7/17/09 Land Mines
GE's earnings from continuing operations totaled 26 cents a share, down from 54 cents a year ago. General Electric Co warned investors that the economic contagion that has dragged down its finance and media businesses has spread to its heavy industrial units, prompting Chief Executive Jeff Immelt to lower his profit forecast for those businesses.
U.S. housing starts rose 3.6% in June to a seasonally-adjusted annual rate of 582,000. This is the highest level of starts since last November. Starts of new single-family homes rose by 14.4% to 470,000 in June, while starts of large apartment units fell 29.4% to 101,000. Building permits, a leading indicator of housing construction, rose 8.7% to a seasonally adjusted annual rate of 563,000. This is the highest level of permits since December.
Jon Markman: "The credit that has kept American families afloat for the past 10 years is similar to those Madoff-produced brokerage statements. The credit is good only so long as China keeps recycling funds through the Ponzi scheme. But if Beijing leaders ever decide that it's just too risky to own U.S. dollars and debt, then the system is going to come crashing down.
Of course, it is not really in China's interest to stop the scheme, even if it wanted to, because its own economy would likewise blow up. Satyajit Das, a credit derivatives expert in Australia, likens this to stepping on one of those land mines that are activated by the weight of a victim's body. As soon as the weight is lifted, the mine explodes, and the person's leg is blown off."
San Francisco Bay Area home sales were up 20% in June over the same month last year, while the median sales price was down 27%, MDA DataQuick reported Thursday.
The median price in the Bay Area was $352,000, down from $485,000 in June 2008 and 47% below the peak median of $665,000, reached in June 2007.
Bankrupt outdoor clothing retailer Eddie Bauer Holdings Inc.said it's selling itself to private equity firm Golden Gate Capital through a bankruptcy auction. Golden Gate had the highest and best offer with an all cash bid of $286 million, Eddie Bauer said. Golden Gate will keep "the substantial majority" of Eddie Bauer's stores and employees, the company said. The transaction is expected to close in early August.
Investor RHJ International SA would cut a maximum of some 10,000 jobs at General Motors Corp.'s Opel unit if successful in its bid for the European automaker, the company's chief executive was quoted as saying Friday.
Investors should take a holiday from now on as the best part of the rally is over and now there are more chances that markets would go down, Marc Faber, author of the Gloom, Boom and Doom Report, told CNBC Friday. We haven't seen the last of the crisis despite all talk about green shoots, and the surge in markets was caused by nothing more than the excess liquidity coming from central banks, said Marc Faber.
The CIT Group woes show that the financial crisis is not over as more writeoffs are on the way, Stephen Roach, chairman at Morgan Stanley Asia.
"Sorry to break to the news, but the financial crisis is not over, à la CIT. You’ve got plenty more writeoffs of bad paper to come," Roach told CNBC.
Art Cashin: "On Friday, the American Association of Independent Investors said nearly 55 percent were bearish. Everybody was talking about the head-and-shoulders*."
"But the market then pulled the rug out from under them," and produced a 3-day S&P rally.
Cashin maintains that close-of-business tomorrow (Friday, July 17) may still yield concrete conclusions about market direction. But he says the field has shifted under that date:
"This market is now overbought. There is a chance for a reversal. We may have to extend that checkpoint into next week."
In closing, EFF Legal Director Cindy Cohn reminded the judge that the principal of judicial oversight is at stake in the motion to dismiss: "What the government is arguing is that the president decides what is legal or not." Judge Walker will consider the arguments and deliver a ruling some time in the coming months.
Shares of Gilead Sciences Inc. edged higher Friday after the company said it is working with a unit of Johnson & Johnson to develop a single daily antiretroviral HIV pill.
A record 1.5 million properties received a default or auction notice or were seized by banks in the first half of the year.
Larry Summers said the rebuilt economy must be more export-oriented and rely less on consumer spending. I didn't know the economy has been rebuilt.
Mexico's central bank cut its benchmark interest rate by 25 basis points to 4.50% on Friday, meeting market expectations.
Unemployment topped 10 percent in 15 states and the District of Columbia last month, according to federal data released Friday. The rate in Michigan surpassed 15 percent, the first time any state hit that mark since 1984.
Director CBO: "Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy. The following chart shows our projection of federal debt relative to GDP under the two scenarios we modeled."
The Dow Jones Industrial Average gained 32 points, or 0.4%, to end at 8,743 on Friday. The S&P 500 index dipped 0.3 points to 940, while the Nasdaq Composite rose 1.6 points to 1,886. For the week, the Dow rose 7.3%, the S&P 500 gained 7% and the Nasdaq was up 7.4%.
Bank of America Corp, the largest U.S. bank, posted a quarterly profit that topped Wall Street forecasts but warned of a fresh surge in soured loans to credit card, mortgage and business customers.
Friday, July 17, 2009
Thursday, July 16, 2009
Something To Happen
7/16/09 Something To Happen
The number of U.S. households on the verge of losing their homes soared by nearly 15 percent in the first half of the year as more people lost their jobs and were unable to pay their monthly mortgage bills.
The mushrooming foreclosure crisis affected more than 1.5 million homes in the first six months of the year, according to a report released Thursday by foreclosure listing service RealtyTrac Inc. 1.19 percent of all U.S. housing units (one in 84) received at least one foreclosure filing in the first half of the year.
John Rubino: "According to widely-followed newsletter writers Harry Schultz and Bob Chapman:
"Some US embassies worldwide are being advised to purchase massive amounts of local currencies; enough to last them a year. Some embassies are being sent enormous amounts of US cash to purchase currencies from those govts, quietly. But not £'s. Inside the State Dept there is a sense of sadness & foreboding that 'something' is about to happen, unknown re a date -- just that within 180 days, but could be 120-150 days."
Bob quotes another source that "Panasonic has told their people to be back in Japan by Sept 09."
Harry Schultz's remarkable take on the situation:
"My HSL suspicion is that the elite plan another FDR style "bank holiday" of indefinite length, perhaps very soon, to let the insiders sort-out the bank mess which is getting more out of their control every day. Insiders want/need to impose new bank rules. Widespread nationalization could result, already under way. It could also lead to a formal US$ devaluation, as FDR did by revaluing gold (& then confiscating it). But devalue against what? The euro? Doubtful. Gold? Maybe. Or vs. the IMF basket of currencies (which seems more likely) -- & much in the news recently.
Any kind of bank holiday will push the US$ lower, which may be a bonus benefit to their ongoing scenario of letting the $ fall. Such a fall would get the devaluation they want without having to declare it. In sum, the insiders want more bank & system control, fewer banks & a lower US$. A bank holiday would suit all their needs."
Harry Shultz: "Obviously, U can't open safeboxes if the banks are closed, so plan accordingly. During the FDR bank holiday, thousands of banks never reopened; it was a face-saving way of shutting them down. I would guess the same would occur today; thousands have little or no net value, loaded with debt, bad mortgages."
FOFOA: "It matters not one iota how well you do in the stock and bond markets leading up to the reset. Neither does it matter what the "gold market" does between now and then. The ONLY thing that matters is how you are positioned on that one - fateful - day! Everything will be reset and surprises will abound."
President Obama is adamant about maintaining the secrecy of a wiretapping program authorized by George W. Bush, an administration lawyer told a federal judge in San Francisco on Wednesday.
Obama "does not intend to use the state-secrets privilege to cover up illegal activities," said Justice Department attorney Anthony Coppolino. But in exceptional circumstances, he said, the president will invoke secrecy to protect "the sources and methods of detecting terrorist attacks ... the crown jewel of the United States national security administration."
Coppolino said the administration will cite national security in seeking dismissal of a lawsuit by telephone customers accusing the government of illegally intercepting phone calls and obtaining phone company records.
Chief U.S. District Judge Vaughn Walker heard about 90 minutes of arguments and said he would rule later.
Walker cited a recent inspector general's report on U.S. intelligence that said the surveillance was far broader than Bush had described and was on legally shaky ground.
An unclassified version of the report was released last week. Walker said the full report might show whether officials had violated private citizens' constitutional rights.
China's gross domestic product expanded by 7.9% in the three months ended June 30 from the year-ago period, driven by domestic consumption and a strong increase in industrial activity, Chinese government data showed Thursday. The growth rate was higher than the 7.7% expansion anticipated by economists polled by Dow Jones Newswires and marked a sharp acceleration from the 6.1% growth recorded in the first quarter. The expansion came in spite of a decline in Chinese consumer and wholesale prices in June. Official data showed the mainland's consumer price index fell 1.7% in June from the year-earlier period, while the monthly producer price index shrank 7.8%. In May, China's CPI fell 1.4% while the PPI declined 7.2%.
The U.S. Treasury estimates the government could lose its entire $2.3 billion investment in troubled lender CIT Group Inc., according to a report published late Wednesday. The online edition of The Wall Street Journal, citing a Treasury Department spokeswoman, reported that much of the investment made by the U.S. through the Troubled Asset Relief Program is likely already gone, due to a fall in the value of CIT's preferred stock.
Harley-Davidson Inc. said Thursday it is cutting 1,000 more employees and lowering its motorcycle shipment guidance as quarterly earnings continued to fall due to weaker sales.
The number of initial claims in the week ending July 11 fell 47,000 to 522,000 - the lowest level since early January. The four-week average of initial claims fell 22,500 to 584,500. The data for continuing claims, which shows the number of Americans receiving state jobless benefits, have also been impacted by the layoff-timing issues. For the week ending July 4, the number of Americans receiving state jobless benefits fell 642,000 to 6.27 million. The drop of 642,000 is the largest on record, but may not be a "meaningful economic" signal because of the data's layoff-timing issues, according to a Labor analyst. The four-week moving average of these continuing claims fell 110,250 to 6.67 million. The insured unemployment rate, which represents the portion of all workers covered by unemployment insurance who are collecting benefits, fell to 4.7% from 5.2%.
J.P. Morgan Chase said its second-quarter net income climbed 36% to $2.72 billion, or 28 cents a share, as revenue rose to $25.62 billion from $18.4 billion. The quarter included a 27 cents a share hit for TARP repayment and a 10-cents-a-share FDIC special assessment penalty. Analysts had forecast earnings of 4 cents a share.
Nokia Corp., the world's largest maker of mobile phones, Thursday reported a 66% fall in second-quarter net profit as the weak global economy continued to hurt sales.
The European Union called today on member nations to ramp up natural gas storage and build more pipelines to cope with any future cutoff in energy supplies from Russia.
The Port of Long Beach has released its June import and export report. It shows that inbound cargo from overseas is down 28.4% compared with June a year ago and that on a year to date basis, imports are down 23.5% overall. Exports are down 28.8% compared with year ago levels and that means exports for the year to date are down 26.9%.
For the second quarter as a whole, output fell at an annual rate of 11.6 percent, a more moderate contraction than in the first quarter, when output fell 19.1 percent. Manufacturing output moved down 0.6 percent in June, with declines at both durable and nondurable goods producers. Outside of manufacturing, the output of mines fell 0.5 percent in June, and the output of utilities increased 0.8 percent. The rate of capacity utilization for total industry declined in June to 68.0 percent, a level 12.9 percentage points below its average for 1972-2008. Prior to the current recession, the low over the history of this series, which begins in 1967, was 70.9 percent in December 1982.
The dollar index traded at 79.208 in recent action, compared with 79.437 in North American trade late Wednesday. Is the dollar setting up for another leg down? The Dow is figured in dollars and does not account for inflation and/or the loss of purchasing power of the dollar.
International demand for long-term U.S. financial assets fell in May, as Russia, Japan and Caribbean banking centers trimmed their holdings even as China stepped up its purchases.
Total net sales of long-term equities, notes and bonds were a net $19.8 billion in May, compared with buying of $11.5 billion the month before, the Treasury said today in Washington. Monthly foreign investment flows dropped $66.6 billion in May, compared with a decline of $38 billion in April.
American Express, the largest U.S. credit card company, has halted its contributions to employees' pension plans in the United States and the U.K., as part of a restructuring process to slash costs amid mounting credit losses.
U.S. average retail gasoline prices fell a penny to $2.49 a gallon on Thursday, according to AAA Daily Fuel Gauge Report. A week ago, gasoline prices averaged $2.58 a gallon. A year ago, gasoline sold for $4.11 a gallon.
Rep. Ron Paul: "I don't have a right to medical care," he emphatically states. In his view, the constitution only guarantees citizens "life, liberty and (the right to) keep the fruits of my labor."
Don't be mistaken, he's very clear to point out, he is in favor of all citizens receiving medical care. "I want everybody to have maximum care at the best price. And that's why I want the government out of it completely."
"Imagine if we had all the records that showed every communication between the Treasury and the Fed and Goldman Sachs?" Paul muses. "That would be really something. That's why they're ganging up [to oppose the audit]. They're a lot more powerful than I am. I have no clout whatsoever."
The Philly Fed diffusion index fell to negative 7.5 in July from negative 2.2 in June. The index has been negative since September 2008.
U.S. demand for total petroleum products such as gasoline and diesel fell in the first half of the year to the lowest level in a decade, a monthly report released by the American Petroleum Institute showed Thursday. Petroleum products delivered to the market, an implied gauge of demand, fell to an average of 18.75 million barrels a day in the first half, the API, a petroleum industry group, said. That's 5.8% lower than the same period a year ago, and nearly 10%, or 2 million barrels a day, lower than the peak reached in 2005.
I continue to believe we have seen the highs in the price for gasoline for 2009 and believe there is every reason for a sharp drop in crude.
McGraw-Hill, which recently put Business Week up for sale, this morning said it is cutting 550 jobs as a cost-control measure.
Worldwide PC shipments fell 5% in the second quarter from a year earlier, according to market research firm Gartner.
U.S. natural gas inventories rise 90 bcf last week. Natural gas extends gains, up 4.5% to $3.427. At 2,886 billion cubic feet, stocks were 589 billion cubic feet higher than last year at this time and 454 billion cubic feet above the five-year average.
Washington Post: "Behind the scenes, Obama is pushing for a mechanism that would take Medicare payment authority out of the hands of politicians and invest it in a separate entity, possibly under the executive branch."
Brett Steenbarger: " Chasing highs after several days of strength, overall, has not been a winning strategy in the short run."
CIT Group Inc. shares slumped more than 75% Thursday as investors girded for what may be the fourth-largest bankruptcy in U.S. history after the troubled lender failed to get a government bailout. Fitch Ratings downgraded the credit ratings of CIT to C and said the company is highly likely to file for bankruptcy protection "in the very near term."
Federal Deposit Insurance Corp. Chairman Sheila Bair believes up to 500 more banks could fail, a U.S. senator said Bair told him in a recent meeting.
"She told us that unless something dramatic happens, we could lose up to 500 more banks," Sen. Jim Bunning, R-Ky., said Thursday at a hearing of the Senate Banking Committee on the foreclosure crisis.
CIT Group Inc.may need as much as $6 billion to avoid seeking bankruptcy protection after the U.S. wouldn’t give the firm another bailout, CreditSights Inc. analysts said. “CIT indicated that it needs at least $2 billion of rescue financing in the next 24 hours or it would likely file,” said CreditSights analysts including Adam Steer. “We believe the figure is in the range of $4 to $6 billion plus, making outside capital sources shy away.”
The National Association of Home Builders says its housing market index climbed in July to the highest level in nearly a year, as low interest rates and other incentives helped builders woo homebuyers.
The Washington-based trade association said Thursday the index rose two points to 17, its highest reading since it was 17 in September. The index peaked at 72 four years ago and was at 16 a year ago. We are basically bumping along the bottom.
August crude futures rose 51 cents, or 0.8%, to $62.05 a barrel on the New York Mercantile Exchange.Natural gas rose 37 cents to $3.66.
Google Inc.'s Internet ad sales grew at their slowest rate ever during the spring, forcing the online search leader to tighten its belt another notch to propel its second-quarter profit above analyst estimates.
The performance — punctuated by revenue growth of just 3 percent — disappointed investors. The company's shares fell more than 3 percent in extended trading Thursday after the results were released.
The 2009 profit forecast went to at least $9.70 per share, from $9.20 per share, a target that IBM set in January. IBM earned $8.89 per share last year.
IBM said profit in the latest quarter, which ended June 30, rose 12 percent to $3.1 billion, or $2.32 per share. Analysts expected $2.02 per share.
Meanwhile, sales dropped 13 percent to $23.25 billion, lower than the $23.59 billion predicted by analysts polled by Thomson Reuters. Sales would have been down 7 percent without currency fluctuations.
The Dow Jones Industrial Average gained 95.61 points, or 1.1%, to 8,711.8. The S&P 500 Index added 8.06 points, or 0.9%, to 940.74, while the Nasdaq Composite surged 22.13 points, or 1.2%, to 1,885.
The number of U.S. households on the verge of losing their homes soared by nearly 15 percent in the first half of the year as more people lost their jobs and were unable to pay their monthly mortgage bills.
The mushrooming foreclosure crisis affected more than 1.5 million homes in the first six months of the year, according to a report released Thursday by foreclosure listing service RealtyTrac Inc. 1.19 percent of all U.S. housing units (one in 84) received at least one foreclosure filing in the first half of the year.
John Rubino: "According to widely-followed newsletter writers Harry Schultz and Bob Chapman:
"Some US embassies worldwide are being advised to purchase massive amounts of local currencies; enough to last them a year. Some embassies are being sent enormous amounts of US cash to purchase currencies from those govts, quietly. But not £'s. Inside the State Dept there is a sense of sadness & foreboding that 'something' is about to happen, unknown re a date -- just that within 180 days, but could be 120-150 days."
Bob quotes another source that "Panasonic has told their people to be back in Japan by Sept 09."
Harry Schultz's remarkable take on the situation:
"My HSL suspicion is that the elite plan another FDR style "bank holiday" of indefinite length, perhaps very soon, to let the insiders sort-out the bank mess which is getting more out of their control every day. Insiders want/need to impose new bank rules. Widespread nationalization could result, already under way. It could also lead to a formal US$ devaluation, as FDR did by revaluing gold (& then confiscating it). But devalue against what? The euro? Doubtful. Gold? Maybe. Or vs. the IMF basket of currencies (which seems more likely) -- & much in the news recently.
Any kind of bank holiday will push the US$ lower, which may be a bonus benefit to their ongoing scenario of letting the $ fall. Such a fall would get the devaluation they want without having to declare it. In sum, the insiders want more bank & system control, fewer banks & a lower US$. A bank holiday would suit all their needs."
Harry Shultz: "Obviously, U can't open safeboxes if the banks are closed, so plan accordingly. During the FDR bank holiday, thousands of banks never reopened; it was a face-saving way of shutting them down. I would guess the same would occur today; thousands have little or no net value, loaded with debt, bad mortgages."
FOFOA: "It matters not one iota how well you do in the stock and bond markets leading up to the reset. Neither does it matter what the "gold market" does between now and then. The ONLY thing that matters is how you are positioned on that one - fateful - day! Everything will be reset and surprises will abound."
President Obama is adamant about maintaining the secrecy of a wiretapping program authorized by George W. Bush, an administration lawyer told a federal judge in San Francisco on Wednesday.
Obama "does not intend to use the state-secrets privilege to cover up illegal activities," said Justice Department attorney Anthony Coppolino. But in exceptional circumstances, he said, the president will invoke secrecy to protect "the sources and methods of detecting terrorist attacks ... the crown jewel of the United States national security administration."
Coppolino said the administration will cite national security in seeking dismissal of a lawsuit by telephone customers accusing the government of illegally intercepting phone calls and obtaining phone company records.
Chief U.S. District Judge Vaughn Walker heard about 90 minutes of arguments and said he would rule later.
Walker cited a recent inspector general's report on U.S. intelligence that said the surveillance was far broader than Bush had described and was on legally shaky ground.
An unclassified version of the report was released last week. Walker said the full report might show whether officials had violated private citizens' constitutional rights.
China's gross domestic product expanded by 7.9% in the three months ended June 30 from the year-ago period, driven by domestic consumption and a strong increase in industrial activity, Chinese government data showed Thursday. The growth rate was higher than the 7.7% expansion anticipated by economists polled by Dow Jones Newswires and marked a sharp acceleration from the 6.1% growth recorded in the first quarter. The expansion came in spite of a decline in Chinese consumer and wholesale prices in June. Official data showed the mainland's consumer price index fell 1.7% in June from the year-earlier period, while the monthly producer price index shrank 7.8%. In May, China's CPI fell 1.4% while the PPI declined 7.2%.
The U.S. Treasury estimates the government could lose its entire $2.3 billion investment in troubled lender CIT Group Inc., according to a report published late Wednesday. The online edition of The Wall Street Journal, citing a Treasury Department spokeswoman, reported that much of the investment made by the U.S. through the Troubled Asset Relief Program is likely already gone, due to a fall in the value of CIT's preferred stock.
Harley-Davidson Inc. said Thursday it is cutting 1,000 more employees and lowering its motorcycle shipment guidance as quarterly earnings continued to fall due to weaker sales.
The number of initial claims in the week ending July 11 fell 47,000 to 522,000 - the lowest level since early January. The four-week average of initial claims fell 22,500 to 584,500. The data for continuing claims, which shows the number of Americans receiving state jobless benefits, have also been impacted by the layoff-timing issues. For the week ending July 4, the number of Americans receiving state jobless benefits fell 642,000 to 6.27 million. The drop of 642,000 is the largest on record, but may not be a "meaningful economic" signal because of the data's layoff-timing issues, according to a Labor analyst. The four-week moving average of these continuing claims fell 110,250 to 6.67 million. The insured unemployment rate, which represents the portion of all workers covered by unemployment insurance who are collecting benefits, fell to 4.7% from 5.2%.
J.P. Morgan Chase said its second-quarter net income climbed 36% to $2.72 billion, or 28 cents a share, as revenue rose to $25.62 billion from $18.4 billion. The quarter included a 27 cents a share hit for TARP repayment and a 10-cents-a-share FDIC special assessment penalty. Analysts had forecast earnings of 4 cents a share.
Nokia Corp., the world's largest maker of mobile phones, Thursday reported a 66% fall in second-quarter net profit as the weak global economy continued to hurt sales.
The European Union called today on member nations to ramp up natural gas storage and build more pipelines to cope with any future cutoff in energy supplies from Russia.
The Port of Long Beach has released its June import and export report. It shows that inbound cargo from overseas is down 28.4% compared with June a year ago and that on a year to date basis, imports are down 23.5% overall. Exports are down 28.8% compared with year ago levels and that means exports for the year to date are down 26.9%.
For the second quarter as a whole, output fell at an annual rate of 11.6 percent, a more moderate contraction than in the first quarter, when output fell 19.1 percent. Manufacturing output moved down 0.6 percent in June, with declines at both durable and nondurable goods producers. Outside of manufacturing, the output of mines fell 0.5 percent in June, and the output of utilities increased 0.8 percent. The rate of capacity utilization for total industry declined in June to 68.0 percent, a level 12.9 percentage points below its average for 1972-2008. Prior to the current recession, the low over the history of this series, which begins in 1967, was 70.9 percent in December 1982.
The dollar index traded at 79.208 in recent action, compared with 79.437 in North American trade late Wednesday. Is the dollar setting up for another leg down? The Dow is figured in dollars and does not account for inflation and/or the loss of purchasing power of the dollar.
International demand for long-term U.S. financial assets fell in May, as Russia, Japan and Caribbean banking centers trimmed their holdings even as China stepped up its purchases.
Total net sales of long-term equities, notes and bonds were a net $19.8 billion in May, compared with buying of $11.5 billion the month before, the Treasury said today in Washington. Monthly foreign investment flows dropped $66.6 billion in May, compared with a decline of $38 billion in April.
American Express, the largest U.S. credit card company, has halted its contributions to employees' pension plans in the United States and the U.K., as part of a restructuring process to slash costs amid mounting credit losses.
U.S. average retail gasoline prices fell a penny to $2.49 a gallon on Thursday, according to AAA Daily Fuel Gauge Report. A week ago, gasoline prices averaged $2.58 a gallon. A year ago, gasoline sold for $4.11 a gallon.
Rep. Ron Paul: "I don't have a right to medical care," he emphatically states. In his view, the constitution only guarantees citizens "life, liberty and (the right to) keep the fruits of my labor."
Don't be mistaken, he's very clear to point out, he is in favor of all citizens receiving medical care. "I want everybody to have maximum care at the best price. And that's why I want the government out of it completely."
"Imagine if we had all the records that showed every communication between the Treasury and the Fed and Goldman Sachs?" Paul muses. "That would be really something. That's why they're ganging up [to oppose the audit]. They're a lot more powerful than I am. I have no clout whatsoever."
The Philly Fed diffusion index fell to negative 7.5 in July from negative 2.2 in June. The index has been negative since September 2008.
U.S. demand for total petroleum products such as gasoline and diesel fell in the first half of the year to the lowest level in a decade, a monthly report released by the American Petroleum Institute showed Thursday. Petroleum products delivered to the market, an implied gauge of demand, fell to an average of 18.75 million barrels a day in the first half, the API, a petroleum industry group, said. That's 5.8% lower than the same period a year ago, and nearly 10%, or 2 million barrels a day, lower than the peak reached in 2005.
I continue to believe we have seen the highs in the price for gasoline for 2009 and believe there is every reason for a sharp drop in crude.
McGraw-Hill, which recently put Business Week up for sale, this morning said it is cutting 550 jobs as a cost-control measure.
Worldwide PC shipments fell 5% in the second quarter from a year earlier, according to market research firm Gartner.
U.S. natural gas inventories rise 90 bcf last week. Natural gas extends gains, up 4.5% to $3.427. At 2,886 billion cubic feet, stocks were 589 billion cubic feet higher than last year at this time and 454 billion cubic feet above the five-year average.
Washington Post: "Behind the scenes, Obama is pushing for a mechanism that would take Medicare payment authority out of the hands of politicians and invest it in a separate entity, possibly under the executive branch."
Brett Steenbarger: " Chasing highs after several days of strength, overall, has not been a winning strategy in the short run."
CIT Group Inc. shares slumped more than 75% Thursday as investors girded for what may be the fourth-largest bankruptcy in U.S. history after the troubled lender failed to get a government bailout. Fitch Ratings downgraded the credit ratings of CIT to C and said the company is highly likely to file for bankruptcy protection "in the very near term."
Federal Deposit Insurance Corp. Chairman Sheila Bair believes up to 500 more banks could fail, a U.S. senator said Bair told him in a recent meeting.
"She told us that unless something dramatic happens, we could lose up to 500 more banks," Sen. Jim Bunning, R-Ky., said Thursday at a hearing of the Senate Banking Committee on the foreclosure crisis.
CIT Group Inc.may need as much as $6 billion to avoid seeking bankruptcy protection after the U.S. wouldn’t give the firm another bailout, CreditSights Inc. analysts said. “CIT indicated that it needs at least $2 billion of rescue financing in the next 24 hours or it would likely file,” said CreditSights analysts including Adam Steer. “We believe the figure is in the range of $4 to $6 billion plus, making outside capital sources shy away.”
The National Association of Home Builders says its housing market index climbed in July to the highest level in nearly a year, as low interest rates and other incentives helped builders woo homebuyers.
The Washington-based trade association said Thursday the index rose two points to 17, its highest reading since it was 17 in September. The index peaked at 72 four years ago and was at 16 a year ago. We are basically bumping along the bottom.
August crude futures rose 51 cents, or 0.8%, to $62.05 a barrel on the New York Mercantile Exchange.Natural gas rose 37 cents to $3.66.
Google Inc.'s Internet ad sales grew at their slowest rate ever during the spring, forcing the online search leader to tighten its belt another notch to propel its second-quarter profit above analyst estimates.
The performance — punctuated by revenue growth of just 3 percent — disappointed investors. The company's shares fell more than 3 percent in extended trading Thursday after the results were released.
The 2009 profit forecast went to at least $9.70 per share, from $9.20 per share, a target that IBM set in January. IBM earned $8.89 per share last year.
IBM said profit in the latest quarter, which ended June 30, rose 12 percent to $3.1 billion, or $2.32 per share. Analysts expected $2.02 per share.
Meanwhile, sales dropped 13 percent to $23.25 billion, lower than the $23.59 billion predicted by analysts polled by Thomson Reuters. Sales would have been down 7 percent without currency fluctuations.
The Dow Jones Industrial Average gained 95.61 points, or 1.1%, to 8,711.8. The S&P 500 Index added 8.06 points, or 0.9%, to 940.74, while the Nasdaq Composite surged 22.13 points, or 1.2%, to 1,885.
Wednesday, July 15, 2009
The Rally
7/15/09 The Rally
This time last year, Intel earned $1.6 billion in net income, or 28 cents a share.
Excluding the charges, Intel said it earned 18 cents a share in the second quarter, beating by far the average analyst forecast of 8 cents, according to Reuters Estimates.
Revenue in the three months ending June 27 was $8 billion, down 15 percent year-over-year, but well above the average forecast of $7.27 billion expected by analysts.
Intel Chief Financial Officer Stacy Smith attributed the upside to strengthening computer markets and strong execution within the company. Intel saw "pockets of relative strength" in consumer PC markets as well as in the Asia Pacific region and in China, Smith told Reuters.
The executive noted that the corporate market remains weak and that Intel does not expect does not expect much of a change in the second half of the year. The company
projected third-quarter revenue at $8.1 billion to $8.9 billion, compared with analysts' average forecast of $7.82 billion, according to Reuters Estimates.
Intel saw third-quarter gross margin at 53 percent, plus or minus 2 percentage points, an improvement from the second quarter's 51 percent.
The Bakken formation encompasses some 25,000 square miles within the Williston Basin in North Dakota and Montana. The U.S. Geological Survey has called it the largest continuous oil accumulation it has ever assessed.
The Three Forks-Sanish formation is made up of sand and porous rock directly below the Bakken shale. But geologists don't know whether the Three Forks-Sanish is a separate oil-producing formation or if it catches oil that flows from the Bakken shale above.
The dollar index, which measures the U.S. unit against a basket of six major currencies, stood at 79.461, down from 79.643 earlier, and from 80.185 in late trade Tuesday.
Manufacturing activity in the New York area neither worsened nor improved in July, the New York Federal Reserve Bank said Wednesday. The bank's Empire State Manufacturing index rose to 0.6 in June from -9.4 in May. The new orders index rose above zero for the first time since September 2008, climbing to 5.9 from negative 8.2. The inventories index declined to a record low negative 36.5. The Empire State index is relatively new, having started in 2001
U.S. consumer prices rose a seasonally adjusted 0.7% in June, matching analysts' expectations, as gasoline prices jumped higher, the Labor Department reported Wednesday. The core CPI - which excludes often-volatile food and energy prices -- rose a seasonally adjusted 0.2%.
Oil futures rose early Wednesday after the American Petroleum Institute reported crude oil stocks declined by 1.15 million barrels last week. Crude for August delivery rose 96 cents to $60.48 a barrel in electronic trading on Globex. Distillate supplies rose by 656,000 barrels, while motor gasoline stocks dipped by 69,000 barrels, API also said late Tuesday.
U.S. crude inventories fell more than expected last week, the Energy Information Administration reported Wednesday, but total stockpiles of gasoline, diesel, and other petroleum products rose for a 16th straight week to an 11-year high. Crude inventories fell by 2.8 million barrels in the week ended July 10, the EIA said. Gasoline stockpiles rose 1.5 million barrels and distillate inventories gained 600,000 barrels, the EIA said. Total petroleum product inventories rose to 771.5 million barrels, the highest level since September, 1998.
The central bank said Japan's economy has stopped worsening and that business sentiment has stopped deteriorating, but to support the recovery, it said it would maintain its outright purchases of corporate bonds and commercial paper through the end of the year. The special liquidity-boosting measures had been scheduled to expire in September.
China’s foreign-exchange reserves, the world’s biggest, topped $2 trillion for the first time as the nation’s economic recovery prompted overseas investors to pump money into stocks and property. Analysts estimate that the Chinese authorities hold about 65 per cent to 70 per cent of their reserves in dollars, with the rest in other currencies including the euro, pound, yen and perhaps the Australian dollar.
To be counted in the official jobless rate, someone must have looked in the last four weeks for a job. In California and other states, one out of every five people who would like to be working full time is not doing so.
UK unemployment posted its largest quarterly increase since records began in 1971 in the three months to May.
Gov. Arnold Schwarzenegger has ordered department heads to eliminate 2,000 jobs on top of the 5,000 positions he wants to cut as part of his budget solution, his officials said Tuesday.
CIT ranks as one of the nation's biggest providers of factoring services, a practice that keeps goods flowing from manufacturers to retailers.
CIT is a major cog in making sure that orders get paid for and delivered to stores. Without CIT, retail shipments for the crucial holiday shopping season could be in jeopardy and, in turn, set off a new wave of bankruptcies among retailers and vendors.
"At the risk of sounding overly cautious, if the government did not help CIT, we could see significant inventory issues for the holidays," said David Strasser, an analyst at Janney Montgomery Scott in Philadelphia. "Some vendors would simply not be able to finance shipments to retailers for holiday."
Credit card firm Capital One Financial Corp.said on Wednesday that its annualized net chargeoffs in June rose modestly to 9.73% from 9.41% in May. The firm said the rate of its accounts 30 days or more delinquent dipped modestly to 4.77% in June, from 4.9% in May.
Average weekly earnings fell by 1.2 percent from May to June 2009.
Industrial production in the U.S. fell in June at the slowest pace in eight months, adding to signs the worst of the recession is over.
The 0.4 percent decrease in output at factories, mines and utilities was smaller than forecast and followed a revised 1.2 percent drop in May, Federal Reserve figures showed today in Washington. Capacity utilization, which measures the proportion of plants in use, decreased to 68 percent, the lowest level since records began in 1967.
Confidence in the world economy dropped for the first time in four months in July as government stimulus efforts showed little sign of reducing unemployment, a Bloomberg survey of users on six continents showed.
The Bloomberg Professional Global Confidence Index declined to 39.13 in July from 43.57 in June. A reading below 50 means pessimists outnumber optimists. A measure of U.S. participants’ confidence in the world’s largest economy fell to 29.5 from 36.7, the survey showed.
The average length of unemployment is higher than it's been since government began tracking the data in 1948. No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn't searched for work in the four weeks preceding the survey.
U.S. District Judge Vaughn Walker will hear arguments from both sides on the Obama administration’s motion for the warrantless surveillance case to be thrown out.
In court filings, the administration says the suit (.pdf) “would require or risk the disclosure of information that is properly subject to the state secrets privilege and related statutory privileges.” The administration claims it’s shielded by sovereign immunity, in addition to citing the controversial state secrets privilege.
All the while, the EFF maintains the dragnet surveillance (.pdf) continues unabated under Obama.
“Using this shadow network of surveillance devices, defendants have acquired and continue to acquire the content of a significant portion of the phone calls, e-mails, instant messages, text messages, web communications and other communications, both international and domestic, of practically every American who uses the phone system or the internet,” the EFF wrote in its lawsuit.
The civil liberties group told Judge Walker the spying is as an “unprecedented, suspicionless general search through the nation’s communications.” The EFF has a tough road ahead of it. A federal appeals court threw out a similar case two years ago, ruling the plaintiffs in that case could not prove their communications were siphoned to the NSA, and hence lacked standing to sue.
A failure to address excess capacity in the global economy may cause a “deflationary spiral” that will prolong the financial crisis and result in more company bailouts, World Bank Chief Economist Justin Lin said.
“Significant excess capacity has been built up and unless this issue is addressed, we will face a deflationary spiral and the crisis will become protracted,” he said during a lecture at South Africa’s University of Pretoria.
“Once excess capacity appears, the economy gets trapped in a vicious cycle,” Lin said. “The financial sector in developed countries may require more rescues in the future and the financial crisis may erupt in some developing nations.”
Nouriel Roubini: "Mounting Job Losses Will Hurt Consumption, Housing, Banks’ Balance Sheets, Public Finances and Lead to Protectionist Pressures."
Gold rose $16 to $939.
At USA Today, ad revenue fell 26%, but that decline was smaller than that of the first quarter. Something to cheer?
"Most REITs will need to address tenuous access to financing across the capital markets," said Steven Marks, head of Fitch's REIT group. "REITs are also contending with an unprecedented downturn in property markets, as indicated by increasing tenant defaults and reductions in net operating income." Commercial real estate firms also face a "sizable overhang" of debt maturities in coming years, stressed property values and potential ratings downgrades, Fitch added.
Russia's gross domestic product contracted by an estimated 10.1% in the first half of 2009 compared to the year-ago period, Economic Development Minister Elvira Nabiullina said on Wednesday, news agency RIA Novosti reported. The Russian government expects the economy to shrink by between 8% and 8.5% in 2009 as a whole.
House Democrats unveiled a health-care bill that would impose taxes on the wealthy and hit businesses with a penalty equal to 8% of payroll if they don't provide insurance.
The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.
The global copper market recorded a surplus of 90,000 metric tons during the first five months of this year, compared with a deficit of 170,000 metric tons the same period a year ago, U.K.-based research group World Bureau of Metal Statistics said Wednesday. Consumption in the first five months stood at 7.47 million tons, down 3.2% from last year. China's consumption, however, jumped 42% to 3 million metric tons, as the country built up its copper strategic reserves.
The Federal Reserve indicated it expects less bad growth rate this year but higher unemployment, in the minutes from last month's meeting. Ten-year note yields rose 10 basis points to 3.57%, after touching the highest since June 24. Regarding its ongoing program of purchasing Treasurys, officials said they are worried about the market's concerns that it would be monetizing the government's debt, though officials considered buying more Treasurys. U.S. debt was under pressure earlier as rising stocks reduced the appeal of holding fixed-income assets. The recession may be near its end but the recovery is likely to be very slow and unemployed workers will have trouble finding jobs for years, according to the latest thinking of top Federal Reserve officials disclosed on Wednesday.
The Federal Reserve expects the economy this year will sink at a slower pace than it previously thought, but that unemployment will top 10 percent, according to a forecast released Wednesday.
The Fed now predicts the economy will shrink between 1 and 1.5 percent this year, an improvement from its old forecast issued in May. At that time, the Fed projected the economy would contract between 1.3 and 2 percent.
“Most participants saw the economy as still quite weak and vulnerable to further adverse shocks,” the central bank said in minutes of the Federal Open Market Committee’s June 23-24 meeting released today in Washington. “Although financial market conditions had improved, credit was still quite tight in many sectors.”
Cooler-than-normal weather this summer in the Northeast may be hinting at a cold, snowy winter to come from Boston to Washington, D.C., according to AccuWeather.com.
According to Bloomberg, the VIX rose with the Standard & Poor’s 500 Index, a sign from the options market that the steepest three-day rally for stocks since June is poised to end.
The Chicago Board Options Exchange Volatility Index, as the VIX is known, added 1.7 percent to 25.44 at 2 p.m. in New York. The S&P 500 gained 2.4 percent. They have moved in the same direction 6 percent of the time since January 2003, according to data compiled by Charles Schwab Corp. The S&P 500 reversed course the next day 66 percent of the time, including seven of the past nine instances.
Tallying its greatest point gain since March 23, the Dow Jones Industrial Average added 256.72 points, or 3.1%, to end at 8,616.2. The S&P 500 Index rose 26.38 points, or 3%, to 932.67. The Nasdaq Composite soared 63.17 points, or 3.5%, to 1,862.9.
7/15/09 The Rally
This time last year, Intel earned $1.6 billion in net income, or 28 cents a share.
Excluding the charges, Intel said it earned 18 cents a share in the second quarter, beating by far the average analyst forecast of 8 cents, according to Reuters Estimates.
Revenue in the three months ending June 27 was $8 billion, down 15 percent year-over-year, but well above the average forecast of $7.27 billion expected by analysts.
Intel Chief Financial Officer Stacy Smith attributed the upside to strengthening computer markets and strong execution within the company. Intel saw "pockets of relative strength" in consumer PC markets as well as in the Asia Pacific region and in China, Smith told Reuters.
The executive noted that the corporate market remains weak and that Intel does not expect does not expect much of a change in the second half of the year. The company
projected third-quarter revenue at $8.1 billion to $8.9 billion, compared with analysts' average forecast of $7.82 billion, according to Reuters Estimates.
Intel saw third-quarter gross margin at 53 percent, plus or minus 2 percentage points, an improvement from the second quarter's 51 percent.
The Bakken formation encompasses some 25,000 square miles within the Williston Basin in North Dakota and Montana. The U.S. Geological Survey has called it the largest continuous oil accumulation it has ever assessed.
The Three Forks-Sanish formation is made up of sand and porous rock directly below the Bakken shale. But geologists don't know whether the Three Forks-Sanish is a separate oil-producing formation or if it catches oil that flows from the Bakken shale above.
The dollar index, which measures the U.S. unit against a basket of six major currencies, stood at 79.461, down from 79.643 earlier, and from 80.185 in late trade Tuesday.
Manufacturing activity in the New York area neither worsened nor improved in July, the New York Federal Reserve Bank said Wednesday. The bank's Empire State Manufacturing index rose to 0.6 in June from -9.4 in May. The new orders index rose above zero for the first time since September 2008, climbing to 5.9 from negative 8.2. The inventories index declined to a record low negative 36.5. The Empire State index is relatively new, having started in 2001
U.S. consumer prices rose a seasonally adjusted 0.7% in June, matching analysts' expectations, as gasoline prices jumped higher, the Labor Department reported Wednesday. The core CPI - which excludes often-volatile food and energy prices -- rose a seasonally adjusted 0.2%.
Oil futures rose early Wednesday after the American Petroleum Institute reported crude oil stocks declined by 1.15 million barrels last week. Crude for August delivery rose 96 cents to $60.48 a barrel in electronic trading on Globex. Distillate supplies rose by 656,000 barrels, while motor gasoline stocks dipped by 69,000 barrels, API also said late Tuesday.
U.S. crude inventories fell more than expected last week, the Energy Information Administration reported Wednesday, but total stockpiles of gasoline, diesel, and other petroleum products rose for a 16th straight week to an 11-year high. Crude inventories fell by 2.8 million barrels in the week ended July 10, the EIA said. Gasoline stockpiles rose 1.5 million barrels and distillate inventories gained 600,000 barrels, the EIA said. Total petroleum product inventories rose to 771.5 million barrels, the highest level since September, 1998.
The central bank said Japan's economy has stopped worsening and that business sentiment has stopped deteriorating, but to support the recovery, it said it would maintain its outright purchases of corporate bonds and commercial paper through the end of the year. The special liquidity-boosting measures had been scheduled to expire in September.
China’s foreign-exchange reserves, the world’s biggest, topped $2 trillion for the first time as the nation’s economic recovery prompted overseas investors to pump money into stocks and property. Analysts estimate that the Chinese authorities hold about 65 per cent to 70 per cent of their reserves in dollars, with the rest in other currencies including the euro, pound, yen and perhaps the Australian dollar.
To be counted in the official jobless rate, someone must have looked in the last four weeks for a job. In California and other states, one out of every five people who would like to be working full time is not doing so.
UK unemployment posted its largest quarterly increase since records began in 1971 in the three months to May.
Gov. Arnold Schwarzenegger has ordered department heads to eliminate 2,000 jobs on top of the 5,000 positions he wants to cut as part of his budget solution, his officials said Tuesday.
CIT ranks as one of the nation's biggest providers of factoring services, a practice that keeps goods flowing from manufacturers to retailers.
CIT is a major cog in making sure that orders get paid for and delivered to stores. Without CIT, retail shipments for the crucial holiday shopping season could be in jeopardy and, in turn, set off a new wave of bankruptcies among retailers and vendors.
"At the risk of sounding overly cautious, if the government did not help CIT, we could see significant inventory issues for the holidays," said David Strasser, an analyst at Janney Montgomery Scott in Philadelphia. "Some vendors would simply not be able to finance shipments to retailers for holiday."
Credit card firm Capital One Financial Corp.said on Wednesday that its annualized net chargeoffs in June rose modestly to 9.73% from 9.41% in May. The firm said the rate of its accounts 30 days or more delinquent dipped modestly to 4.77% in June, from 4.9% in May.
Average weekly earnings fell by 1.2 percent from May to June 2009.
Industrial production in the U.S. fell in June at the slowest pace in eight months, adding to signs the worst of the recession is over.
The 0.4 percent decrease in output at factories, mines and utilities was smaller than forecast and followed a revised 1.2 percent drop in May, Federal Reserve figures showed today in Washington. Capacity utilization, which measures the proportion of plants in use, decreased to 68 percent, the lowest level since records began in 1967.
Confidence in the world economy dropped for the first time in four months in July as government stimulus efforts showed little sign of reducing unemployment, a Bloomberg survey of users on six continents showed.
The Bloomberg Professional Global Confidence Index declined to 39.13 in July from 43.57 in June. A reading below 50 means pessimists outnumber optimists. A measure of U.S. participants’ confidence in the world’s largest economy fell to 29.5 from 36.7, the survey showed.
The average length of unemployment is higher than it's been since government began tracking the data in 1948. No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn't searched for work in the four weeks preceding the survey.
U.S. District Judge Vaughn Walker will hear arguments from both sides on the Obama administration’s motion for the warrantless surveillance case to be thrown out.
In court filings, the administration says the suit (.pdf) “would require or risk the disclosure of information that is properly subject to the state secrets privilege and related statutory privileges.” The administration claims it’s shielded by sovereign immunity, in addition to citing the controversial state secrets privilege.
All the while, the EFF maintains the dragnet surveillance (.pdf) continues unabated under Obama.
“Using this shadow network of surveillance devices, defendants have acquired and continue to acquire the content of a significant portion of the phone calls, e-mails, instant messages, text messages, web communications and other communications, both international and domestic, of practically every American who uses the phone system or the internet,” the EFF wrote in its lawsuit.
The civil liberties group told Judge Walker the spying is as an “unprecedented, suspicionless general search through the nation’s communications.” The EFF has a tough road ahead of it. A federal appeals court threw out a similar case two years ago, ruling the plaintiffs in that case could not prove their communications were siphoned to the NSA, and hence lacked standing to sue.
A failure to address excess capacity in the global economy may cause a “deflationary spiral” that will prolong the financial crisis and result in more company bailouts, World Bank Chief Economist Justin Lin said.
“Significant excess capacity has been built up and unless this issue is addressed, we will face a deflationary spiral and the crisis will become protracted,” he said during a lecture at South Africa’s University of Pretoria.
“Once excess capacity appears, the economy gets trapped in a vicious cycle,” Lin said. “The financial sector in developed countries may require more rescues in the future and the financial crisis may erupt in some developing nations.”
Nouriel Roubini: "Mounting Job Losses Will Hurt Consumption, Housing, Banks’ Balance Sheets, Public Finances and Lead to Protectionist Pressures."
Gold rose $16 to $939.
At USA Today, ad revenue fell 26%, but that decline was smaller than that of the first quarter. Something to cheer?
"Most REITs will need to address tenuous access to financing across the capital markets," said Steven Marks, head of Fitch's REIT group. "REITs are also contending with an unprecedented downturn in property markets, as indicated by increasing tenant defaults and reductions in net operating income." Commercial real estate firms also face a "sizable overhang" of debt maturities in coming years, stressed property values and potential ratings downgrades, Fitch added.
Russia's gross domestic product contracted by an estimated 10.1% in the first half of 2009 compared to the year-ago period, Economic Development Minister Elvira Nabiullina said on Wednesday, news agency RIA Novosti reported. The Russian government expects the economy to shrink by between 8% and 8.5% in 2009 as a whole.
House Democrats unveiled a health-care bill that would impose taxes on the wealthy and hit businesses with a penalty equal to 8% of payroll if they don't provide insurance.
The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.
The global copper market recorded a surplus of 90,000 metric tons during the first five months of this year, compared with a deficit of 170,000 metric tons the same period a year ago, U.K.-based research group World Bureau of Metal Statistics said Wednesday. Consumption in the first five months stood at 7.47 million tons, down 3.2% from last year. China's consumption, however, jumped 42% to 3 million metric tons, as the country built up its copper strategic reserves.
The Federal Reserve indicated it expects less bad growth rate this year but higher unemployment, in the minutes from last month's meeting. Ten-year note yields rose 10 basis points to 3.57%, after touching the highest since June 24. Regarding its ongoing program of purchasing Treasurys, officials said they are worried about the market's concerns that it would be monetizing the government's debt, though officials considered buying more Treasurys. U.S. debt was under pressure earlier as rising stocks reduced the appeal of holding fixed-income assets. The recession may be near its end but the recovery is likely to be very slow and unemployed workers will have trouble finding jobs for years, according to the latest thinking of top Federal Reserve officials disclosed on Wednesday.
The Federal Reserve expects the economy this year will sink at a slower pace than it previously thought, but that unemployment will top 10 percent, according to a forecast released Wednesday.
The Fed now predicts the economy will shrink between 1 and 1.5 percent this year, an improvement from its old forecast issued in May. At that time, the Fed projected the economy would contract between 1.3 and 2 percent.
“Most participants saw the economy as still quite weak and vulnerable to further adverse shocks,” the central bank said in minutes of the Federal Open Market Committee’s June 23-24 meeting released today in Washington. “Although financial market conditions had improved, credit was still quite tight in many sectors.”
Cooler-than-normal weather this summer in the Northeast may be hinting at a cold, snowy winter to come from Boston to Washington, D.C., according to AccuWeather.com.
According to Bloomberg, the VIX rose with the Standard & Poor’s 500 Index, a sign from the options market that the steepest three-day rally for stocks since June is poised to end.
The Chicago Board Options Exchange Volatility Index, as the VIX is known, added 1.7 percent to 25.44 at 2 p.m. in New York. The S&P 500 gained 2.4 percent. They have moved in the same direction 6 percent of the time since January 2003, according to data compiled by Charles Schwab Corp. The S&P 500 reversed course the next day 66 percent of the time, including seven of the past nine instances.
Tallying its greatest point gain since March 23, the Dow Jones Industrial Average added 256.72 points, or 3.1%, to end at 8,616.2. The S&P 500 Index rose 26.38 points, or 3%, to 932.67. The Nasdaq Composite soared 63.17 points, or 3.5%, to 1,862.9.
7/15/09 The Rally
This time last year, Intel earned $1.6 billion in net income, or 28 cents a share.
Excluding the charges, Intel said it earned 18 cents a share in the second quarter, beating by far the average analyst forecast of 8 cents, according to Reuters Estimates.
Revenue in the three months ending June 27 was $8 billion, down 15 percent year-over-year, but well above the average forecast of $7.27 billion expected by analysts.
Intel Chief Financial Officer Stacy Smith attributed the upside to strengthening computer markets and strong execution within the company. Intel saw "pockets of relative strength" in consumer PC markets as well as in the Asia Pacific region and in China, Smith told Reuters.
The executive noted that the corporate market remains weak and that Intel does not expect does not expect much of a change in the second half of the year. The company
projected third-quarter revenue at $8.1 billion to $8.9 billion, compared with analysts' average forecast of $7.82 billion, according to Reuters Estimates.
Intel saw third-quarter gross margin at 53 percent, plus or minus 2 percentage points, an improvement from the second quarter's 51 percent.
The Bakken formation encompasses some 25,000 square miles within the Williston Basin in North Dakota and Montana. The U.S. Geological Survey has called it the largest continuous oil accumulation it has ever assessed.
The Three Forks-Sanish formation is made up of sand and porous rock directly below the Bakken shale. But geologists don't know whether the Three Forks-Sanish is a separate oil-producing formation or if it catches oil that flows from the Bakken shale above.
The dollar index, which measures the U.S. unit against a basket of six major currencies, stood at 79.461, down from 79.643 earlier, and from 80.185 in late trade Tuesday.
Manufacturing activity in the New York area neither worsened nor improved in July, the New York Federal Reserve Bank said Wednesday. The bank's Empire State Manufacturing index rose to 0.6 in June from -9.4 in May. The new orders index rose above zero for the first time since September 2008, climbing to 5.9 from negative 8.2. The inventories index declined to a record low negative 36.5. The Empire State index is relatively new, having started in 2001
U.S. consumer prices rose a seasonally adjusted 0.7% in June, matching analysts' expectations, as gasoline prices jumped higher, the Labor Department reported Wednesday. The core CPI - which excludes often-volatile food and energy prices -- rose a seasonally adjusted 0.2%.
Oil futures rose early Wednesday after the American Petroleum Institute reported crude oil stocks declined by 1.15 million barrels last week. Crude for August delivery rose 96 cents to $60.48 a barrel in electronic trading on Globex. Distillate supplies rose by 656,000 barrels, while motor gasoline stocks dipped by 69,000 barrels, API also said late Tuesday.
U.S. crude inventories fell more than expected last week, the Energy Information Administration reported Wednesday, but total stockpiles of gasoline, diesel, and other petroleum products rose for a 16th straight week to an 11-year high. Crude inventories fell by 2.8 million barrels in the week ended July 10, the EIA said. Gasoline stockpiles rose 1.5 million barrels and distillate inventories gained 600,000 barrels, the EIA said. Total petroleum product inventories rose to 771.5 million barrels, the highest level since September, 1998.
The central bank said Japan's economy has stopped worsening and that business sentiment has stopped deteriorating, but to support the recovery, it said it would maintain its outright purchases of corporate bonds and commercial paper through the end of the year. The special liquidity-boosting measures had been scheduled to expire in September.
China’s foreign-exchange reserves, the world’s biggest, topped $2 trillion for the first time as the nation’s economic recovery prompted overseas investors to pump money into stocks and property. Analysts estimate that the Chinese authorities hold about 65 per cent to 70 per cent of their reserves in dollars, with the rest in other currencies including the euro, pound, yen and perhaps the Australian dollar.
To be counted in the official jobless rate, someone must have looked in the last four weeks for a job. In California and other states, one out of every five people who would like to be working full time is not doing so.
UK unemployment posted its largest quarterly increase since records began in 1971 in the three months to May.
Gov. Arnold Schwarzenegger has ordered department heads to eliminate 2,000 jobs on top of the 5,000 positions he wants to cut as part of his budget solution, his officials said Tuesday.
CIT ranks as one of the nation's biggest providers of factoring services, a practice that keeps goods flowing from manufacturers to retailers.
CIT is a major cog in making sure that orders get paid for and delivered to stores. Without CIT, retail shipments for the crucial holiday shopping season could be in jeopardy and, in turn, set off a new wave of bankruptcies among retailers and vendors.
"At the risk of sounding overly cautious, if the government did not help CIT, we could see significant inventory issues for the holidays," said David Strasser, an analyst at Janney Montgomery Scott in Philadelphia. "Some vendors would simply not be able to finance shipments to retailers for holiday."
Credit card firm Capital One Financial Corp.said on Wednesday that its annualized net chargeoffs in June rose modestly to 9.73% from 9.41% in May. The firm said the rate of its accounts 30 days or more delinquent dipped modestly to 4.77% in June, from 4.9% in May.
Average weekly earnings fell by 1.2 percent from May to June 2009.
Industrial production in the U.S. fell in June at the slowest pace in eight months, adding to signs the worst of the recession is over.
The 0.4 percent decrease in output at factories, mines and utilities was smaller than forecast and followed a revised 1.2 percent drop in May, Federal Reserve figures showed today in Washington. Capacity utilization, which measures the proportion of plants in use, decreased to 68 percent, the lowest level since records began in 1967.
Confidence in the world economy dropped for the first time in four months in July as government stimulus efforts showed little sign of reducing unemployment, a Bloomberg survey of users on six continents showed.
The Bloomberg Professional Global Confidence Index declined to 39.13 in July from 43.57 in June. A reading below 50 means pessimists outnumber optimists. A measure of U.S. participants’ confidence in the world’s largest economy fell to 29.5 from 36.7, the survey showed.
The average length of unemployment is higher than it's been since government began tracking the data in 1948. No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn't searched for work in the four weeks preceding the survey.
U.S. District Judge Vaughn Walker will hear arguments from both sides on the Obama administration’s motion for the warrantless surveillance case to be thrown out.
In court filings, the administration says the suit (.pdf) “would require or risk the disclosure of information that is properly subject to the state secrets privilege and related statutory privileges.” The administration claims it’s shielded by sovereign immunity, in addition to citing the controversial state secrets privilege.
All the while, the EFF maintains the dragnet surveillance (.pdf) continues unabated under Obama.
“Using this shadow network of surveillance devices, defendants have acquired and continue to acquire the content of a significant portion of the phone calls, e-mails, instant messages, text messages, web communications and other communications, both international and domestic, of practically every American who uses the phone system or the internet,” the EFF wrote in its lawsuit.
The civil liberties group told Judge Walker the spying is as an “unprecedented, suspicionless general search through the nation’s communications.” The EFF has a tough road ahead of it. A federal appeals court threw out a similar case two years ago, ruling the plaintiffs in that case could not prove their communications were siphoned to the NSA, and hence lacked standing to sue.
A failure to address excess capacity in the global economy may cause a “deflationary spiral” that will prolong the financial crisis and result in more company bailouts, World Bank Chief Economist Justin Lin said.
“Significant excess capacity has been built up and unless this issue is addressed, we will face a deflationary spiral and the crisis will become protracted,” he said during a lecture at South Africa’s University of Pretoria.
“Once excess capacity appears, the economy gets trapped in a vicious cycle,” Lin said. “The financial sector in developed countries may require more rescues in the future and the financial crisis may erupt in some developing nations.”
Nouriel Roubini: "Mounting Job Losses Will Hurt Consumption, Housing, Banks’ Balance Sheets, Public Finances and Lead to Protectionist Pressures."
Gold rose $16 to $939.
At USA Today, ad revenue fell 26%, but that decline was smaller than that of the first quarter. Something to cheer?
"Most REITs will need to address tenuous access to financing across the capital markets," said Steven Marks, head of Fitch's REIT group. "REITs are also contending with an unprecedented downturn in property markets, as indicated by increasing tenant defaults and reductions in net operating income." Commercial real estate firms also face a "sizable overhang" of debt maturities in coming years, stressed property values and potential ratings downgrades, Fitch added.
Russia's gross domestic product contracted by an estimated 10.1% in the first half of 2009 compared to the year-ago period, Economic Development Minister Elvira Nabiullina said on Wednesday, news agency RIA Novosti reported. The Russian government expects the economy to shrink by between 8% and 8.5% in 2009 as a whole.
House Democrats unveiled a health-care bill that would impose taxes on the wealthy and hit businesses with a penalty equal to 8% of payroll if they don't provide insurance.
The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.
The global copper market recorded a surplus of 90,000 metric tons during the first five months of this year, compared with a deficit of 170,000 metric tons the same period a year ago, U.K.-based research group World Bureau of Metal Statistics said Wednesday. Consumption in the first five months stood at 7.47 million tons, down 3.2% from last year. China's consumption, however, jumped 42% to 3 million metric tons, as the country built up its copper strategic reserves.
The Federal Reserve indicated it expects less bad growth rate this year but higher unemployment, in the minutes from last month's meeting. Ten-year note yields rose 10 basis points to 3.57%, after touching the highest since June 24. Regarding its ongoing program of purchasing Treasurys, officials said they are worried about the market's concerns that it would be monetizing the government's debt, though officials considered buying more Treasurys. U.S. debt was under pressure earlier as rising stocks reduced the appeal of holding fixed-income assets. The recession may be near its end but the recovery is likely to be very slow and unemployed workers will have trouble finding jobs for years, according to the latest thinking of top Federal Reserve officials disclosed on Wednesday.
The Federal Reserve expects the economy this year will sink at a slower pace than it previously thought, but that unemployment will top 10 percent, according to a forecast released Wednesday.
The Fed now predicts the economy will shrink between 1 and 1.5 percent this year, an improvement from its old forecast issued in May. At that time, the Fed projected the economy would contract between 1.3 and 2 percent.
“Most participants saw the economy as still quite weak and vulnerable to further adverse shocks,” the central bank said in minutes of the Federal Open Market Committee’s June 23-24 meeting released today in Washington. “Although financial market conditions had improved, credit was still quite tight in many sectors.”
Cooler-than-normal weather this summer in the Northeast may be hinting at a cold, snowy winter to come from Boston to Washington, D.C., according to AccuWeather.com.
According to Bloomberg, the VIX rose with the Standard & Poor’s 500 Index, a sign from the options market that the steepest three-day rally for stocks since June is poised to end.
The Chicago Board Options Exchange Volatility Index, as the VIX is known, added 1.7 percent to 25.44 at 2 p.m. in New York. The S&P 500 gained 2.4 percent. They have moved in the same direction 6 percent of the time since January 2003, according to data compiled by Charles Schwab Corp. The S&P 500 reversed course the next day 66 percent of the time, including seven of the past nine instances.
Tallying its greatest point gain since March 23, the Dow Jones Industrial Average added 256.72 points, or 3.1%, to end at 8,616.2. The S&P 500 Index rose 26.38 points, or 3%, to 932.67. The Nasdaq Composite soared 63.17 points, or 3.5%, to 1,862.9.
7/15/09 The Rally
This time last year, Intel earned $1.6 billion in net income, or 28 cents a share.
Excluding the charges, Intel said it earned 18 cents a share in the second quarter, beating by far the average analyst forecast of 8 cents, according to Reuters Estimates.
Revenue in the three months ending June 27 was $8 billion, down 15 percent year-over-year, but well above the average forecast of $7.27 billion expected by analysts.
Intel Chief Financial Officer Stacy Smith attributed the upside to strengthening computer markets and strong execution within the company. Intel saw "pockets of relative strength" in consumer PC markets as well as in the Asia Pacific region and in China, Smith told Reuters.
The executive noted that the corporate market remains weak and that Intel does not expect does not expect much of a change in the second half of the year. The company
projected third-quarter revenue at $8.1 billion to $8.9 billion, compared with analysts' average forecast of $7.82 billion, according to Reuters Estimates.
Intel saw third-quarter gross margin at 53 percent, plus or minus 2 percentage points, an improvement from the second quarter's 51 percent.
The Bakken formation encompasses some 25,000 square miles within the Williston Basin in North Dakota and Montana. The U.S. Geological Survey has called it the largest continuous oil accumulation it has ever assessed.
The Three Forks-Sanish formation is made up of sand and porous rock directly below the Bakken shale. But geologists don't know whether the Three Forks-Sanish is a separate oil-producing formation or if it catches oil that flows from the Bakken shale above.
The dollar index, which measures the U.S. unit against a basket of six major currencies, stood at 79.461, down from 79.643 earlier, and from 80.185 in late trade Tuesday.
Manufacturing activity in the New York area neither worsened nor improved in July, the New York Federal Reserve Bank said Wednesday. The bank's Empire State Manufacturing index rose to 0.6 in June from -9.4 in May. The new orders index rose above zero for the first time since September 2008, climbing to 5.9 from negative 8.2. The inventories index declined to a record low negative 36.5. The Empire State index is relatively new, having started in 2001
U.S. consumer prices rose a seasonally adjusted 0.7% in June, matching analysts' expectations, as gasoline prices jumped higher, the Labor Department reported Wednesday. The core CPI - which excludes often-volatile food and energy prices -- rose a seasonally adjusted 0.2%.
Oil futures rose early Wednesday after the American Petroleum Institute reported crude oil stocks declined by 1.15 million barrels last week. Crude for August delivery rose 96 cents to $60.48 a barrel in electronic trading on Globex. Distillate supplies rose by 656,000 barrels, while motor gasoline stocks dipped by 69,000 barrels, API also said late Tuesday.
U.S. crude inventories fell more than expected last week, the Energy Information Administration reported Wednesday, but total stockpiles of gasoline, diesel, and other petroleum products rose for a 16th straight week to an 11-year high. Crude inventories fell by 2.8 million barrels in the week ended July 10, the EIA said. Gasoline stockpiles rose 1.5 million barrels and distillate inventories gained 600,000 barrels, the EIA said. Total petroleum product inventories rose to 771.5 million barrels, the highest level since September, 1998.
The central bank said Japan's economy has stopped worsening and that business sentiment has stopped deteriorating, but to support the recovery, it said it would maintain its outright purchases of corporate bonds and commercial paper through the end of the year. The special liquidity-boosting measures had been scheduled to expire in September.
China’s foreign-exchange reserves, the world’s biggest, topped $2 trillion for the first time as the nation’s economic recovery prompted overseas investors to pump money into stocks and property. Analysts estimate that the Chinese authorities hold about 65 per cent to 70 per cent of their reserves in dollars, with the rest in other currencies including the euro, pound, yen and perhaps the Australian dollar.
To be counted in the official jobless rate, someone must have looked in the last four weeks for a job. In California and other states, one out of every five people who would like to be working full time is not doing so.
UK unemployment posted its largest quarterly increase since records began in 1971 in the three months to May.
Gov. Arnold Schwarzenegger has ordered department heads to eliminate 2,000 jobs on top of the 5,000 positions he wants to cut as part of his budget solution, his officials said Tuesday.
CIT ranks as one of the nation's biggest providers of factoring services, a practice that keeps goods flowing from manufacturers to retailers.
CIT is a major cog in making sure that orders get paid for and delivered to stores. Without CIT, retail shipments for the crucial holiday shopping season could be in jeopardy and, in turn, set off a new wave of bankruptcies among retailers and vendors.
"At the risk of sounding overly cautious, if the government did not help CIT, we could see significant inventory issues for the holidays," said David Strasser, an analyst at Janney Montgomery Scott in Philadelphia. "Some vendors would simply not be able to finance shipments to retailers for holiday."
Credit card firm Capital One Financial Corp.said on Wednesday that its annualized net chargeoffs in June rose modestly to 9.73% from 9.41% in May. The firm said the rate of its accounts 30 days or more delinquent dipped modestly to 4.77% in June, from 4.9% in May.
Average weekly earnings fell by 1.2 percent from May to June 2009.
Industrial production in the U.S. fell in June at the slowest pace in eight months, adding to signs the worst of the recession is over.
The 0.4 percent decrease in output at factories, mines and utilities was smaller than forecast and followed a revised 1.2 percent drop in May, Federal Reserve figures showed today in Washington. Capacity utilization, which measures the proportion of plants in use, decreased to 68 percent, the lowest level since records began in 1967.
Confidence in the world economy dropped for the first time in four months in July as government stimulus efforts showed little sign of reducing unemployment, a Bloomberg survey of users on six continents showed.
The Bloomberg Professional Global Confidence Index declined to 39.13 in July from 43.57 in June. A reading below 50 means pessimists outnumber optimists. A measure of U.S. participants’ confidence in the world’s largest economy fell to 29.5 from 36.7, the survey showed.
The average length of unemployment is higher than it's been since government began tracking the data in 1948. No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn't searched for work in the four weeks preceding the survey.
U.S. District Judge Vaughn Walker will hear arguments from both sides on the Obama administration’s motion for the warrantless surveillance case to be thrown out.
In court filings, the administration says the suit (.pdf) “would require or risk the disclosure of information that is properly subject to the state secrets privilege and related statutory privileges.” The administration claims it’s shielded by sovereign immunity, in addition to citing the controversial state secrets privilege.
All the while, the EFF maintains the dragnet surveillance (.pdf) continues unabated under Obama.
“Using this shadow network of surveillance devices, defendants have acquired and continue to acquire the content of a significant portion of the phone calls, e-mails, instant messages, text messages, web communications and other communications, both international and domestic, of practically every American who uses the phone system or the internet,” the EFF wrote in its lawsuit.
The civil liberties group told Judge Walker the spying is as an “unprecedented, suspicionless general search through the nation’s communications.” The EFF has a tough road ahead of it. A federal appeals court threw out a similar case two years ago, ruling the plaintiffs in that case could not prove their communications were siphoned to the NSA, and hence lacked standing to sue.
A failure to address excess capacity in the global economy may cause a “deflationary spiral” that will prolong the financial crisis and result in more company bailouts, World Bank Chief Economist Justin Lin said.
“Significant excess capacity has been built up and unless this issue is addressed, we will face a deflationary spiral and the crisis will become protracted,” he said during a lecture at South Africa’s University of Pretoria.
“Once excess capacity appears, the economy gets trapped in a vicious cycle,” Lin said. “The financial sector in developed countries may require more rescues in the future and the financial crisis may erupt in some developing nations.”
Nouriel Roubini: "Mounting Job Losses Will Hurt Consumption, Housing, Banks’ Balance Sheets, Public Finances and Lead to Protectionist Pressures."
Gold rose $16 to $939.
At USA Today, ad revenue fell 26%, but that decline was smaller than that of the first quarter. Something to cheer?
"Most REITs will need to address tenuous access to financing across the capital markets," said Steven Marks, head of Fitch's REIT group. "REITs are also contending with an unprecedented downturn in property markets, as indicated by increasing tenant defaults and reductions in net operating income." Commercial real estate firms also face a "sizable overhang" of debt maturities in coming years, stressed property values and potential ratings downgrades, Fitch added.
Russia's gross domestic product contracted by an estimated 10.1% in the first half of 2009 compared to the year-ago period, Economic Development Minister Elvira Nabiullina said on Wednesday, news agency RIA Novosti reported. The Russian government expects the economy to shrink by between 8% and 8.5% in 2009 as a whole.
House Democrats unveiled a health-care bill that would impose taxes on the wealthy and hit businesses with a penalty equal to 8% of payroll if they don't provide insurance.
The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.
The global copper market recorded a surplus of 90,000 metric tons during the first five months of this year, compared with a deficit of 170,000 metric tons the same period a year ago, U.K.-based research group World Bureau of Metal Statistics said Wednesday. Consumption in the first five months stood at 7.47 million tons, down 3.2% from last year. China's consumption, however, jumped 42% to 3 million metric tons, as the country built up its copper strategic reserves.
The Federal Reserve indicated it expects less bad growth rate this year but higher unemployment, in the minutes from last month's meeting. Ten-year note yields rose 10 basis points to 3.57%, after touching the highest since June 24. Regarding its ongoing program of purchasing Treasurys, officials said they are worried about the market's concerns that it would be monetizing the government's debt, though officials considered buying more Treasurys. U.S. debt was under pressure earlier as rising stocks reduced the appeal of holding fixed-income assets. The recession may be near its end but the recovery is likely to be very slow and unemployed workers will have trouble finding jobs for years, according to the latest thinking of top Federal Reserve officials disclosed on Wednesday.
The Federal Reserve expects the economy this year will sink at a slower pace than it previously thought, but that unemployment will top 10 percent, according to a forecast released Wednesday.
The Fed now predicts the economy will shrink between 1 and 1.5 percent this year, an improvement from its old forecast issued in May. At that time, the Fed projected the economy would contract between 1.3 and 2 percent.
“Most participants saw the economy as still quite weak and vulnerable to further adverse shocks,” the central bank said in minutes of the Federal Open Market Committee’s June 23-24 meeting released today in Washington. “Although financial market conditions had improved, credit was still quite tight in many sectors.”
Cooler-than-normal weather this summer in the Northeast may be hinting at a cold, snowy winter to come from Boston to Washington, D.C., according to AccuWeather.com.
According to Bloomberg, the VIX rose with the Standard & Poor’s 500 Index, a sign from the options market that the steepest three-day rally for stocks since June is poised to end.
The Chicago Board Options Exchange Volatility Index, as the VIX is known, added 1.7 percent to 25.44 at 2 p.m. in New York. The S&P 500 gained 2.4 percent. They have moved in the same direction 6 percent of the time since January 2003, according to data compiled by Charles Schwab Corp. The S&P 500 reversed course the next day 66 percent of the time, including seven of the past nine instances.
Tallying its greatest point gain since March 23, the Dow Jones Industrial Average added 256.72 points, or 3.1%, to end at 8,616.2. The S&P 500 Index rose 26.38 points, or 3%, to 932.67. The Nasdaq Composite soared 63.17 points, or 3.5%, to 1,862.9.
This time last year, Intel earned $1.6 billion in net income, or 28 cents a share.
Excluding the charges, Intel said it earned 18 cents a share in the second quarter, beating by far the average analyst forecast of 8 cents, according to Reuters Estimates.
Revenue in the three months ending June 27 was $8 billion, down 15 percent year-over-year, but well above the average forecast of $7.27 billion expected by analysts.
Intel Chief Financial Officer Stacy Smith attributed the upside to strengthening computer markets and strong execution within the company. Intel saw "pockets of relative strength" in consumer PC markets as well as in the Asia Pacific region and in China, Smith told Reuters.
The executive noted that the corporate market remains weak and that Intel does not expect does not expect much of a change in the second half of the year. The company
projected third-quarter revenue at $8.1 billion to $8.9 billion, compared with analysts' average forecast of $7.82 billion, according to Reuters Estimates.
Intel saw third-quarter gross margin at 53 percent, plus or minus 2 percentage points, an improvement from the second quarter's 51 percent.
The Bakken formation encompasses some 25,000 square miles within the Williston Basin in North Dakota and Montana. The U.S. Geological Survey has called it the largest continuous oil accumulation it has ever assessed.
The Three Forks-Sanish formation is made up of sand and porous rock directly below the Bakken shale. But geologists don't know whether the Three Forks-Sanish is a separate oil-producing formation or if it catches oil that flows from the Bakken shale above.
The dollar index, which measures the U.S. unit against a basket of six major currencies, stood at 79.461, down from 79.643 earlier, and from 80.185 in late trade Tuesday.
Manufacturing activity in the New York area neither worsened nor improved in July, the New York Federal Reserve Bank said Wednesday. The bank's Empire State Manufacturing index rose to 0.6 in June from -9.4 in May. The new orders index rose above zero for the first time since September 2008, climbing to 5.9 from negative 8.2. The inventories index declined to a record low negative 36.5. The Empire State index is relatively new, having started in 2001
U.S. consumer prices rose a seasonally adjusted 0.7% in June, matching analysts' expectations, as gasoline prices jumped higher, the Labor Department reported Wednesday. The core CPI - which excludes often-volatile food and energy prices -- rose a seasonally adjusted 0.2%.
Oil futures rose early Wednesday after the American Petroleum Institute reported crude oil stocks declined by 1.15 million barrels last week. Crude for August delivery rose 96 cents to $60.48 a barrel in electronic trading on Globex. Distillate supplies rose by 656,000 barrels, while motor gasoline stocks dipped by 69,000 barrels, API also said late Tuesday.
U.S. crude inventories fell more than expected last week, the Energy Information Administration reported Wednesday, but total stockpiles of gasoline, diesel, and other petroleum products rose for a 16th straight week to an 11-year high. Crude inventories fell by 2.8 million barrels in the week ended July 10, the EIA said. Gasoline stockpiles rose 1.5 million barrels and distillate inventories gained 600,000 barrels, the EIA said. Total petroleum product inventories rose to 771.5 million barrels, the highest level since September, 1998.
The central bank said Japan's economy has stopped worsening and that business sentiment has stopped deteriorating, but to support the recovery, it said it would maintain its outright purchases of corporate bonds and commercial paper through the end of the year. The special liquidity-boosting measures had been scheduled to expire in September.
China’s foreign-exchange reserves, the world’s biggest, topped $2 trillion for the first time as the nation’s economic recovery prompted overseas investors to pump money into stocks and property. Analysts estimate that the Chinese authorities hold about 65 per cent to 70 per cent of their reserves in dollars, with the rest in other currencies including the euro, pound, yen and perhaps the Australian dollar.
To be counted in the official jobless rate, someone must have looked in the last four weeks for a job. In California and other states, one out of every five people who would like to be working full time is not doing so.
UK unemployment posted its largest quarterly increase since records began in 1971 in the three months to May.
Gov. Arnold Schwarzenegger has ordered department heads to eliminate 2,000 jobs on top of the 5,000 positions he wants to cut as part of his budget solution, his officials said Tuesday.
CIT ranks as one of the nation's biggest providers of factoring services, a practice that keeps goods flowing from manufacturers to retailers.
CIT is a major cog in making sure that orders get paid for and delivered to stores. Without CIT, retail shipments for the crucial holiday shopping season could be in jeopardy and, in turn, set off a new wave of bankruptcies among retailers and vendors.
"At the risk of sounding overly cautious, if the government did not help CIT, we could see significant inventory issues for the holidays," said David Strasser, an analyst at Janney Montgomery Scott in Philadelphia. "Some vendors would simply not be able to finance shipments to retailers for holiday."
Credit card firm Capital One Financial Corp.said on Wednesday that its annualized net chargeoffs in June rose modestly to 9.73% from 9.41% in May. The firm said the rate of its accounts 30 days or more delinquent dipped modestly to 4.77% in June, from 4.9% in May.
Average weekly earnings fell by 1.2 percent from May to June 2009.
Industrial production in the U.S. fell in June at the slowest pace in eight months, adding to signs the worst of the recession is over.
The 0.4 percent decrease in output at factories, mines and utilities was smaller than forecast and followed a revised 1.2 percent drop in May, Federal Reserve figures showed today in Washington. Capacity utilization, which measures the proportion of plants in use, decreased to 68 percent, the lowest level since records began in 1967.
Confidence in the world economy dropped for the first time in four months in July as government stimulus efforts showed little sign of reducing unemployment, a Bloomberg survey of users on six continents showed.
The Bloomberg Professional Global Confidence Index declined to 39.13 in July from 43.57 in June. A reading below 50 means pessimists outnumber optimists. A measure of U.S. participants’ confidence in the world’s largest economy fell to 29.5 from 36.7, the survey showed.
The average length of unemployment is higher than it's been since government began tracking the data in 1948. No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn't searched for work in the four weeks preceding the survey.
U.S. District Judge Vaughn Walker will hear arguments from both sides on the Obama administration’s motion for the warrantless surveillance case to be thrown out.
In court filings, the administration says the suit (.pdf) “would require or risk the disclosure of information that is properly subject to the state secrets privilege and related statutory privileges.” The administration claims it’s shielded by sovereign immunity, in addition to citing the controversial state secrets privilege.
All the while, the EFF maintains the dragnet surveillance (.pdf) continues unabated under Obama.
“Using this shadow network of surveillance devices, defendants have acquired and continue to acquire the content of a significant portion of the phone calls, e-mails, instant messages, text messages, web communications and other communications, both international and domestic, of practically every American who uses the phone system or the internet,” the EFF wrote in its lawsuit.
The civil liberties group told Judge Walker the spying is as an “unprecedented, suspicionless general search through the nation’s communications.” The EFF has a tough road ahead of it. A federal appeals court threw out a similar case two years ago, ruling the plaintiffs in that case could not prove their communications were siphoned to the NSA, and hence lacked standing to sue.
A failure to address excess capacity in the global economy may cause a “deflationary spiral” that will prolong the financial crisis and result in more company bailouts, World Bank Chief Economist Justin Lin said.
“Significant excess capacity has been built up and unless this issue is addressed, we will face a deflationary spiral and the crisis will become protracted,” he said during a lecture at South Africa’s University of Pretoria.
“Once excess capacity appears, the economy gets trapped in a vicious cycle,” Lin said. “The financial sector in developed countries may require more rescues in the future and the financial crisis may erupt in some developing nations.”
Nouriel Roubini: "Mounting Job Losses Will Hurt Consumption, Housing, Banks’ Balance Sheets, Public Finances and Lead to Protectionist Pressures."
Gold rose $16 to $939.
At USA Today, ad revenue fell 26%, but that decline was smaller than that of the first quarter. Something to cheer?
"Most REITs will need to address tenuous access to financing across the capital markets," said Steven Marks, head of Fitch's REIT group. "REITs are also contending with an unprecedented downturn in property markets, as indicated by increasing tenant defaults and reductions in net operating income." Commercial real estate firms also face a "sizable overhang" of debt maturities in coming years, stressed property values and potential ratings downgrades, Fitch added.
Russia's gross domestic product contracted by an estimated 10.1% in the first half of 2009 compared to the year-ago period, Economic Development Minister Elvira Nabiullina said on Wednesday, news agency RIA Novosti reported. The Russian government expects the economy to shrink by between 8% and 8.5% in 2009 as a whole.
House Democrats unveiled a health-care bill that would impose taxes on the wealthy and hit businesses with a penalty equal to 8% of payroll if they don't provide insurance.
The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.
The global copper market recorded a surplus of 90,000 metric tons during the first five months of this year, compared with a deficit of 170,000 metric tons the same period a year ago, U.K.-based research group World Bureau of Metal Statistics said Wednesday. Consumption in the first five months stood at 7.47 million tons, down 3.2% from last year. China's consumption, however, jumped 42% to 3 million metric tons, as the country built up its copper strategic reserves.
The Federal Reserve indicated it expects less bad growth rate this year but higher unemployment, in the minutes from last month's meeting. Ten-year note yields rose 10 basis points to 3.57%, after touching the highest since June 24. Regarding its ongoing program of purchasing Treasurys, officials said they are worried about the market's concerns that it would be monetizing the government's debt, though officials considered buying more Treasurys. U.S. debt was under pressure earlier as rising stocks reduced the appeal of holding fixed-income assets. The recession may be near its end but the recovery is likely to be very slow and unemployed workers will have trouble finding jobs for years, according to the latest thinking of top Federal Reserve officials disclosed on Wednesday.
The Federal Reserve expects the economy this year will sink at a slower pace than it previously thought, but that unemployment will top 10 percent, according to a forecast released Wednesday.
The Fed now predicts the economy will shrink between 1 and 1.5 percent this year, an improvement from its old forecast issued in May. At that time, the Fed projected the economy would contract between 1.3 and 2 percent.
“Most participants saw the economy as still quite weak and vulnerable to further adverse shocks,” the central bank said in minutes of the Federal Open Market Committee’s June 23-24 meeting released today in Washington. “Although financial market conditions had improved, credit was still quite tight in many sectors.”
Cooler-than-normal weather this summer in the Northeast may be hinting at a cold, snowy winter to come from Boston to Washington, D.C., according to AccuWeather.com.
According to Bloomberg, the VIX rose with the Standard & Poor’s 500 Index, a sign from the options market that the steepest three-day rally for stocks since June is poised to end.
The Chicago Board Options Exchange Volatility Index, as the VIX is known, added 1.7 percent to 25.44 at 2 p.m. in New York. The S&P 500 gained 2.4 percent. They have moved in the same direction 6 percent of the time since January 2003, according to data compiled by Charles Schwab Corp. The S&P 500 reversed course the next day 66 percent of the time, including seven of the past nine instances.
Tallying its greatest point gain since March 23, the Dow Jones Industrial Average added 256.72 points, or 3.1%, to end at 8,616.2. The S&P 500 Index rose 26.38 points, or 3%, to 932.67. The Nasdaq Composite soared 63.17 points, or 3.5%, to 1,862.9.
7/15/09 The Rally
This time last year, Intel earned $1.6 billion in net income, or 28 cents a share.
Excluding the charges, Intel said it earned 18 cents a share in the second quarter, beating by far the average analyst forecast of 8 cents, according to Reuters Estimates.
Revenue in the three months ending June 27 was $8 billion, down 15 percent year-over-year, but well above the average forecast of $7.27 billion expected by analysts.
Intel Chief Financial Officer Stacy Smith attributed the upside to strengthening computer markets and strong execution within the company. Intel saw "pockets of relative strength" in consumer PC markets as well as in the Asia Pacific region and in China, Smith told Reuters.
The executive noted that the corporate market remains weak and that Intel does not expect does not expect much of a change in the second half of the year. The company
projected third-quarter revenue at $8.1 billion to $8.9 billion, compared with analysts' average forecast of $7.82 billion, according to Reuters Estimates.
Intel saw third-quarter gross margin at 53 percent, plus or minus 2 percentage points, an improvement from the second quarter's 51 percent.
The Bakken formation encompasses some 25,000 square miles within the Williston Basin in North Dakota and Montana. The U.S. Geological Survey has called it the largest continuous oil accumulation it has ever assessed.
The Three Forks-Sanish formation is made up of sand and porous rock directly below the Bakken shale. But geologists don't know whether the Three Forks-Sanish is a separate oil-producing formation or if it catches oil that flows from the Bakken shale above.
The dollar index, which measures the U.S. unit against a basket of six major currencies, stood at 79.461, down from 79.643 earlier, and from 80.185 in late trade Tuesday.
Manufacturing activity in the New York area neither worsened nor improved in July, the New York Federal Reserve Bank said Wednesday. The bank's Empire State Manufacturing index rose to 0.6 in June from -9.4 in May. The new orders index rose above zero for the first time since September 2008, climbing to 5.9 from negative 8.2. The inventories index declined to a record low negative 36.5. The Empire State index is relatively new, having started in 2001
U.S. consumer prices rose a seasonally adjusted 0.7% in June, matching analysts' expectations, as gasoline prices jumped higher, the Labor Department reported Wednesday. The core CPI - which excludes often-volatile food and energy prices -- rose a seasonally adjusted 0.2%.
Oil futures rose early Wednesday after the American Petroleum Institute reported crude oil stocks declined by 1.15 million barrels last week. Crude for August delivery rose 96 cents to $60.48 a barrel in electronic trading on Globex. Distillate supplies rose by 656,000 barrels, while motor gasoline stocks dipped by 69,000 barrels, API also said late Tuesday.
U.S. crude inventories fell more than expected last week, the Energy Information Administration reported Wednesday, but total stockpiles of gasoline, diesel, and other petroleum products rose for a 16th straight week to an 11-year high. Crude inventories fell by 2.8 million barrels in the week ended July 10, the EIA said. Gasoline stockpiles rose 1.5 million barrels and distillate inventories gained 600,000 barrels, the EIA said. Total petroleum product inventories rose to 771.5 million barrels, the highest level since September, 1998.
The central bank said Japan's economy has stopped worsening and that business sentiment has stopped deteriorating, but to support the recovery, it said it would maintain its outright purchases of corporate bonds and commercial paper through the end of the year. The special liquidity-boosting measures had been scheduled to expire in September.
China’s foreign-exchange reserves, the world’s biggest, topped $2 trillion for the first time as the nation’s economic recovery prompted overseas investors to pump money into stocks and property. Analysts estimate that the Chinese authorities hold about 65 per cent to 70 per cent of their reserves in dollars, with the rest in other currencies including the euro, pound, yen and perhaps the Australian dollar.
To be counted in the official jobless rate, someone must have looked in the last four weeks for a job. In California and other states, one out of every five people who would like to be working full time is not doing so.
UK unemployment posted its largest quarterly increase since records began in 1971 in the three months to May.
Gov. Arnold Schwarzenegger has ordered department heads to eliminate 2,000 jobs on top of the 5,000 positions he wants to cut as part of his budget solution, his officials said Tuesday.
CIT ranks as one of the nation's biggest providers of factoring services, a practice that keeps goods flowing from manufacturers to retailers.
CIT is a major cog in making sure that orders get paid for and delivered to stores. Without CIT, retail shipments for the crucial holiday shopping season could be in jeopardy and, in turn, set off a new wave of bankruptcies among retailers and vendors.
"At the risk of sounding overly cautious, if the government did not help CIT, we could see significant inventory issues for the holidays," said David Strasser, an analyst at Janney Montgomery Scott in Philadelphia. "Some vendors would simply not be able to finance shipments to retailers for holiday."
Credit card firm Capital One Financial Corp.said on Wednesday that its annualized net chargeoffs in June rose modestly to 9.73% from 9.41% in May. The firm said the rate of its accounts 30 days or more delinquent dipped modestly to 4.77% in June, from 4.9% in May.
Average weekly earnings fell by 1.2 percent from May to June 2009.
Industrial production in the U.S. fell in June at the slowest pace in eight months, adding to signs the worst of the recession is over.
The 0.4 percent decrease in output at factories, mines and utilities was smaller than forecast and followed a revised 1.2 percent drop in May, Federal Reserve figures showed today in Washington. Capacity utilization, which measures the proportion of plants in use, decreased to 68 percent, the lowest level since records began in 1967.
Confidence in the world economy dropped for the first time in four months in July as government stimulus efforts showed little sign of reducing unemployment, a Bloomberg survey of users on six continents showed.
The Bloomberg Professional Global Confidence Index declined to 39.13 in July from 43.57 in June. A reading below 50 means pessimists outnumber optimists. A measure of U.S. participants’ confidence in the world’s largest economy fell to 29.5 from 36.7, the survey showed.
The average length of unemployment is higher than it's been since government began tracking the data in 1948. No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn't searched for work in the four weeks preceding the survey.
U.S. District Judge Vaughn Walker will hear arguments from both sides on the Obama administration’s motion for the warrantless surveillance case to be thrown out.
In court filings, the administration says the suit (.pdf) “would require or risk the disclosure of information that is properly subject to the state secrets privilege and related statutory privileges.” The administration claims it’s shielded by sovereign immunity, in addition to citing the controversial state secrets privilege.
All the while, the EFF maintains the dragnet surveillance (.pdf) continues unabated under Obama.
“Using this shadow network of surveillance devices, defendants have acquired and continue to acquire the content of a significant portion of the phone calls, e-mails, instant messages, text messages, web communications and other communications, both international and domestic, of practically every American who uses the phone system or the internet,” the EFF wrote in its lawsuit.
The civil liberties group told Judge Walker the spying is as an “unprecedented, suspicionless general search through the nation’s communications.” The EFF has a tough road ahead of it. A federal appeals court threw out a similar case two years ago, ruling the plaintiffs in that case could not prove their communications were siphoned to the NSA, and hence lacked standing to sue.
A failure to address excess capacity in the global economy may cause a “deflationary spiral” that will prolong the financial crisis and result in more company bailouts, World Bank Chief Economist Justin Lin said.
“Significant excess capacity has been built up and unless this issue is addressed, we will face a deflationary spiral and the crisis will become protracted,” he said during a lecture at South Africa’s University of Pretoria.
“Once excess capacity appears, the economy gets trapped in a vicious cycle,” Lin said. “The financial sector in developed countries may require more rescues in the future and the financial crisis may erupt in some developing nations.”
Nouriel Roubini: "Mounting Job Losses Will Hurt Consumption, Housing, Banks’ Balance Sheets, Public Finances and Lead to Protectionist Pressures."
Gold rose $16 to $939.
At USA Today, ad revenue fell 26%, but that decline was smaller than that of the first quarter. Something to cheer?
"Most REITs will need to address tenuous access to financing across the capital markets," said Steven Marks, head of Fitch's REIT group. "REITs are also contending with an unprecedented downturn in property markets, as indicated by increasing tenant defaults and reductions in net operating income." Commercial real estate firms also face a "sizable overhang" of debt maturities in coming years, stressed property values and potential ratings downgrades, Fitch added.
Russia's gross domestic product contracted by an estimated 10.1% in the first half of 2009 compared to the year-ago period, Economic Development Minister Elvira Nabiullina said on Wednesday, news agency RIA Novosti reported. The Russian government expects the economy to shrink by between 8% and 8.5% in 2009 as a whole.
House Democrats unveiled a health-care bill that would impose taxes on the wealthy and hit businesses with a penalty equal to 8% of payroll if they don't provide insurance.
The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.
The global copper market recorded a surplus of 90,000 metric tons during the first five months of this year, compared with a deficit of 170,000 metric tons the same period a year ago, U.K.-based research group World Bureau of Metal Statistics said Wednesday. Consumption in the first five months stood at 7.47 million tons, down 3.2% from last year. China's consumption, however, jumped 42% to 3 million metric tons, as the country built up its copper strategic reserves.
The Federal Reserve indicated it expects less bad growth rate this year but higher unemployment, in the minutes from last month's meeting. Ten-year note yields rose 10 basis points to 3.57%, after touching the highest since June 24. Regarding its ongoing program of purchasing Treasurys, officials said they are worried about the market's concerns that it would be monetizing the government's debt, though officials considered buying more Treasurys. U.S. debt was under pressure earlier as rising stocks reduced the appeal of holding fixed-income assets. The recession may be near its end but the recovery is likely to be very slow and unemployed workers will have trouble finding jobs for years, according to the latest thinking of top Federal Reserve officials disclosed on Wednesday.
The Federal Reserve expects the economy this year will sink at a slower pace than it previously thought, but that unemployment will top 10 percent, according to a forecast released Wednesday.
The Fed now predicts the economy will shrink between 1 and 1.5 percent this year, an improvement from its old forecast issued in May. At that time, the Fed projected the economy would contract between 1.3 and 2 percent.
“Most participants saw the economy as still quite weak and vulnerable to further adverse shocks,” the central bank said in minutes of the Federal Open Market Committee’s June 23-24 meeting released today in Washington. “Although financial market conditions had improved, credit was still quite tight in many sectors.”
Cooler-than-normal weather this summer in the Northeast may be hinting at a cold, snowy winter to come from Boston to Washington, D.C., according to AccuWeather.com.
According to Bloomberg, the VIX rose with the Standard & Poor’s 500 Index, a sign from the options market that the steepest three-day rally for stocks since June is poised to end.
The Chicago Board Options Exchange Volatility Index, as the VIX is known, added 1.7 percent to 25.44 at 2 p.m. in New York. The S&P 500 gained 2.4 percent. They have moved in the same direction 6 percent of the time since January 2003, according to data compiled by Charles Schwab Corp. The S&P 500 reversed course the next day 66 percent of the time, including seven of the past nine instances.
Tallying its greatest point gain since March 23, the Dow Jones Industrial Average added 256.72 points, or 3.1%, to end at 8,616.2. The S&P 500 Index rose 26.38 points, or 3%, to 932.67. The Nasdaq Composite soared 63.17 points, or 3.5%, to 1,862.9.
7/15/09 The Rally
This time last year, Intel earned $1.6 billion in net income, or 28 cents a share.
Excluding the charges, Intel said it earned 18 cents a share in the second quarter, beating by far the average analyst forecast of 8 cents, according to Reuters Estimates.
Revenue in the three months ending June 27 was $8 billion, down 15 percent year-over-year, but well above the average forecast of $7.27 billion expected by analysts.
Intel Chief Financial Officer Stacy Smith attributed the upside to strengthening computer markets and strong execution within the company. Intel saw "pockets of relative strength" in consumer PC markets as well as in the Asia Pacific region and in China, Smith told Reuters.
The executive noted that the corporate market remains weak and that Intel does not expect does not expect much of a change in the second half of the year. The company
projected third-quarter revenue at $8.1 billion to $8.9 billion, compared with analysts' average forecast of $7.82 billion, according to Reuters Estimates.
Intel saw third-quarter gross margin at 53 percent, plus or minus 2 percentage points, an improvement from the second quarter's 51 percent.
The Bakken formation encompasses some 25,000 square miles within the Williston Basin in North Dakota and Montana. The U.S. Geological Survey has called it the largest continuous oil accumulation it has ever assessed.
The Three Forks-Sanish formation is made up of sand and porous rock directly below the Bakken shale. But geologists don't know whether the Three Forks-Sanish is a separate oil-producing formation or if it catches oil that flows from the Bakken shale above.
The dollar index, which measures the U.S. unit against a basket of six major currencies, stood at 79.461, down from 79.643 earlier, and from 80.185 in late trade Tuesday.
Manufacturing activity in the New York area neither worsened nor improved in July, the New York Federal Reserve Bank said Wednesday. The bank's Empire State Manufacturing index rose to 0.6 in June from -9.4 in May. The new orders index rose above zero for the first time since September 2008, climbing to 5.9 from negative 8.2. The inventories index declined to a record low negative 36.5. The Empire State index is relatively new, having started in 2001
U.S. consumer prices rose a seasonally adjusted 0.7% in June, matching analysts' expectations, as gasoline prices jumped higher, the Labor Department reported Wednesday. The core CPI - which excludes often-volatile food and energy prices -- rose a seasonally adjusted 0.2%.
Oil futures rose early Wednesday after the American Petroleum Institute reported crude oil stocks declined by 1.15 million barrels last week. Crude for August delivery rose 96 cents to $60.48 a barrel in electronic trading on Globex. Distillate supplies rose by 656,000 barrels, while motor gasoline stocks dipped by 69,000 barrels, API also said late Tuesday.
U.S. crude inventories fell more than expected last week, the Energy Information Administration reported Wednesday, but total stockpiles of gasoline, diesel, and other petroleum products rose for a 16th straight week to an 11-year high. Crude inventories fell by 2.8 million barrels in the week ended July 10, the EIA said. Gasoline stockpiles rose 1.5 million barrels and distillate inventories gained 600,000 barrels, the EIA said. Total petroleum product inventories rose to 771.5 million barrels, the highest level since September, 1998.
The central bank said Japan's economy has stopped worsening and that business sentiment has stopped deteriorating, but to support the recovery, it said it would maintain its outright purchases of corporate bonds and commercial paper through the end of the year. The special liquidity-boosting measures had been scheduled to expire in September.
China’s foreign-exchange reserves, the world’s biggest, topped $2 trillion for the first time as the nation’s economic recovery prompted overseas investors to pump money into stocks and property. Analysts estimate that the Chinese authorities hold about 65 per cent to 70 per cent of their reserves in dollars, with the rest in other currencies including the euro, pound, yen and perhaps the Australian dollar.
To be counted in the official jobless rate, someone must have looked in the last four weeks for a job. In California and other states, one out of every five people who would like to be working full time is not doing so.
UK unemployment posted its largest quarterly increase since records began in 1971 in the three months to May.
Gov. Arnold Schwarzenegger has ordered department heads to eliminate 2,000 jobs on top of the 5,000 positions he wants to cut as part of his budget solution, his officials said Tuesday.
CIT ranks as one of the nation's biggest providers of factoring services, a practice that keeps goods flowing from manufacturers to retailers.
CIT is a major cog in making sure that orders get paid for and delivered to stores. Without CIT, retail shipments for the crucial holiday shopping season could be in jeopardy and, in turn, set off a new wave of bankruptcies among retailers and vendors.
"At the risk of sounding overly cautious, if the government did not help CIT, we could see significant inventory issues for the holidays," said David Strasser, an analyst at Janney Montgomery Scott in Philadelphia. "Some vendors would simply not be able to finance shipments to retailers for holiday."
Credit card firm Capital One Financial Corp.said on Wednesday that its annualized net chargeoffs in June rose modestly to 9.73% from 9.41% in May. The firm said the rate of its accounts 30 days or more delinquent dipped modestly to 4.77% in June, from 4.9% in May.
Average weekly earnings fell by 1.2 percent from May to June 2009.
Industrial production in the U.S. fell in June at the slowest pace in eight months, adding to signs the worst of the recession is over.
The 0.4 percent decrease in output at factories, mines and utilities was smaller than forecast and followed a revised 1.2 percent drop in May, Federal Reserve figures showed today in Washington. Capacity utilization, which measures the proportion of plants in use, decreased to 68 percent, the lowest level since records began in 1967.
Confidence in the world economy dropped for the first time in four months in July as government stimulus efforts showed little sign of reducing unemployment, a Bloomberg survey of users on six continents showed.
The Bloomberg Professional Global Confidence Index declined to 39.13 in July from 43.57 in June. A reading below 50 means pessimists outnumber optimists. A measure of U.S. participants’ confidence in the world’s largest economy fell to 29.5 from 36.7, the survey showed.
The average length of unemployment is higher than it's been since government began tracking the data in 1948. No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn't searched for work in the four weeks preceding the survey.
U.S. District Judge Vaughn Walker will hear arguments from both sides on the Obama administration’s motion for the warrantless surveillance case to be thrown out.
In court filings, the administration says the suit (.pdf) “would require or risk the disclosure of information that is properly subject to the state secrets privilege and related statutory privileges.” The administration claims it’s shielded by sovereign immunity, in addition to citing the controversial state secrets privilege.
All the while, the EFF maintains the dragnet surveillance (.pdf) continues unabated under Obama.
“Using this shadow network of surveillance devices, defendants have acquired and continue to acquire the content of a significant portion of the phone calls, e-mails, instant messages, text messages, web communications and other communications, both international and domestic, of practically every American who uses the phone system or the internet,” the EFF wrote in its lawsuit.
The civil liberties group told Judge Walker the spying is as an “unprecedented, suspicionless general search through the nation’s communications.” The EFF has a tough road ahead of it. A federal appeals court threw out a similar case two years ago, ruling the plaintiffs in that case could not prove their communications were siphoned to the NSA, and hence lacked standing to sue.
A failure to address excess capacity in the global economy may cause a “deflationary spiral” that will prolong the financial crisis and result in more company bailouts, World Bank Chief Economist Justin Lin said.
“Significant excess capacity has been built up and unless this issue is addressed, we will face a deflationary spiral and the crisis will become protracted,” he said during a lecture at South Africa’s University of Pretoria.
“Once excess capacity appears, the economy gets trapped in a vicious cycle,” Lin said. “The financial sector in developed countries may require more rescues in the future and the financial crisis may erupt in some developing nations.”
Nouriel Roubini: "Mounting Job Losses Will Hurt Consumption, Housing, Banks’ Balance Sheets, Public Finances and Lead to Protectionist Pressures."
Gold rose $16 to $939.
At USA Today, ad revenue fell 26%, but that decline was smaller than that of the first quarter. Something to cheer?
"Most REITs will need to address tenuous access to financing across the capital markets," said Steven Marks, head of Fitch's REIT group. "REITs are also contending with an unprecedented downturn in property markets, as indicated by increasing tenant defaults and reductions in net operating income." Commercial real estate firms also face a "sizable overhang" of debt maturities in coming years, stressed property values and potential ratings downgrades, Fitch added.
Russia's gross domestic product contracted by an estimated 10.1% in the first half of 2009 compared to the year-ago period, Economic Development Minister Elvira Nabiullina said on Wednesday, news agency RIA Novosti reported. The Russian government expects the economy to shrink by between 8% and 8.5% in 2009 as a whole.
House Democrats unveiled a health-care bill that would impose taxes on the wealthy and hit businesses with a penalty equal to 8% of payroll if they don't provide insurance.
The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.
The global copper market recorded a surplus of 90,000 metric tons during the first five months of this year, compared with a deficit of 170,000 metric tons the same period a year ago, U.K.-based research group World Bureau of Metal Statistics said Wednesday. Consumption in the first five months stood at 7.47 million tons, down 3.2% from last year. China's consumption, however, jumped 42% to 3 million metric tons, as the country built up its copper strategic reserves.
The Federal Reserve indicated it expects less bad growth rate this year but higher unemployment, in the minutes from last month's meeting. Ten-year note yields rose 10 basis points to 3.57%, after touching the highest since June 24. Regarding its ongoing program of purchasing Treasurys, officials said they are worried about the market's concerns that it would be monetizing the government's debt, though officials considered buying more Treasurys. U.S. debt was under pressure earlier as rising stocks reduced the appeal of holding fixed-income assets. The recession may be near its end but the recovery is likely to be very slow and unemployed workers will have trouble finding jobs for years, according to the latest thinking of top Federal Reserve officials disclosed on Wednesday.
The Federal Reserve expects the economy this year will sink at a slower pace than it previously thought, but that unemployment will top 10 percent, according to a forecast released Wednesday.
The Fed now predicts the economy will shrink between 1 and 1.5 percent this year, an improvement from its old forecast issued in May. At that time, the Fed projected the economy would contract between 1.3 and 2 percent.
“Most participants saw the economy as still quite weak and vulnerable to further adverse shocks,” the central bank said in minutes of the Federal Open Market Committee’s June 23-24 meeting released today in Washington. “Although financial market conditions had improved, credit was still quite tight in many sectors.”
Cooler-than-normal weather this summer in the Northeast may be hinting at a cold, snowy winter to come from Boston to Washington, D.C., according to AccuWeather.com.
According to Bloomberg, the VIX rose with the Standard & Poor’s 500 Index, a sign from the options market that the steepest three-day rally for stocks since June is poised to end.
The Chicago Board Options Exchange Volatility Index, as the VIX is known, added 1.7 percent to 25.44 at 2 p.m. in New York. The S&P 500 gained 2.4 percent. They have moved in the same direction 6 percent of the time since January 2003, according to data compiled by Charles Schwab Corp. The S&P 500 reversed course the next day 66 percent of the time, including seven of the past nine instances.
Tallying its greatest point gain since March 23, the Dow Jones Industrial Average added 256.72 points, or 3.1%, to end at 8,616.2. The S&P 500 Index rose 26.38 points, or 3%, to 932.67. The Nasdaq Composite soared 63.17 points, or 3.5%, to 1,862.9.
7/15/09 The Rally
This time last year, Intel earned $1.6 billion in net income, or 28 cents a share.
Excluding the charges, Intel said it earned 18 cents a share in the second quarter, beating by far the average analyst forecast of 8 cents, according to Reuters Estimates.
Revenue in the three months ending June 27 was $8 billion, down 15 percent year-over-year, but well above the average forecast of $7.27 billion expected by analysts.
Intel Chief Financial Officer Stacy Smith attributed the upside to strengthening computer markets and strong execution within the company. Intel saw "pockets of relative strength" in consumer PC markets as well as in the Asia Pacific region and in China, Smith told Reuters.
The executive noted that the corporate market remains weak and that Intel does not expect does not expect much of a change in the second half of the year. The company
projected third-quarter revenue at $8.1 billion to $8.9 billion, compared with analysts' average forecast of $7.82 billion, according to Reuters Estimates.
Intel saw third-quarter gross margin at 53 percent, plus or minus 2 percentage points, an improvement from the second quarter's 51 percent.
The Bakken formation encompasses some 25,000 square miles within the Williston Basin in North Dakota and Montana. The U.S. Geological Survey has called it the largest continuous oil accumulation it has ever assessed.
The Three Forks-Sanish formation is made up of sand and porous rock directly below the Bakken shale. But geologists don't know whether the Three Forks-Sanish is a separate oil-producing formation or if it catches oil that flows from the Bakken shale above.
The dollar index, which measures the U.S. unit against a basket of six major currencies, stood at 79.461, down from 79.643 earlier, and from 80.185 in late trade Tuesday.
Manufacturing activity in the New York area neither worsened nor improved in July, the New York Federal Reserve Bank said Wednesday. The bank's Empire State Manufacturing index rose to 0.6 in June from -9.4 in May. The new orders index rose above zero for the first time since September 2008, climbing to 5.9 from negative 8.2. The inventories index declined to a record low negative 36.5. The Empire State index is relatively new, having started in 2001
U.S. consumer prices rose a seasonally adjusted 0.7% in June, matching analysts' expectations, as gasoline prices jumped higher, the Labor Department reported Wednesday. The core CPI - which excludes often-volatile food and energy prices -- rose a seasonally adjusted 0.2%.
Oil futures rose early Wednesday after the American Petroleum Institute reported crude oil stocks declined by 1.15 million barrels last week. Crude for August delivery rose 96 cents to $60.48 a barrel in electronic trading on Globex. Distillate supplies rose by 656,000 barrels, while motor gasoline stocks dipped by 69,000 barrels, API also said late Tuesday.
U.S. crude inventories fell more than expected last week, the Energy Information Administration reported Wednesday, but total stockpiles of gasoline, diesel, and other petroleum products rose for a 16th straight week to an 11-year high. Crude inventories fell by 2.8 million barrels in the week ended July 10, the EIA said. Gasoline stockpiles rose 1.5 million barrels and distillate inventories gained 600,000 barrels, the EIA said. Total petroleum product inventories rose to 771.5 million barrels, the highest level since September, 1998.
The central bank said Japan's economy has stopped worsening and that business sentiment has stopped deteriorating, but to support the recovery, it said it would maintain its outright purchases of corporate bonds and commercial paper through the end of the year. The special liquidity-boosting measures had been scheduled to expire in September.
China’s foreign-exchange reserves, the world’s biggest, topped $2 trillion for the first time as the nation’s economic recovery prompted overseas investors to pump money into stocks and property. Analysts estimate that the Chinese authorities hold about 65 per cent to 70 per cent of their reserves in dollars, with the rest in other currencies including the euro, pound, yen and perhaps the Australian dollar.
To be counted in the official jobless rate, someone must have looked in the last four weeks for a job. In California and other states, one out of every five people who would like to be working full time is not doing so.
UK unemployment posted its largest quarterly increase since records began in 1971 in the three months to May.
Gov. Arnold Schwarzenegger has ordered department heads to eliminate 2,000 jobs on top of the 5,000 positions he wants to cut as part of his budget solution, his officials said Tuesday.
CIT ranks as one of the nation's biggest providers of factoring services, a practice that keeps goods flowing from manufacturers to retailers.
CIT is a major cog in making sure that orders get paid for and delivered to stores. Without CIT, retail shipments for the crucial holiday shopping season could be in jeopardy and, in turn, set off a new wave of bankruptcies among retailers and vendors.
"At the risk of sounding overly cautious, if the government did not help CIT, we could see significant inventory issues for the holidays," said David Strasser, an analyst at Janney Montgomery Scott in Philadelphia. "Some vendors would simply not be able to finance shipments to retailers for holiday."
Credit card firm Capital One Financial Corp.said on Wednesday that its annualized net chargeoffs in June rose modestly to 9.73% from 9.41% in May. The firm said the rate of its accounts 30 days or more delinquent dipped modestly to 4.77% in June, from 4.9% in May.
Average weekly earnings fell by 1.2 percent from May to June 2009.
Industrial production in the U.S. fell in June at the slowest pace in eight months, adding to signs the worst of the recession is over.
The 0.4 percent decrease in output at factories, mines and utilities was smaller than forecast and followed a revised 1.2 percent drop in May, Federal Reserve figures showed today in Washington. Capacity utilization, which measures the proportion of plants in use, decreased to 68 percent, the lowest level since records began in 1967.
Confidence in the world economy dropped for the first time in four months in July as government stimulus efforts showed little sign of reducing unemployment, a Bloomberg survey of users on six continents showed.
The Bloomberg Professional Global Confidence Index declined to 39.13 in July from 43.57 in June. A reading below 50 means pessimists outnumber optimists. A measure of U.S. participants’ confidence in the world’s largest economy fell to 29.5 from 36.7, the survey showed.
The average length of unemployment is higher than it's been since government began tracking the data in 1948. No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn't searched for work in the four weeks preceding the survey.
U.S. District Judge Vaughn Walker will hear arguments from both sides on the Obama administration’s motion for the warrantless surveillance case to be thrown out.
In court filings, the administration says the suit (.pdf) “would require or risk the disclosure of information that is properly subject to the state secrets privilege and related statutory privileges.” The administration claims it’s shielded by sovereign immunity, in addition to citing the controversial state secrets privilege.
All the while, the EFF maintains the dragnet surveillance (.pdf) continues unabated under Obama.
“Using this shadow network of surveillance devices, defendants have acquired and continue to acquire the content of a significant portion of the phone calls, e-mails, instant messages, text messages, web communications and other communications, both international and domestic, of practically every American who uses the phone system or the internet,” the EFF wrote in its lawsuit.
The civil liberties group told Judge Walker the spying is as an “unprecedented, suspicionless general search through the nation’s communications.” The EFF has a tough road ahead of it. A federal appeals court threw out a similar case two years ago, ruling the plaintiffs in that case could not prove their communications were siphoned to the NSA, and hence lacked standing to sue.
A failure to address excess capacity in the global economy may cause a “deflationary spiral” that will prolong the financial crisis and result in more company bailouts, World Bank Chief Economist Justin Lin said.
“Significant excess capacity has been built up and unless this issue is addressed, we will face a deflationary spiral and the crisis will become protracted,” he said during a lecture at South Africa’s University of Pretoria.
“Once excess capacity appears, the economy gets trapped in a vicious cycle,” Lin said. “The financial sector in developed countries may require more rescues in the future and the financial crisis may erupt in some developing nations.”
Nouriel Roubini: "Mounting Job Losses Will Hurt Consumption, Housing, Banks’ Balance Sheets, Public Finances and Lead to Protectionist Pressures."
Gold rose $16 to $939.
At USA Today, ad revenue fell 26%, but that decline was smaller than that of the first quarter. Something to cheer?
"Most REITs will need to address tenuous access to financing across the capital markets," said Steven Marks, head of Fitch's REIT group. "REITs are also contending with an unprecedented downturn in property markets, as indicated by increasing tenant defaults and reductions in net operating income." Commercial real estate firms also face a "sizable overhang" of debt maturities in coming years, stressed property values and potential ratings downgrades, Fitch added.
Russia's gross domestic product contracted by an estimated 10.1% in the first half of 2009 compared to the year-ago period, Economic Development Minister Elvira Nabiullina said on Wednesday, news agency RIA Novosti reported. The Russian government expects the economy to shrink by between 8% and 8.5% in 2009 as a whole.
House Democrats unveiled a health-care bill that would impose taxes on the wealthy and hit businesses with a penalty equal to 8% of payroll if they don't provide insurance.
The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.
The global copper market recorded a surplus of 90,000 metric tons during the first five months of this year, compared with a deficit of 170,000 metric tons the same period a year ago, U.K.-based research group World Bureau of Metal Statistics said Wednesday. Consumption in the first five months stood at 7.47 million tons, down 3.2% from last year. China's consumption, however, jumped 42% to 3 million metric tons, as the country built up its copper strategic reserves.
The Federal Reserve indicated it expects less bad growth rate this year but higher unemployment, in the minutes from last month's meeting. Ten-year note yields rose 10 basis points to 3.57%, after touching the highest since June 24. Regarding its ongoing program of purchasing Treasurys, officials said they are worried about the market's concerns that it would be monetizing the government's debt, though officials considered buying more Treasurys. U.S. debt was under pressure earlier as rising stocks reduced the appeal of holding fixed-income assets. The recession may be near its end but the recovery is likely to be very slow and unemployed workers will have trouble finding jobs for years, according to the latest thinking of top Federal Reserve officials disclosed on Wednesday.
The Federal Reserve expects the economy this year will sink at a slower pace than it previously thought, but that unemployment will top 10 percent, according to a forecast released Wednesday.
The Fed now predicts the economy will shrink between 1 and 1.5 percent this year, an improvement from its old forecast issued in May. At that time, the Fed projected the economy would contract between 1.3 and 2 percent.
“Most participants saw the economy as still quite weak and vulnerable to further adverse shocks,” the central bank said in minutes of the Federal Open Market Committee’s June 23-24 meeting released today in Washington. “Although financial market conditions had improved, credit was still quite tight in many sectors.”
Cooler-than-normal weather this summer in the Northeast may be hinting at a cold, snowy winter to come from Boston to Washington, D.C., according to AccuWeather.com.
According to Bloomberg, the VIX rose with the Standard & Poor’s 500 Index, a sign from the options market that the steepest three-day rally for stocks since June is poised to end.
The Chicago Board Options Exchange Volatility Index, as the VIX is known, added 1.7 percent to 25.44 at 2 p.m. in New York. The S&P 500 gained 2.4 percent. They have moved in the same direction 6 percent of the time since January 2003, according to data compiled by Charles Schwab Corp. The S&P 500 reversed course the next day 66 percent of the time, including seven of the past nine instances.
Tallying its greatest point gain since March 23, the Dow Jones Industrial Average added 256.72 points, or 3.1%, to end at 8,616.2. The S&P 500 Index rose 26.38 points, or 3%, to 932.67. The Nasdaq Composite soared 63.17 points, or 3.5%, to 1,862.9.
Tuesday, July 14, 2009
Producer Prices
7/14/09 Producer Prices
Dell Inc forecast lower gross margins for the July quarter, citing higher component costs and an unfavorable product mix, sending its shares down 3 percent late Monday. Dell Inc.
officials said Tuesday that weak demand from large enterprises and small-and-medium businesses is among the reasons why the computer giant expects to report a decline in its second-quarter gross margins. I think lower demand from small and medium businesses is impacting Costco too.
The Organization of Petroleum Exporting Countries increased its oil production in June for a third straight month, an OPEC monthly report released Tuesday showed. June production from the 12-member cartel, which now accounts for about one third of the world's oil production, rose to 28.441 million barrels a day from 28.402 million barrels a month ago, the report showed.
Sales at retail stores rose 0.6% last month, the most in five months. Excluding both autos and gas, sales fell 0.2%, the fourth straight monthly decline.
Producer prices rose 1.8% in June, the most since November 2007 and more than the 1.2% expected. Excluding food and energy, so-called core prices increased 0.5% .Prices received by producers of intermediate goods climbed 1.9 percent in June after moving up 0.3 percent in the preceding month, and the crude goods index increased 4.6 percent following a 3.6-percent rise in May.
Goldman Sachs Group Inc said on Tuesday that its second quarter net income rose to $3.44 billion, or $4.93 a share, compared to $2.05 billion, or $4.58 a share a year ago.
Johnson & Johnson reported its second quarter net income dropped to $3.2 billion, or $1.15 a share, from $3.3 billion, or $1.17 a share, for the same quarter in 2008. This year's quarter saw the number of outstanding shares fall to 2.78 billion from 2.85 billion. Revenue declined 7.4% to $15.2 billion. The company confirmed its 2009 adjusted earnings per share forecast of $4.45 to $4.55.
Hoisington Investment Management:"Over the next four years, the ratio of U.S.
government debt will rise to somewhere between 71% and 80% of GDP, up from 41% at the end of 2008. The 71% figure, which is from the CBO, is probably understated....Presently, the federal government is increasing spending that in the end may actually retard economic activity, and is also proposing tax increases that will further restrain private sector growth. This policy mix is the same approach that failed in the U.S. from 1929 to 1941 and also failed in Japan over the past two decades."
Rep. Ron Paul: "The only accountability the Federal Reserve has is ultimately to Congress, which granted its charter and can revoke it at any time. It is Congress's constitutional duty to protect the value of the money, and they have abdicated this responsibility for far too long. This was the issue that got me involved in politics 35 years ago. It is very encouraging to finally see the issue getting some needed exposure and traction. It is regrettable that it took a crisis of this magnitude to get a serious debate on this issue."
Natural gas for August delivery fell 11 cents, or 3.3 percent, to settle at $3.263 per million British thermal units Monday on the New York Mercantile Exchange, the lowest closing price since April 27. Gas has plunged 42 percent this year and is down 76 percent from a July 2008 high of $13.694 per million Btu.
Bellevue Towers, the region's tallest luxury condo project, is cutting prices 20 percent to kick-start anemic sales. Other projects coming online are following suit.
Inventories at U.S. businesses fell 1.0% in May. Retail inventories fell 1.6% in May, led by the biggest drop in auto inventories in almost four years. Inventories are down 8.0% on a year-on-year basis. Business sales slipped 0.1% in May. Sales are down 17.8% over the past year. The inventory-to-sales ratio, an indication of demand, fell to 1.42 in May from 1.43 in April.
Crude oil in NY may fall below $45 a barrel by the end of August as the global recession stalls a recovery in fuel consumption in the US , the world’s biggest energy user, BNP Paribas said. “There’s no summer gasoline demand season this year in the US ,” Harry Tchilinguirian, a senior oil analyst at France ’s largest bank, said in an interview yesterday in Tokyo.
FP Trading Desk: "After plenty of speculation that potash prices could drop significantly this year, reports have surfaced that Russian fertilizer firm OAO Silvinit has settled with India at a price of $460 a tonne, down from $625 a tonne last year. Now the rest of the world will be pressured to follow suit."
CSX said that its railroad freight volume is expected to fall by double-digit percentage rates in Q3.
A "painfully gradual" U.S. recovery should start in the third quarter, even as the job market is still weakening, said an economist with the San Francisco Federal Reserve Bank.
The recent vicious cycle, in which losses by banks lead to tighter credit availability and then lower household and business spending, "has begun to slow," economist Mary Daly said in the bank's latest "FedViews" newsletter.
The National Federation of Independent Business said its monthly index of small business optimism slipped one point to a reading of 87.9 last month. It had gained 7.9 points since March, indicating a view the the economy was stabilizing
"The economy is bouncing along the bottom and reorganizing itself to restart the growth process," said William Dunkelberg, chief economist for the NFIB.
"Many indicators — including NFIB's — are headed up. They are still in 'negative' territory, but will soon break the surface and become positive," he said.
Plans for inventory investment and capital spending among the 758 randomly selected respondents slacked off as incoming data suggested the U.S. economy was likely to face a sluggish recovery. The idea that recovery will be a long row to hoe, and not a quick snapback, appears to be settling in.
When the latest round of capacity cuts takes effect in September, the seats on domestic flights will drop to 66.5 million — down from a peak of about 84 million in 2001 and the lowest September figure since 1984, according to OAG Aviation, which tracks flight schedules.
US Airways says it will cut 600 ground jobs this fall because of the slow economy.
August gold gained 30 cents to $922.80 an ounce on the Comex division of the New York Mercantile Exchange. Crude closed down 20 cents at 59.49, and natural gas ended up 18 cents at 3.45.
Nasdaq up 6.5 points, the S&P rose 4.8 points, and the Dow closed 27 points higher.
Dell Inc forecast lower gross margins for the July quarter, citing higher component costs and an unfavorable product mix, sending its shares down 3 percent late Monday. Dell Inc.
officials said Tuesday that weak demand from large enterprises and small-and-medium businesses is among the reasons why the computer giant expects to report a decline in its second-quarter gross margins. I think lower demand from small and medium businesses is impacting Costco too.
The Organization of Petroleum Exporting Countries increased its oil production in June for a third straight month, an OPEC monthly report released Tuesday showed. June production from the 12-member cartel, which now accounts for about one third of the world's oil production, rose to 28.441 million barrels a day from 28.402 million barrels a month ago, the report showed.
Sales at retail stores rose 0.6% last month, the most in five months. Excluding both autos and gas, sales fell 0.2%, the fourth straight monthly decline.
Producer prices rose 1.8% in June, the most since November 2007 and more than the 1.2% expected. Excluding food and energy, so-called core prices increased 0.5% .Prices received by producers of intermediate goods climbed 1.9 percent in June after moving up 0.3 percent in the preceding month, and the crude goods index increased 4.6 percent following a 3.6-percent rise in May.
Goldman Sachs Group Inc said on Tuesday that its second quarter net income rose to $3.44 billion, or $4.93 a share, compared to $2.05 billion, or $4.58 a share a year ago.
Johnson & Johnson reported its second quarter net income dropped to $3.2 billion, or $1.15 a share, from $3.3 billion, or $1.17 a share, for the same quarter in 2008. This year's quarter saw the number of outstanding shares fall to 2.78 billion from 2.85 billion. Revenue declined 7.4% to $15.2 billion. The company confirmed its 2009 adjusted earnings per share forecast of $4.45 to $4.55.
Hoisington Investment Management:"Over the next four years, the ratio of U.S.
government debt will rise to somewhere between 71% and 80% of GDP, up from 41% at the end of 2008. The 71% figure, which is from the CBO, is probably understated....Presently, the federal government is increasing spending that in the end may actually retard economic activity, and is also proposing tax increases that will further restrain private sector growth. This policy mix is the same approach that failed in the U.S. from 1929 to 1941 and also failed in Japan over the past two decades."
Rep. Ron Paul: "The only accountability the Federal Reserve has is ultimately to Congress, which granted its charter and can revoke it at any time. It is Congress's constitutional duty to protect the value of the money, and they have abdicated this responsibility for far too long. This was the issue that got me involved in politics 35 years ago. It is very encouraging to finally see the issue getting some needed exposure and traction. It is regrettable that it took a crisis of this magnitude to get a serious debate on this issue."
Natural gas for August delivery fell 11 cents, or 3.3 percent, to settle at $3.263 per million British thermal units Monday on the New York Mercantile Exchange, the lowest closing price since April 27. Gas has plunged 42 percent this year and is down 76 percent from a July 2008 high of $13.694 per million Btu.
Bellevue Towers, the region's tallest luxury condo project, is cutting prices 20 percent to kick-start anemic sales. Other projects coming online are following suit.
Inventories at U.S. businesses fell 1.0% in May. Retail inventories fell 1.6% in May, led by the biggest drop in auto inventories in almost four years. Inventories are down 8.0% on a year-on-year basis. Business sales slipped 0.1% in May. Sales are down 17.8% over the past year. The inventory-to-sales ratio, an indication of demand, fell to 1.42 in May from 1.43 in April.
Crude oil in NY may fall below $45 a barrel by the end of August as the global recession stalls a recovery in fuel consumption in the US , the world’s biggest energy user, BNP Paribas said. “There’s no summer gasoline demand season this year in the US ,” Harry Tchilinguirian, a senior oil analyst at France ’s largest bank, said in an interview yesterday in Tokyo.
FP Trading Desk: "After plenty of speculation that potash prices could drop significantly this year, reports have surfaced that Russian fertilizer firm OAO Silvinit has settled with India at a price of $460 a tonne, down from $625 a tonne last year. Now the rest of the world will be pressured to follow suit."
CSX said that its railroad freight volume is expected to fall by double-digit percentage rates in Q3.
A "painfully gradual" U.S. recovery should start in the third quarter, even as the job market is still weakening, said an economist with the San Francisco Federal Reserve Bank.
The recent vicious cycle, in which losses by banks lead to tighter credit availability and then lower household and business spending, "has begun to slow," economist Mary Daly said in the bank's latest "FedViews" newsletter.
The National Federation of Independent Business said its monthly index of small business optimism slipped one point to a reading of 87.9 last month. It had gained 7.9 points since March, indicating a view the the economy was stabilizing
"The economy is bouncing along the bottom and reorganizing itself to restart the growth process," said William Dunkelberg, chief economist for the NFIB.
"Many indicators — including NFIB's — are headed up. They are still in 'negative' territory, but will soon break the surface and become positive," he said.
Plans for inventory investment and capital spending among the 758 randomly selected respondents slacked off as incoming data suggested the U.S. economy was likely to face a sluggish recovery. The idea that recovery will be a long row to hoe, and not a quick snapback, appears to be settling in.
When the latest round of capacity cuts takes effect in September, the seats on domestic flights will drop to 66.5 million — down from a peak of about 84 million in 2001 and the lowest September figure since 1984, according to OAG Aviation, which tracks flight schedules.
US Airways says it will cut 600 ground jobs this fall because of the slow economy.
August gold gained 30 cents to $922.80 an ounce on the Comex division of the New York Mercantile Exchange. Crude closed down 20 cents at 59.49, and natural gas ended up 18 cents at 3.45.
Nasdaq up 6.5 points, the S&P rose 4.8 points, and the Dow closed 27 points higher.
Monday, July 13, 2009
Budget Deficit
7/13/09 Budget Deficit
U.S. June federal budget deficit $94.3 billion and now pushes the cumulative deficit so far this year to a record $1.08 trillion, the Treasury Department reported Monday. Outlays rose in June to $309.6 billion, while receipts climbed to $215.3 billion in the month. In sum, thru the first nine months, receipts have averaged $227 billion per month and outlays have been about $300 billion per month.
Brad DeLong: "All in all, it looks like the unemployment rate in 2009 is going to average 1.2 percentage points above where the administration last December thought we would be. First quarter real GDP was $11.36 trillion year-2000 dollars--and second-quarter real GDP will be the same. Thus year-2009 real GDP is going to be close to $11.40 trillion--1.2% lower than the administration forecast that real GDP in the four quarters of 2009 would average $11.53 trillion.
It is interesting and important to note that the excess unemployment now forecast over 2009 relative to last December's forecast is of the same magnitude--1.2%--as the deficiency in real GDP."
Paul Krugman: "Start with economics: last winter the economy was in acute crisis, with a replay of the Great Depression seeming all too possible. And there was a fairly strong policy response in the form of the Obama stimulus plan, even if that plan wasn’t as strong as some of us thought it should have been.
At this point, however, the acute crisis has given way to a much more insidious threat. Most economic forecasters now expect gross domestic product to start growing soon, if it hasn’t already. But all the signs point to a “jobless recovery”: on average, forecasters surveyed by The Wall Street Journal believe that the unemployment rate will keep rising into next year, and that it will be as high at the end of 2010 as it is now.
Now, it’s bad enough to be jobless for a few weeks; it’s much worse being unemployed for months or years. Yet that’s exactly what will happen to millions of Americans if the average forecast is right — which means that many of the unemployed will lose their savings, their homes and more. "
Berkshire Hathaway's reinsurance business, a big profit center for the diversified company, has pulled back from one of the more volatile corners of the reinsurance market: catastrophic property damage.
In Los Angeles County, for example, single-family residences accounted for 39.9% of the tax roll, by value, in 1975, before Proposition 13. This year their share is 55.8%. In the same period, commercial-industrial property has gone from 46.6% of the tax roll to 30.9%. These figures are from the
county assessor’s annual report, but a similar pattern holds statewide. Disneyland, which hasn't had a reportable change of ownership since, well, forever, is currently taxed at an average of about a nickel per square foot. For comparison, a median California home bought last year out of foreclosure, measuring 1,600 square feet and selling for about $330,000 (these are averages from the California Assn. of Realtors), would incur property tax of about $3,300 per year, or $2.06 per square foot. On average, as the anti-tax California Taxpayers Assn. acknowledges, business property was assessed at only about 60% of its full market value as recently as 2006-07, down from a recent peak of more than 87% in 1994-95.
John Hussman: "Because of the enormous second-wave of adjustable mortgage rate resets due to begin in late 2009 and to continue through 2011, as well as the increasing upward pressure that unemployment is putting on delinquencies (e.g. mortgages, credit cards, and home equity loans), I am very concerned about the outlook for the economy in the coming year or two. A wide range of academic studies reach the universal conclusion that two variables account for the majority of fluctuations in mortgage defaults and foreclosures. They are 1) a high “loan-to-value” ratio; that is, the ratio of mortgage loan to the outstanding value of the home, and 2) trigger events - particularly job loss or change in family status. It is also notable that the existence of junior liens, particularly home equity loans, also significantly increases the likelihood of mortgage default when a “trigger event” like unemployment occurs.
It is very important to recognize that the increasing unemployment rate is likely to exert a different dynamic in this economic downturn than it has in prior downturns, because of the high ratio of household debt-to-income, and the high ratio of mortgage loan-to-value at present."
Lender CIT Group, which has been unable to get the FDIC to guarantee its debt, has warned its collapse would jeopardize the future of 760 manufacturing clients and 'precipitate a crisis' for as many as 30,000 retailers.
Satyajit Das: "Governments have limited available tools to address the deep-rooted problems in the current economic models.
Given that interest rates are now at or approaching zero in many developed countries, there is little or no scope for further monetary action although central banks have creatively embarked on a program of "quantitative easing" – code for printing money (also know as the Weimar or Zimbabwe solution).
Government spending, if it can be financed, may not be able to adequately compensate for the contraction of consumption and lack of investment made worse by over capacity in many industries. Government spending has little multiplier effect or velocity. The badly damaged financial system means that the circulation of money in the economy is at a standstill. Government spending provides a short-term demand boost. Capital injections may partially rehabilitate banks. But it is far from clear what will happen when all these measures are reversed...As Keynes wrote in 1933: "We have reached a critical point. We can ... see clearly the gulf to which our present path is leading….[If governments did not take action], we must expect the progressive breakdown of the existing structure of contract and instruments of indebtedness, accompanied by the utter discredit of orthodox leadership in finance and government, with what ultimate outcome we cannot predict."
Construction spending on offices, retail centers and hotels is likely to fall 16 percent this year and 12 percent in 2010, more than previously forecast, the American Institute of Architects said.
Mike Burk "One of the seasonally best weeks of the year had its worst performance ever. A short term bounce is overdue and some of the indices may exceed the June highs in the next few weeks, but it is likely the trend has changed to down.
I expect the major indices to be higher on Friday July 17 than they were on Thursday July 10."
R.H.J. International, a Brussels-listed industrial holding company, said in a statement that it was in talks with G.M. for the acquisition of a majority stake in the European subsidiary, Adam Opel, which includes the operations of Vauxhall in Britain.
“These discussions have been taking place over a number of weeks and are at an advanced stage,” R.H.J. said.
Credit checking agency Experian said Monday that its revenue fell 8% in the first three months of its fiscal year, hurt by exchange rate fluctuations and the slowdown in bank lending.
The BBC reported Monday that Kim Jong-il has life-threatening pancreatic cancer, citing South Korean TV news channel YTN.
The latest forecast from the Semiconductor Industry Association, released in June, predicts a 21 percent decline in worldwide chip sales to $195.6 billion this year. The industry trade group thinks sales will start to rebound in 2010.
Meanwhile, earlier this month market research firm iSuppli Corp. cut its forecast for global semiconductor sales this year, attributing the change to the fact there's "little visibility into future demand trends" and warning that "conditions appear to be worse than previously expected in 2009."
Let's say Intel's results for the quarter beat expectations and sales are ONLY down 20% and earnings are 9 cents down from 28 cents. Should we jump for joy with the shares at $16? The stock is where it was 7 years ago.
Unemployment is likely to rise to 13 percent or higher and will weigh on the economy for several years, countering efforts to stabilize the banking industry, analyst Meredith Whitney told CNBC.
Microsoft will release a free version of its dominant Office software that users can access over the Web, catching up with products that arch rival Google launched three years ago.
One of Office's most popular titles is a home version that sells for $150. It includes the four programs that Microsoft will give away. Microsoft will release the free offering when it starts selling Office 2010, it next major release of the product, sometime in the first half of next year. Its current version came out in January 2007.
LG Display, the world's No. 2 LCD screen maker, said on Thursday its notebook PC panel sales in June rose 20 percent from a year ago, suggesting strong results next week when the company posts quarterly earnings.
Stocks face a downside risk as companies release second-quarter financial results that may not meet rising forecasts, BlackRock Inc.'s chief investment officer for equities said Monday. "Earnings expectations have been raised significantly over the past several months, and meeting those expectations could prove difficult in the current environment, which has the potential to result in disappointments," said Bob Doll in his weekly investment commentary.
Antal Fekete: "
Permanent gold backwardation (negative gold basis) is staring us in the face. The gold basis is trying to tell you something. It heralds the greatest monetary crisis of all times. It warns about the possible collapse of the international monetary and payments system....[2008] gave the world a foretaste. This crisis is a gold crisis. It is a crisis indicating the threat of a shortage of the ultimate extinguisher of debt, without which our runaway debt tower is doomed. When it topples, it will bury the world economy under the rubble, as the Twin Towers buried the people working inside in 2001....But once permanent backwardation makes gold unavailable, debt becomes irredeemable in the eyes of the bondholders. Paying U.S. bonds at maturity in F.R. notes does not establish redeemability. The latter is just evidence of debt secured by the former as collateral revealing that bonds are not really redeemable at all. An interest-bearing bond is replaced by a non-interest-bearing bond, that is, by an inferior instrument. All you do is shuffle various forms of irredeemable debt. When the world wakes up to this prestidigitation, the international monetary system will not be able to survive the shock-waves. The chaos that will engulf the world is appalling.."
Digital Sky Technologies to buy $100M of Facebook common shares from employees at $14.77/share, putting a valuation of $6.5B on the company. Digital Sky already invested $200M in Facebook in May.
August gold rose $10, or 1.1%, to $922.50 an ounce on the Comex division of the New York Mercantile Exchange, ending above $920 an ounce for the first time since July 7.
Crude for August delivery fell 20 cents to end at $59.69 a barrel on the New York Mercantile Exchange.
CSX Corp.said second-quarter net earnings were $308 million, or 78 cents a share, compared with $385 million, or 93 cents a share, in the year-ago period. Excluding items related to the Greenbrier resort, CSX's per-share earnings from continuing operations would have declined 24% to 72 cents. Revenue for the period fell to $2.19 billion from $2.91 billion in the same period a year ago primarily because of a decline in volume and lower fuel surcharge recovery.
Take-Two said it now expects revenue between $120 million and $130 million for the current quarter and revenue of $350 million to $400 million for the period ending Oct. 31. Analysts were expecting revenue of $162.2 million and $471.4 million for the two periods, respectively.
Novellus Systems Inc. said Monday that net losses sank deeper in the second quarter as sales of the company's semiconductor manufacturing equipment fell sharply amid a sharp slump across the sector. For the quarter ended June 27, Novellus reported a net loss of $50 million, or 52 cents a share, compared to a loss of $2.4 million, or 2 cents a share, for the same period the previous year. Excluding one-time charges, the company said it would have lost $39.3 million, or 41 cents, for the period.
the Dow Jones Industrial Average gained 185.16 points, or 2.3%, to 8,331.6. The S&P 500 Index added 21.92 points, or 2.5%, to 901.05, while the Nasdaq Composite rose 37.18 points, or 2.1%, to 1,793.2.
Oil and natural gas drilling activities in the U.S. fell nearly 46% in the second quarter from a year ago, industry group American Petroleum Institute reported Monday. Drilling levels now stand at the lowest since 2003, the API said. About 8,038 oil wells, natural gas wells and dry holes were completed in the second quarter, the API said.
U.S. June federal budget deficit $94.3 billion and now pushes the cumulative deficit so far this year to a record $1.08 trillion, the Treasury Department reported Monday. Outlays rose in June to $309.6 billion, while receipts climbed to $215.3 billion in the month. In sum, thru the first nine months, receipts have averaged $227 billion per month and outlays have been about $300 billion per month.
Brad DeLong: "All in all, it looks like the unemployment rate in 2009 is going to average 1.2 percentage points above where the administration last December thought we would be. First quarter real GDP was $11.36 trillion year-2000 dollars--and second-quarter real GDP will be the same. Thus year-2009 real GDP is going to be close to $11.40 trillion--1.2% lower than the administration forecast that real GDP in the four quarters of 2009 would average $11.53 trillion.
It is interesting and important to note that the excess unemployment now forecast over 2009 relative to last December's forecast is of the same magnitude--1.2%--as the deficiency in real GDP."
Paul Krugman: "Start with economics: last winter the economy was in acute crisis, with a replay of the Great Depression seeming all too possible. And there was a fairly strong policy response in the form of the Obama stimulus plan, even if that plan wasn’t as strong as some of us thought it should have been.
At this point, however, the acute crisis has given way to a much more insidious threat. Most economic forecasters now expect gross domestic product to start growing soon, if it hasn’t already. But all the signs point to a “jobless recovery”: on average, forecasters surveyed by The Wall Street Journal believe that the unemployment rate will keep rising into next year, and that it will be as high at the end of 2010 as it is now.
Now, it’s bad enough to be jobless for a few weeks; it’s much worse being unemployed for months or years. Yet that’s exactly what will happen to millions of Americans if the average forecast is right — which means that many of the unemployed will lose their savings, their homes and more. "
Berkshire Hathaway's reinsurance business, a big profit center for the diversified company, has pulled back from one of the more volatile corners of the reinsurance market: catastrophic property damage.
In Los Angeles County, for example, single-family residences accounted for 39.9% of the tax roll, by value, in 1975, before Proposition 13. This year their share is 55.8%. In the same period, commercial-industrial property has gone from 46.6% of the tax roll to 30.9%. These figures are from the
county assessor’s annual report, but a similar pattern holds statewide. Disneyland, which hasn't had a reportable change of ownership since, well, forever, is currently taxed at an average of about a nickel per square foot. For comparison, a median California home bought last year out of foreclosure, measuring 1,600 square feet and selling for about $330,000 (these are averages from the California Assn. of Realtors), would incur property tax of about $3,300 per year, or $2.06 per square foot. On average, as the anti-tax California Taxpayers Assn. acknowledges, business property was assessed at only about 60% of its full market value as recently as 2006-07, down from a recent peak of more than 87% in 1994-95.
John Hussman: "Because of the enormous second-wave of adjustable mortgage rate resets due to begin in late 2009 and to continue through 2011, as well as the increasing upward pressure that unemployment is putting on delinquencies (e.g. mortgages, credit cards, and home equity loans), I am very concerned about the outlook for the economy in the coming year or two. A wide range of academic studies reach the universal conclusion that two variables account for the majority of fluctuations in mortgage defaults and foreclosures. They are 1) a high “loan-to-value” ratio; that is, the ratio of mortgage loan to the outstanding value of the home, and 2) trigger events - particularly job loss or change in family status. It is also notable that the existence of junior liens, particularly home equity loans, also significantly increases the likelihood of mortgage default when a “trigger event” like unemployment occurs.
It is very important to recognize that the increasing unemployment rate is likely to exert a different dynamic in this economic downturn than it has in prior downturns, because of the high ratio of household debt-to-income, and the high ratio of mortgage loan-to-value at present."
Lender CIT Group, which has been unable to get the FDIC to guarantee its debt, has warned its collapse would jeopardize the future of 760 manufacturing clients and 'precipitate a crisis' for as many as 30,000 retailers.
Satyajit Das: "Governments have limited available tools to address the deep-rooted problems in the current economic models.
Given that interest rates are now at or approaching zero in many developed countries, there is little or no scope for further monetary action although central banks have creatively embarked on a program of "quantitative easing" – code for printing money (also know as the Weimar or Zimbabwe solution).
Government spending, if it can be financed, may not be able to adequately compensate for the contraction of consumption and lack of investment made worse by over capacity in many industries. Government spending has little multiplier effect or velocity. The badly damaged financial system means that the circulation of money in the economy is at a standstill. Government spending provides a short-term demand boost. Capital injections may partially rehabilitate banks. But it is far from clear what will happen when all these measures are reversed...As Keynes wrote in 1933: "We have reached a critical point. We can ... see clearly the gulf to which our present path is leading….[If governments did not take action], we must expect the progressive breakdown of the existing structure of contract and instruments of indebtedness, accompanied by the utter discredit of orthodox leadership in finance and government, with what ultimate outcome we cannot predict."
Construction spending on offices, retail centers and hotels is likely to fall 16 percent this year and 12 percent in 2010, more than previously forecast, the American Institute of Architects said.
Mike Burk "One of the seasonally best weeks of the year had its worst performance ever. A short term bounce is overdue and some of the indices may exceed the June highs in the next few weeks, but it is likely the trend has changed to down.
I expect the major indices to be higher on Friday July 17 than they were on Thursday July 10."
R.H.J. International, a Brussels-listed industrial holding company, said in a statement that it was in talks with G.M. for the acquisition of a majority stake in the European subsidiary, Adam Opel, which includes the operations of Vauxhall in Britain.
“These discussions have been taking place over a number of weeks and are at an advanced stage,” R.H.J. said.
Credit checking agency Experian said Monday that its revenue fell 8% in the first three months of its fiscal year, hurt by exchange rate fluctuations and the slowdown in bank lending.
The BBC reported Monday that Kim Jong-il has life-threatening pancreatic cancer, citing South Korean TV news channel YTN.
The latest forecast from the Semiconductor Industry Association, released in June, predicts a 21 percent decline in worldwide chip sales to $195.6 billion this year. The industry trade group thinks sales will start to rebound in 2010.
Meanwhile, earlier this month market research firm iSuppli Corp. cut its forecast for global semiconductor sales this year, attributing the change to the fact there's "little visibility into future demand trends" and warning that "conditions appear to be worse than previously expected in 2009."
Let's say Intel's results for the quarter beat expectations and sales are ONLY down 20% and earnings are 9 cents down from 28 cents. Should we jump for joy with the shares at $16? The stock is where it was 7 years ago.
Unemployment is likely to rise to 13 percent or higher and will weigh on the economy for several years, countering efforts to stabilize the banking industry, analyst Meredith Whitney told CNBC.
Microsoft will release a free version of its dominant Office software that users can access over the Web, catching up with products that arch rival Google launched three years ago.
One of Office's most popular titles is a home version that sells for $150. It includes the four programs that Microsoft will give away. Microsoft will release the free offering when it starts selling Office 2010, it next major release of the product, sometime in the first half of next year. Its current version came out in January 2007.
LG Display, the world's No. 2 LCD screen maker, said on Thursday its notebook PC panel sales in June rose 20 percent from a year ago, suggesting strong results next week when the company posts quarterly earnings.
Stocks face a downside risk as companies release second-quarter financial results that may not meet rising forecasts, BlackRock Inc.'s chief investment officer for equities said Monday. "Earnings expectations have been raised significantly over the past several months, and meeting those expectations could prove difficult in the current environment, which has the potential to result in disappointments," said Bob Doll in his weekly investment commentary.
Antal Fekete: "
Permanent gold backwardation (negative gold basis) is staring us in the face. The gold basis is trying to tell you something. It heralds the greatest monetary crisis of all times. It warns about the possible collapse of the international monetary and payments system....[2008] gave the world a foretaste. This crisis is a gold crisis. It is a crisis indicating the threat of a shortage of the ultimate extinguisher of debt, without which our runaway debt tower is doomed. When it topples, it will bury the world economy under the rubble, as the Twin Towers buried the people working inside in 2001....But once permanent backwardation makes gold unavailable, debt becomes irredeemable in the eyes of the bondholders. Paying U.S. bonds at maturity in F.R. notes does not establish redeemability. The latter is just evidence of debt secured by the former as collateral revealing that bonds are not really redeemable at all. An interest-bearing bond is replaced by a non-interest-bearing bond, that is, by an inferior instrument. All you do is shuffle various forms of irredeemable debt. When the world wakes up to this prestidigitation, the international monetary system will not be able to survive the shock-waves. The chaos that will engulf the world is appalling.."
Digital Sky Technologies to buy $100M of Facebook common shares from employees at $14.77/share, putting a valuation of $6.5B on the company. Digital Sky already invested $200M in Facebook in May.
August gold rose $10, or 1.1%, to $922.50 an ounce on the Comex division of the New York Mercantile Exchange, ending above $920 an ounce for the first time since July 7.
Crude for August delivery fell 20 cents to end at $59.69 a barrel on the New York Mercantile Exchange.
CSX Corp.said second-quarter net earnings were $308 million, or 78 cents a share, compared with $385 million, or 93 cents a share, in the year-ago period. Excluding items related to the Greenbrier resort, CSX's per-share earnings from continuing operations would have declined 24% to 72 cents. Revenue for the period fell to $2.19 billion from $2.91 billion in the same period a year ago primarily because of a decline in volume and lower fuel surcharge recovery.
Take-Two said it now expects revenue between $120 million and $130 million for the current quarter and revenue of $350 million to $400 million for the period ending Oct. 31. Analysts were expecting revenue of $162.2 million and $471.4 million for the two periods, respectively.
Novellus Systems Inc. said Monday that net losses sank deeper in the second quarter as sales of the company's semiconductor manufacturing equipment fell sharply amid a sharp slump across the sector. For the quarter ended June 27, Novellus reported a net loss of $50 million, or 52 cents a share, compared to a loss of $2.4 million, or 2 cents a share, for the same period the previous year. Excluding one-time charges, the company said it would have lost $39.3 million, or 41 cents, for the period.
the Dow Jones Industrial Average gained 185.16 points, or 2.3%, to 8,331.6. The S&P 500 Index added 21.92 points, or 2.5%, to 901.05, while the Nasdaq Composite rose 37.18 points, or 2.1%, to 1,793.2.
Oil and natural gas drilling activities in the U.S. fell nearly 46% in the second quarter from a year ago, industry group American Petroleum Institute reported Monday. Drilling levels now stand at the lowest since 2003, the API said. About 8,038 oil wells, natural gas wells and dry holes were completed in the second quarter, the API said.
Sunday, July 12, 2009
Job Contraction
7/12/09 Job Contraction
Business Week: "Buried in the
June jobs report is this critical bit of information about the labor market: The average workweek for the month fell 0.1 hours, to 33 hours, the lowest ever recorded for data that go back to 1964. Average weekly earnings, meanwhile, actually fell to $611.49 in June, from $613.34 in May. Hourly earnings remained flat. Economists say the combination of reduced hours and pay, along with continued job losses, could significantly slow a recovery as even the employed lack the means to boost their spending.
"The amount of money taken home is not about the number of jobs but about hours worked," says Mike Englund, chief economist for Action Economics, an economic forecasting firm. "The contraction in underlying income [of those working] is pretty powerful. The job market is continuing to contract at a rapid clip."
David Rosenberg, chief economist and strategist for Gluskin Sheff & Associates (GS.TO), a Toronto wealth-management firm, also draws gloomy conclusions: "The combination of job loss and decline in hours worked [in June] means there was effectively a decline of at least 800,000 jobs." He says if these trends continue, the economy will enter a downward spiral of lower consumer spending and falling prices, or deflation. What's worse, unemployment may not peak for another two years. In that case, Rosenberg says, we are destined for "the mother of all jobless recoveries."
Manhattan apartment rents fell as much as 18 percent in the second quarter from a year earlier as rising unemployment curbed demand.
The median price dropped 3.1 percent to $3,100 a month, appraiser Miller Samuel and broker Prudential Douglas Elliman Real Estate said last week.
Studio prices fell 18 percent to $2,000; one-bedrooms declined 13 percent to $2,795; two-bedrooms were down 5.1 percent to $4,550 and three-bedrooms dropped 4 percent to $7,673.
According to AMG Data, June Equity Fund Inflows $5.1 Bil; Taxable Bond Fund Inflows $28.2 Bil
xETFs - Equity Fund Inflows $3.3 Bil; Taxable Bond Fund Inflows $22 Bil.
Scorching temperatures sent electricity demand soaring to a record high Wednesday on the power grid that serves the Dallas-Fort Worth area and most of Texas.
Wholesale electricity prices also spiked dramatically.
The Electric Reliability Council of Texas, or ERCOT, said demand peaked at 62,786 megawatts between 4 and 5 p.m., exceeding by 447 megawatts the previous record of 62,339 megawatts set Aug. 17, 2006.
A megawatt is enough to serve about 200 Texas homes on a hot day.
ERCOT expects continued heavy demand today, with a projected peak of 62,486 megawatts.
Wholesale electricity prices zoomed to $500 per megawatt-hour between 4:15 and 4:30 p.m. Wednesday. The $500 figure is equivalent to 50 cents per kilowatt-hour. That is more than five times higher than the lowest current retail electric rates, which run between 9 and 10 cents per kilowatt-hour.
Ziff Energy: "Massive value destruction is occurring for the shareholder, or unit holder, for each Mcf of gas produced today at low prices. Core gas reserves are being sold/depleted that simply cannot be replaced by the cash generated.
While Oil prices have recovered very quickly from their dramatic plunge, Gas prices remain extremely low.
At a price of C$3/Mcf at AECO, gas is selling for a 2/3 discount to oil --- disconnected from the traditional oil/gas price relationship.
NY Times: "In all, even before thinking about the coming year’s $1.8 billion shortfall, Michigan’s lawmakers had — through cuts, accounting shifts and tax increases — closed more than $7 billion in budget gaps over the past eight years. While many states have experienced a year of pain or perhaps two during this downturn, Michigan is approaching nearly a decade of budget misery.
“The big difference here,” said Robert L. Emerson, the state budget director, “is that we have very little to fall back on. Michigan has already done a lot of the things that other states are only thinking about doing now. Every reserve fund in the state government has been drained long ago. Our rainy-day fund? There’s $2 million in there. That won’t last you 30 seconds.” The state has cut 10,000 employees since 2000, leaving it with a staff comparable to the early 1970s. Annual general fund revenues, when adjusted for inflation, have shrunk in all but one of the last nine years. They are expected to be $6.9 billion next year, a level last seen in 1991 (and with the inflation adjustment, more like the 1960s)."
About 150 million Internet users in the United States watch about 14.5 billion videos a month, according to the measurement firm comScore, or an average of 97 videos per viewer. Although the Web lacks a standard for video measurement, comScore says average video durations have risen slowly but surely in the past year, to an average of 3.4 minutes in March.
Toyota Motor Corp. may close a San Francisco Bay Area vehicle-assembly plant that it jointly operates with General Motors, The Wall Street Journal reported.
The plant, called New United Motor Manufacturing Inc., has been largely unprofitable since the two companies established a joint venture in 1984, the Journal reported.
Israel this week is likely to adopt its 2009-2010 budget, which will reflect estimated deficits of 7.8% and 4.5% of gross domestic product for the two years respectively, Barclays Capital said.
Top members of Congress say it's unlikely they will meet President Barack Obama's August deadline for a sweeping health care overhaul.
Dave Rosenberg: "In a recent newsletter, Gerhard Fasol, head of Eurotechnology Japan, points out that the Japanese games sector is booming--with the combined net annual income of Japan's top nine game companies overtaking the combined net income of Japan's top 19 electrical giants.
Game companies such as Nintendo are thriving through the global recession while stalwarts such as Panasonic and Sony struggle (Sony's diversification and PlayStation sales haven't helped recently) with huge corporate hierarchies and a dearth of new "must have" products. "
The national average price of gasoline fell about 10 cents a gallon during the past two weeks to $2.56.
That's according to the Lundberg Survey of fuel prices released Sunday.
Analyst Trilby Lundberg says it's the first significant price drop since early December.
The latest average price of regular gasoline is $1.55 less than the price at the same time last year, which peaked at an all-time high of $4.11.
Yahoo! GeoCities, the free web site building service and community, is closing on October 26, 2009.
Business Week: "Buried in the
June jobs report is this critical bit of information about the labor market: The average workweek for the month fell 0.1 hours, to 33 hours, the lowest ever recorded for data that go back to 1964. Average weekly earnings, meanwhile, actually fell to $611.49 in June, from $613.34 in May. Hourly earnings remained flat. Economists say the combination of reduced hours and pay, along with continued job losses, could significantly slow a recovery as even the employed lack the means to boost their spending.
"The amount of money taken home is not about the number of jobs but about hours worked," says Mike Englund, chief economist for Action Economics, an economic forecasting firm. "The contraction in underlying income [of those working] is pretty powerful. The job market is continuing to contract at a rapid clip."
David Rosenberg, chief economist and strategist for Gluskin Sheff & Associates (GS.TO), a Toronto wealth-management firm, also draws gloomy conclusions: "The combination of job loss and decline in hours worked [in June] means there was effectively a decline of at least 800,000 jobs." He says if these trends continue, the economy will enter a downward spiral of lower consumer spending and falling prices, or deflation. What's worse, unemployment may not peak for another two years. In that case, Rosenberg says, we are destined for "the mother of all jobless recoveries."
Manhattan apartment rents fell as much as 18 percent in the second quarter from a year earlier as rising unemployment curbed demand.
The median price dropped 3.1 percent to $3,100 a month, appraiser Miller Samuel and broker Prudential Douglas Elliman Real Estate said last week.
Studio prices fell 18 percent to $2,000; one-bedrooms declined 13 percent to $2,795; two-bedrooms were down 5.1 percent to $4,550 and three-bedrooms dropped 4 percent to $7,673.
According to AMG Data, June Equity Fund Inflows $5.1 Bil; Taxable Bond Fund Inflows $28.2 Bil
xETFs - Equity Fund Inflows $3.3 Bil; Taxable Bond Fund Inflows $22 Bil.
Scorching temperatures sent electricity demand soaring to a record high Wednesday on the power grid that serves the Dallas-Fort Worth area and most of Texas.
Wholesale electricity prices also spiked dramatically.
The Electric Reliability Council of Texas, or ERCOT, said demand peaked at 62,786 megawatts between 4 and 5 p.m., exceeding by 447 megawatts the previous record of 62,339 megawatts set Aug. 17, 2006.
A megawatt is enough to serve about 200 Texas homes on a hot day.
ERCOT expects continued heavy demand today, with a projected peak of 62,486 megawatts.
Wholesale electricity prices zoomed to $500 per megawatt-hour between 4:15 and 4:30 p.m. Wednesday. The $500 figure is equivalent to 50 cents per kilowatt-hour. That is more than five times higher than the lowest current retail electric rates, which run between 9 and 10 cents per kilowatt-hour.
Ziff Energy: "Massive value destruction is occurring for the shareholder, or unit holder, for each Mcf of gas produced today at low prices. Core gas reserves are being sold/depleted that simply cannot be replaced by the cash generated.
While Oil prices have recovered very quickly from their dramatic plunge, Gas prices remain extremely low.
At a price of C$3/Mcf at AECO, gas is selling for a 2/3 discount to oil --- disconnected from the traditional oil/gas price relationship.
NY Times: "In all, even before thinking about the coming year’s $1.8 billion shortfall, Michigan’s lawmakers had — through cuts, accounting shifts and tax increases — closed more than $7 billion in budget gaps over the past eight years. While many states have experienced a year of pain or perhaps two during this downturn, Michigan is approaching nearly a decade of budget misery.
“The big difference here,” said Robert L. Emerson, the state budget director, “is that we have very little to fall back on. Michigan has already done a lot of the things that other states are only thinking about doing now. Every reserve fund in the state government has been drained long ago. Our rainy-day fund? There’s $2 million in there. That won’t last you 30 seconds.” The state has cut 10,000 employees since 2000, leaving it with a staff comparable to the early 1970s. Annual general fund revenues, when adjusted for inflation, have shrunk in all but one of the last nine years. They are expected to be $6.9 billion next year, a level last seen in 1991 (and with the inflation adjustment, more like the 1960s)."
About 150 million Internet users in the United States watch about 14.5 billion videos a month, according to the measurement firm comScore, or an average of 97 videos per viewer. Although the Web lacks a standard for video measurement, comScore says average video durations have risen slowly but surely in the past year, to an average of 3.4 minutes in March.
Toyota Motor Corp. may close a San Francisco Bay Area vehicle-assembly plant that it jointly operates with General Motors, The Wall Street Journal reported.
The plant, called New United Motor Manufacturing Inc., has been largely unprofitable since the two companies established a joint venture in 1984, the Journal reported.
Israel this week is likely to adopt its 2009-2010 budget, which will reflect estimated deficits of 7.8% and 4.5% of gross domestic product for the two years respectively, Barclays Capital said.
Top members of Congress say it's unlikely they will meet President Barack Obama's August deadline for a sweeping health care overhaul.
Dave Rosenberg: "In a recent newsletter, Gerhard Fasol, head of Eurotechnology Japan, points out that the Japanese games sector is booming--with the combined net annual income of Japan's top nine game companies overtaking the combined net income of Japan's top 19 electrical giants.
Game companies such as Nintendo are thriving through the global recession while stalwarts such as Panasonic and Sony struggle (Sony's diversification and PlayStation sales haven't helped recently) with huge corporate hierarchies and a dearth of new "must have" products. "
The national average price of gasoline fell about 10 cents a gallon during the past two weeks to $2.56.
That's according to the Lundberg Survey of fuel prices released Sunday.
Analyst Trilby Lundberg says it's the first significant price drop since early December.
The latest average price of regular gasoline is $1.55 less than the price at the same time last year, which peaked at an all-time high of $4.11.
Yahoo! GeoCities, the free web site building service and community, is closing on October 26, 2009.
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