Dec 10, 2004

Headlines of Interest

London put a stop to another terrorist attack.

Sprint and Nextel are reportly considering a merger as equals. The total value of the deal is estimated at $70 bln.

Today's 10-year auction did not go off as well as yesterday's 5-year. The foreign participation was around 3% compared to yesterday's 60% but some say this may be due to the auction being a reopening rather than a new issue.

There is a bit of a scandal developing about how the Coalition Provisional Authority in Iraq spent $20 bln dollars of Iraqi national savings in the last couple of weeks before control was transferred to the interim gov't. $20 bln is larger than the Iraqi GDP. Apparently the funds were sourced in the way they were because of strict controls on all of the money coming from the U.S.

Today's market action leaned to the bullish side in my view. The market did continue the trend of lower lows and the breadth was not great but the semi's managed to climb back above the 50 day after bad news and there were a fair number of stocks making new highs. The most bullish thing in my mind is really the emotional swing we went through and the fact that this mornings despair came while still within' spitting distance of new highs. We shall see. I have been expecting the breadth and bad economic data to bring stocks down and as this view seems wrong I will probably try to step back and collect my thoughts before taking any action.

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