sector (+26%), was another weak spot for stocks. Concerns that the FCC will continue to delay AT&T's (T 33.38 -0.99) proposed $83 bln merger with BellSouth (BLS 43.52 -1.05), amid ongoing anti-trust inquiries from the House Energy Panel, prompted investors to lock in some of the sector's impressive year-to-date gains.Among the four sectors finishing in positive territory, Materials paced the way as a weaker dollar made steel and gold stocks more attractive. However, as the least influential of the 10 S&P sectors, its nearly 1.0% advance was barely noticed. Energy was another beneficiary of a weak greenback and bright spot for investors, but not necessarily for consumers, since the sector rose in sympathy with oil prices closing above $61/bbl for the first time this month. Crude for December delivery surged 2.2% to a two-week high of $61.16/bbl following a larger than expected drawdown in weekly natural gas inventories.Technology was another focal point Thursday and had the Nasdaq trading in positive territory until a renewed wave of selling interest late in the day become too much for the bulls to bear. Providing the biggest boost was a 6.5% surge in Cisco Systems (CSCO 26.72 +1.62) to a two-year high. The tech bellwether and suggested holding in the Briefing.com Active Portfolio topped Wall Street forecasts and issued upside Q2 revenue growth guidance last night. That prompted several analysts to raise their estimates and price targets, helping the stock extend its weekly advance to more than 12% and restore some optimism about the Tech sector's earnings prospects. BTK -2.3% DJ30 -73.24 DJTA -1.0% NASDAQ -8.93 NQ100 -0.6% R2K -1.0% SOX -1.9% SP400 -0.6% SP500 -7.39 XOI +0.8% NASDAQ Dec/Adv/2015/1015/2.26 bln NYSE Dec/Adv/Vol 1893/1343/1.75 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $61; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-8-06) Blazing full Moon and lunatical suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 19, Standard & Poor's 500 index up 2, and the Nasdaq composite index up 9, all very commissionable on heavy volume as in final pre-election result push for bush, which fell very short. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits were saying the up move without any rational basis was predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even goldman token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Dems Pledge to Scrutinize Big Business

AP - The new masters of the House, the Democrats, are promoting an economic agenda that would put more money in the pockets of ordinary citizens and government, while leading to greater oversight of big business.

·                                 Dow Reaches New High on Election Results AP

·                                 Two Billionaires Bid to Acquire Tribune AP

·                                 News Corp. Earns $843M in First Quarter AP

·                                 Cisco Systems 1Q Profit Jumps 27 Percent AP

What was initially shaping up to be a victory for the bears, fueled primarily by political uncertainty in the wake of Tuesday's mid-term elections, ultimately ended on a positive note as the market's underlying bullish tone returned. Even though market gains were modest, strong industry leadership and earnings optimism helped the Dow close at another new all-time high.With no scheduled economic reports to potentially rattle the market today, coupled with very little in the way of corporate news, an indecisive political picture garnered added attention right out of the gate. For days, the stock market was pricing in the possibility of Democrats taking control of the House, which came to fruition; but the likelihood of Republicans also losing control in the Senate was not anticipated. Thus, with the balance of power in the Senate still up in the air, such uncertainty sparked a sense of early caution that prompted investors to take some money off the table.That is until Microsoft (MSFT 29.00 +0.05) said around 2:00 ET that Windows Vista is officially complete and ready to ship. Even though MSFT shares closed up modestly, renewed confidence about earnings prospects from the software giant helped remind investors about the upcoming earnings release of a fellow tech bellwether -- Cisco Systems (CSCO 25.10 +0.26). Up as much as 2.2% intraday and nearly 50% since bottoming out on Aug. 4, Cisco surging to a two-year high for a third straight day provided some notable support for the tech-heavy Nasdaq. Cisco is a suggested holding in the Briefing.com Active Portfolio.From a sector standpoint, though, Energy turned in the best performance as oil prices closed at session highs near $60/bbl. Crude for December delivery surged 1.8% following a larger than expected drawdown in weekly distillate supplies; but the Energy sector's leadership acted as an offset to the commodity's potential to sustain inflation pressures. Exxon Mobil (XOM 74.13 +1.60) soared 2.2% to finish at a new all-time high.Among the other 17 Dow components trading higher, and helping to offset a 3.4% drubbing in Merck (MRK 44.35 -1.55), was Altria Group (MO 81.43 +1.10). Tobacco stocks got a lift after Californians voted down a ballot initiative that would have quadrupled the state's cigarette taxes. While Democrats pledged to negotiate with drug makers to lower prices, Merck's decline was exacerbated after it disclosed four tax disputes with potential liabilities totaling $5.58 bln a day earlier. Health Care was the only sector closing lower today. DJ30 +19.77 NASDAQ +9.06 NQ100 +0.5% R2K +0.7% SP400 +0.6% SP500 +2.88 XOI +1.4% NASDAQ Dec/Adv/Vol 1258/1775/2.09 bln NYSE Dec/Adv/Vol 1200/2032/1.61 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $59; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-7-06) Blazing full Moon and lunatical suckers bear market is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 51, Standard & Poor's 500 index up 3, and the Nasdaq composite index up 9, all very commissionable on heavy volume in final pre-election result push for bush. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulsen from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

LA Times Editor Forced to Resign
AP - The future of the Los Angles Times has become even more muddied after editor Dean Baquet, who had defied Times' parent Tribune Co. on slashing newsroom jobs, was forced to resign.

·         EU Chief Asks China to Fight Piracy AP

·         Oil Prices Rise in Asian Trading AP

·         FedEx Cancels Airbus Order to Buy Boeing AP

·         Cardinal Faces 401(k) Complaint AP

Stocks closed off their intraday highs but still turned in a respectable performance Tuesday, especially on the heels of such a surprise rally a day earlier.Investors becoming even more convinced that today's mid-term elections will result in legislative gridlock -- a split Congress potentially ill-equipped to ratify major policy initiatives -- was cited as one reason behind today's follow-through buying efforts. Fears of missing out on what the bears believe has already come and gone -- a year-end rally -- coupled with a sell-off in oil, lower bond yields and some decent sector leadership, provided a more likely motivation.With oil prices up nearly 4% over the previous two sessions, a 1.8% decline that pushed the commodity back below $59/bbl lent some additional relief. Crude for December delivery closed at $58.93/bbl (-$1.09) ahead of a report tomorrow that is expected to show weekly inventories remain well supplied since doubts about OPEC members living up to their proposed production cuts continue to linger.Further, with Treasury yields soaring across the curve last Friday, more relief on the interest-rate front was also welcoming news for equity traders. With no influential economic data to digest, bonds got an election-day boost as political uncertainty sparked some safe-haven refuge in Treasuries. While that provided a floor of support for the rate-sensitive Financials, the most influential leadership came from Industrials.Dow component Boeing (BA 84.77 +4.29) soared 5.3% after FedEx (FDX 115.01 +1.07) cancelled an Airbus order and said it will now buy 15 new Boeing 777 freighters. That's roughly a $3.5 bln deal based on list prices. The sector also benefited from a 5.9% surge in Emerson Electric (EMR 87.40 +4.84), which followed up a Q4 EPS surprise with a dividend increase and an announced two-for-one stock split, as well as an analyst upgrade on Southwest Airlines (LUV 15.33 +0.39). That positioned Airlines (+2.6%) as one of the day's best performing S&P industry groups.BTK +1.2% DJ30 +51.22 DJTA +0.5% DJUA -0.2% DOT +0.3% NASDAQ +9.93 NQ100 +0.5% R2K +0.1% SOX +1.9% SP400 +0.2% SP500 +3.06 XOI -1.0% NASDAQ Dec/Adv/Vol 1433/1640/2.10 bln NYSE Dec/Adv/Vol 1414/1820/1.50 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $58; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-6-06) Blazing full Moon and lunatical suckers bear market is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 119.51, Standard & Poor's 500 index up 15.48, and the Nasdaq composite index up 35.16, all very commissionable on heavy volume. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Dow Ends Up Nearly 120 on Buyout Deals

AP - Wall Street roared back Monday, erasing its losses of last week after private-equity buyout deals involving companies such as Four Seasons Hotels Inc. and OSI Restaurant Partners Inc. revived investors' belief that stocks still have room to run.

Four Seasons Receives $3.7 Billion Offer AP

Abbott Buys Out Kos Pharmaceuticals AP

Big 3 Cuts Bring Higher Rental Prices AP

Microsoft Maps Next Step in Google Chase AP

After witnessing their first down week since late September, the pendulum swung back to favor the bulls Monday amid resurgence in M&A activity, some upbeat Fed speak and strong sector leadership. The absence of potentially disruptive economic reports also gave investors the green light to get back into equities, especially since so much weaker than expected data of late have prompted investors to question the sustainability of market gains. The Dow snapped a six-day losing streak while the S&P 500 and Nasdaq posted their biggest one-day increases since October 12. Just four days after reports showed private equity firms set a new record for fund raising ($178 bln), several firms went on a shopping spree Monday. Among the most notable deals was the proposed $3.7 bln buyout bid for Four Seasons Hotels (FS 82.31 +18.44). The deal includes investors ranging from current CEO Isadore Sharp to Saudi Prince Alwaleed Bin Talal and Microsoft (MSFT 28.86 +0.13) Chairman Bill Gates. In addition to a renewed focus on hotels as potential takeover targets, the Consumer Discretionary got an additional lift from restaurants. After consulting with Wachovia Securities (WB 55.16 +0.86), OSI Restaurants (OSI 39.75 +7.32) agreed to be taken private for roughly $3.0 bln. A $2.2 bln offer for Swift Transportation (SWFT 29.85 +5.80) that includes backing from Morgan Stanley (MS 76.15 +1.87) also helped to renew optimism that more M&A deals are on the horizon, providing a floor of support for the broader market and especially the brokerage firms positioned to benefit. To wit, Financials provided some influential leadership and got some added support late in the day as Treasuries turned positive. As a reminder, the 10-year note on Friday plunged 30 ticks, the biggest decline since July 21, 2005, lifting its yield to 4.71% and taking a toll on rate-sensitive stocks. Other M&A announcements included Abbott Laboratories' (ABT 47.45 -0.19) $3.7 bln bid for Kos Pharmaceuticals (KOSP 77.06 +26.97) and McKesson's (MCK 49.61 +1.09) $1.8 bln offer for Per-Se Technologies (PSTI 27.50 +3.05). Of the nine sectors closing higher, Technology paced the way to the upside, getting a big boost from bellwether Cisco Systems (CSCO 24.68 +0.91). The stock, which is also a suggesting holding in the Briefing.com Active Portfolio, surged 3.8% and hit an intraday 52-week high ahead its Q1 report on Wednesday. Even Energy participated in Monday's broad-based rally. Crude for December delivery, which was off more than 1.0% at $58.50/bbl early on after threats of attacks on oil facilities in Nigeria failed to materialize, closed up 1.6% at $60.07/bbl. Aside from some short covering, OPEC suggesting some members may take further action to reduce output at the December meeting if the market doesn't become more balanced provided a floor of support for the commodity. Fortunately for the bulls, the Energy sector took notice and, because of its leadership as a large contributor to the overall earnings picture on the S&P 500, helped investors temporarily look past oil's potential to sustain inflation pressures. Providing an additional vote of confidence that left investors less anxious about Tuesday's midterm elections were comments from Chicago Fed President Michael Moskow. Albeit a non-voting Fed official this year (he votes in 2007), Moskow's hawkish remarks took a back seat to the market's preoccupation with economic growth. As a result, Moskow saying that he does "not see the slowing in housing markets spilling over into a more prolonged period of weakness in the U.S. economy overall," lent some additional relief and eased concerns about the severity of the economic slowdown. BTK +1.2% DJ30 +119.51 DJTA +1.8% DJUA -0.5% DOT +1.6% NASDAQ +35.16 NQ100 +1.7% R2K +1.4% SOX +1.8% SP400 +1.1% SP500 +15.48 XOI +1.3% NASDAQ Dec/Adv/Vol 922/2152/1.82 bln NYSE Dec/Adv/Vol 805/2469/1.38 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $60; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-3-06)Full moon and Stocks drop still only modestly relative to reality and rally into the close to end lower as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 32.50, Standard & Poor's 500 index down 3.04, and the Nasdaq composite index down 3.23, all very commissionable on heavy volume. Stagflation and full employment revisions pre-election.....riiiiight.Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Wal-Mart Cuts Prices on Some Electronics
AP - First, toys, now electronics. Wal-Mart, which began discounting its holiday toys in mid-October, announced on Friday deep price cuts on almost 100 electronics, setting the stage for price wars in advance of the holiday season.

·         Berkshire's Profit Up Nearly Fivefold AP

·         Dow Ends Down 33 Amid Jump in Oil Prices AP

·         Several Carriers Boost Fares by $10 RT AP

·         Ex-McKesson Execs Acquitted of Fraud AP

Stocks closed modestly lower Friday amid a lack of conviction that today's strong jobs report positions the economy for a much-desired soft landing. With investors leaving no rock unturned to gauge the severity of the economic slowdown, the stock market finally wrapped its arms around a report that broke a string of weaker than expected economic data and laid to rest concerns of an impending severe economic slowdown.Before the bell, the Labor Dept. showed that October non-farm payrolls rose 92,000. While that was below an expected rise of 125,000, initially reminiscent of the shortfall a month earlier, it was also noted that September's small increase of 51,000 was revised to a much higher 148,000. Also assuring there is no shortage of jobs was an upward revision to the August figure as well, from 188,000 to 230,000. The adjustments left the average monthly payrolls gain in line with a six-month trend. Along with the unemployment rate unexpectedly falling to a five-year low of 4.4% and hourly earnings inching higher, that gain provides plenty of fuel to keep consumer spending rising at about a 3% real rate.The Treasury market perhaps served as the best reminder today that, while the jobs report was bullish overall, the big payroll revisions, lower unemployment and rising wages diminish the possibility of the Fed easing anytime soon. As a result, Treasuries sold off across the yield curve. To wit, the 10-year note plunged 30 ticks, the biggest decline since July 21, 2005, lifting its yield to 4.71%. That eventually weighed on rate-sensitive stocks and raised valuation concerns about growth companies dependent on borrowing, which resulted in the lack of leadership from influential sectors like Financials and Technology.Throw in a 2.2% surge in oil prices to $59.13/bbl and subsequent weakness from the likes of retailers and transports, and the market struggled to keep early buying efforts intact. Crude oil futures climbed for the first time in three sessions following reports that Nigerian militants may stage a large-scale attack on oil facilities in the region. Energy was the only sector to close higher. BTK +0.1% DJ30 -32.50 DJTA -0.7% DJUA -0.8% DOT -0.3% NASDAQ -3.23 NQ100 -0.4% R2K +0.3% SOX +0.5% SP400 +0.2% SP500 -3.04 XOI +1.8% NASDAQ Dec/Adv/Vol 1283/1740/1.86 bln NYSE Dec/Adv/Vol 1760/1502/1.43 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $59; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-2-06) Stocks drop still only modestly relative to reality and rally into the close to end lower as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 12.48, Standard & Poor's 500 index down .47, and the Nasdaq composite index down .33, all very commissionable on heavy volume. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Microsoft Backs Novell's Linux Platform

AP - Microsoft Corp. has embraced Novell Inc.'s open-source software platform, forming a technological truce between two longtime antagonists who want to make it easier for the still-dominant Windows operating system and the increasingly popular Linux system to work together.

·         Daewoo Exec Gets 8 1/2-Year Prison Term AP

·         Without Deal, Des Moines to Lose Fox AP

·         AT&T-BellSouth Vote Delayed by FCC AP

·         PC Maker Gateway Cuts Nearly 100 Jobs AP

          As if the day before monthly employment data are released doesn't already create a sense of nervousness, today's weak economic news caused some added consternation. However, what was shaping up early on to be a bigger victory for the bears actually ended with only minimal, almost nonexistent, market losses. That speaks volumes to the underlying bullish tone responsible for stocks running virtually uncontested since bottoming out in July.Before the bell, the Labor Dept. showed that productivity slowed to a standstill from July through September. While that does not necessarily reflect a trend in underlying productivity, it does raise concerns that companies may try to offset lower output with higher wages, which was evident in a larger than expected 3.8% rise in unit labor costs. Pegged as a key inflation indicator, that left labor costs at a year/year rate of 5.3% for Q3 -- the biggest gain since 1982. Inflation hawks naturally will be focused on tomorrow's hourly earnings figure.Also weighing on investor sentiment Thursday were October same-store sales results that can best be described as mixed. However, many viewed the majority of retailers missing upwardly revised expectations as a huge disappointment, especially since the all-important holiday selling season is right around the corner.As expected, Wal-Mart (WMT 48.26 -0.59) confirmed that October comps rose an anemic 0.5%; however, investors were not anticipating the retail giant to say November comps are now expected to be flat, signaling its worst monthly sales growth in more than a decade. Competitors Target (TGT 56.92 -0.78) and Costco (COST 52.93 +0.02), which missed analysts' estimates, also did little to quell worries about how healthy the holiday season will be. Acting as offsets with solid results were department stores, such as JC Penney (JCP 77.04 +1.91) and Nordstrom (JWN 46.72 +0.42), as well as specialty apparel retailer Limited Brands (LTD 29.67 +0.86).Technology was also in focus, but an analyst downgrade on Intel (INTC 20.68 -0.34) eventually outweighed an upgrade on Dell (DELL 24.81 +0.79). Also playing into the price action of both stocks was confirmation that Dell has finally begun selling laptops that feature chips from Advanced Micro Devices (AMD 20.83 +0.10), which further reduces Dell's reliance on Intel processors.Meanwhile, Health Care posted a respectable gain as the pending CVS-Caremark deal raised the possibility of more industry consolidation, which plays into our Overweight rating on the sector and favorable outlook on PBMs and HMOs. However, it was only among four sectors posting gains. The other three -- Energy, Material and Telecom -- did little to act as an offset to the absence of buyers ahead of Friday's jobs report. DJ30 -12.48 NASDAQ -0.33 SP500 -0.47 NASDAQ Dec/Adv/Vol 1771/1260/1.92 bln NYSE Dec/Adv/Vol 1794/1449/1.62 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $57; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(11-1-06) Stocks drop still only modestly relative to reality and rally into the close to end lower as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 49.71, Standard & Poor's 500 index down 10.13, and the Nasdaq composite index down 32.36, all very commissionable on heavy volume. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

CVS Buying Caremark for About $21.3B

AP - Drugstore operator CVS Corp. announced Wednesday it is buying pharmacy benefits manager Caremark Rx Inc. for about $21.2 billion in stock.

                       GM, Toyota, Ford Post Big Sales Gains AP

Dow Ends Down 50 on Weak Economic Data AP

Wal-Mart Revises Its Attendance Policy AP

Cable, AOL Lift Time Warner's 3Q Results AP

With the Dow and Nasdaq just one day removed from turning in their best October performances in three years, more evidence concerning the severity of the economic slowdown in the U.S. gave investors an excuse to lock in some recent market gains Wednesday.It is worth noting, though, that today's pullback wasn't all that surprising given the market's knack for knocking trends. After all, the Dow has closed higher on the first day of November 22 times in the last 27 years, according to the Stock Trader's Almanac. Keep in mind too that September is historically the worst month of the year for stocks yet the three major indices on average gained 2.8%.With the market's focus shifting toward economic data, given that Q3 is well on track to post a 13th straight quarter of double-digit profit growth, all eyes today were on the ISM Index, especially after the Chicago PMI hit a 14-month low a day earlier. The ISM index unexpectedly fell to 51.2% in October (consensus 53.0%) -- its lowest level since June 2003. The reading exacerbated worries that the economy is slowing too much. On a more positive note, the report's prices paid component fell off sharply to 47.0% (the lowest since Feb. 2002) from 61.0%, easing concerns from an inflation standpoint, which is consistent with our view that a soft landing is developing nicely for the economy.Be that as it may, a market more pre-occupied about the pace of economic growth viewed the data as disappointing and found a reason to take some money off the table. Among the nine sectors losing ground, Technology -- one of last month's best performers -- paced the way lower. Financials, another strong sector of late amid the growing probability of an interest rate cut in the first half of 2007, also sold off.Health Care was the primary focus Wednesday after reports surfaced that Caremark Rx (CMX 48.03 -1.20) was in talks with CVS Corp (CVS 29.05 -2.33) regarding a possible "merger of equals." However, while confirmation later in the day of a $21 bln deal plays into our Overweight rating on Health Care, the lack of a premium buyout price erased what was a 9% gain in CMX shares. CMX closed down 2.4%, turning today's best performer at the onset of trading into one of the day's biggest laggards. DJ30 -49.71 NASDAQ -32.36 SP500 -10.13 NASDAQ Dec/Adv/Vol 2252/826/2.06 bln NYSE Dec/Adv/Vol 2127/1127/1.75 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $58; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-31-06) Stocks drop still only modestly relative to reality and rally into the close to end mixed as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 5, Standard & Poor's 500 index up 0, and the Nasdaq composite index up 2, all very commissionable on heavy volume. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Donnelley to Acquire Banta in $1.3B Deal
AP - R.R. Donnelley & Sons Co. will acquire Banta Corp. in a $1.3 billion deal combining two Midwestern printing firms with histories dating back more than a century, the companies announced Tuesday.
Gov't Drops Demand for Chevron Royalty AP
Dow Falls 6 on Consumer Confidence Dip AP
Eastman Kodak Posts 3Q Loss of $37M AP
High Court Grapples With $79.5M Verdict AP

After consolidating one of the best month's of market gains in almost a year, the underlying bullish tone responsible for lifting stocks since mid-July returned late in the day. To wit, the Dow, S&P 500 and Nasdaq rose 3.4%, 3.1% and 4.8%, respectively, in October. Tuesday's overall action, though, showed signs of fatigue on the part of buyers who, with two-thirds of the S&P 500 having already reported quarterly results, are beginning to shift their focus to economic data.While Friday's employment report remains the biggest potential market mover this week, today's batch of soft economic data fueling some uncertainty about the pace of economic growth was eventually too much to overcome.Just after the market opened, investors already dealing with an unexpected decline in October Consumer Confidence received the latest update on the health of regional manufacturing activity. Unfortunately for the bulls and to the delight of those questioning whether the Fed can in fact engineer a successful soft landing, the Chicago PMI fell to its lowest level (54.1%) in October since August 2005. After climbing to its strongest level in more than a year a month earlier, the disappointment took some steam out of early buying efforts.Bonds, though, took notice and accordingly pushed yields across the curve to session lows. However, not even the yield on the 10-year note slipping to its lowest level (4.60%) in more than three weeks was enough to lend support to the rate-sensitive Financials sector. In fact, the absence of influential sector leadership posed the biggest problem for the bulls.Technology provided some support again, but with October historically providing opportunities for bargain hunters to pick up beaten-down tech stocks, the sector's continued upward momentum wasn't all that surprising.What was unforeseen was a more than 2.5% swing in the price of oil that closed the commodity slightly higher on the day and back above $58/bbl. While short covering in oil renewed some leadership in Energy, the turnaround in crude took an added toll on the likes of retail and transportation stocks already reeling from concerns about the economy slowing too much.Not even defensive-oriented consumer staples stocks caught a break despite a better than expected Q1 report from Procter & Gamble (PG 63.38 -0.43). While beating expectations for the 14th straight quarter, guidance that was basically in line with forecasts left investors wanting more, especially after the Dow component hit a new 52-week high heading into its report. DJ30 -5.77 NASDAQ +2.94 SP500 +0.01 NASDAQ Dec/Adv/Vol 1593/1463/1.96 bln NYSE Dec/Adv/Vol 1634/1633/1.58 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $58; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-30-06) Stocks drop still only modestly relative to reality and rally into the close to end mixed as the wall street fraud continues tosuck the suckers in; ie., as the Dow Jones industrial average fell 3.76, Standard & Poor's 500 index up 0.59, and the Nasdaq composite index up 13.15, all very commissionable on heavy volume. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Merck to Buy Biotech Firm for $1.1B

AP - Pharmaceutical company Merck & Co. said Monday it agreed to pay an eye-popping $1.1 billion to buy Sirna Therapeutics Inc., a tiny biotechnology firm developing drugs based on new technology at the heart of last month's Nobel Prize for medicine award.

Amerigroup Fined $48M for Discrimination AP

Dow Drops 4 on Lackluster Wal-Mart Sales AP

Comair Seeks to Impose Cuts on Pilots AP

Goodyear to Close Texas Plant, Cut Jobs AP

The major averages closed mixed Monday, as the day's action was more reminiscent of portfolio rebalancing than anything else. To wit, even though the Nasdaq is outpacing gains on the Dow and S&P 500 this month, as it did again today, the tech-heavy Composite still trails the blue chip indices' year-to-date performances.Thus, playing true to trend, with October being a common month to scoop up beaten-down tech names, Technology turned in the day's best performance. In fact, an upgrade from Merrill Lynch on one of the sector's worst performers -- Yahoo! (YHOO 25.95 +0.61) -- helped get the ball rolling during what was shaping up to be another day of broad-based consolidation. As of Friday's close, Yahoo! was down 35% year to date and hit a 52-week low on October 20, presenting an opportunity for bargain hunters looking to capitalize on underappreciated stocks positioned to benefit from a seasonally strong holiday season, which supports our Overweight rating on tech.An analyst upgrade on KLA-Tencor (KLAC 49.39 +1.20) renewed enthusiasm for depressed semiconductor stocks and also helped to offset a 3.0% decline in Verizon Communications (VZ 37.67 -1.17), the Dow's worst performing component Monday. Verizon topped Wall Street forecasts; but, the company saying that spending on fiber initiatives may hurt the bottom line prompted investors to consolidate some of the stock's 35% year-to-date advance and rotate money out of this year's best performing sector -- Telecom -- and into this year's worst performer -- Tech. Another sector experiencing a similar extraction of investment dollars was Energy, this year's second best performing sector, as oil prices plummeted. Crude for December delivery fell nearly 4% to $58.36/bbl amid expectations that inventories remain well supplied, especially with warmer than expected weather conditions reducing demand for distillates like heating oil.Meanwhile, Wal-Mart (WMT 49.48 -1.25) warned that October same-store sales are expected to be up just 0.5% -- the weakest gain in almost six years and well below original forecasts calling for 2.0-4.0% growth. That left some questioning the health of the consumer heading into the all-important holiday season. However, the growing realization that Wal-Mart's woes appear to be more of a company-specific issue than an economy-wide concern left the rest of the retail group free to take advantage of oil's decline and diminishing prospects of the commodity's potential inflationary characteristics.With regard to inflation, the Commerce Dept. before the market opened showed that the core-PCE deflator rose 0.2% in September, matching economists' forecasts to leave the year/year rate at 2.4%. While that is still a bit higher than policy makers would like, the Fed's favored inflation gauge now below the 11-year high of 2.5% registered a month earlier helped to curb concerns of an uptrend. Overall, though, it was actually a neutral factor for the financial markets. BTK -0.2% DJ30 -3.76 DJTA +0.8% DJUA -0.1% DOT +0.9% NASDAQ +13.15 NQ100 +0.6% R2K +0.5% SOX +1.1% SP400 +0.2% SP500 +0.59 XOI -1.6% NASDAQ Dec/Adv/Vol 1409/1647/1.68 bln NYSE Dec/Adv/Vol 1552/1721/1.30 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $58; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-27-06) Stocks drop still only modestly relative to reality as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 73.40, Standard & Poor's 500 index lost 11.74, and the Nasdaq composite index down 28.48, all very commissionable on heavy volume. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Economic Growth Totters to 1.6 Pct. Pace

AP - The economy has slowed to a snail's pace, growing in the just-finished quarter at the slowest rate in more than three years and stirring fresh debate about the country's financial health heading into the elections.

$18M for Calif. Man's Case Against Vons AP
Chevron 3Q Profit Soars to $5 Billion AP
Britain Attacks U.S. Online Gambling Ban AP
Auto Sales Gains Expected for October AP

After several failed attempts to lock in some of the market's impressive gains of late, sellers finally finished what they started, closing stocks lower across the board.With the Dow just a day removed from hitting its 13th record high in 18 days, a sense that stocks were overbought on a short-term basis left the market looking tired and vulnerable in pre-market action. Also acting as a constraint before the opening bell even sounded was a weaker than expected GDP report.At 8:30 ET, the Commerce Dept. reported that Q3 GDP rose only 1.6% (consensus 2.1%) in Q3, the slowest pace in three years, due primarily to a huge 17% drop in residential construction activity which shaved 1.1% off the GDP gain. That wasn't all that surprising, though, since Fed Chairman Bernanke said on October 4th that the U.S. housing market is in a "substantial correction,'' which will lop about one percentage point off economic growth in the second half of the year.The GDP report also showed that consumer spending picked up and that inflation, as reflected in a lower than expected 1.8% rise on the chain deflator, remains contained, indicative of a soft landing. Be that as it may, the weak GDP headline left investors questioning the sustainability of the recent advance, which opened the door for anything negative to push stocks even lower.Then, as it appeared the bulls might simply surrender a modest pullback to some characteristic consolidation following such a huge run-up, sellers wrapped their arms around a negative research note and ran wit hit. Between 1:00 and 2:00 ET, it was reported that Goldman Sachs is cutting its growth forecast for motherboard shipments. After the broker reportedly said motherboard demand is "falling off a cliff," tech stocks did just that, selling off and removing notable sector leadership that took a toll on overall sentiment. Better than expected reports from blue chips like Microsoft (MSFT 28.34 -0.01) and Chevron (CVX 67.64 +0.14) were all but forgotten. DJ30 -73.40 NASDAQ -28.48 SP500 -11.74 NASDAQ Dec/Adv/Vol 2023/1004/2.24 bln NYSE Dec/Adv/Vol 2116/1162/1.55 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $60; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-26-06) Suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 29, Standard & Poor's 500 index up 7 and the Nasdaq composite index up 22, all very commissionable on heavy volume. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Microsoft Earnings Rise, Beating Views

AP - Microsoft Corp., which is gearing up to release new versions of its two most important products, says it started its fiscal year on the right foot with quarterly results that exceeded expectations.

Home Prices Plunge by Most in 35 Years AP
Oil Prices Rise Above $60 a Barrel AP
Wall Street: Has Sun Turned a Corner? AP
Exxon Posts $10.49B Profit; Shares Up AP
Home Price Drop Is Largest in 35 Years...

With the Fed decision in the rearview mirror and the policy statement having a less hawkish tone than initially feared Wednesday, the market's focus returned to earnings Thursday; and, not surprisingly, they continued to top Wall Street estimates.Today's headliner was none other than the world's largest company by market capitalization, Exxon Mobil (XOM 71.62 +0.61). Shares opened at a historic high after the company handily beat. Despite a 1.7% pullback in oil prices, XOM ultimately closed at an all-time high to help power the Dow to its 13th record close in 17 days.Staying in the energy patch, oil prices slipping back below $61/bbl was just one of the many factors boding well for the improved spending patterns and earnings prospects that helped Consumer Discretionary turn in the day's best performance. The sector, which we upgraded to Market Weight in late September, got its biggest boost from a 3.2% surge in its most influential component -- Comcast (CMCSA 40.00 +1.24). The stock, which is also among the ten heaviest weighted companies on the predominantly tech-heavy Nasdaq, closed at a 52-week high after Q3 profits soared 46% year/year.Also providing sector support were homebuilders, as a Q4 warning from Pulte Homes (PHM 32.60 +0.40) was overshadowed by a decline in borrowing costs and a report that new home sales unexpectedly rose 5.3% in September to a 1.075 mln annual rate - the most in three months. Median prices plunging at the fastest rate (-9.7%) in 35 years, however, did temporarily raise concerns that consumers will drastically rein in spending. Fortunately for buyers, the underlying bullish tone returned in afternoon trading to again send the bears looking for cover.In fact, the Commerce Dept. provided a separate report before the bell that provided more evidence that the Fed is on track with its objective of engineering a soft landing. At 8:30 ET, the report showed that non-defense capital goods orders excluding transportation rose a healthy 1.1%, suggesting that overall investment trends are holding up well. Durable goods orders for September rose 7.8%, the biggest increase in six years given a large jump in aircraft orders. While that news typically bodes well for Boeing (BA 79.06 -1.80), the day's worst performing Dow component (-2.2%) losing a huge plane order (worth about $10 bln at list prices) to rival Airbus prevented the Industrials sector from providing any upside leadership.Financials also provided some notable support, fueled by falling bond yields and continued enthusiam for brokerage stocks, which plays into our Overweight rating on the sector. In particular, Goldman Sachs (GS 193.38 +4.77) hit a historic high after it was hired by Clear Channel Communications (CCU 35.48 +3.13) to help the media giant evaluate strategic alternatives. Clear Channel soaring nearly 10% was yet another source of support for the discretionary sector.  DJ30 +28.98 NASDAQ +22.51 SP500 +6.86 NASDAQ Dec/Adv/Vol 1014/2046/2.15 bln NYSE Dec/Adv/Vol 1089/2197/1.69 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $61; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-25-06) Waning full Moon and lunatical suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 6, Standard & Poor's 500 index up 4 and the Nasdaq composite index up 11, all very commissionable on heavy volume.More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach newhighs based on corporate welfare flows with money the nation doesn't have pre-election. GM only lost 115 million. Ford loses 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Fed Keeps Interest Rates at 5.25 Percent

AP - The Federal Reserve held interest rates steady yet again, noting the economy had slowed but saying growth would probably pick up in the months ahead.

Report: Lockheed Cuts Cost Amid Pressure AP
GM, Chrysler Group Post 3Q Losses AP
CITIC Group to Buy Kazakhstan Oil Assets AP
College Degree Worth Extra $23,000/year AP

The indices finished near their best levels of the session as a Fed policy statement that offered no surprises helped investors refocus on the bottom line -- another batch of better than expected earnings reports. Although it posted a small gain, the Dow closed at another record high.As expected, the Fed left the overnight lending rate unchanged at 5.25% for a third straight meeting. Given that the risk going into the report was that it would place a heightened emphasis on inflation concerns, acknowledgement that "the economy seems likely to expand at a moderate pace," but not at such a strong pace as to suggest the Fed is on the brink of tightening again, offered some relief.Further, Richmond Fed President Jeffrey Lacker was the only member preferring a 1/4% hike. While Lacker's third straight dissention made the Fed's pause less compelling, it also lent some credibility to the Fed's focus on keeping elevated levels of core inflation under control. While the language of the policy statement was essentially the same, today's directive excluded the reference about the "prices of energy and other commodities" having the potential to sustain inflation pressures over time.Directing the market's gains, though, was in fact strong leadership from the profit engine that is Energy (+1.7%) as a 3.4% surge in oil prices renewed optimism about the sector's ability to generate strong profits. To wit, ConocoPhillips (COP 62.84 +1.44) handily beat expectations while Exxon Mobil (XOM 70.95 +1.06) touched a new all-time high intraday ahead of its earnings report tomorrow morning. Crude oil futures closed at $61.37/bbl following an unexpected drawdown in weekly crude supplies and amid reports of more unrest in Nigeria.Among today's biggest names reporting was Altria Group (MO 82.10 +2.28), which missed analysts' expectations but surged nearly 3% after raising its full-year profit outlook and finally setting a timetable for spinning off its 88% stake in Kraft Foods (KFT 35.31 -0.05). Also lending support to the Consumer Staples sector were strong Q3 reports from Colgate-Palmolive (CL 62.11 +1.64) and Reynolds American (RAI 65.27 +0.87).As evidenced by the Nasdaq turning in the best performance among the majors, Technology also offered some notable leadership. Semiconductor Equipment (+3.2%) got a big boost from KLA-Tencor (KLAC 49.59 +3.83), which posted a 30% jump in Q1 revenue and raised its outlook for Q2. Adobe Systems (ADBE 38.94 +0.85) backing its Q4 guidance lent support for the software group. Amazon.com (AMZN 37.68 +4.05), which is a component in the Consumer Discretionary sector, soared 12% after announcing cutbacks to improve margins. Its report gave a boost to Internet stocks across the board. Conversely, General Motors (GM 34.71 -1.48) acted as a drag on the sector, as its better than expected earnings report was greeted with a sell-the-news response. GM had gained nearly 9.0% over the last three sessions to a 52-week high in anticipation of a solid report.The Industrials sector was also in focus after Dow component Boeing (BA 80.83 -2.76) topped expectations; but a shortfall on revenues and revised FY06 guidance offset strong earnings-induced gains from Norfolk Southern (NSC 53.73 +4.93) and Ryder System (R 53.60 +1.54). The latter two helped the Dow Jones Transportation Average hit its best levels in three months.Failing to participate in today's market gains was Health Care. Express Scripts (ESRX 66.01 -6.24) posted a 13% year/year rise in Q3 earnings, but shares plunged 8.6% after management said proposed changes to benchmark drug pricing would have a material adverse effect on its future results. In addition to weakness in PBMs, today's worst performing S&P industry group, HMOs, was also a weak spot after a cut by WellPoint (WLP 76.53 -2.09) to its full-year enrollment forecast overshadowed a 27% year/year rise in Q3 profits. DJ30 +6.80 NASDAQ +11.75 SP500 +4.84 NASDAQ Dec/Adv/Vol 1318/1734/2.14 bln NYSE Dec/Adv/Vol 1094/2199/1.82 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $61; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-24-06) Waning full Moon and lunatical suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 10, Standard & Poor's 500 index down0 and the Nasdaq composite index down 10, all very commissionable on heavy volume. Ford loses 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):
Dow Sets New High, but Stocks End Mixed AP - Wall Street wobbled through a listless session and closed mixed Tuesday as investors awaited the results of this week's Federal Reserve meeting. Modest gains in the Dow Jones industrial average were enough for the index to set new trading and closing records. Amazon.com 3Q Earnings Fall; Shares Rise APDeutsche Bank CEO's Future at Stake APOil Prices Increase to $59.59 a Barrel APCountrywide Financial to Cut 2,500 Jobs AP
Per usual the day before the Fed makes its policy decision known, investors erred on the side of caution Tuesday as the major averages traded in relatively tight ranges all day. Even though there is virtually no chance that policy makers will change the fed funds target from 5.25% tomorrow, worries that the policy statement will reflect continued and perhaps even heightened concern about the trend in core inflation kept blue chip gains to a minimum and left the Nasdaq in consolidation mode. On a positive note, investors were again greeted with another batch of better than expected earnings reports across a diverse set of industry groups. However, with investors having already priced in another strong quarter of double-digit profit growth with little room for error, it only took a few disappointments to provide an excuse to lock in some recent gains. Texas Instruments (TXN 30.52 -1.36) had anotherwise solid quarter, but its acknowledgment that Q4 semiconductor growth will be below the seasonal average sent the stock to three-month lows. That weighed on the semiconductor group and removed notable leadership from Technology -- the day's worst performing sector. Of the four sectors trading higher and helping the broader market close relatively unchanged, Energy turned in the best performance as a rebound in oil prices played into the argument that oil stocks are still oversold on a short-term basis. While that bodes well for Energy sector profits, higher energy prices also acted as an obstacle for the bulls to overcome Tuesday. Materials also surged more than 1.0% after Dow component DuPont (DD 46.00 +0.55) swung to a profit in Q3 and reaffirmed its full-year outlook. However, as the least influential of the 10 S&P 500 sectors, Materials struggled to offset the absence of leadership from more notable areas like Technology, Consumer Staples and Health Care. With regard to the latter, it was in focus after Amgen (AMGN 74.94 +1.57) reported a 14% rise in Q3 earnings to beat expectations and raised its FY06 EPS outlook. An analyst downgrade on the sector's most influential component -- Pfizer (PFE 27.28 -0.45) -- acted as an offset. In fact, if it wasn't for a 52-week high on General Motors (GM 36.15 +0.96) of all stocks, the Dow would not have closed at another record high. For a second straight day, the auto maker paced index gains, surging 2.7% in anticipation of a surprisingly strong report tomorrow and following an analyst upgrade on rival Ford Motor (F 8.31 +0.41). BTK -0.8% DJ30 +10.97 DJTA +1.1% DJUA -0.1% DOT -0.1% NASDAQ -10.72 NQ100 -0.7% R2K -0.1% SOX -1.1% SP400 +0.3% SP500 +0.36 XOI +1.1% NASDAQ Dec/Adv/Vol 1756/1277/1.89 bln NYSE Dec/Adv/Vol 1461/1815/1.65 bln
There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $56; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-23-06) Waning full Moon and lunatical suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 114.54, Standard & Poor's 500 index up 8.42 and the Nasdaq composite index up 13.26, all very commissionable on heavy volume. Ford loses 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Skilling Sentenced to 24 Years in Prison

AP - Former Enron Chief Executive Officer Jeffrey Skilling, the most vilified figure from the financial scandal of the decade, was sentenced Monday to 24 years and four months in the harshest sentence yet in the case that arose from the energy trading giant's collapse.

Oil Prices Fall Below $59 a Barrel AP

Ford Loses $5.8B in 3Q on Sagging Sales AP

AT&T Earns $2.17B in 3Q to Surpass Views AP

Wal-Mart to Slow Pace of Store Openings AP

After stumbling out of the gate amid typical nervousness ahead of a two-day FOMC meeting, it didn't take long for the market's underlying bullish tone to resurface and again sideline those trying to fight the upward trend in equities, especially in large-cap names.Among the few catalysts providing a floor of buying support Monday was another batch of better than expected earnings, renewed optimism about Wal-Mart's growth strategy, and another decline in oil prices.The biggest name on today's calendar was AT&T (T 34.71 +0.27), whose 74% year/year earnings growth plays into Overweight rating on Telecom and further supports another quarter of double-digit profit growth for the S&P 500. Over 70% of the more than 150 S&P 500 companies reporting quarterly results thus far have beaten expectations. That leaves aggregate Q3 operating earnings on pace to rise about 18%, above the 14% gain expected prior to the start of the earnings season.However, the biggest news item among blue chips came from Wal-Mart (WMT 51.17 +1.80). The retailer surged 3.7% to a new 52-week high after saying it will significantly reduce capital expenditures to drive overall returns - an initiative that should lead to improved profitability.Also helping the Dow close at a new record high was General Motors (GM 35.06 +1.72). The stock surged 5.7% to its best level in 12 months in anticipation it will turn in a surprisingly strong report tomorrow following Ford Motor's (F 7.90 -0.11) widely expected disappointment this morning.The other Dow component topping analysts' expectations today was American Express (AXP 57.50 -0.54). The stock, which hit a 52-week high last Wednesday, dropped 2.8% after Q3 revenues checked in lighter than expected. AXP was one of only four Dow components to close lower. DJ30 +114.54 NASDAQ +13.26 SP500 +8.42 NASDAQ Dec/Adv/Vol 1520/1547/1.85 nlm NYSE Dec/Adv/Vol 1371/1875/1.53 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $56; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-20-06) Waning full Moon and lunatical suckers bear market rally into the close is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average down 9.36, Standard & Poor's 500 index up 1.64 and the Nasdaq composite index up 1.36, all very commissionable on heavy volume. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight!. Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Dow Drops 9 on Weak Caterpillar Forecast
AP - Wall Street ended a record-setting week narrowly mixed Friday, with the Dow Jones industrials falling to close inches above 12,000 after a lackluster profit report and forecast from Caterpillar Inc. prompted many investors to retreat.

Merck, Schering-Plough Shares Climb AP

Caterpillar Sharply Reduces Forecast AP

Google's Stock Climbs to 9-Month High AP

Layoffs Expected at Philly Newspapers AP

With the Dow closing at a new record for the ninth time in two weeks, it wasn't surprising to see blue chips look fatigued throughout most of the session Friday.What did surprise Wall Street, though, was an earnings miss from one of the average's best performers. Caterpillar (CAT 59.40 -9.62) had its worst day since the market crash on October 19, 1987, plunging 14% after taking its Q3 misfortune a step further by reducing its full-year EPS guidance and providing 2007 forecasts significantly lower than analysts' estimates.While IBM (IBM 90.51 +0.65) was largely responsible for lifting the Dow past 12,000 two days ago, Caterpillar was largely responsible for erecting a wall of worry that left the Dow struggling to close above its latest milestone. Caterpillar's sell-off had a 77-point negative impact on the index. Fortunately for the bulls still confident that the S&P index will rise at an even faster pace than earnings growth, Google (GOOG 459.70 +33.64) handily beat expectations for the eighth time in nine tries since going public. As the fourth most influential component on the Nasdaq, Google's 8% advance eventually overshadowed declines in SanDisk (SNDK 49.14 -12.58) and Broadcom (BRCM 27.51 -1.46) and helped the tech-heavy Composite eke out a gain. SanDisk was the day's worst performing S&P 500 component, tumbling 20% after a larger than expected drop in average selling prices for its flash chips contributed to a 4% year/year decline in Q3 profits. Broadcom sold off after it lowered Q4 sales forecasts.When it was all said and done, Google's report, coupled with better than expected Q3 earnings from Dow components 3M Co. (MMM 78.33 +1.93) and Merck (MRK 45.54 +1.05), lent some additional validation to the market's underlying bullish tone that has let stocks run virtually unabated since bottoming out in mid July.Oil prices closing at their lowest levels of the year provided some additional reassurance. Crude for November delivery closed down 2.9% at $56.82/bbl as traders priced in some uncertainty as to whether OPEC members will abide by their plans to cut production by 1.2 mln barrels a day. However, with the November contract expiring today, there was more open interest in the December contract, which was off 1.9% at $59.35/bbl. DJ30 -9.36 NASDAQ +1.36 SP500 +1.64 NASDAQ Dec/Adv/Vol 1823/1204/1.91 bln NYSE Dec/Adv/Vol 1776/1446/1.61 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $56; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-19-06) Waning full Moon and lunatical suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 19.05, Standard & Poor's 500 index up 1 and the Nasdaq composite index up 3.79, all very commissionable on heavy volume. Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Google's 3Q Profit Nearly Doubles

AP - Google Inc.'s third-quarter profit nearly doubled in the latest demonstration of the Internet search leader's phenomenal financial firepower.

Dow Gains 19, Reaches 12,000 Milestone AP

OPEC Cuts Oil Production by 1.2M Barrels AP

Grasso Ordered to Pay Back Up to $100M AP

Citigroup, Bank of America Shares Tumble AP

For the second session in a row the Dow eclipsed the 12,000 level, but unlike yesterday, optimism on the earnings front fueled by another batch of better than expected reports was enough to close the blue chip index above its latest milestone. However, with a 13th consecutive quarter of double-digit profit growth having already been priced into stocks, coupled with the cautious tone that typically accompanies the start of earnings season, market gains were minimal. A 1.5% rebound in oil prices was among the most noticeable excuses for taking some money off the table and preventing a more convincing rally in equities. After closing at their second lowest level this year, Saudi Arabia backing OPEC's first expected production cut in two years helped oil prices rebound to finish at $58.50/bbl. While higher oil improved the Energy sector's prospects of generating strong profit growth, investors still had to contend with the absence of leadership from two of the most influential S&P 500 sectors -- Financials and Industrials -- and didn't get upside support from Technology until the closing minutes of trade. Technology has been a focal point all week and was under the microscope well before the opening bell sounded. Last night, Advanced Micro Devices (AMD 21.57 -2.66) topped Wall Street forecasts but posted a significant decline in margins, which weighed on semiconductors all day. Fortunately for the bulls, all was not lost since Apple Computer (AAPL 78.81 +4.28) posting a 27% year/year rise in Q4 earnings played into our Overweight rating on Tech. A 6.7% drubbing on Dell (DELL 23.05 -1.65) was the sector's biggest blemish but that was the direct result of market erosion tied to Apple's record-setting Mac sales and a report showing that Hewlett-Packard (HPQ 39.59 +0.58) passed Dell as the leader in global PC shipments. With regard to Financials, a Q3 earnings miss from the third most heavily weighted S&P 500 constituent -- Citigroup (C 49.74 -0.45) -- provided investors with a reason to lock in some of the sector's recent gains. Washington Mutual (WM 42.31 -1.40) badly missing expectations due to continued net interest margin compression from an inverted yield curve and further deterioration in Treasuries that lifted bond yields across the curve also prompted some consolidation. The Industrials sector was in focus after Honeywell (HON 41.58 -1.05) beat expectations for a fifth straight quarter. However, a warning that a slower global economy could limit next year's growth left Honeywell as the day's worst performing Dow component (-2.5%). That in turn overshadowed a better than expected Q3 report from United Parcel Service (UPS 75.25 +2.84), which, as a bellwether of U.S. economic activity, supported our Moderately Bullish market view with a claim that it expects "solid" Q4 holiday sales.DJ30 +19.05 DJTA +1.6% DJUA +0.5% DOT +1.1% NASDAQ +3.79 NQ100 +0.3% R2K +0.5% SOX -0.4% SP400 +0.5% SP500 +0.94 XOI +1.8% NASDAQ Dec/Adv/Vol 1277/1757/1.96 bln NYSE Dec/Adv/Vol 1301/1959/1.58 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $58; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-18-06) Waning full Moon and lunatical suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 42.66, Standard & Poor's 500 index up 1 and the Nasdaq composite index down 7.80, all very commissionable on heavy volume. Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Dow Ends Up 43, but Closes Below 12,000

AP - The Dow Jones industrial average briefly swept past 12,000 for the first time Wednesday, extending its march into record territory as investors grow increasingly optimistic about corporate earnings and the economy.

EBay Beats Views As Profit Rises 10 Pct. AP

AMD Earns 27 Cents Per Share in 3Q AP

AOL Laying Off 1,300 in N.M., Ariz. AP

Consumer Prices Dip, Core Inflation Up AP

It took all of about one minute Wednesday for the Dow to garner the 50 points it needed to surpass the 12,000 level, as stocks got a big boost from Big Blue and a benign reading on inflation.Proving more difficult, though, was sustaining such a gain as a wall of worry that stocks are overbought on a short-term basis was erected almost as quickly as the milestone was attained. Add to that volatile oil prices, relatively no validation in the bond market that core inflation at the consumer level is well contained, and split sector leadership and the bulls struggled to more convincingly keep the three-month rally intact.Since earnings reports from several tech bellwethers the night before were mixed, investors initially waited for the September CPI report to set a more definitive tone to trading since it typically provides a helpful signal as to the direction of Fed policy. To the delight of the bulls, core CPI rose just 0.2%, in line with economists' forecasts and offering some relief following Tuesday's jarring headline increase on inflation at the producer level. Even though today's CPI data left the core rate at a decade-high 2.9% year/year, clearly higher than the Fed would like, the steady dose of 0.2% gains for a third straight month confirmed that the recent uptrend is moderating, easing the worst of inflation fears and providing further evidence that the Fed may again forego a rate hike at next week's FOMC meeting.Meanwhile, International Business Machines (IBM 89.90 +2.95) opening up 4.1% at a new 52-week high after handily beating analysts' forecasts was the biggest reason behind the Dow eclipsing 12,000. Fellow Dow component Intel (INTC 21.16 +0.26), which also posted a better than expected Q3 report Tuesday night, provided additional market support but only managed to recoup a portion of the 3.3% sell-off in INTC shares that took a toll on all three major averages a day earlier. In fact, a sell-off in Semiconductor Equipment, today's second worst performing S&P industry group (-4.8%), was largely responsible for removing some notable leadership in the Tech sector. Novellus Systems (NVLS 26.45 -2.12) said Q3 profits tripled, but issued downside Q4 revenue guidance, while Linear Technology (LLTC 30.54 -2.36) posted a 13% rise in Q1 earnings but also said it sees weaker than expected sales in its December quarter. Yahoo! (YHOO 22.95 -1.20) issuing downside Q4 revenue guidance and Motorola (MOT 23.70 -1.15) missing expectations on a 45% year/year decline in Q3 earnings added insult to injury for a sector where we believe valuations remain reasonable.The only Dow component out with results today was JPMorgan Chase (JPM 47.13 -0.86), which also topped Wall Street estimates and played into our Overweight rating on Financials. However, company CEO Jamie Dimon again warning that JPM was benefiting from an unusually favorable credit environment that's not expected to continue prompted investors to consolidate gains that lifted JPM shares to a 52-week high last Thursday.Fortunately for the bulls, leadership in other influential sectors like Health Care and Consumer Staples eventually helped to offset the lack of support from Technology and the profit engine that continues to be Energy. Oil prices, which were up earlier in the day following larger than expected declines in distillate and gas supplies, closed down more than 2.0% and below $58/bbl a day before tomorrow's emergency OPEC meeting.Since packaging and transportation costs aren't likely to be as high as previously forecast, and lower oil should improve the profit margin impact of commodity-cost inflation, Consumer Staples continued to draw incremental relief from a pullback in energy prices. Despite the sector's defensive characteristics resonating with investors still questioning the pace of economic growth, it was Health Care that was the day's best performing sector as Johnson & Johnson (JNJ 68.15 +2.07) hit a new 52-week high after Prudential raised its price target on the Dow component from $59 to $70. DJ30 +42.66 NASDAQ -7.90 SP500 +1.91 NASDAQ Dec/Adv/Vol 1568/1485/2.17 bln NYSE Dec/Adv/Vol 1432/1831/1.62 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $58; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-17-06) Suckers bear market rally into the close as stocks drop still only modestly relative to reality as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 30.58, Standard & Poor's 500 index down 5.00, and the Nasdaq composite index down 18.89, all very commissionable on heavy volume. Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Dow Ends Down 31 on Jump in Inflation

AP - Wall Street retreated Tuesday from attempts to push the Dow Jones industrial average to 12,000, rattled by unfavorable economic data and concerns that earnings from technology companies will be disappointing.

IBM Posts 5 Percent 3Q Revenue Gain AP

Intel Beats Views Despite Declines AP

Yahoo 3Q Profit Slides on Slowing Growth AP

Judge Vacates Conviction of Ken Lay AP

After getting within three points of Dow 12,000 a day earlier, an added sense that stocks are overbought on a short-term basis and ripe for some profit taking left sellers in control Tuesday, snapping a three-day winning streak. As a reminder, the Dow had hit a record high in seven of the last 10 sessions; all three major indices are up 3.3% on average just two weeks into October. Given the more optimistic view on inflation that has been priced into stocks of late, investors also erred to the side of caution after a disappointing read on inflation at the producer level cast a cloud of uncertainty over tomorrow's more influential CPI report. Total PPI fell 1.3%, the biggest drop in three years due to a record 22.2% drop in gas prices. However, the more closely watched core PPI rose a surprising 0.6% (consensus 0.2%), ruffling the inflation hawks' feathers even though the PPI data are much more volatile than CPI and the increase in auto and truck prices responsible for the jump in core PPI may prove temporary.The biggest thorn in the market's side was a 3.0% sell-off in Intel (INTC 20.96 -0.65). The Dow component, which is also the sixth most heavily weighted component on the Nasdaq, tumbled after Goldman Sachs downgraded the stock on valuation concerns and noted that expectations heading into its Q3 report after the bell are too aggressive. Worries that tech companies won't come through with decent enough profit growth to justify current valuations overshadowed a plethora of better than expected earnings reports, some M&A activity and a 1.7% sell-off in oil prices. Dow component Johnson & Johnson (JNJ 66.07 +1.14) was the biggest blue chip out with strong quarterly results, but its 1.7% surge struggled to offset declines in 18 of the Dow's 30 components. To wit, United Technologies (UTX 65.92 -0.87), the Dow's second worst performer today (-2.4%), also topped forecasts and went a step further by raising its FY06 EPS outlook. However, after opening very close to an all-time high, shareholders opted to consolidate recent gains, which removed some leadership from the influential Industrials sector. Merrill Lynch (MER 84.60 +0.49) was another notable name exceeding Wall Street's expectations. The investment bank more than doubled Q3 net income, providing further evidence the S&P 500 will enjoy a 13th straight quarter of double-digit profit growth and playing into our Overweight rating on Financials. Nonetheless, the rate-sensitive financial sector still ended lower on the day in spite falling bond yields and Chicago Mercantile Exchange's (CME 516.01 +12.76) $8 bln bid for CBOT Holdings (BOT 152.10 +17.59). DJ30 -30.58 NASDAQ -18.89 SP500 -5.00 NASDAQ Dec/Adv/Vol 1926/1089/2.07 bln NYSE Dec/Adv/Vol 2069/1212/1.36 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $60; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-16-06) Waning full Moon and lunatical suckers bear market rally is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 20.09, Standard & Poor's 500 index up 3.43, and the Nasdaq composite index up 6.55, all very commissionable on heavy volume. Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):
     Dow Ends Up 20 As It Nears 12,000 AP - Wall Street extended its record-

     setting advance Monday, sending the Dow Jones industrial average within a

       whisper of 12,000 as investors grew more optimistic that corporate profits will

       remain robust amid a slowing economy.

Gas Prices Fall to Lowest Level in '06 AP

UnitedHealth Shares Down As CEO Departs AP

Ex-FDA Chief to Plead Guilty AP

Mattel Posts 6 Pct. Rise in 3Q Profit AP

Stocks extended their winning streak to three on Monday and, more notably, lifted the Dow to within 3 points of 12,000 before closing at another new all-time high of 11980.60. After stumbling out of the gate on early profit taking efforts, it didn't take long for the market's underlying bullish tone to resurface and again sideline those trying to fight the upward trend in equities. Even though the Q3 earnings season is not expected to begin in earnest until Tuesday, any evidence to support a 13th straight quarter of double-digit profit growth for the S&P 500 kept investors keyed in on the bottom line. Better than expected Q3 earnings from Eaton (ETN 75.53 +5.23) and WW Grainger (GWW 72.70 +2.18), coupled with a stronger than expected early read on October manufacturing conditions which suggested the much desired soft landing remains on track, provided a floor of support for the Industrials sector. Even the sector's transportation components turned in notable performances despite dealing with a third consecutive rise in oil prices. Directly benefiting from crude's 2.4% climb back toward $60/bbl was the profit engine that is Energy - the day's best performing sector (+2.2%). Crude oil was up in sympathy with cold weather in parts of the U.S. boosting the prices of natural gas futures (+14%). The financial sector was also in focus after Charles Schwab (SCHW 17.10 -0.46) beat expectations and Wachovia (WB 55.25 -1.22) matched Wall Street forecasts. However, with SCHW shares up more than 30% since bottoming out in mid-July, shareholders took some money off the table. In turn, Wachovia missing on its top line renewed some concerns about how much of an impact an inverted yield curve will have on other money center banks. Thus, the absence of leadership in Financials kept blue chip gains at a minimum and left investors still waiting for the Dow to reach its next milestone. DJ30 +20.09 NASDAQ +6.55 SP500 +3.44 NASDAQ Dec/Adv/Vol 1093/1942/1.85 bln NYSE Dec/Adv/Vol 1015/2243/1.42 bln

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $59; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-13-06) Waning full Moon and lunatical suckers bear market rally into the close is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 13, Standard & Poor's 500 index up 2, and the Nasdaq composite index up 11, all very commissionable on heavy volume. The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

After logging a third consecutive week of solid gains, blue chips looked tired throughout most of the session Friday, as investors armed with an adequate Q3 report from the oldest Dow component (GE) struggled with mixed economic data, a rebound in oil and rising bond yields. Nonetheless, the underlying bullish tone that has lifted the three major indices 2.4% on average just two weeks into the fourth quarter eventually sidelined enough of the intraday inquiries about the sustainability of a three-month rally in stocks to get the Dow within reach of its next milestone -- 12,000.Only a day after a handful of large-cap names helped paint a more optimistic picture of the Q3 earnings season, bellwether General Electric (GE 35.94 -0.28) was front and center Friday. Even though the Dow component turned in a solid performance overall, Q3 earnings that merely matched Wall Street expectations failed to impress investors and left the market looking elsewhere for better growth opportunities. To wit, the Dow still managed to close at another new all-time high but that was largely due to strength among the Dow's tech components (e.g. IBM +1.7% and HPQ +1.2%).Technology was one of only four sectors to close higher. Fortunately for the bulls, leadership from the profit engine that is Energy (+1.4%) eventually helped investors look past a 1.4% rise in oil prices and the commodity's inflationary characteristics. While the energy sector isn't expected to grow Q3 earnings as impressively as it did in Q2 (+44%), anticipated profit growth of 23% should keep the S&P 500 on pace for a 13th consecutive quarter of double-digit profit growth.An afternoon turnaround in Financials provided some added leadership that eventually carried a positive underlying tone into the close. Led by continued momentum in brokerage stocks, the rate-sensitive sector was also able to shrug off a rise in bond yields after Regions Financial (RF 38.79 +0.79) posting a 37% year/year rise in Q3 earnings provided more evidence that the S&P 500 will keep its streak of at least 10% operating EPS growth intact.Treasuries sold off, lifting the yield on the 10-year note to a three-week high (4.80%) after economic data showed a stronger than expected rise in consumer sentiment and what eventually turned out to be decent retail sales report. Before the bell, the Commerce Dept. showed that September retail sales unexpectedly fell 0.4% while sales, excluding autos, fell 0.5%, the biggest drop in three years. That initially raised some concerns about the health of the consumer. However, further analysis showed that the drop in total retail sales was caused by a record 9.3% plunge in gasoline sales, which is actually good for the economy and not a sign of consumer weakness. DJ30 +12.81 NASDAQ +11.11 SP500 +2.79 NASDAQ Dec/Adv/Vol 1175/1849/1.95 bln NYSE Dec/Adv/Vol 1351/1898/1.44 bln
Up 13, Dow Sets Another Record Close

AP - The Dow Jones industrial average inched to another record close Friday, marking the third straight week of triple-digit increases in the blue chip index.

Jury: Wal-Mart to Pay Workers $78M-Plus AP
Oil Prices Rise Above $58 a Barrel AP
Retail Sales Fall; Inventories Rise AP
FCC Delays Vote on AT&T-BellSouth Deal AP

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $58; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-12-06) Waning full Moon and lunatical suckers bear market rally into the close is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 95.57, Standard & Poor's 500 index up 12.88, and the Nasdaq composite index up 37.91, all very commissionable on heavy volume. The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

Stocks rallied across the board Thursday as investors embraced a much improved earnings picture and more evidence the economy is on track for the Fed's much-desired soft landing. The Dow Jones Industrial Average closed at another new record and came within striking distance of hitting 12,000 while the Nasdaq turned in an even stronger performance (+1.6%). With regard to the tech-heavy Composite's impressive performance, it was actually a discounter -- Costco Wholesale (COST 53.93 +3.86) -- that provided the biggest spark of bargain hunting interest on this year's poorest performing index among the majors. Costco soared nearly 8% after it topped Wall Street's expectations and forecasted 15-19% profit growth for fiscal 2007. Also keeping the Consumer Staples sector in focus was PepsiCo (PEP 62.92 -0.94). That company posted a 71% jump in Q3 earnings and boosted its full-year outlook. Its encouraging report reinforced our Moderately Bullish market view and kept the S&P 500 on pace for a 13th straight quarter of double-digit profit growth. However, with PepsiCo up 9.2% in Q3 and hitting an all-time high on September 27th in anticipation of a strong quarter, the stock sold off as did a lot of other defensive names as investors rotated into more growth-oriented areas. To wit, Technology was the most influential leader of the 10 sectors closing to the upside. Renewed enthusiasm for beaten-down chip stocks coupled with continued momentum in the Nasdaq's most influential component and the fifth most heavily-weighted constituent on the S&P 500 -- Microsoft (MSFT 28.22 +0.68) -- were among the biggest reasons behind broad-based strength on all three indices. Also helping the Dow eclipse the psychological 11,900 barrier for the first time ever was McDonald's (MCD 42.39 +1.14), a suggested holding in Briefing.com's Active Portfolio. The stock surged nearly 3% to a multi-year high after boosting its Q3 EPS outlook following better than expected Sep. same-store sales. Lending further credence behind our recent upgrade of the Consumer Discretionary sector to Market Weight was a better than expected Q3 report and raised FY06 guidance from Yum! Brands (YUM 59.07 +4.50), which turned in the day's best performance (+8.3%) on the S&P 500. Finally, if a handful of better than expected earnings news across a wide array of industry groups wasn't enough to keep the Q3 rally intact, the Fed's Beige Book provided the ideal perspective on economic conditions that has been priced into equities over the last couple of months. Even amid "widespread cooling" in the housing market, the roadmap to the next Fed meeting (Oct. 24-25) showed that most districts reported "few signs of increased pricing pressure," while it was also noted that "wage growth around the nation was generally modest," "consumer spending increased more quickly" and that "manufacturing activity remained generally strong in most Districts." DJ30 +95.57 NASDAQ +37.91 SP500 +12.88 NASDAQ Dec/Adv/Vol 715/2329/2.03bln NYSE Dec/Adv/Vol 689/2581/1.55bln
               Wal-Mart Faces at Least $62M in Damages
AP - A state jury found Thursday that Wal-Mart broke Pennsylvania labor laws by forcing employees to work through rest breaks and off the clock, a decision plaintiffs' lawyers said would result in at least $62 million in damages.
Dow Up 96 to Close at Record 11,948 AP
McDonald's Stock Upgraded on 3Q Forecast AP
PepsiCo 3Q Profit Soars, but stock down as Costs Rise AP
Fed Finds Cooling in Housing Market AP

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $57; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-11-06)Stocks drop still only modestly relative to reality as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 15.04 , Standard & Poor's 500 index down 3.47, and the Nasdaq composite index down 7.16, all very commissionable on heavy volume. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b.s. from Yahoo:

Aside from another pullback in oil prices, investors found little to get excited about Wednesday, as some disappointments on the earnings front kicked off the Q3 reporting season on a sour note as did more of a hawkish interpretation of the FOMC Minutes. Before the market even opened, the underlying tone was bearish after Alcoa (AA 26.85 -1.44) officially kicked thing off a night earlier by badly missing Wall Street's forecasts. Sure, the Dow component reported a solid 86% year/year profit improvement to keep the S&P 500 on pace for a 13th consecutive quarter of double-digit profit growth and lend support to our Moderately Bullish market view; but the huge seventeen cent miss left investors questioning the sustainability of the recent rally, especially with the Dow closing at a new all-time highs a day earlier. Also taking a toll on sentiment and the Materials sector was Monsanto (MON 43.49 -2.92), which matched expectations but raised concerns about slowing profit growth after it issued downside FY07 EPS guidance. The absence of leadership in Energy also stalled some of the recent momentum seen in blue chips. Crude oil futures extended Tuesday's 2.4% slide with a 1.5% decline, closing at a new 2006 low near $57.50/bbl. Even though a "considerably lower level of energy prices of recent weeks, if sustained, would help reduce overall inflation and damp increases in core prices," as was stated in today's FOMC minutes, further deterioration in oil renewed doubts about the Energy sector's ability to keep generating record earnings. Albeit indicating that "real GDP growth would continue to slow into the second half of 2006," offering further evidence the Fed will remain on hold, "before strengthening gradually thereafter," the FOMC minutes also noted that members "continued to see a substantial risk that inflation would not decline as anticipated." Unfortunately for the stock market bulls still reaping the benefits of falling Treasury yields, Fed officials saying they're still "quite concerned" about inflation left bond traders less convinced of a possible Fed easing, which has been priced into the Treasury market over the last couple of months, resulting in more consolidation and a subsequent rise in interest rates. As if a rise in borrowing costs weren't already a concern for rate-sensitive Financials, the sector was dealt an extra blow after asset manager Legg Mason (LM 87.02 -18.29) warned that Q2 earnings will fall well short of expectations. Investment Banks (-1.1%) were another sore spot as online brokers like E*Trade (ET 22.31 -2.15) and Charles Schwab (SCHW 17.20 -0.86) sold off amid reports that Bank of America (BAC 54.04 -0.59), which was downgraded at Bernstein, will offer free online stock trades. Separately, reports that a small airplane crashed into a building in New York City sent the major averages to their worst levels of the day around 3:00 ET, but after most indications suggested it was not a terrorist act, the indices pared those losses merely to close with more modest declines. BTK -0.1% DJ30 -15.04 DJTA -1.0% DJUA +0.1% NASDAQ -7.16 NQ100 -0.1% R2K -0.5% SOX +1.3% SP400 -0.2% SP500 -3.47 XOI -0.5% NASDAQ Dec/Adv/Vol 1796/1222/2.02 bln NYSE Dec/Adv/Vol 1926/1339/1.51 bln
Dow Ends Down 15 on Alcoa Profit Report
AP - Stocks pulled back Wednesday after aluminum producer Alcoa Inc. kicked off earnings season with a weaker-than-expected profit report and minutes from the Federal Reserve's last meeting stoked concerns about the economy.
AT&T-BellSouth Deal to Help Company AP

CEOs Swept Out by Stock Options Scandal AP

Visa to Restructure, Be Publicly Traded AP

Skilling Asks Judge to Throw Out Verdict AP

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $59; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-10-06) Waning full Moon and lunatical suckers bear market rally into the close is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 9, Standard & Poor's 500 index up 2, and the Nasdaq composite index up 3, all very commissionable on heavy volume. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b.s. from Yahoo:

Even though the Dow closed at a new all-time high, there was little conviction on the part of buyers Tuesday as the major averages struggled to stay in the green going into the close. With Dow component Alcoa (AA 28.29 +0.30) slated to officially kick off earnings season after the close, investors waiting to see how corporate profits fared in Q3 amid slowing economic growth did just that -- wait -- as participants weighed some encouraging corporate news and plunging oil prices against rising Treasury yields. Bond traders coming back from a three-day weekend in profit taking mode, pushing the 10-year note down 13 ticks and lifting the yield to a three-week high of 4.74%, added to the sense of reserve among equity traders who have been pricing in the value of future earnings based on lower interest rates. Still gradually re-calibrating expectations for Fed policy, Treasuries fell for a third straight day amid less evidence of a Fed easing after Dallas Fed President Richard Fisher warned that policy makers may need to raise interest rates further if the inflationary pressures don't ease. Fortunately for the bulls eventually getting in the last word, a 2.4% sell-off in oil prices below $59/bbl, without sacrificing anything in the way of leadership from an Energy sector that is expected to see Q3 earnings grow 25%, provided a big source of market support. Analyst upgrades on oil explorers Devon Energy (DVN 63.58 +2.03) and Anadarko Petroleum (APC 43.18 +1.55) acted as offsetting factors. Among the biggest beneficiaries of oil's decline were transportation stocks, as renewed enthusiasm for Trucking and Railroads -- two of today's best performers -- lent some notable support to the Industrials sector. Consumer Discretionary was another influential leader to the upside, as lower energy prices made retail stocks more attractive while homebuilders got a boost following multiple analyst upgrades in the space (e.g. DHI +3.9%, SPF +4.9%, and TOL +5.1%). Consumer Staples was also in focus, especially after Supervalu (SVU 32.38 +1.37) nearly quadrupled quarterly profits and boosted its full-year guidance, and CVS Corp (CVS 29.72 unch) raised its Q3 profit outlook. However, ethanol producer Archer-Daniels-Midland (ADM 37.12 -1.38), one of this year's best performers, consolidating in sympathy with plunging oil prices, overshadowed the upside guidance. Agricultural Products was the day's worst performing S&P industry group. DJ30 +9.36 NASDAQ +3.66 SP500 +2.76 NASDAQ Dec/Adv/Vol 1495/1519/1.73 bln NYSE Dec/Adv/Vol 1561/1671/1.39 bln
Alcoa 3Q Profit Jumps 86 Pct. on Demand
AP - Alcoa Inc.'s earnings soared 86 percent as demand from makers of aircraft, trucks and trains outweighed lower metal prices and a seasonal lull, the aluminum maker said Tuesday. But the results fell far short of Wall Street expectations.
               Sovereign Bancorp Board Discusses CEO AP
               Dow Ends Up 9 in Its Fourth Record Close AP
               Three in HP Scandal Plead Not Guilty AP
               Genentech Profits Surge AP

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $59; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

UPDATE - Two former NYSE traders found guilty of fraud

Stock market staggers, but investors still may be too optimistic

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Not good.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

What is Wrong with the Stock Market?

Dr. Khaled Batarfi

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

              July 17 July 14 (respectively)

Fed acct 4.087 4.935

Tax/loan note acct 10.502 10.155

Cash balance 14.589 15.192

National debt,

subject to limit 8,311.633 8,323.084

The statutory debt limit is $8.965 trillion.

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

WHISPERS OF MERGERS SET OFF BOUTS OF SUSPICIOUS TRADING...August 27, 2006 NYTimes By GRETCHEN MORGENSONThe boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.

(10-9-06) Waning full Moon and lunatical suckers bear market rally into the close is nothing less than a defacto fraud by the lunatic frauds on wall street to suck the suckers in; ie., as the Dow Jones industrial average up 7, Standard & Poor's 500 index up 1, and the Nasdaq composite index up 11, all very commissionable on heavy volume. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b.s. from Yahoo:

Stocks got back on the buying track Monday, but with the bond market closed in observance of the Columbus Day holiday, limited participation from equity traders indicated there was little conviction behind the market's modest move to the upside. Kicking off a new week of trading, but with a sense of caution and an early excuse to lock in recent market gains, were reports that North Korea had detonated its first-ever nuclear weapon. However, since there was little evidence to confirm such a weapons test, what few participants decided not to take a long weekend found a few, primarily positive news items to digest. As evidenced by the tech-heavy Nasdaq turning in the best performance among the majors, a 2.0% surge in the Composite's fourth most influential component -- Google (GOOG 429.00 +8.50) -- was a big reason behind the Nasdaq extending two consecutive weeks of 1.8% gains. Google inked a video content deal with Warner Music Group (WMG 26.77 -0.06) and is reportedly in talks to acquire YouTube for $1.65 bln. Active Portfolio holding Cisco Systems (CSCO 24.31 +0.22) hitting a new 52-week high after a favorable mention in this week's Barron's, as well as leadership in semiconductors fueled by renewed speculation that Intel (INTC 20.62 -0.01) may acquire Nvidia Corp. (NVDA 32.92 +1.99), provided additional support. Of the other seven sectors trading higher, Materials paced the way as investors eyed steel stocks as potential takeover candidates. The sector was also in focus in anticipation of Alcoa (AA 27.99 +0.25) officially kicking off a Q3 earnings season tomorrow that is expected to show operating profit growth for the S&P 500 of around 14%. Such optimism on the earnings front was also responsible for continued momentum in the Financials sector. The latter is positioned to be one of the largest contributors to aggregate EPS growth on the S&P 500 and, due to further recognition that the Fed's tightening activity is reaching an end, underpins our Moderately Bullish market view. Consumer Discretionary also provided some notable leadership as a $7.9 bln offer from the Dolan family to take Cablevision Systems (CVC 26.50 +2.57) private spoke to the underlying value of cable companies, especially rival Comcast Corp. (CMCSA 37.67 +0.54). The sector got an extra lift from the retail group after oil prices erased almost all of a 2.6% intraday gain. At around 1:00 ET, crude oil futures were as high as $61.30/bbl (+$1.54) after OPEC reportedly said Saudi Arabia and five other members will cut production to help offset a more than 20% pullback in prices from their record levels in July. However, the commodity and its inflationary characteristics came tumbling down almost as fast as they spiked 30 minutes earlier to close below $60/bbl following reports that OPEC President Daukoru will not hold an emergency meeting to officially ratify an agreement to cut output. Since everything from explorers to refiners are also expected to keep the S&P 500 on track to achieve a 13th straight quarter of double-digit profit growth, the absence of leadership from the Energy sector kept blue-chip gains at a minimum. DJ30 +7.60 NASDAQ +11.78 SOX +1.1% SP500 +1.08 NASDAQ Dec/Adv/Vol 1203/1809/1.51 bln NYSE Dec/Adv/Vol 1284/1938/1.24 bln
Google Snaps Up YouTube for $1.65B AP - Google Inc. is snapping up YouTube Inc. for $1.65 billion in a deal that catapults the Internet search leader to a starring role in the online video revolution.
                       Dow Ends Up 8, Nasdaq Gains 12 AP
                       Airbus CEO Resigns, Successor Named AP
                       Oil Prices Settle at $59.96 a Barrel AP
                       Fiorina Still Puzzled by Ouster at HP AP
Google Reportedly Talking With YouTube
AP - Internet search leader Google Inc. is in talks to acquire the popular online video site YouTube Inc. for about $1.6 billion in cash and stock, according to published reports.
Kerkorian Ally Resigns From GM Board AP
Goodyear Strikers Determined on Demands AP
Illegal Immigrants Sue Wendy's AP
Group Plans to Liquidate Tower Records AP

Israel Massacres Kids QANA, Lebanon, 31 July 2006 — At least 56 people, more than half children, were killed yesterday in an Israeli airstrike that crushed a building, the deadliest attack of the Israeli campaign, raising...

AT&T Closes BellSouth Deal After FCC OK AP - AT&T Inc. completed its $86 billion buyout of BellSouth Corp., the largest telecommunications takeover in U.S. history, shortly after the Federal Communications Commission unanimously approved the deal on Friday.

Dow Closes Above 12,500 for First Time AP - Wall Street surged higher Wednesday, hurtling the Dow Jones industrials past 12,500 for the first time as year-end bargain hunters picked up stocks across a variety of sectors.

Dow Closes Above 12,500 for First Time AP - Wall Street surged higher Wednesday, hurtling the Dow Jones industrials past 12,500 for the first time as year-end bargain hunters picked up stocks across a variety of sectors.

Nike 2nd-Quarter Profit Climbs 8 Percent AP - A tax break from the Dutch, surging demand in China and the enduring popularity of another shoe brand now owned by Nike Inc. all helped the world's largest athletic shoe and clothing company boost profit in its second quarter.

Investors Get More Info on Executive Pay AP - Investors are getting access to clearer and more detailed information from public companies on their top executives' pay packages and perks under new federal rules that took effect on Friday.

Qantas Accepts $8.64B Takeover Offer AP - Qantas Airways said Thursday it had accepted an 11.1 billion Australian dollar takeover offer from a private equity consortium including Australia's Macquarie Bank and the Texas Pacific Group -- one of the biggest corporate buyouts in Australian history.

HP Investors Unmoved by Spying Suit Deal AP - Investors have largely shrugged off Hewlett-Packard Co.'s boardroom spying scandal, dismissing the brouhaha surrounding the company as immaterial to its day-to-day operations and stellar earnings growth in recent months.

FCC Chair Moves to Break AT&T Deadlock AP - Declaring an "impasse" on AT&T Inc.'s proposed acquisition of BellSouth Corp., Federal Communications Chairman Kevin Martin cleared the way Friday for a commissioner who had disqualified himself from the deliberations to break the deadlock.

FCC Chair Moves to Break AT&T Deadlock AP - Declaring an "impasse" on AT&T Inc.'s proposed acquisition of BellSouth Corp., Federal Communications Chairman Kevin Martin cleared the way Friday for a commissioner who had disqualified himself from the deliberations to break the deadlock.

Report: Kerkorian Sells Full Stake in GM AP - General Motors' Corp.'s painful process of reinventing itself apparently will continue without Kirk Kerkorian, whose ownership of almost 10 percent of the world's largest automaker failed to become a lever for the changes he sought.

Pfizer to Cut U.S. Sales Force 20 Pct. AP - Pfizer Inc. said Tuesday it will cut its U.S. sales force by 20 percent, or 2,200 people, as part of a cost-cutting program to transform the company into a more nimble organization as it struggles with sluggish sales.

Dell Posts Gain in Delayed 3Q Results AP - Dell Inc. beat analysts' expectations in delayed earnings posted Tuesday, but the computer maker warned the results were preliminary and could change due to an intensifying federal investigation into the company's accounting and financial reporting.

Alcoa Plans to Cut 6,700 Jobs Worldwide AP Comcast, Disney Ink Video-On-Demand Deal AP Qantas Approached Amid Takeover Rumors AP Oil Prices Fall to $59.86 a Barrel AP

Bush OKs $11.8B Lucent Sale to Alcatel AP - President Bush has approved the proposed $11.8 billion takeover of Lucent Technologies Inc. by French-owned Alcatel, saying the merger of the two telecommunications equipment companies does not present any major national security concerns.

About 3,000 Protest Outside G20 Meeting AP Rice: Countries Should Follow Vietnam AP Del Monte Halting Hawaii Operations AP Airbus A380 Lands in Hong Kong AP

Stocks Surge on Fed Officials' Comments AP - Wall Street barreled higher Tuesday, with the Dow Jones industrials surging further into record territory after a Federal Reserve official indicated the Fed will maintain its policy of stable interest rates.

Wal-Mart Tries to Improve Fashion Trends AP - This holiday season, a big challenge at Wal-Mart is convincing shoppers like Portia Goodman and Karen Wade to buy fashion instead of just basics.

U.S. Cars Rise in Reliability Ratings AP - Ford's new Fusion model earned high marks from both Consumer Reports testers and consumers who rated its reliability, the magazine said in its 2007 new car preview, showing that U.S. automakers may be making strides in initial quality.

LA Times Editor Forced to Resign AP - The future of the Los Angles Times has become even more muddied after editor Dean Baquet, who had defied Times' parent Tribune Co. on slashing newsroom jobs, was forced to resign.

Wal-Mart Cuts Prices on Some Electronics AP - First, toys, now electronics. Wal-Mart, which began discounting its holiday toys in mid-October, announced on Friday deep price cuts on almost 100 electronics, setting the stage for price wars in advance of the holiday season.

Dow Drops 9 on Weak Caterpillar Forecast AP - Wall Street ended a record-setting week narrowly mixed Friday, with the Dow Jones industrials falling to close inches above 12,000 after a lackluster profit report and forecast from Caterpillar Inc. prompted many investors to retreat.

Top Financial News

Top Financial News

AT&T Closes BellSouth Deal After FCC OK
AP - AT&T Inc. completed its $86 billion buyout of BellSouth Corp., the largest telecommunications takeover in U.S. history, shortly after the Federal Communications Commission unanimously approved the deal on Friday.

Dow Closes Above 12,500 for First Time
AP - Wall Street surged higher Wednesday, hurtling the Dow Jones industrials past 12,500 for the first time as year-end bargain hunters picked up stocks across a variety of sectors.

Dow Closes Above 12,500 for First Time
AP - Wall Street surged higher Wednesday, hurtling the Dow Jones industrials past 12,500 for the first time as year-end bargain hunters picked up stocks across a variety of sectors.

Nike 2nd-Quarter Profit Climbs 8 Percent
AP - A tax break from the Dutch, surging demand in China and the enduring popularity of another shoe brand now owned by Nike Inc. all helped the world's largest athletic shoe and clothing company boost profit in its second quarter.

Investors Get More Info on Executive Pay
AP - Investors are getting access to clearer and more detailed information from public companies on their top executives' pay packages and perks under new federal rules that took effect on Friday.

Qantas Accepts $8.64B Takeover Offer
AP - Qantas Airways said Thursday it had accepted an 11.1 billion Australian dollar takeover offer from a private equity consortium including Australia's Macquarie Bank and the Texas Pacific Group -- one of the biggest corporate buyouts in Australian history.

HP Investors Unmoved by Spying Suit Deal
AP - Investors have largely shrugged off Hewlett-Packard Co.'s boardroom spying scandal, dismissing the brouhaha surrounding the company as immaterial to its day-to-day operations and stellar earnings growth in recent months.

FCC Chair Moves to Break AT&T Deadlock
AP - Declaring an "impasse" on AT&T Inc.'s proposed acquisition of BellSouth Corp., Federal Communications Chairman Kevin Martin cleared the way Friday for a commissioner who had disqualified himself from the deliberations to break the deadlock.

FCC Chair Moves to Break AT&T Deadlock
AP - Declaring an "impasse" on AT&T Inc.'s proposed acquisition of BellSouth Corp., Federal Communications Chairman Kevin Martin cleared the way Friday for a commissioner who had disqualified himself from the deliberations to break the deadlock.

Report: Kerkorian Sells Full Stake in GM
AP - General Motors' Corp.'s painful process of reinventing itself apparently will continue without Kirk Kerkorian, whose ownership of almost 10 percent of the world's largest automaker failed to become a lever for the changes he sought.

Pfizer to Cut U.S. Sales Force 20 Pct.
AP - Pfizer Inc. said Tuesday it will cut its U.S. sales force by 20 percent, or 2,200 people, as part of a cost-cutting program to transform the company into a more nimble organization as it struggles with sluggish sales.

Dell Posts Gain in Delayed 3Q Results
AP - Dell Inc. beat analysts' expectations in delayed earnings posted Tuesday, but the computer maker warned the results were preliminary and could change due to an intensifying federal investigation into the company's accounting and financial reporting.

Alcoa Plans to Cut 6,700 Jobs Worldwide AP
Comcast, Disney Ink Video-On-Demand Deal AP
Qantas Approached Amid Takeover Rumors AP
Oil Prices Fall to $59.86 a Barrel AP

Bush OKs $11.8B Lucent Sale to Alcatel
AP - President Bush has approved the proposed $11.8 billion takeover of Lucent Technologies Inc. by French-owned Alcatel, saying the merger of the two telecommunications equipment companies does not present any major national security concerns.

About 3,000 Protest Outside G20 Meeting AP
Rice: Countries Should Follow Vietnam AP
Del Monte Halting Hawaii Operations AP
Airbus A380 Lands in Hong Kong AP

Wal-Mart Tries to Improve Fashion Trends
AP - This holiday season, a big challenge at Wal-Mart is convincing shoppers like Portia Goodman and Karen Wade to buy fashion instead of just basics.

U.S. Cars Rise in Reliability Ratings
AP - Ford's new Fusion model earned high marks from both Consumer Reports testers and consumers who rated its reliability, the magazine said in its 2007 new car preview, showing that U.S. automakers may be making strides in initial quality.

LA Times Editor Forced to Resign
AP - The future of the Los Angles Times has become even more muddied after editor Dean Baquet, who had defied Times' parent Tribune Co. on slashing newsroom jobs, was forced to resign.

Wal-Mart Cuts Prices on Some Electronics
AP - First, toys, now electronics. Wal-Mart, which began discounting its holiday toys in mid-October, announced on Friday deep price cuts on almost 100 electronics, setting the stage for price wars in advance of the holiday season.

Dow Drops 9 on Weak Caterpillar Forecast
AP - Wall Street ended a record-setting week narrowly mixed Friday, with the Dow Jones industrials falling to close inches above 12,000 after a lackluster profit report and forecast from Caterpillar Inc. prompted many investors to retreat.