Saturday, September 30, 2006

Patience And Hiding Out

10/1/06 Patience And Hiding Out

John Mauldin: "I expect the stock market to be higher in 5-7 years than it is today. Maybe in less than 5. I simply think I can buy this market at a lower price at some time in the future. I expect to become more or less bullish during this next recession, or at the very least selectively bullish. But for now, I think it will pay to be patient."

Bob Woodward says US troops and their allies are being attacked on average every 15 minutes, and the White House is lying about it.

The Congress approved billions of dollars in new border-security measures and ordered construction of 700 miles of fencing on the US-Mexico border. Of course, they don't have the money for all these approvals. Not a problem. Just issue more debt. Naturally, another $70 billion was approved for Iraq.

Statements from a recovering alcoholic:
_He praised Karzai for naming new Supreme Court judges. But he failed to mention that the Afghan parliament rejected Karzai's nominee for chief justice, a conservative cleric blamed for stalling reform, who favored Islamic laws mandating that adulterers be stoned to death and thieves have their hands amputated.

_He praised Italy for helping to train Afghan judges and prosecutors. Many Western officials and experts say the effort is seriously flawed and that Afghanistan's legal system is in a state of collapse.

_He said the Afghan National Police "have faced problems with corruption and substandard leadership." He contended that Karzai's government began tackling the problem after appointing a new leadership team this summer. But he didn't mention that Karzai named to his team 14 senior police generals whom U.S., European and U.N. officials opposed because of their alleged involvement in human-rights abuses and corruption.

-On another subject, he praised the democracy in Kazakhstan. If that's a democracy, then I'm a transvite.

Brett Steenbarger: "Mental flexibility is perhaps the most underrated trading
virtue."

Mike Shedlock: "Long Summary

A hugely inverted yield curve is suggesting a recession
Mass layoffs are increasing
Unemployment is expected to rise
Homebuilder margins are rapidly shrinking
Everything related to housing seems toxic
Credit spreads are widening
Commodities are dropping
Bankruptcies and foreclosures are rising.
Short Summary

"We are seeing historic, record risk-seeking (bullishness/complacency)" in which "EVERYTHING is bullish, or considered so." (Note: Except for commodity prices themselves and commodity-related stocks)
The stock market is priced for a "Goldilocks" scenario, if not better.
Final Thoughts

There is obviously a major disconnect here
The resolution is guaranteed to be interesting
In the meantime, hiding out in short-term Treasuries is a very good-looking alternative."

Although the Dow, S&P 500, and the Nasdaq had big up moves for the month of September, the VIX was unchanged. This leads me to believe that the VIX may be basing out around the 12 level.

The Market Vane has a bullish consensus of 71% and the UBS Index of Investor Optimism is 74 versus only 53 in August. I'll take the flip side of those numbers.

Friday, September 29, 2006

Let's Focus

9/30/06 Let's Focus

I was going to provide some excerpts from Sen. Russ Feingold's speech on the floor of the Senate on the anti-terror bill, which is 243 pages long. Rather than that, hopefully you will take the time to read all of his thoughtful comments. He's a good man with integrity and a good head on his shoulders. Hopefully, he will run for the presidency and win. I'd like to feel positive about pulling the lever in the voting booth.

December gold closed at $604.20 an ounce Friday, down $6.70 for the session and down $30 from the end of August. But the contract still closed 1.5% above its week-ago closing level. December silver fell 19.5 cents to close at $11.54 an ounce, up 2% for the week, but down over 11% for the month. December copper closed at $3.4605 a pound, up 3.25 cents for the day and fractionally higher for the week and month.

Crude and natural gas were down for the month, but reversed a loss and rallied on Friday to show a small gain at the close.

Swift Transportation and Timken both issued earnings warnings. Timken will lay off 700 workers.

Commerce Department said the core PCE index excluding food and energy rose 0.2% in August and 2.5% in the past year, an 11-year high.

The Chicago purchasing managers' index rose to 62.1% in September from 57.1% in August. It's the highest reading in a year. The new orders index rose to 67.3% from 59.6%, while the production index rose to 67.4% from 61.7%.

It is not surprising that the yield on the 10-year Treasury rose to 4.65%. I feel strongly that rates will rise from these levels. As I stated in mid-week, I put my money where my mouth is.

Judge Brandeis: "Our government... teaches the whole people by its example. If the government becomes the lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy."

Wednesday, September 27, 2006

Beneath The Surface

9/28/06 Beneath The Surface

During Wednesday's trading, on the surface it was all about the Dow watch. Was the Dow going to make a new all-time high. After all, it might bring investor confidence up and bring the individual back into buying common stocks. Beneath the surface, however, we saw crude trade at $63 a barrel. That may not seem a big deal to many, but it showed that the $60 level held after the shorts tried several times to break that area of price support. The oil service stocks and other energy stocks rallied. I continue to believe the best risk/rewards in this area are BJ Services and Helmerich and Payne.
Beneath the surface lurks the weatherman. The first cold spell is predicted for the midwest. That should awaken the natural gas market as well as heating oil prices.

Beneath the surface gold raised its head and rose to the $603 an ounce level. There are several big players short gold and other metals. They have a short memory- no pun intended. Glamis Gold traded close to $40 as Goldcorp finally found its footing. Patience can be rewarding.

Goldman Sachs lowered its earnings estimates for Lowe's and Home Depot. Beneath the surface there was huge buying in Lowe's $27.50 puts with an expiration date of 1/07. Those puts traded just over 9,000. Considering the amount of puts outstanding for that date and strike price, that's a lot of puts.

Chesapeake Energy Corp said Wednesday it has decided to shut-in a portion of its near-term natural gas production, effective Oct. 1, due to low wellhead natural gas prices, and plans to temporarily shut-in 100 million cubic feet per day of net natural gas production in various areas in the southwestern U.S. until prices rise. The shut-ins represent roughly 6% of its net oil and natural gas production. Chesapeake added that, as a result, it's likely to cut its fourth-quarter production forecast when it releases its third-quarter results. Aubrey McClendon, Chesapeake's chief executive, said in a statement that the company believes "today's low natural gas prices have more to do with temporarily high natural gas storage inventories largely caused by last winter's abnormally warm weather and less to do with any return to a structural oversupply of natural gas."

Bloomberg reported anger over the war in Iraq is fueling Muslim radicalism, and the dispersal of terrorist cells around the world poses a greater risk of attacks on the U.S., according to excerpts of a National Intelligence Assessment.
The four-page document, posted last night on the Web site of the Director of National Intelligence, said that while U.S. counterterrorism efforts have ``seriously damaged'' al-Qaeda's leadership, the terrorist movement is growing and becoming more decentralized. The threat of attacks worldwide will increase if current trends continue, it says. ``We assess that the operational threat from self- radicalized cells will grow in importance to U.S. counterterrorism efforts, particularly abroad but also in the homeland,'' according to the excerpts labeled ``key judgments'' from an April National Intelligence Estimate.

Tuesday, September 26, 2006

Prospects

9/27/06 Prospects

Manufacturing activity in the central Atlantic region in September grew at a much faster pace than the previous month, the Federal Reserve Bank of Richmond reported Tuesday, as a rebound in factory shipments and a faster pace of growth in new orders helped offset slower employment gains. The Richmond Fed's seasonally-adjusted manufacturing index rose to 9 in September from 3 in August. The Richmond Fed said a survey of manufacturers in the region indicated that raw materials prices rose at an average annual rate of 3.18%, after rising 1.88% in August, while growth in prices of finished goods declined slightly to 2.55% from 2.61% last month. "Looking ahead, contacts were markedly more optimistic about their business prospects for the next six months," the Richmond Fed said. "Firms anticipated faster growth for shipments, new orders and employment, and they bumped up their expectations for capital spending."

The Conference Board said U.S. consumer confidence rebounded in September, helped by lower gasoline prices. The consumer confidence index rose to 104.5 in September after falling to a revised nine-month low of 100.2 in August. Economists forecast the index to rise to 102.7 from the initial August reading of 99.6. The present situation index rose to 127.7 from 123.9, while the expectations index increased to 89.0 from 84.4. Inflation expectations eased in September. Expectations of inflation in the next year fell to 4.9 in September from 5.5 in August. This is the lowest level since March.

Lennar Corp. issued another profit warning, this time for its fiscal fourth quarter, saying a floor hasn't been found to the downturn in the home building sector. Third-quarter ending Aug. 31 net income fell 39% to $207 million, or $1.30 a share, with revenue up 20% to $4.18 billion. The company had previously said earnings would range between $1.25 to $1.35 a share. For the fourth quarter, it sees earnings between $1 and $1.30 a share. Analysts polled by Thomson First Call, on average, expected earnings of $1.60 a share. The market pretty well yawned at the news. The same can be said for than less than robust assessment provided by Lowe's.

Benjamin Graham: "The individual investor should act consistently as an investor and not as a speculator. This means.. that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase."

The energy (that includes coal) and the precious metals sectors are attempting to find their footing, and that in the face of window dressing by the fund managers this week.
I recommend that investors have at least one-third of their portfolios in these combined sectors. I should also mention that I shorted the 10-year Treasury bond early Tuesday morning. Over the past several weeks I have mentioned some hedges I had placed. Their results could be described as no hits, no runs, no errors. Pretty much a wash.

Steve Saville: "For more than 10 years there has been a strong tendency for the gold sector's intermediate-term trend to reverse direction during October-November. In particular, when the gold sector -- represented in this discussion by the AMEX Gold BUGS Index (HUI) -- trends higher into October-November it will regularly reverse course and trend lower over the ensuing 6-12 months; and when the trend is 'down' going into the October-November period there will often be an upward reversal leading to a 6-12 month rally. This is why an October-November bottom for the current decline is likely and why such an outcome would have intermediate-term BULLISH implications."

OPEC President Edmund Daukoru said the slide in prices was harming investment and that "something needs to be done."
He told Reuters in Abuja, Nigeria, that members of the exporters' cartel, which pumps a third of the world's oil, were already talking internally about the price fall.

Former Fed Chief Paul Volcker: ``I am a little bit more worried about inflation,'' said Volcker, 79, speaking at a discussion sponsored by the Women's Economic Round Table in New York yesterday. Gerald Corrigan, who served as New York Fed president from 1985 to 1993, said he shared Volcker's concerns.
While the inflation rate isn't ``high'' or ``running away,'' Volcker said, ``it is kind of creeping up, and I am impressed by the degree of pressure, if that is the right word -- psychological pressure, political pressure -- there is not to do anything about it.''

Standard Chartered Plc raised its estimate for China's economic growth this year to 10.8 percent, saying government efforts to cool an investment boom aren't working.
The forecast was boosted from 10.2 percent, Shanghai-based economist Stephen Green said in a research note. Green also raised his estimate for 2007 growth to 9.7 percent from 8.9 percent. The new 2006 projection represents the fastest expansion since 1995, when the economy grew 10.9 percent.

Russia will ship fuel to a controversial atomic power plant it is building in Iran by March under a deal signed Tuesday, news agencies reported, as Tehran's nuclear chief met with a Russian security officer at the Kremlin. "An additional agreement in the contract to build the Bushehr station was signed, which fixes September 2007 as the launch date," Sergei Novikov, a spokesman for Russia's atomic energy agency, told AFP. The plant will actually produce electricity from November next year, he said, while the nuclear fuel for the plant will be delivered no later than March.

Eagle Materials Inc. on Tuesday cut its fiscal 2007 earnings forecast to a range of $3.80 to $4.20 a share from its previous view of $4.40 to $4.70 a share. The Dallas-based building materials company said in a statement the lowered forecast is primarily due to the accelerated decline in housing starts, which has led to weakened business conditions in its gypsum wallboard and paper businesses.

Benjamin Graham: "Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed."


December gold climbed $1.20 to close at $597.10 an ounce, its strongest closing level since Sept. 11. December silver ended up 17 cents at $11.495 an ounce and December copper tacked on 1.85 cents to close at $3.466 a pound. The silver and copper contracts marked their highest closing level since Sept. 8.

The S&P 500 reached its highest level since February 2001. The Dow is closing in on its all-time high set in 2000.

November crude fell 44 cents to close at $61.01 a barrel with prices trading between $60.60 and $62. October natural gas recovered from a three-year low of $4.38 per million Britisth thermal units to close up 5.1 cents at $4.526.

Abe, Japan's Prime Minister, told reporters it is time to improve Japan's relationship with China and South Korea that deteriorated during the Koizumi administration.

The healthcare cost squeeze is still on. Premiums for job-based health coverage rose 7.7% on average from spring 2005 to spring 2006, down from a 9.2% increase in 2005, according to the Employer Health Benefits Survey released Tuesday by the Kaiser Family Foundation and the Health Research and Educational Trust. Premiums saw their third consecutive year of declining increases, but wages rose 3.8% and inflation increased 3.5%.

Congress is unlikely to approve a bill giving President Bush's warrantless wiretapping program legal status and new restrictions before the November midterm elections, dealing a significant blow to one of the White House's top wartime priorities.
House and Senate versions of the legislation differ too much to bridge the gap by week's end, when Congress recesses until after the Nov. 7 elections, according to two GOP leadership aides who demanded anonymity because the decision had not yet been announced.

Home construction in Tulsa quickened in August after an unusually slow July, boosting year-to-date totals ahead of the 2005 pace once again.
The 382 homes that were started in August was 22 percent above the 313 logged in July, according to data released Monday by New Orders Weekly, a construction tracking service.

Despite persistent talk about possible airline mergers, Continental Airlines wants to stay independent, its chief executive said Tuesday.
Larry Kellner, chairman and chief executive of Houston-based Continental, told investors that the carrier is in good shape to go it alone.

California’s public sector employers are to face a cash crunch over the next 15 years with the cost of healthcare provision for retiring workers forecast to rise to $31bn a year, according to a new report.

The California HealthCare Foundation expects health care costs in the most populous state in the US to rise more than eight fold from $3.9bn this year to $31bn by 2020. The sharp increase will be driven by inflation, increases in life expectancy and an ageing population.

Prospects

9/27/06 Prospects

Manufacturing activity in the central Atlantic region in September grew at a much faster pace than the previous month, the Federal Reserve Bank of Richmond reported Tuesday, as a rebound in factory shipments and a faster pace of growth in new orders helped offset slower employment gains. The Richmond Fed's seasonally-adjusted manufacturing index rose to 9 in September from 3 in August. The Richmond Fed said a survey of manufacturers in the region indicated that raw materials prices rose at an average annual rate of 3.18%, after rising 1.88% in August, while growth in prices of finished goods declined slightly to 2.55% from 2.61% last month. "Looking ahead, contacts were markedly more optimistic about their business prospects for the next six months," the Richmond Fed said. "Firms anticipated faster growth for shipments, new orders and employment, and they bumped up their expectations for capital spending."

The Conference Board said U.S. consumer confidence rebounded in September, helped by lower gasoline prices. The consumer confidence index rose to 104.5 in September after falling to a revised nine-month low of 100.2 in August. Economists forecast the index to rise to 102.7 from the initial August reading of 99.6. The present situation index rose to 127.7 from 123.9, while the expectations index increased to 89.0 from 84.4. Inflation expectations eased in September. Expectations of inflation in the next year fell to 4.9 in September from 5.5 in August. This is the lowest level since March.

Lennar Corp. issued another profit warning, this time for its fiscal fourth quarter, saying a floor hasn't been found to the downturn in the home building sector. Third-quarter ending Aug. 31 net income fell 39% to $207 million, or $1.30 a share, with revenue up 20% to $4.18 billion. The company had previously said earnings would range between $1.25 to $1.35 a share. For the fourth quarter, it sees earnings between $1 and $1.30 a share. Analysts polled by Thomson First Call, on average, expected earnings of $1.60 a share. The market pretty well yawned at the news. The same can be said for than less than robust assessment provided by Lowe's.

Benjamin Graham: "The individual investor should act consistently as an investor and not as a speculator. This means.. that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase."

The energy (that includes coal) and the precious metals sectors are attempting to find their footing, and that in the face of window dressing by the fund managers this week.
I recommend that investors have at least one-third of their portfolios in these combined sectors. I should also mention that I shorted the 10-year Treasury bond early Tuesday morning. Over the past several weeks I have mentioned some hedges I had placed. Their results could be described as no hits, no runs, no errors. Pretty much a wash.

Steve Saville: "For more than 10 years there has been a strong tendency for the gold sector's intermediate-term trend to reverse direction during October-November. In particular, when the gold sector -- represented in this discussion by the AMEX Gold BUGS Index (HUI) -- trends higher into October-November it will regularly reverse course and trend lower over the ensuing 6-12 months; and when the trend is 'down' going into the October-November period there will often be an upward reversal leading to a 6-12 month rally. This is why an October-November bottom for the current decline is likely and why such an outcome would have intermediate-term BULLISH implications."

OPEC President Edmund Daukoru said the slide in prices was harming investment and that "something needs to be done."
He told Reuters in Abuja, Nigeria, that members of the exporters' cartel, which pumps a third of the world's oil, were already talking internally about the price fall.

Former Fed Chief Paul Volcker: ``I am a little bit more worried about inflation,'' said Volcker, 79, speaking at a discussion sponsored by the Women's Economic Round Table in New York yesterday. Gerald Corrigan, who served as New York Fed president from 1985 to 1993, said he shared Volcker's concerns.
While the inflation rate isn't ``high'' or ``running away,'' Volcker said, ``it is kind of creeping up, and I am impressed by the degree of pressure, if that is the right word -- psychological pressure, political pressure -- there is not to do anything about it.''

Standard Chartered Plc raised its estimate for China's economic growth this year to 10.8 percent, saying government efforts to cool an investment boom aren't working.
The forecast was boosted from 10.2 percent, Shanghai-based economist Stephen Green said in a research note. Green also raised his estimate for 2007 growth to 9.7 percent from 8.9 percent. The new 2006 projection represents the fastest expansion since 1995, when the economy grew 10.9 percent.

Russia will ship fuel to a controversial atomic power plant it is building in Iran by March under a deal signed Tuesday, news agencies reported, as Tehran's nuclear chief met with a Russian security officer at the Kremlin. "An additional agreement in the contract to build the Bushehr station was signed, which fixes September 2007 as the launch date," Sergei Novikov, a spokesman for Russia's atomic energy agency, told AFP. The plant will actually produce electricity from November next year, he said, while the nuclear fuel for the plant will be delivered no later than March.

Eagle Materials Inc. on Tuesday cut its fiscal 2007 earnings forecast to a range of $3.80 to $4.20 a share from its previous view of $4.40 to $4.70 a share. The Dallas-based building materials company said in a statement the lowered forecast is primarily due to the accelerated decline in housing starts, which has led to weakened business conditions in its gypsum wallboard and paper businesses.

Benjamin Graham: "Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed."


December gold climbed $1.20 to close at $597.10 an ounce, its strongest closing level since Sept. 11. December silver ended up 17 cents at $11.495 an ounce and December copper tacked on 1.85 cents to close at $3.466 a pound. The silver and copper contracts marked their highest closing level since Sept. 8.

The S&P 500 reached its highest level since February 2001. The Dow is closing in on its all-time high set in 2000.

November crude fell 44 cents to close at $61.01 a barrel with prices trading between $60.60 and $62. October natural gas recovered from a three-year low of $4.38 per million Britisth thermal units to close up 5.1 cents at $4.526.

Abe, Japan's Prime Minister, told reporters it is time to improve Japan's relationship with China and South Korea that deteriorated during the Koizumi administration.

The healthcare cost squeeze is still on. Premiums for job-based health coverage rose 7.7% on average from spring 2005 to spring 2006, down from a 9.2% increase in 2005, according to the Employer Health Benefits Survey released Tuesday by the Kaiser Family Foundation and the Health Research and Educational Trust. Premiums saw their third consecutive year of declining increases, but wages rose 3.8% and inflation increased 3.5%.

Congress is unlikely to approve a bill giving President Bush's warrantless wiretapping program legal status and new restrictions before the November midterm elections, dealing a significant blow to one of the White House's top wartime priorities.
House and Senate versions of the legislation differ too much to bridge the gap by week's end, when Congress recesses until after the Nov. 7 elections, according to two GOP leadership aides who demanded anonymity because the decision had not yet been announced.

Home construction in Tulsa quickened in August after an unusually slow July, boosting year-to-date totals ahead of the 2005 pace once again.
The 382 homes that were started in August was 22 percent above the 313 logged in July, according to data released Monday by New Orders Weekly, a construction tracking service.

Despite persistent talk about possible airline mergers, Continental Airlines wants to stay independent, its chief executive said Tuesday.
Larry Kellner, chairman and chief executive of Houston-based Continental, told investors that the carrier is in good shape to go it alone.

California’s public sector employers are to face a cash crunch over the next 15 years with the cost of healthcare provision for retiring workers forecast to rise to $31bn a year, according to a new report.

The California HealthCare Foundation expects health care costs in the most populous state in the US to rise more than eight fold from $3.9bn this year to $31bn by 2020. The sharp increase will be driven by inflation, increases in life expectancy and an ageing population.

Monday, September 25, 2006

Oil And Gold

9/24/06 Oil And Gold

It's not over until the fat lady sings, and the fat lady is nowhere to be seen.
December gold rose 50 cents to close at $595.90 an ounce Monday, its highest closing level since Sept. 13. Prices staged a complete reversal from the earlier low of $587.50 as oil prices reversed course to climb to a high above $62 a barrel. November crude had declined 65 cents to $59.90 a barrel early in the session on the New York Mercantile Exchange. The contract hadn't traded under the $60 level since late November. December silver tacked on 1.5 cents to end at $11.325 an ounce.

Median sales prices of existing homes fell from year-ago levels in August for the first time in 11 years and just the sixth time in the past 30 years, the National Association of Realtors said Monday. Sales of existing homes fell 0.5% in August to a seasonally adjusted annual rate of 6.30 million, the industry group said. Sales are down 12.6% in the past year. The median price of an existing home fell 1.7% year-over-year to $225,000. It's the first time since April 1995 that median prices have fallen on a year-over-year basis.

With the weakness in the housing market, the yield on 10-year treasury bonds fell
to 4.55%.

Higher inflation remains a bigger risk for the economy than a sharp slowdown of growth, said Richard Fisher, the president of the Dallas Fed bank on Monday. "I continue to fret more about inflation than I do about growth," Fisher said in a speech prepared for delivery in Monterrey, Mexico. Fisher dismissed the benign August PPI report released last week as unreliable. The best gauges of inflationary pressures "are not yet comforting," he said. Fisher said there was a "serious correction" taking place in the housing sector, but said outside this sector, the economy is "healthy and robust."

Keep an eye on the VIX. It had a range of 11.99 to 13.41 and closed at 12.12

The area around Venezuela's El Tigre, known as the Orinoco Oil Belt, possesses the world's biggest petroleum reserves -- 1.3 trillion barrels of so-called extra-heavy oil. Chevron, Exxon Mobil, ConocoPhillips and dozens of other foreign firms are
here, using recently developed technologies to extractthe tarlike, sulfurous crude and refine it. "Everyone agrees that the Orinoco Belt has the biggest
reserves in the world," said Alberto Quiros, a Chavez critic and former president of Royal Dutch Shell's Venezuela operations. "What Chavez will do with them
is another question, but there's no doubt thatVenezuela will take Saudi Arabia's place as No. 1."

Asked if Iran will stop enrichment and reprocessing activities, Ahmadinejad says, "Why should we agree to that? There is no such provision in the NPT [Nuclear Nonproliferation Treaty]."

Martin Weiss: "According to Time, two recent Pentagon messages are especially significant. The first, a "Prepare to Deploy" order, has been sent to an Aegis-class cruiser, two mine sweepers and two mine hunters. The second, from the Chief of Naval Operations (CNO), requests a review of long-standing U.S. plans to blockade Iranian ports in the Persian Gulf.
The Pentagon's primary focus: The precise spot on the planet we have been focusing your attention on all year long -- the Strait of Hormuz, a 20-mile-wide bottleneck in the Persian Gulf through which roughly 40% of the world's oil must pass each day.
Time's conclusion:
"Coupled with the CNO's request for a blockade review, a deployment of minesweepers to the west coast of Iran would seem to suggest that a much discussed -- but until now largely theoretical -- prospect has become real: that the U.S. may be preparing for war with Iran."

Bloomberg: "Gold may rise for a second week on speculation that European central banks will reduce sales. Eighteen of 27 traders, investors and analysts surveyed by Bloomberg News from Sydney to Chicago on Sept. 21 and Sept. 22 advised buying gold, which rose 2.1 percent last week to $595.40 an ounce in New York. Six people said to sell, and three were neutral. European banks face a deadline of tomorrow to reach their annual gold sales limit of 500 tons, and had shed 380 tons of this year's allotment as of Sept. 19, according to the producer- funded World Gold Council in London. In the week ended Sept. 15, bank sales were the most since June, and gold prices fell the most in two months."

"We have to hire at least around 10,000 people a year to meet our ambition of continued growth," Anders Dahlvig, CEO of the Ikea Group, was quoted as saying in Swedish financial daily Dagens Industri.
There are more than 230 Ikea stores in 33 countries, and sales have more than tripled in the last decade, to 17.3 billion euros ($22.1 billion) in the full-year ending Aug. 31. The company plans to open 24 new stores in the next 12 months in countries including Germany, the United States and Sweden.

The average retail price of gasoline nationwide is now $2.38 a gallon -- the lowest level since March. In sum, prices have declined on avaerage 64 cents a gallon. Unless this is an unusually warm winter, and that is not anticipated, I don't expect the price of gasoline to decline more than another 10 cents a gallon.

Venezuela is planning a South American pipeline, a proposed 12,515-kilometer (7,776-mile) conduit to carry gas to Brazil, Argentina, Uruguay and Paraguay.
The $20 billion continent-spanning pipeline, according to Chavez, will open the way for energy integration "among the brother peoples" of South America, because Venezuela has gas for all these nations and wants to offer them this resource for the "balance of the multipolar world."
Venezuela has the eighth-largest gas reserves in the world and the largest in South America at 150 trillion cubic feet. Recent studies, in fact, have shown that the country's reserves could be even more extensive.
Presently, the U.S. is highly dependent on oil from Venezuela. The U.S. believes Venezuela has nowhere else to go with its oil. Naturally, the Bush Administration is wrong. More and more energy is already being supplied to China. Chavez is looking forward to the day when Venezuela ships no energy to the U.S. It will happen.

Semiconductor maker PMC-Sierra Inc. on Monday reduced its revenue outlook for the third quarter, due to waning demand for the company's communications chip products.
The company lowered its sales guidance to a range of $114 million to $116 million, compared with its earlier estimate of $122 million to $124 million. Revenue totaled $118.8 million in the second quarter this year.