INDICATIONS
U.S. stock futures down a notch before payrolls
Jobs data due out at 8:30 a.m. Eastern; 123,000 jobs seen created
By Steve Goldstein, MarketWatch
Last Update: 6:21 AM ET Oct 6, 2006

http://www.marketwatch.com/News/Story/Story.aspx?column=Indications&siteid=

Conspiracy Theories Abound as Oil Prices Fluctuate

By Steven Mufson
Washington Post Staff Writer
Friday, October 6, 2006; Page D01

http://www.washingtonpost.com/wp-dyn/content/article/2006/10/05/AR2006100501907.html

Computer System Under Attack
Commerce Department Targeted; Hackers Traced to China

By Alan Sipress
Washington Post Staff Writer
Friday, October 6, 2006; Page A21

http://www.washingtonpost.com/wp-dyn/content/article/2006/10/05/AR2006100501781.html

Hedge Fund-Bondholders forcing companys who delay quarterly filling (option backdating) as defaulted on their outstanding bonds, bancruptcy/chapter11 could be following. NY-Court decission helps Hedge Funds on the issue.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aehxkaA9qcwg&refer=home

Big Government Gets Bigger
Study Counts More Employees, Cites Increase in Contractors

By Christopher Lee
Washington Post Staff Writer
Friday, October 6, 2006; Page A21

http://www.washingtonpost.com/wp-dyn/content/article/2006/10/05/AR2006100501782.html

Microsoft aims to scuttle pirated copies of Vista
Thu Oct 5, 2006 3:14am ET135

http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-10-05T071207Z_01_N05310829_RTRIDST_0_TECH-MICROSOFT-PIRACY.XML&rpc=66&type=qcna

From Econoday:

Nonfarm Payrolls, M/M change
Actual 51,000
Consensus 125,000
Consensus Range 100,000 to 145,000
Previous 128,000
Unemployment Rate, Level
Actual 4.6%
Consensus 4.7%
Consensus Range 4.6% to 4.8%
Previous 4.7 %

Average Hourly Earnings, M/M change
Actual 0.2%
Consensus 0.3%
Consensus Range 0.2% to 0.4%
Previous 0.1 %
Average Workweek, Level
Actual 33.8hrs
Consensus 33.8hrs
Consensus Range 33.8hrs to 33.9hrs
Previous 33.8 hrs


Highlights
Release data are posted. Highlights and updated charts on this event will follow shortly.

Market Consensus Before Announcement
The employment situation report for August really began to paint the view that the economy really is in a slowing phase as non-farm payrolls rose a very moderate 128,000. But earnings were even more sluggish, posting only a 0.1 percent gain in August. Employment has been on the soft side for a few months but August was the first notable weakness in hourly earnings. Nonfarm Payrolls, M/M change
Actual 51,000
Consensus 125,000
Consensus Range 100,000 to 145,000
Previous 128,000
Unemployment Rate, Level
Actual 4.6%
Consensus 4.7%
Consensus Range 4.6% to 4.8%
Previous 4.7 %

Average Hourly Earnings, M/M change
Actual 0.2%
Consensus 0.3%
Consensus Range 0.2% to 0.4%
Previous 0.1 %
Average Workweek, Level
Actual 33.8hrs
Consensus 33.8hrs
Consensus Range 33.8hrs to 33.9hrs
Previous 33.8 hrs


Highlights
Release data are posted. Highlights and updated charts on this event will follow shortly.

Market Consensus Before Announcement
The employment situation report for August really began to paint the view that the economy really is in a slowing phase as non-farm payrolls rose a very moderate 128,000. But earnings were even more sluggish, posting only a 0.1 percent gain in August. Employment has been on the soft side for a few months but August was the first notable weakness in hourly earnings. Continued soft gains in both payrolls and wages would be welcome news as long as they do not get any weaker. What the markets would not like would be slow employment gains but a resumption of strong wage increases. Continued strength in labor costs has been a remaining concern for bringing overall inflation down. Even with sluggish employment gains, labor markets still show some signs of tightness as the unemployment rate edged down to 4.7 percent in August from 4.8 percent in July. A slight reversal likely would be welcomed by the markets.


Bill-

Whoever is writing these reports now is DELIBERATELY misstating their import. Notice the
language "Continued soft gains in both payrolls and wages would be welcome news as long as they do not get any weaker." WHAT??? Does this person know what the replacement rate is for jobs? Do they know that small gains like this are far, far less than replacement rate? Did they even proofread, having stated that the gain was 128K, not the actual 51K? This has been going on for months. Econoday has joined the sell-side in my opinion.

MarkM -

The Econoday data has been updated for September numbers, but the report has not been updated - it still is discussing August.

Are there black helicopters hovering over your house? ;-)

Not only over MY house, but every house in the neighborhood. :)

Okay, Occam's Razor wins again.

MarkM had an Emily Litella moment.

Do I still get to post here occasionally?

Comments by Harry Newton on Intel's sale of their Dialogic division. Harry ain't happy. Intel shareholders shouldn't be happy either.

http://www.technologyinvestor.com/

MarkM

How do you see the gold market under the current circumstances with stagflation? Your short, medium and longterm view would be appreciated. Thanks

Remembering the year end rally of 1972 when the DOW broke thru 1000 and then...

http://tinyurl.com/g68p8

Remembering the year end rally of 1972 when the DOW broke thru 1000 and then...

http://tinyurl.com/g68p8

Re: "Remembering the year end rally of 1972 when the DOW broke thru 1000 and then..."

...and then...
the Yom Kippur War (1973)...
http://en.wikipedia.org/wiki/Yom_Kippur_War
...and then...
1973 oil crisis
http://en.wikipedia.org/wiki/Arab_Oil_Embargo
...and then...
the end of the War in Vietnam
http://en.wikipedia.org/wiki/Vietnam_war

Those events sent shockwaves through the world economies. Very few countries emerged from the aftermath unscathed, but they emerged and prospered. And this too shall pass.

CK-

Both stagflation and deflation should be very good for gold. Price stability would not.

Short term the pressure on gold price is downward. In 2007 I see that reversing. Beyond, the structural pressures against the $USD are immense, as they are against the economy in general. The financial obligations of the government are escalating and since neither party wants to acknowledge the damage done, it will be up to the Fed to inflate them away.

Bonner and Wiggins have it wrong that we are the only empire in history to fail to exact payment from its "subjects". We do. We trade ever diminishing paper dollars for real goods. Over time our Fed will inflate them away to nothing. The bad bargain we have made is that we have simultaneously traded our social fabric, including jobs, for the bottom lines of our multinational corporations. I doubt we have a trick up our sleeves to gain the better of that bargain.

Kerkorian walking away from GM...GM was biggest gainer in the DOW this year...where does that leave DOW?...where does that leave GM?

http://www.thestreet.com/newsanalysis/automakers/10313589.html

In '73, the S&P rolled over, broke through its 50 day average well before crashing. In '87, also. which I regard as the first "post-modern" crash, when derivatives (S&P futures for "portfolio insurance" played a role. NAZ in Y2K also broke its 50 day before crashing.

Can we expect the same now from the DOW,or RUT? or have debt, derivatives, and hedge funds made possible a massive crash from a new high?

What do you think?

Crash?

Liquidity would stop any large crash initially.
If the damage was too large though - it would be a slow bleed after that IMO.

As far as current conditions - I will be a buyer of non-commodity equities on any sharp correction. OEX open interest is leaning the same way.

Some puts in the back pocket are nice though - for that "what if"

Re: 'Kerkorian walking away from GM"

Good riddance.
From a contrarian perspective, whenever a corporate "vulture" stop circling a supposedly dead carcass and fly away, it may be a reassuring sign that life still exist below.

Re: "where does that leave GM?

The stock will undoubtly trade lower in the interim due to all the Kerkorian sycophants following suit. You know the ones I writing about - those who sincerely believe that since Kerkorian is a billionaire, he must be smarter or richer than they they ever hope to become. Therefore, when Kerkorian buy, they buy; when he sell, they sell.

Harsh? maybe. However, the likes of Kerkorian and Icahn and others, inflicted some severe damage to the American economy in the "go-go 80's" when being a corporate raider (in the public's eye) meant a perch on the same lofty pedestal as a rock star or even the Beatles(wow!).

Long term I'm still betting on GM - at least until the America economy enter the much-anticipated meltdown phase.