The Post: "Security Permeates Budget" +++
washingtonpost.com
"Bush Unveils $2.13 Trillion Budget"
washingtonpost.com <---details
EDS Equipment Manufacturers:
bombsecurity.com
S&P's Chief T/A: "A Rough Week, but Stocks Hold On"
businessweek.com
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Hi sun-tzu,
Can't thank you enough for sharing your keen insights and feels for the markets here.
Take care :-).
Di
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Rearranged some, boldface is mine.
>>> Security Permeates Budget
Many Agencies Would Share $37.7 Billion in New Funds
By Eric Pianin and Bill Miller
Washington Post Staff Writers
Tuesday, February 5, 2002; Page A07
Concerns about homeland security permeate virtually every facet of proposed federal spending as the Bush administration moves to redefine the government's mission in the wake of the Sept. 11 terrorist attacks, the fiscal 2003 budget released yesterday shows.
While police and firefighters, border security agents, bioterrorism experts and intelligence agencies understandably were among the biggest winners in the new budget -- which contains nearly $38 billion for domestic security activities -- agencies that once had only the most remote links to homeland security would be showered with funds for that purpose.
The Agriculture Department, for example, would spend $146 million on various programs to protect the nation's food supply from threats ranging from terrorists to insects. The little-known Commerce Department Bureau of Export Administration would receive $30 million more than in 2002 to make sure that potentially dangerous materials exported to other countries don't end up in the hands of terrorists.
The Interior Department would be given $884 million in new funding to protect national monuments and parks. The Small Business Administration would get millions more for its disaster loan program to assist in case of renewed attacks, and the U.S. Customs Service would boost revenue for homeland security activities by raising passenger fees for those traveling by air or sea.
Bush's budget plan for the fiscal year that begins Oct. 1 would shift resources from other areas to double spending for homeland security -- from $19.5 billion this year to $37.7 billion in fiscal 2003.
Budget and goverment experts say that while many of these expenditures are to be expected in the face of government expectations of more terrorist activity, some caution that spending could get out of hand as agency heads rush to seek more money by cloaking their mission in the mantle of homeland security.
"I think there's a clear danger of having the homeland security category abused because that is an area that's hot," said Robert Bixby of the Concord Coalition, a budget watchdog group. "It will be very tempting for agencies to redefine their missions under homeland security and for almost any member of Congress to explain an add-on or earmark as a matter of homeland security."
G. William Hoagland, Republican staff director for the Senate Budget Committee, said that Bush's budget has scattered homeland security spending across 2,000 accounts in 40 to 50 separate agencies, making it difficult for Congress to track.
"It's clear there are individual agencies that will try to maximize their budgets by making sure things fall into the category of homeland security," he said.
Congress last fall approved $40 billion in emergency spending in response to the attacks on the World Trade Center and the Pentagon that killed more than 3,100 people and the anthrax attacks that killed five more.
"It reflects an unprecedented commitment to securing our homeland," Homeland Security Director Tom Ridge said yesterday. Many of the president's homeland security initiatives were denoted in the budget book with the image of a Revolutionary War Minuteman.
The biggest share of the homeland security budget package goes to border security, with $10.6 billion requested, an increase of about $2 billion over current fiscal year spending.
... Half that money would go to the Immigration and Naturalization Service,
........ which would add more than 1,100 INS inspectors and 570 new Border Patrol agents and
........ develop a computerized system that would track the arrivals and departures of non-citizens by the end of 2004.
The administration would also pour nearly $6 billion into the effort to combat bioterrorism,
... which follows the first significant bioterror attack in U.S. history -- the mailing of letters containing deadly anthrax microbes to media and government offices last fall.
The funding includes
... $2.4 billion for research and development of vaccines, diagnostic tests and technologies;
... $1.2 billion to improve the ability of state and local health systems to respond to bioterrorism attacks, and
... $851 million to build up and manage the National Pharmaceutical Stockpile, bolster training and enhance food safety.
Bush also requested a total of $4.8 billion for aviation security,
... with most of that going to the newly created Transportation Security Administration.
........ The agency is in the midst of hiring 30,000 new federal airport security workers and
........ must obtain and install equipment that would detect explosives in luggage by the end of the year.
Another $3.5 billion is sought to help state and local police, firefighters and emergency medical technicians respond to terrorist attacks.
... The money would enable state and local governments to obtain equipment, conduct regional training drills and improve technology and emergency communications systems.
The budget proposal also includes $722 million to improve the way federal, state and local agencies gather and share intelligence about terrorist threats and crises.
According to a table prepared by the administration,
... the Department of Defense would receive the largest share of homeland security money at 22 percent,
... the Transportation Department would receive 20 percent,
... the Justice Department 19 percent,
... Health and Human Services 12 percent,
... the Federal Emergency Management Agency 9 percent,
... Treasury 8 percent and
... Energy 3 percent.
The remainder would be sprinkled among scores of agencies, including
...$129 million for NASA to protect its rockets,
... $65 million for the Army Corps of Engineers to "harden and secure" its water projects,
... $814 million for security at State Department agencies and
... $34 million for the Nuclear Regulatory Commission.
Ridge said that agencies would get even more than they initially sought and that spending would remain high for years to come.
Staff writer Heler Dewar contributed to this report
© 2002 The Washington Post Company <<<
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>>> FEBRUARY 4, 2002
TECHNICAL MARKET INSIGHT • From S&P
By Mark D. Arbeter, Chief technical analyst for Standard & Poor's
A Rough Week, but Stocks Hold On
But caution remains in order as the market is still susceptible to a downside breakout
The S&P 500 and the Nasdaq saw some technical deterioration last week, but the damage was limited to an expansion of the 7-week trading range. The rapid mid-week upside reversal and accompanying high put/call ratios suggest that a short-term low is in place.
However, the continued downside probing near the bottom of the trading range, and the heavy distribution by institutions of late, still leave the market susceptible to a downside breakout.
The S&P 500 closed below important support of 1114.50 on Tuesday, then fell as far as 1081.66 during the day on Wednesday before reversing sharply. We have been saying that to confirm a downside break, we had to see two consecutive closes below 1114.50 by at least 1%. Because the market reversed on Wednesday, this did not occur. It is very interesting to note that the S&P 500 reversed extremely close to the intraday low it saw in March 2001 at 1081.19. The market made an important bottom in the Spring of 2001 and was testing this area on September 10, right before the attacks. Therefore, the 1080 area has become an important support zone.
If the conditions for a downside breakout do occur, the "500" is likely to trade into the 1054 to 1111 area once again. This support was created by the sideways consolidation that occurred in October. A typical retracement of 50% of the rally since Sept. 21 comes in at 1060. Another way to measure the potential decline is to add the width of the recent sideways consolidation and subtract that from the bottom of the range. This measuring technique would give us a target of 1052, right in line with the other projections.
The Nasdaq also fell below important support during the week, closing below the 1918.50 level on Tuesday. But, just like the "500", the Nasdaq did not meet the criteria for a downside breakout because the it did not close 2% to 3% below support for 2 straight trading sessions. If this criteria is finally met, the Nasdaq does not have good chart support until the 1628 to 1776 area. A 50% retracement of the move since September targets the 1743 level while the measuring technique used above for the "500" comes in at 1738. Volume measures on both the Nasdaq and the NYSE remain in bearish configurations as defined by our up/down volume models. This indicates fairly heavy distribution by institutions since early in January, not something that raises our confidence about the short-term direction of the market. Because of the negative volume measures, the chance for a downside market break remains real.
Important leadership from growth stocks has disappeared as money has rotated back into defensive issues as well as value stocks. The new high list is littered with stocks with defensive characteristics such as food and beverage, small banks and financials, insurance, utility and medical stocks. This also does not breed a lot of confidence as investors have moved into areas of the market that they deem as safe.
Sentiment remains a mixed bag with shorter-term indicators moving to bearish extremes while longer-term measures remain on the bullish side. The total CBOE put/call ratio hit 1.05 on Tuesday, the highest level since September. The equity-only put/call was also very high that day. But longer term measures of sentiment remain stubbornly slanted towards the bullish camp. Investors Intelligence poll of newsletter writers refuse to give in from their bullish stance, with 51.6% bulls and only 26.8% bears.
We continue to be cautious as there is a real chance that the market will see additional downside action in the near-term. Our intermediate-term call of a wide sideways trading range also remains unchanged. <<< |
