5/14/06 Conditions
Earthfiles.com: "The Tibet plateau glaciers have one-sixth of all the world's ice. But those glaciers, which cover about 60,000 square miles at an average height of 13,000 feet above sea level, are melting at the unprecedented rate of 7% per year, triggering drought, desertification and sandstorms in other regions, including China. So far in 2006, China has had thirteen sandstorms. One in mid-April dumped 330,000 tons of sand on Beijing. More than 10 million people, mainly in northern China, are trying to survive a severe drought and lack of drinking water the past month."
Doug Noland: "So far this year, 10-year Treasury yields have jumped 80 basis points to the highest level since May 2002. Over this period, the dollar index has declined about 7%. It should be noted that, as the dollar index sank from 120 to 93 between early-2002 and mid-2003, bond yields collapsed from 5.4% to a low of just above 3%."
Is the dollar a safe haven or the Swiss franc?
Boeing raised list prices about 4 percent for most of its airplanes built in the Seattle area.
The price index of overall exports rose 0.6 percent in April as a 0.7 percent increase in nonagricultural prices more than offset a 0.6 percent decline in agricultural prices. Nonagricultural prices continued the upward trend over each of the past five months, and increased 2.5 percent for the year ended in April. Overall export prices rose 2.4 percent for the same period. The increase in nonagricultural prices was led by a 2.0 percent advance in prices for nonagricultural industrial supplies and materials, the largest monthly increase since October. A sharp rise in fuel prices drove the increase, but higher metals prices were also a contributing factor. The price index for nonagricultural industrial supplies and materials advanced 8.0 percent over the past 12 months.
Iran's President states he considers "invalid" any European proposals that ask Iran to halt uranium enrichment.
Inco said it's raised the cash component of its Falconbridge bid by C$5 a share more by boosting the value of the cash component of the bid, and also said that it now sees $375 million in synergies a year, vs. an earlier estimate of $350 million. Falconbridge also agreed to pay a $450 million break-up fee.
Brett Steenbarger: "We had two consecutive days on Thursday and Friday in which 70% or more of traded issues declined on the day. Since 1990 (N = 4124 trading days), that has only occurred 13 times.The next day, the S&P 500 Index ($SPX) was up by an average .59% (9 up, 4 down)--much stronger than the average daily gain of .04% (2174 up, 1950 down) for the sample overall.Two days later, the S&P was up by an average 1.37% (10 up, 3 down)--considerably stronger than the average two-day gain of .08% (2209 up, 1915 down) for the 1990-2006 sample."
Mike Burk: "The last time there were 5 consecutive down days in the R2K was in March 2005 and before that late December 2004 / early January 2005. Both initiated short term down trends."
Cuba is partnering with companies from China, India, Norway and Canada to exploit offshore resources, according to the U.S.-Cuba Trade Association and the legislation's sponsors.
Saturday, May 13, 2006
Friday, May 12, 2006
The Data
5/13/06 The Data
The talking heads got all excited after the March trade deficit only came in at $62+ billion against an expected $66 billion. Unfortunately, crude prices in April and May are higher than they were in March. As such, unless Boeing delivered a zillion planes in April and zillions more in May, the trade deficit will be more than $66 billion in both April and May. In sum, we are still on target for a $800 billion trade deficit this year. It's no wonder the bond market is in the soup and the dollar continues to tank. As I have said for so long, only someone who wants to lose money will be long dollars and U.S. treasury bonds.
You know foreigners will lighten up on dollar-denominated assets, and that means on-going supply for equities and bonds. In addition, there is more attention being paid to corn, wheat, and soybeans, and for good reason. Demand is rising and will create lower supply levels. I mentioned this at the turn of the year. I believe there is a place for these commodities in long-term accounts.
The University of Michigan's preliminary May index of consumer sentiment was 79.0, down from April's final reading of 87.4. The May reading was the weakest since October 2005, when sentiment hit a 12-year low just after hurricanes Katrina and Rita devastated U.S. southeast petroleum refining capacity and gasoline prices spiked.
"If investments (assets) are passed to a different owner, they need to be compensated," Celso Amorim told reporters Friday at a summit of EU, Latin American and Caribbean leaders.
Bolivia's President Evo Morales warned Thursday that companies including Brazil's Petroleo Brasileiro SA may not be compensated following the forced nationalization of their Bolivian operations.
One should ask-- if business is so strong, why is the consumer sentiment dropping so sharply? What's more important corporate earnings for 5,000+ public companies or millions of folks on Main Street struggling to make ends meet? Wall Street mystics can't see past Wall and Broad Streets. There's a whole world out there and it's not sitting pretty. Don't take my word for it. Take a gander on your own time. As for the Fed, they need to look at the data. Look at the people, you twits! Stop printing the money at alarming rates and making the dollar worthless.
CHC Helicopter Corp. has won three new contracts worth $200 million from Statoil ASA to provide helicopter services in the Norwegian Sea, plus renewal of a $74-million contract to provide the Irish Coast Guard with search-and-rescue service through 2010.
In the latest Harris Interactive poll, of 1,003 U.S. adults surveyed in a telephone poll, 29% think Mr. Bush is doing an “excellent or pretty good” job as president, down from 35% in April and significantly lower than 43% in January. Approval ratings for Congress overall also sank, and now stand at 18%. In sum, 29% are found to be brain dead.
Yesterday, mid-way thru the trading session, the talking heads were grasping for straws--
the dollar index had rallied back up to 84(but didn't hold it) and crude was down to $72. Meanwhile, the VIX is running wild on the upside and the yield curve is steepening with the 2-year at 5.01%, the 10-year at 5.19%, and the 30-year at 5.30%. Those folks with the $2.25 trillion in ARMS are about to feel a great deal of pain.
Can you tell me what jerk is going to buy a 50-year Treasury bond? There was a time when a baby was born, you would buy a savings bond for the child. Would you do that now? Then why buy a 50-year Treasury?
Marc Faber: "To summarize, the higher the S&P 500 goes the more the US dollar will lose its value against gold and foreign currencies. In our opinion, the underperformance of US assets against foreign assets and precious metals, which began in 2002, will continue for as far as the eye can see."
The Department of Justice said Friday Microsoft Corp. has agreed to extend oversight of the software company's final antitrust judgment by at least two years. If the extension is approved by the court, it would expire in fall of 2009. Microsoft has agreed to a 2-year extension of the communications protocol licensing program of the final judgment, along with all its enforcement provisions. Microsoft has also agreed that the government may apply for an additional extension for up to three additional years, through November 2012.
Here's some data for the Fed. The US dollar suffered a severe sell-off on Friday, taking it to its weakest level against a trade-weighted basket of currencies since October 1997. As they say in the trading pits, it's the pause-to-be that refreshes! Naturally, the talking heads will say a weak dollar makes our exports cheaper. Unfortuately, since we depend on foreign capital to fund our deficits, a weak dollar is a bitter pill and a detractor for attracting foreign capital.
Most Mideast currencies are pegged to the dollar which means the value of stock investments held by foreigners has been plummeting in line with the U.S. currency. The Dubai stock market shed 14.35% for the week, while the Abu Dhabi market gave up 10.49%.
The talking heads got all excited after the March trade deficit only came in at $62+ billion against an expected $66 billion. Unfortunately, crude prices in April and May are higher than they were in March. As such, unless Boeing delivered a zillion planes in April and zillions more in May, the trade deficit will be more than $66 billion in both April and May. In sum, we are still on target for a $800 billion trade deficit this year. It's no wonder the bond market is in the soup and the dollar continues to tank. As I have said for so long, only someone who wants to lose money will be long dollars and U.S. treasury bonds.
You know foreigners will lighten up on dollar-denominated assets, and that means on-going supply for equities and bonds. In addition, there is more attention being paid to corn, wheat, and soybeans, and for good reason. Demand is rising and will create lower supply levels. I mentioned this at the turn of the year. I believe there is a place for these commodities in long-term accounts.
The University of Michigan's preliminary May index of consumer sentiment was 79.0, down from April's final reading of 87.4. The May reading was the weakest since October 2005, when sentiment hit a 12-year low just after hurricanes Katrina and Rita devastated U.S. southeast petroleum refining capacity and gasoline prices spiked.
"If investments (assets) are passed to a different owner, they need to be compensated," Celso Amorim told reporters Friday at a summit of EU, Latin American and Caribbean leaders.
Bolivia's President Evo Morales warned Thursday that companies including Brazil's Petroleo Brasileiro SA may not be compensated following the forced nationalization of their Bolivian operations.
One should ask-- if business is so strong, why is the consumer sentiment dropping so sharply? What's more important corporate earnings for 5,000+ public companies or millions of folks on Main Street struggling to make ends meet? Wall Street mystics can't see past Wall and Broad Streets. There's a whole world out there and it's not sitting pretty. Don't take my word for it. Take a gander on your own time. As for the Fed, they need to look at the data. Look at the people, you twits! Stop printing the money at alarming rates and making the dollar worthless.
CHC Helicopter Corp. has won three new contracts worth $200 million from Statoil ASA to provide helicopter services in the Norwegian Sea, plus renewal of a $74-million contract to provide the Irish Coast Guard with search-and-rescue service through 2010.
In the latest Harris Interactive poll, of 1,003 U.S. adults surveyed in a telephone poll, 29% think Mr. Bush is doing an “excellent or pretty good” job as president, down from 35% in April and significantly lower than 43% in January. Approval ratings for Congress overall also sank, and now stand at 18%. In sum, 29% are found to be brain dead.
Yesterday, mid-way thru the trading session, the talking heads were grasping for straws--
the dollar index had rallied back up to 84(but didn't hold it) and crude was down to $72. Meanwhile, the VIX is running wild on the upside and the yield curve is steepening with the 2-year at 5.01%, the 10-year at 5.19%, and the 30-year at 5.30%. Those folks with the $2.25 trillion in ARMS are about to feel a great deal of pain.
Can you tell me what jerk is going to buy a 50-year Treasury bond? There was a time when a baby was born, you would buy a savings bond for the child. Would you do that now? Then why buy a 50-year Treasury?
Marc Faber: "To summarize, the higher the S&P 500 goes the more the US dollar will lose its value against gold and foreign currencies. In our opinion, the underperformance of US assets against foreign assets and precious metals, which began in 2002, will continue for as far as the eye can see."
The Department of Justice said Friday Microsoft Corp. has agreed to extend oversight of the software company's final antitrust judgment by at least two years. If the extension is approved by the court, it would expire in fall of 2009. Microsoft has agreed to a 2-year extension of the communications protocol licensing program of the final judgment, along with all its enforcement provisions. Microsoft has also agreed that the government may apply for an additional extension for up to three additional years, through November 2012.
Here's some data for the Fed. The US dollar suffered a severe sell-off on Friday, taking it to its weakest level against a trade-weighted basket of currencies since October 1997. As they say in the trading pits, it's the pause-to-be that refreshes! Naturally, the talking heads will say a weak dollar makes our exports cheaper. Unfortuately, since we depend on foreign capital to fund our deficits, a weak dollar is a bitter pill and a detractor for attracting foreign capital.
Most Mideast currencies are pegged to the dollar which means the value of stock investments held by foreigners has been plummeting in line with the U.S. currency. The Dubai stock market shed 14.35% for the week, while the Abu Dhabi market gave up 10.49%.
Ammo
5/12/06 Ammo
For the last several years money managers and traders have been buying on the dips,
and that has been a winning strategy. So I ask you. Will you use your ammo today or
ride it out over the weekend? There's no reason for you to be scared. There's nothing new--
gold, copper, and nickel are hitting highs and crude is bouncing around the $73 level, and
interest rates are trending higher, and the trade deficit will exceed $66 billion for the latest month's report. The dollar is getting trampled and the yen is below 110-- it's only the worst in 8 months and the dollar is 129 to the euro--only the worst in a year.
China's trade surplus in April was $10.5 billion-- we've seen it before.
Robert McHugh stated he received the 9th Hindenburg Omen since April 7th yesterday on May 11.
Don't be scared. You didn't give a crap about the other eight. Step up to the plate. I still
want to sell into strength. Make my day.
Now there is something new. Did you notice the voting at the Ford annual meeting? The support
for management was not there. Trouble is circling the company. At the beginning of the year I predicted the company could be sold. I believe that more strongly today. Despite all the difficulties in the U.S. car business, Ford still has plenty of cash flow. It is, in my view, significantly undervalued on a cash flow basis. A private equity combine could have a field day with Ford.
For the last several years money managers and traders have been buying on the dips,
and that has been a winning strategy. So I ask you. Will you use your ammo today or
ride it out over the weekend? There's no reason for you to be scared. There's nothing new--
gold, copper, and nickel are hitting highs and crude is bouncing around the $73 level, and
interest rates are trending higher, and the trade deficit will exceed $66 billion for the latest month's report. The dollar is getting trampled and the yen is below 110-- it's only the worst in 8 months and the dollar is 129 to the euro--only the worst in a year.
China's trade surplus in April was $10.5 billion-- we've seen it before.
Robert McHugh stated he received the 9th Hindenburg Omen since April 7th yesterday on May 11.
Don't be scared. You didn't give a crap about the other eight. Step up to the plate. I still
want to sell into strength. Make my day.
Now there is something new. Did you notice the voting at the Ford annual meeting? The support
for management was not there. Trouble is circling the company. At the beginning of the year I predicted the company could be sold. I believe that more strongly today. Despite all the difficulties in the U.S. car business, Ford still has plenty of cash flow. It is, in my view, significantly undervalued on a cash flow basis. A private equity combine could have a field day with Ford.
Ammo
5/12/06 Ammo
For the last several years money managers and traders have been buying on the dips,
and that has been a winning strategy. So I ask you. Will you use your ammo today or
ride it out over the weekend? There's no reason for you to be scared. There's nothing new--
gold, copper, and nickel are hitting highs and crude is bouncing around the $73 level, and
interest rates are trending higher, and the trade deficit will exceed $66 billion for the latest month's report. The dollar is getting trampled and the yen is below 110-- it's only the worst in 8 months and the dollar is 129 to the euro--only the worst in a year.
China's trade surplus in April was $10.5 billion-- we've seen it before.
Robert McHugh stated he received the 9th Hindenburg Omen since April 7th yesterday on May 11.
Don't be scared. You didn't give a crap about the other eight. Step up to the plate. I still
want to sell into strength. Make my day.
Now there is something new. Did you notice the voting at the Ford annual meeting? The support
for management was not there. Trouble is circling the company. At the beginning of the year I predicted the company could be sold. I believe that more strongly today. Despite all the difficulties in the U.S. car business, Ford still has plenty of cash flow. It is, in my view, significantly undervalued on a cash flow basis. A private equity combine could have a field day with Ford.
For the last several years money managers and traders have been buying on the dips,
and that has been a winning strategy. So I ask you. Will you use your ammo today or
ride it out over the weekend? There's no reason for you to be scared. There's nothing new--
gold, copper, and nickel are hitting highs and crude is bouncing around the $73 level, and
interest rates are trending higher, and the trade deficit will exceed $66 billion for the latest month's report. The dollar is getting trampled and the yen is below 110-- it's only the worst in 8 months and the dollar is 129 to the euro--only the worst in a year.
China's trade surplus in April was $10.5 billion-- we've seen it before.
Robert McHugh stated he received the 9th Hindenburg Omen since April 7th yesterday on May 11.
Don't be scared. You didn't give a crap about the other eight. Step up to the plate. I still
want to sell into strength. Make my day.
Now there is something new. Did you notice the voting at the Ford annual meeting? The support
for management was not there. Trouble is circling the company. At the beginning of the year I predicted the company could be sold. I believe that more strongly today. Despite all the difficulties in the U.S. car business, Ford still has plenty of cash flow. It is, in my view, significantly undervalued on a cash flow basis. A private equity combine could have a field day with Ford.
Tuesday, May 09, 2006
Buying Time
5/11/06 Buying Time
The Fed wants to buy time for the next six weeks to analyze the economic data in an effort to determine whether it is appropriate to raise rates for the 17th time or maintain the Fed Funds at 5%. Unfortunately, time costs money. Puts and calls and other derivatives carry a cost. Who does the Fed think will pay for this time? Clearly, the Fed thinks it will involve no cost for them. I assure you there will be a payment. Markets have some degree of uncertainty and some volatility. Despite what market mavens may believe, our currency is now in the control of foreigners. Money flows determine the direction of all markets, and the cash flow can be found in Asean countries as well as Petro countries. Continued printing of U.S. dollars by the Fed will only fuel inflation. It will not provide a sound platform for our twin tower deficits.
The talking heads on TV want to mesmerize you with the Dow approaching the highs of 2000. We are talking about 30 stocks. How about the dollar index at a one-year low, gold at a 26-year high, treasuries at a 5-year high yield, unleaded gasoline at the wholesale level at $2.16, and crude baove $72. How about a cooling housing market sitting on top of $9 trillion in mortgage debt with 25% of that debt in ARMs? How about 3.8% less gasoline available today than 1 year ago, and that's with $3 gasoline? Time never comes cheap. It can be less expensive than some periods but never cheap. It evaporates and you can't get it back. You can't beat time and you can't outsmart the unknown. If you want to rely on the Fed to sort it all out, be my guest. I will appoint you the president of the Schmuck Club.
Medtronic Begins Landmark Clinical Trial: Cardiac Device Combines Defibrillation and Heart Monitoring; Heart-Failure Device Demonstrates Medtronic's Focus on Cardiac Disease Management
The Bank of England stated growth may accelerate to about 3 percent in the fourth quarter before slowing to about 2.75 percent by the final three months of 2007, the central bank estimated in its quarterly inflation report, released in London today. Consumer-price inflation will accelerate to above 2 percent this year before moderating to target by the end of 2007, it said.
For the first time copper sold above $8000 a ton. Meanwhile, gold traded higher to the $709 level.
More than two in three Houston-area residents believe the country is headed for harder times, the highest pessimism level in the 18 years that the Houston Area Survey has asked the question.
StockTradingGuy: "Going back to 1980, the DJI has been up 17 of the last 26 Mays. Over the last 16 years, there have only been 4 down May months. If anything, May seems to be a decent month to be on the long side."
After acquiring Maytag, Whirlool is laying off 4,500 workers.
DaimlerChrysler on Wednesday said that it will add a third work shift to its manufacturing operations in Illinois, where the German-American car giant currently builds the 2007 Dodge Caliber. The plant will begin making the all-new Jeep Compass this month with the 2007 Jeep Patriot on tap for later this year.
The Fed wants to buy time for the next six weeks to analyze the economic data in an effort to determine whether it is appropriate to raise rates for the 17th time or maintain the Fed Funds at 5%. Unfortunately, time costs money. Puts and calls and other derivatives carry a cost. Who does the Fed think will pay for this time? Clearly, the Fed thinks it will involve no cost for them. I assure you there will be a payment. Markets have some degree of uncertainty and some volatility. Despite what market mavens may believe, our currency is now in the control of foreigners. Money flows determine the direction of all markets, and the cash flow can be found in Asean countries as well as Petro countries. Continued printing of U.S. dollars by the Fed will only fuel inflation. It will not provide a sound platform for our twin tower deficits.
The talking heads on TV want to mesmerize you with the Dow approaching the highs of 2000. We are talking about 30 stocks. How about the dollar index at a one-year low, gold at a 26-year high, treasuries at a 5-year high yield, unleaded gasoline at the wholesale level at $2.16, and crude baove $72. How about a cooling housing market sitting on top of $9 trillion in mortgage debt with 25% of that debt in ARMs? How about 3.8% less gasoline available today than 1 year ago, and that's with $3 gasoline? Time never comes cheap. It can be less expensive than some periods but never cheap. It evaporates and you can't get it back. You can't beat time and you can't outsmart the unknown. If you want to rely on the Fed to sort it all out, be my guest. I will appoint you the president of the Schmuck Club.
Medtronic Begins Landmark Clinical Trial: Cardiac Device Combines Defibrillation and Heart Monitoring; Heart-Failure Device Demonstrates Medtronic's Focus on Cardiac Disease Management
The Bank of England stated growth may accelerate to about 3 percent in the fourth quarter before slowing to about 2.75 percent by the final three months of 2007, the central bank estimated in its quarterly inflation report, released in London today. Consumer-price inflation will accelerate to above 2 percent this year before moderating to target by the end of 2007, it said.
For the first time copper sold above $8000 a ton. Meanwhile, gold traded higher to the $709 level.
More than two in three Houston-area residents believe the country is headed for harder times, the highest pessimism level in the 18 years that the Houston Area Survey has asked the question.
StockTradingGuy: "Going back to 1980, the DJI has been up 17 of the last 26 Mays. Over the last 16 years, there have only been 4 down May months. If anything, May seems to be a decent month to be on the long side."
After acquiring Maytag, Whirlool is laying off 4,500 workers.
DaimlerChrysler on Wednesday said that it will add a third work shift to its manufacturing operations in Illinois, where the German-American car giant currently builds the 2007 Dodge Caliber. The plant will begin making the all-new Jeep Compass this month with the 2007 Jeep Patriot on tap for later this year.
Real Time Reality
5/10/06 Real Time Reality
"It is not the fact that gold is close to breaking above $700 that has surprised us, but rather the pace at which it is expanding," said Matthew Parry, an economist at Moody's Economy.com. He emphasized, however, that his company "does not ... envisage the current bull-run having much further to go once $700 has been broken." If Greenspan were now head of the Fed, do you think he'd be concerned with $700 gold and the dollar index at 84.55? Do you think he'd be talking even the remote possibility of a pause?
The NAR forecast for 2006 was something to behold. They predict a 30-year fixed rate mortgage at 7%. The 30-year is now 6.50% with the 10-year Treasury at 5.13% and the 30-year Treasury at 5.21%. What does that tell you about interest rates for the 10-year and the 30-year by year-end? Sounds to me like 5.65% and 5.75% are distinct possibilities. The equity market is not trading on this possibility. Bad endings rarely are projected in advance. Continuing with the NAR forecast, they predict existing home sales to decline 6.4% in 2006, new home sales to drop 11.6%, and starts to dip by 5.4%. Despite all this negativity, the NAR thinks existing home prices will increase by 5.7%. I wouldn't want to stake the equity in one's home on that.
Gary Dorsch: "The Euro zone's M3 money supply is 8.6% higher from a year ago, and the UK's M4 is 12.2% higher. China's M2 money measure is 18.8% higher. The US M3 is off the charts."
Time Warner Inc.'s AOL unit is laying off 1,300 employees, or roughly 7% of its workforce, and closing its call center in Jacksonville, Fla., according to a published report Tuesday.
A new Harris Poll finds that about half of all U.S. adults think it is likely or very likely that there will be a major new war involving many American soldiers (52%) a major terrorist attack like 9/11 in the United States (49%) in the next 10 years. Slightly fewer adults (45%) think that it is likely or very likely that Social Security benefits will be eliminated or sharply reduced, while slightly more than one-third (35%) think it likely or very likely that we will see a woman become president. Approximately one in six (16%) thinks it is likely or very likely that there will be a stock market crash like the one that happened in 1929.
Palatin Technologies,Inc. announced today financial results for the third quarterended March 31, 2006. Total revenues in the quarter ended March 31, 2006were $5.0 million, compared to $2.8 million for the same period in 2005.Palatin reported a net loss of $7.6 million, or ($0.13) per basic anddiluted share, for the quarter ended March 31, 2006, compared to a net lossof $3.9 million, or ($0.07) per basic and diluted share, for the sameperiod in 2005. The increase in the net loss for the quarter ended March 31, 2006 versus the quarter ended March 31, 2005 was primarily attributable toincreased development costs related to bremelanotide, a drug underdevelopment for the treatment of erectile dysfunction (ED) and femalesexual dysfunction (FSD). The Company is currently conducting five clinicalstudies with bremelanotide that were initiated in the current fiscal year. COSTS AND EXPENSES :Total operating expenses for the quarter ended March 31, 2006 were$12.8 million, compared to $6.9 million for the same period in 2005. Development costs directly related to bremelanotide increased by $4.8 million, primarily reflecting costs associated with clinical trials thatwere initiated in the current fiscal year. Costs of other research and development programs also increased, as did spending for research personneland facilities. CASH POSITION :Palatin's cash, cash equivalents and investments totaled $16.3 millionas of March 31, 2006, compared to $18.1 million at June 30, 2005. In April 2006, the Company received $25 million of net proceeds from the sale ofcommon stock and warrants.
Bloomberg's Andy Mukherjee: "Even as they continue to pile up U.S. debt in their foreign- exchange reserves to keep their currencies stable against the dollar, Asian nations, China among them, are preparing for a scenario where the dollar does indeed collapse under the weight of a record U.S. current account deficit. At the Hyderabad meeting, finance ministers of China, Japan and South Korea got together with their counterparts from the Association of Southeast Asian Nations, or Asean. The 13-nation group said it would sponsor a research project, titled ``Toward greater financial stability in the Asian region: Exploring steps to create regional monetary units.''
I would like to take an additional moment to discuss CASCADE NATURAL Gas. With the Oregon decoupling taking effect May 1, with the Washington rate increase most likely taking effect in late 2006, and continued 4-5% growth in their customer base, I envision Cascade earning at least $1.60 per share in the 12 months beginning 1/1/07 with a significant increase in the 24 cent quarterly dividend. That to me is the worst case scenario. The other real possibility is the purchase by a larger northwest gas suppler in the near term. From the 10Q report hot off the press: "To assist the Company in evaluating all available options to maximize shareholder value, the Company has retained J.P. Morgan Securities, Inc., to provide strategic and financial advice as well as regulatory support. In addition, the Company is considering other strategic alternatives, including a possible business combination." The company has never previously stated "a possible business combination." Do you need to be hit over the head to get it?
Ashraf Laidi: "Today's auction of $21 bln in 3-year treasury notes drew 24% participation from foreign investors (indirect bidders), which was above February's 22% but lower than the 2003 and 2004 averages of 27% and 45%. Last month's 2-year auction drew 24% participation -- the lowest since November 2004, while the 5-year auction drew 21% participation -- the lowest since the records began in February 2003."
Investor's Business Daily and TechnoMetrica Market Intelligence said their economic optimism index declined for the third month in a row to 46.1 in May from 48.6 in April. A reading below 50 indicates pessimism.
The Dow reached its all-time high of 11,723 in early 2000. Adjusted for inflation, what would that high be today? In real inflation terms at least 2000 points higher.
The following are the corrected numbers provided by the BLS:
"In manufacturing, productivity changes in the first quarter were: 4.2 percent in manufacturing, 3.8 percent in durable goods manufacturing, and 4.4 percent in nondurable goods manufacturing. Productivity growth in manufacturing in the first quarter of 2006 reflected a 5.8-percent increase in output and a 1.6-percent increase in hours worked in the sector. Output and hours in manufacturing, which includes about 13 percent of U.S. business sector employment, tend to vary more from quarter to quarter than data for the aggregate business and nonfarm business sectors." Please note the increase in hours worked in the manufacturing sector, an indication of the growing strength in this area.
"It is not the fact that gold is close to breaking above $700 that has surprised us, but rather the pace at which it is expanding," said Matthew Parry, an economist at Moody's Economy.com. He emphasized, however, that his company "does not ... envisage the current bull-run having much further to go once $700 has been broken." If Greenspan were now head of the Fed, do you think he'd be concerned with $700 gold and the dollar index at 84.55? Do you think he'd be talking even the remote possibility of a pause?
The NAR forecast for 2006 was something to behold. They predict a 30-year fixed rate mortgage at 7%. The 30-year is now 6.50% with the 10-year Treasury at 5.13% and the 30-year Treasury at 5.21%. What does that tell you about interest rates for the 10-year and the 30-year by year-end? Sounds to me like 5.65% and 5.75% are distinct possibilities. The equity market is not trading on this possibility. Bad endings rarely are projected in advance. Continuing with the NAR forecast, they predict existing home sales to decline 6.4% in 2006, new home sales to drop 11.6%, and starts to dip by 5.4%. Despite all this negativity, the NAR thinks existing home prices will increase by 5.7%. I wouldn't want to stake the equity in one's home on that.
Gary Dorsch: "The Euro zone's M3 money supply is 8.6% higher from a year ago, and the UK's M4 is 12.2% higher. China's M2 money measure is 18.8% higher. The US M3 is off the charts."
Time Warner Inc.'s AOL unit is laying off 1,300 employees, or roughly 7% of its workforce, and closing its call center in Jacksonville, Fla., according to a published report Tuesday.
A new Harris Poll finds that about half of all U.S. adults think it is likely or very likely that there will be a major new war involving many American soldiers (52%) a major terrorist attack like 9/11 in the United States (49%) in the next 10 years. Slightly fewer adults (45%) think that it is likely or very likely that Social Security benefits will be eliminated or sharply reduced, while slightly more than one-third (35%) think it likely or very likely that we will see a woman become president. Approximately one in six (16%) thinks it is likely or very likely that there will be a stock market crash like the one that happened in 1929.
Palatin Technologies,Inc. announced today financial results for the third quarterended March 31, 2006. Total revenues in the quarter ended March 31, 2006were $5.0 million, compared to $2.8 million for the same period in 2005.Palatin reported a net loss of $7.6 million, or ($0.13) per basic anddiluted share, for the quarter ended March 31, 2006, compared to a net lossof $3.9 million, or ($0.07) per basic and diluted share, for the sameperiod in 2005. The increase in the net loss for the quarter ended March 31, 2006 versus the quarter ended March 31, 2005 was primarily attributable toincreased development costs related to bremelanotide, a drug underdevelopment for the treatment of erectile dysfunction (ED) and femalesexual dysfunction (FSD). The Company is currently conducting five clinicalstudies with bremelanotide that were initiated in the current fiscal year. COSTS AND EXPENSES :Total operating expenses for the quarter ended March 31, 2006 were$12.8 million, compared to $6.9 million for the same period in 2005. Development costs directly related to bremelanotide increased by $4.8 million, primarily reflecting costs associated with clinical trials thatwere initiated in the current fiscal year. Costs of other research and development programs also increased, as did spending for research personneland facilities. CASH POSITION :Palatin's cash, cash equivalents and investments totaled $16.3 millionas of March 31, 2006, compared to $18.1 million at June 30, 2005. In April 2006, the Company received $25 million of net proceeds from the sale ofcommon stock and warrants.
Bloomberg's Andy Mukherjee: "Even as they continue to pile up U.S. debt in their foreign- exchange reserves to keep their currencies stable against the dollar, Asian nations, China among them, are preparing for a scenario where the dollar does indeed collapse under the weight of a record U.S. current account deficit. At the Hyderabad meeting, finance ministers of China, Japan and South Korea got together with their counterparts from the Association of Southeast Asian Nations, or Asean. The 13-nation group said it would sponsor a research project, titled ``Toward greater financial stability in the Asian region: Exploring steps to create regional monetary units.''
I would like to take an additional moment to discuss CASCADE NATURAL Gas. With the Oregon decoupling taking effect May 1, with the Washington rate increase most likely taking effect in late 2006, and continued 4-5% growth in their customer base, I envision Cascade earning at least $1.60 per share in the 12 months beginning 1/1/07 with a significant increase in the 24 cent quarterly dividend. That to me is the worst case scenario. The other real possibility is the purchase by a larger northwest gas suppler in the near term. From the 10Q report hot off the press: "To assist the Company in evaluating all available options to maximize shareholder value, the Company has retained J.P. Morgan Securities, Inc., to provide strategic and financial advice as well as regulatory support. In addition, the Company is considering other strategic alternatives, including a possible business combination." The company has never previously stated "a possible business combination." Do you need to be hit over the head to get it?
Ashraf Laidi: "Today's auction of $21 bln in 3-year treasury notes drew 24% participation from foreign investors (indirect bidders), which was above February's 22% but lower than the 2003 and 2004 averages of 27% and 45%. Last month's 2-year auction drew 24% participation -- the lowest since November 2004, while the 5-year auction drew 21% participation -- the lowest since the records began in February 2003."
Investor's Business Daily and TechnoMetrica Market Intelligence said their economic optimism index declined for the third month in a row to 46.1 in May from 48.6 in April. A reading below 50 indicates pessimism.
The Dow reached its all-time high of 11,723 in early 2000. Adjusted for inflation, what would that high be today? In real inflation terms at least 2000 points higher.
The following are the corrected numbers provided by the BLS:
"In manufacturing, productivity changes in the first quarter were: 4.2 percent in manufacturing, 3.8 percent in durable goods manufacturing, and 4.4 percent in nondurable goods manufacturing. Productivity growth in manufacturing in the first quarter of 2006 reflected a 5.8-percent increase in output and a 1.6-percent increase in hours worked in the sector. Output and hours in manufacturing, which includes about 13 percent of U.S. business sector employment, tend to vary more from quarter to quarter than data for the aggregate business and nonfarm business sectors." Please note the increase in hours worked in the manufacturing sector, an indication of the growing strength in this area.
Monday, May 08, 2006
Sharing The Wealth
5/9/06 Sharing The Wealth
From AFX News Limited: "Venezuelan President Hugo Chavez said that the government would create a new royalties tax for oil companies and raise the income tax on heavy crude oil producers in the Faja region. 'We are going to create a new oil tax, called an extraction tax,' raising state income by 885 mln usd, Chavez said in his weekly program 'Hello, President' on Sunday. Chavez said during his six-hour talk that the new tax on producers would be 33 pct, and replace an existing oil royalty of 16.7 pct. He also said income tax on the four Faja producer groups would be raised from the current 34 pct to 50 pct, the level for producers in the rest of the country."
Inco said it remains committed to its "friendly, value-creating" deal to acquire Falconbridge Ltd. and to meeting its obligations under their support agreement.
Falconbridge stated it is 'determined to complete' transaction with Inco. Falconbridge Ltd. on Monday said it continues to believe there is "strong value proposition" in its proposed acquisition by Inco Ltd., and that the companies are determined to complete the transaction in accordance with the existing agreement.
Yesterday, senior management of both Cascade Natural Gas and Northwest Natural Gas made presentations at the American Gas Association Financial Forum in Scottsdale, AZ.
Rep. Ron Paul: "If we want to do something about gas prices, we should demand greatly reduced welfare and military spending, a balanced budget, and fewer regulations that interfere with the market development of alternative fuels. All subsidies and special benefits to energy companies should be ended. We also should demand a return to a sound commodity monetary system. And in the meantime, let's eliminate federal gas taxes at the pump. That alone would save Americans 18.4 cents per gallon. By contrast, oil companies only make about 10 cents per gallon. So maybe it's government that's being greedy."
Dell Inc. said Monday that it expects to report a fiscal first-quarter profit below it previous forecast, while revenue will be at the low end of its prior estimate, due to stiffer price competition from rival computer makers.
The National Coffee Association's Joe DeRupo stated that in 2006 82% of adult Americans will drink coffee, up from 79% two years ago.
eBay and United Health both made new 52-week lows on Monday. Both companies have provided superior long-term results for its shareholders.
Brett Steenbarger: "A narrow day after a market rise is not a pause that refreshes, but rather may indicate an exhaustion of the rally. Incredibly, 10 of the last 11 times this pattern has occurred (since 2/05), the market (SPY) has been down three days later."
Larry's Markets filed for chapter 11 bankruptcy. The company runs stores in Seattle, Redmond, Bellevue, Kirkland and Tukwila. Larry's has 550 employees.
Mittal Steel on Tuesday said it's willing to increase its offer for the world's second-largest steelmaker, Arcelor, and has made preliminary contact with Arcelor's chairman, Joseph Kinsch.
In the new Gallup poll, Bush's approval rating fell to 31%.
Texas and five other states, concerned about summer gasoline supplies, have asked federal officials about possible waivers from clean fuel rules, the head of the Environmental Protection Agency said Monday.
Mike Shedlock: "Long term prices of houses simply can not rise above people's means to pay for them. That is a simple economic fact. Here is another simple economic fact: Family incomes are falling. The negative savings rate and rising foreclosures are more proof of stress in the system."
China and India have jointly bid for a stake in an oil venture in Colombia for some US $800 million, said an Indian official Friday.
"It's going from a seller's market to a buyer's market," said David Lereah, the chief economist for the National Association of Realtors. In March, "price appreciation went down to 7.4 percent, from over 10 percent," he added. "That most probably reflects that sellers are bringing their prices down."
The Detroit News pointed out the three-day hearing, beginning today in New York with U.S. Bankruptcy Judge Robert Drain, is a pivotal event in Delphi's bankruptcy case since it zeroes in on one of the most contentious pieces of the supplier's turnaround plan -- major wage and benefit cuts for active workers and retirees.
The PlayStation 3 video game console will be available for $499 in the United States starting Nov. 17, Sony executives said Monday.
From AFX News Limited: "Venezuelan President Hugo Chavez said that the government would create a new royalties tax for oil companies and raise the income tax on heavy crude oil producers in the Faja region. 'We are going to create a new oil tax, called an extraction tax,' raising state income by 885 mln usd, Chavez said in his weekly program 'Hello, President' on Sunday. Chavez said during his six-hour talk that the new tax on producers would be 33 pct, and replace an existing oil royalty of 16.7 pct. He also said income tax on the four Faja producer groups would be raised from the current 34 pct to 50 pct, the level for producers in the rest of the country."
Inco said it remains committed to its "friendly, value-creating" deal to acquire Falconbridge Ltd. and to meeting its obligations under their support agreement.
Falconbridge stated it is 'determined to complete' transaction with Inco. Falconbridge Ltd. on Monday said it continues to believe there is "strong value proposition" in its proposed acquisition by Inco Ltd., and that the companies are determined to complete the transaction in accordance with the existing agreement.
Yesterday, senior management of both Cascade Natural Gas and Northwest Natural Gas made presentations at the American Gas Association Financial Forum in Scottsdale, AZ.
Rep. Ron Paul: "If we want to do something about gas prices, we should demand greatly reduced welfare and military spending, a balanced budget, and fewer regulations that interfere with the market development of alternative fuels. All subsidies and special benefits to energy companies should be ended. We also should demand a return to a sound commodity monetary system. And in the meantime, let's eliminate federal gas taxes at the pump. That alone would save Americans 18.4 cents per gallon. By contrast, oil companies only make about 10 cents per gallon. So maybe it's government that's being greedy."
Dell Inc. said Monday that it expects to report a fiscal first-quarter profit below it previous forecast, while revenue will be at the low end of its prior estimate, due to stiffer price competition from rival computer makers.
The National Coffee Association's Joe DeRupo stated that in 2006 82% of adult Americans will drink coffee, up from 79% two years ago.
eBay and United Health both made new 52-week lows on Monday. Both companies have provided superior long-term results for its shareholders.
Brett Steenbarger: "A narrow day after a market rise is not a pause that refreshes, but rather may indicate an exhaustion of the rally. Incredibly, 10 of the last 11 times this pattern has occurred (since 2/05), the market (SPY) has been down three days later."
Larry's Markets filed for chapter 11 bankruptcy. The company runs stores in Seattle, Redmond, Bellevue, Kirkland and Tukwila. Larry's has 550 employees.
Mittal Steel on Tuesday said it's willing to increase its offer for the world's second-largest steelmaker, Arcelor, and has made preliminary contact with Arcelor's chairman, Joseph Kinsch.
In the new Gallup poll, Bush's approval rating fell to 31%.
Texas and five other states, concerned about summer gasoline supplies, have asked federal officials about possible waivers from clean fuel rules, the head of the Environmental Protection Agency said Monday.
Mike Shedlock: "Long term prices of houses simply can not rise above people's means to pay for them. That is a simple economic fact. Here is another simple economic fact: Family incomes are falling. The negative savings rate and rising foreclosures are more proof of stress in the system."
China and India have jointly bid for a stake in an oil venture in Colombia for some US $800 million, said an Indian official Friday.
"It's going from a seller's market to a buyer's market," said David Lereah, the chief economist for the National Association of Realtors. In March, "price appreciation went down to 7.4 percent, from over 10 percent," he added. "That most probably reflects that sellers are bringing their prices down."
The Detroit News pointed out the three-day hearing, beginning today in New York with U.S. Bankruptcy Judge Robert Drain, is a pivotal event in Delphi's bankruptcy case since it zeroes in on one of the most contentious pieces of the supplier's turnaround plan -- major wage and benefit cuts for active workers and retirees.
The PlayStation 3 video game console will be available for $499 in the United States starting Nov. 17, Sony executives said Monday.
Sunday, May 07, 2006
Majority Opinions
5/8/06 Majority Opinions
Economists at all 22 securities firms that trade with the central bank stated last week that Fed officials will boost their target rate a quarter-percentage point to 5 percent when they meet May 10. Seventeen of the so-called primary dealers said that will be the last increase until at least August.
Sixty-five percent of 51 traders, strategists and investors surveyed May 5 from Mumbai to New York advised buying the yen against the dollar this week, a Bloomberg survey showed.
I'm not too comfortable being with such a majority. I believe there will be other rate increases after May 10, and I believe these increases will place a near-term floor under the dollar against the yen and the euro. That does not mean I am bullish on the dollar. It simply means things don't go down in a straight line.
Wachovia Corp, the No. 4 U.S. bank, is near an agreement to buy Golden West Financial Corp. of Oakland for roughly $26 billion, The Wall Street Journal said in its online edition Sunday, citing unnamed people familiar with the matter. Golden West owns World Savings and is best known as an ARM lender.
"In general, for most of the plastic surgeons in cosmetic surgery, the numbers are down. It's the economy for men and women. It's trickle-down economics. We are luxury items," said Dr. William Vasileff of Michigan's Birmingham Institute of Plastic Surgery, adding that collections on surgeries already performed have dropped off as well. "Patients have co-pays they don't want to co-pay."
Stanford's medical school has joined a deal to provide U.S. medical research information to consumers and doctors in China. Bridgetech Holdings International of San Diego will build a web site that it hopes will become a prime source for health-related information in China, according to a news report. The Texas A&M Health Center and China's Wu Jieping Medical Foundation have also signed onto the project. "The Internet is now beginning to have new avenues of access within the People's Republic of China,'' Stanford medical school spokesman Paul Costello told Knight Ridder. "We thought it was a powerful way to extend our hand across to the people of China and the health professionals of China.''
Stanford will provide access to university publications and information on a variety of topics including stem cell research and pediatrics. Bridgetech said it expects the site to draw 100 million visitors in its first 18 months after launching this summer.
Brett Steenbearger: "We have had five consecutive up weeks in the Dow Jones Industrial Average, gaining over 4% during that time...It turns out that the event is quite unusual: it's only occurred 69 times since January, 1978 (N = 1474 weeks)...When the Dow has been up five weeks in a row, the *next* five weeks have averaged a gain of only .02% (39 up, 30 down)."
Buffett said Berkshire will get more opportunities to acquire utility businesses. In my view, utility businesses are frequently under appreciated. Their cash flow is more dependable than most other businesses and much more resilient during recessionary periods.
Thermo Electron Corp., the world's biggest maker of medical-laboratory instruments, agreed to buy Fisher Scientific International Inc. for $10.6 billion in stock to expand in the market for equipment used in drug research.
Fisher investors will get 2 Thermo shares, or $78.90, for each of their shares, about 7 percent more than the Hampton, New Hampshire-based company's closing price last week, Waltham, Massachusetts-based Thermo said in a Business Wire statement today. Fisher investors will own about 61 percent of the company.
The dollar slid to its lowest in a year against the euro and the weakest in eight months versus the yen.
John Hussman: " Analysts might benefit investors by noting that stocks have lagged the return on lowly Treasury bills for nearly eight years, and thereby remind them that valuations matter.
From mid-1998 through Friday's close, the S&P 500 index has delivered total returns of just 3% annually. The index remains well short of the all-time high it achieved in 2000. "
According to a report in UK's Daily Mail, scientists have pinned down one variant of this piece of the genome on Chromosome 8, one of the strings of DNA in which the genetic code is written, is linked to 8 per cent of prostate cancers in Europeans and 16 per cent in people of African descent. Africans are 1.6 times more likely to develop prostate cancer than Europeans, and 2.4 times more likely to die from the disease. The new findings, published in the journal Nature Genetics, suggest the Chromosome 8 variant not only plays a role in aggressive cancers but may be largely responsible for the ethnic differences.
Teck Cominco bids C$17.8B cash and stock for Inco, and that equates to $78.50 Canadian.
The bid is conditional upon Inco not completing its takeover deal for Falconbridge Ltd. As such, I place a low probability of success for Teck Cominco.
James Montier: "Nasdaq stocks are trading at a nose-bleed high of 40 times trailing earnings. But short interest on the exchange-traded index fund that tracks the Nasdaq (ticker:QQQQ) is less than two days of trading volume. Since investors sell short in hope of buying back later at a lower price, it's clear that few are betting that Nasdaq stocks are overvalued at 40 times trailing earnings."
Economists at all 22 securities firms that trade with the central bank stated last week that Fed officials will boost their target rate a quarter-percentage point to 5 percent when they meet May 10. Seventeen of the so-called primary dealers said that will be the last increase until at least August.
Sixty-five percent of 51 traders, strategists and investors surveyed May 5 from Mumbai to New York advised buying the yen against the dollar this week, a Bloomberg survey showed.
I'm not too comfortable being with such a majority. I believe there will be other rate increases after May 10, and I believe these increases will place a near-term floor under the dollar against the yen and the euro. That does not mean I am bullish on the dollar. It simply means things don't go down in a straight line.
Wachovia Corp, the No. 4 U.S. bank, is near an agreement to buy Golden West Financial Corp. of Oakland for roughly $26 billion, The Wall Street Journal said in its online edition Sunday, citing unnamed people familiar with the matter. Golden West owns World Savings and is best known as an ARM lender.
"In general, for most of the plastic surgeons in cosmetic surgery, the numbers are down. It's the economy for men and women. It's trickle-down economics. We are luxury items," said Dr. William Vasileff of Michigan's Birmingham Institute of Plastic Surgery, adding that collections on surgeries already performed have dropped off as well. "Patients have co-pays they don't want to co-pay."
Stanford's medical school has joined a deal to provide U.S. medical research information to consumers and doctors in China. Bridgetech Holdings International of San Diego will build a web site that it hopes will become a prime source for health-related information in China, according to a news report. The Texas A&M Health Center and China's Wu Jieping Medical Foundation have also signed onto the project. "The Internet is now beginning to have new avenues of access within the People's Republic of China,'' Stanford medical school spokesman Paul Costello told Knight Ridder. "We thought it was a powerful way to extend our hand across to the people of China and the health professionals of China.''
Stanford will provide access to university publications and information on a variety of topics including stem cell research and pediatrics. Bridgetech said it expects the site to draw 100 million visitors in its first 18 months after launching this summer.
Brett Steenbearger: "We have had five consecutive up weeks in the Dow Jones Industrial Average, gaining over 4% during that time...It turns out that the event is quite unusual: it's only occurred 69 times since January, 1978 (N = 1474 weeks)...When the Dow has been up five weeks in a row, the *next* five weeks have averaged a gain of only .02% (39 up, 30 down)."
Buffett said Berkshire will get more opportunities to acquire utility businesses. In my view, utility businesses are frequently under appreciated. Their cash flow is more dependable than most other businesses and much more resilient during recessionary periods.
Thermo Electron Corp., the world's biggest maker of medical-laboratory instruments, agreed to buy Fisher Scientific International Inc. for $10.6 billion in stock to expand in the market for equipment used in drug research.
Fisher investors will get 2 Thermo shares, or $78.90, for each of their shares, about 7 percent more than the Hampton, New Hampshire-based company's closing price last week, Waltham, Massachusetts-based Thermo said in a Business Wire statement today. Fisher investors will own about 61 percent of the company.
The dollar slid to its lowest in a year against the euro and the weakest in eight months versus the yen.
John Hussman: " Analysts might benefit investors by noting that stocks have lagged the return on lowly Treasury bills for nearly eight years, and thereby remind them that valuations matter.
From mid-1998 through Friday's close, the S&P 500 index has delivered total returns of just 3% annually. The index remains well short of the all-time high it achieved in 2000. "
According to a report in UK's Daily Mail, scientists have pinned down one variant of this piece of the genome on Chromosome 8, one of the strings of DNA in which the genetic code is written, is linked to 8 per cent of prostate cancers in Europeans and 16 per cent in people of African descent. Africans are 1.6 times more likely to develop prostate cancer than Europeans, and 2.4 times more likely to die from the disease. The new findings, published in the journal Nature Genetics, suggest the Chromosome 8 variant not only plays a role in aggressive cancers but may be largely responsible for the ethnic differences.
Teck Cominco bids C$17.8B cash and stock for Inco, and that equates to $78.50 Canadian.
The bid is conditional upon Inco not completing its takeover deal for Falconbridge Ltd. As such, I place a low probability of success for Teck Cominco.
James Montier: "Nasdaq stocks are trading at a nose-bleed high of 40 times trailing earnings. But short interest on the exchange-traded index fund that tracks the Nasdaq (ticker:QQQQ) is less than two days of trading volume. Since investors sell short in hope of buying back later at a lower price, it's clear that few are betting that Nasdaq stocks are overvalued at 40 times trailing earnings."
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