4/15/07 Takeovers And Rumors
After competing bids from Microsoft and Yahoo, Google nailed down the purchase of DoubleClick for $3.1 billion or $2 billion more than the company brought just 2 years ago while still a public company. DoubleClick never got much respect price-wise in the public domain. It's amazing what a bidding war can do for a price.
Here's another bit of amazing that took place the other day. "New Pacific Realty Corp. announced the sale of 9900 Wilshire to an affiliate of The CPC Group for $500 million. The half-billion-dollar price tag for the 7.95 acre site, which is adjacent to the Beverly Hilton Hotel and overlooks the prestigious Los Angeles Country Club, is one of the last remaining major development parcels in the City of Beverly Hills, and believed to be largest price ever paid in North America for a development site in the entitlement phase. New Pacific Realty acquired the site just three years ago for $33.5 million.”
Then there is the normal Friday takeover speculation. Frequently, in the oil patch, it will center on Nabors Industries. This past Friday it was Weatherford International, an oil services company. The shares closed higher at $50 with the April 50 calls having traded 14,303 contracts with the last price at $1.20 and with the April 55 calls trading 6,300 contracts and closing at 35 cents. The last day of trading for April options is next Friday, April 20. Since the beginning of 2007, the shares have risen about 12 points. The company is expected to earn $3.25 in 2007 and $3.75 in 2008. Ten days ago the CEO said he expects improvement in the company's North American markets in the second half of 2007. "I think the North American markets are not bad, but I think they are likely to be better in the second half of the year, Bernard Duroc-Danner, the company's chief executive officer, told investors at the Howard Weil Energy Conference. Duroc-Danner also said he expects the weakness in Canadian markets to improve, and told investors the "travails in Canada are almost behind us."
As I mentioned yesterday, there is also speculation surrounding possible bids in the neighborhood of $20 billion for Sallie Mae.
According to the Financial Times, Chinese customs data showed a record 307,740 tonnes of copper were imported last month, with imports up 58% in the first three months of the year.
Because of the enormous growth in China, on occasion, India falls under the radar. Quietly, India's forex reserves have climbed to $200 billion.
The WSJ reported that GE executives said the company’s WMC mortgage unit has tightened its lending requirements and substantially curtailed its mortgage originations in the wake of the meltdown in the sub-prime mortgage sector.
Doug Noland provided via Bloomberg that 'foreclosures sold at auction now account for 15% of all home sales in California and continue to rise,’ Sean O’Toole, Foreclosure Radar’s chief executive officer and founder, said… ‘Folks with 100% financing and subprime credit are choosing to walk away rather than make payments on a house that’s now 10% under water.’
As foreclosures become a greater share of home sales, it is easy to see that prices of homes are headed down.
Doug Noland: "As tornado warning sirens blare in the background - with the thesis that Financial Arbitrage Capitalism has radically extended the life expectancy of Ponzi Finance Units. Actually, Financial Arbitrage Capitalism is itself ultimately one massive Ponzi Finance Unit. This system is dependent upon continuous Credit excess, expanding leveraged speculation, and asset inflation. Ironically, when financial weakness is revealed in one sector – as it was recently in mortgage finance – the expectation of imminent Federal Reserve easing actually bolsters Ponzi finance dynamics elsewhere. I’ll surmise this evening that when this Ponzi scheme eventually succumbs, it will take a slug of Wall Street finance down with it."
Speculation is growing that Britain's Barclays may abandon its bid for the Dutch bank ABN Amro, CNBC’s Maria Bartiromo reported. Barclays is due to finalize its bid for ABN next week, Bartiromo said, "but sources tell me there is a chance Barclays will pull out" because of "past liability concerns over past money-laundering questions." Meanwhile, Bloomberg reported Royal Bank of Scotland Group Plc may offer to buy ABN Amro Holding NV with Santander Central Hispano SA and Fortis, triggering the largest-ever takeover battle in the financial-services industry.
The euro stands near a two-year peak at $1.3554. The common euro-zone currency's lifetime high stands at $1.3670, according to electronic platform EBS.
Finance ministers and central bankers from the Group of Seven nations said they are confident disparities in global trade and growth are starting to narrow. Does that mean the U.S.share of world trade will continue to decline?
Karl Rove and other White House employees were cautioned in employee manuals, memos and briefings to carefully save any e-mails that might discuss official matters even if those messages came from private e-mail accounts, the White House disclosed Friday.
John Mauldin: "If one converts total outstanding debt into a real number using the GDP deflator, the marginal utility of debt is even worse. In the 1960s, real total debt outstanding in the U.S. "bought" $0.64 in additional real GDP. In the current decade, a dollar of real additional debt now "buys" $0.15 in additional real GDP."
My thanks to Thomas G. Dolan for reminding me of this quote from Will Rogers:
"The difference between death and taxes is death doesn't get worse every time Congress meets."
The deputy director of operations for the US Central Command, Brig. Gen. Robert H. Holmes says the American military has no plan to attack Iran.
Syria and Israel could clinch a peace deal in six months, a Syrian-American businessman at the heart of secret unofficial peace talks said on Thursday after appearing before a top parliamentary panel.
“Peace can be reached in six months if both parties are willing,” Ibrahim (Abe) Suleiman said. “The negotiations are finished. There are only minor things that could be fixed in two or three meetings. Peace is possible now.”
Global Politician Magazine: "The additional US and UK soldiers sent to be bolster NATO troops in Afghanistan fall way short of the numbers required to confront the Pushtoon resistance. The troop numbers have been further exacerbated by America's distrust of the Afghan army-
the army has been intentionally deprived of heavy weaponry-rendering almost useless in any upcoming battle. All of this means that the US will have to bear the brunt of the fighting. This comes as a huge blow- US forces are over stretched in Iraq and there are not enough troops to send to Afghanistan. The situation is rapidly deteriorating in Afghanistan. The assassination attempt on Dick Cheney clearly highlights America's predicament."
Saturday, April 14, 2007
Friday, April 13, 2007
The Music Goes Round And Round
4/14/07 The Music Goes Round And Round
Merck raised its full-year 2007 outlook, saying it now expects earnings of $2.75 to $2.85 a share, excluding items, and reported per-share earnings of $2.60 to $2.75. Analysts are looking for per-share earnings of $2.66 for the year. The outlook doesn't reflect the establishment of any reserves for any potential liability relating to the Vioxx litigation, Merck noted. On Thursday the shares made a new high. I'd would strongly consider taking profits.
The Financial Times reported Paul Wolfowitz was under pressure to resign as president of the World Bank after admitting he was personally involved in securing a large pay rise and promotion for a Bank official with whom he was romantically involved.
From WTRG: "The U.S. rotary rig count was down 23 rigs to 1,726 for the week of April 6, 2007 and is 9.3 percent higher than last year. The number of rotary rigs drilling for oil is up 12 at 283. The number of rigs targeting oil is 19 rigs higher than last year's level of activity. Rigs currently drilling for oil represent 16.4% percent of total drilling activity. Year-over-year oil exploration in the US is up 4.4 percent. Gas exploration is up 9.5 percent. The weekly average of crude oil spot prices is 3.1 percent lower than last year and natural gas spot prices are 8.3 percent higher. Canadian rig activity* was down 23 at 126 for the week of April 6, 2007 and is 143 lower than last year's rig count.
Samsung Electronics Co., the world's second-largest semiconductor maker, posted a second straight drop in quarterly profit after computer-chip prices extended a slide.
McDonald's Corp. said first-quarter profit rose more than analysts estimated after March sales in Europe jumped the most in at least 13 years. Preliminary net income rose to 62 cents a share, five cents more than the average estimate of 14 analysts. Sales at stores open at least 13 months climbed 6.3 percent. Profit a year earlier was 49 cents. European same-store sales surged 11 percent in March and 8 percent in the quarter, helped by a new McOriental burger in France and a chicken snack wrap in the U.K.
Pier 1 will close about 60 stores in the next year to save $17 million annually and halt eight straight quarterly losses.
Apple is delaying its new Leopard operating system by 3 months due to pulling programmers to work on iPhones.
Alltel Wireless said Thursday it is closing an Issaquah, WA call center and eliminating 260 jobs, moves that come two years after it acquired Bellevue-based Western Wireless in a $4.4 billion deal.
The U.S. trade deficit narrowed by 0.7% in February to $58.4 billion, the Commerce Department said Friday. Exports fell 2.2% to $124 billion, the biggest monthly decline since December 2002. The U.S. trade deficit with China widened to $18.4 billion in compared with $13.8 billion in the same month last year.
George Ure noted "the fact is that there were 31 days in January, and so the "daily burn rate" which is how I look at things, being a refugee corporate operations guy, is $1.9 billion per day for January. The month of February was how many days? 28 Did you say? Then that makes the daily burn rate $2,085,714,285,72 a day."
The trade gap with China is still running 25 percent above the pace set at the beginning of 2006, a year when the imbalance for the entire year soared to $232.5 billion.
The PPI is up 3.2% in the past 12 months, the biggest year-over-year gain since August. The core PPI is up 1.7% in the past year, down from 1.8% in the 12 months ending in February.
Chris Mayer: "The official numbers tell us inflation is less than 3%. Yet calculating inflation using the same methods of before Clinton took office - which was not that long ago - Williams (Shadow Stats) gets inflation closer to 6%! The latter figure is nearer to the experiences of everyday people living in this country, who have to pay for groceries, gasoline, insurance, medical bills and more. This is why Williams says that the average person has a truer sense of price inflation than what the official numbers would have you believe."
Sallie Mae is in talks with private-equity firms in a deal that may be worth more than $20 billion, The New York Times reported Friday, citing people familiar with the matter.
"On May 1 we are going to take control of the oil fields," Hugo Chavez said. "I'm sure no transnational company is going to draw a shotgun, but we will go with the armed forces and the people."
The Chinese central bank said that its foreign-exchange reserves rose $135.7 billion in the first quarter -- more than half the increase for all of last year.
The WSJ reported Cott Corp. a Toronto company that makes private-label drinks for such retailers as Wal-Mart Stores Inc., is talking with private-equity firms about joining its operations with Cadbury Schweppes PLC's beverage arm, a person familiar with the talks said. Cott said it has responded to "interested parties" that have approached the company, and is "exploring the potential benefits of participating in possible industry consolidation."
The Brunei Methanol Co., a joint venture between Brunei's state-owned PB Petrochemical Co. and Japan's Mitsubishi Gas Chemical Co. and Itochu Corp., signed agreements Thursday with other government and corporate parties to build a $400 million methanol production plant.
General Electric Co. reported first-quarter earnings of $4.5 billion, up 2 percent from the same period in 2006. Per-share earnings of 44 cents, and were in line with estimates by analysts polled by Thomson Financial. Revenue of $40.2 billion for the quarter was up by 6 percent from the same period last year.
Barry Ritholtz: "This economy has been stimulus driven -- ultra low rates, deficit spending, tax cuts, ADCS, (2) War spending, printing cash -- all contributed to the cyclical recovery since the 2001 recession. However, this has been anything but organic. Its been largely dependent upon government largesse. As that stimulus fades -- the pig is now mostly through the python -- so too does the economic growth. When your growth is dependent upon cheap money and easy credit, guess what happens when credit tightens and money becomes less easy?"
Richard Daughty: "In short, inflation in food prices, and all other prices, is everywhere you look, which is certainly understandable, since everywhere you look there are central banks creating more money and credit, and governments running budget deficits!"
Henry To: "While the ratio between money market fund assets and the market cap of the S&P 500 is not a great timing indicator - what it does show is the amount of "cushion" that we have in order to insure against a significant market decline. Also, while this indicator is telling us that we are closer to the end of the bull market than the beginning of one, it is also telling us that we are not close to exhaustion just yet. Based on historical experience, this author will not be too concerned about the end of the current bull market until this ratio hits a reading of 15% or below. Finally, given that this ratio has just risen from 17.29% as of February 28, 2007 to 17.44% as of March 31, 2007 (the highest reading since August 2004), chances are that the equity markets will be higher in the weeks and months ahead. For the individual investor who is not leveraged and who is already long, a buy-and-hold strategy (instead of trading around the volatility) still makes the most sense. For now, we will remain 100% long in our DJIA Timing System - although we reserve the right to trim our position should the technicals of the market deteriorate in the days ahead."
I give Henry a good deal of credit. Since Sept 7 of last year, he has put his money where his mouth is. He has been long equities and he has been right.
Cutter & Buck Inc., the Seattle-based sportswear designer, said it has agreed to be acquired by New Wave Group AB for $14.38 a share, or $156.5 million.
U.S. consumer sentiment fell in early April, according to the Reuters/University of Michigan consumer sentiment index released Friday. The index fell to 85.3 from 88.4 in March. It's the lowest since August. The current conditions dropped to 102.4 in April from 103.5 in March. The expectations index fell to 74.3 in April from 78.7 in March. Consumers' expectations for inflation over the next year rose to 3.3% from 3.0%. They expect annual inflation of 3% over the next five years, up from 2.9% in March.
Gold for June delivery closed up $10.20 at $689.90 an ounce on the New York Mercantile Exchange. The contract gained 1.5% on the week. May silver closed up 23.5 cents at $14.090 an ounce, gaining 2.5% on the week. June palladium rose $6.75 at $381.05 an ounce, gaining 6.9% on the week, and July platinum rose $6.90 at $1,286.40 an ounce, gaining 1.6% on the week. May copper rose 3 cents at $3.532 a pound, gaining 4.4% on the week.
Now this is funny!!! Luskin (Rove's lawyer) said Rove didn't know that deleting e-mails from his RNC inbox also deleted them from the RNC's server. That system was changed in 2005. Sometime in 2005, the RNC took action solely to prevent Rove from deleting his e-mails on that server. One reason for specifying Rove, Henry Waxman said, appears to have been pending legal action against him. As Santa might say, "ho ho ho boys and girls."
Rove uses several e-mail accounts, including one with the RNC; one with the White House; and a third, private domain account that is registered to the political consulting company he once owned.
Waxman also said he now has "serious concerns about the White House's compliance with the Presidential Records Act," which requires administrations to keep records of deliberations, decisions and policies. The congressman asked for an inventory of all communications by White House officials on non-government e-mail accounts.
John Conyers: "The White House position seems to be that executive privilege not only applies in the Oval Office, but to the RNC as well."
A guest post by Jeffrey J. Brown on the Oil Drum: "I have been advising for anyone who would listen to voluntarily cut back on their consumption, based on the premise that we were probably headed, in a post-Peak Oil environment, for a prolonged period of deflation in the auto/housing/finance sectors and inflation in food and energy prices...In my opinion, the unfortunate new reality is that we are going to see a growing labor surplus--against the backdrop of deflation in the auto/housing/finance sectors and inflation in food and energy prices. By reducing your expenses now, while you can do it voluntarily, you will at least be better prepared for whatever the future may bring...I recommend that you try to reduce the distance between work and home to as close to zero as possible, and furthermore, that you live in smaller, much more energy efficient housing, preferably close to mass transit lines...We need to once again become a nation of producers. I recommend that you try to become, or work for, a provider of essential goods and services...The biggest risk to family finances is trying to maintain the SUV, suburban mortgage way of life in a period of contracting energy supplies. Beyond that, one of the next biggest risks in my opinion, is excessive and unwise spending--especially debt financed spending--on college education costs."
Crude oil for May delivery fell 22 cents at $63.63 a barrel on the New York Mercantile Exchange. May heating oil fell 0.54 cent at $1.9007 a gallon. May natural-gas futures fell 12.3 cents at $7.801 per million British thermal units.
Peter Schiff: "The dollar is no longer responding to traditional stimulants. This week, despite the apparently "hawkish" tone in the recently released Fed minutes, and trade deficit figures that were slightly less horrific than expected, the dollar nevertheless declined against just about every currency on the planet. As a result, it now teeters dangerously close to the edge of a very large precipice. Looming large is the 80 level of the U.S. Dollar Index which has stood as long term support for almost thirty years. This week, the Index broke below 82, and is sinking fast. When this critical level is breached, look out below. Without any support beneath it, the dollar could literally fall off a cliff."
Merck raised its full-year 2007 outlook, saying it now expects earnings of $2.75 to $2.85 a share, excluding items, and reported per-share earnings of $2.60 to $2.75. Analysts are looking for per-share earnings of $2.66 for the year. The outlook doesn't reflect the establishment of any reserves for any potential liability relating to the Vioxx litigation, Merck noted. On Thursday the shares made a new high. I'd would strongly consider taking profits.
The Financial Times reported Paul Wolfowitz was under pressure to resign as president of the World Bank after admitting he was personally involved in securing a large pay rise and promotion for a Bank official with whom he was romantically involved.
From WTRG: "The U.S. rotary rig count was down 23 rigs to 1,726 for the week of April 6, 2007 and is 9.3 percent higher than last year. The number of rotary rigs drilling for oil is up 12 at 283. The number of rigs targeting oil is 19 rigs higher than last year's level of activity. Rigs currently drilling for oil represent 16.4% percent of total drilling activity. Year-over-year oil exploration in the US is up 4.4 percent. Gas exploration is up 9.5 percent. The weekly average of crude oil spot prices is 3.1 percent lower than last year and natural gas spot prices are 8.3 percent higher. Canadian rig activity* was down 23 at 126 for the week of April 6, 2007 and is 143 lower than last year's rig count.
Samsung Electronics Co., the world's second-largest semiconductor maker, posted a second straight drop in quarterly profit after computer-chip prices extended a slide.
McDonald's Corp. said first-quarter profit rose more than analysts estimated after March sales in Europe jumped the most in at least 13 years. Preliminary net income rose to 62 cents a share, five cents more than the average estimate of 14 analysts. Sales at stores open at least 13 months climbed 6.3 percent. Profit a year earlier was 49 cents. European same-store sales surged 11 percent in March and 8 percent in the quarter, helped by a new McOriental burger in France and a chicken snack wrap in the U.K.
Pier 1 will close about 60 stores in the next year to save $17 million annually and halt eight straight quarterly losses.
Apple is delaying its new Leopard operating system by 3 months due to pulling programmers to work on iPhones.
Alltel Wireless said Thursday it is closing an Issaquah, WA call center and eliminating 260 jobs, moves that come two years after it acquired Bellevue-based Western Wireless in a $4.4 billion deal.
The U.S. trade deficit narrowed by 0.7% in February to $58.4 billion, the Commerce Department said Friday. Exports fell 2.2% to $124 billion, the biggest monthly decline since December 2002. The U.S. trade deficit with China widened to $18.4 billion in compared with $13.8 billion in the same month last year.
George Ure noted "the fact is that there were 31 days in January, and so the "daily burn rate" which is how I look at things, being a refugee corporate operations guy, is $1.9 billion per day for January. The month of February was how many days? 28 Did you say? Then that makes the daily burn rate $2,085,714,285,72 a day."
The trade gap with China is still running 25 percent above the pace set at the beginning of 2006, a year when the imbalance for the entire year soared to $232.5 billion.
The PPI is up 3.2% in the past 12 months, the biggest year-over-year gain since August. The core PPI is up 1.7% in the past year, down from 1.8% in the 12 months ending in February.
Chris Mayer: "The official numbers tell us inflation is less than 3%. Yet calculating inflation using the same methods of before Clinton took office - which was not that long ago - Williams (Shadow Stats) gets inflation closer to 6%! The latter figure is nearer to the experiences of everyday people living in this country, who have to pay for groceries, gasoline, insurance, medical bills and more. This is why Williams says that the average person has a truer sense of price inflation than what the official numbers would have you believe."
Sallie Mae is in talks with private-equity firms in a deal that may be worth more than $20 billion, The New York Times reported Friday, citing people familiar with the matter.
"On May 1 we are going to take control of the oil fields," Hugo Chavez said. "I'm sure no transnational company is going to draw a shotgun, but we will go with the armed forces and the people."
The Chinese central bank said that its foreign-exchange reserves rose $135.7 billion in the first quarter -- more than half the increase for all of last year.
The WSJ reported Cott Corp. a Toronto company that makes private-label drinks for such retailers as Wal-Mart Stores Inc., is talking with private-equity firms about joining its operations with Cadbury Schweppes PLC's beverage arm, a person familiar with the talks said. Cott said it has responded to "interested parties" that have approached the company, and is "exploring the potential benefits of participating in possible industry consolidation."
The Brunei Methanol Co., a joint venture between Brunei's state-owned PB Petrochemical Co. and Japan's Mitsubishi Gas Chemical Co. and Itochu Corp., signed agreements Thursday with other government and corporate parties to build a $400 million methanol production plant.
General Electric Co. reported first-quarter earnings of $4.5 billion, up 2 percent from the same period in 2006. Per-share earnings of 44 cents, and were in line with estimates by analysts polled by Thomson Financial. Revenue of $40.2 billion for the quarter was up by 6 percent from the same period last year.
Barry Ritholtz: "This economy has been stimulus driven -- ultra low rates, deficit spending, tax cuts, ADCS, (2) War spending, printing cash -- all contributed to the cyclical recovery since the 2001 recession. However, this has been anything but organic. Its been largely dependent upon government largesse. As that stimulus fades -- the pig is now mostly through the python -- so too does the economic growth. When your growth is dependent upon cheap money and easy credit, guess what happens when credit tightens and money becomes less easy?"
Richard Daughty: "In short, inflation in food prices, and all other prices, is everywhere you look, which is certainly understandable, since everywhere you look there are central banks creating more money and credit, and governments running budget deficits!"
Henry To: "While the ratio between money market fund assets and the market cap of the S&P 500 is not a great timing indicator - what it does show is the amount of "cushion" that we have in order to insure against a significant market decline. Also, while this indicator is telling us that we are closer to the end of the bull market than the beginning of one, it is also telling us that we are not close to exhaustion just yet. Based on historical experience, this author will not be too concerned about the end of the current bull market until this ratio hits a reading of 15% or below. Finally, given that this ratio has just risen from 17.29% as of February 28, 2007 to 17.44% as of March 31, 2007 (the highest reading since August 2004), chances are that the equity markets will be higher in the weeks and months ahead. For the individual investor who is not leveraged and who is already long, a buy-and-hold strategy (instead of trading around the volatility) still makes the most sense. For now, we will remain 100% long in our DJIA Timing System - although we reserve the right to trim our position should the technicals of the market deteriorate in the days ahead."
I give Henry a good deal of credit. Since Sept 7 of last year, he has put his money where his mouth is. He has been long equities and he has been right.
Cutter & Buck Inc., the Seattle-based sportswear designer, said it has agreed to be acquired by New Wave Group AB for $14.38 a share, or $156.5 million.
U.S. consumer sentiment fell in early April, according to the Reuters/University of Michigan consumer sentiment index released Friday. The index fell to 85.3 from 88.4 in March. It's the lowest since August. The current conditions dropped to 102.4 in April from 103.5 in March. The expectations index fell to 74.3 in April from 78.7 in March. Consumers' expectations for inflation over the next year rose to 3.3% from 3.0%. They expect annual inflation of 3% over the next five years, up from 2.9% in March.
Gold for June delivery closed up $10.20 at $689.90 an ounce on the New York Mercantile Exchange. The contract gained 1.5% on the week. May silver closed up 23.5 cents at $14.090 an ounce, gaining 2.5% on the week. June palladium rose $6.75 at $381.05 an ounce, gaining 6.9% on the week, and July platinum rose $6.90 at $1,286.40 an ounce, gaining 1.6% on the week. May copper rose 3 cents at $3.532 a pound, gaining 4.4% on the week.
Now this is funny!!! Luskin (Rove's lawyer) said Rove didn't know that deleting e-mails from his RNC inbox also deleted them from the RNC's server. That system was changed in 2005. Sometime in 2005, the RNC took action solely to prevent Rove from deleting his e-mails on that server. One reason for specifying Rove, Henry Waxman said, appears to have been pending legal action against him. As Santa might say, "ho ho ho boys and girls."
Rove uses several e-mail accounts, including one with the RNC; one with the White House; and a third, private domain account that is registered to the political consulting company he once owned.
Waxman also said he now has "serious concerns about the White House's compliance with the Presidential Records Act," which requires administrations to keep records of deliberations, decisions and policies. The congressman asked for an inventory of all communications by White House officials on non-government e-mail accounts.
John Conyers: "The White House position seems to be that executive privilege not only applies in the Oval Office, but to the RNC as well."
A guest post by Jeffrey J. Brown on the Oil Drum: "I have been advising for anyone who would listen to voluntarily cut back on their consumption, based on the premise that we were probably headed, in a post-Peak Oil environment, for a prolonged period of deflation in the auto/housing/finance sectors and inflation in food and energy prices...In my opinion, the unfortunate new reality is that we are going to see a growing labor surplus--against the backdrop of deflation in the auto/housing/finance sectors and inflation in food and energy prices. By reducing your expenses now, while you can do it voluntarily, you will at least be better prepared for whatever the future may bring...I recommend that you try to reduce the distance between work and home to as close to zero as possible, and furthermore, that you live in smaller, much more energy efficient housing, preferably close to mass transit lines...We need to once again become a nation of producers. I recommend that you try to become, or work for, a provider of essential goods and services...The biggest risk to family finances is trying to maintain the SUV, suburban mortgage way of life in a period of contracting energy supplies. Beyond that, one of the next biggest risks in my opinion, is excessive and unwise spending--especially debt financed spending--on college education costs."
Crude oil for May delivery fell 22 cents at $63.63 a barrel on the New York Mercantile Exchange. May heating oil fell 0.54 cent at $1.9007 a gallon. May natural-gas futures fell 12.3 cents at $7.801 per million British thermal units.
Peter Schiff: "The dollar is no longer responding to traditional stimulants. This week, despite the apparently "hawkish" tone in the recently released Fed minutes, and trade deficit figures that were slightly less horrific than expected, the dollar nevertheless declined against just about every currency on the planet. As a result, it now teeters dangerously close to the edge of a very large precipice. Looming large is the 80 level of the U.S. Dollar Index which has stood as long term support for almost thirty years. This week, the Index broke below 82, and is sinking fast. When this critical level is breached, look out below. Without any support beneath it, the dollar could literally fall off a cliff."
Thursday, April 12, 2007
Reports
4/13/07 Reports
The 10 members of the Organization of the Petroleum Exporting Countries bound by the group's output agreements produced an average of 26.54 million barrels per day in March, down 80,000 b/d from February, Platts said late Thursday. Including Iraq and Angola, total OPEC production was 30.11 million b/d, down 70,000 b/d from the prior month, Platts reported.
The International Energy Agency said that world oil output fell by 265 thousand barrels a day in March, to 85.3 million barrels a day, after OPEC supply cuts and OECD production outages.
The IEA said global oil product demand has been revised down to 84.3 million barrels a day in 2006 and 85.8 million barrels a day 2007. For 2006 this is mainly related to improved data in non-OECD countries. Demand in the OECD remained largely unchanged, as a cold snap in North America was offset by milder temperatures in Europe and the Pacific.
Manor Care Inc, the biggest U.S. operator of homes for the elderly, said on Wednesday it was evaluating strategic options, sending its shares up more than 9 percent.Manor Care said on Wednesday that it had hired investment bank JPMorgan Chase & Co.
Medimmune has hired Goldman Sachs to explore a sale of the company.
U.S. import prices jumped a larger-than-expected 1.7% in March as petroleum prices rose sharply, Labor Department data showed. The cost of non-petroleum imports showed a 0.3% gain after a 0.1% rise the previous month and the biggest increase in three months. Export prices rose 0.7% in March as prices for agricultural and nonagricultural goods increased, compared with a forecast for a 0.4% gain.
The number of U.S. workers filing new claims for jobless benefits unexpectedly jumped 19,000 last week, government data on Thursday showed in a report skewed by seasonal layoffs for school holidays.
China's forex reserves approximate $1.2 trillion.
The FT reports cross-border flows from institutional investors into US equities relative to other assets are almost at their lowest point in more than a decade, according to State Street.
A bomb rocked Iraq's parliament building in the heavily fortified Green Zone thursday, killing at least two lawmakers in a stunning security breach in the third month of a U.S.-Iraqi crackdown on violence in the capital, officials said.
Wal-Mart Stores Inc said Thursday that strong sales of groceries helped boost same-store sales 4 percent in March. For the five-week period ended April 6, Wal-Mart same-store sales rose 3.4 percent, while Sam's Club same-store sales were up 7.4 percent. However, the company said that the first quarter will still be a "challenge."
China surpassed the United States as the world's second-largest exporter in the middle of last year, according to figures released Thursday by the World Trade Organization, and the Asian country is pulling further and further ahead. Export growth from China boomed 27 percent last year, out-pacing all other major trading nations, the WTO said
Now some state courts are requiring financial institutions to verify that an account does not contain 100% exempt funds before freezing it, and legal-aid attorneys are bringing lawsuits to force banks to ensure that the money they restrain can legally be garnisheed. "When someone has an account which is exclusively made up of Social Security funds, it's likely these are their only funds," says Margot Saunders, the counsel for the National Consumer Law Center. "When their accounts are frozen, they have no money to pay rent, buy food, transportation or go to the doctor." Although no hard data exist on the amount of exempt funds frozen by creditors, community advocates say it's a serious issue. "This is an exploding problem," says Saunders, noting that legal task forces in several states are working on the problem.
Barry Ritholtz: "It is increasingly apparent from the many economic signals we have seen that business spending is fading, and is unlikely to replace consumer spending anytime soon."
The Chinese government will issue a policy in less than two months' time to regulate the use of natural gas and alleviate a shortage in supply, Thursday's China Securities Journal reports.
Some White House staff wrote e-mail messages about official business on Republican Party accounts, and some may have been wrongly deleted, the administration said on Wednesday. I suggest the Congress begin to delete senior White House staff members, and move up from there. "They say they have not been preserved. I don't believe that!" Patrick Leahy shouted from the Senate floor. "You can't erase e-mails, not today. They've gone through too many servers," said Leahy, D-Vt. "Those e-mails are there, they just don't want to produce them. We'll subpoena them if necessary."
Fiscal fourth-quarter results for defense contractor SAIC Inc. came in better than expected, and analysts say the company is weathering an industry slowdown better than peers.
MSN Money reports as medical costs soar in the U.S., the number of uninsured has swelled, exceeding 46 million, or nearly 16% of Americans, last year, according to Census Bureau statistics. As a result, more and more folks are choosing what's known as medical tourism and heading overseas for surgeries and dental treatments they couldn't otherwise afford. In 2006 alone, an estimated 150,000 Americans traveled abroad for medical care, a number expected to double by next year, according to Josef Woodman, the author of "Patients Beyond Borders: Everybody's Guide to Affordable, World-Class Medical Tourism." Nearly half of those -- around 70,000 -- had medically necessary surgeries such as hip replacements or spinal work, heart surgeries including bypass or valve replacements, and even cancer treatments.
Natural gas in storage rose 23 billion cubic feet in the week ending April 6, the Energy Department said Thursday, and the closing price at the end of the trading day was $7.96.
The dollar fell 0.4% against the euro after dropping as low as $1.3505, the lowest since January 2005.
The International Council of Shopping Centers-UBS same-store sales tally of 53 stores posted a 5.9 percent gain, exceeding estimates for 4 percent to 5 percent. Michael P. Niemira, chief economist at ICSC, said the improving weather and earlier Easter boosted March results by 3 percentage points.
But those temporary factors that helped March results are expected to hurt April's figures by that same amount, according to Niemira. The weather has turned cooler in recent days, stifling sales of spring clothing. Bill Kirk, CEO of Weather Trends International, a weather consultancy for retailers, forecast that it will be the coldest April in 24 years.
In my view, this cold April will also reduce natural gas supplies and help to provide a support for prices, which now are approaching $8 per million cubic feet.
U.S. Senator Russ Feingold introduced legislation on April 10 to effectively end U.S. military involvement in Iraq. The bill, supported by Senate Majority Leader Harry Reid, requires the President to begin safely redeploying U.S. troops from Iraq 120 days from enactment, as required by the emergency supplemental spending bill passed by the Senate. The bill ends funding for the war, with three narrow exceptions, effective March 31, 2008. In addition to Reid, the bill is cosponsored by Senators Barbara Boxer (D-CA), Chris Dodd (D-CT), Ted Kennedy (D-MA), John Kerry (D-MA), Pat Leahy (D-VT), and Sheldon Whitehouse (D-RI). If the President vetoes the emergency supplemental spending bill, Reid has said he will work to ensure Feingold’s bill gets a vote in the Senate before Memorial Day.
Last Fall, under the Freedom of Information Act, the National Security Archive Group, in attempt to make certain that there is not an invasion of privacy for innocent Americans, sued the Justice Department for records that detail how the FBI protects privacy while collecting hundreds of millions of records in its investigative Data Warehouse, which contains 659 million documents! The FBI has requested the court to stop the legal proceedings and give the FBI until February 2013 to comply with the request. I suggest we lock up those who are collecting the data and keep them in the data warehouse until 2013. We wouldn't want them to lose themselves or any any documents in the interim period.
Bo Bronson: "Since July 1958, the monthly RA (Risk Aversion) has ranged 11.7 percentage points from a low of -4.7% at the Sept 1987 stock market high[12] to a high of +7.0% at the previous Supercycle Bear Market low in October 1974. At 1.1% currently, it has only risen to its historical midpoint over the past 49 years. We believe that during the coming, second and final downleg in the current Supercycle Bear Market, the RA will continue rising to at least 7%[13], again causing a ~ 50% decline, this time from the February 20 stock market high. This is typical for the decline from an “irrational complacency,” echo-mania high during Supercycle Bear Markets."
Kenneth Heebner, manager of the top-performing real-estate fund over the past decade, said U.S. home prices may plunge as much as 20 percent because of rising defaults on riskier mortgages. He said "it will be the biggest housing-price decline since the Great Depression."
Here's where some of your tax dollars go. Defense spending totaled $67.8 billion in March and $268.3 billion so far for the year, up 7%. Spending on interest on the public debt totaled $21.3 billion in March and $202.1 billion for the year, up about 4%. Meanwhile, for the fiscal year so far, individual income-tax receipts are up about 11%, while corporate-tax receipts are 18% higher. Payroll taxes are up about 5%. Withheld income taxes are 9% higher; nonwithheld income taxes are up 17%. Do you think you are getting value for your tax dollars? There is too much government in the lives of all Americans.
Michael Kahn: "With most major indexes well below their February peaks, which are respective resistance levels, and volume drying up at a steady pace, the conclusion has to be that the stock market is now running on empty."
Gold for June delivery closed down $2 at $679.70 an ounce on the New York Mercantile Exchange. May silver fell 3.5 cents at $13.855 an ounce, July platinum closed down $1.80 at $1,275.50 an ounce and May copper fell 8.05 cents at $3.5020 a pound. However, June palladium bucked the trend, rising $4.75 at $374.30 an ounce.
An afternoon auction of $6 billion in 10-year Treasury Inflation Protected Securities attracted weak demand, including a very low 18.7% indirect bid.
Bill Gross: "It will not be loan losses that threaten future economic growth, however, but the tightening of credit conditions that are in part a result of those losses. To a certain extent this reluctance to extend credit is a typical response to end-of-cycle exuberance run amok. And if one had to measure this cycle's exuberance on a scale of 1-10, double-digits would be the overwhelming vote. Anyone could get a loan because shabby credits were ultimately being camouflaged within CDOs that in turn were being sold to unsophisticated foreign lenders in need of yield as opposed to ¼% bank deposits (read Japan/Yen carry trade). But there is something else in play now that resembles in part the Carter Administration's Depository Institutions and Monetary Control Act of 1980. Lender fears of potential new regulations can do nothing but begin to restrict additional lending at the margin, as will headlines heralding alleged predatory lending practices in recent years. After doubling over 18 months between 2005 and the first half of 2006, non-traditional loan growth has recently turned negative, and lenders' attitudes are turning decidedly conservative..."
Merck's new pain reliever drug Arcoxia, which was proposed as a successor to Vioxx, was rejected by a federal health advisory panel.
A Dow Chemical executive who was fired after being accused of engaging in unauthorized discussions with third parties about selling the company told CNBC's David Faber that "it never happened."
Ipsco Inc., the Regina-based steel maker, which is operated out of Lisle, Ill., is in talks that could lead to it being sold, a potential transaction one analyst valued at $8.7-billion. A Russian business daily reported that Moscow-based Evraz Group SA, Russia's largest steel maker, is in talks to acquire Ipsco.
The Democrat-led Senate's passage Wednesday of legislation seeking to allow federal funding for cutting-edge embryonic stem cell research sets up another fight with President Bush, who has vowed to veto the bill just as he did in July.
Clark Kerr: “The status quo is the only solution that cannot be vetoed.”
The 10 members of the Organization of the Petroleum Exporting Countries bound by the group's output agreements produced an average of 26.54 million barrels per day in March, down 80,000 b/d from February, Platts said late Thursday. Including Iraq and Angola, total OPEC production was 30.11 million b/d, down 70,000 b/d from the prior month, Platts reported.
The International Energy Agency said that world oil output fell by 265 thousand barrels a day in March, to 85.3 million barrels a day, after OPEC supply cuts and OECD production outages.
The IEA said global oil product demand has been revised down to 84.3 million barrels a day in 2006 and 85.8 million barrels a day 2007. For 2006 this is mainly related to improved data in non-OECD countries. Demand in the OECD remained largely unchanged, as a cold snap in North America was offset by milder temperatures in Europe and the Pacific.
Manor Care Inc, the biggest U.S. operator of homes for the elderly, said on Wednesday it was evaluating strategic options, sending its shares up more than 9 percent.Manor Care said on Wednesday that it had hired investment bank JPMorgan Chase & Co.
Medimmune has hired Goldman Sachs to explore a sale of the company.
U.S. import prices jumped a larger-than-expected 1.7% in March as petroleum prices rose sharply, Labor Department data showed. The cost of non-petroleum imports showed a 0.3% gain after a 0.1% rise the previous month and the biggest increase in three months. Export prices rose 0.7% in March as prices for agricultural and nonagricultural goods increased, compared with a forecast for a 0.4% gain.
The number of U.S. workers filing new claims for jobless benefits unexpectedly jumped 19,000 last week, government data on Thursday showed in a report skewed by seasonal layoffs for school holidays.
China's forex reserves approximate $1.2 trillion.
The FT reports cross-border flows from institutional investors into US equities relative to other assets are almost at their lowest point in more than a decade, according to State Street.
A bomb rocked Iraq's parliament building in the heavily fortified Green Zone thursday, killing at least two lawmakers in a stunning security breach in the third month of a U.S.-Iraqi crackdown on violence in the capital, officials said.
Wal-Mart Stores Inc said Thursday that strong sales of groceries helped boost same-store sales 4 percent in March. For the five-week period ended April 6, Wal-Mart same-store sales rose 3.4 percent, while Sam's Club same-store sales were up 7.4 percent. However, the company said that the first quarter will still be a "challenge."
China surpassed the United States as the world's second-largest exporter in the middle of last year, according to figures released Thursday by the World Trade Organization, and the Asian country is pulling further and further ahead. Export growth from China boomed 27 percent last year, out-pacing all other major trading nations, the WTO said
Now some state courts are requiring financial institutions to verify that an account does not contain 100% exempt funds before freezing it, and legal-aid attorneys are bringing lawsuits to force banks to ensure that the money they restrain can legally be garnisheed. "When someone has an account which is exclusively made up of Social Security funds, it's likely these are their only funds," says Margot Saunders, the counsel for the National Consumer Law Center. "When their accounts are frozen, they have no money to pay rent, buy food, transportation or go to the doctor." Although no hard data exist on the amount of exempt funds frozen by creditors, community advocates say it's a serious issue. "This is an exploding problem," says Saunders, noting that legal task forces in several states are working on the problem.
Barry Ritholtz: "It is increasingly apparent from the many economic signals we have seen that business spending is fading, and is unlikely to replace consumer spending anytime soon."
The Chinese government will issue a policy in less than two months' time to regulate the use of natural gas and alleviate a shortage in supply, Thursday's China Securities Journal reports.
Some White House staff wrote e-mail messages about official business on Republican Party accounts, and some may have been wrongly deleted, the administration said on Wednesday. I suggest the Congress begin to delete senior White House staff members, and move up from there. "They say they have not been preserved. I don't believe that!" Patrick Leahy shouted from the Senate floor. "You can't erase e-mails, not today. They've gone through too many servers," said Leahy, D-Vt. "Those e-mails are there, they just don't want to produce them. We'll subpoena them if necessary."
Fiscal fourth-quarter results for defense contractor SAIC Inc. came in better than expected, and analysts say the company is weathering an industry slowdown better than peers.
MSN Money reports as medical costs soar in the U.S., the number of uninsured has swelled, exceeding 46 million, or nearly 16% of Americans, last year, according to Census Bureau statistics. As a result, more and more folks are choosing what's known as medical tourism and heading overseas for surgeries and dental treatments they couldn't otherwise afford. In 2006 alone, an estimated 150,000 Americans traveled abroad for medical care, a number expected to double by next year, according to Josef Woodman, the author of "Patients Beyond Borders: Everybody's Guide to Affordable, World-Class Medical Tourism." Nearly half of those -- around 70,000 -- had medically necessary surgeries such as hip replacements or spinal work, heart surgeries including bypass or valve replacements, and even cancer treatments.
Natural gas in storage rose 23 billion cubic feet in the week ending April 6, the Energy Department said Thursday, and the closing price at the end of the trading day was $7.96.
The dollar fell 0.4% against the euro after dropping as low as $1.3505, the lowest since January 2005.
The International Council of Shopping Centers-UBS same-store sales tally of 53 stores posted a 5.9 percent gain, exceeding estimates for 4 percent to 5 percent. Michael P. Niemira, chief economist at ICSC, said the improving weather and earlier Easter boosted March results by 3 percentage points.
But those temporary factors that helped March results are expected to hurt April's figures by that same amount, according to Niemira. The weather has turned cooler in recent days, stifling sales of spring clothing. Bill Kirk, CEO of Weather Trends International, a weather consultancy for retailers, forecast that it will be the coldest April in 24 years.
In my view, this cold April will also reduce natural gas supplies and help to provide a support for prices, which now are approaching $8 per million cubic feet.
U.S. Senator Russ Feingold introduced legislation on April 10 to effectively end U.S. military involvement in Iraq. The bill, supported by Senate Majority Leader Harry Reid, requires the President to begin safely redeploying U.S. troops from Iraq 120 days from enactment, as required by the emergency supplemental spending bill passed by the Senate. The bill ends funding for the war, with three narrow exceptions, effective March 31, 2008. In addition to Reid, the bill is cosponsored by Senators Barbara Boxer (D-CA), Chris Dodd (D-CT), Ted Kennedy (D-MA), John Kerry (D-MA), Pat Leahy (D-VT), and Sheldon Whitehouse (D-RI). If the President vetoes the emergency supplemental spending bill, Reid has said he will work to ensure Feingold’s bill gets a vote in the Senate before Memorial Day.
Last Fall, under the Freedom of Information Act, the National Security Archive Group, in attempt to make certain that there is not an invasion of privacy for innocent Americans, sued the Justice Department for records that detail how the FBI protects privacy while collecting hundreds of millions of records in its investigative Data Warehouse, which contains 659 million documents! The FBI has requested the court to stop the legal proceedings and give the FBI until February 2013 to comply with the request. I suggest we lock up those who are collecting the data and keep them in the data warehouse until 2013. We wouldn't want them to lose themselves or any any documents in the interim period.
Bo Bronson: "Since July 1958, the monthly RA (Risk Aversion) has ranged 11.7 percentage points from a low of -4.7% at the Sept 1987 stock market high[12] to a high of +7.0% at the previous Supercycle Bear Market low in October 1974. At 1.1% currently, it has only risen to its historical midpoint over the past 49 years. We believe that during the coming, second and final downleg in the current Supercycle Bear Market, the RA will continue rising to at least 7%[13], again causing a ~ 50% decline, this time from the February 20 stock market high. This is typical for the decline from an “irrational complacency,” echo-mania high during Supercycle Bear Markets."
Kenneth Heebner, manager of the top-performing real-estate fund over the past decade, said U.S. home prices may plunge as much as 20 percent because of rising defaults on riskier mortgages. He said "it will be the biggest housing-price decline since the Great Depression."
Here's where some of your tax dollars go. Defense spending totaled $67.8 billion in March and $268.3 billion so far for the year, up 7%. Spending on interest on the public debt totaled $21.3 billion in March and $202.1 billion for the year, up about 4%. Meanwhile, for the fiscal year so far, individual income-tax receipts are up about 11%, while corporate-tax receipts are 18% higher. Payroll taxes are up about 5%. Withheld income taxes are 9% higher; nonwithheld income taxes are up 17%. Do you think you are getting value for your tax dollars? There is too much government in the lives of all Americans.
Michael Kahn: "With most major indexes well below their February peaks, which are respective resistance levels, and volume drying up at a steady pace, the conclusion has to be that the stock market is now running on empty."
Gold for June delivery closed down $2 at $679.70 an ounce on the New York Mercantile Exchange. May silver fell 3.5 cents at $13.855 an ounce, July platinum closed down $1.80 at $1,275.50 an ounce and May copper fell 8.05 cents at $3.5020 a pound. However, June palladium bucked the trend, rising $4.75 at $374.30 an ounce.
An afternoon auction of $6 billion in 10-year Treasury Inflation Protected Securities attracted weak demand, including a very low 18.7% indirect bid.
Bill Gross: "It will not be loan losses that threaten future economic growth, however, but the tightening of credit conditions that are in part a result of those losses. To a certain extent this reluctance to extend credit is a typical response to end-of-cycle exuberance run amok. And if one had to measure this cycle's exuberance on a scale of 1-10, double-digits would be the overwhelming vote. Anyone could get a loan because shabby credits were ultimately being camouflaged within CDOs that in turn were being sold to unsophisticated foreign lenders in need of yield as opposed to ¼% bank deposits (read Japan/Yen carry trade). But there is something else in play now that resembles in part the Carter Administration's Depository Institutions and Monetary Control Act of 1980. Lender fears of potential new regulations can do nothing but begin to restrict additional lending at the margin, as will headlines heralding alleged predatory lending practices in recent years. After doubling over 18 months between 2005 and the first half of 2006, non-traditional loan growth has recently turned negative, and lenders' attitudes are turning decidedly conservative..."
Merck's new pain reliever drug Arcoxia, which was proposed as a successor to Vioxx, was rejected by a federal health advisory panel.
A Dow Chemical executive who was fired after being accused of engaging in unauthorized discussions with third parties about selling the company told CNBC's David Faber that "it never happened."
Ipsco Inc., the Regina-based steel maker, which is operated out of Lisle, Ill., is in talks that could lead to it being sold, a potential transaction one analyst valued at $8.7-billion. A Russian business daily reported that Moscow-based Evraz Group SA, Russia's largest steel maker, is in talks to acquire Ipsco.
The Democrat-led Senate's passage Wednesday of legislation seeking to allow federal funding for cutting-edge embryonic stem cell research sets up another fight with President Bush, who has vowed to veto the bill just as he did in July.
Clark Kerr: “The status quo is the only solution that cannot be vetoed.”
Wednesday, April 11, 2007
Facts
4/12/07 Facts
For the first time in more than three years, Houston-area home sales fell last month, a possible sign that the housing market's heady days may be coming to an end.
Single-family home sales dropped 8.8 percent in March from the same month in 2006, according to the Houston Association of Realtors.
Teen-wear apparel retailer American Eagle Outfitters said hot sales on spring things powered a 20% jump in same-store sales in March. That was well ahead of the 11.1% projection reached by analysts reporting to Thomson Financial.
Genentech Inc. said its first-quarter net earnings came in at $706 million, or 66 cents a share, compared with $421 million, or 39 cents a share, in the same quarter last year. Revenue in the quarter ended March 31 rose 43%, to $2.84 billion from $1.99 billion. Earnings from continuing operations were 74 a share in the latest three-month period. Analysts, on average, had been looking for a per-share profit of 67 cents on revenue of $2.74 billion according to Thomson Financial. Genentech also backed its forecast for pro forma per-share earnings growth of 25% to 30%.
Minutes from the Federal Reserve's last meeting on interest rates confirmed the central bank's focus on inflation. "The FOMC agreed that further policy firming might prove necessary to foster lower inflation, but in light of increased uncertainty about the outlook for both growth and inflation, the FOMC also agreed that the statement should no longer cite only the possibility of further firming," the minutes said.
Comcast Corp. has agreed to acquire Fandango.
The U.S. federal spent more money in March than in any other month ever, the Treasury reported Wednesday. The federal budget deficit widened to $96.3 billion in March, compared with $85.3 billion last March, the government said.
Gold for June delivery settled up 20 cents at $681.70 an ounce on the New York Mercantile Exchange. May silver fell 4 cents to $13.89 an ounce. July platinum closed up $7.70 at $1,281.30 an ounce, June palladium rose $6.10 at $369.55 an ounce and May copper ended up 5.65 cents at $3.5825 a pound.
The American Petroleum Institute reported a rise of 1.97 million barrels in crude supplies for the week ended April 6. The Energy Department reported an increase of 0.7 million barrels. Motor gasoline supplies fell 3.2 million barrels, API said. The government reported a drop of 5.5 million barrels. Distillate supplies fell 443,000 barrels, API said, while the government reported a rise of 100,000 barrels.
On Wednesday, it snowed in Chicago, Milwaukee, and parts of Minnesota.
U.S. home prices will probably fall this year for the first time in at least 38 years, the National Association of Realtors said Wednesday. In its monthly housing outlook, the real estate industry group said tighter lending standards will cut into home sales even further than it had been projecting, driving prices lower. Median sales prices of existing homes are now projected to fall 0.7% in 2007 before a modest 1.6% gain in 2008, the realtors said. Since the realtors began tracking prices of single-family existing homes in 1968, the smallest price gain was 2.0% in 2006. The average gain has been 6.5%. Sales of existing homes are expected to fall 2.2% in 2007, while sales of new homes will drop 14.1%, the realtors project.
For the first time since late in December, BJ Services traded above $30. The April 30 calls traded over 8,000 contracts compared with an open interest of about 22,000 contracts.
RIM revealed that an informal inquiry by the Securities and Exchange Commission into past stock-option grants has been upgraded to a formal investigation.
The International Monetary Fund cut its forecast for U.S. economic growth in 2007 to 2.2 percent, the slowest expansion in five years, on a weakening housing market.
US Army soldiers in Iraq will now be required to serve 15-month tours so the Pentagon can maintain the levels needed to fight the insurgency and try to secure the country, US Defence Secretary Robert Gates said Wednesday.
An accord on energy-sector cooperation was outlined in a statement issued at the ministerial level as part of the Japan/China summit process. Japan indicated that the accord could result in a transfer of technology to Beijing from Tokyo. The development of the nuclear energy sector in China was also placed within the ambit of this accord.
Trade volume between China and Japan hit a record US$211.3 billion in 2006, accounting for 17.2 percent of Japan's overall foreign trade, and China is expected to surpass the United States to become Japan's largest trade partner in 2007, said a senior official from the Beijing office of the Japan External Trade Organization (JETRO).
China's imports from Japan increased 15.6 percent in 2006, compared with 8.8 percent in 2005. Japan expanded the exports of electronic components, vehicles and automotive parts in 2006 for China to provide more products for the world market to meet rising demand. Non-ferrous metals and plastics from Japan were also popular in China.
Nestle SA is expected to acquire Novartis AG's baby-food unit Gerber for about $5 billion, the Wall Street Journal reported on its Web site on Thursday, citing people familiar with the matter.
For the first time in more than three years, Houston-area home sales fell last month, a possible sign that the housing market's heady days may be coming to an end.
Single-family home sales dropped 8.8 percent in March from the same month in 2006, according to the Houston Association of Realtors.
Teen-wear apparel retailer American Eagle Outfitters said hot sales on spring things powered a 20% jump in same-store sales in March. That was well ahead of the 11.1% projection reached by analysts reporting to Thomson Financial.
Genentech Inc. said its first-quarter net earnings came in at $706 million, or 66 cents a share, compared with $421 million, or 39 cents a share, in the same quarter last year. Revenue in the quarter ended March 31 rose 43%, to $2.84 billion from $1.99 billion. Earnings from continuing operations were 74 a share in the latest three-month period. Analysts, on average, had been looking for a per-share profit of 67 cents on revenue of $2.74 billion according to Thomson Financial. Genentech also backed its forecast for pro forma per-share earnings growth of 25% to 30%.
Minutes from the Federal Reserve's last meeting on interest rates confirmed the central bank's focus on inflation. "The FOMC agreed that further policy firming might prove necessary to foster lower inflation, but in light of increased uncertainty about the outlook for both growth and inflation, the FOMC also agreed that the statement should no longer cite only the possibility of further firming," the minutes said.
Comcast Corp. has agreed to acquire Fandango.
The U.S. federal spent more money in March than in any other month ever, the Treasury reported Wednesday. The federal budget deficit widened to $96.3 billion in March, compared with $85.3 billion last March, the government said.
Gold for June delivery settled up 20 cents at $681.70 an ounce on the New York Mercantile Exchange. May silver fell 4 cents to $13.89 an ounce. July platinum closed up $7.70 at $1,281.30 an ounce, June palladium rose $6.10 at $369.55 an ounce and May copper ended up 5.65 cents at $3.5825 a pound.
The American Petroleum Institute reported a rise of 1.97 million barrels in crude supplies for the week ended April 6. The Energy Department reported an increase of 0.7 million barrels. Motor gasoline supplies fell 3.2 million barrels, API said. The government reported a drop of 5.5 million barrels. Distillate supplies fell 443,000 barrels, API said, while the government reported a rise of 100,000 barrels.
On Wednesday, it snowed in Chicago, Milwaukee, and parts of Minnesota.
U.S. home prices will probably fall this year for the first time in at least 38 years, the National Association of Realtors said Wednesday. In its monthly housing outlook, the real estate industry group said tighter lending standards will cut into home sales even further than it had been projecting, driving prices lower. Median sales prices of existing homes are now projected to fall 0.7% in 2007 before a modest 1.6% gain in 2008, the realtors said. Since the realtors began tracking prices of single-family existing homes in 1968, the smallest price gain was 2.0% in 2006. The average gain has been 6.5%. Sales of existing homes are expected to fall 2.2% in 2007, while sales of new homes will drop 14.1%, the realtors project.
For the first time since late in December, BJ Services traded above $30. The April 30 calls traded over 8,000 contracts compared with an open interest of about 22,000 contracts.
RIM revealed that an informal inquiry by the Securities and Exchange Commission into past stock-option grants has been upgraded to a formal investigation.
The International Monetary Fund cut its forecast for U.S. economic growth in 2007 to 2.2 percent, the slowest expansion in five years, on a weakening housing market.
US Army soldiers in Iraq will now be required to serve 15-month tours so the Pentagon can maintain the levels needed to fight the insurgency and try to secure the country, US Defence Secretary Robert Gates said Wednesday.
An accord on energy-sector cooperation was outlined in a statement issued at the ministerial level as part of the Japan/China summit process. Japan indicated that the accord could result in a transfer of technology to Beijing from Tokyo. The development of the nuclear energy sector in China was also placed within the ambit of this accord.
Trade volume between China and Japan hit a record US$211.3 billion in 2006, accounting for 17.2 percent of Japan's overall foreign trade, and China is expected to surpass the United States to become Japan's largest trade partner in 2007, said a senior official from the Beijing office of the Japan External Trade Organization (JETRO).
China's imports from Japan increased 15.6 percent in 2006, compared with 8.8 percent in 2005. Japan expanded the exports of electronic components, vehicles and automotive parts in 2006 for China to provide more products for the world market to meet rising demand. Non-ferrous metals and plastics from Japan were also popular in China.
Nestle SA is expected to acquire Novartis AG's baby-food unit Gerber for about $5 billion, the Wall Street Journal reported on its Web site on Thursday, citing people familiar with the matter.
Tuesday, April 10, 2007
Commodities
4/11/07 Commodities
Jim Rogers: "We are in a bull market for commodities because supply and demand got terribly out of whack years ago, and they are still out of whack. I also wouldn't call it a theory. Nobody has discovered a gigantic oil field for thirty years. That's not a theory; that's a basic fact. In the meantime, demand for oil has been going up for many years. That's not a theory, either; that's a simple fact. Likewise, there has been one lead mine open in the world for the past twenty years, and the last lead smelter was built in the U.S. in 1979. I could continue: the number of acres devoted to wheat farming has been declining for 20 years. Those are simple facts that lead me--and, I think, any rational person--to conclude that we're in a bull market for commodities that has a ways to go."
United Rentals said it will explore strategic alternatives to enhance shareholder value, including a possible sale of the company.
D.R. Horton Inc. said second-quarter net sales orders fell 37% to 9,983 homes from 15,771 homes a year earlier. The value of net sales orders declined 41% to $2.6 billion from last year's $4.4 billion. The cancellation rate was "essentially unchanged" at 32%
Dow Chemical Co. said in a statement late Monday it "has had no discussion about a leveraged buyout."
The Blue Chip Economic Indicators panel of forecasters said they expect U.S. gross domestic product to expand at a rate of 2.3 percent in 2007, the slowest growth since 2002. The group in March had predicted growth at a rate of 2.5 percent.
"There's no question the credit problems we've seen in sub-prime are blending into Alt-A," said analyst Matthew Howlett of Fox-Pitt Kelton Inc. "It's reflective of the poor underwriting that has gone on in this sector."
Bloomberg reported China's trade surplus almost doubled in the first quarter, adding to friction as the U.S. takes complaints against its second-largest trading partner to the World Trade Organization. The surplus widened to $46.4 billion from $23.3 billion a year earlier, the customs bureau said on its Web site today. However, the March gap was $6.87 billion, smaller than economists expected.
WTRG Economics explained the large decline in the price of crude on Monday. An oversupply at the storage hub in Cushing, Okla., while localized, had a disproportionate effect on prices, Citigroup Global Markets energy analyst Tim Evans said. Because the hub serves as a delivery point for oil, the facility is the Achilles' heel for the petroleum market, he said. As it nears capacity, dealers have no place to store more oil should they want to take advantage of low prices on the May futures contract, which expires April 20, Evans said.
It would be wise to stay focused on the spread between crude in the U.S. and Brent oil now trading above $67 a barrel. That spread will narrow.
The New York Times reports that a Canadian pension fund and other financial firms are working on a $45 billion takeover bid for BCE, parent of BellCanada.
Brad Setser: "The US “exported” $87b of long-term Treasuries, $83b of long-term Agencies, $23 of long-term corporate debt to China between the end of June 2005 and the end of June 2006. During that period, the US exported $48b of goods to China. No wonder many on Wall Street like an unbalanced world …"
Rep. Ron Paul: "The greatest threat facing America today is not terrorism, or foreign economic competition, or illegal immigration. The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation. It is this one-two punch-- Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference-- that threatens to impoverish us by further destroying the value of our dollars. The Fed's inflationary policies hurt older people the most. Older people generally rely on fixed incomes from pensions and Social Security, along with their savings. Inflation destroys the buying power of their fixed incomes, while low interest rates reduce any income from savings. So while Fed policies encourage younger people to overborrow because interest rates are so low, they also punish thrifty older people who saved for retirement."
Here is a link to an article in the NY Times on Palatin:
http://www.nytimes.com/2007/04/10/scienc...
My readers are probably bored by all the mentions I have made of Palatin over the past two years and frustrated by the fact that the stock has traded at $1.75 to $4 during this time. At the outset, I said this was a 3 to 5 year hold. It takes quite some time for a drug to go through adequate trials and document research data. Consider the case of Dendreon. Many a shareholder lost faith after 5 years.
There is no question in my mind that Palatin's future has more than excellent potential. Patience will be rewarded.
George Ure provided the following: "A top Constitutional scholar from Princeton who gave a televised speech that slammed President George W. Bush's executive overreach was recently told that he had been added to the Transportation Security Administration's terrorist watch list. He shared his experience this weekend at the law blog Balkinization. Walter F. Murphy, the McCormick Professor of Jurisprudence, Emeritus, at Princeton University, attempted to check his luggage at the curbside in Albuquerque before boarding a plane to Newark, New Jersey. Murphy was told he could not use the service. "I was denied a boarding pass because I was on the Terrorist Watch list," he said. When inquiring with a clerk why he was on the list, Murphy was asked if he had participated in any peace marches."
From The Economist: "Shiites in Iraqi demonstrated en masse against the United States on the fourth anniversary of Saddam Hussein's fall. German commentators are pessimistic about the future of the country, predicting further unrest and even civil war.
Monday marked the fourth anniversary of the fall of Saddam Hussein. But instead of celebrations, the tone in Iraq was set by angry anti-American protests."
A German study suggests there is evidence that cocoa but not tea is linked to blood pressure reduction. The study is published in the American Medical Association journal Archives of Internal Medicine.
Robert Parry: "What makes George W. Bush and Dick Cheney such extraordinary threats to the future of American democracy is their readiness to tell half-truths and outright lies consistently without any apparent fear of accountability. While other politicians might spin some facts in a policy debate or tell a fib about a personal indiscretion, President Bush and Vice President Cheney act as if they have the power and the right to manufacture reality itself, often on matters of grave significance that bear on war and peace or the future of the nation. Even in the face of growing public skepticism, Bush and Cheney continue to invent new lies and retell old ones, seemingly with the goal of at least keeping their gullible right-wing "base" behind the faux reality depicted on Fox News, the Rush Limbaugh radio show and other right-wing media outlets."
On April 5th, Beltway pundit Joe Klein wrote that the Bush Administration is in “epic collapse.” According to Klein, the three latest developments from the White House – the showdown on Iraq, the scandal at Walter Reed Hospital and the firing of the eight U.S. Attorneys – “precisely illuminate the three qualities that make this Administration one of the worst in American history: arrogance (Iraq), incompetence (Walter Reed) and cynicism (the U.S. Attorneys).”
Crude oil for May delivery closed up 38 cents at $61.89 a barrel on the New York Mercantile Exchange. A surge in natural-gas futures, which followed comments from the U.S. Department of Energy that demand would remain strong through the summer, also boosted energy prices. In fact, the U.S. Department of Energy said it expected to see natural-gas prices rising 18% over last summer. May natural-gas futures rose 32.3 cents at $7.869 per million British thermal units, and reached a 5-week high of $7.938 per million BTUs in intraday trading. May heating oil ended up 4.04 cents at $1.8561 a gallon.
The dollar fell across the board Tuesday, touching a two-year low against the euro amid concerns over the U.S. housing market and rising trade tensions with China.
CNBC mentioned that the job cuts at Citigroup could total 45,000.
Bloomberg reported copper prices in New York rose to the highest in almost six months on signs of surging demand from China, the world's biggest consumer of the metal. China's imports of copper and copper products rose 61 percent from a year earlier to 307,740 metric tons in March, the highest ever. Booming demand from China, the world's fastest- growing major economy, has sent prices soaring 43 percent since early February.
Jim Rogers: "We are in a bull market for commodities because supply and demand got terribly out of whack years ago, and they are still out of whack. I also wouldn't call it a theory. Nobody has discovered a gigantic oil field for thirty years. That's not a theory; that's a basic fact. In the meantime, demand for oil has been going up for many years. That's not a theory, either; that's a simple fact. Likewise, there has been one lead mine open in the world for the past twenty years, and the last lead smelter was built in the U.S. in 1979. I could continue: the number of acres devoted to wheat farming has been declining for 20 years. Those are simple facts that lead me--and, I think, any rational person--to conclude that we're in a bull market for commodities that has a ways to go."
United Rentals said it will explore strategic alternatives to enhance shareholder value, including a possible sale of the company.
D.R. Horton Inc. said second-quarter net sales orders fell 37% to 9,983 homes from 15,771 homes a year earlier. The value of net sales orders declined 41% to $2.6 billion from last year's $4.4 billion. The cancellation rate was "essentially unchanged" at 32%
Dow Chemical Co. said in a statement late Monday it "has had no discussion about a leveraged buyout."
The Blue Chip Economic Indicators panel of forecasters said they expect U.S. gross domestic product to expand at a rate of 2.3 percent in 2007, the slowest growth since 2002. The group in March had predicted growth at a rate of 2.5 percent.
"There's no question the credit problems we've seen in sub-prime are blending into Alt-A," said analyst Matthew Howlett of Fox-Pitt Kelton Inc. "It's reflective of the poor underwriting that has gone on in this sector."
Bloomberg reported China's trade surplus almost doubled in the first quarter, adding to friction as the U.S. takes complaints against its second-largest trading partner to the World Trade Organization. The surplus widened to $46.4 billion from $23.3 billion a year earlier, the customs bureau said on its Web site today. However, the March gap was $6.87 billion, smaller than economists expected.
WTRG Economics explained the large decline in the price of crude on Monday. An oversupply at the storage hub in Cushing, Okla., while localized, had a disproportionate effect on prices, Citigroup Global Markets energy analyst Tim Evans said. Because the hub serves as a delivery point for oil, the facility is the Achilles' heel for the petroleum market, he said. As it nears capacity, dealers have no place to store more oil should they want to take advantage of low prices on the May futures contract, which expires April 20, Evans said.
It would be wise to stay focused on the spread between crude in the U.S. and Brent oil now trading above $67 a barrel. That spread will narrow.
The New York Times reports that a Canadian pension fund and other financial firms are working on a $45 billion takeover bid for BCE, parent of BellCanada.
Brad Setser: "The US “exported” $87b of long-term Treasuries, $83b of long-term Agencies, $23 of long-term corporate debt to China between the end of June 2005 and the end of June 2006. During that period, the US exported $48b of goods to China. No wonder many on Wall Street like an unbalanced world …"
Rep. Ron Paul: "The greatest threat facing America today is not terrorism, or foreign economic competition, or illegal immigration. The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation. It is this one-two punch-- Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference-- that threatens to impoverish us by further destroying the value of our dollars. The Fed's inflationary policies hurt older people the most. Older people generally rely on fixed incomes from pensions and Social Security, along with their savings. Inflation destroys the buying power of their fixed incomes, while low interest rates reduce any income from savings. So while Fed policies encourage younger people to overborrow because interest rates are so low, they also punish thrifty older people who saved for retirement."
Here is a link to an article in the NY Times on Palatin:
http://www.nytimes.com/2007/04/10/scienc...
My readers are probably bored by all the mentions I have made of Palatin over the past two years and frustrated by the fact that the stock has traded at $1.75 to $4 during this time. At the outset, I said this was a 3 to 5 year hold. It takes quite some time for a drug to go through adequate trials and document research data. Consider the case of Dendreon. Many a shareholder lost faith after 5 years.
There is no question in my mind that Palatin's future has more than excellent potential. Patience will be rewarded.
George Ure provided the following: "A top Constitutional scholar from Princeton who gave a televised speech that slammed President George W. Bush's executive overreach was recently told that he had been added to the Transportation Security Administration's terrorist watch list. He shared his experience this weekend at the law blog Balkinization. Walter F. Murphy, the McCormick Professor of Jurisprudence, Emeritus, at Princeton University, attempted to check his luggage at the curbside in Albuquerque before boarding a plane to Newark, New Jersey. Murphy was told he could not use the service. "I was denied a boarding pass because I was on the Terrorist Watch list," he said. When inquiring with a clerk why he was on the list, Murphy was asked if he had participated in any peace marches."
From The Economist: "Shiites in Iraqi demonstrated en masse against the United States on the fourth anniversary of Saddam Hussein's fall. German commentators are pessimistic about the future of the country, predicting further unrest and even civil war.
Monday marked the fourth anniversary of the fall of Saddam Hussein. But instead of celebrations, the tone in Iraq was set by angry anti-American protests."
A German study suggests there is evidence that cocoa but not tea is linked to blood pressure reduction. The study is published in the American Medical Association journal Archives of Internal Medicine.
Robert Parry: "What makes George W. Bush and Dick Cheney such extraordinary threats to the future of American democracy is their readiness to tell half-truths and outright lies consistently without any apparent fear of accountability. While other politicians might spin some facts in a policy debate or tell a fib about a personal indiscretion, President Bush and Vice President Cheney act as if they have the power and the right to manufacture reality itself, often on matters of grave significance that bear on war and peace or the future of the nation. Even in the face of growing public skepticism, Bush and Cheney continue to invent new lies and retell old ones, seemingly with the goal of at least keeping their gullible right-wing "base" behind the faux reality depicted on Fox News, the Rush Limbaugh radio show and other right-wing media outlets."
On April 5th, Beltway pundit Joe Klein wrote that the Bush Administration is in “epic collapse.” According to Klein, the three latest developments from the White House – the showdown on Iraq, the scandal at Walter Reed Hospital and the firing of the eight U.S. Attorneys – “precisely illuminate the three qualities that make this Administration one of the worst in American history: arrogance (Iraq), incompetence (Walter Reed) and cynicism (the U.S. Attorneys).”
Crude oil for May delivery closed up 38 cents at $61.89 a barrel on the New York Mercantile Exchange. A surge in natural-gas futures, which followed comments from the U.S. Department of Energy that demand would remain strong through the summer, also boosted energy prices. In fact, the U.S. Department of Energy said it expected to see natural-gas prices rising 18% over last summer. May natural-gas futures rose 32.3 cents at $7.869 per million British thermal units, and reached a 5-week high of $7.938 per million BTUs in intraday trading. May heating oil ended up 4.04 cents at $1.8561 a gallon.
The dollar fell across the board Tuesday, touching a two-year low against the euro amid concerns over the U.S. housing market and rising trade tensions with China.
CNBC mentioned that the job cuts at Citigroup could total 45,000.
Bloomberg reported copper prices in New York rose to the highest in almost six months on signs of surging demand from China, the world's biggest consumer of the metal. China's imports of copper and copper products rose 61 percent from a year earlier to 307,740 metric tons in March, the highest ever. Booming demand from China, the world's fastest- growing major economy, has sent prices soaring 43 percent since early February.
Monday, April 09, 2007
Heating Up
4/10/07 Heating Up
Warren Buffett's Berkshire Hathaway has bought large stakes in two other North American railroad companies besides Burlington Northern Santa Fe, CNBC's Liz Claman has learned. "I confirmed with Warren Buffett that aside from Burlington Northern, Berkshire Hathaway has bought large stakes--one of $700 millioin and another for slightly less--in two North American railroad companies," Claman said. "He declined to say which ones." These are rumored to be CSX and Union Pacific.
The WSJ noted prices of farm goods are climbing -- in part because of demand for crop-based fuels -- pushing up food prices around the world and creating a new source of inflationary pressure.
According to the Lundberg Survey, nationwide the average price of regular unleaded gas has risen by 18 cents to $2.89 over the last two weeks.
According to Bloomberg, Mirant Corp., a U.S. electricity producer that emerged from bankruptcy last year, said it may seek a buyer. Also among the strategic alternatives under consideration by the board include returning ``excess cash'' from asset sales to shareholders, Mirant said in a statement today. The Atlanta-based company has a market value of $10.4 billion based on the closing share price on April 5. Mirant and Dynegy Inc. were identified by investors and analysts as being among potential takeover targets after Kohlberg Kravis & Co. agreed to acquire Texas electricity producer TXU Corp. for $44 billion.
Six American soldiers were killed in attacks in Iraq, the military said, as Shiites gathered to mark the fourth anniversary of the fall of Baghdad amid calls for more attacks on U.S. forces.
Airbus delivered 115 planes to customers in Q1. Boeing delivered 106.
John Hussman: "While the S&P 500 has gained just 4% from its March lows on a weekly closing basis, it is clear that investors and market analysts now view the recent market correction as ancient history. The Investment Intelligence figures on advisory sentiment have shifted clearly to the bullish camp, with 50.6% of advisors bullish and 26.3% bearish. Meanwhile, valuations remain rich, the yield curve remains inverted (10 year vs. 3-month Treasury yields) and interest rates are now in fairly uniformly uptrends. I cannot stress enough that the most violent market declines have always emerged from conditions of rich valuations, elevated bullishness, overbought price trends, and upward pressures on interest rates. That doesn't mean that major losses must by necessity follow present conditions, but in the face of the historical tendency for deep losses to emerge in situations like this, it would be unwise to establish an investment position that relies on continued market strength...Analysts are already slashing expectations for earnings growth. As the New York Times noted last week, analyst expectations at the beginning of 2007 were for first-quarter earnings to post year-over-year growth of 8.7%. Current estimates have been cut to an expectation of just 3.3% growth. Second quarter growth is now projected to be just 3.5% year-over-year, with full-year growth estimates down to 6.3% (effectively building rapid growth expectations into the second half to compensate). If investors no longer have hopes for a near-term easing from the Fed, nor hopes for rapid earnings growth, the only remaining notion is the belief that stocks are appropriately priced on the basis of “forward operating earnings.” As I've emphasized in recent comments, this belief is fiction."
Daily Reckoning: "The U.S. dollar, in 2007, is worth only about 20 cents…compared to the dollar of 1971. And lately, there is reason to think the incline will become even steeper. The U.S. government's official debt is increasing at a record rate of $80 million every hour. Dollar-based credits and obligations are piling up outside of the United States (as measured by the trade deficit) at the rate of $2 billion every day. And all over the world, "Dark Pools" of liquidity threaten to turn the dollar's descent into a giant water slide. One fraud leads to another. Gradually, slowly, unwittingly we get so deep into them that we can't see out. And in this swamp of mendacity, the truth seems out of place, like an honest man in a Senate race. We find, for example, that "Sub-prime trickles down to area businesses," according to the Orange County Register. Well, what did you expect, dear reader? Standards are falling everywhere…and nobody's money is safe."
Tim Wood: "I look at probability and based upon those probabilities neither the June/July 2006 low nor the March 2007 low have measured up to the statistical norms that have occurred at every 4-year cycle low since 1896."
Roger Ehrenberg: "Either Goldman trades at a mere 50% of its fair market value or Fortress (and, shortly, Blackstone) are grossly overvalued."
Advanced Micro Devices Inc. expects revenue of about $1.225 billion for the first quarter ended March 31, and said revenue fell sharply on a quarter-over-quarter basis for its Computing Solutions' business due to lower overall average selling prices and significantly lower unit sales, especially in its resale sales channel. The current average estimate of analysts polled by Thomson Financial is for a loss of 30 cents a share in the March period on revenue of about $1.55 billion. Advanced Micro also said it plans to restructure its business in an effort to lower its operating costs. It's targeting a reduction a $500 million in capital spending in 2007. The company will also "significantly reduce" discretionary expenses and limit hiring to critical positions.
MedImmune Inc. expects first-quarter earnings, excluding stock-based compensation expenses, to rise to 62 to 67 cents a share, from 23 cents a share a year earlier. Analysts surveyed by Thomson Financial had been expecting earnings of 50 cents a share, on average. The company said revenue grew 11% to 12%, and net income margin more than doubled. The company said it expects first-quarter sales for Synagis to grow 9% to 10%.
"Now we are entering the mass production of centrifuges and starting to launch industrial scale enrichment, another step toward the flourishing of Islamic Iran," Vice President Gholamreza Aghazadeh said at a ceremony at Natanz.
Bloomberg reported Farallon Capital Management LLC, the fifth largest U.S. hedge-fund manager, is negotiating to buy the manufactured home community business of Affordable Residential Communities Inc., for approximately $1.8 billion.
People aware of private equity interests say Dow Chemical has told them "not to bother" approaching the company, CNBC's David Faber reported.
Ali Allawi: "The corroded and corrupt state of Saddam was replaced by the corroded, inefficient, incompetent and corrupt state of the new order."
Allawi writes that the Americans' "insipid retelling of `success' stories" merely hid "the huge black hole that lay underneath."
Martin Sieff: "After four years of war, 3,200 American deaths, 23,000 U.S. troops wounded and possibly in excess of 100,000 Iraqis killed, U.S. policymakers are now making what may prove to be their worst mistake yet: They may be on a new collision course with Moqtada al-Sadr."
Duke University Medical Center reported that Forskolin, an herbal extract, has the potential along with antibiotics to kill the bacteria which is the main cause of infections in the bladder.
Marathon Oil Corp. said its first quarter will likely be marked by lower selling prices for crude oil and natural gas. The company also expects weaker sales volume of refined products, compared with the prior-year period.
Crude oil for May delivery closed down $2.77, or 4%, at $61.51 a barrel on the New York Mercantile Exchange. May natural-gas futures fell 6.1 cents at $7.546 per million British thermal units, while May heating oil fell 4.52 cents at $1.8157 a gallon.
Gold for June delivery ended down $2.50 at $676.90 an ounce on the New York Mercantile Exchange. May silver ended down 7 cents at $13.81 an ounce, while May copper rose 12.90 cents at $3.5060 a pound. July platinum fell $1.60 at $1,264.30 an ounce, while June palladium rose $1.60 at $358.0 an ounce.
My best ideas for Monday were to sell the following puts:
WCI Jan 08 with a 15 strike price for $1 and CSX Jan 08 with a strike price of
27.50 for 35 cents. Just a note to state that I sold both of these yesterday for the prices mentioned. I only recommend what I would do for myself.
Warren Buffett's Berkshire Hathaway has bought large stakes in two other North American railroad companies besides Burlington Northern Santa Fe, CNBC's Liz Claman has learned. "I confirmed with Warren Buffett that aside from Burlington Northern, Berkshire Hathaway has bought large stakes--one of $700 millioin and another for slightly less--in two North American railroad companies," Claman said. "He declined to say which ones." These are rumored to be CSX and Union Pacific.
The WSJ noted prices of farm goods are climbing -- in part because of demand for crop-based fuels -- pushing up food prices around the world and creating a new source of inflationary pressure.
According to the Lundberg Survey, nationwide the average price of regular unleaded gas has risen by 18 cents to $2.89 over the last two weeks.
According to Bloomberg, Mirant Corp., a U.S. electricity producer that emerged from bankruptcy last year, said it may seek a buyer. Also among the strategic alternatives under consideration by the board include returning ``excess cash'' from asset sales to shareholders, Mirant said in a statement today. The Atlanta-based company has a market value of $10.4 billion based on the closing share price on April 5. Mirant and Dynegy Inc. were identified by investors and analysts as being among potential takeover targets after Kohlberg Kravis & Co. agreed to acquire Texas electricity producer TXU Corp. for $44 billion.
Six American soldiers were killed in attacks in Iraq, the military said, as Shiites gathered to mark the fourth anniversary of the fall of Baghdad amid calls for more attacks on U.S. forces.
Airbus delivered 115 planes to customers in Q1. Boeing delivered 106.
John Hussman: "While the S&P 500 has gained just 4% from its March lows on a weekly closing basis, it is clear that investors and market analysts now view the recent market correction as ancient history. The Investment Intelligence figures on advisory sentiment have shifted clearly to the bullish camp, with 50.6% of advisors bullish and 26.3% bearish. Meanwhile, valuations remain rich, the yield curve remains inverted (10 year vs. 3-month Treasury yields) and interest rates are now in fairly uniformly uptrends. I cannot stress enough that the most violent market declines have always emerged from conditions of rich valuations, elevated bullishness, overbought price trends, and upward pressures on interest rates. That doesn't mean that major losses must by necessity follow present conditions, but in the face of the historical tendency for deep losses to emerge in situations like this, it would be unwise to establish an investment position that relies on continued market strength...Analysts are already slashing expectations for earnings growth. As the New York Times noted last week, analyst expectations at the beginning of 2007 were for first-quarter earnings to post year-over-year growth of 8.7%. Current estimates have been cut to an expectation of just 3.3% growth. Second quarter growth is now projected to be just 3.5% year-over-year, with full-year growth estimates down to 6.3% (effectively building rapid growth expectations into the second half to compensate). If investors no longer have hopes for a near-term easing from the Fed, nor hopes for rapid earnings growth, the only remaining notion is the belief that stocks are appropriately priced on the basis of “forward operating earnings.” As I've emphasized in recent comments, this belief is fiction."
Daily Reckoning: "The U.S. dollar, in 2007, is worth only about 20 cents…compared to the dollar of 1971. And lately, there is reason to think the incline will become even steeper. The U.S. government's official debt is increasing at a record rate of $80 million every hour. Dollar-based credits and obligations are piling up outside of the United States (as measured by the trade deficit) at the rate of $2 billion every day. And all over the world, "Dark Pools" of liquidity threaten to turn the dollar's descent into a giant water slide. One fraud leads to another. Gradually, slowly, unwittingly we get so deep into them that we can't see out. And in this swamp of mendacity, the truth seems out of place, like an honest man in a Senate race. We find, for example, that "Sub-prime trickles down to area businesses," according to the Orange County Register. Well, what did you expect, dear reader? Standards are falling everywhere…and nobody's money is safe."
Tim Wood: "I look at probability and based upon those probabilities neither the June/July 2006 low nor the March 2007 low have measured up to the statistical norms that have occurred at every 4-year cycle low since 1896."
Roger Ehrenberg: "Either Goldman trades at a mere 50% of its fair market value or Fortress (and, shortly, Blackstone) are grossly overvalued."
Advanced Micro Devices Inc. expects revenue of about $1.225 billion for the first quarter ended March 31, and said revenue fell sharply on a quarter-over-quarter basis for its Computing Solutions' business due to lower overall average selling prices and significantly lower unit sales, especially in its resale sales channel. The current average estimate of analysts polled by Thomson Financial is for a loss of 30 cents a share in the March period on revenue of about $1.55 billion. Advanced Micro also said it plans to restructure its business in an effort to lower its operating costs. It's targeting a reduction a $500 million in capital spending in 2007. The company will also "significantly reduce" discretionary expenses and limit hiring to critical positions.
MedImmune Inc. expects first-quarter earnings, excluding stock-based compensation expenses, to rise to 62 to 67 cents a share, from 23 cents a share a year earlier. Analysts surveyed by Thomson Financial had been expecting earnings of 50 cents a share, on average. The company said revenue grew 11% to 12%, and net income margin more than doubled. The company said it expects first-quarter sales for Synagis to grow 9% to 10%.
"Now we are entering the mass production of centrifuges and starting to launch industrial scale enrichment, another step toward the flourishing of Islamic Iran," Vice President Gholamreza Aghazadeh said at a ceremony at Natanz.
Bloomberg reported Farallon Capital Management LLC, the fifth largest U.S. hedge-fund manager, is negotiating to buy the manufactured home community business of Affordable Residential Communities Inc., for approximately $1.8 billion.
People aware of private equity interests say Dow Chemical has told them "not to bother" approaching the company, CNBC's David Faber reported.
Ali Allawi: "The corroded and corrupt state of Saddam was replaced by the corroded, inefficient, incompetent and corrupt state of the new order."
Allawi writes that the Americans' "insipid retelling of `success' stories" merely hid "the huge black hole that lay underneath."
Martin Sieff: "After four years of war, 3,200 American deaths, 23,000 U.S. troops wounded and possibly in excess of 100,000 Iraqis killed, U.S. policymakers are now making what may prove to be their worst mistake yet: They may be on a new collision course with Moqtada al-Sadr."
Duke University Medical Center reported that Forskolin, an herbal extract, has the potential along with antibiotics to kill the bacteria which is the main cause of infections in the bladder.
Marathon Oil Corp. said its first quarter will likely be marked by lower selling prices for crude oil and natural gas. The company also expects weaker sales volume of refined products, compared with the prior-year period.
Crude oil for May delivery closed down $2.77, or 4%, at $61.51 a barrel on the New York Mercantile Exchange. May natural-gas futures fell 6.1 cents at $7.546 per million British thermal units, while May heating oil fell 4.52 cents at $1.8157 a gallon.
Gold for June delivery ended down $2.50 at $676.90 an ounce on the New York Mercantile Exchange. May silver ended down 7 cents at $13.81 an ounce, while May copper rose 12.90 cents at $3.5060 a pound. July platinum fell $1.60 at $1,264.30 an ounce, while June palladium rose $1.60 at $358.0 an ounce.
My best ideas for Monday were to sell the following puts:
WCI Jan 08 with a 15 strike price for $1 and CSX Jan 08 with a strike price of
27.50 for 35 cents. Just a note to state that I sold both of these yesterday for the prices mentioned. I only recommend what I would do for myself.
Sunday, April 08, 2007
Rumors
4/9/07 Rumors
According to Reuters, a consortium of Middle Eastern investors and American buyout firms is preparing a $50 billion approach for Dow Chemical Co. in what could be the world's biggest ever leveraged buyout, a paper said on Sunday.The Sunday Express said, quoting sources close to the deal, that a financing package has been put in place for a break-up bid of between $52 to $58 a share and an approach valuing the company at at least $50 billion could come by the end of this week. At least half of the capital is being provided by investors from Saudi Arabia, Kuwait, Bahrain, Qatar, UAE and Oman, with the rest contributed by a number of U.S. buyout firms including Kohlberg Kravis Roberts , it said.
Another Reuters story suggests Brewing giant SABMiller is plotting to acquire rival Scottish & Newcastle in a 6.5-billion-pounds ($12.8 billion) deal, a paper said on Sunday. The maker of Miller Lite and Peroni could make a bid of around 712 pence a share for S&N within days, the Sunday Express quoted sources close to the company as saying. It would also seek to sell on -- to spirits group Diageo -- the UK arm that makes Britain's biggest selling lager Foster's, John Smith's bitter and Strongbow cider as well as its French business to satisfy industry watchdogs, the report said.
Cold weather gripped much of the nation on Easter. Temperatures in many states ranged from the 20s to the 40s. Some cities were even greeted with snow.
On the first day that applications were accepted, the number of petitions from companies applying for visas for highly skilled immigrants exceeded the government cap by nearly 100,000, U.S. Citizenship and Immigration Services announced Tuesday, April 3. USCIS said that it received 150,000 applications for 65,000 H-1B visa slots on Monday, April 2, when the process officially began. In several weeks, the agency will dole out visas using a computer lottery to randomly select companies that filed petitions by April 3.
Spanish bank Santander is working with Britain's Royal Bank of Scotland to table a counterbid for ABN AMRO which is in exclusive merger talks with Barclays Plc a paper said on Sunday. The two banks are putting together a break-up bid and an offer could be presented soon after an agreed deal expected to be announced by Barclays and ABN within the next 10 days, the Sunday Telegraph said in an unsourced report. Under the potential transaction, Santander would take control of ABN's retail banking operations in continental Europe and its South African businesses, with RBS acquiring ABN's wholesale banking operations and U.S. business La Salle, it said.
Rep. Frank Wolf of Virginia, one of the Republicans who visited Assad earlier in the week, defended the right of lawmakers to visit Syria. “I don’t care what the administration says on this,” he said. “You’ve got to do what you think is in the best interest of your country.”
A statement in Baghdad Sunday says the four members of Task Force Lightning were killed Saturday by an explosion near their vehicle in Diyala province north of the capital. Another soldier was wounded in the attack.An unofficial tally shows at least 32-hundred-72 Americans have died in Iraq since the war began more than four years ago.
Officials on Sunday confirmed that Tehran barred Iraqi premier Nuri al-Maliki's plane from flying over Iran, according to circulated local reports.
Iran's foreign ministry spokesman said Sunday that Iran would not negotiate over its "obvious rights" to enrich uranium.
According to the WSJ, Sadr urged Iraqi forces to stop cooperating with the United States and told his guerrilla fighters to concentrate their attacks on American troops rather than Iraqis. A truck bomb killed 15 south of Baghdad.
Unlike gasoline and diesel fuel, which shoot around the nation in pipelines at high speeds and in vast quantities, ethanol travels almost exclusively by rail, truck and river barge. That's because it absorbs water, which can wreak havoc on traditional pipelines and taint petroleum products that pass through them.
Mike Burk: "On average, April has been one of the strongest months of the year, however, next week has been the weakest week of the month with modestly positive returns...The market is overbought and seasonality does not offer much support. I expect the major indices to be lower on Friday April 13 than they were on Thursday April 5."
Michael Panzer: " Mutual fund cash levels are near record lows, margin debt and leverage-based speculation are at euphoric extremes, and risk spreads reflect an extraordinary degree of complacency. Every data point, whether good or bad, is seen as another reason for heads-I-win, tails-you-lose optimism...The belief exists that there is still big money to be made from taking out-sized risks, and incentives remain heavily skewed to the upside. Practically speaking, current performance is all that matters, with nary a thought given to longer-term returns -- or concerns. What might be lost through aggressively geared-up bets on repeated rolls of the dice seems to pale in comparison to what can be realized if everything goes exactly according to plan...The mantra seems to be: "Why be defensive at all?" With a support system supposedly in place that can theoretically postpone the day of reckoning more-or-less indefinitely, the rational response is to push the envelope to its extremes. Combine that with the constant bullish squawking and tom-tom thumping by banks and other financial institutions, retailers, policymakers, politicians, and the media, and it adds up a siren song of short-sightedness and self-indulgence that is hard to resist...And yet, one day, as is likely to happen ever more frequently with CDOs-Squared and other toxic new age monstrosities, the "event" that really matters will come along. A paradigm-killer that sets in motion a chain reaction that completely undermines the apparently never-ending stability that everyone has gotten used to. By then, people will realize very quickly that America, once viewed as the world's foremost economic superpower, is nothing more than a cliff-risk nation."
Bloomberg reported Warren Buffett's Berkshire Hathaway Inc. has acquired a 10.9 percent stake in Burlington Northern Santa Fe Corp., according to Securities and Exchange Commission filings, making the billionaire's company the largest holder. Berkshire owned 39 million shares of the second-largest U.S. railroad as of April 5, after reporting a holding of 37.4 million on April 3, the filings show.
London's Sunday Telegraph reported private equity group Terra Firma plans to launch a counter bid for Alliance Boots, which opened its books to its deputy chairman and a private equity fund over a 10-billion-pound bid. In late March, Alliance Boots, England's biggest pharmacy chain, said it had opened its books to Kohlberg Kravis Roberts and its deputy chairman Stefano Pessina -- a billionaire with a 15 percent stake in the company. They raised their proposed offer to 1,040 pence from 1,000 pence a share.
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A state-owned Qatari company has bought the Chelsea Barracks in London from the Ministry of Defence, a newspaper reported on Sunday, citing the Gulf Arab firm's chief executive. Qatar's The Peninsular newspaper did not say how much Qatari Diar Real Estate & Investment Co. paid for the 13-acre (5.2 hectare) property located in the heart of London.
According to Reuters, a consortium of Middle Eastern investors and American buyout firms is preparing a $50 billion approach for Dow Chemical Co. in what could be the world's biggest ever leveraged buyout, a paper said on Sunday.The Sunday Express said, quoting sources close to the deal, that a financing package has been put in place for a break-up bid of between $52 to $58 a share and an approach valuing the company at at least $50 billion could come by the end of this week. At least half of the capital is being provided by investors from Saudi Arabia, Kuwait, Bahrain, Qatar, UAE and Oman, with the rest contributed by a number of U.S. buyout firms including Kohlberg Kravis Roberts , it said.
Another Reuters story suggests Brewing giant SABMiller is plotting to acquire rival Scottish & Newcastle in a 6.5-billion-pounds ($12.8 billion) deal, a paper said on Sunday. The maker of Miller Lite and Peroni could make a bid of around 712 pence a share for S&N within days, the Sunday Express quoted sources close to the company as saying. It would also seek to sell on -- to spirits group Diageo -- the UK arm that makes Britain's biggest selling lager Foster's, John Smith's bitter and Strongbow cider as well as its French business to satisfy industry watchdogs, the report said.
Cold weather gripped much of the nation on Easter. Temperatures in many states ranged from the 20s to the 40s. Some cities were even greeted with snow.
On the first day that applications were accepted, the number of petitions from companies applying for visas for highly skilled immigrants exceeded the government cap by nearly 100,000, U.S. Citizenship and Immigration Services announced Tuesday, April 3. USCIS said that it received 150,000 applications for 65,000 H-1B visa slots on Monday, April 2, when the process officially began. In several weeks, the agency will dole out visas using a computer lottery to randomly select companies that filed petitions by April 3.
Spanish bank Santander is working with Britain's Royal Bank of Scotland to table a counterbid for ABN AMRO which is in exclusive merger talks with Barclays Plc a paper said on Sunday. The two banks are putting together a break-up bid and an offer could be presented soon after an agreed deal expected to be announced by Barclays and ABN within the next 10 days, the Sunday Telegraph said in an unsourced report. Under the potential transaction, Santander would take control of ABN's retail banking operations in continental Europe and its South African businesses, with RBS acquiring ABN's wholesale banking operations and U.S. business La Salle, it said.
Rep. Frank Wolf of Virginia, one of the Republicans who visited Assad earlier in the week, defended the right of lawmakers to visit Syria. “I don’t care what the administration says on this,” he said. “You’ve got to do what you think is in the best interest of your country.”
A statement in Baghdad Sunday says the four members of Task Force Lightning were killed Saturday by an explosion near their vehicle in Diyala province north of the capital. Another soldier was wounded in the attack.An unofficial tally shows at least 32-hundred-72 Americans have died in Iraq since the war began more than four years ago.
Officials on Sunday confirmed that Tehran barred Iraqi premier Nuri al-Maliki's plane from flying over Iran, according to circulated local reports.
Iran's foreign ministry spokesman said Sunday that Iran would not negotiate over its "obvious rights" to enrich uranium.
According to the WSJ, Sadr urged Iraqi forces to stop cooperating with the United States and told his guerrilla fighters to concentrate their attacks on American troops rather than Iraqis. A truck bomb killed 15 south of Baghdad.
Unlike gasoline and diesel fuel, which shoot around the nation in pipelines at high speeds and in vast quantities, ethanol travels almost exclusively by rail, truck and river barge. That's because it absorbs water, which can wreak havoc on traditional pipelines and taint petroleum products that pass through them.
Mike Burk: "On average, April has been one of the strongest months of the year, however, next week has been the weakest week of the month with modestly positive returns...The market is overbought and seasonality does not offer much support. I expect the major indices to be lower on Friday April 13 than they were on Thursday April 5."
Michael Panzer: " Mutual fund cash levels are near record lows, margin debt and leverage-based speculation are at euphoric extremes, and risk spreads reflect an extraordinary degree of complacency. Every data point, whether good or bad, is seen as another reason for heads-I-win, tails-you-lose optimism...The belief exists that there is still big money to be made from taking out-sized risks, and incentives remain heavily skewed to the upside. Practically speaking, current performance is all that matters, with nary a thought given to longer-term returns -- or concerns. What might be lost through aggressively geared-up bets on repeated rolls of the dice seems to pale in comparison to what can be realized if everything goes exactly according to plan...The mantra seems to be: "Why be defensive at all?" With a support system supposedly in place that can theoretically postpone the day of reckoning more-or-less indefinitely, the rational response is to push the envelope to its extremes. Combine that with the constant bullish squawking and tom-tom thumping by banks and other financial institutions, retailers, policymakers, politicians, and the media, and it adds up a siren song of short-sightedness and self-indulgence that is hard to resist...And yet, one day, as is likely to happen ever more frequently with CDOs-Squared and other toxic new age monstrosities, the "event" that really matters will come along. A paradigm-killer that sets in motion a chain reaction that completely undermines the apparently never-ending stability that everyone has gotten used to. By then, people will realize very quickly that America, once viewed as the world's foremost economic superpower, is nothing more than a cliff-risk nation."
Bloomberg reported Warren Buffett's Berkshire Hathaway Inc. has acquired a 10.9 percent stake in Burlington Northern Santa Fe Corp., according to Securities and Exchange Commission filings, making the billionaire's company the largest holder. Berkshire owned 39 million shares of the second-largest U.S. railroad as of April 5, after reporting a holding of 37.4 million on April 3, the filings show.
London's Sunday Telegraph reported private equity group Terra Firma plans to launch a counter bid for Alliance Boots, which opened its books to its deputy chairman and a private equity fund over a 10-billion-pound bid. In late March, Alliance Boots, England's biggest pharmacy chain, said it had opened its books to Kohlberg Kravis Roberts and its deputy chairman Stefano Pessina -- a billionaire with a 15 percent stake in the company. They raised their proposed offer to 1,040 pence from 1,000 pence a share.
.
A state-owned Qatari company has bought the Chelsea Barracks in London from the Ministry of Defence, a newspaper reported on Sunday, citing the Gulf Arab firm's chief executive. Qatar's The Peninsular newspaper did not say how much Qatari Diar Real Estate & Investment Co. paid for the 13-acre (5.2 hectare) property located in the heart of London.
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