Stocks rise as investors sort through mixed earnings; Apple scores but Yahoo falls short.

Seth Sutel and Bernard Condon, AP Business Writers, On Tuesday July 20, 2010, 5:04 pm

NEW YORK (AP) -- Investors are trying to get a read on the economy using earnings reports. They're finding it's not so easy.

The result Tuesday was yet another erratic day of stock trading. The Dow Jones industrial average rose 75 points after having fallen 140 in early trading in response to a series of disappointing revenue reports. Analysts were hard-pressed to come up with a reason for the turnaround. But trading was extremely light, and that tends to skew stock prices.

Analysts said some investors were getting a little more upbeat as they awaited earnings reports from Yahoo Inc. and Apple Inc. after the close. But those reports came in mixed, just like those from the many companies that have also reported second-quarter results. Apple's stock surged in after-hours trading, but Yahoo fell. Like IBM Corp., Johnson & Johnson and Goldman Sachs Inc., its revenue fell short of expectations.

Investors have been quick to sell on even a whiff of bad news. Early Tuesday, they were motivated by the reports from IBM, J&J and Goldman. Investors have been focusing on revenue rather than bottom-line earnings because of the link between companies' sales and the economy. If revenue is down because consumers aren't spending, that's a sign that the economy could remain weak.

Investors seem to have decided as Tuesday wore on that earnings didn't look quite as bad as they first thought. Analysts noted that Goldman's drop in revenue was similar to those reported by JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. Their revenue fell not because of a weak economy, but because their customers decided to avoid the financial markets' turbulence during the spring.

Some analysts said there were technical factors involved in the market's moves.

"Investors may have been anticipating the market heading back to early July lows so when it didn't fall apart in early trading, they slowly came back in," said Michael Sheldon, chief market strategist at RDM Financial Group in Westport, Conn.

Those investors were looking at charts that track the movements of indicators including the Standard & Poor's 500. When the S&P reaches, or doesn't reach, a specific level, that can prompt investors to buy or sell.

It was hard to predict what turn trading might take Wednesday. Yahoo and Apple are considered indicators of the overall economy, but their mixed results weren't giving investors a clear-cut direction for stocks.

According to preliminary calculations, the Dow rose 75.53, or 0.7 percent, to 10,229.96. The broader Standard & Poor's 500 index rose 12.23, or 1.1 percent, to 1,083.48 and the Nasdaq composite index rose 24.26, or 1.1 percent, to 2,222.49.

Advancing stocks were ahead of losers by 4 to 1 on the NYSE, where volume came to an extremely light 1.1 biillion shares.

http://finance.yahoo.com/news/Stocks-are-higher-on-mixed-apf-1741651426.html?x=0&sec=topStories&pos=3&asset=&ccode=

Stocks Surge after Alcoa, CSX Report Strong Profits:

Stephen Bernard, AP Business Writer, On Tuesday July 13, 2010, 4:53 pm

NEW YORK (AP) -- The stock market got a shot of confidence and adrenaline from the start of second-quarter earnings season.

Investors were enthusiastic Tuesday about better-than-expected profits from aluminum maker Alcoa Inc. and railroad operator CSX Corp. The Dow Jones industrial average rose more than 145 points and the major indexes were up well over 1 percent.

There was more good news from Intel Corp. after the close of trading. The chip maker reported earnings and revenue that beat analysts' expectations, and it also raised its forecast for the year. Its stock shot up more than 5 percent in after-hours trading.

The companies, among the first to report second-quarter earnings, also issued upbeat forecasts for the rest of the year. That was heartening news for investors who have been concerned that the recovery was stalling, or that the economy might even fall back into recession.

"When we go back to earnings and fundamentals, companies are delivering," said Tom Karsten, senior managing partner at Karsten Financial in Fort Worth, Texas.

Alcoa's earnings reports are closely watched because its varied customer base provides a snapshot of a broad range of other industries. It is also a component of the Dow Jones industrial average. CSX also provides insight into economic activity because it ships a wide range of products.

Alcoa said global consumption of aluminum will grow this year by more than it had forecast just three months ago. There have been concerns that the global economic recovery will end as many European nations face mounting government debt problems and high unemployment slows growth in the U.S.

CSX, meanwhile, said it sees its the economy's upward momentum continuing this year.

Intel's results are considered a good gauge of the health of the economy since its sales are driven by consumers and businesses buying computers.

Frank Ingarra, co-portfolio manager of Hennessy Funds in Stamford, Conn., said Alcoa and CSX's results lifted the market because they hit on the two themes that traders are looking for in earnings: revenue growth and optimistic outlooks.

"That's why the earnings were so good," Ingarra said. "You saw that top-line growth and good guidance."

During the recession, companies that made money often did so by cutting costs rather than bringing in sales. So sales growth is a sign that business is indeed picking up.

The Commerce Department reported Tuesday that the U.S. trade deficit increased to its widest level in 18 months as an increase in exports was outpaced by rising imports. A jump in both imports and exports is a sign that the economy is growing.

Earnings will likely continue to dictate trading over the next few weeks as hundreds of companies release results.

According to preliminary calculations, the Dow rose 146.75, or 1.4 percent, to 10,363.02. The Standard & Poor's 500 index rose 16.59, or 1.5 percent, to 1,095.34, while the Nasdaq composite index rose 43.67, or 2 percent, to 2,242.03.

http://yhoo.it/bbZZat

Stocks Surge as Financial and Materials Stocks Jump:

Stocks leap after traders snap up banks, materials shares; Dow gains 275. to top 10,000 again.

Tim Paradis, AP Business Writer, On Wednesday July 7, 2010, 5:54 pm

NEW YORK (AP) -- The Dow Jones industrials climbed back above 10,000 Wednesday after investors had second thoughts about the heavy selling in the stock market during the last two weeks.

Stocks soared and the Dow rose 275 points after a modest gain Tuesday. It was the market's first back-to-back advance since mid-June and the first close above psychological benchmark of 10,000 since June 28. But analysts warn that the buying doesn't mean that investors are more optimistic. They said there wasn't a single catalyst behind the move and that it looked like a case of investors scooping up stocks that had become cheaper after heavy losses. The Dow had fallen 7.3 percent over two weeks.

"It's just more of a reaction to a little bit too much negativity," said Marc Harris, co-head of global research for RBC Capital Markets in New York.

The Dow and broader indexes gained more than 2 percent. Trading volume was light, however, signaling that many skeptical investors were staying out of the market. Interest rates rose as some investors dumped Treasurys in favor of riskier assets like stocks.

Financial stocks rose on an upbeat profit forecast from State Street Corp. The stock gained 9.9 percent. Materials stocks rose after having logged steep drops over worries about the economy. Aluminum producer Alcoa Inc. climbed 3.3 percent, while U.S. Steel rose 5.7 percent

Wednesday's big gain fit into a pattern of volatility that began in late April, when the Dow began tumbling from its 2010 high of 11,205.03. The Dow had fallen 13 percent since then, and the long slide included many triple-digit moves.

The protracted drop began on concerns that debt problems in Greece and other European countries would stifle the continent's recovery and eventually the recovery in the U.S. But in the past few weeks, stocks have been tumbling on signs that the domestic rebound is slowing. Some traders were selling on fears that the country is headed back into recession. They were also buying Treasurys so they could put their money into a safe place.

Jack Ablin, chief investment officer at Harris Private Bank in Chicago, said that what's called a "double-dip" is unlikely, but the idea of one is scary because the government wouldn't have many options to revive the economy a second time.

"When you're driving around on a spare tire you're on the lookout for nails," he said.

There were no economic reports to influence the market on Wednesday. Traders were getting a series of reports Thursday likely to give some insight into consumers' behavior. The government's weekly report on jobless claims is due out, and retailers will report June sales results. Investors will be looking for any signs that layoffs are slowing, and that consumers are feeling better about spending.

The market's other big concern is upcoming earnings reports. Investors want to know if companies are also seeing business slow, and if they're changing their forecasts for the coming quarters.

Ablin said the forecast from State Street bolstered confidence ahead of earnings for the April-June period. However, Ablin said he didn't expect the bounce to continue because investors are anxious about the hundreds of company reports still to come.

"I don't think any investor wants to commit one way or another with the whole string of earnings announcements" ahead, Ablin said.

The Dow rose 274.66, or 2.8 percent, to 10,018.28. The Dow rose 57 points Tuesday. The index hasn't risen two straight days since June 17-18.

The Standard & Poor's 500 index rose 32.21, or 3.1 percent, to 1,060.27, and the Nasdaq composite index rose 65.59, or 3.1 percent, 2,159.47.

Bond prices fell, driving up interest rates. The yield on the 10-year Treasury note rose to 2.99 percent from 2.94 percent late Tuesday. The yield fell below 3 percent last week for the first time since April 2009. The 10-year yield is used as a benchmark for interest rates on consumer loans and mortgages.

The dollar fell against other major currencies, including the euro.

Crude oil rose $2.09 to $74.07 per barrel on the New York Mercantile Exchange. Gold rose.

State Street rose $3.29, or 9.9 percent, to $36.63. Alcoa advanced 34 cents, or 3.3 percent, to $10.55, while U.S. Steel rose $2.17, or 5.7 percent, to $40.39.

About six stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume came to 5.1 billion shares, compared with 4.7 billion Tuesday.

The Russell 2000 index of smaller companies rose 21.63, or 3.7 percent, to 611.66.

Overseas markets closed higher after sliding in early trading. Investors awaited a Thursday meeting of the European Central Bank. Traders are expecting the bank to keep interest rates unchanged, but will want to get details on the European Union's "stress tests" of bank balance sheets. The notion that the examination could be more rigorous than first thought helped U.S. stocks and drove the euro higher. Similar tests of U.S. banks in May last year helped bolster confidence in the financial system by reassuring investors that big banks likely would survive a deeper slide in the economy.

Britain's FTSE 100 rose 1 percent, Germany's DAX index rose 0.9 percent, and France's CAC-40 climbed 1.8 percent. Japan's Nikkei stock average fell 0.6 percent.

http://yhoo.it/czkRsc

CYCC - Cyclacel Pharmaceuticals - Announces FDA Orphan Drug Designation for Sapacitabine in Both AML and MDS:

Press Release Source: Cyclacel Pharmaceuticals, Inc. On Thursday July 1, 2010, 7:00 am EDT

BERKELEY HEIGHTS, N.J., July 1, 2010 (GLOBE NEWSWIRE) -- Cyclacel Pharmaceuticals, Inc. (Nasdaq:CYCC), a biopharmaceutical company developing oral therapies that target the various phases of cell cycle control for the treatment of cancer and other serious disorders, today announced that the U.S. Food and Drug Administration (FDA) has granted orphan drug designation to the company's sapacitabine (CYC682) product candidate for the treatment of both acute myeloid leukemia (AML) and myelodysplastic syndromes (MDS).

"Orphan drug designation for both AML and MDS significantly strengthens the value proposition represented by sapacitabine and enhances our opportunity to advance this promising product candidate to late stage clinical development and commercialization," said Spiro Rombotis, President and Chief Executive Officer of Cyclacel.

Sapacitabine, a cell cycle modulating nucleoside analogue, is in Phase 2 studies for the treatment of AML in the elderly, MDS and lung cancer. Cyclacel has reported Phase 2 results from ongoing studies in AML and MDS. The company plans to advance sapacitabine into pivotal Phase 3 development in 2010. During the first quarter of 2010, the company submitted a Special Protocol Assessment (SPA) request to the FDA for a randomized Phase 3 study of sapacitabine in elderly patients with AML.

Orphan drug designation entitles Cyclacel Pharmaceuticals to seven years of marketing exclusivity for sapacitabine upon regulatory approval, as well as the opportunity to apply for grant funding from the U.S. government to defray costs of clinical trial expenses, tax credits for clinical research expenses and a potential waiver of the FDA's application user fee. Orphan status is granted by the FDA to promote the development of new drug therapies for the treatment of diseases that affect fewer than 200,000 individuals in the United States.

http://finance.yahoo.com/news/Cyclacel-Pharmaceuticals-pz-2152455345.html?x=0&.v=1

US Economic Recovery of Lies:

http://thedailybell.com/1096/US-Economic-Recovery-of-Lies.html

Slow-motion recovery keeps unemployment high...

High unemployment isn't going away. The slow pace of economic growth shows the recovery is too weak to generate enough jobs for 15.3 million unemployed people. Layoffs are contributing to the problem. That's evident from an elevated number of weekly claims for jobless aid. Two government reports Thursday offered new evidence on all of those fronts. For many Americans, it doesn't feel much like a recovery. The unemployed face fierce competition for job openings. Those with jobs are watching their paychecks shrink. A growing number of people are at risk of falling into foreclosure. And only people with the most stellar credit are likely to get a new loan. "We're out of recession, but the recovery is not going to bring a whole lot of smiles," said Joel Naroff, of Naroff Economic Advisors. – AP

Dominant Social Theme: Growth is hard to come by and patience wins the day.

Free-Market Analysis: The trouble with economic reporting in the West is that it simply does not tell the truth. This AP story is a good example. Its main point is that the American "recovery" is not going to be strong enough to provide enough jobs for the 15.3 million unemployed. Now this supposition has two problems. First of all there is no "recovery" as it is commonly understood, and second we assume that the 15 million out-of-work figure is based on a 10 percent unemployment rate. In fact, that figure is very much in dispute because of the way American federal government analysts count – and then don't count – the unemployed. Many savvy observers believe that the unemployment rate is twice as high, at 20 percent, and we believe it to be even higher than that.

Anyway, as far as the US recovery itself goes, this is a most misleading conversation within the mainstream press. Even during less severe downturns, Western economies have continually degraded and this is no ordinary downturn as we have pointed out many times. This time around the fiat money system basically collapsed. The entire system has been on life-support for about two years now. What kind of extrication can be expected from such a quandary?

We figured that to save the system, central banks would have to pump an aggregate US$100 trillion into Western economies over a period of time. We're not sure how far along they are, or if they'll reach that figure but the amounts of debt-based money that has been created and loaned out or stuffed into commercial bank coffers is staggering. It hasn't all circulated but watch out (for hyper-inflation) if it does. Of course, that was before this latest sovereign debt crisis. Since central banks do all sorts of things they don't report – engaging in various kinds of swaps and derivatives trading, who knows what the final number may be. Here's some more from the AP article:

The economy grew at a 3 percent annual rate from January to March, according to a new estimate released by the Commerce Department Thursday. The new reading, based on more complete information, was slightly weaker than an initial estimate of 3.2 percent a month ago. Consumers spent less than first estimated. Same goes for business spending on equipment and software. And the nation's trade deficit was a bigger drag on economic activity. Those factors led to slower growth last quarter than first estimated.

In a separate report, the Labor Department said the number of newly laid off workers filings claims for unemployment benefits fell to 460,000 last week. But the latest level of claims is actually higher than it was at the start of the year. By this point in the recovery, economists had hoped claims would be in the 400,000 to 425,000 range. That would signal more robust job growth was on the way.

Sounds grim? It gets worse. This article was written just as first quarter American growth was revised DOWN – adjusted from an annual rate of 3.2 percent to just 3 percent, according to the Commerce Department. The expected growth rate was to have been about 3.4 percent. It certainly didn't get there.

In fact, there are plenty of statistics that could be marshaled to put this current recovery into focus. But when one starts to do that a trend emerges, and it isn't a pretty one. We recently came across an article in the socialist Monthly Review. The article, "Capitalism, the Absurd System – A View from the United States," was co-written by Robert W. McChesney, whom left-wing Utne Reader in 2008 listed as one of their "50 visionaries who are changing the world".

The article has some fascinating charts, including one that shows GDP growth shrinking from four percent in the 1940s to a little over one percent in the 2000s. The chart is attributed to the Bureau of Economic analysis and we're not sure if it adjusted for inflation. There is another telling chart in the article, showing how wages have fallen. The article describes the trend this way: "Worker productivity is much greater than it was back in 1975, but very little of this increased wealth actually goes to workers themselves. ... The wages of U.S. manufacturing workers have fallen rapidly during the last three and a half decades as a share of value added in U.S. manufacturing. The median wage of all nonagricultural workers has stagnated over the same period."

Given this context, it is interesting to see how the article explains the non-performance of Western capitalism – specifically in the United States – by turning to Marx for enlightenment as follows: "Marx's work provides searing insights on how to understand a society that, at the surface, appears to be one thing but, at its deeper productive foundations, is something else. Marx argued that a core contradiction built into capitalism was between its ever-increasing socialization and enhancement of productivity, and its ongoing system of private appropriation of profit."

Of course Marx never did seem to explain adequately how workers were deprived of their share of a growing pie of profits, and when it comes to explaining how current capitalist trends mighty be countered, the authors are similarly fuzzy: "Mere state ownership of key productive forces is not enough to create a socialist society; the people must exercise a sovereign rule over these productive forces and society as a whole, and the society must be organized to promote collective needs."

As usual, we wonder who exactly will "exercise a sovereign rule over these productive forces." Additionally, we would ask, when it comes to the organization of society "to promote collective needs," exactly who will be doing the organizing. This is always where collectivist solutions tend to fall down. They get hazy about who is going to provide the leadership that will lead the people to the promised land.

We think we can explain all this a little more succinctly using some free-market thinking. The problem with Western economies for at least the past 100 is central banking. It is central banks, by overprinting money that cause first booms and then busts. The power elite, rarely if ever mentioned in Marxian analysis, stands behind the central banking system – which began as an Anglo-American invention but has now spread around the world. As US Congressman Ron Paul has pointed out, the central bank is an engine of centralization. After every boom cometh a bust and after every bust more businesses go bankrupt and more of the middle class is washed away.

That's why the AP's statement about the American recovery certainly stretches the truth. (Of course it's not fair to pick on AP – the recovery meme is a promotion of the power elite and is virtually everywhere these days throughout mainstream US media.) The point is that Western recoveries under a central banking regime are inevitably fainter and fainter. Each recovery is weaker than the last while crises grow stronger and deeper.

As we recall Bell feedbacker F. Beard recently pointing out, the system is set up so that people "buy at the top" – take out loans and generally expand portfolios during the good times and then are faced with certain consequences when the economy turns sour. The problem is always the same: Loans are suddenly under water as debtors discover that the equity of their investments is worth less than what they owe. Bank lenders know the inevitability of this. Many borrowers do not.

Is the current economic crisis is some sort of turning point? In the past the power elite has shoveled money at commercial banks and securities firms – and then proclaimed a recovery when the stock market began to move up. Even when the recovery was weak and limited the elite could rely on the mainstream media to forcefully proclaim victory over recession, inflation, deflation, etc.

But with stock markets rising and the media crowing, it was never really possible to examine the extent of the damage in a prolonged or realistic way. That's changed now. The Internet has allowed real discussions of the economic fraud of the so-called modern capitalist system. And the system itself has so badly failed in the past few years that it is probably much more difficult to cover-up the damage this time.

Conclusion: For those apt to defend the system, the next few years likely shall prove both difficult and unforgiving. We anticipate continued conversations about alternative forms of money and different ways of approaching the economy. The elite of course shall suggest further centralization and central banking control. But we have a feeling that this will be a hard argument to make. The mainstream press has lost credibility as regards these matters. Articles such as this one published by the AP will be an increasingly hard sell to an increasingly informed public.

Waddell is the Mystery Trader in Last Thursday's Market Plunge:

http://www.reuters.com/article/idUSTRE64D42W20100514

(Reuters) - A big mystery seller of futures contracts during the market meltdown last week was not a hedge fund or a high frequency trader as many have suspected, but money manager Waddell & Reed Financial Inc, according to a document obtained by Reuters.

Waddell sold on May 6 a large order of e-mini contracts during a 20-minute span in which U.S. equity markets plunged, briefly wiping out nearly $1 trillion in market capital, the internal document from CME Group Inc said.

The e-minis are one of the most liquid futures contracts in the world, providing holders exposure to the benchmark Standard & Poors 500 Index. The contracts can act as a directional indicator for the underlying stock index.

Regulators and exchange officials quickly focused on Waddell's sale of 75,000 e-mini contracts, which the document said "superficially appeared to be anomalous activity."

Gary Gensler, chairman of the Commodity Futures Trading Commission, said in congressional testimony on Tuesday that it had found one sale was responsible for about 9 percent of the volume in e-minis during the sell-off in the U.S. markets.

Gensler said there was no suggestion that the trader, who he did not identify, did anything wrong in only entering orders to sell. Gensler said data shows that the trades appeared to be a bona fide hedging strategy.

The CME document shows that during the sell-off and subsequent rally, other active traders in e-minis included Jump Trading, Goldman Sachs, Interactive Brokers, JPMorgan Chase and Citadel Group.

During the 20-minute period, 842,514 contracts in e-minis were traded while Waddell from 2 p.m. to 3 p.m. traded its contracts, CME said. The CME document did not provide a break-out of Waddell's trading during the crucial 20 minutes.

Overland Park, Kansas-based Waddell did not comment. CFTC also declined to comment.

A CME spokesman, who declined to comment on the document, said the Chicago-based futures exchange operator never discusses customer activity.

"We found no evidence of improper trading activity or erroneous trades by CME Globex customers," said CME spokesman Allan Schoenberg.

Waddell's contracts were executed at Barclays Capital and later given up to Morgan Stanley, according to the document.

CME said it spoke to representatives from both banks on May 6 and planned to speak to Waddell representatives the following day. The firm oversaw $74.2 billion in assets as of March 31.

Morgan Stanley told CME that it "did not have concerns regarding the activity," the document said, because Waddell "would typically use equity index futures to hedge macro market risk associated with the substantial long exposure of its clients."

'QUITE A SHOCK TO THE MARKET'

Gensler said the contracts were sold between 2:32 p.m. and 2:51 p.m., the height of the meltdown.

The market for e-minis on May 6 fell more than 5 percent in a little more than 5 minutes starting at 2:40 p.m. -- the height of the crash, the document said. The e-minis began to recover before stock prices turned higher.

An order the size of the Waddell contract would be a big trade to execute on a normal day, said a trader whose firm is active in S&P 500 futures market. About 50,000 contracts are typically traded in an hour, the trader said.

"To get rid of 75,000 contracts, that's a lot of trading even if the market is healthy," the trader said. "But when suddenly the market changes and there's not as many bids there to trade with, 75,000 is going to cause quite a shock to the market."

"That's an enormous position for anybody, whether it's a hedge or whether it's a trade. It's a big position, no doubt about it," the trader said.

(Additional reporting Matthew Goldstein)

(Reporting by Herbert Lash and Jonathan Spicer. Editing by Robert MacMillan)

VIDEO - Fundamental & Technical Analysis of the S&P 500's Daily & Weekly Charts:

http://www.viddler.com/explore/zigzagman/videos/19/

Here is the end of the week Technical Analysis of the S&P 500's daily and weekly charts, plus a look at the important Economic and Earnings Reports due out next week...

Happy Trading this week...
zigzagman

How China Holds the American Economy by the Balls:

By Scott Thill / AlterNet
May 3, 2010

http://www.alternet.org/story/146702/how_china_holds_the_american_economy_by_the_balls/?page=entire

America stays afloat selling billions of American dollars and Treasuries to our Chinese sugar daddy to keep our faltering consumer economy alive.

On May 1, China popped the cork on Expo 2010 in Shanghai, a months-long international celebration signifying the ascension of the city, and thereby its parent nation, as a global economic and cultural powerhouse. Meanwhile, in the United States, China's economic and cultural power has come under mounting fire.

Short-happy hedge funder Jim Chanos, who prophesied the fall of Enron, argued in April that the country's heated property market was on a "treadmill to hell." Foreign Policy followed suit by more or less blaming China's alleged currency manipulation, rather than America's own corporate and economic malfeasance, for exporting unemployment to the United States. Even our President Barack Obama jumped on the dogpile, expressing concern that China has not moved its currency to a "more market-oriented exchange rate," during an April meeting with Chinese President Hu Jintao in Washington. His administration stopped short, however, of releasing an April 15 report to Congress expressing this disapproval in concrete terms, choosing instead to trot out the disgraced deregulationist Larry Summers to soothe the Chinese that such matters will be taken up at future gatherings.

For its part, China has responded to the finger-pointing by the United States with its own middle digit.

"We oppose the practice of finger-pointing among countries or strong-arm measures to force other countries to appreciate currencies," Chinese Premier Wen Jiabao said in March, before restating his well-publicized 2009 worries that U.S. Treasuries are in trouble. "In the press conference last year, I said I was a bit concerned about it. This year, I make the same remark. I am still concerned. I hope the U.S. will take concrete measures to assure its investors."

Good luck with that, China. From resilient wage and unemployment stagnation to revelations of investment banks like Goldman Sachs selling "shitty" bundles of toxic mortgages to national and international suckers with one hand while clandestinely shorting them with the other, the United States is in no position to assure investors of anything. Which is why they've taken lately to crowing about China, rather than settling their own business at home. That business includes, of course, selling billions of American dollars and Treasuries to our Chinese sugar daddy to keep our faltering consumer economy alive.

"China holds about $820 billion U.S. dollars, and about $480 billion is in U.S. Treasuries," Stefan Halper, senior fellow at the Cambridge Centre of International Studies and author of the new book The Beijing Consensus, told AlterNet by phone. "China would not take steps to decrease the value of the dollar, because that would decrease the value of its own holdings. China doesn't want to bring the dollar down or the U.S. economy down, but it is benefiting from American consumers, who buy its exports. which represents about 60 percent of its economy per year."

Halper is firmly in the camp of those who are tagging China as a currency manipulator. In The Beijing Consensus, he argues that the rising 21st century superpower is suppressing the yuan, exporting unemployment and even standing in the way of America's lagging recovery from the global recession. In the process, Halper writes, China is also exporting its overall philosophy of economics and governance at the expense, pardon the pun, of our own.

"Beyond everything else that China sells to the world, it functions as the world's largest billboard for the new alternative of 'going capitalist and staying autocratic,'" Halper explains in The Beijing Consensus. "Beijing has provided the world's most compelling, high-speed demonstration of how to liberalize economically without surrendering to liberal politics."

Of course, he admitted, China couldn't have done it alone. America was more than happy, drunk on deregulation and war, to dig its own grave.

"The disastrous involvement in Iraq and Afghanistan have just depreciated the American story and the American example," Halper told AlterNet. "You can look at the Pew data: There has been rising disapproval of the U.S. since Bush put us into those two wars. Plus, the Washington Consensus proved not to be a good form of Third World development, which opened the door to Chinese offers of low-interest loans and non-interference. So yeah, we've done things poorly. We've had a recession, and an inability to regulate our markets. We're certainly not perfect."

That's probably the understatement of the new millennium. Viewed through that prism, the argument that our preeminent funder is somehow partially responsible for our own extensive economic troubles is disingenuous, even if esteemed economists like Paul Krugman have been sipping the blame-China Kool-Aid. What's gets lost in the financial wonkery -- or wankery, if you will -- is the fact that, through our own corruption and greed, we have willingly pushed nations into the arms of China rather than earn their trust. Through the misguided Washington Consensus, we and others tried and succeeded at establishing a rapacious list of interventionist measures -- concretized as "stabilize, privatize, and liberalize" by Harvard professor of international political economy Dani Rodrik -- since the 1990s that has ultimately culminated in our current lunacy. To argue at this late stage of the game that China is partially to blame for this is playing the kind of crappy defense that loses championships in pro sports. It shows, above all, that we have no game.

"China will make decisions in its own interests, just as the U.S. does," Rachel Ziemba, senior analyst for China and oil-exploring countries at Roubini Global Economics, told AlterNet. "It's actually in China's interest in the mid-term to have a more flexible exchange rate as it increases their monetary policy autonomy and could boost domestic purchasing power, helping domestic consumption. It also could help control domestic inflation. But domestic dictates, not U.S. pressure, will determine Chinese policy moves in this area. Chinese authorities are balancing different economic pressures, and an appreciation of the currency would increase the price of Chinese exports."

Like Halper, Krugman and more, Ziemba thinks that China is indeed a currency manipulator. "The pace of foreign-exchange reserve accumulation implies that the Chinese central bank is intervening heavily in the foreign-exchange market, implying that, yes, it is manipulating its currency."

In that, it's not very different than anyone else playing the currency game, including the United States. Except that it's deftly playing the pegging game -- to the dollar, then to a managed float in 2005, then back again to the dollar during the crisis -- for the benefit of its nation, rather than a select few banks, funds and other entities. It's in it to win it. For everyone, depending on who you ask.

"The bulk of China's foreign exchange reserves are recycled into dollar-based assets, which helps fund the massive U.S. savings shortfall," Morgan Stanley Asia's Stephen Roach wrote in a Council on Foreign Relations roundup called "Is China a Currency Manipulator?" "Who might deficit-prone Washington turn to if it shuts off the Chinese funding spigot? At a minimum, reduced buying by America's largest foreign lender would spell sharp downward pressures on the dollar and/or higher long-term U.S. interest rates -- developments that could well trigger the dreaded double dip in the U.S. economy."

In other words, China is keeping its eye on the prize -- its own economic and political survival -- while the rest of the world, from the United States to the European Union treads water. And why not? A modest accounting argues that China's economy expanded at over 10 percent in the first quarter of 2010. Meanwhile, U.S. real gross domestic product probably grew around 3 percent in the same period.

"We believe consumer spending is being buoyed by a variety factors that will not be maintained over the long term," Ethan Harris, chief North American economist for Merrill Lynch, told MarketWatch in late April. "Even with the recovery in net worth, households have essentially lost 15 years of saving."

"Many countries have imbalanced economic systems," Ziemba told AlterNet. "China's economy has low external debt, which is a big plus, but the contingent liabilities of the government have increased as bank loans have increased. Yet with deposits having climbed as much as loans, China's banking system is well capitalized."

In the final analysis, complaints about China's financial practices should be properly contextualized, especially when those lodging the complaints have done more to disrupt global financial practices than anyone else. Perhaps when those complainers have settled their own accounts -- with vampire squids like Goldman Sachs and JP Morgan Chase, or the print-happy Federal Reserve Bank, or the Supreme Court that recently ruled that corporations possess the same rights as people -- then their whining about China's currency manipulation should be taken a bit more seriously. But not sooner.

"To the question of American excess and inability to regulate our financial markets, you're right," agreed Halper. "We have fallen down on that, and the Chinese have taken the opportunity to extol their model. But you've got compare China over time. What you see is two things: A rising middle class with a strong commercial material culture, and a highly repressive iron hand on the part of the central government. And that really is the most fascinating thing we see today. It's not classical communism. It's in business to perpetuate its own power, and we have to come to grips with it."

Sure, no problem. But only after we come to grips with the business of perpetuating our own power first. Change begins, after all, at home.

America at the Crossroads - and the War on Gold:

Darryl Robert Schoon
Posted May 4, 2010

http://www.321gold.com/editorials/schoon/schoon050410.html

Every so often a philosophical dilemma becomes real. So it is today. For two thousand years, the message of Christ Jesus influenced and informed the West, if not in deed, then in word. Today, that is no longer so. Today, godless capitalism is threatening to supplant the two millennia reign of Christ's message of brotherly love - if not in word, then, certainly, in deed.

In times of great change, art reflects social and philosophical undercurrents. The movie, Avatar, is an example of this phenomenon as was the movie, Wall Street, in 1987. Gordon Gekko, Oliver Stone's protagonist in Wall Street probably didn't read much; but, if he did, a book such as A Utopia of Greed: Ayn Rand's Moral Defense of Capitalism could have been on his reading list.

One of Gordon Gekko's more memorable lines is Greed, for want of a better word, is good. Greed is good is also one of Ayn Rand's fundamental beliefs; and, if Karl Marx is the father of godless communism, Ayn Rand, America's premier doyenne of selfishness, is the patron saint of its antagonist, godless capitalism.

Alisa Rosenbaum was born in Russia in 1905 where she would later change her name to Ayn Rand. In her youth, she would become an atheist, a belief she would hold for the rest of her life. No other self-proclaimed atheist would achieve such a large following - except perhaps Karl Marx; additionally, no other writer would be as responsible for giving philosophical cover to the selfishness and greed that would later characterize American-style "laissez-faire" capitalism.

Ayn Rand saw selfishness and greed as virtues; and, to their later disgrace, so, too, did many others.



Ba'al: the Golden Calf of Capitalism Grows Up:

When Ayn Rand died in 1982, a six foot floral wreath in the shape of a US dollar was laid by her casket; a symbol that was to be ironically appropriate as Ayn Rand's death would precede the demise of the US dollar by only a few short decades.

Nothing exemplified the effect that Ayn Rand's philosophy would have on America as much as the movie, Wall Street. Released in 1987, it reflected the values that would be responsible for America's moral decline over the next 30 years. This 45 second clip from Wall Street is chillingly revelatory:



In September 2010, Oliver Stone's sequel to Wall Street, Money Never Sleeps, is scheduled for release with an older but still unrepentant Gordon Gekko. After the 1980s, greed did not go away in America - it flourished.

AYN RAND, GOLDMAN SACHS & GOD:

Nowhere was Ayn Rand's influence felt more than on Wall Street. The selfishness and greed that Ayn Rand exalted found a natural home among Wall Street banks, especially Goldman Sachs where Senior Partner Gus Levy succinctly summed up Goldman's strategy as long term greed. It was a mission statement Ayn Rand could be proud of.

It is incorrect, however, to attribute Wall Street's greed solely to Ayn Rand. Greed and selfishness existed long before she posited the two vices as virtues, just as free markets existed long before capitalism was illegitimately birthed in a manger of paper money at the Bank of England in 1694.

Ayn Rand's writings are nonetheless responsible for giving greed and selfishness the sheen of respectability they previously lacked, especially among the bespoke jackals that serve our currencies back to us in the form of loans.

In defense of today's bankers, Goldman Sachs CEO Lloyd Blankfein recently stated, We are doing God's work; and, so, they are, if capitalism's culling of the trusting, vulnerable and less fortunate is included in Blankfein's novel definition of God's calling.

[I] managed to sell a few [worthless] abacusbonds to widows and orphans that I ran into at the airport.. not feeling too guilty about this, the real purpose of my job is to make capital markets more efficient. email, 6/13/2007, Fabrice Tourre, vice-president Goldman Sachs

If it is God for whom Blankfein toils - at enormous compensation, i.e. $68 million in 2007 - it is not the God of the New Testament where Christ Jesus admonishes us to be our brother's keeper. It is the Hindu God, Shiva, the destroyer and transformer for whom Blankfein puts in overtime; and in that capacity he has done yeoman's work for which he is to be congratulated.

Goldman Sachs, more than any other bank, under Blankfein's leadership has played a central role in destroying capitalism, i.e. economies based on bankers' debt-basedcapital, a parasitoidal system bankers designed to indebt productivity and commerce for profit until society collapses.

PAPER MONEY - GOLD = PAPER
SHIVA'S DANCE OF CAPITAL DESTRUCTION:

While Lloyd Blankfein's contribution to capitalism's demise should not be minimized, capitalism's current problems actually began in 1971 when gold, one of the four essential ingredients in the bankers' brew of debt-based money, was eliminated from the classic formula that had served bankers and governments so well for so long.



Capitalism's recipe insures government's infinite growth as government access to central bank credit is unlimited and bankers will profit from loaning paper money into perpetuity.

When gold was removed from paper money in 1971, this simple yet powerful recipe for capitalism's success was fundamentally altered and so, too, would be capitalism. It would only be a matter of time until capitalism sans gold would falter.

Lloyd Blankfein, Robert Rubin, Lawrence Summers and Alan Greenspan et. al., individually and collectively, would only hasten the process. Lord Shiva's dance of capital destruction was already underway; because without gold, the illusion of paper money as money is only an illusion. Without gold, paper currencies are only coupons with expiration dates written in invisible ink.

To call capitalism a monetary system is a misnomer. It's a financial shakedown, a scheme whereby bankers profit by inserting debt into every aspect of human activity. Eventually, everyone becomes indebted beyond their capacity to repay and the system collapses.

The bankers' indebting of others eventually will end in their own demise, with governments, businesses, and consumers drowning in debt and banks insolvent. Capitalism is an economic parasitoid, a parasitic system where parasite and host both expire.

A parasitoid is an organism that spends a significant portion of its life history attached to or within a single host organism, which it ultimately kills (and often consumes) in the process. Thus they are similar to typical parasites except in the certain fate of the host.
http://en.wikipedia.org/wiki/Parasitoid

As with all life-forms, parasitoids will do everything to insure their survival while blind to the fact it is their actions that will destroy them. Until its self-inflicted end, capitalism will struggle to survive and expand - and a part of that struggle is the bankers' war on gold.

THE WAR ON GOLD:

The IMF.. explicitly states in its Articles of Agreement that member countries are prohibited from tying their currencies to gold.

Gold Wars, Ferdinand Lips, The Foundation for the Advancement of Monetary Education, New York

In 2001, Ferdinand Lips published Gold Wars, his book that describes the bankers' ongoing war on gold. That Lips, a Swiss banker, would write such a book is to our benefit as the Swiss have a unique, historical, and deep respect for the monetary metal.

Curiously, Lips had earlier been an agent for the infamous Rothschild banking family. In 1968 he was co-founder and Managing Director of Rothschild Bank AG Zurich. As such, Lips had an insight into the world of gold that few had and some believe it would later cost him his life.

One story in Gold Wars is of particular interest as it involves John Exter, the extraordinary central banker (formerly vice-president in charge of international banking and gold and silver operations at the New York Federal Reserve), and Paul Volcker, later Fed chairman and erroneously believed by many to be a hero.

Exter's story shows Volcker in entirely different light, not as a hero but as the one responsible for the removal of gold from the monetary system. Volcker, according to Exter, played a central role in the decision to do so.

In Gold Wars (pp.76-77) John Exter tells Ferdinand Lips how the decision to demonetize gold was made: On August 10, 1971, a group of bankers, economists and monetary experts held an informal meeting... to discuss the monetary crisis. Around 3 o'clock in the afternoon, a big car rolled up with Paul Volcker in it. He was then Under-secretary of the Treasury for Monetary Affairs.

We discussed various possible solutions. As you would expect, I was for tight money - raising interest rates - but that was overwhelmingly rejected... As for raising the gold price, as I suggested, Volcker said it made sense, but he didn't think he could get it through Congress.

At one point, Volcker turned to me and asked what I would do. I told him that since he wouldn't raise interest rates and wouldn't raise the price of gold, he only had one option... he'd have to close the Gold Window... Five days later Nixon closed the Gold Window.

The final link between the dollar and gold was broken. The dollar became nothing more than a fiat currency and the Fed [and especially the banks] were then free to continue monetary expansion at will. The result... was a massive explosion of debt.

Paul Volcker, then, is the one who eliminated gold from capitalism's 300 year-old recipe for power and wealth. Karl Marx was right when he predicted that capitalism would destroy itself. We just didn't know it would be Paul Volcker who would pull the plug.

THE SLEDGEHAMMER THAT BROKE THE CAMEL'S BACK:

The explosion of debt allowed by Volcker's removal of gold in 1971 has now reached extraordinary levels. In 1971, US debt was $436 billion. Today, US government obligations exceed one hundred trillion dollars. Tethering the dollar to gold was the one constraint on US spending. Volcker eliminated that constraint thus enabling the US to indebt itself ad infinitum - and it did.

Debt, the inevitable effluvia of credit, is Shiva's final shiv in capitalism's back. But it is not the indebtedness of those the bankers indebted that are now causing capitalism's final paroxysms. It's the debts of the banker's themselves.

When US banking and financial interests repealed the Glass-Steagall Act, it reopened the doors to another depression, doors that had been sealed since the 1930s. Prior to its repeal in 1999, Congressman John Dingall (D-Mich) whose father helped write Glass-Steagall in 1933 warned:

What we are creating now is a group of institutions which are too big to fail... Taxpayers are going to be called upon to cure the failures we are creating tonight, and it is going to cost a lot of money, and it is coming.

Congressman Dingall's warnings were ignored by both republicans and democrats. The republican-sponsored bill to repeal Glass-Steagall was passed overwhelmingly in the House by both parties (362-57) and in the Senate (90-8) effectively enslaving America's future generations, gratis of a $300 million lobbying effort by banks and insurance companies.

The beauty of paper money is that it buys real power

Once again, both republicans and democrats sold out the nation's future and allowed banks to bet the savings of America, this time with obscene leverage of 40:1 and more. Not surprisingly when the banks bet the house and lost, the house collapsed.

Politicians can't be bought. They can only be leased.

When bankers couldn't cover their losses, governments came to their rescue and indemnified them with taxpayer money. But the trillions of dollars spent to rescue banks and restart capitalism's broken engine is not being levied on the banks. It's being levied on those who saved them. The current upsurge in sovereign debt is the cost of the bankers' crisis subsumed into national ledgers.

Recently, President Barack Obama went to Wall Street to ask for help in reforming the financial system. Asking Wall Street's help with financial reform is akin to Neville Chamberlain asking Hitler to assist in redrawing Europe's borders. The current effort is designed not to fix the system, but to continue it.

Avarice is never appeased. Greed is never satisfied and the fires that Ayn Rand inflamed will not subside until the house that fanned them and gave them shelter burns to the ground. The bankers have come too far to go back. There is only the road ahead - and it's a cliff.

SHIVA'S COMING MAKEOVER:

I end my articles with the words: buy gold, buy silver, have faith. Of the three, I believe faith to be the most important, the most valuable and the least understood. A strong and unwavering belief in an intellectual construct is not faith, though many believe it to be.

Faith is a knowing that we are one with our Source, despite all appearances to the contrary. Finding faith in a tautological matrix that creates its own reflection is not easy. Faith exists despite the world of appearances; despite maya; despite - and not because of - human ignorance.

In March 2007, I delivered my paper predicting a severe economic collapse to Marshall Thurber's Positive Deviant Network (the PDN) and the reaction was disbelief and anger except for the very few already invested in gold.

In 2008, one year later, after $6 trillion of worth had been stripped from global markets, the Positive Deviant Network was more predisposed to hear what I had to say. That February, I gave a talk to the PDN on what I believed to be the real reasons for the crisis. My talk, America at the Crossroads, can now be viewed on YouTube in four parts: http://www.youtube.com/watch?v=4xjKnATlxMY

At its birth, America embodied the highest hopes of mankind but is now a tragic caricature of those great ideals. As it enters the 21st century, America finds itself bankrupt morally as well as financially. Its ideals stood the test of time but America did not.

Two hundred years ago, Thomas Jefferson warned America about the dangers of private bankers and standing, i.e. permanent, armies. Fifty years ago, President Eisenhower warned America about the dangers posed by the emerging military-industrial complex; and ten years ago, Congressman Dingall warned America about the danger of repealing Glass-Steagall.

America was warned and America didn't listen. Now, the price must be paid. Shiva's dance of destruction and transformation is underway. The destruction comes first, the transformation comes next - but only if America first changes its ways.

It's coming to America first,
the cradle of the best and of the worst.
It's here they got the range
and the machinery for change
and it's here they got the spiritual thirst.
It's here the family's broken
and it's here the lonely say
that the heart has got to open
in a fundamental way
Democracy is coming... to the USA

--Leonard Cohen, 1984

Leonard Cohen's simply-stated truth - that the heart has got to open in a fundamental way - is the crucial prerequisite for America's transformation. During America's drive for self-aggrandizement, world dominion, corporate profits and billion-dollar bonuses, America lost its way - and lost touch with its heart in the process.

America is at a crossroads. It has already chosen. It'd best do so again.

What's the difference between a pendulum and a wrecking ball?
Sometimes nothing.

Buy gold, buy silver, have faith...

Ten Ways the American Economy Is Built on Fraud:

This summary is not available. Please click here to view the post.

VIDEO - POZN Gets FDA Approval For Pain Drug Vimovo:

Friday was a great day for Pozen Inc.

The FDA gave full approval to their drug Vimovo. It can now be sold all across America...

$POZN Gets FDA Approval for Pozen Inc.'s Pain Drug - Vimovo !...

POZN - US FDA OK's AstraZeneca, Pozen Inc.'s Pain Drug:

Fri Apr 30, 2010 5:19pm EDT

* Agency clears drug for U.S. market

* Vimovo includes naproxen and Nexium ingredient

* Pozen shares up more than 21 percent after-hours

WASHINGTON, April 30 (Reuters) - The U.S. Food and Drug Administration has approved AstraZeneca Plc (AZN.L) and Pozen Inc's (POZN.O) pain drug Vimovo, an agency spokeswoman told Reuters on Friday.

Vimovo is a fixed-dose combination of the anti-inflammatory drug naproxen and an immediate release version of esomeprazole, the active ingredient in AstraZeneca's acid reflux treatment Nexium.

Shares of Pozen were up more than 21 percent, or about $2.30, in after-hours trading on Friday, trading at $13.15, after earlier closing at $10.85. (Reporting by Susan Heavey; additional reporting by Ben Hirschler in London and Vidya Loganathan in Bangalore; editing by Carol Bishopric)

http://www.reuters.com/article/idCNN3015546220100430?rpc=44

POZN is currently halted...Per the Nasdaq.com website:

http://www.nasdaqtrader.com/Trader.aspx?id=TradeHalts

No time is given for resumption of trading...

There was a huge Bear Raid at 12:37 this afternoon, as the MM's took out all of the stop-loss limit orders people had in place:



POZN After-Hours Chart shows it closed at $13.15 when it was halted for "news pending":

$DNDN - Dendreon Gets FDA Approval For Provenge To Treat Prostate Cancer!:

FDA Approves a Cellular Immunotherapy for Men with Advanced Prostate Cancer:

The U.S. Food and Drug Administration today approved Provenge (sipuleucel-T), a new therapy for certain men with advanced prostate cancer that uses their own immune system to fight the disease.

Provenge is indicated for the treatment of asymptomatic or minimally symptomatic prostate cancer that has spread to other parts of the body and is resistant to standard hormone treatment.

Prostate cancer is the second most common type of cancer among men in the United States, behind skin cancer, and usually occurs in older men. In 2009, an estimated 192,000 new cases of prostate cancer were diagnosed and about 27,000 men died from the disease, according to the National Cancer Institute.

“The availability of Provenge provides a new treatment option for men with advanced prostate cancer, who currently have limited effective therapies available,” said Karen Midthun, M.D., acting director of the FDA’s Center for Biologics Evaluation and Research.

Provenge is an autologous cellular immunotherapy, designed to stimulate a patient’s own immune system to respond against the cancer. Each dose of Provenge is manufactured by obtaining a patient’s immune cells from the blood, using a machine in a process known as leukapheresis. To enhance their response against the cancer, the immune cells are then exposed to a protein that is found in most prostate cancers, linked to an immune stimulating substance. After this process, the patient’s own cells are returned to the patient to treat the prostate cancer. Provenge is administered intravenously in a three-dose schedule given at about two-week intervals.

The effectiveness of Provenge was studied in 512 patients with metastatic hormone treatment refractory prostate cancer in a randomized, double-blind, placebo-controlled, multicenter trial, which showed an increase in overall survival of 4.1 months. The median survival for patients receiving Provenge treatments was 25.8 months, as compared to 21.7 months for those who did not receive the treatment.

Almost all of the patients who received Provenge had some type of adverse reaction. Common adverse reactions reported included chills, fatigue, fever, back pain, nausea, joint ache and headache. The majority of adverse reactions were mild or moderate in severity. Serious adverse reactions, reported in approximately one quarter of the patients receiving Provenge, included some acute infusion reactions and stroke. Cerebrovascular events, including hemorrhagic and ischemic strokes, were observed in 3.5 percent of patients in the Provenge group compared with 2.6 percent of patients in the control group.

Provenge is manufactured by Seattle-based Dendreon Corp.

http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm210174.htm

DNDN was halted at 12:34 pm ET, and remains halted at 2:10 pm...Just before the halt, it jumped up almost 15% and up over $7.00 in three minutes from $40. to $47.

US HOT STOCKS: Hertz, Thomas Weisel, Whirlpool, Goldman, Citi:

U.S. stocks were mixed Monday, as the Dow Jones Industrial Average rose 24 points to 11228, but the Standard & Poor's 500 index fell 1.3 points to 1216 and the Nasdaq Composite Index declined 2.1 points to 2528. Among the companies whose shares are actively trading in the session are Hertz Global Holdings Inc. (HTZ), Thomas Weisel Partners Group Inc. (TWPG) and Whirlpool Corp. (WHR).

Car-rental company Hertz ($15.13, +$2.25, +17.43%) plans to acquire rival Dollar Thrifty Automotive Group Inc. (DTG, $42.32, +$3.47, +8.93%) for $1.27 billion in cash and stock, giving Hertz a larger foothold in the leisure-rental market when its core business-travel operation remains in the doldrums. Avis Budget Group Inc. (CAR, $16.62, +$1.95, +13.29%) also traded higher.

Stifel Financial Corp. (SF, $53.28, -$2.46, -4.41%) and Thomas Weisel ($7.18, +$2.82, +64.68%) agreed to merge. Each Thomas Weisel share will be exchanged for 0.1364 shares of Stifel stock in a deal valued at over $300 million.

Whirlpool's ($117.64, +$15.42, +15.09%) first-quarter earnings more than doubled, smashing analysts' estimates, as revenue surged and margins increased amid an improving global economy. The appliance maker also raised its 2010 earnings outlook.

Financial stocks slid Monday as proposed regulation from Senate Democrats about sweeping new rules for the derivatives market would likely hurt revenue at most big banks, though many investors think there is little chance of the measure passing in such a stringent form. Goldman Sachs Group Inc. (GS, $152.52, -$4.88, -3.10%), Morgan Stanley (MS, $31.14, -$0.80, -2.50%), J.P. Morgan Chase & Co. (JPM, $43.99, -$0.95, -2.11%) and Bank of America Corp. (BAC, $18.29, -$0.14, -0.76%) all fell.

The Treasury Department said Monday it would sell up to 1.5 billion Citigroup Inc. (C, $4.69, -$0.18, -3.60%) shares, the first round of a plan to divest its entire 7.7 billion share stake in the bank holding company.

Caterpillar Inc. (CAT, $72.21, +$3.43, +4.99%) swung to a sharply higher-than-expected profit in the first quarter following prior-year restructuring charges, though sales fell and taxes rose. The heavy machinery maker also raised its 2010 forecast. Other machinery stocks also rose, with Deere & Co. (DE, $62.95, +$1.16, +1.88%), Terex Corp. (TEX, $28.44, +$0.70, +2.53%), Joy Global Inc. (JOYG, $63.88, +$2.43, +3.95%), Manitowoc Co. (MTW, $16.28, +$0.65, +4.16%) and Bucyrus International Inc. (BUCY, $70.94, +$2.57, +3.76%) all gaining.

Switch & Data Facilities Co. (SDXC, $19.61, +$1.91, +10.79%) said federal regulators raised no antitrust concerns about Equinix Inc.'s (EQIX, $102.12, +$6.38, +6.66%) purchase of the company. The two data-center providers expect the deal to close next Friday.

Digirad Corp. (DRAD, $2.62, +$0.56, +27.18%), which makes medical-imaging products, said it got clearance from the U.S. Food and Drug Administration to market and distribute its ergo large field-of-view, general-purpose portable imaging system.

Mortgage insurer PMI Group Inc.'s (PMI, $6.27, -$0.36, -5.43%) first-quarter loss widened and was worse than analysts expected. In addition, its main mortgage insurance unit may have fallen below a minimum capital threshold. As a result, the unit may be required to stop selling new business in some states, the company said in a regulatory filing Monday.

[b]Other Stocks In Focus:[/b]

Biotechnology company AspenBio Pharma Inc. (APPY, $4.27, +$0.53, +14.17%) shares hit their highest level since January 2009 amid chatter that a partnership or takeover is in the works. AspenBio has been gaining lately as data from a pivotal trial on its blood-based diagnostic test for appendicitis is expected this quarter. ThinkEquity didn't dismiss the chatter, but said a partnership/takeover is more likely after the company gets further down the regulatory pathway. Based on its recent naming of a CEO with sales and marketing experience, it looks like APPY wants to be the one to commercialize the test, ThinkEquity said.

While medical-products company Baxter International Inc.'s (BAX, $47.81, -$1.51, -3.07%) shares have fallen 16% since its 2010 guidance cut last Thursday, JPMorgan thinks they'll be "range-bound" around this level because of lasting uncertainty about the plasma market. The firm lowered Baxter's rating to neutral from overweight. JPMorgan said management lowered the bar enough for 2010, but that isn't the concern. "The underlying issue is the lack of visibility on 2011, an absence of catalysts, and the likelihood that we won't have visibility until December at the earliest or more likely 1Q next year," it said.

BioSante Pharmaceuticals Inc. (BPAX, $2.19, +$0.05, +2.34%) said it entered into a deal which carries an option for "a major pharmaceutical company" to get a non-exclusive license to use BioSante's antibody technology.

BlackRock Inc.'s (BLK, $193.50, -$17.52, -8.30%) first-quarter earnings quintupled as the money-management firm continues its integration of Barclays Global Investors, which it bought late last year. However, the results missed analysts' estimates as the company has run into some trouble with the deal.

Jefferies International lowered British Sky Broadcasting (BSY, $38.07, -$0.92, -2.36%) to hold from buy ahead of the company's fiscal third quarter results, due Thursday, saying it expects "uninspiring" results with net adds below last year. At 18 times calenderized 2010 per-share earnings, the stock is up with events and fully valued, the firm said, adding it thinks the stock is likely to be influenced by the court decision expected imminently relating to a stay of execution on channel wholesale regulation. News Corp. (NWS, $18.64, +$0.14, +0.76%) which owns Dow Jones & Co., publisher of this newswire, has a roughly 39% stake in BSkyB.

Pharmaceutical-research Charles River Laboratories International Inc. (CRL, $34.30, -$5.47, -13.75%) and Chinese drug-research contractor WuXi PharmaTech (Cayman) (WX, $19.44, +$2.87, +17.32%) will merge in a $1.6 billion deal. Charles River also announced first-quarter earnings that slightly missed expectations, while revenue came in ahead of views.

CKE Restaurants Inc. (CKR, $12.37, -$0.48, -3.74%) said Saturday it has agreed to be sold to Apollo Management Group for $694 million, or $12.55 a share, after private-equity firm Thomas H. Lee Partners declined to match Apollo's higher offer for the operator of the Carl's Jr. and Hardee's fast-food chains. CKE shareholders will get $12.55 a share, but shares slipped Monday as it appeared there would be no bidding war.

Dendreon Corp. (DNDN, $41.99, +$1.89, +4.71%) gained after Brean Murray Carret raised its target price on the stock to $50 from $40. Analyst Jonathan Aschoff said the boost emphasizes his confidence Dendreon will get U.S. Food and Drug Administration approval for Provenge, the drug company's prostate cancer candidate. Some of Brean Murray's peers are backing out of the stock at what Aschoff believes is "exactly the wrong time," he wrote.

Eagle Materials Inc.'s (EXP, $34.18, +$1.73, +5.33%) fiscal fourth-quarter profit declined 73% as sales fell and extended plant shutdowns increased operating costs. But results at the maker of concrete, cement and gypsum wallboard for buildings and infrastructure beat analysts' estimates.

BMO Capital Markets adjusted its ratings on several real-estate investment trusts ahead of first-quarter earnings reports. The firm said it believes "management teams are on the verge of becoming collectively more optimistic about the future, and we think this improvement in operating expectations could happen as soon as this coming earnings season." The firm boosted its ratings on Equity Residential (EQR, $45.26, +$0.66, +1.48%) and Mid-America Apartment Communities Inc. (MAA, $54.78, +$0.95, +1.76%) to outperform from market perform and Essex Property Trust Inc. (ESS, $105.98, +$1.99, +1.91%) to market perform from underperform, but it cut its ratings on Apartment Investment & Management Co. (AIV, $22.19, +$0.08, +0.36%) and Colonial Properties Trust (CL, $83.76, +$0.49, +0.59%) to underperform from market perform.

Oppenheimer downgraded regional bank First Midwest Bancorp (FMBI, $16.36, -$1.55, -8.63%) to perform from outperform, saying the stock was strong last week on much better-than-expected results. First Midwest also had an FDIC-assisted transaction last week in which it acquired the assets of a failed bank, and the firm said it is concerned investors might be disappointed with that news, as two other banks had multiple, larger deals.

Guess? Inc. (GES, $50.63, +$1.01, +2.04%) shares have more than doubled in the past year, but they may well rise another 25%, Barron's said. Sales could grow in the double digits this year, and profit margins are strikingly high. The apparel retailer is finding a new edge, updating its trademark jeans and peddling in-the-moment items like jeggings (jeans/leggings) for young women and embroidered, distressed t-shirts for men.

Credit Suisse turned indecisive, downgrading ITT Educational Services Inc. (ESI, $109.51, -$2.28, -2.04%) and DeVry Inc. (DV, $64.69, -$4.77, -6.87%) just two weeks after upgrading them as it says government draft policy on "gainful employment" regulation may not be so generous after all. Other for-profit education companies trading lower included Apollo Group Inc. (APOL, $62.59, -$0.94, -1.48%) and Corinthian Colleges Inc. (COCO, $17.27, -$0.62, -3.47%).

Lorillard Inc.'s (LO, $80.50, +$0.93, +1.17%) first-quarter profit jumped 26% as shipments at the tobacco company increased following prior-year disruptions.

Caris & Co. boosted its price target on Netflix Inc. (NFLX, $107.08, +$7.35, +7.37%) by 25% to $120, saying that the online video-rental company continues to post strong growth and has surpassed its price target for the fourth time this year. The firm said consensus expectations are moving up, but fiscal 2011 numbers still look too low.

Bernstein cut its rating on Nokia Corp. (NOK, $12.44, -$0.32, -2.51%) to market perform from outperform, saying the fate of the world's largest maker of mobile phones is now too dependent on the success of Symbian 3, the delayed revamp of its "smartphone" operating system. The broker also told clients that the first-quarter results showed that the improvement in gross margins witnessed since the second quarter of 2009 has been halted and said Nokia's guidance cut for the second quarter of 2010 shows that "this isn't a temporary weakness but a trend that will stop only with the next product portfolio refresh."

Shares of Office Depot Inc. (ODP, $9.01, +$0.56, +6.63%) traded sharply higher Monday after Credit Suisse upgraded its stock-investment rating on the office supplier, with the positive sentiment also boosting shares of OfficeMax Inc. (OMX, $17.48, +$0.85, +5.11%). Credit Suisse said in a note Monday that channel checks point to a modest but slow improvement in the first quarter at Office Depot. "This sector has not yet seen the pickup other retail sectors have shown," the firm said as it raised its rating on Office Depot to neutral from underperform.

Quaker Chemical Corp. (KWR, $35.53, +$2.26, +6.79%) continued on its bullish April, rising to a new all-time high after gaining by a third this month. Shares have nearly doubled over the past three months and the specialty chemicals maker will report its first-quarter results after the close Tuesday.

Global Hunter Securities cut its stock-investment rating on Perry Ellis International Inc. (PERY, $25.31, -$1.44, -5.38%) to neutral from buy based on valuation. The firm said that while it expects to see strong execution from operations due to gross margin expansion and cost controls, the apparel company's shares have exceeded its price target.

PrivateBancorp Inc. (PVTB, $15.04, -$2.03, -11.89%) swung to a first-quarter loss that was wider than analysts' estimates as provisions for loan losses quadrupled.

Private equity firm GTCR LLC said Monday it is acquiring security systems firm Protection One Inc. (PONE, $15.40, +$1.64, +11.92%) from a group including Quadrangle Group LLC and Monarch Capital Partners.

SPX Corp. (SPW, $69.97, +$3.07, +4.59%) was boosted to buy from neutral by Bank of America Merrill Lynch analysts who said the diversified industrial company should see improvements to its businesses, particularly its flow and test measurement segments, while the industrial and thermal markets remain muted.

Thoratec Corp. (THOR, $35.07, +$0.72, +2.10%) agreed to sell its International Technidyne division, which makes a wide range of equipment for hemostasis management and point-of-care testing, to manufacturing company Danaher Corp. (DHR, $84.80, -$0.61, -0.71%) for at least $110 million.

Titan International Inc.'s (TWI, $12.05, +$0.58, +5.06%) first-quarter profit fell by 70% but at 6 cents a share was still twice the Street's consensus as revenue also slightly topped views as well. The maker of wheels and tires used for off-highway machinery, such as tractors, which said agriculture demand should remain strong in the second quarter. It also said mining looks bright and added it was increasing prices.

Travelzoo Inc. (TZOO, $19.00, +$2.50, +15.17%) reported first-quarter results better than the one analyst covering the stock expected. The company, which is paid by travel companies to advertise their offers, said the number of subscribers to its newsletter in North America and Europe jumped 25% from the previous year.

Keefe, Bruyette & Woods cut bank holding company Trustmark Corp. (TRMK, $26.06, -$0.77, -2.87%) to market perform from outperform on valuation, saying the shares have been strong since its exit from TARP in December, and there's limited upside left to its 12-month target price. "We continue to like TRMK's strong core profitability," the firm said.

Tuesday Morning Corp. (TUES, $7.56, -$1.03, -11.99%) shares fell after the home decoration close-out retailer posted third-quarter earnings just shy of expectations. The shortfall comes two weeks after the company raised its full-year earnings guidance to reflect a bump-up in sales on improved traffic.

-By Dow Jones Newswires; write to hotstocks@dowjones.com

http://online.wsj.com/article/BT-CO-20100426-711600.html?mod=WSJ_Banking_middleHeadlines

Goldman Suit Exposes Big Banks to Firestorm:

http://news.goldseek.com/RickAckerman/1271829600.php

By: Rick Ackerman
Wednesday, April 21, 2010

Now we learn that the SEC split 3-2 over whether to go after Goldman Sachs in court. Supposedly, the regulatory agency prefers unanimous votes when bringing enforcement actions against the firms it regulates. Why the exception this time? The Wall Street Journal made it sound like it was simply partisan politics that carried the day – i.e., the SEC’s two Republicans voted against suing Goldman for civil fraud, but the three Democrats prevailed. That is superficially what happened, and it is as much of the story as the SEC is willing to divulge right now. But it’s bound to leave many observers, particularly Obama-ites in Congress who are out to pillory the bankers, with the impression that the two Republicans were merely looking out for their fat-cat buddies on Wall Street. This thought occurred to us as well, so we’d have to concede it is at least possible.

But might there have been another reason why the Republicans backed away from bringing formal charges against Goldman? We think there is and that it goes to the heart of the corruption in which the world’s largest banks have inextricably trapped themselves. For if you assert in a of court law that Goldman defrauded its customers, you have implicated every bank in the big leagues. Enabled by their respective central banks, they all – even the ones run by otherwise spotless Swiss Burghers -- play the same Ponzi game. Moreover, regardless of whether the charges brought against Goldman are civil or criminal, they will open the door to an endless flood of litigation with the potential to bring down the entire banking system. From this point forward, Goldman will be fair game for every aggrieved city, county, state, sovereign fund and class of investor they have done business with for the last decade. The same goes for Bank of America, J.P. Morgan, Morgan Stanley, Deutsche Bank et al.

Lynch Mob:

So it’s just possible the Republicans put politics aside when they voted, in effect, to quietly sanction Goldman behind the scenes. It must also have occurred to them that it would ultimately be impossible to mask the overwhelming stench of Goldman’s actions. The firm, after all, did sell an investment to the public that had secretly been created by someone betting on the portfolio to fail. There is no way Goldman can talk its way out of this, although that hasn’t stopped CEO Lloyd Blankfein from trying. With Goldman reporting a spectacular $3.4 billion quarter yesterday, he might as well be trying to explain to a lynch mob that he has never, ever kicked his cat and that he always helps little old ladies cross the street.

Some see the charge of civil, as opposed to criminal, fraud as reflecting a compromise engineered by Mr. Obama to help expedite his takeover of the financial sector. “He stirs up the masses with yet another example of Wall Street greed and fraud,” wrote one contributor to the Rick’s Picks forum, “but offers nothing more than what amounts to a fine to his friends at Goldman. We all know how deep their pockets are. They are quietly happy that this is the extent of the fallout.” While this seems plausible, it doesn’t reckon with the fact that just one civil suit could conceivably put the world’s largest banks in mortal jeopardy for years to come. Indeed, if they should somehow dodge the bullet, it would be evidence that the corruption that permeates the banking system has engulfed our judicial and political systems as well.

US Bank Accounting 'Masks True Debt Levels’:

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7572887/US-bank-accounting-masks-true-debt-levels.html

US bank accounting 'masks true debt levels’

By James Quinn, US Business Editor
Published: 6:00AM BST 10 Apr 2010

Major Wall Street banks are using accounting techniques similar to those utilised by Lehman Brothers in its final days to mask the size of their balance sheets at the end of reporting periods.

The banks – which include Goldman Sachs – use complex but perfectly legitimate transactions in order to present investors and the wider market with a brighter assessment of their financial health.

Data analysed by the Wall Street Journal found that 18 major banks were, on average, able to reduce debt levels used to fund securities tradesby 42pc over the last five quarters using repurchase agreements, also known as “repo” trades. Under certain circumstances, some repurchase trades can be booked as “sales” and used to reduce debt.

The assessment, based on data from the Federal Reserve Bank of New York, highlights the extent to which advanced accounting is still in use, even in the wake of the crippling financial crisis.

In Lehman’s case, the court-appointed investigator’s report into the bank’s September 2008 downfall found that the bank had used “Repo 105” – the name given to the technique within the bank – to significantly mask its borrowing, so decreasing its apparent risk profile.

According to the report, the ruse allowed Lehman to claim its liabilities were $50bn (£33bn) lower than they actually were by May 2008, just months before the bank collapsed.

The US Securities and Exchange Commission (SEC) is now looking into how widespread the use of such techniques actually is.

At the end of March, the US financial regulator dispatched letters giving America’s24 largest banking and insurance firms two weeks to hand over detailed information on how the repurchase agreements are used, as well as how such agreements are accounted for and disclosed to investors.

It is not known what the SEC intends to do with the data once it has received it, or indeed whether it will ever be made public.

Whatever the outcome, the latest revelations about the extent of the use of repo-financing should worry investors in the financial sector, as it suggests that banks are continuing to take pre-crisis level risks in spite of the events of the last two years.

A Goldman Sachs spokesman said: “Normal fluctuations in the size of our balance sheet… as well as fluctuations in specific line items, are fully disclosed in our quarterly and annual SEC filings.”