12/18/10 Federal Borrowings
"It is dangerous to be right when the government is wrong."
-- Voltaire
Doug Noland: "This year will mark the second consecutive year where federal borrowings will have actually expanded more than the growth of total Non-financial borrowings. Nothing similar to this has happened in the post-WWII period. For perspective, even during the deficit-prone 1970s, total federal borrowings were only 16% of total Non-financial debt growth during the decade (the annual high was 1975’s 50.8%). Federal borrowings equaled 22% of total Non-financial debt growth during the eighties (1982 high of 42.9%). The nineties saw total federal borrowings for the decade drop to 14.4% of total Non-financial debt growth (1991 high at 66.8%)....In just 9 quarters, total federal liabilities have ballooned $4.013 TN, or 60%. After doubling mortgage Credit in less than 7 years, our system is now on track to double federal debt in about four years. Federal expenditures jumped to a record SAAR $3.760 TN during the third quarter, up 6.4% from Q3 2009; up 19% from Q3 2008; and 29% higher than Q3 2007. Federal expenditures increased to 25.5% of GDP during the quarter, up from 20.8% in Q3 2007. During the quarter, combined federal and state&local expenditures reached almost 40% of GDP (vs. 34.4% during Q3 2007)....I saw nothing in the Q3 Flow of Funds that is counter to my thesis of a very problematic inflation of government finance – with an inevitable crisis of confidence and fiscal train wreck. And as one would expect from such a historic Bubble Dynamic, the longer this Bubble is prolonged the greater the unavoidable financial, economic and social dislocation. "
What country can preserve its liberties if its rulers are not warned from time to time that their people preserve the spirit of resistance?-Thomas Jefferson
Michael Santoli: "Since World War II, there have been 10 back-to-back double-digit advances. Only twice (1951 and 1994) did the streak run to a third year, and the average return in the third year was 1.7%."
John C. Danforth: "I have never seen more senators express discontent with their jobs. ... I think the major cause is that, deep down in our hearts, we have been accomplices to doing something terrible and unforgivable to this wonderful country. Deep down in our hearts, we know that we have bankrupted America and that we have given our children a legacy of bankruptcy. ... We have defrauded our country to get ourselves elected."
Regulators shuttered six banks holding a total of $1.23 billion in assets, including three in Georgia and one each in Arkansas, Minnesota and Florida, as real-estate losses drive this year’s bank failures to 157.
Democracy is two wolves and a lamb voting on what to have for lunch.
Liberty is a well-armed lamb contesting the vote.
Benjamin Franklin 1759
The Federal Reserve is currently creating out of thin air about $1,000 a month for every household in the US.
Saturday, December 18, 2010
Friday, December 17, 2010
Hindenburg Omen
12/17/10 Hindenburg Omen
Robert McHugh: "But we have an official Hindenburg Omen as of August 20th,
2010.
We got a second official confirmed Hindenburg Omen observation Wednesday,
December 15th, 2010 after getting a first observation Tuesday, December
14th, 2010, meaning we are now on the clock watching for a stock market
crash, and at the very least a significant decline. There is a much higher
than normal probability of a stock market crash starting sometime over the
next four months. All criteria were met Tuesday and Wednesday, December
14th and 15th, 2010. December 14th's observation saw 17 NYSE New 52 Week
Highs, and 113 NYSE New 52 Week Lows according to the Wall Street Journal,
the lower of the two coming in at 3.58 percent, above the 2.2 percent
threshold required for a Hindenburg Omen observation. Total NYSE issues
traded were 3,158. New Highs were not more than twice New Lows, the
McClellan Oscillator was negative at negative -16.23, and the 10 Week
Moving Average is rising. The second observation on December 15thth has
occurred within the required 36 day period necessary for a cluster (two or
more observations) to occur. December 15th's observation saw 156 NYSE New
52 Week Highs, and 89 NYSE New 52 Week Lows according to the Wall Street
Journal, the lower of the two coming in at 2.83 percent, above the 2.2
percent threshold required for a Hindenburg Omen observation. Total NYSE
issues traded were 3,143. New Highs were not more than twice New Lows, the
McClellan Oscillator was negative at negative -68.80, and the 10 Week
Moving Average is rising.
Now that we have a second observation, we have an official confirmed Hindenburg
Omen. This is the first Hindenburg Omen since August 2010, and only the
second since 2008, which of course led to the massive stock market crash
in the autumn 2008, and the fourth since the Bear Market started in 2007
(we got one in 2007, one in 2008 and two here in 2010). We got crashes
after both the October 2007 and June 2008 Hindenburg Omens.
Natural gas futures on Friday fell 1.6% to $3.98 per million British thermal
units, dropping below $4 for the first time since Nov. 19. Phil Flynn of
commodities trading firm PFG Best said it's also the first time that natural
gas has fallen below $4 in the month of December since 2001. "If you go back
over the last few years, in December it's cold and the prices go up," Flynn
said. "To be under $4 is almost unheard of." Normally, demand rises during the
onset of winter, but this year, plentiful supplies of natural gas from U.S.
domestic production have helped keep prices down, Flynn said. Also on Friday,
crude oil futures fell 0.6% to $87.20 a barrel. Oil has been on a downward path
since early this week, when the U.S. Federal Reserve signaled no new stimulus
under its quantitative easing plan, cooling off demand for some commodities.
The extension for unemployment benefits that is part of the compromise tax deal
is good news for many of the unemployed, but it won’t provide aid to anyone
who’s been out of a job over 99 weeks.
Canada's BMO Financial said on Friday that it is buying Milwaukee-based banking
firm Marshall & Ilsley for US$ 7.75 a share in a stock for stock transaction
worth a total of US$4.10 billion. The firms expect the deal to close by the end
of July 2011. "The acquisition is consistent with our strategy to strengthen
our North American businesses," BMO CEO Bill Downe said in a press release.
Downe added that, "It also increases scale and provides strong entry into other
attractive markets, including Minnesota, Missouri, and Kansas, and expansion in
Indiana and Wisconsin." Marshall and Ilsley shares jumped 27% on the deal.
Moody's cut Ireland's rating to Baa1 with a negative outlook from Aa2 and
warned further downgrades could follow if Dublin was unable to stabilize its
debt situation, caused by a banking crash after a decade-long property bubble
burst.
"While a downgrade had been anticipated, the severity of the downgrade is
surprising," Dublin-based Glas Securities said In the tax cut extension passed
in the House last night, private equity firms
and hedge funds win their battle against carried interest provisions that would
have taxed their earnings at ordinary income rates rather than as capital
gains. But small businesses lose their push for 1099 relief that would have
eased the requirement to issue IRS forms to vendors receiving $600 or more in
a year.
The Oil Drum: "The price of natural gas and electricity will be low over the
next quarter-century, and crude oil will become more expensive but not
radically so, the Energy Department predicted on Thursday, in a report that
contradicts widely held notions.
And even without a national global warming law, American carbon dioxide
emissions will not inexorably set new records; they will stay below the rate of
2005 for the next 15 years because of economic forces, the forecast said." When
was the last time a government forecast was accurate?
Moody's places the ratings of six Greek banks on review for possible
downgrade.
A "mild pickup" could be in store the economy following a slow winter, the
Conference Board said Friday as it reported that its leading economic index
rose 1.1% in November, the largest gain since March. "Continuing strength in
financial indicators is now joined by gains in manufacturing and consumer
expectations, but housing remains weak," said Ataman Ozyildirim, economist at
the Conference Board, in a statement. "Possible clouds" on the medium-term
horizon are ongoing weakness in housing and jobs, the Conference Board added.
Nine of the 10 indicators included in the index rose in November, with the
largest positive contribution from the index of supplier deliveries. Building
permits were the only negative contributor. November's result matched Wall
Street's expectations. October's LEI was revised down to 0.4%, from a prior
estimate of 0.5%. The LEI is a weighted gauge of 10 indicators that are
designed to signal business cycle peaks and troughs.
ZeroHedge: "Now that all recent bond auctions have settled, and with no further
bond auctions scheduled until the rest of the year, we can look at the final
tally of US total debt: the number - $13,879,785,000,000. This represents a
$1.568 trillion increase in total US debt held by the public for 2010, and
$4.388 trillion since the collapse of Lehman. This is in essence the cost to US
taxpayers to keep the financial system solvent, as the US has become the
biggest marginal leveraging actor in the world, with everyone else, notably US
consumers, and Europe, doing all they can to strip as much debt as they
possible can. Of course, since this money does not have to be repaid any time
soon, or ever, nobody seems to mind, especially not the politicians in
Washington. As we have said before, and pro forma for the Obama tax deal, we
expect total debt issuance in 2011 to accelerate once again, and to hit just
under $2 trillion, putting total US debt at the end of next year at around $16
trillion. We also fully expect the Fed to monetize the bulk of that issuance.
We can't wait to hear the positive spin on this one."
Reuters: "U.S. state and local governments faced the realization on Friday that
in just 14 days they will no longer be able to sell taxable Build America
Bonds, the federally subsidized debt created in the economic stimulus plan to
fund infrastructure projects and create jobs.
Investors, analysts, underwriters and federal policy-makers also confronted a
future without taxable BABs, which made up more than a quarter of all new
municipal debt sold this year and which have been largely credited with
restarting stalled municipal credit markets.
As a result, prices of tax-free municipal bonds, particularly with longer
maturities, are apt to fall, along with capital spending by states and local
governments.
President Barack Obama once called for the BABs program to be made permanent.
But the program will expire at year end after Obama decided against including
its extension in a tax deal he cut with Republicans in Congress."
Sara Lee Corp. is considering a sale to Brazil's JBS SA and the two companies
have been holding talks on and off for several months, the Wall Street Journal
reported Friday on its website. However, no final decision have been made, the
newspaper said, citing people familiar with the matter. Sara Lee has been
exploring various strategic options after its chief executive, Brenda Barnes,
stepped down in August following a stroke, the Journal said.
The Dow Jones Industrial Average fell 7.34 points, or 0.1%, to 11,491.91, but
gained 0.7% for the week. The S&P 500 rose 1.04 points, or 0.1%, to 1,243.91 and
gained 0.3% for the week. The Nasdaq Composite advanced 5.7 points, or 0.2%, to
2,642.97, up 0.2% for the week. The S&P 500 and Dow have risen for three
straight weeks; the Nasdaq is up four.
The unemployment rate rose in 21 states and Washington D.C. in November, up from the 14 states that showed increases the month before, according to government data released Friday. Fifteen states did report decreases in jobless rates in November, while 14 states remained unchanged.
Hang Seng index closes near 10 week low.
Robert McHugh: "But we have an official Hindenburg Omen as of August 20th,
2010.
We got a second official confirmed Hindenburg Omen observation Wednesday,
December 15th, 2010 after getting a first observation Tuesday, December
14th, 2010, meaning we are now on the clock watching for a stock market
crash, and at the very least a significant decline. There is a much higher
than normal probability of a stock market crash starting sometime over the
next four months. All criteria were met Tuesday and Wednesday, December
14th and 15th, 2010. December 14th's observation saw 17 NYSE New 52 Week
Highs, and 113 NYSE New 52 Week Lows according to the Wall Street Journal,
the lower of the two coming in at 3.58 percent, above the 2.2 percent
threshold required for a Hindenburg Omen observation. Total NYSE issues
traded were 3,158. New Highs were not more than twice New Lows, the
McClellan Oscillator was negative at negative -16.23, and the 10 Week
Moving Average is rising. The second observation on December 15thth has
occurred within the required 36 day period necessary for a cluster (two or
more observations) to occur. December 15th's observation saw 156 NYSE New
52 Week Highs, and 89 NYSE New 52 Week Lows according to the Wall Street
Journal, the lower of the two coming in at 2.83 percent, above the 2.2
percent threshold required for a Hindenburg Omen observation. Total NYSE
issues traded were 3,143. New Highs were not more than twice New Lows, the
McClellan Oscillator was negative at negative -68.80, and the 10 Week
Moving Average is rising.
Now that we have a second observation, we have an official confirmed Hindenburg
Omen. This is the first Hindenburg Omen since August 2010, and only the
second since 2008, which of course led to the massive stock market crash
in the autumn 2008, and the fourth since the Bear Market started in 2007
(we got one in 2007, one in 2008 and two here in 2010). We got crashes
after both the October 2007 and June 2008 Hindenburg Omens.
Natural gas futures on Friday fell 1.6% to $3.98 per million British thermal
units, dropping below $4 for the first time since Nov. 19. Phil Flynn of
commodities trading firm PFG Best said it's also the first time that natural
gas has fallen below $4 in the month of December since 2001. "If you go back
over the last few years, in December it's cold and the prices go up," Flynn
said. "To be under $4 is almost unheard of." Normally, demand rises during the
onset of winter, but this year, plentiful supplies of natural gas from U.S.
domestic production have helped keep prices down, Flynn said. Also on Friday,
crude oil futures fell 0.6% to $87.20 a barrel. Oil has been on a downward path
since early this week, when the U.S. Federal Reserve signaled no new stimulus
under its quantitative easing plan, cooling off demand for some commodities.
The extension for unemployment benefits that is part of the compromise tax deal
is good news for many of the unemployed, but it won’t provide aid to anyone
who’s been out of a job over 99 weeks.
Canada's BMO Financial said on Friday that it is buying Milwaukee-based banking
firm Marshall & Ilsley for US$ 7.75 a share in a stock for stock transaction
worth a total of US$4.10 billion. The firms expect the deal to close by the end
of July 2011. "The acquisition is consistent with our strategy to strengthen
our North American businesses," BMO CEO Bill Downe said in a press release.
Downe added that, "It also increases scale and provides strong entry into other
attractive markets, including Minnesota, Missouri, and Kansas, and expansion in
Indiana and Wisconsin." Marshall and Ilsley shares jumped 27% on the deal.
Moody's cut Ireland's rating to Baa1 with a negative outlook from Aa2 and
warned further downgrades could follow if Dublin was unable to stabilize its
debt situation, caused by a banking crash after a decade-long property bubble
burst.
"While a downgrade had been anticipated, the severity of the downgrade is
surprising," Dublin-based Glas Securities said In the tax cut extension passed
in the House last night, private equity firms
and hedge funds win their battle against carried interest provisions that would
have taxed their earnings at ordinary income rates rather than as capital
gains. But small businesses lose their push for 1099 relief that would have
eased the requirement to issue IRS forms to vendors receiving $600 or more in
a year.
The Oil Drum: "The price of natural gas and electricity will be low over the
next quarter-century, and crude oil will become more expensive but not
radically so, the Energy Department predicted on Thursday, in a report that
contradicts widely held notions.
And even without a national global warming law, American carbon dioxide
emissions will not inexorably set new records; they will stay below the rate of
2005 for the next 15 years because of economic forces, the forecast said." When
was the last time a government forecast was accurate?
Moody's places the ratings of six Greek banks on review for possible
downgrade.
A "mild pickup" could be in store the economy following a slow winter, the
Conference Board said Friday as it reported that its leading economic index
rose 1.1% in November, the largest gain since March. "Continuing strength in
financial indicators is now joined by gains in manufacturing and consumer
expectations, but housing remains weak," said Ataman Ozyildirim, economist at
the Conference Board, in a statement. "Possible clouds" on the medium-term
horizon are ongoing weakness in housing and jobs, the Conference Board added.
Nine of the 10 indicators included in the index rose in November, with the
largest positive contribution from the index of supplier deliveries. Building
permits were the only negative contributor. November's result matched Wall
Street's expectations. October's LEI was revised down to 0.4%, from a prior
estimate of 0.5%. The LEI is a weighted gauge of 10 indicators that are
designed to signal business cycle peaks and troughs.
ZeroHedge: "Now that all recent bond auctions have settled, and with no further
bond auctions scheduled until the rest of the year, we can look at the final
tally of US total debt: the number - $13,879,785,000,000. This represents a
$1.568 trillion increase in total US debt held by the public for 2010, and
$4.388 trillion since the collapse of Lehman. This is in essence the cost to US
taxpayers to keep the financial system solvent, as the US has become the
biggest marginal leveraging actor in the world, with everyone else, notably US
consumers, and Europe, doing all they can to strip as much debt as they
possible can. Of course, since this money does not have to be repaid any time
soon, or ever, nobody seems to mind, especially not the politicians in
Washington. As we have said before, and pro forma for the Obama tax deal, we
expect total debt issuance in 2011 to accelerate once again, and to hit just
under $2 trillion, putting total US debt at the end of next year at around $16
trillion. We also fully expect the Fed to monetize the bulk of that issuance.
We can't wait to hear the positive spin on this one."
Reuters: "U.S. state and local governments faced the realization on Friday that
in just 14 days they will no longer be able to sell taxable Build America
Bonds, the federally subsidized debt created in the economic stimulus plan to
fund infrastructure projects and create jobs.
Investors, analysts, underwriters and federal policy-makers also confronted a
future without taxable BABs, which made up more than a quarter of all new
municipal debt sold this year and which have been largely credited with
restarting stalled municipal credit markets.
As a result, prices of tax-free municipal bonds, particularly with longer
maturities, are apt to fall, along with capital spending by states and local
governments.
President Barack Obama once called for the BABs program to be made permanent.
But the program will expire at year end after Obama decided against including
its extension in a tax deal he cut with Republicans in Congress."
Sara Lee Corp. is considering a sale to Brazil's JBS SA and the two companies
have been holding talks on and off for several months, the Wall Street Journal
reported Friday on its website. However, no final decision have been made, the
newspaper said, citing people familiar with the matter. Sara Lee has been
exploring various strategic options after its chief executive, Brenda Barnes,
stepped down in August following a stroke, the Journal said.
The Dow Jones Industrial Average fell 7.34 points, or 0.1%, to 11,491.91, but
gained 0.7% for the week. The S&P 500 rose 1.04 points, or 0.1%, to 1,243.91 and
gained 0.3% for the week. The Nasdaq Composite advanced 5.7 points, or 0.2%, to
2,642.97, up 0.2% for the week. The S&P 500 and Dow have risen for three
straight weeks; the Nasdaq is up four.
The unemployment rate rose in 21 states and Washington D.C. in November, up from the 14 states that showed increases the month before, according to government data released Friday. Fifteen states did report decreases in jobless rates in November, while 14 states remained unchanged.
Hang Seng index closes near 10 week low.
Thursday, December 16, 2010
JS Kim
12/16/10 JS Kim
JS Kim: "The government and bankers laud a rising stock market as proof that the
economy is recovering. They go on record stating that inflation is less than 2%
when in reality it is more than four times higher. They state unemployment is
less than 10% when it is nearly 23%. Thus, to many people, the economy appears
as the Sampoong department store’s exterior appeared to the public right before
its collapse, structurally sound and with a solid exterior. This is the reason
why 40,000 people a day visited the department store despite its fatal
structural integrity problems. The government and bankers are just like the
Sampoong department store owners, actively concealing all warning signs from the
public and selling them an illusion that all is okay when instead, the economy
is heading for collapse. Just as the Sampoong department store owners
constructed a crappy building destined to collapse due to excessive greed,
bankers with the help of government officials, constructed dozens of financial
derivative products destined to collapse due to their excessive greed as well.”
(via ZeroHedge)
The MOVE Index, Merrill Lynch's reading on bond market volatility, jumped 7.25%
today, rising 44% in the last five weeks as 10-year yields pile up 100 basis
points.
Based just on Kinect sales, Jefferies is raising Microsoft's holiday quarter
estimate 3 cents to $0.69/share.
Nic Lenoir: "my concern is not slow growth but civil war."
ZeroHedge: "That ICI has just confirmed the 32nd consecutive outflow from
domestic equity mutual funds is not surprising. After all, we have long been
saying that retail's love affair with stocks has gone straight to the bitter
divorce stage. That the amount of outflows was a massive $2.7 billion is a
little more surprising: after all last week was just $1.7 billion, and the
market really surged since then in its last ditch attempt to get the dumbest
money in. It failed (and total outflows year to date are not $96 billion: we
expect $100 billion through the end of the year). But what is truly surprising,
and what debunks every myth that investors are now rotating out of bonds and
into stocks, is that in the last week in addition to a surge in domestic
equity
outflows, for the first time in what seems forever, there was also an outflow
of $401 million in taxable bond funds (in addition to $1.3 billion in outflows
from muni bonds)."
Iran on Wednesday accused the United States, Britain and Israel of involving in
the deadly suicide bomb attack in the country which left 39 killed and more
than 50 others wounded.
Wal-Mart Stores Inc., the world’s largest retailer, raised prices on hundreds of
toys this month, squeezing more out of sales during the biggest shopping period
of the year. “In previous years Wal-Mart has come out and hammered everyone with
unbelievably low toy prices,” said Eric Johnson, director of the Center for
Digital Strategies at the Tuck School of Business at Dartmouth in Hanover, New
Hampshire. “They stepped away from that this year, and after Thanksgiving their
prices have crept back up.”
The price increases were due to temporary discounts on products, including toys,
that ended Nov. 30, Ravi Jariwala, a spokesman for Bentonville, Arkansas-based
Wal-Mart, said in an interview. He declined to elaborate on the message’s
reference to a successful financial month.
The U.S. current-account deficit widened to $127.2 billion in the third
quarter from $123.2 billion in the second quarter, the Commerce Department
reported Thursday. As a share of gross domestic product, the deficit increased
to 3.5% in the third quarter -- the largest share since the fourth quarter of
2008 -- from 3.4% in the second quarter. The overall deficit widened as the
deficit on goods hit $171.2 billion in the third quarter, compared with $169.6
billion in the second quarter. The current account is the broadest measure of
international flows of goods, services and capital in and out of the United
States. Net financial inflows rose to $181.6 billion in the third quarter from
$31 billion in the second quarter, with a pick up from foreign-owned assets in
the United States.
Construction of new U.S. homes rose 3.9% to a seasonally adjusted annualized
rate of 555,000 in November, the Commerce Department reported Thursday. The
November rate matched forecasts from analysts polled by MarketWatch. Housing
starts for October were revised higher to a rate of 534,000 from a prior
estimate of 519,000. Permits for new construction fell 4% to an annualized rate
of 530,000 in November, reaching the lowest level since April of 2009. With
persistent weakness in the housing market, homebuilders have been cautious.
First-time claims for state unemployment benefits fell unexpectedly in the
latest week, the Labor Department reported Thursday. The number of initial
claims in the week ending Dec. 11 fell 3,000 to 420,000. The consensus forecast
of Wall Street economists was for claims to inch higher. The four-week average
fell 5,250 to 422,750.Claims in the previous week were revised to a decrease of
15,000 to 423,000 compared with the initial estimate of a decline of 17,000 to
421,000. Meanwhile, the number of Americans receiving state jobless benefits
held steady rose 22,000 to 4.14 million in the week ending Dec. 4. The
four-week moving average of continuing claims fell 47,250 to 4.19 million.
European Union leaders will be warned on Thursday that a rolling debt crisis
poses a systemic threat to the euro zone as they seek to paper over divisions
at a summit on how to restore confidence.
European Commission President Jose Manuel Barroso will tell the 27 leaders
that the crisis requires new steps by the whole single currency area and specific
measures by member states such as Spain and Portugal to put their finances in
order.
"The current sovereign crisis has now become systemic in nature, and is driven
not only by budgetary fundamentals but also by the mispricing of credit risk by
investors and short-term herding behavior in the markets," Barroso will say,
according to speaking notes obtained by Reuters.
FedEx reported a quarterly profit and revenue that missed Wall Street
estimates, but raised its full-year outlook on stronger-than-expected holiday
volume and an improved economic forecast.
The Nation reports, “that the $700 billion Treasury Department bank
bailout…signed into law under President George W. Bush in 2008 was a small down
payment on an secretive ‘backdoor bailout’ that saw the Fed provide roughly
$3.3 trillion in liquidity and more than $9 trillion in short-term loans and
other financial arrangements.”
Foreclosures will surge to new highs in 2011, beating even the 1.2 million home
seizures expected for 2010 and the 900,000 recorded in 2009, RealtyTrac's Rick
Sharga has been telling reporters.
China may raise interest rates up to six times by the end of next year as
inflation becomes more entrenched in the economy, according to Mizuho Research
Institute Ltd. China’s central bank has relied on reserve-requirement ratios to
help control liquidity, and with levelsnear 20 percent there’s little room for
increases, said Takamoto Suzuki, a senior economist at the unit of Japan’s
third-largest bank. “A rate hike will be inevitable,” Tokyo-based Suzuki said.
“It wouldn’t be surprising if the central bank lifts interest rates by about
1.5 percentage points by the end of next year.”Consumer prices climbed 5.1
percent in November from a year earlier, the fastest since July 2008, the
statistics bureau said on Dec. 11. The People’s Bank of China this month
announced its sixth increase in reserve-requirement ratios, making major banks
to set aside 18.5 percent of deposits. The PBOC raised borrowing costs in
October for the first time since December 2007, increasing the one-year deposit
rate to 2.5 percent and the lending rate to 5.56 percent.
Iraqi authorities have obtained confessions from captured insurgents who claim
al Qaeda is planning suicide attacks in the U.S. and Europe during the
Christmas season, two senior Iraqi officials said Wednesday. A U.S. official
familiar with the matter confirmed the threat as credible. "People are looking
at this very closely," the U.S. official said. "We take it very seriously."
John Williams: "The various European crises remain an intermittent foil for the
U.S. dollar, pulling market attention away from the unfolding solvency crisis
in the United States and a likely move to massive selling against the U.S.
currency. Accordingly, high risk of the early stages of a hyperinflation
beginning to unfold by mid-2011 continues.
Rising inflation should become increasingly broad, reflecting an increasingly
serious problem in the first-half of 2011.”
The Philadelphia Fed's manufacturing survey unexpectedly improved in December,
climbing to 24.3 from 22.5 in November. Economists polled by MarketWatch
expected a drop to 17.5. "All of the broad indicators remained positive and
suggest an expansion of activity. Increases in input prices were more
widespread this month, and more firms reported increases in prices for their
manufactured goods," the Philly Fed said. "The survey's broad indicators of
future activity suggest that optimism among the region's manufacturing
executives also continues to improve." From 34 in November, the Price Paid index
surged to 51.2!
New building permits fell 4.0 percent to a 530,000-unit pace last month, the
lowest since April 2009, after a 0.9 percent increase in October. Permits were
dragged down by a 23 percent plunge in the volatile multi-family segment.
Permits for single-family homes rose 3 percent last month.
Analysts had expected overall building permits to rise to a 560,000-unit pace in
November.
Working natural gas in storage was 3,561 Bcf as of Friday, December 10, 2010,
according to EIA estimates. This represents a net decline of 164 Bcf from the
previous week. Stocks were 35 Bcf less than last year at this time and 321 Bcf
above the 5-year average of 3,240 Bcf. In the East Region, stocks were 60 Bcf
above the 5-year average following net withdrawals of 111 Bcf. Stocks in the
Producing Region were 237 Bcf above the 5-year average of 967 Bcf after a net
withdrawal of 42 Bcf. Stocks in the West Region were 25 Bcf above the 5-year
average after a net drawdown of 11 Bcf. At 3,561 Bcf, total working gas is
within the 5-year historical range. Analysts polled by Platts were looking for
a reduction of between 159 and 163 billion cubic feet for the week ended Dec.
10. Natural gas prices fell to a 4-week low. Some analysts are projecting a
milder winter. That was not the case a year ago.
2-year Treasury yield rises to 0.68%.
Cotton surged the exchange limit in New York.
Albert Edwards:"I’ve been doing this job long enough to recognise when the
markets are entering a new phase of madness that leaves me scratching my head
with bemusement. The notion that we are in a sustainable economic recovery is
as ludicrous as it was in 2005-2007. But investors are back on the dance floor,
waltzing their way towards the next, inevitable implosion – yet another they
will no doubt claim in retrospect was totally unpredictable!"
President Barack Obama has signed into law legislation that delays for one year
a cut in Medicare pay to doctors.
The 25 percent reduction in physician payments had been scheduled to kick in
Jan. 1, potentially disrupting care for the nation's seniors.
Delaying the cut will cost the government an estimated $19 billion.
The money will be shifted from the health care overhaul law, mostly by
tightening rules on tax credits intended to prevent waste.
Shanky's Technical Analysis: "The charts look nasty. If the Fed can be
distracted by the bond markets and the EU bailouts there are not enough funds
to save all. They can't print it fast enough and the Ponzi will finally die.
All of this is happening now. I have come to the conclusion that there is a
good chance that the top is set. At this time we have to consider the only two
scenarios left - top is set or there is one more pop left in their arsenal.
Those waiting on a failed treasury auction to mark the top will be too late.
That will be the final shot to destroy the Fed and treasury's Ponzi economic
system."
The Dow Jones Industrial Average ended up 41.78 points, or 0.4%, at 11,499.25. The S&P 500 closed up 7.64 points, or 0.6%, at 1,242.87, led by industrial stocks. The Nasdaq Composite gained 20.09 points, or 0.8%, to 2,637.31.
JS Kim: "The government and bankers laud a rising stock market as proof that the
economy is recovering. They go on record stating that inflation is less than 2%
when in reality it is more than four times higher. They state unemployment is
less than 10% when it is nearly 23%. Thus, to many people, the economy appears
as the Sampoong department store’s exterior appeared to the public right before
its collapse, structurally sound and with a solid exterior. This is the reason
why 40,000 people a day visited the department store despite its fatal
structural integrity problems. The government and bankers are just like the
Sampoong department store owners, actively concealing all warning signs from the
public and selling them an illusion that all is okay when instead, the economy
is heading for collapse. Just as the Sampoong department store owners
constructed a crappy building destined to collapse due to excessive greed,
bankers with the help of government officials, constructed dozens of financial
derivative products destined to collapse due to their excessive greed as well.”
(via ZeroHedge)
The MOVE Index, Merrill Lynch's reading on bond market volatility, jumped 7.25%
today, rising 44% in the last five weeks as 10-year yields pile up 100 basis
points.
Based just on Kinect sales, Jefferies is raising Microsoft's holiday quarter
estimate 3 cents to $0.69/share.
Nic Lenoir: "my concern is not slow growth but civil war."
ZeroHedge: "That ICI has just confirmed the 32nd consecutive outflow from
domestic equity mutual funds is not surprising. After all, we have long been
saying that retail's love affair with stocks has gone straight to the bitter
divorce stage. That the amount of outflows was a massive $2.7 billion is a
little more surprising: after all last week was just $1.7 billion, and the
market really surged since then in its last ditch attempt to get the dumbest
money in. It failed (and total outflows year to date are not $96 billion: we
expect $100 billion through the end of the year). But what is truly surprising,
and what debunks every myth that investors are now rotating out of bonds and
into stocks, is that in the last week in addition to a surge in domestic
equity
outflows, for the first time in what seems forever, there was also an outflow
of $401 million in taxable bond funds (in addition to $1.3 billion in outflows
from muni bonds)."
Iran on Wednesday accused the United States, Britain and Israel of involving in
the deadly suicide bomb attack in the country which left 39 killed and more
than 50 others wounded.
Wal-Mart Stores Inc., the world’s largest retailer, raised prices on hundreds of
toys this month, squeezing more out of sales during the biggest shopping period
of the year. “In previous years Wal-Mart has come out and hammered everyone with
unbelievably low toy prices,” said Eric Johnson, director of the Center for
Digital Strategies at the Tuck School of Business at Dartmouth in Hanover, New
Hampshire. “They stepped away from that this year, and after Thanksgiving their
prices have crept back up.”
The price increases were due to temporary discounts on products, including toys,
that ended Nov. 30, Ravi Jariwala, a spokesman for Bentonville, Arkansas-based
Wal-Mart, said in an interview. He declined to elaborate on the message’s
reference to a successful financial month.
The U.S. current-account deficit widened to $127.2 billion in the third
quarter from $123.2 billion in the second quarter, the Commerce Department
reported Thursday. As a share of gross domestic product, the deficit increased
to 3.5% in the third quarter -- the largest share since the fourth quarter of
2008 -- from 3.4% in the second quarter. The overall deficit widened as the
deficit on goods hit $171.2 billion in the third quarter, compared with $169.6
billion in the second quarter. The current account is the broadest measure of
international flows of goods, services and capital in and out of the United
States. Net financial inflows rose to $181.6 billion in the third quarter from
$31 billion in the second quarter, with a pick up from foreign-owned assets in
the United States.
Construction of new U.S. homes rose 3.9% to a seasonally adjusted annualized
rate of 555,000 in November, the Commerce Department reported Thursday. The
November rate matched forecasts from analysts polled by MarketWatch. Housing
starts for October were revised higher to a rate of 534,000 from a prior
estimate of 519,000. Permits for new construction fell 4% to an annualized rate
of 530,000 in November, reaching the lowest level since April of 2009. With
persistent weakness in the housing market, homebuilders have been cautious.
First-time claims for state unemployment benefits fell unexpectedly in the
latest week, the Labor Department reported Thursday. The number of initial
claims in the week ending Dec. 11 fell 3,000 to 420,000. The consensus forecast
of Wall Street economists was for claims to inch higher. The four-week average
fell 5,250 to 422,750.Claims in the previous week were revised to a decrease of
15,000 to 423,000 compared with the initial estimate of a decline of 17,000 to
421,000. Meanwhile, the number of Americans receiving state jobless benefits
held steady rose 22,000 to 4.14 million in the week ending Dec. 4. The
four-week moving average of continuing claims fell 47,250 to 4.19 million.
European Union leaders will be warned on Thursday that a rolling debt crisis
poses a systemic threat to the euro zone as they seek to paper over divisions
at a summit on how to restore confidence.
European Commission President Jose Manuel Barroso will tell the 27 leaders
that the crisis requires new steps by the whole single currency area and specific
measures by member states such as Spain and Portugal to put their finances in
order.
"The current sovereign crisis has now become systemic in nature, and is driven
not only by budgetary fundamentals but also by the mispricing of credit risk by
investors and short-term herding behavior in the markets," Barroso will say,
according to speaking notes obtained by Reuters.
FedEx reported a quarterly profit and revenue that missed Wall Street
estimates, but raised its full-year outlook on stronger-than-expected holiday
volume and an improved economic forecast.
The Nation reports, “that the $700 billion Treasury Department bank
bailout…signed into law under President George W. Bush in 2008 was a small down
payment on an secretive ‘backdoor bailout’ that saw the Fed provide roughly
$3.3 trillion in liquidity and more than $9 trillion in short-term loans and
other financial arrangements.”
Foreclosures will surge to new highs in 2011, beating even the 1.2 million home
seizures expected for 2010 and the 900,000 recorded in 2009, RealtyTrac's Rick
Sharga has been telling reporters.
China may raise interest rates up to six times by the end of next year as
inflation becomes more entrenched in the economy, according to Mizuho Research
Institute Ltd. China’s central bank has relied on reserve-requirement ratios to
help control liquidity, and with levelsnear 20 percent there’s little room for
increases, said Takamoto Suzuki, a senior economist at the unit of Japan’s
third-largest bank. “A rate hike will be inevitable,” Tokyo-based Suzuki said.
“It wouldn’t be surprising if the central bank lifts interest rates by about
1.5 percentage points by the end of next year.”Consumer prices climbed 5.1
percent in November from a year earlier, the fastest since July 2008, the
statistics bureau said on Dec. 11. The People’s Bank of China this month
announced its sixth increase in reserve-requirement ratios, making major banks
to set aside 18.5 percent of deposits. The PBOC raised borrowing costs in
October for the first time since December 2007, increasing the one-year deposit
rate to 2.5 percent and the lending rate to 5.56 percent.
Iraqi authorities have obtained confessions from captured insurgents who claim
al Qaeda is planning suicide attacks in the U.S. and Europe during the
Christmas season, two senior Iraqi officials said Wednesday. A U.S. official
familiar with the matter confirmed the threat as credible. "People are looking
at this very closely," the U.S. official said. "We take it very seriously."
John Williams: "The various European crises remain an intermittent foil for the
U.S. dollar, pulling market attention away from the unfolding solvency crisis
in the United States and a likely move to massive selling against the U.S.
currency. Accordingly, high risk of the early stages of a hyperinflation
beginning to unfold by mid-2011 continues.
Rising inflation should become increasingly broad, reflecting an increasingly
serious problem in the first-half of 2011.”
The Philadelphia Fed's manufacturing survey unexpectedly improved in December,
climbing to 24.3 from 22.5 in November. Economists polled by MarketWatch
expected a drop to 17.5. "All of the broad indicators remained positive and
suggest an expansion of activity. Increases in input prices were more
widespread this month, and more firms reported increases in prices for their
manufactured goods," the Philly Fed said. "The survey's broad indicators of
future activity suggest that optimism among the region's manufacturing
executives also continues to improve." From 34 in November, the Price Paid index
surged to 51.2!
New building permits fell 4.0 percent to a 530,000-unit pace last month, the
lowest since April 2009, after a 0.9 percent increase in October. Permits were
dragged down by a 23 percent plunge in the volatile multi-family segment.
Permits for single-family homes rose 3 percent last month.
Analysts had expected overall building permits to rise to a 560,000-unit pace in
November.
Working natural gas in storage was 3,561 Bcf as of Friday, December 10, 2010,
according to EIA estimates. This represents a net decline of 164 Bcf from the
previous week. Stocks were 35 Bcf less than last year at this time and 321 Bcf
above the 5-year average of 3,240 Bcf. In the East Region, stocks were 60 Bcf
above the 5-year average following net withdrawals of 111 Bcf. Stocks in the
Producing Region were 237 Bcf above the 5-year average of 967 Bcf after a net
withdrawal of 42 Bcf. Stocks in the West Region were 25 Bcf above the 5-year
average after a net drawdown of 11 Bcf. At 3,561 Bcf, total working gas is
within the 5-year historical range. Analysts polled by Platts were looking for
a reduction of between 159 and 163 billion cubic feet for the week ended Dec.
10. Natural gas prices fell to a 4-week low. Some analysts are projecting a
milder winter. That was not the case a year ago.
2-year Treasury yield rises to 0.68%.
Cotton surged the exchange limit in New York.
Albert Edwards:"I’ve been doing this job long enough to recognise when the
markets are entering a new phase of madness that leaves me scratching my head
with bemusement. The notion that we are in a sustainable economic recovery is
as ludicrous as it was in 2005-2007. But investors are back on the dance floor,
waltzing their way towards the next, inevitable implosion – yet another they
will no doubt claim in retrospect was totally unpredictable!"
President Barack Obama has signed into law legislation that delays for one year
a cut in Medicare pay to doctors.
The 25 percent reduction in physician payments had been scheduled to kick in
Jan. 1, potentially disrupting care for the nation's seniors.
Delaying the cut will cost the government an estimated $19 billion.
The money will be shifted from the health care overhaul law, mostly by
tightening rules on tax credits intended to prevent waste.
Shanky's Technical Analysis: "The charts look nasty. If the Fed can be
distracted by the bond markets and the EU bailouts there are not enough funds
to save all. They can't print it fast enough and the Ponzi will finally die.
All of this is happening now. I have come to the conclusion that there is a
good chance that the top is set. At this time we have to consider the only two
scenarios left - top is set or there is one more pop left in their arsenal.
Those waiting on a failed treasury auction to mark the top will be too late.
That will be the final shot to destroy the Fed and treasury's Ponzi economic
system."
The Dow Jones Industrial Average ended up 41.78 points, or 0.4%, at 11,499.25. The S&P 500 closed up 7.64 points, or 0.6%, at 1,242.87, led by industrial stocks. The Nasdaq Composite gained 20.09 points, or 0.8%, to 2,637.31.
Wednesday, December 15, 2010
David Stockman
12/15/10 David Stockman
Conditions for New York manufacturers improved in December after a rough
November, according to survey released by the New York Fed on Wednesday. The
Empire State manufacturing survey for December rose 22 points to +10.6 after a
negative reading in November. Economists polled by MarketWatch had expected a
+3 reading. The new orders and shipments subcomponents returned to positive
territory, while the unfilled orders index remained negative. The inventories
index also was negative, indicating they declined during the month, the New
York Fed said.
The consumer price index ticked up 0.1% in November, as prices for food and
energy gained, the Labor Department reported Wednesday. Food prices rose 0.2%.
Energy prices also gained 0.2% in November, the smallest change since June. Led
by increases for shelter and airline fares, the core CPI, which excludes food
and energy costs, rose 0.1%, for its first gain since July. Economists polled
by MarketWatch had expected the overall and core gauges of inflation to each
rise 0.1%. In the past year, the overall CPI has increased 1.1%, below the
Federal Reserve's target of about 1.6% to 2%. Meanwhile, the core gauge has
gained 0.8% over the past year. On Tuesday, Federal Reserve reiterated concerns
that "measures of underlying inflation are somewhat low." In October, the
overall CPI rose 0.2%, while core prices were unchanged. fuel oil was up 11.1
percent year-on-year.
World markets drop after Moody's says it might downgrade Spain's credit rating.
Yesterday it was Belgium.
Nov. Real Earnings: -0.1% for real average hourly earnings M/M, +0.6% Y/Y. Real
avg. weekly earnings -0.1% M/M, +1.7% Y/Y. Avg. workweek unchanged.
Applications for U.S. home mortgages declined last week as home loan interest
rates rose for a fifth consecutive week, to seven month highs, an industry
group said on Wednesday.
Power provider Dynegy Inc. has accepted a buyout offer from investor Carl Icahn
that values the company at about $665 million.
Confidence among Japan’s largest manufacturers worsened for the first time
since the end of the financial crisis last year as a stronger yen eroded export
gains and the effect of government stimulus measures faded. The quarterly
Tankan index of sentiment at large manufacturers dropped to 5 in December from 8
in September, the Bank of Japan said in Tokyo.
U.S. retail gasoline demand fell 2.7 percent last week as prices rose to their
highest level this year, MasterCard Advisors' SpendingPulse report showed on
Tuesday.
David Stockman: ""We have had a Fed engineered serial bubble, that has created
the appearance of wealth, that has caused people to consume beyond their means
through borrowing, and that has flushed the income and wealth of our society up
to the top, as a result of the Fed turning the financial markets into a casino.
These are pure casinos, they are not capital markets, they are not adding to
the productive capacity of our economy, they simply are a bunch of robots
trading with each other by the millisecond as a result of the Fed giving them
zero cost overnight money, and giving them all kinds of hand signals on what to
front-run. The Fed is destroying prosperity by funding demand that we can't
support with earnings and productions, causing massive current accounts
deficits and the flow of funds overseas and the build up in China, OPEC and
Korea of massive dollar reserves which is a totally unsustainable,
unsupportable system, and we are coming near the edge of where that can
continue to remain stable."
Crude-oil futures turned higher Wednesday after the Energy Information
Administration showed a surprise drop in U.S. crude-oil inventories last week.
The EIA said stockpiles fell 9.9 million barrels for the week ended Dec. 10.
Analysts polled by Dow Jones Newswires were expecting a decline of 2.7 million
barrels, and the American Petroleum Institute late Tuesday had also reported a
more modest drop, of 1.4 million barrels. The EIA said gasoline inventories
rose 800,000 barrels versus forecasts of an increase of 1.9 million barrels.
And distillate inventories increased 1.1 million barrels, countering
expectations for a 200,000 barrel-drop. A steeper drop in inventories suggests
more demand. Oil for January delivery rose 61 cents to $88.90 a barrel.
Industrial output rose 0.4 percent in November, its biggest gain since July and
the latest sign of a firmer end to the year for the world's largest economy, a
report showed on Wednesday.
The increase was above a median forecast of 0.3 percent in a Reuters poll, and
followed a downward revision of October's reading from flat to a drop of 0.2
percent.
Output rose 5.4 percent compared to one year earlier, according to the Federal
Reserve data. A spike in utilities partly offset a sharp 6.0 percent decline in
the production of motor vehicles and parts.
Capacity use, a measure of how fully firms are using their resources, rose to
75.2 in November from a revised 74.9 in October, but remained substantially
below its long term average.
Novartis AG wrapped up its long-awaited buyout of the remainder of U.S.-listed
eyecare group Alcon Inc for $12.9 billion, after sweetening its original offer
with cash.
The Swiss drugmaker is hoping the Alcon deal, worth some $52 billion in total,
will help it diversify and give it protection against patent losses on
big-selling medicines such as blood pressure drug Diovan.
Novartis has been trying to clinch 100 percent ownership of Alcon since the
start of the year, but its original all-paper offer of 2.8 shares for each
Alcon share met stiff resistance from Alcon's Independent Director Committee
(IDC), which repeatedly dismissed it as "grossly inadequate."
The merger consideration will now include up to 2.8 Novartis shares and will be
topped up, if necessary, with cash to ensure Alcon shareholders receive $168
per share, the average price Novartis paid earlier this year for Nestle's 77
percent stake in Alcon.
About 52 percent of U.S. households use natural gas for heating, according to
the Energy Department.
The Energy Department may report tomorrow that 164 billion cubic feet of gas
were withdrawn from storage in the week ended Dec. 10, above the five-year
average of 153 billion, according to the median of 14 analyst estimates
compiled by Bloomberg.
U.S. gas stockpiles totaled 3.725 trillion cubic feet in the week ended Dec. 3,
9.8 percent above the five-year average for that week and 1.5 percent below the
year-earlier level.
2-year Treasury yield at 0.65%, the 10-year at 3.52% and the 30-year at 4.59%.
Mortgage expert Mark Hanson:"In order to sell and re-buy, a homeowner must
receive enough proceeds from the sale to 1) pay off the mortgage(s), 2) pay a
Realtor 5-6 percent and 3) put a 3.5-20 percent down payment on a new vintage
loan," begins Hanson, and those alone may be too financially off-putting in
today's economy for many potential buyers.
"Effective negative-equity is the big weight on housing that has no easy or
quick cure," continues Hanson.
The Dow closes down 19, the Nasdaq down 10, and the S&P down 6 points.
Gold got clipped for $21.
Twitter Inc. said Wednesday that it has raised a new round of funding, led by venture capital firm Kleiner Perkins Caufield & Byers. Twitter did not disclose the size of the funding round, though the AllThingsD blog reported that it was $200 million, valuing the firm at $3.7 billion. As part of the funding round, Twitter said it has added two new board members: Flipboard CEO Mike McCue and former Google Inc. executive David Rosenblatt. The company said it now employs more than 350 people, and that it has added over 100 million new registered accounts in the past year.
Conditions for New York manufacturers improved in December after a rough
November, according to survey released by the New York Fed on Wednesday. The
Empire State manufacturing survey for December rose 22 points to +10.6 after a
negative reading in November. Economists polled by MarketWatch had expected a
+3 reading. The new orders and shipments subcomponents returned to positive
territory, while the unfilled orders index remained negative. The inventories
index also was negative, indicating they declined during the month, the New
York Fed said.
The consumer price index ticked up 0.1% in November, as prices for food and
energy gained, the Labor Department reported Wednesday. Food prices rose 0.2%.
Energy prices also gained 0.2% in November, the smallest change since June. Led
by increases for shelter and airline fares, the core CPI, which excludes food
and energy costs, rose 0.1%, for its first gain since July. Economists polled
by MarketWatch had expected the overall and core gauges of inflation to each
rise 0.1%. In the past year, the overall CPI has increased 1.1%, below the
Federal Reserve's target of about 1.6% to 2%. Meanwhile, the core gauge has
gained 0.8% over the past year. On Tuesday, Federal Reserve reiterated concerns
that "measures of underlying inflation are somewhat low." In October, the
overall CPI rose 0.2%, while core prices were unchanged. fuel oil was up 11.1
percent year-on-year.
World markets drop after Moody's says it might downgrade Spain's credit rating.
Yesterday it was Belgium.
Nov. Real Earnings: -0.1% for real average hourly earnings M/M, +0.6% Y/Y. Real
avg. weekly earnings -0.1% M/M, +1.7% Y/Y. Avg. workweek unchanged.
Applications for U.S. home mortgages declined last week as home loan interest
rates rose for a fifth consecutive week, to seven month highs, an industry
group said on Wednesday.
Power provider Dynegy Inc. has accepted a buyout offer from investor Carl Icahn
that values the company at about $665 million.
Confidence among Japan’s largest manufacturers worsened for the first time
since the end of the financial crisis last year as a stronger yen eroded export
gains and the effect of government stimulus measures faded. The quarterly
Tankan index of sentiment at large manufacturers dropped to 5 in December from 8
in September, the Bank of Japan said in Tokyo.
U.S. retail gasoline demand fell 2.7 percent last week as prices rose to their
highest level this year, MasterCard Advisors' SpendingPulse report showed on
Tuesday.
David Stockman: ""We have had a Fed engineered serial bubble, that has created
the appearance of wealth, that has caused people to consume beyond their means
through borrowing, and that has flushed the income and wealth of our society up
to the top, as a result of the Fed turning the financial markets into a casino.
These are pure casinos, they are not capital markets, they are not adding to
the productive capacity of our economy, they simply are a bunch of robots
trading with each other by the millisecond as a result of the Fed giving them
zero cost overnight money, and giving them all kinds of hand signals on what to
front-run. The Fed is destroying prosperity by funding demand that we can't
support with earnings and productions, causing massive current accounts
deficits and the flow of funds overseas and the build up in China, OPEC and
Korea of massive dollar reserves which is a totally unsustainable,
unsupportable system, and we are coming near the edge of where that can
continue to remain stable."
Crude-oil futures turned higher Wednesday after the Energy Information
Administration showed a surprise drop in U.S. crude-oil inventories last week.
The EIA said stockpiles fell 9.9 million barrels for the week ended Dec. 10.
Analysts polled by Dow Jones Newswires were expecting a decline of 2.7 million
barrels, and the American Petroleum Institute late Tuesday had also reported a
more modest drop, of 1.4 million barrels. The EIA said gasoline inventories
rose 800,000 barrels versus forecasts of an increase of 1.9 million barrels.
And distillate inventories increased 1.1 million barrels, countering
expectations for a 200,000 barrel-drop. A steeper drop in inventories suggests
more demand. Oil for January delivery rose 61 cents to $88.90 a barrel.
Industrial output rose 0.4 percent in November, its biggest gain since July and
the latest sign of a firmer end to the year for the world's largest economy, a
report showed on Wednesday.
The increase was above a median forecast of 0.3 percent in a Reuters poll, and
followed a downward revision of October's reading from flat to a drop of 0.2
percent.
Output rose 5.4 percent compared to one year earlier, according to the Federal
Reserve data. A spike in utilities partly offset a sharp 6.0 percent decline in
the production of motor vehicles and parts.
Capacity use, a measure of how fully firms are using their resources, rose to
75.2 in November from a revised 74.9 in October, but remained substantially
below its long term average.
Novartis AG wrapped up its long-awaited buyout of the remainder of U.S.-listed
eyecare group Alcon Inc for $12.9 billion, after sweetening its original offer
with cash.
The Swiss drugmaker is hoping the Alcon deal, worth some $52 billion in total,
will help it diversify and give it protection against patent losses on
big-selling medicines such as blood pressure drug Diovan.
Novartis has been trying to clinch 100 percent ownership of Alcon since the
start of the year, but its original all-paper offer of 2.8 shares for each
Alcon share met stiff resistance from Alcon's Independent Director Committee
(IDC), which repeatedly dismissed it as "grossly inadequate."
The merger consideration will now include up to 2.8 Novartis shares and will be
topped up, if necessary, with cash to ensure Alcon shareholders receive $168
per share, the average price Novartis paid earlier this year for Nestle's 77
percent stake in Alcon.
About 52 percent of U.S. households use natural gas for heating, according to
the Energy Department.
The Energy Department may report tomorrow that 164 billion cubic feet of gas
were withdrawn from storage in the week ended Dec. 10, above the five-year
average of 153 billion, according to the median of 14 analyst estimates
compiled by Bloomberg.
U.S. gas stockpiles totaled 3.725 trillion cubic feet in the week ended Dec. 3,
9.8 percent above the five-year average for that week and 1.5 percent below the
year-earlier level.
2-year Treasury yield at 0.65%, the 10-year at 3.52% and the 30-year at 4.59%.
Mortgage expert Mark Hanson:"In order to sell and re-buy, a homeowner must
receive enough proceeds from the sale to 1) pay off the mortgage(s), 2) pay a
Realtor 5-6 percent and 3) put a 3.5-20 percent down payment on a new vintage
loan," begins Hanson, and those alone may be too financially off-putting in
today's economy for many potential buyers.
"Effective negative-equity is the big weight on housing that has no easy or
quick cure," continues Hanson.
The Dow closes down 19, the Nasdaq down 10, and the S&P down 6 points.
Gold got clipped for $21.
Twitter Inc. said Wednesday that it has raised a new round of funding, led by venture capital firm Kleiner Perkins Caufield & Byers. Twitter did not disclose the size of the funding round, though the AllThingsD blog reported that it was $200 million, valuing the firm at $3.7 billion. As part of the funding round, Twitter said it has added two new board members: Flipboard CEO Mike McCue and former Google Inc. executive David Rosenblatt. The company said it now employs more than 350 people, and that it has added over 100 million new registered accounts in the past year.
Tuesday, December 14, 2010
Treasuries
12/14/10 Treasuries
Amgen announced pivotal Phase 3 '147 study meets primary endpoint; XGEVA
(Denosumab) Significantly Improved Bone Metastasis-Free Survival in Men With
Prostate Cancer Co announced top-line results from a Phase 3 trial evaluating
XGEVA (denosumab) versus placebo in 1,432 men with castrate-resistant prostate
cancer. The trial, known as the '147 study, demonstrated that XGEVA
significantly improved median bone metastasis-free survival by 4.2 months
(HR=0.85, 95 percent CI 0.73-0.98, p=0.03) compared to placebo (primary
endpoint), and significantly improved time to first occurrence of bone
metastases (secondary endpoint). Overall survival was similar between the XGEVA
and placebo groups (secondary endpoint).
Thermo Fisher Scientific, the maker of laboratory and diagnostic equipment, said
on Monday that it had agreed to buy Dionex for $2.1 billion in cash.
Dionex, based in Sunnyvale, Calif., makes ion chromatography systems, which
analyze water for inorganic compounds. They are used for medical research,
environmental services and by water companies. It has more more than 1,600
employees in 21 countries.
Under the terms of the agreement, Thermo Fisher will commence a tender offer to
acquire all of the outstanding shares of Dionex for $118.50 a share in cash.
That is 21 percent above Dionex’s closing share price on Friday and 32 percent
above its average closing share price over the last 60 trading days.
According to Bloomberg, China's government this weekend set a goal this week to
expand the money supply by 16% next year while at the same time reducing
inflation to 4% and maintaining GDP growth in the 8% range.
U.S. retail sales rose in November for the fifth straight month as consumers
spent more money on gas, clothes, hobby items and online goods. Retail sales
expanded last month by 0.8% overall, or by 1.2% excluding the volatile
automotive sector, the Commerce Department reported Tuesday. Economists
surveyed by MarketWatch had forecast total sales to rise by 0.6%, or by 0.7%
minus the automotive segment. Auto sales often swing sharply from month to
month and can mask underlying retail trends. Retail sales in October,
meanwhile, were revised up to 1.7% from an original reading of 1.2%. And
September retail sales were revised up to 0.9% from 0.7%. Over the past three
months retail sales have risen at a 7.8% annual pace.
Led higher by energy goods, U.S. producer prices rose a seasonally adjusted
0.8% in November, the biggest gain since March, the Labor Department reported
Tuesday. Prices for finished energy goods rose 2.1%, as gasoline prices gained
4.7%. Meanwhile, food prices rose 1% in November, as prices for fresh fruits
and melons gained 13.6%. Over the past year, overall producer prices are up
3.5%. Core producer prices, which exclude volatile food and energy costs, rose
0.3% in November, the largest gain since July, as prices for passenger cars
rebounded from the prior month. Over the past year, core prices are up 1.2%.
For November, economists surveyed by MarketWatch had expected overall producer
prices to rise 0.7%, and for the core to gain 0.3%. In October, overall
producer prices rose 0.4%, while the core fell 0.6%. The government also
reported that prices for intermediate goods rose 1.1% in November, while prices
for crude goods gained 0.6%.
Best Buy Co. said Tuesday that its fiscal third-quarter profit fell to $217
million, or 54 cents a share, from $227 million, or 53 cents, a year earlier.
Sales in the quarter ended Nov. 27 dropped to $11.9 billion from $12.02
billion. Analysts, on average, estimated Best Buy to earn 60 cents a share on
sales of $12.5 billion, according to FactSet. The company forecast profit for
the year to be $3.20 to $3.40 a share, below its previous forecast range.
Analysts surveyed by FactSet estimated profit of $3.58 a share. Best Buy shares
fell 10% in premarket trading. Q3 comp sales down 3.3%; domestic Q3 comp sales
down 5.0%. Online sales declined to year-over-year growth of 7 percent, down
from 15 percent in the second quarter and 21 percent in the first quarter.
Yahoo Inc plans to lay off more than 600 employees as early as Tuesday, two
sources familiar with the situation said on Monday.
Sorcha Faal: "A new report circulating in the Kremlin today prepared for
President Medvedev by Russian Space Forces (VKS) 45th Division of Space Control
says that an upcoming WikiLeaks release of secret US cables details that the
Americans have been “engaged” since 2004 in a “war” against UFO’s based on or
near the Continent of Antarctica, particularly the Southern Ocean.
According to this report, the United States went to its highest alert level on
June 10, 2004 after a massive fleet of UFO’s [photo 2nd left, click for video
here] “suddenly emerged” from the Southern Ocean and approached Guadalajara,
Mexico barely 1,600 kilometers (1,000 miles) from the American border. Prior to
reaching the US border, however, this massive UFO fleet is said in this report
to have “dimensionally returned” to their Southern Ocean “home base”.
The fears of the Americans regarding these Southern Ocean UFO’s began, this
report says, during the unprecedented events of July 11, 1991 (referred to as
7/11) when during the Solar Eclipse these mysterious aircraft appeared by the
hundreds over nearly all of Mexico, even their Capital city. Most notable about
the events of 7/11 were that as millions of Mexicans were watching on their
televisions the National broadcasts [click for video here] of these UFO’s over
Mexico City, the American media refused to allow their people to view it.
Since 2004, this report continues, fleets of Southern Ocean UFO’s have continued
to emerge from their bases, with the latest such event being this Friday past
when another of their massive fleets was sighted over the South American Nation
of Chile."
Japan's government announced it would cut the country's hefty corporate tax
rate by 5 percentage points, in a bid to stimulate the economy and help
Japanese businesses stay competitive.
The step announced late Monday is aimed at promoting investment, employment
and
salary increases at home so that Japan can exit deflation, Prime Minister Naoto
Kan said.
“If you were looking at buying a house a few weeks ago, the same house, to you,
looks as much as 9 percent more expensive,” he said. The effects of higher
mortgage rates, along with climbing gasolineprices, will offset much of the tax
package’s intended stimulative effects, according to Gluskin Sheff & Associates
Chief Economist David Rosenberg. The average rateon a typical 30-year
fixed-rate mortgage has climbed for four weeks, to an average of 4.61 percent
last week, according to Freddie Mac, pushing the monthly cost of a $300,000
loan to $1,540, from $1,462.
The Baltic Dry Index, a measure of commodity-shipping costs, fell to the lowest
level in more than four months on a surplus of ships. The index declined 19
points, or 0.9 percent, to 2,076 today, according to data from the Baltic
Exchange in London. That’s the lowest since Aug. 6.
iBankCoin: "Although the major indices are making new 52 week highs on a daily
basis, they are doing so in a very nonchalant way, dribbling higher. The areas
of the market where the “hot money” is welcomed with arms wide open are growing
smaller. While many traders may perceive the above analysis as an invitation to
get aggressively short, I contend that strategy is flawed. Just because the
indices have gone much higher in a relatively short amount of time, it does not
necessarily mean that they will give most or all of it back. Thus, I am not
convinced that the risk/reward profile is conducive for net shorts for anything
more than a one or two day trade, if that.
In addition, the marquee names are still basing out (some have been doing so
for seven weeks) with tight price candles and without heavy selling volume.
These include: $AAPL $AMZN $BIDU $GOOG $PCLN. Although the consolidations in
those stocks have been of the bullish variety, they still need to be monitored
closely to see in which direction they eventually break.
In sum, a little skepticism about whether Santa Claus is coming this year could
go a long way, literally and figuratively."
On Dec. 16, 100K Facebook shares will go on sale at website SharesPost with a
minimum bid of $23/share, says a source. The auction is open only to accredited
investors worth more than $1M.
Global investor sentiment continues to improve, according to a survey released
Tuesday by Bank of America Merrill Lynch. A net 44% of respondents think the
world's economy will strengthen in 2011, up from 35% the previous month. The
study also found that a net 16% of fund managers surveyed are overweight U.S.
stocks, up from a net 1% in November. A net 36% said they expect the dollar to
appreciate next year, up from a net 14% who thought so in November. The survey
of 209 fund managers also found that energy is the favorite sector, displacing
technology, which had been the favorite for the previous 11 months.
Copper fluctuated near a 31-month high in New York and a record in London amid
renewed investor concerns about cooling measures in China and as the Federal
Reserve prepares to discuss interest rates and bond purchases.
Cotton futures in New York soared by the daily limit for a second day, advancing
to a one-month high after a government report estimated U.S. inventories will
drop to a 14-year low.
Shares of HCP Inc. rose Tuesday after the real-estate investment trust said it
has agreed to buy all of the real-estate assets of nursing-home operator HCR
ManorCare Inc. in a transaction valued at $6.1 billion.
Inventories at U.S. businesses rose 0.7% in October, below expectations and
slower than the 1.4% increase in sales, the Commerce Department said Tuesday.
The inventory-to-sales ratio, an indication of demand, slipped to 1.27 in
October from 1.28 in September. Economists had been expecting the nation's
inventories to rise 0.8% in October. One new piece of information was retail
inventories, which fell 0.6% in October compared with a 1.8% increase in sales.
The inventory-to-sales ratio in retail fell to 1.35 in October from 1.38 in
September. It was at 1.38 a year ago. Inventories in September were revised up
to a 1.3% gain from the previous estimate of a 0.9% increase. This could lift
GDP estimates for the July-September quarter higher than the current estimate
of a 2.5% gain.
30-year Treasury yield at 4.55% and the 10-year at 3.46%, both 7-month high yields. Mortgage rates are
moving higher.
The Federal Reserve Tuesday left its key interest rate and the size of its bond purchase program unchanged, as widely expected. The central bank's rate-setting Open Market Committee maintained the target range for the federal funds rate at its all-time low range of 0 to 0.25%, where it has stood since December 2008. It kept its bond purchase program, nicknamed QE2, at $600 billion. In its statement, the Fed said that the economy recovery is continuing "though at a rate that has been insufficient to bring down unemployment." Thomas Hoenig, the president of the Kansas City Fed, dissented again, warning that the large stimulus could cause inflation expectations to rise and choke off a recovery.
The Justice Department on Wednesday is expected to seek to join civil lawsuits resulting from the Gulf of Mexico oil spill, the first major federal legal action in the probe of the disaster, according to people familiar with the matter.
Dozens of private-party lawsuits have been consolidated in so-called multidistrict litigation in federal court in New Orleans, representing claims against BP PLC and its contractors for damages from the worst oil spill in U.S. history.
Dow closes up 48 points, Nasdaq up 2 points, and the S&P 500 plus 1 point.
Amgen announced pivotal Phase 3 '147 study meets primary endpoint; XGEVA
(Denosumab) Significantly Improved Bone Metastasis-Free Survival in Men With
Prostate Cancer Co announced top-line results from a Phase 3 trial evaluating
XGEVA (denosumab) versus placebo in 1,432 men with castrate-resistant prostate
cancer. The trial, known as the '147 study, demonstrated that XGEVA
significantly improved median bone metastasis-free survival by 4.2 months
(HR=0.85, 95 percent CI 0.73-0.98, p=0.03) compared to placebo (primary
endpoint), and significantly improved time to first occurrence of bone
metastases (secondary endpoint). Overall survival was similar between the XGEVA
and placebo groups (secondary endpoint).
Thermo Fisher Scientific, the maker of laboratory and diagnostic equipment, said
on Monday that it had agreed to buy Dionex for $2.1 billion in cash.
Dionex, based in Sunnyvale, Calif., makes ion chromatography systems, which
analyze water for inorganic compounds. They are used for medical research,
environmental services and by water companies. It has more more than 1,600
employees in 21 countries.
Under the terms of the agreement, Thermo Fisher will commence a tender offer to
acquire all of the outstanding shares of Dionex for $118.50 a share in cash.
That is 21 percent above Dionex’s closing share price on Friday and 32 percent
above its average closing share price over the last 60 trading days.
According to Bloomberg, China's government this weekend set a goal this week to
expand the money supply by 16% next year while at the same time reducing
inflation to 4% and maintaining GDP growth in the 8% range.
U.S. retail sales rose in November for the fifth straight month as consumers
spent more money on gas, clothes, hobby items and online goods. Retail sales
expanded last month by 0.8% overall, or by 1.2% excluding the volatile
automotive sector, the Commerce Department reported Tuesday. Economists
surveyed by MarketWatch had forecast total sales to rise by 0.6%, or by 0.7%
minus the automotive segment. Auto sales often swing sharply from month to
month and can mask underlying retail trends. Retail sales in October,
meanwhile, were revised up to 1.7% from an original reading of 1.2%. And
September retail sales were revised up to 0.9% from 0.7%. Over the past three
months retail sales have risen at a 7.8% annual pace.
Led higher by energy goods, U.S. producer prices rose a seasonally adjusted
0.8% in November, the biggest gain since March, the Labor Department reported
Tuesday. Prices for finished energy goods rose 2.1%, as gasoline prices gained
4.7%. Meanwhile, food prices rose 1% in November, as prices for fresh fruits
and melons gained 13.6%. Over the past year, overall producer prices are up
3.5%. Core producer prices, which exclude volatile food and energy costs, rose
0.3% in November, the largest gain since July, as prices for passenger cars
rebounded from the prior month. Over the past year, core prices are up 1.2%.
For November, economists surveyed by MarketWatch had expected overall producer
prices to rise 0.7%, and for the core to gain 0.3%. In October, overall
producer prices rose 0.4%, while the core fell 0.6%. The government also
reported that prices for intermediate goods rose 1.1% in November, while prices
for crude goods gained 0.6%.
Best Buy Co. said Tuesday that its fiscal third-quarter profit fell to $217
million, or 54 cents a share, from $227 million, or 53 cents, a year earlier.
Sales in the quarter ended Nov. 27 dropped to $11.9 billion from $12.02
billion. Analysts, on average, estimated Best Buy to earn 60 cents a share on
sales of $12.5 billion, according to FactSet. The company forecast profit for
the year to be $3.20 to $3.40 a share, below its previous forecast range.
Analysts surveyed by FactSet estimated profit of $3.58 a share. Best Buy shares
fell 10% in premarket trading. Q3 comp sales down 3.3%; domestic Q3 comp sales
down 5.0%. Online sales declined to year-over-year growth of 7 percent, down
from 15 percent in the second quarter and 21 percent in the first quarter.
Yahoo Inc plans to lay off more than 600 employees as early as Tuesday, two
sources familiar with the situation said on Monday.
Sorcha Faal: "A new report circulating in the Kremlin today prepared for
President Medvedev by Russian Space Forces (VKS) 45th Division of Space Control
says that an upcoming WikiLeaks release of secret US cables details that the
Americans have been “engaged” since 2004 in a “war” against UFO’s based on or
near the Continent of Antarctica, particularly the Southern Ocean.
According to this report, the United States went to its highest alert level on
June 10, 2004 after a massive fleet of UFO’s [photo 2nd left, click for video
here] “suddenly emerged” from the Southern Ocean and approached Guadalajara,
Mexico barely 1,600 kilometers (1,000 miles) from the American border. Prior to
reaching the US border, however, this massive UFO fleet is said in this report
to have “dimensionally returned” to their Southern Ocean “home base”.
The fears of the Americans regarding these Southern Ocean UFO’s began, this
report says, during the unprecedented events of July 11, 1991 (referred to as
7/11) when during the Solar Eclipse these mysterious aircraft appeared by the
hundreds over nearly all of Mexico, even their Capital city. Most notable about
the events of 7/11 were that as millions of Mexicans were watching on their
televisions the National broadcasts [click for video here] of these UFO’s over
Mexico City, the American media refused to allow their people to view it.
Since 2004, this report continues, fleets of Southern Ocean UFO’s have continued
to emerge from their bases, with the latest such event being this Friday past
when another of their massive fleets was sighted over the South American Nation
of Chile."
Japan's government announced it would cut the country's hefty corporate tax
rate by 5 percentage points, in a bid to stimulate the economy and help
Japanese businesses stay competitive.
The step announced late Monday is aimed at promoting investment, employment
and
salary increases at home so that Japan can exit deflation, Prime Minister Naoto
Kan said.
“If you were looking at buying a house a few weeks ago, the same house, to you,
looks as much as 9 percent more expensive,” he said. The effects of higher
mortgage rates, along with climbing gasolineprices, will offset much of the tax
package’s intended stimulative effects, according to Gluskin Sheff & Associates
Chief Economist David Rosenberg. The average rateon a typical 30-year
fixed-rate mortgage has climbed for four weeks, to an average of 4.61 percent
last week, according to Freddie Mac, pushing the monthly cost of a $300,000
loan to $1,540, from $1,462.
The Baltic Dry Index, a measure of commodity-shipping costs, fell to the lowest
level in more than four months on a surplus of ships. The index declined 19
points, or 0.9 percent, to 2,076 today, according to data from the Baltic
Exchange in London. That’s the lowest since Aug. 6.
iBankCoin: "Although the major indices are making new 52 week highs on a daily
basis, they are doing so in a very nonchalant way, dribbling higher. The areas
of the market where the “hot money” is welcomed with arms wide open are growing
smaller. While many traders may perceive the above analysis as an invitation to
get aggressively short, I contend that strategy is flawed. Just because the
indices have gone much higher in a relatively short amount of time, it does not
necessarily mean that they will give most or all of it back. Thus, I am not
convinced that the risk/reward profile is conducive for net shorts for anything
more than a one or two day trade, if that.
In addition, the marquee names are still basing out (some have been doing so
for seven weeks) with tight price candles and without heavy selling volume.
These include: $AAPL $AMZN $BIDU $GOOG $PCLN. Although the consolidations in
those stocks have been of the bullish variety, they still need to be monitored
closely to see in which direction they eventually break.
In sum, a little skepticism about whether Santa Claus is coming this year could
go a long way, literally and figuratively."
On Dec. 16, 100K Facebook shares will go on sale at website SharesPost with a
minimum bid of $23/share, says a source. The auction is open only to accredited
investors worth more than $1M.
Global investor sentiment continues to improve, according to a survey released
Tuesday by Bank of America Merrill Lynch. A net 44% of respondents think the
world's economy will strengthen in 2011, up from 35% the previous month. The
study also found that a net 16% of fund managers surveyed are overweight U.S.
stocks, up from a net 1% in November. A net 36% said they expect the dollar to
appreciate next year, up from a net 14% who thought so in November. The survey
of 209 fund managers also found that energy is the favorite sector, displacing
technology, which had been the favorite for the previous 11 months.
Copper fluctuated near a 31-month high in New York and a record in London amid
renewed investor concerns about cooling measures in China and as the Federal
Reserve prepares to discuss interest rates and bond purchases.
Cotton futures in New York soared by the daily limit for a second day, advancing
to a one-month high after a government report estimated U.S. inventories will
drop to a 14-year low.
Shares of HCP Inc. rose Tuesday after the real-estate investment trust said it
has agreed to buy all of the real-estate assets of nursing-home operator HCR
ManorCare Inc. in a transaction valued at $6.1 billion.
Inventories at U.S. businesses rose 0.7% in October, below expectations and
slower than the 1.4% increase in sales, the Commerce Department said Tuesday.
The inventory-to-sales ratio, an indication of demand, slipped to 1.27 in
October from 1.28 in September. Economists had been expecting the nation's
inventories to rise 0.8% in October. One new piece of information was retail
inventories, which fell 0.6% in October compared with a 1.8% increase in sales.
The inventory-to-sales ratio in retail fell to 1.35 in October from 1.38 in
September. It was at 1.38 a year ago. Inventories in September were revised up
to a 1.3% gain from the previous estimate of a 0.9% increase. This could lift
GDP estimates for the July-September quarter higher than the current estimate
of a 2.5% gain.
30-year Treasury yield at 4.55% and the 10-year at 3.46%, both 7-month high yields. Mortgage rates are
moving higher.
The Federal Reserve Tuesday left its key interest rate and the size of its bond purchase program unchanged, as widely expected. The central bank's rate-setting Open Market Committee maintained the target range for the federal funds rate at its all-time low range of 0 to 0.25%, where it has stood since December 2008. It kept its bond purchase program, nicknamed QE2, at $600 billion. In its statement, the Fed said that the economy recovery is continuing "though at a rate that has been insufficient to bring down unemployment." Thomas Hoenig, the president of the Kansas City Fed, dissented again, warning that the large stimulus could cause inflation expectations to rise and choke off a recovery.
The Justice Department on Wednesday is expected to seek to join civil lawsuits resulting from the Gulf of Mexico oil spill, the first major federal legal action in the probe of the disaster, according to people familiar with the matter.
Dozens of private-party lawsuits have been consolidated in so-called multidistrict litigation in federal court in New Orleans, representing claims against BP PLC and its contractors for damages from the worst oil spill in U.S. history.
Dow closes up 48 points, Nasdaq up 2 points, and the S&P 500 plus 1 point.
Treasuries
12/14/10 Treasuries
Amgen announced pivotal Phase 3 '147 study meets primary endpoint; XGEVA
(Denosumab) Significantly Improved Bone Metastasis-Free Survival in Men With
Prostate Cancer Co announced top-line results from a Phase 3 trial evaluating
XGEVA (denosumab) versus placebo in 1,432 men with castrate-resistant prostate
cancer. The trial, known as the '147 study, demonstrated that XGEVA
significantly improved median bone metastasis-free survival by 4.2 months
(HR=0.85, 95 percent CI 0.73-0.98, p=0.03) compared to placebo (primary
endpoint), and significantly improved time to first occurrence of bone
metastases (secondary endpoint). Overall survival was similar between the XGEVA
and placebo groups (secondary endpoint).
Thermo Fisher Scientific, the maker of laboratory and diagnostic equipment, said
on Monday that it had agreed to buy Dionex for $2.1 billion in cash.
Dionex, based in Sunnyvale, Calif., makes ion chromatography systems, which
analyze water for inorganic compounds. They are used for medical research,
environmental services and by water companies. It has more more than 1,600
employees in 21 countries.
Under the terms of the agreement, Thermo Fisher will commence a tender offer to
acquire all of the outstanding shares of Dionex for $118.50 a share in cash.
That is 21 percent above Dionex’s closing share price on Friday and 32 percent
above its average closing share price over the last 60 trading days.
According to Bloomberg, China's government this weekend set a goal this week to
expand the money supply by 16% next year while at the same time reducing
inflation to 4% and maintaining GDP growth in the 8% range.
U.S. retail sales rose in November for the fifth straight month as consumers
spent more money on gas, clothes, hobby items and online goods. Retail sales
expanded last month by 0.8% overall, or by 1.2% excluding the volatile
automotive sector, the Commerce Department reported Tuesday. Economists
surveyed by MarketWatch had forecast total sales to rise by 0.6%, or by 0.7%
minus the automotive segment. Auto sales often swing sharply from month to
month and can mask underlying retail trends. Retail sales in October,
meanwhile, were revised up to 1.7% from an original reading of 1.2%. And
September retail sales were revised up to 0.9% from 0.7%. Over the past three
months retail sales have risen at a 7.8% annual pace.
Led higher by energy goods, U.S. producer prices rose a seasonally adjusted
0.8% in November, the biggest gain since March, the Labor Department reported
Tuesday. Prices for finished energy goods rose 2.1%, as gasoline prices gained
4.7%. Meanwhile, food prices rose 1% in November, as prices for fresh fruits
and melons gained 13.6%. Over the past year, overall producer prices are up
3.5%. Core producer prices, which exclude volatile food and energy costs, rose
0.3% in November, the largest gain since July, as prices for passenger cars
rebounded from the prior month. Over the past year, core prices are up 1.2%.
For November, economists surveyed by MarketWatch had expected overall producer
prices to rise 0.7%, and for the core to gain 0.3%. In October, overall
producer prices rose 0.4%, while the core fell 0.6%. The government also
reported that prices for intermediate goods rose 1.1% in November, while prices
for crude goods gained 0.6%.
Best Buy Co. said Tuesday that its fiscal third-quarter profit fell to $217
million, or 54 cents a share, from $227 million, or 53 cents, a year earlier.
Sales in the quarter ended Nov. 27 dropped to $11.9 billion from $12.02
billion. Analysts, on average, estimated Best Buy to earn 60 cents a share on
sales of $12.5 billion, according to FactSet. The company forecast profit for
the year to be $3.20 to $3.40 a share, below its previous forecast range.
Analysts surveyed by FactSet estimated profit of $3.58 a share. Best Buy shares
fell 10% in premarket trading. Q3 comp sales down 3.3%; domestic Q3 comp sales
down 5.0%. Online sales declined to year-over-year growth of 7 percent, down
from 15 percent in the second quarter and 21 percent in the first quarter.
Yahoo Inc plans to lay off more than 600 employees as early as Tuesday, two
sources familiar with the situation said on Monday.
Sorcha Faal: "A new report circulating in the Kremlin today prepared for
President Medvedev by Russian Space Forces (VKS) 45th Division of Space Control
says that an upcoming WikiLeaks release of secret US cables details that the
Americans have been “engaged” since 2004 in a “war” against UFO’s based on or
near the Continent of Antarctica, particularly the Southern Ocean.
According to this report, the United States went to its highest alert level on
June 10, 2004 after a massive fleet of UFO’s [photo 2nd left, click for video
here] “suddenly emerged” from the Southern Ocean and approached Guadalajara,
Mexico barely 1,600 kilometers (1,000 miles) from the American border. Prior to
reaching the US border, however, this massive UFO fleet is said in this report
to have “dimensionally returned” to their Southern Ocean “home base”.
The fears of the Americans regarding these Southern Ocean UFO’s began, this
report says, during the unprecedented events of July 11, 1991 (referred to as
7/11) when during the Solar Eclipse these mysterious aircraft appeared by the
hundreds over nearly all of Mexico, even their Capital city. Most notable about
the events of 7/11 were that as millions of Mexicans were watching on their
televisions the National broadcasts [click for video here] of these UFO’s over
Mexico City, the American media refused to allow their people to view it.
Since 2004, this report continues, fleets of Southern Ocean UFO’s have continued
to emerge from their bases, with the latest such event being this Friday past
when another of their massive fleets was sighted over the South American Nation
of Chile."
Japan's government announced it would cut the country's hefty corporate tax
rate by 5 percentage points, in a bid to stimulate the economy and help
Japanese businesses stay competitive.
The step announced late Monday is aimed at promoting investment, employment
and
salary increases at home so that Japan can exit deflation, Prime Minister Naoto
Kan said.
“If you were looking at buying a house a few weeks ago, the same house, to you,
looks as much as 9 percent more expensive,” he said. The effects of higher
mortgage rates, along with climbing gasolineprices, will offset much of the tax
package’s intended stimulative effects, according to Gluskin Sheff & Associates
Chief Economist David Rosenberg. The average rateon a typical 30-year
fixed-rate mortgage has climbed for four weeks, to an average of 4.61 percent
last week, according to Freddie Mac, pushing the monthly cost of a $300,000
loan to $1,540, from $1,462.
The Baltic Dry Index, a measure of commodity-shipping costs, fell to the lowest
level in more than four months on a surplus of ships. The index declined 19
points, or 0.9 percent, to 2,076 today, according to data from the Baltic
Exchange in London. That’s the lowest since Aug. 6.
iBankCoin: "Although the major indices are making new 52 week highs on a daily
basis, they are doing so in a very nonchalant way, dribbling higher. The areas
of the market where the “hot money” is welcomed with arms wide open are growing
smaller. While many traders may perceive the above analysis as an invitation to
get aggressively short, I contend that strategy is flawed. Just because the
indices have gone much higher in a relatively short amount of time, it does not
necessarily mean that they will give most or all of it back. Thus, I am not
convinced that the risk/reward profile is conducive for net shorts for anything
more than a one or two day trade, if that.
In addition, the marquee names are still basing out (some have been doing so
for seven weeks) with tight price candles and without heavy selling volume.
These include: $AAPL $AMZN $BIDU $GOOG $PCLN. Although the consolidations in
those stocks have been of the bullish variety, they still need to be monitored
closely to see in which direction they eventually break.
In sum, a little skepticism about whether Santa Claus is coming this year could
go a long way, literally and figuratively."
On Dec. 16, 100K Facebook shares will go on sale at website SharesPost with a
minimum bid of $23/share, says a source. The auction is open only to accredited
investors worth more than $1M.
Global investor sentiment continues to improve, according to a survey released
Tuesday by Bank of America Merrill Lynch. A net 44% of respondents think the
world's economy will strengthen in 2011, up from 35% the previous month. The
study also found that a net 16% of fund managers surveyed are overweight U.S.
stocks, up from a net 1% in November. A net 36% said they expect the dollar to
appreciate next year, up from a net 14% who thought so in November. The survey
of 209 fund managers also found that energy is the favorite sector, displacing
technology, which had been the favorite for the previous 11 months.
Copper fluctuated near a 31-month high in New York and a record in London amid
renewed investor concerns about cooling measures in China and as the Federal
Reserve prepares to discuss interest rates and bond purchases.
Cotton futures in New York soared by the daily limit for a second day, advancing
to a one-month high after a government report estimated U.S. inventories will
drop to a 14-year low.
Shares of HCP Inc. rose Tuesday after the real-estate investment trust said it
has agreed to buy all of the real-estate assets of nursing-home operator HCR
ManorCare Inc. in a transaction valued at $6.1 billion.
Inventories at U.S. businesses rose 0.7% in October, below expectations and
slower than the 1.4% increase in sales, the Commerce Department said Tuesday.
The inventory-to-sales ratio, an indication of demand, slipped to 1.27 in
October from 1.28 in September. Economists had been expecting the nation's
inventories to rise 0.8% in October. One new piece of information was retail
inventories, which fell 0.6% in October compared with a 1.8% increase in sales.
The inventory-to-sales ratio in retail fell to 1.35 in October from 1.38 in
September. It was at 1.38 a year ago. Inventories in September were revised up
to a 1.3% gain from the previous estimate of a 0.9% increase. This could lift
GDP estimates for the July-September quarter higher than the current estimate
of a 2.5% gain.
30-year Treasury yield at 4.55% and the 10-year at 3.46%, both 7-month high yields. Mortgage rates are
moving higher.
The Federal Reserve Tuesday left its key interest rate and the size of its bond purchase program unchanged, as widely expected. The central bank's rate-setting Open Market Committee maintained the target range for the federal funds rate at its all-time low range of 0 to 0.25%, where it has stood since December 2008. It kept its bond purchase program, nicknamed QE2, at $600 billion. In its statement, the Fed said that the economy recovery is continuing "though at a rate that has been insufficient to bring down unemployment." Thomas Hoenig, the president of the Kansas City Fed, dissented again, warning that the large stimulus could cause inflation expectations to rise and choke off a recovery.
The Justice Department on Wednesday is expected to seek to join civil lawsuits resulting from the Gulf of Mexico oil spill, the first major federal legal action in the probe of the disaster, according to people familiar with the matter.
Dozens of private-party lawsuits have been consolidated in so-called multidistrict litigation in federal court in New Orleans, representing claims against BP PLC and its contractors for damages from the worst oil spill in U.S. history.
Dow closes up 48 points, Nasdaq up 2 points, and the S&P 500 plus 1 point.
Amgen announced pivotal Phase 3 '147 study meets primary endpoint; XGEVA
(Denosumab) Significantly Improved Bone Metastasis-Free Survival in Men With
Prostate Cancer Co announced top-line results from a Phase 3 trial evaluating
XGEVA (denosumab) versus placebo in 1,432 men with castrate-resistant prostate
cancer. The trial, known as the '147 study, demonstrated that XGEVA
significantly improved median bone metastasis-free survival by 4.2 months
(HR=0.85, 95 percent CI 0.73-0.98, p=0.03) compared to placebo (primary
endpoint), and significantly improved time to first occurrence of bone
metastases (secondary endpoint). Overall survival was similar between the XGEVA
and placebo groups (secondary endpoint).
Thermo Fisher Scientific, the maker of laboratory and diagnostic equipment, said
on Monday that it had agreed to buy Dionex for $2.1 billion in cash.
Dionex, based in Sunnyvale, Calif., makes ion chromatography systems, which
analyze water for inorganic compounds. They are used for medical research,
environmental services and by water companies. It has more more than 1,600
employees in 21 countries.
Under the terms of the agreement, Thermo Fisher will commence a tender offer to
acquire all of the outstanding shares of Dionex for $118.50 a share in cash.
That is 21 percent above Dionex’s closing share price on Friday and 32 percent
above its average closing share price over the last 60 trading days.
According to Bloomberg, China's government this weekend set a goal this week to
expand the money supply by 16% next year while at the same time reducing
inflation to 4% and maintaining GDP growth in the 8% range.
U.S. retail sales rose in November for the fifth straight month as consumers
spent more money on gas, clothes, hobby items and online goods. Retail sales
expanded last month by 0.8% overall, or by 1.2% excluding the volatile
automotive sector, the Commerce Department reported Tuesday. Economists
surveyed by MarketWatch had forecast total sales to rise by 0.6%, or by 0.7%
minus the automotive segment. Auto sales often swing sharply from month to
month and can mask underlying retail trends. Retail sales in October,
meanwhile, were revised up to 1.7% from an original reading of 1.2%. And
September retail sales were revised up to 0.9% from 0.7%. Over the past three
months retail sales have risen at a 7.8% annual pace.
Led higher by energy goods, U.S. producer prices rose a seasonally adjusted
0.8% in November, the biggest gain since March, the Labor Department reported
Tuesday. Prices for finished energy goods rose 2.1%, as gasoline prices gained
4.7%. Meanwhile, food prices rose 1% in November, as prices for fresh fruits
and melons gained 13.6%. Over the past year, overall producer prices are up
3.5%. Core producer prices, which exclude volatile food and energy costs, rose
0.3% in November, the largest gain since July, as prices for passenger cars
rebounded from the prior month. Over the past year, core prices are up 1.2%.
For November, economists surveyed by MarketWatch had expected overall producer
prices to rise 0.7%, and for the core to gain 0.3%. In October, overall
producer prices rose 0.4%, while the core fell 0.6%. The government also
reported that prices for intermediate goods rose 1.1% in November, while prices
for crude goods gained 0.6%.
Best Buy Co. said Tuesday that its fiscal third-quarter profit fell to $217
million, or 54 cents a share, from $227 million, or 53 cents, a year earlier.
Sales in the quarter ended Nov. 27 dropped to $11.9 billion from $12.02
billion. Analysts, on average, estimated Best Buy to earn 60 cents a share on
sales of $12.5 billion, according to FactSet. The company forecast profit for
the year to be $3.20 to $3.40 a share, below its previous forecast range.
Analysts surveyed by FactSet estimated profit of $3.58 a share. Best Buy shares
fell 10% in premarket trading. Q3 comp sales down 3.3%; domestic Q3 comp sales
down 5.0%. Online sales declined to year-over-year growth of 7 percent, down
from 15 percent in the second quarter and 21 percent in the first quarter.
Yahoo Inc plans to lay off more than 600 employees as early as Tuesday, two
sources familiar with the situation said on Monday.
Sorcha Faal: "A new report circulating in the Kremlin today prepared for
President Medvedev by Russian Space Forces (VKS) 45th Division of Space Control
says that an upcoming WikiLeaks release of secret US cables details that the
Americans have been “engaged” since 2004 in a “war” against UFO’s based on or
near the Continent of Antarctica, particularly the Southern Ocean.
According to this report, the United States went to its highest alert level on
June 10, 2004 after a massive fleet of UFO’s [photo 2nd left, click for video
here] “suddenly emerged” from the Southern Ocean and approached Guadalajara,
Mexico barely 1,600 kilometers (1,000 miles) from the American border. Prior to
reaching the US border, however, this massive UFO fleet is said in this report
to have “dimensionally returned” to their Southern Ocean “home base”.
The fears of the Americans regarding these Southern Ocean UFO’s began, this
report says, during the unprecedented events of July 11, 1991 (referred to as
7/11) when during the Solar Eclipse these mysterious aircraft appeared by the
hundreds over nearly all of Mexico, even their Capital city. Most notable about
the events of 7/11 were that as millions of Mexicans were watching on their
televisions the National broadcasts [click for video here] of these UFO’s over
Mexico City, the American media refused to allow their people to view it.
Since 2004, this report continues, fleets of Southern Ocean UFO’s have continued
to emerge from their bases, with the latest such event being this Friday past
when another of their massive fleets was sighted over the South American Nation
of Chile."
Japan's government announced it would cut the country's hefty corporate tax
rate by 5 percentage points, in a bid to stimulate the economy and help
Japanese businesses stay competitive.
The step announced late Monday is aimed at promoting investment, employment
and
salary increases at home so that Japan can exit deflation, Prime Minister Naoto
Kan said.
“If you were looking at buying a house a few weeks ago, the same house, to you,
looks as much as 9 percent more expensive,” he said. The effects of higher
mortgage rates, along with climbing gasolineprices, will offset much of the tax
package’s intended stimulative effects, according to Gluskin Sheff & Associates
Chief Economist David Rosenberg. The average rateon a typical 30-year
fixed-rate mortgage has climbed for four weeks, to an average of 4.61 percent
last week, according to Freddie Mac, pushing the monthly cost of a $300,000
loan to $1,540, from $1,462.
The Baltic Dry Index, a measure of commodity-shipping costs, fell to the lowest
level in more than four months on a surplus of ships. The index declined 19
points, or 0.9 percent, to 2,076 today, according to data from the Baltic
Exchange in London. That’s the lowest since Aug. 6.
iBankCoin: "Although the major indices are making new 52 week highs on a daily
basis, they are doing so in a very nonchalant way, dribbling higher. The areas
of the market where the “hot money” is welcomed with arms wide open are growing
smaller. While many traders may perceive the above analysis as an invitation to
get aggressively short, I contend that strategy is flawed. Just because the
indices have gone much higher in a relatively short amount of time, it does not
necessarily mean that they will give most or all of it back. Thus, I am not
convinced that the risk/reward profile is conducive for net shorts for anything
more than a one or two day trade, if that.
In addition, the marquee names are still basing out (some have been doing so
for seven weeks) with tight price candles and without heavy selling volume.
These include: $AAPL $AMZN $BIDU $GOOG $PCLN. Although the consolidations in
those stocks have been of the bullish variety, they still need to be monitored
closely to see in which direction they eventually break.
In sum, a little skepticism about whether Santa Claus is coming this year could
go a long way, literally and figuratively."
On Dec. 16, 100K Facebook shares will go on sale at website SharesPost with a
minimum bid of $23/share, says a source. The auction is open only to accredited
investors worth more than $1M.
Global investor sentiment continues to improve, according to a survey released
Tuesday by Bank of America Merrill Lynch. A net 44% of respondents think the
world's economy will strengthen in 2011, up from 35% the previous month. The
study also found that a net 16% of fund managers surveyed are overweight U.S.
stocks, up from a net 1% in November. A net 36% said they expect the dollar to
appreciate next year, up from a net 14% who thought so in November. The survey
of 209 fund managers also found that energy is the favorite sector, displacing
technology, which had been the favorite for the previous 11 months.
Copper fluctuated near a 31-month high in New York and a record in London amid
renewed investor concerns about cooling measures in China and as the Federal
Reserve prepares to discuss interest rates and bond purchases.
Cotton futures in New York soared by the daily limit for a second day, advancing
to a one-month high after a government report estimated U.S. inventories will
drop to a 14-year low.
Shares of HCP Inc. rose Tuesday after the real-estate investment trust said it
has agreed to buy all of the real-estate assets of nursing-home operator HCR
ManorCare Inc. in a transaction valued at $6.1 billion.
Inventories at U.S. businesses rose 0.7% in October, below expectations and
slower than the 1.4% increase in sales, the Commerce Department said Tuesday.
The inventory-to-sales ratio, an indication of demand, slipped to 1.27 in
October from 1.28 in September. Economists had been expecting the nation's
inventories to rise 0.8% in October. One new piece of information was retail
inventories, which fell 0.6% in October compared with a 1.8% increase in sales.
The inventory-to-sales ratio in retail fell to 1.35 in October from 1.38 in
September. It was at 1.38 a year ago. Inventories in September were revised up
to a 1.3% gain from the previous estimate of a 0.9% increase. This could lift
GDP estimates for the July-September quarter higher than the current estimate
of a 2.5% gain.
30-year Treasury yield at 4.55% and the 10-year at 3.46%, both 7-month high yields. Mortgage rates are
moving higher.
The Federal Reserve Tuesday left its key interest rate and the size of its bond purchase program unchanged, as widely expected. The central bank's rate-setting Open Market Committee maintained the target range for the federal funds rate at its all-time low range of 0 to 0.25%, where it has stood since December 2008. It kept its bond purchase program, nicknamed QE2, at $600 billion. In its statement, the Fed said that the economy recovery is continuing "though at a rate that has been insufficient to bring down unemployment." Thomas Hoenig, the president of the Kansas City Fed, dissented again, warning that the large stimulus could cause inflation expectations to rise and choke off a recovery.
The Justice Department on Wednesday is expected to seek to join civil lawsuits resulting from the Gulf of Mexico oil spill, the first major federal legal action in the probe of the disaster, according to people familiar with the matter.
Dozens of private-party lawsuits have been consolidated in so-called multidistrict litigation in federal court in New Orleans, representing claims against BP PLC and its contractors for damages from the worst oil spill in U.S. history.
Dow closes up 48 points, Nasdaq up 2 points, and the S&P 500 plus 1 point.
Monday, December 13, 2010
Extreme Overbought
12/13/10 Extreme Overbought
General Electric Co has agreed to buy British oil drilling pipe-maker
Wellstream Holdings Plc for 800 million pounds ($1.3 billion), as GE continues
its push into the offshore oil services industry.
The deal is the latest in a series of GE buys in the oil services sector in
recent years and shows that, despite the BP oil spill in the Gulf of Mexico
this summer, the industry expects deep water drilling to continue apace.
Selling pressure on 10-year U.S. Treasuries drove yields to fresh six-month
highs on Monday as investors threatened to undo this year's bond rally on signs
of global economic recovery and deeper U.S. deficits.
John Hussman: "In recent weeks, the U.S. stock market has been characterized by
an overvalued, overbought, overbullish, rising-yields syndrome that has
historically been hostile to stocks. Last week, the situation became much more
pointed. Past instances have been associated with such uniformly negative
outcomes that the current situation has to be accompanied by the word
"warning."
The following set of conditions is one way to capture the basic "overvalued,
overbought, overbullish, rising-yields" syndrome:
1) S&P 500 more than 8% above its 52 week (exponential) average
2) S&P 500 more than 50% above its 4-year low
3) Shiller P/E greater than 18
4) 10-year Treasury yield higher than 6 months earlier
5) Advisory bullishness > 47%, with bearishness < 27% (Investor's
Intelligence)"
Bespoke: "Friday's close puts the S&P 500 into ’extreme overbought’ territory
(2+ standard deviations above 50-DMA) and at its most overbought level since
November 2009."
The percentage of bulls has now exceeded the peak which marked the precise top
of the 2010 rally in early May. From that peak, stocks swooned over 15% in the
next few months.
ZeroHedge: "At a time of record deficits, when the Fed will soon own over $1
trillion in Treasurys, the smallest marginal moves on rates will have a
disastrous impact on what is already an unsustainable deficit. Add to this the
fact that we now anticipate that the debt ceiling will have to be raised not
once but twice in 2011, and we, just like everyone else who is not a sellside
Koolaid peddler, are scratching our heads as to just how it is possible that
stocks continue to show the kind of dogged momentum chasing determination that
virtually every buysider realizes will sooner or later end in tears."
Dell's deal values Compellent at $27.75 a share.
Copper futures climbed to a 31-month high in New York and a record in London
after China refrained from raising borrowing costs, while higher copper output
and imports by the largest consumer boosted the demand outlook.
Stephen Rosenman in Q1 predicts Apple will sell 43.7M devices to earn $5.5B, or
$6.05/share.
Banks' total exposure to Ireland and the southern rim of the euro zone has been
greater than previously thought, according to data from the Bank for
International Settlements. The data illustrates how costly it would be if
Greece or Ireland were forced to restructure their debts as part of a bailout.
"Signs of a top in bond prices could set the tone for investors in 2011. The
government may start having trouble funding its debt, taking away the Fed's
printing press." Bill Fleckenstein
A new McClatchy/Marist Poll released over the weekend found Obama's job approval rating at just 42 percent — the lowest number of his presidency. One reason Obama's numbers have taken a turn for the worse: The president has lost ground with Democrats in recent weeks.
The Dow Jones Industrial Average rose 18.24 points, or 0.2%, to 11,428.56.The S&P 500 index gained 0.06 point to 1,240.46, led by gains in its energy and materials sectors. The Nasdaq Composite fell 12.63 points, or 0.5%, to 2,624.91.
General Electric Co has agreed to buy British oil drilling pipe-maker
Wellstream Holdings Plc for 800 million pounds ($1.3 billion), as GE continues
its push into the offshore oil services industry.
The deal is the latest in a series of GE buys in the oil services sector in
recent years and shows that, despite the BP oil spill in the Gulf of Mexico
this summer, the industry expects deep water drilling to continue apace.
Selling pressure on 10-year U.S. Treasuries drove yields to fresh six-month
highs on Monday as investors threatened to undo this year's bond rally on signs
of global economic recovery and deeper U.S. deficits.
John Hussman: "In recent weeks, the U.S. stock market has been characterized by
an overvalued, overbought, overbullish, rising-yields syndrome that has
historically been hostile to stocks. Last week, the situation became much more
pointed. Past instances have been associated with such uniformly negative
outcomes that the current situation has to be accompanied by the word
"warning."
The following set of conditions is one way to capture the basic "overvalued,
overbought, overbullish, rising-yields" syndrome:
1) S&P 500 more than 8% above its 52 week (exponential) average
2) S&P 500 more than 50% above its 4-year low
3) Shiller P/E greater than 18
4) 10-year Treasury yield higher than 6 months earlier
5) Advisory bullishness > 47%, with bearishness < 27% (Investor's
Intelligence)"
Bespoke: "Friday's close puts the S&P 500 into ’extreme overbought’ territory
(2+ standard deviations above 50-DMA) and at its most overbought level since
November 2009."
The percentage of bulls has now exceeded the peak which marked the precise top
of the 2010 rally in early May. From that peak, stocks swooned over 15% in the
next few months.
ZeroHedge: "At a time of record deficits, when the Fed will soon own over $1
trillion in Treasurys, the smallest marginal moves on rates will have a
disastrous impact on what is already an unsustainable deficit. Add to this the
fact that we now anticipate that the debt ceiling will have to be raised not
once but twice in 2011, and we, just like everyone else who is not a sellside
Koolaid peddler, are scratching our heads as to just how it is possible that
stocks continue to show the kind of dogged momentum chasing determination that
virtually every buysider realizes will sooner or later end in tears."
Dell's deal values Compellent at $27.75 a share.
Copper futures climbed to a 31-month high in New York and a record in London
after China refrained from raising borrowing costs, while higher copper output
and imports by the largest consumer boosted the demand outlook.
Stephen Rosenman in Q1 predicts Apple will sell 43.7M devices to earn $5.5B, or
$6.05/share.
Banks' total exposure to Ireland and the southern rim of the euro zone has been
greater than previously thought, according to data from the Bank for
International Settlements. The data illustrates how costly it would be if
Greece or Ireland were forced to restructure their debts as part of a bailout.
"Signs of a top in bond prices could set the tone for investors in 2011. The
government may start having trouble funding its debt, taking away the Fed's
printing press." Bill Fleckenstein
A new McClatchy/Marist Poll released over the weekend found Obama's job approval rating at just 42 percent — the lowest number of his presidency. One reason Obama's numbers have taken a turn for the worse: The president has lost ground with Democrats in recent weeks.
The Dow Jones Industrial Average rose 18.24 points, or 0.2%, to 11,428.56.The S&P 500 index gained 0.06 point to 1,240.46, led by gains in its energy and materials sectors. The Nasdaq Composite fell 12.63 points, or 0.5%, to 2,624.91.
Sunday, December 12, 2010
The Shadow Knows
12/12/10 The Shadow Knows
One bank failure in Pennsylvania and one in Michigan brought the year's tally
of failures to 151, according to the Federal Deposit Insurance Corp. Friday.
Regulators closed Paramount Bank of Farmington Hills, Mich., and Earthstar Bank
of Southampton, Pa. Level One Bank of Farmington Hills, Mich., will take over
Paramount's $252.7 million in assets and $213.6 million in deposits; and
Polonia Bank of Huntingdon Valley, Pa. will take over Earthstar's $112.6
million in assets and $104.5 million in deposits. The total cost to the FDIC
deposit insurance fund is $113.1 million.
"If you're trapped in the dream of the other, you're fucked."
— Gilles Deleuze
Mike Burk: "Since the late August lows the DJIA has rallied 14% while the
Russell 2000 (R2K) is up 30%. Since their November lows the DJIA is up 3.7%
while the R2K is up 10.1%. The market is overbought. Breadth indicators are
mixed, those derived from NASDAQ data are strong while those derived from NYSE
data are weak.
I expect the major averages to be lower on Friday December 17 than they were
on Friday December 10."
Andrew Gavin Marshall:"If Wikileaks is a psy-op, it is either the stupidest or most intelligent psychological operation ever undertaken. But one thing is for sure: systems and structures of power are in the process of being exposed to a much wider audience than ever before. The question for the alternative media and critical researchers, alike, is what will they do with this information and this opportunity?"
“WikiLeaks is a not-for-profit media organisation. Our goal is to bring important news and information to the public. We provide an innovative, secure and anonymous way for sources to leak information to our journalists (our electronic drop box).”
"The technocrat is the natural friend of the dictator—computers and dictatorship; but the revolutionary lives in the gap which separates technical progress from social totality, and inscribed there his dream of permanent revolution. This dream, therefore, is itself action, reality, and an effective menace to all established order; it renders possible what it dreams about. "
— Gilles Deleuze
478,000 full-time jobs were lost in November. In November, state and local governments cut 11,000 jobs.
“The money power preys upon the nation in times of peace, and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods, or throw light upon its crimes. It can only be overthrown by the awakened conscience of the nation."
William Jennings Bryan
Natural gas prices may rebound next year as producers cut output for the first time in six years amid record stockpiles and an expanding U.S. economy. A 21 percent drop in prices this year will contribute to a decline in drilling for the fuel sold to factories, power plants and homeowners, the Energy Department said in its monthly Short- Term Energy Outlook on Dec. 7.
ZeroHedge:"As of September 30, Bernanke has successfully stopped the net decline of monetary aggregates even when including the massive shadow banking system....As of Q3 2009, the sequential change in shadow and traditional bank liabilities was net positive by $3.8 billion: this is the first time this number has posted an increase since December 2008! This fact should send a wedge of terror into the hearts of all those, both deflationists and inflationsts, who realize the significance of this inflection point: it appears that Bernanke has finally succeeded at offsetting the drop in the shadow banking system."
One bank failure in Pennsylvania and one in Michigan brought the year's tally
of failures to 151, according to the Federal Deposit Insurance Corp. Friday.
Regulators closed Paramount Bank of Farmington Hills, Mich., and Earthstar Bank
of Southampton, Pa. Level One Bank of Farmington Hills, Mich., will take over
Paramount's $252.7 million in assets and $213.6 million in deposits; and
Polonia Bank of Huntingdon Valley, Pa. will take over Earthstar's $112.6
million in assets and $104.5 million in deposits. The total cost to the FDIC
deposit insurance fund is $113.1 million.
"If you're trapped in the dream of the other, you're fucked."
— Gilles Deleuze
Mike Burk: "Since the late August lows the DJIA has rallied 14% while the
Russell 2000 (R2K) is up 30%. Since their November lows the DJIA is up 3.7%
while the R2K is up 10.1%. The market is overbought. Breadth indicators are
mixed, those derived from NASDAQ data are strong while those derived from NYSE
data are weak.
I expect the major averages to be lower on Friday December 17 than they were
on Friday December 10."
Andrew Gavin Marshall:"If Wikileaks is a psy-op, it is either the stupidest or most intelligent psychological operation ever undertaken. But one thing is for sure: systems and structures of power are in the process of being exposed to a much wider audience than ever before. The question for the alternative media and critical researchers, alike, is what will they do with this information and this opportunity?"
“WikiLeaks is a not-for-profit media organisation. Our goal is to bring important news and information to the public. We provide an innovative, secure and anonymous way for sources to leak information to our journalists (our electronic drop box).”
"The technocrat is the natural friend of the dictator—computers and dictatorship; but the revolutionary lives in the gap which separates technical progress from social totality, and inscribed there his dream of permanent revolution. This dream, therefore, is itself action, reality, and an effective menace to all established order; it renders possible what it dreams about. "
— Gilles Deleuze
478,000 full-time jobs were lost in November. In November, state and local governments cut 11,000 jobs.
“The money power preys upon the nation in times of peace, and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods, or throw light upon its crimes. It can only be overthrown by the awakened conscience of the nation."
William Jennings Bryan
Natural gas prices may rebound next year as producers cut output for the first time in six years amid record stockpiles and an expanding U.S. economy. A 21 percent drop in prices this year will contribute to a decline in drilling for the fuel sold to factories, power plants and homeowners, the Energy Department said in its monthly Short- Term Energy Outlook on Dec. 7.
ZeroHedge:"As of September 30, Bernanke has successfully stopped the net decline of monetary aggregates even when including the massive shadow banking system....As of Q3 2009, the sequential change in shadow and traditional bank liabilities was net positive by $3.8 billion: this is the first time this number has posted an increase since December 2008! This fact should send a wedge of terror into the hearts of all those, both deflationists and inflationsts, who realize the significance of this inflection point: it appears that Bernanke has finally succeeded at offsetting the drop in the shadow banking system."
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