12/8/06 Happenings
From the BJ Services 2006 report: "Based on our forecasted increase in rig activity and improved pricing, we expect continued improvement in our results of operations in fiscal 2007. We expect revenue improvement from all of our business segments." The stock, at $32+, is selling at 10 times projected earnings for 2007.
Tribune Co. said that sales edged higher last month despite a continued slowdown in publishing revenue as the media company's broadcasting and entertainment group delivered a 6.9 percent revenue increase to $106.9 million.
European Central Bank President Jean-Claude Trichet said in a prepared statement that the central bank will "very closely" monitor risks to price stability after making a rate hike to 3.5%. He also revised up 2007 and 2008 economic growth forecasts due to lower energy prices.
Chevron Corp.will buy back up to $5 billion worth of its common stock over a period of up to three years. The new program follows a $5 billion program initiated in April 2004 and another $5 billion program launched in December 2005, which has been completed. The company set its 2007 capital and exploratory spending program at $19.6 billion. That represents a 20% increase from an expected $16 billion in 2006.
The Monster Employment Index rose three points to 175 in November from October, its highest reading since the online recruiter launched the benchmark in October 2003. The November reading, which is up from 149 in November 2005, reflects employers increasing holiday-season and year-end hiring, Monster said.
The Bank of England on Thursday left its key interest rate unchanged after two increases in the last four months have taken the cost of borrowing to a five-year high. The bank held its rate at 5% -- in line with market expectations.
Fears that a slowing U.S. economywill drag the global economy downward are unlikely to materialize,according to PIERS Trade Horizons. Based on second-quarter container trade statistics, the latestavailable, as well as its analysis of key economic indicators andunderlying economic fundamentals, PIERS Trade Horizons expects global realGDP growth will average some 3.25% over the second half of this year,resulting in full-year growth of at least 3.5% for 2006 as a whole, up aquarter-percentage-point from last year. Further out, PIERS forecasts anexpansion in real GDP of 3.3% in 2007. "In other words, growth will moderate but remain solid," says MichaelAndrews, PIERS chief global economist. "This despite a U.S. slowdown." One reason the U.S. slowdown seems to be having limited impact onglobal growth is that it has so far been largely confined to theresidential sector, with few spillover effects to the rest of the economyor to most foreign countries. "We can see the impact of the slowdown in the housing sector on growthin imports of furniture, for example," notes Andrews. Thus, the annualgrowth rate for furniture imports from Northeast Asia, the top source forAmerica's top import, nearly halved to 9.6% in the first half of this year,from the same period a year earlier, after expanding a robust 16.6% in2005. The rate of growth in furniture imports from Southeast Asia fell from8.4% in 2005 to negative 5.3% in the first half of 2006. "However, the slowdown in sales to the U.S. by these countries is beingoffset by growth in business with other countries within their regions -and, in several cases, by growing domestic consumption," explains Andrews. "Generally speaking, exports from the rest of the world to the U.S.relative to total exports for most nations have been declining for sometime, making the U.S. relatively less important as a driver of growth forother nations than has been the case in the past."There is much speculation as to the nonfarm payroll number for November.Inasmuch as the number will be revised at least twice, my interest is passingat best. Rather, I have my eye on the Bank of Japan meeting on Dec. 19.Most believe there will not be a change in rates. I think there is at least a 30% chance of a modest rate increase.
OPEC meets on Dec. 14. MAN Energy analyst Edward Meir stated"We think OPEC's inclination would still be to go for another cut, notso much on concern that prices are low, but more because of the factthat the November cut seems to have fallen short."
Outstanding consumer credit fell by $1.2 billion or an annual rate of 0.6% in October.
January natural gas fell 5.6 cents to close at $7.671 per million British thermal units. January crude was up 30 cents to close at $62.49 a barrel.
ConocoPhillips said it plans to divest about 830 retail outlets, and the company approved 2007 cash capital expenditures of about $11.8 billion.
February gold rose $1.10 to close at $637 an ounce. March silver added 24 cents to $14.035 an ounce, and March copper continued lower to close at $3.102 a pound, down 5.8 cents.
An initial public offering from wheeled sneaker maker Heely's Inc. (HLYS) is expected to price above its $16-$18 range for its stock market debut on Friday, an analyst said Thursday.
Thursday, December 07, 2006
Wednesday, December 06, 2006
Reality
12/7/06 Reality
Meritage Homes Corp.CEO Steven Hilton said Wednesday he expects the housing market to remain "tough for at least the next couple of quarters." He said expansion plans "are on hold now," but that the company next year could buy land or pursue acquisitions. If Meritage's stock goes down and it doesn't see opportunities for M&A or land purchases, it will buy back shares, the CEO added.
Addison Wiggin: "The fall of the dollar is like a car accident...you can cover your eyes, but you can’t help but watch it with a sense of amazement. Throughout history, all printed money eventually ends up the same way: practically worthless."
Andrew Parnes, CFO at Standard Pacific Corp., said the spring selling season will be a better gauge than the winter months of whether the slumping housing market has bottomed out. "It's going to take more than a few months of improved or stable [home] order activity to say things have gotten better," the CFO said
A Citigroup analyst said he expects home-order trends to turn around by the first quarter of 2007, therefore "the time to buy the stocks is now" even if profit estimates continue to decline.
"The rally thus far has already occurred sooner than many expected, and we believe the group is about to accelerate its ascent," Kim wrote.
He raised his target prices on several home builders he rates buy: including Beazer Homes and Centex. Maybe the analyst is correct; however, I pointed out in mid-July that the homebuilding group had stopped going down and, in fact, rallied on four consecutive days while the rest of the market was trying to get back on its feet. I remarked the best idea I had was selling puts on Centex. Yes, it was conservative, but the $30 and $35 puts expired worthless- as did the ones on Beazer. I would be selling at least half of my positions in homebuilder stocks- that is, had I been a buyer in mid-July. At the very least, I'd be selling in the money calls.
Richard Daughty: "The bad news, which is what I fixate upon because that is the pitifully miserable way I am, is that slower wage growth means that "consumers don't have as much money as everyone thought they did ... $100 billion less on an annual basis." A hundred billion bucks less income than they figured! Whew! Viewed in another light, "The new data show that, instead of growing at a 7.4% annual rate in the second quarter, employee compensation actually grew just 1.4%." Apparently, those are nominal gains, and are not adjusted for inflation. A sneer of contempt crossed the handsome face of The Mogambo (played by, if you recall, Brad Pitt), and they instantly knew that they had made a mistake! Quickly they added "The new data shows that real disposable incomes fell in the second quarter by 1.5%, rather than rising by 1.7%."
The American Petroleum Institute reported a drop of 4.1 million barrels in crude supplies for the week ended Dec. 1. The Energy Department had reported a fall of 1.1 million. Motor gasoline supplies were up 674,000 barrels, the API said, contrary to the government's reported fall of 1.1 million. Distillate supplies were down 1.5 million barrels, the API said, vs. the 400,000-barrel fall reported by the government.
Ara Hovnanian, CEO of home builder Hovnanian Enterprises Inc., said the company is not overly optimistic on the housing market's recovery and is not managing as if "everything will be hunky-dory in 2007." He stated buyers don't want to purchase a home "that may be cheaper a month later."
Liz Ann Sonders: "December has historically been the weakest month for the dollar against the euro since the European currency began trading at the beginning of 1999. On average, the dollar has lost 2.7% in Decembers since then, with the biggest decline (-7.4%) coming in December 2000. Given that this year-end weakness (caused by holidays and closing-of-books) is well-documented, many traders like to short the dollar in anticipation thereof."
Ford Motor Co. said its $4.5 billion of unsecured senior convertible notes due 2036 will pay interest semiannually at a rate of 4.25% per annum. The principal amount has been increased from $3 billion.
January crude fell 24 cents to close at $62.19 a barrel after trading as high as $63 earlier. January natural gas gained 4.2 cents to close at $7.727 per million British thermal units after a four-session decline.
February gold dropped $12 to close at $635.90 an ounce. March silver closed at a one-week low of $13.795 an ounce, down 23 cents. March copper fell to $3.16 a pound, closing down 8.7 cents, or 2.7%.
The European Central Bank is expected to increase its benchmark interest rate Thursday.
Gannett Co. Inc. said that advertising at USAToday.com would rise by 18 percent to 20 percent this year.
Weyerhaeuser Company announced that challenging market conditions
necessitate further actions, which could include closures, curtailments and
restricted operating postures at softwood lumber, engineered lumber and
structural panels operations across North America. Downtime and restricted operating postures have already been undertaken at about 70 percent of Weyerhaeuser residential wood products facilities.These curtailments have led to significant fourth quarter production
decreases across all product lines."Demand for wood products is very weak," said Steven R. Rogel, chairman, president and chief executive officer. "We continue to analyze
our operating postures and portfolio and expect additional capacity adjustments in the near term."
While many analysts are talking about the worst is over in the housing industry, I suggest they heed the words of the Weyerhaeuser CEO.
Meritage Homes Corp.CEO Steven Hilton said Wednesday he expects the housing market to remain "tough for at least the next couple of quarters." He said expansion plans "are on hold now," but that the company next year could buy land or pursue acquisitions. If Meritage's stock goes down and it doesn't see opportunities for M&A or land purchases, it will buy back shares, the CEO added.
Addison Wiggin: "The fall of the dollar is like a car accident...you can cover your eyes, but you can’t help but watch it with a sense of amazement. Throughout history, all printed money eventually ends up the same way: practically worthless."
Andrew Parnes, CFO at Standard Pacific Corp., said the spring selling season will be a better gauge than the winter months of whether the slumping housing market has bottomed out. "It's going to take more than a few months of improved or stable [home] order activity to say things have gotten better," the CFO said
A Citigroup analyst said he expects home-order trends to turn around by the first quarter of 2007, therefore "the time to buy the stocks is now" even if profit estimates continue to decline.
"The rally thus far has already occurred sooner than many expected, and we believe the group is about to accelerate its ascent," Kim wrote.
He raised his target prices on several home builders he rates buy: including Beazer Homes and Centex. Maybe the analyst is correct; however, I pointed out in mid-July that the homebuilding group had stopped going down and, in fact, rallied on four consecutive days while the rest of the market was trying to get back on its feet. I remarked the best idea I had was selling puts on Centex. Yes, it was conservative, but the $30 and $35 puts expired worthless- as did the ones on Beazer. I would be selling at least half of my positions in homebuilder stocks- that is, had I been a buyer in mid-July. At the very least, I'd be selling in the money calls.
Richard Daughty: "The bad news, which is what I fixate upon because that is the pitifully miserable way I am, is that slower wage growth means that "consumers don't have as much money as everyone thought they did ... $100 billion less on an annual basis." A hundred billion bucks less income than they figured! Whew! Viewed in another light, "The new data show that, instead of growing at a 7.4% annual rate in the second quarter, employee compensation actually grew just 1.4%." Apparently, those are nominal gains, and are not adjusted for inflation. A sneer of contempt crossed the handsome face of The Mogambo (played by, if you recall, Brad Pitt), and they instantly knew that they had made a mistake! Quickly they added "The new data shows that real disposable incomes fell in the second quarter by 1.5%, rather than rising by 1.7%."
The American Petroleum Institute reported a drop of 4.1 million barrels in crude supplies for the week ended Dec. 1. The Energy Department had reported a fall of 1.1 million. Motor gasoline supplies were up 674,000 barrels, the API said, contrary to the government's reported fall of 1.1 million. Distillate supplies were down 1.5 million barrels, the API said, vs. the 400,000-barrel fall reported by the government.
Ara Hovnanian, CEO of home builder Hovnanian Enterprises Inc., said the company is not overly optimistic on the housing market's recovery and is not managing as if "everything will be hunky-dory in 2007." He stated buyers don't want to purchase a home "that may be cheaper a month later."
Liz Ann Sonders: "December has historically been the weakest month for the dollar against the euro since the European currency began trading at the beginning of 1999. On average, the dollar has lost 2.7% in Decembers since then, with the biggest decline (-7.4%) coming in December 2000. Given that this year-end weakness (caused by holidays and closing-of-books) is well-documented, many traders like to short the dollar in anticipation thereof."
Ford Motor Co. said its $4.5 billion of unsecured senior convertible notes due 2036 will pay interest semiannually at a rate of 4.25% per annum. The principal amount has been increased from $3 billion.
January crude fell 24 cents to close at $62.19 a barrel after trading as high as $63 earlier. January natural gas gained 4.2 cents to close at $7.727 per million British thermal units after a four-session decline.
February gold dropped $12 to close at $635.90 an ounce. March silver closed at a one-week low of $13.795 an ounce, down 23 cents. March copper fell to $3.16 a pound, closing down 8.7 cents, or 2.7%.
The European Central Bank is expected to increase its benchmark interest rate Thursday.
Gannett Co. Inc. said that advertising at USAToday.com would rise by 18 percent to 20 percent this year.
Weyerhaeuser Company announced that challenging market conditions
necessitate further actions, which could include closures, curtailments and
restricted operating postures at softwood lumber, engineered lumber and
structural panels operations across North America. Downtime and restricted operating postures have already been undertaken at about 70 percent of Weyerhaeuser residential wood products facilities.These curtailments have led to significant fourth quarter production
decreases across all product lines."Demand for wood products is very weak," said Steven R. Rogel, chairman, president and chief executive officer. "We continue to analyze
our operating postures and portfolio and expect additional capacity adjustments in the near term."
While many analysts are talking about the worst is over in the housing industry, I suggest they heed the words of the Weyerhaeuser CEO.
Tuesday, December 05, 2006
Revisions Revisions Revisions
12/6/06 Revisions Revisions Revisions
The Labor Department said unit labor costs were revised much lower in both the second and third quarters. Instead of rising at a 5.3% pace in the past year, unit labor costs in the nonfarm business sector were revised to a 2.9% annual pace. Productivity in the nonfarm business sector rose at a 0.2% annual pace in the third quarter, revised from no gain previously reported. Unit labor costs, meanwhile, were revised to a 2.3% annualized from 3.6% previously. The markets key on these government numbers. Why I don't know. They become moving targets.
Here is a sample of the revisions and the nonsense surrounding them:
"Measures for the nonfinancial corporate sector also were revised to reflect updated information on output and employee compensation during the second quarter of 2006. Productivity was revised down along with output, as hours grew at the same rate reported Nov 2. Hourly compensation was revised down from a 6.5-percent gain to 0.7-percent decline in the second quarter. Because hourly compensation was revised down more than productivity, the increase in unit labor costs also was revised down, from 6.4 percent to 3.7 percent."
The dollar fell to a fresh four-month low vs. the yen. Meanwhile, the U.S. dollar index is approaching 82 on the downside.
Chain store sales for the week ended Dec. 2 rose 3.1% from the year-ago period, according to a survey by the International Council of Shopping Centers, Inc. and UBS Securities released Tuesday. On a week-over-week basis, sales slipped 2.6%. "Through this past Sunday, consumers shopped less and completed less of their total expected holiday spending than even last year," said Michael Niemira, ICSC's chief economist.
Toll Brothers, the luxury home builder, said next year fiscal year's profit may fall 62% but also said it may be seeing a floor in some markets where deposits and traffic, although erratic from week to week, seem to be dancing on the bottom or slightly above.
Reckson Associates Realty Corp. affirmed its backing of a takeover proposal from S.L. Green and said a takeover proposal from American Real Estate Partners LP, controlled by the investor Carl Icahn, "does not meet the standard" set out in the SL Green merger agreement "to permit discussions or negotiations with AREP."
Bridgestone Corp. , will buy Bandag Corp. , a maker of tire retreading materials and equipment, for $1.05 billion in cash or $50.75 per share.
Tim Iacono: "To most Americans, what the dollar can be exchanged for overseas matters little - only about ten percent of the U.S. population has passports and most of those people never leave the country. As for import prices, recent studies have shown that only a very small amount of exchange rate movements are passed through via manufactured products. Oil however is another matter. A steep decline in the dollar means that oil prices for Americans will go up, all else being equal - this reality may become more significant after next week's OPEC meeting where the subject of prices is sure to come up."
New orders at U.S. factories fell 4.7 percent in October, the biggest fall in more than six years and marking the third drop in four months, while inventories rose again. However, excluding transportation, factory orders fell just 0.8 percent.
The Institute for Supply Management's services index rose to 58.9 in November from 57.1 in October. Employment, prices paid and new orders also rose, according to a report on Tuesday.
Palatin Technologies, Inc presented results from two Phase 2B trials evaluating bremelanotide for the treatment of male erectile dysfunction (ED) at the 9th European Society for Sexual Medicine (ESSM) Congress at the Hofburg Convention Center, Vienna on December 5, 2006. This presentation received "The European Society for Sexual Medicine 2006 Award for Best Presentation on Male Sexual Dysfunction (Clinical)."
February gold fell $3 to close at $647.90 an ounce in New York. March silver fell 22 cents, or 1.5%, to end at $14.025 an ounce. March copper closed at $3.247 a pound, up 7.1 cents.
Shares of McDonald's traded above the $43 mark for the first time in seven years. It was a long road back from the 12 1/8 hit only a few years ago.
Shares of Walt Disney reached a high of $34.08 in intraday trading, the highest price seen since May 23, 2001.
Announced layoffs totaled 76,773 in November, up from 69,177 in October but down from 99,279 a year earlier, according to Challenger, Gray & Christmas Inc.
The Conference Board reported that the leading index for Japan increased 0.5 percent and the coincident index increased 0.6 percent in October.
Mayo Clinic announced last
week that it has developed a new medical device that will help patients
control their breathing (respiratory motion) when undergoing computed
tomographic (CT) fluoroscopy-guided biopsies. The Interactive Breath-hold
Control will be the first medical device of its kind in the world. The
device will allow physicians to more rapidly and accurately diagnose
patients reducing the need for a more invasive surgical biopsy.
I'd like to take a moment to discuss the holiday season, which is abnormally stressful for many individuals. Learning to manage stress levels is one of the most important functions to master. I cannot say enough of the negative impact from high stress levels, which can produce high levels of cortisol in the body.
Cortisol is an important hormone in the body, secreted by the adrenal glands and involved in the following functions and more:
Proper glucose metabolism
Regulation of blood pressure
Insulin release for blood sugar maintanence
Immune function
Inflammatory response
Higher and more prolonged levels of cortisol in the bloodstream (like those associated with chronic stress) have been shown to have negative effects, such as:
Impaired cognitive performance
Suppressed thyroid function
Blood sugar imbalances such as hyperglycemia
Decreased bone density
Decrease in muscle tissue
Higher blood pressure
Lowered immunity and inflammatory responses in the body, as well as other health consequences
Increased abdominal fat, which is associated with a greater amount of health problems than fat deposited in other areas of the body. Some of the health problems associated with increased stomach fat are heart attacks, strokes, the development of , higher levels of “bad” cholesterol (LDL) and lower levels of “good” cholesterol (HDL), which can lead to other health problems!
The Labor Department said unit labor costs were revised much lower in both the second and third quarters. Instead of rising at a 5.3% pace in the past year, unit labor costs in the nonfarm business sector were revised to a 2.9% annual pace. Productivity in the nonfarm business sector rose at a 0.2% annual pace in the third quarter, revised from no gain previously reported. Unit labor costs, meanwhile, were revised to a 2.3% annualized from 3.6% previously. The markets key on these government numbers. Why I don't know. They become moving targets.
Here is a sample of the revisions and the nonsense surrounding them:
"Measures for the nonfinancial corporate sector also were revised to reflect updated information on output and employee compensation during the second quarter of 2006. Productivity was revised down along with output, as hours grew at the same rate reported Nov 2. Hourly compensation was revised down from a 6.5-percent gain to 0.7-percent decline in the second quarter. Because hourly compensation was revised down more than productivity, the increase in unit labor costs also was revised down, from 6.4 percent to 3.7 percent."
The dollar fell to a fresh four-month low vs. the yen. Meanwhile, the U.S. dollar index is approaching 82 on the downside.
Chain store sales for the week ended Dec. 2 rose 3.1% from the year-ago period, according to a survey by the International Council of Shopping Centers, Inc. and UBS Securities released Tuesday. On a week-over-week basis, sales slipped 2.6%. "Through this past Sunday, consumers shopped less and completed less of their total expected holiday spending than even last year," said Michael Niemira, ICSC's chief economist.
Toll Brothers, the luxury home builder, said next year fiscal year's profit may fall 62% but also said it may be seeing a floor in some markets where deposits and traffic, although erratic from week to week, seem to be dancing on the bottom or slightly above.
Reckson Associates Realty Corp. affirmed its backing of a takeover proposal from S.L. Green and said a takeover proposal from American Real Estate Partners LP, controlled by the investor Carl Icahn, "does not meet the standard" set out in the SL Green merger agreement "to permit discussions or negotiations with AREP."
Bridgestone Corp. , will buy Bandag Corp. , a maker of tire retreading materials and equipment, for $1.05 billion in cash or $50.75 per share.
Tim Iacono: "To most Americans, what the dollar can be exchanged for overseas matters little - only about ten percent of the U.S. population has passports and most of those people never leave the country. As for import prices, recent studies have shown that only a very small amount of exchange rate movements are passed through via manufactured products. Oil however is another matter. A steep decline in the dollar means that oil prices for Americans will go up, all else being equal - this reality may become more significant after next week's OPEC meeting where the subject of prices is sure to come up."
New orders at U.S. factories fell 4.7 percent in October, the biggest fall in more than six years and marking the third drop in four months, while inventories rose again. However, excluding transportation, factory orders fell just 0.8 percent.
The Institute for Supply Management's services index rose to 58.9 in November from 57.1 in October. Employment, prices paid and new orders also rose, according to a report on Tuesday.
Palatin Technologies, Inc presented results from two Phase 2B trials evaluating bremelanotide for the treatment of male erectile dysfunction (ED) at the 9th European Society for Sexual Medicine (ESSM) Congress at the Hofburg Convention Center, Vienna on December 5, 2006. This presentation received "The European Society for Sexual Medicine 2006 Award for Best Presentation on Male Sexual Dysfunction (Clinical)."
February gold fell $3 to close at $647.90 an ounce in New York. March silver fell 22 cents, or 1.5%, to end at $14.025 an ounce. March copper closed at $3.247 a pound, up 7.1 cents.
Shares of McDonald's traded above the $43 mark for the first time in seven years. It was a long road back from the 12 1/8 hit only a few years ago.
Shares of Walt Disney reached a high of $34.08 in intraday trading, the highest price seen since May 23, 2001.
Announced layoffs totaled 76,773 in November, up from 69,177 in October but down from 99,279 a year earlier, according to Challenger, Gray & Christmas Inc.
The Conference Board reported that the leading index for Japan increased 0.5 percent and the coincident index increased 0.6 percent in October.
Mayo Clinic announced last
week that it has developed a new medical device that will help patients
control their breathing (respiratory motion) when undergoing computed
tomographic (CT) fluoroscopy-guided biopsies. The Interactive Breath-hold
Control will be the first medical device of its kind in the world. The
device will allow physicians to more rapidly and accurately diagnose
patients reducing the need for a more invasive surgical biopsy.
I'd like to take a moment to discuss the holiday season, which is abnormally stressful for many individuals. Learning to manage stress levels is one of the most important functions to master. I cannot say enough of the negative impact from high stress levels, which can produce high levels of cortisol in the body.
Cortisol is an important hormone in the body, secreted by the adrenal glands and involved in the following functions and more:
Proper glucose metabolism
Regulation of blood pressure
Insulin release for blood sugar maintanence
Immune function
Inflammatory response
Higher and more prolonged levels of cortisol in the bloodstream (like those associated with chronic stress) have been shown to have negative effects, such as:
Impaired cognitive performance
Suppressed thyroid function
Blood sugar imbalances such as hyperglycemia
Decreased bone density
Decrease in muscle tissue
Higher blood pressure
Lowered immunity and inflammatory responses in the body, as well as other health consequences
Increased abdominal fat, which is associated with a greater amount of health problems than fat deposited in other areas of the body. Some of the health problems associated with increased stomach fat are heart attacks, strokes, the development of , higher levels of “bad” cholesterol (LDL) and lower levels of “good” cholesterol (HDL), which can lead to other health problems!
Monday, December 04, 2006
The Horizon
12/5/06 The Horizon
From Abnormal Returns: "Closely monitoring the holdings of fund managers, hedge or mutual, is not unlike tailgating. That is following the car in front of you too closely, as opposed to the pre-game meal served prior to a football game. Tailgating behind a great driver could get you to your destination a little faster. However, tailgating is also a large contributor to auto accidents. Tailgating deprives the trailing driver with vital information on the road ahead. Relying on the driver in front of you is at best an iffy proposition."
On the Tribune Company, the January 2008 $35 calls have an open interest of 1096. I found it interesting that 241 of these calls traded at $1.00 on Monday.
Mining Weekly: "Chinese gold consumption is expected to rise 17% this year, news service Bloomberg quoted China Gold Association chair Cheng Fumin as saying. China is the world's third biggest consumer of the precious metal and is expected to use 350 metric tons this year, up from 300 tons in 2005, owing to an increase in demand for bullion as an investment, Fumin said.
This was despite a fall-off in demand for gold jewelry, caused by high prices.
China is the world's fourth-biggest gold producer and plans to attract foreign investment to the sector.
Fumin indicated that China's gold production may rise more than 10% next year, Bloomberg reported."
The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in October, fell to 107.2 from 109.1 in September.The October level was 13.2 percent below the year-earlier level.
Rep. Ron Paul: "Politicians often manage to fool voters and the media, but they rarely fool the financial markets over time. When investors lack faith in the U.S. dollar, they really lack faith in the economic policies of the U.S. government."
Phil Davis: "There is a 10% fantasy built into everything you own because you are under the illusion that the dollars you have in your pocket and the dollars you see in your bank statements are worth 100 pennies -- but they are not! And I'm not just talking about the fact that a dollar buys 50% less copper than it did last year -- just try leaving the country with that funny money of yours and see what you can buy in any of the 50 economies around the world that are outperforming us!"
In line with recent upbeat data from the euro zone, the Sentix index on Monday showed that investor sentiment improved in early December, with the current situation judged to be at its best since the survey began in February 2003.
Yesterday crude declined by 99 cents a barrel; however, ExxonMobil rose 57 cents in price. Meanwhile, January natural gas dropped 61.6 cents, or 7.3%, to finish the day at $7.806 per million British thermal units.
From Abnormal Returns: "Closely monitoring the holdings of fund managers, hedge or mutual, is not unlike tailgating. That is following the car in front of you too closely, as opposed to the pre-game meal served prior to a football game. Tailgating behind a great driver could get you to your destination a little faster. However, tailgating is also a large contributor to auto accidents. Tailgating deprives the trailing driver with vital information on the road ahead. Relying on the driver in front of you is at best an iffy proposition."
On the Tribune Company, the January 2008 $35 calls have an open interest of 1096. I found it interesting that 241 of these calls traded at $1.00 on Monday.
Mining Weekly: "Chinese gold consumption is expected to rise 17% this year, news service Bloomberg quoted China Gold Association chair Cheng Fumin as saying. China is the world's third biggest consumer of the precious metal and is expected to use 350 metric tons this year, up from 300 tons in 2005, owing to an increase in demand for bullion as an investment, Fumin said.
This was despite a fall-off in demand for gold jewelry, caused by high prices.
China is the world's fourth-biggest gold producer and plans to attract foreign investment to the sector.
Fumin indicated that China's gold production may rise more than 10% next year, Bloomberg reported."
The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in October, fell to 107.2 from 109.1 in September.The October level was 13.2 percent below the year-earlier level.
Rep. Ron Paul: "Politicians often manage to fool voters and the media, but they rarely fool the financial markets over time. When investors lack faith in the U.S. dollar, they really lack faith in the economic policies of the U.S. government."
Phil Davis: "There is a 10% fantasy built into everything you own because you are under the illusion that the dollars you have in your pocket and the dollars you see in your bank statements are worth 100 pennies -- but they are not! And I'm not just talking about the fact that a dollar buys 50% less copper than it did last year -- just try leaving the country with that funny money of yours and see what you can buy in any of the 50 economies around the world that are outperforming us!"
In line with recent upbeat data from the euro zone, the Sentix index on Monday showed that investor sentiment improved in early December, with the current situation judged to be at its best since the survey began in February 2003.
Yesterday crude declined by 99 cents a barrel; however, ExxonMobil rose 57 cents in price. Meanwhile, January natural gas dropped 61.6 cents, or 7.3%, to finish the day at $7.806 per million British thermal units.
Events
12/4/06 Events
President Evo Morales signed into law Sunday contracts giving the government control over foreign energy companies' operations, completing a process begun May 1 with the nationalization of Bolivia's petroleum industry.
Pfizer Inc. said Saturday it has cut off all clinical trials and development for a cholesterol drug that was supposed to be the star of its pipeline because of an unexpected number of deaths and cardiovascular problems in patients who used it.
Robert McHugh: "Now the punch line: This is the exact pattern we see currently in the Dow Industrials from 2002 through 2006. The entire rally from October 2002 has in effect been one very large Broadening Top, Megaphone pattern, identical to the patterns that led to the 1929, 1957, 1986, 1987 and 2000 stock market clobberings. And we sit very close to point e. The upper boundary of the 2002-2006 pattern suggests a top around 12,300 +/- if it completes this month, as high as 12,500 if it finishes in early 2007. Point e came after prices crawled along the upper boundary for a short while in 1929, so we could see the 2002 to 2006 pattern do likewise, meaning point e could top as late as early 2007."
BCA Research: "The yen is very pro-cyclical and almost always weakens during periods of slowing global growth. Currently, the world economy is still in a softening phase that could last well into 2007. Bottom line: the conditions are not in place to bet against the yen or yen carry trades."
Tiger Woods and Tatweer, a member of Dubai Holding, a leading UAE holding Company, announced
plans for 'Al Ruwaya,' the first-ever course designed by Woods in "The Tiger Woods - Dubai."
Tracinda Corp., which is controlled by Kirk Kerkorian, Monday filed a tender offer with the Securities and Exchange Commission for the purchase of 15 million shares of MGM Mirage for $55 each. Tracinda said it presently owns about 158.4 million MGM Mirage common shares, or 55.8% of the company's outstanding stock.
FedEx Corp. said it will raise its FedEx Ground and FedEx Home Delivery rates by an average of 4.9%, effective Jan. 1.
To see Shamu at Orlando SeaWorld will now cost $54 for a child's ticket and $70 for an adult.
Marshall & Ilsley Corp. agreed to acquire United Heritage Bankshares of Florida Inc. for about $217 million in stock. The deal calls for Marshall to swap 0.8740 of a share of its common stock for each United Heritage common share.
Poultry producers Pilgrim's Pride Corp. and Gold Kist Inc. entered into a merger agreement under which the former will acquire the latter for $21 a share in cash.
Station Casinos Inc. said it's received an acquisition proposal that values its common shares at $82 each from Fertitta Colony Partners LLC, an entity that includes members of its senior management team.
Bank of New York Co. and Mellon Financial Corp. agreed to merge, forming the world's No. 1 securities-servicing and asset-management firm. Under terms, Bank of New York's holders will get 0.9434 share of the new company for each of their shares. Mellon holders will receive one share of the new company for each of their shares.
Chipmaker LSI Logic Corp. has agreed to buy Agere Systems Inc. in an all-stock deal worth around $4 billion. LSI said Agere shareholders will receive 2.16 LSI shares for each Agere share they hold.
John Hussman: "If profit margins were at their usual norms, the current P/E ratio for the S&P 500 would be about 23 times earnings...For the Large 500 data series, capital expenditures as a percent of revenue has fallen from 7.5 percent in 2000 to 5.6 percent today...In the few times margins have reached a level of 7.5 percent or above, subsequent 3-year earnings growth has been flat or steeply negative...Investors consistently overpay for stocks during periods of high margins. The median P/E during the 20 percent of the highest margin periods is 25. During the 40 percent of periods with the lowest margins, the median P/E has been less than 13...Earnings will grow at about 5.9 percent a year if we assume profit margins remain near their current record levels. Assuming a decline in margins toward the long-term average of 6.5 percent, earnings will grow at one-third of a percent a year. If profit margins dropped to 5.5 percent, the level they reached in 1975 and 1983, earnings would decline 3 percent a year. Remember, this assumes a continuation of healthy top-line sales growth. Those are the headwinds that result from high profit margins."
Be Patient. Taking an overall view, in my opinion, better buying opportunities will present themselves.
President Evo Morales signed into law Sunday contracts giving the government control over foreign energy companies' operations, completing a process begun May 1 with the nationalization of Bolivia's petroleum industry.
Pfizer Inc. said Saturday it has cut off all clinical trials and development for a cholesterol drug that was supposed to be the star of its pipeline because of an unexpected number of deaths and cardiovascular problems in patients who used it.
Robert McHugh: "Now the punch line: This is the exact pattern we see currently in the Dow Industrials from 2002 through 2006. The entire rally from October 2002 has in effect been one very large Broadening Top, Megaphone pattern, identical to the patterns that led to the 1929, 1957, 1986, 1987 and 2000 stock market clobberings. And we sit very close to point e. The upper boundary of the 2002-2006 pattern suggests a top around 12,300 +/- if it completes this month, as high as 12,500 if it finishes in early 2007. Point e came after prices crawled along the upper boundary for a short while in 1929, so we could see the 2002 to 2006 pattern do likewise, meaning point e could top as late as early 2007."
BCA Research: "The yen is very pro-cyclical and almost always weakens during periods of slowing global growth. Currently, the world economy is still in a softening phase that could last well into 2007. Bottom line: the conditions are not in place to bet against the yen or yen carry trades."
Tiger Woods and Tatweer, a member of Dubai Holding, a leading UAE holding Company, announced
plans for 'Al Ruwaya,' the first-ever course designed by Woods in "The Tiger Woods - Dubai."
Tracinda Corp., which is controlled by Kirk Kerkorian, Monday filed a tender offer with the Securities and Exchange Commission for the purchase of 15 million shares of MGM Mirage for $55 each. Tracinda said it presently owns about 158.4 million MGM Mirage common shares, or 55.8% of the company's outstanding stock.
FedEx Corp. said it will raise its FedEx Ground and FedEx Home Delivery rates by an average of 4.9%, effective Jan. 1.
To see Shamu at Orlando SeaWorld will now cost $54 for a child's ticket and $70 for an adult.
Marshall & Ilsley Corp. agreed to acquire United Heritage Bankshares of Florida Inc. for about $217 million in stock. The deal calls for Marshall to swap 0.8740 of a share of its common stock for each United Heritage common share.
Poultry producers Pilgrim's Pride Corp. and Gold Kist Inc. entered into a merger agreement under which the former will acquire the latter for $21 a share in cash.
Station Casinos Inc. said it's received an acquisition proposal that values its common shares at $82 each from Fertitta Colony Partners LLC, an entity that includes members of its senior management team.
Bank of New York Co. and Mellon Financial Corp. agreed to merge, forming the world's No. 1 securities-servicing and asset-management firm. Under terms, Bank of New York's holders will get 0.9434 share of the new company for each of their shares. Mellon holders will receive one share of the new company for each of their shares.
Chipmaker LSI Logic Corp. has agreed to buy Agere Systems Inc. in an all-stock deal worth around $4 billion. LSI said Agere shareholders will receive 2.16 LSI shares for each Agere share they hold.
John Hussman: "If profit margins were at their usual norms, the current P/E ratio for the S&P 500 would be about 23 times earnings...For the Large 500 data series, capital expenditures as a percent of revenue has fallen from 7.5 percent in 2000 to 5.6 percent today...In the few times margins have reached a level of 7.5 percent or above, subsequent 3-year earnings growth has been flat or steeply negative...Investors consistently overpay for stocks during periods of high margins. The median P/E during the 20 percent of the highest margin periods is 25. During the 40 percent of periods with the lowest margins, the median P/E has been less than 13...Earnings will grow at about 5.9 percent a year if we assume profit margins remain near their current record levels. Assuming a decline in margins toward the long-term average of 6.5 percent, earnings will grow at one-third of a percent a year. If profit margins dropped to 5.5 percent, the level they reached in 1975 and 1983, earnings would decline 3 percent a year. Remember, this assumes a continuation of healthy top-line sales growth. Those are the headwinds that result from high profit margins."
Be Patient. Taking an overall view, in my opinion, better buying opportunities will present themselves.
Saturday, December 02, 2006
More Thoughts
12/3/06 More Thoughts
Brett Steenbarger: "Corporate bond volatility bottomed out in May of this year and has been on the rise since then; that is not true of SPX volatility. One hypothesis I'm entertaining is that increasing volatility in interest rates and the dollar will be leading increasing equity volatility."
Yesterday, I provided the wrong link to an article on Palatin. Please excuse. Let's try it again. http://abcnews.go.com/Nightline/Sex/stor...
From George Ure: "Bart's" work over at Nowand Futures.com which offers a recreation of the Fed's gone-since-March-06 M-3, the broadest measure of the money supply, By his figuring the annual rate of change of M3 is running just about 10%, underscoring out long held belief that since 9/11 which coincided with the first leg down of the Second Depression, but misdirected public attention from that fact, the central banksters have been flooding the markets with liquidity on the theory that deflation can be exactly and precisely counteracted by driving offsetting inflation into the system. "
Alarmed about the baht's 14.2 percent gain against the dollar this year, the Bank of Thailand intervened in the currency market Friday and earlier in the week to try to curb the surge, said Nitaya Pibulratanagit, the assistant governor.
"The baht has risen beyond its fundamentals," said Suchada Kirakul, the central bank's senior director for the domestic economy, blaming at least some of the appreciation on speculative inflows from offshore investors.
The South Korean won is near its strongest levels since 1997. The Philippine peso and Indonesian rupiah have strengthened. China's yuan is steadily inching higher, hitting fresh highs nearly every week.
These gains mean that American consumers could pay higher prices on at least some Asian exports just as the holiday shopping season gets into full swing.
Over the past 20 weeks, total money funds and commercial paper have both expanded at a 21% rate. It's as if they are both growth stocks in the nifty fifty category.
In case you believe volatility is dead, take a look at Meritage Homes. From Jan. to mid-July the stock dropped from 71 to 34. From mid-July thru Friday, the stock has risen from 34 to 48. Not for the faint hearted.
Doug Noland: "Considering the liquidity and speculative backdrop, I’d be willing to bet that sinking market yields foster some extraordinary (inflationary) consequences. And it is my view that heightened compensation pressures are today a major Inflationary Bias, nurtured through years of Credit and liquidity excess. Barring financial crisis or some development that restrains Credit expansion or incites de-leveraging, the combination of ballooning corporate liquidity and the worsening skilled labor shortage would appear poised to manifest in continued Income Inflation. All bets are off, however, when the marketplace turns against the Corporate (“Credit arbitrage”) Trade. For now, I’m going to force myself to see it before I believe it. Wall Street and the global leveraged speculating community have become incredibly powerful. I don’t expect they’ll be willing to let go of this pot of gold without a hell of a fight."
Deepcaster: "Regarding "Juiced Numbers," John Williams has created an excellent Newsletter "Shadow Government Statistics" at www.shadowstats.com which is a welcome antidote to Federal Reserve and government data manipulation. In late November, 2006, Shadowstats issued its report of the "real" numbers as opposed to the government ones. Williams found that annual money supply growth, calculated as if M3 had been continued (the Federal Reserve discontinued the calculation and release of M3 figures earlier this year), indicates that the annual money supply growth as of 3/4 of the way through 2006 was approaching 10%. A 10% increase in the money supply signals massive monetary inflation! Coupled with the massive credit inflation of recent years, we are truly in a massively inflating economy.
Of course, the Fed-led Cartel's manipulation of a variety of markets has temporarily masked this hyperinflationary reality and has, coupled with the juiced CPI numbers, created an illusion of deflation. Late in this year of 2006, the United States government's CPI number was just under 2% but shadowstats.com (which calculates it the old fashioned way) indicated a 9% CPI rate of inflation.
As well, shadowstats.com real numbers show the U.S. GDP contracting by nearly 2% a year rather than the government number of plus 2% per year .
Conclusion: while the Fed-led Cartel has created the illusion of deflation, in fact what we have is stagflation. A declining GDP and massive increases in credit and money supply and OTC derivatives are facts. It is only the "juiced numbers" and manipulated markets which disguise this stagflationary reality, albeit only temporarily.
In Deepcaster's view this explosion of derivatives cannot continue because, inter alia, the amount of derivatives necessary to maintain the Cartel's control of the markets continues to increase. This is similar to the situation in which the volume of drugs which a drug addict has to use has to continually increase to achieve the same "high." And at some point the desired effect cannot be obtained at all."
Bill Bonner: "Mightn’t we some other day - if we live long enough -- pick up a copy of the Random House Dictionary of Financial Terms, published in 2030, and read the following entry: ‘U.S. Dollar...currency used by America, from 1780 to 2025, when hyperinflation rendered it valueless. It was replaced by the gold-backed American Yuan.’"
The VIX closed the week at 11.66, and one year earlier it was 11.01.
On Friday, the closing TICK on the NYSE was quite strong at +1451.
Brett Steenbarger: "Corporate bond volatility bottomed out in May of this year and has been on the rise since then; that is not true of SPX volatility. One hypothesis I'm entertaining is that increasing volatility in interest rates and the dollar will be leading increasing equity volatility."
Yesterday, I provided the wrong link to an article on Palatin. Please excuse. Let's try it again. http://abcnews.go.com/Nightline/Sex/stor...
From George Ure: "Bart's" work over at Nowand Futures.com which offers a recreation of the Fed's gone-since-March-06 M-3, the broadest measure of the money supply, By his figuring the annual rate of change of M3 is running just about 10%, underscoring out long held belief that since 9/11 which coincided with the first leg down of the Second Depression, but misdirected public attention from that fact, the central banksters have been flooding the markets with liquidity on the theory that deflation can be exactly and precisely counteracted by driving offsetting inflation into the system. "
Alarmed about the baht's 14.2 percent gain against the dollar this year, the Bank of Thailand intervened in the currency market Friday and earlier in the week to try to curb the surge, said Nitaya Pibulratanagit, the assistant governor.
"The baht has risen beyond its fundamentals," said Suchada Kirakul, the central bank's senior director for the domestic economy, blaming at least some of the appreciation on speculative inflows from offshore investors.
The South Korean won is near its strongest levels since 1997. The Philippine peso and Indonesian rupiah have strengthened. China's yuan is steadily inching higher, hitting fresh highs nearly every week.
These gains mean that American consumers could pay higher prices on at least some Asian exports just as the holiday shopping season gets into full swing.
Over the past 20 weeks, total money funds and commercial paper have both expanded at a 21% rate. It's as if they are both growth stocks in the nifty fifty category.
In case you believe volatility is dead, take a look at Meritage Homes. From Jan. to mid-July the stock dropped from 71 to 34. From mid-July thru Friday, the stock has risen from 34 to 48. Not for the faint hearted.
Doug Noland: "Considering the liquidity and speculative backdrop, I’d be willing to bet that sinking market yields foster some extraordinary (inflationary) consequences. And it is my view that heightened compensation pressures are today a major Inflationary Bias, nurtured through years of Credit and liquidity excess. Barring financial crisis or some development that restrains Credit expansion or incites de-leveraging, the combination of ballooning corporate liquidity and the worsening skilled labor shortage would appear poised to manifest in continued Income Inflation. All bets are off, however, when the marketplace turns against the Corporate (“Credit arbitrage”) Trade. For now, I’m going to force myself to see it before I believe it. Wall Street and the global leveraged speculating community have become incredibly powerful. I don’t expect they’ll be willing to let go of this pot of gold without a hell of a fight."
Deepcaster: "Regarding "Juiced Numbers," John Williams has created an excellent Newsletter "Shadow Government Statistics" at www.shadowstats.com which is a welcome antidote to Federal Reserve and government data manipulation. In late November, 2006, Shadowstats issued its report of the "real" numbers as opposed to the government ones. Williams found that annual money supply growth, calculated as if M3 had been continued (the Federal Reserve discontinued the calculation and release of M3 figures earlier this year), indicates that the annual money supply growth as of 3/4 of the way through 2006 was approaching 10%. A 10% increase in the money supply signals massive monetary inflation! Coupled with the massive credit inflation of recent years, we are truly in a massively inflating economy.
Of course, the Fed-led Cartel's manipulation of a variety of markets has temporarily masked this hyperinflationary reality and has, coupled with the juiced CPI numbers, created an illusion of deflation. Late in this year of 2006, the United States government's CPI number was just under 2% but shadowstats.com (which calculates it the old fashioned way) indicated a 9% CPI rate of inflation.
As well, shadowstats.com real numbers show the U.S. GDP contracting by nearly 2% a year rather than the government number of plus 2% per year .
Conclusion: while the Fed-led Cartel has created the illusion of deflation, in fact what we have is stagflation. A declining GDP and massive increases in credit and money supply and OTC derivatives are facts. It is only the "juiced numbers" and manipulated markets which disguise this stagflationary reality, albeit only temporarily.
In Deepcaster's view this explosion of derivatives cannot continue because, inter alia, the amount of derivatives necessary to maintain the Cartel's control of the markets continues to increase. This is similar to the situation in which the volume of drugs which a drug addict has to use has to continually increase to achieve the same "high." And at some point the desired effect cannot be obtained at all."
Bill Bonner: "Mightn’t we some other day - if we live long enough -- pick up a copy of the Random House Dictionary of Financial Terms, published in 2030, and read the following entry: ‘U.S. Dollar...currency used by America, from 1780 to 2025, when hyperinflation rendered it valueless. It was replaced by the gold-backed American Yuan.’"
The VIX closed the week at 11.66, and one year earlier it was 11.01.
On Friday, the closing TICK on the NYSE was quite strong at +1451.
Friday, December 01, 2006
Interesting Points
12/2/06 Interesting Points
An article well worth reading on Palatin: http://abcnews.go.com/Nightline/story?id...
In addition, we will have this information presented on Palatin:
At the meeting of the European Society of Sexual Medicine Palatin will be represented in two (2) Podium Discussions as follows: 1.REVIEW OF POTENTIAL ROLE OF BREMELANOTIDE
(PT-141) IN THE TREATMENT OF FEMALE SEXUAL DYSFUNCTION.
Speaker- Michael A. Perlman of Cornell University Medical School.
2.RANDOMIZED,DOUBLE BLIND,PLACEBO-CONTROLLED AT HOME STUDY OF INTRANASAL BREMELANOTIDE (PT-141) IN MEN WITH ERECTILE DYSFUNCTION WITH AND WITHOUT DIABETES MELLITUS.
Speaker- W.Hellstrom-Professor of Urology-Tulane Medical School -Chief of Andrology(Male infertility and sexual dysfunction).
GM said its first-quarter 2007 production plans are off 9% from a year ago, mainly because of the automaker's move away from rental fleet sales.
February gold closed at $650.60 an ounce Friday. March silver added 7.5 cents to close at $14.19 an ounce. March copper closed at $3.172 a pound.
Ford said it plans to build 620,000 vehicles in the fourth quarter, down 15,000 units from prior forecasts. In the first quarter 2007, Ford plans to produce 750,000 cars and trucks, which the automaker said is consistent with the high end of its prior targets. Ford earlier said first half 2007 production would be down 8% to 12% from a year ago.
Robert Nardelli, chief executive of Home Depot Inc., downplayed speculation Friday that his company was the target of a $100 billion takeover, according to the Atlanta Journal Constitution. Home Depot Inc.said late Friday in a regulatory filing that it has had no discussion about a potential leveraged buyout or recapitalization.
Financial markets expect the Federal Reserve to begin aggressively cutting interest rates in the first half of 2007, according to the federal funds futures market at the Chicago Board of Trade. Following a report that the factory sector contracted in November, the futures market was pricing in 28% odds of a cut to 5% in January and an 80% chance of a cut in March.
The ISM index fell to 49.5% in November from 51.2% in October. This is the first time the index has been below the 50 threshold since April 2003. New orders fell to 48.7% in November from 52.1% in October. Production fell to 48.5% from 51.9%.
Spending on U.S. construction projects dropped by 1.0% in October, as outlays on private residential construction matched a low hit in July 2006, the Commerce Department said Friday. Private residential construction spending fell by 1.9% in October, the latest evidence the U.S. housing market has pulled back sharply. Private construction spending dropped by a sharp 1.5% in October. Spending on private nonresidential construction projects fell by 0.7%. Meanwhile, the homebuilding stocks continue to rally as interest rates on treasuries decline.
Claire's Stores Inc. said Friday it is exploring strategic alternatives, including a possible sale of the company. The company said it hired Goldman Sachs as its financial adviser.
January crude closed at $63.43 a barrel Friday, up 30 cents for the day and up $4.19, or 7.1%, for the week. It recovered from an earlier session low of $62.30.
The commander of coalition forces in northern Iraq said Friday that four Iraqi army divisions in his area will be put under Baghdad's control by next March, just the kind of transfer that a U.S. study commission reportedly is ready to embrace.
Yesterday, Barrons Online ran the following story:
"Private Equity Stalks Oil-field Services." In my view, the best risk
reward can be found with BJ Services. I have written about this company on numerous occasions, and yes, it is up from $29 to Friday's close of $33.87; however, for the year that ends 9/30/07, the company is expected to earn about $3.25 a share or roughly a third higher than earnings in 2006. BJ Services should sell at a much higher multiple than 10+. A fifteen p/e would still be only half of the earnings growth. If there were a buyout, a price of $48 would not be rich, in my view. Take a look at the January 2008 calls. They went out at $3 bid on Friday.
An article well worth reading on Palatin: http://abcnews.go.com/Nightline/story?id...
In addition, we will have this information presented on Palatin:
At the meeting of the European Society of Sexual Medicine Palatin will be represented in two (2) Podium Discussions as follows: 1.REVIEW OF POTENTIAL ROLE OF BREMELANOTIDE
(PT-141) IN THE TREATMENT OF FEMALE SEXUAL DYSFUNCTION.
Speaker- Michael A. Perlman of Cornell University Medical School.
2.RANDOMIZED,DOUBLE BLIND,PLACEBO-CONTROLLED AT HOME STUDY OF INTRANASAL BREMELANOTIDE (PT-141) IN MEN WITH ERECTILE DYSFUNCTION WITH AND WITHOUT DIABETES MELLITUS.
Speaker- W.Hellstrom-Professor of Urology-Tulane Medical School -Chief of Andrology(Male infertility and sexual dysfunction).
GM said its first-quarter 2007 production plans are off 9% from a year ago, mainly because of the automaker's move away from rental fleet sales.
February gold closed at $650.60 an ounce Friday. March silver added 7.5 cents to close at $14.19 an ounce. March copper closed at $3.172 a pound.
Ford said it plans to build 620,000 vehicles in the fourth quarter, down 15,000 units from prior forecasts. In the first quarter 2007, Ford plans to produce 750,000 cars and trucks, which the automaker said is consistent with the high end of its prior targets. Ford earlier said first half 2007 production would be down 8% to 12% from a year ago.
Robert Nardelli, chief executive of Home Depot Inc., downplayed speculation Friday that his company was the target of a $100 billion takeover, according to the Atlanta Journal Constitution. Home Depot Inc.said late Friday in a regulatory filing that it has had no discussion about a potential leveraged buyout or recapitalization.
Financial markets expect the Federal Reserve to begin aggressively cutting interest rates in the first half of 2007, according to the federal funds futures market at the Chicago Board of Trade. Following a report that the factory sector contracted in November, the futures market was pricing in 28% odds of a cut to 5% in January and an 80% chance of a cut in March.
The ISM index fell to 49.5% in November from 51.2% in October. This is the first time the index has been below the 50 threshold since April 2003. New orders fell to 48.7% in November from 52.1% in October. Production fell to 48.5% from 51.9%.
Spending on U.S. construction projects dropped by 1.0% in October, as outlays on private residential construction matched a low hit in July 2006, the Commerce Department said Friday. Private residential construction spending fell by 1.9% in October, the latest evidence the U.S. housing market has pulled back sharply. Private construction spending dropped by a sharp 1.5% in October. Spending on private nonresidential construction projects fell by 0.7%. Meanwhile, the homebuilding stocks continue to rally as interest rates on treasuries decline.
Claire's Stores Inc. said Friday it is exploring strategic alternatives, including a possible sale of the company. The company said it hired Goldman Sachs as its financial adviser.
January crude closed at $63.43 a barrel Friday, up 30 cents for the day and up $4.19, or 7.1%, for the week. It recovered from an earlier session low of $62.30.
The commander of coalition forces in northern Iraq said Friday that four Iraqi army divisions in his area will be put under Baghdad's control by next March, just the kind of transfer that a U.S. study commission reportedly is ready to embrace.
Yesterday, Barrons Online ran the following story:
"Private Equity Stalks Oil-field Services." In my view, the best risk
reward can be found with BJ Services. I have written about this company on numerous occasions, and yes, it is up from $29 to Friday's close of $33.87; however, for the year that ends 9/30/07, the company is expected to earn about $3.25 a share or roughly a third higher than earnings in 2006. BJ Services should sell at a much higher multiple than 10+. A fifteen p/e would still be only half of the earnings growth. If there were a buyout, a price of $48 would not be rich, in my view. Take a look at the January 2008 calls. They went out at $3 bid on Friday.
Thursday, November 30, 2006
The Home Stretch
12/1/06 The Home Stretch
PIRA Energy said that OPEC crude exports had fallen by 1.28 million bpd in the four weeks to November 19 and were 1.7 million bpd below their recent peak in mid-October.
U.S. initial weekly jobless claims highest in more than year
The number of U.S. workers applying for jobless benefits climbed by the highest amount in more than a year last week, to 357,000, the Labor Department said Thursday. First-time claims for state unemployment benefits rose by 34,000 to 357,000 for the week ending Nov. 25. The rise in claims is up from a revised 323,000 the prior week, the Labor Department said. The number of workers continuing to collect unemployment benefits jumped by 45,000 during the week ending Nov. 18, to 2.48 million. The four-week average of continuing claims also rose, by 18,750 to 2.45 million.
Real consumer spending in the United States rose 0.4% in October, the Commerce Department reported Thursday. Core inflation rose slightly faster than expected at 0.2%, keeping the year-over-year gain in the core personal consumption expenditure price index at 2.4%. Nominal incomes rose 0.4%, the weakest growth since June, and a tenth lower than expected. However, with prices falling 0.2%, real (inflation-adjusted) after-tax incomes rose 0.6%, the second-best growth in more than a year. Nominal spending increased 0.2 in October.
In early Thursday trading, crude topped $63 a barrel and gold traded at $653 an ounce. Meanwhile, the dollar remained in the toilet-- where it belongs as long as these MO MO's
remain in the Administration.
Business activity in the Chicago region slowed to its lowest level in more than three years in November, according to Chicago purchasing managers index released Thursday. The Chicago purchasing managers index fell to 49.9% in November from 53.5% in October. This is the lowest level since April 2003. The employment index dropped to 49.4% from 57.0%. The prices paid index fell to 60.2% from 62.5% in October. The new orders index fell to 52.0% from 54.1%. Inventories fell to 57.7% from 67.2% in the previous month. The deliveries-diffusion index fell to 43.0% from 54.1%. This is the lowest since March 2001.
The Energy Department said natural-gas inventories fell 32 billion cubic feet for the week ended Nov. 24. Total stocks now stand at 3.417 trillion cubic feet, up 185 billion cubic feet from the year-ago level, and 230 billion cubic feet above the five-year average, the government data said. Meanwhile, prices hit a 2-month high at $9.05 per million cubic feet.
Crude ended the day at $63.13 a barrel, natural gas at $8.84 per million cubic feet, Deceember gold at $646.90 per ounce, December silver at $13.92 an ounce, and December copper at $3.17 a pound. Meanwhile, the U.S. dollar index stumbled down to 82.80.
The poor economic data was the reason for the 10-year government bonds to end the day at a yield of 4.46%, while the 2-year yield declined to 4.62%. The lower interest rates assisted the homebuilding index to continue its climb, and that despite the poor housing numbers.
Many analysts thought that the disappointing November Wal-Mart same-store sales were simply a company specific problem. Obviously, that was not the case. Gap's November same-store sales were down 8%, Abercrombie and Fitch 3%, Dillard's 3%, Ann
Taylor 4.3%, Cato 6%, Sharper Image 27%, Pacific Sunwear 3.8%, Finish Line 3.3%, Gottschalks 0.9%, Pier I 1.3%, and Fred's 2%.
To put the icing on the cake, Wal-Mart projected that December same-store sales would be in a range of flat to up 1%. You can bet this will not be company specific.
Valero is shutting down a coker unit in Pennsylvania for “needed repairs”. The outage will cut gasoline production by 300-450,000 bls and distillate by 250-400,000 bls.
Tradingthecharts.com: "One precursor of a possible more important market peak could be the DJ Utilities Index, which appears to be nearing an important peak from an Elliott point of view. The Utilities are in their final advance after spending eight months within a contracting triangle. Seems as if the 4th wave of (5) is also in a triangle pacing itself for a year end rally. 2 measured moves are just over head where this market could finally peak after a four year advance."
Increased competition from Canada and a dip in new home construction in the U.S. has lumber mill officials in north-central Idaho concerned about possible shutdowns, though so far that step has been avoided. "Prices are not good at all, and we'll have to watch that," said Calvin Hogg, chief financial officer at Three Rivers Timber, which employs about 190 people in Kamiah. "Nobody is very happy where things are." According to the Census Bureau, housing starts dropped from a record high of 2.2 million in February 2005 to 1.48 million last month, reducing the demand for lumber.
Kerkorian sold 14 million shares of GM at $28.75, and that reduces
his ownership to 4.8%. He will be most fortunate to come out of this situation with a small loss. The first loss is the best loss.
With government bonds yielding less than 4.50%, what is the margin of safety in the forecasts for corporate profits in 2007?
If the housing sector is weak, if the auto sector is weak, if manufacturing is weak, if the dollar is weak, then what's strong?-- Prospects for oil service companies, gold and silver companies, and possibly the merger and acquisition business. As the dollar weakens, U.S. companies become cheaper for foreigners to purchase.
India announced that their economic growth had unexpectedly accelerated to 9.2% in the 3rd QTR.
Donald Rumsfeld: "Be precise. A lack of precision is dangerous when the margin of error is small."
Imagine this. “Packard had the highest margin of profit per car in automotive history the year it went out of business."
PIRA Energy said that OPEC crude exports had fallen by 1.28 million bpd in the four weeks to November 19 and were 1.7 million bpd below their recent peak in mid-October.
U.S. initial weekly jobless claims highest in more than year
The number of U.S. workers applying for jobless benefits climbed by the highest amount in more than a year last week, to 357,000, the Labor Department said Thursday. First-time claims for state unemployment benefits rose by 34,000 to 357,000 for the week ending Nov. 25. The rise in claims is up from a revised 323,000 the prior week, the Labor Department said. The number of workers continuing to collect unemployment benefits jumped by 45,000 during the week ending Nov. 18, to 2.48 million. The four-week average of continuing claims also rose, by 18,750 to 2.45 million.
Real consumer spending in the United States rose 0.4% in October, the Commerce Department reported Thursday. Core inflation rose slightly faster than expected at 0.2%, keeping the year-over-year gain in the core personal consumption expenditure price index at 2.4%. Nominal incomes rose 0.4%, the weakest growth since June, and a tenth lower than expected. However, with prices falling 0.2%, real (inflation-adjusted) after-tax incomes rose 0.6%, the second-best growth in more than a year. Nominal spending increased 0.2 in October.
In early Thursday trading, crude topped $63 a barrel and gold traded at $653 an ounce. Meanwhile, the dollar remained in the toilet-- where it belongs as long as these MO MO's
remain in the Administration.
Business activity in the Chicago region slowed to its lowest level in more than three years in November, according to Chicago purchasing managers index released Thursday. The Chicago purchasing managers index fell to 49.9% in November from 53.5% in October. This is the lowest level since April 2003. The employment index dropped to 49.4% from 57.0%. The prices paid index fell to 60.2% from 62.5% in October. The new orders index fell to 52.0% from 54.1%. Inventories fell to 57.7% from 67.2% in the previous month. The deliveries-diffusion index fell to 43.0% from 54.1%. This is the lowest since March 2001.
The Energy Department said natural-gas inventories fell 32 billion cubic feet for the week ended Nov. 24. Total stocks now stand at 3.417 trillion cubic feet, up 185 billion cubic feet from the year-ago level, and 230 billion cubic feet above the five-year average, the government data said. Meanwhile, prices hit a 2-month high at $9.05 per million cubic feet.
Crude ended the day at $63.13 a barrel, natural gas at $8.84 per million cubic feet, Deceember gold at $646.90 per ounce, December silver at $13.92 an ounce, and December copper at $3.17 a pound. Meanwhile, the U.S. dollar index stumbled down to 82.80.
The poor economic data was the reason for the 10-year government bonds to end the day at a yield of 4.46%, while the 2-year yield declined to 4.62%. The lower interest rates assisted the homebuilding index to continue its climb, and that despite the poor housing numbers.
Many analysts thought that the disappointing November Wal-Mart same-store sales were simply a company specific problem. Obviously, that was not the case. Gap's November same-store sales were down 8%, Abercrombie and Fitch 3%, Dillard's 3%, Ann
Taylor 4.3%, Cato 6%, Sharper Image 27%, Pacific Sunwear 3.8%, Finish Line 3.3%, Gottschalks 0.9%, Pier I 1.3%, and Fred's 2%.
To put the icing on the cake, Wal-Mart projected that December same-store sales would be in a range of flat to up 1%. You can bet this will not be company specific.
Valero is shutting down a coker unit in Pennsylvania for “needed repairs”. The outage will cut gasoline production by 300-450,000 bls and distillate by 250-400,000 bls.
Tradingthecharts.com: "One precursor of a possible more important market peak could be the DJ Utilities Index, which appears to be nearing an important peak from an Elliott point of view. The Utilities are in their final advance after spending eight months within a contracting triangle. Seems as if the 4th wave of (5) is also in a triangle pacing itself for a year end rally. 2 measured moves are just over head where this market could finally peak after a four year advance."
Increased competition from Canada and a dip in new home construction in the U.S. has lumber mill officials in north-central Idaho concerned about possible shutdowns, though so far that step has been avoided. "Prices are not good at all, and we'll have to watch that," said Calvin Hogg, chief financial officer at Three Rivers Timber, which employs about 190 people in Kamiah. "Nobody is very happy where things are." According to the Census Bureau, housing starts dropped from a record high of 2.2 million in February 2005 to 1.48 million last month, reducing the demand for lumber.
Kerkorian sold 14 million shares of GM at $28.75, and that reduces
his ownership to 4.8%. He will be most fortunate to come out of this situation with a small loss. The first loss is the best loss.
With government bonds yielding less than 4.50%, what is the margin of safety in the forecasts for corporate profits in 2007?
If the housing sector is weak, if the auto sector is weak, if manufacturing is weak, if the dollar is weak, then what's strong?-- Prospects for oil service companies, gold and silver companies, and possibly the merger and acquisition business. As the dollar weakens, U.S. companies become cheaper for foreigners to purchase.
India announced that their economic growth had unexpectedly accelerated to 9.2% in the 3rd QTR.
Donald Rumsfeld: "Be precise. A lack of precision is dangerous when the margin of error is small."
Imagine this. “Packard had the highest margin of profit per car in automotive history the year it went out of business."
Wednesday, November 29, 2006
More Government Numbers
11/30/06 More Government Numbers
I do my best to ignore government numbers. For the most part, in my view, a capable person would not be found working in the government sector. As such,
relying on data coming out of this arena is foolish. That includes the Fed and their Beige Book, which stated most areas of the United States reported moderate economic growth through the first weeks of November and labor markets were tight in many regions, especially for high-skilled occupations, the Fed said. At the same time, wage growth remained moderate and most districts reported that prices had moderated for construction materials and energy products. Fed districts reported strong demand for workers in industries, such as, sales, engineering and health care, as well as oil field workers, welders, and truck drivers. Most Fed districts reported that overall housing market activity continued to slow and said they had experienced declining sales of single family homes and rising inventories, the Beige Book said. There were also scattered reports of house price reductions, the Fed said. Several Fed districts said they expect weak housing market conditions to persist for several months. Manufacturing activity was generally positive in most districts, however, with reports of weakness concentrated among producers linked to the housing and automotive industries, the Fed said. Most Fed districts reported increased consumer spending, with the retail sales outlook for the busy winter holiday season "cautiously optimistic," the Beige Book reported.
U.S. GDP expanded at a 2.2 percent annual rate during the third quarter, higher than the 1.6 percent gain first estimated and above Wall Street expectations for a 1.8 percent gain. However, more of the third quarter's output went into inventories than previously believed, while consumer spending was a touch softer. At the same time, After-tax corporate profits during the quarter were far stronger than expected, rising 4.6 percent after a slim 0.3 percent increase in the prior quarter. Economists had been expecting another weak quarterly gain, of 0.4 percent.
Ford said a total of 38,000 employees -- almost half of the automaker's U.S. factory workforce -- had accepted buyout offers to leave the company. The number includes about 30,000 workers who the most recent round of buyout offers that concluded this week and about 8,000 employees who accepted Ford's earlier plant-by-plant buyout offers.The buyouts exceed Ford's goal of cutting 30,000 blue-collar jobs in North America by 2008 and exceeds rival General Motors Corp.'s similar efforts earlier this year, which resulted in 34,400 workers accepting buyout offers.
Pfizer announced cutting 20% of its salesforce or 2200 workers.
Calgary-based TransAlta Corp. will immediately stop mining at its Centralia, Washington, coal mine and switch to coal from the Powder River Basin in Wyoming to fuel the related power plant.The closure will eliminate about 600 mine-related jobs, but the company said the mine was becoming uneconomical to operate and producing electricity from the Centralia coal-fired power plant too costly."In order to produce competitively priced electricity from our Centralia coal-fired plant we have to meet the fuel requirements for our plant from a more predictable an economic source," the company said in a press release.
January crude climbed $1.47 to close at $62.46 a barrel, marking the contract's highest closing level since Nov. 9. The Energy Department reported on Wednesday its first decline in crude supply in five weeks. January natural gas closed up 31.2 cents, or 3.7%, at $8.871 per million British thermal units. It logged its strongest close since Sept. 13 on cold U.S. weather forecasts.
December gold fell $1.80 to close at $635.50 an ounce Wednesday. December silver fell by 5.4 cents to close at $13.566 an ounce and December copper lost 1 cent to end the day at $3.128 a pound.
Total assets in U.S. mutual funds broke the $10 trillion plateau in October.
Online shoppers bought $608 million worth of items Monday, the highest-ever single day total in e-commerce history and slightly topping expectations for what's known as "Cyber Monday", comScore Networks Inc. reports. The tally for this year's Cyber Monday was a 26% increase from last year's Cyber Monday, and above the $600 million comScore had predicted.
Sales of new-homes fell 3.2% in October to a seasonally adjusted annual rate of 1.004 million, the Commerce Department estimated Wednesday. New-home sales are now down 25.4% in the past year. The sales pace in July, August and September was revised lower by a total of 64,000. Median sales prices were up 2% in the past 12 months to $248,500, reversing a trend toward falling prices year-over-year. The number of new homes on the market dropped 0.7% to 558,000, the third straight decline. The inventory represents a 7-month supply at the current sales pace, up from 6.7 months in September.
Dollar General will close 400 stores.
It was not very long ago that I suggested accumulating natural gas at the $5.50 level. I did not expect it to jump close to $9 in such a short time. Locking in profits makes some sense. Some input from ZMANN makes some sense:
"Even with a repeat of the coldest Dec - Mar period on record, trough storage comes out at 1,235 Bcf which is above average. In the event of an average winter from here on out, we arrive at trough storage that is just short of last year’s record."
Fan Gang, a member of People's Bank of China's policy committee: "The US dollar is no longer a stable anchor in the global financial system, nor is it likely to become one, therefore it is time to look for alternatives."
The British pound is trading at a 14-year high versus the dollar.
The Philadelphia Oil Service Sector Index climbed 3 percent, with all 15 of component stocks marking gains. BJ Services climbed 5.5% to $33.76.
An additional view on Tribune:
http://www.secinvestor.com/2006/11/29/Tr.
Talisman Energy Inc. agreed to sell its indirect 1.25% interest in Syncrude to Canadian Oil Sands Trust's operating unit for $475 million. Talisman said the price tag comprises $237.5 million in cash, and 8.19 million Canadian Oil units. Talisman said it has also sold its 2% gross overriding royalty on Suncor Energy Inc.'s undeveloped Lease 23 to Suncor for $107.5 million. Talisman said the sales are part of its process "to realize value from the company's non-core oil sands assets."
I do my best to ignore government numbers. For the most part, in my view, a capable person would not be found working in the government sector. As such,
relying on data coming out of this arena is foolish. That includes the Fed and their Beige Book, which stated most areas of the United States reported moderate economic growth through the first weeks of November and labor markets were tight in many regions, especially for high-skilled occupations, the Fed said. At the same time, wage growth remained moderate and most districts reported that prices had moderated for construction materials and energy products. Fed districts reported strong demand for workers in industries, such as, sales, engineering and health care, as well as oil field workers, welders, and truck drivers. Most Fed districts reported that overall housing market activity continued to slow and said they had experienced declining sales of single family homes and rising inventories, the Beige Book said. There were also scattered reports of house price reductions, the Fed said. Several Fed districts said they expect weak housing market conditions to persist for several months. Manufacturing activity was generally positive in most districts, however, with reports of weakness concentrated among producers linked to the housing and automotive industries, the Fed said. Most Fed districts reported increased consumer spending, with the retail sales outlook for the busy winter holiday season "cautiously optimistic," the Beige Book reported.
U.S. GDP expanded at a 2.2 percent annual rate during the third quarter, higher than the 1.6 percent gain first estimated and above Wall Street expectations for a 1.8 percent gain. However, more of the third quarter's output went into inventories than previously believed, while consumer spending was a touch softer. At the same time, After-tax corporate profits during the quarter were far stronger than expected, rising 4.6 percent after a slim 0.3 percent increase in the prior quarter. Economists had been expecting another weak quarterly gain, of 0.4 percent.
Ford said a total of 38,000 employees -- almost half of the automaker's U.S. factory workforce -- had accepted buyout offers to leave the company. The number includes about 30,000 workers who the most recent round of buyout offers that concluded this week and about 8,000 employees who accepted Ford's earlier plant-by-plant buyout offers.The buyouts exceed Ford's goal of cutting 30,000 blue-collar jobs in North America by 2008 and exceeds rival General Motors Corp.'s similar efforts earlier this year, which resulted in 34,400 workers accepting buyout offers.
Pfizer announced cutting 20% of its salesforce or 2200 workers.
Calgary-based TransAlta Corp. will immediately stop mining at its Centralia, Washington, coal mine and switch to coal from the Powder River Basin in Wyoming to fuel the related power plant.The closure will eliminate about 600 mine-related jobs, but the company said the mine was becoming uneconomical to operate and producing electricity from the Centralia coal-fired power plant too costly."In order to produce competitively priced electricity from our Centralia coal-fired plant we have to meet the fuel requirements for our plant from a more predictable an economic source," the company said in a press release.
January crude climbed $1.47 to close at $62.46 a barrel, marking the contract's highest closing level since Nov. 9. The Energy Department reported on Wednesday its first decline in crude supply in five weeks. January natural gas closed up 31.2 cents, or 3.7%, at $8.871 per million British thermal units. It logged its strongest close since Sept. 13 on cold U.S. weather forecasts.
December gold fell $1.80 to close at $635.50 an ounce Wednesday. December silver fell by 5.4 cents to close at $13.566 an ounce and December copper lost 1 cent to end the day at $3.128 a pound.
Total assets in U.S. mutual funds broke the $10 trillion plateau in October.
Online shoppers bought $608 million worth of items Monday, the highest-ever single day total in e-commerce history and slightly topping expectations for what's known as "Cyber Monday", comScore Networks Inc. reports. The tally for this year's Cyber Monday was a 26% increase from last year's Cyber Monday, and above the $600 million comScore had predicted.
Sales of new-homes fell 3.2% in October to a seasonally adjusted annual rate of 1.004 million, the Commerce Department estimated Wednesday. New-home sales are now down 25.4% in the past year. The sales pace in July, August and September was revised lower by a total of 64,000. Median sales prices were up 2% in the past 12 months to $248,500, reversing a trend toward falling prices year-over-year. The number of new homes on the market dropped 0.7% to 558,000, the third straight decline. The inventory represents a 7-month supply at the current sales pace, up from 6.7 months in September.
Dollar General will close 400 stores.
It was not very long ago that I suggested accumulating natural gas at the $5.50 level. I did not expect it to jump close to $9 in such a short time. Locking in profits makes some sense. Some input from ZMANN makes some sense:
"Even with a repeat of the coldest Dec - Mar period on record, trough storage comes out at 1,235 Bcf which is above average. In the event of an average winter from here on out, we arrive at trough storage that is just short of last year’s record."
Fan Gang, a member of People's Bank of China's policy committee: "The US dollar is no longer a stable anchor in the global financial system, nor is it likely to become one, therefore it is time to look for alternatives."
The British pound is trading at a 14-year high versus the dollar.
The Philadelphia Oil Service Sector Index climbed 3 percent, with all 15 of component stocks marking gains. BJ Services climbed 5.5% to $33.76.
An additional view on Tribune:
http://www.secinvestor.com/2006/11/29/Tr.
Talisman Energy Inc. agreed to sell its indirect 1.25% interest in Syncrude to Canadian Oil Sands Trust's operating unit for $475 million. Talisman said the price tag comprises $237.5 million in cash, and 8.19 million Canadian Oil units. Talisman said it has also sold its 2% gross overriding royalty on Suncor Energy Inc.'s undeveloped Lease 23 to Suncor for $107.5 million. Talisman said the sales are part of its process "to realize value from the company's non-core oil sands assets."
Tuesday, November 28, 2006
Value And Patience
11/29/06 Value And Patience
Sales of existing U.S. homes rose 0.5% to a seasonally adjusted annual rate of 6.24 million in October, the first increase since February, the National Association of Realtors reported Tuesday. September's sales were revised higher to 6.21 million from 6.18 million initially reported. Sales are down 11.5% in the past year. Median sales prices fell a record 3.5% year-over-year, the third decline in a row. Inventories of unsold homes increased 1.9% to 3.854 million, representing a 7.4-month supply at the October sales rate. It's the largest months' supply since April 1993.
U.S. consumer confidence weakened in November, the Conference Board said Tuesday. The consumer confidence index fell to 102.9 in November from a revised 105.1 in October. The present situation index fell to 123.6 from 125.1, while the expectations index slipped to 89.2 from 91.9.
Led by falling order for new airplanes, demand for U.S.-made durable goods fell 8.3% in October, erasing September's 8.7% gain, the Commerce Department said. Excluding transportation goods, orders fell 1.7%. It was the biggest drop in orders for durable goods since July 2000. New orders for civilian aircraft plunged 44.5% last month. Orders for core capital goods fell 5.1% in October, the first decline in six months. Based on this weak durable goods report, the 10-year Treasury yield dipped below 4.50% for the first time since Feb.10. The weak data and the falling yields contributed to the dollar declining further against the euro. Meanwhile, December natural-gas futures climbed 32 cents, or 4%, to close at $8.318 per million British thermal units Tuesday, its highest closing level since late October. January natural gas became the lead-month contract and it closed at $8.559, up 20.2 cents, or 2.4%. January crude added 67 cents to close at $60.99 a barrel, its strongest closing level in more than two weeks.
The Federal Reserve may need to raise its overnight interest rate target above 5.25% to keep inflation under control, said Charles Plosser, president of the Philadelphia Federal Reserve Bank, in a speech on Tuesday in Rochester, N.Y. Plosser said it's possible inflation could return to acceptable levels without further hikes, but stressed that the Fed must act to back up its words or it will lose credibility.
Bernanke said the economy is still on track to expand at a moderate pace over the next year without slowing too much.He said the inflation is already "better behaved of late" and should continue to slow gradually.
I would like to spend some more time on the Tribune Company, the owner of 11 daily newspapers--including the LA Times, Baltimore Sun, and the Chicago Tribune-- 25 TV stations, the Cubs, a cable network, a radio station, the Williamsburg Magazine, the Chicago Magazine, and many classified and entertainment sites. The current market values the shares at about $7.5 billion. In addition, there is outstanding debt of $5.3 billion. Lots of rumors have circulated that the bids for the whole company have been low and, at the same time, there have been many bids for parts of the company- the LA Times, the Cubs, the Chicago Tribune, the Baltimore Sun, and the South Florida Sun-Sentinel. In my opinion, there is terrific value in this company, and therefore, I strongly suggest the reader consider taking a position. My best idea is to buy the January 2009 (not a misprint) $20 call at roughly $12.30. This let's you leverage your purchase and yet pay only a tiny premium.
After the close of trading on Tuesday, Tribune Company said it's extending its deadline for deciding whether to sell the company until the first quarter of 2007.Tribune Chairman Dennis FitzSimons says response to a possible sale has been strong and the company extended its timetable to thoroughly consider the proposals.
Chicago-based Tribune had said it would decide whether to sell all or parts of the company by the end of the year.
"We are committed to a complete review process that will yield maximum value for all Tribune shareholders," William A. Osborn, chairman of an independent committee set up to review offers, said in a statement. "We anticipate a final recommendation to the full board during the first quarter of 2007."
Tribune Chairman Dennis FitzSimons said response to the company's proposed sale has been "strong" and the timeline was being extended so the company could thoroughly consider all the proposals.
"This process has generated strong interest from a number of parties," he said in a statement.
Separately, the company said that the FCC has approved the sales of WCWN-TV in Albany and WLVI-TV in Boston. Both transactions are expected to close in December and are part of a performance improvement plan announced earlier this year. To date, the company has sold or agreed to sell approximately $450 million of non-core assets.
In sum, with a little patience, I believe the company's substantial value will accrue to
the shareholders. This is company with first class assets, and they should bring a good return over the present $32 market price.
ServiceMaster Co.,the lawn care and pest control company, said on Tuesday it was considering putting itself up for sale, sending shares up nearly 7 percent.
The company's solid cash flow has attracted the interest of private equity firms in recent weeks, according to industry sources.
Martin Weiss: "A barrel of crude oil -- and virtually every other major source of energy -- is measured in U.S. dollars. So if the value of each dollar declines, the number of dollars per barrel must go up accordingly. For example ...
Approximately one year ago the U.S. Dollar Index was at 92, while crude oil was in the high $50s.
Today, the U.S. Dollar Index is at 83.66, down 9% in value, but crude oil is trading near the same levels as one year ago.
Even assuming no increased oil demand ...
Even assuming no new threats to oil supplies ...
That means the price of crude oil needs to quickly adjust upward by about 9% just to compensate for the dollar's decline. And, as I just explained, that dollar decline has barely begun."
Fourth quarter U.S. GDP growth estimates were reduced to zero from one percent by
Deutsche Bank economists.
Sales of existing U.S. homes rose 0.5% to a seasonally adjusted annual rate of 6.24 million in October, the first increase since February, the National Association of Realtors reported Tuesday. September's sales were revised higher to 6.21 million from 6.18 million initially reported. Sales are down 11.5% in the past year. Median sales prices fell a record 3.5% year-over-year, the third decline in a row. Inventories of unsold homes increased 1.9% to 3.854 million, representing a 7.4-month supply at the October sales rate. It's the largest months' supply since April 1993.
U.S. consumer confidence weakened in November, the Conference Board said Tuesday. The consumer confidence index fell to 102.9 in November from a revised 105.1 in October. The present situation index fell to 123.6 from 125.1, while the expectations index slipped to 89.2 from 91.9.
Led by falling order for new airplanes, demand for U.S.-made durable goods fell 8.3% in October, erasing September's 8.7% gain, the Commerce Department said. Excluding transportation goods, orders fell 1.7%. It was the biggest drop in orders for durable goods since July 2000. New orders for civilian aircraft plunged 44.5% last month. Orders for core capital goods fell 5.1% in October, the first decline in six months. Based on this weak durable goods report, the 10-year Treasury yield dipped below 4.50% for the first time since Feb.10. The weak data and the falling yields contributed to the dollar declining further against the euro. Meanwhile, December natural-gas futures climbed 32 cents, or 4%, to close at $8.318 per million British thermal units Tuesday, its highest closing level since late October. January natural gas became the lead-month contract and it closed at $8.559, up 20.2 cents, or 2.4%. January crude added 67 cents to close at $60.99 a barrel, its strongest closing level in more than two weeks.
The Federal Reserve may need to raise its overnight interest rate target above 5.25% to keep inflation under control, said Charles Plosser, president of the Philadelphia Federal Reserve Bank, in a speech on Tuesday in Rochester, N.Y. Plosser said it's possible inflation could return to acceptable levels without further hikes, but stressed that the Fed must act to back up its words or it will lose credibility.
Bernanke said the economy is still on track to expand at a moderate pace over the next year without slowing too much.He said the inflation is already "better behaved of late" and should continue to slow gradually.
I would like to spend some more time on the Tribune Company, the owner of 11 daily newspapers--including the LA Times, Baltimore Sun, and the Chicago Tribune-- 25 TV stations, the Cubs, a cable network, a radio station, the Williamsburg Magazine, the Chicago Magazine, and many classified and entertainment sites. The current market values the shares at about $7.5 billion. In addition, there is outstanding debt of $5.3 billion. Lots of rumors have circulated that the bids for the whole company have been low and, at the same time, there have been many bids for parts of the company- the LA Times, the Cubs, the Chicago Tribune, the Baltimore Sun, and the South Florida Sun-Sentinel. In my opinion, there is terrific value in this company, and therefore, I strongly suggest the reader consider taking a position. My best idea is to buy the January 2009 (not a misprint) $20 call at roughly $12.30. This let's you leverage your purchase and yet pay only a tiny premium.
After the close of trading on Tuesday, Tribune Company said it's extending its deadline for deciding whether to sell the company until the first quarter of 2007.Tribune Chairman Dennis FitzSimons says response to a possible sale has been strong and the company extended its timetable to thoroughly consider the proposals.
Chicago-based Tribune had said it would decide whether to sell all or parts of the company by the end of the year.
"We are committed to a complete review process that will yield maximum value for all Tribune shareholders," William A. Osborn, chairman of an independent committee set up to review offers, said in a statement. "We anticipate a final recommendation to the full board during the first quarter of 2007."
Tribune Chairman Dennis FitzSimons said response to the company's proposed sale has been "strong" and the timeline was being extended so the company could thoroughly consider all the proposals.
"This process has generated strong interest from a number of parties," he said in a statement.
Separately, the company said that the FCC has approved the sales of WCWN-TV in Albany and WLVI-TV in Boston. Both transactions are expected to close in December and are part of a performance improvement plan announced earlier this year. To date, the company has sold or agreed to sell approximately $450 million of non-core assets.
In sum, with a little patience, I believe the company's substantial value will accrue to
the shareholders. This is company with first class assets, and they should bring a good return over the present $32 market price.
ServiceMaster Co.,the lawn care and pest control company, said on Tuesday it was considering putting itself up for sale, sending shares up nearly 7 percent.
The company's solid cash flow has attracted the interest of private equity firms in recent weeks, according to industry sources.
Martin Weiss: "A barrel of crude oil -- and virtually every other major source of energy -- is measured in U.S. dollars. So if the value of each dollar declines, the number of dollars per barrel must go up accordingly. For example ...
Approximately one year ago the U.S. Dollar Index was at 92, while crude oil was in the high $50s.
Today, the U.S. Dollar Index is at 83.66, down 9% in value, but crude oil is trading near the same levels as one year ago.
Even assuming no increased oil demand ...
Even assuming no new threats to oil supplies ...
That means the price of crude oil needs to quickly adjust upward by about 9% just to compensate for the dollar's decline. And, as I just explained, that dollar decline has barely begun."
Fourth quarter U.S. GDP growth estimates were reduced to zero from one percent by
Deutsche Bank economists.
Optimism
11/28/06 Optimism
The UBS/Gallup Index of Investor Optimism jumped 14 points to 93, its highest reading since January, when it also reached 93. The index, which has risen 40 points during the past three months, was 79 in October.
According to data compiled by Private Equity Real Estate, a leading magazine covering the global real estateindustry, private equity real estate funds will raise approximately $55billion in 2006, far surpassing the $37 billion raised in 2005.
Manufacturing activity in Texas continued to expand in November, but several indexes were weaker than lastmonth, according to the Federal Reserve Bank of Dallas' Texas Manufacturing Outlook Survey.The survey's production index was essentially unchanged in November, 8.5 compared with 8.4 in October. Readings above zero denote expansion, while negative levels indicate contraction."The report suggests activity continues to expand overall, but someindustries are doing better than others," said Dallas Fed economist FionaSigalla. "The majority of firms expect increases in production and the volume of new orders and shipments six months from now."The survey found that manufacturers were more optimistic about their companies' operations than the rest of the economy. Sentiment on general business activity, while slightly negative, was unchanged from October.Last year, Texas produced almost 9 percent of the total manufactured goods in the United States. Texas ranks second behind California in factory production and first as an exporter of manufactured products.
A mortar attack ignited a huge fire Monday night at an oil facility in northern Iraq,
shutting the flow of crude oil to a major refinery, and a U.S. Air Force jet with one pilot aboard crashed in Anbar province, a hotbed of the Sunni-Arab insurgency, officials said. Al-Jazeera reported that the pilot was killed.
Worldwide stocks of aluminium fell to their lowest level for nearly four years in October to 2.876 mln tonnes from 2.886 mln in September, according to the International Aluminium Institute (IAI).
The figures exclude stocks from China, Russia or Iran, which do not provide figures to the IAI. Global stocks fell 0.35 pct in October from September and 10.9 pct from October 2005 when they stood at 3.229 mln tonnes, the IAI said.
Gold for December delivery closed at $640.60 an ounce, silver futures at $13.49 an ounce, and copper futures at $3.1875 a pound.
Crude for January delivery closed at $60.32 a barrel. Gasoline futures ended at $1.5937 a gallon, heating oil at $1.7052 a gallon and natural-gas futures at $7.998 per million British thermal units.
Russia is second only to the Saudis in oil exports, and Europe depends on it for a quarter of the crude it consumes. With Russia the world's largest gas exporter and Europe's neighbor, European dependency has grown to the point that the EU now counts on Moscow for nearly half of its gas needs. Russian President Vladimir Putin restated his opposition to giving foreign companies easy access to his country's energy sources, or breaking up oil and gas state monopolies. Klare, author of "Blood and Oil: The Dangers and Consequences of America's Growing Petroleum Dependency," says the world already has entered "a new era, where energy has replaced nuclear weapons as the medium of superpower rivalry."
Paccar Inc. is eliminating one shift each at its Peterbilt Motors Co. plant outside Nashville and its Kenworth Truck Co. plant in Renton, Wash.
Both plants will be left with one daily shift because of an expected downturn in demand due to higher costs associated with meeting new federal emissions regulations, Paccar spokesman Andy Wold said Monday.
Tribune Co. continues to seek a single buyer for all of its properties. At the $32 level, I consider this a low risk arbitrage situation.
Stratos International had a great quarter. The stock jumped to $7.50 in after hours trading. The CEO expects to report news on seeking alternatives (buyout) in "a matter of weeks not months." A takeout at the $9.50 level would not surprise me.
The UBS/Gallup Index of Investor Optimism jumped 14 points to 93, its highest reading since January, when it also reached 93. The index, which has risen 40 points during the past three months, was 79 in October.
According to data compiled by Private Equity Real Estate, a leading magazine covering the global real estateindustry, private equity real estate funds will raise approximately $55billion in 2006, far surpassing the $37 billion raised in 2005.
Manufacturing activity in Texas continued to expand in November, but several indexes were weaker than lastmonth, according to the Federal Reserve Bank of Dallas' Texas Manufacturing Outlook Survey.The survey's production index was essentially unchanged in November, 8.5 compared with 8.4 in October. Readings above zero denote expansion, while negative levels indicate contraction."The report suggests activity continues to expand overall, but someindustries are doing better than others," said Dallas Fed economist FionaSigalla. "The majority of firms expect increases in production and the volume of new orders and shipments six months from now."The survey found that manufacturers were more optimistic about their companies' operations than the rest of the economy. Sentiment on general business activity, while slightly negative, was unchanged from October.Last year, Texas produced almost 9 percent of the total manufactured goods in the United States. Texas ranks second behind California in factory production and first as an exporter of manufactured products.
A mortar attack ignited a huge fire Monday night at an oil facility in northern Iraq,
shutting the flow of crude oil to a major refinery, and a U.S. Air Force jet with one pilot aboard crashed in Anbar province, a hotbed of the Sunni-Arab insurgency, officials said. Al-Jazeera reported that the pilot was killed.
Worldwide stocks of aluminium fell to their lowest level for nearly four years in October to 2.876 mln tonnes from 2.886 mln in September, according to the International Aluminium Institute (IAI).
The figures exclude stocks from China, Russia or Iran, which do not provide figures to the IAI. Global stocks fell 0.35 pct in October from September and 10.9 pct from October 2005 when they stood at 3.229 mln tonnes, the IAI said.
Gold for December delivery closed at $640.60 an ounce, silver futures at $13.49 an ounce, and copper futures at $3.1875 a pound.
Crude for January delivery closed at $60.32 a barrel. Gasoline futures ended at $1.5937 a gallon, heating oil at $1.7052 a gallon and natural-gas futures at $7.998 per million British thermal units.
Russia is second only to the Saudis in oil exports, and Europe depends on it for a quarter of the crude it consumes. With Russia the world's largest gas exporter and Europe's neighbor, European dependency has grown to the point that the EU now counts on Moscow for nearly half of its gas needs. Russian President Vladimir Putin restated his opposition to giving foreign companies easy access to his country's energy sources, or breaking up oil and gas state monopolies. Klare, author of "Blood and Oil: The Dangers and Consequences of America's Growing Petroleum Dependency," says the world already has entered "a new era, where energy has replaced nuclear weapons as the medium of superpower rivalry."
Paccar Inc. is eliminating one shift each at its Peterbilt Motors Co. plant outside Nashville and its Kenworth Truck Co. plant in Renton, Wash.
Both plants will be left with one daily shift because of an expected downturn in demand due to higher costs associated with meeting new federal emissions regulations, Paccar spokesman Andy Wold said Monday.
Tribune Co. continues to seek a single buyer for all of its properties. At the $32 level, I consider this a low risk arbitrage situation.
Stratos International had a great quarter. The stock jumped to $7.50 in after hours trading. The CEO expects to report news on seeking alternatives (buyout) in "a matter of weeks not months." A takeout at the $9.50 level would not surprise me.
Monday, November 27, 2006
Tis The Season
11/27/06 Tis The Season
According to ShopperTrak RCT Corp., which tracks total sales at more than 45,000 mall-based retail outlets, total sales rose 6 percent to $8.96 billion on Friday, the start of the holiday shopping season, compared to the same day a year ago.
Stephen Roach: "For my money, the risks of the 'global fizzle' are being taken
too lightly."
Crudethoughts.blogspot.com: "In conclusion, according to the EIA the world through August 2006 has produced roughly 100 million fewer barrels of crude + condensate than if we had simply maintained the December 2005 production level. This is consistent with the Hubbert/Deffeyes model. It is not consistent with the Yergin/Jackson model. The early data suggest that Deffeyes is correct and that Jackson is wrong, but we can't yet say with certainty who is correct."
According to an Associated Press analysis, during the 1999-2006 price boom, the oil industry drilled an average of 7 percent fewer new wells monthly than in the seven preceding years of low, stable prices.
—The national supply of unrefined oil, including imports, grew an average of only 6 percent during the high-priced years, down from 14 percent during the previous span.
—The gasoline supply expanded by only 10 percent from 1999 to 2006, down from 15 percent in the earlier period.
The National Retail Federation survey predicts consumers plan to spend $24.8
billion on gift cards for presents this year, a 34% increase from last year. In addition,
the survey anticipates an increase of 5% in sales to $457 billion during this holiday
season.
Mike Burk: "Historically the major indices have been up about 80% of the time on the Friday after Thanksgiving, this year they were all down. The weeks following a down Thanksgiving Fridays have been just about evenly mixed...The market is still overbought, but pretty strong technically. For the past 50 years next week has had a positive seasonal bias, but weeks following a down Friday after Thanksgiving have been mixed. I expect the major indices to be higher on Friday December 1 than they were on Friday November 24."
In September, the Fed estimates that, including mortgages, outstanding household debt amounted to $12.3 trillion. That's a not-so-pretty penny.
Matthew Simmons, Chairman of energy investment bank Simmons & Company International: "We are in a rusty industry. We have the world heading to astonishing growth in oil and gas demand. To meet that demand envisages an awful lot of drilling."
Is Palatin working on an alliance with a big drug company?
The Thanksgiving weekend accounts for 9 percent to 10 percent of holiday sales, according to data compiled by the Telsey Group, an independent research firm.
Had the Republicans not been decimated in the mid-term elections, I wonder whether Bush and Cheney would be making as many trips out of the country.
The Daytona Beach News Journal's Mike Joyce: "We all mourn the loss of our uniformed sons and daughters in Iraq. Almost 3,000 have died. Some 22,000 more have been wounded, many in ways that will severely diminish their ability to lead normal lives. We grieve for them.
Neither do we forget the hundreds of U.S. contract personnel who have died. We worry about the mounting costs of the war. The Bush team has borrowed virtually every cent we have spent on it. This burden will be borne by our children, and their children, well into the future. Estimates of the total, including interest, veteran benefits and rebuilding military inventories, vary, but a middle ground is at least $1 trillion dollars. And because each family in the United States already owes $150,000 as its portion of the national debt, it may be even more, for it will surely be a while before we pay off this additional debt load."
John Hussman: "Our emphasis on risk management means that I take a fairly dull view of rallies in overvalued, overbought, overbullish markets. Historically, these advances have little likelihood of being retained over the full cycle, and it's extremely hard to “time” their exit because the overbought/overbullish part invites abrupt reversals."
According to Reuters, Wall-Mart will enter the Indian market through a tie-up with Bharti Enterprises. The joint venture plans to have several hundred stores in the next four to five years.
The Saudi oil minister said there could be an output cut coming out of the next OPEC
meeting on Dec. 14.
The Swift Transportation board of directors rejected the $29 bid from its largest shareholder as inadequate and will work to get the bid improved.
According to ShopperTrak RCT Corp., which tracks total sales at more than 45,000 mall-based retail outlets, total sales rose 6 percent to $8.96 billion on Friday, the start of the holiday shopping season, compared to the same day a year ago.
Stephen Roach: "For my money, the risks of the 'global fizzle' are being taken
too lightly."
Crudethoughts.blogspot.com: "In conclusion, according to the EIA the world through August 2006 has produced roughly 100 million fewer barrels of crude + condensate than if we had simply maintained the December 2005 production level. This is consistent with the Hubbert/Deffeyes model. It is not consistent with the Yergin/Jackson model. The early data suggest that Deffeyes is correct and that Jackson is wrong, but we can't yet say with certainty who is correct."
According to an Associated Press analysis, during the 1999-2006 price boom, the oil industry drilled an average of 7 percent fewer new wells monthly than in the seven preceding years of low, stable prices.
—The national supply of unrefined oil, including imports, grew an average of only 6 percent during the high-priced years, down from 14 percent during the previous span.
—The gasoline supply expanded by only 10 percent from 1999 to 2006, down from 15 percent in the earlier period.
The National Retail Federation survey predicts consumers plan to spend $24.8
billion on gift cards for presents this year, a 34% increase from last year. In addition,
the survey anticipates an increase of 5% in sales to $457 billion during this holiday
season.
Mike Burk: "Historically the major indices have been up about 80% of the time on the Friday after Thanksgiving, this year they were all down. The weeks following a down Thanksgiving Fridays have been just about evenly mixed...The market is still overbought, but pretty strong technically. For the past 50 years next week has had a positive seasonal bias, but weeks following a down Friday after Thanksgiving have been mixed. I expect the major indices to be higher on Friday December 1 than they were on Friday November 24."
In September, the Fed estimates that, including mortgages, outstanding household debt amounted to $12.3 trillion. That's a not-so-pretty penny.
Matthew Simmons, Chairman of energy investment bank Simmons & Company International: "We are in a rusty industry. We have the world heading to astonishing growth in oil and gas demand. To meet that demand envisages an awful lot of drilling."
Is Palatin working on an alliance with a big drug company?
The Thanksgiving weekend accounts for 9 percent to 10 percent of holiday sales, according to data compiled by the Telsey Group, an independent research firm.
Had the Republicans not been decimated in the mid-term elections, I wonder whether Bush and Cheney would be making as many trips out of the country.
The Daytona Beach News Journal's Mike Joyce: "We all mourn the loss of our uniformed sons and daughters in Iraq. Almost 3,000 have died. Some 22,000 more have been wounded, many in ways that will severely diminish their ability to lead normal lives. We grieve for them.
Neither do we forget the hundreds of U.S. contract personnel who have died. We worry about the mounting costs of the war. The Bush team has borrowed virtually every cent we have spent on it. This burden will be borne by our children, and their children, well into the future. Estimates of the total, including interest, veteran benefits and rebuilding military inventories, vary, but a middle ground is at least $1 trillion dollars. And because each family in the United States already owes $150,000 as its portion of the national debt, it may be even more, for it will surely be a while before we pay off this additional debt load."
John Hussman: "Our emphasis on risk management means that I take a fairly dull view of rallies in overvalued, overbought, overbullish markets. Historically, these advances have little likelihood of being retained over the full cycle, and it's extremely hard to “time” their exit because the overbought/overbullish part invites abrupt reversals."
According to Reuters, Wall-Mart will enter the Indian market through a tie-up with Bharti Enterprises. The joint venture plans to have several hundred stores in the next four to five years.
The Saudi oil minister said there could be an output cut coming out of the next OPEC
meeting on Dec. 14.
The Swift Transportation board of directors rejected the $29 bid from its largest shareholder as inadequate and will work to get the bid improved.
Saturday, November 25, 2006
The Narrowing Exit
11/26/06 The Narrowing Exit
Alfred Hitchcock: "There is no terror in a bang, only in the anticipation of it."
While shoppers focus on holiday bargains, it might be wise to focus on leftovers. Think of your dollars as leftovers-- what's left after depreciating against other major
currencies and hard assets, such as, gold, and what remains after decades of excessive gov't spending and the Fed printing excessive amounts of dollars, which helps to create inflation as well as depreciating the value of our currency.
Brett Steenbarger: "Investors Intelligence shows us as having 58.5% bulls, 22.3 bears. That's the most bullish sentiment ratio we've seen during 2006. Meanwhile, the dollar is just plain ugly. Equity investors don't seem too worried about the dollar at this point. Not with a VIX that recently hit decade-level lows.
With the massive amount of dollars held in reserves around the world, will countries want to be invested in a depreciating asset? And what happens if there's a sudden rush for the doors and the dollar goes into freefall? "
Wal-Mart estimated that November sales fell 0.1 percent at its U.S. stores open at least a year. The company had expected same-store sales to be flat compared with the same period last year.
Doug Noland: "Total Money Market Fund Assets, as reported by the Investment Company Institute, jumped $23.2 billion last week to $2.311 Trillion. Money Fund Assets have increased $254 billion y-t-d, or 13.7% annualized, with a one-year gain of $281 billion (13.8%). It is also worth noting that Money Fund Assets have expanded at a 22.7% rate over the past five months."
Peter Schiff: "While Americans were busy digesting their Thanksgiving feasts, the rest of the world was barfing up dollars. As a result of our massive trade deficits, foreigners certainly have their bellies full of them. This week's action in the Forex markets indicates that they may have finally eaten their fill. Unfortunately, the bad taste will likely linger as the dollar's rout has only just begun."
Stock market gains year to date: Mexico 39%, India 46%, Russia 53%, China 76%.
Meanwhile, platinum is up 33% and copper 68%.
Dr. Janice Dorn: " Life is not about what happens to you. It is about who you are."
The Bank of Korea raised reserve requirements on banks for short-term deposits for the first time in almost 17 years. The move was aimed at curbing lending. Can you
see our Fed doing this?
Benjamin Disraeli: "What we anticipate seldom occurs; what we least expected generally happens."
Venezuelan state oil company PDVSA on Saturday said an "operational event" had affected a unit of the 640,000 barrel per day (bpd) Amuay refinery. A Venezuelan newspaper on Saturday reported there had been an explosion at the facility.
Mike Shedlock: "Eventually, overall credit will start contracting, regardless of what the Fed says or does, and the wizards behind the curtain will be exposed for the frauds that they are. This means that the Fed is going to be as out of control of the upcoming credit contraction as it was of the preceding credit expansion. It is the end of the line for the Fed, and contrary to popular belief, open market operations are not going to hold things together."
Alfred Hitchcock: "There is no terror in a bang, only in the anticipation of it."
While shoppers focus on holiday bargains, it might be wise to focus on leftovers. Think of your dollars as leftovers-- what's left after depreciating against other major
currencies and hard assets, such as, gold, and what remains after decades of excessive gov't spending and the Fed printing excessive amounts of dollars, which helps to create inflation as well as depreciating the value of our currency.
Brett Steenbarger: "Investors Intelligence shows us as having 58.5% bulls, 22.3 bears. That's the most bullish sentiment ratio we've seen during 2006. Meanwhile, the dollar is just plain ugly. Equity investors don't seem too worried about the dollar at this point. Not with a VIX that recently hit decade-level lows.
With the massive amount of dollars held in reserves around the world, will countries want to be invested in a depreciating asset? And what happens if there's a sudden rush for the doors and the dollar goes into freefall? "
Wal-Mart estimated that November sales fell 0.1 percent at its U.S. stores open at least a year. The company had expected same-store sales to be flat compared with the same period last year.
Doug Noland: "Total Money Market Fund Assets, as reported by the Investment Company Institute, jumped $23.2 billion last week to $2.311 Trillion. Money Fund Assets have increased $254 billion y-t-d, or 13.7% annualized, with a one-year gain of $281 billion (13.8%). It is also worth noting that Money Fund Assets have expanded at a 22.7% rate over the past five months."
Peter Schiff: "While Americans were busy digesting their Thanksgiving feasts, the rest of the world was barfing up dollars. As a result of our massive trade deficits, foreigners certainly have their bellies full of them. This week's action in the Forex markets indicates that they may have finally eaten their fill. Unfortunately, the bad taste will likely linger as the dollar's rout has only just begun."
Stock market gains year to date: Mexico 39%, India 46%, Russia 53%, China 76%.
Meanwhile, platinum is up 33% and copper 68%.
Dr. Janice Dorn: " Life is not about what happens to you. It is about who you are."
The Bank of Korea raised reserve requirements on banks for short-term deposits for the first time in almost 17 years. The move was aimed at curbing lending. Can you
see our Fed doing this?
Benjamin Disraeli: "What we anticipate seldom occurs; what we least expected generally happens."
Venezuelan state oil company PDVSA on Saturday said an "operational event" had affected a unit of the 640,000 barrel per day (bpd) Amuay refinery. A Venezuelan newspaper on Saturday reported there had been an explosion at the facility.
Mike Shedlock: "Eventually, overall credit will start contracting, regardless of what the Fed says or does, and the wizards behind the curtain will be exposed for the frauds that they are. This means that the Fed is going to be as out of control of the upcoming credit contraction as it was of the preceding credit expansion. It is the end of the line for the Fed, and contrary to popular belief, open market operations are not going to hold things together."
Friday, November 24, 2006
The Dollar
11/25/06 The Dollar
The euro topped 1.30 for the first time since April 2005. With the weak dollar, it is not surprising for gold to rally to $639 and for oil to find support just below the $60 a barrel level. The dollar made a 3-month low versus the yen, 5-month low versus the Swiss franc, and almost a 2-year low versus the pound. This is occurring with rates rising in euroland, Japan, and England. That's what makes the dollar weakness all the more significant. Will it shake the complacency in the U.S. equity market? Much depends on the risk factor and the appetite for derivatives. Just don't get stuck with too many turkeys in your portfolio.
Hong Kong's Orient Overseas International has agreed to sell its four North American container terminals to a consortium led by the Ontario Teachers' Pension Fund for $2.4bn cash, in a deal that creates a new high in valuations in the suddenly fashionable ports sector.
The price values the four terminals – two in the port of New York/New Jersey and two in the Canadian Pacific coast port of Vancouver – at 20 times annual earnings before interest, tax, depreciation and amortisation.
Wal-Mart won approval for offering bank accounts in Mexico.
Oil rose after a report that Eni SpA halted delivery of some Nigerian crude because of a militant attack. Rome-based Eni declared force majeure at the Okono/Okpoho offshore oil field, Dow Jones Newswires reported,
On a very slow and shortened Friday trading day I found a few items of note.
BJ Services, which closed around $32, has an open interest on the January
$35 calls of 11,000 contracts. On Friday, 3045 contracts traded and they closed
at 80 cents.
A few standouts were Apple, Research-in-Motion, and Gamestop as they powered to new highs in a weak market.
I have one further thought. While the dollar index was breaking down to the 83.60 level, treasury bond yields continued to decline with the yield curve heavily inverted.
It is difficult for me to imagine how a falling dollar can be accompanied by lower treasury yields. To me, this is ass backwards-- especially with global rates moving higher.
"The evidence is very persuasive that lowering homocysteine with folic acid will lower your risk of heart attack and stroke by about 10-20 percent," David Wald, of the Wolfson Institute for Preventive Medicine, Barts and the London, Queen Mary School of Medicine and Dentistry in London, said in an interview.
Folic acid is a synthetic compound of folate, a B vitamin found in green leafy vegetables and liver. Women are advised to take folic acid before conceiving and during the early months of pregnancy to prevent neural tube disorders such as spina bifida.
Homocysteine is thought to increase the risk of cardiovascular disease by damaging the inner lining of arteries.
The euro topped 1.30 for the first time since April 2005. With the weak dollar, it is not surprising for gold to rally to $639 and for oil to find support just below the $60 a barrel level. The dollar made a 3-month low versus the yen, 5-month low versus the Swiss franc, and almost a 2-year low versus the pound. This is occurring with rates rising in euroland, Japan, and England. That's what makes the dollar weakness all the more significant. Will it shake the complacency in the U.S. equity market? Much depends on the risk factor and the appetite for derivatives. Just don't get stuck with too many turkeys in your portfolio.
Hong Kong's Orient Overseas International has agreed to sell its four North American container terminals to a consortium led by the Ontario Teachers' Pension Fund for $2.4bn cash, in a deal that creates a new high in valuations in the suddenly fashionable ports sector.
The price values the four terminals – two in the port of New York/New Jersey and two in the Canadian Pacific coast port of Vancouver – at 20 times annual earnings before interest, tax, depreciation and amortisation.
Wal-Mart won approval for offering bank accounts in Mexico.
Oil rose after a report that Eni SpA halted delivery of some Nigerian crude because of a militant attack. Rome-based Eni declared force majeure at the Okono/Okpoho offshore oil field, Dow Jones Newswires reported,
On a very slow and shortened Friday trading day I found a few items of note.
BJ Services, which closed around $32, has an open interest on the January
$35 calls of 11,000 contracts. On Friday, 3045 contracts traded and they closed
at 80 cents.
A few standouts were Apple, Research-in-Motion, and Gamestop as they powered to new highs in a weak market.
I have one further thought. While the dollar index was breaking down to the 83.60 level, treasury bond yields continued to decline with the yield curve heavily inverted.
It is difficult for me to imagine how a falling dollar can be accompanied by lower treasury yields. To me, this is ass backwards-- especially with global rates moving higher.
"The evidence is very persuasive that lowering homocysteine with folic acid will lower your risk of heart attack and stroke by about 10-20 percent," David Wald, of the Wolfson Institute for Preventive Medicine, Barts and the London, Queen Mary School of Medicine and Dentistry in London, said in an interview.
Folic acid is a synthetic compound of folate, a B vitamin found in green leafy vegetables and liver. Women are advised to take folic acid before conceiving and during the early months of pregnancy to prevent neural tube disorders such as spina bifida.
Homocysteine is thought to increase the risk of cardiovascular disease by damaging the inner lining of arteries.
Thursday, November 23, 2006
Further Developments
11/24/06 Further Developments
Jerry Colangelo, chairman of the NBA's Phoenix Suns and former owner of both the Suns and baseball's Arizona Diamondbacks, said Wednesday he has had preliminary discussions with unspecified other people who share his interest in buying the Cubs, whose owner is the Tribune Co. Make no mistake, in my view, the parts of Tribune are worth significantly more than selling this company as a whole. If tax strategies can be worked out, that's the way to go for the shareowners.
RTX introduced DUALphone 3088 which can be used as a normal telephone as well
as for calling via Skype(TM) - without a PC. The new DUALphone helps people
to save money on their phone bill and gives them more flexibility when
using Skype.
From Daily Reckoning: "So, let’s look at Google as a publishing business. Roughly, it has a market cap of more than $150 billion, revenues of $10 billion, and profits of $2.8 billion. A very nice company...but what is it worth? If you project recent rates of growth into the future, it could be worth $500. If profits were to double...and double again...it would be trading at a reasonable multiple of earnings. But if earnings don’t go up 300%, it is over-priced.
What’s more, as a publishing business, Google has a major flaw - it has no firm connection with its readers. People do not think of themselves as ‘Google customers,’ the way they often identify themselves with a local paper, a newsletter, a magazine, or even a website. For example, many people are actually proud to be New York Times readers (if you can believe it). Google is largely invisible, like a pane of glass. It does not ‘own’ its customers. Instead, customers will desert it - as they did Yahoo - as soon as something newer, better, and faster comes along. Then, Google will be yesterday’s news."
Gedex is a private company incorporated in 1999 and headquartered in Toronto, Canada. Gedex's next generation gravity gradiometer system provides images of subsurface density that, independently and in conjunction with other data, provide valuable information in exploring for and delineating subsurface resources.
The 170 year old Mining Journal's first-ever award for mining research was given to Gedex for building groundbreaking airborne surveying systems capable of "seeing" 12 kilometres (eight miles) beneath the earth's surface to identify oil, gas, minerals and precious metals invisible to current systems.
The award to Gedex Inc. was adjudicated by an international panel of
experts, who cited Gedex for "primary research that is expected to have the
most significance for mining and mining equipment in the future."
Chinese President Hu Jintao is in Pakistan for a four-day visit expected to re-inforce ties between the two long-time friends.
Jim Rodgers: "And let me remind you of one more important difference between commodities and stocks: Commodities cannot go to zero, while shares in Enron can (and did)."
Air France-KLM is in exploratory talks with Alitalia that could lead to an eventual takeover of the loss-making, partly state-owned Italian flag carrier.
Kirk Kerkorian made a really smart move by selling part of his GM stake at $33. The buyers must be looking for a tax loss.
John Mauldin: "The average hedge fund is no different from the average stock. On a good day, it will probably lose money for its owners. On a bad one, it will wipe them out.”
US President George W Bush's special "fast-track" authority to negotiate trade deals expires next year. After 30 June 2007, the US Congress will once more have the right to change or veto any agreement that Mr Bush signs.
Bill Bonner: “So, we give you our first general rule: you will do better investing privately than you will investing along with the public. Why is that? Because, a private investor is more likely to know what he knows and what he doesn’t. And by getting close to his investments - by really knowing the industry and the business - he is able to eliminate some of the unknowns and make a better decision. Generally, that means he pays less for his investments and works harder to get them.
“And now, another rule - the further you get from the facts and from the consequences of any action, the worse the results. This is true for individuals as it is for groups."
The euro hit a five-and-a-half month high against the dollar on Thursday after a strong German business sentiment reading gave the single currency a boost. In addition, the dollar hit a 2-month low versus the yen.
Members of the Organization of Petroleum Exporting Countries are leaning towards a further output cut when the group next meets Dec. 14 in Nigeria, Iran's OPEC governor said Wednesday.
Jerry Colangelo, chairman of the NBA's Phoenix Suns and former owner of both the Suns and baseball's Arizona Diamondbacks, said Wednesday he has had preliminary discussions with unspecified other people who share his interest in buying the Cubs, whose owner is the Tribune Co. Make no mistake, in my view, the parts of Tribune are worth significantly more than selling this company as a whole. If tax strategies can be worked out, that's the way to go for the shareowners.
RTX introduced DUALphone 3088 which can be used as a normal telephone as well
as for calling via Skype(TM) - without a PC. The new DUALphone helps people
to save money on their phone bill and gives them more flexibility when
using Skype.
From Daily Reckoning: "So, let’s look at Google as a publishing business. Roughly, it has a market cap of more than $150 billion, revenues of $10 billion, and profits of $2.8 billion. A very nice company...but what is it worth? If you project recent rates of growth into the future, it could be worth $500. If profits were to double...and double again...it would be trading at a reasonable multiple of earnings. But if earnings don’t go up 300%, it is over-priced.
What’s more, as a publishing business, Google has a major flaw - it has no firm connection with its readers. People do not think of themselves as ‘Google customers,’ the way they often identify themselves with a local paper, a newsletter, a magazine, or even a website. For example, many people are actually proud to be New York Times readers (if you can believe it). Google is largely invisible, like a pane of glass. It does not ‘own’ its customers. Instead, customers will desert it - as they did Yahoo - as soon as something newer, better, and faster comes along. Then, Google will be yesterday’s news."
Gedex is a private company incorporated in 1999 and headquartered in Toronto, Canada. Gedex's next generation gravity gradiometer system provides images of subsurface density that, independently and in conjunction with other data, provide valuable information in exploring for and delineating subsurface resources.
The 170 year old Mining Journal's first-ever award for mining research was given to Gedex for building groundbreaking airborne surveying systems capable of "seeing" 12 kilometres (eight miles) beneath the earth's surface to identify oil, gas, minerals and precious metals invisible to current systems.
The award to Gedex Inc. was adjudicated by an international panel of
experts, who cited Gedex for "primary research that is expected to have the
most significance for mining and mining equipment in the future."
Chinese President Hu Jintao is in Pakistan for a four-day visit expected to re-inforce ties between the two long-time friends.
Jim Rodgers: "And let me remind you of one more important difference between commodities and stocks: Commodities cannot go to zero, while shares in Enron can (and did)."
Air France-KLM is in exploratory talks with Alitalia that could lead to an eventual takeover of the loss-making, partly state-owned Italian flag carrier.
Kirk Kerkorian made a really smart move by selling part of his GM stake at $33. The buyers must be looking for a tax loss.
John Mauldin: "The average hedge fund is no different from the average stock. On a good day, it will probably lose money for its owners. On a bad one, it will wipe them out.”
US President George W Bush's special "fast-track" authority to negotiate trade deals expires next year. After 30 June 2007, the US Congress will once more have the right to change or veto any agreement that Mr Bush signs.
Bill Bonner: “So, we give you our first general rule: you will do better investing privately than you will investing along with the public. Why is that? Because, a private investor is more likely to know what he knows and what he doesn’t. And by getting close to his investments - by really knowing the industry and the business - he is able to eliminate some of the unknowns and make a better decision. Generally, that means he pays less for his investments and works harder to get them.
“And now, another rule - the further you get from the facts and from the consequences of any action, the worse the results. This is true for individuals as it is for groups."
The euro hit a five-and-a-half month high against the dollar on Thursday after a strong German business sentiment reading gave the single currency a boost. In addition, the dollar hit a 2-month low versus the yen.
Members of the Organization of Petroleum Exporting Countries are leaning towards a further output cut when the group next meets Dec. 14 in Nigeria, Iran's OPEC governor said Wednesday.
Wednesday, November 22, 2006
Risk
11/23/06 Risk
We have been extremely fortunate in 2006. Unlike the horrific hurricane season in 2005, this year the storms have been relatively benign. This has not been lost on the insurance industry. Does that mean that risk has disappeared and that complacency is our meal ticket?
Risk Management Solutions (RMS) reaffirmed its medium-term five-year view of landfalling hurricane risk for the period of 2007-2011. The company is projecting higher modeled annualized insurance losses by 40% on average across the Gulf Coast,
Florida, and the Southeast, and by 25-30% in the Mid-Atlantic and Northeast
coastal regions relative to those derived using long-term 1900-2006
historical average hurricane frequencies. A key driver of the current elevated view of landfalling hurricane risk is an increase of more than 30% in the modeled frequency of major (Saffir-Simpson Category 3-5) hurricanes making landfall in the U.S., to
account for current elevated levels of hurricane activity in the Atlantic basin that are expected to persist for at least the next five years. The increased frequency and intensity of hurricane activity in the Atlantic Ocean Basin, as observed since 1995, are driven by higher sea surface temperatures in the tropical North Atlantic and by associated changes in atmospheric circulation. In addition, the experts also reaffirmed that the "increase in activity of the most severe Category 3-5 hurricanes will be higher than the increase in Category 1-2 storms, based on the high likelihood of warmer
than normal sea surface temperatures in the tropical Atlantic."
The major market indices have been ignoring the inverted yield curve for the majority of 2006. Cheap money has fueled speculative borrowing and the equity market has chowed down on this meal. Is it a meal for the long-term? If you look at the VIX trading under $10, it is quite apparent complacency rules the day.
Then there are the massive amounts of buyouts. The private equity crowd is coining it.
Financial engineering works best when money is really cheap- like now. Will that continue? No one rings a bell.
comScore Networks released the first in a series of reports that measure consumers' online non-travel (retail) spending during the 2006 holiday season, which began November 1, 2006. During the first 19 days of November this year, total online retail spending reached $6.35 billion, marking a 23-percent increase versus the corresponding days in 2005.
The dollar tumbled to a three-month low against the euro and a three-week low versus the yen Wednesday.
The number of people collecting unemployment benefits climbed by 14,000 in the week ending Nov. 11, to 2.45 million, the Labor Department said.
The Consumer Federation of America and the Credit Union National Association found 32 percent of shoppers want to spend less than they did during the 2005 holidays. About half of the survey's roughly 1,000 respondents said they would like to spend about the same. Only 15 percent intended to spend more. Maybe lower prices at Wal-Mart will open the pocketbooks of these consumers.
Mark McMillan: "Many traders seem to try to predict tops and bottoms from the level of the VIX or the VXN. We don't believe that it is possible to predict the bottoms or tops from the levels. We do believe that they are a useful indicator that should be monitored at extremes and for patterns. It is the reversals from when these indicators are overextended that tops or bottoms can be successfully traded, and all traders should be aware of their usefulness as an auxiliary indicator."
Richard Daughty: "But if you want to see something really, really eye-popping, then Savings/Other Deposits in the banks is the place to go, as they were up an astonishing $228 billion last week! In one week! This is huuuUUUuuuuge! A quarter of a trillion bucks appeared like magic in accounts at the banks! In one week! I guess this must be the arrival of the temporary Treasury accounts money that was recently authorized. But wow!
My breath comes in ragged gasps and my heart spasms involuntarily at the potential ramifications of the banks instantly having another huge $228 billion glob of deposits to tap into, to make new loans, enrich themselves, cause price inflation and increase indebtedness to finance a boom.
And I am positively woozy at the thought of this money multiplied by the almost-zero fractional reserve requirement of banks, as they now are required to hold less than one-percent of the total of bank deposits or marked-to-market assets as reserves against any new loans. Truly, I am aghast and terrified at this astonishing, astonishing, and (did I say "astonishing"?) astonishing amount of money flooding the banks."
JFK: "As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them."
We have been extremely fortunate in 2006. Unlike the horrific hurricane season in 2005, this year the storms have been relatively benign. This has not been lost on the insurance industry. Does that mean that risk has disappeared and that complacency is our meal ticket?
Risk Management Solutions (RMS) reaffirmed its medium-term five-year view of landfalling hurricane risk for the period of 2007-2011. The company is projecting higher modeled annualized insurance losses by 40% on average across the Gulf Coast,
Florida, and the Southeast, and by 25-30% in the Mid-Atlantic and Northeast
coastal regions relative to those derived using long-term 1900-2006
historical average hurricane frequencies. A key driver of the current elevated view of landfalling hurricane risk is an increase of more than 30% in the modeled frequency of major (Saffir-Simpson Category 3-5) hurricanes making landfall in the U.S., to
account for current elevated levels of hurricane activity in the Atlantic basin that are expected to persist for at least the next five years. The increased frequency and intensity of hurricane activity in the Atlantic Ocean Basin, as observed since 1995, are driven by higher sea surface temperatures in the tropical North Atlantic and by associated changes in atmospheric circulation. In addition, the experts also reaffirmed that the "increase in activity of the most severe Category 3-5 hurricanes will be higher than the increase in Category 1-2 storms, based on the high likelihood of warmer
than normal sea surface temperatures in the tropical Atlantic."
The major market indices have been ignoring the inverted yield curve for the majority of 2006. Cheap money has fueled speculative borrowing and the equity market has chowed down on this meal. Is it a meal for the long-term? If you look at the VIX trading under $10, it is quite apparent complacency rules the day.
Then there are the massive amounts of buyouts. The private equity crowd is coining it.
Financial engineering works best when money is really cheap- like now. Will that continue? No one rings a bell.
comScore Networks released the first in a series of reports that measure consumers' online non-travel (retail) spending during the 2006 holiday season, which began November 1, 2006. During the first 19 days of November this year, total online retail spending reached $6.35 billion, marking a 23-percent increase versus the corresponding days in 2005.
The dollar tumbled to a three-month low against the euro and a three-week low versus the yen Wednesday.
The number of people collecting unemployment benefits climbed by 14,000 in the week ending Nov. 11, to 2.45 million, the Labor Department said.
The Consumer Federation of America and the Credit Union National Association found 32 percent of shoppers want to spend less than they did during the 2005 holidays. About half of the survey's roughly 1,000 respondents said they would like to spend about the same. Only 15 percent intended to spend more. Maybe lower prices at Wal-Mart will open the pocketbooks of these consumers.
Mark McMillan: "Many traders seem to try to predict tops and bottoms from the level of the VIX or the VXN. We don't believe that it is possible to predict the bottoms or tops from the levels. We do believe that they are a useful indicator that should be monitored at extremes and for patterns. It is the reversals from when these indicators are overextended that tops or bottoms can be successfully traded, and all traders should be aware of their usefulness as an auxiliary indicator."
Richard Daughty: "But if you want to see something really, really eye-popping, then Savings/Other Deposits in the banks is the place to go, as they were up an astonishing $228 billion last week! In one week! This is huuuUUUuuuuge! A quarter of a trillion bucks appeared like magic in accounts at the banks! In one week! I guess this must be the arrival of the temporary Treasury accounts money that was recently authorized. But wow!
My breath comes in ragged gasps and my heart spasms involuntarily at the potential ramifications of the banks instantly having another huge $228 billion glob of deposits to tap into, to make new loans, enrich themselves, cause price inflation and increase indebtedness to finance a boom.
And I am positively woozy at the thought of this money multiplied by the almost-zero fractional reserve requirement of banks, as they now are required to hold less than one-percent of the total of bank deposits or marked-to-market assets as reserves against any new loans. Truly, I am aghast and terrified at this astonishing, astonishing, and (did I say "astonishing"?) astonishing amount of money flooding the banks."
JFK: "As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them."
Tuesday, November 21, 2006
Developments
11/22/06 Developments
U.S. Military Migrating to Stratos Optical Fiber Optic Connectors for Communications Applications. For those still not familiar with Stratos
International, I suggest it would be worth your while to peruse the situation.
Nasdaq Stock Market Inc. may consider raising its bid for the London Stock Exchange if the LSE recommends an offer at a higher price or a rival bid emerges, the president of Nasdaq International said on Tuesday.
Bad weather forced a loading halt at Alaska's main export terminal.
Indonesia's Finance Minister Sri Mulyani Indrawati has scrapped import taxes levied on capital goods used in the upstream oil and gas sector, according to a ministry statement.
Brett Steenbarger: "When volume is concentrated in winning stocks, profit taking seems to take hold over the next four days."
Martin Weiss: "The total inventory of new and used homes waiting for buyers is still the largest of all time. The number of investors and speculators dumping their properties on the market is just beginning to swell. But if you think the housing bust is severe nationally, look at what's happening in California: Housing permits were down by a whopping 47 percent in September, many times worse than the national average, according to the California Building Industry Association and the Construction Industry Research Board. For single-family homes statewide, it was even more severe: Down 57 percent from the same time last year. And in certain formerly hot areas -- like San Francisco, San Mateo and Marin counties -- new housing starts have dropped by an unbelievable 71 percent!"
Mike Shedlock:"While overall employment increased by less than 22 percent from the 1993 to 2006, employment in the construction of residential buildings increased by almost 70 percent. Employment in real estate agencies increased by almost 30 percent over this period. Employment in residential specialty trade contractors increased by almost 28 percent in just the years from 2001 to 2006. When the bubble deflates, employment levels in these sectors will fall back in line with their historic patterns, as construction and sales levels move to more normal levels. If employment in housing-related sectors were to fall back to levels consistent with their share of their labor force in the mid-1990s, it would lead a loss of close to 1 million jobs. If the construction sector temporarily falls below its normal level of activity as inventories of unsold homes adjust to normal levels, the job loss would be even greater."
Champion Enterprises Inc. said Tuesday it's terminated its previous agreement to sell the retail operations of its Advantage Homes unit as a result of the buyer's failure to secure financing to complete the purchase. "While the previously announced sale was an attractive financial opportunity for Champion at the time, the current slowdown in the California housing market has made completing the financing a challenge for our buyer," said William Griffiths, Champion CEO, in a statement.
The leaders of India and China set a goal Tuesday to double their bilateral trade in four years to 40 billion dollars, highlighting Chinese President Hu Jintao's visit to a country China once faced on the battlefield.
Federal spending in fiscal year 2006 increased by 9 percent, the largest increase since 1990. Discretionary federal spending has increased year after year, up more than 40 percent since President Bush took office. Instead of turkey, they should be serving pork at the White House on Thanksgiving.
Deere expects sales in the US and Canada to be flat next year, and will cut production of agricultural equipment by 4 per cent to trim excess supply. Global sales of agricultural equipment are expected to rise 4 per cent in fiscal 2007 after a 3 per cent increase this year, with demand in Europe countering the relative weakness in other markets.The company is projecting earnings at roughly $5.69 for 2007. In my view, that is on the low side.
The White House estimates that real GDP will grow by about 2.9% from the fourth quarter of 2006 until the fourth quarter of 2007, down from the 3.3% estimated by the Office of Management and Budget in June. The White House raised its forecast for inflation to 2.6% from 2.4%. The administration forecasts the unemployment rate to tick higher to 4.6% from 4.4% in October.
According to the United States Department of Agriculture, the
average American family of four spends at least $632 each month on
groceries.
The New York Employee Confidence Index increased 7.5 points to 60.4 in October as more workers reported
optimism in the economy and their personal employment prospects, according
to the Spherion(R) Employment Report, a monthly survey conducted by Harris
Interactive(R) on behalf of Spherion Corporation.
December gold climbed $6.60 to close at $628.70 an ounce, near the day's high of $629, while December silver added 34.5 cents to close at $13.085 an ounce.
January crude closed at $60.17 a barrel, up $1.37.
For the past several months I have been massively wrong about the VIX, which on Monday closed below 10 for the first time since 1994 and is at its
lowest levels in 13 years. On Tuesday the VIX again closed
below 10. However, with patience going into April and May, I
still believe the VIX will be at least double its current
price.
As part of the review of its overall downstream operations, Alcoa also
plans a targeted restructuring program in order to further increase
efficiency and profitability. The restructuring will encompass plant
closings and consolidations that will affect approximately 6,700
positions across the company's global businesses during the next year.
Ths program is expected to save approximately $125 million before taxes.
onan annualized basis.
It was a great day for Google and Apple- both trading at
all-time highs.
U.S. Military Migrating to Stratos Optical Fiber Optic Connectors for Communications Applications. For those still not familiar with Stratos
International, I suggest it would be worth your while to peruse the situation.
Nasdaq Stock Market Inc. may consider raising its bid for the London Stock Exchange if the LSE recommends an offer at a higher price or a rival bid emerges, the president of Nasdaq International said on Tuesday.
Bad weather forced a loading halt at Alaska's main export terminal.
Indonesia's Finance Minister Sri Mulyani Indrawati has scrapped import taxes levied on capital goods used in the upstream oil and gas sector, according to a ministry statement.
Brett Steenbarger: "When volume is concentrated in winning stocks, profit taking seems to take hold over the next four days."
Martin Weiss: "The total inventory of new and used homes waiting for buyers is still the largest of all time. The number of investors and speculators dumping their properties on the market is just beginning to swell. But if you think the housing bust is severe nationally, look at what's happening in California: Housing permits were down by a whopping 47 percent in September, many times worse than the national average, according to the California Building Industry Association and the Construction Industry Research Board. For single-family homes statewide, it was even more severe: Down 57 percent from the same time last year. And in certain formerly hot areas -- like San Francisco, San Mateo and Marin counties -- new housing starts have dropped by an unbelievable 71 percent!"
Mike Shedlock:"While overall employment increased by less than 22 percent from the 1993 to 2006, employment in the construction of residential buildings increased by almost 70 percent. Employment in real estate agencies increased by almost 30 percent over this period. Employment in residential specialty trade contractors increased by almost 28 percent in just the years from 2001 to 2006. When the bubble deflates, employment levels in these sectors will fall back in line with their historic patterns, as construction and sales levels move to more normal levels. If employment in housing-related sectors were to fall back to levels consistent with their share of their labor force in the mid-1990s, it would lead a loss of close to 1 million jobs. If the construction sector temporarily falls below its normal level of activity as inventories of unsold homes adjust to normal levels, the job loss would be even greater."
Champion Enterprises Inc. said Tuesday it's terminated its previous agreement to sell the retail operations of its Advantage Homes unit as a result of the buyer's failure to secure financing to complete the purchase. "While the previously announced sale was an attractive financial opportunity for Champion at the time, the current slowdown in the California housing market has made completing the financing a challenge for our buyer," said William Griffiths, Champion CEO, in a statement.
The leaders of India and China set a goal Tuesday to double their bilateral trade in four years to 40 billion dollars, highlighting Chinese President Hu Jintao's visit to a country China once faced on the battlefield.
Federal spending in fiscal year 2006 increased by 9 percent, the largest increase since 1990. Discretionary federal spending has increased year after year, up more than 40 percent since President Bush took office. Instead of turkey, they should be serving pork at the White House on Thanksgiving.
Deere expects sales in the US and Canada to be flat next year, and will cut production of agricultural equipment by 4 per cent to trim excess supply. Global sales of agricultural equipment are expected to rise 4 per cent in fiscal 2007 after a 3 per cent increase this year, with demand in Europe countering the relative weakness in other markets.The company is projecting earnings at roughly $5.69 for 2007. In my view, that is on the low side.
The White House estimates that real GDP will grow by about 2.9% from the fourth quarter of 2006 until the fourth quarter of 2007, down from the 3.3% estimated by the Office of Management and Budget in June. The White House raised its forecast for inflation to 2.6% from 2.4%. The administration forecasts the unemployment rate to tick higher to 4.6% from 4.4% in October.
According to the United States Department of Agriculture, the
average American family of four spends at least $632 each month on
groceries.
The New York Employee Confidence Index increased 7.5 points to 60.4 in October as more workers reported
optimism in the economy and their personal employment prospects, according
to the Spherion(R) Employment Report, a monthly survey conducted by Harris
Interactive(R) on behalf of Spherion Corporation.
December gold climbed $6.60 to close at $628.70 an ounce, near the day's high of $629, while December silver added 34.5 cents to close at $13.085 an ounce.
January crude closed at $60.17 a barrel, up $1.37.
For the past several months I have been massively wrong about the VIX, which on Monday closed below 10 for the first time since 1994 and is at its
lowest levels in 13 years. On Tuesday the VIX again closed
below 10. However, with patience going into April and May, I
still believe the VIX will be at least double its current
price.
As part of the review of its overall downstream operations, Alcoa also
plans a targeted restructuring program in order to further increase
efficiency and profitability. The restructuring will encompass plant
closings and consolidations that will affect approximately 6,700
positions across the company's global businesses during the next year.
Ths program is expected to save approximately $125 million before taxes.
onan annualized basis.
It was a great day for Google and Apple- both trading at
all-time highs.
Monday, November 20, 2006
Forecasts
11/21/06 Forecasts
In the third quarter, Lowe's sales at stores open at least a year fell 4 percent, the first decline in this measure since the first quarter of 2001. Lowe's said same-store sales would fall 4 percent to 6 percent in the fourth quarter. Lowe's said declining U.S. home sales and construction, lower hurricane-related sales and higher materials costs hurt third-quarter results. Lowe's cut its full-year profit forecast to a range of $1.95 to $1.97 a share, and said it expects fourth-quarter profit of 36 cents to 38 cents a share. Lowe's said both the fourth quarter and full year would include one less week than the year earlier because of a calendar shift. In September, Lowe's had said annual earnings would be near the low end of a range of $2 to $2.07 a share.
The day after Thanksgiving did not even rank as one of the top five busiest holiday shopping days last year, according to a report released by MasterCard Worldwide.The Sunday following Thanksgiving has been the least busy day of the holiday shopping season for the past two years.
TD Bank Financial Group said Monday it will take TD Banknorth Inc. private in a transaction valued at about $3.2 billion, or $32.33 a share in cash.
The Nasdaq Stock Market said it's offered 2.7 billion pounds ($5.1 billion), or 1,243 pence a share, for the London Stock Exchange, and the offer was rejected.
According to a Mastercard survey, nearly three out of four people plan to shop online during the holidays, with 26 percent saying they will shop online more this year than they did last year. On average, these consumers will plan to
spend 41 percent of their total holiday expenditures online.
Consumers said they planned on spending an average of nearly $700 this
season with nearly $300 of that amount to be spent online for holiday
gifts. While consumers will spend the majority of their in-store holiday
budgets this year on clothing and related accessories, gift cards are
moving past many traditional items on shopping lists. For example,
nearly 60 percent of those surveyed anticipate buying gift cards or
gift certificates, while only 42 percent plan to purchase toys, games,
or sporting goods.
"The drop in the rate of consumers opening new accounts in 2006 may
give the appearance that they are being more conservative with regard to
using credit, however this may not be the case when combined with other
results from our study," said Ty Taylor, president of Experian Consumer
Direct. "Although our data shows a drop in the rate of consumers opening
bank credit card accounts, it also shows that their balances on other types
of loans, such as installment loans, are increasing."
The rate at which consumers were 90 days or more late in
payments increased 12.6 percent from 2001 (39.6 percent) to 2006 (44.6
percent).
Gary Lammert: "The 398th day for the Wilshire is 22 November 2006. The 16th day of the concurrent and final 8/20/16 day growth fractals for the ten year note,
30 year bond, and CRB is 22 Novembr 2006. The 58th day of the 29/73/58
day fractal for GM is 22 November 2006. 22 November 2006 is the ideal
final saturation day for the Wilshire secondary to its March 2000."
alltime high.
Oregon Steel is being acquired for $63.25 per share by Russian Evraz.
The Conference Board reported that the Composite Index of Leading Economic Indicators increased 0.2% in October, following a 0.4% increase in September and a 0.3% decrease in August. Says Ken Goldstein, Labor Economist at The Conference Board: "In sum, the impact of a slower housing market on consumers and slower profit growth on business isn't completely offset by lower gas prices and a rising stock
market. This suggests that the economy is unlikely either to reheat or to
get significantly cooler. Instead, the kind of slow growth now being
experienced could continue right through the winter and into the spring."
The Conference Board reported that the Coincident Index, a major
barometer of current economic activity, increased 0.1% in October,
following a 0.2% increase in September and August. The lagging index
increased 0.2% in October and September, following no change in August.
South Korea's currency won hit a new high against Japanese
yen on Monday at 792.38 won to 100 yen, the highest in 9 years.
The National Association of Realtors reported that sales dipped to a
seasonally adjusted annual rate of 6.27 million units nationwide, down
by 12.7 percent from the same period a year ago.
According to the NAR, home sales fell by 38 percent in Nevada, 36 percent in Arizona; 34.2 percent in Florida and 28.6 percent in California.
John Hussman: "In richly valued markets, the primary source of sustainable returns is good stock selection that is hedged against general market fluctuations, plus the implied interest earned on those hedges."
According to a report from the research firm Nielsen/NetRatings, Microsoft Corp.'s MSN unit was the only one of the top five search providers to see its traffic fall, dropping 8% from a year earlier. MSN's search market share in October was 8.8%, according the report released Monday.
Fresh Del Monte Produce Inc. is ceasing its Hawaii production, operations and shipments effective immediately, putting 700 employees out of work, far ahead of its original 2008 schedule, the company said.
Medtronic Inc. posted a drop in fiscal second-quarter profit due to higher costs. Net income fell 16.6% to $681 million, or59 cents a share, from $817 million, or 67 cents a share, in the same period last year. Revenue for the quarter jumped more than 11% to $3.08billion from $2.77 billion in 2005. A poll of analysts by Thomson First Call had been looking for the diversified medical device maker to postrevenue of $2.97 billion for the period ended Oct. 27. Sales of thecompany's cardiac rhythm management products, which includesimplantable heart defibrillators and pacemakers, rose 6% to $1.36 billion. Sales of its implantable defibrillators, which have seenslowed growth in recent quarters, rose 4% to $764 million.
BCA Research: "There was a record-breaking overshoot in residential construction andit will be a long time before the next rebound in activity and pricesdevelops. In the interim, affordability must improve considerably, viaa combination of lower borrowing rates and lower house prices."
In the third quarter, Lowe's sales at stores open at least a year fell 4 percent, the first decline in this measure since the first quarter of 2001. Lowe's said same-store sales would fall 4 percent to 6 percent in the fourth quarter. Lowe's said declining U.S. home sales and construction, lower hurricane-related sales and higher materials costs hurt third-quarter results. Lowe's cut its full-year profit forecast to a range of $1.95 to $1.97 a share, and said it expects fourth-quarter profit of 36 cents to 38 cents a share. Lowe's said both the fourth quarter and full year would include one less week than the year earlier because of a calendar shift. In September, Lowe's had said annual earnings would be near the low end of a range of $2 to $2.07 a share.
The day after Thanksgiving did not even rank as one of the top five busiest holiday shopping days last year, according to a report released by MasterCard Worldwide.The Sunday following Thanksgiving has been the least busy day of the holiday shopping season for the past two years.
TD Bank Financial Group said Monday it will take TD Banknorth Inc. private in a transaction valued at about $3.2 billion, or $32.33 a share in cash.
The Nasdaq Stock Market said it's offered 2.7 billion pounds ($5.1 billion), or 1,243 pence a share, for the London Stock Exchange, and the offer was rejected.
According to a Mastercard survey, nearly three out of four people plan to shop online during the holidays, with 26 percent saying they will shop online more this year than they did last year. On average, these consumers will plan to
spend 41 percent of their total holiday expenditures online.
Consumers said they planned on spending an average of nearly $700 this
season with nearly $300 of that amount to be spent online for holiday
gifts. While consumers will spend the majority of their in-store holiday
budgets this year on clothing and related accessories, gift cards are
moving past many traditional items on shopping lists. For example,
nearly 60 percent of those surveyed anticipate buying gift cards or
gift certificates, while only 42 percent plan to purchase toys, games,
or sporting goods.
"The drop in the rate of consumers opening new accounts in 2006 may
give the appearance that they are being more conservative with regard to
using credit, however this may not be the case when combined with other
results from our study," said Ty Taylor, president of Experian Consumer
Direct. "Although our data shows a drop in the rate of consumers opening
bank credit card accounts, it also shows that their balances on other types
of loans, such as installment loans, are increasing."
The rate at which consumers were 90 days or more late in
payments increased 12.6 percent from 2001 (39.6 percent) to 2006 (44.6
percent).
Gary Lammert: "The 398th day for the Wilshire is 22 November 2006. The 16th day of the concurrent and final 8/20/16 day growth fractals for the ten year note,
30 year bond, and CRB is 22 Novembr 2006. The 58th day of the 29/73/58
day fractal for GM is 22 November 2006. 22 November 2006 is the ideal
final saturation day for the Wilshire secondary to its March 2000."
alltime high.
Oregon Steel is being acquired for $63.25 per share by Russian Evraz.
The Conference Board reported that the Composite Index of Leading Economic Indicators increased 0.2% in October, following a 0.4% increase in September and a 0.3% decrease in August. Says Ken Goldstein, Labor Economist at The Conference Board: "In sum, the impact of a slower housing market on consumers and slower profit growth on business isn't completely offset by lower gas prices and a rising stock
market. This suggests that the economy is unlikely either to reheat or to
get significantly cooler. Instead, the kind of slow growth now being
experienced could continue right through the winter and into the spring."
The Conference Board reported that the Coincident Index, a major
barometer of current economic activity, increased 0.1% in October,
following a 0.2% increase in September and August. The lagging index
increased 0.2% in October and September, following no change in August.
South Korea's currency won hit a new high against Japanese
yen on Monday at 792.38 won to 100 yen, the highest in 9 years.
The National Association of Realtors reported that sales dipped to a
seasonally adjusted annual rate of 6.27 million units nationwide, down
by 12.7 percent from the same period a year ago.
According to the NAR, home sales fell by 38 percent in Nevada, 36 percent in Arizona; 34.2 percent in Florida and 28.6 percent in California.
John Hussman: "In richly valued markets, the primary source of sustainable returns is good stock selection that is hedged against general market fluctuations, plus the implied interest earned on those hedges."
According to a report from the research firm Nielsen/NetRatings, Microsoft Corp.'s MSN unit was the only one of the top five search providers to see its traffic fall, dropping 8% from a year earlier. MSN's search market share in October was 8.8%, according the report released Monday.
Fresh Del Monte Produce Inc. is ceasing its Hawaii production, operations and shipments effective immediately, putting 700 employees out of work, far ahead of its original 2008 schedule, the company said.
Medtronic Inc. posted a drop in fiscal second-quarter profit due to higher costs. Net income fell 16.6% to $681 million, or59 cents a share, from $817 million, or 67 cents a share, in the same period last year. Revenue for the quarter jumped more than 11% to $3.08billion from $2.77 billion in 2005. A poll of analysts by Thomson First Call had been looking for the diversified medical device maker to postrevenue of $2.97 billion for the period ended Oct. 27. Sales of thecompany's cardiac rhythm management products, which includesimplantable heart defibrillators and pacemakers, rose 6% to $1.36 billion. Sales of its implantable defibrillators, which have seenslowed growth in recent quarters, rose 4% to $764 million.
BCA Research: "There was a record-breaking overshoot in residential construction andit will be a long time before the next rebound in activity and pricesdevelops. In the interim, affordability must improve considerably, viaa combination of lower borrowing rates and lower house prices."
Sunday, November 19, 2006
Tidbits
11/120/06 Tidbits
"If you mean by clear military victory an Iraqi government that can be established and whose writ runs across the whole country, that gets the civil war under control and sectarian violence under control . . . I don't believe that is possible," Mr Kissinger told BBC television.
eBay's Meg Whitman: "Skype today is adding in excess of 300,000 new users a day."
China is now our country's 4th largest export market behind Canada, Mexico, and Japan. It should not take very more years untilit reaches first place. Between 2000 and 2005 our exports to China grew 157 percent.
Algeria's energy minister said OPEC may call for deeper production cuts at a December meeting in Nigeria, according to published reports.
"We may decide on a new reduction during our meeting in Abuja Dec. 15, to further ensure oil price stability," AFP reported Energy Minister Chakib Khelil said on Algerian public radio Sunday.
Qatar's energy minister also indicated OPEC could increase oil output cuts beyond the 1.2 million barrels a day agreed upon at an October meeting in Doha.
Medtronic and Lowe's will report quarterly results on Monday.
A senior U.S. official tells Newsweek that some inside the administration believe it may be too late to stop Tehran from continuing its nuclear program. Should diplomacy fail, Washington might have to accept Iran as a "virtual nuclear-weapons state" if President Bush gets help on Iraq and other issues, this official says. That means Tehran might be permitted to develop the technology for making nuclear fuel -- and potentially a bomb -- as long as it holds to its pledge to limit its program to peaceful purposes. But this is still seen as a remote fallback position. In Newsweek's November 27 issue (on newsstands Monday, November 20), Senior Editor Michael Hirsh and National Security Correspondent John Barry report on new, public signals that Washington is edging closer to Tehran's terms for talks.
Bush addressing China's Hu: "I strongly support your vision, Mr. President, of encouraging your country to become a nation of consumers and not savers, which will inure to the benefit of our manufacturers, both large and small, and our farmers, as well."
Freeport-McMoRan said it will pay a total of $126.46 per Phelps Dodge share, a premium of 33 percent to Phelps Dodge's closing price on November 17 of $95.02. Each Phelps Dodge shareholder would receive $88 per share in cash plus 0.67 of a common share of Freeport-McMoRan. The cash portion of $18 billion represents 70 percent of the deal. Freeport-McMoRan said the combined company will be the largest North American-based mining firm.
Private equity firm Blackstone Group is set to announce a takeover plan for Equity Office Properties Trust , The Wall Street Journal reported on Sunday.
Citing people familiar with the matter, the newspaper said Blackstone is expected to pay about $48.50 for each share of Equity Office, the largest publicly traded office building owner in the United States.
The auction of Boston-based money manager Putnam Investments will move into its latter stages this week with final offers due from three bidders before the Thanksgiving holiday in the United States, The Wall Street Journal reported on its Web site on Sunday.
Democratic Representative Charles Rangel said he will again introduce legislation to revive a US military draft when his party takes control of Congress in January.
David Ogilvy: "I always said that mega-mergers were for megalomaniacs."
"If you mean by clear military victory an Iraqi government that can be established and whose writ runs across the whole country, that gets the civil war under control and sectarian violence under control . . . I don't believe that is possible," Mr Kissinger told BBC television.
eBay's Meg Whitman: "Skype today is adding in excess of 300,000 new users a day."
China is now our country's 4th largest export market behind Canada, Mexico, and Japan. It should not take very more years untilit reaches first place. Between 2000 and 2005 our exports to China grew 157 percent.
Algeria's energy minister said OPEC may call for deeper production cuts at a December meeting in Nigeria, according to published reports.
"We may decide on a new reduction during our meeting in Abuja Dec. 15, to further ensure oil price stability," AFP reported Energy Minister Chakib Khelil said on Algerian public radio Sunday.
Qatar's energy minister also indicated OPEC could increase oil output cuts beyond the 1.2 million barrels a day agreed upon at an October meeting in Doha.
Medtronic and Lowe's will report quarterly results on Monday.
A senior U.S. official tells Newsweek that some inside the administration believe it may be too late to stop Tehran from continuing its nuclear program. Should diplomacy fail, Washington might have to accept Iran as a "virtual nuclear-weapons state" if President Bush gets help on Iraq and other issues, this official says. That means Tehran might be permitted to develop the technology for making nuclear fuel -- and potentially a bomb -- as long as it holds to its pledge to limit its program to peaceful purposes. But this is still seen as a remote fallback position. In Newsweek's November 27 issue (on newsstands Monday, November 20), Senior Editor Michael Hirsh and National Security Correspondent John Barry report on new, public signals that Washington is edging closer to Tehran's terms for talks.
Bush addressing China's Hu: "I strongly support your vision, Mr. President, of encouraging your country to become a nation of consumers and not savers, which will inure to the benefit of our manufacturers, both large and small, and our farmers, as well."
Freeport-McMoRan said it will pay a total of $126.46 per Phelps Dodge share, a premium of 33 percent to Phelps Dodge's closing price on November 17 of $95.02. Each Phelps Dodge shareholder would receive $88 per share in cash plus 0.67 of a common share of Freeport-McMoRan. The cash portion of $18 billion represents 70 percent of the deal. Freeport-McMoRan said the combined company will be the largest North American-based mining firm.
Private equity firm Blackstone Group is set to announce a takeover plan for Equity Office Properties Trust , The Wall Street Journal reported on Sunday.
Citing people familiar with the matter, the newspaper said Blackstone is expected to pay about $48.50 for each share of Equity Office, the largest publicly traded office building owner in the United States.
The auction of Boston-based money manager Putnam Investments will move into its latter stages this week with final offers due from three bidders before the Thanksgiving holiday in the United States, The Wall Street Journal reported on its Web site on Sunday.
Democratic Representative Charles Rangel said he will again introduce legislation to revive a US military draft when his party takes control of Congress in January.
David Ogilvy: "I always said that mega-mergers were for megalomaniacs."
Observations
11/19/06 Observations
Gary Shilling: "I am convinced that the housing bubble is gigantic and will burst before long with massive implications here and abroad. In fact, it's the key to the global economic outlook...The 25% or greater decline in house prices we foresee will sire considerable consumer spending retrenchment that almost guarantee a major recession. Note the close link between the Homebuilders' Sentiment Index, which has collapsed, and real consumer spending."
In analyzing California's state finances, Elizabeth Hill observed that, based on past housing cycles, it is expected that prices will drop for several years, but it is unclear how deep the slump will be.
The total commercial paper market is approaching $2 trillion!
Doug Noland: "Today, the unfolding Derivatives "Insurance" Bubble is creating one additional troubling facet to what has developed into a full-fledged global Credit Bubble comprising U.S. household, government and corporate finance, along with Credit systems and asset markets around the world. Global imbalances and associated liquidity excess are unprecedented, and the dollar vulnerable. Despite the recent energy price decline, the domestic and global backdrop remains inflationary as opposed to dis-inflationary. Here at home, productivity is waning and wage pressures are rising... unlimited Credit/"finance" and unchecked leveraged speculation are the bane of free market Capitalism. Yet it's amazing how recent Monetary Disorder (inflating stock markets) has the "free market" bullish crowd filling the airwaves with flawed analysis and wishful thinking."
RealtyTrac(R) (http://www.realtytrac.com), the leading online marketplace for foreclosure properties, released its October 2006 U.S. Foreclosure Market Report, which shows that 115,568 properties nationwide entered some stage of foreclosure during the month, the most reported in any month so far this year and an increase of 42 percent from October 2005. The report also shows a national foreclosure rate of one new foreclosure filing for every 1,001 U.S. households, the highest monthly foreclosure rate reported so far this year.
Dubai launched the Gulf region's first fuel oil futures contracts last month that could mark the beginning of the emirate's transformation into a new energy derivatives trading centre.
The year-old Dubai Gold and Commodities Exchange began trading the Fujairah 380 CST high sulphur fuel oil futures contracts on October 29 to add to its other products - gold, silver and currency futures.
Imports from China to the dozen euro nations rose to 88.3bn euros in the first eight months of the year, up 21% from the year-earlier period. That put China ahead of the US, with 84.3bn euros of imports into the euro area, and behind only the UK, with 109.7bn euros in the latest period.
The US trade deficits with Canada and Mexico, America's top two trading partners, have grown from US$52 billion and $41 billion in 2003 to an estimated $85 billion and $60 billion in 2006, respectively. The US trade deficit with the European Union has increased from $97 billion in 2003 to an estimated $135 billion in 2006. Finally, the US trade deficits with China and Japan have soared from $124 billion and $66 billion in 2003 to an estimated $250 billion and $90 billion in 2006, respectively.
Mike Burk: "Over the past 50 years the annualized return of the SPX, excluding dividends has been about 7%. From its low in October 2002 the annualized return of the SPX excluding dividends has been about 15%. The chart below shows the SPX from its October 2002 low to the present...From its low last June the annualized return of the SPX excluding dividends has been 36%...The rise in the SPX from its June lows has been at a rate equivalent to the best Presidential Year 3 rate and a little over twice the average return for the period."
Harlow Shapley:"Theories crumble, but good observations never fade."
Gary Shilling: "I am convinced that the housing bubble is gigantic and will burst before long with massive implications here and abroad. In fact, it's the key to the global economic outlook...The 25% or greater decline in house prices we foresee will sire considerable consumer spending retrenchment that almost guarantee a major recession. Note the close link between the Homebuilders' Sentiment Index, which has collapsed, and real consumer spending."
In analyzing California's state finances, Elizabeth Hill observed that, based on past housing cycles, it is expected that prices will drop for several years, but it is unclear how deep the slump will be.
The total commercial paper market is approaching $2 trillion!
Doug Noland: "Today, the unfolding Derivatives "Insurance" Bubble is creating one additional troubling facet to what has developed into a full-fledged global Credit Bubble comprising U.S. household, government and corporate finance, along with Credit systems and asset markets around the world. Global imbalances and associated liquidity excess are unprecedented, and the dollar vulnerable. Despite the recent energy price decline, the domestic and global backdrop remains inflationary as opposed to dis-inflationary. Here at home, productivity is waning and wage pressures are rising... unlimited Credit/"finance" and unchecked leveraged speculation are the bane of free market Capitalism. Yet it's amazing how recent Monetary Disorder (inflating stock markets) has the "free market" bullish crowd filling the airwaves with flawed analysis and wishful thinking."
RealtyTrac(R) (http://www.realtytrac.com), the leading online marketplace for foreclosure properties, released its October 2006 U.S. Foreclosure Market Report, which shows that 115,568 properties nationwide entered some stage of foreclosure during the month, the most reported in any month so far this year and an increase of 42 percent from October 2005. The report also shows a national foreclosure rate of one new foreclosure filing for every 1,001 U.S. households, the highest monthly foreclosure rate reported so far this year.
Dubai launched the Gulf region's first fuel oil futures contracts last month that could mark the beginning of the emirate's transformation into a new energy derivatives trading centre.
The year-old Dubai Gold and Commodities Exchange began trading the Fujairah 380 CST high sulphur fuel oil futures contracts on October 29 to add to its other products - gold, silver and currency futures.
Imports from China to the dozen euro nations rose to 88.3bn euros in the first eight months of the year, up 21% from the year-earlier period. That put China ahead of the US, with 84.3bn euros of imports into the euro area, and behind only the UK, with 109.7bn euros in the latest period.
The US trade deficits with Canada and Mexico, America's top two trading partners, have grown from US$52 billion and $41 billion in 2003 to an estimated $85 billion and $60 billion in 2006, respectively. The US trade deficit with the European Union has increased from $97 billion in 2003 to an estimated $135 billion in 2006. Finally, the US trade deficits with China and Japan have soared from $124 billion and $66 billion in 2003 to an estimated $250 billion and $90 billion in 2006, respectively.
Mike Burk: "Over the past 50 years the annualized return of the SPX, excluding dividends has been about 7%. From its low in October 2002 the annualized return of the SPX excluding dividends has been about 15%. The chart below shows the SPX from its October 2002 low to the present...From its low last June the annualized return of the SPX excluding dividends has been 36%...The rise in the SPX from its June lows has been at a rate equivalent to the best Presidential Year 3 rate and a little over twice the average return for the period."
Harlow Shapley:"Theories crumble, but good observations never fade."
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