5/20/06 Positioning
Whether the market is rising or falling or fairly stagnant, it is mandatory to position oneself properly. Each idividual has his/her tolerance for risk. Remember- the first rule is to limit loss to the minimum and thereby protect your nest egg. Google is not for everyone nor is a U.S. Treasury bond. The second rule is to understand your investment. I promise you that the large investment houses do not fully comprehend their trading in derivatives. They are an accident waiting to happen, and can carry many innocent investors out with them. Here is a small snippet from the Financial Times: "The recent sharp falls in stock markets appear to have been exacerbated by an unusual wave of derivatives activity on the part of hedge funds and big banks, traders yesterday indicated."
Please do not play the game of predicting a bottom or the next bounce. It is a foolhardy as predicting a top to copper. This week commodity prices had their biggest weekly drop in more than 25 years, led by metals and grains. Gold dropped about $100. Crude declined to a 6-week low. These are declines in long-term bull markets. Treasury bonds had a rally in a bear market.
It doesn't matter how many Fed governors call for a pause. The Fed does not control long-term interest rates. We depend on foreign capital.
Bloomberg noted "The global derivatives market expanded to a record $298 trillion in the second half of 2005, led by a 34 percent increase in contracts to insure debt payments, the Bank for International Settlements said... Credit-default swaps rose to $13.7 trillion..."
Make no mistake. Derivatives are the ultimate weapon of mass destruction in financial markets.
A deputy governor of Sweden's Riksbank, Lars Nyberg, said it will soon be time to take the next step towards a less expansionary monetary policy.
He said the expansionary monetary policy can still be seen in, for example, growing credit facilities as well as rising house prices, which now appears to have spread to the commercial property market."The economic indicators and inflation prospects imply it will soon be time to take the next step towards less expansionary monetary policy... in line with market expectations," Nyberg said.
Maybe the Fed and our financial institutions will arrive at the same consclusion as did the Riksbank --- before it's too late.
Saturday, May 20, 2006
Thursday, May 18, 2006
More Spending
5/19/06 More Spending
In a close vote at 1am early Thursday morning, the House passed a $2.7 trillion spending bill.
The measure calls for increasing military spending by 7 percent, to nearly $558 billion in 2007, a figure that includes $50 billion for military operations in Iraq and Afghanistan. The package would essentially freeze or cut spending on most domestic discretionary programs, including education, energy and national parks, and it calls for trimming $6.8 billion over five years from entitlement programs like Medicaid and farm subsidies. The plan would raise the debt ceiling by $653 billion, to $9.6 trillion, and it assumes that the shortfall next year will be $348 billion, about what it is likely to be in 2006.
The laugh of the week: FBI agents began digging on a farm in Milford Township late Wednesday looking for fresh clues in the 1975 disappearance of former Teamsters boss Jimmy Hoffa.
Factory activity expanded for the 11th straight month in the Philadelphia region in May, the Philadelphia Federal Reserve Bank said Thursday. The Philly Fed's business outlook survey rose to 14.4 from 13.2 in April.
Richard Daughty: "Nowadays, "growth" in GDP is created only by increasing debt, which creates new money, which increases prices, which is also a measure of an increase in GDP, and then the inflation that produced the higher prices (and thus the higher GDP) is ignored, making it look like the economy "grew."
In a smart move, a MarketSafeSM Gold Bullion CD from EverBank® is now available.
June natural gas dropped to $5.88 per million British thermal units, its lowest level since late Jan. 2005 after the Energy Department said natural-gas inventories rose 91 billion cubic feet for the week ended May 12.
The Conference Board reported that the Composite Index of Leading Economic Indicators declined 0.1% in April, following a 0.4% rise in March and a 0.4% decline in February. Says Ken Goldstein, Labor Economist at The Conference Board: "The economy is cooling off from the torrid pace of the first quarter. The composite index of Coincident Economic Indicators increased again in April,an indication that the economy carried some forward momentum into the early part of the second quarter. The Leading Economic Indicators, however, edged lower in April. This latest decline, combined with some earlier softening,suggests growth in the third quarter may be slower. With the price of a barrel of oil still around $70, and with interest rates slowly rising, the economy isn't likely to be picking up steam."
Three of the ten indicators that make up the leading index increased in April. The positive contributors -- beginning with the largest positive contributor -- were vendor performance, stock prices, and interest rate spread. The negative contributors -- beginning with the largest negative contributor -- were building permits,manufacturers' new orders for nondefense capital goods, index of consumer expectations, average weekly initial claims for unemployment insurance(inverted), real money supply, and manufacturers' new orders for consumer goods and materials. The average weekly manufacturing hours held steady in April.
In early Thursday trading treasury yields dropped significantly. For example, the 10-year declined to 5.08% from 5.16% and the 30-year from 5.29% to 5.21%. Has anything changed from a fundamental basis? Richmond Fed President Jeffrey Lacker stated ``the inflation outlook is at the borderline of acceptable and perhaps moving beyond. In circumstances like that, containing inflation has to be the primary focus.'' I would continue to avoid the U.S. Treasury market. Why? I think rates will continue to rise and I believe the dollar will continue to fall in value against other major currencies.
More than one billion people in the world have access to the Internet, with a quarter of them with broadband, or high-speed connections, according to a survey.
The report by the firm eMarketer said the milestone of one billion was reached in late 2005, and that nearly 250 million households had broadband connections. The firm estimates that of these people, 845 million use the Internet regularly. It's time for me to focus some attention on the long-term potential for Yahoo and eBay as shares of both are out of favor.
Venezuela's national assembly approved a reform of the organic hydrocarbons law that hikes the royalty rate for all crude exploration and production projects, in some cases doubling the existing rate.
No global warming? According to earthfiles.com, "6,298 Glaciers Are Melting At Unprecedented Rate of 7% Ice Loss Per Year."
June gold closed at $680.90, down $10.90. July silver dropped 72 cents, or 5.4%, to close at a three-week low of $12.52 an ounce. July platinum fell 1.4% and June palladium lost 2.8%. But July copper gained 3.95 cents to close at $3.711 a pound.
Bay Area home sales in April dropped to their lowest level in five years while prices slowly reached a new peak, according to a report on Wednesday.
In the nine-county Bay Area region, 8,358 new and resale houses and condos were sold in April, according to DataQuick Information Systems. That was down more than 14 percent from 9,745 for March, and down just over 25 percent from 11,158 a year ago.
St. Louis Fed president William Poole: "The risks on the inflation side are tilted to the upside,"
Dell Inc. will start using chips from Advanced Micro Devices Inc. in its high-end server product line later this year, both companies said in separate statements late Thursday. This marks the first time Dell has used chips from AMD in its products.
President Bush will nominate Federal Reserve Gov. Donald Kohn to serve as the central bank's vice chairman, the White House announced Thursday. As I have stated so often, Kohn was my choice to take over after Greenspan retired.
Japan's economy grew at an annual 1.9 percent pace in the three months ended March 31, the Cabinet Office said today in Tokyo. The median forecast of 28 economists was for the economy to grow at a 1.1 percent pace. The yen rallied after release of this news.
Symantec sued Microsoft and wants to prevent the release of the Vista operating system. According to the complaint, Microsoft has rewritten the volume management software for its next version of Windows in ways that were not allowed under the licence between the two companies.They used it to develop a rival product, said a spokesperson for Symantec.
Douglas V. Gnazzo: "At its present rate of expansion the current account outcome is headed for $1 TRILLION for the year. Total indebtedness in the United States now amounts to $40 trillion. At interest rates of 5%, this requires annual financing costs of approximately $2 trillion. Real disposable income edged up by 1.4% in 2005, while spending increased 3.5%." If you were a foreigner holding dollars and/or dollar denominated assets, would you be worried?
In a close vote at 1am early Thursday morning, the House passed a $2.7 trillion spending bill.
The measure calls for increasing military spending by 7 percent, to nearly $558 billion in 2007, a figure that includes $50 billion for military operations in Iraq and Afghanistan. The package would essentially freeze or cut spending on most domestic discretionary programs, including education, energy and national parks, and it calls for trimming $6.8 billion over five years from entitlement programs like Medicaid and farm subsidies. The plan would raise the debt ceiling by $653 billion, to $9.6 trillion, and it assumes that the shortfall next year will be $348 billion, about what it is likely to be in 2006.
The laugh of the week: FBI agents began digging on a farm in Milford Township late Wednesday looking for fresh clues in the 1975 disappearance of former Teamsters boss Jimmy Hoffa.
Factory activity expanded for the 11th straight month in the Philadelphia region in May, the Philadelphia Federal Reserve Bank said Thursday. The Philly Fed's business outlook survey rose to 14.4 from 13.2 in April.
Richard Daughty: "Nowadays, "growth" in GDP is created only by increasing debt, which creates new money, which increases prices, which is also a measure of an increase in GDP, and then the inflation that produced the higher prices (and thus the higher GDP) is ignored, making it look like the economy "grew."
In a smart move, a MarketSafeSM Gold Bullion CD from EverBank® is now available.
June natural gas dropped to $5.88 per million British thermal units, its lowest level since late Jan. 2005 after the Energy Department said natural-gas inventories rose 91 billion cubic feet for the week ended May 12.
The Conference Board reported that the Composite Index of Leading Economic Indicators declined 0.1% in April, following a 0.4% rise in March and a 0.4% decline in February. Says Ken Goldstein, Labor Economist at The Conference Board: "The economy is cooling off from the torrid pace of the first quarter. The composite index of Coincident Economic Indicators increased again in April,an indication that the economy carried some forward momentum into the early part of the second quarter. The Leading Economic Indicators, however, edged lower in April. This latest decline, combined with some earlier softening,suggests growth in the third quarter may be slower. With the price of a barrel of oil still around $70, and with interest rates slowly rising, the economy isn't likely to be picking up steam."
Three of the ten indicators that make up the leading index increased in April. The positive contributors -- beginning with the largest positive contributor -- were vendor performance, stock prices, and interest rate spread. The negative contributors -- beginning with the largest negative contributor -- were building permits,manufacturers' new orders for nondefense capital goods, index of consumer expectations, average weekly initial claims for unemployment insurance(inverted), real money supply, and manufacturers' new orders for consumer goods and materials. The average weekly manufacturing hours held steady in April.
In early Thursday trading treasury yields dropped significantly. For example, the 10-year declined to 5.08% from 5.16% and the 30-year from 5.29% to 5.21%. Has anything changed from a fundamental basis? Richmond Fed President Jeffrey Lacker stated ``the inflation outlook is at the borderline of acceptable and perhaps moving beyond. In circumstances like that, containing inflation has to be the primary focus.'' I would continue to avoid the U.S. Treasury market. Why? I think rates will continue to rise and I believe the dollar will continue to fall in value against other major currencies.
More than one billion people in the world have access to the Internet, with a quarter of them with broadband, or high-speed connections, according to a survey.
The report by the firm eMarketer said the milestone of one billion was reached in late 2005, and that nearly 250 million households had broadband connections. The firm estimates that of these people, 845 million use the Internet regularly. It's time for me to focus some attention on the long-term potential for Yahoo and eBay as shares of both are out of favor.
Venezuela's national assembly approved a reform of the organic hydrocarbons law that hikes the royalty rate for all crude exploration and production projects, in some cases doubling the existing rate.
No global warming? According to earthfiles.com, "6,298 Glaciers Are Melting At Unprecedented Rate of 7% Ice Loss Per Year."
June gold closed at $680.90, down $10.90. July silver dropped 72 cents, or 5.4%, to close at a three-week low of $12.52 an ounce. July platinum fell 1.4% and June palladium lost 2.8%. But July copper gained 3.95 cents to close at $3.711 a pound.
Bay Area home sales in April dropped to their lowest level in five years while prices slowly reached a new peak, according to a report on Wednesday.
In the nine-county Bay Area region, 8,358 new and resale houses and condos were sold in April, according to DataQuick Information Systems. That was down more than 14 percent from 9,745 for March, and down just over 25 percent from 11,158 a year ago.
St. Louis Fed president William Poole: "The risks on the inflation side are tilted to the upside,"
Dell Inc. will start using chips from Advanced Micro Devices Inc. in its high-end server product line later this year, both companies said in separate statements late Thursday. This marks the first time Dell has used chips from AMD in its products.
President Bush will nominate Federal Reserve Gov. Donald Kohn to serve as the central bank's vice chairman, the White House announced Thursday. As I have stated so often, Kohn was my choice to take over after Greenspan retired.
Japan's economy grew at an annual 1.9 percent pace in the three months ended March 31, the Cabinet Office said today in Tokyo. The median forecast of 28 economists was for the economy to grow at a 1.1 percent pace. The yen rallied after release of this news.
Symantec sued Microsoft and wants to prevent the release of the Vista operating system. According to the complaint, Microsoft has rewritten the volume management software for its next version of Windows in ways that were not allowed under the licence between the two companies.They used it to develop a rival product, said a spokesperson for Symantec.
Douglas V. Gnazzo: "At its present rate of expansion the current account outcome is headed for $1 TRILLION for the year. Total indebtedness in the United States now amounts to $40 trillion. At interest rates of 5%, this requires annual financing costs of approximately $2 trillion. Real disposable income edged up by 1.4% in 2005, while spending increased 3.5%." If you were a foreigner holding dollars and/or dollar denominated assets, would you be worried?
Wednesday, May 17, 2006
Remote
5/18/06 Remote
The headline news was that the Nasdaq had a sharp drop and was now negative for the year. Not to be completely outdone, trading curbs were in place yesterday morning and the S&P 500 declined to its lowest point in 3 motnhs. Maybe that wasn't the most important news. Let's consider this:
John Snow: "The prospect is 'remote' for a sudden dollar drop." Now, why out of the blue, would Snow make such a statement? I strongly suggest you give this some important thought. In early trading yesterday, the dollar index was at 83.70, right at a 13 month low. The CPI came out and indicated inflation was alive and well -- only a surprise to those with their head up their rear end. Interest rates immediately rose and the 10-year Treasury traded up to a 5.18% yield and the 30-year up to 5.29%. Gold had been up about $20 and then lost that gain. However, as the Nasdaq and the Dow were getting slammed, the dollar index rallied up to 84.75, a huge move in 2 1/2 hours. Some might say because there was noise from euroland that the recent strength in the euro would hurt exports. The euro over a year ago was much stronger and exports were not hurt. Was it short covering? We need to watch the dollar index carefully.
As interest rates rose, there was a greater notion that the Fed would raise again at the next meeting. Housing stocks got hit again. The sentiment was so bearish that, some of these June puts were10 points out of the money, and had my name on them. I want people to sleep at night with this insurance.
Are things in housing that bad? Meritage Homes Corp. Chief Executive Steven Hilton on Wednesday said that, in spite of slowing housing markets, the home builder will meet its 2006 profit forecast between $11.25 and $11.50 a share, up from $8.88 a share in 2005. Speaking at the company's annual investor conference, Hilton said the company expects to offset lower orders by expanding its community count. Despite some markets softening, he noted the long-term outlook for home builders is positive, citing immigration, retiree migration, job-income growth, more baby boomers purchasing vacation homes, and supply constraints due to entitlement delays and no-growth attitudes in some neighborhoods. The stock sells around $59+ and the June 50 puts are trading for 35 cents.
Japan is holding less dollars than at any point in the last two years. That is a smart decision.
Petroleum deliveries for April were down 1.5% from a year earlier, the API said. Refinery utilization averaged 87.7% in April, down from 92.6% in the year-ago period, it said. The API also pointed out that with the transition this spring to a greater use of ethanol in gasoline, "more inventory is likely to appear as 'blending components' rather than as 'finished gasoline," because ethanol is typically blended into gasoline as the product leaves the terminal for the retail outlets.
Jon Markman points out that, according to Ned Davis Research data, since 1950, the market has lost 3.5% during the period from April 30 to Sept. 30 during midterm election years, versus a gain of 0.9% in the period in all years and a gain of 5.6% in the other half of the year -- Sept. 30 to April 30.
In April, Turkmenistan signed a deal to supply China with 30 billion cubic meters of gas per year from 2009 to 2039. "Even if many analysts doubt Turkmenistan's ability to meet this contract, that deal evokes the contradictions inherent in China's transitional phase," the Washington-based Jamestown Foundation said in a report. "In its substance it evokes the old approach: China subsidizing dictators by paying for pipelines as well as for gas and trying to knock prices down while tying up the producer for 30 years."
For well over a year, I have been writing about the global energy deals that China and India made and are making. I spent a good deal of time writing about Kazakhstan, a key long-term energy supplier. Not once did I write that the U.S. was a participant in any of these deals. Why? No one wants to do business with Bush and Cheney and few want our dollars. The polls indicate the American public has had with this crew. Now it's time to finish the job in the elections to be held this year. It's nothing personal. We just should not be represented by inept leaders, and that is being mild.
The majority of homes sold in the United States are too expensive for a family with the median income, the National Association of Home Builders and Wells Fargo said Wednesday. The housing opportunity index rose to 41.3% in the first quarter from a record low 41% in the fourth quarter, meaning that 41.3% of homes sold were affordable for a family earning the median income. Prices of homes sold fell $4,000 to $250,000 while interest rates rose to 6.39% from 6.21%. The median household income rose to $59,600 from $58,000.
Average weekly earnings rose by 4.1 percent, seasonally adjusted, from April 2005 to April 2006. After deflation by the CPI-W, average weekly earnings increased by 0.4 percent.
There is no denying that rising inflation presents problems for all areas of our society. At the same point, a greater emphasis needs to be placed on the fact that foreign purchases of U.S. Treasury bonds hit a 3-year low in March, the latest figures that are available. I see a continuation of this trend and it spells trouble -- big trouble. We are dependent on foreign capital to fund our growing deficits.
Thomas Jefferson: "Ignorance is preferable to error, and he is less remote from the truth who believes nothing than he who believes what is wrong."
The headline news was that the Nasdaq had a sharp drop and was now negative for the year. Not to be completely outdone, trading curbs were in place yesterday morning and the S&P 500 declined to its lowest point in 3 motnhs. Maybe that wasn't the most important news. Let's consider this:
John Snow: "The prospect is 'remote' for a sudden dollar drop." Now, why out of the blue, would Snow make such a statement? I strongly suggest you give this some important thought. In early trading yesterday, the dollar index was at 83.70, right at a 13 month low. The CPI came out and indicated inflation was alive and well -- only a surprise to those with their head up their rear end. Interest rates immediately rose and the 10-year Treasury traded up to a 5.18% yield and the 30-year up to 5.29%. Gold had been up about $20 and then lost that gain. However, as the Nasdaq and the Dow were getting slammed, the dollar index rallied up to 84.75, a huge move in 2 1/2 hours. Some might say because there was noise from euroland that the recent strength in the euro would hurt exports. The euro over a year ago was much stronger and exports were not hurt. Was it short covering? We need to watch the dollar index carefully.
As interest rates rose, there was a greater notion that the Fed would raise again at the next meeting. Housing stocks got hit again. The sentiment was so bearish that, some of these June puts were10 points out of the money, and had my name on them. I want people to sleep at night with this insurance.
Are things in housing that bad? Meritage Homes Corp. Chief Executive Steven Hilton on Wednesday said that, in spite of slowing housing markets, the home builder will meet its 2006 profit forecast between $11.25 and $11.50 a share, up from $8.88 a share in 2005. Speaking at the company's annual investor conference, Hilton said the company expects to offset lower orders by expanding its community count. Despite some markets softening, he noted the long-term outlook for home builders is positive, citing immigration, retiree migration, job-income growth, more baby boomers purchasing vacation homes, and supply constraints due to entitlement delays and no-growth attitudes in some neighborhoods. The stock sells around $59+ and the June 50 puts are trading for 35 cents.
Japan is holding less dollars than at any point in the last two years. That is a smart decision.
Petroleum deliveries for April were down 1.5% from a year earlier, the API said. Refinery utilization averaged 87.7% in April, down from 92.6% in the year-ago period, it said. The API also pointed out that with the transition this spring to a greater use of ethanol in gasoline, "more inventory is likely to appear as 'blending components' rather than as 'finished gasoline," because ethanol is typically blended into gasoline as the product leaves the terminal for the retail outlets.
Jon Markman points out that, according to Ned Davis Research data, since 1950, the market has lost 3.5% during the period from April 30 to Sept. 30 during midterm election years, versus a gain of 0.9% in the period in all years and a gain of 5.6% in the other half of the year -- Sept. 30 to April 30.
In April, Turkmenistan signed a deal to supply China with 30 billion cubic meters of gas per year from 2009 to 2039. "Even if many analysts doubt Turkmenistan's ability to meet this contract, that deal evokes the contradictions inherent in China's transitional phase," the Washington-based Jamestown Foundation said in a report. "In its substance it evokes the old approach: China subsidizing dictators by paying for pipelines as well as for gas and trying to knock prices down while tying up the producer for 30 years."
For well over a year, I have been writing about the global energy deals that China and India made and are making. I spent a good deal of time writing about Kazakhstan, a key long-term energy supplier. Not once did I write that the U.S. was a participant in any of these deals. Why? No one wants to do business with Bush and Cheney and few want our dollars. The polls indicate the American public has had with this crew. Now it's time to finish the job in the elections to be held this year. It's nothing personal. We just should not be represented by inept leaders, and that is being mild.
The majority of homes sold in the United States are too expensive for a family with the median income, the National Association of Home Builders and Wells Fargo said Wednesday. The housing opportunity index rose to 41.3% in the first quarter from a record low 41% in the fourth quarter, meaning that 41.3% of homes sold were affordable for a family earning the median income. Prices of homes sold fell $4,000 to $250,000 while interest rates rose to 6.39% from 6.21%. The median household income rose to $59,600 from $58,000.
Average weekly earnings rose by 4.1 percent, seasonally adjusted, from April 2005 to April 2006. After deflation by the CPI-W, average weekly earnings increased by 0.4 percent.
There is no denying that rising inflation presents problems for all areas of our society. At the same point, a greater emphasis needs to be placed on the fact that foreign purchases of U.S. Treasury bonds hit a 3-year low in March, the latest figures that are available. I see a continuation of this trend and it spells trouble -- big trouble. We are dependent on foreign capital to fund our growing deficits.
Thomas Jefferson: "Ignorance is preferable to error, and he is less remote from the truth who believes nothing than he who believes what is wrong."
Tuesday, May 16, 2006
Analysis
5/17/06 Analysis
By now we know that the April PPI rose 0.8% and the core rate (ex food and energy) only 0.1%.
When analyzing a business, the core rate means nothing. Take Wal-Mart. They are concerned about the impact high energy costs are having on their customers. BJ Wholesale explained their margins were reduced due to higher gas prices. I can give example after example. However, the bond market chose to focus soley on the core rate and interest rates declined for the second consecutive day. Do you really think all businesses can pass increased costs on to their customers? If you do, I think you should trade in the bond pits.
The stock market took a very negative view of the housing numbers. In April, starts declined by 7.4%, the weakest monthly number since November 2004, and permits dropped by 5.4%. Some brokerage firms lowered their earnings estimates for various housing stocks. I think the lower housing starts and permits are good for the industry. Inventory levels need to be reduced, and when they do, bids for homes will once again reach the offering side of the market. KB Homes recently dropped about 8 points in price down to $65+ a share. Starting tomorrow, there are 22 trading days until June options expire. The June $45 KB Homes puts are selling for 20 to 25 cents. The stock has to decline about 50 cents a day on average for those puts to be worth a penny. There is plenty of fear in this group; however, even with Microsoft dropping to a new 52-week low and breaking $23 on the downside, the Microsoft June $22.50
puts are trading around 25 cents.
Marketwatch reported that Medtronic Inc. yesterday said clinical results from two studies show that its Endeavor drug-eluting coronary stent continues to provide significant and sustained efficacy and safety over time, with low rates of repeat procedures and no observations of late-stent thrombosis. The Endeavor stent received CE Mark approval in July 2005, and is not yet approved for use in the United States. The Minneapolis-based medical device company said it filed its first pre-market approval module with the Food and Drug Administration in October 2005, and remains on track for PMA approval in 2007. Medtronic presented the data at the Paris Course on Revascularization.
New research from the NationalInstitute on Aging (NIA) demonstrates that natural compounds available inWild Blueberries increased lifespan and slowed aging-related declines in awhole organism. Working with elegans, an invertebrate model ofmicroscopic-sized worms in a family called nematodes, the study examinedthe effects of Wild Blueberry polyphenols on lifespan and aging (AgingCell, 5(1): 59-68, February 2006). According to the study published by Mark Wilson, MS and collaborators,"This is a significant finding that lends support to previous experimentson cultured cells or short-term rodent studies showing beneficial effectsin aging-related declines and stress resistance...and thus represents asignificant advance in the study of the biological effects of naturalcompounds." Nematodes represent a common in vivo model for studying agingand longevity. Certain aspects of aging are similar between nematodes andmammals, including humans. There is evidence that Wild Blueberry compoundsmay impact cell signaling and gene expression working beyond their directantioxidant effect by reducing stress signals. Cellular stress andinflammation are related to many diseases of aging including heart disease,cancer and neurodegenerative diseases.
I would like to add one more thought to the PPI. Those expecting inflation to moderate might consider that, at the earlier stages of processing, prices for intermediate goods moved up 0.9 percent in April, after edging down 0.1 percent in the prior month, while the crude goods index increased 1.2 percent, following a 2.7-percent decrease in March. One month does not make a trend; however, these figures cannot be dismissed.
Apple dropped 4% yesterday to just below the $65 level. Several market sources cited a bearish report by broker/deal research firm Off the Record Research. A total of 71,696 calls and 79,462 puts changed hands in Apple across the U.S. options market, above its average daily volume of 117,806 contracts, according to Track Data. The May options expire this Friday and recently Apple has declined about 9 points. Apple was not alone. Microsoft, Dell, and eBay made new 52-week lows as did D.R. Horton. KB Homes came within a fraction of a point of a new 52-week low.
Lazy Days, a large privately held retailer of recreational vehicles, reported lower first-quarter sales. But an analyst noted Tuesday that demand for motor homes could be stronger than it appears, based on sales of used vehicles. "Given its size, we believe Lazy Days serves as a proxy for industry retail trends," Baird U.S. Equity Research analyst Craig Kennison said in a note to investors Tuesday.
The company registered a 3 percent drop in first-quarter revenue, as a 3 percent increase in sales of used vehicles was more than offset by a 7 percent decline in new vehicle sales, according to Kennison.
Lazy Days, based in Tampa, Fla., is a major retailer for manufacturers Monaco Coach Corp., Winnebago Industries Inc. and Thor Corp.
Venezuela is considering selling its fleet of 21 U.S.-made F-16 fighter jets to another country, perhaps Iran, in response to a U.S. ban on arms sales to President Hugo Chavez's government, a military official said Tuesday.
Matrix Research upgraded Cascade Natural Gas from neutral to a strong buy.
Marsoft: "After a brief rally in the fourth quarter of 2005, dry bulk freight rates fell anew in the first quarter of 2006, with spot rates tumbling to their lowest levels since early 2003. Period charter rates have followed much the same path as spot rates over the past year, with one-year TC rates generally falling by about 50% compared to their early 2005 peaks.
Cape rates fell back significantly in early 2006, though they remained well above their average level of the past 25 years. For our benchmark Tubarao/Rotterdam iron ore voyage, we estimate that earnings fell from $49,000 per day in late 2005 to an average of $38,000 per day in the first quarter of 2006, the lowest level since mid-2003.
Panamax spot rates on our benchmark USG/Japan grain route fell by nearly 20% in $/tonne terms during the first quarter of 2006, but after accounting for a 7% rise in bunker costs, earnings declined by a steeper 30%, from $23,000 per day in late 2005 to just $16,000 per day in early 2006, their lowest level in three years. Meanwhile, Panamax one-year TC rates declined for a fourth consecutive quarter, tumbling from $19,000 per day in the final quarter of 2005 to just below $17,000 per day in the first quarter of 2006.
Handy and Handymax spot rates also fell by about 30% in the first quarter of 2006. On our benchmark transatlantic roundtrip voyage, we estimate that earnings for a 51,000 dwt Handymax fell from $20,000 per day to $14,000 per day, while small Handy rates for the same trip dropped from $14,000 per day to $9,000 per day."
Russian President Putin: "The Rouble must become a more widespread means of international transactions. To this end, we need to open a stock exchange in Russia to trade in oil, gas, and other goods to be paid for in Roubles." Please don't dismiss this thought. It sounds similar to the Iranian oil bourse.
This morning the British pound rose as high as $1.9003 from $1.8859. The euro and yen also advanced against the dollar ahead of U.S. CPI figures later in the session. Gold and copper had big gains as well. It is no coincidence that the CPI will be released early today.
Xstrata, the UK-listed mining group, launched a US$14.6bn unsolicited bid for Canadian nickel miner Falconbridge.
According to the latest Post/ABC survey, Bush's disapproval rating among Republicans has nearly doubled, from 16 percent to 30 percent, in the past month while his approval rating dipped below 70 percent for the first time. Public dissatisfaction with Bush has grown in lockstep with opposition to the conflict in Iraq. Not quite a third — 32 percent — said they approve of the way Bush is handling Iraq, down five points in the past month and a new low in Post-ABC polling. About a third say Iraq has been worth the cost, the lowest level of support recorded in Post-ABC polls. Two in three Americans believe the war has not been worth it, a view shared by eight in 10 Democrats, seven in 10 independents and a third of all Republicans.
More than 180 000 people were evacuated from coastal areas of southern China Wednesday as Typhoon Chanchu, the strongest storm to hit the region at this time of year, churned towards the mainland and Hong Kong.
The rain appears to have finally stopped in New England.
Applications for mortgage loans at major banks rose by 4.6% last week, the Mortgage Bankers Association said Wednesday. Applications are down 14.7% from a year ago.
By now we know that the April PPI rose 0.8% and the core rate (ex food and energy) only 0.1%.
When analyzing a business, the core rate means nothing. Take Wal-Mart. They are concerned about the impact high energy costs are having on their customers. BJ Wholesale explained their margins were reduced due to higher gas prices. I can give example after example. However, the bond market chose to focus soley on the core rate and interest rates declined for the second consecutive day. Do you really think all businesses can pass increased costs on to their customers? If you do, I think you should trade in the bond pits.
The stock market took a very negative view of the housing numbers. In April, starts declined by 7.4%, the weakest monthly number since November 2004, and permits dropped by 5.4%. Some brokerage firms lowered their earnings estimates for various housing stocks. I think the lower housing starts and permits are good for the industry. Inventory levels need to be reduced, and when they do, bids for homes will once again reach the offering side of the market. KB Homes recently dropped about 8 points in price down to $65+ a share. Starting tomorrow, there are 22 trading days until June options expire. The June $45 KB Homes puts are selling for 20 to 25 cents. The stock has to decline about 50 cents a day on average for those puts to be worth a penny. There is plenty of fear in this group; however, even with Microsoft dropping to a new 52-week low and breaking $23 on the downside, the Microsoft June $22.50
puts are trading around 25 cents.
Marketwatch reported that Medtronic Inc. yesterday said clinical results from two studies show that its Endeavor drug-eluting coronary stent continues to provide significant and sustained efficacy and safety over time, with low rates of repeat procedures and no observations of late-stent thrombosis. The Endeavor stent received CE Mark approval in July 2005, and is not yet approved for use in the United States. The Minneapolis-based medical device company said it filed its first pre-market approval module with the Food and Drug Administration in October 2005, and remains on track for PMA approval in 2007. Medtronic presented the data at the Paris Course on Revascularization.
New research from the NationalInstitute on Aging (NIA) demonstrates that natural compounds available inWild Blueberries increased lifespan and slowed aging-related declines in awhole organism. Working with elegans, an invertebrate model ofmicroscopic-sized worms in a family called nematodes, the study examinedthe effects of Wild Blueberry polyphenols on lifespan and aging (AgingCell, 5(1): 59-68, February 2006). According to the study published by Mark Wilson, MS and collaborators,"This is a significant finding that lends support to previous experimentson cultured cells or short-term rodent studies showing beneficial effectsin aging-related declines and stress resistance...and thus represents asignificant advance in the study of the biological effects of naturalcompounds." Nematodes represent a common in vivo model for studying agingand longevity. Certain aspects of aging are similar between nematodes andmammals, including humans. There is evidence that Wild Blueberry compoundsmay impact cell signaling and gene expression working beyond their directantioxidant effect by reducing stress signals. Cellular stress andinflammation are related to many diseases of aging including heart disease,cancer and neurodegenerative diseases.
I would like to add one more thought to the PPI. Those expecting inflation to moderate might consider that, at the earlier stages of processing, prices for intermediate goods moved up 0.9 percent in April, after edging down 0.1 percent in the prior month, while the crude goods index increased 1.2 percent, following a 2.7-percent decrease in March. One month does not make a trend; however, these figures cannot be dismissed.
Apple dropped 4% yesterday to just below the $65 level. Several market sources cited a bearish report by broker/deal research firm Off the Record Research. A total of 71,696 calls and 79,462 puts changed hands in Apple across the U.S. options market, above its average daily volume of 117,806 contracts, according to Track Data. The May options expire this Friday and recently Apple has declined about 9 points. Apple was not alone. Microsoft, Dell, and eBay made new 52-week lows as did D.R. Horton. KB Homes came within a fraction of a point of a new 52-week low.
Lazy Days, a large privately held retailer of recreational vehicles, reported lower first-quarter sales. But an analyst noted Tuesday that demand for motor homes could be stronger than it appears, based on sales of used vehicles. "Given its size, we believe Lazy Days serves as a proxy for industry retail trends," Baird U.S. Equity Research analyst Craig Kennison said in a note to investors Tuesday.
The company registered a 3 percent drop in first-quarter revenue, as a 3 percent increase in sales of used vehicles was more than offset by a 7 percent decline in new vehicle sales, according to Kennison.
Lazy Days, based in Tampa, Fla., is a major retailer for manufacturers Monaco Coach Corp., Winnebago Industries Inc. and Thor Corp.
Venezuela is considering selling its fleet of 21 U.S.-made F-16 fighter jets to another country, perhaps Iran, in response to a U.S. ban on arms sales to President Hugo Chavez's government, a military official said Tuesday.
Matrix Research upgraded Cascade Natural Gas from neutral to a strong buy.
Marsoft: "After a brief rally in the fourth quarter of 2005, dry bulk freight rates fell anew in the first quarter of 2006, with spot rates tumbling to their lowest levels since early 2003. Period charter rates have followed much the same path as spot rates over the past year, with one-year TC rates generally falling by about 50% compared to their early 2005 peaks.
Cape rates fell back significantly in early 2006, though they remained well above their average level of the past 25 years. For our benchmark Tubarao/Rotterdam iron ore voyage, we estimate that earnings fell from $49,000 per day in late 2005 to an average of $38,000 per day in the first quarter of 2006, the lowest level since mid-2003.
Panamax spot rates on our benchmark USG/Japan grain route fell by nearly 20% in $/tonne terms during the first quarter of 2006, but after accounting for a 7% rise in bunker costs, earnings declined by a steeper 30%, from $23,000 per day in late 2005 to just $16,000 per day in early 2006, their lowest level in three years. Meanwhile, Panamax one-year TC rates declined for a fourth consecutive quarter, tumbling from $19,000 per day in the final quarter of 2005 to just below $17,000 per day in the first quarter of 2006.
Handy and Handymax spot rates also fell by about 30% in the first quarter of 2006. On our benchmark transatlantic roundtrip voyage, we estimate that earnings for a 51,000 dwt Handymax fell from $20,000 per day to $14,000 per day, while small Handy rates for the same trip dropped from $14,000 per day to $9,000 per day."
Russian President Putin: "The Rouble must become a more widespread means of international transactions. To this end, we need to open a stock exchange in Russia to trade in oil, gas, and other goods to be paid for in Roubles." Please don't dismiss this thought. It sounds similar to the Iranian oil bourse.
This morning the British pound rose as high as $1.9003 from $1.8859. The euro and yen also advanced against the dollar ahead of U.S. CPI figures later in the session. Gold and copper had big gains as well. It is no coincidence that the CPI will be released early today.
Xstrata, the UK-listed mining group, launched a US$14.6bn unsolicited bid for Canadian nickel miner Falconbridge.
According to the latest Post/ABC survey, Bush's disapproval rating among Republicans has nearly doubled, from 16 percent to 30 percent, in the past month while his approval rating dipped below 70 percent for the first time. Public dissatisfaction with Bush has grown in lockstep with opposition to the conflict in Iraq. Not quite a third — 32 percent — said they approve of the way Bush is handling Iraq, down five points in the past month and a new low in Post-ABC polling. About a third say Iraq has been worth the cost, the lowest level of support recorded in Post-ABC polls. Two in three Americans believe the war has not been worth it, a view shared by eight in 10 Democrats, seven in 10 independents and a third of all Republicans.
More than 180 000 people were evacuated from coastal areas of southern China Wednesday as Typhoon Chanchu, the strongest storm to hit the region at this time of year, churned towards the mainland and Hong Kong.
The rain appears to have finally stopped in New England.
Applications for mortgage loans at major banks rose by 4.6% last week, the Mortgage Bankers Association said Wednesday. Applications are down 14.7% from a year ago.
Monday, May 15, 2006
Changing Tides
5/16/06 Changing Tides
U.S. home builders have turned negative on the housing market for the first time since just after 9/11, the National Association of Home Builders and Wells Fargo said Monday. The NAHB/Wells Fargo housing market index, a builders' sentiment gauge, fell six points in May from a revised 51 to 45, the lowest level since June 1995, the industry group said. The index shows more builders say the market is "poor" than say it's "good." The index has fallen 23 points in the last seven months. In May, builders' assessment of current single-family home sales fell to 50 from 55. The assessment of future sales dropped to 54 from 59. The assessment of the traffic of prospective buyers dropped to 32 from 39. Meanwhile, the NAR reported that, from 3/2005 to 3/2006 price of a single family home rose 10.3% on a nationwide basis. It will be interesting to see what the results are for the next 12 months. For example, existing home sales are down more than 15% in five states that have had the hottest housing markets, the National Association of Realtors said Monday. Sales were down 22.2% year-over-year in Arizona, 19.2% in California, 18.2% in the District of Columbia, 15.7% in Florida and 15% in Nevada, the real estate group said. Nationally, sales of existing homes fell 2.1% year-over-year in the first quarter. The hot states now are New Mexico, Louisiana, Montana and Mississippi.
Capital flows into the United States fell to $69.8 billion in March after reaching a revised $90.5 billion in February, the Treasury Department said Monday. In sum, the capital flow in March covered the monthly trade deficit by $7 billion but that excludes the budget deficit that is running over $25 billion a month in the red.
Manufacturing activity in the New York area expanded at a slower pace in May, the New York Federal Reserve Bank said Monday. The bank's Empire State Manufacturing index fell to 12.4 in May from 15.8 in April. This is the lowest level since June 2005.
eBay's Skype, the Web telephone company, on Monday announced a marketing promotion that will allow its users in the United States and Canada to make free calls to conventional wireline and mobile phones.
Gary Lammert: "March 2000 was not Sept-October 1929. But perhaps May 2006 is April 1932.The borrowers of last resort: the American consumer and the taxrefunding and war borrowing US government are unknowingly nearexhaustion. The American president with low unemployment, continuedtax rebates, and recent hefty tax revenues is perhaps as unsuspectingof the deterministic fractal valuation events soon to unfold as is hisincreasingly dissatisfied public. Mr.Hoover with his ample treasuryhad a relatively enviable position."
After several years in which residential rental prices had little or no rise, the dynamics are changing and rents are on the rise. How will that impact the CPI in coming months?
Rep. Ron Paul: "Our relative wealth as a nation is measured in dollars, and the steady erosion of the value of those dollars means we will all be poorer in the future. The artificial stimulation of our economy through cheap money comes with a price. When dollars are abundant, they are worth less. This is the reality facing Americans today, especially older Americans who rely on savings to finance their retirement years."
Profit margins narrowed for the first time in at least two years and expenses rose. Investors were disappointed that the earnings gain was spurred by credit card revenue and a one-time tax gain. Target's results were hurt by markdowns and investments to buy more merchandise direct from manufacturers, Goldman, Sachs & Co. analyst Adrianne Shapira said today in a report. Those of you who purchased Wal-Mart stock and sold Target short have a handsome gain on the books.
Despite a sharp decline in oil, gold, silver, copper, zinc and other metals, despite a continued rise in volatility, despite a drop in interest rates and a rise in the dollar index, equities simply have trouble gaining traction. The Dow and the S&P 500 registered modest gains and the Nasdaq a small loss.
The President of Venezuela yesterday offered to supply the poor in Britain with cheap heating oil in the winter, in an apparent attempt to embarrass Tony Blair's Government.
The NAHB projects home sales will fall 12 percent in 2006 from record sales in 2005, and new single-family home starts will decline 7 percent from last year. The index has declined on a seasonally adjusted basis every month since January. D.R. Horton, the nation's largest homebuilder, declined to a new 52-week low.
Wal-Mart stated first-quarter net income rose 6.3% to $2.615 billion, or 63 cents a share, with revenue up 12.2% to $80.47 billion. Analysts polled by Thomson First Call were expecting earnings of 61 cents a share on revenue of $80.43 billion. The company said its inventory performance was the best it's seen in many quarters, and expects a 2% to 4% U.S. same-store sales rise in the second quarter, and earnings between 70 cents and 74 cents a share. It continues to see fiscal year earnings between $2.88 and $2.95 a share.
House Majority Leader John Boehner said Monday he will not push legislation to reduce the U.S. tariff on ethanol imports.
Bush wants "middle ground" on immigration. It does not surprise me that he did not mention prosecuting those who hire illegal imiigrants. You don't need the national guard for that and you don't need to seek additional funding for that. However, it does require a leader who knows the difference between right and wrong.
U.S. home builders have turned negative on the housing market for the first time since just after 9/11, the National Association of Home Builders and Wells Fargo said Monday. The NAHB/Wells Fargo housing market index, a builders' sentiment gauge, fell six points in May from a revised 51 to 45, the lowest level since June 1995, the industry group said. The index shows more builders say the market is "poor" than say it's "good." The index has fallen 23 points in the last seven months. In May, builders' assessment of current single-family home sales fell to 50 from 55. The assessment of future sales dropped to 54 from 59. The assessment of the traffic of prospective buyers dropped to 32 from 39. Meanwhile, the NAR reported that, from 3/2005 to 3/2006 price of a single family home rose 10.3% on a nationwide basis. It will be interesting to see what the results are for the next 12 months. For example, existing home sales are down more than 15% in five states that have had the hottest housing markets, the National Association of Realtors said Monday. Sales were down 22.2% year-over-year in Arizona, 19.2% in California, 18.2% in the District of Columbia, 15.7% in Florida and 15% in Nevada, the real estate group said. Nationally, sales of existing homes fell 2.1% year-over-year in the first quarter. The hot states now are New Mexico, Louisiana, Montana and Mississippi.
Capital flows into the United States fell to $69.8 billion in March after reaching a revised $90.5 billion in February, the Treasury Department said Monday. In sum, the capital flow in March covered the monthly trade deficit by $7 billion but that excludes the budget deficit that is running over $25 billion a month in the red.
Manufacturing activity in the New York area expanded at a slower pace in May, the New York Federal Reserve Bank said Monday. The bank's Empire State Manufacturing index fell to 12.4 in May from 15.8 in April. This is the lowest level since June 2005.
eBay's Skype, the Web telephone company, on Monday announced a marketing promotion that will allow its users in the United States and Canada to make free calls to conventional wireline and mobile phones.
Gary Lammert: "March 2000 was not Sept-October 1929. But perhaps May 2006 is April 1932.The borrowers of last resort: the American consumer and the taxrefunding and war borrowing US government are unknowingly nearexhaustion. The American president with low unemployment, continuedtax rebates, and recent hefty tax revenues is perhaps as unsuspectingof the deterministic fractal valuation events soon to unfold as is hisincreasingly dissatisfied public. Mr.Hoover with his ample treasuryhad a relatively enviable position."
After several years in which residential rental prices had little or no rise, the dynamics are changing and rents are on the rise. How will that impact the CPI in coming months?
Rep. Ron Paul: "Our relative wealth as a nation is measured in dollars, and the steady erosion of the value of those dollars means we will all be poorer in the future. The artificial stimulation of our economy through cheap money comes with a price. When dollars are abundant, they are worth less. This is the reality facing Americans today, especially older Americans who rely on savings to finance their retirement years."
Profit margins narrowed for the first time in at least two years and expenses rose. Investors were disappointed that the earnings gain was spurred by credit card revenue and a one-time tax gain. Target's results were hurt by markdowns and investments to buy more merchandise direct from manufacturers, Goldman, Sachs & Co. analyst Adrianne Shapira said today in a report. Those of you who purchased Wal-Mart stock and sold Target short have a handsome gain on the books.
Despite a sharp decline in oil, gold, silver, copper, zinc and other metals, despite a continued rise in volatility, despite a drop in interest rates and a rise in the dollar index, equities simply have trouble gaining traction. The Dow and the S&P 500 registered modest gains and the Nasdaq a small loss.
The President of Venezuela yesterday offered to supply the poor in Britain with cheap heating oil in the winter, in an apparent attempt to embarrass Tony Blair's Government.
The NAHB projects home sales will fall 12 percent in 2006 from record sales in 2005, and new single-family home starts will decline 7 percent from last year. The index has declined on a seasonally adjusted basis every month since January. D.R. Horton, the nation's largest homebuilder, declined to a new 52-week low.
Wal-Mart stated first-quarter net income rose 6.3% to $2.615 billion, or 63 cents a share, with revenue up 12.2% to $80.47 billion. Analysts polled by Thomson First Call were expecting earnings of 61 cents a share on revenue of $80.43 billion. The company said its inventory performance was the best it's seen in many quarters, and expects a 2% to 4% U.S. same-store sales rise in the second quarter, and earnings between 70 cents and 74 cents a share. It continues to see fiscal year earnings between $2.88 and $2.95 a share.
House Majority Leader John Boehner said Monday he will not push legislation to reduce the U.S. tariff on ethanol imports.
Bush wants "middle ground" on immigration. It does not surprise me that he did not mention prosecuting those who hire illegal imiigrants. You don't need the national guard for that and you don't need to seek additional funding for that. However, it does require a leader who knows the difference between right and wrong.
Sunday, May 14, 2006
Concerns
5/15/04 Concerns
An index of prices that companies in Japan pay for energy and raw materials climbed 2.5 percent from a year earlier, the 26th successive increase, the Bank of Japan said in Tokyo on Sunday. A 27 percent gain in Dubai crude oil prices this year, the benchmark for Asian refiners, has made it more difficult for companies to pass on costs to customers. . ``Companies just can't pass on costs at the same pace as they did last year,'' said Junichi Makino, a senior economist at Daiwa Institute of Research Ltd. in Tokyo. ``Cost gains will become a bigger concern for corporate profits this year.'' This same cost squeeze face companies in the U.S.
In the latest Newsweek poll, 57 Percent Say Administration Has Gone Too Far in Expanding Presidential Power; 50 Percent Say History Will View Bush as a Below Average President 71 Percent Are Dissatisfied With the Way Things Are Going in the U.S.
Venezuela's President Hugo Chavez warned at a conference in London on Sunday that a US attack on Iran would trigger an enormous military escalation, and he criticized the war in Iraq, calling it the "Vietnam of the 21st century.".
According to the Financial Times, on Tuesday Chile's president will lay the first stone of a new liquid natural gas re-gasification plant at Quintero near the port of Valparaiso. Engineering studies have still to be completed, but the ceremony will underline official commitment to the project being developed by BG of the UK together with local partners Enap, Endesa and Metrogas. The plant, which will cost up to $400m and supply about 45 per cent of Chile’s needs, will depend on imported LNG from Indonesia or Africa and the gas it produces will supplement fuel currently sold to Chile by Argentina.
The Detroit Free Press observed that Sheldon Sandler, founder of Bel Air Partners, a New Jersey financial consulting firm specializing in auto retailing, said the priciest of the major dealerships to acquire now is Lexus, which commands a premium of six to 10 times annual profits, in addition to its property. BMW and Mercedes come next, followed by Honda and Toyota, at multiples of four times profits.
Cadillac, Chevrolet and Chrysler stores command premiums of two to 3 1/2 times annual earnings, but Pontiac, Ford, Buick and Lincoln Mercury dealers are sometimes worth no more than the value of the real estate they occupy, Sandler said.
Early this morning, June gold futures dropped $19 an ounce to $692.80 and July silver futures fell 77.5 cents to $13.46 an ounce.
The yuan strengthened beyond 8 to the dollar for the first time in more than 12 years. How long will it take to get to 7 to the dollar?
In early overseas Monday trading, crude-oil futures fell by more than $1 a barrel.
With the recent spike in the volatility index (VIX), it would not surprise to see an effort to have a very short term rally. Again, if that were the case, I would use the strength to lighten up on trading positions.
Barry Ritholtz: "The breach of a key uptrend in the ratio of the S&P 500 to the 10-year U.S. government bond yield suggests either stock prices are headed much lower or bond yields are headed much higher -- or both -- in the longer term."
"This is the tip of the iceberg. It's going to get worse," Massachusetts Emergency Management Agency spokesman Peter Judge said Sunday. "We fear that 15 rivers will be pushed over flood level or right up to flood level." The governors of New Hampshire and Massachusetts declared states of emergency, while Maine Gov. John Baldacci declared a state of emergency for his state's southernmost county, York County.
Southeast Asian trade ministers(ASEAN) opened talks Monday on ways to speed up economic integration and turn the region into a single market by 2015, five years earlier than planned.
An index of prices that companies in Japan pay for energy and raw materials climbed 2.5 percent from a year earlier, the 26th successive increase, the Bank of Japan said in Tokyo on Sunday. A 27 percent gain in Dubai crude oil prices this year, the benchmark for Asian refiners, has made it more difficult for companies to pass on costs to customers. . ``Companies just can't pass on costs at the same pace as they did last year,'' said Junichi Makino, a senior economist at Daiwa Institute of Research Ltd. in Tokyo. ``Cost gains will become a bigger concern for corporate profits this year.'' This same cost squeeze face companies in the U.S.
In the latest Newsweek poll, 57 Percent Say Administration Has Gone Too Far in Expanding Presidential Power; 50 Percent Say History Will View Bush as a Below Average President 71 Percent Are Dissatisfied With the Way Things Are Going in the U.S.
Venezuela's President Hugo Chavez warned at a conference in London on Sunday that a US attack on Iran would trigger an enormous military escalation, and he criticized the war in Iraq, calling it the "Vietnam of the 21st century.".
According to the Financial Times, on Tuesday Chile's president will lay the first stone of a new liquid natural gas re-gasification plant at Quintero near the port of Valparaiso. Engineering studies have still to be completed, but the ceremony will underline official commitment to the project being developed by BG of the UK together with local partners Enap, Endesa and Metrogas. The plant, which will cost up to $400m and supply about 45 per cent of Chile’s needs, will depend on imported LNG from Indonesia or Africa and the gas it produces will supplement fuel currently sold to Chile by Argentina.
The Detroit Free Press observed that Sheldon Sandler, founder of Bel Air Partners, a New Jersey financial consulting firm specializing in auto retailing, said the priciest of the major dealerships to acquire now is Lexus, which commands a premium of six to 10 times annual profits, in addition to its property. BMW and Mercedes come next, followed by Honda and Toyota, at multiples of four times profits.
Cadillac, Chevrolet and Chrysler stores command premiums of two to 3 1/2 times annual earnings, but Pontiac, Ford, Buick and Lincoln Mercury dealers are sometimes worth no more than the value of the real estate they occupy, Sandler said.
Early this morning, June gold futures dropped $19 an ounce to $692.80 and July silver futures fell 77.5 cents to $13.46 an ounce.
The yuan strengthened beyond 8 to the dollar for the first time in more than 12 years. How long will it take to get to 7 to the dollar?
In early overseas Monday trading, crude-oil futures fell by more than $1 a barrel.
With the recent spike in the volatility index (VIX), it would not surprise to see an effort to have a very short term rally. Again, if that were the case, I would use the strength to lighten up on trading positions.
Barry Ritholtz: "The breach of a key uptrend in the ratio of the S&P 500 to the 10-year U.S. government bond yield suggests either stock prices are headed much lower or bond yields are headed much higher -- or both -- in the longer term."
"This is the tip of the iceberg. It's going to get worse," Massachusetts Emergency Management Agency spokesman Peter Judge said Sunday. "We fear that 15 rivers will be pushed over flood level or right up to flood level." The governors of New Hampshire and Massachusetts declared states of emergency, while Maine Gov. John Baldacci declared a state of emergency for his state's southernmost county, York County.
Southeast Asian trade ministers(ASEAN) opened talks Monday on ways to speed up economic integration and turn the region into a single market by 2015, five years earlier than planned.
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