5/27/07 Thoughts
The Nasdaq reported that short interest on the exchange surged another 5.1% to 8,400,000,000 shares, from mid April through mid May, hitting another all-time high. Moreover, like the NYSE, the last three months have see Nasdaq short interest soar 22%, the largest three-month percentage increase since at least 1991, according to Bloomberg data.
I was not surprised to see Google jump 9 points on Friday. The April Comscore data showed that Google had 49.7% share of the search engine market vs. 48.3% in March. Yahoo!'s share fell to 26.8% vs. 27.5% in March. Microsoft's share fell to 10.3% from 10.9% in March.
I'd like to see Yahoo purchase Facebook.
China’s Shanghai Composite index surged 3.7%, increasing y-t-d gains to 56% and 52-week gains to 163%.
Soybeans are approaching a 3 year high.
Doug Noland: "The Chinese and others can make a very strong case today for pinning blame for global imbalances on our financial excesses and inflationary policy biases... I can only hope that at some point an understanding emerges that income equality, protectionism, and other serious “threats” to Capitalism are the inescapable handiwork of protracted Credit inflation and attendant Bubble excesses....Let’s return to the “Scary” thought of Chinese reserves hitting the $2 TN mark next year. Massive Current Account Deficits and escalating dollar outflows to play (“undollar”) global markets now combine for a parabolic surge in dollar liquidity outflows to the world. And from foreign official comments and the emergence of these so-called “sovereign wealth funds” it is equally clear that there is now a major shift afoot to “diversify.” It’s no longer a safe bet that dollar flows will be recycled predictably back almost exclusively into the comfortable confines of the Treasury and agency marketplace. On the margin, global “official” flows have an increasing appetite for “risk assets,” a major reversal that will go anything but unnoticed by the enterprising global leveraged speculating community... I’ll suggest it’s historic and warn it’s precarious. I’ll proffer that this unfolding dynamic (ongoing heightened Credit Availability, Marketplace Liquidity, and Inflationary Biases) will in general necessitate higher global official short-term interest rates. The U.S. bond market, in particular, has been positioned for a faltering economy and Fed rate cuts – a scenario less likely near-term because of the unfolding extraordinary global liquidity and risk-seeking backdrop. And I can appreciate that savvy bond fund managers would hesitate remaining on the wrong side of this Official Treasury for Risk Asset Trade...So the bulls today trumpet the case that U.S. stocks are cheap in real terms (S&P500 at “only” 18 P/E) and relative to global equities prices. The reality of the situation, however, is that years of U.S. Bubble excess have significantly inflated “fundamentals” such as corporate earnings and cashflows and personal incomes, along with global asset prices generally. Bubble-on-Bubble excess today inflates the perceived reasonable bounds for valuation to extremes - on top of an earnings base that is acutely vulnerable to a post-Bubble collapse. Yet perceptions hold that market risk is today much lower than during the 2000 Bubble... I fully expect corporate profits, personal income, and government tax receipts to all prove highly susceptible to the inevitable Credit cycle downside...It’s when the pendulum inevitably swings back and the market places cautious multiples on post-boom earnings (that can be abruptly sliced "in half") that create devastating losses for unsuspecting “investors.” I’m with Fan Gang on this: I find the current direction of things Scary."
When investors ring the register over and over again, it is difficult to perceive how the current direction of things could possibly be scary. In fact, week after week, month after month, there have been warnings about bubbles after bubbles. When the dotcom bubble exploded, millions of investors were hurt. The housing market hasn't even scratched the exploding surface. When short-term interest rates begin to approach 6%, and I fully expect that to occur, then the blood will start to flow in the housing market. As for equities, the fallout will result from the lack of liquidity in derivatives. That's right. The lack of liquidity. Insurance is only good when there is some entity available to pay off on the insurance. Never mind a run on the banks. Watch for the run on those insuring the derivatives. What percentage of the S&P 500 Index is comprised of financial companies?
The N.Y.Times reported the Bush administration is developing what are described as concepts for reducing American combat forces in Iraq by as much as half next year, according to senior administration officials in the midst of the internal debate. That's so comforting! Meanwhile, we are approaching 3,500 of our troops having been killed and 25,000 seriously wounded. Politicians talk of winning the war. I suggest anyone who talks like that should not be re-elected.
Barry Ritholtz: "New job creation has been mediocre, and wildly overstated by BLS since changes made to measuring jobs in 2001."
About 38 million Americans are expected to travel 50 miles or more this weekend, a 1.7 percent increase from last year's holiday, according to the AAA. About 83 percent of them will drive, with the remainder taking airplanes, trains or other transportation.
An AP-Ipsos poll showed that nearly half the country says gas prices are causing a "serious hardship," but fewer people than last year are reducing their driving, trimming other expenses or curtailing vacation plans due to higher energy costs.
Saturday, May 26, 2007
More M&A
5/26/07 More M&A
The Tribune Company said shareholders tendered about 224 million shares, representing 92 percent of its outstanding shares. Tribune had earlier said it would repurchase 126 million shares, representing more than half its outstanding shares, at $34 a share, or about $4.3 billion. As more than 126 million shares have been tendered, Tribune said it will purchase shares on a pro rata basis.Tribune said it will commence cash payment for shares purchased in the offer by June 5.
North Korea has test-fired several missiles towards the Sea of Japan.
The Coca-Cola Company agreed to acquire Energy Brands, Inc., known as glaceau, for $4.1 billion in cash. Coca-Cola will acquire the full range of Energy Brands' fast-growing, enhanced water brands, including vitamin water. Tata Tea on Friday sold their stake in Glaceau or Energy Brands Inc for $1.2 billion, netting a gain of USD 523 million in a span of just over nine months.It had bought the stake for $677 million in August 2006.
BJ Services Company announced that David D. Dunlap, Executive Vice President and Chief Operating Officer will present at the RBC Capital Markets Energy Conference on Wednesday, June 6, 2007 at 10:50 a.m. Eastern (9:50 a.m. Central).
Japan’s core consumer prices fell .1% in April versus a .3% decline in March that was the steepest decline in two years, the government statistics bureau said in Tokyo.
World sugar output will rise by 1.2% to 163.3 million metric tons during the 2007-2008 crop year, pushing the stocks-to-use ratio to a 25-year high, the US Foreign Agricultural Service said.
Apple’s iPhone will be available June 20.
Upper Deck Co. has made a pitch to buy the Topps Co. The offer of $10.75 per share trumps a $9.75-per-share bid earlier from a group of investors led by former Disney CEO Michael Eisner.
Valero Energy Corp. and ConocoPhillips cut production in Louisiana and Texas. Workers at Nigerian National Petroleum Co. began the second day of a strike that stalled operations at export terminals. "We starting off with driving season this weekend,'' said James Cordier, president of Liberty Trading Group in Tampa, Florida. ``We are at very low supplies. Since 1958 we haven't had less gasoline in the U.S.''
The Nasdaq Stock Market agreed to buy Nordic stock exchange operator OMX for $3.67 billion Friday, as Nasdaq seeks to expand abroad following a series of rival stock market mergers.
Anti-U.S. cleric Moqtada al-Sadr used his first public address this year to call for the withdrawal of U.S.-led forces from Iraq and urge the country's warring Shiite and Sunni Muslims to cease fighting.
The Dubai Mercantile Exchange Limited, a joint venture between Tatweer, a member of Dubai Holding, and the New York Mercantile Exchange Inc., received no-action relief from the Division of Market Oversight of the U.S. Commodity Futures Trading Commission. The relief allows U.S.-based Dubai Mercantile Exchange members and their guaranteed customers to enter orders directly from the U.S. through DME Direct. In addition, the CFTC issued an order permitting NYMEX and CFTC-registered Futures Commission Merchants (FCM's) to hold DME customer positions and associated funds in U.S. customer-segregated accounts in connection with NYMEX's clearing of futures and options on futures contracts traded on the DME.
The Wall Street Journal points out: "crude-oil prices on the New York Mercantile Exchange have risen 5.1% so far this year, gasoline prices have surged 47%."
Jefferies issued a note stating that Valueclick would be a good fit for Yahoo.
According to the WSJ, American men in their 30s today are worse off than their fathers' generation, a reversal from just a decade ago, when sons generally were better off than their fathers, a new study finds. The study, the first in a series on economic mobility undertaken by several prominent think tanks, also says the typical American family's income has lagged far behind productivity growth since 2000, a departure from most of the post-World War II period.
Brad Setser points out: "The External and Public Relations Department of the Bank of Russia announces that the Russia's international reserves equalled $386.3 bn. as of May 11, 2007, against $372.1 bn. as of May 4, 2007." In addition, Setser noted "Reserve growth in the emerging world now seems to running at a $100b a month pace, if not slightly higher." That is an astounding number.
Rigzone observed "The Indian government is targeting to raise oil production from overseas assets by 50 percent, even as it doubles domestic natural gas output by 2012 to meet the energy needs of the world's second-fastest-growing economy."
Existing home sales fell 2.6% in April to 5.99 million units on a seasonally adjusted annual basis, the slowest sales pace in four years, the National Association of Realtors said. On a year-on-year basis, existing home sales were down 10.7%. The median national sales price was down 0.8% year on year to $220,900 in April. Inventories of unsold homes rose 10.4% to 4.20 million, a 8.4 month supply, the highest in 15 years.
Sen. John Warner, R-Va., said Thursday that if the security situation in Iraq does not improve by mid-July, the president should consider adopting a new strategy there. "It seems to me it's time for them (Iraqi troops) to ... step up," said Warner, R-Va.
Hybrids running on both gasoline and electricity now have 3.4 percent of the market, up from 0.4 percent in 2004.
Alcan, Inc. said Friday it has not ruled out the option of buying its larger rival Alcoa, Inc.
AeroFlex Inc. has agreed to be acquired by Veritas Capital for $14.50 a share in cash, or roughly $1.1 billion.
June gold rose $2 to close at $655.30 an ounce Friday.
Crude closed up $1.02 to $65.20 and natural gas declined 4 cents to $7.64.
The Tribune Company said shareholders tendered about 224 million shares, representing 92 percent of its outstanding shares. Tribune had earlier said it would repurchase 126 million shares, representing more than half its outstanding shares, at $34 a share, or about $4.3 billion. As more than 126 million shares have been tendered, Tribune said it will purchase shares on a pro rata basis.Tribune said it will commence cash payment for shares purchased in the offer by June 5.
North Korea has test-fired several missiles towards the Sea of Japan.
The Coca-Cola Company agreed to acquire Energy Brands, Inc., known as glaceau, for $4.1 billion in cash. Coca-Cola will acquire the full range of Energy Brands' fast-growing, enhanced water brands, including vitamin water. Tata Tea on Friday sold their stake in Glaceau or Energy Brands Inc for $1.2 billion, netting a gain of USD 523 million in a span of just over nine months.It had bought the stake for $677 million in August 2006.
BJ Services Company announced that David D. Dunlap, Executive Vice President and Chief Operating Officer will present at the RBC Capital Markets Energy Conference on Wednesday, June 6, 2007 at 10:50 a.m. Eastern (9:50 a.m. Central).
Japan’s core consumer prices fell .1% in April versus a .3% decline in March that was the steepest decline in two years, the government statistics bureau said in Tokyo.
World sugar output will rise by 1.2% to 163.3 million metric tons during the 2007-2008 crop year, pushing the stocks-to-use ratio to a 25-year high, the US Foreign Agricultural Service said.
Apple’s iPhone will be available June 20.
Upper Deck Co. has made a pitch to buy the Topps Co. The offer of $10.75 per share trumps a $9.75-per-share bid earlier from a group of investors led by former Disney CEO Michael Eisner.
Valero Energy Corp. and ConocoPhillips cut production in Louisiana and Texas. Workers at Nigerian National Petroleum Co. began the second day of a strike that stalled operations at export terminals. "We starting off with driving season this weekend,'' said James Cordier, president of Liberty Trading Group in Tampa, Florida. ``We are at very low supplies. Since 1958 we haven't had less gasoline in the U.S.''
The Nasdaq Stock Market agreed to buy Nordic stock exchange operator OMX for $3.67 billion Friday, as Nasdaq seeks to expand abroad following a series of rival stock market mergers.
Anti-U.S. cleric Moqtada al-Sadr used his first public address this year to call for the withdrawal of U.S.-led forces from Iraq and urge the country's warring Shiite and Sunni Muslims to cease fighting.
The Dubai Mercantile Exchange Limited, a joint venture between Tatweer, a member of Dubai Holding, and the New York Mercantile Exchange Inc., received no-action relief from the Division of Market Oversight of the U.S. Commodity Futures Trading Commission. The relief allows U.S.-based Dubai Mercantile Exchange members and their guaranteed customers to enter orders directly from the U.S. through DME Direct. In addition, the CFTC issued an order permitting NYMEX and CFTC-registered Futures Commission Merchants (FCM's) to hold DME customer positions and associated funds in U.S. customer-segregated accounts in connection with NYMEX's clearing of futures and options on futures contracts traded on the DME.
The Wall Street Journal points out: "crude-oil prices on the New York Mercantile Exchange have risen 5.1% so far this year, gasoline prices have surged 47%."
Jefferies issued a note stating that Valueclick would be a good fit for Yahoo.
According to the WSJ, American men in their 30s today are worse off than their fathers' generation, a reversal from just a decade ago, when sons generally were better off than their fathers, a new study finds. The study, the first in a series on economic mobility undertaken by several prominent think tanks, also says the typical American family's income has lagged far behind productivity growth since 2000, a departure from most of the post-World War II period.
Brad Setser points out: "The External and Public Relations Department of the Bank of Russia announces that the Russia's international reserves equalled $386.3 bn. as of May 11, 2007, against $372.1 bn. as of May 4, 2007." In addition, Setser noted "Reserve growth in the emerging world now seems to running at a $100b a month pace, if not slightly higher." That is an astounding number.
Rigzone observed "The Indian government is targeting to raise oil production from overseas assets by 50 percent, even as it doubles domestic natural gas output by 2012 to meet the energy needs of the world's second-fastest-growing economy."
Existing home sales fell 2.6% in April to 5.99 million units on a seasonally adjusted annual basis, the slowest sales pace in four years, the National Association of Realtors said. On a year-on-year basis, existing home sales were down 10.7%. The median national sales price was down 0.8% year on year to $220,900 in April. Inventories of unsold homes rose 10.4% to 4.20 million, a 8.4 month supply, the highest in 15 years.
Sen. John Warner, R-Va., said Thursday that if the security situation in Iraq does not improve by mid-July, the president should consider adopting a new strategy there. "It seems to me it's time for them (Iraqi troops) to ... step up," said Warner, R-Va.
Hybrids running on both gasoline and electricity now have 3.4 percent of the market, up from 0.4 percent in 2004.
Alcan, Inc. said Friday it has not ruled out the option of buying its larger rival Alcoa, Inc.
AeroFlex Inc. has agreed to be acquired by Veritas Capital for $14.50 a share in cash, or roughly $1.1 billion.
June gold rose $2 to close at $655.30 an ounce Friday.
Crude closed up $1.02 to $65.20 and natural gas declined 4 cents to $7.64.
Thursday, May 24, 2007
Some Disappointments And Some Surprises
5/25/07 Some Disappointments And Some Surprises
Hormel stated that, looking out to the full fiscal year, its Jennie-O Turkey Store "will continue to face the challenge of recovering significantly higher input costs through pricing," one factor leading it to lower its per-share profit to target to $2.12 to $2.22 from $2.15 to $2.25 a share.
Sanderson Farms said overall market prices for poultry products were significantly higher than a year earlier, with whole chicken prices up 11.9% and bulk leg quarter prices up 125.3%. (Since no one eats chicken, I guess inflation is not a worry).The company added it is pleased with the direction of corn and soybean meal prices over the last few weeks, but added it expects grain prices to remain volatile into the next fiscal year.
Jabil Circuit Inc. said its second-quarter net income dropped to $13.9 million, or 7 cents a share, from $69.0 million, or 32 cents a share, a year ago. Analysts had been expecting the company to post earnings of 26 cents a share, according to data compiled by Thomson Financial.
Excluding the Matrix deal and Mylan Labs launch of amlodipine besylate, earnings would have been 47 cents a share. Revenue for the quarter rose 53% to $483.7 million, including $42.8 million primarily due to the launch of oxybutynin in the company's third quarter. Analysts polled by Thomson Financial were expecting earnings of 50 cents a share on revenue of $492 million.
Christopher Bancroft, part of the family that controls 64% of Dow Jones & Co. voting shares, objects to the takeover bid from News Corp., The Wall Street Journal reported Thursday, citing an interview. He told the newspaper he fears a bid would jeopardize The Wall Street Journal's independence. "Why would I risk that?" he said. "I'm open to any situation that benefits The Wall Street Journal and Dow Jones and its shareholders. At the moment, I don't see anything that would do that."
Home builder Toll Brothers said that its second-quarter net income dropped to $36.7 million, or 22 cents a share, from $174.9 million, or $1.06 a share, a year ago. Sales dipped to $1.17 billion, from $1.44 billion last year. The company took a $72.9 million, or 44 cents a share, writedown in the quarter. Excluding this charge, second quarter earnings would have totaled 66 cents a share, down from $1.10 a year ago. Analysts had been expecting earnings of 25 cents a share, according to data compiled by Thomson Financial. The company signed 2,031 contracts in the quarter, down 14% from the same point last year. "In what generally remains a soft market, there are glimmers of strength in certain territories," it said. Toll Brothers also stated that it's not comfortable giving full earnings guidance but expects to deliver between 6,100 and 6,900 homes in 2007 and home building revenues of of between $4.26 billion and $4.88 billion.
For full-year 2007, Limited said it now expects per-share earnings of $1.55 to $1.65, excluding items, down from its previous outlook of $1.75 to $1.90.
Alcoa, Inc. is sticking to its offer to acquire rival aluminum producer Alcan, Inc. (AL) for $58.60 in cash and 0.4108 of a share, or $73.25 as of the May 7 offer announcement, saying management has already met with a significant number of Alcan's shareholders and "are pleased to have received strong support for the combination."
Abercrombie & Fitch said it still expects fiscal 2007 per-share earnings of $1.47 to $1.52, and capital expenditures of $395 million to $405 million. The company also said it expects to increase gross square-footage by about 11% to 12%, through the addition of 10 new Abercrombie & Fitch stores, 29 new Abercrombie stores, 69 new Hollister stores, and nine new Ruehl stores.
The NY Times stated that some oil executives are now warning that the current shortages of fuel could become a long-term problem, leading to stubbornly higher prices at the pump.They point to a surprising culprit: uncertainty created by the government’s push to increase the supply of biofuels like ethanol in coming years.
Hedge funds have invested as much as $50 billion in China’s stock markets, according to a study by a government think tank.
Network Appliance Inc., whose computers store and distribute data, tumbled after the company's fiscal first-quarter sales and profit forecast trailed analysts' estimates. The company forecasted a downturn in revenue, blaming a slowdown in U.S. technology spending.
Brent crude is approaching $72 a barrel. Meanwhile, India was the world's sixth-largest oil importer in 2004, and it imported more than 812 million barrels of crude oil in 2006-2007, up more than 11 percent from the year before, according to the Indian ministry of petroleum and natural gas.
With about 65 percent of those imports coming from the Middle East, India is attempting to secure supplies from the region. Indian company Essar Group is considering a $3.4 billion refinery in northern Egypt that will process 300,000 barrels per day.
Orders for durable goods in the U.S. rose in April for a third straight month. The last time durable goods orders rose for three months in a row was from April through June 2005. Orders for durable goods increased by 0.6% last month to a seasonally adjusted $217.86 billion, the Commerce Department said. Durables, which are goods designed to last at least three years, rose 5.0% in March, revised from a previously estimated 3.7% increase. A key barometer of business equipment spending -- orders for nondefense capital goods excluding aircraft -- climbed by 1.2%, after increasing 4.4% in March. Year-to-year, orders were down 1.3%.
First-time claims for state unemployment benefits rose for the first time in six weeks, the Labor Department reported Thursday. The number of initial claims in the week ending May 19 rose 15,000 to 311,000. Claims in the previous week were revised to an decrease of 2,000 to 296,000 compared with the initial estimate of a fall of 5,000 to 293,000.The four-week average of initial claims fell 3,500 to 302,750. This is the lowest level since late February 2006. Meanwhile, the number of Americans receiving state jobless benefits rose 58,000 to 2.53 million in the week ending May 12. The four-week moving average of continuing claims fell 14,750 to 2.51 million, the lowest since March 31.
Thomas Au: "As the world’s largest holder of dollars, the People’s Bank of China is now the world’s de facto central bank. That’s a scary thought because China is a nouveau riche nation that is not ready for a principal role in global economy. But in 1929, the United States was similarly a parvenu, a country that held 50% of the world’s monetary reserves (in the form of gold) even though its central bank, the Federal Reserve Bank of the United States (or Fed for short), was all of sixteen years old; this adolescent outfit had been created only in 1913 after the passage of the 16th Amendment to the Constitution. Moreover, China is facing the essentially same dilemma today as America did in 1929. The United States in the 1920s flooded the world with liquidity in order to hold down a fundamentally strong dollar and prop up a weak pound at the behest of Britain’s central banker, Montague Norman, and a Treasury Minister named Winston Churchill (who failed at everything he did in public life before winning World War II). China has been similarly accommodative until recently to support the weak U.S. dollar, despite making heroic efforts to “sterilize” these dollars. But some of the liquidity inevitably found its way into the Chinese and global economies, helping to bring about torrid (and probably unsustainable) double-digit percentage growth in China...In fact, the country is using all three major monetary tools, open market operations, raising discount rates, and raising reserve requirements in a concerted effort to cool down its economy. Such a confluence of policies is seldom seen in the western world. It’s possible that a more seasoned Fed in the 1930s might have barely avoided the depression that resulted from the 1929 crash. But to hold the 1930s Fed to the elevated standards of today would have been too much to ask. (When was the last time parents you know tore out their hair because their sixteen-year old was incapable of acting like an adult?) Likewise, more experienced hands at the helm of the People’s Bank of China might possibly avoid the oncoming bubble and crash. But that is asking a lot of an institution and country that are just beginning to make the transition from Communism to capitalism.
The problem with experience, someone once said, is that it comes along only after you need it most. The American central bank has experience, but it’s not the one needing it. The Chinese central bank is now in the driver’s seat, and hasn’t yet had experience come along. It’s about as seasoned today as America’s Benjamin Strong-led Fed was just before 1929. More to the point, it’s not about to listen to the U.S. because we are a major part of the problem in other respects. I believe that China is setting a massive tightening of the global money supply in progress, and that this tightening could soon be followed by a global depression. Either event may happen or ultimately fail to happen. But in either case, it is basically out of America's control. Like a lot of other goods that Americans now import, the modern 1929 (or a somewhat better outcome), will have been “Made in China.”
Advanced Medical Optics is reportedly forming a bid according to CNBC's David Faber that would trump the Warburg Pincus buyout offer of $65.00 per share.
Henry To: "While the 20-day moving average of the ISE Sentiment (at a current reading of 134.3) is still not close to overbought levels, its rally from a reading of 98.5 on March 21st (representing the most oversold reading since a reading of 97.6 at the close on October 30, 2002) is getting "long in the tooth" in the short-run. Should this continue to rise higher in the coming days, then we will most likely initiate a short position in our DJIA Timing System. Moreover, unless the 20 DMA gets more oversold again, we will continue to avoid a long position our DJIA Timing System. Conclusion: The recent renewed bullishness of the popular market commentators, along with the overbought conditions in the U.S. and global stock markets has made me wary as a bull - and thus we have decided to exit our 100% long position in our DJIA Timing System on the afternoon of May 8th (a long position which we entered during September of last year). In addition, there are now obvious divergences in place - divergences which I will update our readers in this coming mid-week commentary."
WCI Communities Inc. said it sent a letter to shareholders saying it plans to meet over the coming weeks with several entities which have expressed interest in buying the residential builder. The Bonita Springs, Fla., company again urged shareholders not to vote for a slate of directors proposed by financier Carl Icahn. WCI said Icahn has declined the company's offer to participate in the sale process.
Sales of new U.S. homes unexpectedly surged in April, rising by 16% to a seasonally adjusted annual rate of 981,000, the Commerce Department said Thursday, far exceeding the 865,000 pace expected. Sales were boosted by plunging prices. The median price of a new home was $229,100 in April, down 10.9% in the past year. The inventory of unsold homes fell by 1.5% to 538,000, representing a 6.5-month supply. In March, the inventory was at 8.1 months. Sales in April were down 10.6% compared with April 2006. Sales in the first four months of 2007 were 20% lower than in the first four months of 2006. April sales were led by a 28% gain in the South and an 8.5% gain in the West. With that housing data, yields on 2-year and 10-year Treasury bonds rose to about 4.89% and the 30-year climbed to 5.04%. Not surprisingly, 30-year fixed rate mortgage average rose sharply in the week ending Thursday, to 6.37% from 6.21% last week, according to Freddie Mac.
Natural-gas inventories rose by 104 billion cubic feet for the week ended May 18, the Energy Department said Thursday.Total stocks now stand at 1.946 trillion cubic feet, down 205 billion cubic feet from the year-ago level, but 334 billion cubic feet above the five-year average, the government data said.
Clorox Co. expects fiscal 2008 earnings of $3.44 to $3.61 on organic sales growth in a range of 3% to 5%. Excluding restructuring charges, the Oakland, Calif.-based consumer products company expects earnings of $3.52 to $3.67 a share. Analysts polled by Thomson Financial are expecting, on average, a per-share profit of $3.68.
Dell Inc. will offer desktop systems at more than 3,000 Wal-Mart Stores Inc. locations. Wal-Mart said the desktops will be sold as part of a ``package bundle'' for less than $700.
Gap Inc. still expects fiscal 2007 earnings of 76 cents to 86 cents a share, or 80 cents to 90 cents a share excluding Forth & Towne's expected loss.
July crude dropped 2.4%, or $1.59, to close at $64.18 a barrel. June reformulated gas climbed 2% to finish at $2.3569 a gallon. June natural gas fell 7.6 cents to end at $7.681 per million British thermal units.
June gold fell 1.4% to close at $653.30 an ounce Thursday. July silver fell 18.5 cents to close at $12.92 an ounce and July copper finished at $3.1805 a pound, down 3.6%.
Hormel stated that, looking out to the full fiscal year, its Jennie-O Turkey Store "will continue to face the challenge of recovering significantly higher input costs through pricing," one factor leading it to lower its per-share profit to target to $2.12 to $2.22 from $2.15 to $2.25 a share.
Sanderson Farms said overall market prices for poultry products were significantly higher than a year earlier, with whole chicken prices up 11.9% and bulk leg quarter prices up 125.3%. (Since no one eats chicken, I guess inflation is not a worry).The company added it is pleased with the direction of corn and soybean meal prices over the last few weeks, but added it expects grain prices to remain volatile into the next fiscal year.
Jabil Circuit Inc. said its second-quarter net income dropped to $13.9 million, or 7 cents a share, from $69.0 million, or 32 cents a share, a year ago. Analysts had been expecting the company to post earnings of 26 cents a share, according to data compiled by Thomson Financial.
Excluding the Matrix deal and Mylan Labs launch of amlodipine besylate, earnings would have been 47 cents a share. Revenue for the quarter rose 53% to $483.7 million, including $42.8 million primarily due to the launch of oxybutynin in the company's third quarter. Analysts polled by Thomson Financial were expecting earnings of 50 cents a share on revenue of $492 million.
Christopher Bancroft, part of the family that controls 64% of Dow Jones & Co. voting shares, objects to the takeover bid from News Corp., The Wall Street Journal reported Thursday, citing an interview. He told the newspaper he fears a bid would jeopardize The Wall Street Journal's independence. "Why would I risk that?" he said. "I'm open to any situation that benefits The Wall Street Journal and Dow Jones and its shareholders. At the moment, I don't see anything that would do that."
Home builder Toll Brothers said that its second-quarter net income dropped to $36.7 million, or 22 cents a share, from $174.9 million, or $1.06 a share, a year ago. Sales dipped to $1.17 billion, from $1.44 billion last year. The company took a $72.9 million, or 44 cents a share, writedown in the quarter. Excluding this charge, second quarter earnings would have totaled 66 cents a share, down from $1.10 a year ago. Analysts had been expecting earnings of 25 cents a share, according to data compiled by Thomson Financial. The company signed 2,031 contracts in the quarter, down 14% from the same point last year. "In what generally remains a soft market, there are glimmers of strength in certain territories," it said. Toll Brothers also stated that it's not comfortable giving full earnings guidance but expects to deliver between 6,100 and 6,900 homes in 2007 and home building revenues of of between $4.26 billion and $4.88 billion.
For full-year 2007, Limited said it now expects per-share earnings of $1.55 to $1.65, excluding items, down from its previous outlook of $1.75 to $1.90.
Alcoa, Inc. is sticking to its offer to acquire rival aluminum producer Alcan, Inc. (AL) for $58.60 in cash and 0.4108 of a share, or $73.25 as of the May 7 offer announcement, saying management has already met with a significant number of Alcan's shareholders and "are pleased to have received strong support for the combination."
Abercrombie & Fitch said it still expects fiscal 2007 per-share earnings of $1.47 to $1.52, and capital expenditures of $395 million to $405 million. The company also said it expects to increase gross square-footage by about 11% to 12%, through the addition of 10 new Abercrombie & Fitch stores, 29 new Abercrombie stores, 69 new Hollister stores, and nine new Ruehl stores.
The NY Times stated that some oil executives are now warning that the current shortages of fuel could become a long-term problem, leading to stubbornly higher prices at the pump.They point to a surprising culprit: uncertainty created by the government’s push to increase the supply of biofuels like ethanol in coming years.
Hedge funds have invested as much as $50 billion in China’s stock markets, according to a study by a government think tank.
Network Appliance Inc., whose computers store and distribute data, tumbled after the company's fiscal first-quarter sales and profit forecast trailed analysts' estimates. The company forecasted a downturn in revenue, blaming a slowdown in U.S. technology spending.
Brent crude is approaching $72 a barrel. Meanwhile, India was the world's sixth-largest oil importer in 2004, and it imported more than 812 million barrels of crude oil in 2006-2007, up more than 11 percent from the year before, according to the Indian ministry of petroleum and natural gas.
With about 65 percent of those imports coming from the Middle East, India is attempting to secure supplies from the region. Indian company Essar Group is considering a $3.4 billion refinery in northern Egypt that will process 300,000 barrels per day.
Orders for durable goods in the U.S. rose in April for a third straight month. The last time durable goods orders rose for three months in a row was from April through June 2005. Orders for durable goods increased by 0.6% last month to a seasonally adjusted $217.86 billion, the Commerce Department said. Durables, which are goods designed to last at least three years, rose 5.0% in March, revised from a previously estimated 3.7% increase. A key barometer of business equipment spending -- orders for nondefense capital goods excluding aircraft -- climbed by 1.2%, after increasing 4.4% in March. Year-to-year, orders were down 1.3%.
First-time claims for state unemployment benefits rose for the first time in six weeks, the Labor Department reported Thursday. The number of initial claims in the week ending May 19 rose 15,000 to 311,000. Claims in the previous week were revised to an decrease of 2,000 to 296,000 compared with the initial estimate of a fall of 5,000 to 293,000.The four-week average of initial claims fell 3,500 to 302,750. This is the lowest level since late February 2006. Meanwhile, the number of Americans receiving state jobless benefits rose 58,000 to 2.53 million in the week ending May 12. The four-week moving average of continuing claims fell 14,750 to 2.51 million, the lowest since March 31.
Thomas Au: "As the world’s largest holder of dollars, the People’s Bank of China is now the world’s de facto central bank. That’s a scary thought because China is a nouveau riche nation that is not ready for a principal role in global economy. But in 1929, the United States was similarly a parvenu, a country that held 50% of the world’s monetary reserves (in the form of gold) even though its central bank, the Federal Reserve Bank of the United States (or Fed for short), was all of sixteen years old; this adolescent outfit had been created only in 1913 after the passage of the 16th Amendment to the Constitution. Moreover, China is facing the essentially same dilemma today as America did in 1929. The United States in the 1920s flooded the world with liquidity in order to hold down a fundamentally strong dollar and prop up a weak pound at the behest of Britain’s central banker, Montague Norman, and a Treasury Minister named Winston Churchill (who failed at everything he did in public life before winning World War II). China has been similarly accommodative until recently to support the weak U.S. dollar, despite making heroic efforts to “sterilize” these dollars. But some of the liquidity inevitably found its way into the Chinese and global economies, helping to bring about torrid (and probably unsustainable) double-digit percentage growth in China...In fact, the country is using all three major monetary tools, open market operations, raising discount rates, and raising reserve requirements in a concerted effort to cool down its economy. Such a confluence of policies is seldom seen in the western world. It’s possible that a more seasoned Fed in the 1930s might have barely avoided the depression that resulted from the 1929 crash. But to hold the 1930s Fed to the elevated standards of today would have been too much to ask. (When was the last time parents you know tore out their hair because their sixteen-year old was incapable of acting like an adult?) Likewise, more experienced hands at the helm of the People’s Bank of China might possibly avoid the oncoming bubble and crash. But that is asking a lot of an institution and country that are just beginning to make the transition from Communism to capitalism.
The problem with experience, someone once said, is that it comes along only after you need it most. The American central bank has experience, but it’s not the one needing it. The Chinese central bank is now in the driver’s seat, and hasn’t yet had experience come along. It’s about as seasoned today as America’s Benjamin Strong-led Fed was just before 1929. More to the point, it’s not about to listen to the U.S. because we are a major part of the problem in other respects. I believe that China is setting a massive tightening of the global money supply in progress, and that this tightening could soon be followed by a global depression. Either event may happen or ultimately fail to happen. But in either case, it is basically out of America's control. Like a lot of other goods that Americans now import, the modern 1929 (or a somewhat better outcome), will have been “Made in China.”
Advanced Medical Optics is reportedly forming a bid according to CNBC's David Faber that would trump the Warburg Pincus buyout offer of $65.00 per share.
Henry To: "While the 20-day moving average of the ISE Sentiment (at a current reading of 134.3) is still not close to overbought levels, its rally from a reading of 98.5 on March 21st (representing the most oversold reading since a reading of 97.6 at the close on October 30, 2002) is getting "long in the tooth" in the short-run. Should this continue to rise higher in the coming days, then we will most likely initiate a short position in our DJIA Timing System. Moreover, unless the 20 DMA gets more oversold again, we will continue to avoid a long position our DJIA Timing System. Conclusion: The recent renewed bullishness of the popular market commentators, along with the overbought conditions in the U.S. and global stock markets has made me wary as a bull - and thus we have decided to exit our 100% long position in our DJIA Timing System on the afternoon of May 8th (a long position which we entered during September of last year). In addition, there are now obvious divergences in place - divergences which I will update our readers in this coming mid-week commentary."
WCI Communities Inc. said it sent a letter to shareholders saying it plans to meet over the coming weeks with several entities which have expressed interest in buying the residential builder. The Bonita Springs, Fla., company again urged shareholders not to vote for a slate of directors proposed by financier Carl Icahn. WCI said Icahn has declined the company's offer to participate in the sale process.
Sales of new U.S. homes unexpectedly surged in April, rising by 16% to a seasonally adjusted annual rate of 981,000, the Commerce Department said Thursday, far exceeding the 865,000 pace expected. Sales were boosted by plunging prices. The median price of a new home was $229,100 in April, down 10.9% in the past year. The inventory of unsold homes fell by 1.5% to 538,000, representing a 6.5-month supply. In March, the inventory was at 8.1 months. Sales in April were down 10.6% compared with April 2006. Sales in the first four months of 2007 were 20% lower than in the first four months of 2006. April sales were led by a 28% gain in the South and an 8.5% gain in the West. With that housing data, yields on 2-year and 10-year Treasury bonds rose to about 4.89% and the 30-year climbed to 5.04%. Not surprisingly, 30-year fixed rate mortgage average rose sharply in the week ending Thursday, to 6.37% from 6.21% last week, according to Freddie Mac.
Natural-gas inventories rose by 104 billion cubic feet for the week ended May 18, the Energy Department said Thursday.Total stocks now stand at 1.946 trillion cubic feet, down 205 billion cubic feet from the year-ago level, but 334 billion cubic feet above the five-year average, the government data said.
Clorox Co. expects fiscal 2008 earnings of $3.44 to $3.61 on organic sales growth in a range of 3% to 5%. Excluding restructuring charges, the Oakland, Calif.-based consumer products company expects earnings of $3.52 to $3.67 a share. Analysts polled by Thomson Financial are expecting, on average, a per-share profit of $3.68.
Dell Inc. will offer desktop systems at more than 3,000 Wal-Mart Stores Inc. locations. Wal-Mart said the desktops will be sold as part of a ``package bundle'' for less than $700.
Gap Inc. still expects fiscal 2007 earnings of 76 cents to 86 cents a share, or 80 cents to 90 cents a share excluding Forth & Towne's expected loss.
July crude dropped 2.4%, or $1.59, to close at $64.18 a barrel. June reformulated gas climbed 2% to finish at $2.3569 a gallon. June natural gas fell 7.6 cents to end at $7.681 per million British thermal units.
June gold fell 1.4% to close at $653.30 an ounce Thursday. July silver fell 18.5 cents to close at $12.92 an ounce and July copper finished at $3.1805 a pound, down 3.6%.
Wednesday, May 23, 2007
Developments
5/24/07 Developments
The median selling price of previously owned homes across the nation was $212,300 in the first quarter, down 1.8 percent from a year earlier, according to the National Association of Realtors. That was the lowest in two years. The U.S. median home price probably will fall 1 percent in 2007 from a year earlier, the realtors' group said on May 8. That would be the first national decline since the Great Depression in the 1930s, said Lawrence Yun, an economist with the Chicago-based trade group.
OAO GMK Norilsk Nickel, the world's largest producer of the metal, increased an offer for LionOre Mining International Ltd. by 28 percent to C$6.8 billion ($6.3 billion), trumping an improved bid from Xstrata Plc. Norilsk bid C$27.50 a share, up from the C$21.50 it proposed May 3.
The House will hold two separate votes on the war-funding measure, House Appropriations Chairman David Obey of Wisconsin told reporters, one on the military spending with Iraqi government benchmarks and then a separate vote on the domestic spending. The measures will then be combined and sent to the Senate for its approval later this week. Congress is scheduled to leave Washington for the week-long Memorial Day recess on Friday.
Stride Rite gets a $20.50 buyout offer from Payless Shoes.
Alcan rejected Alcoa's bid and stated "it does not adequately reflect the value of Alcan's extremely attractive assets, strategic capabilities and growth prospects."
Physio-Control's total sales fell 52 percent last quarter after it suspended U.S. product shipments, parent company Medtronic reported Tuesday.
Redmond-based Physio, a manufacturer of automated external defibrillators, halted U.S. sales after the Food and Drug Administration found shortcomings in its quality-control procedures.
The military said seven soldiers and two Marines were killed in separate attacks Tuesday, bringing the U.S. death toll for the month to at least 80. Last month, 104 U.S. troops were killed in Iraq.
U.S. officials have warned that American casualties were likely to increase as troops made more frequent patrols during the three-month-old U.S.-led security crackdown in Baghdad.
The British pound rose after the minutes from the Bank of England's latest interest-rate meeting showed all nine members voted for a quarter-point hike to 5.5%.
New Zealand’s second-biggest listed company, Fletcher, said it would buy US-based Formica for US$700m, making it the world’s biggest laminates maker. Fletcher said it would acquire the Cincinnati-based Formica from private equity firms Cerberus Capital Management and Oaktree Capital Management to boost its global reach and earnings.
The Bancroft family is scheduled to meet on Wednesday to discuss News Corp’s $5bn takeover bid for Dow Jones, the media group they control, according to people familiar with the matter.
Target Corp. said its first-quarter profit rose almost 18 percent, although revenue was just shy of analyst expectations. The nation's second-largest discount retailer said it earned $651 million, or 75 cents per share, up from $554 million, or 63 cents per share, during the same period last year. Revenue of $14.04 billion was up 9 percent from $12.86 billion a year ago.
Ross Stores stuck to its full year profit forecast of $1.85 to $1.95 a share.
The 10-year Treasury note ended lower 9/32 at 97 05/32 with a yield
of 4.863%, up from 4.829% late Tuesday. In intraday trading, the benchmark 10-year's yield had climbed to 4.875%, the highest level since Jan. 31.
Richard McGregor: "China created fewer jobs (as a percentage of the workforce) between 1982 and 2006 than Brazil, even though it grew by an annual average of more than 10 per cent compared with Brazil’s 3-4 per cent, the IMF found.”
Bill Bonner: "It appears that the world is in the grip of two major and contradictory trends. At the top, money has never been easier to get…nor have rich people ever been more eager to get rid of it. Money changes hands so fast…and in such volume…the markets and bankers are having trouble keeping up with it. Institutional investors have so much money they don't know what to do with it. Meanwhile, down in the Lower Depths…the poor lumpen can't even afford to drive to the store to rent a movie. They're not earning any more money…while their costs continue to rise. Every year, we get a notice that a college has raised its tuition. Our insurance and health care costs seem to go up annually. Every time we fill up our tank…or eat in a restaurant…we get a nasty shock."
Palatin Technologies, Inc. and King Pharmaceuticals, Inc. reported that data from Study 16 and Study 17 of the Phase 2B clinical trial program evaluating bremelanotide in men with erectile dysfunction (ED) were presented yesterday at the American Urological Association (AUA) Annual Meeting (AUA 2007) held in Anaheim, CA. New positive data presented showed that bremelanotide improved both self-esteem and sexual relationship in men with erectile dysfunction (ED). Other positive top line data from the Phase 2B clinical trial program were reported by the companies in November 2006 and at the 9th European Society for Sexual Medicine (ESSM) Congress in Vienna in December 2006. In order to better understand the effects that bremelanotide may have on improving quality of life and self-esteem, patients in Study 16 were administered the SEAR (Self-Esteem and Relationship), a validated psychological instrument with two major domains: sexual relationship and confidence. The SEAR data were presented at AUA 2007 by Stanley E. Althof, PhD, Professor of Psychology, Case Western Reserve School of Medicine in a session entitled Improvement in Sexual Relationship, Satisfaction, Confidence and Self-Esteem in Erectile Dysfunction Patients Treated with Bremelanotide. Dr. Althof commented, "Our analysis has shown that treatment with bremelanotide improved both the Self-Esteem and Sexual Relationship domains of the SEAR in non-diabetic ED patients and this was strongly correlated with improvements in erectile function. These results indicate that bremelanotide improves sexual confidence and has the potential to be an important treatment option for patients with ED." "An increasing focus and attention on the utility of therapy in restoring quality of life and improvements to interpersonal relationships continues to evolve and will drive the need for novel treatment options for ED," Dr. Althof added. "We are extremely pleased with the positive reception that our Phase 2B studies received at the AUA meeting," stated Dr. Trevor Hallam, Palatin's Executive Vice President of R&D. Dr. Hallam further commented, "We are looking forward to discussing these results with the FDA at an end of Phase 2 meeting later this year and moving to Phase 3 trials as soon as possible."
Paul Kasriel: "The decline in M2's relative currency component began shortly after the peak in this cycle's housing starts. Not only would undocumented workers likely not be counted in the establishment payroll statistics but they also would likely be paid in currency, not direct deposits to bank accounts. The absolute and relative slowing in U.S. currency growth in recent years is consistent with the hypothesis that there have been large layoffs of undocumented workers. In turn, this would help explain the relatively mild contraction in documented residential construction employment."
Paul Lamont: "Perhaps Chairman Bernanke does not expect it, but reports in the field, credit derivative indexes, and the Federal Reserve Bank's own research economists are warning of further U.S. mortgage woes."
If you're going to play the risk arb game, it might prove useful to think rationally. Let's take a quick look at Alcan. At $86 it has a market cap of approximately $32 billion with sales of roughly $25 billion and net profit margins of 7.6%. Alcoa has sales of $31 billion with a $35 billion market cap and net profit margins of 8.55%. In sum, they are a pretty fair match statistically. Look at Billiton with sales of $36 billion, 35% net profit margins, and a market cap of $153 billion! Their profit margins are roughly 5 times that of Alcan's. That's pretty much the case of Rio Tinto with sales of $21 billion, net profit margins over 34%, and a market cap of $93 billion. Unless Billiton and/or Rio Tinto think they can significantly increase Alcan's margins, why pay anything like $86 or $32 billion? I wouldn't. For Alcoa it's a different ballgame. It's two so-so companies joining forces. One must remember that aluminum is still a cyclical business. It's only with the Alcoa bid that Alcan has sold above $60. For the better part of 10 years it traded between $20 and $50. During this time, Alcoa has traded between $15 and $45. These two companies deserve one another. Additionally, the Metals Insider newsletter says there is a common theme emerging from US fabricators of aluminum products—reduced buying and inventory de-stocking caused by a 5% year-on-year decline in shipments. Data from the Aluminum Association backs up analysts’ views that a three-year string of increased shipments will be snapped in 2007. Reason: Annualized demand is down almost 10%. Maybe those purchasing Alcan at $85 should reflect on the facts.
The American Petroleum Institute reported a fall of 975,000 barrels in crude supplies for the week ended May 18. The Energy Department had reported an increase of 2 million barrels for the latest week. Motor gasoline supplies were down 2.3 million barrels, the API said. The government reported a rise of 1.5 million barrels. Distillate supplies were down 836,000 barrels, the API said. The government posted a 500,000-barrel rise.
July crude climbed 26 cents to close at $65.77 a barrel Wednesday and June reformulated gasoline finished at $2.3104 a gallon, up 0.41 cent for the session.
June gold rose $2.70 to close at $662.60 an ounce Wednesday. July silver climbed 11.5 cents to close at $13.105.
Microsoft Corp. has all the major pieces it needs to become a bigger player in online advertising, said the company's chief advertising strategist, laying to rest for now speculation that Microsoft might acquire Yahoo Inc.
Hesiod: "Acquisition means life to miserable mortals.”
The median selling price of previously owned homes across the nation was $212,300 in the first quarter, down 1.8 percent from a year earlier, according to the National Association of Realtors. That was the lowest in two years. The U.S. median home price probably will fall 1 percent in 2007 from a year earlier, the realtors' group said on May 8. That would be the first national decline since the Great Depression in the 1930s, said Lawrence Yun, an economist with the Chicago-based trade group.
OAO GMK Norilsk Nickel, the world's largest producer of the metal, increased an offer for LionOre Mining International Ltd. by 28 percent to C$6.8 billion ($6.3 billion), trumping an improved bid from Xstrata Plc. Norilsk bid C$27.50 a share, up from the C$21.50 it proposed May 3.
The House will hold two separate votes on the war-funding measure, House Appropriations Chairman David Obey of Wisconsin told reporters, one on the military spending with Iraqi government benchmarks and then a separate vote on the domestic spending. The measures will then be combined and sent to the Senate for its approval later this week. Congress is scheduled to leave Washington for the week-long Memorial Day recess on Friday.
Stride Rite gets a $20.50 buyout offer from Payless Shoes.
Alcan rejected Alcoa's bid and stated "it does not adequately reflect the value of Alcan's extremely attractive assets, strategic capabilities and growth prospects."
Physio-Control's total sales fell 52 percent last quarter after it suspended U.S. product shipments, parent company Medtronic reported Tuesday.
Redmond-based Physio, a manufacturer of automated external defibrillators, halted U.S. sales after the Food and Drug Administration found shortcomings in its quality-control procedures.
The military said seven soldiers and two Marines were killed in separate attacks Tuesday, bringing the U.S. death toll for the month to at least 80. Last month, 104 U.S. troops were killed in Iraq.
U.S. officials have warned that American casualties were likely to increase as troops made more frequent patrols during the three-month-old U.S.-led security crackdown in Baghdad.
The British pound rose after the minutes from the Bank of England's latest interest-rate meeting showed all nine members voted for a quarter-point hike to 5.5%.
New Zealand’s second-biggest listed company, Fletcher, said it would buy US-based Formica for US$700m, making it the world’s biggest laminates maker. Fletcher said it would acquire the Cincinnati-based Formica from private equity firms Cerberus Capital Management and Oaktree Capital Management to boost its global reach and earnings.
The Bancroft family is scheduled to meet on Wednesday to discuss News Corp’s $5bn takeover bid for Dow Jones, the media group they control, according to people familiar with the matter.
Target Corp. said its first-quarter profit rose almost 18 percent, although revenue was just shy of analyst expectations. The nation's second-largest discount retailer said it earned $651 million, or 75 cents per share, up from $554 million, or 63 cents per share, during the same period last year. Revenue of $14.04 billion was up 9 percent from $12.86 billion a year ago.
Ross Stores stuck to its full year profit forecast of $1.85 to $1.95 a share.
The 10-year Treasury note ended lower 9/32 at 97 05/32 with a yield
of 4.863%, up from 4.829% late Tuesday. In intraday trading, the benchmark 10-year's yield had climbed to 4.875%, the highest level since Jan. 31.
Richard McGregor: "China created fewer jobs (as a percentage of the workforce) between 1982 and 2006 than Brazil, even though it grew by an annual average of more than 10 per cent compared with Brazil’s 3-4 per cent, the IMF found.”
Bill Bonner: "It appears that the world is in the grip of two major and contradictory trends. At the top, money has never been easier to get…nor have rich people ever been more eager to get rid of it. Money changes hands so fast…and in such volume…the markets and bankers are having trouble keeping up with it. Institutional investors have so much money they don't know what to do with it. Meanwhile, down in the Lower Depths…the poor lumpen can't even afford to drive to the store to rent a movie. They're not earning any more money…while their costs continue to rise. Every year, we get a notice that a college has raised its tuition. Our insurance and health care costs seem to go up annually. Every time we fill up our tank…or eat in a restaurant…we get a nasty shock."
Palatin Technologies, Inc. and King Pharmaceuticals, Inc. reported that data from Study 16 and Study 17 of the Phase 2B clinical trial program evaluating bremelanotide in men with erectile dysfunction (ED) were presented yesterday at the American Urological Association (AUA) Annual Meeting (AUA 2007) held in Anaheim, CA. New positive data presented showed that bremelanotide improved both self-esteem and sexual relationship in men with erectile dysfunction (ED). Other positive top line data from the Phase 2B clinical trial program were reported by the companies in November 2006 and at the 9th European Society for Sexual Medicine (ESSM) Congress in Vienna in December 2006. In order to better understand the effects that bremelanotide may have on improving quality of life and self-esteem, patients in Study 16 were administered the SEAR (Self-Esteem and Relationship), a validated psychological instrument with two major domains: sexual relationship and confidence. The SEAR data were presented at AUA 2007 by Stanley E. Althof, PhD, Professor of Psychology, Case Western Reserve School of Medicine in a session entitled Improvement in Sexual Relationship, Satisfaction, Confidence and Self-Esteem in Erectile Dysfunction Patients Treated with Bremelanotide. Dr. Althof commented, "Our analysis has shown that treatment with bremelanotide improved both the Self-Esteem and Sexual Relationship domains of the SEAR in non-diabetic ED patients and this was strongly correlated with improvements in erectile function. These results indicate that bremelanotide improves sexual confidence and has the potential to be an important treatment option for patients with ED." "An increasing focus and attention on the utility of therapy in restoring quality of life and improvements to interpersonal relationships continues to evolve and will drive the need for novel treatment options for ED," Dr. Althof added. "We are extremely pleased with the positive reception that our Phase 2B studies received at the AUA meeting," stated Dr. Trevor Hallam, Palatin's Executive Vice President of R&D. Dr. Hallam further commented, "We are looking forward to discussing these results with the FDA at an end of Phase 2 meeting later this year and moving to Phase 3 trials as soon as possible."
Paul Kasriel: "The decline in M2's relative currency component began shortly after the peak in this cycle's housing starts. Not only would undocumented workers likely not be counted in the establishment payroll statistics but they also would likely be paid in currency, not direct deposits to bank accounts. The absolute and relative slowing in U.S. currency growth in recent years is consistent with the hypothesis that there have been large layoffs of undocumented workers. In turn, this would help explain the relatively mild contraction in documented residential construction employment."
Paul Lamont: "Perhaps Chairman Bernanke does not expect it, but reports in the field, credit derivative indexes, and the Federal Reserve Bank's own research economists are warning of further U.S. mortgage woes."
If you're going to play the risk arb game, it might prove useful to think rationally. Let's take a quick look at Alcan. At $86 it has a market cap of approximately $32 billion with sales of roughly $25 billion and net profit margins of 7.6%. Alcoa has sales of $31 billion with a $35 billion market cap and net profit margins of 8.55%. In sum, they are a pretty fair match statistically. Look at Billiton with sales of $36 billion, 35% net profit margins, and a market cap of $153 billion! Their profit margins are roughly 5 times that of Alcan's. That's pretty much the case of Rio Tinto with sales of $21 billion, net profit margins over 34%, and a market cap of $93 billion. Unless Billiton and/or Rio Tinto think they can significantly increase Alcan's margins, why pay anything like $86 or $32 billion? I wouldn't. For Alcoa it's a different ballgame. It's two so-so companies joining forces. One must remember that aluminum is still a cyclical business. It's only with the Alcoa bid that Alcan has sold above $60. For the better part of 10 years it traded between $20 and $50. During this time, Alcoa has traded between $15 and $45. These two companies deserve one another. Additionally, the Metals Insider newsletter says there is a common theme emerging from US fabricators of aluminum products—reduced buying and inventory de-stocking caused by a 5% year-on-year decline in shipments. Data from the Aluminum Association backs up analysts’ views that a three-year string of increased shipments will be snapped in 2007. Reason: Annualized demand is down almost 10%. Maybe those purchasing Alcan at $85 should reflect on the facts.
The American Petroleum Institute reported a fall of 975,000 barrels in crude supplies for the week ended May 18. The Energy Department had reported an increase of 2 million barrels for the latest week. Motor gasoline supplies were down 2.3 million barrels, the API said. The government reported a rise of 1.5 million barrels. Distillate supplies were down 836,000 barrels, the API said. The government posted a 500,000-barrel rise.
July crude climbed 26 cents to close at $65.77 a barrel Wednesday and June reformulated gasoline finished at $2.3104 a gallon, up 0.41 cent for the session.
June gold rose $2.70 to close at $662.60 an ounce Wednesday. July silver climbed 11.5 cents to close at $13.105.
Microsoft Corp. has all the major pieces it needs to become a bigger player in online advertising, said the company's chief advertising strategist, laying to rest for now speculation that Microsoft might acquire Yahoo Inc.
Hesiod: "Acquisition means life to miserable mortals.”
The Music Continues
5/23/07 The Music Continues
According to Bloomberg, Medtronic Inc.will report that its stent for preventing heart attacks didn’t cause blood clots in test, increasing the cardiac-device maker’s chances of expanding its share of the $5.4 billion-a-year worldwide market. Medtronic Inc. reported fiscal fourth-quarter net earnings of $812 million, or 70 cents a share, up 9.7% from $740 million, or 61 cents a share, in the year-ago period. Adjusting for special litigation and restructuring charges and certain income tax benefits, adjusted earnings came in at 66 cents a share in the fiscal fourth quarter of 2007.
Michael Moskow, Pres. of the Chicago Fed: “I see the economy improving as we move through this year,” Moskow said. “Our expectation is that inflation rates will continue to come down as well during this period and I would expect the unemployment rate will not go up a great deal.”
The Bush administration is quietly on track to nearly double the number of combat troops in Iraq this year, an analysis of Pentagon deployment orders showed Monday. The little-noticed second surge, designed to reinforce U.S. troops in Iraq, is being executed by sending more combat brigades and extending tours of duty for troops already there. The actions could boost the number of combat soldiers from 52,500 in early January to as many as 98,000 by the end of this year if the Pentagon overlaps arriving and departing combat brigades. The Decider is once again acting against the will of the American people.
On Sunday, Kuwait said it would decouple its currency, the dinar, from the dollar in order to fight inflation. Its move resonates not just in the Middle East, but as far away as China and Ecuador -- other countries that also tie their economies to moves in the dollar. Will the dollar become a second-class citizen, so to speak?
Warner Music Group is likely to counter a $4.7 billion private equity buyout for long-sought rival EMI Group and turn what looked like a closed deal for the recording company into a new takeover battle, analysts said on Monday. EMI said on Monday it agreed to the offer from Terra Firma, possibly ending a seven-year standoff with smaller competitor Warner Music. Both firms feared regulators would kill any deal. Warner Music, the fourth-largest music company, is evaluating its options after Terra Firma offered to pay 2.4 billion pounds ($4.73 billion) or 265 pence a share in cash to buy No. 3 music group EMI, two sources close to the talks told Reuters. One source said Warner Music, whose acts include Madonna, Red Hot Chili Peppers and Green Day, would consider bidding more than 265 pence per share in the coming weeks. The source said Warner might also wait until Terra Firma was prepared to sell off EMI assets or the company as a whole.
The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations increased to 24, the highest since June, from 16.5 in April.
Gasoline inventories rose to 195.2 million barrels the week ended May 11, the second consecutive weekly increase, according to a U.S. Energy Department report on May 16. The gain left supplies 7.5 percent below the five year average.
According to Reuters, the FDA will weigh the risks of GlaxoSmithKline diabetes drug Avandia. On Monday, a medical journal reported risks related to the drug. Patients who took Avandia to reduce their blood-sugar levels were 43 percent more likely to have a heart attack than patients who were given other medications or a placebo, the study found.
Puget Sound Energy ratepayers should expect a 13.2 percent increase in their monthly electricity bills triggered by a federal court ruling earlier this month. That ruling by the 9th U.S. Circuit Court of Appeals questioned the legality of Bonneville Power Administration payments to Puget Sound Energy (PSE) and other investor-owned Northwest utilities that collectively serve some 60 percent of the region.
Staples Inc. nudged its profit guidance lower on Tuesday, saying that the pressure to cut costs among consumers and businesses could slow already sluggish U.S. sales.
Halliburton Co. is shifting the company's focus and capital investments away from North America and toward the oil and gas-rich Middle East, its chief executive Dave Lesar said here Tuesday.
Chinese stocks rose to a fresh record high for the second day in a row on Tuesday, as property developers jumped on expectations for a stronger yuan and robust housing demand. The Shanghai Composite Index gained 0.9 percent to 4,110.38, breaking above 4,100 for the first time. The Shenzhen Composite Index climbed 1.4 percent to 1,198.41, also a record high.
Iraq's Vice President Tariq Al Hashimi said Sunday he opposes a draft oil law that is crucial to Iraq's future because it gives too many concessions to international oil companies and the country's regions.
"We have a total of 140 trillion cubic feet of unrisked natural gas resources," said George Kirkland, Chevron's head of exploration, production and gas activities, at the company's annual analyst meeting in March. "With such a significant resource development opportunity, natural gas will play a larger role in our future production. Over the next 20 years natural gas will grow from 30% to nearly 45% of our daily production."
In 2005, Rigzone noted, 94% of the 1.7 billion barrels of oil equivalent that Exxon added to its reserve base came from its natural gas reserves in Qatar.
The International Monetary Fund is still considering whether to sell 400 tons of its gold stocks to help plug a widening income shortfall, the head of the global lender, Rodrigo Rato, said on Monday.
Boris Sobolev: " Average profit margins based on total cash costs fell from 44.95% in Q4/06 to 42.65% in Q1/07. This is at the same time when gold rose from an average price of $613.5/oz in Q4/06 to an average $650/oz in Q1/07 or 5.96% gain. Cash costs were negatively impacted by the industry-wide escalations in labor, spare parts and energy costs, due to the processing of lower grade ores and in some cases lower mine production. So, in fact total cash costs per ounce are rising at a faster rate than the gold price. As a result, most gold producers have become less profitable over the past 2 quarters.This appears to be one of the major reasons why gold stocks have been under-performing the yellow metal. As paradoxical as it may sound, the best thing that can happen to gold producers is an economic slowdown especially if one remembers the anti-cyclical nature of gold.As far as silver producers are concerned, their stock prices have been rising despite decreasing profit margins. But the situation there is quite different in terms of investor expectations.
Paul Kasriel: "I do agree that export growth is likely to pick up near term what with the rest of the world growing strongly and the dollar trending lower. But remember, a good part of the rest of the world's growth is derived from exports. With U.S. domestic demand slowing, this will have a negative effect on the rest of the world's exports (see U. S. Economic and Interest Outlook, May 14, 2007, "The Rest Of The World Is Going To Rejuvenate The U.S. Economy?".) In addition, foreign central banks are tightening their monetary policies, which will slow down their domestic demand growth with a lag. Lastly exports accounted for less than 11-1/2% of real GDP last year - already a record post-war high. If the other 88% of GDP (consumer spending and private domestic investment) is slowing, it is going to take one heck of an acceleration in exports to keep the U.S. economy from stalling out."
The June crude contract expired at the end of Tuesday's trading session. July crude became the front-month contract at the close of the session.
B-P is shutting down 100-thousand barrels a day of its Alaskan oil production for a "few days." The company says it has discovering a water pipeline leak at Prudhoe Bay.
State Street on Tuesday said its monthly global investor confidence index, which measures the buying and selling patterns of institutional investors, fell to 91.2 in May from a revised 93 the previous month. On a regional basis, confidence in North America also fell, but rose in Europe and Asia.
“The market is likely to be tight to 2012, and potentially beyond,” Rio Tinto energy CEO Preston Chiaro said in a presentation posted to the company’s website, citing the World Nuclear Association.
In Cairo last Sunday, Egyptian President Hosni Mubarak warned Cheney against any military confrontation with Iran because it would have "grave repercussions on the region," his spokesman Suleiman Awaad said. Mubarak also told Cheney solving the Palestinian conflict was the key to resolving the rest of the region's crises, Awaad said. Jordan also opposes any military action against Iran, said a Jordanian official after Cheney met with King Abdullah II in Aqaba.
The Justice Department has released a new batch of documents linked to the firings of 8 US attorneys. The documents were apparently released in anticipation of House testimony Wednesday by Monica Goodling, the former counsel for Attorney General Albert Gonzales. Goodling was also the White House liaison. Goodling is under immunity about her role in the firings.
Thomas Friedman: "After all, who can ask more soldiers to sacrifice their lives in Iraq for an administration that wouldn't even sacrifice its politics?"
June gold fell $3.90 to close at $659.90 an ounce Tuesday. July silver fell by 14 cents to close at $12.99 an ounce and July copper closed at $3.3025 a pound, down 2.9%, or 9.8 cents.
June reformulated gasoline was the biggest loser among the energy futures, losing 9.5 cents to close at a one-week low of $2.3063 a gallon Tuesday. June crude fell $1.30 to close at $64.97 a barrel, while July crude, which become the lead-month contract at the session's end, lost $1.36 to $65.51. June natural gas fell 1.4% to close at $7.801 per million British thermal units as traders largely ignored a prediction of an "above-normal" 2007 Atlantic hurricane season.
The biggest worry for the U.S. economy is inflation, and not the possibility of a severe economic slowdown, said Jeffrey Lacker, the president of the Richmond Fed bank. "I don't think the moderation we've seen [on inflation] is statistically significant," Lacker said.
Outback Steakhouse parent OSI Restaurant Partners Inc. said on Tuesday that a group, including Bain Capital, Catterton Partners and OSI's founders, has raised its offer by 3 percent to about $3.18 billion. The investor group raised its offer to $41.15 per share from $40 per share.
The volume of mortgage applications rose 1.6% in the week ended May 18 compared to the prior week, data compiled by the Mortgage Bankers Association show. Also on a seasonally adjusted basis, applications for mortgages to purchase homes increased 1.3% week to week, while refinancing applications were 1.9% higher.
BHP Billiton is in early-stage discussions with Alcan as the Canadian aluminum producer tries to fend off an offer from Alcoa, according to a report in The Globe and Mail newspaper. Alcan CEO Dick Evans told the newspaper that he's had discussions with third parties, and the newspaper said its sources identified BHP as having talks with the Montreal firm.
Crescent Real Estate Equities Co. has agreed to be acquired by funds managed by Morgan Stanley Real Estate for $22.80 per share in a deal valued at roughly $6.5 billion, including debt.
Kirk Kerkorian's firm Tracinda Corp. said it's in talks to buy two of MGM's best-known Las Vegas landmarks, the Bellagio and CityCenter.
The benchmark 10-year Treasury note ended down 10/32 at 97 14/32, yielding 4.829%, up from 4.789% late Monday. In intraday trading, the 10-year yield had risen to 4.831%, the highest level since Feb. 2.
Payless Shoe agrees to buy StrideRite for about $800 million.
According to Bloomberg, Medtronic Inc.will report that its stent for preventing heart attacks didn’t cause blood clots in test, increasing the cardiac-device maker’s chances of expanding its share of the $5.4 billion-a-year worldwide market. Medtronic Inc. reported fiscal fourth-quarter net earnings of $812 million, or 70 cents a share, up 9.7% from $740 million, or 61 cents a share, in the year-ago period. Adjusting for special litigation and restructuring charges and certain income tax benefits, adjusted earnings came in at 66 cents a share in the fiscal fourth quarter of 2007.
Michael Moskow, Pres. of the Chicago Fed: “I see the economy improving as we move through this year,” Moskow said. “Our expectation is that inflation rates will continue to come down as well during this period and I would expect the unemployment rate will not go up a great deal.”
The Bush administration is quietly on track to nearly double the number of combat troops in Iraq this year, an analysis of Pentagon deployment orders showed Monday. The little-noticed second surge, designed to reinforce U.S. troops in Iraq, is being executed by sending more combat brigades and extending tours of duty for troops already there. The actions could boost the number of combat soldiers from 52,500 in early January to as many as 98,000 by the end of this year if the Pentagon overlaps arriving and departing combat brigades. The Decider is once again acting against the will of the American people.
On Sunday, Kuwait said it would decouple its currency, the dinar, from the dollar in order to fight inflation. Its move resonates not just in the Middle East, but as far away as China and Ecuador -- other countries that also tie their economies to moves in the dollar. Will the dollar become a second-class citizen, so to speak?
Warner Music Group is likely to counter a $4.7 billion private equity buyout for long-sought rival EMI Group and turn what looked like a closed deal for the recording company into a new takeover battle, analysts said on Monday. EMI said on Monday it agreed to the offer from Terra Firma, possibly ending a seven-year standoff with smaller competitor Warner Music. Both firms feared regulators would kill any deal. Warner Music, the fourth-largest music company, is evaluating its options after Terra Firma offered to pay 2.4 billion pounds ($4.73 billion) or 265 pence a share in cash to buy No. 3 music group EMI, two sources close to the talks told Reuters. One source said Warner Music, whose acts include Madonna, Red Hot Chili Peppers and Green Day, would consider bidding more than 265 pence per share in the coming weeks. The source said Warner might also wait until Terra Firma was prepared to sell off EMI assets or the company as a whole.
The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations increased to 24, the highest since June, from 16.5 in April.
Gasoline inventories rose to 195.2 million barrels the week ended May 11, the second consecutive weekly increase, according to a U.S. Energy Department report on May 16. The gain left supplies 7.5 percent below the five year average.
According to Reuters, the FDA will weigh the risks of GlaxoSmithKline diabetes drug Avandia. On Monday, a medical journal reported risks related to the drug. Patients who took Avandia to reduce their blood-sugar levels were 43 percent more likely to have a heart attack than patients who were given other medications or a placebo, the study found.
Puget Sound Energy ratepayers should expect a 13.2 percent increase in their monthly electricity bills triggered by a federal court ruling earlier this month. That ruling by the 9th U.S. Circuit Court of Appeals questioned the legality of Bonneville Power Administration payments to Puget Sound Energy (PSE) and other investor-owned Northwest utilities that collectively serve some 60 percent of the region.
Staples Inc. nudged its profit guidance lower on Tuesday, saying that the pressure to cut costs among consumers and businesses could slow already sluggish U.S. sales.
Halliburton Co. is shifting the company's focus and capital investments away from North America and toward the oil and gas-rich Middle East, its chief executive Dave Lesar said here Tuesday.
Chinese stocks rose to a fresh record high for the second day in a row on Tuesday, as property developers jumped on expectations for a stronger yuan and robust housing demand. The Shanghai Composite Index gained 0.9 percent to 4,110.38, breaking above 4,100 for the first time. The Shenzhen Composite Index climbed 1.4 percent to 1,198.41, also a record high.
Iraq's Vice President Tariq Al Hashimi said Sunday he opposes a draft oil law that is crucial to Iraq's future because it gives too many concessions to international oil companies and the country's regions.
"We have a total of 140 trillion cubic feet of unrisked natural gas resources," said George Kirkland, Chevron's head of exploration, production and gas activities, at the company's annual analyst meeting in March. "With such a significant resource development opportunity, natural gas will play a larger role in our future production. Over the next 20 years natural gas will grow from 30% to nearly 45% of our daily production."
In 2005, Rigzone noted, 94% of the 1.7 billion barrels of oil equivalent that Exxon added to its reserve base came from its natural gas reserves in Qatar.
The International Monetary Fund is still considering whether to sell 400 tons of its gold stocks to help plug a widening income shortfall, the head of the global lender, Rodrigo Rato, said on Monday.
Boris Sobolev: " Average profit margins based on total cash costs fell from 44.95% in Q4/06 to 42.65% in Q1/07. This is at the same time when gold rose from an average price of $613.5/oz in Q4/06 to an average $650/oz in Q1/07 or 5.96% gain. Cash costs were negatively impacted by the industry-wide escalations in labor, spare parts and energy costs, due to the processing of lower grade ores and in some cases lower mine production. So, in fact total cash costs per ounce are rising at a faster rate than the gold price. As a result, most gold producers have become less profitable over the past 2 quarters.This appears to be one of the major reasons why gold stocks have been under-performing the yellow metal. As paradoxical as it may sound, the best thing that can happen to gold producers is an economic slowdown especially if one remembers the anti-cyclical nature of gold.As far as silver producers are concerned, their stock prices have been rising despite decreasing profit margins. But the situation there is quite different in terms of investor expectations.
Paul Kasriel: "I do agree that export growth is likely to pick up near term what with the rest of the world growing strongly and the dollar trending lower. But remember, a good part of the rest of the world's growth is derived from exports. With U.S. domestic demand slowing, this will have a negative effect on the rest of the world's exports (see U. S. Economic and Interest Outlook, May 14, 2007, "The Rest Of The World Is Going To Rejuvenate The U.S. Economy?".) In addition, foreign central banks are tightening their monetary policies, which will slow down their domestic demand growth with a lag. Lastly exports accounted for less than 11-1/2% of real GDP last year - already a record post-war high. If the other 88% of GDP (consumer spending and private domestic investment) is slowing, it is going to take one heck of an acceleration in exports to keep the U.S. economy from stalling out."
The June crude contract expired at the end of Tuesday's trading session. July crude became the front-month contract at the close of the session.
B-P is shutting down 100-thousand barrels a day of its Alaskan oil production for a "few days." The company says it has discovering a water pipeline leak at Prudhoe Bay.
State Street on Tuesday said its monthly global investor confidence index, which measures the buying and selling patterns of institutional investors, fell to 91.2 in May from a revised 93 the previous month. On a regional basis, confidence in North America also fell, but rose in Europe and Asia.
“The market is likely to be tight to 2012, and potentially beyond,” Rio Tinto energy CEO Preston Chiaro said in a presentation posted to the company’s website, citing the World Nuclear Association.
In Cairo last Sunday, Egyptian President Hosni Mubarak warned Cheney against any military confrontation with Iran because it would have "grave repercussions on the region," his spokesman Suleiman Awaad said. Mubarak also told Cheney solving the Palestinian conflict was the key to resolving the rest of the region's crises, Awaad said. Jordan also opposes any military action against Iran, said a Jordanian official after Cheney met with King Abdullah II in Aqaba.
The Justice Department has released a new batch of documents linked to the firings of 8 US attorneys. The documents were apparently released in anticipation of House testimony Wednesday by Monica Goodling, the former counsel for Attorney General Albert Gonzales. Goodling was also the White House liaison. Goodling is under immunity about her role in the firings.
Thomas Friedman: "After all, who can ask more soldiers to sacrifice their lives in Iraq for an administration that wouldn't even sacrifice its politics?"
June gold fell $3.90 to close at $659.90 an ounce Tuesday. July silver fell by 14 cents to close at $12.99 an ounce and July copper closed at $3.3025 a pound, down 2.9%, or 9.8 cents.
June reformulated gasoline was the biggest loser among the energy futures, losing 9.5 cents to close at a one-week low of $2.3063 a gallon Tuesday. June crude fell $1.30 to close at $64.97 a barrel, while July crude, which become the lead-month contract at the session's end, lost $1.36 to $65.51. June natural gas fell 1.4% to close at $7.801 per million British thermal units as traders largely ignored a prediction of an "above-normal" 2007 Atlantic hurricane season.
The biggest worry for the U.S. economy is inflation, and not the possibility of a severe economic slowdown, said Jeffrey Lacker, the president of the Richmond Fed bank. "I don't think the moderation we've seen [on inflation] is statistically significant," Lacker said.
Outback Steakhouse parent OSI Restaurant Partners Inc. said on Tuesday that a group, including Bain Capital, Catterton Partners and OSI's founders, has raised its offer by 3 percent to about $3.18 billion. The investor group raised its offer to $41.15 per share from $40 per share.
The volume of mortgage applications rose 1.6% in the week ended May 18 compared to the prior week, data compiled by the Mortgage Bankers Association show. Also on a seasonally adjusted basis, applications for mortgages to purchase homes increased 1.3% week to week, while refinancing applications were 1.9% higher.
BHP Billiton is in early-stage discussions with Alcan as the Canadian aluminum producer tries to fend off an offer from Alcoa, according to a report in The Globe and Mail newspaper. Alcan CEO Dick Evans told the newspaper that he's had discussions with third parties, and the newspaper said its sources identified BHP as having talks with the Montreal firm.
Crescent Real Estate Equities Co. has agreed to be acquired by funds managed by Morgan Stanley Real Estate for $22.80 per share in a deal valued at roughly $6.5 billion, including debt.
Kirk Kerkorian's firm Tracinda Corp. said it's in talks to buy two of MGM's best-known Las Vegas landmarks, the Bellagio and CityCenter.
The benchmark 10-year Treasury note ended down 10/32 at 97 14/32, yielding 4.829%, up from 4.789% late Monday. In intraday trading, the 10-year yield had risen to 4.831%, the highest level since Feb. 2.
Payless Shoe agrees to buy StrideRite for about $800 million.
Monday, May 21, 2007
More Deals
5/22/07 More Deals
Hologic on Sunday agreed to buy Cytyc in a $6.2 billion deal to create a leading firm in women's healthcare. Terms call for Hologic to pay $16.50 in cash and 0.52 of its own shares for each Cytyc share, which at Friday's prices would value Cytyc at $46.46, a 33% premium. For Hologic's fiscal year 2008, combined revenues are expected to be in excess of $1.7 billion, and combined adjusted earnings per share is expected to be in the range of $2.35 to $2.40.
Carlyle Group's push into Middle East private equity is likely to focus on investments in higher-population countries such as Egypt and Algeria more than on oil-rich Gulf states, according to Harry Alverson, managing director.
Jimmy Carter: "I think as far as the adverse impact on the nation around the world, this administration has been the worst in history."
The average price of self-serve regular gasoline hit a record high of $3.18, rising more than 11 cents over the past two weeks, according to a nationwide survey.
Lowe's said first-quarter profit declined 12% to $739 million, or 48 cents a share, from $841 million, or 53 cents a share. Sales rose 2% to $12.17 billion from $11.92 billion, with comparable-store sales down 6%. For the year, it sees earnings between $1.99 and $2.03 a share on 7% sales growth and a 1% to 2% same-store sales fall.
Logistics company EGL Inc. has received a revised takeover offer from Ceva Group, which is owned by affiliates of Apollo Management, worth $47.50 a share in cash. The firm said a special committee has determined that the offer is superior to a bid of $46.25 a share from its CEO and largest shareholder, James Crane.
Chemicals and ammunition manufacturer Olin Corp. has agreed to buy Pioneer Cos. Inc. for $35 a share. The offer represents a 19.5% premium to the previous closing price of $29.30 a share, which valued the firm at $348 million.
TPG Capital (formerly Texas Pacific Group) and GS Capital Partners will acquire Alltel for $71.50 per share in cash, the company said, in what would be among the largest private equity deals ever. Alltel's stock closed at $65.35 on Friday.
''Shrek the Third'' took in $122 million in its first weekend, breaking the franchise's own record for best debut ever for an animated film, according to studio estimates Sunday.
Six U.S. soldiers and an interpreter were killed Saturday when a bomb exploded near their position in western Baghdad, the U.S. military reported Sunday, underscoring the heightened vulnerability of U.S. forces as they increase their presence in the capital.
A seventh U.S. soldier was killed by a roadside bomb Saturday in Diwaniyah, about 100 miles south of Baghdad, the military said. Two soldiers were wounded in that attack.
The deaths raise to 71 the number of U.S. service members killed this month. According to iCasualties.org, 531 U.S. service members have been killed since Dec. 1, an average of more than three deaths a day. In all, at least 3,421 members of the U.S. military have died since the beginning of the Iraq war in March 2003.
"There is hardly anybody in America left ... who doesn't believe that it was a terrible mistake to invade a country that didn't attack us," Gore said.
Rupert Murdoch's News Corp. may be preparing to walk away from a $5 billion bid for Dow Jones & Co. after trying without success to win support from the Bancroft family, which controls the publisher of the Wall Street Journal. News Corp. ``is increasingly frustrated'' with the failure of family members to respond to overtures by Murdoch, Pali Research analyst Richard Greenfield wrote today in a note to investors.
Canada's dollar rose to the strongest level in almost 30 years as surging demand for commodities and persistent economic growth boosts speculation the nation's central bank will increase borrowing costs this year.
According to the Financial Times, European service-sector companies are even more optimistic about prospects for sales, profits, employment and investment than a year ago, according to a closely watched business survey from NTC Economics.The build-up in economic momentum across Europe is reflected in companies’ expectation that staff costs will accelerate, with fewer than one in 10 surveyed expecting slower inflation in wages.
To pay for this, many are expecting to raise prices in the next 12 months.
John Hussman: "There is, in fact, no stable relationship between earnings yields and interest rates. The relationship is actually negative in data since 1929, is marginally positive (but statistically insignificant) in data since 1950, and is only strongly positive in data from 1980 through 2000 as a statistical artifact of the disinflationary period from 1980 to 2000...Proponents of the Fed Model ignore pre-1980 data entirely. That period since 1980 on the above chart is the entire basis for the analysis. In effect, the Fed Model looks at the decline in earnings yields since 1980, and loads the entire explanation on the decline in interest rates. What actually happened is that you had a second factor – the move from extreme undervaluation (abnormally high earnings yields) to extreme overvaluation (abnormally low earnings yields). The true “fair value” relationship between earnings yields and interest rates is nothing close to 1-for-1...In fact, I discovered a few years ago that the main usefulness of the Fed Model is to identify risks in the bond market – specifically, when stock yields are low but the Fed Model gives a “buy signal” anyway, it is evidence that bond yields are unusually depressed. That signal is typically followed by poor bond market performance (with no reliable implication for stocks)...Since 1980, the difference between the S&P 500 earnings yield and the 10-year Treasury yield explains just 6% of the variability in subsequent 2-year total returns (leaving 94% of the variability unaccounted for), and just 3% of the variability in subsequent 10-year returns. If we look back to 1950, we find that the difference between the S&P 500 earnings yield and the 10-year Treasury yield explains just 3% of the variability in subsequent 2-year returns, and just 6% of the variability in subsequent 10-year returns. Adherents of the Fed Model might as well toss a coin to predict whether subsequent returns will be above or below average."
Saudi Basic Industries Corp., the world's biggest chemical company by market value, agreed to buy General Electric Co.'s plastics unit for $11.6 billion.
A forecast released today by the National Association for Business Economics puts the growth of the gross domestic product at 2.2 percent for this year. The rate was 2.7 percent in the group's previous survey, in February.
Google Inc. captured 55.2% of all Internet searches in April, while Yahoo Inc. logged a 21.9% share, according to a monthly tally released Monday by Nielsen/NetRatings Inc. Microsoft's MSN/Windows Live Search had a 9% share in April, good for third place, NetRatings said.
June gold gained $1.80 to close at $663.80 an ounce Monday. July silver gained 12.7 cents to close at $13.13 an ounce and June copper rose 7.7 cents to end at $3.4005 a pound.
Crude gained $1.33 to $66.27, while natural gas declined 3 cents to $7.91.
Dynegy Inc.said that Chevron U.S.A. Inc., a subsidiary of Chevron Corp., plans to sell all of its 96.9 million shares of Dynegy's Class A common stock in an underwritten public offering.
Al Gore: "A president who breaks the law is a threat to the very structure of our government."
Hologic on Sunday agreed to buy Cytyc in a $6.2 billion deal to create a leading firm in women's healthcare. Terms call for Hologic to pay $16.50 in cash and 0.52 of its own shares for each Cytyc share, which at Friday's prices would value Cytyc at $46.46, a 33% premium. For Hologic's fiscal year 2008, combined revenues are expected to be in excess of $1.7 billion, and combined adjusted earnings per share is expected to be in the range of $2.35 to $2.40.
Carlyle Group's push into Middle East private equity is likely to focus on investments in higher-population countries such as Egypt and Algeria more than on oil-rich Gulf states, according to Harry Alverson, managing director.
Jimmy Carter: "I think as far as the adverse impact on the nation around the world, this administration has been the worst in history."
The average price of self-serve regular gasoline hit a record high of $3.18, rising more than 11 cents over the past two weeks, according to a nationwide survey.
Lowe's said first-quarter profit declined 12% to $739 million, or 48 cents a share, from $841 million, or 53 cents a share. Sales rose 2% to $12.17 billion from $11.92 billion, with comparable-store sales down 6%. For the year, it sees earnings between $1.99 and $2.03 a share on 7% sales growth and a 1% to 2% same-store sales fall.
Logistics company EGL Inc. has received a revised takeover offer from Ceva Group, which is owned by affiliates of Apollo Management, worth $47.50 a share in cash. The firm said a special committee has determined that the offer is superior to a bid of $46.25 a share from its CEO and largest shareholder, James Crane.
Chemicals and ammunition manufacturer Olin Corp. has agreed to buy Pioneer Cos. Inc. for $35 a share. The offer represents a 19.5% premium to the previous closing price of $29.30 a share, which valued the firm at $348 million.
TPG Capital (formerly Texas Pacific Group) and GS Capital Partners will acquire Alltel for $71.50 per share in cash, the company said, in what would be among the largest private equity deals ever. Alltel's stock closed at $65.35 on Friday.
''Shrek the Third'' took in $122 million in its first weekend, breaking the franchise's own record for best debut ever for an animated film, according to studio estimates Sunday.
Six U.S. soldiers and an interpreter were killed Saturday when a bomb exploded near their position in western Baghdad, the U.S. military reported Sunday, underscoring the heightened vulnerability of U.S. forces as they increase their presence in the capital.
A seventh U.S. soldier was killed by a roadside bomb Saturday in Diwaniyah, about 100 miles south of Baghdad, the military said. Two soldiers were wounded in that attack.
The deaths raise to 71 the number of U.S. service members killed this month. According to iCasualties.org, 531 U.S. service members have been killed since Dec. 1, an average of more than three deaths a day. In all, at least 3,421 members of the U.S. military have died since the beginning of the Iraq war in March 2003.
"There is hardly anybody in America left ... who doesn't believe that it was a terrible mistake to invade a country that didn't attack us," Gore said.
Rupert Murdoch's News Corp. may be preparing to walk away from a $5 billion bid for Dow Jones & Co. after trying without success to win support from the Bancroft family, which controls the publisher of the Wall Street Journal. News Corp. ``is increasingly frustrated'' with the failure of family members to respond to overtures by Murdoch, Pali Research analyst Richard Greenfield wrote today in a note to investors.
Canada's dollar rose to the strongest level in almost 30 years as surging demand for commodities and persistent economic growth boosts speculation the nation's central bank will increase borrowing costs this year.
According to the Financial Times, European service-sector companies are even more optimistic about prospects for sales, profits, employment and investment than a year ago, according to a closely watched business survey from NTC Economics.The build-up in economic momentum across Europe is reflected in companies’ expectation that staff costs will accelerate, with fewer than one in 10 surveyed expecting slower inflation in wages.
To pay for this, many are expecting to raise prices in the next 12 months.
John Hussman: "There is, in fact, no stable relationship between earnings yields and interest rates. The relationship is actually negative in data since 1929, is marginally positive (but statistically insignificant) in data since 1950, and is only strongly positive in data from 1980 through 2000 as a statistical artifact of the disinflationary period from 1980 to 2000...Proponents of the Fed Model ignore pre-1980 data entirely. That period since 1980 on the above chart is the entire basis for the analysis. In effect, the Fed Model looks at the decline in earnings yields since 1980, and loads the entire explanation on the decline in interest rates. What actually happened is that you had a second factor – the move from extreme undervaluation (abnormally high earnings yields) to extreme overvaluation (abnormally low earnings yields). The true “fair value” relationship between earnings yields and interest rates is nothing close to 1-for-1...In fact, I discovered a few years ago that the main usefulness of the Fed Model is to identify risks in the bond market – specifically, when stock yields are low but the Fed Model gives a “buy signal” anyway, it is evidence that bond yields are unusually depressed. That signal is typically followed by poor bond market performance (with no reliable implication for stocks)...Since 1980, the difference between the S&P 500 earnings yield and the 10-year Treasury yield explains just 6% of the variability in subsequent 2-year total returns (leaving 94% of the variability unaccounted for), and just 3% of the variability in subsequent 10-year returns. If we look back to 1950, we find that the difference between the S&P 500 earnings yield and the 10-year Treasury yield explains just 3% of the variability in subsequent 2-year returns, and just 6% of the variability in subsequent 10-year returns. Adherents of the Fed Model might as well toss a coin to predict whether subsequent returns will be above or below average."
Saudi Basic Industries Corp., the world's biggest chemical company by market value, agreed to buy General Electric Co.'s plastics unit for $11.6 billion.
A forecast released today by the National Association for Business Economics puts the growth of the gross domestic product at 2.2 percent for this year. The rate was 2.7 percent in the group's previous survey, in February.
Google Inc. captured 55.2% of all Internet searches in April, while Yahoo Inc. logged a 21.9% share, according to a monthly tally released Monday by Nielsen/NetRatings Inc. Microsoft's MSN/Windows Live Search had a 9% share in April, good for third place, NetRatings said.
June gold gained $1.80 to close at $663.80 an ounce Monday. July silver gained 12.7 cents to close at $13.13 an ounce and June copper rose 7.7 cents to end at $3.4005 a pound.
Crude gained $1.33 to $66.27, while natural gas declined 3 cents to $7.91.
Dynegy Inc.said that Chevron U.S.A. Inc., a subsidiary of Chevron Corp., plans to sell all of its 96.9 million shares of Dynegy's Class A common stock in an underwritten public offering.
Al Gore: "A president who breaks the law is a threat to the very structure of our government."
Sunday, May 20, 2007
Analysis
5/21/07 Analysis
Between The Hedges: "The 50-week moving average of the percentage of bears iscurrently 37.6%, a very high level seen during only two other periods since tracking began in the 1980s. Those periods were October 1990-July 1991 and March-May 2003, both of which were near major market bottoms. The extreme readings in the50-week moving average of the percentage of bears, during those periods, peaked at 41.6% on Jan. 31, 1991 and 38.1% on April 10, 2003. We are very close to eclipsing the peak in bearish sentiment during the 2000-03 market meltdown, which is astonishing considering the macro backdrop now and then. I continue to find that steadfastly high bearish sentiment in many quarters mind-boggling for the following reasons:
· The 26.6% rise in the S&P 500 in just over 11 months,
· The 106.8% gain for the S&P 500 since the 2002 major bear market lows,
· The NYSE cumulative advance/decline line hit a new record high Wednesday of last week,
· All market-caps and styles are participating,
· The market had one of the best August/September/October runs in U.S. history,
· The Dow made another all-time high yesterday and,
· We are in the early stages of what is historically a very strong period for U.S. equities after a midterm election.
As well, despite recent gains, the forward P/E on the S&P 500 is a very reasonable 16.3, close to where it began the year(16.2), due to the historic run of double-digit profit growth increases and better-than-expected earnings and guidance in the first quarter. The S&P P/E multiple has contracted for three consecutive years. It has only contracted four consecutive years two times since 1905. Each point of multiple expansion is equivalent to a 6.6% gain in the S&P 500. I strongly suspect we will finally see expansion this year. The many bears still remain stunningly complacent, in my opinion... I still expect the S&P 500 to return a total of around 17% for the year...
I still believe the coming bullish shift in long-term sentiment with respect to U.S. stocks will result in the "mother of all short-covering rallies."
In a statement on Saturday, Genesis Healthcare said its board determined that Formation-JER's $69.35 proposal is superior to that of Fillmore and urged holders to accept the $69.35-a-share deal.
A nanocomposite particle can be constructed so that it has a mix of properties that would not otherwise happen in nature. By combining an organic matrix with
metallic clusters that can absorb light, it is possible to incorporate such
particles into cells and then destroy those targeted cells with a laser. In
a presentation at the NSTI Nanotech 2007 Conference, researchers describe
work conducted at the NanoBiotechnology Center, Department of Radiation
Medicine, Roswell Park Cancer Institute, Buffalo, NY and the University of
Michigan, Ann Arbor, MI, regarding the creation and characterization of a
dendrimer nanocomposite (DNC) matrix containing silver clusters that can be
used to target and destroy melanoma cancer cells.
Composite NanoDevices (CNDs), are an emerging class of hybrid
nanoparticulate materials. CNDs are made from dendrimer-based polymers, for
example from poly(amidoamine) [(PAMAMs)].
To visualize the device, Dr. Lajos P. Balogh says simply think of
nanoscale, dense, but soft "tumbleweed," where clusters of inorganic
materials (such as silver) can be trapped inside. The CND "tumbleweed"
device can be made in discrete sizes, carry different electric charges and
can encapsulate different materials inside. This design offers researchers
a wider choice of size, surface functionality and payload than traditional
small in vivo devices where the agent is conjugated directly to the
surface.
A laser can be used to kill cells indiscriminately, but it is really a
blunt instrument. High powered lasers do so much damage that the tissue
becomes opaque to further light. Yet, lower-powered lasers do not deliver
enough energy to kill cells. By labeling cells with CNDs, light absorption
can be selectively and locally enhanced wherever composite nanodevices are
present. Irradiation of the mix of labeled and unlabeled cells by laser
light, causes tiny bubbles to form that disrupt and damage the labeled
cells, but leave unlabeled cells unaffected. This technology holds promise
as an alternative therapy for cancer patients.
According to Dr. Balogh, "The DNC is a multi-functional platform.
Because it can carry multiple agents inside, yet present a simple outer
surface to the body, it can be programmed to deliver those agents to a
particular organ or tissue."
The Telegraph newspaper in the UK is reporting the Yahoo! may pay $1 billion for social network operation Bebo.
Mike Burk: "The small cap indices have been down for two weeks in a row, many of the short term indicators appear to have bottomed and seasonal strength kicks in the second half of the week. I expect the major indices to be higher on Friday May 25 than they were on Friday May 18."
Kevin Duffy: "The real inflationary action, however, is in credit expansion. For example, in the last 6 years, the Federal Reserve has grown its balance sheet less than $300 billion while the nation's money supply has expanded by $4.3 trillion, or 14 times as much. In other words, the central banker can bait the hook, but lenders and borrowers still have to take the bait...The trouble with pyramid schemes is that they're not designed to go in reverse. Eventually, the number of willing dupes is exhausted. The same people who panicked late to get into the game are just as likely to panic when the music stops. The longer the music plays, the more leveraged and unstable the inverted credit pyramid becomes. As the late economist Hyman Minsky observed, "stability is unstable."... In the past six years, the Fed grew its balance sheet 50%, money supply expanded 60%, and the Top Five investments banks increased total assets by 160%. In the latest quarter, the total assets of Goldman Sachs exceeded total bank credit at the Fed for the first time...As the great Austrian economist Ludwig von Mises warned, "There is no means of avoiding the final collapse of a boom brought about by credit expansion."
Thirteen state Democratic parties have now passed resolutions demanding impeachment, nine of them since Nancy Pelosi ordered the Democratic Party away from impeachment.
Former counsel to Alberto Gonzales and Justice Department liaison to the White House Monica Goodling will testify before the House Judiciary Committee on May 23.
Arab American News: "This Shi'a power will result in a huge Sunni backlash — as shown by the actions of such Sunni organizations as the Taliban and al-Qaeda — and if anything, will strengthen anti-Americanism in the region, as the revival comes at a time of rising Sunni extremism. Anti-Shi'a feelings and actions by the extremists will hurt the U.S., as anti-Shi'a feelings will solidify Sunni public opinion and expand the influence of groups such as al-Qaeda."
Deputy U.S. Treasury Secretary Robert Kimmitt: "I informed my colleagues that our fiscal deficit continues to decline and the U.S. economy is making the transition to a sustainable growth path," Kimmitt said. "While the economy grew modestly in the first quarter, we are confident it will return toward trend over the year. We see evidence that housing is stabilizing and that rising delinquencies in the subprime mortgage market have not spread more generally. Inflation remains contained and the job market is strong."
Capitalia's main stockholders approved UniCredit's offer of 1.12 of its own shares for each Capitalia share, Giovanni Puglisi, head of investor Fondazione Banco di Sicilia, said in an interview. That values Capitalia shares at 8.41 euros each, or 6.2 percent more than the closing price on May 17.
Atlantic Free Press: "Iran's oil reserves are considerable and they provide 80-90% of export earnings for the country and over 40% of the government budget. Iran is OPEC's second largest oil producer, operates OPEC's largest tanker fleet and has proven oil reserves amounting to 10% of the world total. Note that the vast majority of Iran's oil reserves are located in the southwestern Khuzestan region which is near the Iraqi border. Current crude oil production capacity is about 3.8 million bbl/d which is approximately 60% of 1974 levels. The effects of two wars (Iran-Iraq, Gulf War,) economic sanctions and government mismanagement since the 1978/9 revolution are thereby highlighted. According to the DOE, "Iran's existing oil fields have a natural decline rate estimated at 8 percent onshore and 10 percent per year offshore. The fields are in need of upgrading, modernization, and enhanced oil recovery (EOR) efforts such as gas reinjection." EOR is particularly important as 60% of Iran's oil fields are more than 50 years old. Current recovery rates are approximately 2/3 of the industry world wide average. Iranian oil exports are managed through complicated buy back and swap contracts, Turkmenistan and Kazakhstan figure prominently in the latter arrangements. The Iranian constitution prohibits the granting of petroleum rights on a concessionary basis or direct equity stake.
Iran exports crude from four large terminals of which the famous Kharg Island is by far the largest and whose capacity is under expansion. Iran's' largest oil buyers are Japan, China, South Korea and Italy in that order. The Azadegan field in Khuzistan (adjacent to Iraq border) discovered in 1999 is the largest oil reserve find in 30 years. Japan will figure prominently in its development but there are still disagreements over mine clearing. First production of medium sour crude might come online in 2009, or 2010. A very large, shallow water offshore discovery at Dasht-e Abadan near the port city of Abadan may be of a magnitude comparable to Azadegan. Regarding the important oil discoveries in the Caspian Sea, Iran is the only country that can provide a pipeline route between the Caspian Sea and the Persian Gulf... Iran is an importer of gasoline due to a shortage of refinery capacity... Iran is the second largest importer in the world of gasoline after the United States.
Iran has an estimated 970 trillion cubic feet (Tcf) in proven natural gas reserves, second only to Russia. According to DOE data, perhaps 62% of these gas fields have yet to be developed."
Between The Hedges: "The 50-week moving average of the percentage of bears iscurrently 37.6%, a very high level seen during only two other periods since tracking began in the 1980s. Those periods were October 1990-July 1991 and March-May 2003, both of which were near major market bottoms. The extreme readings in the50-week moving average of the percentage of bears, during those periods, peaked at 41.6% on Jan. 31, 1991 and 38.1% on April 10, 2003. We are very close to eclipsing the peak in bearish sentiment during the 2000-03 market meltdown, which is astonishing considering the macro backdrop now and then. I continue to find that steadfastly high bearish sentiment in many quarters mind-boggling for the following reasons:
· The 26.6% rise in the S&P 500 in just over 11 months,
· The 106.8% gain for the S&P 500 since the 2002 major bear market lows,
· The NYSE cumulative advance/decline line hit a new record high Wednesday of last week,
· All market-caps and styles are participating,
· The market had one of the best August/September/October runs in U.S. history,
· The Dow made another all-time high yesterday and,
· We are in the early stages of what is historically a very strong period for U.S. equities after a midterm election.
As well, despite recent gains, the forward P/E on the S&P 500 is a very reasonable 16.3, close to where it began the year(16.2), due to the historic run of double-digit profit growth increases and better-than-expected earnings and guidance in the first quarter. The S&P P/E multiple has contracted for three consecutive years. It has only contracted four consecutive years two times since 1905. Each point of multiple expansion is equivalent to a 6.6% gain in the S&P 500. I strongly suspect we will finally see expansion this year. The many bears still remain stunningly complacent, in my opinion... I still expect the S&P 500 to return a total of around 17% for the year...
I still believe the coming bullish shift in long-term sentiment with respect to U.S. stocks will result in the "mother of all short-covering rallies."
In a statement on Saturday, Genesis Healthcare said its board determined that Formation-JER's $69.35 proposal is superior to that of Fillmore and urged holders to accept the $69.35-a-share deal.
A nanocomposite particle can be constructed so that it has a mix of properties that would not otherwise happen in nature. By combining an organic matrix with
metallic clusters that can absorb light, it is possible to incorporate such
particles into cells and then destroy those targeted cells with a laser. In
a presentation at the NSTI Nanotech 2007 Conference, researchers describe
work conducted at the NanoBiotechnology Center, Department of Radiation
Medicine, Roswell Park Cancer Institute, Buffalo, NY and the University of
Michigan, Ann Arbor, MI, regarding the creation and characterization of a
dendrimer nanocomposite (DNC) matrix containing silver clusters that can be
used to target and destroy melanoma cancer cells.
Composite NanoDevices (CNDs), are an emerging class of hybrid
nanoparticulate materials. CNDs are made from dendrimer-based polymers, for
example from poly(amidoamine) [(PAMAMs)].
To visualize the device, Dr. Lajos P. Balogh says simply think of
nanoscale, dense, but soft "tumbleweed," where clusters of inorganic
materials (such as silver) can be trapped inside. The CND "tumbleweed"
device can be made in discrete sizes, carry different electric charges and
can encapsulate different materials inside. This design offers researchers
a wider choice of size, surface functionality and payload than traditional
small in vivo devices where the agent is conjugated directly to the
surface.
A laser can be used to kill cells indiscriminately, but it is really a
blunt instrument. High powered lasers do so much damage that the tissue
becomes opaque to further light. Yet, lower-powered lasers do not deliver
enough energy to kill cells. By labeling cells with CNDs, light absorption
can be selectively and locally enhanced wherever composite nanodevices are
present. Irradiation of the mix of labeled and unlabeled cells by laser
light, causes tiny bubbles to form that disrupt and damage the labeled
cells, but leave unlabeled cells unaffected. This technology holds promise
as an alternative therapy for cancer patients.
According to Dr. Balogh, "The DNC is a multi-functional platform.
Because it can carry multiple agents inside, yet present a simple outer
surface to the body, it can be programmed to deliver those agents to a
particular organ or tissue."
The Telegraph newspaper in the UK is reporting the Yahoo! may pay $1 billion for social network operation Bebo.
Mike Burk: "The small cap indices have been down for two weeks in a row, many of the short term indicators appear to have bottomed and seasonal strength kicks in the second half of the week. I expect the major indices to be higher on Friday May 25 than they were on Friday May 18."
Kevin Duffy: "The real inflationary action, however, is in credit expansion. For example, in the last 6 years, the Federal Reserve has grown its balance sheet less than $300 billion while the nation's money supply has expanded by $4.3 trillion, or 14 times as much. In other words, the central banker can bait the hook, but lenders and borrowers still have to take the bait...The trouble with pyramid schemes is that they're not designed to go in reverse. Eventually, the number of willing dupes is exhausted. The same people who panicked late to get into the game are just as likely to panic when the music stops. The longer the music plays, the more leveraged and unstable the inverted credit pyramid becomes. As the late economist Hyman Minsky observed, "stability is unstable."... In the past six years, the Fed grew its balance sheet 50%, money supply expanded 60%, and the Top Five investments banks increased total assets by 160%. In the latest quarter, the total assets of Goldman Sachs exceeded total bank credit at the Fed for the first time...As the great Austrian economist Ludwig von Mises warned, "There is no means of avoiding the final collapse of a boom brought about by credit expansion."
Thirteen state Democratic parties have now passed resolutions demanding impeachment, nine of them since Nancy Pelosi ordered the Democratic Party away from impeachment.
Former counsel to Alberto Gonzales and Justice Department liaison to the White House Monica Goodling will testify before the House Judiciary Committee on May 23.
Arab American News: "This Shi'a power will result in a huge Sunni backlash — as shown by the actions of such Sunni organizations as the Taliban and al-Qaeda — and if anything, will strengthen anti-Americanism in the region, as the revival comes at a time of rising Sunni extremism. Anti-Shi'a feelings and actions by the extremists will hurt the U.S., as anti-Shi'a feelings will solidify Sunni public opinion and expand the influence of groups such as al-Qaeda."
Deputy U.S. Treasury Secretary Robert Kimmitt: "I informed my colleagues that our fiscal deficit continues to decline and the U.S. economy is making the transition to a sustainable growth path," Kimmitt said. "While the economy grew modestly in the first quarter, we are confident it will return toward trend over the year. We see evidence that housing is stabilizing and that rising delinquencies in the subprime mortgage market have not spread more generally. Inflation remains contained and the job market is strong."
Capitalia's main stockholders approved UniCredit's offer of 1.12 of its own shares for each Capitalia share, Giovanni Puglisi, head of investor Fondazione Banco di Sicilia, said in an interview. That values Capitalia shares at 8.41 euros each, or 6.2 percent more than the closing price on May 17.
Atlantic Free Press: "Iran's oil reserves are considerable and they provide 80-90% of export earnings for the country and over 40% of the government budget. Iran is OPEC's second largest oil producer, operates OPEC's largest tanker fleet and has proven oil reserves amounting to 10% of the world total. Note that the vast majority of Iran's oil reserves are located in the southwestern Khuzestan region which is near the Iraqi border. Current crude oil production capacity is about 3.8 million bbl/d which is approximately 60% of 1974 levels. The effects of two wars (Iran-Iraq, Gulf War,) economic sanctions and government mismanagement since the 1978/9 revolution are thereby highlighted. According to the DOE, "Iran's existing oil fields have a natural decline rate estimated at 8 percent onshore and 10 percent per year offshore. The fields are in need of upgrading, modernization, and enhanced oil recovery (EOR) efforts such as gas reinjection." EOR is particularly important as 60% of Iran's oil fields are more than 50 years old. Current recovery rates are approximately 2/3 of the industry world wide average. Iranian oil exports are managed through complicated buy back and swap contracts, Turkmenistan and Kazakhstan figure prominently in the latter arrangements. The Iranian constitution prohibits the granting of petroleum rights on a concessionary basis or direct equity stake.
Iran exports crude from four large terminals of which the famous Kharg Island is by far the largest and whose capacity is under expansion. Iran's' largest oil buyers are Japan, China, South Korea and Italy in that order. The Azadegan field in Khuzistan (adjacent to Iraq border) discovered in 1999 is the largest oil reserve find in 30 years. Japan will figure prominently in its development but there are still disagreements over mine clearing. First production of medium sour crude might come online in 2009, or 2010. A very large, shallow water offshore discovery at Dasht-e Abadan near the port city of Abadan may be of a magnitude comparable to Azadegan. Regarding the important oil discoveries in the Caspian Sea, Iran is the only country that can provide a pipeline route between the Caspian Sea and the Persian Gulf... Iran is an importer of gasoline due to a shortage of refinery capacity... Iran is the second largest importer in the world of gasoline after the United States.
Iran has an estimated 970 trillion cubic feet (Tcf) in proven natural gas reserves, second only to Russia. According to DOE data, perhaps 62% of these gas fields have yet to be developed."
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