Shock and Awe Rhymes with Stock and Bonds (sort of)

I had to direct people here earlier in the daym, but these links may be useful if this thread takes off.

Obv. with a war on there isn't much HealthSouth coverage, but do y'all feel the corporate scandals of the past 2 years are really over? It seems like everyone's resigned to a "been there, done that" mentality. I for one think there's plenty of scandal to come.

HAL (NYSE) $ 20.20 $ -0.50 -2.42%

i second this. part of my job invovles "fixing" big money errors for a large financial company. while most of it is legal, i do have a growing folder of illegal transactions that i keep at home...just in case.

Nope!
HAL (NYSE) $ 20.20 $ -0.50 -2.42%

That's cuz it'll take longer for those govt contracts to take effect... fear not, it'll be up once the war is over.

http://www.washingtonpost.com/wp-dyn/articles/A14472-2003Mar23.html

My own sense of the (very foggy) big picture, is that the USA will suffer from a worse economy over the next decade than if this war had not taken place, mainly because the cost of the war will not be paid for by our coalition partners as in 1991. Further, the sense of grievance the world now feels toward the USA for its arrogance and eagerness to use weapons to enforce its will on Iraq seems likely to have a ripple effect on sales of US products globally.

If the entire Bush-Cheney-Rumsfeld-Wolfowitz program of armed aggression aginst the Axis of Evil is carried through, the US economy is toast. The deficit would soar, the dollar would plunge, and dozens of countries would be meeting to agree on sanctions against us. I shudder to think...

*more big explosions, Sadaam dead, whatever

However the stock market indices still seem to be decouple from the real economy of peoples lives. Sure people's pensions are fucked and manufacturing is down the pan but unemployment in britain continues to fall even if it is just service industry jobs that's propping that up.

What is going to effect things is the cost of this war. Its going to put up defecits, taxes or cut public spending, all of which could hit the economy hard,defecits being the most benign but by now means the easy way.

For britain, the row with france seems to have firmly booted a referendum on joining the euro into the next parliament.

I guess investors are a part of the public but any wieght of the general populace will have a much slower effect taking weeks to take hold.

The stock market is usually a good indicator of a "six months forward" view, but obviously instability in the world causes volatility. I do think that the rally, now over, was led primarilly by what I'd call "Rummy Hawks" (or something), and the longer the war drags on, the worse it'll get. But who knows? In theory, stock price is tied to a company's earnings, but anyone who lived through the late 1990s knows that's a fallacy.

Exactly. Technology can only assist the economy if it can be afforded. At the moment, the Dow is only reflecting what's happening on a larger scale. Corporations seem to be pink-slipping people left and right. (Only Microsoft isn't: I know that, since a mate of mine just got hired.) If they are doing that, how are they supposed to afford to create new technology?

As for consumer spending, sod that: my pockets are currently so empty, I can't feel the bottom when I put my hand in them. How can I afford to buy new tech?

Judge Upholds 'Dolphin-Safe' Definition
Fri Apr 11, 5:23 AM ET

SAN FRANCISCO - A federal judge has upheld the current definition of the "dolphin-safe" tuna label and barred the Bush administration from altering it, handing a victory for environmentalists.

The ruling Thursday by U.S. District Judge Thelton Henderson prevents the government from labeling tuna "dolphin safe" if fishermen encircled the dolphins to make the tuna catch.

Henderson upheld the old definition, under which any tuna caught using dolphins as targets were automatically barred from bearing the consumer-friendly label on cans sold in the United States.

On Dec. 31, the Commerce Department said tuna that fishermen catch by encircling dolphins may immediately be imported into the United States and bear the dolphin-safe label if observers certify no dolphins were killed or seriously injured in the process. Environmentalists sued.

"This is a victory for dolphins," said Mark Palmer, spokesman for the Earth Island Institute's International Marine Mammal Project. "We can now go to trial over the next few months knowing that the integrity of the dolphin-safe tuna label will be protected by this injunction."

Environmentalists charged that the government failed to adequately address the stress to dolphins caused by chasing them with speedboats, encircling them in large nets and releasing them after they were caught with the tuna.

The government said less than 5,000 dolphins are killed annually using the practices in Latin America and elsewhere, down from more than 100,000 killed per year in the 1980s.

A change in the rules was strongly backed by fisheries in Mexico and Venezuela. But the government agreed not to activate it pending the judge's decision.

- (local radio station)

April 12, 2003
The Bushes Report Income But Only Part of the Returns
By DAVID CAY JOHNSTON

President and Mrs. Bush released part of their income tax returns yesterday, breaking with a 26-year tradition of sitting presidents fully informing the public about their income and taxes. A significantly fuller copy was made available to The New York Times.

Vice President Dick Cheney and his wife, Lynne, issued a statement and provided, at the request of The Times, a copy of the actual tax return.

The Bushes reported adjusted gross income of $856,058 last year and paid taxes of $268,719, or 31.4 percent. The salary of the president is $400,000, but the Bushes reported only $397,534. The White House press office said it was unable to explain this disparity.

In 2001 the Bushes reported adjusted gross income of $811,100 and paid taxes of $250,202, or 30.8 percent.

Most of the income in both years was interest from the blind trust into which President Bush put the fortune he made from his investment in the Texas Rangers baseball franchise. The Bushes declared $436,028 of taxable interest last year.

The Bushes claimed $84,118 in itemized deductions, including $69,925 to churches and charities, down from $82,700 in 2001. Southern Methodist University, Evergreen Chapel at Camp David, Tarrytown United Methodist Church and the Federal Government's Combined Federal Campaign were cited in a statement as recipients of gifts.

The Cheneys reported income of $1,166,735 and taxes of $341,114, or 29.2 percent. The Cheneys reported $221,684 in itemized deductions, including charitable gifts of $121,983. The Cheneys also had $559,461 of tax-exempt interest.

Last year Vice President Cheney released only part of his tax return to some news organizations, although later his office provided a nearly complete copy to The New York Times. Other news organizations that sought the return were rebuffed, including the journal Tax Notes, a nonprofit organization that posts presidential tax returns going back to Franklin D. Roosevelt at its virtual museum at www.taxhistory.org.

The founder of the virtual museum, Joseph Thorndike, called the White House response to its requests for the Cheney tax returns "Orwellian."

"The White House and the office of the vice president tells the public they are releasing their tax returns," Mr. Thorndike, a historian, said. "Then they don't, because they give out just a summary or just Form 1040, which is not a tax return but just one part of it."

Mr. Thorndike said his staff has tried for two years to obtain the 2000 and 2001 tax returns of Mr. Cheney and his wife. "They never say no," he said. "They just don't give it to us."

A full copy of the 2002 Cheney return was provided to Mr. Thorndike's staff last night, Cathie Martin, Mr. Cheney's spokeswoman, said.

The White House withheld an unknown number of pages, including nine statements on the Bush return, when it made part of the tax return available yesterday to the White House press corps. The nine statements and a document showing the calculation for a $414 depletion allowance, presumably from the president's former oil business, were provided to The New York Times at its request.

One statement justifies $25,595 in miscellaneous deductions claimed by the Bushes, mostly fees for managing their investments.

No law requires the president or vice president to make their returns public. Presidents Ronald Reagan, George Bush and Bill Clinton all followed President Jimmy Carter in fully disclosing their tax returns.

The tradition began in 1977, when President Carter released his tax returns to ensure public trust in the office of the presidency. He said he acted because of the tax evasion charges to which Vice President Spiro T. Agnew pleaded no contest in 1973 and the fraudulent $576,000 tax deduction that President Richard M. Nixon took in his first year in the White House.

Mr. Nixon was never charged, but Edward L. Morgan, a White House lawyer and a Treasury assistant secretary in the Nixon administration, pleaded guilty to tax fraud in 1975 over the preparation of Mr. Nixon's return. He served four months in federal prison.

G.O.P. Senator's Remark on Gays Draws Fire
By THE ASSOCIATED PRESS

WASHINGTON, April 21 (AP) — A comment by Senator Rick Santorum that compared homosexuality to bigamy, polygamy, incest and adultery has led gay rights leaders to call for his removal from the Senate leadership.

In a recent interview with The Associated Press, Mr. Santorum, a Pennsylvania Republican, criticized homosexuality while discussing a pending Supreme Court case over a Texas sodomy law.

If the Supreme Court endorses a right to consensual gay sex within the home, he said, "then you have the right to bigamy, you have the right to polygamy, you have the right to incest, you have the right to adultery. You have the right to anything."

A coalition of gay rights groups in Washington and Pennsylvania compared the remarks to those the Senate majority leader, Trent Lott, made in December about Strom Thurmond's 1948 segregationist campaign for the presidency. Shortly afterward, Senator Lott was forced to resign as leader.

Mr. Santorum, chairman of the Republican conference in the Senate, is third in his party's leadership.

"We're urging the Republican leadership to condemn the remarks," said David Smith, a spokesman for the Human Rights Campaign, the nation's largest gay advocacy organization. "They were stunning in their insensitivity."

A Santorum spokeswoman, Erica Clayton Wright, said the lawmaker's comments "were specific to the Supreme Court case."

The White House did not immediately return a call seeking comment, and a spokesman for the Senate majority leader, Bill Frist, declined comment.

I created a little tool that automatically does the calculations for me on the Diamonds. When I ran it today, I was sure that the thing was broken, so I did the math by hand. Nope, the thing wasn't broken. It was correct.

From today's option action on DIAMONDS Trust, Series 1 (DIA):
Open Interest in Out of the Money PUT OPTIONS, Expire at Close Fri, Oct 20, 2006:
200659

Open Interest in Out of the Money CALL OPTIONS, Expire at Close Fri, Oct 20, 2006:
10460
200659 puts / 10460 calls = 19.18 times more puts vs. calls.

This is one of those short squeezes where you just stand back, look at the thing in awe and mumble to yourself.

for what it's worth -- even the DJI has just topped its previous record peak (from 2000, i believe), this figure is non-inflation adjusted. that is, the DJI still has not topped its record close in REAL (i.e., inflation-adjusted) terms (which would be DJIA => 12K). also, the S&P and NASDAQ indexes are still way below their nominal record closes (even w/t adjusting for inflation).

1) People are betting on a war with Iran

2) It's at least possible that there's some kind of "irrational pessimism" with regard to the puts - like a negative bubble. Groupthink where everyone just doesn't believe the Dow can keep going up. Although I doubt this, it seems possible.

I'd also be curious as to how this put/call ratio ranks historically and how it compares to other significant historical moments.