2/16/08 Deteriorating Conditions
The U.S. Import Price Index increased 1.7 percent in January,
led by a 5.5 percent increase in petroleum prices.
The overall increase followed a 0.2 percent decline in
December. U.S. export prices advanced 1.2 percent in
January following a 0.4 percent rise in December.
Top electronics retailer Best Buy Co cut its full-year outlook
on Friday, saying fourth-quarter sales would miss its
expectations as the softer U.S. economy hurt January store
traffic, pushing its shares down 3 percent. Lower revenue for advanced televisions, MP3 devices and video games
will result in a modest fall in sales at stores open at least 14
months, or same-store sales, Best Buy said.
"The macroeconomic environment grew more challenging after the holidays," Jim Muehlbauer, interim chief financial officer, said in a statement. "Our post-holiday results are not going to be what we originally expected."
An index of consumer sentiment fell to a 16-year low. The index fell to 69.6 in mid-February from 78.4 in January.
Crude futures for March delivery gained 4 cents to close at $95.50 a barrel on the New York Mercantile Exchange. Platinum for April delivery soared as high as $2,079.90 an ounce, beating the previous record set on Thursday. The contract finished up $57.80 at $2,063.70 an ounce. Platinum futures soared $179.70, or nearly 10%, this week from last Friday's closing level of $1,884. Gold for April delivery dropped $4.70 to end at $906.10 an ounce. Gold posted a weekly loss of $16.20 from last Friday's closing level of $922.30.
Countrywide's delinquencies and foreclosures also continued to rise, with delinquencies up to 7.47% from 7.27% and foreclosures growing to 1.48% from 1.44% a month earlier.
The Empire State manufacturing survey indicates that conditions for New York manufacturers deteriorated in February, the Federal Reserve Bank of New York said Friday. The general business conditions index tumbled nearly 21 points to -11.7, falling below zero for the first time since May 2005.
ConocoPhillips raised its quarterly dividend 15% to 47 cents from 41 cents. The dividend is payable March 3 to shareholders of record as of Feb. 25.
Wilsons The Leather Experts Inc. plans to begin a program of reducing its mall store base, implementing aggressive cost cutting initiatives and launching a new accessories store concept. As part of the initiative, Wilsons said it plans to close up to 160 mall locations "that do not fit its go-forward strategy." All remaining 100 stores in the mall division will be remodeled to a new "Studio" concept, a brand-driven store for women focusing on fashion accessories. The Minneapolis-based retailer said the plan will affect approximately 938 store-related positions.
China's trade surplus in January totaled $19.49 billion, up 22.5% from a year earlier, but down against the preceding month, according to data released by China's General Administration of Customs Friday. China's surplus in December totaled $22.69 billion.
According to a Business Council survey released Thursday, 81% of CEOs polled by the group expected "sluggish" U.S. economic growth of 0% to 2% this year.
The credit crunch driven by the U.S. housing crisis appears to have hit another engine of the American economy -- small businesses. "We've been concerned about this for some time, but things are really beginning to deteriorate," said Todd McCracken, president of the National Small Business Association (NSBA).
New York state governor Eliot Spitzer warned Thursday that bond and credit woes afflicting Wall Street and global markets could turn into a more damaging "financial tsunami."
Paul Krugman: "Why has a crisis that began with loans to a limited group of home buyers ended up disrupting so much of the financial system? Because, ultimately, it’s more than a subprime crisis; indeed, it’s more than a housing crisis. It’s a crisis of faith."
According to AMG Data Services, including ETF activity, Equity funds report net cash outflows totaling -$7.606 billion in the week ended 2/13/08 with Domestic funds reporting net outflows of -$6.795 billion and Non-domestic funds reporting net outflows of -$811 million; Excluding ETF activity, Equity funds report net cash outflows totaling -$332 million with Domestic funds reporting net outflows of -$4 million and Non-domestic funds reporting net outflows totaling -$328 million.
Saturday, February 16, 2008
Wednesday, February 13, 2008
The Big Easy
2/13/08 The Big Easy
Homeowners threatened with foreclosure would in some instances get a 30-day reprieve under an initiative the Bush administration announced Tuesday. Dubbed "Project Lifeline," the program will be available to people who have taken out all types of mortgages, not just the high-cost subprime loans that have been the focus of previous relief efforts. The program was put together by six of the nation's largest financial institutions, which service almost 50 percent of the nation's mortgages.
Warren Buffett said Tuesday that he has offered to help out troubled bond insurers by offering a second level of insurance on up to $800 billion in municipal bonds. In an interview on CNBC, Buffett said his Berkshire Hathaway holding company made the offer of reinsurance to bond insurers Ambac Financial Group Inc., MBIA Inc. and Financial Guaranty Insurance Co. Buffett said one firm rejected his offer, and he was still waiting to hear from the other two. He did not say which was which.
n its monthly review of the government's finances, the Treasury Department said Tuesday that the budget was in surplus in January, but totals $87.7 billion so far this budget year, double the $42.2 billion imbalance recorded during the same period in 2007. The new budget year started last Oct. 1.
General Motors Corp. reported a $38.7 billion loss for 2007 on Tuesday, the largest annual loss ever for an automotive company, and said it is making a new round of buyout offers to U.S. hourly workers in hopes of replacing some of them with lower-paid help.
U.S. Crude oil for March delivery lost 81 cents, or 0.9%, to close at $92.78 a barrel on the New York Mercantile Exchange. Gold for April delivery declined $15.60 at $911.10 an ounce on the New York Mercantile Exchange.
"We think this deal is a strategic imperative for Microsoft, and that Yahoo is in a tough spot if it wishes to remain independent," said Miller, manager of Legg Mason Value Trust, a large holder of Yahoo stock. He thinks Microsoft will have to enhance its offer it wants to seal the deal for Yahoo.
The outlook for 2008 is much weaker than three months ago but a recession is still unlikely, according to the median forecast of 50 economists surveyed by the Philadelphia Federal Reserve Bank. The forecasters expect growth of 0.7% in the first quarter and 1.3% in the second quarter, much weaker than the average 2.25% average growth in the two quarters previously forecast.
As expected, Yahoo Inc began carrying out lay-offs up to 1,000 employees on Tuesday, as part of job cutbacks announced last month, several employees at the company's headquarters said on Tuesday. U.K. inflation accelerated to a seven-month high in January as soaring gasoline and food costs blunted the impact of discounting by fashion stores. Consumer prices climbed 2.2 percent from a year earlier, compared with 2.1 percent in December, the Office for National Statistics said today in London.
Homeowners threatened with foreclosure would in some instances get a 30-day reprieve under an initiative the Bush administration announced Tuesday. Dubbed "Project Lifeline," the program will be available to people who have taken out all types of mortgages, not just the high-cost subprime loans that have been the focus of previous relief efforts. The program was put together by six of the nation's largest financial institutions, which service almost 50 percent of the nation's mortgages.
Warren Buffett said Tuesday that he has offered to help out troubled bond insurers by offering a second level of insurance on up to $800 billion in municipal bonds. In an interview on CNBC, Buffett said his Berkshire Hathaway holding company made the offer of reinsurance to bond insurers Ambac Financial Group Inc., MBIA Inc. and Financial Guaranty Insurance Co. Buffett said one firm rejected his offer, and he was still waiting to hear from the other two. He did not say which was which.
n its monthly review of the government's finances, the Treasury Department said Tuesday that the budget was in surplus in January, but totals $87.7 billion so far this budget year, double the $42.2 billion imbalance recorded during the same period in 2007. The new budget year started last Oct. 1.
General Motors Corp. reported a $38.7 billion loss for 2007 on Tuesday, the largest annual loss ever for an automotive company, and said it is making a new round of buyout offers to U.S. hourly workers in hopes of replacing some of them with lower-paid help.
U.S. Crude oil for March delivery lost 81 cents, or 0.9%, to close at $92.78 a barrel on the New York Mercantile Exchange. Gold for April delivery declined $15.60 at $911.10 an ounce on the New York Mercantile Exchange.
"We think this deal is a strategic imperative for Microsoft, and that Yahoo is in a tough spot if it wishes to remain independent," said Miller, manager of Legg Mason Value Trust, a large holder of Yahoo stock. He thinks Microsoft will have to enhance its offer it wants to seal the deal for Yahoo.
The outlook for 2008 is much weaker than three months ago but a recession is still unlikely, according to the median forecast of 50 economists surveyed by the Philadelphia Federal Reserve Bank. The forecasters expect growth of 0.7% in the first quarter and 1.3% in the second quarter, much weaker than the average 2.25% average growth in the two quarters previously forecast.
As expected, Yahoo Inc began carrying out lay-offs up to 1,000 employees on Tuesday, as part of job cutbacks announced last month, several employees at the company's headquarters said on Tuesday. U.K. inflation accelerated to a seven-month high in January as soaring gasoline and food costs blunted the impact of discounting by fashion stores. Consumer prices climbed 2.2 percent from a year earlier, compared with 2.1 percent in December, the Office for National Statistics said today in London.
Monday, February 11, 2008
Subprime Loss Estimates
2/12/08 Subprime Loss Estimates
"If you end up freezing (Venezuelan assets) and it harms us, we're going to harm you," Chavez said during his weekly radio and television program, "Hello, President." "Do you know how? We aren't going to send oil to the United States. Take note, Mr. Bush, Mr. Danger."
Democratic Sen. Hillary Rodham Clinton replaced campaign manager Patti Solis Doyle with longtime aide Maggie Williams on Sunday, a staff shake-up coming just hours after presidential rival Barack Obama's weekend sweep of three contests. According to the Chicago Tribune, over the last seven years, Clinton had raised $175 million for her reelection and her presidential campaign. But Solis Doyle didn't tell Clinton that there was next to no cash on hand until after the New Hampshire primary."We were lying about money," a source said. "The cash on hand was nothing." In turn, Clinton didn't tell Solis Doyle that she was lending her own money to keep the campaign afloat. Solis Doyle found out third-hand. And when she asked Clinton about it, the senator told her she couldn't understand how the campaign had gotten to such a point.
Microsoft, Sony Ericsson to launch Window mobile phone.
The negotiating committee of the Writers Guild of America voted unanimously to accept a tentative three-year deal with major Hollywood studios, clearing the way for final approval of the agreement by striking film and TV writers, The Wall Street Journal reported Sunday.
Coal prices rose to a record for a third straight week at Australia's Newcastle port, a benchmark for Asia, as snowstorms in China cut exports, adding to supply disruptions in Australia and South Africa.
Sun Capital to buy Kellwood for $21 a share.
Yahoo is seeking to restart merger talks with the AOL unit of Time Warner as a way to defend itself from a hostile Microsoft approach, The Times (of London) newspaper reported Monday, citing an unnamed source. The report said tie-ups with Google and Disney also are being explored.
Losses linked to the subprime-credit turmoil could hit $400 billion, implying global financial institutions have yet to write down the full amount of the soured investments, The Financial Times reported Monday. The report cited German Financial Minister Peer Steinbrück speaking after the gathering of the Group of Seven finance leaders in Tokyo as the source of the figure. The estimate is well above the U.S. Federal Reserve's estimates of subprime losses last year of $100 billion to $150 billion and higher than the $120 billion in losses reported by Wall Street banks and other financial institutions in recent weeks.
According to the WSJ, Motorola Inc. and Nortel Networks Corp. are in talks to combine their wireless-infrastructure units in a joint venture, said people familiar with the situation, the latest response to slowing growth in the telecom-equipment industry.
According to Bloomberg, Ford Motor Co., the world's third- largest automaker, may eliminate as many as 9,000 more U.S. factory jobs through its latest buyout offers, a person with direct knowledge of the situation said. The cuts would be in addition to the 33,600 union workers who left through buyouts and early retirements in 2006 and 2007, when Ford lost a combined $15.3 billion.
According to FT, Microsoft has a team of advisers in place for any proxy fight. It includes Alan Miller of Innisfree, the proxy solicitation firm, and Joele Frank, the New York M&A public relations specialist, as well as financial advisers from the Blackstone Group and Morgan Stanley. Yahoo is using Dan Burch at MacKenzie Partners, a proxy firm that would lobby shareholders to try to secure their votes in favour of the current board. Microsoft has until March 13 to nominate a new slate of directors.
The auction of Getty Images , the distributor of pictures and video, appears to be in jeopardy, The New York Times reported Monday.Though several bidders, mostly private equity firms like Kohlberg Kravis Roberts, Bain Capital and Providence Equity partners, had expressed interest last month, Getty received no offers significantly above its current market value of $1.6 billion, according to The Times.
Mobile phone coupon company Cellfire has raised $12 million in a third round of funding. The round includes a new investor, Silver Creek Ventures, and existing ones, including Menlo Ventures and Storm Ventures. People who sign up for Cellfire’s service automatically receive coupons on their cell phones. If they accept the coupon, users receive a unique redemption code that’s redeemed at the store.
Drybulk rates increased into the Chinese New Year.
The Houston Chronicle reports the U.S. housing market still has a long way to fall — and with it the nation's economy — and China's economy won't cushion the blow as it did in the 2001 slump. That's the view of two top economists scheduled to make presentations this week at CERAWeek, Cambridge Energy Research Associates' annual energy forum in Houston. Robert Shiller, the Yale economist who is widely credited with the earliest warnings of the subprime mortgage crisis, said signs are pointing toward steeper declines in U.S. home prices. Average home prices fell by 8 percent last year, according to the Standard & Poor's/Case-Shiller index based on 20 big American cities."This may be a major turning point where we see years of falling home prices and economic decline," Shiller, an originator of the Case-Shiller index, said in an interview with the Chronicle.
John Hussman: "At present, we've cleared that overbought condition, so there's nothing that would allow us to form pointed short-term expectations for market returns. Presently, the Market Climate remains broadly unfavorable, and that is enough to hold us to a fully hedged investment stance in the Strategic Growth Fund...The strongest factor driving market returns here is the unfavorable condition of market internals including price/volume behavior, breadth, leadership, industry action, credit spreads, and other factors. Meanwhile, it's important to reiterate that P/E ratios based on “forward operating earnings” and even our own “price/peak-earnings” measures are somewhat corrupted here by the fact that the earnings in these ratios implicitly assume the continuation of record profit margins about 40-50% above long-term norms. As a result, we are also attending to measures that take profit margins into account more explicitly. To the extent that profit margins are not likely to be sustained indefinitely, P/E ratios are likely to be a poor metric of valuation, encouraging investors to believe that stocks are cheap on the basis of recent earnings, when they are not at all cheap on the basis of long-term earnings power."
Microsoft Corp. said Monday it has entered into an agreement to acquire Danger Inc., a company which produces software and services for consumer handsets.
YAHOO SAYS MICROSOFT OFFER 'SUBSTANTIALLY' UNDERVALUED, KEEPING OPTIONS OPEN. I view this as a generic and weak negotiating response. Whether it's true that off the record Microsoft offered $40 or $43 a year ago for Yahoo when the latter's stock was trading at $28 is irrelevant. It is relative that a year later Yahoo shares were at the $19 level. Had the company been performing well, it would have have been doubtful to trade at a 52-week low. Over the past year, Microsoft has used much of its cash position on other acquisitions. The company will need to take on debt to buy Yahoo at $31, and it will be dilutive to earnings. No other company will pay $31 and Yahoo is not in a position to deliver $31 in value to shareholders on their own. Yahoo's option is to try and get a small kiss from Microsoft and call it a day. Their management has had its chance at running the company and can't hack it to the next level.
BANK OF AMERICA, CHEVRON ADDED TO DOW INDUSTRIALS, REPLACING ALTRIA AND HONEYWELL.
The dollar was buying 106.64 yen, compared with 107.43 yen late Friday.
In early Monday trading, natural gas is trading at $8.54. Gas has advanced 13.3 percent so far this year. That's a turkey sandwich! The cold weather is taking its toll on the short sellers.
AIG unsure of value of some of its credit derivatives. AIG auditors cite "material weakness" in financial reporting. In addition, the company increased its estimates of losses in October and November from insuring mortgage-related instruments from about $1bn to nearly $5bn.
Hypercom Corp. rose $1.24, or 31 percent, to $5.19. Ingenico SA offered to buy the maker of electronic-payment software for about $332 million, or $6.25 a share, in cash.
A report released Monday by Forrester Research Inc. says U.S. companies and government agencies are expected to increase their spending on information technology by just 2.8 percent this year. That is a substantial downward revision from the 4.6 percent growth that Forrester was predicting in December.
BJ Services: "For the second fiscal quarter of 2008, we expect drilling activity to remain relatively flat in the U.S. market, and we expect pricing pressures to continue at least until the latter part of the year. We do expect continued high demand for our services in a number of areas, especially in gas shale areas in Arkansas, the Rockies and the Mid-Continent region, and we anticipate increased Gulf of Mexico activity particularly in the deep water area. Canadian drilling activity is expected to increase in the second fiscal quarter as we enter the winter drilling season, and we expect our operating results to improve there compared to the first fiscal quarter. We also anticipate increased revenue and improved margins in the International Pressure Pumping segment. Both the Blue Angel stimulation vessel in Brazil and the Vestfonn stimulation vessel in India have returned to work after being dry-docked for a portion of the first fiscal quarter. We have a number of new projects in our international pressure pumping operations that either have already begun or are scheduled to begin in the second fiscal quarter in Latin America, North Africa and China that we believe will help to improve international operating margins. Our Oilfield Services group is projected to be up slightly in the second quarter as revenue growth from Completion Tools and Completion Fluids will be partially offset by continued seasonal decline in our Process and Pipeline Services business." Board member John Huff bought $819,000 worth of BJ Services stock last Wednesday. That's the largest insider purchase at the company in over five years and only the third such buy during that time frame, according to InsiderScore.com. Huff acquired 37,545 shares in the transaction, at an average per-share price of $21.82, according to a Securities and Exchange Commission filing on Friday
Crude-oil futures for March delivery rallied $1.82, or 2%, to close at $93.59 a barrel. Gold for April delivery gained $4.40 to end at $926.70 an ounce on the New York Mercantile Exchange. Platinum for April delivery surged to a record $1,949 an ounce Monday. The contract soared $55.40, or 3%, to end at $1,939.40 an ounce.
A merger between Delta Air Lines Inc and Northwest Airlines Corp could be announced in the next few weeks as Northwest pilots review details of a proposed deal, people briefed on the situation said on Monday.
``It is unfortunate that Yahoo has not embraced our full and fair proposal to combine our companies,'' Microsoft said in a statement today, without outlining a specific plan or timetable. ``We are confident that moving forward promptly to consummate a transaction is in the best interests of all parties.''
BlackBerry smartphones experienced a "critical severity outage" on Monday, the company told clients in an e-mail.
Starbucks Corp. and AT&T Inc. will start offering a mix of free and paid wireless Internet service in most of the international coffee retailer's U.S. shops, beginning this spring. The move announced Monday ends a six-year partnership T-Mobile, which did not include free Wi-Fi and charged higher fees than AT&T will. Starbucks said it will give customers who use a Starbucks card two hours of free wireless access per day. More time than that will cost $3.99 for a two-hour session. Monthly memberships will cost $19.99 and include access to any of AT&T's 70,000 hot spots worldwide. Nearly all of AT&T's broadband Internet customers, about 12 million, will automatically have unlimited free Wi-Fi access at Starbucks, the companies said. The deal boosts the number of AT&T hotspots in the U.S. to 17,000 — the most in the nation.
Obama is leading in polls in Virginia, Maryland and Washington, D.C., which all vote tomorrow. Obama held his first rally today at the Comcast Center arena at the University of Maryland's College Park campus. The arena, which seats more than 17,500 people, was packed with cheering Obama supporters. He plans a similar event at a stadium in Baltimore. At stake tomorrow are 168 pledged delegates to the Democratic National Convention in August from the two states and Washington, D.C.
"If you end up freezing (Venezuelan assets) and it harms us, we're going to harm you," Chavez said during his weekly radio and television program, "Hello, President." "Do you know how? We aren't going to send oil to the United States. Take note, Mr. Bush, Mr. Danger."
Democratic Sen. Hillary Rodham Clinton replaced campaign manager Patti Solis Doyle with longtime aide Maggie Williams on Sunday, a staff shake-up coming just hours after presidential rival Barack Obama's weekend sweep of three contests. According to the Chicago Tribune, over the last seven years, Clinton had raised $175 million for her reelection and her presidential campaign. But Solis Doyle didn't tell Clinton that there was next to no cash on hand until after the New Hampshire primary."We were lying about money," a source said. "The cash on hand was nothing." In turn, Clinton didn't tell Solis Doyle that she was lending her own money to keep the campaign afloat. Solis Doyle found out third-hand. And when she asked Clinton about it, the senator told her she couldn't understand how the campaign had gotten to such a point.
Microsoft, Sony Ericsson to launch Window mobile phone.
The negotiating committee of the Writers Guild of America voted unanimously to accept a tentative three-year deal with major Hollywood studios, clearing the way for final approval of the agreement by striking film and TV writers, The Wall Street Journal reported Sunday.
Coal prices rose to a record for a third straight week at Australia's Newcastle port, a benchmark for Asia, as snowstorms in China cut exports, adding to supply disruptions in Australia and South Africa.
Sun Capital to buy Kellwood for $21 a share.
Yahoo is seeking to restart merger talks with the AOL unit of Time Warner as a way to defend itself from a hostile Microsoft approach, The Times (of London) newspaper reported Monday, citing an unnamed source. The report said tie-ups with Google and Disney also are being explored.
Losses linked to the subprime-credit turmoil could hit $400 billion, implying global financial institutions have yet to write down the full amount of the soured investments, The Financial Times reported Monday. The report cited German Financial Minister Peer Steinbrück speaking after the gathering of the Group of Seven finance leaders in Tokyo as the source of the figure. The estimate is well above the U.S. Federal Reserve's estimates of subprime losses last year of $100 billion to $150 billion and higher than the $120 billion in losses reported by Wall Street banks and other financial institutions in recent weeks.
According to the WSJ, Motorola Inc. and Nortel Networks Corp. are in talks to combine their wireless-infrastructure units in a joint venture, said people familiar with the situation, the latest response to slowing growth in the telecom-equipment industry.
According to Bloomberg, Ford Motor Co., the world's third- largest automaker, may eliminate as many as 9,000 more U.S. factory jobs through its latest buyout offers, a person with direct knowledge of the situation said. The cuts would be in addition to the 33,600 union workers who left through buyouts and early retirements in 2006 and 2007, when Ford lost a combined $15.3 billion.
According to FT, Microsoft has a team of advisers in place for any proxy fight. It includes Alan Miller of Innisfree, the proxy solicitation firm, and Joele Frank, the New York M&A public relations specialist, as well as financial advisers from the Blackstone Group and Morgan Stanley. Yahoo is using Dan Burch at MacKenzie Partners, a proxy firm that would lobby shareholders to try to secure their votes in favour of the current board. Microsoft has until March 13 to nominate a new slate of directors.
The auction of Getty Images , the distributor of pictures and video, appears to be in jeopardy, The New York Times reported Monday.Though several bidders, mostly private equity firms like Kohlberg Kravis Roberts, Bain Capital and Providence Equity partners, had expressed interest last month, Getty received no offers significantly above its current market value of $1.6 billion, according to The Times.
Mobile phone coupon company Cellfire has raised $12 million in a third round of funding. The round includes a new investor, Silver Creek Ventures, and existing ones, including Menlo Ventures and Storm Ventures. People who sign up for Cellfire’s service automatically receive coupons on their cell phones. If they accept the coupon, users receive a unique redemption code that’s redeemed at the store.
Drybulk rates increased into the Chinese New Year.
The Houston Chronicle reports the U.S. housing market still has a long way to fall — and with it the nation's economy — and China's economy won't cushion the blow as it did in the 2001 slump. That's the view of two top economists scheduled to make presentations this week at CERAWeek, Cambridge Energy Research Associates' annual energy forum in Houston. Robert Shiller, the Yale economist who is widely credited with the earliest warnings of the subprime mortgage crisis, said signs are pointing toward steeper declines in U.S. home prices. Average home prices fell by 8 percent last year, according to the Standard & Poor's/Case-Shiller index based on 20 big American cities."This may be a major turning point where we see years of falling home prices and economic decline," Shiller, an originator of the Case-Shiller index, said in an interview with the Chronicle.
John Hussman: "At present, we've cleared that overbought condition, so there's nothing that would allow us to form pointed short-term expectations for market returns. Presently, the Market Climate remains broadly unfavorable, and that is enough to hold us to a fully hedged investment stance in the Strategic Growth Fund...The strongest factor driving market returns here is the unfavorable condition of market internals including price/volume behavior, breadth, leadership, industry action, credit spreads, and other factors. Meanwhile, it's important to reiterate that P/E ratios based on “forward operating earnings” and even our own “price/peak-earnings” measures are somewhat corrupted here by the fact that the earnings in these ratios implicitly assume the continuation of record profit margins about 40-50% above long-term norms. As a result, we are also attending to measures that take profit margins into account more explicitly. To the extent that profit margins are not likely to be sustained indefinitely, P/E ratios are likely to be a poor metric of valuation, encouraging investors to believe that stocks are cheap on the basis of recent earnings, when they are not at all cheap on the basis of long-term earnings power."
Microsoft Corp. said Monday it has entered into an agreement to acquire Danger Inc., a company which produces software and services for consumer handsets.
YAHOO SAYS MICROSOFT OFFER 'SUBSTANTIALLY' UNDERVALUED, KEEPING OPTIONS OPEN. I view this as a generic and weak negotiating response. Whether it's true that off the record Microsoft offered $40 or $43 a year ago for Yahoo when the latter's stock was trading at $28 is irrelevant. It is relative that a year later Yahoo shares were at the $19 level. Had the company been performing well, it would have have been doubtful to trade at a 52-week low. Over the past year, Microsoft has used much of its cash position on other acquisitions. The company will need to take on debt to buy Yahoo at $31, and it will be dilutive to earnings. No other company will pay $31 and Yahoo is not in a position to deliver $31 in value to shareholders on their own. Yahoo's option is to try and get a small kiss from Microsoft and call it a day. Their management has had its chance at running the company and can't hack it to the next level.
BANK OF AMERICA, CHEVRON ADDED TO DOW INDUSTRIALS, REPLACING ALTRIA AND HONEYWELL.
The dollar was buying 106.64 yen, compared with 107.43 yen late Friday.
In early Monday trading, natural gas is trading at $8.54. Gas has advanced 13.3 percent so far this year. That's a turkey sandwich! The cold weather is taking its toll on the short sellers.
AIG unsure of value of some of its credit derivatives. AIG auditors cite "material weakness" in financial reporting. In addition, the company increased its estimates of losses in October and November from insuring mortgage-related instruments from about $1bn to nearly $5bn.
Hypercom Corp. rose $1.24, or 31 percent, to $5.19. Ingenico SA offered to buy the maker of electronic-payment software for about $332 million, or $6.25 a share, in cash.
A report released Monday by Forrester Research Inc. says U.S. companies and government agencies are expected to increase their spending on information technology by just 2.8 percent this year. That is a substantial downward revision from the 4.6 percent growth that Forrester was predicting in December.
BJ Services: "For the second fiscal quarter of 2008, we expect drilling activity to remain relatively flat in the U.S. market, and we expect pricing pressures to continue at least until the latter part of the year. We do expect continued high demand for our services in a number of areas, especially in gas shale areas in Arkansas, the Rockies and the Mid-Continent region, and we anticipate increased Gulf of Mexico activity particularly in the deep water area. Canadian drilling activity is expected to increase in the second fiscal quarter as we enter the winter drilling season, and we expect our operating results to improve there compared to the first fiscal quarter. We also anticipate increased revenue and improved margins in the International Pressure Pumping segment. Both the Blue Angel stimulation vessel in Brazil and the Vestfonn stimulation vessel in India have returned to work after being dry-docked for a portion of the first fiscal quarter. We have a number of new projects in our international pressure pumping operations that either have already begun or are scheduled to begin in the second fiscal quarter in Latin America, North Africa and China that we believe will help to improve international operating margins. Our Oilfield Services group is projected to be up slightly in the second quarter as revenue growth from Completion Tools and Completion Fluids will be partially offset by continued seasonal decline in our Process and Pipeline Services business." Board member John Huff bought $819,000 worth of BJ Services stock last Wednesday. That's the largest insider purchase at the company in over five years and only the third such buy during that time frame, according to InsiderScore.com. Huff acquired 37,545 shares in the transaction, at an average per-share price of $21.82, according to a Securities and Exchange Commission filing on Friday
Crude-oil futures for March delivery rallied $1.82, or 2%, to close at $93.59 a barrel. Gold for April delivery gained $4.40 to end at $926.70 an ounce on the New York Mercantile Exchange. Platinum for April delivery surged to a record $1,949 an ounce Monday. The contract soared $55.40, or 3%, to end at $1,939.40 an ounce.
A merger between Delta Air Lines Inc and Northwest Airlines Corp could be announced in the next few weeks as Northwest pilots review details of a proposed deal, people briefed on the situation said on Monday.
``It is unfortunate that Yahoo has not embraced our full and fair proposal to combine our companies,'' Microsoft said in a statement today, without outlining a specific plan or timetable. ``We are confident that moving forward promptly to consummate a transaction is in the best interests of all parties.''
BlackBerry smartphones experienced a "critical severity outage" on Monday, the company told clients in an e-mail.
Starbucks Corp. and AT&T Inc. will start offering a mix of free and paid wireless Internet service in most of the international coffee retailer's U.S. shops, beginning this spring. The move announced Monday ends a six-year partnership T-Mobile, which did not include free Wi-Fi and charged higher fees than AT&T will. Starbucks said it will give customers who use a Starbucks card two hours of free wireless access per day. More time than that will cost $3.99 for a two-hour session. Monthly memberships will cost $19.99 and include access to any of AT&T's 70,000 hot spots worldwide. Nearly all of AT&T's broadband Internet customers, about 12 million, will automatically have unlimited free Wi-Fi access at Starbucks, the companies said. The deal boosts the number of AT&T hotspots in the U.S. to 17,000 — the most in the nation.
Obama is leading in polls in Virginia, Maryland and Washington, D.C., which all vote tomorrow. Obama held his first rally today at the Comcast Center arena at the University of Maryland's College Park campus. The arena, which seats more than 17,500 people, was packed with cheering Obama supporters. He plans a similar event at a stadium in Baltimore. At stake tomorrow are 168 pledged delegates to the Democratic National Convention in August from the two states and Washington, D.C.
Sunday, February 10, 2008
Keep It Real
2/11/08 Keep It Real
The Wall Street Journal had quoted an unnamed source as saying Microsoft's offer of $31 per share was an attempt to "steal" the company and that Yahoo was unlikely to consider anything under $40 per share -- double its price in January.
When was the last time Yahoo stock sold at $40? It was the winter of 2005, and before that during the dotcom craze. Yahoo has done little over the past six years for shreholders. Their cash flow performance has been poor and they have shown an inability to monetize their web efforts. If Microsoft chooses to pursue this acquisition, I would begin a cash tender for 50.1% of Yahoo's outstanding shares at $30 a share. In addition, I would file papers to initiate a proxy fight in order to place directors on the board at the June annual meeting for Yahoo. (During last year's annual meeting, one-third of shareholder votes were cast against re-electing Bostock and two other committee members.) In addition, I'd propose that the remaining shares of Yahoo not purchased in the tender would be acquired for cash or stock or debt or a combination of any of those choices.
"We keep at things," Microsoft's CEO Ballmer told employees when the bid was announced. "We don't start and stop."
Is Microsoft looking to rent even more office space in Bellevue?
The hottest rumor among local commercial real-estate brokers has the Redmond software giant leasing almost all of 26-story City Center Plaza, now under construction at Northeast Sixth Street and 110th Avenue Northeast.
That would be another 550,000 square feet or so for Microsoft in Bellevue, on top of the 317,000 it now occupies at Lincoln Square and the 1.3 million it has committed to lease at two projects under construction, The Bravern on Northeast Eighth and Advanta Office Commons in Eastgate. It is quite possible that this space is planned for the growth envisioned with the acquisition of Yahoo.
OPEC could switch the pricing of oil from dollars into euros within a decade, secretary general Abdullah al-Badri told a weekly magazine.
At the start of 2007, Google commanded 52.6 percent of the search market, Yahoo had 26.9 percent and Microsoft had 10.4 percent, according to comScore. By December, Google's share had edged up to 58.6 percent while Yahoo's slipped to 22.4 percent and Microsoft was at 9.8 percent.
Dietrich Bonhoeffer: "To understand reality is not the same as to know about outward events. It is to perceive the essential nature of things. The best-informed man is not necessarily the wisest. Indeed there is a danger that precisely in the multiplicity of his knowledge he will lose sight of what is essential. But on the other hand, knowledge of an apparently trivial detail quite often makes it possible to see into the depth of things. And so the wise man will seek to acquire the best possible knowledge about events, but always without becoming dependent upon this knowledge. To recognize the significant in the factual is wisdom."
Mike Burk: "Although prices fell sharply last week the breadth indicators all held up well...The secondaries lead both up and down and since the middle of January the secondaries have been outperforming the blue chips...The bad news is the extreme number of new lows in mid January implies another retest of the recent lows in the next few months...I expect the major indices to be higher on Friday February 15 than they were on Friday February 8."
European Central Bank President Jean- Claude Trichet said there's no end to financial-market turmoil in sight and policy makers will continue to take ``appropriate measures'' if necessary. ``We are observing an ongoing, significant market correction,'' said Trichet at a press conference after meeting finance ministers and central bankers from the Group of Seven nations in Tokyo.
Financial regulators and central bankers delivered a grim assessment of the credit market upheaval on Saturday, warning that worse may lie ahead as banks tighten lending and an economic slowdown spreads.
Shares of Fannie Mae fell Friday as a Morgan Stanley analyst said he expects it to report decaying credit quality in its portfolio, a worrying sign that the meltdown in subprime lending may be spilling over into prime mortgage.
Louise Nevelson: "What we call reality is an agreement that people have arrived at to make life more livable."
The Wall Street Journal had quoted an unnamed source as saying Microsoft's offer of $31 per share was an attempt to "steal" the company and that Yahoo was unlikely to consider anything under $40 per share -- double its price in January.
When was the last time Yahoo stock sold at $40? It was the winter of 2005, and before that during the dotcom craze. Yahoo has done little over the past six years for shreholders. Their cash flow performance has been poor and they have shown an inability to monetize their web efforts. If Microsoft chooses to pursue this acquisition, I would begin a cash tender for 50.1% of Yahoo's outstanding shares at $30 a share. In addition, I would file papers to initiate a proxy fight in order to place directors on the board at the June annual meeting for Yahoo. (During last year's annual meeting, one-third of shareholder votes were cast against re-electing Bostock and two other committee members.) In addition, I'd propose that the remaining shares of Yahoo not purchased in the tender would be acquired for cash or stock or debt or a combination of any of those choices.
"We keep at things," Microsoft's CEO Ballmer told employees when the bid was announced. "We don't start and stop."
Is Microsoft looking to rent even more office space in Bellevue?
The hottest rumor among local commercial real-estate brokers has the Redmond software giant leasing almost all of 26-story City Center Plaza, now under construction at Northeast Sixth Street and 110th Avenue Northeast.
That would be another 550,000 square feet or so for Microsoft in Bellevue, on top of the 317,000 it now occupies at Lincoln Square and the 1.3 million it has committed to lease at two projects under construction, The Bravern on Northeast Eighth and Advanta Office Commons in Eastgate. It is quite possible that this space is planned for the growth envisioned with the acquisition of Yahoo.
OPEC could switch the pricing of oil from dollars into euros within a decade, secretary general Abdullah al-Badri told a weekly magazine.
At the start of 2007, Google commanded 52.6 percent of the search market, Yahoo had 26.9 percent and Microsoft had 10.4 percent, according to comScore. By December, Google's share had edged up to 58.6 percent while Yahoo's slipped to 22.4 percent and Microsoft was at 9.8 percent.
Dietrich Bonhoeffer: "To understand reality is not the same as to know about outward events. It is to perceive the essential nature of things. The best-informed man is not necessarily the wisest. Indeed there is a danger that precisely in the multiplicity of his knowledge he will lose sight of what is essential. But on the other hand, knowledge of an apparently trivial detail quite often makes it possible to see into the depth of things. And so the wise man will seek to acquire the best possible knowledge about events, but always without becoming dependent upon this knowledge. To recognize the significant in the factual is wisdom."
Mike Burk: "Although prices fell sharply last week the breadth indicators all held up well...The secondaries lead both up and down and since the middle of January the secondaries have been outperforming the blue chips...The bad news is the extreme number of new lows in mid January implies another retest of the recent lows in the next few months...I expect the major indices to be higher on Friday February 15 than they were on Friday February 8."
European Central Bank President Jean- Claude Trichet said there's no end to financial-market turmoil in sight and policy makers will continue to take ``appropriate measures'' if necessary. ``We are observing an ongoing, significant market correction,'' said Trichet at a press conference after meeting finance ministers and central bankers from the Group of Seven nations in Tokyo.
Financial regulators and central bankers delivered a grim assessment of the credit market upheaval on Saturday, warning that worse may lie ahead as banks tighten lending and an economic slowdown spreads.
Shares of Fannie Mae fell Friday as a Morgan Stanley analyst said he expects it to report decaying credit quality in its portfolio, a worrying sign that the meltdown in subprime lending may be spilling over into prime mortgage.
Louise Nevelson: "What we call reality is an agreement that people have arrived at to make life more livable."
Subscribe to:
Posts (Atom)