5/13/07 Arrogance Of Power
On each weekend, I provide a quote from Doug Noland, who, in my view, provides some of the best commentaries on our economy. Here is today's sample of his observations: "Checks and Balances and the Separation of Powers are recognized as absolutely paramount to a healthy democracy, yet these principles are somehow viewed with intense disdain when it comes to modern finance-based Capitalism. To be sure, when exuberance in the private-sector’s capacity to create wealth (and expand finance!) reaches its most fanatical extremes, there will be general antipathy toward any effective governmental monetary control. A great amount of historical precedent has me convinced that unchecked money and Credit pose the greatest risk to free market Capitalism...The prevailing demand for borrowing emanates from securities markets activities – specifically for M&A and leveraged securities speculation. In both cases, “the sky’s the limit.” As such, we’re in a period of extraordinary capacity for finance to mount a powerful burst of expansion - which it has been doing. The Credit infrastructure has developed incredible capabilities over the past few years; Wall Street and the global leveraged speculating community have become enormously big and powerful; foreign central bank “recycling” of dollar liquidity has evolved into one of history’s most remarkable (and dangerous) Monetary Processes; and Wall Street has begun to position for the next easing cycle with tens of trillions of securities available for such an endeavor.
The monetary backdrop has clearly become extremely unstable – I’ll refer to it as an “Unchecked Liquidity Dislocation.” The question then becomes, can monetary affairs settle down to a less unwieldy posture? Or are we instead now firmly locked in a Minsky Ponzi “deviation amplifying system” - that at some unpredictable time and in some unpredictable fashion comes to a predictably devastating conclusion?"
Paccar chose Columbus, Miss., for a new $400 million engine plant.The plant will employ 200 people initially and may reach 500 as production increases. Construction is set to start this year and finish in 2009. Paccar will use the plant to build 12.9-liter and 9.2-liter diesel engines for its Kenworth, Peterbilt and DAF trucks. The same engines are now made at Paccar's plant in Eindhoven, Netherlands, Easton said.
Chevron pulled workers from oil fields in Nigeria's Niger Delta amid an increase in election-related attacks, dealing a blow to global oil markets.
Talking to Fox News, the conservative broadcaster, on his visit to Baghdad on Thursday, Dick Cheney said: “We didn’t get elected to worry just about the fate of the Republican party. Our mission is to do everything we can to prevail ... against one of the most evil opponents we’ve ever faced.” Maybe Cheney was looking in the mirror.
“The assumption has always been that Mr Bush was planning to bequeath the Iraq war to his successor and that the Republicans in Congress would go along with him,” says Charlie Cook, a leading political analyst. “But that looks increasingly difficult by the day. We could be facing a Nixon in 1975 situation where senior Republicans ultimately prevail on George Bush to change course.”
The leaders of Russia, Turkmenistan and Kazakhstan reached a landmark pipeline deal on Saturday that will strengthen Moscow's control over Central Asia's energy export routes. The deal to build a pipeline along the Caspian Sea coast to ship Turkmen natural gas to Western markets via Kazakhstan and Russia is a blow to U.S. and European efforts to secure alternatives to Middle East oil and gas that would be independent from Russian influence. "We are opening the Caspian route at the request of Turkmenistan," Russian President Vladimir Putin said after the announcement of the deal in the Turkmen city of Turkmenbashi on the Caspian shore. Putin said the new pipeline's annual capacity may reach "at least" 20 billion cubic meters of gas by 2012, while Russian Industry and Energy Minister Viktor Khristenko told reporters that it could eventually carry 30 billion cubic meters a year.
Roger Conrad: "The Dow Jones Utilities Average is up threefold from its lows of late 2002, and is some 25 percent to 30 percent above the peak it reached in late 2000."
Chuck Butler: "I have to tell you that I filled my gas tank yesterday and I remember when I could have a great night out on the town for what it cost to fill my gas tank! Oh, and it's just going to get worse folks."
Mike Burk: "Most of the market run up since last summer has been marked by a lack of sellers not exuberant buyers. It looks like the sellers are returning...Most of the internal market indicators have been deteriorating and seasonality for next week offers no support. I expect the major indices to be lower on Friday May 18 than they were on Friday May 11."
William Fulbright:
"It is a curiosity of human nature that lack of self-assurance seems to breed an exaggerated sense of power and mission. When a nation is very powerful but lacking self-confidence, it is likely to behave in a manner dangerous to itself and to others. Feeling the need to prove what is obvious to everyone else, it begins to confuse great power with unlimited power and great responsibility with total responsibility: it can admit of no error; it must win every argument, no matter how trivial. For lack of an appreciation of how truly powerful it is, the nation begins to lose wisdom and perspective and, with them, the strength and understanding that it takes to be magnanimous to smaller and weaker nations.
"Gradually but unmistakably America is showing signs of that arrogance of power which has afflicted, weakened, and in some cases destroyed great nations in the past. In so doing, we are not living up to our capacity and promise as a civilized example for the world. The measure of our falling short is the measure of the patriot's duty of dissent."
Mark Twain: "The offspring of riches: Pride, vanity, ostentation, arrogance, tyranny"
Saturday, May 12, 2007
The Majority
5/12/07 The Majority
China's monthly trade surplus more than doubled in April to nearly $17 billion, the government said Friday.
Lawrence Wilkerson, who was chief of staff to then-Secretary of State Colin Powell, said on the public radio program On Point Thursday that "Bill Clinton's peccadilloes ... pale in significance" when compared to the "high crimes and misdemeanors" of Bush and Cheney.
In a recent InsiderAdvantage/Majority Opinion poll, forty-two percent of independents want Bush and Cheney impeached. These aren't just voters who disapprove of the White House. Instead, they're for initiating a process that could remove them from office.
Publilius Syrus: “Debt is the slavery of the free.”
The International Energy Agency said Friday that the Organization of Petroleum Exporting Countries needs to raise output soon and raised concern over the ability of refiners and OPEC's willingness to meet a 1.6 million barrels a day jump in oil product demand in June.
KB Home, the fifth-largest U.S. homebuilder, said it received an offer worth 580 million euros ($782 million) for its 49 percent stake in Kaufman & Broad SA, the largest homebuilder in Paris and the surrounding region.
Qatar's Deputy Premier and Minister of Energy and Industry H E Abdullah bin Hamad Al Attiyah: "In a single decade, Qatar has overtaken Indonesia to become the largest LNG producer in the world with a production capacity of 31 million of LNG per annum."
U.S. retail sales fell a worse-than-expected 0.2% in April, the worst showing in seven months, the Commerce Department estimated Friday.
The producer price index for finished goods rose 0.7% in April, driven by a 3.4% increase in energy prices. Wholesale gasoline prices rose 8.2%. Outside of energy, however, price gains were more moderate. Food prices rose 0.4%, the smallest gain in four months. Excluding both food and energy goods, wholesale prices for finished goods were unchanged in April. (You want me to believe this?)
Allstate Corp. will stop writing new homeowners policies in California beginning in July, the company said Thursday.
The RBC Cash Index found that confidence clocked in at 87.1 in May. The new figure hovered near April's reading of 85.4, a six-month low.
The ECB indicated it will raise its interest rate from 3.75% to 4% in June.
The 10 members of the Organization of Petroleum Exporting Countries (OPEC) bound by the group's output agreements produced an average 26.57 million barrels of crude oil per day in April, a Platts survey showed May 10. This is up 30,000 barrels per day (b/d) from March's 26.54 million b/d and 770,000 b/d above their 25.8 million b/d production target established last month.
It should be noted that Al-Sadr supporters said that this week they'd finished collecting 144 signatures - a majority of the 275-member Iraqi legislature - on a bill demanding a scheduled withdrawal and an immediate freeze on the number of foreign soldiers in Iraq. A similar effort last year drew only 113 signatures, said one Sadrist member of parliament, Salagh Augali.
Yahoo's fees per paying user dipped in the first quarter.
Canadian publisher Thomson Corp. said on Friday it reached an agreement to sell its education assets to private investors for a total value of about US$7.75 billion in cash.
Nouriel Roubini: "
Based on a variety of data that have come out after the first estimate of Q1 US growth at 1.3% it is now likely that US growth in Q1 was actually below 1% (probably close to 0.7%); we are thus already into a “growth recession” territory. As discussed extensively in this blog a US hard landing can take two forms: a “growth recession” i.e. a period of time when growth is well below potential and in the 0% to 1% range; or an outright recession, i.e. two consecutive quarters of zero growth.
If Q1 growth turns out to be below 1% (as now likely) we would already be in growth recession range in Q1. The revisions of Q1 GDP growth that will push the revised estimate of Q1 growth rate below 1% are:
- Lower change in inventories than initially estimated reducing Q1 growth
- Better construction spending than initially estimated increasing Q1 growth
- Much worse trade balance in March than initially estimated reducing Q1 growth
The net effect of these three factors is an estimated 0.7% growth for Q1 (JP
Morgan today revised its Q1 estimate downward to 0.8%).
Much more seriously, Q2 started on a very weak note for private consumption based on initial estimates of retail sales. I now expect Q2 growth to be closer to 0% or even negative (i.e an outright recession)."
Goldcorp Inc., the world's third- largest gold producer, said first-quarter profit rose 35 percent as prices rallied and the company acquired mines to boost production.
The U.S. statutory debt limit is $8.965 trillion.
Our debt level is now about $8.735 trillion.
Plutarch: " An imbalance between rich and poor is the oldest and most fatal ailment of all republics.”
Inventories at U.S. businesses fell 0.1% in March, below expectations and much slower than the 1.4% increase in sales, the Commerce Department said Friday.
The inventory-to-sales ratio fell to 1.27 in March from 1.29 in February. This is the lowest inventory to sales ratio since August 2006.
A U.S. judge ordered former Justice Department aide Monica Goodling to testify before Congress about the firings of eight U.S. attorneys under a limited grant of immunity from prosecution. U.S. District Judge Thomas F. Hogan granted the House Judiciary Committee's application for a court order to compel the testimony of Goodling. The former Justice Department aide "may not refuse to testify, and may not refuse to provide other information, when compelled to do so'' by the committee, said the order signed by Hogan and posted on the Web site of the court in Washington.
The Chicago Mercantile Exchange raised its bid for the Chicago Board of Trade by 16 percent to $9.2 billion to ward off a higher offer from Intercontinental Exchange Inc.
Zman: "I’m setting aside thoughts of hurricane induced spikes and/or several consecutive weeks of excessive heat for now. Taking into account that while current Lower 48 production is up only slightly relative to 2006’s storm impacted volumes but that Canadian volumes are more than likely to decline more than LNG imports will increase I don’t see natural gas trading on average much above or below current levels of $7.00 to $8.50 this summer."
June crude closed at $62.37 a barrel, up 56 cents for the session and up 44 cents for the week. June reformulated gasoline closed at $2.3521 a gallon, up 2.6 cents for the day, and up 6.1% for the week. June natural gas gained 17.3 cents to end at $7.899 per million British thermal units, though it ended the week with a 0.5% loss.
China's monthly trade surplus more than doubled in April to nearly $17 billion, the government said Friday.
Lawrence Wilkerson, who was chief of staff to then-Secretary of State Colin Powell, said on the public radio program On Point Thursday that "Bill Clinton's peccadilloes ... pale in significance" when compared to the "high crimes and misdemeanors" of Bush and Cheney.
In a recent InsiderAdvantage/Majority Opinion poll, forty-two percent of independents want Bush and Cheney impeached. These aren't just voters who disapprove of the White House. Instead, they're for initiating a process that could remove them from office.
Publilius Syrus: “Debt is the slavery of the free.”
The International Energy Agency said Friday that the Organization of Petroleum Exporting Countries needs to raise output soon and raised concern over the ability of refiners and OPEC's willingness to meet a 1.6 million barrels a day jump in oil product demand in June.
KB Home, the fifth-largest U.S. homebuilder, said it received an offer worth 580 million euros ($782 million) for its 49 percent stake in Kaufman & Broad SA, the largest homebuilder in Paris and the surrounding region.
Qatar's Deputy Premier and Minister of Energy and Industry H E Abdullah bin Hamad Al Attiyah: "In a single decade, Qatar has overtaken Indonesia to become the largest LNG producer in the world with a production capacity of 31 million of LNG per annum."
U.S. retail sales fell a worse-than-expected 0.2% in April, the worst showing in seven months, the Commerce Department estimated Friday.
The producer price index for finished goods rose 0.7% in April, driven by a 3.4% increase in energy prices. Wholesale gasoline prices rose 8.2%. Outside of energy, however, price gains were more moderate. Food prices rose 0.4%, the smallest gain in four months. Excluding both food and energy goods, wholesale prices for finished goods were unchanged in April. (You want me to believe this?)
Allstate Corp. will stop writing new homeowners policies in California beginning in July, the company said Thursday.
The RBC Cash Index found that confidence clocked in at 87.1 in May. The new figure hovered near April's reading of 85.4, a six-month low.
The ECB indicated it will raise its interest rate from 3.75% to 4% in June.
The 10 members of the Organization of Petroleum Exporting Countries (OPEC) bound by the group's output agreements produced an average 26.57 million barrels of crude oil per day in April, a Platts survey showed May 10. This is up 30,000 barrels per day (b/d) from March's 26.54 million b/d and 770,000 b/d above their 25.8 million b/d production target established last month.
It should be noted that Al-Sadr supporters said that this week they'd finished collecting 144 signatures - a majority of the 275-member Iraqi legislature - on a bill demanding a scheduled withdrawal and an immediate freeze on the number of foreign soldiers in Iraq. A similar effort last year drew only 113 signatures, said one Sadrist member of parliament, Salagh Augali.
Yahoo's fees per paying user dipped in the first quarter.
Canadian publisher Thomson Corp. said on Friday it reached an agreement to sell its education assets to private investors for a total value of about US$7.75 billion in cash.
Nouriel Roubini: "
Based on a variety of data that have come out after the first estimate of Q1 US growth at 1.3% it is now likely that US growth in Q1 was actually below 1% (probably close to 0.7%); we are thus already into a “growth recession” territory. As discussed extensively in this blog a US hard landing can take two forms: a “growth recession” i.e. a period of time when growth is well below potential and in the 0% to 1% range; or an outright recession, i.e. two consecutive quarters of zero growth.
If Q1 growth turns out to be below 1% (as now likely) we would already be in growth recession range in Q1. The revisions of Q1 GDP growth that will push the revised estimate of Q1 growth rate below 1% are:
- Lower change in inventories than initially estimated reducing Q1 growth
- Better construction spending than initially estimated increasing Q1 growth
- Much worse trade balance in March than initially estimated reducing Q1 growth
The net effect of these three factors is an estimated 0.7% growth for Q1 (JP
Morgan today revised its Q1 estimate downward to 0.8%).
Much more seriously, Q2 started on a very weak note for private consumption based on initial estimates of retail sales. I now expect Q2 growth to be closer to 0% or even negative (i.e an outright recession)."
Goldcorp Inc., the world's third- largest gold producer, said first-quarter profit rose 35 percent as prices rallied and the company acquired mines to boost production.
The U.S. statutory debt limit is $8.965 trillion.
Our debt level is now about $8.735 trillion.
Plutarch: " An imbalance between rich and poor is the oldest and most fatal ailment of all republics.”
Inventories at U.S. businesses fell 0.1% in March, below expectations and much slower than the 1.4% increase in sales, the Commerce Department said Friday.
The inventory-to-sales ratio fell to 1.27 in March from 1.29 in February. This is the lowest inventory to sales ratio since August 2006.
A U.S. judge ordered former Justice Department aide Monica Goodling to testify before Congress about the firings of eight U.S. attorneys under a limited grant of immunity from prosecution. U.S. District Judge Thomas F. Hogan granted the House Judiciary Committee's application for a court order to compel the testimony of Goodling. The former Justice Department aide "may not refuse to testify, and may not refuse to provide other information, when compelled to do so'' by the committee, said the order signed by Hogan and posted on the Web site of the court in Washington.
The Chicago Mercantile Exchange raised its bid for the Chicago Board of Trade by 16 percent to $9.2 billion to ward off a higher offer from Intercontinental Exchange Inc.
Zman: "I’m setting aside thoughts of hurricane induced spikes and/or several consecutive weeks of excessive heat for now. Taking into account that while current Lower 48 production is up only slightly relative to 2006’s storm impacted volumes but that Canadian volumes are more than likely to decline more than LNG imports will increase I don’t see natural gas trading on average much above or below current levels of $7.00 to $8.50 this summer."
June crude closed at $62.37 a barrel, up 56 cents for the session and up 44 cents for the week. June reformulated gasoline closed at $2.3521 a gallon, up 2.6 cents for the day, and up 6.1% for the week. June natural gas gained 17.3 cents to end at $7.899 per million British thermal units, though it ended the week with a 0.5% loss.
Thursday, May 10, 2007
April Sales
5/11/07 April Sales
Target's April same-store sales were down 6.1%. Gap Inc. said same-store sales dropped 16% in April. J.C. Penney said Thursday its April sales at department stores open at least one year fell 4.7%. Federated Department Stores Inc. said April same-store sales fell 2.2%, missing its forecast for an increase of 2.5% to 4%. Wal-Mart Stores Inc. said its total U.S. same-store sales fell 3.5% in April. Wal-Mart stores posted a drop in same-store sales of 4.6% for the month, while its Sam's Club locations experienced a rise of 2.5%. The company is forecasting a gain of +1% to +2% for May. Nordstrom Inc. said April same-store sales climbed 3.1%, compared to the expectation for a rise of 4.2%. Kohl's Corp. said Thursday its April sales at stores open at least one year fell 10.5%.
Costco Wholesale said same-store sales in April rose 7%, with U.S. sales up 6% and international sales up 10%. Costco said it benefited from one extra day of sales, which resulted in a 2% lift.
"Within the past few weeks, the impact of higher dairy costs has significantly increased our cost profile," said Richard Lenny, Hershey's chairman, president and chief executive.
Hillenbrand Industries Inc. on Thursday said it plans to split itself into two publicly traded companies, one focused on medical technologies and the other dedicated to sales of caskets and funeral products. The company plans to spin off Hill-Rom, the medical technology business, through a tax-free dividend of its shares to Hillenbrand shareholders.
Tony Blair said today he will step down as Britain's prime minister on June 27.
The New England Journal of Medicine said in an editorial Wednesday that Merck's Gardasil, a treatment for human papillomavirus or HPV, appears to be safe and effective but "a cautious approach may be warranted" due to unanswered questions about the drug's long-term effectiveness and potential for adverse effects that could emerge over time.
The U.S. trade deficit widened in March as higher crude oil shipments drove the biggest increase in imports in more than four years, a government report showed. The gap in goods and services trade widened 10.4 percent to $63.9 billion from $57.9 billion in February, the Commerce Department reported today in Washington. Imports and exports were the second highest on record. Imports from China declined.
Initial jobless claims decreased by 9,000 to 297,000 in the week ended May 5, the lowest since the week ended Jan. 13, the Labor Department said today in Washington. The four-week moving average, a less-volatile measure, fell to 317,250 from 328,750. The number of people continuing to collect state unemployment benefits rose to 2.555 million in the week that ended April 28, from 2.49 million. Continuing claims have averaged 2.525 million so far this year, compared with 2.459 million for all of 2006.
The Bank of England raised its benchmark interest rate to a six-year high as consumer spending, a house-price boom and record employment drove inflation to the fastest in a decade. The nine-member Monetary Policy Committee increased the Bank Rate by a quarter-point to 5.5 percent, the highest since April 2001.
Joost, the online video site established by the founders of Skype, has raised $45m in funding from four venture capital and media groups, just a week after launching the service.
Real Media retained Lehman Brothers to assist in its assessment of strategic alternatives. On May 1, the New York Post (citing unnamed sources) reported Microsoft was considering a $1b buyout.
ConocoPhillips refinery workers told the company's top executives Wednesday that budget cuts may be compromising plant safety.
Nouriel Roubini: "The price to earnings ratios for Chinese equities is about 50 while the Shanghai stock market has increased by over 40% from its low following the market turmoil in February this year." Goldman Sachs warned of a correction in China's stock market. As an observation, the value of shares traded on China’s stock markets on Wednesday was greater than the rest of Asia combined – including Japan – helping the benchmark index to breach the 4,000 mark for the first time.
Bloomberg reported that "Swiss consumer prices rose the most in more than 15 years in April...In the euro zone countries, producer prices were up 2.7% from March 2006." It's so comforting to know that only the U.S. has muted inflation. How do I know this? The government says so, and I always believe what they tell gullible U.S. citizens. Meanwhile, prices of goods imported into the U.S. rose 1.3% in April, driven higher for the second month in a row by a big increase in the price of imported petroleum. Petroleum prices climbed 6.5% in April, following a revised gain of 8.1% in March, the Labor Department reported Thursday. Prices of U.S. exports rose 0.3%, led by a 1.3% gain in prices of industrial supplies and materials.
A CNN poll out Tuesday found a majority of Americans disapprove of Bush's first veto, and 65 percent expressed opposition to the war. "The president refuses to listen to the American people who want this war to end," said House Speaker Nancy Pelosi. "The American people are war-fatigued. The American people want to know there's a way out," Illinois Republican Rep. Ray LaHood said.
Inverness Medical Innovations Inc. has raised its $90 a share bid for Biosite Inc. to $92.50, thereby topping rival Beckman Coulter Inc.'s current offer of $90 a share, Biosite said
Reformulated gasoline for June delivery climbed 2.5%, or 5.66 cents, to $2.2875 a gallon on the New York Mercantile Exchange. It touched $2.301, its strongest level since mid-August of 2006.
Natural-gas inventories rose by 96 billion cubic feet for the week ended May 4, the Energy Department said Thursday. Total stocks now stand at 1.747 trillion cubic feet, down 230 billion cubic feet from the year-ago level, but 297 billion cubic feet above the five-year average, the government data said.
I feel confident that Palatin's Phase III trials should start shortly after they meet with the FDA within the next 45 days.
The treatment options for patients with early Parkinson's expanded Wednesday with the approval of a new drug in patch form — a first for medicines to treat symptoms of the disease. The once-daily Neupro patch contains a drug called rotigotine, which has not been sold before in the United States, the FDA said. The drug patch, made by Schwarz Pharma AG, is the first for the treatment of symptoms of Parkinson's disease.
Goldman Sachs estimates a 20% drop in new home sales in 2007 and a further 5% decline in 2008.
"Hitler was striving for global domination, and the United States is striving for global domination now," Sergei Markov, the Kremlin-connected head of the Moscow-based Institute for Political Research told The Associated Press. "Hitler thought he was above the League of Nations, and the United States thinks it is above the United Nations. Their action is similar."
Clif Droke: "There has never been an instance when a major bull market didn't end with broad and eager public participation, which is something we don't see today. When greed supplants fear as the dominant emotion among the investing public then you will know this bull market is nearing its apogee. The public will someday come back again to the stock market in droves, much as they were late arrivals to the party in the 1990s bull market. Once the news headlines turn rosy again it will be the signal for the final stampede to begin. Until then, the bull market will remain firmly intact."
June reformulated gasoline climbed 4.3%, or 9.52 cents, to end the day at $2.3261 a gallon, the contract's strongest level since mid-August. June crude edged up by 26 cents to close at $61.81 a barrel. June natural gas was up 0.6 cent to close at $7.726 per million British thermal units.
June gold dropped 2.3%, or $15.50, to close at $667 an ounce Thursday, the contract's weakest closing level since March 23. July silver lost 2.5%, or 33 cents, to end at $13.14 an ounce, its lowest closing level since March 14. July copper finished at $3.5665 a pound, down 3.1% at its lowest level since April 30.
Target's April same-store sales were down 6.1%. Gap Inc. said same-store sales dropped 16% in April. J.C. Penney said Thursday its April sales at department stores open at least one year fell 4.7%. Federated Department Stores Inc. said April same-store sales fell 2.2%, missing its forecast for an increase of 2.5% to 4%. Wal-Mart Stores Inc. said its total U.S. same-store sales fell 3.5% in April. Wal-Mart stores posted a drop in same-store sales of 4.6% for the month, while its Sam's Club locations experienced a rise of 2.5%. The company is forecasting a gain of +1% to +2% for May. Nordstrom Inc. said April same-store sales climbed 3.1%, compared to the expectation for a rise of 4.2%. Kohl's Corp. said Thursday its April sales at stores open at least one year fell 10.5%.
Costco Wholesale said same-store sales in April rose 7%, with U.S. sales up 6% and international sales up 10%. Costco said it benefited from one extra day of sales, which resulted in a 2% lift.
"Within the past few weeks, the impact of higher dairy costs has significantly increased our cost profile," said Richard Lenny, Hershey's chairman, president and chief executive.
Hillenbrand Industries Inc. on Thursday said it plans to split itself into two publicly traded companies, one focused on medical technologies and the other dedicated to sales of caskets and funeral products. The company plans to spin off Hill-Rom, the medical technology business, through a tax-free dividend of its shares to Hillenbrand shareholders.
Tony Blair said today he will step down as Britain's prime minister on June 27.
The New England Journal of Medicine said in an editorial Wednesday that Merck's Gardasil, a treatment for human papillomavirus or HPV, appears to be safe and effective but "a cautious approach may be warranted" due to unanswered questions about the drug's long-term effectiveness and potential for adverse effects that could emerge over time.
The U.S. trade deficit widened in March as higher crude oil shipments drove the biggest increase in imports in more than four years, a government report showed. The gap in goods and services trade widened 10.4 percent to $63.9 billion from $57.9 billion in February, the Commerce Department reported today in Washington. Imports and exports were the second highest on record. Imports from China declined.
Initial jobless claims decreased by 9,000 to 297,000 in the week ended May 5, the lowest since the week ended Jan. 13, the Labor Department said today in Washington. The four-week moving average, a less-volatile measure, fell to 317,250 from 328,750. The number of people continuing to collect state unemployment benefits rose to 2.555 million in the week that ended April 28, from 2.49 million. Continuing claims have averaged 2.525 million so far this year, compared with 2.459 million for all of 2006.
The Bank of England raised its benchmark interest rate to a six-year high as consumer spending, a house-price boom and record employment drove inflation to the fastest in a decade. The nine-member Monetary Policy Committee increased the Bank Rate by a quarter-point to 5.5 percent, the highest since April 2001.
Joost, the online video site established by the founders of Skype, has raised $45m in funding from four venture capital and media groups, just a week after launching the service.
Real Media retained Lehman Brothers to assist in its assessment of strategic alternatives. On May 1, the New York Post (citing unnamed sources) reported Microsoft was considering a $1b buyout.
ConocoPhillips refinery workers told the company's top executives Wednesday that budget cuts may be compromising plant safety.
Nouriel Roubini: "The price to earnings ratios for Chinese equities is about 50 while the Shanghai stock market has increased by over 40% from its low following the market turmoil in February this year." Goldman Sachs warned of a correction in China's stock market. As an observation, the value of shares traded on China’s stock markets on Wednesday was greater than the rest of Asia combined – including Japan – helping the benchmark index to breach the 4,000 mark for the first time.
Bloomberg reported that "Swiss consumer prices rose the most in more than 15 years in April...In the euro zone countries, producer prices were up 2.7% from March 2006." It's so comforting to know that only the U.S. has muted inflation. How do I know this? The government says so, and I always believe what they tell gullible U.S. citizens. Meanwhile, prices of goods imported into the U.S. rose 1.3% in April, driven higher for the second month in a row by a big increase in the price of imported petroleum. Petroleum prices climbed 6.5% in April, following a revised gain of 8.1% in March, the Labor Department reported Thursday. Prices of U.S. exports rose 0.3%, led by a 1.3% gain in prices of industrial supplies and materials.
A CNN poll out Tuesday found a majority of Americans disapprove of Bush's first veto, and 65 percent expressed opposition to the war. "The president refuses to listen to the American people who want this war to end," said House Speaker Nancy Pelosi. "The American people are war-fatigued. The American people want to know there's a way out," Illinois Republican Rep. Ray LaHood said.
Inverness Medical Innovations Inc. has raised its $90 a share bid for Biosite Inc. to $92.50, thereby topping rival Beckman Coulter Inc.'s current offer of $90 a share, Biosite said
Reformulated gasoline for June delivery climbed 2.5%, or 5.66 cents, to $2.2875 a gallon on the New York Mercantile Exchange. It touched $2.301, its strongest level since mid-August of 2006.
Natural-gas inventories rose by 96 billion cubic feet for the week ended May 4, the Energy Department said Thursday. Total stocks now stand at 1.747 trillion cubic feet, down 230 billion cubic feet from the year-ago level, but 297 billion cubic feet above the five-year average, the government data said.
I feel confident that Palatin's Phase III trials should start shortly after they meet with the FDA within the next 45 days.
The treatment options for patients with early Parkinson's expanded Wednesday with the approval of a new drug in patch form — a first for medicines to treat symptoms of the disease. The once-daily Neupro patch contains a drug called rotigotine, which has not been sold before in the United States, the FDA said. The drug patch, made by Schwarz Pharma AG, is the first for the treatment of symptoms of Parkinson's disease.
Goldman Sachs estimates a 20% drop in new home sales in 2007 and a further 5% decline in 2008.
"Hitler was striving for global domination, and the United States is striving for global domination now," Sergei Markov, the Kremlin-connected head of the Moscow-based Institute for Political Research told The Associated Press. "Hitler thought he was above the League of Nations, and the United States thinks it is above the United Nations. Their action is similar."
Clif Droke: "There has never been an instance when a major bull market didn't end with broad and eager public participation, which is something we don't see today. When greed supplants fear as the dominant emotion among the investing public then you will know this bull market is nearing its apogee. The public will someday come back again to the stock market in droves, much as they were late arrivals to the party in the 1990s bull market. Once the news headlines turn rosy again it will be the signal for the final stampede to begin. Until then, the bull market will remain firmly intact."
June reformulated gasoline climbed 4.3%, or 9.52 cents, to end the day at $2.3261 a gallon, the contract's strongest level since mid-August. June crude edged up by 26 cents to close at $61.81 a barrel. June natural gas was up 0.6 cent to close at $7.726 per million British thermal units.
June gold dropped 2.3%, or $15.50, to close at $667 an ounce Thursday, the contract's weakest closing level since March 23. July silver lost 2.5%, or 33 cents, to end at $13.14 an ounce, its lowest closing level since March 14. July copper finished at $3.5665 a pound, down 3.1% at its lowest level since April 30.
Wednesday, May 09, 2007
Data Points
5/10/07 Data Points
Toyota warned that profits in the current year would be flat as it reported record annual sales and profits, helped by strong overseas sales, cost cutting and a favorable exchange rate. This provides another indication of the difficult environment facing even the best-run companies.
In Iraq’s relatively peaceful Kurdistan, a truck bomb killed 12 people and wounded 40 in the northern city of Arbil, a Kurdish official said. It was one of the few bombings in the Kurdish region since the U.S.-led invasion of Iraq in 2003. This is one more sign of the raging civil war in Iraq.
AK Steel CEO James Wainscott said the company isn’t “actively seeking a buyer."
All Nigerian oil production could come to a standstill at the end of the month, as industry-wide militant attacks are planned to coincide with the handover of power from President Matthew Olusegun Aremu Obasanjo to his successor on May 29, sources in the energy industry said Wednesday.
Global Industries, Ltd. confirmed that one of its construction vessels, the DLB Cheyenne operating offshore Nigeria, was forcibly boarded last night by currently unidentified armed militants. Four of the Company's employees were abducted. One Nigerian crew member and three Nigerian naval personnel sustained non-life threatening injuries and were treated on-site by Global's medical personnel.
ONGC Videsh Ltd. and a group of other Indian state-run companies have discovered oil and gas in Iran. The Farsi field may have as much as 10 trillion cubic feet of natural gas and 1 billion barrels of oil.
Toll Brothers said its preliminary second-quarter sales fell from the same quarter last year, due to continued weakness in the U.S. housing sector, and the company also said it will not meet its previous sales and earnings guidance.
At least three groups of private-equity buyers have formed to pursue a potential purchase of wireless carrier Alltel, according to media reports. According to the reports, Providence Equity Partners and the Blackstone Group are teaming up in a bid for the U.S. rural wireless telecommunication services provider. Both the Wall Street Journal and Reuters were reporting the news, citing unnamed sources familiar with the matter. The deal could be worth as much as $30 billion, the reports said. The Wall Street Journal also reported that TPG Capital and the private-equity arm of Goldman Sachs Group are also involved in discussions as is the team of Carlyle and Kohlberg Kravis Roberts.
Dendreon Corp. said U.S. regulators want more data on its prostate cancer medicine, delaying approval of the company's first product. The stock lost more than half its value. The Food and Drug Administration asked for information supporting the efficacy claim for the experimental medicine, the company said. Dendreon said it is seeking clarification on the request.
Mitchell H. Gold, M.D., president and chief executive officer of Dendreon: "Given our strong belief in the survival benefit and safety profile of PROVENGE, coupled with the positive outcome of the Advisory Committee meeting, we are disappointed that this decision will cause a delay in the availability of PROVENGE for patients who suffer from advanced prostate cancer. We are committed to working closely with the FDA to resolve these questions in a timely and efficient manner to bring PROVENGE to patients with advanced prostate cancer who currently have few appealing treatment options."
Shares of Rio Tinto Group, the world's third-largest mining company, rose to a record on speculation it may get a bid from BHP Billiton Ltd., its largest rival.
The number of homes listed for sale in 18 major metropolitan areas at the end of April was up 7% from March, according to data compiled by ZipRealty Inc.
Alcoa was split into Alcan & Alcoa in the 1920's due to antitrust issues. Maybe the landscape has changed a good deal since the 1920's, but the price for this combination goes a long ways to offsetting the advantages of Alcan's cheap hydroelectric power. I can see why Alcoa wants Alcan, but the reverse arrives at a different conclusion.
CareerBuilder.com said Microsoft Corp. purchased a minority stake in the online job site. The companies have also extended their strategic content alliance through 2013. Other owners of CareerBuilder.com include Gannett, Tribune and The McClatchy Co.
Talisman Energy's management is shooting for full-year cash flow of about C$5 billion. The company increased its semi-annual dividend 17% to 8.75 Canadian cents (7.91 cents) a share. The dividend is payable on June 29 to shareholders of record as of June 4,
Palatin Technologies, Inc. and King Pharmaceuticals, Inc. announced plans to present the results from two bremelanotide Phase 2b studies of men with erectile dysfunction (ED). The presenters are Jed Kaminetsky, MD, Clinical Assistant Professor, Department of Urology, NYU School of Medicine; Stanley E. Althof, PhD, Professor of Psychology, Case Western Reserve School of Medicine and Christopher Steidle, MD, Clinical Associate Professor of Urology, Indiana University School of Medicine.The companies plan to present the results at the American Urological Association (AUA) Annual Meeting in Anaheim, CA, which takes place May 19-24, 2007. The Phase 2b studies were designed to evaluate the safety and efficacy of bremelanotide for the treatment of male ED using a range of intranasally administered doses in an at-home environment. A total of 726 and 294 patients were enrolled in a non-diabetic ED patient study and a diabetic ED patient study, respectively. Palatin and King announced initial positive results from the Phase 2b trial evaluating bremelanotide for the treatment of male non- diabetic ED patients in November 2006. Dr. Kaminetsky's presentation, titled "Phase 2b Study of Bremelanotide in the Treatment of ED in Non-Diabetic Males," and Dr. Althof's presentation, titled "Improvement in Sexual Relationship Satisfaction, Confidence, and Self- Esteem in ED Patients Treated with Bremelanotide," will be presented at a podium session titled "Sexual Function/Dysfunction/Andrology: Evaluation (II)" on Monday, May 21st at 1:00 PM PDT. Dr. Steidle's poster, titled "Phase 2b Study of Bremelanotide in the Treatment of ED in Diabetic Males," will be presented at a poster session titled "Sexual Function/Dysfunction/Andrology: Surgical, Medical and Non-surgical Therapy (II)" from 3:30 PM - 5:30 PM PDT on Monday, May 21st.
The American Petroleum Institute reported a climb of 971,000 barrels in crude supplies for the week ended May 4. The group also downwardly revised the previous week's total to 343.8 million from 344.8. The Energy Department had reported an increase of 5.6 million barrels for the latest week. Motor gasoline supplies were up 937,000 barrels, the API said. The government reported a rise of 400,000 barrels. Distillate supplies were down 626,000 barrels, the API said, though the government said supplies were up 1.7 million barrels for the week.
Marc Faber: "What irritates everyone around the world is the constant lecturing by American policymakers about human rights and democracy, and the blatant dual and hypocritical standards the US applies to foreign governments and cultures...The other thing that gets on people's nerves is the constant boasting by America's policymakers and leaders about the supposed superiority of the United States. Now, this may have to do with Americans' ideas about best marketing practice, but it annoys people to constantly read and hear about "the world's best team", "the world's best product," "the world's greatest economy," and "the world's best city" in reference to New York...Perhaps what is more relevant is which cities offer the highest quality of life for residents and expatriates. In those terms, according to Mercer Consulting, Zurich ranks first, followed by Geneva, Vancouver, Vienna, Auckland, Düsseldorf, Frankfurt, Munich, Bern, Sydney, and Copenhagen. The best American cities, as far as quality of life is concerned, are Honolulu (ranked 27th in the world), San Francisco (28th), and Boston (36th), while New York is ranked 46th behind Washington DC, Chicago, and Portland...Given my recent rather negative comments about the financial sector it would surprise me if the metropolises where brokers and asset managers congregate didn't endure some hardship in the next few years...in future, cities that were built as, and thrived as, commercial or financial centres may become less important from a business point of view. The future role of cities may therefore be driven more by conventions, leisure and cultural activities, nightlife, entertainment venues, and tourism...I suggest that there is a possibility that following a 200-year lasting decline in commodity prices in real terms, commodities - including farm products - will appreciate in real terms for many more years. If this were indeed to be the case, it is conceivable that, as on past occasions, some countries, regions, and cities could reach a higher per capita income than the US or Western European countries."
McDonald's says it now sells more chicken than Kentucky Fried Chicken.
Orders from Cisco's biggest U.S. buyers are ``relatively sluggish,'' Chief Executive Officer John Chambers said.
Nabors Industries said the SEC is ending a probe of the company's stock-option practices without recommending any enforcement action against the oil driller.
Gold for June delivery fell $4.90 at $682.50 an ounce on the New York Mercantile Exchange. July silver fell 13.0 cents, or 1%, to $13.470 an ounce, July platinum fell $3.70 to $1,339.50 an ounce, and June palladium fell $5.55 to $370.40 an ounce. July copper ended down 4.35 cents, or 1.2%, at $3.6790 a pound.
The Oil Drum: "US Air Force Major Patrick Sullivan leverages the US government’s Open Source Center to scour Chinese-language press releases, revealing an otherwise under-reported $2.6 billion dollar deal between CNOOC and the Nigerian government to develop a new deepwater block—particularly significant because the 1800 meter depth, and lack of other foreign partners in the deal, suggests that CNOOC’s deepwater technical capabilities may be much more advanced than commonly assumed in the West."
In the face of Peak Oil, Sullivan concludes that 'China’s perceived quest to ‘lock up’ supplies creates a potential that they may run afoul of U.S. efforts to sustain its supplies of the hydrocarbon pie.'
The Federal Reserve kept the benchmark U.S. interest rate at 5.25 percent and said inflation remains the ``predominant'' risk for the economy.``The committee's predominant policy concern remains the risk that inflation will fail to moderate as expected,'' the Federal Open Market Committee said in a statement today after meeting in Washington. ``Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth... the economy ``seems likely to continue to expand at a moderate pace over coming quarters.'' In language that was little changed from March, they added that core inflation remains ``somewhat elevated.''
Whole Foods Markets Inc. said its net income fell to $46 million, or 32 cents a share, in its second fiscal quarter, from $51.8 million, or 36 a share in the year-ago quarter. Revenue rose to $1.46 billion from $1.31 billion.
Crude oil for June delivery fell 71 cents, or 1.1%, at $61.55 a barrel on the New York Mercantile Exchange. June reformulated gasoline rose 2.64 cents to $2.2309 a gallon. June natural gas rose 8.3 cents to $7.720 per million British thermal units. June heating oil fell 1.41 cents to $1.8158 a gallon.
Toyota warned that profits in the current year would be flat as it reported record annual sales and profits, helped by strong overseas sales, cost cutting and a favorable exchange rate. This provides another indication of the difficult environment facing even the best-run companies.
In Iraq’s relatively peaceful Kurdistan, a truck bomb killed 12 people and wounded 40 in the northern city of Arbil, a Kurdish official said. It was one of the few bombings in the Kurdish region since the U.S.-led invasion of Iraq in 2003. This is one more sign of the raging civil war in Iraq.
AK Steel CEO James Wainscott said the company isn’t “actively seeking a buyer."
All Nigerian oil production could come to a standstill at the end of the month, as industry-wide militant attacks are planned to coincide with the handover of power from President Matthew Olusegun Aremu Obasanjo to his successor on May 29, sources in the energy industry said Wednesday.
Global Industries, Ltd. confirmed that one of its construction vessels, the DLB Cheyenne operating offshore Nigeria, was forcibly boarded last night by currently unidentified armed militants. Four of the Company's employees were abducted. One Nigerian crew member and three Nigerian naval personnel sustained non-life threatening injuries and were treated on-site by Global's medical personnel.
ONGC Videsh Ltd. and a group of other Indian state-run companies have discovered oil and gas in Iran. The Farsi field may have as much as 10 trillion cubic feet of natural gas and 1 billion barrels of oil.
Toll Brothers said its preliminary second-quarter sales fell from the same quarter last year, due to continued weakness in the U.S. housing sector, and the company also said it will not meet its previous sales and earnings guidance.
At least three groups of private-equity buyers have formed to pursue a potential purchase of wireless carrier Alltel, according to media reports. According to the reports, Providence Equity Partners and the Blackstone Group are teaming up in a bid for the U.S. rural wireless telecommunication services provider. Both the Wall Street Journal and Reuters were reporting the news, citing unnamed sources familiar with the matter. The deal could be worth as much as $30 billion, the reports said. The Wall Street Journal also reported that TPG Capital and the private-equity arm of Goldman Sachs Group are also involved in discussions as is the team of Carlyle and Kohlberg Kravis Roberts.
Dendreon Corp. said U.S. regulators want more data on its prostate cancer medicine, delaying approval of the company's first product. The stock lost more than half its value. The Food and Drug Administration asked for information supporting the efficacy claim for the experimental medicine, the company said. Dendreon said it is seeking clarification on the request.
Mitchell H. Gold, M.D., president and chief executive officer of Dendreon: "Given our strong belief in the survival benefit and safety profile of PROVENGE, coupled with the positive outcome of the Advisory Committee meeting, we are disappointed that this decision will cause a delay in the availability of PROVENGE for patients who suffer from advanced prostate cancer. We are committed to working closely with the FDA to resolve these questions in a timely and efficient manner to bring PROVENGE to patients with advanced prostate cancer who currently have few appealing treatment options."
Shares of Rio Tinto Group, the world's third-largest mining company, rose to a record on speculation it may get a bid from BHP Billiton Ltd., its largest rival.
The number of homes listed for sale in 18 major metropolitan areas at the end of April was up 7% from March, according to data compiled by ZipRealty Inc.
Alcoa was split into Alcan & Alcoa in the 1920's due to antitrust issues. Maybe the landscape has changed a good deal since the 1920's, but the price for this combination goes a long ways to offsetting the advantages of Alcan's cheap hydroelectric power. I can see why Alcoa wants Alcan, but the reverse arrives at a different conclusion.
CareerBuilder.com said Microsoft Corp. purchased a minority stake in the online job site. The companies have also extended their strategic content alliance through 2013. Other owners of CareerBuilder.com include Gannett, Tribune and The McClatchy Co.
Talisman Energy's management is shooting for full-year cash flow of about C$5 billion. The company increased its semi-annual dividend 17% to 8.75 Canadian cents (7.91 cents) a share. The dividend is payable on June 29 to shareholders of record as of June 4,
Palatin Technologies, Inc. and King Pharmaceuticals, Inc. announced plans to present the results from two bremelanotide Phase 2b studies of men with erectile dysfunction (ED). The presenters are Jed Kaminetsky, MD, Clinical Assistant Professor, Department of Urology, NYU School of Medicine; Stanley E. Althof, PhD, Professor of Psychology, Case Western Reserve School of Medicine and Christopher Steidle, MD, Clinical Associate Professor of Urology, Indiana University School of Medicine.The companies plan to present the results at the American Urological Association (AUA) Annual Meeting in Anaheim, CA, which takes place May 19-24, 2007. The Phase 2b studies were designed to evaluate the safety and efficacy of bremelanotide for the treatment of male ED using a range of intranasally administered doses in an at-home environment. A total of 726 and 294 patients were enrolled in a non-diabetic ED patient study and a diabetic ED patient study, respectively. Palatin and King announced initial positive results from the Phase 2b trial evaluating bremelanotide for the treatment of male non- diabetic ED patients in November 2006. Dr. Kaminetsky's presentation, titled "Phase 2b Study of Bremelanotide in the Treatment of ED in Non-Diabetic Males," and Dr. Althof's presentation, titled "Improvement in Sexual Relationship Satisfaction, Confidence, and Self- Esteem in ED Patients Treated with Bremelanotide," will be presented at a podium session titled "Sexual Function/Dysfunction/Andrology: Evaluation (II)" on Monday, May 21st at 1:00 PM PDT. Dr. Steidle's poster, titled "Phase 2b Study of Bremelanotide in the Treatment of ED in Diabetic Males," will be presented at a poster session titled "Sexual Function/Dysfunction/Andrology: Surgical, Medical and Non-surgical Therapy (II)" from 3:30 PM - 5:30 PM PDT on Monday, May 21st.
The American Petroleum Institute reported a climb of 971,000 barrels in crude supplies for the week ended May 4. The group also downwardly revised the previous week's total to 343.8 million from 344.8. The Energy Department had reported an increase of 5.6 million barrels for the latest week. Motor gasoline supplies were up 937,000 barrels, the API said. The government reported a rise of 400,000 barrels. Distillate supplies were down 626,000 barrels, the API said, though the government said supplies were up 1.7 million barrels for the week.
Marc Faber: "What irritates everyone around the world is the constant lecturing by American policymakers about human rights and democracy, and the blatant dual and hypocritical standards the US applies to foreign governments and cultures...The other thing that gets on people's nerves is the constant boasting by America's policymakers and leaders about the supposed superiority of the United States. Now, this may have to do with Americans' ideas about best marketing practice, but it annoys people to constantly read and hear about "the world's best team", "the world's best product," "the world's greatest economy," and "the world's best city" in reference to New York...Perhaps what is more relevant is which cities offer the highest quality of life for residents and expatriates. In those terms, according to Mercer Consulting, Zurich ranks first, followed by Geneva, Vancouver, Vienna, Auckland, Düsseldorf, Frankfurt, Munich, Bern, Sydney, and Copenhagen. The best American cities, as far as quality of life is concerned, are Honolulu (ranked 27th in the world), San Francisco (28th), and Boston (36th), while New York is ranked 46th behind Washington DC, Chicago, and Portland...Given my recent rather negative comments about the financial sector it would surprise me if the metropolises where brokers and asset managers congregate didn't endure some hardship in the next few years...in future, cities that were built as, and thrived as, commercial or financial centres may become less important from a business point of view. The future role of cities may therefore be driven more by conventions, leisure and cultural activities, nightlife, entertainment venues, and tourism...I suggest that there is a possibility that following a 200-year lasting decline in commodity prices in real terms, commodities - including farm products - will appreciate in real terms for many more years. If this were indeed to be the case, it is conceivable that, as on past occasions, some countries, regions, and cities could reach a higher per capita income than the US or Western European countries."
McDonald's says it now sells more chicken than Kentucky Fried Chicken.
Orders from Cisco's biggest U.S. buyers are ``relatively sluggish,'' Chief Executive Officer John Chambers said.
Nabors Industries said the SEC is ending a probe of the company's stock-option practices without recommending any enforcement action against the oil driller.
Gold for June delivery fell $4.90 at $682.50 an ounce on the New York Mercantile Exchange. July silver fell 13.0 cents, or 1%, to $13.470 an ounce, July platinum fell $3.70 to $1,339.50 an ounce, and June palladium fell $5.55 to $370.40 an ounce. July copper ended down 4.35 cents, or 1.2%, at $3.6790 a pound.
The Oil Drum: "US Air Force Major Patrick Sullivan leverages the US government’s Open Source Center to scour Chinese-language press releases, revealing an otherwise under-reported $2.6 billion dollar deal between CNOOC and the Nigerian government to develop a new deepwater block—particularly significant because the 1800 meter depth, and lack of other foreign partners in the deal, suggests that CNOOC’s deepwater technical capabilities may be much more advanced than commonly assumed in the West."
In the face of Peak Oil, Sullivan concludes that 'China’s perceived quest to ‘lock up’ supplies creates a potential that they may run afoul of U.S. efforts to sustain its supplies of the hydrocarbon pie.'
The Federal Reserve kept the benchmark U.S. interest rate at 5.25 percent and said inflation remains the ``predominant'' risk for the economy.``The committee's predominant policy concern remains the risk that inflation will fail to moderate as expected,'' the Federal Open Market Committee said in a statement today after meeting in Washington. ``Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth... the economy ``seems likely to continue to expand at a moderate pace over coming quarters.'' In language that was little changed from March, they added that core inflation remains ``somewhat elevated.''
Whole Foods Markets Inc. said its net income fell to $46 million, or 32 cents a share, in its second fiscal quarter, from $51.8 million, or 36 a share in the year-ago quarter. Revenue rose to $1.46 billion from $1.31 billion.
Crude oil for June delivery fell 71 cents, or 1.1%, at $61.55 a barrel on the New York Mercantile Exchange. June reformulated gasoline rose 2.64 cents to $2.2309 a gallon. June natural gas rose 8.3 cents to $7.720 per million British thermal units. June heating oil fell 1.41 cents to $1.8158 a gallon.
Tuesday, May 08, 2007
Results
5/9/07 Results
Thomson would pay 352.52 pence a share in cash and swap 0.16 share of Thomson shares for each share of Reuters. Based on Monday's close, the deal values Reuters at 697 pence a share ($14), about a 13% premium from Reuters' closing price. The offer is about 42% higher than where Reuters' shares were trading on May 3, before the company confirmed it received a preliminary bid.
Bronco Drilling's revenues for the first quarter of 2007 were $78.9 million compared to $82.5 million for the fourth quarter of 2006 and $56.4 million for the first quarter of 2006. Average operating rigs for the first quarter of 2007 grew to 51 from 50 for the previous quarter. The growth in rigs is due to the continued refurbishment and deployment of rigs from the Company's inventory. Revenue days for the quarter decreased to 3,631 from 4,176 for the previous quarter and increased from 3,354 for the first quarter of 2006. Utilization for the first quarter of 2007 was 79% compared to 91% for the previous quarter and 96% for the first quarter of 2006. Average daily cash margins for the quarter ended March 31, 2007, were $9,282 compared to $10,142 for the previous quarter and $8,465 for the first quarter of 2006. Net income for the first quarter of 2007 was $11.4 million compared to $16.4 million for the previous quarter and $11.3 million for the first quarter of 2006. The Company generated EBITDA of $31.0 million for the first quarter of 2007 compared to $38.5 million for the previous quarter and $24.3 million for the first quarter of 2006. The Company's fully diluted earnings per share for the quarter ended March 31, 2007, was $0.44 based on 25.9 million shares.
CSX Corp. said Tuesday its board approved an additional $1 billion in stock buybacks and an increase in the company's dividend by 25%, beginning in September. The Jacksonville, Fla.-company forecast "record levels" of operating income and per-share earnings in 2007. CSX's dividend will be 15 cents, payable September 14 to shareholders of record on August 31.
McDonald's Corp. said its global comparable sales rose 4.8% in April. Systemwide sales for its namesake restaurants increased 9.6% for the month. The Dow component said comparable sales swelled 3.5% in the U.S. in April due to demand for its breakfast menu, Happy Meals and Snack Wrap products. Comparable sales also rose 3.5% for the month in Europe while the company's the Asia/Pacific, Middle East and Africa business posted growth of 10.3% for the period.
WCI Communities Inc. said it swung to a first-quarter net loss of $15.8 million, or 38 cents a share, from net income of $40.2 million, or 89 cents a share in the year-ago quarter. The company said net unit orders for the quarter fell 41% from a year earlier to 237. In a statement, Chief Executive Jerry Starkey said the "peak selling season in Florida this year was a disappointment." “Taking into consideration our recent tower closing experience and the individual locations and mix of sold units, we estimate that our tower defaults during 2007 will range from 8% to 10% in aggregate. As we close towers and collect the receivables, we expect to reduce our debt significantly, and ultimately lower our net debt to capital by year-end 2007 to about 50% from our year-end 2006 level of 66%.”
MemberHealth Inc., a Medicare sponsor, said it agreed to be acquired by Universal American Financial in a deal valued at $630 million. The purchase price consists of 55% cash and 45% Universal American stock valued at $20 a share.
Arcelor Mittal is planning to bid around $4.5 billion, or $40 a share, for AK Steel, according to a report on the Financial Times' Alphaville Web site. However, the WSJ reported a person close to fast-expanding Mittal Steel Co. said it is unlikely that the company is bidding on AK Steel Holding Corp. The person agreed that such a deal would have serious U.S. antitrust concerns related to steel produced for the auto industry and possibly other markets.
The National Federation of Independent Business said its index of small business optimism fell for the third straight month, dropping 0.5 point to 96.8 last month. "Overall, expectations for the economy are soft," William Dunkelberg, NFIB's chief economist, said in a statement. "Real growth will continue, but closer to 2% than to 3%."
Nucor's CEO DiMicco:“To participate in the acquisition activity just to be one of the boys is a bad business decision."
Alcoa may face competition for its $26.9 billion bid for rival Alcan from mining companies including BHP Billiton and Rio Tinto Group, said Credit Suisse Group.
The N.Y. Times reported News Corp.’s Fox Interactive Media is close to acquiring Photobucket, an Internet service that allows users to store photos and videos, for as much as $300 million. Photobucket has 41 million users, up from 14 million a year ago. Sixty percent of Photobucket’s Web traffic came from users of News Corp.’s MySpace during the week ending last Saturday.
The number of homeowners in all three phases of foreclosure rose last month over the same period a year ago, according to Foreclosures.com, which gathers data from county courthouses nationwide. Those receiving their first notice of foreclosure from a bank climbed 127 percent, those with homes going up for sale by auction jumped 164 percent and those whose homes were repossessed by banks went up 40 percent.
President Hugo Chavez said Sunday that Venezuela hopes to gradually sell off its refineries in the United States and build a new network of refineries in Latin America.
24/7's Todd Sullivan: "Starbucks, who uses an estimated 93 million gallons of milk a year is looking at a $279 million dollar milk bill in 2007. While it may not seem a lot to a billion dollar company, it does equate to 36 cents a share, an increase of about 9 cents or about 10.3% of profits over 2006. This does not include the price increase to be incurred from changing the percentage of hormone free milk from 27% to 37%. They do charge 50 cents more at some locations for this milk so it must cost considerably more…. no? When you are predicting 83 to 87 cents a share and 18% growth, the 10% of that in milk costs is huge.".....
"REX & Co, backed by a subsidiary of AIG, has a new product that lets homeowners tap the value of their homes without taking out a loan. The novel product gives homeowners cash for their equity in return for a portion of the proceeds from the eventual sale of the home."
The price of Washington's King County houses has risen for the fourth month in a row, reaching a median $465,000 in April.
"I know from almost two years of private discussions with Alcan that they also see the strategic logic behind this combination," said Alain Belda, Alcoa's chairman and CEO. "I'm disappointed that we were not able to come to a negotiated transaction. And while I'm taking this offer to shareholders, I hope that this combination can move forward with the support of Alcan management and board," Belda said.
In Nigeria, there are fears of supply disruptions following the bombing of three major oil pipelines by the main militant group in southern Nigeria.
"Fighters of the Movement for the Emancipation of the Niger Delta attacked and destroyed three major pipelines ... We will continue indefinitely with attacks on all pipelines, platforms and support vessels," the group said in an e-mail.
Chief Joshua Benemesia, the head of a government-backed anti-piracy force, said he had confirmed the attack with members of the Bayelsa State volunteers who were stationed in the two areas attacked, Brass and Akassa.
Barry Ritholtz: "Whenever we see a massive spasm of acquisitions, it makes me wonder what is it really that is driving the deals -- especially considering that these purchases could have been made for pennies on the dollar a mere three years ago. Back then rates were even lower, China was still growing at 10% year-over-year, taxes were low."
Clear Channel Communications Inc. said on Monday it was delaying a shareholder vote on a buyout proposed by two private equity firms, as it considers a higher, revised $19.6 billion offer by the bidders. The company said it was in talks with the bidders, Bain Capital Partners and Thomas H. Lee Partners , about a possible change in the structure of the deal to value Clear Channel at $39.20 a share, rather than $39 a share, and give shareholders the option to take an ongoing stake in the company following the deal's closing. The radio station operator also said it was delaying Tuesday's vote on the $39 offer to May 22 -- the third time the vote has been delayed.
"The world isn't pricing risk appropriately. Investors are simply not being paid for the risks they're taking," adds Steve Rattner of the Quadrangle Group.
The National Association of Realtors provided its monthly forecast update. "If it weren't for a favorable economic backdrop, housing would probably have a hard landing," said Lawrence Yun, senior economist for the NAR. "As it is, we see this as a soft landing with home sales rising gradually in the second half of the year and prices recovering a bit later." Sales of existing homes will probably fall about 3% this year to 6.29 million from 6.48 million in 2006. Sales of new homes are projected to fall about 18% to 864,000, compared with a 14% drop predicted last month. Housing starts are expected to drop 19% to 1.46 million.
The volume of Motorola June 17 puts was quite astounding in the first 1 3/4 hours of trading on Tuesday with over 15,000 contracts changing hands versus an open interest of 998.
Fortress Investment Group LLC agreed to buy real estate developer and railroad operator Florida East Coast Industries Inc. for $3.5 billion. The $84-a-share offer represents a 13 percent premium over yesterday's $74.13 closing price for Jacksonville, Florida-based Florida East Coast, the company said today. Shareholders will get a special cash dividend of $21.50 for each share from Florida East Coast, and $62.50 in cash from Fortress.
"I don't think there is any question if you are missing trucks, Humvees and helicopters that the response is going to be slower," Kansas Governor Sebelius said. "The real victims here will be the residents of Greensburg, because the recovery will be at a slower pace."
Seven storms may strike the U.S. coastline this hurricane season, and some may cut across Florida before moving into the Gulf of Mexico, according to an outlook from AccuWeather.com. At least three weather systems in the Atlantic Basin will strengthen to major hurricanes with winds above 111 miles per hour (179 kilometers per hour), said Joe Bastardi, chief hurricane forecaster for State College, Pennsylvania-based AccuWeather. As many as 14 tropical storms may form during the June-through-November season, he said at a hurricane conference in Houston.
Inventories at US wholesalers rose 0.3% in March after rising 0.4% in February and 0.6% in January. Sales surged 1.8% in March after rising 1.0% in the prior month. Sales had declined 0.9% in January. The March gain is the largest rise since September 2005.The inventory-to-sales ratio fell to 1.14 from 1.15 in the prior month, leaving it at the lowest level since December. One should ask whether there will be inventory re-building in the months ahead, and, if so, what impact will that have on better GDP numbers, the dollar, and interest rates.
European officials voiced fresh concerns Tuesday about World Bank President Paul Wolfowitz's leadership, increasing pressure for his resignation amid revelations that he broke bank rules in arranging a pay package for his girlfriend.
Gold for June delivery closed down $3.0 at $687.40 an ounce on the New York Mercantile Exchange. July silver fell 4.0 cents to close at $13.60 an ounce, July platinum closed down $7.70 at $1,343.20 an ounce and June palladium fell $3.25 to $375.95 an ounce. July copper added 0.7 cent to $3.7225 a pound.
Gates, Microsoft's founder, has said that he will only remain full time with the company until mid-2008. In his remaining months, Gates said his efforts will be mainly directed toward "search, [advertising] buyers and sellers... that will be my biggest thing."
Shareholder JANA Partners called on Alcoa Board to drop Alcan bid. "Given Alcoa's long history of failing to generate shareholder value through acquisition, we believe that its greatest value can be realized through a sale or break-up of the company," JANA managing partner Barry Rosenstein said in a letter to Alcoa Chairman and Chief Executive Alain Belda.
Crude oil for June delivery closed up 79 cents at $62.26 a barrel on the New York Mercantile Exchange. Reformulated gasoline for June delivery rose 1.49 cents to $2.2045 a gallon. June heating oil rose 2.7 cents to $1.8299 a gallon. June natural gas fell 14.2 cents to $7.637 per million British thermal units.
The U.S. Energy Department Tuesday raised its outlook for the summer's average pump price by 14 cents to $2.95 a gallon, and said it projects prices, which are now above $3 a gallon, to rise above the $3 mark again in August. The report also predicted that continued growth in global oil demand would keep the oil markets tight.
In the quarter ended April 28, Cisco would have earned $2.1 billion, or 34 cents a share, on a non-GAAP basis. The company's adjusted profit slightly exceeded Wall Street's forecast.
Patrick Leahy, chairman of the committee: "The Department of Justice must not be reduced to another political arm of the White House . . . Today it is experiencing a crisis of leadership perhaps unrivalled in its 137-year history."
Abbas Araghchi, the Iranian deputy foreign minister who attended last week's conference on Iraq's future at Sharm el Sheikh, Egypt, has offered Tehran's co-operation to the US in developing an "exit strategy" from Iraq. "Their invasion was a disaster – let there not be a disastrous withdrawal," he said in an interview. "Yes, immediate withdrawal could lead to chaos, civil war. No one is asking for immediate withdrawal of foreign forces. But there should be a plan."
Walt Disney Co. on Tuesday posted a net profit ahead of Wall Street targets thanks to strong performances from ESPN and movies like "Wild Hogs," but revenue lagged estimates and its shares fell 2 percent.
Thomson would pay 352.52 pence a share in cash and swap 0.16 share of Thomson shares for each share of Reuters. Based on Monday's close, the deal values Reuters at 697 pence a share ($14), about a 13% premium from Reuters' closing price. The offer is about 42% higher than where Reuters' shares were trading on May 3, before the company confirmed it received a preliminary bid.
Bronco Drilling's revenues for the first quarter of 2007 were $78.9 million compared to $82.5 million for the fourth quarter of 2006 and $56.4 million for the first quarter of 2006. Average operating rigs for the first quarter of 2007 grew to 51 from 50 for the previous quarter. The growth in rigs is due to the continued refurbishment and deployment of rigs from the Company's inventory. Revenue days for the quarter decreased to 3,631 from 4,176 for the previous quarter and increased from 3,354 for the first quarter of 2006. Utilization for the first quarter of 2007 was 79% compared to 91% for the previous quarter and 96% for the first quarter of 2006. Average daily cash margins for the quarter ended March 31, 2007, were $9,282 compared to $10,142 for the previous quarter and $8,465 for the first quarter of 2006. Net income for the first quarter of 2007 was $11.4 million compared to $16.4 million for the previous quarter and $11.3 million for the first quarter of 2006. The Company generated EBITDA of $31.0 million for the first quarter of 2007 compared to $38.5 million for the previous quarter and $24.3 million for the first quarter of 2006. The Company's fully diluted earnings per share for the quarter ended March 31, 2007, was $0.44 based on 25.9 million shares.
CSX Corp. said Tuesday its board approved an additional $1 billion in stock buybacks and an increase in the company's dividend by 25%, beginning in September. The Jacksonville, Fla.-company forecast "record levels" of operating income and per-share earnings in 2007. CSX's dividend will be 15 cents, payable September 14 to shareholders of record on August 31.
McDonald's Corp. said its global comparable sales rose 4.8% in April. Systemwide sales for its namesake restaurants increased 9.6% for the month. The Dow component said comparable sales swelled 3.5% in the U.S. in April due to demand for its breakfast menu, Happy Meals and Snack Wrap products. Comparable sales also rose 3.5% for the month in Europe while the company's the Asia/Pacific, Middle East and Africa business posted growth of 10.3% for the period.
WCI Communities Inc. said it swung to a first-quarter net loss of $15.8 million, or 38 cents a share, from net income of $40.2 million, or 89 cents a share in the year-ago quarter. The company said net unit orders for the quarter fell 41% from a year earlier to 237. In a statement, Chief Executive Jerry Starkey said the "peak selling season in Florida this year was a disappointment." “Taking into consideration our recent tower closing experience and the individual locations and mix of sold units, we estimate that our tower defaults during 2007 will range from 8% to 10% in aggregate. As we close towers and collect the receivables, we expect to reduce our debt significantly, and ultimately lower our net debt to capital by year-end 2007 to about 50% from our year-end 2006 level of 66%.”
MemberHealth Inc., a Medicare sponsor, said it agreed to be acquired by Universal American Financial in a deal valued at $630 million. The purchase price consists of 55% cash and 45% Universal American stock valued at $20 a share.
Arcelor Mittal is planning to bid around $4.5 billion, or $40 a share, for AK Steel, according to a report on the Financial Times' Alphaville Web site. However, the WSJ reported a person close to fast-expanding Mittal Steel Co. said it is unlikely that the company is bidding on AK Steel Holding Corp. The person agreed that such a deal would have serious U.S. antitrust concerns related to steel produced for the auto industry and possibly other markets.
The National Federation of Independent Business said its index of small business optimism fell for the third straight month, dropping 0.5 point to 96.8 last month. "Overall, expectations for the economy are soft," William Dunkelberg, NFIB's chief economist, said in a statement. "Real growth will continue, but closer to 2% than to 3%."
Nucor's CEO DiMicco:“To participate in the acquisition activity just to be one of the boys is a bad business decision."
Alcoa may face competition for its $26.9 billion bid for rival Alcan from mining companies including BHP Billiton and Rio Tinto Group, said Credit Suisse Group.
The N.Y. Times reported News Corp.’s Fox Interactive Media is close to acquiring Photobucket, an Internet service that allows users to store photos and videos, for as much as $300 million. Photobucket has 41 million users, up from 14 million a year ago. Sixty percent of Photobucket’s Web traffic came from users of News Corp.’s MySpace during the week ending last Saturday.
The number of homeowners in all three phases of foreclosure rose last month over the same period a year ago, according to Foreclosures.com, which gathers data from county courthouses nationwide. Those receiving their first notice of foreclosure from a bank climbed 127 percent, those with homes going up for sale by auction jumped 164 percent and those whose homes were repossessed by banks went up 40 percent.
President Hugo Chavez said Sunday that Venezuela hopes to gradually sell off its refineries in the United States and build a new network of refineries in Latin America.
24/7's Todd Sullivan: "Starbucks, who uses an estimated 93 million gallons of milk a year is looking at a $279 million dollar milk bill in 2007. While it may not seem a lot to a billion dollar company, it does equate to 36 cents a share, an increase of about 9 cents or about 10.3% of profits over 2006. This does not include the price increase to be incurred from changing the percentage of hormone free milk from 27% to 37%. They do charge 50 cents more at some locations for this milk so it must cost considerably more…. no? When you are predicting 83 to 87 cents a share and 18% growth, the 10% of that in milk costs is huge.".....
"REX & Co, backed by a subsidiary of AIG, has a new product that lets homeowners tap the value of their homes without taking out a loan. The novel product gives homeowners cash for their equity in return for a portion of the proceeds from the eventual sale of the home."
The price of Washington's King County houses has risen for the fourth month in a row, reaching a median $465,000 in April.
"I know from almost two years of private discussions with Alcan that they also see the strategic logic behind this combination," said Alain Belda, Alcoa's chairman and CEO. "I'm disappointed that we were not able to come to a negotiated transaction. And while I'm taking this offer to shareholders, I hope that this combination can move forward with the support of Alcan management and board," Belda said.
In Nigeria, there are fears of supply disruptions following the bombing of three major oil pipelines by the main militant group in southern Nigeria.
"Fighters of the Movement for the Emancipation of the Niger Delta attacked and destroyed three major pipelines ... We will continue indefinitely with attacks on all pipelines, platforms and support vessels," the group said in an e-mail.
Chief Joshua Benemesia, the head of a government-backed anti-piracy force, said he had confirmed the attack with members of the Bayelsa State volunteers who were stationed in the two areas attacked, Brass and Akassa.
Barry Ritholtz: "Whenever we see a massive spasm of acquisitions, it makes me wonder what is it really that is driving the deals -- especially considering that these purchases could have been made for pennies on the dollar a mere three years ago. Back then rates were even lower, China was still growing at 10% year-over-year, taxes were low."
Clear Channel Communications Inc. said on Monday it was delaying a shareholder vote on a buyout proposed by two private equity firms, as it considers a higher, revised $19.6 billion offer by the bidders. The company said it was in talks with the bidders, Bain Capital Partners and Thomas H. Lee Partners , about a possible change in the structure of the deal to value Clear Channel at $39.20 a share, rather than $39 a share, and give shareholders the option to take an ongoing stake in the company following the deal's closing. The radio station operator also said it was delaying Tuesday's vote on the $39 offer to May 22 -- the third time the vote has been delayed.
"The world isn't pricing risk appropriately. Investors are simply not being paid for the risks they're taking," adds Steve Rattner of the Quadrangle Group.
The National Association of Realtors provided its monthly forecast update. "If it weren't for a favorable economic backdrop, housing would probably have a hard landing," said Lawrence Yun, senior economist for the NAR. "As it is, we see this as a soft landing with home sales rising gradually in the second half of the year and prices recovering a bit later." Sales of existing homes will probably fall about 3% this year to 6.29 million from 6.48 million in 2006. Sales of new homes are projected to fall about 18% to 864,000, compared with a 14% drop predicted last month. Housing starts are expected to drop 19% to 1.46 million.
The volume of Motorola June 17 puts was quite astounding in the first 1 3/4 hours of trading on Tuesday with over 15,000 contracts changing hands versus an open interest of 998.
Fortress Investment Group LLC agreed to buy real estate developer and railroad operator Florida East Coast Industries Inc. for $3.5 billion. The $84-a-share offer represents a 13 percent premium over yesterday's $74.13 closing price for Jacksonville, Florida-based Florida East Coast, the company said today. Shareholders will get a special cash dividend of $21.50 for each share from Florida East Coast, and $62.50 in cash from Fortress.
"I don't think there is any question if you are missing trucks, Humvees and helicopters that the response is going to be slower," Kansas Governor Sebelius said. "The real victims here will be the residents of Greensburg, because the recovery will be at a slower pace."
Seven storms may strike the U.S. coastline this hurricane season, and some may cut across Florida before moving into the Gulf of Mexico, according to an outlook from AccuWeather.com. At least three weather systems in the Atlantic Basin will strengthen to major hurricanes with winds above 111 miles per hour (179 kilometers per hour), said Joe Bastardi, chief hurricane forecaster for State College, Pennsylvania-based AccuWeather. As many as 14 tropical storms may form during the June-through-November season, he said at a hurricane conference in Houston.
Inventories at US wholesalers rose 0.3% in March after rising 0.4% in February and 0.6% in January. Sales surged 1.8% in March after rising 1.0% in the prior month. Sales had declined 0.9% in January. The March gain is the largest rise since September 2005.The inventory-to-sales ratio fell to 1.14 from 1.15 in the prior month, leaving it at the lowest level since December. One should ask whether there will be inventory re-building in the months ahead, and, if so, what impact will that have on better GDP numbers, the dollar, and interest rates.
European officials voiced fresh concerns Tuesday about World Bank President Paul Wolfowitz's leadership, increasing pressure for his resignation amid revelations that he broke bank rules in arranging a pay package for his girlfriend.
Gold for June delivery closed down $3.0 at $687.40 an ounce on the New York Mercantile Exchange. July silver fell 4.0 cents to close at $13.60 an ounce, July platinum closed down $7.70 at $1,343.20 an ounce and June palladium fell $3.25 to $375.95 an ounce. July copper added 0.7 cent to $3.7225 a pound.
Gates, Microsoft's founder, has said that he will only remain full time with the company until mid-2008. In his remaining months, Gates said his efforts will be mainly directed toward "search, [advertising] buyers and sellers... that will be my biggest thing."
Shareholder JANA Partners called on Alcoa Board to drop Alcan bid. "Given Alcoa's long history of failing to generate shareholder value through acquisition, we believe that its greatest value can be realized through a sale or break-up of the company," JANA managing partner Barry Rosenstein said in a letter to Alcoa Chairman and Chief Executive Alain Belda.
Crude oil for June delivery closed up 79 cents at $62.26 a barrel on the New York Mercantile Exchange. Reformulated gasoline for June delivery rose 1.49 cents to $2.2045 a gallon. June heating oil rose 2.7 cents to $1.8299 a gallon. June natural gas fell 14.2 cents to $7.637 per million British thermal units.
The U.S. Energy Department Tuesday raised its outlook for the summer's average pump price by 14 cents to $2.95 a gallon, and said it projects prices, which are now above $3 a gallon, to rise above the $3 mark again in August. The report also predicted that continued growth in global oil demand would keep the oil markets tight.
In the quarter ended April 28, Cisco would have earned $2.1 billion, or 34 cents a share, on a non-GAAP basis. The company's adjusted profit slightly exceeded Wall Street's forecast.
Patrick Leahy, chairman of the committee: "The Department of Justice must not be reduced to another political arm of the White House . . . Today it is experiencing a crisis of leadership perhaps unrivalled in its 137-year history."
Abbas Araghchi, the Iranian deputy foreign minister who attended last week's conference on Iraq's future at Sharm el Sheikh, Egypt, has offered Tehran's co-operation to the US in developing an "exit strategy" from Iraq. "Their invasion was a disaster – let there not be a disastrous withdrawal," he said in an interview. "Yes, immediate withdrawal could lead to chaos, civil war. No one is asking for immediate withdrawal of foreign forces. But there should be a plan."
Walt Disney Co. on Tuesday posted a net profit ahead of Wall Street targets thanks to strong performances from ESPN and movies like "Wild Hogs," but revenue lagged estimates and its shares fell 2 percent.
Monday, May 07, 2007
Another Big Deal In The Works
5/8/07 Another Big Deal In The Works
Alcoa said it would make a hostile bid for Canada's Alcan Inc., estimated at $27 billion, after talks between the rivals failed to lead to a deal. If successful, the bid of $73.25 per share in cash and stock would create the world's largest producer of the metal that is used for products ranging from beverage cans to airplanes, cars and heavy machinery parts. Russian rival RUSAL is the current volume leader. The bid of $58.60 in cash and 0.4108 per share of Pittsburgh-based Alcoa common stock would represent a 32 percent premium to Alcan's average closing price on the New York Stock Exchange over the last 30 trading days. Alcoa said its move comes after nearly two years of merger discussions between the companies that failed to a yield an agreement. It put the enterprise value of the deal at $33 billion, including $6 billion in debt. The offer and withdrawal rights are scheduled to expire at 5:00 p.m., Eastern Daylight Saving Time on July 10, 2007, subject to extension. Alcoa has received a commitment letter from Citi, Goldman Sachs Credit Partners L.P. and Goldman Sachs Canada Credit Partners Co. to fully finance the proposed transaction. Skadden, Arps, Slate, Meagher & Flom LLP, Stikeman Elliott LLP, and Cleary Gottlieb Steen and Hamilton LLP are acting as legal counsel to Alcoa. Citi, Goldman, Sachs & Co., BMO Capital Markets, and Lehman Brothers are acting as financial advisors.
"Without a meaningful equity offering or asset divestiture program that reduces debt on the balance sheet, it is highly unlikely the combined corporate credit rating will retain an investment-grade rating, which would represent at least a three-notch downgrade for Alcoa's and Alcan's existing corporate ratings," Standard and Poor's said in a press release.
Henry DeMarest Lloyd: “Monopoly is business at the end of its journey.”
Warren Buffett said he could envision his Berkshire Hathaway Inc. insurance and investment company pursuing a $40 billion to $60 billion acquisition, according to a Bloomberg News report. "We have plenty of things to sell if we needed to, but the cash is coming in faster than the ideas."
Armor Holdings Inc. said Monday it would be acquired by BAE Systems Inc, a unit of the U.K.'s BAE Systems Plc, for $88 a share, or $4.1 billion.
Dutch Bank ABN Amro said Monday it has rejected a $24.5 billion bid for its U.S. subsidiary LaSalle Bank from a consortium of banks led by Royal Bank of Scotland Group PLC and which indludes Spain's Santander and Fortis due to the conditions attached to the bid.
The Fed's U.S. Trade Weighted Real Broad Dollar index, a monthly inflation-adjusted gauge of the dollar, has fallen 16 percent since 2002 to 94.27, near the lowest in 10 years.
Goldman Sachs Group Inc. chief investment strategist Abby Joseph Cohen increased her forecasts for the Standard & Poor's 500 Index and Dow Jones Industrial Average to 1600 and 14,000, respectively, by the end of the year. The S&P 500 closed on May 4 at 1505.62, the highest since September 2000. Cohen's new estimate implies a 6.3 percent advance from the current level. The Dow, which finished at a record 13,264.62 last week, would have to rally 5.5 percent to meet Cohen's projection.
Gasoline prices have surged to a record nationwide average of $3.07 per gallon, nearly 20 cents higher than two weeks earlier, oil industry analyst Trilby Lundberg said Sunday.
Johnson & Johnson's Conor Medsystems LLC said the CoStar II trial for its CoStar paclitaxel-eluting coronary stent failed to meet its primary endpoint, dealing another blow to the company's drug-coated stent business.
John Hussman: "Lately, the bullish arguments are running so fast and loose that it is apparently no longer a requirement that they have any relationship to fact...The S&P 500 is currently at about 18.5 times record top-of-channel earnings on record margins. At normalized profit margins, the P/E would be over 25. At every horizon, including monthly, weekly and daily frequencies, the market is either at or through its upper Bollinger bands."
Barry Ritholtz: "Against the Japanese yen, S&P500 is up 18 percent during this decade. But in British pounds, its down 22%. Even worse, in Euros, the SPX lost a third of its value. The impact of inflation on commodity prices is even more stark: Compare what a unit of S&P500 bought at the end of 1999 versus today. The S&P500 index buys only 58% as much corn, only 57% as much house (based on the Case-Shiller index) as it used to, only 40% as much Oil, and only 32% as much gold as it did in 1999."
Bank of America Corp. is doing away with the collection of borrower, lender and third-party fees that typically add a few thousand dollars to the price of buying a home.
Bill Fleckenstein: "I did find an amazing similarity between the last month or so of the rise in Japan that ended on Dec. 29, 1989, and the current advance in the Dow Jones Industrial Average ($INDU) (through April 27): Specifically, the last 32 out of 38 trading days in Tokyo were on the upside, with an initial run with a higher close on 19 out of 21 days, followed by seven out of 11, followed by six for six before about a 40% drop in the course of nine months took place. Recently, from the lows of March 5, the Dow closed higher in four out of six sessions, followed by seven out of 11, followed by 20 out of 22 -- for a grand total of 31 out of 39 days. Now, I am not a big believer in analogs, but if the mind-set in Tokyo back in those days was similar to the mind-set that we're witnessing here today, which, by my reckoning, it is, I guess it's not impossible for that similarity to have some predictive power."
Liberty Mutual Group said it was buying Ohio Casualty Corp. for $2.7 billion, or $44 a share in cash.
The American Urological Association meets May 19-24th. On May 21st the afternoon session is on ED. Bremelanotide will have a major piece of the program. They will be presenting on studies #16 and #17. This presentation could have a major impact on Palatin as it moves towards phase III trials.
WWD reported that Gottschalks, a regional department store chain, is said to be on the auction block, and that Dubai-based Istithmar, which already owns Loehmann's and is reportedly eyeing Barneys, is supposedly taking a look.
Ford Motor Co. said Monday it will close its casting plant in Brook Park, Ohio, outside of Cleveland, in 2009. The plant employs 1,218 hourly and salaried workers. The company also will shutter Cleveland Engine Plant 1 in Brook Park for at least a year starting in two weeks. It employs 577 workers.
Gary Tanashian: "The Yen is at major support. The whole world is on the other side of the boat. You do the math and please do not say you were not warned. Being long over-pumped equity markets, China stories and commodity assets would not be the place to be if the Yen makes a major move and all that funny munny stops dead in its tracks... Right now I would rather be long caution than long CNBC."
EGL Inc. said its special committee determined that an $2 billion buyout offer from Apollo Management LP affiliate CEVA Group PLC is superior to a $1.77 billion offer from the company's chief executive. EGL is currently in an agreement to be acquired for $38 a share by a group led by EGL Chief Executive James Crane and backed by private-equity firms Centerbridge Partners ...
Steven Vita: "The American Association of Individual Investors poll, on the other hand, dipped below 35% bulls last week, a level breached only nine times in the past 15 years -- and only once after the market posted a gain in the prior month. Clearly, the broad populace is fighting the market trend."
"In the next 90 days we're going to see increased American casualties because we're taking the fight to the enemy," Maj. Gen. Rick Lynch, commander of U.S. troops south of Baghdad, told reporters.
Warren Buffett: “I don’t look at the stock market at all as ridiculously overpriced,” Buffett said. “If you told me I had to buy a 20-year bond or make a 20-year investment in the stock market, I’d rather buy the stock market. It’s not cheap, but it’s not ridiculous."
Gasoline supplies rose 50,000 barrels last week, the first increase in 13 weeks, according to the median of 12 responses in a Bloomberg News survey. Refineries probably operated at 89.3 percent of capacity, up 1 percentage point from the week before, the survey showed.
The German Weather Service said that April broke records kept since 1901 as the hottest and driest month. Italian officials say this winter was the warmest on record in 200 years.
Just how many layoffs are planned by IBM?
June gold climbed 70 cents to close at $690.40 an ounce Monday. July silver gained 11 cents to close at $13.64 an ounce. July copper was down 4.3 cents to close at $3.7155 a pound
An interesting item: The accepted by Sam Zell is $34 for the Tribune Co. Yet, on Monday, 1,400 June call contracts with a strike price of $35 traded at 15 cents. There were only 1,000 outstanding contracts prior to Monday's trading.
Outstanding U.S. consumer credit climbed by $13.5 billion in March, or at a 6.7% annual rate, the Federal Reserve reported Monday. It was the largest increase since November. Nonrevolving credit, which includes automobile loans, rose by 5.2% annualized, or $6.7 billion. Revolving credit like credit cards climbed by $6.8 billion, a 9.2% annualized increase. The overall increase was much larger than expected and this, despite $3 a gallon gas.
Crude slipped to $61.47 and natural gas to $7.78.
Teva Pharma is bidding more than $6.1 billion to acquire Merck KGaA’s generic-drug unit.
Robert McChesney: "When the government allocates monopoly rights to frequency, and there are only a handful in each community, it's picking the winners in the competition. "
Alcoa said it would make a hostile bid for Canada's Alcan Inc., estimated at $27 billion, after talks between the rivals failed to lead to a deal. If successful, the bid of $73.25 per share in cash and stock would create the world's largest producer of the metal that is used for products ranging from beverage cans to airplanes, cars and heavy machinery parts. Russian rival RUSAL is the current volume leader. The bid of $58.60 in cash and 0.4108 per share of Pittsburgh-based Alcoa common stock would represent a 32 percent premium to Alcan's average closing price on the New York Stock Exchange over the last 30 trading days. Alcoa said its move comes after nearly two years of merger discussions between the companies that failed to a yield an agreement. It put the enterprise value of the deal at $33 billion, including $6 billion in debt. The offer and withdrawal rights are scheduled to expire at 5:00 p.m., Eastern Daylight Saving Time on July 10, 2007, subject to extension. Alcoa has received a commitment letter from Citi, Goldman Sachs Credit Partners L.P. and Goldman Sachs Canada Credit Partners Co. to fully finance the proposed transaction. Skadden, Arps, Slate, Meagher & Flom LLP, Stikeman Elliott LLP, and Cleary Gottlieb Steen and Hamilton LLP are acting as legal counsel to Alcoa. Citi, Goldman, Sachs & Co., BMO Capital Markets, and Lehman Brothers are acting as financial advisors.
"Without a meaningful equity offering or asset divestiture program that reduces debt on the balance sheet, it is highly unlikely the combined corporate credit rating will retain an investment-grade rating, which would represent at least a three-notch downgrade for Alcoa's and Alcan's existing corporate ratings," Standard and Poor's said in a press release.
Henry DeMarest Lloyd: “Monopoly is business at the end of its journey.”
Warren Buffett said he could envision his Berkshire Hathaway Inc. insurance and investment company pursuing a $40 billion to $60 billion acquisition, according to a Bloomberg News report. "We have plenty of things to sell if we needed to, but the cash is coming in faster than the ideas."
Armor Holdings Inc. said Monday it would be acquired by BAE Systems Inc, a unit of the U.K.'s BAE Systems Plc, for $88 a share, or $4.1 billion.
Dutch Bank ABN Amro said Monday it has rejected a $24.5 billion bid for its U.S. subsidiary LaSalle Bank from a consortium of banks led by Royal Bank of Scotland Group PLC and which indludes Spain's Santander and Fortis due to the conditions attached to the bid.
The Fed's U.S. Trade Weighted Real Broad Dollar index, a monthly inflation-adjusted gauge of the dollar, has fallen 16 percent since 2002 to 94.27, near the lowest in 10 years.
Goldman Sachs Group Inc. chief investment strategist Abby Joseph Cohen increased her forecasts for the Standard & Poor's 500 Index and Dow Jones Industrial Average to 1600 and 14,000, respectively, by the end of the year. The S&P 500 closed on May 4 at 1505.62, the highest since September 2000. Cohen's new estimate implies a 6.3 percent advance from the current level. The Dow, which finished at a record 13,264.62 last week, would have to rally 5.5 percent to meet Cohen's projection.
Gasoline prices have surged to a record nationwide average of $3.07 per gallon, nearly 20 cents higher than two weeks earlier, oil industry analyst Trilby Lundberg said Sunday.
Johnson & Johnson's Conor Medsystems LLC said the CoStar II trial for its CoStar paclitaxel-eluting coronary stent failed to meet its primary endpoint, dealing another blow to the company's drug-coated stent business.
John Hussman: "Lately, the bullish arguments are running so fast and loose that it is apparently no longer a requirement that they have any relationship to fact...The S&P 500 is currently at about 18.5 times record top-of-channel earnings on record margins. At normalized profit margins, the P/E would be over 25. At every horizon, including monthly, weekly and daily frequencies, the market is either at or through its upper Bollinger bands."
Barry Ritholtz: "Against the Japanese yen, S&P500 is up 18 percent during this decade. But in British pounds, its down 22%. Even worse, in Euros, the SPX lost a third of its value. The impact of inflation on commodity prices is even more stark: Compare what a unit of S&P500 bought at the end of 1999 versus today. The S&P500 index buys only 58% as much corn, only 57% as much house (based on the Case-Shiller index) as it used to, only 40% as much Oil, and only 32% as much gold as it did in 1999."
Bank of America Corp. is doing away with the collection of borrower, lender and third-party fees that typically add a few thousand dollars to the price of buying a home.
Bill Fleckenstein: "I did find an amazing similarity between the last month or so of the rise in Japan that ended on Dec. 29, 1989, and the current advance in the Dow Jones Industrial Average ($INDU) (through April 27): Specifically, the last 32 out of 38 trading days in Tokyo were on the upside, with an initial run with a higher close on 19 out of 21 days, followed by seven out of 11, followed by six for six before about a 40% drop in the course of nine months took place. Recently, from the lows of March 5, the Dow closed higher in four out of six sessions, followed by seven out of 11, followed by 20 out of 22 -- for a grand total of 31 out of 39 days. Now, I am not a big believer in analogs, but if the mind-set in Tokyo back in those days was similar to the mind-set that we're witnessing here today, which, by my reckoning, it is, I guess it's not impossible for that similarity to have some predictive power."
Liberty Mutual Group said it was buying Ohio Casualty Corp. for $2.7 billion, or $44 a share in cash.
The American Urological Association meets May 19-24th. On May 21st the afternoon session is on ED. Bremelanotide will have a major piece of the program. They will be presenting on studies #16 and #17. This presentation could have a major impact on Palatin as it moves towards phase III trials.
WWD reported that Gottschalks, a regional department store chain, is said to be on the auction block, and that Dubai-based Istithmar, which already owns Loehmann's and is reportedly eyeing Barneys, is supposedly taking a look.
Ford Motor Co. said Monday it will close its casting plant in Brook Park, Ohio, outside of Cleveland, in 2009. The plant employs 1,218 hourly and salaried workers. The company also will shutter Cleveland Engine Plant 1 in Brook Park for at least a year starting in two weeks. It employs 577 workers.
Gary Tanashian: "The Yen is at major support. The whole world is on the other side of the boat. You do the math and please do not say you were not warned. Being long over-pumped equity markets, China stories and commodity assets would not be the place to be if the Yen makes a major move and all that funny munny stops dead in its tracks... Right now I would rather be long caution than long CNBC."
EGL Inc. said its special committee determined that an $2 billion buyout offer from Apollo Management LP affiliate CEVA Group PLC is superior to a $1.77 billion offer from the company's chief executive. EGL is currently in an agreement to be acquired for $38 a share by a group led by EGL Chief Executive James Crane and backed by private-equity firms Centerbridge Partners ...
Steven Vita: "The American Association of Individual Investors poll, on the other hand, dipped below 35% bulls last week, a level breached only nine times in the past 15 years -- and only once after the market posted a gain in the prior month. Clearly, the broad populace is fighting the market trend."
"In the next 90 days we're going to see increased American casualties because we're taking the fight to the enemy," Maj. Gen. Rick Lynch, commander of U.S. troops south of Baghdad, told reporters.
Warren Buffett: “I don’t look at the stock market at all as ridiculously overpriced,” Buffett said. “If you told me I had to buy a 20-year bond or make a 20-year investment in the stock market, I’d rather buy the stock market. It’s not cheap, but it’s not ridiculous."
Gasoline supplies rose 50,000 barrels last week, the first increase in 13 weeks, according to the median of 12 responses in a Bloomberg News survey. Refineries probably operated at 89.3 percent of capacity, up 1 percentage point from the week before, the survey showed.
The German Weather Service said that April broke records kept since 1901 as the hottest and driest month. Italian officials say this winter was the warmest on record in 200 years.
Just how many layoffs are planned by IBM?
June gold climbed 70 cents to close at $690.40 an ounce Monday. July silver gained 11 cents to close at $13.64 an ounce. July copper was down 4.3 cents to close at $3.7155 a pound
An interesting item: The accepted by Sam Zell is $34 for the Tribune Co. Yet, on Monday, 1,400 June call contracts with a strike price of $35 traded at 15 cents. There were only 1,000 outstanding contracts prior to Monday's trading.
Outstanding U.S. consumer credit climbed by $13.5 billion in March, or at a 6.7% annual rate, the Federal Reserve reported Monday. It was the largest increase since November. Nonrevolving credit, which includes automobile loans, rose by 5.2% annualized, or $6.7 billion. Revolving credit like credit cards climbed by $6.8 billion, a 9.2% annualized increase. The overall increase was much larger than expected and this, despite $3 a gallon gas.
Crude slipped to $61.47 and natural gas to $7.78.
Teva Pharma is bidding more than $6.1 billion to acquire Merck KGaA’s generic-drug unit.
Robert McChesney: "When the government allocates monopoly rights to frequency, and there are only a handful in each community, it's picking the winners in the competition. "
Sunday, May 06, 2007
Buffett
5/7/07 Buffett
Berkshire Hathaway plans to increase its profile as a buyer of businesses outside the U.S. in coming months, Chairman Warren Buffett said during the company's annual meeting on Saturday. Buffett said the U.S. housing downturn was hurting results at Berkshire's residential construction businesses. "My guess is that perhaps continues, perhaps for quite a while," he said. Warren Buffett said on Saturday he might hire up to four people to succeed him as chief investment officer of Berkshire Hathaway Inc. , and cautioned that recent strong results from the company's insurance operations were unsustainable. “Corporate America is living in the best of all worlds, and history has shown that those conditions don’t persist indefinitely,” he said. In addition, Buffett repeated recent warnings about the widespread use of leverage and derivatives and criticized the “electronic herd” of hedge fund managers, saying their fast trades in and out of assets are a “fool’s game”. However, he said the crisis in the US sub-prime market, which he called “dumb lending and dumb borrowing”, was unlikely to spread to the rest of the economy.
Berkshire Hathaway has cut its exposure to hurricane losses by roughly half this year because catastrophe reinsurance prices have fallen.
The bad news is my horse was last in the Kentucky Derby. The good news is the horse is ok and still running. He just doesn't realize all the other horses finished the race.
John Williams: "Something like 80% of economists get their annual forecasts wrong," said he. "So to be right more often, all you have to do is go against what most economists are saying."
Royal Bank of Scotland and its partners have made an indicative offer worth $24.5 billion for ABN AMRO's U.S. bank arm LaSalle, conditional on them also buying the rest of ABN, sources familiar with the matter said. The group will also propose an offer of about 39 euros per share, including a 60 euro cent dividend, for all of ABN, the sources told Reuters, which would value the Dutch bank at about 72 billion euros.
The Oil Drum: "In Saudi Arabia gasoline costs about 45 cents a gallon. In Iran it's 33 cents. Venezuelans pay less than a quarter.These absurdly low prices are a direct result of massive government subsidies....But it's straining government budgets. More importantly, it's not allowing the free market to do its job. Higher prices on the open market are not leading to a drop in demand, which is keeping the cost of oil high for everyone else. "Roughly two-thirds of new oil demand is coming from countries that have subsidized oil markets," said Christopher Ruppel, a senior geopolitical analyst with the consulting firm John S. Herold. "So demand is not going to be affected if oil goes from $60 a barrel to $80."
People's Bank of China Governor Zhou Xiaochuan said there's room to raise commercial banks' reserve requirements further after seven increases in 11 months failed to slow lending and inflation.
Bush's approval rating fell to 28 percent this week, the lowest since a similar score by President Jimmy Carter in 1979, the year of the Iran hostage crisis. The poll also found that 71 percent of Americans are dissatisfied with the way things are going in the U.S.
Almost two-thirds of those polled, 62 percent, said that Bush's actions in Iraq showed he was ``stubborn and unwilling to admit his mistakes,'' the survey said. The poll also showed that all three leading Democratic contenders beat their Republican counterparts in head-to-head competition among registered voters.
More than 23,000 military service members have been wounded in Iraq. Federal agencies must give hiring preference to military veterans.
Brad Setser: "Brazil’s reserves: up $12.3b in April. Bacen also did a $3b reverse currency swap – its largest ever – last week. It isn’t just intervening in the spot market. Russia’s reserves: up an incredible $30.3b in April. Maybe $4b of that comes from “valuation gains”; it is mostly real. India’s reserves: up $5b or so in April, with a bit over $2b of that from “valuation gains.” And India has scaled back its intervention, big time, after the huge blow-out in its reserves in February. The rupee is up sharply. We won’t know much about China’s April reserve growth for a long time, but Jon Anderson of UBS notes that the pace of sterilization suggests that the strong pace of reserve growth in the first quarter continued. Remember, the first quarter was really big – over $40b a month on average. The second division of reserve accumulation held their own as well. Korea’s reserves were up $3.35b in April. Some of its “investment profits” may stem from the currency market – the BoK is high on my watch list for central banks that may be diversifying. Saudi Arabia won’t report its April reserves for a while. But Saudi's March reserve growth was strong, as oil prices rebounded." This is the stuff that makes for real liquidity and global economic growth.
David Walker, the nation's comptroller general:"The United States can be likened to Rome before the fall of the empire. Its financial condition is 'worse than advertised,' [Walker] says. "It has a 'broken business model'. It faces deficits in its budgets, its balance of payments, its savings - and its leadership."
Mike Burk: "The market is and has been overbought for a month or more and it keeps going up. The blue chips have been outperforming the secondaries which is usually a negative. May, after the first few days, has historically been good for the secondaries, but not the blue chips. The market has been doing a good job of following the typical seasonal pattern recently and, if that continues, there will be a shift to strength to the secondaries in the next few weeks...For the past 10 years or more the Federal Reserve Bank has had a history of inflating the money supply in response to national or international economic problems. The result has been a series of asset bubbles, first the stock market, then the housing market and now the stock market again. Money supply growth has been well above trend for the past 6 months and is currently running at nearly 11%. Under these conditions an "irrationally exuberant" stock market is not surprising, but it does make analysis difficult. I expect the major indices to be lower on Friday May 11 than they were on Friday May 4."
Consider what the odds would be for the Dow to rise in 23 of the last 26 trading sessions. I couldn't even imagine this taking place in a rational world.
Roadside bombs killed eight American soldiers in separate attacks Sunday in Diyala province and Baghdad. Two other American soldiers died Sunday in separate bombings in Baghdad. The military Sunday also reported three other deaths — two Marines in a blast Saturday in Anbar province and a soldier who died Sunday in a non-combat incident in northern Iraq. Those deaths raised to at least 3,373 the number of U.S. military members who have died since the Iraq war started in March 2003, according to an Associated Press count. The dying continues and the bullshit continues in the White House and the Congress. Next time consider your vote with greater care. It could save lives.
According to the WSJ, House Democrats are drafting a new Iraq war spending bill that fences off more than half the military funds until a second vote by Congress in July, when lawmakers will assess progress made by the Baghdad government.
Jim Ottaway Jr., a former Dow Jones board member, said in a statement posted on the Journal's Web site that a Murdoch takeover would lead to the "loss of the independence and integrity of a leading national editorial voice." "Rupert Murdoch comes from a very different tradition of Australian-British media ownership and editorial practice in which he has for a long time expressed his personal, political, and business biases through his newspapers and television channels," Ottaway said. "The Bancroft family has treated Dow Jones as a public trust, not for personal or political interests, or maximum enhancement of family wealth by sale to a high bidder."
George Tenet, reported the WSJ, said intelligence analysts weren't asked to predict the consequences of the decisions to purge members of Saddam Hussein's Baath Party from positions of authority in Iraq, and to demobilize the Iraqi army. Those decisions, he said in an interview, weren't contemplated.
Between The Hedges: "Even most bulls seem to want the market to decline to redeploy cash they raised in anticipation of a meaningful correction. I still sense very few investors believe the market has meaningful upside from current levels and are positioned accordingly.
As well, there are many other indicators registering high levels of investor anxiety. The ISE Sentiment Index hit a depressed 94.0 on Tuesday. Moreover, the 10-week moving average of the ISE Sentiment Index is hovering just off a record low at 111.2. The CBOE total put/call ratio 10-week moving average is currently 1.0. It has been higher during only two other periods in the last 12 years. Moreover, NYSE short interest has soared 14.6% the last two months, the largest two-month jump on record, to a new all-time high. Nasdaq short interest has surged 13.8% over the last two months, also the largest two-month jump on record, and also to a new record high. Furthermore, public short interest continues to soar to record levels, and U.S. stock mutual funds have seen outflows for most of the last year, according to AMG Data Services. The percentage of U.S. mutual fund assets in domestic stocks is still the lowest since at least 1984, when record-keeping began."
Berkshire Hathaway plans to increase its profile as a buyer of businesses outside the U.S. in coming months, Chairman Warren Buffett said during the company's annual meeting on Saturday. Buffett said the U.S. housing downturn was hurting results at Berkshire's residential construction businesses. "My guess is that perhaps continues, perhaps for quite a while," he said. Warren Buffett said on Saturday he might hire up to four people to succeed him as chief investment officer of Berkshire Hathaway Inc. , and cautioned that recent strong results from the company's insurance operations were unsustainable. “Corporate America is living in the best of all worlds, and history has shown that those conditions don’t persist indefinitely,” he said. In addition, Buffett repeated recent warnings about the widespread use of leverage and derivatives and criticized the “electronic herd” of hedge fund managers, saying their fast trades in and out of assets are a “fool’s game”. However, he said the crisis in the US sub-prime market, which he called “dumb lending and dumb borrowing”, was unlikely to spread to the rest of the economy.
Berkshire Hathaway has cut its exposure to hurricane losses by roughly half this year because catastrophe reinsurance prices have fallen.
The bad news is my horse was last in the Kentucky Derby. The good news is the horse is ok and still running. He just doesn't realize all the other horses finished the race.
John Williams: "Something like 80% of economists get their annual forecasts wrong," said he. "So to be right more often, all you have to do is go against what most economists are saying."
Royal Bank of Scotland and its partners have made an indicative offer worth $24.5 billion for ABN AMRO's U.S. bank arm LaSalle, conditional on them also buying the rest of ABN, sources familiar with the matter said. The group will also propose an offer of about 39 euros per share, including a 60 euro cent dividend, for all of ABN, the sources told Reuters, which would value the Dutch bank at about 72 billion euros.
The Oil Drum: "In Saudi Arabia gasoline costs about 45 cents a gallon. In Iran it's 33 cents. Venezuelans pay less than a quarter.These absurdly low prices are a direct result of massive government subsidies....But it's straining government budgets. More importantly, it's not allowing the free market to do its job. Higher prices on the open market are not leading to a drop in demand, which is keeping the cost of oil high for everyone else. "Roughly two-thirds of new oil demand is coming from countries that have subsidized oil markets," said Christopher Ruppel, a senior geopolitical analyst with the consulting firm John S. Herold. "So demand is not going to be affected if oil goes from $60 a barrel to $80."
People's Bank of China Governor Zhou Xiaochuan said there's room to raise commercial banks' reserve requirements further after seven increases in 11 months failed to slow lending and inflation.
Bush's approval rating fell to 28 percent this week, the lowest since a similar score by President Jimmy Carter in 1979, the year of the Iran hostage crisis. The poll also found that 71 percent of Americans are dissatisfied with the way things are going in the U.S.
Almost two-thirds of those polled, 62 percent, said that Bush's actions in Iraq showed he was ``stubborn and unwilling to admit his mistakes,'' the survey said. The poll also showed that all three leading Democratic contenders beat their Republican counterparts in head-to-head competition among registered voters.
More than 23,000 military service members have been wounded in Iraq. Federal agencies must give hiring preference to military veterans.
Brad Setser: "Brazil’s reserves: up $12.3b in April. Bacen also did a $3b reverse currency swap – its largest ever – last week. It isn’t just intervening in the spot market. Russia’s reserves: up an incredible $30.3b in April. Maybe $4b of that comes from “valuation gains”; it is mostly real. India’s reserves: up $5b or so in April, with a bit over $2b of that from “valuation gains.” And India has scaled back its intervention, big time, after the huge blow-out in its reserves in February. The rupee is up sharply. We won’t know much about China’s April reserve growth for a long time, but Jon Anderson of UBS notes that the pace of sterilization suggests that the strong pace of reserve growth in the first quarter continued. Remember, the first quarter was really big – over $40b a month on average. The second division of reserve accumulation held their own as well. Korea’s reserves were up $3.35b in April. Some of its “investment profits” may stem from the currency market – the BoK is high on my watch list for central banks that may be diversifying. Saudi Arabia won’t report its April reserves for a while. But Saudi's March reserve growth was strong, as oil prices rebounded." This is the stuff that makes for real liquidity and global economic growth.
David Walker, the nation's comptroller general:"The United States can be likened to Rome before the fall of the empire. Its financial condition is 'worse than advertised,' [Walker] says. "It has a 'broken business model'. It faces deficits in its budgets, its balance of payments, its savings - and its leadership."
Mike Burk: "The market is and has been overbought for a month or more and it keeps going up. The blue chips have been outperforming the secondaries which is usually a negative. May, after the first few days, has historically been good for the secondaries, but not the blue chips. The market has been doing a good job of following the typical seasonal pattern recently and, if that continues, there will be a shift to strength to the secondaries in the next few weeks...For the past 10 years or more the Federal Reserve Bank has had a history of inflating the money supply in response to national or international economic problems. The result has been a series of asset bubbles, first the stock market, then the housing market and now the stock market again. Money supply growth has been well above trend for the past 6 months and is currently running at nearly 11%. Under these conditions an "irrationally exuberant" stock market is not surprising, but it does make analysis difficult. I expect the major indices to be lower on Friday May 11 than they were on Friday May 4."
Consider what the odds would be for the Dow to rise in 23 of the last 26 trading sessions. I couldn't even imagine this taking place in a rational world.
Roadside bombs killed eight American soldiers in separate attacks Sunday in Diyala province and Baghdad. Two other American soldiers died Sunday in separate bombings in Baghdad. The military Sunday also reported three other deaths — two Marines in a blast Saturday in Anbar province and a soldier who died Sunday in a non-combat incident in northern Iraq. Those deaths raised to at least 3,373 the number of U.S. military members who have died since the Iraq war started in March 2003, according to an Associated Press count. The dying continues and the bullshit continues in the White House and the Congress. Next time consider your vote with greater care. It could save lives.
According to the WSJ, House Democrats are drafting a new Iraq war spending bill that fences off more than half the military funds until a second vote by Congress in July, when lawmakers will assess progress made by the Baghdad government.
Jim Ottaway Jr., a former Dow Jones board member, said in a statement posted on the Journal's Web site that a Murdoch takeover would lead to the "loss of the independence and integrity of a leading national editorial voice." "Rupert Murdoch comes from a very different tradition of Australian-British media ownership and editorial practice in which he has for a long time expressed his personal, political, and business biases through his newspapers and television channels," Ottaway said. "The Bancroft family has treated Dow Jones as a public trust, not for personal or political interests, or maximum enhancement of family wealth by sale to a high bidder."
George Tenet, reported the WSJ, said intelligence analysts weren't asked to predict the consequences of the decisions to purge members of Saddam Hussein's Baath Party from positions of authority in Iraq, and to demobilize the Iraqi army. Those decisions, he said in an interview, weren't contemplated.
Between The Hedges: "Even most bulls seem to want the market to decline to redeploy cash they raised in anticipation of a meaningful correction. I still sense very few investors believe the market has meaningful upside from current levels and are positioned accordingly.
As well, there are many other indicators registering high levels of investor anxiety. The ISE Sentiment Index hit a depressed 94.0 on Tuesday. Moreover, the 10-week moving average of the ISE Sentiment Index is hovering just off a record low at 111.2. The CBOE total put/call ratio 10-week moving average is currently 1.0. It has been higher during only two other periods in the last 12 years. Moreover, NYSE short interest has soared 14.6% the last two months, the largest two-month jump on record, to a new all-time high. Nasdaq short interest has surged 13.8% over the last two months, also the largest two-month jump on record, and also to a new record high. Furthermore, public short interest continues to soar to record levels, and U.S. stock mutual funds have seen outflows for most of the last year, according to AMG Data Services. The percentage of U.S. mutual fund assets in domestic stocks is still the lowest since at least 1984, when record-keeping began."
Subscribe to:
Posts (Atom)