INDICATIONS
U.S. stock futures down after mixed tech results
Wal-Mart expands generic prescription drug program
By Steve Goldstein, MarketWatch
Last Update: 6:59 AM ET Oct 19, 2006

http://tinyurl.com/tbfgp

What's a Gold Quality Swap and is it holding back the price of Gold?

http://www.safehaven.com/article-6115.htm

"Under a gold location swap, gold stored in a particular physical location is swapped with a market counterparty for specified period with gold stored in another physical location. Under a gold quality swap, gold of a particular quality [fineness] is swapped with a market counterparty for a specified period with gold of different fineness. In each case a fee is built into the transaction."

Immigrants Sending $45 Billion Home

By Krissah Williams
Washington Post Staff Writer
Thursday, October 19, 2006; Page A09

http://tinyurl.com/wlegd

All this in an economy predicted to collapse? We should work for better outcome.

Saudi's Signal Support for Production Cut

http://news.yahoo.com/s/ap/20061019/ap_on_bi_ge/qatar_opec_3

This might be a leading "tell" regarding the price of precious metals.

In the big, big picture category below is a link to an article (book review actually) that I found extremely helpful. The book is Debt and Delusion by Peter Warburton published in 1999. The review is by Robert Blumen.

http://www.mises.org/story/1579

Now I am punching above my weight here but to me this article describes the central monetary / economic / finacial motif of our time: that we have, since Volker's time, somehow managed to disconnect huge deficit spending from inflation. Since this seems akin to squaring the circle many are very uneasy. But I have not, until this article, thought much about how this has been achieved. And without understanding this I cannot say what my real complaint is or why I think it will end badly (much less how it will end and how to protect against the repecussions.)

The fact that Warburton has connected this innovation - deficits without inflation - directly to the meteoric growth in dervatives seems all the more convincing since this is surely the most important market inovation of our time. Warburton's suggestion that derivatives have helped create a "synthetic demand" for US debt seems chilling.

Interestingly, no mention is made of either China-based deflationary forces or of Asian savings here. But I have always suspected that these forces were not large enough to counter balance the massive rise in credit / debt / money supply outlined by the likes of Doug Noland.

There is more discussion of the derivatives angle here:

http://www.safehaven.com/article-3036.htm

Any comments would be welcome.

Weak Dollar Trade Lifts Oil, Metals & Miners
--------------------------------------------------------------------------------

Knobias
1:16 p.m. 10/19/2006


-- The dollar is weaker by 0.5% vs. both the yen and euro. A weak dollar is a positive for hard assets. Energy (+1.3%) and Basic Materials (+0.5%) are market leaders (along with Telcos). December gold is up $10.60 to $603.20. The Philly Gold/Silver Index (XAU +2.8%) reflects the gold rush today. Copper (PD, BHP, FCX, PCU, RTP), titanium (ATI, RTI, TIE), steel (CRS, CHAP, OS, STLD) and aluminum (CENX, AL) industries are also seeing demand from investors.-- RS: Reliance Steel & Aluminum (RS) beat the street by 5c, reporting $1.41 vs. 75c, but guided to $1.15 - $1.20, below the $1.26 Q4 consensus. ++ Coal (+5%): Coal is back in the black after Peabody Energy (BTU +5%) reported 53c vs. 42c for Q3, 20.5% above the 44c consensus. Arch Coal (ACI +5.5%) reports tomorrow.

Sorry couldn't provide a link.

The Capital Spectator
Money, Oil, Economics & the Search for the Bottom Line

"Bernanke and company will be faced with the thankless task of choosing between containing inflation and keeping the economy bubbling..."

"In this instance, the current, against-all-fundamentals, rally would be the classic wall street puff-up before the decline."

http://www.capitalspectator.com/archives/2006/10/a_tale_of_two_p.html

Hedge funds take in record $44.5 bln in 3rd qtr.

I am not sure how big this is relatively to the size of the market, but with all these funds flowing around how can the markets fall?

http://today.reuters.com/news/articleinvesting.aspx?type=fundsNews2&storyID=2006-10-19T200000Z_01_N19242972_RTRIDST_0_FINANCIAL-FUND-HEDGES.XML&WTmodLoc=InvArt-C2-NextArticle-1

Judge goes against Grasso in pay dispute
Former NYSE chief may have to repay tens of millions
By Alistair Barr & David Weidner, MarketWatch
Last Update: 5:13 PM ET Oct 19, 2006

http://tinyurl.com/yxwbyj

Working in Computer Factories May Increase Cancer Risk

http://tinyurl.com/yknc9v

Anyone familiar with the Computer/Electronics Industry know this is ancient oral history finally being documented in print.

After the DOW moved 1000 points - retail investors are now starting to trickle in. Is the party just starting or ending?

http://www.marketwatch.com/news/story/Story.aspx?guid=%7b2AA569C9-01E1-472F-A8F8-CEB9155F8208%7d&siteid=&print=true&dist=printTop

"TREASURER Peter Costello has called on East Asia's central bankers to "telegraph" their intentions to diversify out of American investments and ensure an orderly adjustment"

http://www.smh.com.au/news/business/costello-seeks-orderly-us-withdrawal/2006/10/17/1160850931319.html#