4/12/08 Storm Brewing?
G7 officials said risks to the economic outlook were tilted to the downside. They pointed to the weak U.S. housing market, stressed financial markets and rising inflation as hurdles that still must be overcome. "There may be more bumps in the road," U.S. Treasury Secretary Henry Paulson said after the officials concluded a meeting. "As we work through this period, our highest priority is limiting its impact on the real economy."
Bear Stearns & Co.'s assets under management have shrunk 20 percent since the end of November, and stock and fixed income trading has plummeted to "well less" than half of activity levels in 2007 and the first quarter of this year, the company said in documents filed with the Securities and Exchange Commission late Friday.
Marcus Tullius Cicero:"Endless money forms the sinews of war."
AMR Corp. will cancel about 200 American Airlines flights Saturday due to ongoing safety inspections on its fleet of MD-80 jets. The company said it plans to resume a normal schedule on Sunday.
Sallie Mae, the nation's largest student lender, Friday said it would stop offering federal consolidation loans. The move means that some borrowers will have a harder time finding lenders willing to consolidate any federal loans they may have into a fixed-rate loan.
Joseph Quinlan, Bank of America chief market strategist: "There are many aspects to the U.S. housing bust but none more important than the effect imploding home values have had on U.S. consumer confidence," he writes in a research note. "The historic bust in U.S. housing has stopped consumers dead in their tracks, succeeding where other events failed. "Remember, a dot-com meltdown, a terrorist attack on U.S. soil, U.S.-led wars in Iraq and Afghanistan and $100-plus oil -- none of these events have put much of a damper on U.S. consumer spending. Not when soaring home values gave the U.S. consumer the confidence and wherewithal to keep spending and living beyond their means."
According to AMG Data Services, including ETF activity, Equity funds report net cash inflows totaling $901 million in the week ended 4/9/08 with Domestic funds reporting net outflows of -$1.455 billion and Non-domestic funds reporting net inflows of $2.356 billion; Excluding ETF activity, Equity funds report the first net cash inflows since 2.27/08 totaling $866 million, with Domestic funds reporting net inflows of $592 million, the largest since 2/6/08, and Non-domestic funds reporting net inflows totaling $273 million.
The dollar index declined 0.3%, ending the week at 71.81.
Doug Noland: "Greenspan now warns against over-zealous regulation and the intrusion of governments into the competitive marketplace. Well, he should have considered these inevitable consequences when he disregarded Credit and asset Bubbles. And to admit to such mistakes to ensure a sounder monetary policy regime going forward would be statesmanlike – which he apparently is not. And while the focus these days is on government programs and regulatory reform, it is my hope that meaningful discussion emerges with regard to a sound “analytical framework” for our central bank. Unfortunately, he was lionized. It now becomes difficult to separate the cult of Greenspan – an individual I view as single-handedly more responsible for Credit and asset Bubbles than anyone else in history - from the Federal Reserve policymaking “analytical framework.” Chairman Bernanke has referred to the understanding of the Great Depression as the “holy grail” of economics. The pursuit of the “grail” will now be assessing and interpreting the Greenspan Episode."
Freightliner plans to cut about 1,500 jobs at its truck-manufacturing plant in Cleveland, N.C., a rural town 45 minutes north of Charlotte. The Portland-based company says a drop in demand for its heavy trucks has prompted the cuts, which are slated to take effect June 6. The plant has about 2,900 workers and will go to a single shift from two as a result.
Peter Schiff: "Although Bernanke may have spent much time studying the Great Depression, his understanding of it is anything but sound. That epic slowdown resulted from a series of policy mistakes, first by the Federal Reserve and then by the Federal Government. Bernanke's view is that these mistakes were simply not large enough. What the current Fed chairman does not grasp is that the seeds of the Depression were sown during the "roaring" 1920s when the Fed, in an effort to support the British pound, kept interest rates much too low. It was this unnaturally cheap money that fueled a raging stock market bubble. In 1929, when the Fed finally came to its senses and raised rates, the bubble finally popped. In his reading of this history, Bernanke ignores the effects of the overly easy policy and simply lays blame on the tightening."
Richard Daughty: "This same bankrupt America is getting ready to send out $160 billion in 'economic stimulus' checks, where the government is literally giving people free money even though the government is borrowing like crazy just to keep afloat, which means that we that are truly, truly toast."
According to the Financial Times, the Group of Seven industrialized nations on Friday night endorsed plans to force banks to hold more capital to guard against risks that contributed to the credit crisis, as part of an initiative to strengthen the financial system.
Fannie Mae will allow more struggling homeowners to sell their homes for less than they owe on their mortgages in a gambit that could hit the mortgage finance company with upfront losses but stave off massive hemorrhage from foreclosures.The program by the largest U.S. financier and guarantor of home mortgages addresses homeowners with "upside-down" loans who owe more than their homes are worth. There are now an estimated 9 million U.S. homeowners in that predicament, according to Moody's Economy.com.
Chinese President Hu Jintao met Taiwan's Vice President-elect Vincent Siew today in Hainan, the highest-level contact between leaders of the two neighbors across the Taiwan Strait in almost six decades.The meeting at the Boao Forum for Asia on southern China's Hainan island discussed trade and economic issues, according to Siew's spokesman and China's state-run media organizations.
The charitable arm of BB&T Corp., a banking company, pledged $1 million to the University of North Carolina Charlotte in 2005 and obtained an agreement that Ayn Rand's novel ``Atlas Shrugged'' would become required reading for students. Marshall University in Huntington, West Virginia, and Johnson C. Smith University in Charlotte, North Carolina, say they also took grants and agreed to teach Rand.
Russia's economy will expand faster than initially forecast this year, even as growth in the U.S. slows in the next two quarters, said Russian Finance Minister Alexei Kudrin. The Russian economy probably will grow 7.1 percent this year, compared with an earlier forecast of 6.5 percent, helped by high prices for oil, Russia's major export, Kudrin told reporters in Washington D.C.
Senator Carl Levin said that while the Democratic-controlled Congress can't force a change in U.S. President George W. Bush's Iraq policy, it can compel the Iraqis to pay a greater share of the war's costs.
Chevron Corp. and Total have confirmed that they are in discussions with the Iraqi Oil Ministry to increase production in an important oil field in southern Iraq.
Ronald Reagan: “We don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much." That debt now amounts to $10+ trillion.
Jeff Barnard: "Scientists listening to underwater microphones have detected an unusual swarm of earthquakes off the central Oregon Coast. Scientists don't know what the earthquakes mean, but they could be the result of magma rumbling underneath the Juan de Fuca Plate - away from the recognized earthquake faults off Oregon, said geophysicist Robert Dziak of the National Oceanic and Atmospheric Administration and Oregon State University's Hatfield Marine Science Center in Newport, Ore. They hope to send out the OSU research ship, Wecoma, to take water samples, looking for evidence that sediment on the ocean bottom has been stirred up and chemicals in the water that would indicate magma is moving up through the crust, Dziak said. There have been more than 600 quakes over the past 10 days in a basin 150 miles southwest of Newport. The biggest was magnitude 5.4 and two others were more than magnitude 5.0, OSU reported. They have not followed the typical pattern of a major shock followed by a series of diminishing aftershocks, and few have been strong enough to be felt on shore. It looks like what happens before a volcanic eruption, except there are no volcanoes in the area, Dziak said."
Saturday, April 12, 2008
GE
4/11/08 GE
General Electric said first-quarter net income dropped 6% to $4.3 billion, or 43 cents a share, while revenue rose 8% to $42.24 billion. From continuing operations, the component of the Dow Jones Industrial Average earned 44 cents a share, below FactSet-compiled analyst estimates of 51 cents a share. "Demand for our global Infrastructure business remained strong, but our financial services businesses were challenged by a slowing U.S. economy and difficult capital markets," GE Chairman and CEO Jeff Immelt said. GE also lowered 2008 guidance to a range of $2.20 to $2.30 a share, with second-quarter EPS seen 53 cents to 55 cents a share. Analysts expected annual earnings of $2.43 and second-quarter earnings of 58 cents a share. In early Friday trading, GE shares dropped 4 points. GE Money operating income was down 19%. Commercial Finance was off 20%.
China's foreign-exchange reserves, the world's largest, surged to $1.68 trillion at the end of March, adding pressure on the government to prevent money inflows from fueling inflation already at an 11-year high. Currency holdings expanded 40 percent from a year earlier, the People's Bank of China said.
“I consider this the biggest financial crisis of my lifetime,” Mr. Soros said during an interview Monday in his office overlooking Central Park. A “superbubble” that has been swelling for a quarter of a century is finally bursting, he said.
Mike Shedlock: "The Fed is now considering borrowing from the Treasury (US taxpayers). Were the Fed to have to do this to remain whole, i.e., have the Treasury underwrite the Fed's balance sheet, the US central bank would be de facto insolvent, having insufficient assets to carry out its mandate.
The perceived invincibility of the Fed's ability to reflate is now clearly in question. The Fed's own discussions prove it."
Southwest Airlines said after markets closed Thursday that its 2008 spending on jet fuel could rise more than $500 million from last year because of rising oil prices. In a filing with the Securities and Exchange Commission, Southwest said it had hedging contracts in place for more than 70 percent of its expected jet fuel consumption in 2008 at an average price of about $51 per barrel of crude oil.
A surge in prices for imported petroleum pushed the prices of goods imported into the U.S. up by 2.8% in March, the most since November 2007, the Labor Department reported Friday. Imported petroleum prices jumped by 9.1% in March, their biggest increase since rising 12.4% in November 2007. The price of imported natural gas also surged, by 7.7% in March, after rising 9.9% in February. Since March 2007, import prices have risen by a whopping +14.8%.
Home-furnishings retailer Linens 'n Things is expected to file for Chapter 11 bankruptcy protection by Tuesday, The Wall Street Journal reported.
Frontier Airline Holdings Inc. said Friday that it's filed for Chapter 11 bankruptcy protection.
Japan's Mizuho Financial Group Inc cut a third off its earnings estimate for the year just ended, stung by $5.5 billion in subprime-related losses, mostly at its brokerage arm.
Shares in Internet provider Foundry Networks Inc. plunged in premarket trading Friday, after it said it expects a profit well below Wall Street expectations because of a drop in orders.
The International Energy Agency Friday made its biggest cut to forecasts for growth in world oil demand in seven years, underlining the extent to which weaker U.S. and European economic growth is eroding crude consumption in the world's wealthiest nations. The forecast for world oil-demand growth, a key metric closely followed by the global crude market, was revised down by 460,000 barrels per day.
According to the RBC Cash Index, confidence dropped to a mark of 29.5 in April, down from 33.1 in March. The new reading was the worst since the index began in 2002. It marked the fourth month in a row where confidence has fallen to an all-time low.
Engineers on Thursday were assessing a leaky joint in a pipe stretching from the world's deepest offshore production platform to a pipeline on the Gulf of Mexico seabed. Natural gas production at the Independence Hub, 185 miles southeast of New Orleans, remained shut down as offshore experts with majority owner Enterprise Products Partners determined how to fix the problem discovered this week. "We are still finalizing our repair plans," Enterprise spokesman Rick Rainey said. He said repairs could take up to a month.
The Independence Hub, operated by Anadarko Petroleum Corp. in 8,000 feet of water, began producing last July.
TriZetto Group Inc.is being acquired by Apax Partners for $1.4 billion, or $22.00 per share.
Martin Feldstein, president of National Bureau of Economic Research:"Any intervention would be a mistake, because the dollar needs to fall further," he said, according to the German text of the interview. "I've been saying for years that European countries need to get ready for a falling dollar. Because the United States needs to continue to reduce its trade deficit."
The average U.S. retail price for unleaded regular gasoline rose by a penny Friday from the previous day to $3.37 a gallon, up from $3.25 a month ago and $2.81 a year ago, according to the Daily Fuel Gauge Report from the Automobile Association of America.
Japan's wholesale prices rose at the fastest pace since February 1981, highlighting concern higher fuel and food costs will fan inflation even as the economy slows. Producer prices climbed 3.9 percent in March from a year earlier, after a revised 3.6 percent increase in February, the Bank of Japan said.
American Airlines has canceled 595 more flights, bringing this week's total to nearly 3,100 as inspections continue on the wiring of its MD-80 jets.
The U.S. consumer sentiment index fell to 63.2 in April from 69.5 March, according to a Friday report from University of Michigan/Reuters. Sentiment fell to its lowest level since March 1982.
Dell traded at a new 52-week low.
European Central Bank council member Axel Weber said he doesn't see any scope to cut interest rates with inflation running at the fastest pace in almost 16 years.
The Dow Jones Industrial Average fell 256.56 points, or 2%, to 12,325.42, with the blue chips hit with a weekly loss of 2.2%. The S&P 500 shed 27.72 points, or 2%, to 1,332.83, down 2.7% from last Friday. Hardest hit was the Nasdaq Composite, which dumped 61.46 points, or 2.6%, to 2,290.24, off 3.4% on the week.
Crude oil for May delivery rose 3 cents to settle at $110.14 a barrel on the New York Mercantile Exchange. It fell to an intraday low of $108.92 earlier. The futures contract ended the week up 3.7%. Gold for June delivery fell $4.80 to end at $927 an ounce on the New York Mercantile Exchange. However, gold posted a gain of $13.80 on the week from last Friday's closing level of $913.20 an ounce.
A count by MSNBC gives Clinton 256 superdelegates to Obama's 225.
General Electric said first-quarter net income dropped 6% to $4.3 billion, or 43 cents a share, while revenue rose 8% to $42.24 billion. From continuing operations, the component of the Dow Jones Industrial Average earned 44 cents a share, below FactSet-compiled analyst estimates of 51 cents a share. "Demand for our global Infrastructure business remained strong, but our financial services businesses were challenged by a slowing U.S. economy and difficult capital markets," GE Chairman and CEO Jeff Immelt said. GE also lowered 2008 guidance to a range of $2.20 to $2.30 a share, with second-quarter EPS seen 53 cents to 55 cents a share. Analysts expected annual earnings of $2.43 and second-quarter earnings of 58 cents a share. In early Friday trading, GE shares dropped 4 points. GE Money operating income was down 19%. Commercial Finance was off 20%.
China's foreign-exchange reserves, the world's largest, surged to $1.68 trillion at the end of March, adding pressure on the government to prevent money inflows from fueling inflation already at an 11-year high. Currency holdings expanded 40 percent from a year earlier, the People's Bank of China said.
“I consider this the biggest financial crisis of my lifetime,” Mr. Soros said during an interview Monday in his office overlooking Central Park. A “superbubble” that has been swelling for a quarter of a century is finally bursting, he said.
Mike Shedlock: "The Fed is now considering borrowing from the Treasury (US taxpayers). Were the Fed to have to do this to remain whole, i.e., have the Treasury underwrite the Fed's balance sheet, the US central bank would be de facto insolvent, having insufficient assets to carry out its mandate.
The perceived invincibility of the Fed's ability to reflate is now clearly in question. The Fed's own discussions prove it."
Southwest Airlines said after markets closed Thursday that its 2008 spending on jet fuel could rise more than $500 million from last year because of rising oil prices. In a filing with the Securities and Exchange Commission, Southwest said it had hedging contracts in place for more than 70 percent of its expected jet fuel consumption in 2008 at an average price of about $51 per barrel of crude oil.
A surge in prices for imported petroleum pushed the prices of goods imported into the U.S. up by 2.8% in March, the most since November 2007, the Labor Department reported Friday. Imported petroleum prices jumped by 9.1% in March, their biggest increase since rising 12.4% in November 2007. The price of imported natural gas also surged, by 7.7% in March, after rising 9.9% in February. Since March 2007, import prices have risen by a whopping +14.8%.
Home-furnishings retailer Linens 'n Things is expected to file for Chapter 11 bankruptcy protection by Tuesday, The Wall Street Journal reported.
Frontier Airline Holdings Inc. said Friday that it's filed for Chapter 11 bankruptcy protection.
Japan's Mizuho Financial Group Inc cut a third off its earnings estimate for the year just ended, stung by $5.5 billion in subprime-related losses, mostly at its brokerage arm.
Shares in Internet provider Foundry Networks Inc. plunged in premarket trading Friday, after it said it expects a profit well below Wall Street expectations because of a drop in orders.
The International Energy Agency Friday made its biggest cut to forecasts for growth in world oil demand in seven years, underlining the extent to which weaker U.S. and European economic growth is eroding crude consumption in the world's wealthiest nations. The forecast for world oil-demand growth, a key metric closely followed by the global crude market, was revised down by 460,000 barrels per day.
According to the RBC Cash Index, confidence dropped to a mark of 29.5 in April, down from 33.1 in March. The new reading was the worst since the index began in 2002. It marked the fourth month in a row where confidence has fallen to an all-time low.
Engineers on Thursday were assessing a leaky joint in a pipe stretching from the world's deepest offshore production platform to a pipeline on the Gulf of Mexico seabed. Natural gas production at the Independence Hub, 185 miles southeast of New Orleans, remained shut down as offshore experts with majority owner Enterprise Products Partners determined how to fix the problem discovered this week. "We are still finalizing our repair plans," Enterprise spokesman Rick Rainey said. He said repairs could take up to a month.
The Independence Hub, operated by Anadarko Petroleum Corp. in 8,000 feet of water, began producing last July.
TriZetto Group Inc.is being acquired by Apax Partners for $1.4 billion, or $22.00 per share.
Martin Feldstein, president of National Bureau of Economic Research:"Any intervention would be a mistake, because the dollar needs to fall further," he said, according to the German text of the interview. "I've been saying for years that European countries need to get ready for a falling dollar. Because the United States needs to continue to reduce its trade deficit."
The average U.S. retail price for unleaded regular gasoline rose by a penny Friday from the previous day to $3.37 a gallon, up from $3.25 a month ago and $2.81 a year ago, according to the Daily Fuel Gauge Report from the Automobile Association of America.
Japan's wholesale prices rose at the fastest pace since February 1981, highlighting concern higher fuel and food costs will fan inflation even as the economy slows. Producer prices climbed 3.9 percent in March from a year earlier, after a revised 3.6 percent increase in February, the Bank of Japan said.
American Airlines has canceled 595 more flights, bringing this week's total to nearly 3,100 as inspections continue on the wiring of its MD-80 jets.
The U.S. consumer sentiment index fell to 63.2 in April from 69.5 March, according to a Friday report from University of Michigan/Reuters. Sentiment fell to its lowest level since March 1982.
Dell traded at a new 52-week low.
European Central Bank council member Axel Weber said he doesn't see any scope to cut interest rates with inflation running at the fastest pace in almost 16 years.
The Dow Jones Industrial Average fell 256.56 points, or 2%, to 12,325.42, with the blue chips hit with a weekly loss of 2.2%. The S&P 500 shed 27.72 points, or 2%, to 1,332.83, down 2.7% from last Friday. Hardest hit was the Nasdaq Composite, which dumped 61.46 points, or 2.6%, to 2,290.24, off 3.4% on the week.
Crude oil for May delivery rose 3 cents to settle at $110.14 a barrel on the New York Mercantile Exchange. It fell to an intraday low of $108.92 earlier. The futures contract ended the week up 3.7%. Gold for June delivery fell $4.80 to end at $927 an ounce on the New York Mercantile Exchange. However, gold posted a gain of $13.80 on the week from last Friday's closing level of $913.20 an ounce.
A count by MSNBC gives Clinton 256 superdelegates to Obama's 225.
Thursday, April 10, 2008
Sharp Turn Down
4/10/08 Sharp Turn Down
Yahoo Inc and Time Warner Inc are "closing in" on a deal where Yahoo would merge with Time Warner's AOL Internet unit, brushing aside Microsoft's bid for Yahoo, a source familiar with the talks said on Wednesday.The source confirmed a Wall Street Journal story saying Yahoo would receive a cash investment from Time Warner in exchange for a 20 percent stake in the combined Yahoo-AOL business. The deal would exclude AOL's fading dial-up Internet access business and value AOL at about $10 billion. Separately, The New York Times reported that Microsoft and Rupert Murdoch's News Corp are in negotiations on making a joint bid for Yahoo. That merger would join Yahoo, Microsoft Corp's MSN and News Corp's MySpace, the paper said.
The survey by the Pew Research Center, a Washington-based organization, paints a mixed picture for the 53 percent of adults in the country who define themselves as "middle class," with household incomes ranging from below $40,000 to more than $100,000. It found that a majority of all Americans said they haven't progressed in the last five years. One in four, or 25 percent, said their economic situation had not improved, while 31 percent said they had fallen backward. Those numbers together are the highest since the survey question was first asked in 1964. Among the middle class, 54 percent said they had made no progress (26 percent) or fallen back (28 percent). Asked about their financial experiences in the past year, 53 percent of middle-class people said they had to cut spending because money was tight. Nearly one in five, or 18 percent, said they had trouble getting or paying for medical care, while 10 percent reported they had been laid off or otherwise lost their jobs. Looking ahead to the coming year, half of the middle class surveyed said they expected to have to cut more spending. Among those employed, one in four, or 25 percent, expressed worries that they would be laid off, that their job would be outsourced or that their employer would relocate in the coming year, while 26 percent were concerned that they would see cuts in salary or health benefits.
Paulson says U.S. economy has 'turned down sharply'.
Paul Volcker: "Out of perceived necessity, sweeping powers have been exercised in a manner that is neither natural nor comfortable for a central bank."
Millennium Pharmaceuticals Inc., the Cambridge, Mass., biopharmaceutical producer, definitively agreed to be acquired by Takeda Pharmaceutical Co.of Osaka, Japan, for $25 a share cash, or $8.8 billion, the companies said.
Wal-Mart Stores on Thursday blamed an early Easter and weather woes for March sales that were at the lower end of its guidance. Wal-Mart said sales at its stores open at least a year, a key measure of retail performance known as same-store sales rose 0.7%, which was at the lower-end of its guidance of flat to up 2% for the month. For April, the company expects same-store sales to be up 1% to 3%.Wal-Mart raised its first-quarter profit forecast to between 74 to 76 cents a share from its previous estimate of 70 to 74 cents a share.
U.S. President George W. Bush's most senior advisers approved "enhanced interrogation techniques" of top al Qaeda suspects by the Central Intelligence Agency, ABC News reported on Wednesday, citing sources it did not name. Then national security adviser Condoleezza Rice chaired the meetings, which took place in the White House Situation Room and were typically attended by a select group of senior officials or their deputies, ABC said. In addition to Rice, the principals at the time included Vice President Cheney, Defense Secretary Donald Rumsfeld and Secretary of State Colin Powell, CIA Director George Tenet and Attorney General John Ashcroft, the report said.
American Airlines has canceled more than 900 additional flights on Thursday as the nation's largest carrier continues safety inspections of its MD-80 fleet. American Airlines said it should resume normal services by Saturday.
The Bank of England's Monetary Policy Committee on Thursday cut the bank's key lending rate by a quarter point to 5%, as expected by economists.
Combating fears about its banks and rising inflation, Iceland's central bank on Thursday lifted its key rate by a half-point to 15.5%.
E.I. du Pont de Nemours & Co. said it's revising higher its first-quarter profit outlook, and now sees a profit of $1.29 a share, up from a prior range pegged at $1.14 to $1.19 a share.
Goldman Sachs upgraded oil and gas services group Halliburton Co. to buy from neutral, citing valuation and the potential for revenue gains as new offshore rigs are brought online over the next few years. The broker also downgraded Weatherford International to neutral from buy on valuation grounds. Goldman said its top pick in the sector remains Schlumberger given its strong exposure to the markets where new rigs are headed.
Costco Wholesale Corp. reported that for March, same-store sales rose 7%. Sales were aided by the rising price of gasoline.
Mining giant BHP Billiton said Thursday that it isn't aware of a proposed acquisition by Chinese authorities of a substantial stake in the firm.
The U.S. dollar Thursday fell below the 7 yuan level against the Chinese currency for the first time after China ended the yuan's fixed peg against the dollar.
Lehman Brothers Holdings Inc has liquidated three floundering investment funds that lost value and ended up taking $1 billion of assets onto its balance sheet, according to a filing with the U.S. Securities and Exchange Commission.The bank blamed the liquidation on "market disruptions that occurred in the second half of the 2007 fiscal year and further deterioration in the 2008 quarter," according to the quarterly filing on Wednesday.
According to the WSJ, many U.S. companies hoping to profit from surging exports created by the weak dollar are facing an unexpected hurdle: There aren't enough of the big, metal shipping containers that help form the backbone of the global economy.
China's quarterly trade surplus shrank for the first time in more than three years, evidence that cooling exports are slowing the nation's economic growth.The trade surplus narrowed 10.2 percent to about $41.6 billion in the three months to March 31 from a year earlier, according to calculations by Bloomberg News based on trade data released by the Ministry of Commerce. Foreign direct investment almost doubled to $27.4 billion from a year earlier, the Ministry of Commerce said today, adding to the cash flooding the economy from exports and fanning price increases.
Credito Valtellinese Scrl ignored the April 30 call date on its 150 million euros ($236 million) of notes. As a result, the bank will pay a penalty interest rate of 160 basis points more than money-market rates -- higher than the 100-basis-point premium it paid for the past five years, though still lower than it would probably pay to refinance.
Germany’s RWE has made an indicative all-cash offer for nuclear power firm British Energy worth up to 11 billion pounds ($22 billion) including debt, according to press reports.
Oasis Hong Kong Airlines, a long-haul budget carrier that tried to offer premium service and spacious seats at low prices, suddenly went into liquidation on Wednesday and canceled all flights. It was the fourth budget carrier worldwide to halt operations in the last week and a half.
Wholesale Inventories for February rose 1.1% versus estimates of a .5% rise and an upwardly revised 1.3% increase in January.
The U.S. trade deficit unexpectedly widened in February, reflecting a jump in imports of automobiles and machinery that swamped record exports.The gap grew 5.7 percent to $62.3 billion, the highest since November, from a revised $59 billion in January, the Commerce Department said today in Washington. The 3.1 percent gain in imports was the biggest in almost a year, even as purchases of petroleum and goods from China dropped. February exports were $3.0 billion more than January exports of $148.4 billion. February imports were $6.3 billion more than January imports of $207.3 billion. The Chinese New Year caused imports from China to fall to their lowest level since March 2007. And oil imports fell after eleven straight monthly gains. Record imports of food, industrial supplies and consumer goods pushed the deficit higher.
The Federal Reserve will stop cutting interest rates once it is assured that the economic contraction is limited to the financial sector, PIMCO CEO Mohamed El-Arian told CNBC.
Rob Hanna: "In all I would consider the relatively high put/call ratios we are currently seeing a positive. They may help to provide a “wall of worry” for the market to climb."
Initial jobless claims for the week ending April 5 fell 53,000 to 357,000, the Labor Department reported Thursday, easing back recent gains. The four-week average of those claims rose 2,500 to 378,250 -- the highest level since October 2005. The prior weekly result for initial claims was revised to 410,000 from a first estimate of 407,000. For the week ending March 29, continuing jobless claims rose 3,000 to 2.94 million - the highest since July 2004. The four-week moving average of those claims gained 36,500 to 2.9 million - the highest level since August 2004.
George Newberry: "A few weeks ago I went to see Tent City (Ontario, Ca). I was so shocked and distraught I could barely talk about it. I have lived through many recessions but this was something I had never seen before. I felt as if I had been transported back to a time before I was born and was looking at a small example of what people witnessed during the Great Depression. I also felt I was only seeing the "tip of the iceberg."...Many people say, "I don't want to hear doom and gloom." That is saying, "I don't want to face reality." If people go to their church, synagogue, mosque, temple or elsewhere and pray for God to stop evil, then go home and think they are safe because God will take care of it, they are fools. God didn't separate people by religions and turn them against one another, people did it to themselves. We allowed people to create all of our problems and only we can stop them. If we confront and stop the things that are causing our destruction from within, before it is too late, there can be peace on Earth. If we do nothing, we must brace ourselves and get ready for complete chaos. We haven't seen anything yet; it's going to get a lot worse."
"So far the majority of retailers have missed expectations and are blaming the Easter effect and macroeconomic conditions," said Thomson Financial in a note wrapping up some of the results.
Todd Harrison: "$500 trillion in derivatives ties the global machination together, which is why the Bear Stearns bankruptcy would have led to "financial Armageddon." Given the interdependency of financial assets in our finance-based economy, how can we intelligently assume that it was a "one time event?"
Without taking sides in the race for the White House, Colin Powell said, "Whichever one of them becomes president on Jan. 1, 2009, they will face a military force that cannot continue to sustain 140,000 people deployed in Iraq and the 20 (thousand) odd or 25,000 people we have deployed in Afghanistan and our other deployments."
The U.S. dollar index was trading at 71.713 in early Thursday trading.
U.S. natural gas inventories fell for a 20th week, down 14 Billion cubic feet in the week ended April 4 to 1,234 Bcf, the Energy Information Administration reported on Thursday. Stocks were 351 Bcf less than last year at this time and 23 Bcf below the five-year average of 1,257 Bcf.
Gold for June delivery fell $5.70 to end at $931.80 an ounce on the New York Mercantile Exchange. Crude oil for May delivery fell 76 cents, or 0.7%, to end at $110.11 a barrel on the New York Mercantile Exchange.
For the quarter ended March 31, Genentech posted net income of $790 million, compared with $706 million for the previous year's quarter. Earnings per share including stock options were 74 cents versus 66 cents. Excluding stock options and other items, Genentech would have reported adjusted earnings per share of 84 cents. Operating revenue increased to $3.06 billion. A poll of analysts by FactSet pegged Genentech at reporting earnings of 76 cents a share, adjusted earnings of 82 cents a share and revenue of $3.12 billion.
American Airlines cancels about 570 Friday flights.
Bear Stearns expects first-quarter results to be "significantly lower" than a year earlier. In a filing with the U.S. Securities and Exchange Commission, Bear said the global liquidity crisis, a "repricing" of credit risk, and weakness in fixed-income, investment banking and asset management operations "created a difficult operating environment."
Yahoo Inc and Time Warner Inc are "closing in" on a deal where Yahoo would merge with Time Warner's AOL Internet unit, brushing aside Microsoft's bid for Yahoo, a source familiar with the talks said on Wednesday.The source confirmed a Wall Street Journal story saying Yahoo would receive a cash investment from Time Warner in exchange for a 20 percent stake in the combined Yahoo-AOL business. The deal would exclude AOL's fading dial-up Internet access business and value AOL at about $10 billion. Separately, The New York Times reported that Microsoft and Rupert Murdoch's News Corp are in negotiations on making a joint bid for Yahoo. That merger would join Yahoo, Microsoft Corp's MSN and News Corp's MySpace, the paper said.
The survey by the Pew Research Center, a Washington-based organization, paints a mixed picture for the 53 percent of adults in the country who define themselves as "middle class," with household incomes ranging from below $40,000 to more than $100,000. It found that a majority of all Americans said they haven't progressed in the last five years. One in four, or 25 percent, said their economic situation had not improved, while 31 percent said they had fallen backward. Those numbers together are the highest since the survey question was first asked in 1964. Among the middle class, 54 percent said they had made no progress (26 percent) or fallen back (28 percent). Asked about their financial experiences in the past year, 53 percent of middle-class people said they had to cut spending because money was tight. Nearly one in five, or 18 percent, said they had trouble getting or paying for medical care, while 10 percent reported they had been laid off or otherwise lost their jobs. Looking ahead to the coming year, half of the middle class surveyed said they expected to have to cut more spending. Among those employed, one in four, or 25 percent, expressed worries that they would be laid off, that their job would be outsourced or that their employer would relocate in the coming year, while 26 percent were concerned that they would see cuts in salary or health benefits.
Paulson says U.S. economy has 'turned down sharply'.
Paul Volcker: "Out of perceived necessity, sweeping powers have been exercised in a manner that is neither natural nor comfortable for a central bank."
Millennium Pharmaceuticals Inc., the Cambridge, Mass., biopharmaceutical producer, definitively agreed to be acquired by Takeda Pharmaceutical Co.of Osaka, Japan, for $25 a share cash, or $8.8 billion, the companies said.
Wal-Mart Stores on Thursday blamed an early Easter and weather woes for March sales that were at the lower end of its guidance. Wal-Mart said sales at its stores open at least a year, a key measure of retail performance known as same-store sales rose 0.7%, which was at the lower-end of its guidance of flat to up 2% for the month. For April, the company expects same-store sales to be up 1% to 3%.Wal-Mart raised its first-quarter profit forecast to between 74 to 76 cents a share from its previous estimate of 70 to 74 cents a share.
U.S. President George W. Bush's most senior advisers approved "enhanced interrogation techniques" of top al Qaeda suspects by the Central Intelligence Agency, ABC News reported on Wednesday, citing sources it did not name. Then national security adviser Condoleezza Rice chaired the meetings, which took place in the White House Situation Room and were typically attended by a select group of senior officials or their deputies, ABC said. In addition to Rice, the principals at the time included Vice President Cheney, Defense Secretary Donald Rumsfeld and Secretary of State Colin Powell, CIA Director George Tenet and Attorney General John Ashcroft, the report said.
American Airlines has canceled more than 900 additional flights on Thursday as the nation's largest carrier continues safety inspections of its MD-80 fleet. American Airlines said it should resume normal services by Saturday.
The Bank of England's Monetary Policy Committee on Thursday cut the bank's key lending rate by a quarter point to 5%, as expected by economists.
Combating fears about its banks and rising inflation, Iceland's central bank on Thursday lifted its key rate by a half-point to 15.5%.
E.I. du Pont de Nemours & Co. said it's revising higher its first-quarter profit outlook, and now sees a profit of $1.29 a share, up from a prior range pegged at $1.14 to $1.19 a share.
Goldman Sachs upgraded oil and gas services group Halliburton Co. to buy from neutral, citing valuation and the potential for revenue gains as new offshore rigs are brought online over the next few years. The broker also downgraded Weatherford International to neutral from buy on valuation grounds. Goldman said its top pick in the sector remains Schlumberger given its strong exposure to the markets where new rigs are headed.
Costco Wholesale Corp. reported that for March, same-store sales rose 7%. Sales were aided by the rising price of gasoline.
Mining giant BHP Billiton said Thursday that it isn't aware of a proposed acquisition by Chinese authorities of a substantial stake in the firm.
The U.S. dollar Thursday fell below the 7 yuan level against the Chinese currency for the first time after China ended the yuan's fixed peg against the dollar.
Lehman Brothers Holdings Inc has liquidated three floundering investment funds that lost value and ended up taking $1 billion of assets onto its balance sheet, according to a filing with the U.S. Securities and Exchange Commission.The bank blamed the liquidation on "market disruptions that occurred in the second half of the 2007 fiscal year and further deterioration in the 2008 quarter," according to the quarterly filing on Wednesday.
According to the WSJ, many U.S. companies hoping to profit from surging exports created by the weak dollar are facing an unexpected hurdle: There aren't enough of the big, metal shipping containers that help form the backbone of the global economy.
China's quarterly trade surplus shrank for the first time in more than three years, evidence that cooling exports are slowing the nation's economic growth.The trade surplus narrowed 10.2 percent to about $41.6 billion in the three months to March 31 from a year earlier, according to calculations by Bloomberg News based on trade data released by the Ministry of Commerce. Foreign direct investment almost doubled to $27.4 billion from a year earlier, the Ministry of Commerce said today, adding to the cash flooding the economy from exports and fanning price increases.
Credito Valtellinese Scrl ignored the April 30 call date on its 150 million euros ($236 million) of notes. As a result, the bank will pay a penalty interest rate of 160 basis points more than money-market rates -- higher than the 100-basis-point premium it paid for the past five years, though still lower than it would probably pay to refinance.
Germany’s RWE has made an indicative all-cash offer for nuclear power firm British Energy worth up to 11 billion pounds ($22 billion) including debt, according to press reports.
Oasis Hong Kong Airlines, a long-haul budget carrier that tried to offer premium service and spacious seats at low prices, suddenly went into liquidation on Wednesday and canceled all flights. It was the fourth budget carrier worldwide to halt operations in the last week and a half.
Wholesale Inventories for February rose 1.1% versus estimates of a .5% rise and an upwardly revised 1.3% increase in January.
The U.S. trade deficit unexpectedly widened in February, reflecting a jump in imports of automobiles and machinery that swamped record exports.The gap grew 5.7 percent to $62.3 billion, the highest since November, from a revised $59 billion in January, the Commerce Department said today in Washington. The 3.1 percent gain in imports was the biggest in almost a year, even as purchases of petroleum and goods from China dropped. February exports were $3.0 billion more than January exports of $148.4 billion. February imports were $6.3 billion more than January imports of $207.3 billion. The Chinese New Year caused imports from China to fall to their lowest level since March 2007. And oil imports fell after eleven straight monthly gains. Record imports of food, industrial supplies and consumer goods pushed the deficit higher.
The Federal Reserve will stop cutting interest rates once it is assured that the economic contraction is limited to the financial sector, PIMCO CEO Mohamed El-Arian told CNBC.
Rob Hanna: "In all I would consider the relatively high put/call ratios we are currently seeing a positive. They may help to provide a “wall of worry” for the market to climb."
Initial jobless claims for the week ending April 5 fell 53,000 to 357,000, the Labor Department reported Thursday, easing back recent gains. The four-week average of those claims rose 2,500 to 378,250 -- the highest level since October 2005. The prior weekly result for initial claims was revised to 410,000 from a first estimate of 407,000. For the week ending March 29, continuing jobless claims rose 3,000 to 2.94 million - the highest since July 2004. The four-week moving average of those claims gained 36,500 to 2.9 million - the highest level since August 2004.
George Newberry: "A few weeks ago I went to see Tent City (Ontario, Ca). I was so shocked and distraught I could barely talk about it. I have lived through many recessions but this was something I had never seen before. I felt as if I had been transported back to a time before I was born and was looking at a small example of what people witnessed during the Great Depression. I also felt I was only seeing the "tip of the iceberg."...Many people say, "I don't want to hear doom and gloom." That is saying, "I don't want to face reality." If people go to their church, synagogue, mosque, temple or elsewhere and pray for God to stop evil, then go home and think they are safe because God will take care of it, they are fools. God didn't separate people by religions and turn them against one another, people did it to themselves. We allowed people to create all of our problems and only we can stop them. If we confront and stop the things that are causing our destruction from within, before it is too late, there can be peace on Earth. If we do nothing, we must brace ourselves and get ready for complete chaos. We haven't seen anything yet; it's going to get a lot worse."
"So far the majority of retailers have missed expectations and are blaming the Easter effect and macroeconomic conditions," said Thomson Financial in a note wrapping up some of the results.
Todd Harrison: "$500 trillion in derivatives ties the global machination together, which is why the Bear Stearns bankruptcy would have led to "financial Armageddon." Given the interdependency of financial assets in our finance-based economy, how can we intelligently assume that it was a "one time event?"
Without taking sides in the race for the White House, Colin Powell said, "Whichever one of them becomes president on Jan. 1, 2009, they will face a military force that cannot continue to sustain 140,000 people deployed in Iraq and the 20 (thousand) odd or 25,000 people we have deployed in Afghanistan and our other deployments."
The U.S. dollar index was trading at 71.713 in early Thursday trading.
U.S. natural gas inventories fell for a 20th week, down 14 Billion cubic feet in the week ended April 4 to 1,234 Bcf, the Energy Information Administration reported on Thursday. Stocks were 351 Bcf less than last year at this time and 23 Bcf below the five-year average of 1,257 Bcf.
Gold for June delivery fell $5.70 to end at $931.80 an ounce on the New York Mercantile Exchange. Crude oil for May delivery fell 76 cents, or 0.7%, to end at $110.11 a barrel on the New York Mercantile Exchange.
For the quarter ended March 31, Genentech posted net income of $790 million, compared with $706 million for the previous year's quarter. Earnings per share including stock options were 74 cents versus 66 cents. Excluding stock options and other items, Genentech would have reported adjusted earnings per share of 84 cents. Operating revenue increased to $3.06 billion. A poll of analysts by FactSet pegged Genentech at reporting earnings of 76 cents a share, adjusted earnings of 82 cents a share and revenue of $3.12 billion.
American Airlines cancels about 570 Friday flights.
Bear Stearns expects first-quarter results to be "significantly lower" than a year earlier. In a filing with the U.S. Securities and Exchange Commission, Bear said the global liquidity crisis, a "repricing" of credit risk, and weakness in fixed-income, investment banking and asset management operations "created a difficult operating environment."
Wednesday, April 09, 2008
Another Delay
4/9/08 Another Delay
Boeing Co. said Wedneday that it's delaying the first delivery of its 787 Dreamliner by six months with the plane's maiden flight now planned for late this year rather than mid-spring. The schedule change will have no impact on 2008 guidance, and "strong" 2009 earnings growth is still expected, the Chicago-based manufacturer said. Boeing said it expects to deliver 25 Dreamliners in 2009, significantly down from the 109 planes previously targeted. The first delivery will now take place in the third quarter of 2009.
Lehman Brothers disclosed in a 10-K filing that Level 3 assets, or hard-to-value corporate loans, residential and commercial mortgage-backed securities and other instruments, rose to $42.51 billion, or 14% of total assets at fair value at the end of February, from $41.98 billion, or 14.4% of total assets at fair value at the end of November.
Goldman Sachs and Morgan Stanley both disclosed in 10-K filings that Level 3 assets, or hard-to-value corporate loans, residential and commercial mortgage-related securities and other instruments, rose from the last quarter. Goldman Sachs said Level 3 assets rose to $82.3 billion, or 13% of total assets at fair value, at the end of February from $54.7 billion, or 10% of total assets at fair value, at the end of November. Morgan Stanley said Level 3 assets rose to $78.2 billion at the end of February from $73.7 billion at the end of November, in both cases representing about 15% of total assets measured at fair value.
OPEC member countries pumped 110,000 barrels of crude oil a day less in March than they did in February, according to a survey released by Platts. Platts said much of the decline is related more to maintenance work in Nigeria and Venezuela than any shift in philosophy.
The Bank of Japan negatively revised its economic outlook Wednesday, saying the economy was slowing. The central bank thus dropped its view published last month that a moderate expansion remained in place. "Japan's economic growth is slowing mainly due to the effects of high energy and materials prices," the central bank said in its April economic report.
BHP Billiton said Wednesday that 2008 prices for coking coal products are expected to increase by between 206% to 240% over last year.
At least 160 employees at CBS Corp.-owned television stations in 13 cities were let go, including such seasoned broadcasters as prominent Chicago anchor Diann Burns, renowned Boston sportscaster Bob Lobel and longtime Minneapolis meteorologist Paul Douglas.
As of Tuesday, at least 4,025 members of the U.S. military had died since the beginning of the Iraq war in March 2003, according to an Associated Press count.
Mexico's president on Tuesday sent an energy reform bill to the Senate aimed at allowing private contractors a greater role in helping the ailing state oil company boost declining production and build new refineries.
Australian consumer confidence fell in April to the lowest since 1993.
About 1,000 departures were scrubbed today, after 460 yesterday, American spokesman John Hotard said. At Dallas-Fort Worth International Airport, the airline's biggest hub, 251 departures were canceled, airport spokesman Ken Capps said.
The global economy is losing speed and there is a rising risk of a world-wide recession, the IMF said in its latest World Economic Outlook released Wednesday. The U.S. economy will experience a mild recession this year and western Europe economy will also slow. The Federal Reserve may be forced to cut rates for some time and the European Central Bank should end its reluctance to cut interest rates, the IMF said.
The Federal Reserve is mulling further steps to address liquidity problems in financial markets should measures taken to date fail to gain traction, a Fed official confirmed Wednesday. Among steps under review would be for the Treasury to borrow in excess of requirements and deposit the overage at the Fed, according to the central bank official. Other potential actions include issuing debt under the Fed's name and seeking authority to immediately pay interest on commercial bank reserves, the official said.
Bill Bonner writes: "This week Japan's former vice-minister of finance Eisuke Sakakibara predicted that fresh turbulence in the currency markets over the next six months is likely to see the yen 'break 90 to the US dollar.'" writes colleague Manraaj Singh. "Maybe you'll remember Sakakibara from the late 1990's when the financial media dubbed him 'Mr. Yen' for his ability to move global currency markets with his pronouncements. He's predicting that the market turmoil triggered by the U.S. subprime crisis is unlikely to go away for 'a year or two' and that there may be more shocks to come from Europe over subprime exposure."
The average price of regular unleaded rose 1.2 cents to $3.343 a gallon from the $3.331 the day before, according to AAA's Web site. Gas prices are up nearly 20% from what they were last year.
The U.S. dollar index at 72.143 in early Wednesday trading.
With our economy in a recession and imports slowing due to reduced consumer demand, it is interesting that Union Pacific, Burlington Northern, and CSX are all within a smidgen of their 52-week highs.
During the first quarter, BNSF loaded 69 million tons of coal in the Powder River Basin, up 8.6 percent (or 5.4 million tons) compared with first-quarter 2007's total. This month, some mines are planning large-scale construction projects, which might negatively affect April coal train loadings in the PRB and on the joint line, BNSF said.
Petraeus said he has recommended to President Bush that the U.S. complete, by the end of July, the withdrawal of the 20,000 extra troops. Beyond that, the general proposed a 45-day period of "consolidation and evaluation," to be followed by an indefinite period of assessment before he would recommend any further pullouts.
A major shareholder of Bronco Drilling Co. said Tuesday it plans to vote against Allis-Chalmers Energy Inc.'s planned acquisition of the drilling services provider and encouraged other shareholders to do the same. In a letter sent to the Edmond, Okla.-based company and filed with the Securities and Exchange Commission, Third Avenue Management LLC said it believes the proposed acquisition price is "woefully inadequate" and that Bronco should remain an independent company. "We believe that Bronco's shareholders will do better continuing to own Bronco as a standalone company, particularly in light of the improving fundamentals in the natural gas drilling market in the U.S.," said Third Avenue, which owns a 23.5 percent stake in Bronco. Additionally, Third Avenue expressed concern over Allis-Chalmers' "substantial debt load."
U.S. crude inventories fell surprisingly, down 3.2 million barrels to 316 million barrels in the week ending April 4, U.S. Energy Information Administration reported on Wednesday. Analysts surveyed by energy information provider Platts expected an increase of 2.7 million barrels. After the data, crude oil for May delivery rose $2.71, or 2.5 percent, to $111.21 a barrel at 10:50 a.m. on the New York Mercantile Exchange. Prices are up 81 percent from a year ago.Gasoline for May delivery climbed 5.8 cents, or 2.1 percent, to $2.8084 a gallon. Futures reached $2.8228, an intraday record for gasoline to be blended with ethanol, known as RBOB, which began trading in October 2005. Meanwhile, U.S. crude inventories rose by 6 million barrels to 315.5 million barrels in the week ending April 4, the American Petroleum Institute reported on Wednesday. Distillate stocks fell by 177,000 barrels to 112.8 million barrels in the same period, while gasoline stocks rose by 1.8 million barrels to 219.2 million barrels, the API said.
Analysts at Lehman Brothers on Wednesday: "We believe the challenging economic/jobs outlook combined with the oversupply of residential property will put downward pressure on apartment fundamentals," the analysts wrote in a research note.
Chuck Todd: "Seriously, the two Dem gubernatorial candidates in North Carolina are fighting over who supports Obama more. In fact, one candidate (Richard Moore) is using paid advertising to tout his Obama support. Maybe we should stop pretending North Carolina is going to be competitive; it's not. The problem now for Clinton is what will the delegate count and popular vote count look like after May 6 if North Carolina is a blowout for Obama -- and if Clinton wins narrowly in Pennsylvania and Indiana. Will Obama net more delegates out of North Carolina than Clinton nets out of Pennsylvania and Indiana combined (if she wins them both)? Will Obama's popular vote lead actually grow after North Carolina, because his win there is bigger than hypothetical combined Clinton victories in PA and IN?"
According to the latest CNN count, Obama has 1,629 delegates, with 1,414 pledged delegates and 215 superdelegates, according to the latest CNN count. Clinton has 1,486 delegates, with 1,243 pledged delegates and 243 superdelegates.
Business Week: "What everyone agrees on is that Circuit City needs some kind of jolt. Persistent cost cutting helped the beleaguered Richmond (Va.) company report a profit on Apr. 9 of $4.9 million for its fiscal fourth quarter ended Feb. 29. This ended a streak of five consecutive quarterly losses for the company as it battles increased competition from chief rival Best Buy, discount retailer Wal-Mart Stores, and warehouse club operators such as Costco in an environment where consumers are being very selective with their purchases. Even though the slim profit surprised Wall Street, it's clear the company is struggling to grow and revenue fell 8% to $3.65 billion. Sales at stores open at least a year, a key gauge of a retailer's performance, fell 10.4% in the quarter."
The updated forecast by William Gray's team at Colorado State University calls for 15 named storms in the Atlantic in 2008 and says there's a better than average chance that at least one major hurricane will hit the United States. An average of 6 hurricanes form in the Atlantic each year.
Bed Bath and Beyond shares closed 5.7% lower at $27.80 after the company said it expects first-quarter net earnings of 26 cents to 30 cents a share. Analysts surveyed by FactSet Research currently expect earnings of 38 cents a share.
Yahoo Inc. may begin testing the outsourcing of its online search advertising to rival Google Inc., according to a report published Wednesday. The companies would undertake the tests in order to evaluate the potential of a broader outsourcing arrangement, the report said. Such an arrangement could complicate Microsoft Corp.'s unsolicited bid to acquire Yahoo, which was made in order to better compete with Google.
"Any definitive agreement between Yahoo and Google would consolidate over 90% of the search advertising market in Google's hands," Microsoft said in a statement.
Chevron Corp. reported late Wednesday that it expects first-quarter upstream net income from production and exploration to rise from its fourth-quarter results, benefiting from higher oil and natural gas prices despite slightly lower oil production volumes domestically and overseas. At the same time, the second biggest U.S. oil company said earnings from its refining and marketing operations are likely to "remain at the low level" of the previous quarter, when it posted net downstream earnings of $204 million.
Crude oil for May delivery rose $2.37, or 2.2%, to close at $110.87 on New York Mercantile Exchange. Earlier it surged to a new intraday high of $112.21 a barrel.
Gold for June delivery rallied $19.50 to finish at $937.50 an ounce on the New York Mercantile Exchange. Corn rose to a record $6.16 a bushel as stockpiles dropped more than anticipated.
China Petroleum & Chemical Corp., Asia's biggest refiner, is offering to sell crude oil cargoes to cut stockpiles as its refining losses widen because of government orders to sell fuels at below-market prices, traders said. China United International Petroleum & Chemicals Co., China Petroleum's wholly owned trading arm, offered to sell at least 9 million barrels of crude oil from West Africa and the Middle East for loading in May, said five traders with knowledge of the offer. United Petroleum, or Unipec, bought the cargoes in recent months, the traders said.
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Boeing Co. said Wedneday that it's delaying the first delivery of its 787 Dreamliner by six months with the plane's maiden flight now planned for late this year rather than mid-spring. The schedule change will have no impact on 2008 guidance, and "strong" 2009 earnings growth is still expected, the Chicago-based manufacturer said. Boeing said it expects to deliver 25 Dreamliners in 2009, significantly down from the 109 planes previously targeted. The first delivery will now take place in the third quarter of 2009.
Lehman Brothers disclosed in a 10-K filing that Level 3 assets, or hard-to-value corporate loans, residential and commercial mortgage-backed securities and other instruments, rose to $42.51 billion, or 14% of total assets at fair value at the end of February, from $41.98 billion, or 14.4% of total assets at fair value at the end of November.
Goldman Sachs and Morgan Stanley both disclosed in 10-K filings that Level 3 assets, or hard-to-value corporate loans, residential and commercial mortgage-related securities and other instruments, rose from the last quarter. Goldman Sachs said Level 3 assets rose to $82.3 billion, or 13% of total assets at fair value, at the end of February from $54.7 billion, or 10% of total assets at fair value, at the end of November. Morgan Stanley said Level 3 assets rose to $78.2 billion at the end of February from $73.7 billion at the end of November, in both cases representing about 15% of total assets measured at fair value.
OPEC member countries pumped 110,000 barrels of crude oil a day less in March than they did in February, according to a survey released by Platts. Platts said much of the decline is related more to maintenance work in Nigeria and Venezuela than any shift in philosophy.
The Bank of Japan negatively revised its economic outlook Wednesday, saying the economy was slowing. The central bank thus dropped its view published last month that a moderate expansion remained in place. "Japan's economic growth is slowing mainly due to the effects of high energy and materials prices," the central bank said in its April economic report.
BHP Billiton said Wednesday that 2008 prices for coking coal products are expected to increase by between 206% to 240% over last year.
At least 160 employees at CBS Corp.-owned television stations in 13 cities were let go, including such seasoned broadcasters as prominent Chicago anchor Diann Burns, renowned Boston sportscaster Bob Lobel and longtime Minneapolis meteorologist Paul Douglas.
As of Tuesday, at least 4,025 members of the U.S. military had died since the beginning of the Iraq war in March 2003, according to an Associated Press count.
Mexico's president on Tuesday sent an energy reform bill to the Senate aimed at allowing private contractors a greater role in helping the ailing state oil company boost declining production and build new refineries.
Australian consumer confidence fell in April to the lowest since 1993.
About 1,000 departures were scrubbed today, after 460 yesterday, American spokesman John Hotard said. At Dallas-Fort Worth International Airport, the airline's biggest hub, 251 departures were canceled, airport spokesman Ken Capps said.
The global economy is losing speed and there is a rising risk of a world-wide recession, the IMF said in its latest World Economic Outlook released Wednesday. The U.S. economy will experience a mild recession this year and western Europe economy will also slow. The Federal Reserve may be forced to cut rates for some time and the European Central Bank should end its reluctance to cut interest rates, the IMF said.
The Federal Reserve is mulling further steps to address liquidity problems in financial markets should measures taken to date fail to gain traction, a Fed official confirmed Wednesday. Among steps under review would be for the Treasury to borrow in excess of requirements and deposit the overage at the Fed, according to the central bank official. Other potential actions include issuing debt under the Fed's name and seeking authority to immediately pay interest on commercial bank reserves, the official said.
Bill Bonner writes: "This week Japan's former vice-minister of finance Eisuke Sakakibara predicted that fresh turbulence in the currency markets over the next six months is likely to see the yen 'break 90 to the US dollar.'" writes colleague Manraaj Singh. "Maybe you'll remember Sakakibara from the late 1990's when the financial media dubbed him 'Mr. Yen' for his ability to move global currency markets with his pronouncements. He's predicting that the market turmoil triggered by the U.S. subprime crisis is unlikely to go away for 'a year or two' and that there may be more shocks to come from Europe over subprime exposure."
The average price of regular unleaded rose 1.2 cents to $3.343 a gallon from the $3.331 the day before, according to AAA's Web site. Gas prices are up nearly 20% from what they were last year.
The U.S. dollar index at 72.143 in early Wednesday trading.
With our economy in a recession and imports slowing due to reduced consumer demand, it is interesting that Union Pacific, Burlington Northern, and CSX are all within a smidgen of their 52-week highs.
During the first quarter, BNSF loaded 69 million tons of coal in the Powder River Basin, up 8.6 percent (or 5.4 million tons) compared with first-quarter 2007's total. This month, some mines are planning large-scale construction projects, which might negatively affect April coal train loadings in the PRB and on the joint line, BNSF said.
Petraeus said he has recommended to President Bush that the U.S. complete, by the end of July, the withdrawal of the 20,000 extra troops. Beyond that, the general proposed a 45-day period of "consolidation and evaluation," to be followed by an indefinite period of assessment before he would recommend any further pullouts.
A major shareholder of Bronco Drilling Co. said Tuesday it plans to vote against Allis-Chalmers Energy Inc.'s planned acquisition of the drilling services provider and encouraged other shareholders to do the same. In a letter sent to the Edmond, Okla.-based company and filed with the Securities and Exchange Commission, Third Avenue Management LLC said it believes the proposed acquisition price is "woefully inadequate" and that Bronco should remain an independent company. "We believe that Bronco's shareholders will do better continuing to own Bronco as a standalone company, particularly in light of the improving fundamentals in the natural gas drilling market in the U.S.," said Third Avenue, which owns a 23.5 percent stake in Bronco. Additionally, Third Avenue expressed concern over Allis-Chalmers' "substantial debt load."
U.S. crude inventories fell surprisingly, down 3.2 million barrels to 316 million barrels in the week ending April 4, U.S. Energy Information Administration reported on Wednesday. Analysts surveyed by energy information provider Platts expected an increase of 2.7 million barrels. After the data, crude oil for May delivery rose $2.71, or 2.5 percent, to $111.21 a barrel at 10:50 a.m. on the New York Mercantile Exchange. Prices are up 81 percent from a year ago.Gasoline for May delivery climbed 5.8 cents, or 2.1 percent, to $2.8084 a gallon. Futures reached $2.8228, an intraday record for gasoline to be blended with ethanol, known as RBOB, which began trading in October 2005. Meanwhile, U.S. crude inventories rose by 6 million barrels to 315.5 million barrels in the week ending April 4, the American Petroleum Institute reported on Wednesday. Distillate stocks fell by 177,000 barrels to 112.8 million barrels in the same period, while gasoline stocks rose by 1.8 million barrels to 219.2 million barrels, the API said.
Analysts at Lehman Brothers on Wednesday: "We believe the challenging economic/jobs outlook combined with the oversupply of residential property will put downward pressure on apartment fundamentals," the analysts wrote in a research note.
Chuck Todd: "Seriously, the two Dem gubernatorial candidates in North Carolina are fighting over who supports Obama more. In fact, one candidate (Richard Moore) is using paid advertising to tout his Obama support. Maybe we should stop pretending North Carolina is going to be competitive; it's not. The problem now for Clinton is what will the delegate count and popular vote count look like after May 6 if North Carolina is a blowout for Obama -- and if Clinton wins narrowly in Pennsylvania and Indiana. Will Obama net more delegates out of North Carolina than Clinton nets out of Pennsylvania and Indiana combined (if she wins them both)? Will Obama's popular vote lead actually grow after North Carolina, because his win there is bigger than hypothetical combined Clinton victories in PA and IN?"
According to the latest CNN count, Obama has 1,629 delegates, with 1,414 pledged delegates and 215 superdelegates, according to the latest CNN count. Clinton has 1,486 delegates, with 1,243 pledged delegates and 243 superdelegates.
Business Week: "What everyone agrees on is that Circuit City needs some kind of jolt. Persistent cost cutting helped the beleaguered Richmond (Va.) company report a profit on Apr. 9 of $4.9 million for its fiscal fourth quarter ended Feb. 29. This ended a streak of five consecutive quarterly losses for the company as it battles increased competition from chief rival Best Buy, discount retailer Wal-Mart Stores, and warehouse club operators such as Costco in an environment where consumers are being very selective with their purchases. Even though the slim profit surprised Wall Street, it's clear the company is struggling to grow and revenue fell 8% to $3.65 billion. Sales at stores open at least a year, a key gauge of a retailer's performance, fell 10.4% in the quarter."
The updated forecast by William Gray's team at Colorado State University calls for 15 named storms in the Atlantic in 2008 and says there's a better than average chance that at least one major hurricane will hit the United States. An average of 6 hurricanes form in the Atlantic each year.
Bed Bath and Beyond shares closed 5.7% lower at $27.80 after the company said it expects first-quarter net earnings of 26 cents to 30 cents a share. Analysts surveyed by FactSet Research currently expect earnings of 38 cents a share.
Yahoo Inc. may begin testing the outsourcing of its online search advertising to rival Google Inc., according to a report published Wednesday. The companies would undertake the tests in order to evaluate the potential of a broader outsourcing arrangement, the report said. Such an arrangement could complicate Microsoft Corp.'s unsolicited bid to acquire Yahoo, which was made in order to better compete with Google.
"Any definitive agreement between Yahoo and Google would consolidate over 90% of the search advertising market in Google's hands," Microsoft said in a statement.
Chevron Corp. reported late Wednesday that it expects first-quarter upstream net income from production and exploration to rise from its fourth-quarter results, benefiting from higher oil and natural gas prices despite slightly lower oil production volumes domestically and overseas. At the same time, the second biggest U.S. oil company said earnings from its refining and marketing operations are likely to "remain at the low level" of the previous quarter, when it posted net downstream earnings of $204 million.
Crude oil for May delivery rose $2.37, or 2.2%, to close at $110.87 on New York Mercantile Exchange. Earlier it surged to a new intraday high of $112.21 a barrel.
Gold for June delivery rallied $19.50 to finish at $937.50 an ounce on the New York Mercantile Exchange. Corn rose to a record $6.16 a bushel as stockpiles dropped more than anticipated.
China Petroleum & Chemical Corp., Asia's biggest refiner, is offering to sell crude oil cargoes to cut stockpiles as its refining losses widen because of government orders to sell fuels at below-market prices, traders said. China United International Petroleum & Chemicals Co., China Petroleum's wholly owned trading arm, offered to sell at least 9 million barrels of crude oil from West Africa and the Middle East for loading in May, said five traders with knowledge of the offer. United Petroleum, or Unipec, bought the cargoes in recent months, the traders said.
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Tuesday, April 08, 2008
Worsening Conditions
4/8/08 Worsening Conditions
The total potential losses in the United States from the credit crunch could top $945 billion, the International Monetary Fund estimated on Tuesday.
Iran has begun installing 6,000 new centrifuges at its uranium enrichment plant in Natanz, state television quoted President Mahmoud Ahmadinejad as saying Tuesday.
Apple Inc. was downgraded to underperform from market perform at Morgan Keegan, based on "mounting evidence of broad-based weakness in consumer technology spending in the U.S. and Europe," the broker said.
The IMF plan to cut 380 jobs and sell 403.3 tonnes of gold, about an eighth of its reserves, still has to be approved by other authorities.
John Adams: "The only maxim of a free government ought to be to trust no man living with power to endanger the public liberty."
Leon Black's buyout firm Apollo Management is mulling the idea of a "prepackaged" bankruptcy plan for ailing home furnishings retailer Linens 'n Things, the New York Post reported online on Tuesday, citing sources.
Chief Executive Michael Dell: "We are not thinking in a short-term context but a long-term context," Dell said. "Last year growth in EPS (earnings per share) was 15 percent year over year. We have a goal to increase our EPS, and we have the right plans in place to grow EPS on a healthy basis." He reiterated a plan for the company to buy back another $1 billion of its own shares in the current quarter after repurchasing $4 billion in the fourth quarter.
Shares of First Marblehead Corp. plunged in premarket trading Tuesday after the student-loan services provider said it is working to find a new loan guarantor. The Education Resources Institute, which has been the exclusive provider of borrower default guarantees for First Marblehead's clients, filed for bankruptcy protection.
Garmin Ltd. fell after Amsterdam-based rival TomTom NV cut financial estimates for 2008, citing weak demand despite lower prices. Garmin's stock lost $4.20 to $48.50.
Washington Mutual told employees Monday that it will exit the wholesale lending business and close home-loan centers nationwide. WASHINGTON MUTUAL IN PACT TO RAISE $7 BILLION; SEES $1.1 BILLION LOSS, SLASHING DIVIDEND. In order to save cash, it will slash its $0.15 dividend down to $0.01 in an effort to save $490 million annually. WaMu lays off 3,000 at home-loan centers.
Dole Food Co., the world's largest fresh-fruit and vegetable producer, is selling land in Hawaii and California to avoid default on $350 million in bonds.
Rice climbed to a record for a fourth day as the Philippines, the biggest importer, announced plans to buy 1 million tons and some of the world's largest exporters cut sales to ensure they can feed their own people.
Jerry Zeifman, the general counsel and chief of staff of the House Judiciary Committee who supervised Hillary Clinton's work on the Watergate investigation in 1974: "She was an unethical, dishonest lawyer," Zeifman said. "She conspired to violate the Constitution, the rules of the House, the rules of the committee and the rules of confidentiality."
Huge layoffs are coming to The Seattle Times as it deals with a continuing loss of revenue for both the Times and the Seattle Post-Intelligencer. In a company e-mail sent Monday by Times Publisher Frank Blethen and President Carolyn Kelly, it was announced that approximately 200 positions would be cut through a combination of hiring freezes and "a significant number of layoffs." The company has 1,845 employees.
U.K. house prices dropped by the most since 1992 in March as the seizure in credit markets worldwide forced banks to pull mortgage offers, a report by HBOS Plc showed.
Keith Bradsher: "The free ride for American consumers is ending. For two generations, Americans have imported goods produced ever more cheaply from a succession of low-wage countries � first Japan and Korea, then China, and now increasingly places like Vietnam and India. But mounting inflation in the developing world, especially Asia, is threatening that arrangement, and not just in China, where rising energy and labor costs have already made exports to the United States more expensive, but in the lower-cost alternatives to China, too. �Inflation is the major threat to Asian countries,� said Jong-Wha Lee, the head of the Asian Development Bank�s office of regional economic integration. It is also a threat to Western consumers because Asian exporters, even in very poor countries, are passing their rising costs on to customers."
The Secret Service is preparing to provide Vice President Cheney with agents, transportation, advance work and other security-related trappings of executive power for six months after the Bush administration packs up and moves out in January, the agency's director, Mark Sullivan, told Congress last week. The expected cost: $4 million. Although presidents and their spouses are entitled to Secret Service protection long after they depart the White House, federal law authorizes protective services for the vice president and his immediate family only during his time in office. Extending Cheney's detail would require a directive from the president or a joint resolution of Congress.
Retail gas prices will peak near $3.60 a gallon in June, but prices at such lofty levels will make many Americans think twice about hitting the road this summer, the Energy Department said Tuesday. Federal energy officials expect oil to average $101 a barrel this year, a sharp upward revision from its earlier forecast that suggests prices will remain above $100 for some time. But the U.S. Energy Information Administration expects American drivers, truckers and airlines to use less fuel this year as the economy softens. That could take some pressure off prices for gasoline and other fuels, and could keep the price of gasoline under a U.S. average of $4 a gallon.
Robert McHugh: "Stocks couldn't do it, couldn't break out north of their 2008 sideways trend-channel. Failed again Monday. Thus, we are looking for a top this week, or early next. The phi mate and Bradley model turn dates this coming week could be indicating either another leg from 12,700 back down to 11,700, or a breakout from this range. We shall see. But even another leg down to support offers an 800 +/- move, which is decent if you are a trader. The trend into these turn dates should be reversed, so that argues for a top this week. On the other hand, tomorrow is Tuesday, a favorite day of the week for the PPT. The last four Tuesdays have gone like this: Up 416 points; up 420 points; up 187 points; up 394 points. Hmmm. We are seeing Bearish Divergences over the past week between the 10 day average Advance/Decline Lines and prices for most major averages, which warrants caution if you are long. Over the past four trading days, prices have hardly budged in the DJIA and the S&P 500, which suggests a sharp breakout is coming. The McClellan Oscillator had a fourth consecutive small change Monday, each of the past four day's small changes getting smaller each day, again suggesting a large price breakout move is coming. This particular analytical tool does not tell us the direction of the sharp price move, unfortunately. I cannot recall four consecutive days of small changes in the M.O."
Nouriel Roubini: "My view is closer to a U-shaped recession as I expect that the economic contraction will last at least 12 months and possibly as long as 18 months through the middle of 2009. This view is based on the fact that the last two recessions � in 1990-91 and 2001 � lasted 8 months each and today the macro and financial conditions are worse � relative to those two previous recessions."
Petraeus said in prepared testimony that he recommends the U.S. military suspend troop drawdowns from Iraq after July for a 45-day pause before assessing when additional reductions can be made.
Growth in U.S. energy consumption will slow down this year as the economy faces a possible recession, a U.S. government forecast showed on Tuesday. Consumption of liquid fuels and other petroleum products is projected to grow by 40,000 barrels a day in 2008, a downward revision of 100,000 barrels a day from the previous monthly forecast, the Energy Information Administration said in its latest report. Gasoline consumption, having increased only 0.4% last year, is projected to increase only 0.3% this year and 0.7% in 2009. WTI crude oil, the underlying product of crude futures on the New York Mercantile Exchange, is projected to average $94.11 and $85.92 per barrel, respectively, in 2008 and 2009.
The National Association of Realtors said February pending sales of existing homes fell about 2% from the previous month. "The slip in pending home sales implies we're not out of the woods yet, though an era of successive deep sales declines appears to be over," said Lawrence Yun, NAR's chief economist, in a statement. The National Association of Realtors said its pending home sales index, which is considered a leading indicator of existing home sales, was down 21.4% from the February 2007 level.
The index of small business optimism fell 3.3 points in March to 89.6, the lowest monthly reading since the surveys began in 1986, the National Federation of Independent Business said. "We are seeing recession readings," said NFIB Chief Economist William Dunkelberg in a statement. Weaker plans to create new jobs accounted for 21 percent of the decline. During the next three months, 3 percent of the owners surveyed plan to create new jobs, down 8 points from February and the lowest reading since March 2003, NFIB said.
Novellus Systems said Tuesday its first-quarter earnings would be lower than expected and its revenue would be at the low end of its forecast range, sending its shares down 5 percent.
According to the WSJ, Capital One will lay off 750 employees at its UK division.
China is in the early stages of trying to secure a bigger chunk of BHP Billiton than the 9% in Rio Tinto than it purchased alongside Alcoa, according to a report on The Australian's Web site, citing sources in Beijing.
Russia currently controls the only gas pipeline out of Central Asia, which runs north from Turkemenistan through Kazakhstan and into Russia. China wants at least one pipeline to run east out of the region through Kazakhstan, while India is considering bringing in gas via pipelines from Iran or Pakistan.
By bailing out Wall Street and applying "band-aids" to the economy, the U.S. Federal Reserve may well be causing its own downfall - even as it hastens the demise of the greenback as a viable global currency, investment guru Jim Rogers told Money Morning during an exclusive interview. Because of such strategic missteps, U.S. consumers could be facing a long and painful economic malaise, similar to the "lost decade" of 1990s Japan, or the stagflation-riddled 1970s in the United States, Rogers said.
Standard & Poor's said late Tuesday that it downgraded four mortgage insurers because house prices are falling more than expected and unemployment in the U.S. is headed higher. The rating agency lowered the counterparty credit rating on MGIC Investment Corp.to 'BBB' from 'A-' and the counterparty credit and financial strength ratings of its mortgage insurance subsidiaries to 'A' from 'AA-'. PMI Group, Old Republic and Radian Group were also downgraded, S&P said.
Citigroup Inc.is close to selling $12 billion of leveraged loans and bonds to a group of private-equity firms including Apollo Group, Texas Pacific Group and Blackstone Group, the Wall Street Journal reported late Tuesday.
Odds are fully pricing in the chance of a quarter-point cut to the fed funds target rate, to 2%, and a 44% chance of a half-point cut.
Crude oil for May delivery fell 59 cents, or 0.5%, to settle at $108.5 a barrel on the New York Mercantile Exchange. Gold for June delivery fell $8.80 to end at $918 an ounce on the New York Mercantile Exchange.
United Parcel Service Inc. has cut its first-quarter earnings guidance to 86 cents or 87 cents a share, down from its previously expected range of 94-cents to 98 cents. The U.S. economy has continued to weaken, causing a reduction in domestic package volume and a shift away from premium products, UPS said late Tuesday. Significantly increased fuel costs in the quarter also contributed to the lower-than-expected results. In late trading the shares fell about 3 points to 70+.
Members of the Federal Reserve's policy-setting committee worried at their most recent meeting that housing and financial market stress could trigger a nasty slide in the economy, even as inflation pushed higher, minutes of the meeting released on Tuesday show.
China, the world's biggest copper consumer, may increase imports of ore used to make the metal by 20 percent to a record this year, said Trafigura Beheer BV, the country's top supplier.
EMC will acquire San Diego-based Iomega for a purchase price of $3.85 per share in a deal valued at some $213 million.
American Airlines said it was canceling up to 500 flights today, perhaps one-fifth of its schedule, to check the bundling of wires in some planes, the same issue that caused the airline to scrap more than 400 flights last month.
Marathon Oil, the largest refiner in the U.S. Midwest, said first-quarter refining and marketing operations had a loss amid higher costs. Margins will be "slightly negative" compared with 12.46 cents a gallon in the first quarter of 2007, the Houston-based company said today in a statement. The company said it had "substantially" weaker refining margins in the Midwest and Gulf Coast markets. The results were "much worse than expected," Credit Suisse Group analyst Mark Flannery said in a note to clients.
The Environmental Protection Agency says utilities will need to invest more than $277 billion over the next two decades on repairs and improvements to drinking water systems. Water industry engineers put the figure drastically higher, at about $480 billion.
A new Quinnipiac University poll of Pennsylvania Democrats released today found that Hillary Clinton’s lead over Barack Obama continues to decrease. Clinton now leads Obama 50%-44% in the state. This is a three point drop from the previous poll done last week, and a six point drop from two weeks ago.
The total potential losses in the United States from the credit crunch could top $945 billion, the International Monetary Fund estimated on Tuesday.
Iran has begun installing 6,000 new centrifuges at its uranium enrichment plant in Natanz, state television quoted President Mahmoud Ahmadinejad as saying Tuesday.
Apple Inc. was downgraded to underperform from market perform at Morgan Keegan, based on "mounting evidence of broad-based weakness in consumer technology spending in the U.S. and Europe," the broker said.
The IMF plan to cut 380 jobs and sell 403.3 tonnes of gold, about an eighth of its reserves, still has to be approved by other authorities.
John Adams: "The only maxim of a free government ought to be to trust no man living with power to endanger the public liberty."
Leon Black's buyout firm Apollo Management is mulling the idea of a "prepackaged" bankruptcy plan for ailing home furnishings retailer Linens 'n Things, the New York Post reported online on Tuesday, citing sources.
Chief Executive Michael Dell: "We are not thinking in a short-term context but a long-term context," Dell said. "Last year growth in EPS (earnings per share) was 15 percent year over year. We have a goal to increase our EPS, and we have the right plans in place to grow EPS on a healthy basis." He reiterated a plan for the company to buy back another $1 billion of its own shares in the current quarter after repurchasing $4 billion in the fourth quarter.
Shares of First Marblehead Corp. plunged in premarket trading Tuesday after the student-loan services provider said it is working to find a new loan guarantor. The Education Resources Institute, which has been the exclusive provider of borrower default guarantees for First Marblehead's clients, filed for bankruptcy protection.
Garmin Ltd. fell after Amsterdam-based rival TomTom NV cut financial estimates for 2008, citing weak demand despite lower prices. Garmin's stock lost $4.20 to $48.50.
Washington Mutual told employees Monday that it will exit the wholesale lending business and close home-loan centers nationwide. WASHINGTON MUTUAL IN PACT TO RAISE $7 BILLION; SEES $1.1 BILLION LOSS, SLASHING DIVIDEND. In order to save cash, it will slash its $0.15 dividend down to $0.01 in an effort to save $490 million annually. WaMu lays off 3,000 at home-loan centers.
Dole Food Co., the world's largest fresh-fruit and vegetable producer, is selling land in Hawaii and California to avoid default on $350 million in bonds.
Rice climbed to a record for a fourth day as the Philippines, the biggest importer, announced plans to buy 1 million tons and some of the world's largest exporters cut sales to ensure they can feed their own people.
Jerry Zeifman, the general counsel and chief of staff of the House Judiciary Committee who supervised Hillary Clinton's work on the Watergate investigation in 1974: "She was an unethical, dishonest lawyer," Zeifman said. "She conspired to violate the Constitution, the rules of the House, the rules of the committee and the rules of confidentiality."
Huge layoffs are coming to The Seattle Times as it deals with a continuing loss of revenue for both the Times and the Seattle Post-Intelligencer. In a company e-mail sent Monday by Times Publisher Frank Blethen and President Carolyn Kelly, it was announced that approximately 200 positions would be cut through a combination of hiring freezes and "a significant number of layoffs." The company has 1,845 employees.
U.K. house prices dropped by the most since 1992 in March as the seizure in credit markets worldwide forced banks to pull mortgage offers, a report by HBOS Plc showed.
Keith Bradsher: "The free ride for American consumers is ending. For two generations, Americans have imported goods produced ever more cheaply from a succession of low-wage countries � first Japan and Korea, then China, and now increasingly places like Vietnam and India. But mounting inflation in the developing world, especially Asia, is threatening that arrangement, and not just in China, where rising energy and labor costs have already made exports to the United States more expensive, but in the lower-cost alternatives to China, too. �Inflation is the major threat to Asian countries,� said Jong-Wha Lee, the head of the Asian Development Bank�s office of regional economic integration. It is also a threat to Western consumers because Asian exporters, even in very poor countries, are passing their rising costs on to customers."
The Secret Service is preparing to provide Vice President Cheney with agents, transportation, advance work and other security-related trappings of executive power for six months after the Bush administration packs up and moves out in January, the agency's director, Mark Sullivan, told Congress last week. The expected cost: $4 million. Although presidents and their spouses are entitled to Secret Service protection long after they depart the White House, federal law authorizes protective services for the vice president and his immediate family only during his time in office. Extending Cheney's detail would require a directive from the president or a joint resolution of Congress.
Retail gas prices will peak near $3.60 a gallon in June, but prices at such lofty levels will make many Americans think twice about hitting the road this summer, the Energy Department said Tuesday. Federal energy officials expect oil to average $101 a barrel this year, a sharp upward revision from its earlier forecast that suggests prices will remain above $100 for some time. But the U.S. Energy Information Administration expects American drivers, truckers and airlines to use less fuel this year as the economy softens. That could take some pressure off prices for gasoline and other fuels, and could keep the price of gasoline under a U.S. average of $4 a gallon.
Robert McHugh: "Stocks couldn't do it, couldn't break out north of their 2008 sideways trend-channel. Failed again Monday. Thus, we are looking for a top this week, or early next. The phi mate and Bradley model turn dates this coming week could be indicating either another leg from 12,700 back down to 11,700, or a breakout from this range. We shall see. But even another leg down to support offers an 800 +/- move, which is decent if you are a trader. The trend into these turn dates should be reversed, so that argues for a top this week. On the other hand, tomorrow is Tuesday, a favorite day of the week for the PPT. The last four Tuesdays have gone like this: Up 416 points; up 420 points; up 187 points; up 394 points. Hmmm. We are seeing Bearish Divergences over the past week between the 10 day average Advance/Decline Lines and prices for most major averages, which warrants caution if you are long. Over the past four trading days, prices have hardly budged in the DJIA and the S&P 500, which suggests a sharp breakout is coming. The McClellan Oscillator had a fourth consecutive small change Monday, each of the past four day's small changes getting smaller each day, again suggesting a large price breakout move is coming. This particular analytical tool does not tell us the direction of the sharp price move, unfortunately. I cannot recall four consecutive days of small changes in the M.O."
Nouriel Roubini: "My view is closer to a U-shaped recession as I expect that the economic contraction will last at least 12 months and possibly as long as 18 months through the middle of 2009. This view is based on the fact that the last two recessions � in 1990-91 and 2001 � lasted 8 months each and today the macro and financial conditions are worse � relative to those two previous recessions."
Petraeus said in prepared testimony that he recommends the U.S. military suspend troop drawdowns from Iraq after July for a 45-day pause before assessing when additional reductions can be made.
Growth in U.S. energy consumption will slow down this year as the economy faces a possible recession, a U.S. government forecast showed on Tuesday. Consumption of liquid fuels and other petroleum products is projected to grow by 40,000 barrels a day in 2008, a downward revision of 100,000 barrels a day from the previous monthly forecast, the Energy Information Administration said in its latest report. Gasoline consumption, having increased only 0.4% last year, is projected to increase only 0.3% this year and 0.7% in 2009. WTI crude oil, the underlying product of crude futures on the New York Mercantile Exchange, is projected to average $94.11 and $85.92 per barrel, respectively, in 2008 and 2009.
The National Association of Realtors said February pending sales of existing homes fell about 2% from the previous month. "The slip in pending home sales implies we're not out of the woods yet, though an era of successive deep sales declines appears to be over," said Lawrence Yun, NAR's chief economist, in a statement. The National Association of Realtors said its pending home sales index, which is considered a leading indicator of existing home sales, was down 21.4% from the February 2007 level.
The index of small business optimism fell 3.3 points in March to 89.6, the lowest monthly reading since the surveys began in 1986, the National Federation of Independent Business said. "We are seeing recession readings," said NFIB Chief Economist William Dunkelberg in a statement. Weaker plans to create new jobs accounted for 21 percent of the decline. During the next three months, 3 percent of the owners surveyed plan to create new jobs, down 8 points from February and the lowest reading since March 2003, NFIB said.
Novellus Systems said Tuesday its first-quarter earnings would be lower than expected and its revenue would be at the low end of its forecast range, sending its shares down 5 percent.
According to the WSJ, Capital One will lay off 750 employees at its UK division.
China is in the early stages of trying to secure a bigger chunk of BHP Billiton than the 9% in Rio Tinto than it purchased alongside Alcoa, according to a report on The Australian's Web site, citing sources in Beijing.
Russia currently controls the only gas pipeline out of Central Asia, which runs north from Turkemenistan through Kazakhstan and into Russia. China wants at least one pipeline to run east out of the region through Kazakhstan, while India is considering bringing in gas via pipelines from Iran or Pakistan.
By bailing out Wall Street and applying "band-aids" to the economy, the U.S. Federal Reserve may well be causing its own downfall - even as it hastens the demise of the greenback as a viable global currency, investment guru Jim Rogers told Money Morning during an exclusive interview. Because of such strategic missteps, U.S. consumers could be facing a long and painful economic malaise, similar to the "lost decade" of 1990s Japan, or the stagflation-riddled 1970s in the United States, Rogers said.
Standard & Poor's said late Tuesday that it downgraded four mortgage insurers because house prices are falling more than expected and unemployment in the U.S. is headed higher. The rating agency lowered the counterparty credit rating on MGIC Investment Corp.to 'BBB' from 'A-' and the counterparty credit and financial strength ratings of its mortgage insurance subsidiaries to 'A' from 'AA-'. PMI Group, Old Republic and Radian Group were also downgraded, S&P said.
Citigroup Inc.is close to selling $12 billion of leveraged loans and bonds to a group of private-equity firms including Apollo Group, Texas Pacific Group and Blackstone Group, the Wall Street Journal reported late Tuesday.
Odds are fully pricing in the chance of a quarter-point cut to the fed funds target rate, to 2%, and a 44% chance of a half-point cut.
Crude oil for May delivery fell 59 cents, or 0.5%, to settle at $108.5 a barrel on the New York Mercantile Exchange. Gold for June delivery fell $8.80 to end at $918 an ounce on the New York Mercantile Exchange.
United Parcel Service Inc. has cut its first-quarter earnings guidance to 86 cents or 87 cents a share, down from its previously expected range of 94-cents to 98 cents. The U.S. economy has continued to weaken, causing a reduction in domestic package volume and a shift away from premium products, UPS said late Tuesday. Significantly increased fuel costs in the quarter also contributed to the lower-than-expected results. In late trading the shares fell about 3 points to 70+.
Members of the Federal Reserve's policy-setting committee worried at their most recent meeting that housing and financial market stress could trigger a nasty slide in the economy, even as inflation pushed higher, minutes of the meeting released on Tuesday show.
China, the world's biggest copper consumer, may increase imports of ore used to make the metal by 20 percent to a record this year, said Trafigura Beheer BV, the country's top supplier.
EMC will acquire San Diego-based Iomega for a purchase price of $3.85 per share in a deal valued at some $213 million.
American Airlines said it was canceling up to 500 flights today, perhaps one-fifth of its schedule, to check the bundling of wires in some planes, the same issue that caused the airline to scrap more than 400 flights last month.
Marathon Oil, the largest refiner in the U.S. Midwest, said first-quarter refining and marketing operations had a loss amid higher costs. Margins will be "slightly negative" compared with 12.46 cents a gallon in the first quarter of 2007, the Houston-based company said today in a statement. The company said it had "substantially" weaker refining margins in the Midwest and Gulf Coast markets. The results were "much worse than expected," Credit Suisse Group analyst Mark Flannery said in a note to clients.
The Environmental Protection Agency says utilities will need to invest more than $277 billion over the next two decades on repairs and improvements to drinking water systems. Water industry engineers put the figure drastically higher, at about $480 billion.
A new Quinnipiac University poll of Pennsylvania Democrats released today found that Hillary Clinton’s lead over Barack Obama continues to decrease. Clinton now leads Obama 50%-44% in the state. This is a three point drop from the previous poll done last week, and a six point drop from two weeks ago.
Bankruptcies
4/7/08 Bankruptcies
The more than 90,000 bankruptcy filings in March were the highest since insolvency laws became more restrictive in October 2005, according to statistics compiled from court records by Jupiter eSources LLC. At a daily rate, filings in March were 30 percent above the pace in 2007. In the first quarter, the number of consumers filing for bankruptcy rose to a staggering 228,335, surpassing the 187,361 filings during the same period last year.
"Households are living on such thin budgets, there's a vulnerability that middle-class families, in particular, are having to deal with more and more," said Samuel Gerdano, executive director of the American Bankruptcy Institute. The institute relies on data collected by the National Bankruptcy Research Center. Gerdano expects "vulnerability" to push the number of consumer bankruptcy filings to more than a million before the year is over. Consumers aren't the only ones facing financial stress. The number of bankruptcies being filed by businesses also is expected to increase sharply as a result of tighter credit and a tougher business environment. "There is a wave coming because the financial markets have changed so dramatically," Gerdano said Friday during a telephone call from Washington, D.C., where the institute is hosting its annual meeting.
In early Monday trading, June gold up $6.10 at $919.30 an ounce on Nymex.
Borders Group Inc.said it reached an improved financing pact with Pershing Square Capital Management L.P. "The process of reviewing alternative financing proposals over the past two weeks was beneficial as it yielded an outcome that is better for our company and our shareholders," the Ann Arbor, Mich.-based company said. "Borders is now turning its focus to the broader strategic alternatives process."
The average U.S. retail gasoline prices edged up to $3.34 a gallon on Monday, up a penny from the day before and well ahead of the month-ago price of $3.20 a gallon, according to the AAA Daily Fuel Gauge Report.
The Financial Times writes that Delta and Northwest have restarted merger talks.
The yield on the benchmark 2 year note has risen 6 basis points to 1.88 percent. I continue to believe the yield has just begun to rise.
AK Steel Holding Corp.said Monday that it plans to increase spot market prices for its carbon steel products by $150 a ton for all new orders, effective immediately.
Kinetic Concepts will buy tissue repair company LifeCell for $1.7 billion to expand and diversify its product line. The $51 per share offer from KCI, which specializes in advanced wound care and therapeutic support systems, represents an 18 percent premium over LifeCell's closing price on Friday.The two companies said the combined entity would generate revenue of about $2 billion in 2008 and employ more than 7,000 people.
Goldman Sachs raised 2008 aluminum targets from $1.12/pound to $1.31/pound, and 2009 aluminum targets from $1.21/pound to $1.33/pound.
Cisco has scheduled a live webcast of its press conference on Tuesday, April 8, 2008 at 12:00 PM (PT), from the annual Cisco Partner Summit conference in Honolulu, Hawaii. The news conference will highlight important technology and channel go-to-market innovation.
Meanwhile, Oppenheimer cut its earnings estimate for Cisco.
"I think that December/January was the peak and that we have been sliding into recession ever since then," Feldstein, the president of the National Bureau of Economic Research, said on CNBC television. Feldstein said he believes that the recession will linger. "I think it could go on longer" than the "last two recessions (which) lasted eight months peak to trough," he said, adding the current recession could last about twice as long. He also said the first quarter U.S. gross domestic product number will be a "misleading" number in that it may not reflect the economy was in a recession in the first three months of the year.
Xstrata, the world's largest thermal coal exporter, has settled thermal coal contracts with Japan's Chubu Electric for the business year starting this month at $125 a ton, up 125 percent, a source close to the deal said on Monday. The settlement price compares with last year's $55.65, based on Xstrata's final settlement price with a group of Japanese utilities. The contracts are for coal with gross calorific value of 6,322 (GAR) kilocalories per kilo.
Gold for June delivery rose $13.60 to end at $926.80 an ounce on the New York Mercantile Exchange. The UBS Bloomberg Constant Maturity Commodity Index, which tracks 26 raw materials, gained 1.4 percent to 1472.364 Monday. It's up 32 percent from a year ago. Crude rose to the $109 level and natural gas jumped 46 cents to $9.79. The Midwest and Northeast will have below-normal temperatures by April 12, said Rockville, Maryland-based MDA Federal Inc.'s EarthSat Energy Weather. Inventories finished the heating season last month at their lowest since 2005.
Margaret Campbell, a Montana state legislator, plans to declare her support for Senator Obama, of Illinois. She becomes the 69th superdelegate he has picked up since the Feb. 5 coast-to-coast string of primary elections and caucus votes. In the same period, Senator Clinton, of New York, has seen a net loss of two superdelegates, according to figures from the Obama campaign that Clinton aides do not dispute.
Advanced Micro Devices Inc. will cut 10% of its work force, saying its first-quarter revenue would be lower than expected. Under the chipmaker's new forecast, first-quarter revenue will come in around $1.5 billion, up 22% from the year-earlier period but down 15% from the fourth quarter.
Alcoa Inc's first-quarter profit fell to $303 million, or 37 cents a share, from $662 million, or 75 cents a share, a year ago. Excluding one time items, the company would have reported a profit from continuing operations of 44 cents a share. Revenue fell to $7.38 billion from $7.91 billion in the year ago period. Analysts polled by Thomson Financial estimated a profit of 48 cents a share on $7.2 billion in revenue.
In February, total consumer credit increased by $5.2 billion, or a 2.4% annual rate, to $2.54 trillion, the Federal Reserve reported Monday. Of the total increase, credit card debt rose by 6% and accounted for $4.7 billion. Non-revolving credit like student and auto loans climbed by 0.4%, or $496 million, the Fed said.
The Education Resources Institute, the largest non-profit guarantor of student loans made outside of government programs, filed for bankruptcy protection, saying its liquidity had been hurt by a rise in delinquencies and defaults and "mounting difficulties" in financing loan securitizations.
New Zealand business confidence fell to the lowest level in 33 years, with companies saying a slumping housing market and slowing consumer spending may cause the economy to contract.
Online spending is expected to rise a robust 17 percent this year, despite a sluggish economy that has bruised many brick-based retailers, according to an annual survey to be released Tuesday. Retail sales online, excluding travel purchases, are set to grow to $204 billion in 2008 from $174.5 billion last year, fueled by sales of apparel, computers and autos, according to a survey conducted by Internet analysis firm Forrester Research for Shop.org, the online arm of the National Retail Federation trade group. That projection is below the 21 percent increase seen in the prior year, but industry officials attribute it to the maturing of the business, not the sluggish economy.
The more than 90,000 bankruptcy filings in March were the highest since insolvency laws became more restrictive in October 2005, according to statistics compiled from court records by Jupiter eSources LLC. At a daily rate, filings in March were 30 percent above the pace in 2007. In the first quarter, the number of consumers filing for bankruptcy rose to a staggering 228,335, surpassing the 187,361 filings during the same period last year.
"Households are living on such thin budgets, there's a vulnerability that middle-class families, in particular, are having to deal with more and more," said Samuel Gerdano, executive director of the American Bankruptcy Institute. The institute relies on data collected by the National Bankruptcy Research Center. Gerdano expects "vulnerability" to push the number of consumer bankruptcy filings to more than a million before the year is over. Consumers aren't the only ones facing financial stress. The number of bankruptcies being filed by businesses also is expected to increase sharply as a result of tighter credit and a tougher business environment. "There is a wave coming because the financial markets have changed so dramatically," Gerdano said Friday during a telephone call from Washington, D.C., where the institute is hosting its annual meeting.
In early Monday trading, June gold up $6.10 at $919.30 an ounce on Nymex.
Borders Group Inc.said it reached an improved financing pact with Pershing Square Capital Management L.P. "The process of reviewing alternative financing proposals over the past two weeks was beneficial as it yielded an outcome that is better for our company and our shareholders," the Ann Arbor, Mich.-based company said. "Borders is now turning its focus to the broader strategic alternatives process."
The average U.S. retail gasoline prices edged up to $3.34 a gallon on Monday, up a penny from the day before and well ahead of the month-ago price of $3.20 a gallon, according to the AAA Daily Fuel Gauge Report.
The Financial Times writes that Delta and Northwest have restarted merger talks.
The yield on the benchmark 2 year note has risen 6 basis points to 1.88 percent. I continue to believe the yield has just begun to rise.
AK Steel Holding Corp.said Monday that it plans to increase spot market prices for its carbon steel products by $150 a ton for all new orders, effective immediately.
Kinetic Concepts will buy tissue repair company LifeCell for $1.7 billion to expand and diversify its product line. The $51 per share offer from KCI, which specializes in advanced wound care and therapeutic support systems, represents an 18 percent premium over LifeCell's closing price on Friday.The two companies said the combined entity would generate revenue of about $2 billion in 2008 and employ more than 7,000 people.
Goldman Sachs raised 2008 aluminum targets from $1.12/pound to $1.31/pound, and 2009 aluminum targets from $1.21/pound to $1.33/pound.
Cisco has scheduled a live webcast of its press conference on Tuesday, April 8, 2008 at 12:00 PM (PT), from the annual Cisco Partner Summit conference in Honolulu, Hawaii. The news conference will highlight important technology and channel go-to-market innovation.
Meanwhile, Oppenheimer cut its earnings estimate for Cisco.
"I think that December/January was the peak and that we have been sliding into recession ever since then," Feldstein, the president of the National Bureau of Economic Research, said on CNBC television. Feldstein said he believes that the recession will linger. "I think it could go on longer" than the "last two recessions (which) lasted eight months peak to trough," he said, adding the current recession could last about twice as long. He also said the first quarter U.S. gross domestic product number will be a "misleading" number in that it may not reflect the economy was in a recession in the first three months of the year.
Xstrata, the world's largest thermal coal exporter, has settled thermal coal contracts with Japan's Chubu Electric for the business year starting this month at $125 a ton, up 125 percent, a source close to the deal said on Monday. The settlement price compares with last year's $55.65, based on Xstrata's final settlement price with a group of Japanese utilities. The contracts are for coal with gross calorific value of 6,322 (GAR) kilocalories per kilo.
Gold for June delivery rose $13.60 to end at $926.80 an ounce on the New York Mercantile Exchange. The UBS Bloomberg Constant Maturity Commodity Index, which tracks 26 raw materials, gained 1.4 percent to 1472.364 Monday. It's up 32 percent from a year ago. Crude rose to the $109 level and natural gas jumped 46 cents to $9.79. The Midwest and Northeast will have below-normal temperatures by April 12, said Rockville, Maryland-based MDA Federal Inc.'s EarthSat Energy Weather. Inventories finished the heating season last month at their lowest since 2005.
Margaret Campbell, a Montana state legislator, plans to declare her support for Senator Obama, of Illinois. She becomes the 69th superdelegate he has picked up since the Feb. 5 coast-to-coast string of primary elections and caucus votes. In the same period, Senator Clinton, of New York, has seen a net loss of two superdelegates, according to figures from the Obama campaign that Clinton aides do not dispute.
Advanced Micro Devices Inc. will cut 10% of its work force, saying its first-quarter revenue would be lower than expected. Under the chipmaker's new forecast, first-quarter revenue will come in around $1.5 billion, up 22% from the year-earlier period but down 15% from the fourth quarter.
Alcoa Inc's first-quarter profit fell to $303 million, or 37 cents a share, from $662 million, or 75 cents a share, a year ago. Excluding one time items, the company would have reported a profit from continuing operations of 44 cents a share. Revenue fell to $7.38 billion from $7.91 billion in the year ago period. Analysts polled by Thomson Financial estimated a profit of 48 cents a share on $7.2 billion in revenue.
In February, total consumer credit increased by $5.2 billion, or a 2.4% annual rate, to $2.54 trillion, the Federal Reserve reported Monday. Of the total increase, credit card debt rose by 6% and accounted for $4.7 billion. Non-revolving credit like student and auto loans climbed by 0.4%, or $496 million, the Fed said.
The Education Resources Institute, the largest non-profit guarantor of student loans made outside of government programs, filed for bankruptcy protection, saying its liquidity had been hurt by a rise in delinquencies and defaults and "mounting difficulties" in financing loan securitizations.
New Zealand business confidence fell to the lowest level in 33 years, with companies saying a slumping housing market and slowing consumer spending may cause the economy to contract.
Online spending is expected to rise a robust 17 percent this year, despite a sluggish economy that has bruised many brick-based retailers, according to an annual survey to be released Tuesday. Retail sales online, excluding travel purchases, are set to grow to $204 billion in 2008 from $174.5 billion last year, fueled by sales of apparel, computers and autos, according to a survey conducted by Internet analysis firm Forrester Research for Shop.org, the online arm of the National Retail Federation trade group. That projection is below the 21 percent increase seen in the prior year, but industry officials attribute it to the maturing of the business, not the sluggish economy.
Monday, April 07, 2008
Rice
4/6/08 Rice
"The assumption is that all farmers are better off when prices go up," said Robert Zeigler, director general of the International Rice Research Institute in the Philippines. "The problem is that a large proportion of rice producers in the world are actually net rice buyers - they produce less than their actual needs." Rice prices have been creeping upward since the beginning of this decade, but it was not until February that they spiked sharply. Thai B grade rice, a widely traded variety, sold for $546 per ton in March, up 68 percent from a year earlier. "Nobody has ever seen such a jump in the price of rice, certainly not in my lifetime, and that's a long time," said Kwanchai Gomez, the executive director of the Thai Rice Foundation, a research center financed by the Thai royal family. She is 68 years old. Many consumers around the globe rely on Thai rice, including African and Middle Eastern countries. Hong Kong imports 90 percent of its rice from Thailand. Thai farmers harvest an average of 2.63 tons per hectare, or about a ton per acre, compared with 6.22 tons per hectare in China, 4.22 in Indonesia, 3.03 in India and 7.55 in the United States. These yields are a measure not only of efficiency but reflect the strains of rice produced. Yields for jasmine rice in Thailand, for example, are much lower than plain white rice, but the fragrant rice fetches double or triple on world markets.
According to Reuters, shares in Petrohawk Energy Corp hit all-time highs on Friday and its option volume soared on speculation that the oil and natural gas producer was a takeover target.
On Friday Allegheny Tech rose 8+ points with huge option buying, and this despite Cowen opining that "Street Ests. Too High; Sentiment Too Positive."
Mark Penn quit as Hillary Clinton's chief strategist.
Futures traders doubled bets against the greenback in the past two months, data from the Commodity Futures Trading Commission in Washington show. Citigroup Inc., Deutsche Bank AG and Royal Bank of Scotland Group Plc, which handle almost 40 percent of global foreign exchange trading, say the currency may slump to $1.65 per euro by October, from $1.57 on April 4.
Yahoo, under pressure from Microsoft to accept its $41 billion buyout offer, said Monday it doesn't oppose a deal with the huge software maker but wants a better deal. Jerry Yang, chief executive of Sunnyvale, Calif.-based Yahoo Inc., and Chairman Roy Bostock sent a letter Monday to Microsoft CEO Steve Ballmer. "We are open to all alternatives that maximize stockholder value," Yang and Bostock said in the letter. "To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing." In the letter, Yang and Bostock assert that Microsoft has mischaracterized the companies' discussions, and say the company's threat to begin a hostile takeover is "counterproductive."
Baker Hughes said Monday that the worldwide rig count for March was 3,259, down 158 from the 3,417 it reported in February. The international rig count was up 22 from February and the U.S. rig count was up 32, while the Canadian rig count fell 212 to 408 in March.
Novartis AG has agreed to buy Nestle AG's 77 percent stake in U.S. company Alcon in a deal worth up to $39 billion to boost its eye care business, the Swiss drugmaker said on Monday. Novartis will acquire a first, 25 percent stake in Alcon for $11 billion and is set to buy Nestle's remaining 52 percent for a fixed price of $28 billion between January 2010 and July 2011.
U.S. private equity firm TPG and other investors are near a deal to invest $5 billion in Washington Mutual Inc , the Wall Street Journal reported on its Web site.
Light sweet crude for May delivery rose $1.31 cents to $107.54 a barrel by 1035 GMT (6:35 a.m. EDT) after leaping $2.40 a barrel on Friday, recouping all of the week's earlier losses.
A deal to allow delegates from Florida and Michigan to participate at the Democratic National Convention is unlikely before summer, party chairman Howard Dean said yesterday.
John Hussman: "There was never a point where Bear's customers and counterparties were at risk...As for actions that might have prevented Bear's sudden collapse, Timothy Geithner, the president of the Federal Reserve Bank of New York, indicated that the Fed had not made funds available to Bear earlier in the week, saying “I would not have been comfortable lending to Bear at that time. We only lend to sound institutions. Lending freely to Bear would not have been a prudent act.” Evidently it was prudent to commit $30 billion in public funds without the assurance of being made whole."
China and New Zealand have signed a groundbreaking free trade agreement.
"The assumption is that all farmers are better off when prices go up," said Robert Zeigler, director general of the International Rice Research Institute in the Philippines. "The problem is that a large proportion of rice producers in the world are actually net rice buyers - they produce less than their actual needs." Rice prices have been creeping upward since the beginning of this decade, but it was not until February that they spiked sharply. Thai B grade rice, a widely traded variety, sold for $546 per ton in March, up 68 percent from a year earlier. "Nobody has ever seen such a jump in the price of rice, certainly not in my lifetime, and that's a long time," said Kwanchai Gomez, the executive director of the Thai Rice Foundation, a research center financed by the Thai royal family. She is 68 years old. Many consumers around the globe rely on Thai rice, including African and Middle Eastern countries. Hong Kong imports 90 percent of its rice from Thailand. Thai farmers harvest an average of 2.63 tons per hectare, or about a ton per acre, compared with 6.22 tons per hectare in China, 4.22 in Indonesia, 3.03 in India and 7.55 in the United States. These yields are a measure not only of efficiency but reflect the strains of rice produced. Yields for jasmine rice in Thailand, for example, are much lower than plain white rice, but the fragrant rice fetches double or triple on world markets.
According to Reuters, shares in Petrohawk Energy Corp hit all-time highs on Friday and its option volume soared on speculation that the oil and natural gas producer was a takeover target.
On Friday Allegheny Tech rose 8+ points with huge option buying, and this despite Cowen opining that "Street Ests. Too High; Sentiment Too Positive."
Mark Penn quit as Hillary Clinton's chief strategist.
Futures traders doubled bets against the greenback in the past two months, data from the Commodity Futures Trading Commission in Washington show. Citigroup Inc., Deutsche Bank AG and Royal Bank of Scotland Group Plc, which handle almost 40 percent of global foreign exchange trading, say the currency may slump to $1.65 per euro by October, from $1.57 on April 4.
Yahoo, under pressure from Microsoft to accept its $41 billion buyout offer, said Monday it doesn't oppose a deal with the huge software maker but wants a better deal. Jerry Yang, chief executive of Sunnyvale, Calif.-based Yahoo Inc., and Chairman Roy Bostock sent a letter Monday to Microsoft CEO Steve Ballmer. "We are open to all alternatives that maximize stockholder value," Yang and Bostock said in the letter. "To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing." In the letter, Yang and Bostock assert that Microsoft has mischaracterized the companies' discussions, and say the company's threat to begin a hostile takeover is "counterproductive."
Baker Hughes said Monday that the worldwide rig count for March was 3,259, down 158 from the 3,417 it reported in February. The international rig count was up 22 from February and the U.S. rig count was up 32, while the Canadian rig count fell 212 to 408 in March.
Novartis AG has agreed to buy Nestle AG's 77 percent stake in U.S. company Alcon in a deal worth up to $39 billion to boost its eye care business, the Swiss drugmaker said on Monday. Novartis will acquire a first, 25 percent stake in Alcon for $11 billion and is set to buy Nestle's remaining 52 percent for a fixed price of $28 billion between January 2010 and July 2011.
U.S. private equity firm TPG and other investors are near a deal to invest $5 billion in Washington Mutual Inc , the Wall Street Journal reported on its Web site.
Light sweet crude for May delivery rose $1.31 cents to $107.54 a barrel by 1035 GMT (6:35 a.m. EDT) after leaping $2.40 a barrel on Friday, recouping all of the week's earlier losses.
A deal to allow delegates from Florida and Michigan to participate at the Democratic National Convention is unlikely before summer, party chairman Howard Dean said yesterday.
John Hussman: "There was never a point where Bear's customers and counterparties were at risk...As for actions that might have prevented Bear's sudden collapse, Timothy Geithner, the president of the Federal Reserve Bank of New York, indicated that the Fed had not made funds available to Bear earlier in the week, saying “I would not have been comfortable lending to Bear at that time. We only lend to sound institutions. Lending freely to Bear would not have been a prudent act.” Evidently it was prudent to commit $30 billion in public funds without the assurance of being made whole."
China and New Zealand have signed a groundbreaking free trade agreement.
Sunday, April 06, 2008
Monthly Employment Data
4/5/08 Monthly Employment Data
The economy lost 80,000 nonfarm payroll jobs last month, according to a survey of business establishments, about the same as the 76,000 lost in February and more than the 60,000 expected to be lost by economists surveyed by MarketWatch. Payroll growth in February and January was revised lower by a total of 67,000. The separate survey of households showed a rise in unemployment of 434,000. As a result, the unemployment rate popped to 5.1% from 4.8% in the prior month. This is the highest unemployment rate since September 2005.
Robert McHugh: " The Department of Labor reported that Non-Farm Payroll Jobs FELL 80,000 for the month of March, 2008. The truth is, it is much worse. Looking deep behind that number, this figure is after they goosed it higher by 142,000 "make believe" new jobs that do not exist. The Labor Department adjusts the non-farm payroll figure every month by a guess of new jobs created by new businesses, that are not confirmed, are not counted, are not in actuality real. It is called the Birth/Death adjustment, and I wouldn't be surprised if this number will soon go the way of the M-3 figure, hidden from our view, so they can artificially report any number they feel like.
The truth is, the U.S. labor market actually lost 222,000 jobs in March. Now think about this: We need to create approximately 150,000 jobs every month just to keep up with legal population growth. That means the labor market fell 377,000 jobs short of breakeven in March. This a huge added blow for the American household. As long as Wall Street is okay, the Master Planners believe the economy is okay. The American household is in serious trouble, and the bailouts are only going to Wall Street at this time. However, if the American consumer dies, Wall Street will too. More effort needs to be placed at the source of the problem."
Microsoft set the clock ticking for Yahoo to accept its $41 billion buyout offer in a letter to the Internet pioneer's board Saturday, warning that if a deal wasn't reached by April 26 the software maker would launch a hostile takeover at a less attractive price. In the letter, Ballmer said Yahoo's search share and page views, two measures of the strength of the Web portal company's business, appear to have fallen since the offer was made at the end of January. At the time, Microsoft's cash-and-stock offer was valued at $44.6 billion, or 62 percent above Yahoo's market value. Judging by Friday's closing share prices, the deal is now worth just under $41 billion.
Several members of the six-nation Gulf Cooperation Council (GCC) that includes Saudi Arabia are determined to meet a 2010 target to introduce single currency, the council's secretary general said on Sunday. "There is determination from a number of countries to complete monetary union by 2010," Abdul-Rahman al-Attiyah said at a central bank governors' meeting in Qatar's capital, Doha.
Doug Noland: " Regrettably, all the best efforts by the Federal Reserve and Washington politicians to sustain the U.S. Bubble Economy are doomed to failure. It’s not that they are necessarily the wrong policies. More to the point, the basic premise that our economy is sound and growth sustainable is misguided. We’ve experienced a protracted and historic Credit inflation and it will simply be impossible to keep asset prices, incomes, corporate cash flows, and spending levitated at current levels. The type and scope of Credit growth required today has become infeasible. The risk intermediation requirements are too daunting. Sustaining housing inflation and consumption levels has become unachievable. And the underpinnings of our currency have turned too fragile...Basically, the strategy is to substitute government-backed debt for the now discredited Wall Street-backed finance. I’m the first one to admit that this desperate undertaking stopped financial implosion in its tracks. However, the problem with this whole approach – because of our “societal,” financial, and policymaking biases – is that our Credit system will just be throwing greater amounts of (government-supported) debt on top of already fragile Credit Structures underpinned largely by home mortgages. Wall Street-backed finance buckled specifically because this (“Ponzi Finance”) debt structure was untenable the day increasing amounts of speculative Credit were no longer forthcoming. The underlying inventory of houses doesn’t have the capacity to generate debt service – only the mortgagees taking on greater amounts of debt... It is my view that our economy will require a massive reallocation of resources. We will be forced to create much less non-productive (especially mortgage and asset-based) Credit in the Financial Sphere, while producing huge additional quantities of tradable goods in the Economic Sphere. In our expansive “services” sector, there will no choice but to “liquidate” labor and redirect its efforts. Throughout finance, there will be no alternative than to “liquidate” bad debt, labor and insolvent institutions – again in the name of a necessary redirecting of resources. After an unnecessarily protracted boom, there will be scores of enterprises that will prove uneconomic in the new financial and economic backdrop. “Liquidation” will be unavoidable, policymaker hopes and dreams notwithstanding."
Mike Burk: "The market is over bought; many of the indicators are at or near extremes...Historically, by most measures, next week has been weak. In April 2000 it was one of the worst weeks ever...The market took off in the summer of 2006 when the banks were giving away money, now the fed is doing it. Short term the market is overbought, but with money supply exploding any pull back should be modest.I expect the major indices to be lower on Friday April 11 than they were on Friday April 4."
Honeywell International said Friday that it would buy Norcross Safety Products for $1.2 billion to expand its line of personal protective gear.Norcross, based in Oak Brook, Ill., makes protective and safety equipment for the fire service, utility and general industrial worker segments. Honeywell is buying the company from its majority owner, Odyssey Investment Partners.
Microsoft plans to release its new version of the Windows OS next year.
According to Business Week, in most housing downturns, rental markets thrive. This time, a glut of properties has put the brakes on rent hikes in many cities. For many Americans, as property values sink and mortgage interest payments rise, the dream of homeownership has turned into a nightmare. In the past, however, one group of people who have tended to ride out real estate downturns are landlords, who can raise rents while potential buyers sit on the sidelines waiting for conditions to settle. But not this year. Rent growth in 2007 actually went flat in some metro areas hardest hit by the housing meltdown. "What we will see is more of a return to where we were before the huge boom in homeownership," says Rob Massey, vice-president of industry development for Rentals.com. "In cases where you don't see the rental market rebounding, it's because of an oversupply of properties."
Manraaj Singh:"Since the beginning of the decade, the S&P 500 Index has actually fallen by five percent. In China, the benchmark Shanghai A-shares Index is up by 124 per cent - and that's after falling 43 per cent from its peak in October. They were up 296 per cent at their peak. I think that Chinese investors have seen an "adequate" return on their savings. U.S. investors, on the other hand, probably wouldn't think so…and neither would the average British investor… the FTSE is down 11 per cent over the same period."
"Until now, we are not experiencing any dramatic changes worldwide for our products, not even at home in the United States," Intel CEO Paul Otellini told Germany's Spiegel magazine in an interview released on Saturday ahead of publication on Monday.In fact, Otellini said, Intel has actually benefited to some degree from the U.S. slowdown because the weak U.S. dollar has helped its exports.
Michelle Leder: "In the proxy, which was filed shortly after the company announced that its CFO was stepping down, Qwest listed “other perquisites” for CEO Ed Mueller of $1.9 million and goes on to explain that the bulk of the amount as being related to the sale of Mueller’s house in the Bay Area
The amount also includes the incremental cost to us of our purchase of Mr. Mueller’s former house in California. We purchased the house in September 2007 for $8,900,000 (including closing costs), which was its then-prevailing value as determined by the average of two independent appraisals. We sold the house in December 2007 for proceeds of $7,112,606 (net of closing costs and commissions). We paid an additional $43,644 to maintain the house while we owned it, resulting in a total incremental cost to us of $1,831,038.
So in less than three months, Mueller’s house lost around 20% of its value and Qwest shareholders footnoted the bill? Looks like Qwest may in the running for the worst footnote of 2008, too!"
At least one UBS AG investor might back a plan to break up and sell the Swiss bank, the U.K. Independent On Sunday said. Ethos, a Swiss corporate governance foundation which owns a small stake in UBS, is reported to be willing to back a breakup, the newspaper said without citing sources. Last week, former UBS President Luqman Arnold wrote a letter to the bank suggesting a possible sale.
The economy lost 80,000 nonfarm payroll jobs last month, according to a survey of business establishments, about the same as the 76,000 lost in February and more than the 60,000 expected to be lost by economists surveyed by MarketWatch. Payroll growth in February and January was revised lower by a total of 67,000. The separate survey of households showed a rise in unemployment of 434,000. As a result, the unemployment rate popped to 5.1% from 4.8% in the prior month. This is the highest unemployment rate since September 2005.
Robert McHugh: " The Department of Labor reported that Non-Farm Payroll Jobs FELL 80,000 for the month of March, 2008. The truth is, it is much worse. Looking deep behind that number, this figure is after they goosed it higher by 142,000 "make believe" new jobs that do not exist. The Labor Department adjusts the non-farm payroll figure every month by a guess of new jobs created by new businesses, that are not confirmed, are not counted, are not in actuality real. It is called the Birth/Death adjustment, and I wouldn't be surprised if this number will soon go the way of the M-3 figure, hidden from our view, so they can artificially report any number they feel like.
The truth is, the U.S. labor market actually lost 222,000 jobs in March. Now think about this: We need to create approximately 150,000 jobs every month just to keep up with legal population growth. That means the labor market fell 377,000 jobs short of breakeven in March. This a huge added blow for the American household. As long as Wall Street is okay, the Master Planners believe the economy is okay. The American household is in serious trouble, and the bailouts are only going to Wall Street at this time. However, if the American consumer dies, Wall Street will too. More effort needs to be placed at the source of the problem."
Microsoft set the clock ticking for Yahoo to accept its $41 billion buyout offer in a letter to the Internet pioneer's board Saturday, warning that if a deal wasn't reached by April 26 the software maker would launch a hostile takeover at a less attractive price. In the letter, Ballmer said Yahoo's search share and page views, two measures of the strength of the Web portal company's business, appear to have fallen since the offer was made at the end of January. At the time, Microsoft's cash-and-stock offer was valued at $44.6 billion, or 62 percent above Yahoo's market value. Judging by Friday's closing share prices, the deal is now worth just under $41 billion.
Several members of the six-nation Gulf Cooperation Council (GCC) that includes Saudi Arabia are determined to meet a 2010 target to introduce single currency, the council's secretary general said on Sunday. "There is determination from a number of countries to complete monetary union by 2010," Abdul-Rahman al-Attiyah said at a central bank governors' meeting in Qatar's capital, Doha.
Doug Noland: " Regrettably, all the best efforts by the Federal Reserve and Washington politicians to sustain the U.S. Bubble Economy are doomed to failure. It’s not that they are necessarily the wrong policies. More to the point, the basic premise that our economy is sound and growth sustainable is misguided. We’ve experienced a protracted and historic Credit inflation and it will simply be impossible to keep asset prices, incomes, corporate cash flows, and spending levitated at current levels. The type and scope of Credit growth required today has become infeasible. The risk intermediation requirements are too daunting. Sustaining housing inflation and consumption levels has become unachievable. And the underpinnings of our currency have turned too fragile...Basically, the strategy is to substitute government-backed debt for the now discredited Wall Street-backed finance. I’m the first one to admit that this desperate undertaking stopped financial implosion in its tracks. However, the problem with this whole approach – because of our “societal,” financial, and policymaking biases – is that our Credit system will just be throwing greater amounts of (government-supported) debt on top of already fragile Credit Structures underpinned largely by home mortgages. Wall Street-backed finance buckled specifically because this (“Ponzi Finance”) debt structure was untenable the day increasing amounts of speculative Credit were no longer forthcoming. The underlying inventory of houses doesn’t have the capacity to generate debt service – only the mortgagees taking on greater amounts of debt... It is my view that our economy will require a massive reallocation of resources. We will be forced to create much less non-productive (especially mortgage and asset-based) Credit in the Financial Sphere, while producing huge additional quantities of tradable goods in the Economic Sphere. In our expansive “services” sector, there will no choice but to “liquidate” labor and redirect its efforts. Throughout finance, there will be no alternative than to “liquidate” bad debt, labor and insolvent institutions – again in the name of a necessary redirecting of resources. After an unnecessarily protracted boom, there will be scores of enterprises that will prove uneconomic in the new financial and economic backdrop. “Liquidation” will be unavoidable, policymaker hopes and dreams notwithstanding."
Mike Burk: "The market is over bought; many of the indicators are at or near extremes...Historically, by most measures, next week has been weak. In April 2000 it was one of the worst weeks ever...The market took off in the summer of 2006 when the banks were giving away money, now the fed is doing it. Short term the market is overbought, but with money supply exploding any pull back should be modest.I expect the major indices to be lower on Friday April 11 than they were on Friday April 4."
Honeywell International said Friday that it would buy Norcross Safety Products for $1.2 billion to expand its line of personal protective gear.Norcross, based in Oak Brook, Ill., makes protective and safety equipment for the fire service, utility and general industrial worker segments. Honeywell is buying the company from its majority owner, Odyssey Investment Partners.
Microsoft plans to release its new version of the Windows OS next year.
According to Business Week, in most housing downturns, rental markets thrive. This time, a glut of properties has put the brakes on rent hikes in many cities. For many Americans, as property values sink and mortgage interest payments rise, the dream of homeownership has turned into a nightmare. In the past, however, one group of people who have tended to ride out real estate downturns are landlords, who can raise rents while potential buyers sit on the sidelines waiting for conditions to settle. But not this year. Rent growth in 2007 actually went flat in some metro areas hardest hit by the housing meltdown. "What we will see is more of a return to where we were before the huge boom in homeownership," says Rob Massey, vice-president of industry development for Rentals.com. "In cases where you don't see the rental market rebounding, it's because of an oversupply of properties."
Manraaj Singh:"Since the beginning of the decade, the S&P 500 Index has actually fallen by five percent. In China, the benchmark Shanghai A-shares Index is up by 124 per cent - and that's after falling 43 per cent from its peak in October. They were up 296 per cent at their peak. I think that Chinese investors have seen an "adequate" return on their savings. U.S. investors, on the other hand, probably wouldn't think so…and neither would the average British investor… the FTSE is down 11 per cent over the same period."
"Until now, we are not experiencing any dramatic changes worldwide for our products, not even at home in the United States," Intel CEO Paul Otellini told Germany's Spiegel magazine in an interview released on Saturday ahead of publication on Monday.In fact, Otellini said, Intel has actually benefited to some degree from the U.S. slowdown because the weak U.S. dollar has helped its exports.
Michelle Leder: "In the proxy, which was filed shortly after the company announced that its CFO was stepping down, Qwest listed “other perquisites” for CEO Ed Mueller of $1.9 million and goes on to explain that the bulk of the amount as being related to the sale of Mueller’s house in the Bay Area
The amount also includes the incremental cost to us of our purchase of Mr. Mueller’s former house in California. We purchased the house in September 2007 for $8,900,000 (including closing costs), which was its then-prevailing value as determined by the average of two independent appraisals. We sold the house in December 2007 for proceeds of $7,112,606 (net of closing costs and commissions). We paid an additional $43,644 to maintain the house while we owned it, resulting in a total incremental cost to us of $1,831,038.
So in less than three months, Mueller’s house lost around 20% of its value and Qwest shareholders footnoted the bill? Looks like Qwest may in the running for the worst footnote of 2008, too!"
At least one UBS AG investor might back a plan to break up and sell the Swiss bank, the U.K. Independent On Sunday said. Ethos, a Swiss corporate governance foundation which owns a small stake in UBS, is reported to be willing to back a breakup, the newspaper said without citing sources. Last week, former UBS President Luqman Arnold wrote a letter to the bank suggesting a possible sale.
Thursday, April 03, 2008
Employment Data
4/4/08 Employment Data
Despite increased weakness in the economy, planned job cuts announced by employers fell by 26 percent in March to 53,579, down from 72,091 cuts in February, according to a report on monthly job cuts released Wednesday by global outplacement consultancy Challenger, Gray & Christmas Inc. The drop in March is similar to a decline in March 2007, when announced job cuts plunged 42 percent to an eight-month low of 48,997 from 84,014 in February, which turned out to be the largest job-cut month of the year. Last month’s job cuts were 9.4 percent higher than a year ago. Through the first quarter, job cuts totaling 200,656 are just 2.4 percent higher than the 195,986 cuts in the same period in 2007.
The number of U.S. workers applying for unemployment benefit soared by 38,000 last week, posting the highest reading since September 2005. The four-week average for jobless claims also rose by 15,750 to 374,500, the highest since the beginning of October 2005. For the week ending March 22, continuing jobless claims rose by 97,000 to 2.94 million.
Nato has confirmed it will not offer membership to Georgia or Ukraine but agreed to review the decision on the ex-Soviet republics in December.
The World Bank estimates ``that 33 countries around the world face potential social unrest because of the acute hike in food and energy prices,'' Robert Zoellick, the bank's president, said on the organization's Web site. For these countries ``there is no margin for survival,'' he said.
Rough rice for May delivery advanced to $20.26 per 100 pounds on the Chicago Board of Trade today as the United Nations' Food and Agriculture Organization said global exports will drop 3.5 percent this year as nations curb sales.
Edward Kane, a finance professor at Boston College:"On the grounds that they were helping innovative U.S. firms to compete effectively in global markets, federal supervisors refused to take on the political and practical challenge of establishing and maintaining their ability to see and to discipline complicated risk exposures."
Google is cutting about 300 jobs from the American operations of DoubleClick in the first sizable layoffs in its history. The cuts would represent about a quarter of DoubleClick’s American work force of about 1,200.
ATA Airlines canceled all flights Thursday after filing for bankruptcy as it posted advisories at ticket counters in the handful of cities it still served and sought assistance for stranded passengers. The Indianapolis-based airline, once the nation's 10th-largest, entered bankruptcy for the second time in just over three years Wednesday, this time citing the loss of a key military charter business.
Italy's Stock Exchange says it suspended Alitalia's shares after Air France-KLM quit talks with Italian unions and Alitalia's chairman Maurizio Prato resigned.
Rob Hanna:"I ran some numbers tonight looking at action immediately following up days of 3.5% or more in the S&P 500. Of the 35 instances since 1960 that my scan found, 31 of them traded lower than their thrust day close at some point in the next 5 days. (Make that 32 for 36 after Wednesday.) 18 of the 35 traded lower by 1.75% or more. What’s this tell me? The pullback today was normal. In fact, continued pullback would be normal. The last two big thrust days (3/11 and 3/18) the market fell hard and fast almost immediately. If the market can get through tomorrow without a sharp selloff, that could be a positive. It would be a change in character."
Martin Feldstein: The US has a “let the market determine the value of the dollar” policy and a “let the Fed set interest rates to reflect US economic conditions policy” and a “strong RMB” policy not a "strong dollar policy."
The U.S. office market showed the first indication of a slowdown in the first quarter as tenants occupied less space for the first time in more than four years, according to real estate research firm Reis.
ConocoPhillips says it likely produced the equivalent of 1.8 million barrels of oil every day during the first three months of the year and made more money on each than in the past; however, the company believes it made much less profit on refined products like gasoline as its refining margins got squeezed, according to a preliminary first-quarter outlook. ConocoPhillips' results from its chemical and midstream operations are also expected to be lower.
"The Great Depression," says the headline. "Food stamps are the symbol of poverty in the U.S. In the era of the credit crunch, a record 28 million Americans are now relying on them to survive - a sure sign the world's richest country faces economic crisis."
For at least 16 months after the Sept. 11 terror attacks in 2001, the Bush administration believed that the Constitution's protection against unreasonable searches and seizures on U.S. soil didn't apply to its efforts to protect against terrorism. That view was expressed in a secret Justice Department legal memo dated Oct. 23, 2001. The administration on Wednesday stressed that it now disavows that view.The October 2001 memo was written at the request of the White House by John Yoo, then the deputy assistant attorney general, and addressed to Alberto Gonzales, the White House counsel at the time. The administration had asked the department for an opinion on the legality of potential responses to terrorist activity.The 37-page memo is classified and has not been released. Its existence was disclosed Tuesday in a footnote of a separate secret memo, dated March 14, 2003, released by the Pentagon in response to a Freedom of Information Act lawsuit by the American Civil Liberties Union.
Intelligence centers run by states across the country have access to personal information about millions of Americans, including unlisted cellphone numbers, insurance claims, driver's license photographs and credit reports, according to a document obtained by The Washington Post.
Consumers fell behind on car, credit-card and home-equity loans at the highest level in 15 years during the fourth quarter, another sign the U.S. economy is slowing, according to an American Bankers Association survey. Payments at least 30 days past due increased across all eight categories of loans tracked, the Washington-based group said today in a statement. Late loans climbed 21 basis points to 2.65 percent of all accounts in a consumer-loan index created by the group.
After two straight weeks of declines, fixed mortgage rates rebounded, with the average conforming 30-year fixed mortgage rate moving up to 6.12%, according to Bankrate.com's weekly national survey of large lenders, released Thursday.
In the Seattle metro area, the restaurant sales tax is now 9.5% as of 4/1/08.
Michael Dell He said the company "will go past" its previously stated target of reducing headcount by 8,800 workers. "To be very clear, we are not satisfied with the current state of affairs," Dell told the gathering. "There are no fixed costs at Dell. Everything is being looked at."
CIT Group Inc., a troubled commercial lender which announced late last year it would stop originating private student loans, said it will stop originating government-guaranteed student loans, effective immediately.
Economic activity in the services sector improved in March but remained at a level that indicates a contraction, said the Institute for Supply Management Thursday. Its non-manufacturing index rose to 49.6%, under the level that indicates an industry is expanding, but slightly higher than February's 49.3% reading.
U.S. natural gas inventories fell for a 19th week, down 29 Billion cubic feet in the week ended March 28, Energy Information Administration reported on Thursday. At 1,248 Bcf, stocks were 304 Bcf less than last year at this time and 6 Bcf above the five-year average of 1,242 Bcf, EIA said.
New York Federal Reserve Bank President Timothy Geithner said capital markets are still ``substantially impaired'' and policy makers and financial industry leaders must ``act forcefully'' to stem the crisis.
Sen. Barack Obama's campaign just announced it raised more than $40 million last month from 442,000 contributors. The Obama campaign says it added more than 218,000 new contributors to its rolls last month and that it has now received money from 1.3 million people. By comparison, Clinton raised approximately $20 million in March.
Crude oil for May delivery fell $1, or 1%, to settle at $103.83 a barrel on the New York Mercantile Exchange. Gold for June delivery rose $9.40 to end at $909.60 an ounce on the New York Mercantile Exchange.
Borrowers fell behind on their car, home equity and home improvement loans in last three months of 2007 at a delinquency rate not hit since the early 1990s. The American Bankers Association reported Thursday that late payments on a group of consumer loans increased to 2.65 percent in the October-December quarter, up from 2.44 percent in the July-September quarter. It was the highest level since the first quarter of 1992, when the economy had just emerged from a recession.
Despite increased weakness in the economy, planned job cuts announced by employers fell by 26 percent in March to 53,579, down from 72,091 cuts in February, according to a report on monthly job cuts released Wednesday by global outplacement consultancy Challenger, Gray & Christmas Inc. The drop in March is similar to a decline in March 2007, when announced job cuts plunged 42 percent to an eight-month low of 48,997 from 84,014 in February, which turned out to be the largest job-cut month of the year. Last month’s job cuts were 9.4 percent higher than a year ago. Through the first quarter, job cuts totaling 200,656 are just 2.4 percent higher than the 195,986 cuts in the same period in 2007.
The number of U.S. workers applying for unemployment benefit soared by 38,000 last week, posting the highest reading since September 2005. The four-week average for jobless claims also rose by 15,750 to 374,500, the highest since the beginning of October 2005. For the week ending March 22, continuing jobless claims rose by 97,000 to 2.94 million.
Nato has confirmed it will not offer membership to Georgia or Ukraine but agreed to review the decision on the ex-Soviet republics in December.
The World Bank estimates ``that 33 countries around the world face potential social unrest because of the acute hike in food and energy prices,'' Robert Zoellick, the bank's president, said on the organization's Web site. For these countries ``there is no margin for survival,'' he said.
Rough rice for May delivery advanced to $20.26 per 100 pounds on the Chicago Board of Trade today as the United Nations' Food and Agriculture Organization said global exports will drop 3.5 percent this year as nations curb sales.
Edward Kane, a finance professor at Boston College:"On the grounds that they were helping innovative U.S. firms to compete effectively in global markets, federal supervisors refused to take on the political and practical challenge of establishing and maintaining their ability to see and to discipline complicated risk exposures."
Google is cutting about 300 jobs from the American operations of DoubleClick in the first sizable layoffs in its history. The cuts would represent about a quarter of DoubleClick’s American work force of about 1,200.
ATA Airlines canceled all flights Thursday after filing for bankruptcy as it posted advisories at ticket counters in the handful of cities it still served and sought assistance for stranded passengers. The Indianapolis-based airline, once the nation's 10th-largest, entered bankruptcy for the second time in just over three years Wednesday, this time citing the loss of a key military charter business.
Italy's Stock Exchange says it suspended Alitalia's shares after Air France-KLM quit talks with Italian unions and Alitalia's chairman Maurizio Prato resigned.
Rob Hanna:"I ran some numbers tonight looking at action immediately following up days of 3.5% or more in the S&P 500. Of the 35 instances since 1960 that my scan found, 31 of them traded lower than their thrust day close at some point in the next 5 days. (Make that 32 for 36 after Wednesday.) 18 of the 35 traded lower by 1.75% or more. What’s this tell me? The pullback today was normal. In fact, continued pullback would be normal. The last two big thrust days (3/11 and 3/18) the market fell hard and fast almost immediately. If the market can get through tomorrow without a sharp selloff, that could be a positive. It would be a change in character."
Martin Feldstein: The US has a “let the market determine the value of the dollar” policy and a “let the Fed set interest rates to reflect US economic conditions policy” and a “strong RMB” policy not a "strong dollar policy."
The U.S. office market showed the first indication of a slowdown in the first quarter as tenants occupied less space for the first time in more than four years, according to real estate research firm Reis.
ConocoPhillips says it likely produced the equivalent of 1.8 million barrels of oil every day during the first three months of the year and made more money on each than in the past; however, the company believes it made much less profit on refined products like gasoline as its refining margins got squeezed, according to a preliminary first-quarter outlook. ConocoPhillips' results from its chemical and midstream operations are also expected to be lower.
"The Great Depression," says the headline. "Food stamps are the symbol of poverty in the U.S. In the era of the credit crunch, a record 28 million Americans are now relying on them to survive - a sure sign the world's richest country faces economic crisis."
For at least 16 months after the Sept. 11 terror attacks in 2001, the Bush administration believed that the Constitution's protection against unreasonable searches and seizures on U.S. soil didn't apply to its efforts to protect against terrorism. That view was expressed in a secret Justice Department legal memo dated Oct. 23, 2001. The administration on Wednesday stressed that it now disavows that view.The October 2001 memo was written at the request of the White House by John Yoo, then the deputy assistant attorney general, and addressed to Alberto Gonzales, the White House counsel at the time. The administration had asked the department for an opinion on the legality of potential responses to terrorist activity.The 37-page memo is classified and has not been released. Its existence was disclosed Tuesday in a footnote of a separate secret memo, dated March 14, 2003, released by the Pentagon in response to a Freedom of Information Act lawsuit by the American Civil Liberties Union.
Intelligence centers run by states across the country have access to personal information about millions of Americans, including unlisted cellphone numbers, insurance claims, driver's license photographs and credit reports, according to a document obtained by The Washington Post.
Consumers fell behind on car, credit-card and home-equity loans at the highest level in 15 years during the fourth quarter, another sign the U.S. economy is slowing, according to an American Bankers Association survey. Payments at least 30 days past due increased across all eight categories of loans tracked, the Washington-based group said today in a statement. Late loans climbed 21 basis points to 2.65 percent of all accounts in a consumer-loan index created by the group.
After two straight weeks of declines, fixed mortgage rates rebounded, with the average conforming 30-year fixed mortgage rate moving up to 6.12%, according to Bankrate.com's weekly national survey of large lenders, released Thursday.
In the Seattle metro area, the restaurant sales tax is now 9.5% as of 4/1/08.
Michael Dell He said the company "will go past" its previously stated target of reducing headcount by 8,800 workers. "To be very clear, we are not satisfied with the current state of affairs," Dell told the gathering. "There are no fixed costs at Dell. Everything is being looked at."
CIT Group Inc., a troubled commercial lender which announced late last year it would stop originating private student loans, said it will stop originating government-guaranteed student loans, effective immediately.
Economic activity in the services sector improved in March but remained at a level that indicates a contraction, said the Institute for Supply Management Thursday. Its non-manufacturing index rose to 49.6%, under the level that indicates an industry is expanding, but slightly higher than February's 49.3% reading.
U.S. natural gas inventories fell for a 19th week, down 29 Billion cubic feet in the week ended March 28, Energy Information Administration reported on Thursday. At 1,248 Bcf, stocks were 304 Bcf less than last year at this time and 6 Bcf above the five-year average of 1,242 Bcf, EIA said.
New York Federal Reserve Bank President Timothy Geithner said capital markets are still ``substantially impaired'' and policy makers and financial industry leaders must ``act forcefully'' to stem the crisis.
Sen. Barack Obama's campaign just announced it raised more than $40 million last month from 442,000 contributors. The Obama campaign says it added more than 218,000 new contributors to its rolls last month and that it has now received money from 1.3 million people. By comparison, Clinton raised approximately $20 million in March.
Crude oil for May delivery fell $1, or 1%, to settle at $103.83 a barrel on the New York Mercantile Exchange. Gold for June delivery rose $9.40 to end at $909.60 an ounce on the New York Mercantile Exchange.
Borrowers fell behind on their car, home equity and home improvement loans in last three months of 2007 at a delinquency rate not hit since the early 1990s. The American Bankers Association reported Thursday that late payments on a group of consumer loans increased to 2.65 percent in the October-December quarter, up from 2.44 percent in the July-September quarter. It was the highest level since the first quarter of 1992, when the economy had just emerged from a recession.
Employment
4/3/08 Employment
United Airlines, the world's second-biggest carrier, grounded its fleet of 52 Boeing Co. 777 long-haul aircraft after missing maintenance checks. A review of maintenance records showed a test of the fire- suppression system on its 777s hadn't been performed, the Chicago-based airline said in a statement today. The equipment is now being scrutinized and the U.S. Federal Aviation Administration has been informed.
The ADP employment report indicates there is ``upside risk'' to HSBC Securities USA Inc.'s forecast that payrolls would fall by 100,000 in March, Ryan Wang, an economist at HSBC said in a note to clients.
Buyers snap up 41 units at Oakland's Eight Orchids development for up to 34 percent below asking price.
As many as 2,300 people, most of them contractors, could lose their jobs at Johnson Space Center as the shuttle fleet nears retirement in two years, NASA officials predicted Tuesday.
Monsanto earned $1.13 billion, or $2.02 per share, in the three months ended Feb. 29 from $543 million, or 98 cents per share, in the prior year. Its revenue jumped 45 percent to $3.8 billion from $2.6 billion in the prior-year period. The company said corn seed sales were a standout during the quarter, jumping to $1.7 billion from $1.2 billion during the same period a year before.
Alternative asset managers continue to hold a negative view on the S&P 500, the U.S. dollar, and the 10-year Treasury Note, according to market sentiment indicators released yesterday by Greenwich Alternative Investments. According to the indicators, 58% of hedge fund managers hold a bearish view on the S&P 500, 17% hold a neutral view, and 25% are bullish. Meanwhile, the dollar continued its slide lower in March and the majority of the hedge fund managers expect this trend to continue. In total, 58% are bearish about the U.S. currency, 17% are neutral and 25% are bullish.
In Rhode Island, the segment of the population on food stamps has risen by 18 per cent in two years. The US Department of Agriculture says the cost of feeding a low-income family of four has risen 6 per cent in 12 months. "The amount of food stamps per household hasn't gone up with the food costs," says Dayna Ballantyne, who runs a food bank in Des Moines, Iowa. "Our clients are finding they aren't able to purchase food like they used to." Join the crowd.
Cisco Systems Inc said sales of its high-end routers accelerated in the past several months despite worries that a slower U.S. economy was hurting technology spending.
Manhattan apartment sales plunged the most in 18 years last quarter as buyers faced the prospect of a recession and job cuts at Wall Street securities firms. First-quarter sales fell 34 percent from a year earlier and inventory rose 4.6 percent to 6,194 units, New York-based real estate appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said.
The outlook for U.S. growth has worsened since January and the possibility of a recession can't be ruled out, Federal Reserve Chairman Ben Bernanke said Wednesday. "It not appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly," Bernanke said in testimony prepared for the Joint Economic Committee of Congress. "Clearly, the U.S. economy is going through a very difficult period."
Bernanke: "Surveys indicate that employers have scaled back hiring plans and that jobseekers are experiencing greater difficulties finding work. The unemployment rate edged down in February and remains at a relatively low level; however, in light of the sluggishness of economic activity and other indicators of a softer labor market, I expect it to move somewhat higher in coming months."
According to the Financial Times, "China has offered export guarantee facilities worth up to $50bn to encourage investment in Nigeria in a bold strategy to woo Africa’s biggest oil producer."
Rising inflation, high gas prices and a tightening home mortgage market have driven up auto-loan delinquencies, according to Fitch Ratings, the credit-rating agency. The number of Americans who are more than 60 days late on their car loan payments rose to a 10-year high in January, Fitch recently reported, attributing the rise in late payments to “increasing pressure on the consumer” in a weakening economy.
The Commerce Department reported Wednesday that factory orders dropped by 1.3 percent in February, about double the downturn that economists had been expecting. Orders had fallen an even bigger 2.3 percent in January, the largest decline in five months. Shipments dropped by 2.1%, the most since falling 3.8% in September 2006.
Barack Obama received the endorsement of Lee Hamilton, who besides being a former Congressman from Indiana — a state with an important primary still to be held — was also the top Democrat on the 9/11 Commission and a co-chairman of the Iraq Study Group. In a statement released this morning, Mr. Hamilton said he viewed Mr. Obama, from neighboring Illinois, as a champion of ‘’the politics of consensus and not of partisan division.”
Hillary Clinton holds a 9-point lead over rival Barack Obama among likely Pennsylvania Democratic primary voters ahead of the state's April 22 primary, according to a Quinnipiac University poll.
U.S. crude inventories rose by 1.9 million barrels to 309.4 million barrels in the week ending March 28, the American Petroleum Institute reported on Wednesday. Distillate stocks fell by 96,000 barrels to 113 million barrels in the same period, while gasoline stocks dropped by 1.5 million barrels to 217.4 million barrels, the API said. Meanwhile, U.S. crude inventories rose more than expected, up 7.4 million barrels to 319.2 million barrels in the week ending March 28, U.S. Energy Information Administration reported on Wednesday. Gasoline supplies fell by 4.5 million barrels in the latest week, while distillate stocks fell by 1.6 million barrels, EIA reported.
Schering Plough plans to reduce headcount by 10 percent and the goal is to make 80 percent of the cuts by the end of 2010.
Research In Motion Ltd. said Wednesday its fiscal fourth-quarter profit and sales more than doubled as the BlackBerry maker beat expectations. For the quarter ended March 1, the Canadian company earned $412.5 million, or 72 cents per share, up from a profit of $187.4 million, or 33 cents per share, in the same period a year earlier. Revenue more than doubled to $1.88 billion from $930 million.
The Federal Reserve announced Wednesday that it will auction an additional $25 billion in super-safe Treasury securities to big investment firms, part of an effort to ease problems in credit markets.
Crude for May delivery gained $3.85, or 3.8%, to settle at $104.83 a barrel on the New York Mercantile Exchange. Gold futures for June delivery rose $12.40, or 1.4 percent, to $900.20 an ounce on the Comex division of the New York Mercantile Exchange.
Corn is the biggest U.S. crop, valued at a record $52.1 billion in 2007, with soybeans in second place at $26.8 billion, government figures show.
Homebuilders and the mortgage industry are emerging as big victors in a bipartisan agreement reached by Senate leaders on legislation designed to limit the housing crisis. The $15 billion measure, announced Wednesday by Majority Leader Harry Reid, D-Nev., and GOP leader Mitch McConnell of Kentucky, contains a $6 billion emergency tax break that would let companies use losses from 2008 and 2009 to offset profits earned over the previous four years, instead of the usual two-year timeframe.
Cisco Systems was downgraded to neutral from buy at UBS, though the broker kept its price target at $27.
The first quarter of 2008 saw widespread tightening of U.K. credit conditions, the Bank of England said in its quarterly credit conditions survey released Thursday. Lenders see further tightening over the next three months, the survey found.
The Monster Employment Index, developed by the New York online-recruitment firm, rose 2 points in March to 167 from 165 in March. The index is 10% below the year-earlier level of 185.
United Airlines, the world's second-biggest carrier, grounded its fleet of 52 Boeing Co. 777 long-haul aircraft after missing maintenance checks. A review of maintenance records showed a test of the fire- suppression system on its 777s hadn't been performed, the Chicago-based airline said in a statement today. The equipment is now being scrutinized and the U.S. Federal Aviation Administration has been informed.
The ADP employment report indicates there is ``upside risk'' to HSBC Securities USA Inc.'s forecast that payrolls would fall by 100,000 in March, Ryan Wang, an economist at HSBC said in a note to clients.
Buyers snap up 41 units at Oakland's Eight Orchids development for up to 34 percent below asking price.
As many as 2,300 people, most of them contractors, could lose their jobs at Johnson Space Center as the shuttle fleet nears retirement in two years, NASA officials predicted Tuesday.
Monsanto earned $1.13 billion, or $2.02 per share, in the three months ended Feb. 29 from $543 million, or 98 cents per share, in the prior year. Its revenue jumped 45 percent to $3.8 billion from $2.6 billion in the prior-year period. The company said corn seed sales were a standout during the quarter, jumping to $1.7 billion from $1.2 billion during the same period a year before.
Alternative asset managers continue to hold a negative view on the S&P 500, the U.S. dollar, and the 10-year Treasury Note, according to market sentiment indicators released yesterday by Greenwich Alternative Investments. According to the indicators, 58% of hedge fund managers hold a bearish view on the S&P 500, 17% hold a neutral view, and 25% are bullish. Meanwhile, the dollar continued its slide lower in March and the majority of the hedge fund managers expect this trend to continue. In total, 58% are bearish about the U.S. currency, 17% are neutral and 25% are bullish.
In Rhode Island, the segment of the population on food stamps has risen by 18 per cent in two years. The US Department of Agriculture says the cost of feeding a low-income family of four has risen 6 per cent in 12 months. "The amount of food stamps per household hasn't gone up with the food costs," says Dayna Ballantyne, who runs a food bank in Des Moines, Iowa. "Our clients are finding they aren't able to purchase food like they used to." Join the crowd.
Cisco Systems Inc said sales of its high-end routers accelerated in the past several months despite worries that a slower U.S. economy was hurting technology spending.
Manhattan apartment sales plunged the most in 18 years last quarter as buyers faced the prospect of a recession and job cuts at Wall Street securities firms. First-quarter sales fell 34 percent from a year earlier and inventory rose 4.6 percent to 6,194 units, New York-based real estate appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said.
The outlook for U.S. growth has worsened since January and the possibility of a recession can't be ruled out, Federal Reserve Chairman Ben Bernanke said Wednesday. "It not appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly," Bernanke said in testimony prepared for the Joint Economic Committee of Congress. "Clearly, the U.S. economy is going through a very difficult period."
Bernanke: "Surveys indicate that employers have scaled back hiring plans and that jobseekers are experiencing greater difficulties finding work. The unemployment rate edged down in February and remains at a relatively low level; however, in light of the sluggishness of economic activity and other indicators of a softer labor market, I expect it to move somewhat higher in coming months."
According to the Financial Times, "China has offered export guarantee facilities worth up to $50bn to encourage investment in Nigeria in a bold strategy to woo Africa’s biggest oil producer."
Rising inflation, high gas prices and a tightening home mortgage market have driven up auto-loan delinquencies, according to Fitch Ratings, the credit-rating agency. The number of Americans who are more than 60 days late on their car loan payments rose to a 10-year high in January, Fitch recently reported, attributing the rise in late payments to “increasing pressure on the consumer” in a weakening economy.
The Commerce Department reported Wednesday that factory orders dropped by 1.3 percent in February, about double the downturn that economists had been expecting. Orders had fallen an even bigger 2.3 percent in January, the largest decline in five months. Shipments dropped by 2.1%, the most since falling 3.8% in September 2006.
Barack Obama received the endorsement of Lee Hamilton, who besides being a former Congressman from Indiana — a state with an important primary still to be held — was also the top Democrat on the 9/11 Commission and a co-chairman of the Iraq Study Group. In a statement released this morning, Mr. Hamilton said he viewed Mr. Obama, from neighboring Illinois, as a champion of ‘’the politics of consensus and not of partisan division.”
Hillary Clinton holds a 9-point lead over rival Barack Obama among likely Pennsylvania Democratic primary voters ahead of the state's April 22 primary, according to a Quinnipiac University poll.
U.S. crude inventories rose by 1.9 million barrels to 309.4 million barrels in the week ending March 28, the American Petroleum Institute reported on Wednesday. Distillate stocks fell by 96,000 barrels to 113 million barrels in the same period, while gasoline stocks dropped by 1.5 million barrels to 217.4 million barrels, the API said. Meanwhile, U.S. crude inventories rose more than expected, up 7.4 million barrels to 319.2 million barrels in the week ending March 28, U.S. Energy Information Administration reported on Wednesday. Gasoline supplies fell by 4.5 million barrels in the latest week, while distillate stocks fell by 1.6 million barrels, EIA reported.
Schering Plough plans to reduce headcount by 10 percent and the goal is to make 80 percent of the cuts by the end of 2010.
Research In Motion Ltd. said Wednesday its fiscal fourth-quarter profit and sales more than doubled as the BlackBerry maker beat expectations. For the quarter ended March 1, the Canadian company earned $412.5 million, or 72 cents per share, up from a profit of $187.4 million, or 33 cents per share, in the same period a year earlier. Revenue more than doubled to $1.88 billion from $930 million.
The Federal Reserve announced Wednesday that it will auction an additional $25 billion in super-safe Treasury securities to big investment firms, part of an effort to ease problems in credit markets.
Crude for May delivery gained $3.85, or 3.8%, to settle at $104.83 a barrel on the New York Mercantile Exchange. Gold futures for June delivery rose $12.40, or 1.4 percent, to $900.20 an ounce on the Comex division of the New York Mercantile Exchange.
Corn is the biggest U.S. crop, valued at a record $52.1 billion in 2007, with soybeans in second place at $26.8 billion, government figures show.
Homebuilders and the mortgage industry are emerging as big victors in a bipartisan agreement reached by Senate leaders on legislation designed to limit the housing crisis. The $15 billion measure, announced Wednesday by Majority Leader Harry Reid, D-Nev., and GOP leader Mitch McConnell of Kentucky, contains a $6 billion emergency tax break that would let companies use losses from 2008 and 2009 to offset profits earned over the previous four years, instead of the usual two-year timeframe.
Cisco Systems was downgraded to neutral from buy at UBS, though the broker kept its price target at $27.
The first quarter of 2008 saw widespread tightening of U.K. credit conditions, the Bank of England said in its quarterly credit conditions survey released Thursday. Lenders see further tightening over the next three months, the survey found.
The Monster Employment Index, developed by the New York online-recruitment firm, rose 2 points in March to 167 from 165 in March. The index is 10% below the year-earlier level of 185.
Wednesday, April 02, 2008
Financials
4/2/08 Financials
Lehman priced a $4 billion offering of 4 million shares of 7.25% convertible preferred stock."Lehman's raise-up is unique in that it was not driven by the need to replenish capital as a result of large write-downs," Citigroup analyst Prashant Bhatia wrote. "Therefore, Lehman can be more opportunistic in putting its new capital to work in the near term."
On a conference call from a Morgan Stanley-sponsored financial services conference in London, the CFO said his firm cut its ABS CDO/subprime exposure to $1.8 billion from $10.4 billion, it cut CMBS exposure to $11.6 billion from $36.2 billion, and it cut other mortgage related exposure to $6.7 billion from $13.9 billion. Kelleher also said the the ongoing credit crisis will remain a serious problem "at least" through the end of 2008.
The financial services industry "is facing the most severe investment banking crisis in 30 years," according to a report by analysts at Morgan Stanley on Tuesday, which added earnings in the sector may take close to two years to recover.
Swiss bank UBS intends to raise 15 billion Swiss francs ($15.1 billion) in an underwriten rights issue and that its chairman Marcel Ospel will step down. UBS said that it will post a loss of around 12 billion francs in the first quarter, after taking losses and writedowns of around $19 billion related to U.S real estate and related structured credit positions. UBS also said that it will form a new unit to hold certain currently illiquid U.S. real estate assets. UBS said that it's confident that these measures will deal effectively with real estate exposure.
Deutsche Bank AG said Tuesday that it expects first-quarter write-downs of $4 billion due to "significantly more challenging" market conditions triggered by the U.S. subprime collapse.
Thornburg Mortgage, a jumbo mortgage provider that has been trying to avoid bankruptcy, raised $1.35 billion from a sale of debt and warrants to buy common stock.The Santa Fe, New Mexico-based company said it has received $1.15 billion of the proceeds, and that the other $200 million will be held in escrow until the completion of a tender offer for preferred stock. It said the new subordinated notes carry an initial interest rate of 18 percent.
Analysts at financial research firm Celent say the U.S. banking industry will lose 200,000 jobs over the next 12 to 18 months.
O'Reilly Automotive Inc.said it'll buy CSK Auto in a deal valued at $1 billion, including $500 million in debt. CSK shareholders will receive $11 of O'Reilly common stock, subject to a collar, plus $1 in cash for each share of CSK common stock.
Microsoft Corp. is standing firm and won't raise its $44.6 billion bid for Yahoo Inc., people close to the Redmond, Wash., software giant told The Wall Street Journal.
Construction spending fell again in February as home building tumbled for a record 24th straight month.The Commerce Department reported Tuesday that overall construction activity dropped 0.3 percent in February, reflecting weakness not only in home building but also in nonresidential activity. Only government building projects showed a gain in February.
Rep. Ron Paul: "These past few weeks have provided an unfortunate opportunity to discuss inflation. The dollar index has reached new all-time lows. The total money supply, M3, as calculated by private sources, is growing at a disturbing 17% rate. The Fed is pumping dollars into the economy at an alarming rate. Just recently the Fed announced new loan auctions totaling $100 billion. That is new money created from thin air. If these money auctions, combined with the bailout of Bear Stearns, continue to be the trend, we are in for some economic stormy weather. The explanation lies in understanding the basics of money, and why it is dangerous to give government and big banks control over it."
According to Washington Post, auditors say 95 major systems have exceeded their original budgets by a total of $295 billion and are generally delivered almost two years late.
The World Bank trims its 2008 growth forecast to 9.4 percent from 9.6 percent but said it should be robust enough to help drive the global economy.
With the exception of cocoa and corn, commodities were in the red across the board.
A group of investors including RSF Partners, Farallon Capital Management and Greenfield Partners said they've created a land-development joint venture to purchase properties from a unit of home builder Centex Corp.The agreement encompasses a group of 27 projects and about 8,500 residential lots in 11 states, with most of the properties located in California and Nevada. The deal price for the portfolio was $161 million, according to a press release. Centex has a 5% ownership interest in the venture, and has the option to purchase a "limited number of the lots from certain neighborhoods."
Gold for June delivery tumbled $33.70, or 3.6%, to close at $887.80 an ounce on the New York Mercantile Exchange.
Jim Farley, head of Ford Motor Co.'s marketing division, warned Tuesday that the tough climate to sell cars and trucks in the U.S. could get even worse in the coming months. "I'd like to be able to tell you that the worst behind us, but I really can't give you that assurance," he said in a conference call. "Our sense is that the next quarter, the second quarter of the year, may be our most difficult of the year." Earlier, Ford reported a 14% decline in March U.S. sales.
In the final analysis in Texas, Obama had 99 delegates to 94 for Clinton.
The Dow Jones Industrial Average climbed 391.47 points, or 3.2%, to 12,654.36. The S&P 500 climbed 47.47 points, or 3.6%, to 1,370.17, while the Nasdaq Composite rallied 83.65, or 3.7%, points to 2,362.75. In sum, it was the best beginning for the second quarter in the equity market in the last 70 years.
Crude for May delivery rose 17 cents, or 0.2%, to $101.75 a barrel in early afternooon trading. It fell to an intraday low of $99.55 earlier. Gold for June delivery tumbled $33.70, or 3.6%, to close at $887.80 an ounce on the New York Mercantile Exchange.
Jim Farley, head of Ford Motor Co.'s marketing division, warned Tuesday that the tough climate to sell cars and trucks in the U.S. could get even worse in the coming months. "I'd like to be able to tell you that the worst behind us, but I really can't give you that assurance," he said in a conference call. "Our sense is that the next quarter, the second quarter of the year, may be our most difficult of the year." Earlier, Ford reported a 14% decline in March U.S. sales.
Fannie Mae has told lenders it will require a credit score of at least 580 for most individual loans as part of the latest move to make its standards more stringent for mortgages it buys or guarantees, according to a report Wednesday in The Wall Street Journal.
Instability in financial markets does not appear to have impacted trade flows in the crude oil business to any noticeable extent, Nordic American Tanker Shipping said. Strong demand from Far Eastern and South America economies is balancing out challenges in the U.S. and elsewhere, the shipping firm said. Spot market tanker rates in January were $45,000 per day per vessel, compared to $27,000 per day per vessel in the fourth quarter. First-quarter earnings and dividends will be "appreciably" higher than the fourth quarter, with the dividend above $1 a share.
The ADP report suggests nonfarm payrolls grew by about 33,000 in March, much better that the drop of 60,000 expected by Wall Street economists. Analysts note that the ADP has overshot the employment report in each of the past four months. Joel Prakken, chairman of Macroeconomic Advisors, the firm that produces the report, said.
Best Buy said Wednesday its profit fell 3 percent to $737 million, or $1.71 per share, in the quarter ended March 1, from $763 million, or $1.55 per share last year. There were fewer shares outstanding in the most recent quarter.
Lehman priced a $4 billion offering of 4 million shares of 7.25% convertible preferred stock."Lehman's raise-up is unique in that it was not driven by the need to replenish capital as a result of large write-downs," Citigroup analyst Prashant Bhatia wrote. "Therefore, Lehman can be more opportunistic in putting its new capital to work in the near term."
On a conference call from a Morgan Stanley-sponsored financial services conference in London, the CFO said his firm cut its ABS CDO/subprime exposure to $1.8 billion from $10.4 billion, it cut CMBS exposure to $11.6 billion from $36.2 billion, and it cut other mortgage related exposure to $6.7 billion from $13.9 billion. Kelleher also said the the ongoing credit crisis will remain a serious problem "at least" through the end of 2008.
The financial services industry "is facing the most severe investment banking crisis in 30 years," according to a report by analysts at Morgan Stanley on Tuesday, which added earnings in the sector may take close to two years to recover.
Swiss bank UBS intends to raise 15 billion Swiss francs ($15.1 billion) in an underwriten rights issue and that its chairman Marcel Ospel will step down. UBS said that it will post a loss of around 12 billion francs in the first quarter, after taking losses and writedowns of around $19 billion related to U.S real estate and related structured credit positions. UBS also said that it will form a new unit to hold certain currently illiquid U.S. real estate assets. UBS said that it's confident that these measures will deal effectively with real estate exposure.
Deutsche Bank AG said Tuesday that it expects first-quarter write-downs of $4 billion due to "significantly more challenging" market conditions triggered by the U.S. subprime collapse.
Thornburg Mortgage, a jumbo mortgage provider that has been trying to avoid bankruptcy, raised $1.35 billion from a sale of debt and warrants to buy common stock.The Santa Fe, New Mexico-based company said it has received $1.15 billion of the proceeds, and that the other $200 million will be held in escrow until the completion of a tender offer for preferred stock. It said the new subordinated notes carry an initial interest rate of 18 percent.
Analysts at financial research firm Celent say the U.S. banking industry will lose 200,000 jobs over the next 12 to 18 months.
O'Reilly Automotive Inc.said it'll buy CSK Auto in a deal valued at $1 billion, including $500 million in debt. CSK shareholders will receive $11 of O'Reilly common stock, subject to a collar, plus $1 in cash for each share of CSK common stock.
Microsoft Corp. is standing firm and won't raise its $44.6 billion bid for Yahoo Inc., people close to the Redmond, Wash., software giant told The Wall Street Journal.
Construction spending fell again in February as home building tumbled for a record 24th straight month.The Commerce Department reported Tuesday that overall construction activity dropped 0.3 percent in February, reflecting weakness not only in home building but also in nonresidential activity. Only government building projects showed a gain in February.
Rep. Ron Paul: "These past few weeks have provided an unfortunate opportunity to discuss inflation. The dollar index has reached new all-time lows. The total money supply, M3, as calculated by private sources, is growing at a disturbing 17% rate. The Fed is pumping dollars into the economy at an alarming rate. Just recently the Fed announced new loan auctions totaling $100 billion. That is new money created from thin air. If these money auctions, combined with the bailout of Bear Stearns, continue to be the trend, we are in for some economic stormy weather. The explanation lies in understanding the basics of money, and why it is dangerous to give government and big banks control over it."
According to Washington Post, auditors say 95 major systems have exceeded their original budgets by a total of $295 billion and are generally delivered almost two years late.
The World Bank trims its 2008 growth forecast to 9.4 percent from 9.6 percent but said it should be robust enough to help drive the global economy.
With the exception of cocoa and corn, commodities were in the red across the board.
A group of investors including RSF Partners, Farallon Capital Management and Greenfield Partners said they've created a land-development joint venture to purchase properties from a unit of home builder Centex Corp.The agreement encompasses a group of 27 projects and about 8,500 residential lots in 11 states, with most of the properties located in California and Nevada. The deal price for the portfolio was $161 million, according to a press release. Centex has a 5% ownership interest in the venture, and has the option to purchase a "limited number of the lots from certain neighborhoods."
Gold for June delivery tumbled $33.70, or 3.6%, to close at $887.80 an ounce on the New York Mercantile Exchange.
Jim Farley, head of Ford Motor Co.'s marketing division, warned Tuesday that the tough climate to sell cars and trucks in the U.S. could get even worse in the coming months. "I'd like to be able to tell you that the worst behind us, but I really can't give you that assurance," he said in a conference call. "Our sense is that the next quarter, the second quarter of the year, may be our most difficult of the year." Earlier, Ford reported a 14% decline in March U.S. sales.
In the final analysis in Texas, Obama had 99 delegates to 94 for Clinton.
The Dow Jones Industrial Average climbed 391.47 points, or 3.2%, to 12,654.36. The S&P 500 climbed 47.47 points, or 3.6%, to 1,370.17, while the Nasdaq Composite rallied 83.65, or 3.7%, points to 2,362.75. In sum, it was the best beginning for the second quarter in the equity market in the last 70 years.
Crude for May delivery rose 17 cents, or 0.2%, to $101.75 a barrel in early afternooon trading. It fell to an intraday low of $99.55 earlier. Gold for June delivery tumbled $33.70, or 3.6%, to close at $887.80 an ounce on the New York Mercantile Exchange.
Jim Farley, head of Ford Motor Co.'s marketing division, warned Tuesday that the tough climate to sell cars and trucks in the U.S. could get even worse in the coming months. "I'd like to be able to tell you that the worst behind us, but I really can't give you that assurance," he said in a conference call. "Our sense is that the next quarter, the second quarter of the year, may be our most difficult of the year." Earlier, Ford reported a 14% decline in March U.S. sales.
Fannie Mae has told lenders it will require a credit score of at least 580 for most individual loans as part of the latest move to make its standards more stringent for mortgages it buys or guarantees, according to a report Wednesday in The Wall Street Journal.
Instability in financial markets does not appear to have impacted trade flows in the crude oil business to any noticeable extent, Nordic American Tanker Shipping said. Strong demand from Far Eastern and South America economies is balancing out challenges in the U.S. and elsewhere, the shipping firm said. Spot market tanker rates in January were $45,000 per day per vessel, compared to $27,000 per day per vessel in the fourth quarter. First-quarter earnings and dividends will be "appreciably" higher than the fourth quarter, with the dividend above $1 a share.
The ADP report suggests nonfarm payrolls grew by about 33,000 in March, much better that the drop of 60,000 expected by Wall Street economists. Analysts note that the ADP has overshot the employment report in each of the past four months. Joel Prakken, chairman of Macroeconomic Advisors, the firm that produces the report, said.
Best Buy said Wednesday its profit fell 3 percent to $737 million, or $1.71 per share, in the quarter ended March 1, from $763 million, or $1.55 per share last year. There were fewer shares outstanding in the most recent quarter.
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