Saturday, March 10, 2007

No Money Down Loans End

3/11/07 No Money Down Loans End

Countrywide Financial Corp., the largest U.S. mortgage lender, on Friday told its brokers to stop offering borrowers the option of no-money-down home loans, according to a document obtained by Reuters.

Mary Anne and Pamela Aden: " Putting it into perspective, it would take $1 million each day for 189,000 years to pay off the U.S. debt and liabilities. Yet the government keeps spending money it doesn't have. Since the government doesn't want to cut spending or raise taxes to reduce its debt, it simply produces money to cover its expenses, which is what governments throughout history have always done, and this amount is also huge. Just over the past year, the amount of paper dollars that've been created is equal to half the value of all the gold that's ever been produced worldwide over the past 2,000 years, which is about $2 trillion. If that shocks you, consider that the war in Iraq alone will probably end up costing the equivalent of what all the gold produced in the past 2000 years is worth."

Peter Schiff: "Despite the rebound, the technical and psychological damage to the stock market is major, and the odds that the carnage is over are slim. A more likely scenario is that the bear market rally that began for U.S. stocks in October of 2002 has ended, and a new leg down in this long-term bear market has begun. As for the likelihood of recession, not only does it seem to be highly probable, but it is more of an outright certainty. With the construction industry shedding 62,000 jobs last month (the most in sixteen years), it is clear that housing is already in recession! The major question is when the overall recession will begin: the second half of "07 or early '08?"

Mike Shedlock: "One thing that is important to know about the phone survey is that anyone who says they have a job is counted no matter how few hours they work at it, and regardless of pay. Thus real estate agents who have not made a home sale for 4 months are still considered employed, whether or not they have commission checks coming in or not. The same goes for those selling trinkets on EBAY as well as those who consider themselves employed on the basis of some Multi Level Marketing venture they are in. Finally, the phone survey does not have a list of cell phone numbers so those without a "real line" are excluded from the survey."

From this week's Barron's on the Tribune Co.: "Barron's has learned from a person connected to the ongoing auction that Zell's proposal has bested offers by Los Angeles billionaires Ron Burkle and Eli Broad and another by the Chandler Family, disgruntled owner of 20% of Tribune. This person says that Zell wants to take the company private in a transaction valued at about $13 billion and become chairman of the surviving entity."

Bill Bonner provided the following: "
The Orange County (California) Register:
"For Kal Elsayed, a former executive at New Century Financial, a large lender based in Irvine, driving a red convertible Ferrari to work at a company that provided home loans to people with low incomes and weak credit might have appeared ostentatious, he now acknowledges. But, he says, that was nothing compared with the private jets that executives at other companies had.
"You just lost touch with reality after a while because that's just how people were living," said Mr. Elsayed, 42, who spent nine years at New Century before leaving to start his own mortgage firm in 2005. "We made so much money you couldn't believe it. And you didn't have to do anything. You just had to show up."

Printing money. Printing more money.
Doug Noland: "Bank Credit surged $33.3 billion (week of 2/28) to a record $8.410 TN. Bank Credit has expanded at a 7.9% annualized rate y-t-d (9 wks), with a one-year gain of $750 billion, or 9.8%. For the week, Securities Credit jumped $20.1 billion. Loans & Leases expanded $13.1 billion to a record $6.167 TN. Commercial & Industrial (C&I) Loans expanded 11.4% over the past year. For the week, C&I loans jumped $10.5 billion, while Real Estate loans declined $3.5 billion. Year-to-date, C&I loans have expanded at an 11.4% rate and Real Estate loans at a 7.6% pace. Bank Real Estate loans expanded 14.2% over the past year. For the week, Consumer loans dropped $6.8 billion, while Securities loans gained $11.2 billion. Other loans added $1.8 billion. On the liability side, (previous M3) Large Time Deposits increased $3.3 billion.
M2 (narrow) "money" jumped $34.2 billion to a record $7.145 TN (week of 2/26). Narrow "money" expanded $383 billion, or 5.7%, over the past year. M2 has expanded at an 8.2% pace during the past 20 weeks. For the week, Currency increased $1.6 billion, while Demand & Checkable Deposits declined $5.5 billion. Savings Deposits surged $33 billion, and Small Denominated Deposits added $1.1 billion. Retail Money Fund assets increased $3.5 billion...Open Market Paper (mostly commercial paper), expanded at a 24% rate during Q4 and 20.8% for the year to $2.216 TN. Open Market Paper has expanded $645bn (41.4%) during the past two years. Home for much of this new finance, Money Market Fund Assets expanded at a 27% pace during Q4. For 2006, Money Fund Assets jumped $306bn, or 15.2%, to $2.313 TN, second only to 2001's $429bn (the year, not coincidently, the GSE's expanded a record $344bn). At $608bn, Open Market Paper comprises the largest Money Market Fund holding, followed by Security RPs ($395bn), Municipal Securities ($370bn) and Corporate Bonds including ABS ($368bn). Funding Corps Assets declined $1bn in 2002, increased $78bn in 2003 and $70bn in 2004, then surged $293 billion in 2005...Post-Bubble Subprime and general mortgage Credit risks pose an increasingly recognized problem on one hand, while heightened Bubble excesses in Corporate and Securities Finance are equally risky on the other. Because of heightened inflation risks associated with domestic and global excesses, and one can envisage a scenario where the Fed remains quite hesitant to provide the easing cycle Wall Street is anxiously positioned for."

The nation's banks are just beginning to feel the pain of defaults on risky mortgages they made at low introductory rates when housing prices were soaring, U.S. Federal Reserve Governor Susan Bies said.

According to Bloomberg, Australia's northwestern coast, where most of the country's iron ore is mined, is facing its second severe cyclone in a week, which may again disrupt output at companies including Rio Tinto Group and BHP Billiton Ltd. Tropical Cyclone Jacob, now packing winds of up to 170 kilometers (106 miles) an hour, is forecast to reach land on Sunday, the Bureau of Meteorology said today in Perth, the capital of Western Australia state. It's likely to remain a ``Category 3'' storm, implying winds of up to 224 kilometers an hour and the possibility of housing damage and power failures.

Kohlberg Kravis Roberts & Co. and Italian billionaire Stefano Pessina offered 9.7 billion pounds ($18.8 billion) for Alliance Boots Plc, the largest U.K. drugstore chain, in what would be Europe's biggest buyout.

Office rents have climbed more than 25% on average in the last three years in much of Los Angeles County. In some of Orange County's thriving office parks, rents have risen by more than 50% in that period, with the Irvine Spectrum posting the region's biggest average jump, at nearly 57%, according to a recent report from real estate brokerage Cushman & Wakefield.

Friday, March 09, 2007

New Facts

3/10/07 New Facts

Florida homebuyers canceled 36% of their contracts with Hovnanian in the quarter; elsewhere in the country, the company's cancellation rate was 29%. "Most of our markets have begun to show signs of stabilization," said president and CEO Ara K. Hovnanian, "but we are not yet confident that we have found the bottom of this housing slowdown...Once the housing market bottoms out, we are not expecting a rapid recovery."
The lowered outlook despite better first-quarter results above forecasts "suggests to us that buyers' response to higher incentives early in the quarter did not meet management's expectations," wrote Banc of America Securities analyst Daniel Oppenheim in a research note Friday.
"We think higher incentives may be necessary to boost sales during the spring season," he added.

Subprime mortgage lender New Century Financial announced it will no longer accept loan applications because some of its backers are refusing to provide funding. New Century has breached one of the covenants, or minimum financial targets, on which its agreements with warehouse lenders are based, and has not succeeded in securing waivers from five of its lenders. The bank has been obliged to repurchase some bad loans by one of its lenders, but has received $265 million in financing from another; Citigroup is rumored to be the former and Morgan Stanley the latter.

The U.S. trade deficit narrowed by 3.8% in January to $59.1 billion, the Commerce Department said Friday. Exports rose while imports declined slightly in January. The U.S. trade deficit with China widened to $21.3 billion in compared with $17.9 billion in the same month last year. The improving trade deficit could boost first quarter gross domestic product.

97,000 new non-farm payroll jobs were created in February, the fewest number of jobs in two years, even as the unemployment rate fell back to 4.5%, the Labor Department reported Friday. Average hourly earnings increased a larger-than-expected 6 cents, or 0.4%, bringing the year-over-year gain to 4.1%. The share of the unemployed who had been without a job for 27 weeks or longer increased by 1.7 percentage points to 17.8 percent in February.

George Ure: "The only people counted for unemployment are those who are getting government benefits. Lose those, and you're no longer counted. Unemployed, homeless, starving, maybe, but not counted. So sorry."

Fremont General Corp.'s mandate from federal regulators to tighten its lending standards marks the start of a trend, Punk Ziegel analyst Richard X. Bove said in a note to clients Friday. The Federal Deposit Insurance Crop., "wants proper and accurate documentaions on the loans and it wants these credits properly underwritten," Bove said. "Moreover, the FDIC wants liquidity and capital placed against the weak credits."

Winston Hotels Inc. received an unsolicited takeover offer from Inland American Real Estate Trust Inc. at $15 a share.

Rising mortgage defaults by subprime borrowers may add more than 500,000 homes to a residential real estate market already beset by slumping prices, according to CreditSights Inc.

China plans to set up an agency to help manage its $1.07 trillion of currency reserves that would be Asia's largest government-controlled investment fund. Finance Minister Jin Renqing said in Beijing today the fund will be modeled on Singapore's Temasek Holdings Pte., which holds stakes in companies ranging from Chinese banks to Indian textile makers. "We can achieve more profit from the investments," Jin said at a news conference. "We are now preparing the organization of this new corporation."

After the IPO Clearwire's stock climbed as high as $27.95 per share on Mar. 8 -- but the stock fell back to $24.62 per share at the close of trading, and that was below the $25 IPO price.

TheOilDrum: "China plans to begin filling the tanks at its third strategic oil reserve in its eastern Shandong Province by the middle of this year to help secure the country's fuel supplies. China Petroleum and Chemical Corporation (Sinopec) will complete the Huangdao base in Shandong, said Du Guosheng, assistant to the president of Sinopec. The capacity of the Huangdao base is expected to reach 19 million barrels, Du said."

Zmann: "Nevertheless I’m starting to think that natural gas prices won’t get the large retrenchment I had once expected. I’d bet on a short term sell off during the shoulder season but then upward pressure from a plethora of sources including everything from budgetary constraints to threatened shut ins to hurricanes to La Nina to falling imports from Canada. So I’m transitioning from bearish to neutral and doing the homework to have long bets in place when/if I feel the time is right."

The FBI in 2005 reported to Congress that its agents had delivered a total of 9,254 national security letters seeking e-mail, telephone or financial information on 3,501 U.S. citizens and legal residents over the previous two years.
Justice Department Inspector General Glenn A. Fine's report says the number of letters was underreported by 20 percent, according to the officials. How about this for accountability? Cut the pay by 20%. When was the last time a government worker took a pay cut for poor performance?

Ron Paul of Texas: "When it comes to Social Security and Medicare, the government won't be able to keep its promises in the future. That is the reality every American should get used to, despite the grand promises of Washington reformers."

Addison Wiggin: "That's another reason the Concord Coalition took the road. Because, as Coalition speaker and U.S. Comptroller David Walker told a radio audience, "there are a lot of people in Washington spending other people's money on all kinds of fraudulent and wasteful things. Other people's money…like your kids' and grandkids' money."Later at a "town hall" meeting at St. Anselm's College in Manchester, Walker finished his speech with this nugget: He put a picture of his three grand-children on the big screen behind him; girls aged from four months to seven years. "These are my grandchildren. They can't vote. They don't have a voice. I am their voice."
"While the special committee of our board of directors continues to oversee Tribune's exploration of strategic alternatives, we have no current plans to sell additional newspapers," Scott Smith, president of the publishing division of the Chicago parent company, said in a brief statement. Tribune Co. announced Tuesday that it was selling the Advocate of Stamford and the Greenwich Time to Gannett for $73 million in a transaction between the nation's two largest newspaper companies. After the announcement of that sale, Chief Executive Dennis FitzSimons said the company had exceeded its goal of selling $500 million in "non-core assets."The Tribune Co., which announced this week it is shedding two small Connecticut newspapers, says it has no plans to sell the Chicago Tribune, Los Angeles Times, the Baltimore Sun or any of its other papers. In my opinion, Wall Street has misinterpreted the company's statement. The company does not want to sell any more of its newspapers on a piece meal basis. That has nothing to do with selling the whole company.

January wholesale inventories rose by 0.7%, the Commerce Department reported, following an unrevised drop of 0.5% in December. Sales at wholesalers fell by 0.9% in January. The inventory-to-sales ratio rose to 1.19 as a result, from 1.17 in December.

Strong demand for corn from ethanol plants is driving up the cost of livestock and will raise prices for beef, pork and chicken, the Agriculture Department said Friday. Meat and poultry production will fall as producers face higher feed costs, the department said in its monthly crop report. Ethanol fuel, which is blended with gasoline, is consuming 20 percent of last year's corn crop and is expected to gobble up more than 25 percent of this year's crop. Ethanol is another government program created by dummies for their large political campaign donors.

Crude dropped $1.59 to $60.05 a barrel. Natural gas fell 2.2% to $7.08 per million British thermal units.

April gold closed at $652 an ounce Friday, down $3.50 for the session. May silver fell 15 cents to end at $12.97 an ounce. May copper fell 1.8%, or 4.95 cents, to end the day at $2.784 a pound.

Thursday, March 08, 2007


3/9/07 Retail

Wal-Mart Stores Inc. said its February sales at stores open at least one year rose 0.9%. Analysts, on average, had expected its same-store sales to rise 1.5%, according to Thomson Financial. Total company sales for the four weeks ended March 2 rose 8.1% to $26.79 billion. Same-store sales for the March period are to rise between 1% and 2%, the company said. Wal-Mart raised its annual dividend by 31% to 88 cents a share from 67 cents a share. The first payment of the new dividend, which will be paid on a quarterly basis at 22 cents a share, will be made on April 2 to shareholders of record on March 16.

The Bank of England on Thursday kept interest rates on hold for the second month in a row at 5.25%.

Costco's comparable-store sales for the quarter rose 5% chain-wide, reflecting increases of 5% in the U.S. and 4% internationally. For the February reporting period, same-store sales rose 4% overall, reflecting increases of 4% in the U.S. and 5% overseas.

Express Scripts sweetened its hostile cash-and-stock bid for Caremark, and said it expects to receive a second request from the Federal Trade Commission in relation to the deal.

``I don't want to be too sophisticated here, but 2007 is going to suck, all 12 months of the calendar year,'' D.R. Horton Chief Executive Officer Donald Tomnitz said at a Citigroup Inc. conference in New York. ``Our future is not as bright as what we would like it to be.''

The European Central Bank raised its key interest rate by a quarter percentage point to 3.75 percent on Thursday. The increase from 3.5 percent had been widely expected. It was the seventh increase since December 2005 when the rate was 2 percent.

The number of workers filing for unemployment benefits fell 10,000 last week to 328,000, but the four-week average of new claims moved up to a 17-month high of 339,000, the Labor Department reported Thursday. The number of workers receiving unemployment checks fell by 98,000 to 2.53 million in the week ending Feb. 24. The insured unemployment rate - the portion of all workers who are covered by unemployment insurance who are collecting benefits - fell back to 1.9% from a cyclical high of 2%. The four-week average of continuing claims inched higher to 2.55 million, however, the highest since January 2006.

Target Corp. said its February sales at stores open at least one year rose 5.7%.

McDonald's Corp. said its global comparable sales rose 5.7% in February. The company's comparable sales rose 3.1% in February. McDonald's said comparable sales rose 5.9% in Europe and 12.3% in the combined Asia/Pacific, Middle East and Africa region for the month.

"The West Coast will certainly be the wild, wild West this year," said Tom Kloza, chief oil analyst for the Oil Price Information Service. Extensive maintenance work at West Coast refineries has curtailed supplies and exacerbated the typical "preseason rally" spurred by jitters about tight supplies.

Brett Steenbarger: "we are not yet at downside momentum levels consistent with a market bottom."

From Economonitor: "Deutsche Bank views the current selloff as a temporary correction like May 2006 rather than a meltdown like September 1998. Like May 2006, the current selloff was triggered by risk repricing. Unlike May 2006, carry trade positioning was more extreme while positioning in commodities was less so. 1998 is an even farther cousin than May 2006 in magnitude. In the near-term, weak buying activity is likely to increase volatility in equities, leading to more frequent market overshoots. Increased volatility is also likely to increase risk premia in fixed income, withdrawing support for the long end of U.S. Treasuries and resulting in steeper yield curves. In the longer term, risk premia will be supported by tightening credit conditions in the U.S. and uncertainty over ECB monetary policy."

For the most part, energy analysts have missed the boat by under-estimating oil and gas demand in China and India as well as over-estimating world-wide production. For example, what impact will continuing double digit demand in China have on crude prices as production declines? We don't have mid-term elections this year, which, in my view, manipulated prices at the pump down dramatically and we don't have Goldman Sachs engineering a dramatic drop in crude. Gas at the pump has only just begun to increase. The hedge funds will wake up and realize the money is on the long side.

From 247WallSt: "Bank of American is out with a report that shows China's car production hit 5.2 million vehicles compared to 4.4 million in the US during 2006. Ten years ago, China only produced 6% as many cars are the US built."

Time Magazine: "Cheney has become the Administration's enemy within, the man whose single-minded pursuit of ideological goals, creaking political instincts and love of secrecy produced an independent operation inside the White House that has done more harm than good."

Voters in three dozen Vermont towns voted March 6 to call upon Congress to open an impeachment probe of President George Bush and Vice President Dick Cheney.

�Time�s glory is to...unmask falsehood and bring truth to light.� - William Shakespeare

�He had a motive to lie, and the motive to lie matched up exactly with the lie,� Mr. Fitzgerald told the jury. �That�s where your common sense kicks in.�

Catalina Marketing Corp. said Thursday it agreed to a sweetened takeover offer from ValueAct Capital, which will pay $32.50 per share, or $1.6 billion in cash for the marketing services company.

The Energy Department said natural-gas inventories fell 102 billion cubic feet for the week ended March 2. Total stocks now stand at 1.631 trillion cubic feet, down 268 billion cubic feet from the year-ago level, but 194 billion cubic feet above the five-year average, the government data said. The latest draw down is, for the most part, above the estimates made on Monday of this week. I believe the downside risk for natural gas is probably about 10% while the upside on a very hot summer could be 30% or more.

The Bush Administration was in talks with oil company chief executives and heads of states who were considering signing project deals with Iran in order to dissuade them from moving ahead, a State Department official said Tuesday.
Testifying before the U.S. House Foreign Affairs Committee, U.S. Undersecretary of State for Political Affairs Nicholas Burns Burns said the Administration had in recent weeks engaged relevant companies and countries in discussions about their potential investment in Iran's oil and natural gas sector.
Burns said he has told CEOs and prime ministers that the U.S. was "vigorously opposed" to the deals and that any agreements would "undermine international efforts to resolve the nuclear issue."
"Our discussions are intended to diminish the likelihood of seeing them finalized," Burns said in his submitted testimony. Several oil companies, including Royal Dutch Shell (RDSA), Repsol YPF S.A. (REP), Statoil ASA (STO), Norsk Hydro ASA (NHY), Australia LNG and China's National Offshore Oil Corp. are preparing to sign several major oil and gas deals. When the Administration stops making enemies, then maybe someone will listen to their jawboning. Until that occurs, they should zip their traps shut.

Rudo de Ruijter, Independent Researcher, Netherlands: "Those who use dollars outside the US continuously pay a contribution to the US. It comes in the form of an inflation of 1.25 million dollars per minute. This is the result of the fast increase of the US foreign debt. Half of all US� imports are simply added to the foreign debt and paid for by the foreign dollar holders through inflation. Moreover these dollar holders do not seem to realize, that the dollar rate they are looking at, is nothing more than a dangerous fa�ade. If they don�t understand what is still keeping it upright, the fa�ade may hit them by surprise. Meanwhile, well camouflaged, the dollar is at the center of several US� conflicts."

Iraq's cabinet agreed a draft of the law last month after months of wrangling, sending it to parliament for final approval.
The law sets out how oil revenues will be divided among the population and regulates how foreign companies will be able to invest in exploration and production.
Iraqi and U.S. officials have said the law will be a crucial ingredient for Iraqi reconciliation. It states that oil revenues will be spread evenly according to population around the country rather than staying in the region where the oil is found.
Sunni Arabs have long feared that Shi'ites and ethnic Kurds, who sit on top of Iraq's vast oil fields, will not share the country's wealth in an even way.
The Muslim Scholars Association, a leading Sunni clerics group accused by the Iraqi government of fomenting violence, said the law as drafted was "invalid and lacks legitimacy".
"The occupation forces have been rushing to pass such a law in a way that the rights of generations of Iraqis will sold," the group said in a statement, adding that U.S. and British forces had "hidden their intentions for many years".

"The Americans backed by the British occupation forces have started to reveal their greed for Iraq's oil wealth," it said.

From 2006 Bronco Drilling 10K: "Our rig fleet consists of 65 drilling rigs, of which 51 are currently operating, three are in the process of being refurbished and 11 are held in inventory. We expect to put the three rigs that are currently being refurbished into service by the end of the second quarter of 2007...Twenty-one of the rigs are currently operating on term contracts ranging from one to two years. Thirty of the rigs are operating on a well-to-well basis. Twenty-nine of the fifty-one rigs we currently operate have undergone significant refurbishment since October 2003 by us or the parties from which the rigs were purchased...In 2006, we drilled wells for 80 different customers, compared to 52 customers in 2005, and 29 customers in 2004...We substantially completed the refurbishment of 12 rigs in 2006, six rigs in 2005 and plan on refurbishing three inventoried rigs during 2007."

April gold rose $2.60 to close at $655.50 an ounce. May silver rose 1.5 cents to close at $13.12 an ounce and May copper climbed 1.9%, or 5.15 cents, to end at $2.8335 a pound.

BJ Services Company Ltd. announced that it is expanding its portfolio of pipeline services with the acquisition of Aberdeen-based Norson Services Ltd, a division of Norson Group Ltd. Founded in 1974, Norson provides international services in subsea pipeline testing and pre-commissioning services, umbilical testing services, chemical cleaning, hydraulic and lube oil flushing and process services to the construction, offshore and marine markets. The acquisition of Norson further strengthens BJ Process and Pipeline Services� (BJ PPS) service capabilities in a number of ways. Of particular note is the addition of Norson�s hydraulic and electrical umbilical testing services and the services provided by the company�s subsea units, which include remote pigging and flooding, subsea hydrotesting and subsea data logging. "With the continued rise in the use of floating production systems (FPSO) for offshore oil production, we are witnessing an ever increasing demand for subsea pipeline commissioning and umbilical testing services," said Lindsay Link, general manager of BJ PPS. "The merging of Norson�s service lines with our current portfolio will make it possible for us to supply companies that require these specialist services, and make BJ PPS a world leader in pipeline pre-commissioning, with unrivaled expertise and capabilities," he added.

April natural gas fell 12.7 cents to close at $7.239 per million British thermal units. April crude declined 18 cents to close at $61.64 a barrel.

CVS Corp. again raised its takeover bid for Caremark Rx Inc. by sweetening a one-time dividend and said the new proposal was its "best and final" offer. CVS offered to pay $52.96 a share, plus a sweetened, one-time dividend of $7.50 per share. The dividend previously was $6 per share.


3/8/07 Developments

Friendly Ice Cream Corp. said it hired Goldman Sachs as as financial advisor, and Weil, Gotshal & Manges as legal advisor, to assist the board in exploring strategic options, including a possible sale of the company.

Baker Hughes said the worldwide rig count rose 98 in February to 3,352, with the U.S. rig count up 22 to 1,736.

U.S. private-sector employment grew by 57,000 in February, the weakest job growth since July 2003, according to the ADP national employment index released Wednesday. Adding in some 20,000 government jobs created in a typical month, the ADP report would signal payroll growth of about 80,000 in February. Economists are currently projecting job growth of about 100,000 for Friday's report.
In February, employment in goods-producing industries cut 43,000 jobs, including 29,000 fewer jobs in manufacturing. It was the largest loss in the goods-producing sector since September. Job losses had averaged 4,000 over the previous three months.
Services-producing firms created 100,000, the weakest since April. Job gains had averaged 171,000 over the previous three months.
Small- and medium-sized businesses (fewer than 500 employees) created 86,000 jobs in February, while large businesses lost 29,000, the most since mid-2003, ADP said.

�There is a cloud over the vice-president,� Patrick Fitz�gerald, special prosecutor, told the jury on Tuesday. �He sent Libby off to the meeting with Judy [Judith Miller, a New York Times reporter] where Plame was discussed. That cloud is something that we just can�t pretend isn�t there.� Of course, Bush never talked to Cheney prior to Libby telling the reporters about Plame. In common English, this is called treason.

Exxon Mobil Corp. will cede control of its Cerro Negro operation in Venezuela's oil-rich Orinoco River basin later this year in order to comply with Venezuelan President Hugo Chavez's decree last week, the company said Tuesday. This isn't the first time such a development has occurred with U.S. oil companies. Check back to 1936. That's when Mexico formed Pemex by expropriating U.S. oil company assets.

From TheOilDrum: a posting by Phil Hart, a petroleum facilities engineer and member of ASPO-Australia. Phil worked for Shell in the UK for five years, before returning home to Melbourne in late 2006.
"Following a summary of EIA data for 2006, I thought I would make a more detailed country-by-country estimate of the potential for 2007.
Starting with the headline EIA figures for last year:
Crude Oil and Condensate: 73.5 Mb/d (down 0.2)
Natural Gas Liquids (NGLs): 7.9 Mb/d (up 0.14)
Other Liquids: 3.3 Mb/d (up 0.08)
Total Liquids: 84.6 Mb/d (up an insignificant 0.02)
Mb/d = million barrels per day
kb/d = thousand barrels per day
Numbers for November and December suggest real OPEC production cuts in Algeria, Libya, Qatar and UAE. The total cut could be 230kb/d which knocks around 50kb/d off annual average production. I did not expect to find evidence for cuts, but that's how the data looks to me - four small cuts made at the same time by countries that otherwise increased their production last year through announced projects. Thus, I believe those four OPEC members, but only those four, have the ability to restore that production. Without those cuts, crude and condensate production would still be clearly down, but total liquids would have shown a somewhat more significant increase."

General Motors Corp. may take a charge of almost $1 billion to cover bad mortgage loans made by its former home-lending unit, according to a Lehman Brothers Holdings Inc. analyst.

South African gold production fell by 7.5 percent in 2006, taking it to its lowest level in 84 years, the Chamber of Mines said on Wednesday. By comparison, dollars are being printed at a dangerously high rate.

From the LA Times(owned by the Tribune Co): "Sam Zell, a Chicago real estate magnate who made a fortune by turning around distressed properties, has emerged as a strong contender to buy the company that owns the Los Angeles Times, KTLA-TV Channel 5 and the Chicago Cubs baseball team, according to people familiar with ongoing negotiations.
Zell's bid for Tribune Co. is getting serious consideration because it could buy out the disgruntled Chandler family of California and take the company private, said one Tribune executive who asked not to be named because details of the company's auction were supposed to remain confidential. That scenario is attractive to Tribune management because it would remove the company from the pressure of Wall Street investors.
The media conglomerate's financial representatives have been negotiating with Zell in an effort to drive up the value of his offer, said the Tribune executive and a businessman who has spoken to Zell."

High costs and the uncertainty of the oil market have prompted the Centre for Global Energy Studies (CGES) to revise downward its forecast for supply growth from non-OPEC producers.
The CGES calculated that actual growth in non-OPEC supplies had been over-estimated by an average of more than 400,000 bpd in recent years, said the report entitled "Non-OPEC production: Rising costs slow output growth."

The American Petroleum Institute reported a fall of 6.6 million barrels in crude supplies for the week ended March 2. The Energy Department had reported a decline of 4.8 million barrels. Motor gasoline supplies were down 7.4 million barrels, the API said, vs. the government's reported fall of 3.8 million. Distillate supplies were down 899,000 barrels, the API said, compared with the government's 1.3 million-barrel decline.

The number of applications for loans to buy homes rose by 1% on a week-to-week basis and by about 2% compared to a year ago. Purchase loans have been relatively flat for six weeks, the MBA's data showed.
Meanwhile, applications for loans to refinance existing mortgages increased 15% from the week ended Feb. 23 to the highest level seen in 12 weeks. Refinancings were up about 38% compared with this time last year.

The US Energy Information Administration on Tuesday forecast national retail gasoline prices to increase by nearly 40� per gallon from $2.28/gallon in February to a peak of $2.67/gallon in June. Of course, in San Francisco gasoline is at least $3 at the pump now.

From "Administration officials, including former White House spokesman Ari Fleischer, testified that Libby had been told about Ms Plame by Mr Cheney, who had ordered Libby to leak that information in order to discredit Mr Wilson."

Royal Dutch Shell cut oil output in Nigeria by 187,000 barrels per day.

If there were any doubt that Hugo Ch�vez's rival visits are intended to be an "anti-Bush" tour, the Venezuelan leader said on Tuesday: "We know he comes to try to stop the changes that Latin America is going through and to try to cause problems between us. Gringo, go home."

Crude for April delivery rose $1.13 to $61.82 a barrel. Natural gas fell 1.4% to $7.36 per million British thermal units.

The Reserve Bank of New Zealand increased its official cash rate by a quarter percentage point to 7.50%, in line with expectations. In an accompanying statement, Reserve Bank Governor Alan Bollard said "the current policy tightening is aimed at reducing the risk of an unsustainable rebound in activity. Depending on the persistence of the current upturn, further tightening may be required." The central bank also said that "a return to a moderating trend in housing and domestic demand will be essential if we are to see a reduction in medium-term inflation pressures."

In January, overall, outstanding consumer debt increased $6.4 billion, or 3.2% annualized, the Fed said.

The HFR's hedge fund index is up 1.81% so far this year.

April gold climbed 1%, or $6.70, to close at $652.90 an ounce Wednesday. May silver rose 12 cents to close at $13.105 an ounce and May copper climbed 2.5%, or 6.85 cents, to end the session at $2.782 a pound.

According to a poll released Tuesday by the National Sleep Foundation (NSF), American women are very, very tired. Sixty percent say they don't get enough rest most nights of the week while 43 percent report that daytime sleepiness interferes with their regular activities.

Surge In Deaths

3/7/07 Surge In Deaths

On Tuesday another 9 U.S. soldiers were killed in Iraq. A total of 2,552 U.S. service members have been killed in action since the March 2003 Iraq invasion as of yesterday, according to the Department of Defense Web site. The number of deaths including those who died from other causes has risen to 3,166. That does not include the estimated 30,000 wounded and/or those returning home with psychological and emotional scars that will remain with them forever. It doesn't include the home lives that have been destroyed. In the meantime, we have an Administration and a Congress who are political eunuchs and refuse to do the right thing. Bring our men and women home now-- not in 2008 or in 2009. One should note that Monday was the bloodiest day in Iraq in about one month.

Citigroup launched a $10.75bn takeover bid for Nikko Cordial, the scandal-hit Japanese brokerage. It sounds like a perfect fit.

TheOilDrum: "Oil prices set new records and the industry maintained a historically high level of activity in 2006. Energy agencies issued consensus forecasts that production would rise. Yet crude oil production was down and total liquids production was flat. The economists should be shaking in their boots."

Topps Co. Inc., known for sports cards and Bazooka bubble gum, said Tuesday it accepted a $385.4 million takeover offer from a buyout group that includes Michael Eisner, the former chief executive of The Walt Disney Co. The buyout group, which includes The Tornante Co. LLC, founded by Eisner, and the Chicago-based private equity firm Madison Dearborn Partners LLC, has agreed to pay $9.75 for each Topps share.

George Ure: "70 percent of all real estate loans have originated since 2000 and 75% of the sub-prime loans have originated since 2004...With $1.5 trillion in Adjustable Rate Mortgages expected to reset rates in 2007, homeowners will want to review their current ARMs, determine their adjusted payment and assess their mortgage options, reports The popular fixed payment loan or option ARM with payments based on rates as low as 1 percent will present special problems as homeowners face increasing payments, rates and loan balances due to the negative amortization feature of these loans."

A deep-vein thrombosis was discovered in Cheney's left lower leg.

Productivity growth in the U.S. non-farm business sector was revised to a 1.6% annual growth rate from the 3.0% estimate a month ago, the Labor Department said Tuesday. Unit labor costs rose at a 6.6% annual pace in the quarter, revised higher from a 1.7% increase.

Iran�s foreign minister today denied the claim of the UN nuclear chief that his country had temporarily slowed its nuclear program.

�We are witnessing an almost uncontained hyper-use of military force in international relations,� the Russian president said in Munich last month, referring unambiguously to the United States. �Nobody feels secure anymore,� and America�s adversaries �feel cornered.� Of course, said Putin, �such a policy stimulates an arms race. The force�s dominance inevitably encourages a number of countries to acquire weapons of mass destruction� (emphasis added).

Ticker Sense: "With Monday's additional 94 basis point decline, the S&P 500 now hangs 2.9 standard deviations below its 50-day moving average. This ranks as the third lowest reading since 2002...With Monday's near 1% decline, the S&P 500 is now down 5.86% form its peak on 2/20. This is the seventh time during this bull market that the S&P 500 has declined by 5% or more from a peak...On average, declines have lasted an average of 74 calendar days. Once the market does reach its low point, it has taken an average of 64 calendar days to recoup the losses."

247WallSt: "The growth rate of internet use in Russia and India is out-pacing the increase in China according to a new survey from comScore. The US remains the largest market for internet use with 153.4 million users, but that number is only up 2% over the last year. China is second in number of people using the internet with 86.8 million people online, an increase of 20% over the course of a year. But, growth in India was 33% to 21.1 million users, and in Russia use rose 21% to 12.7 million. Mexico was another fast growing market with use rising 18% to 10.1 million."

"Bookings for March are a little soft," Southwest Airlines said in a statement.

In the latest Finance & Development magazine, Mangal Goswami, Jack Ree and Ina Kota explain that global capital flows reached $6 trillion in 2005.

Richard Daughty: "And now we suddenly make the horrifying discovery that not only are we (people, businesses, and governments) up to our freaking eyeballs in debt ("putting equity to work!"), and not only is half of the country dependant upon a monthly check from the government, but also, everybody's retirement account, savings account, investment portfolio, tax revenue stream and everything else is invested in those selfsame stocks, bonds and houses! And thus! Thus! Thus, all of our very lives are depending, totally and completely, on those markets continuing to go up, literally forever! Gaaah! If they don't, then not only is everybody's retirement wiped out, but the economy of the USA, and the USA itself, will die a horrible economic death. Gaaaaaaaaaah!!"

The pending home sales index fell 4.1% in January after a 4.5% rise in December. The index is down 8.9% in the past year. David Lereah, chief economist for the realtors' group, said he detected "an underlying pattern of stabilization in the housing market." The guy is quite a comedian.

Demand for U.S.-made manufactured goods dropped 5.6% in January, the largest decline since July 2000, the Commerce Department reported Tuesday. A 60% plunge orders for new civilian aircraft led the decline. Orders for core capital equipment fell 6.3%, the biggest decline in three years. Orders for durable goods fell 8.7%, revised down from last week's 7.8% estimate. Orders for nondurable goods fell 2%, the government said in the latest report. Factory shipments fell 1.2%. Factory inventories fell 0.2%. Unfilled orders rose 0.1%

IBD reports that, as demand for homes in highly appreciated housing markets has cooled -- due largely to affordability issues, many builders are lowering their aims. They're cutting prices and shrinking home and lot sizes. "It used to be the bigger the better. That has changed," said Morningstar housing analyst Eric Landry...The U.S. average home price has been dropping since mid-2006. But in many markets prices are still far higher than a few years ago.

PATTERSON-UTI ENERGY, INC. reported that for the month of February 2007 the Company had an average of 257 drilling rigs operating, including 243 rigs in the U.S. and 14 rigs in Canada. For the two months ended February 2007 the Company had an average of 262 drilling rigs operating, including 247 rigs in the U.S. and 15 rigs in Canada. The Company has approximately 340 currently marketable land-based drilling rigs that operate primarily in the oil and natural gas producing regions of Texas, New Mexico, Oklahoma, Arkansas, Louisiana, Mississippi, Colorado, Utah, Wyoming, Montana, North Dakota, South Dakota and western Canada.

Rep. Ron Paul: "The Medicare "trust fund" is already badly in the red, and the only solution will be a dramatic increase in payroll taxes for younger workers. The National Taxpayers Union reports that Medicare will consume nearly 40% of the nation's GDP after several decades because of the new drug benefit. That's not 40% of federal revenues, or 40% of federal spending, but rather 40 % of the nation's entire private sector output!"

Crude for April delivery ROSE 62 cents to $60.69 a barrel. Natural gas climbed 3% to $7.47 per million British thermal units.

April gold rose $7 to close at $646.20 an ounce Tuesday. May silver rose 23.5 cents to end at $12.985 an ounce and May copper gained 4.3 cents to close at $2.7135 a pound.

Countrywide Financial CFO Eric P. Sieracki said some subprime lenders will go out of business in the current downdraft in the sector, but said his company will emerge. "If you're a monoline subprime lender, this is a dark time for you," Sieracki said in his presentation at the Raymond James 28th Annual Investors Conference. Only 9% of the company's fundings come from subprime, he said.

Yahoo Inc. is in discussions to deepen its advertising-sharing arrangements with 225 newspapers, Chief Financial Officer Sue Decker said at a public appearance Tuesday.

Monday, March 05, 2007


3/6/07 Observations

John Hussman: "Expectations for future operating earnings assume that current, record high profit margins will not only be sustained, but will expand further. Yet even when earnings ultimately fall short, analysts will be under no obligation to lower their “forward” expectations, at least initially. The resulting illusion of cheap valuations, fairly early in the next bear market, is likely to keep a great many investors holding on deep into the decline (whenever it begins in earnest). As in many other bear markets, earnings will probably decline convincingly only after a great deal of damage has already been done. I cannot emphasize enough that price/earnings ratios, especially those based on “forward operating earnings,” are unusually poor metrics of valuation at present. As a refresher of where the earnings picture stands at present, note that S&P 500 earnings have now slightly exceeded their long-term 6% growth trendline, while profit margins are about 50% above the norm (i.e. an earnings trendline about 33% lower would run through the middle of the data). From an historical perspective, this is about as good as it gets – once earnings have become similarly elevated, one has generally been able to find a point years later where earnings have achieved zero growth from that peak."

The yield on the two-year note declined more than 2 basis points to 4.5 percent at 8:18 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The 10-year note's yield declined 1 basis point to 4.49 percent. The shrinking gap reflects growing expectations the Federal Reserve will lower interest rates this year.

A&P is buying Pathmark for $677.3 million in cash and stock, creating a 550-store supermarket chain.

Marc Faber: "Certainly you don't want to [store] any gold in the United states because if I am right and the price of gold goes up as much as I think it will, I would imagine that at time in the US they will expropriate gold."

Saudi Arabia's government warned against any attack on Iran over its nuclear program, saying the impact on the region would be damaging.``Iran is an important country in the region, and is able to carry out a positive role, and if the confrontation reaches its climax, it could hurt the region,'' Saudi Foreign Minister Saud al-Faisal said. His remarks were carried yesterday by the state- run Saudi Press Agency.

Advanced Micro Devices Inc. said it's unlikely to meet its outlook for revenue of between $1.6 billion and $1.7 billion for the first quarter. Advanced Micro Devices Inc. has struggled to supply its distribution partners with microprocessors in the first quarter, AMD Chief Executive Hector Ruiz said Monday. "We didn't do as good as a job as we should have."

The dollar fell to a three-month low against the yen in Asia Monday, as investors unwound yen-carry trade positions and as Japanese corporations began repatriating foreign-denominated earnings before fiscal year-end.

According to Reuters, the Detroit News has reported that Blackstone is looking at buying Chrysler.

The Wall Street Journal reported Monday that Palm is working with Morgan Stanley to evaluate its options, citing "people familiar with the matter." Possibilities could include a sale to Nokia Corp.

The ISM non-manufacturing index fell to 54.3% from 59% in January. New orders fell to 54.8% from 55.4%. The employment index rose to 52.2% from 51.7%. The price index slipped to 53.8% from 55.2% in the previous month.

Center for Research on Globalization: "In his paper titled simply, The Redirection, Seymour Hersh reveals presidential involvement in the massive covert operation to ignite a religious war in the Middle East as a prelude to the forcible reconfiguration of the region into a new patchwork quilt of pliable and supplicant theocratic cantons designed to enshrine the security of Israel and the over-arching supremacy of US oil interests. For his part, Hersh urges Congress to perform its constitutional duty to oversee the massive expenditures for the covert operations that he traces to untold billions in raw currency in US dollars that were conveniently stockpiled in Iraq where they were earmarked for “reconstruction.” However, instead of rebuilding the cities and infrastructure of Iraq, the mega-billions in US cash are now being subverted to the bank accounts of radical Sunni groups known to be in league with Al Qaeda and their patrons – the Taliban. Hersh quotes well-known regional authorities who are confidently predicting a US and Israel-backed confrontation between Shia and Sunni forces. The covert American-Israeli plan to expand the Iraq Civil War to engulf the entire region in a blazing arc of atrocities and ultra-violence that will extend from Lebanon to Afghanistan is the brainchild of the neoconservative cell remaining in power in the Bush White House:
Vice President Dick Cheney;
National Security Advisor Elliot Abrams;
Ambassador Zalmay Khalilzad and their co-conspirator from Saudi Arabia,
Prince Bandar bin-Sultan, the former Saudi Ambassador to Washington who now finds himself at odds with other factions of the royal family of Saud."
David Swanson: " In the meantime, the Democrats' strategy of letting the war continue, not thoroughly investigating the fraud that launched it, and not holding the war-makers accountable may prove not to be the electoral winner that Party figures like Emanuel expect. It might even prove a political equalizer and so a loser in 2008 or beyond. Every day that the Democrats don't move to end the war in Iraq is another day in which that war, stretching ever on, can become the Democrats' war. Only if they come to believe that the war's unpopularity will work against them in the voting booths in 2008 or thereafter will they be strongly motivated to take the sorts of actions that might actually bring it to an end."

The Wall Street Journal reported Monday that Little Rock, Ark.-based Alltel has solicited AT&T about a potential deal and has broached the subject with Verizon Communications Inc. and even Sprint Nextel Corp.

Intel Corp. Chief Executive Paul Otellini said he expects the pricing market for computer chips to remain "very competitive" for the foreseeable future.

On Monday, gold closed down $4.90 and silver declined 21 cents. May copper fell 3.65 cents to end the day at $2.6705 a pound.

April crude fell 2.6%, or $1.57, to close at $60.07 a barrel Monday. April natural gas closed up 1.1 cents at $7.254 per million British thermal units.

Home sales haven't rebounded dramatically so far this spring selling season, which suggests a hoped-for recovery in the housing market won't play out as soon as some had expected, Toll Brothers Inc.'s chief financial offer said Monday.

S&P on Monday downgraded Lehman Brothers to buy from strong buy, partly on subprime mortgage woes, and reduced its 2007 earnings estimate to $7.39 a share from $8.15 a share.

Bassett Furniture Industries Inc. said Monday it plans to close its wood manufacturing facility in Bassett, Va., impacting 280 employees, or 15% of its workforce. Bassett said it plans to source the majority of the products produced at the facility from overseas suppliers.

Sunday, March 04, 2007

Bad Debts

3/5/07 Bad Debts

HSBC Holdings will take a charge of $11 billion to cover the bad debts seen by its acquired Household division in the U.S., according to reports from the Sunday Times and Sunday Telegraph newspapers.

IRAN has trained secret networks of agents across the Gulf states to attack Western interests and incite civil unrest in the event of a military strike against its nuclear program, a former Iranian diplomat has revealed.
Spies working as teachers, doctors and nurses at Iranian-owned schools and hospitals have formed sleeper cells ready to be "unleashed" at the first sign of any serious threat to Tehran, it is claimed.
Trained by Iranian intelligence, they are also said to be recruiting fellow Shiites in the region, whose communities have traditionally been marginalised by the Gulf's ruling Arab clans.

Iran's President stated that Iran and Saudi Arabia shouldered great common responsibilities in the Islamic world and the Middle East region.
In the meeting with the king of Saudi Arabia, Ahmadinejad said that Islamic nations looked up to both countries, Iran and Saudi Arabia as their only hope and expected these two to resolve their issues and needs.
"This is why Tehran-Riyadh relationships are more than just a friendly and neighborly tie," he added.

Ross C. "Rocky" Anderson, Mayor of Salt Lake City: "Never before has there been such a compelling case for impeachment and removal from office of the president of the United States for heinous human rights violations, breaches of trust, abuses of power injurious to the nation, war crimes, misleading Congress and the American people about threats to our nation's security and the supposed case for war, and grave violations of treaties, the Constitution, and domestic statutory law," Anderson proclaimed."

NY Times editorial: "The Bush administration’s assault on some of the founding principles of American democracy marches onward despite the Democratic victory in the 2006 elections. The new Democratic majorities in Congress can block the sort of noxious measures that the Republican majority rubber-stamped. But preventing new assaults on civil liberties is not nearly enough. Five years of presidential overreaching and Congressional collaboration continue to exact a high toll in human lives, America’s global reputation and the architecture of democracy. Brutality toward prisoners, and the denial of their human rights, have been institutionalized; unlawful spying on Americans continues; and the courts are being closed to legal challenges of these practices. It will require forceful steps by this Congress to undo the damage. A few lawmakers are offering bills intended to do just that, but they are only a start. Taking on this task is a moral imperative that will show the world the United States can be tough on terrorism without sacrificing its humanity and the rule of law."

Jiang Enzhu, a spokesman for the parliament, told the briefing that the People's Liberation Army's 2007 budget would be 350.92 billion yuan ($58 billion), a 17.8 per cent increase from last year. This represents 7.5 per cent of China's total budget spending for the year and follows last year's 14.7 per cent increase in defence spending. Last year's military budget was 283.8 billion yuan but American and other analysts have long suggested that China's real military spending is up to three times that amount.

It's been 2-1/2 years since a bank failed, but this week a small bank in Pittsburgh was closed by the Pennsylvania state banking department. Normally, a bank failure wouldn't cause much agita except to those bank customers who lose some of their savings. In fact, the news report points out that "the Federal Deposit Insurance Corp. said Metropolitan Savings Bank of Pittsburgh had about $1.2 million in deposits in 70 accounts that could exceed the federal insurance limit."

Fred Cederholm: "The technological revolutions of computer hardware (and software) and the information highway capabilities of the internet have connected the world. News is instantaneous. There are efficiencies for thousands of transactions to occur AND BE PROCESSED in a second – even in a thousandth of a second. Never before in the history of our planet can so much transpire so fast and be known worldwide so quickly. Enter, click, send… has become a mantra of society. This really scares me and with good reason. Click (action), click (reaction), click (response) happens so fast that there little (if any) time to TH*NK and let true reason and wisdom prevail. As we have just seen, enter, click, send… can literally set in motion a financial panic. Or worse… enter, click, send… can launch a military attack. Enter, click send can even initiate a totally new war. We have become so fast – make that efficient in our enter, click, send world– that the so-called checks and stop gaps of our “programmed” system protections may not work/ function as we expect, want, or need them to perform. Unfortunately, so often we don’t know that is the case until after an “event” - when it is too late to undo (or stop) what has been set in motion. The systemic glitches of a technologically connected world, our planetary interdependencies, and an underlying overriding contemporary uneasiness of fear; all contributed to the declines of past week. The unreal (or at least unsubstantiated) perceptions behind the drop of the markets in Shanghai, China triggered a financial tsunami rippling around the Earth. What would be the case if a truly identifiable catastrophic event were to occur? We can only hope and pray that we won’t find out. I’m Fred Cederholm and I’ve been thinking. You should be thinking, too."

Robert McHugh: "The only way out of this mess will be a massive and drastic Dollar devaluation, accomplished through the printing and distribution of trillions of dollars to households across America. Fiscal policy is already too much of a mess to be counted on to stop this recession. Another war will just make matters worse. No, this time it will take monetary hyperinflation the likes of which America has never seen before. You see, the Fed has had a lot of practice over the past two decades. They will be ready to serve. This fundamental economic fact will be Bullish for Gold stocks and precious metals. The patterns in Gold stocks and precious metals are very different than that massive Bearish Broadening Top in the Dow Industrials. The pattern in the HUI and Gold is a Symmetrical Triangle, a continuation pattern, a "pause" in an already established long-term rising trend."

Mike Burk: " Last Tuesday NASDAQ volume of declining issues (OTC DV) was 24 times the volume of advancing issues (OTC AV). In the past ratios of that magnitude usually occurred near short term lows...Last Tuesday's 24 to 1 ratio of OTC AV / OTC DV ranks 8th highest since 1978, the first year for which I have NASDAQ volume data...Of the 4 worst declines as measured by OTC AV / OTD DV since the October 1987 crash, the one on 2/27/2007 was the least severe. In every case the occurrence was near a short term low...The OTC has been up 58% of the time in March with an average return of 0.1%. However, during the 3rd year of the Presidential Cycle the OTC has never been down and averaged a 3.9% return...My SPX data goes back to 1928 and during that time the SPX has been up 59% of the time in March with an average gain of 0.1%. The results for the 3rd year of the Presidential Cycle have been slightly better with the index up 60% of the time and the average gain 0.4%. However, between 1931 and 1959 the SPX was only up once (1943) in March during the 3rd year of the Presidential Cycle. Beginning with 1963 it, like the OTC, has never been down...The market is oversold and seasonally next week is positive. I expect the major indices to be higher on Friday March 9 than they were on Friday March 2."

Read on about Walter Reed Hospital:,20867,21324938-2703,00.html

Thousands of feet below Arkansas hay fields and cow pastures, a newly tapped reservoir of natural gas is quietly giving up its bounty.
After 300 million years trapped in hard, black shale, gas now flows into pipelines headed for market to ultimately warm homes and businesses.
In the flicker of five years, the Fayetteville Shale has gone from "just sort of a geologic oddity" to a significant industrial development, says Ed Ratchford of the Arkansas Geologic Commission. Investors, so far, are satisfied with early production and a university study says the newly tapped energy source could have a $5.5 billion impact on Arkansas by the end of 2008.