2/9/07 Same-Store Sales
Cosco's same-store sales for January rose a disappointing 2%.
Wal-Mart sees their U.S. comp sales for February rising between 1-2%.
Nordstrom Inc. said January same-store sales rose 11% over year-earlier levels, and that is most impressive.
Target Corp. said January same-store sales rose 5.1%. The company forecasts Feb results to gain between 4-6%.
The Energy Department said natural-gas inventories fell 224 billion cubic feet for the week ended Feb. 2. Total stocks now stand at 2.347 trillion cubic feet, down 26 billion cubic feet from the year-ago level, but 378 billion cubic feet above the five-year average, the government data said.
Limited Brands Inc. said its January sales at stores open at least one year rose 11%. Excluding the fifth week in January this year and the gift card breakage adjustment from last year, the sales increase from the comparable four-week period last year was 14%. That's quite a performance.
Tribune Co. reported fourth-quarter net income rose 78% on 5.4% higher revenue. Earnings reached $239.1 million, or 99 cents a share, from $134.4 million, or 43 cents, in the year-earlier period. Earnings from continuing operations were 96 cents against 42 cents. The figures reflect charges totaling 3 cents a share and gains totaling 31 cents. A survey of analysts by Thomson First Call produced a consensus estimate of 61 cents for the quarter. Revenue rose to $1.47 billion from $1.39 billion. Thomson's survey estimated revenue at $1.43 billion. "Key factors" in the quarter "were improved results in broadcasting, strong interactive-revenue growth, and excellent expense control," Dennis FitzSimons, chairman, president and chief executive, said in a statement.
Toll Brothers Inc. reported that fiscal 2007 first-quarter home-building revenue fell 19% to $1.09 billion from $1.34 billion in the year-earlier period. The company said the backlog at Jan. 31, the quarter's end, was off 30% from a year earlier, at $4.15 billion. Toll's net signed contracts were valued at $749 million, down 34%. Net of cancellations, first-quarter contracts fell 33% to 1,027 units from 1,544 units in the first quarter of fiscal 2006. And Toll estimated that write-downs for the quarter would range from $60 million to more than $160 million. Chairman and Chief Executive Robert I. Toll said in a statement that "it appears that the pace of cancellations is starting to abate." The rate was 29.8% in the first quarter compared with 36.9% in the fiscal fourth quarter. But "we are still well above the Company's historical average of about 7%," he said.
Forbes article: Nearly one in five men in the U.S. suffer from erectile dysfunction, according to a recent study in the American Journal of Medicine. Some researchers have estimated that as many as 40% of U.S. women have low libido or inability to reach orgasm... Palatin Technology is developing a nose spray, called bremelanotide, to treat men and women with sexual dysfunction. Applied 10 to 15 minutes prior to sex, it travels through the central nervous system to increase blood flow in the penile or vaginal tissue. The company hopes to get FDA approval for men in 2009 and women around 2011. "On the female front, we've got a chance to be first to market," says CEO Carl Spana. "People wonder how many women will come in for treatment, but my gut tells me they will come in."
Heavy snowfall shut five British airports Thursday and forced the cancellation of some train service in England and Wales.
A U.S. military helicopter flying over farmland northwest of Baghdad crashed Wednesday, military officials said, killing all seven people on board. It was the fifth U.S. helicopter lost in the past three weeks and the second to crash in five days. Four U.S. Marines were killed in fighting in Anbar province, the military said Thursday. The Marines, who were assigned to Multi-National Force — West, died Wednesday from wounds sustained due to enemy action in two separate incidents in the insurgent stronghold west of Baghdad, according to a statement.
That brings the number of deaths for U.S. soldiers in Iraq to at least 3114. There has been a surge-- a surge in our troops perishing.
Eastman Kodak now plans to cut a total of 28,000 to 30,000 jobs, up from a prior projection for the layoff of 25,000 to 27,000 employees. The company said it eliminated 1,200 jobs in the fourth quarter, bringing the total-to-date reductions to 23,400 positions.
The number of workers continuing to collect unemployment benefits, meanwhile, fell by 54,000 to 2.49 million, the lowest since Jan. 13. The four-week moving average of continuing claims rose by 20,000 to 2.50 million, the highest since Dec. 16.
The National Weather Service predicted that below-normal temperatures will persist in most of the U.S. through 2/20.
HSBC warned that its US mortgage business would push group bad debt provisions for 2006 $1.75bn (£888m) higher than expected. HSBC said pressure on house prices and rising repayments had prompted it to review its level of bad debt charges. You think the housing market is still bottoming out?
Robert Shiller wonders if a sustained decline in housing prices is in our future.
The chief executive of Mexican state oil monopoly Petroleos Mexicanos on Wednesday said the company expects its Cantarell oil field to produce an average of 1.53 million barrels a day of crude oil in 2007, down from 1.79 million barrels a day in 2006. As Oil Drum points out, Mexican oil production decline means that 4 out of 5 major OECD producers are now in decline (Norway, UK, USA and Mexico), leaving only Canada with growing production.
Cisco Systems Inc. said senior executive Mike Volpi, 40, resigned on Thursday. Volpi, as general manager of the routing and service provider technology group, was responsible for all routing products and the company's strategy for the communications service provider market. He was also a key driver of Cisco's acquisition strategy and led 75 acquisitions between 1994 and 2001. He also was responsible for the Scientific Atlanta acquisition. I view this as a major loss for Cisco.
When the annual averages for 2006 were compared
with annual averages for 2005, productivity rose 2.2 percent in the business sector and 2.1 percent in nonfarm businesses--slightly less than the 2.3-percent gains in both sectors from 2004 to 2005.
Baker Hughes Incorporated announced that the international rig count for January 2007 was 972, up 21 from the 951 counted in December 2006, and up 67 from the 905 counted in January 2006. The international offshore rig count for January 2007 was 276, up 5 from the 271 counted in December 2006 and up 13 from the 263 counted in January 2006. The US rig count for January 2007 was 1,714, down 4 from the 1,718 counted in December 2006 and up 241 from the 1,473 counted in January 2006. The Canadian rig count for January 2007 was 568, up 112 from the 456 counted in December 2006 and down 92 from the 660 counted in January 2006. The worldwide rig count for January 2007 was 3,254, up 129 from the 3,125 counted in December 2006 and up 216 from the 3,038 counted in January 2006.
Brent Budowsky: "What has emerged in evidence so far, is not surprising, but it is astonishing. Vice-President Cheney was so deeply involved and obsessed with discrediting Joe Wilson that the impact and implications are enormous and underestimated.
The Vice President was choreographer of the attack on Wilson. He acted as though he was the deputy White House political director and the deputy White House press secretary. He was organizing meetings, drafting talking points and assigning which staff would talk to which reporter.
This is not what Vice Presidents do. This is more than an attack on his enemy Wilson. Most of us who have had high government positions have faced these situations, and launching a counter-attack could have been done far more discreetly and professionally.
Plus: the naming of the Plame name, at the very least, created harm to national security and was an unpatriotic act. The minute the Vice President, Libby and Rove knew Valerie Plame worked at the CIA in a bureau that insiders would know immediately was highly sensitive that without any doubt triggered red lights, immediately.
When we were writing the original indentities protection law, not one of us could have ever imagined that identity disclosers would be high officials in the U.S. government. The law was aimed at people very hostile to the U.S. who were acting in a manner that helped the KGB.
It was unthinkable to all of us that anyone involved in these disclosures, felonious or not, would be high in the U.S. government. Anyone who goes on television and says otherwise is a liar.
Why?
My theory, with substantial evidence to back it up, is that the danger of Joe Wilson was not the damage that Wilson's view did to the Administration policy. It was the danger that Wilson's work would unravel a long-term, well-planned, highly deceptive campaign that preceded Wilson's involvement to deceive the country to drive us to war.
Prediction: major plea bargaining either has begun, or will begin, before the verdict and watch out if Libby sings in a plea deal.
Prediction: the original defense argument that Libby was a fall guy for others will only anger and inflame the judge and jury. It is no defense to say that others might have committed similar or related crimes and that is the impression this argument created.
Watch this: the sequence of events that could be explosive includes a) the original Cheney deposition to Fitzgerald, then b) testimony on the record of extensive and absurd involvement by the Vice President to the micro-level on the attack against Wilson, leading to c) Cheney's testimony in the trial if it happens.
The prosecutor and jury will compare what Cheney said in the deposition, what facts emerged in the trial and Cheney's testimony at trial. Do not be surprised if the word pardon appears in the press, though the reaction would be as strong as the Saturday Night Massacre in the Nixon years.
The surprise: what will shock people will be when the Senate Intelligence Committee releases its report on pre-war intelligence, which was covered up by the committee's Republican leaders before the elections.
The Senate report will, I predict, show major deceptions that well preceded the events in the Wilson case. This will put the whole case in context. It will turn the spotlight on the misrepresentations prior to Wilson, that will explain the obsessive attack of Cheney and Libby against Wilson.
Fasten your seat belts.
Nobody is out of the woods yet, and these woods are dark and deep."
New Century Financial will need to restate several quarters because of "errors related to its allowance for loan repurchase losses." The company said it now expects 2007 loan production to be 20% below 2006 levels, vs. previous forecasts that it would be flat, as the level of early-payment defaults and loan repurchases have led to tighter underwriting guidelines.
Goldman Sachs has agreed to sell its commodity index to rating agency Standard & Poor's in a deal that some analysts say could change the way traders view the oil markets.
An article worth reading on the peak oil cris:
http://www.fcnp.com/index.php?option=com...
Colbert Report: "The only way to bring democracy to Iraq is to silence it here."
Gold for April delivery closed up $5.50 at $662.80 an ounce on the New York Mercantile Exchange. Silver closed up 6 cents at $13.77 an ounce. Platinum declined $4.70 to end at $1,198.30 an ounce. Palladium closed down $4.20 at $341 an ounce, and copper ended down 0.5 cent at $2.4505 a pound.
March crude rose $2 Thursday to close at $59.71 a barrel, the contract's highest closing level of the year. Occidental Petroleum Corp. said it would be unable to meet commitments to its customers after a fire led to the shutdown of most production from its Elk Hills field in California. There is no timeframe for resuming production at the field, which normally has output of 120,000 barrels of oil equivalent a day, said Occidental spokeswoman Susie Geiger. About 95 percent of output is shut in. Occidental spokeswoman Jan Sieving confirmed in an interview that the company declared force majeure. March natural gas gained 2.1%, or 16.2 cents, to close at $7.871 per million British thermal units.
Thursday, February 08, 2007
Changes In The Wind
2/8/07 Changes In The Wind
Chicago real estate magnate Sam Zell has expressed interest in bidding for Tribune Co., the Los Angeles Times reported Wednesday, citing people close to the matter. The LA Times is a holding of Tribune. Zell, whose Equity Office Properties Trust is in a bidding war, approached the Chicago-based media company with a complicated proposal that may include taking an equity stake while adding debt to fund a large dividend for shareholders, the report said. Zell didn't respond to a request for comment, while a Tribune spokesman declined to comment. Tribune, which owns the Los Angeles Times and the Chicago Cubs baseball team, is expected to hold board and committee meetings on Feb. 12 and Feb. 13, sources have said.
Hutchison Telecom is planning to sell its 67% stake in Indian mobile operator Hutchison Essar via an auction, the Hindustan Times reported Wednesday, citing unnamed sources close to the deal. The report said there'd be four likely bidders: Vodafone Group, Reliance Communications, the Hinduja group and Essar.
BHP Billiton said that it would buy back $10 billion in shares and reported a 41% rise in first-half net profit.
Cisco's CEO Chambers forecast for third-quarter sales, excluding gains from last year's purchase of Scientific-Atlanta, was an increase of 15 percent to 17 percent. He predicted fourth-quarter growth of as much as 16 percent. Both are above Cisco's long-term forecast for growth of 10 percent to 15 percent.
Devon Energy added 427 million Boe through successful drilling (discoveries,extensions and performance revisions) in 2006. The company also acquired 106 million Boe in 2006, primarily through the purchase of Chief's Barnett Shale natural gas properties. Revisions, largely related to changes in year-end oil and gas prices, reduced 2006 proved reserves by 50 million Boe. Proved developed reserves were 1,674 million Boe at December 31, 2006, or 70 percent of proved reserves. Year-end reserves comprised 708 million barrels of crude oil, 8.4 trillion cubic feet of natural gas and 275 million barrels of natural gas liquids.
George Kleinman: "The commodity futures price you’re currently looking at is only a snapshot in time. It represents what the common wisdom is telling us today the consensus believes the future price will be. However, common wisdom isn’t always wisdom that will enrich you. It changes and is generally wrong (because the price today is just about never the price of tomorrow). Go your own way despite what the crowd may think."
Joe Duarte: "Iraq is now entering the realm of surreal, and is on the verge of total Disorder, such as what happens in the realm of physics when an object enters the event horizon, or the center of a black hole...the situation in Iraq, regardless of what anyone says at this point, looks ready to get even worse...The markets have yet to fully discount the potential for the outbreak of total Disorder in that corner of the world."
December was the 21st month in a row that the savings rate came in negative.
In Orange County, Ca skipped property tax payments are at the highest level since 1996.
India's economy is forecast to expand 9.2 percent, following a 9 percent gain in the previous year, the Central Statistical Organisation said in a statement in New Delhi.
U.K. retail sales for January increased at the fastest pace in six months.
Keane Inc. agreed to be acquired by Caritor Inc., a private San Ramon, Calif., information technology services provider, for about $854 million. The deal values Keane shares at $14.30 each in cash.
Philadelphia Federal Reserve President Charles Plosser warned that the central bank may have to raise interest rates further to contain inflation.
There was a better-than-expected 3% jump in productivity and a contained 1.7% rise in unit labor costs in the fourth quarter. Real hourly compensation increased 7.1% as consumer prices fell 2.2%. Compared with the same quarter a year ago, productivity was up 2.1%, while unit labor costs rose 2.8%. For all of 2006, productivity rose 2.1%, the slowest annual increase in 10 years. Unit labor costs rose 3.2%, the most since 2000.
Reuters reports that 8,000 workers left Ford in January as part of a buy-out offer aimed at cutting costs.
How much longer will record tight credit spreads and low volatility continue?
Whirlpool Corp. reported a 13 percent drop in fourth-quarter net earnings as demand softened in the United States, and cut its profit outlook for this year.
Whirlpool said it expected 2007 appliance shipments to decline 2 percent to 3 percent in North America, its biggest market, where sales have been hurt by the slow U.S. housing market.
Britain's poultry farmers are threatened by an international boycott that could wipe out exports of meat, eggs and live birds worth £400 million a year.
Vornado Realty Trust said on Wednesday it has terminated its cash and stock proposal to acquire Equity Office Properties Trust.
Oil Drum: "Global oil demand growth is seen rising 2% annually through 2011, the International Energy Agency said Tuesday, in a forecast that is more optimistic about the rate of future energy consumption compared with previous five-year periods, because of rapid growth in Asia. World oil consumption growth is expected to rise on average by 1.8 million barrels a day over the five-year period, from 84.5 million barrels a day in 2006 to 93.3 million barrels a day in 2011, the Paris-based IEA forecast in its medium-term report for 2006-2011."
The U.S. Air Force will deploy at Kadena base in Japan's Okinawa Prefecture its newest stealth fighter, the F-22A Raptor, for 90-120 days from around Feb. 10, the first time the plane will be fielded outside bases in the United States, a commanding officer here said Wednesday. Lt. Col. Wade Tolliver, commander of the 27th Fighter Squadron at the Langley Air Force Base in Virginia, told Kyodo News that the United States will deploy 12 F-22A planes and about 260 personnel, including about 20 pilots, at the Kadena Air Base...The F-22A Raptor was developed by defense contractor Lockheed Martin Corp. as an air superiority fighter and a successor to the F-15. It went into service with the U.S. Air Force in December 2005. The aircraft, which can evade radar detection, is equipped for ground attack, electronic attack and signals intelligence roles as well. It has high mobility at supersonic speeds and the ability to attack ground targets.
Nortel to cut 2,900 jobs.
The American Petroleum Institute reported a fall of 6.9 million barrels in distillate supplies for the week ended Feb. 2. The Energy Department had reported a decline of 3.7 million barrels. Motor gasoline supplies were down 3.1 million barrels, the API said, contrary to the government's reported rise of 2.6 million. Crude supplies climbed 1.5 million barrels, the API said, but the government said they rose 400,000-barrels.
Iran does not intend to comply with the requirements of a resolution by the UN Security Council demanding the Islamic Republic to suspend its uranium enrichment activities, a senior Iranian official said Sunday.
The U.S. Energy Information Administration (EIA) said on Tuesday that, due to OPEC output cuts, commercial oil stocks in industrialized countries would fall 900,000 barrels per day in the first quarter -- three times faster than average for the time of year.
Over 3,100 U.S. troops have died in the Iraq war. When are the troops coming home?
With credit card debt growing at the slowest pace in nine months, consumer credit debt increased by $6 billion, or 3% annualized, in December, less than half the growth of November, the Federal Reserve reported Wednesday. Total outstanding debt increased by $6.01 billion in December to $2.4 trillion after a $13.7 billion, or 6.9%, increase in November.
March crude fell $1.17 to close at $57.71 a barrel. April gold fell $1.40 to close at $657.30 an ounce Wednesday. March silver rose 3.5 cents to end at $13.71 an ounce, while March copper lost 1.7%, or 4.15 cents, to finish at $2.455 a pound.
Libby said he had forgotten that Cheney was his original source until finding his own handwritten notes on the conversation. The notes predated the Russert phone call by more than a month.
Albert Einstein: "Memory is deceptive because it is colored by today's events.”
Chicago real estate magnate Sam Zell has expressed interest in bidding for Tribune Co., the Los Angeles Times reported Wednesday, citing people close to the matter. The LA Times is a holding of Tribune. Zell, whose Equity Office Properties Trust is in a bidding war, approached the Chicago-based media company with a complicated proposal that may include taking an equity stake while adding debt to fund a large dividend for shareholders, the report said. Zell didn't respond to a request for comment, while a Tribune spokesman declined to comment. Tribune, which owns the Los Angeles Times and the Chicago Cubs baseball team, is expected to hold board and committee meetings on Feb. 12 and Feb. 13, sources have said.
Hutchison Telecom is planning to sell its 67% stake in Indian mobile operator Hutchison Essar via an auction, the Hindustan Times reported Wednesday, citing unnamed sources close to the deal. The report said there'd be four likely bidders: Vodafone Group, Reliance Communications, the Hinduja group and Essar.
BHP Billiton said that it would buy back $10 billion in shares and reported a 41% rise in first-half net profit.
Cisco's CEO Chambers forecast for third-quarter sales, excluding gains from last year's purchase of Scientific-Atlanta, was an increase of 15 percent to 17 percent. He predicted fourth-quarter growth of as much as 16 percent. Both are above Cisco's long-term forecast for growth of 10 percent to 15 percent.
Devon Energy added 427 million Boe through successful drilling (discoveries,extensions and performance revisions) in 2006. The company also acquired 106 million Boe in 2006, primarily through the purchase of Chief's Barnett Shale natural gas properties. Revisions, largely related to changes in year-end oil and gas prices, reduced 2006 proved reserves by 50 million Boe. Proved developed reserves were 1,674 million Boe at December 31, 2006, or 70 percent of proved reserves. Year-end reserves comprised 708 million barrels of crude oil, 8.4 trillion cubic feet of natural gas and 275 million barrels of natural gas liquids.
George Kleinman: "The commodity futures price you’re currently looking at is only a snapshot in time. It represents what the common wisdom is telling us today the consensus believes the future price will be. However, common wisdom isn’t always wisdom that will enrich you. It changes and is generally wrong (because the price today is just about never the price of tomorrow). Go your own way despite what the crowd may think."
Joe Duarte: "Iraq is now entering the realm of surreal, and is on the verge of total Disorder, such as what happens in the realm of physics when an object enters the event horizon, or the center of a black hole...the situation in Iraq, regardless of what anyone says at this point, looks ready to get even worse...The markets have yet to fully discount the potential for the outbreak of total Disorder in that corner of the world."
December was the 21st month in a row that the savings rate came in negative.
In Orange County, Ca skipped property tax payments are at the highest level since 1996.
India's economy is forecast to expand 9.2 percent, following a 9 percent gain in the previous year, the Central Statistical Organisation said in a statement in New Delhi.
U.K. retail sales for January increased at the fastest pace in six months.
Keane Inc. agreed to be acquired by Caritor Inc., a private San Ramon, Calif., information technology services provider, for about $854 million. The deal values Keane shares at $14.30 each in cash.
Philadelphia Federal Reserve President Charles Plosser warned that the central bank may have to raise interest rates further to contain inflation.
There was a better-than-expected 3% jump in productivity and a contained 1.7% rise in unit labor costs in the fourth quarter. Real hourly compensation increased 7.1% as consumer prices fell 2.2%. Compared with the same quarter a year ago, productivity was up 2.1%, while unit labor costs rose 2.8%. For all of 2006, productivity rose 2.1%, the slowest annual increase in 10 years. Unit labor costs rose 3.2%, the most since 2000.
Reuters reports that 8,000 workers left Ford in January as part of a buy-out offer aimed at cutting costs.
How much longer will record tight credit spreads and low volatility continue?
Whirlpool Corp. reported a 13 percent drop in fourth-quarter net earnings as demand softened in the United States, and cut its profit outlook for this year.
Whirlpool said it expected 2007 appliance shipments to decline 2 percent to 3 percent in North America, its biggest market, where sales have been hurt by the slow U.S. housing market.
Britain's poultry farmers are threatened by an international boycott that could wipe out exports of meat, eggs and live birds worth £400 million a year.
Vornado Realty Trust said on Wednesday it has terminated its cash and stock proposal to acquire Equity Office Properties Trust.
Oil Drum: "Global oil demand growth is seen rising 2% annually through 2011, the International Energy Agency said Tuesday, in a forecast that is more optimistic about the rate of future energy consumption compared with previous five-year periods, because of rapid growth in Asia. World oil consumption growth is expected to rise on average by 1.8 million barrels a day over the five-year period, from 84.5 million barrels a day in 2006 to 93.3 million barrels a day in 2011, the Paris-based IEA forecast in its medium-term report for 2006-2011."
The U.S. Air Force will deploy at Kadena base in Japan's Okinawa Prefecture its newest stealth fighter, the F-22A Raptor, for 90-120 days from around Feb. 10, the first time the plane will be fielded outside bases in the United States, a commanding officer here said Wednesday. Lt. Col. Wade Tolliver, commander of the 27th Fighter Squadron at the Langley Air Force Base in Virginia, told Kyodo News that the United States will deploy 12 F-22A planes and about 260 personnel, including about 20 pilots, at the Kadena Air Base...The F-22A Raptor was developed by defense contractor Lockheed Martin Corp. as an air superiority fighter and a successor to the F-15. It went into service with the U.S. Air Force in December 2005. The aircraft, which can evade radar detection, is equipped for ground attack, electronic attack and signals intelligence roles as well. It has high mobility at supersonic speeds and the ability to attack ground targets.
Nortel to cut 2,900 jobs.
The American Petroleum Institute reported a fall of 6.9 million barrels in distillate supplies for the week ended Feb. 2. The Energy Department had reported a decline of 3.7 million barrels. Motor gasoline supplies were down 3.1 million barrels, the API said, contrary to the government's reported rise of 2.6 million. Crude supplies climbed 1.5 million barrels, the API said, but the government said they rose 400,000-barrels.
Iran does not intend to comply with the requirements of a resolution by the UN Security Council demanding the Islamic Republic to suspend its uranium enrichment activities, a senior Iranian official said Sunday.
The U.S. Energy Information Administration (EIA) said on Tuesday that, due to OPEC output cuts, commercial oil stocks in industrialized countries would fall 900,000 barrels per day in the first quarter -- three times faster than average for the time of year.
Over 3,100 U.S. troops have died in the Iraq war. When are the troops coming home?
With credit card debt growing at the slowest pace in nine months, consumer credit debt increased by $6 billion, or 3% annualized, in December, less than half the growth of November, the Federal Reserve reported Wednesday. Total outstanding debt increased by $6.01 billion in December to $2.4 trillion after a $13.7 billion, or 6.9%, increase in November.
March crude fell $1.17 to close at $57.71 a barrel. April gold fell $1.40 to close at $657.30 an ounce Wednesday. March silver rose 3.5 cents to end at $13.71 an ounce, while March copper lost 1.7%, or 4.15 cents, to finish at $2.455 a pound.
Libby said he had forgotten that Cheney was his original source until finding his own handwritten notes on the conversation. The notes predated the Russert phone call by more than a month.
Albert Einstein: "Memory is deceptive because it is colored by today's events.”
Tuesday, February 06, 2007
Developments
2/7/07 Developments
Equity Office Properties received, and the board had approved, a higher bid for the company from Blackstone Group, valued at $55.50 a share cash, or about $39 billion.
Telecommunications gear maker Alcatel-Lucent could cut more than 20 percent of its world-wide staff, L'Expansion weekly said on Tuesday on its Website, citing industry sources. This would mean 15,000 to 20,000 jobs of which 1,500 to 2,000 would be in France.
Barry Ritholtz: "If we combine these two issues -- earnings decelerating below double digit gains, and valuations appearing reasonable only due to a skewing effect of 4 major stocks -- you have a recipe for an expensive, not a cheap market." This is a point John Hussman has been making for a long time.
George Ure: "My point is that the accounting basis of the federal government would land a private-sector accountant in jail if pulled with the IRS. Printing up money on an as-desired basis, might also draw Treasuries attention, unless of course, the Fools on the Hill sent the right paperwork. And that all starts with on and off budget accounting and a silly notion that paper + ink equals "money." If any of us tried it, paper +ink equals jail. Unless we were going for $2.9 trillion worth..."
MGIC Investment Corp., a Milwaukee- based private mortgage insurer, agreed to buy Radian Group Inc. for $4.9 billion in stock.
MGIC will exchange 0.9658 share of its stock for each share of Radian, the two companies said today in a statement. That values Philadelphia-based Radian at $60.78 a share, less than its Monday closing value of $60.84 on the New York Stock Exchange.
Leanan: "Meanwhile, Middle East trading sources said Saudi Arabia has steeply raised the amount of its jet fuel earmarked for the US military, which is expanding its presence in the Gulf.
They said state oil company Saudi Aramco may have put aside upwards of a million tonnes of the aviation fuel for possible use by the US military this year, compared with around 200,000 tonnes in 2006.
“I believe that Saudi Arabia was warned in advance of the increased US military activity starting early 2007 and may have allocated 1mn to 1.2mn tonnes of jet fuel for possible use by the US military during 2007,” one source said.
The Pentagon dispatched a second aircraft carrier strike group to the Gulf last month.
The Defense Energy Support Center (DESC), which oversees the Pentagon’s fuel purchases, said an increased presence would entail more fuel demand."
Japan's broadest index of future economic activity signaled for a second month that growth may slow in the world's second-largest economy. The leading index was at 25 percent in December, below 50 percent for a second month, the Cabinet Office said today in Tokyo.
The arctic cold front dipped into the nation from the Dakotas to New England. Water pipes burst and car batteries balked, forcing many businesses to close.
Winter is alive and well.
President Bush wants Congress to pony up $168 million next year to fund his proposed expansion of the Strategic Petroleum Reserve. As part of his strategy to bolster the nation's energy security, Bush has called for doubling the storage capacity of the nation's emergency oil stockpile.
Japan Airlines Co. announced Tuesday that it will cut 4,300 employees, or about 8 percent of its entire work force, by the end of fiscal 2009 after it reported a net loss for the most recent quarter.
David Michael Green: "You know your empire's crumbling when it's considered an achievement to pretend that you've halved the rate at which you're adding to the massive mountain of debt you've already accumulated."
Richard Daughty on Social Security: "Now, instead of using the average of the 10 highest quarters of income (which is how I remember it) to determine my benefit amount, they now average my income to include the time when I didn't make squat, like just out of high school! And I made practically nothing while in the Army, and, as a starving college student trying to make it on the GI Bill, I made nothing then, either! And graduate school was even worse! And now they are going to average my earnings to include all those ten lean years (a quarter of my working life when I made almost zero income), in calculating my benefit? I'm screwed!"
John Rubino: "We believe purchasing power risk to be a serious issue for today's cautious investors. Our concern is owed to a strongly-held belief that the value of the US dollar is likely to decline substantially in the not-too-distant future."
The Labor Department admitted that it had underestimated the number of jobs employers added to their payrolls during 2006 by a whopping 400,000. I wouldn't believe BLS for a second. Revisions are what they do best.
Wal-Mart Stores, Inc. today announced the beta version of its new video downloads service, now available at http://www.walmart.com/videodownloads. The beta service, powered by new technology from HP Video Merchant Services, includes more than 3,000 movie and TV titles from major Hollywood studios and television networks and offers customers the convenient option of downloading movies and TV shows to their personal computers for viewing on PCs, laptops and portable media players.
On Wednesday the weekly oil numbers are released. It is anticipated that
distillates will be down 3.2 million barrels. We'll see if that number is baked into
$59-60 oil. It's worth keeping an eye on the degree days at least until mid-Feb.
Steve Saville: "We expect to see a reversal in the liquidity trend -- from expanding to contracting -- during the first half of 2007; a reversal signaled, first and foremost, by the widening of credit and yield spreads."
Although online produces less than 10 percent of most newspapers' revenue, publishers say they're finding their way on the Internet. Their online ad sales are expected to grow 22 percent this year, says the Newspaper Association of America.
MLF Partners LP, an activist hedge fund run by Feshbach, returned 29% after fees in 2006, leaving it up more than 360% since he started it in late 2001, according to a letter he sent to investors last month. MarketWatch obtained a copy of the letter.
For your 2006 tax return, the AMT exemption amount for married taxpayers filing jointly is increased from $58,000 to $62,550 and for single taxpayers from $40,250 to $42,500.
For several years, Congress has avoided the AMT's impact on middle-class families by passing one-year patches. Bush's budget assumes no more patches after the 2008 tax year. He also assumes that new revenues from the AMT will help him balance the budget by 2012.
"The budget rests on the assumption that the AMT will be allowed to expire and affect more than 40 million households in 2012, something nobody believes would be allowed," said Robert Greenstein, executive director of the liberal Center for Budget and Policy Priorities, a research organization.
Bush takes a pass on how he thinks the AMT issue will be resolved. With each passing year it would rake in more revenues for the Treasury if left unfixed - $93 billion by 2012, according to the nonpartisan Congressional Budget Office. For years I have been writing about the AMT and the economic harm it has caused for the middle class. This tax is a growing cancer.
Bush has included in the budget a request to increase drug co-payments for non-disabled veterans to $15 from $8, as well as new enrollment fees for veterans seeking medical care. The annual enrollment fees start at $250 and rise to $750, based on a veteran's household income. The provisions would not apply to lower income veterans or those with service disabilities. In 2008, the proposed fees would raise $355 million. If this isn't BS, then what is?
Fortune reports India's Ranbaxy has confirmed that it is interested in buying the generics arm of Merck in the U.S., and the Aditya Birla Group is said to be eyeing Novelis, a Canadian aluminum company that has reported it is in talks about a possible sale.
"Even during a period when revenue fundamentals are excellent, few carriers generate the operating cash flow needed to fund large numbers of new aircraft without driving leverage higher," Bill Warlick, senior director of Fitch's U.S. Airlines and Transportation team, said in a statement. "U.S. carriers, especially the legacy airlines, will need to consider either financing new aircraft through debt or operating leases as a way to obtain new planes."
Venezuela's state-owned oil company Petroleos de Venezuela (PDV) has secured a $1 billion credit line in the international markets.
The Oil Drum: "The oil world seems to have learned how to get along with the prospect of war with Iran, which is to say that it is choosing to ignore it. The Bush surge in Iraq with the prospect of fresh and heavy fighting is old news. The news that Mexican production fell half a million barrels a day last year caused not a ripple. The shutdown of most of Nigeria’s refining capacity has evoked the equivalent of a mighty yawn. The fact that OPEC production fell last year, even before the production cuts announced in September began to take effect, evokes derision rather than worry. “OPEC just can’t get its act together.” The announcement in December by the Kuwaiti government that production had peaked and is now declining at the world’s second largest field, Burgan, passed without comment or even a blip in the price slide. The fact that Iran on current trends is set to become an oil importer in six or seven years causes not the least anxiety. The world’s oil replacement ratio, that is to say the percentage of consumption that is replaced each year with new discovery, has fallen to 30% and keeps falling. The truth of the matter is that the world is in the midst of an energy crisis, but neither the NYMEX nor the IPE seem to have noticed."
April gold climbed $2.60 Tuesday to close at $658.70 an ounce. March silver climbed 11.5 cents to end at $13.675 an ounce and March copper closed at $2.4965 a pound, up 3.3%, or 8 cents.
Gene Isenberg, Nabors' Chairman and CEO, commented on the Company's results. 'Our results for 2006 set all-time records in virtually every financial and operational metric. All six of our rig operating units achieved record levels of performance except Alaska, driving the Company's achievements. When combined with the record results of our Other Operating Segments, we achieved aggregate operating income of $1.5 billion, which for the first time delivered net income in excess of $1 billion. Most importantly, Nabors generated opportunities to increase its average capital employed by $1.75 billion during the year, maintaining a 22% return which should underpin future growth... Despite the muted results of the fourth quarter and a more tempered outlook for 2007, we still expect to achieve another record year, generally in-line with the more than 20% increase implied by consensus estimates. This healthy outlook stems from the limited downside in our US Land Drilling unit, new rig deployments, and the magnitude of price increases yet to be realized throughout our International, US Offshore and Alaskan rig operations. Any contraction in North American gas drilling will in all likelihood be shallow and brief given the rapid self-correcting mechanisms present in today's marketplace.'
March crude rose 14 cents to close at $58.88 barrel. March natural gas closed at $7.616 per million British thermal units, down 1.8 cents.
Equity Office Properties received, and the board had approved, a higher bid for the company from Blackstone Group, valued at $55.50 a share cash, or about $39 billion.
Telecommunications gear maker Alcatel-Lucent could cut more than 20 percent of its world-wide staff, L'Expansion weekly said on Tuesday on its Website, citing industry sources. This would mean 15,000 to 20,000 jobs of which 1,500 to 2,000 would be in France.
Barry Ritholtz: "If we combine these two issues -- earnings decelerating below double digit gains, and valuations appearing reasonable only due to a skewing effect of 4 major stocks -- you have a recipe for an expensive, not a cheap market." This is a point John Hussman has been making for a long time.
George Ure: "My point is that the accounting basis of the federal government would land a private-sector accountant in jail if pulled with the IRS. Printing up money on an as-desired basis, might also draw Treasuries attention, unless of course, the Fools on the Hill sent the right paperwork. And that all starts with on and off budget accounting and a silly notion that paper + ink equals "money." If any of us tried it, paper +ink equals jail. Unless we were going for $2.9 trillion worth..."
MGIC Investment Corp., a Milwaukee- based private mortgage insurer, agreed to buy Radian Group Inc. for $4.9 billion in stock.
MGIC will exchange 0.9658 share of its stock for each share of Radian, the two companies said today in a statement. That values Philadelphia-based Radian at $60.78 a share, less than its Monday closing value of $60.84 on the New York Stock Exchange.
Leanan: "Meanwhile, Middle East trading sources said Saudi Arabia has steeply raised the amount of its jet fuel earmarked for the US military, which is expanding its presence in the Gulf.
They said state oil company Saudi Aramco may have put aside upwards of a million tonnes of the aviation fuel for possible use by the US military this year, compared with around 200,000 tonnes in 2006.
“I believe that Saudi Arabia was warned in advance of the increased US military activity starting early 2007 and may have allocated 1mn to 1.2mn tonnes of jet fuel for possible use by the US military during 2007,” one source said.
The Pentagon dispatched a second aircraft carrier strike group to the Gulf last month.
The Defense Energy Support Center (DESC), which oversees the Pentagon’s fuel purchases, said an increased presence would entail more fuel demand."
Japan's broadest index of future economic activity signaled for a second month that growth may slow in the world's second-largest economy. The leading index was at 25 percent in December, below 50 percent for a second month, the Cabinet Office said today in Tokyo.
The arctic cold front dipped into the nation from the Dakotas to New England. Water pipes burst and car batteries balked, forcing many businesses to close.
Winter is alive and well.
President Bush wants Congress to pony up $168 million next year to fund his proposed expansion of the Strategic Petroleum Reserve. As part of his strategy to bolster the nation's energy security, Bush has called for doubling the storage capacity of the nation's emergency oil stockpile.
Japan Airlines Co. announced Tuesday that it will cut 4,300 employees, or about 8 percent of its entire work force, by the end of fiscal 2009 after it reported a net loss for the most recent quarter.
David Michael Green: "You know your empire's crumbling when it's considered an achievement to pretend that you've halved the rate at which you're adding to the massive mountain of debt you've already accumulated."
Richard Daughty on Social Security: "Now, instead of using the average of the 10 highest quarters of income (which is how I remember it) to determine my benefit amount, they now average my income to include the time when I didn't make squat, like just out of high school! And I made practically nothing while in the Army, and, as a starving college student trying to make it on the GI Bill, I made nothing then, either! And graduate school was even worse! And now they are going to average my earnings to include all those ten lean years (a quarter of my working life when I made almost zero income), in calculating my benefit? I'm screwed!"
John Rubino: "We believe purchasing power risk to be a serious issue for today's cautious investors. Our concern is owed to a strongly-held belief that the value of the US dollar is likely to decline substantially in the not-too-distant future."
The Labor Department admitted that it had underestimated the number of jobs employers added to their payrolls during 2006 by a whopping 400,000. I wouldn't believe BLS for a second. Revisions are what they do best.
Wal-Mart Stores, Inc. today announced the beta version of its new video downloads service, now available at http://www.walmart.com/videodownloads. The beta service, powered by new technology from HP Video Merchant Services, includes more than 3,000 movie and TV titles from major Hollywood studios and television networks and offers customers the convenient option of downloading movies and TV shows to their personal computers for viewing on PCs, laptops and portable media players.
On Wednesday the weekly oil numbers are released. It is anticipated that
distillates will be down 3.2 million barrels. We'll see if that number is baked into
$59-60 oil. It's worth keeping an eye on the degree days at least until mid-Feb.
Steve Saville: "We expect to see a reversal in the liquidity trend -- from expanding to contracting -- during the first half of 2007; a reversal signaled, first and foremost, by the widening of credit and yield spreads."
Although online produces less than 10 percent of most newspapers' revenue, publishers say they're finding their way on the Internet. Their online ad sales are expected to grow 22 percent this year, says the Newspaper Association of America.
MLF Partners LP, an activist hedge fund run by Feshbach, returned 29% after fees in 2006, leaving it up more than 360% since he started it in late 2001, according to a letter he sent to investors last month. MarketWatch obtained a copy of the letter.
For your 2006 tax return, the AMT exemption amount for married taxpayers filing jointly is increased from $58,000 to $62,550 and for single taxpayers from $40,250 to $42,500.
For several years, Congress has avoided the AMT's impact on middle-class families by passing one-year patches. Bush's budget assumes no more patches after the 2008 tax year. He also assumes that new revenues from the AMT will help him balance the budget by 2012.
"The budget rests on the assumption that the AMT will be allowed to expire and affect more than 40 million households in 2012, something nobody believes would be allowed," said Robert Greenstein, executive director of the liberal Center for Budget and Policy Priorities, a research organization.
Bush takes a pass on how he thinks the AMT issue will be resolved. With each passing year it would rake in more revenues for the Treasury if left unfixed - $93 billion by 2012, according to the nonpartisan Congressional Budget Office. For years I have been writing about the AMT and the economic harm it has caused for the middle class. This tax is a growing cancer.
Bush has included in the budget a request to increase drug co-payments for non-disabled veterans to $15 from $8, as well as new enrollment fees for veterans seeking medical care. The annual enrollment fees start at $250 and rise to $750, based on a veteran's household income. The provisions would not apply to lower income veterans or those with service disabilities. In 2008, the proposed fees would raise $355 million. If this isn't BS, then what is?
Fortune reports India's Ranbaxy has confirmed that it is interested in buying the generics arm of Merck in the U.S., and the Aditya Birla Group is said to be eyeing Novelis, a Canadian aluminum company that has reported it is in talks about a possible sale.
"Even during a period when revenue fundamentals are excellent, few carriers generate the operating cash flow needed to fund large numbers of new aircraft without driving leverage higher," Bill Warlick, senior director of Fitch's U.S. Airlines and Transportation team, said in a statement. "U.S. carriers, especially the legacy airlines, will need to consider either financing new aircraft through debt or operating leases as a way to obtain new planes."
Venezuela's state-owned oil company Petroleos de Venezuela (PDV) has secured a $1 billion credit line in the international markets.
The Oil Drum: "The oil world seems to have learned how to get along with the prospect of war with Iran, which is to say that it is choosing to ignore it. The Bush surge in Iraq with the prospect of fresh and heavy fighting is old news. The news that Mexican production fell half a million barrels a day last year caused not a ripple. The shutdown of most of Nigeria’s refining capacity has evoked the equivalent of a mighty yawn. The fact that OPEC production fell last year, even before the production cuts announced in September began to take effect, evokes derision rather than worry. “OPEC just can’t get its act together.” The announcement in December by the Kuwaiti government that production had peaked and is now declining at the world’s second largest field, Burgan, passed without comment or even a blip in the price slide. The fact that Iran on current trends is set to become an oil importer in six or seven years causes not the least anxiety. The world’s oil replacement ratio, that is to say the percentage of consumption that is replaced each year with new discovery, has fallen to 30% and keeps falling. The truth of the matter is that the world is in the midst of an energy crisis, but neither the NYMEX nor the IPE seem to have noticed."
April gold climbed $2.60 Tuesday to close at $658.70 an ounce. March silver climbed 11.5 cents to end at $13.675 an ounce and March copper closed at $2.4965 a pound, up 3.3%, or 8 cents.
Gene Isenberg, Nabors' Chairman and CEO, commented on the Company's results. 'Our results for 2006 set all-time records in virtually every financial and operational metric. All six of our rig operating units achieved record levels of performance except Alaska, driving the Company's achievements. When combined with the record results of our Other Operating Segments, we achieved aggregate operating income of $1.5 billion, which for the first time delivered net income in excess of $1 billion. Most importantly, Nabors generated opportunities to increase its average capital employed by $1.75 billion during the year, maintaining a 22% return which should underpin future growth... Despite the muted results of the fourth quarter and a more tempered outlook for 2007, we still expect to achieve another record year, generally in-line with the more than 20% increase implied by consensus estimates. This healthy outlook stems from the limited downside in our US Land Drilling unit, new rig deployments, and the magnitude of price increases yet to be realized throughout our International, US Offshore and Alaskan rig operations. Any contraction in North American gas drilling will in all likelihood be shallow and brief given the rapid self-correcting mechanisms present in today's marketplace.'
March crude rose 14 cents to close at $58.88 barrel. March natural gas closed at $7.616 per million British thermal units, down 1.8 cents.
Monday, February 05, 2007
Around The Globe
2/6/07 Around The Globe
Dubai's ruler, Sheik Mohammed bin Rashid Al-Maktoum, vowed at a ceremony Saturday to make his emirate "a pioneering global city" that would be "free of the direct influence of oil price fluctuations." The occasion marked the launching of the so-called Dubai Strategic Plan -- an ambitious project to increase the real per capita gross domestic product, which takes into account inflation, of this Arab city from its current value of $31,000 to $44,000 in 2015. The increase would require a sky-high 11 percent annual GDP growth rate. Al-Maktoum said the non-oil sector now accounts for 97 percent of the emirate's total GDP -- a significant shift from 1975, when oil revenues made up 64 percent of the GDP.
Confirming a Wall Street Journal report, Triad Hospitals Inc. said it's agreed to be acquired at a price of $50.25 a share in cash, an acquisition premium of more than 16% over Friday's closing price of $43.27. The transaction with affiliates of CCMP Capital Advisors and GS Capital Partners carries a total value of about $6.4 billion, including some $1.7 billion of debt. Plano, Tex.-based Triad said its board has recommended that stockholders approve the merger agreement, terms of which permit the company to solicit third-party bids during the next 40 days.
U.K. homebuilder Barratt Development on said it made a recommended 2.2 billion-pound ($4.32 billion) cash and share offer for Wilson Bowden. Under the terms of the deal, Wilson Bowden shareholders will receive 950 pence in cash and 1.0647 new Barrat shares for each Wilson Bowden share.
State Street Corp. said it would acquire Investors Financial Services Corp. for about $4.5 billion in stock. The deal values Investors Financial Services at $65.01 a share.
Vornado's new proposal is for an up-front tender offer to buy up to 55 percent of Equity Office's shares for $56 per share in cash and then a follow-on merger that would pay out the share element.
The deal has been structured to ensure that the offer is worth $56 a share for as long as Vornado's shares are worth between $115 and $135 each.
Barry Ritholtz: "Its been a very long time -- 930 days -- since the Dow Industrials suffered a 2% one day decline; Not only has the S&P 500 gone almost four years without a 2% down day, it has been seven months since it has corrected 2% at all! This is the second-longest such period in 53 years."
Hundreds of Pearl Harbor Sailors are headed to Iraq. Two destroyers answered the call to duty Saturday, and a unexpected call it was. The Navy is calling a surge deployment
Destroyers Hamilton and Russell left today on this short notice deployment. Many of the sailors have only been back for a few months and they were not expecting to ship out so soon. Family members say that makes this even harder to deal with the situation.
Investor Carl Icahn is offering to acquire all of auto parts maker Lear Corp. for $36 a share in cash through his affiliate group, American Real Estate Partners LP.
John Hussman: "One ought to become concerned about risk when investors become convinced that it does not exist. There are certainly times when it appears easy, in hindsight, to make money in the stock market. The difficulty is in keeping it through the full cycle. The fact that over half of most bull market advances are surrendered in the subsequent bear doesn't sink in until after the fact. It's all fun and games until someone gets hurt...There is not a single instance in historical data since 1871 when the S&P 500 traded above 18 times record earnings and there was not a low a year or more later that erased every bit of advantage over Treasury bills. Not one...Simply put, there is no investment merit to the stock market at these valuations."
The Mills Corp. confirmed that it's received an acquisition proposal from a group including Simon Property Group and Farallon Capital Management LLC, its largest shareholder, that values the company at $24 per share in cash. Mills said its board will promptly consider the proposal but noted that its merger agreement with Brookfield Asset Management remains in effect.
Brookfield Asset Management Inc. agreed to acquire Longview Fibre Co. in a deal worth $2.15 billion, including assumed debt. The consideration values Longview shares at $24.75 each, compared to Friday's closing price of $21.01, up 21 cents.
The WSJ reports vacant U.S. homes for sale have climbed to their highest level in four decades.
Russia will ban British poultry imports from Tuesday to prevent the spread of bird flu, the country’s animal and plant health watchdog said on Monday.
Rosselkhoznadzor said in a statement the ban would apply to live birds, hatching eggs, poultry meat and all poultry products not subjected to thermal treatment, as well as poultry feed and equipment for keeping and slaughtering birds.
Red Kite Metals, part of a $1 billion hedge fund run by RK Capital Management LLP, lost about 30 percent in January as metals prices tumbled, said two investors in the fund.
In Brad Setser's astute blog, he relates these comments from
Andrew Rozanov: "I would like to commend those astute commentators who pointed out the direct relevance and central role of the forward currency swaps market in facilitating carry trades. It is arguably the easiest and most preferred method to put on a 'carry trade' by the leveraged community. It was described several years ago in a book written for a Japanese audience by a former Moore Capital trader, Ken Shibusawa, who currently runs his own hedge fund advisory firm in Tokyo (Japanese website for his company:" http://www.shibusawa-co.jp/index.html).
The ISM non-manufacturing index rose to 59.0% from 56.7% in December. The new orders index was essentially flat at 55.4% vs. 55.6% in December. The employment index fell to 51.7% from 53.2%. The prices paid index fell to 55.2% from 59.&% in December.
According to Forbes, Monday is budget day in Washington, and to mark the occasion, President Bush is expected to send to Congress a pro-growth, low-tax document with some eye-popping numbers. Buried within it, according to a senior Democrat, will be a $784 billion item--for national defense. That'll be the figure everyone focuses on and that will be the President's biggest problem. That three-quarter-of-a-trillion dollar number is actually the total, according to House Budget Committee Chairman John Spratt, D-S.C., of four separate budget requests covering three different fiscal years--a base budget for FY2008, supplemental budgets for FY2007 and FY2008, and a partial supplemental budget for FY2009. But Democrats will certainly want to add them all together. "That is a huge sum of money for one budget cycle," Spratt says. "The president calls for us to rein in spending and then calls for a $784 billion increase in spending."
Defense accounts for about a fifth of federal spending. The core Pentagon budget for fiscal 2008 would increase to $481 billion, a record. In addition, the president is seeking an extra $100 billion this year and $145 billion next year for the conflicts in Iraq and Afghanistan and the broader war against terrorism.
"The president's budget is filled with debt and deception, disconnected from reality and continues to move America in the wrong direction," said Senate Budget Committee Chairman Kent Conrad, D-N.D.
DaimlerChrysler AG's Chrysler Group plans to cut more than 10,000 factory jobs and close at least two plants to return the U.S-based unit to profitability, the Detroit News said on Monday.
Michael Panzer: " Whether the difference comes down to supplemental appropriations for the war in Iraq or other off-budget expenditures, or obfuscation arising out of the fact that reported U.S. government deficits include the surpluses of the so-called Social Security Trust Fund, there seems to be a serious disconnect between the size of the cumulative federal deficit and how much money our nation has been borrowing."
April gold climbed $4.60 to close at $656.10 an ounce in New York Monday. March silver tacked on 18.5 cents to close at $13.56 an ounce, but March copper lost 0.65 cent to end at $2.4165 a pound.
MarketWatch reported U.S. and foreign banks tightened their credit standards for approving both individual and commercial real-estate loans in the fourth quarter of 2006, the Federal Reserve said Monday. In its January senior loan officer survey, the Fed reported 33% of banks made it tougher to get a commercial real-estate loan, while 18% of banks made getting a home-mortgage loan harder. At the same time, 41% of banks surveyed said home-mortgage loan demand has gotten "moderately weaker" over the past three months. Thirty-seven percent of banks also said commercial real-estate loan demand has weakened. The Fed's quarterly survey is based on responses from 57 U.S. banks and 22 foreign banks.
Bush proposed a 50-basis point cut in student lender rate subsidies as part of his budget for fiscal year 2008. You be the judge. Is funding education more important than funding Bush's war in Iraq?
March natural gas gained 15.8 cents to close at $7.634 per million British thermal units. March crude fell 28 cents to close at $58.74 a barrel.
Bombings and mortar attacks killed at least 74 people Monday across Iraq — all but seven of them in Baghdad. Nearly 1,000 people have been killed in attacks in the past week. I guess that doesn't qualify for civil war.
Dubai's ruler, Sheik Mohammed bin Rashid Al-Maktoum, vowed at a ceremony Saturday to make his emirate "a pioneering global city" that would be "free of the direct influence of oil price fluctuations." The occasion marked the launching of the so-called Dubai Strategic Plan -- an ambitious project to increase the real per capita gross domestic product, which takes into account inflation, of this Arab city from its current value of $31,000 to $44,000 in 2015. The increase would require a sky-high 11 percent annual GDP growth rate. Al-Maktoum said the non-oil sector now accounts for 97 percent of the emirate's total GDP -- a significant shift from 1975, when oil revenues made up 64 percent of the GDP.
Confirming a Wall Street Journal report, Triad Hospitals Inc. said it's agreed to be acquired at a price of $50.25 a share in cash, an acquisition premium of more than 16% over Friday's closing price of $43.27. The transaction with affiliates of CCMP Capital Advisors and GS Capital Partners carries a total value of about $6.4 billion, including some $1.7 billion of debt. Plano, Tex.-based Triad said its board has recommended that stockholders approve the merger agreement, terms of which permit the company to solicit third-party bids during the next 40 days.
U.K. homebuilder Barratt Development on said it made a recommended 2.2 billion-pound ($4.32 billion) cash and share offer for Wilson Bowden. Under the terms of the deal, Wilson Bowden shareholders will receive 950 pence in cash and 1.0647 new Barrat shares for each Wilson Bowden share.
State Street Corp. said it would acquire Investors Financial Services Corp. for about $4.5 billion in stock. The deal values Investors Financial Services at $65.01 a share.
Vornado's new proposal is for an up-front tender offer to buy up to 55 percent of Equity Office's shares for $56 per share in cash and then a follow-on merger that would pay out the share element.
The deal has been structured to ensure that the offer is worth $56 a share for as long as Vornado's shares are worth between $115 and $135 each.
Barry Ritholtz: "Its been a very long time -- 930 days -- since the Dow Industrials suffered a 2% one day decline; Not only has the S&P 500 gone almost four years without a 2% down day, it has been seven months since it has corrected 2% at all! This is the second-longest such period in 53 years."
Hundreds of Pearl Harbor Sailors are headed to Iraq. Two destroyers answered the call to duty Saturday, and a unexpected call it was. The Navy is calling a surge deployment
Destroyers Hamilton and Russell left today on this short notice deployment. Many of the sailors have only been back for a few months and they were not expecting to ship out so soon. Family members say that makes this even harder to deal with the situation.
Investor Carl Icahn is offering to acquire all of auto parts maker Lear Corp. for $36 a share in cash through his affiliate group, American Real Estate Partners LP.
John Hussman: "One ought to become concerned about risk when investors become convinced that it does not exist. There are certainly times when it appears easy, in hindsight, to make money in the stock market. The difficulty is in keeping it through the full cycle. The fact that over half of most bull market advances are surrendered in the subsequent bear doesn't sink in until after the fact. It's all fun and games until someone gets hurt...There is not a single instance in historical data since 1871 when the S&P 500 traded above 18 times record earnings and there was not a low a year or more later that erased every bit of advantage over Treasury bills. Not one...Simply put, there is no investment merit to the stock market at these valuations."
The Mills Corp. confirmed that it's received an acquisition proposal from a group including Simon Property Group and Farallon Capital Management LLC, its largest shareholder, that values the company at $24 per share in cash. Mills said its board will promptly consider the proposal but noted that its merger agreement with Brookfield Asset Management remains in effect.
Brookfield Asset Management Inc. agreed to acquire Longview Fibre Co. in a deal worth $2.15 billion, including assumed debt. The consideration values Longview shares at $24.75 each, compared to Friday's closing price of $21.01, up 21 cents.
The WSJ reports vacant U.S. homes for sale have climbed to their highest level in four decades.
Russia will ban British poultry imports from Tuesday to prevent the spread of bird flu, the country’s animal and plant health watchdog said on Monday.
Rosselkhoznadzor said in a statement the ban would apply to live birds, hatching eggs, poultry meat and all poultry products not subjected to thermal treatment, as well as poultry feed and equipment for keeping and slaughtering birds.
Red Kite Metals, part of a $1 billion hedge fund run by RK Capital Management LLP, lost about 30 percent in January as metals prices tumbled, said two investors in the fund.
In Brad Setser's astute blog, he relates these comments from
Andrew Rozanov: "I would like to commend those astute commentators who pointed out the direct relevance and central role of the forward currency swaps market in facilitating carry trades. It is arguably the easiest and most preferred method to put on a 'carry trade' by the leveraged community. It was described several years ago in a book written for a Japanese audience by a former Moore Capital trader, Ken Shibusawa, who currently runs his own hedge fund advisory firm in Tokyo (Japanese website for his company:" http://www.shibusawa-co.jp/index.html).
The ISM non-manufacturing index rose to 59.0% from 56.7% in December. The new orders index was essentially flat at 55.4% vs. 55.6% in December. The employment index fell to 51.7% from 53.2%. The prices paid index fell to 55.2% from 59.&% in December.
According to Forbes, Monday is budget day in Washington, and to mark the occasion, President Bush is expected to send to Congress a pro-growth, low-tax document with some eye-popping numbers. Buried within it, according to a senior Democrat, will be a $784 billion item--for national defense. That'll be the figure everyone focuses on and that will be the President's biggest problem. That three-quarter-of-a-trillion dollar number is actually the total, according to House Budget Committee Chairman John Spratt, D-S.C., of four separate budget requests covering three different fiscal years--a base budget for FY2008, supplemental budgets for FY2007 and FY2008, and a partial supplemental budget for FY2009. But Democrats will certainly want to add them all together. "That is a huge sum of money for one budget cycle," Spratt says. "The president calls for us to rein in spending and then calls for a $784 billion increase in spending."
Defense accounts for about a fifth of federal spending. The core Pentagon budget for fiscal 2008 would increase to $481 billion, a record. In addition, the president is seeking an extra $100 billion this year and $145 billion next year for the conflicts in Iraq and Afghanistan and the broader war against terrorism.
"The president's budget is filled with debt and deception, disconnected from reality and continues to move America in the wrong direction," said Senate Budget Committee Chairman Kent Conrad, D-N.D.
DaimlerChrysler AG's Chrysler Group plans to cut more than 10,000 factory jobs and close at least two plants to return the U.S-based unit to profitability, the Detroit News said on Monday.
Michael Panzer: " Whether the difference comes down to supplemental appropriations for the war in Iraq or other off-budget expenditures, or obfuscation arising out of the fact that reported U.S. government deficits include the surpluses of the so-called Social Security Trust Fund, there seems to be a serious disconnect between the size of the cumulative federal deficit and how much money our nation has been borrowing."
April gold climbed $4.60 to close at $656.10 an ounce in New York Monday. March silver tacked on 18.5 cents to close at $13.56 an ounce, but March copper lost 0.65 cent to end at $2.4165 a pound.
MarketWatch reported U.S. and foreign banks tightened their credit standards for approving both individual and commercial real-estate loans in the fourth quarter of 2006, the Federal Reserve said Monday. In its January senior loan officer survey, the Fed reported 33% of banks made it tougher to get a commercial real-estate loan, while 18% of banks made getting a home-mortgage loan harder. At the same time, 41% of banks surveyed said home-mortgage loan demand has gotten "moderately weaker" over the past three months. Thirty-seven percent of banks also said commercial real-estate loan demand has weakened. The Fed's quarterly survey is based on responses from 57 U.S. banks and 22 foreign banks.
Bush proposed a 50-basis point cut in student lender rate subsidies as part of his budget for fiscal year 2008. You be the judge. Is funding education more important than funding Bush's war in Iraq?
March natural gas gained 15.8 cents to close at $7.634 per million British thermal units. March crude fell 28 cents to close at $58.74 a barrel.
Bombings and mortar attacks killed at least 74 people Monday across Iraq — all but seven of them in Baghdad. Nearly 1,000 people have been killed in attacks in the past week. I guess that doesn't qualify for civil war.
Sunday, February 04, 2007
Reality Sets In
2/5/07 Reality Sets In
More and more Medicare beneficiaries would have to pay higher premiums for coverage of prescription drugs and doctors’ services under President Bush’s 2008 budget, to be unveiled on Monday.
Brett Steenbarger: "In sum, it appears that when we have two-week strength in both the S&P 500 large caps and among the S&P energy issues, returns are noticeably subnormal over the next two weeks. When both the large caps and the energy components have been weak over a two-week period, returns are notably superior. "
Robert McHugh: "We've just witnessed such a rally from July 2006. The quality is suspect. Since the Dow Industrials bottomed on July 14th, at a closing low of 10,739.35, we have witnessed a 1,914.14 point rally into Friday, February 2nd's close of 12,653.49. However, the entire amount of that rally has occurred on simply 18 trading days of 80 point rallies or higher. Just 18 trading days out of 139 accounted for the entire rally since July 2006. That means that 121 of the 139 trading days since July 14th were a wash. If you look at those 18 trading days, only once was there a follow-through rally of more than 80 points the next day. These rallies were spaced apart by about 9 days on average. In other words, they occurred out of the blue, after almost two weeks of prices going nowhere."
Mike Shedlock: "The expectation was for 150,000 to 170,000 jobs. The number came in at at 111,000. So was the raw number a bad showing? To help answer that question let's take a look at birth/death adjustments...January and July are typically the revision months for the BLS. Given that many (myself included) harp about all the positive assumptions, this month we see a negative adjustment of 175,000 jobs. In spite of that significant downward adjustment, jobs still came in at +111,000. All in all that is a respectable showing. But what does it say about September through December? Hmm. The Birth/Death assumptions for those months were +221,000. In effect the BLS assumed 221,000 jobs were created in those four months but now it is saying that 79.2% of those jobs were fictional. But rather than telling us what months they were wrong about, we are left guessing."
Mike Burk: "In April 2004 the Russell 2000 (R2K) topped after moving upward for 8 consecutive days. After that high it fell 14.7% to its August 13 low. That is the only example I would find where the index made a significant top concluding with 6 or more consecutive up days.
On average the R2K moves upward for 6 or more consecutive days about twice a year and those moves are usually in the midst of a larger upward move...Next week is the week before the 2nd Friday in February during the 3rd year of the Presidential Cycle...Next week has been a strong week. The OTC has been up 73% of the time since 1963 and the SPX up 85% of the time. The 3rd year has been much stronger than the averages for all years. Over all years the OTC has been up 59% of the time and the SPX 56% of the time."
Clif Droke: "A bullish confirmation signal was generated in the Dow Jones Transportation Average on Friday. The DJTA finally closed above the 5,000 resistance level, which makes for an all-time high in this economically sensitive proxy. I've stated previously that a close above the 5,000 level would be a highly significant event, technically, and that it further holds the promise of further economic recovery as well as a continuation of the bull market in stocks."
The number of times "carry trade" appeared in news media hit record levels this week. It has been recently suggested that the yen is currently 15% undervalued.
An abrupt change in the value of the yen could create a significant rise in short-term volatility.
International Herald Tribune: "The size of the carry-trade is in dispute, as leverage is provided through derivatives, but naked exposure could be as much as $1 trillion. The carry-trade is a major contributor to the very low global cost of money and the collapse of the price of risk, which together have enabled global asset markets to rise almost in unison. This rise, most dramatically reflected in China and India, is potentially destabilizing. As for the carry-trade itself, a sudden reversal could be catastrophic. It is a gigantic gambling game, reflected in the dramatic increase in the balance sheets of investment banks and the explosion in assets of private equity and hedge funds. The phenomenon is also perpetuating global trade imbalances by allowing deeply indebted countries — including the United States and Australia — to continue to over-borrow."
The U.S. Treasury gross public debt now exceeds $8.7 trillion and the statutory debt limit is $8.965 trillion. Of course, those numbers have nothing to say about consumer installment debt approximating $2.4 trillion. When do numbers mean something? You tell me.
India's per capita income is expected to increase by 7 percent in the fiscal year ending in March, the first time in the past 15 years, according to the Economic Advisory Council (EAC) to Indian Prime Minister. The overall economic growth will reach 9 percent this fiscal year with a sharp increase of the saving rate, which will be 35 percent of gross domestic product (GDP), said Dr. C. Rangarajan, chairman of the EAC, at a meeting chaired by Prime Minster Manmohan Singh Saturday.
More and more Medicare beneficiaries would have to pay higher premiums for coverage of prescription drugs and doctors’ services under President Bush’s 2008 budget, to be unveiled on Monday.
Brett Steenbarger: "In sum, it appears that when we have two-week strength in both the S&P 500 large caps and among the S&P energy issues, returns are noticeably subnormal over the next two weeks. When both the large caps and the energy components have been weak over a two-week period, returns are notably superior. "
Robert McHugh: "We've just witnessed such a rally from July 2006. The quality is suspect. Since the Dow Industrials bottomed on July 14th, at a closing low of 10,739.35, we have witnessed a 1,914.14 point rally into Friday, February 2nd's close of 12,653.49. However, the entire amount of that rally has occurred on simply 18 trading days of 80 point rallies or higher. Just 18 trading days out of 139 accounted for the entire rally since July 2006. That means that 121 of the 139 trading days since July 14th were a wash. If you look at those 18 trading days, only once was there a follow-through rally of more than 80 points the next day. These rallies were spaced apart by about 9 days on average. In other words, they occurred out of the blue, after almost two weeks of prices going nowhere."
Mike Shedlock: "The expectation was for 150,000 to 170,000 jobs. The number came in at at 111,000. So was the raw number a bad showing? To help answer that question let's take a look at birth/death adjustments...January and July are typically the revision months for the BLS. Given that many (myself included) harp about all the positive assumptions, this month we see a negative adjustment of 175,000 jobs. In spite of that significant downward adjustment, jobs still came in at +111,000. All in all that is a respectable showing. But what does it say about September through December? Hmm. The Birth/Death assumptions for those months were +221,000. In effect the BLS assumed 221,000 jobs were created in those four months but now it is saying that 79.2% of those jobs were fictional. But rather than telling us what months they were wrong about, we are left guessing."
Mike Burk: "In April 2004 the Russell 2000 (R2K) topped after moving upward for 8 consecutive days. After that high it fell 14.7% to its August 13 low. That is the only example I would find where the index made a significant top concluding with 6 or more consecutive up days.
On average the R2K moves upward for 6 or more consecutive days about twice a year and those moves are usually in the midst of a larger upward move...Next week is the week before the 2nd Friday in February during the 3rd year of the Presidential Cycle...Next week has been a strong week. The OTC has been up 73% of the time since 1963 and the SPX up 85% of the time. The 3rd year has been much stronger than the averages for all years. Over all years the OTC has been up 59% of the time and the SPX 56% of the time."
Clif Droke: "A bullish confirmation signal was generated in the Dow Jones Transportation Average on Friday. The DJTA finally closed above the 5,000 resistance level, which makes for an all-time high in this economically sensitive proxy. I've stated previously that a close above the 5,000 level would be a highly significant event, technically, and that it further holds the promise of further economic recovery as well as a continuation of the bull market in stocks."
The number of times "carry trade" appeared in news media hit record levels this week. It has been recently suggested that the yen is currently 15% undervalued.
An abrupt change in the value of the yen could create a significant rise in short-term volatility.
International Herald Tribune: "The size of the carry-trade is in dispute, as leverage is provided through derivatives, but naked exposure could be as much as $1 trillion. The carry-trade is a major contributor to the very low global cost of money and the collapse of the price of risk, which together have enabled global asset markets to rise almost in unison. This rise, most dramatically reflected in China and India, is potentially destabilizing. As for the carry-trade itself, a sudden reversal could be catastrophic. It is a gigantic gambling game, reflected in the dramatic increase in the balance sheets of investment banks and the explosion in assets of private equity and hedge funds. The phenomenon is also perpetuating global trade imbalances by allowing deeply indebted countries — including the United States and Australia — to continue to over-borrow."
The U.S. Treasury gross public debt now exceeds $8.7 trillion and the statutory debt limit is $8.965 trillion. Of course, those numbers have nothing to say about consumer installment debt approximating $2.4 trillion. When do numbers mean something? You tell me.
India's per capita income is expected to increase by 7 percent in the fiscal year ending in March, the first time in the past 15 years, according to the Economic Advisory Council (EAC) to Indian Prime Minister. The overall economic growth will reach 9 percent this fiscal year with a sharp increase of the saving rate, which will be 35 percent of gross domestic product (GDP), said Dr. C. Rangarajan, chairman of the EAC, at a meeting chaired by Prime Minster Manmohan Singh Saturday.
Saturday, February 03, 2007
The Way It Is
2/4/07 The Way It Is
More than a quarter of Americans have skipped or postponed an essential visit to a doctor because it was too expensive, a new MSN-Zogby poll says.
The ranks of the nation's uninsured have grown by 11.2% since 2000, according to a study by the Kaiser Commission on Medicaid and the Uninsured. Tens of millions of Americans lack insurance, and millions more are underinsured, with gaps in their coverage that leave them exposed to catastrophic medical bills.
I believe Kaiser understates the gravity of the situation. They ignore the fact that millions only can afford catastrophic insurance and are unable to pay for regular monthly health insurance premiums. Hence, from a statistical standpoint, they are counted as insured. In a real sense, day to day they are not.
Herbalife Ltd. has received an acquisition offer of $38 a share from Whitney V L.P. and its affiliates. Whitney and its related parties already own roughly 27% of the Los Angeles-based vitamin and nutritional supplement company's outstanding stock.
March crude closed at $59.02 a barrel, up 3%, or $1.72 and had a gain of 6.5% for the week. March natural gas fell 5.4 cents to close Friday at $7.476 per million British thermal units, but it was up 4.4% for the week.
April gold closed at $651.50 an ounce Friday in New York, down 1.7%, or $11.50, for the session, but up 80 cents from last Friday's closing level. March silver fell 35 cents to end $13.375 an ounce, unchanged for the week. March copper dropped 10.75 cents to end at $2.423 a pound, down 8.2% for the week.
The Reserve Bank of India raised its repo rate by 25 basis points to 7.5 per cent. It increased its gross domestic product growth forecast for the year to March 2007 to 8.5-9 per cent, up from 8 per cent.
Doug Noland: "There are now five Service Producing jobs for every one Goods Producing job, up from a ratio of four-to-one ten years ago...a good percentage of the seven million “services” jobs added over the past five years owe much of their existence to rampant Credit and asset inflation. They’re (seductively and dangerously) Bubble Manifestations similar to the tech employment boom that proved so susceptible and disruptive. And, clearly, accelerating Income Growth is at this point very much a Credit Bubble phenomenon. For now, these dynamics ensure extraordinary uncertainty. Yet we should expect the eventual bursting of this Bubble to initiate job and Income losses that will make post-tech Bubble dislocations look inconsequential by comparison."
Wal-Mart recorded a same-store sales gain of 2.2% for January.
Mexicans working abroad sent home a record $25 billion last year, most of it from the United States, according to a study released Friday. The estimated figure represents a 25 percent increase over 2005 and a nearly 80 percent surge since 2003, the Inter-American Development Bank, or IDB, said in its report.
Pickering, president of Houston-based Pickering Energy Partners, said any leveraged buyout of Nabors is "possible, but not likely." Swings in oil and gas prices may hurt profit for drillers such as Nabors, making them risky investments for private equity groups, Pickering said.
Utility E.On AG said Friday it raised its offer for Spain's Endesa SA to $53.4 billion as it delivered its final bid in a more than year-long takeover saga. Duesseldorf-based E.On had previously offered 36.5 billion euros ($47.5 billion). It was left alone in the race for Endesa, Spain's biggest electricity company, after Spanish rival Gas Natural SA withdrew its bid on Thursday.
The foreign companies that partner Venezuelan state oil firm PDVSA in Orinoco upgrade projects have until May 1 to adapt their structures to new joint ventures in which PDVSA is to have at least 60%, President Hugo Chavez said.
when President Bush proposes a new nearly $3-trillion federal budget next week, he also will be seeking another $245 billion for the wars in Iraq and Afghanistan.
That includes $99.6 billion in additional war-spending for the remainder of the 2007 budget year, which closes at the end of September, plus another $145.2 billion in supplemental war spending for the 2008 budget year, according to a senior administration official. Not worry. Iraq will repay us in oil!!!
Some Iranian officials earlier said that the Islamic Republic would install 3000 centrifuges concurrent with nuclear celebrations in the Decade of Fajr (also known as the Ten-Day Dawn festivals beginning from February 1 to 11, marking the victory of the Islamic Revolution in Iran back in 1979).
The source who asked to remain anonymous told FNA that Iran does not intend to officially announce the start of the installation of the 3000 centrifuges.
Diplomatic sources announced in Vienna on Friday that Iran has started installation of 3000 centrifuges in Natanz nuclear facility.
Chief Red Cloud: "We were told that they wished merely to pass through our country. . . to seek for gold in the far west . . . Yet before the ashes of the council are cold, the Great Father is building his forts among us. . . . His presence here is . . . an insult to the spirits of our ancestors. Are we then to give up their sacred graves to be allowed for corn?"
Abraham Lincoln: "The best way to destroy an enemy is to make him a friend."
More than a quarter of Americans have skipped or postponed an essential visit to a doctor because it was too expensive, a new MSN-Zogby poll says.
The ranks of the nation's uninsured have grown by 11.2% since 2000, according to a study by the Kaiser Commission on Medicaid and the Uninsured. Tens of millions of Americans lack insurance, and millions more are underinsured, with gaps in their coverage that leave them exposed to catastrophic medical bills.
I believe Kaiser understates the gravity of the situation. They ignore the fact that millions only can afford catastrophic insurance and are unable to pay for regular monthly health insurance premiums. Hence, from a statistical standpoint, they are counted as insured. In a real sense, day to day they are not.
Herbalife Ltd. has received an acquisition offer of $38 a share from Whitney V L.P. and its affiliates. Whitney and its related parties already own roughly 27% of the Los Angeles-based vitamin and nutritional supplement company's outstanding stock.
March crude closed at $59.02 a barrel, up 3%, or $1.72 and had a gain of 6.5% for the week. March natural gas fell 5.4 cents to close Friday at $7.476 per million British thermal units, but it was up 4.4% for the week.
April gold closed at $651.50 an ounce Friday in New York, down 1.7%, or $11.50, for the session, but up 80 cents from last Friday's closing level. March silver fell 35 cents to end $13.375 an ounce, unchanged for the week. March copper dropped 10.75 cents to end at $2.423 a pound, down 8.2% for the week.
The Reserve Bank of India raised its repo rate by 25 basis points to 7.5 per cent. It increased its gross domestic product growth forecast for the year to March 2007 to 8.5-9 per cent, up from 8 per cent.
Doug Noland: "There are now five Service Producing jobs for every one Goods Producing job, up from a ratio of four-to-one ten years ago...a good percentage of the seven million “services” jobs added over the past five years owe much of their existence to rampant Credit and asset inflation. They’re (seductively and dangerously) Bubble Manifestations similar to the tech employment boom that proved so susceptible and disruptive. And, clearly, accelerating Income Growth is at this point very much a Credit Bubble phenomenon. For now, these dynamics ensure extraordinary uncertainty. Yet we should expect the eventual bursting of this Bubble to initiate job and Income losses that will make post-tech Bubble dislocations look inconsequential by comparison."
Wal-Mart recorded a same-store sales gain of 2.2% for January.
Mexicans working abroad sent home a record $25 billion last year, most of it from the United States, according to a study released Friday. The estimated figure represents a 25 percent increase over 2005 and a nearly 80 percent surge since 2003, the Inter-American Development Bank, or IDB, said in its report.
Pickering, president of Houston-based Pickering Energy Partners, said any leveraged buyout of Nabors is "possible, but not likely." Swings in oil and gas prices may hurt profit for drillers such as Nabors, making them risky investments for private equity groups, Pickering said.
Utility E.On AG said Friday it raised its offer for Spain's Endesa SA to $53.4 billion as it delivered its final bid in a more than year-long takeover saga. Duesseldorf-based E.On had previously offered 36.5 billion euros ($47.5 billion). It was left alone in the race for Endesa, Spain's biggest electricity company, after Spanish rival Gas Natural SA withdrew its bid on Thursday.
The foreign companies that partner Venezuelan state oil firm PDVSA in Orinoco upgrade projects have until May 1 to adapt their structures to new joint ventures in which PDVSA is to have at least 60%, President Hugo Chavez said.
when President Bush proposes a new nearly $3-trillion federal budget next week, he also will be seeking another $245 billion for the wars in Iraq and Afghanistan.
That includes $99.6 billion in additional war-spending for the remainder of the 2007 budget year, which closes at the end of September, plus another $145.2 billion in supplemental war spending for the 2008 budget year, according to a senior administration official. Not worry. Iraq will repay us in oil!!!
Some Iranian officials earlier said that the Islamic Republic would install 3000 centrifuges concurrent with nuclear celebrations in the Decade of Fajr (also known as the Ten-Day Dawn festivals beginning from February 1 to 11, marking the victory of the Islamic Revolution in Iran back in 1979).
The source who asked to remain anonymous told FNA that Iran does not intend to officially announce the start of the installation of the 3000 centrifuges.
Diplomatic sources announced in Vienna on Friday that Iran has started installation of 3000 centrifuges in Natanz nuclear facility.
Chief Red Cloud: "We were told that they wished merely to pass through our country. . . to seek for gold in the far west . . . Yet before the ashes of the council are cold, the Great Father is building his forts among us. . . . His presence here is . . . an insult to the spirits of our ancestors. Are we then to give up their sacred graves to be allowed for corn?"
Abraham Lincoln: "The best way to destroy an enemy is to make him a friend."
Friday, February 02, 2007
Toast
2/3/07 Toast
November and December payrolls were revised up by a combined 81,000. Employers in the U.S. added a smaller- than-forecast 111,000 workers to payrolls in January, and the unemployment rate rose to 4.6%. Workers' average hourly earnings rose 3 cents, or 0.2 percent, after increasing 0.4 percent the previous month. Average weekly hours worked by production workers fell to 33.8 from 33.9. Average weekly earnings fell to $577.64 last month from $578.33 in December.The Labor Department officially revised the payroll numbers after reviewing more complete tax data not available earlier from state unemployment insurance programs and making adjustments to its estimates of seasonal hiring patterns.The revision added 754,000 jobs to the previously estimate for the year ended March 2006, the biggest revision since Labor started adjusting the numbers in 1991.
It is because of the on-going revisions that I ceased spending a good deal of time on these payroll numbers. Like all government numbers, they are a moving target.
Talking about moving targets, Patrick Fitzgerald has Cheney and Libby firmly in his sights. It is just a matter of time until they are labeled toast. Then it's on to Bush. He will have to explain how he put the matter about Niger and uranium into his State of the Union message after the intel from Wilson and Tenet and then pressured Tenet to provide a different read on the matter. Bush will soon be toast.
Equity Office Properties Trust, the target of the largest real estate takeover, rejected a $41 billion offer from Vornado Realty Trust, saying a $38.3 billion bid by Blackstone Group LP is less risky for shareholders. Equity Office also said a vote on Blackstone's offer will probably take place Feb. 7, two days later than planned, to give shareholders time to review new information about the bid.
Blackstone Group LP, Kohlberg Kravis Roberts & Co. and CVC Capital Partners Ltd. said they're considering an offer for U.K. supermarket company J Sainsbury Plc in what would be Europe's biggest leveraged buyout.
American Axle & Manufacturing Holdings Inc., which makes car and truck components, said Friday it expects its customers' production volumes for North American light trucks to fall 2 percent in 2007.
Russia and Iran are in talks on creating a natural gas organization that could shift the alignment of the energy markets, the Wall Street Journal reported Friday. The cartel would be similar to the structure of the Organization of Petroleum Exporting Countries, but Russian President Vladimir Putin has downplayed talks of setting prices like OPEC, the Journal said.
Richard Iley, an economist at BNP Paribas, said: “The ISM manufacturing index was weaker than expected and dovetails with our assessment that the manufacturing sector is really very weak and on the brink of recession.”
Nouriel Roubini: "Today the conventional wisdom is that the yen carry trades will continue as long as the BoJ keeps rates at 0.25% or raises them slowly over the next few months; this conventional wisdom also argues that as long as macro news remain weak in Japan expectations of BoJ policy will not change much and the yen will remain weak. But the lesson of 1998 is that unchanged macro outlook and unchanged BoJ policies may still trigger a rapid unraveling of yen carry trade if some minor yen supportive news occurs. When everyone is short on yen and doing the carry trade they are looking for some extraneous piece of news that becomes a focal point for covering such shorts. Then, any relevant news can become such focal point. And once can think of plenty of news of surprises that would lead investors en masse to start covering their yen shorts today. So, could what happened in 1998 happen again today? "
The two main Nigerian oil workers' unions on Thursday threatened a strike next week to protest against rising violence in the country's petroleum-producing southern region.
Apache will reduce its 2007 exploration and development spending in North America by $600 million, with further cuts possible if costs don't keep pace with falling gas prices, Chief Executive G. Steven Farris said Thursday.
In an interview with Bloomberg, Matthew Simmons stated that global oil supply has peaked and believes the likelihood oil prices could reach as much as $300 a barrel.
OPEC, producer of 40 percent of the world's oil, began a 500,000 barrel-a-day reduction Feb.1. OPEC supplied 385,000 barrels a day more than its targets in December, according to Bloomberg News estimates. Heating demand in the U.S. Northeast will be 28 percent above normal through Feb. 8, Belton, Missouri-based forecaster Weather Derivatives said.
The Reuters/University of Michigan Surveys of Consumers said the final January reading on the consumer sentiment index rose to 96.9 from 91.7 at the end of December. The final January reading was the highest since December 2004.
Orders for U.S.-made factory goods rose by 2.4% in December, as orders for metals and machinery offset a big drop in demand for defense capital goods, the Commerce Department reported Friday. Excluding defense goods, factory orders rose by 3.1% in December, according to the report. Taking out transportation, orders climbed by 2.2%.
The Helmerich and Payne EPS estimates for 2007 and 2008 have been raised from $3.63 to $3.80 and from $4.39 to $4.47, respectively.
Dustin Cox: "The national debt is nearly $9 trillion today. That means that every single American citizen owes more than $30,000 to pay off our debt. Now, while the lower 98 percent of the American citizenry are receiving our "tax breaks" of around $300 apiece, we should ask ourselves whether the wonderful effects of Bush's tax cuts offset the additional $15,000 each and every one of us owes thanks to George W. Bush. For the overwhelming majority of us, they don't."
Standard Pacific Corp reported a fourth-quarter loss but provided a 2007 profit outlook above analysts' consensus estimates. Meanwhile, Brookfield Homes Corp.'s posted a lower-than-expected quarterly profit decline.
Tim Adams has served as undersecretary for international affairs since 2005, where he has helped lead efforts to get China to loosen the peg between its yuan currency and the dollar. In a letter to Bush, Adams said the demands of the job are "simply incompatible" with his family responsibilities. Another smart decision to leave a sinking ship.
According to Vickers, the sell-to-buy ratio for all insider transactions over the last six months stands at about 13 to 1, far in excess of the long-term average of 2.5 to 1.
Michael Kahn: "Technically, breakouts in Treasury yields coupled with the background condition of a continuing bull market in commodities make the likelihood that the multidecade decline in interest rates is long over, and the new path of least resistance is up. For investors, there is no incentive to own any credit-market securities other than those with the very shortest of maturities."
Barron's points out that, in 2007, Wyeth is expected to receive Food and Drug Administration approval for several new drugs, including Pristiq for depression, Vivant for osteoporosis, and bifeprunox for schizophrenia.
An extra week in the quarter gave a boost to revenue at Gannett's 90 newspapers and helped overcome a shift in advertising to the Internet. Ad sales at USA Today, the largest newspaper by circulation in the U.S., rose 13 percent. Midterm elections held on Nov. 7 in the U.S. helped drive a 30 percent jump in revenue at the company's 23 television networks.
Although Chinese steel mills have agreed with the world's main iron ore suppliers on a 9.6 percent price rise for 2007, which is much lower than the 19 percent increase last year and the 71.5 percent hike in 2005, the ultimate price they pay could largely depend on international dry-bulk shipping rates.
"Dry-bulk shipping rates are expected to stay high this year and the average rate could possibly be higher than last year," said Yu Jun, a transportation analyst with CITIC Securities.
The possible rise is a result of the slow growth of the dry-bulk fleet and strong iron ore demand.
"The global fleet expansion in recent years has concentrated on supertankers and container ships. Shipbuilders also prefer to use the limited space in shipyards to build more expensive vessels rather than dry-bulk carriers," said Li Lei, an analyst with China Securities.
Speculation returned to Nabors Industries on Friday. The stock rallied over $1 and traded above $31 and over 14,000 February call options with a strike price of $32.50 changed hands.
The number of rigs drilling for oil and natural gas in North America rose by 11, or 0.5%, to 2,374, according to a weekly update by Baker Hughes Inc. on Friday. The number of active oil rigs rose by 9 to 264, while the number of gas rigs increased by 6 to 1,446. The U.S. rig count rose by 15 to 1,714, while the Canadian rig count decreased by 4 to 660. The offshore rig count fell by two to 81.
The Wall Street Journal reported that a metals- trading hedge fund lost 20 percent in January. This could have been a reason for the weakness in zinc, copper, silver, and gold on Friday.
Thomas Paine: “It has been the political career of this man to begin with hypocrisy, proceed with arrogance, and finish with contempt." Those words could be fitting today.
November and December payrolls were revised up by a combined 81,000. Employers in the U.S. added a smaller- than-forecast 111,000 workers to payrolls in January, and the unemployment rate rose to 4.6%. Workers' average hourly earnings rose 3 cents, or 0.2 percent, after increasing 0.4 percent the previous month. Average weekly hours worked by production workers fell to 33.8 from 33.9. Average weekly earnings fell to $577.64 last month from $578.33 in December.The Labor Department officially revised the payroll numbers after reviewing more complete tax data not available earlier from state unemployment insurance programs and making adjustments to its estimates of seasonal hiring patterns.The revision added 754,000 jobs to the previously estimate for the year ended March 2006, the biggest revision since Labor started adjusting the numbers in 1991.
It is because of the on-going revisions that I ceased spending a good deal of time on these payroll numbers. Like all government numbers, they are a moving target.
Talking about moving targets, Patrick Fitzgerald has Cheney and Libby firmly in his sights. It is just a matter of time until they are labeled toast. Then it's on to Bush. He will have to explain how he put the matter about Niger and uranium into his State of the Union message after the intel from Wilson and Tenet and then pressured Tenet to provide a different read on the matter. Bush will soon be toast.
Equity Office Properties Trust, the target of the largest real estate takeover, rejected a $41 billion offer from Vornado Realty Trust, saying a $38.3 billion bid by Blackstone Group LP is less risky for shareholders. Equity Office also said a vote on Blackstone's offer will probably take place Feb. 7, two days later than planned, to give shareholders time to review new information about the bid.
Blackstone Group LP, Kohlberg Kravis Roberts & Co. and CVC Capital Partners Ltd. said they're considering an offer for U.K. supermarket company J Sainsbury Plc in what would be Europe's biggest leveraged buyout.
American Axle & Manufacturing Holdings Inc., which makes car and truck components, said Friday it expects its customers' production volumes for North American light trucks to fall 2 percent in 2007.
Russia and Iran are in talks on creating a natural gas organization that could shift the alignment of the energy markets, the Wall Street Journal reported Friday. The cartel would be similar to the structure of the Organization of Petroleum Exporting Countries, but Russian President Vladimir Putin has downplayed talks of setting prices like OPEC, the Journal said.
Richard Iley, an economist at BNP Paribas, said: “The ISM manufacturing index was weaker than expected and dovetails with our assessment that the manufacturing sector is really very weak and on the brink of recession.”
Nouriel Roubini: "Today the conventional wisdom is that the yen carry trades will continue as long as the BoJ keeps rates at 0.25% or raises them slowly over the next few months; this conventional wisdom also argues that as long as macro news remain weak in Japan expectations of BoJ policy will not change much and the yen will remain weak. But the lesson of 1998 is that unchanged macro outlook and unchanged BoJ policies may still trigger a rapid unraveling of yen carry trade if some minor yen supportive news occurs. When everyone is short on yen and doing the carry trade they are looking for some extraneous piece of news that becomes a focal point for covering such shorts. Then, any relevant news can become such focal point. And once can think of plenty of news of surprises that would lead investors en masse to start covering their yen shorts today. So, could what happened in 1998 happen again today? "
The two main Nigerian oil workers' unions on Thursday threatened a strike next week to protest against rising violence in the country's petroleum-producing southern region.
Apache will reduce its 2007 exploration and development spending in North America by $600 million, with further cuts possible if costs don't keep pace with falling gas prices, Chief Executive G. Steven Farris said Thursday.
In an interview with Bloomberg, Matthew Simmons stated that global oil supply has peaked and believes the likelihood oil prices could reach as much as $300 a barrel.
OPEC, producer of 40 percent of the world's oil, began a 500,000 barrel-a-day reduction Feb.1. OPEC supplied 385,000 barrels a day more than its targets in December, according to Bloomberg News estimates. Heating demand in the U.S. Northeast will be 28 percent above normal through Feb. 8, Belton, Missouri-based forecaster Weather Derivatives said.
The Reuters/University of Michigan Surveys of Consumers said the final January reading on the consumer sentiment index rose to 96.9 from 91.7 at the end of December. The final January reading was the highest since December 2004.
Orders for U.S.-made factory goods rose by 2.4% in December, as orders for metals and machinery offset a big drop in demand for defense capital goods, the Commerce Department reported Friday. Excluding defense goods, factory orders rose by 3.1% in December, according to the report. Taking out transportation, orders climbed by 2.2%.
The Helmerich and Payne EPS estimates for 2007 and 2008 have been raised from $3.63 to $3.80 and from $4.39 to $4.47, respectively.
Dustin Cox: "The national debt is nearly $9 trillion today. That means that every single American citizen owes more than $30,000 to pay off our debt. Now, while the lower 98 percent of the American citizenry are receiving our "tax breaks" of around $300 apiece, we should ask ourselves whether the wonderful effects of Bush's tax cuts offset the additional $15,000 each and every one of us owes thanks to George W. Bush. For the overwhelming majority of us, they don't."
Standard Pacific Corp reported a fourth-quarter loss but provided a 2007 profit outlook above analysts' consensus estimates. Meanwhile, Brookfield Homes Corp.'s posted a lower-than-expected quarterly profit decline.
Tim Adams has served as undersecretary for international affairs since 2005, where he has helped lead efforts to get China to loosen the peg between its yuan currency and the dollar. In a letter to Bush, Adams said the demands of the job are "simply incompatible" with his family responsibilities. Another smart decision to leave a sinking ship.
According to Vickers, the sell-to-buy ratio for all insider transactions over the last six months stands at about 13 to 1, far in excess of the long-term average of 2.5 to 1.
Michael Kahn: "Technically, breakouts in Treasury yields coupled with the background condition of a continuing bull market in commodities make the likelihood that the multidecade decline in interest rates is long over, and the new path of least resistance is up. For investors, there is no incentive to own any credit-market securities other than those with the very shortest of maturities."
Barron's points out that, in 2007, Wyeth is expected to receive Food and Drug Administration approval for several new drugs, including Pristiq for depression, Vivant for osteoporosis, and bifeprunox for schizophrenia.
An extra week in the quarter gave a boost to revenue at Gannett's 90 newspapers and helped overcome a shift in advertising to the Internet. Ad sales at USA Today, the largest newspaper by circulation in the U.S., rose 13 percent. Midterm elections held on Nov. 7 in the U.S. helped drive a 30 percent jump in revenue at the company's 23 television networks.
Although Chinese steel mills have agreed with the world's main iron ore suppliers on a 9.6 percent price rise for 2007, which is much lower than the 19 percent increase last year and the 71.5 percent hike in 2005, the ultimate price they pay could largely depend on international dry-bulk shipping rates.
"Dry-bulk shipping rates are expected to stay high this year and the average rate could possibly be higher than last year," said Yu Jun, a transportation analyst with CITIC Securities.
The possible rise is a result of the slow growth of the dry-bulk fleet and strong iron ore demand.
"The global fleet expansion in recent years has concentrated on supertankers and container ships. Shipbuilders also prefer to use the limited space in shipyards to build more expensive vessels rather than dry-bulk carriers," said Li Lei, an analyst with China Securities.
Speculation returned to Nabors Industries on Friday. The stock rallied over $1 and traded above $31 and over 14,000 February call options with a strike price of $32.50 changed hands.
The number of rigs drilling for oil and natural gas in North America rose by 11, or 0.5%, to 2,374, according to a weekly update by Baker Hughes Inc. on Friday. The number of active oil rigs rose by 9 to 264, while the number of gas rigs increased by 6 to 1,446. The U.S. rig count rose by 15 to 1,714, while the Canadian rig count decreased by 4 to 660. The offshore rig count fell by two to 81.
The Wall Street Journal reported that a metals- trading hedge fund lost 20 percent in January. This could have been a reason for the weakness in zinc, copper, silver, and gold on Friday.
Thomas Paine: “It has been the political career of this man to begin with hypocrisy, proceed with arrogance, and finish with contempt." Those words could be fitting today.
Thursday, February 01, 2007
Results
2/2/07 Results
Helmerich and Payne reported operating income of $146,654,000 for the first quarter of fiscal 2007, which represents an increase of over 80% as compared to operating income of $80,904,000 for the first quarter of fiscal 2006, and a sequential quarterly increase of over 20% as compared to operating income of $121,994,000 for the quarter ended September 30, 2006. The most recent quarter-to-quarter growth in operating income was mostly a result of increased activity in the Company's U.S. land operations and increased margins in its international operations. Segment operating income in the Company's U.S. land operations increased for the 11th consecutive quarter to $118,408,000 for the first quarter of fiscal 2007, from $70,991,000 for the same period last year and from $103,679,000 for last year's fourth fiscal quarter. The average rig margin per day was up slightly compared to the previous quarter as a result of a lower average rig expense per day. Total activity days in U.S. land operations during the quarter increased to 10,548, compared with 8,035 activity days during the same period last year and 9,577 activity days during the fourth quarter of fiscal 2006. Additional rig activity days associated with the Company's new FlexRig®* construction program are estimated to continue at 900 to 1,100 per quarter during this fiscal year as three to four rigs per month are completed and sent to the field. Company President and C.E.O., Hans Helmerich commented, "We continue to experience strong demand for the H&P brand, which is based on delivering savings to our customers through high efficiency rigs and an organization focused on safety and field execution. Although the U.S. land market has recently experienced a softening in dayrates and lower utilization rates, we expect our customers' strong preference for FlexRigs to sustain better margins and utilization rates for our fleet as compared to our competition. Whereas much of the industry's new builds and rig refurbishments will actually go to replace aging and less capable equipment, our current new build program drives an 80% expansion to our fleet. The incremental number of fully contracted new FlexRigs that we are scheduled to deliver this year will significantly contribute to earnings going forward." The company has a rig fleet that currently includes 127 U.S. land rigs, nine U.S. platform rigs located in the Gulf of Mexico and 27 international land rigs. In addition, the Company expects to complete another 35 new H&P-designed and operated FlexRigs during calendar 2007, expanding its total number of FlexRigs to 123 and its total number of U.S. land rigs to 162.
The monthly purchasing manager's index, or PMI, improved nearly two points to 54.2 last month from 52.3 in December.
Exxon Mobil Corp. reported a slight decline in fourth-quarter earnings Thursday due to lower natural gas prices and shrinking profits from gasoline sales.
Helmerich and Payne reported operating income of $146,654,000 for the first quarter of fiscal 2007, which represents an increase of over 80% as compared to operating income of $80,904,000 for the first quarter of fiscal 2006, and a sequential quarterly increase of over 20% as compared to operating income of $121,994,000 for the quarter ended September 30, 2006. The most recent quarter-to-quarter growth in operating income was mostly a result of increased activity in the Company's U.S. land operations and increased margins in its international operations. Segment operating income in the Company's U.S. land operations increased for the 11th consecutive quarter to $118,408,000 for the first quarter of fiscal 2007, from $70,991,000 for the same period last year and from $103,679,000 for last year's fourth fiscal quarter. The average rig margin per day was up slightly compared to the previous quarter as a result of a lower average rig expense per day. Total activity days in U.S. land operations during the quarter increased to 10,548, compared with 8,035 activity days during the same period last year and 9,577 activity days during the fourth quarter of fiscal 2006. Additional rig activity days associated with the Company's new FlexRig®* construction program are estimated to continue at 900 to 1,100 per quarter during this fiscal year as three to four rigs per month are completed and sent to the field. Company President and C.E.O., Hans Helmerich commented, "We continue to experience strong demand for the H&P brand, which is based on delivering savings to our customers through high efficiency rigs and an organization focused on safety and field execution. Although the U.S. land market has recently experienced a softening in dayrates and lower utilization rates, we expect our customers' strong preference for FlexRigs to sustain better margins and utilization rates for our fleet as compared to our competition. Whereas much of the industry's new builds and rig refurbishments will actually go to replace aging and less capable equipment, our current new build program drives an 80% expansion to our fleet. The incremental number of fully contracted new FlexRigs that we are scheduled to deliver this year will significantly contribute to earnings going forward." The company has a rig fleet that currently includes 127 U.S. land rigs, nine U.S. platform rigs located in the Gulf of Mexico and 27 international land rigs. In addition, the Company expects to complete another 35 new H&P-designed and operated FlexRigs during calendar 2007, expanding its total number of FlexRigs to 123 and its total number of U.S. land rigs to 162.
The monthly purchasing manager's index, or PMI, improved nearly two points to 54.2 last month from 52.3 in December.
Exxon Mobil Corp. reported a slight decline in fourth-quarter earnings Thursday due to lower natural gas prices and shrinking profits from gasoline sales.
Eurozone economies started the year on sharply diverging paths, with Germany's industrial recovery powering ahead, but French and Italian manufacturing sectors seeing marked slowdowns, a closely-watched survey showed.
Manufacturing growth in the 13-country region fell more than expected to the lowest for almost a year, according to the purchasing managers' index for the sector, which dropped from 56.5 in December to 55.5 last month.
Dell said CEO Kevin Rollins resigned and that Michael Dell would take over as head of the PC company he founded. Dell also said it expects to miss earnings and revenue estimates for this quarter.
Insurance broker Marsh & McLennan Companies Inc. said on Thursday that it would sell its troubled money manager, Putnam Investments, to a unit of Canada's Power Financial Corp. for $3.9 billion.
Personal income increased $60.6 billion, or 0.5 percent, and disposable personal income (DPI)
increased $50.8 billion, or 0.5 percent, in December, according to the Bureau of Economic Analysis.
Personal consumption expenditures (PCE) increased $67.1 billion, or 0.7 percent. In November,
personal income increased $32.4 billion, or 0.3 percent, DPI increased $25.4 billion, or 0.3 percent,
and PCE increased $51.1 billion, or 0.5 percent, based on revised estimates. In sum, the personal savings rate was -1.2%.
The 2006 figure was lower than a negative 0.4 percent in 2005 and was the poorest showing since a negative 1.5 percent savings rate in 1933 during the Great Depression.
Robert Scheer: " Can there be any more egregious example of betraying the oath of office of the president to uphold the Constitution than his deceiving Congress from the very well of the House on the reasons for going to war? The Constitution clearly delegates to Congress, and not to the president, the exclusive power to declare war, and deceiving our representatives in making the case for war is a far more important crime than the perjury charge against Libby."
Christie's International, the world's biggest auction house, is in Dubai ``for the long-term'' and is betting that it will develop into a $250 million market faster than the 20 years it took Hong Kong, according to Jussi Pylkkanen, president of Christie's Europe.
Profit margins reached a record in 2006 after rising in 18 straight quarters. That helped propel a four-year bull market and sent the Standard & Poor's 500 Index to a six-year high. Now, almost half of the S&P 500 companies to report fourth- quarter earnings have said margins shrank or were unchanged.
From EnergyFiles.com: "Oil production in North America peaked in 1973 and has been declining slowly ever since. Although onshore oil output is rapidly diminishing, this is partly offset by growing production from the Gulf of Mexico and from offshore eastern Canada. However offshore output increases are expected to cease by 2013."
Factory activity in the United States contracted in January, the Institute for Supply Management reported Thursday. The ISM index fell to 49.3% in January from 51.4% in December. New orders fell to 50.3% in January from 51.9% in December. The employment index inched higher to 49.5% from 49.4%. The price index rose to 53.0% from 47.5%.
The Energy Department said natural-gas inventories fell 186 billion cubic feet for the week ended Jan. 26. Total stocks now stand at 2.571 trillion cubic feet, up 152 billion cubic feet from the year-ago level, and 454 billion cubic feet above the five-year average, the government data said.
Pending sales of existing U.S. homes advanced a stronger-than-expected 4.9 percent in December, the biggest monthly gain since 2004, a real estate agents' trade association said on Thursday in a report showing some stability in the housing market. The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in December, rose to 112.4 from an upwardly revised level of 107.2 in November. The monthly gain was the biggest since a 6.9 percent advance in the index logged in March 2004. But, for all of 2006, pending sales were down 4.4 percent from 2005.
Between the end of August and the end of November Russia, according to the I.M.F., increased its ‘Official’ holdings of gold by 9.2 tonnes.
Frequently, over the last year, I have written about the rapid decline of oil production at Mexico's Cantarell field. At this time, it might be prudent to keep an eye on Saudi Arabia's Ghawar field, the largest in the world. It accounts for 30% of Saudi Arabia's oil reserves.
Most new oilfields produce almost pure oil or oil mixed with natural gas--with little water. The Saudis inject large quantities of water into the reservoir in order to keep up the pressure for the oil to flow. An increasing amount of sea water is being pumped into the reservoir, and that is beginning to approach a water cut of roughly 35%. This should serve as a danger sign. The Saudis will say everything is fine with this field. I would recommend taking their statements with gallons of water.
March crude fell 84 cents to close at $57.30 a barrel Thursday. March natural gas lost 13.7 cents to end at $7.53 per million.
General Motors posted a 16.4% decline in January U.S. sales to 247,464 vehicles, due mainly to its move away from lower-margin rental fleet sales. GM also cut its production outlook to 1.08 million vehicles in the first quarter, down 3.6% from last month's guidance. Ford Motor Co posted an 18.9% plunge in January U.S. sales to 166,835 cars and trucks, down from 205,671 a year ago due in large part to the move away from fleet sales.
February gold climbed $5.40 to close at $657.40 an ounce. March silver added 1.1%, or 15.5 cents, to finish at $13.725 an ounce, but March copper fell by 6.4 cents to end at $2.5305 a pound.
Manufacturing growth in the 13-country region fell more than expected to the lowest for almost a year, according to the purchasing managers' index for the sector, which dropped from 56.5 in December to 55.5 last month.
Dell said CEO Kevin Rollins resigned and that Michael Dell would take over as head of the PC company he founded. Dell also said it expects to miss earnings and revenue estimates for this quarter.
Insurance broker Marsh & McLennan Companies Inc. said on Thursday that it would sell its troubled money manager, Putnam Investments, to a unit of Canada's Power Financial Corp. for $3.9 billion.
Personal income increased $60.6 billion, or 0.5 percent, and disposable personal income (DPI)
increased $50.8 billion, or 0.5 percent, in December, according to the Bureau of Economic Analysis.
Personal consumption expenditures (PCE) increased $67.1 billion, or 0.7 percent. In November,
personal income increased $32.4 billion, or 0.3 percent, DPI increased $25.4 billion, or 0.3 percent,
and PCE increased $51.1 billion, or 0.5 percent, based on revised estimates. In sum, the personal savings rate was -1.2%.
The 2006 figure was lower than a negative 0.4 percent in 2005 and was the poorest showing since a negative 1.5 percent savings rate in 1933 during the Great Depression.
Robert Scheer: " Can there be any more egregious example of betraying the oath of office of the president to uphold the Constitution than his deceiving Congress from the very well of the House on the reasons for going to war? The Constitution clearly delegates to Congress, and not to the president, the exclusive power to declare war, and deceiving our representatives in making the case for war is a far more important crime than the perjury charge against Libby."
Christie's International, the world's biggest auction house, is in Dubai ``for the long-term'' and is betting that it will develop into a $250 million market faster than the 20 years it took Hong Kong, according to Jussi Pylkkanen, president of Christie's Europe.
Profit margins reached a record in 2006 after rising in 18 straight quarters. That helped propel a four-year bull market and sent the Standard & Poor's 500 Index to a six-year high. Now, almost half of the S&P 500 companies to report fourth- quarter earnings have said margins shrank or were unchanged.
From EnergyFiles.com: "Oil production in North America peaked in 1973 and has been declining slowly ever since. Although onshore oil output is rapidly diminishing, this is partly offset by growing production from the Gulf of Mexico and from offshore eastern Canada. However offshore output increases are expected to cease by 2013."
Factory activity in the United States contracted in January, the Institute for Supply Management reported Thursday. The ISM index fell to 49.3% in January from 51.4% in December. New orders fell to 50.3% in January from 51.9% in December. The employment index inched higher to 49.5% from 49.4%. The price index rose to 53.0% from 47.5%.
The Energy Department said natural-gas inventories fell 186 billion cubic feet for the week ended Jan. 26. Total stocks now stand at 2.571 trillion cubic feet, up 152 billion cubic feet from the year-ago level, and 454 billion cubic feet above the five-year average, the government data said.
Pending sales of existing U.S. homes advanced a stronger-than-expected 4.9 percent in December, the biggest monthly gain since 2004, a real estate agents' trade association said on Thursday in a report showing some stability in the housing market. The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in December, rose to 112.4 from an upwardly revised level of 107.2 in November. The monthly gain was the biggest since a 6.9 percent advance in the index logged in March 2004. But, for all of 2006, pending sales were down 4.4 percent from 2005.
Between the end of August and the end of November Russia, according to the I.M.F., increased its ‘Official’ holdings of gold by 9.2 tonnes.
Frequently, over the last year, I have written about the rapid decline of oil production at Mexico's Cantarell field. At this time, it might be prudent to keep an eye on Saudi Arabia's Ghawar field, the largest in the world. It accounts for 30% of Saudi Arabia's oil reserves.
Most new oilfields produce almost pure oil or oil mixed with natural gas--with little water. The Saudis inject large quantities of water into the reservoir in order to keep up the pressure for the oil to flow. An increasing amount of sea water is being pumped into the reservoir, and that is beginning to approach a water cut of roughly 35%. This should serve as a danger sign. The Saudis will say everything is fine with this field. I would recommend taking their statements with gallons of water.
March crude fell 84 cents to close at $57.30 a barrel Thursday. March natural gas lost 13.7 cents to end at $7.53 per million.
General Motors posted a 16.4% decline in January U.S. sales to 247,464 vehicles, due mainly to its move away from lower-margin rental fleet sales. GM also cut its production outlook to 1.08 million vehicles in the first quarter, down 3.6% from last month's guidance. Ford Motor Co posted an 18.9% plunge in January U.S. sales to 166,835 cars and trucks, down from 205,671 a year ago due in large part to the move away from fleet sales.
February gold climbed $5.40 to close at $657.40 an ounce. March silver added 1.1%, or 15.5 cents, to finish at $13.725 an ounce, but March copper fell by 6.4 cents to end at $2.5305 a pound.
Wednesday, January 31, 2007
Battle Lines
2/1/07 Battle Lines
Tata Steel of India won the battle to control Anglo-Dutch steelmaker Corus with a £6.2bn ($12.2bn) offer on Wednesday, after more than eight hours of head-to-head bidding against Companhia Siderúrgica Nacional of Brazil.
Total compensation costs for civilian workers increased 0.8 percent from September to December 2006, seasonally adjusted, moderating from the 1.0 percent gain from June to September, the Bureau of Labor Statistics of the U.S. Department of Labor reported. Wages and salaries increased 0.8 percent between September and December, compared with the 0.9 percent gain of the previous quarter. Benefit costs during the quarter rose 1.1 percent, unchanged from the gain of the previous quarter. For state and local government workers, compensation costs increased 1.0 percent from September to December, after increasing 1.4 percent for the quarter ended in September.
The Chicago Purchasing Managers Index fell to 48.8 in January from 51.6 in December, suggesting a contraction in the regional manufacturing sector. Among the components of the index, the prices paid index fell to 54.9 from 56.9 in December. New orders slumped to 46.3 from 56.3. The employment index fell to 42.8 from 48.2.
Spending on private residential construction projects fell for the ninth consecutive month in December, pushing total construction outlays down by 0.4%, the Commerce Department reported Wednesday. Compared with December 2005, outlays in December 2006 were down 1.4%. In December, spending on private projects fell 0.8%. Private housing outlays fell 1.6%. Private nonresidential outlays rose 0.9%. Public construction outlays rose 0.6%.
ElkCorp said Wednesday that Carlyle Group won't revise its takeover offer above the $43.50-a-share bid by Building Materials Corp of America.
The U.S. economy surged ahead at a greater-than-expected 3.5% annual growth rate in the fourth quarter, the Commerce Department estimated Wednesday. Consumer prices fell 0.8% annualized in the quarter, the first quarterly decline in 45 years. The core personal consumption expenditure price index, which excludes food and energy prices, rose 2.1%, slightly above the Federal Reserve's 1% to 2% comfort zone.
Nouriel Roubini: "Clearly the strongest driver of the rebound of growth in Q4 was private consumption that rose at an annualized rate of 4.4%; given that consumption is about 70% of GDP consumption contributed 3.05% to the Q4 growth of 3.5%. Net exports were also another significant contributor to Q4 growth; with export growth accelerating to 10% and imports falling 3.2% the contribution of net exports to growth was 1.64%. The third component that contributed to growth was government spending that grew at a 3.7% (mostly driven by the whopping 11.9% increase in defense spending) and that contributed 0.7% to Q4 growth."
Altria's distribution of about 89 percent of Kraft's shares will be made on March 30 to shareholders of record as of March 16, the company said in a statement.Altria will distribute about 0.7 of a share of Kraft for every one share of Altria. Fractional amounts will be paid in cash. The exact ratio will be determined on the record date.
The American Petroleum Institute reported a rise of 5.7 million barrels in crude supplies for the week ended Jan. 26. The Energy Department had reported a rise of 2.7 million barrels. Motor gasoline supplies were up 1.3 million barrels, the API said, vs. the government's reported rise of 3.8 million. Distillate supplies fell 1 million barrels, the API said, compared to the government's 2.6 million-barrel decline.
"Obesity is increasing at an alarming rate and is a primary factorbehind the growing prevalence of type 2 diabetes, cardiovascular disease, and certain cancers," said Dr. Trevor Hallam, Executive Vice President, Research and Development of Palatin. "We have made considerable progress with the pre- clinical development of our melanocortin receptor-based programmes, especially in the obesity area and we are quite excited to take this programme to the next level with a world-class organisation like AstraZeneca." "This collaboration with AstraZeneca points to the progress we have made with our melanocortin receptor obesity programme and the potential of melanocortin receptors as targets for obesity. It recognises the value Palatin has built and provides the necessary resources to advance the programme. AstraZeneca has a longstanding record of achievement in drug development and commercialisation and their global leadership in relevant therapeutic areas makes them the ideal party to maximise the potential ofour obesity programme," stated Carl Spana, Ph.D., Palatin's President & Chief Executive Officer. "This collaboration highlights the potential ofour internal research and development capabilities."
Tata Steel of India won the battle to control Anglo-Dutch steelmaker Corus with a £6.2bn ($12.2bn) offer on Wednesday, after more than eight hours of head-to-head bidding against Companhia Siderúrgica Nacional of Brazil.
Total compensation costs for civilian workers increased 0.8 percent from September to December 2006, seasonally adjusted, moderating from the 1.0 percent gain from June to September, the Bureau of Labor Statistics of the U.S. Department of Labor reported. Wages and salaries increased 0.8 percent between September and December, compared with the 0.9 percent gain of the previous quarter. Benefit costs during the quarter rose 1.1 percent, unchanged from the gain of the previous quarter. For state and local government workers, compensation costs increased 1.0 percent from September to December, after increasing 1.4 percent for the quarter ended in September.
The Chicago Purchasing Managers Index fell to 48.8 in January from 51.6 in December, suggesting a contraction in the regional manufacturing sector. Among the components of the index, the prices paid index fell to 54.9 from 56.9 in December. New orders slumped to 46.3 from 56.3. The employment index fell to 42.8 from 48.2.
Spending on private residential construction projects fell for the ninth consecutive month in December, pushing total construction outlays down by 0.4%, the Commerce Department reported Wednesday. Compared with December 2005, outlays in December 2006 were down 1.4%. In December, spending on private projects fell 0.8%. Private housing outlays fell 1.6%. Private nonresidential outlays rose 0.9%. Public construction outlays rose 0.6%.
ElkCorp said Wednesday that Carlyle Group won't revise its takeover offer above the $43.50-a-share bid by Building Materials Corp of America.
The U.S. economy surged ahead at a greater-than-expected 3.5% annual growth rate in the fourth quarter, the Commerce Department estimated Wednesday. Consumer prices fell 0.8% annualized in the quarter, the first quarterly decline in 45 years. The core personal consumption expenditure price index, which excludes food and energy prices, rose 2.1%, slightly above the Federal Reserve's 1% to 2% comfort zone.
Nouriel Roubini: "Clearly the strongest driver of the rebound of growth in Q4 was private consumption that rose at an annualized rate of 4.4%; given that consumption is about 70% of GDP consumption contributed 3.05% to the Q4 growth of 3.5%. Net exports were also another significant contributor to Q4 growth; with export growth accelerating to 10% and imports falling 3.2% the contribution of net exports to growth was 1.64%. The third component that contributed to growth was government spending that grew at a 3.7% (mostly driven by the whopping 11.9% increase in defense spending) and that contributed 0.7% to Q4 growth."
Altria's distribution of about 89 percent of Kraft's shares will be made on March 30 to shareholders of record as of March 16, the company said in a statement.Altria will distribute about 0.7 of a share of Kraft for every one share of Altria. Fractional amounts will be paid in cash. The exact ratio will be determined on the record date.
The American Petroleum Institute reported a rise of 5.7 million barrels in crude supplies for the week ended Jan. 26. The Energy Department had reported a rise of 2.7 million barrels. Motor gasoline supplies were up 1.3 million barrels, the API said, vs. the government's reported rise of 3.8 million. Distillate supplies fell 1 million barrels, the API said, compared to the government's 2.6 million-barrel decline.
"Obesity is increasing at an alarming rate and is a primary factorbehind the growing prevalence of type 2 diabetes, cardiovascular disease, and certain cancers," said Dr. Trevor Hallam, Executive Vice President, Research and Development of Palatin. "We have made considerable progress with the pre- clinical development of our melanocortin receptor-based programmes, especially in the obesity area and we are quite excited to take this programme to the next level with a world-class organisation like AstraZeneca." "This collaboration with AstraZeneca points to the progress we have made with our melanocortin receptor obesity programme and the potential of melanocortin receptors as targets for obesity. It recognises the value Palatin has built and provides the necessary resources to advance the programme. AstraZeneca has a longstanding record of achievement in drug development and commercialisation and their global leadership in relevant therapeutic areas makes them the ideal party to maximise the potential ofour obesity programme," stated Carl Spana, Ph.D., Palatin's President & Chief Executive Officer. "This collaboration highlights the potential ofour internal research and development capabilities."
The Chinese stock market is developing into a "bubble" and investors may be behaving irrationally, a leading
Chinese legislator told the Financial Times.
Cheng Siwei, vice-chairman of the National People's Congress, warned the mainland
stock market could be overheating, after a rise of 130 pct last year.
"There is a bubble going on. Investors should be concerned about the
risks," Cheng said in an interview with the Financial Times.
US Air withdraws bid for Delta Air.
Dr. Kurt Richebacher: "Private households in the United States have embarked on their greatest borrowing binge of all time, fostered and facilitated by the rampant house price inflation and a most aggressive financial system. What has been developing in the balance sheets of private households, therefore, is a race between booming "wealth creation" through rising house prices and soaring indebtedness. It appears that indebtedness will
win this race and wealth creation will lose."
February gold climbed $7.80 to close at a two-month high of $652 an ounce in New York.
Additionally, under an accord known as the Washington Agreement, European central banks agreed to limit sales to 500 tons a year. The banks are falling behind schedule with weekly sales, said Dennis Gartman, trader, economist and editor of Suffolk, Virginia-based Gartman Letter.``Some enormous selling lies ahead, or, more plausibly, the banks have sold what they want and are reducing their efforts,'' Gartman said. ``The latter is enormously positive for gold.''
Ford Motor Co. said its U.S. sales of cars and trucks fell about 20 percent this month from a year
earlier, mostly because of a planned reduction in purchases by
rental-car companies.
Former Time magazine reporter Matthew
Cooper testified today that top presidential aide Karl Rove was
the first person to tell him that an Iraq war critic's wife was a
CIA agent. Cooper, testifying in Lewis ``Scooter'' Libby's perjury
trial, also contradicted Libby's account of a conversation the
two had the following day, on July 12, 2003, about war critic
Joseph Wilson's wife, Valerie Plame.
First-time applications for
state unemployment benefits fell by 20,000 to a seasonally adjusted,
two-week low of 307,000 in the week ending Jan. 27, the Labor
Department reported Thursday. The four-week average of initial claims,
considered a better gauge of underlying labor market strength because
it smoothes out often-volatile data, dropped by 4,500 to 304,750, an
11-month low. The number of people collecting unemployment checks rose
by 71,000 to a seasonally adjusted 2.55 million in the week ending Jan.
20. It's a two-week high. The four-week average of continuing claims
rose by 30,500 to 2.48 million, the highest since Dec. 23.
Higher
energy prices dragged down growth in real consumer spending and real
disposable incomes in December, the Commerce Department reported
Thursday. Core inflation, meanwhile, rose an unexpectedly low 0.1%, the
second straight month of relatively stable prices excluding food and
energy. Headline inflation rose 0.4% in December, backed by a 0.9% gain
in prices of nondurable goods, such as energy goods. Real, or
inflation-adjusted, consumer spending rose 0.3%. Real disposable
incomes rose 0.2%, the weakest growth since May.
Vornado Realty Trust raised its bid for office manager Equity Office Properties Trust to $56 a share.
Royal
Dutch Shell cut its 2007 oil and gas production forecast to a range of
3.3 million to 3.5 million barrels of oil equivalent a day. Shell had
previously predicted 2007 production between 3.5 million and 3.6
million barrels of oil a day.
Chandler
Trusts has extended the deadline on an offer for Tribune Co. that had
been scheduled to expire Wednesday, according to a media report. The
Associated Press, citing a person close to the Chandler family,
reported that the extension allows Tribune's board more time to
consider the highest-valued bid for its assets.
Inc. late Wednesday reported fourth-quarter profit nearly tripled,
while sales rose 67%, as the No. 1 Internet search engine captured a
greater share of online ad spending. For the period ended Dec. 31,
Google said net income surged to $1.03 billion, or $3.29 a share, from
$372 million, or $1.22, a year earlier.
March crude closed at $58.14 a barrel, up $1.17 for the session, but
down 6.8% for the month of January. The Energy Department reported the
first fall in distillate supplies in seven week, but also said crude
supplies rose a third week. March natural gas fell 7.3 cents to close
at $7.667 per million British thermal units, though the recent
colder-than-normal temperatures in parts of the U.S. helped the
contract gain 17.9% for the month.
Tuesday, January 30, 2007
Research
1/31/07 Research
I am providing a link for an update on the production, usage, and storage of natural gas. It is an excellent piece of research done by Bentek Energy. I urge the readers to spend some time on this data. Here is the link: http//www.bentekenergy.com/Document/BE
The Conference Board said Tuesday that the consumer confidence index rose to 110.3 in January from a revised 110.0 in December. It's the highest since May 2002. Consumers were more upbeat about the present situation, primarily because of a more favorable job market, said Lynn Franco, head of the consumer research center at the organization. Attitudes about the future declined. "All in all, the index suggests a moderate improvement in the pace of growth in early 2007," Franco said.
China's proven crude reserves dropped 12.33% last year to 2.19 billion tonnes from a year earlier while natural gas reserves surged more than 50% to 2.27 trillion cubic metres, far higher than the 1.15% average increase of world reserves, the National Development and Reform Commission (NDRC) said.
China is the only country that posted a significant dip in crude reserves while Kazakhstan in Central Asia and the African country Angola recorded soaring increases of almost 50%, according to the NDRC report.
On Sunday, Gholamhossein Nozari, head of the state-owned National Iranian Oil Company, told Iran's student news agency ISNA that Iran had signed an initial deal worth $10bn (£5bn) with Repsol and Shell to produce liquefied natural gas from the South Pars field.
The Shell spokeswoman said the upstream side of the project would be developed under a buyback agreement. Shell and Repsol would build the production facilities, which would be owned and operated by an Iranian company. Shell and Repsol would be paid back their costs plus a pre-agreed profit.
More than half the Americans, or 58 percent, say they wish the Bush presidency to be simply over, a sentiment that is almost unanimous among Democrats (86 percent), according to a latest Newsweek poll.
Standard & Poor's on Tuesday raised India's sovereign credit rating to investment grade, citing the country's strong economic outlook, its rising foreign exchange reserves and the improved regulation of its stock and bond markets.
From DailyReckoning: Al-Jazeera reports that Turkey's parliament is giving serious thought to sending troops to occupy Kurdish northern Iraq "for security purposes" — an act that could set off a free-for-all in the Middle East.
Onur Oymen, the deputy chairman of the Opposition Republican People?s Party (CHP), said: "Northern Iraq is the only place in the world where a terrorist group can operate without being pursued."
"If the Iraqis and the US are not prepared to take action over this, then we must."
February gold climbed $1 to close at $644.20 an ounce Tuesday. March silver gained 12.5 cents to close at $13.375 an ounce and March copper rose 1.95 cents to end at $2.5615 a pound.
March natural gas climbed 11.6%, or 80.3 cents, to close Tuesday at $7.74 per million British thermal units. March crude rose 5.5%, or $2.96, to close at $56.97 a barrel.
AstraZeneca and Palatin Technologies announced an exclusive global licensing and research collaboration agreement to discover, develop and commercialise small molecule compounds that target melanocortin receptors.
The collaboration is based on Palatin's melanocortin receptor Obesity programme and includes access to compound libraries, core technologies and expertise in melanocortin receptor drug discovery and development. A near- term objective of the collaboration is to finalise selection of a lead drug candidate for clinical evaluation. Data accumulated from genetic, pharmacological and physiological studies identify the central melanocortin system as a key regulator of energy homeostasis. This offers significant potential for the development of novel treatments for obesity, diabetes and metabolic syndrome.
Under the terms of the agreement, Palatin will receive an upfront payment of $10 million from AstraZeneca and is eligible for milestone payments totalling $300 million, with up to $180 million contingent upon development and regulatory milestones and the balance on achievement of sales targets, together with the payment of stepped royalties on product sales to double digit rates, dependent on sales achieved. AstraZeneca will assume responsibility for product commercialisation, product discovery and development costs, with both companies contributing scientific expertise in the research collaboration.
I am providing a link for an update on the production, usage, and storage of natural gas. It is an excellent piece of research done by Bentek Energy. I urge the readers to spend some time on this data. Here is the link: http//www.bentekenergy.com/Document/BE
The Conference Board said Tuesday that the consumer confidence index rose to 110.3 in January from a revised 110.0 in December. It's the highest since May 2002. Consumers were more upbeat about the present situation, primarily because of a more favorable job market, said Lynn Franco, head of the consumer research center at the organization. Attitudes about the future declined. "All in all, the index suggests a moderate improvement in the pace of growth in early 2007," Franco said.
China's proven crude reserves dropped 12.33% last year to 2.19 billion tonnes from a year earlier while natural gas reserves surged more than 50% to 2.27 trillion cubic metres, far higher than the 1.15% average increase of world reserves, the National Development and Reform Commission (NDRC) said.
China is the only country that posted a significant dip in crude reserves while Kazakhstan in Central Asia and the African country Angola recorded soaring increases of almost 50%, according to the NDRC report.
On Sunday, Gholamhossein Nozari, head of the state-owned National Iranian Oil Company, told Iran's student news agency ISNA that Iran had signed an initial deal worth $10bn (£5bn) with Repsol and Shell to produce liquefied natural gas from the South Pars field.
The Shell spokeswoman said the upstream side of the project would be developed under a buyback agreement. Shell and Repsol would build the production facilities, which would be owned and operated by an Iranian company. Shell and Repsol would be paid back their costs plus a pre-agreed profit.
More than half the Americans, or 58 percent, say they wish the Bush presidency to be simply over, a sentiment that is almost unanimous among Democrats (86 percent), according to a latest Newsweek poll.
Standard & Poor's on Tuesday raised India's sovereign credit rating to investment grade, citing the country's strong economic outlook, its rising foreign exchange reserves and the improved regulation of its stock and bond markets.
From DailyReckoning: Al-Jazeera reports that Turkey's parliament is giving serious thought to sending troops to occupy Kurdish northern Iraq "for security purposes" — an act that could set off a free-for-all in the Middle East.
Onur Oymen, the deputy chairman of the Opposition Republican People?s Party (CHP), said: "Northern Iraq is the only place in the world where a terrorist group can operate without being pursued."
"If the Iraqis and the US are not prepared to take action over this, then we must."
February gold climbed $1 to close at $644.20 an ounce Tuesday. March silver gained 12.5 cents to close at $13.375 an ounce and March copper rose 1.95 cents to end at $2.5615 a pound.
March natural gas climbed 11.6%, or 80.3 cents, to close Tuesday at $7.74 per million British thermal units. March crude rose 5.5%, or $2.96, to close at $56.97 a barrel.
AstraZeneca and Palatin Technologies announced an exclusive global licensing and research collaboration agreement to discover, develop and commercialise small molecule compounds that target melanocortin receptors.
The collaboration is based on Palatin's melanocortin receptor Obesity programme and includes access to compound libraries, core technologies and expertise in melanocortin receptor drug discovery and development. A near- term objective of the collaboration is to finalise selection of a lead drug candidate for clinical evaluation. Data accumulated from genetic, pharmacological and physiological studies identify the central melanocortin system as a key regulator of energy homeostasis. This offers significant potential for the development of novel treatments for obesity, diabetes and metabolic syndrome.
Under the terms of the agreement, Palatin will receive an upfront payment of $10 million from AstraZeneca and is eligible for milestone payments totalling $300 million, with up to $180 million contingent upon development and regulatory milestones and the balance on achievement of sales targets, together with the payment of stepped royalties on product sales to double digit rates, dependent on sales achieved. AstraZeneca will assume responsibility for product commercialisation, product discovery and development costs, with both companies contributing scientific expertise in the research collaboration.
Monday, January 29, 2007
Warning
1/30/07 Warning
Conditions in global financial markets look potentially "unstable", suggesting investors need to prepare for a "repricing" of some assets, Jean-Claude Trichet, president of the European Central Bank, said over the weekend in Davos. The recent explosion of structured financial products and derivatives had made it more difficult for regulators and investors to judge current risks in the financial system, Mr Trichet said. "We are currently seeing elements in global financial markets which are not necessarily stable," Mr Trichet said, pointing to the "low level of rates, spreads and risk premiums" as factors that could trigger a repricing.
Robert Bryce: "Iraq's oil output has plummeted since Bush and the neocons rushed to invade the country in March 2003. But that falling output has been offset, at least partially, by higher prices. And given that Iraq will for good or ill be America's colonial possession in the Persian Gulf for the foreseeable future, higher oil prices are far better than lower prices."
Mexico's average daily production in December was the lowest since November 2000, and well below the 3.39 million barrels a day produced in December 2005. It was also the first time in six years that average daily production has fallen below 3 million barrels daily...After reaching a record 3.38 million barrels a day in 2004, Pemex crude production has been steadily slipping because of decline in heavy crude at its giant Cantarell oilfield...
With output at Cantarell expected to fall by an average of 14 percent a year between now and 2015, Pemex is hoping to replace that production with oil from other projects, including the offshore Ku-Maloob-Zaap and the onshore Chicontepec basin.
China's railway transportation volume accounted for a quarter of the world's total, though the country has only six per cent of global operational railway mileage, the Ministry of Railways has claimed.
China beat all other countries in passenger and cargo traffic last year, with its passenger turnover hitting 662.2 billion person-kilometres and freight turnover reaching 2.87 billion tonne-kilometres, Railway spokesperson Wang Yongping said. The general railway turnover also topped the world with a total of 2.86 trillion tonne-kilometres, 130 billion ton-kilometres more than that of the United States and one and a half times that of Russia.
Meanwhile, the country has only 76,600 kilometres of railways in operation, making the density of its railway transportation the largest in the world.
India has for the first time emerged as the 10th largest trading partner of China in 2006, according to latest Chinese foreign trade statistics.
While the European Union retained the status of China's top trading partner, bilateral trade between China and India hit an all-time record at $24.9 billion last year, exceeding the $20-billion goal two years ahead of target.
Detailed figures are yet to be released. China's total bilateral trade with the EU rose 25.3 per cent to hit $272.3 billion.
China's trade surplus with the European Union soared to 91.66 billion dollars at the end of last year, up 31 per cent from 2005, the commerce ministry said on Sunday.
Senate Intelligence Committee Chairman Jay Rockefeller said he may subpoena Bush administration documents on its controversial domestic surveillance program.
Two U.S. soldiers were killed when their helicopter crashed north of the Shi'ite holy city of Najaf on Sunday, the U.S. military said.
Iraq's deputy prime minister on Sunday said Iran and the United States were using Iraq as a "zone of conflict and competition" and jeopardizing efforts to stabilize the country.
An unsourced report in a French publication said drug titan Sanofi-Aventis -- with whom it sells the blockbuster blood-clot drug Plavix and blood pressure treatment Avapro -- could announce a merger deal with Bristol-Myers within the next few weeks.
Merrill Lynch & Co. Inc. said on Monday it will buy First Republic Bank for $1.8 billion. Merrill Lynch's cash-and-stock offer of $55 a share represents a 44-percent premium over First Republic's closing price on Friday.
Abitibi-Consolidated Inc. and Bowater Inc. announced that they have entered into a definitive agreement to combine in an all-stock merger of equals. The companies stated that the combination will create an operationally and financially stronger company better able to meet changing customer needs, compete more effectively in an increasingly global market, adapt to lower demand for newsprint in North America, and deliver increased value to shareholders. The combined company, which will be called AbitibiBowater Inc., will be the third-largest North American paper company and the eighth largest in the world, they said. It will have pro forma annual revenues of approximately US$7.9 billion or C$9.3 billion, Abitibi and Bowater said.
Kentucky Derby winner Barbaro was euthanized Monday after complications from his breakdown at the Preakness last May. "We just reached a point where it was going to be difficult for him to go on without pain," co-owner Roy Jackson said. "It was the right decision, it was the right thing to do. We said all along if there was a situation where it would become more difficult for him then it would be time."
John Hussman: "A few weeks ago, I noted that historically, we've observed relatively few instances when the S&P 500 traded at a 4-year high, at over 18 times record earnings, with advisory bullishness over 53% and with Treasury bills rising above their level of 6 months earlier. (In addition to the instances noted before, these conditions were also approximately met in December 1961, just prior to a sharp market decline in early 1962).
Of the many abrupt market declines we've observed since 1960, say, where the market dropped by 10% over a period of several weeks, only about half of those instances were preceded by the above conditions. But the outcomes have been unanimously unfavorable when these conditions have been observed...Bayes' Rule currently puts the likelihood of a 5% or deeper market correction beginning within the next few weeks at near certainty, the probability of a 10% correction starting during the next 13 weeks at about 65%, and the probability of a bear market beginning within the next 6 months at over 75%. There is, of course, no such thing as certainty in the financial markets. Suffice it to say that the probabilities aren't good." John Hussman points out that "Essentially, Bayes' Rule tells us that when we evaluate evidence, we should pay special attention to those pieces of evidence that are largely consistent with only one of the possible conclusions."
Rep. Ron Paul: "The Pentagon recently reported that it now spends roughly $8.4 billion per month waging the war in Iraq, while the additional cost of our engagement in Afghanistan brings the monthly total to a staggering $10 billion. Since 2001, Congress has spent more than $500 billion on specific appropriations for Iraq. This sum is not reflected in official budget and deficit figures. Congress has funded the war by passing a series of so-called "supplemental" spending bills, which are passed outside of the normal appropriations process and thus deemed off-budget.
This is fundamentally dishonest: if we're going to have a war, let's face the costs-- both human and economic-- squarely. Congress has no business hiding the costs of war through accounting tricks."
Shanghai has set its 2007 GDP growth target at above nine percent, the lowest target in 15 years, to aim for more balanced and sustainable economic and social development, Mayor Han Zheng said on Sunday.
Tehran, political analyst Hermidas Bavand said U.S. force increases were leading many Iranians to believe Washington is looking to pick a fight, perhaps one that would overshadow America's disastrous intervention in Iraq.
"It's an extremely dangerous situation. I don't think Tehran wants war under any circumstances. But there might be an accidental event that could escalate into a large confrontation," Bavand said. "It could be difficult to contain." As I stated back in 2002, Bush's real eye has been on Iran from the very beginning. Iraq was suppose to be simply an opening round.
Iran's military has more than 500,000 troops and an antiquated collection of ships, aircraft, ballistic missiles and other weapons. U.S. military analysts describe the Iranian military as large but ineffective.
Surrounding Iran are more than 200,000 U.S. troops in bases scattered across Iraq, Afghanistan, Bahrain, Kuwait, Kyrgyzstan, Turkey, Qatar and the United Arab Emirates. The U.S. Navy has a carrier battle group in the region and another on the way, and dozens of U.S. bombers and strike aircraft are arrayed on bases surrounding Iran.
The yen declined to the lowest against the dollar in more than four years after a Japanese government report showed a drop in retail sales last month.
February gold fell $1.50 to close at $643.20 an ounce. March silver was down 12.5 cents to end at $13.25 an ounce and March copper lost 9.5 cents to finish at $2.542 a pound.
Interest rates continue to move higher with the 2-year at 4.99%, the 10-year at 4.90%, and the 30-year at 5%.
According to the EIA, OPEC members’ crude oil production in the fourth quarter averaged 0.7 million barrels per day below third quarter levels, with Saudi Arabia accounting for half of this reduction. Preliminary data suggest commercial inventories in Organization for Economic Cooperation and Development [OECD] countries dropped by about 1 million barrels per day in the fourth quarter, about 0.45 million barrels greater than the normal seasonal decline, leaving inventories at near normal levels at year-end. On a days-of-supply basis, OECD inventories are projected to decline from close to the top of the normal range during the third quarter of 2006 to near the bottom of the normal range by the end of 2007.
Feb. natural gas falls 3.6% to close at $6.917/mln BTUs and this contract will now go off the board with the March contract the new spot month.
March crude was down 2.5%, or $1.41, to close at $54.01/brl.
Conditions in global financial markets look potentially "unstable", suggesting investors need to prepare for a "repricing" of some assets, Jean-Claude Trichet, president of the European Central Bank, said over the weekend in Davos. The recent explosion of structured financial products and derivatives had made it more difficult for regulators and investors to judge current risks in the financial system, Mr Trichet said. "We are currently seeing elements in global financial markets which are not necessarily stable," Mr Trichet said, pointing to the "low level of rates, spreads and risk premiums" as factors that could trigger a repricing.
Robert Bryce: "Iraq's oil output has plummeted since Bush and the neocons rushed to invade the country in March 2003. But that falling output has been offset, at least partially, by higher prices. And given that Iraq will for good or ill be America's colonial possession in the Persian Gulf for the foreseeable future, higher oil prices are far better than lower prices."
Mexico's average daily production in December was the lowest since November 2000, and well below the 3.39 million barrels a day produced in December 2005. It was also the first time in six years that average daily production has fallen below 3 million barrels daily...After reaching a record 3.38 million barrels a day in 2004, Pemex crude production has been steadily slipping because of decline in heavy crude at its giant Cantarell oilfield...
With output at Cantarell expected to fall by an average of 14 percent a year between now and 2015, Pemex is hoping to replace that production with oil from other projects, including the offshore Ku-Maloob-Zaap and the onshore Chicontepec basin.
China's railway transportation volume accounted for a quarter of the world's total, though the country has only six per cent of global operational railway mileage, the Ministry of Railways has claimed.
China beat all other countries in passenger and cargo traffic last year, with its passenger turnover hitting 662.2 billion person-kilometres and freight turnover reaching 2.87 billion tonne-kilometres, Railway spokesperson Wang Yongping said. The general railway turnover also topped the world with a total of 2.86 trillion tonne-kilometres, 130 billion ton-kilometres more than that of the United States and one and a half times that of Russia.
Meanwhile, the country has only 76,600 kilometres of railways in operation, making the density of its railway transportation the largest in the world.
India has for the first time emerged as the 10th largest trading partner of China in 2006, according to latest Chinese foreign trade statistics.
While the European Union retained the status of China's top trading partner, bilateral trade between China and India hit an all-time record at $24.9 billion last year, exceeding the $20-billion goal two years ahead of target.
Detailed figures are yet to be released. China's total bilateral trade with the EU rose 25.3 per cent to hit $272.3 billion.
China's trade surplus with the European Union soared to 91.66 billion dollars at the end of last year, up 31 per cent from 2005, the commerce ministry said on Sunday.
Senate Intelligence Committee Chairman Jay Rockefeller said he may subpoena Bush administration documents on its controversial domestic surveillance program.
Two U.S. soldiers were killed when their helicopter crashed north of the Shi'ite holy city of Najaf on Sunday, the U.S. military said.
Iraq's deputy prime minister on Sunday said Iran and the United States were using Iraq as a "zone of conflict and competition" and jeopardizing efforts to stabilize the country.
An unsourced report in a French publication said drug titan Sanofi-Aventis -- with whom it sells the blockbuster blood-clot drug Plavix and blood pressure treatment Avapro -- could announce a merger deal with Bristol-Myers within the next few weeks.
Merrill Lynch & Co. Inc. said on Monday it will buy First Republic Bank for $1.8 billion. Merrill Lynch's cash-and-stock offer of $55 a share represents a 44-percent premium over First Republic's closing price on Friday.
Abitibi-Consolidated Inc. and Bowater Inc. announced that they have entered into a definitive agreement to combine in an all-stock merger of equals. The companies stated that the combination will create an operationally and financially stronger company better able to meet changing customer needs, compete more effectively in an increasingly global market, adapt to lower demand for newsprint in North America, and deliver increased value to shareholders. The combined company, which will be called AbitibiBowater Inc., will be the third-largest North American paper company and the eighth largest in the world, they said. It will have pro forma annual revenues of approximately US$7.9 billion or C$9.3 billion, Abitibi and Bowater said.
Kentucky Derby winner Barbaro was euthanized Monday after complications from his breakdown at the Preakness last May. "We just reached a point where it was going to be difficult for him to go on without pain," co-owner Roy Jackson said. "It was the right decision, it was the right thing to do. We said all along if there was a situation where it would become more difficult for him then it would be time."
John Hussman: "A few weeks ago, I noted that historically, we've observed relatively few instances when the S&P 500 traded at a 4-year high, at over 18 times record earnings, with advisory bullishness over 53% and with Treasury bills rising above their level of 6 months earlier. (In addition to the instances noted before, these conditions were also approximately met in December 1961, just prior to a sharp market decline in early 1962).
Of the many abrupt market declines we've observed since 1960, say, where the market dropped by 10% over a period of several weeks, only about half of those instances were preceded by the above conditions. But the outcomes have been unanimously unfavorable when these conditions have been observed...Bayes' Rule currently puts the likelihood of a 5% or deeper market correction beginning within the next few weeks at near certainty, the probability of a 10% correction starting during the next 13 weeks at about 65%, and the probability of a bear market beginning within the next 6 months at over 75%. There is, of course, no such thing as certainty in the financial markets. Suffice it to say that the probabilities aren't good." John Hussman points out that "Essentially, Bayes' Rule tells us that when we evaluate evidence, we should pay special attention to those pieces of evidence that are largely consistent with only one of the possible conclusions."
Rep. Ron Paul: "The Pentagon recently reported that it now spends roughly $8.4 billion per month waging the war in Iraq, while the additional cost of our engagement in Afghanistan brings the monthly total to a staggering $10 billion. Since 2001, Congress has spent more than $500 billion on specific appropriations for Iraq. This sum is not reflected in official budget and deficit figures. Congress has funded the war by passing a series of so-called "supplemental" spending bills, which are passed outside of the normal appropriations process and thus deemed off-budget.
This is fundamentally dishonest: if we're going to have a war, let's face the costs-- both human and economic-- squarely. Congress has no business hiding the costs of war through accounting tricks."
Shanghai has set its 2007 GDP growth target at above nine percent, the lowest target in 15 years, to aim for more balanced and sustainable economic and social development, Mayor Han Zheng said on Sunday.
Tehran, political analyst Hermidas Bavand said U.S. force increases were leading many Iranians to believe Washington is looking to pick a fight, perhaps one that would overshadow America's disastrous intervention in Iraq.
"It's an extremely dangerous situation. I don't think Tehran wants war under any circumstances. But there might be an accidental event that could escalate into a large confrontation," Bavand said. "It could be difficult to contain." As I stated back in 2002, Bush's real eye has been on Iran from the very beginning. Iraq was suppose to be simply an opening round.
Iran's military has more than 500,000 troops and an antiquated collection of ships, aircraft, ballistic missiles and other weapons. U.S. military analysts describe the Iranian military as large but ineffective.
Surrounding Iran are more than 200,000 U.S. troops in bases scattered across Iraq, Afghanistan, Bahrain, Kuwait, Kyrgyzstan, Turkey, Qatar and the United Arab Emirates. The U.S. Navy has a carrier battle group in the region and another on the way, and dozens of U.S. bombers and strike aircraft are arrayed on bases surrounding Iran.
The yen declined to the lowest against the dollar in more than four years after a Japanese government report showed a drop in retail sales last month.
February gold fell $1.50 to close at $643.20 an ounce. March silver was down 12.5 cents to end at $13.25 an ounce and March copper lost 9.5 cents to finish at $2.542 a pound.
Interest rates continue to move higher with the 2-year at 4.99%, the 10-year at 4.90%, and the 30-year at 5%.
According to the EIA, OPEC members’ crude oil production in the fourth quarter averaged 0.7 million barrels per day below third quarter levels, with Saudi Arabia accounting for half of this reduction. Preliminary data suggest commercial inventories in Organization for Economic Cooperation and Development [OECD] countries dropped by about 1 million barrels per day in the fourth quarter, about 0.45 million barrels greater than the normal seasonal decline, leaving inventories at near normal levels at year-end. On a days-of-supply basis, OECD inventories are projected to decline from close to the top of the normal range during the third quarter of 2006 to near the bottom of the normal range by the end of 2007.
Feb. natural gas falls 3.6% to close at $6.917/mln BTUs and this contract will now go off the board with the March contract the new spot month.
March crude was down 2.5%, or $1.41, to close at $54.01/brl.
Sunday, January 28, 2007
Less Americans Back Bush
1/28/07 Less Americans Back Bush
According to the latest Newsweek Poll, taken in the days following the
speech, the president's job approval rating hit an all-time low in the
Newsweek Poll at 30 percent. Sixty-one percent of all those polled says
they are dissatisfied with the way things are going in the United States at
this time; just 30 percent are satisfied. Sixty-seven percent of those polled believe Bush's decisions about policy in Iraq and other major areas are influenced more by his personal
beliefs regardless of the facts, while just 22 percent say his decisions
are influenced more by the facts. And 71 percent say Bush will not have
enough support over the next two years to make a difference in getting
things done in Washington; just 21 percent say he will.
Riki Ellison, President of the Missile Defense Advocacy Alliance, announced that the intercept test of the Terminal High Altitude Area Defense system (THAAD) was successful off of the coast of Hawaii at the Pacific Missile Range Facility near Kauai. "This intercept once again validates the United States technical and political will to defeat and
destroy ballistic missiles from rogue nations such as Iran and North
Korea." He informed his 9,000 membership that today's test was another
positive step in the development of the system.
Tank tracker Lloyds Marine Intelligence Unit said Friday that oil exports from the Organization of the Petroleum Exporting Countries fell to less than 23 million barrels a day in December from just under 24 million barrels a day in November, according to a Dow Jones newswire report.
Saudi Arabia, the world's largest crude oil producer and exporter, was the quickest to implement OPEC's production cuts; its exports in December were 1.1 million barrels a day lower than before the OPEC's October call for production cuts.
In a boost to India's prospects in picking up stakes in the coveted Sakhalin-III oil exploration project, Russian President Vladimir Putin Friday asked Indian oil companies to 'deal directly' with their Russian counterparts and assured his government's support for it.
'Indian - companies need to deal directly with Russian companies. We are ready to provide all administrative support for it,' Putin replied when he was asked about India's prospects in the Sakhalin-III.
India has already invested $2.7 billion in the Sakhalin I oil fields where it has 20 per cent stake. India will get an estimated 2.5 million barrels of crude oil annually from the oilfields. The first shipment of oil from this project came in December last year.
USDA Cattle on Feed Report released Friday was generally neutral to somewhat negative. The December placement effort turned out to be somewhat larger than the trade was anticipating. Also last month’s marketing was the smallest since the data series began in 1996. Finally, the January 1 on feed total also represents a new record high. The report showed January 1 on feed at 101 percent, December placements 91 percent, marketed in December 95 percent.
Mike Burk: "The good news is:
• Since 1887 (120 years) the Dow Jones Industrial Average (DJIA) has been up 70% of the time in the coming week (the last 3 trading days of January and the first 2 days of February) during the 3rd year of the Presidential Cycle (next week)...
Most of the technical indicators are direction free. Seasonally the period has been quite strong, but seasonal influences have not had much effect on the market recently. For example, last week the S&P was down for only the 2nd time since 1953 while the mid and small cap indices were up. Right now, there is little to go on but seasonality which has been positive.
I expect the major indices to be higher on Friday February 2 than they were on Friday January 26."
M.A. Nystrom: "It takes a full dollar today to buy what a nickel would have bought in 1913, according to the Fed's own CPI calculator!"
Motley Fool: "While it is easy see that BJ Services was hurt this quarter by a correction in energy prices, the long-term trend that Schlumberger's CEO Andrew Gould is so bullish about also holds true for BJ Services."
Laboring in a war with no discernible front line, more than 770 civilian contractors have died in Iraq since the U.S.-led invasion began in March 2003.
Statistics kept by the Labor Department indicate fatalities among civilian contractors working for American firms escalated rapidly late last year, with at least 301 dying in Iraq in 2006 — including 124 in the final three months.
U.S. military deaths totaled 818 during the year, the Defense Department has reported.
According to the latest Newsweek Poll, taken in the days following the
speech, the president's job approval rating hit an all-time low in the
Newsweek Poll at 30 percent. Sixty-one percent of all those polled says
they are dissatisfied with the way things are going in the United States at
this time; just 30 percent are satisfied. Sixty-seven percent of those polled believe Bush's decisions about policy in Iraq and other major areas are influenced more by his personal
beliefs regardless of the facts, while just 22 percent say his decisions
are influenced more by the facts. And 71 percent say Bush will not have
enough support over the next two years to make a difference in getting
things done in Washington; just 21 percent say he will.
Riki Ellison, President of the Missile Defense Advocacy Alliance, announced that the intercept test of the Terminal High Altitude Area Defense system (THAAD) was successful off of the coast of Hawaii at the Pacific Missile Range Facility near Kauai. "This intercept once again validates the United States technical and political will to defeat and
destroy ballistic missiles from rogue nations such as Iran and North
Korea." He informed his 9,000 membership that today's test was another
positive step in the development of the system.
Tank tracker Lloyds Marine Intelligence Unit said Friday that oil exports from the Organization of the Petroleum Exporting Countries fell to less than 23 million barrels a day in December from just under 24 million barrels a day in November, according to a Dow Jones newswire report.
Saudi Arabia, the world's largest crude oil producer and exporter, was the quickest to implement OPEC's production cuts; its exports in December were 1.1 million barrels a day lower than before the OPEC's October call for production cuts.
In a boost to India's prospects in picking up stakes in the coveted Sakhalin-III oil exploration project, Russian President Vladimir Putin Friday asked Indian oil companies to 'deal directly' with their Russian counterparts and assured his government's support for it.
'Indian - companies need to deal directly with Russian companies. We are ready to provide all administrative support for it,' Putin replied when he was asked about India's prospects in the Sakhalin-III.
India has already invested $2.7 billion in the Sakhalin I oil fields where it has 20 per cent stake. India will get an estimated 2.5 million barrels of crude oil annually from the oilfields. The first shipment of oil from this project came in December last year.
USDA Cattle on Feed Report released Friday was generally neutral to somewhat negative. The December placement effort turned out to be somewhat larger than the trade was anticipating. Also last month’s marketing was the smallest since the data series began in 1996. Finally, the January 1 on feed total also represents a new record high. The report showed January 1 on feed at 101 percent, December placements 91 percent, marketed in December 95 percent.
Mike Burk: "The good news is:
• Since 1887 (120 years) the Dow Jones Industrial Average (DJIA) has been up 70% of the time in the coming week (the last 3 trading days of January and the first 2 days of February) during the 3rd year of the Presidential Cycle (next week)...
Most of the technical indicators are direction free. Seasonally the period has been quite strong, but seasonal influences have not had much effect on the market recently. For example, last week the S&P was down for only the 2nd time since 1953 while the mid and small cap indices were up. Right now, there is little to go on but seasonality which has been positive.
I expect the major indices to be higher on Friday February 2 than they were on Friday January 26."
M.A. Nystrom: "It takes a full dollar today to buy what a nickel would have bought in 1913, according to the Fed's own CPI calculator!"
Motley Fool: "While it is easy see that BJ Services was hurt this quarter by a correction in energy prices, the long-term trend that Schlumberger's CEO Andrew Gould is so bullish about also holds true for BJ Services."
Laboring in a war with no discernible front line, more than 770 civilian contractors have died in Iraq since the U.S.-led invasion began in March 2003.
Statistics kept by the Labor Department indicate fatalities among civilian contractors working for American firms escalated rapidly late last year, with at least 301 dying in Iraq in 2006 — including 124 in the final three months.
U.S. military deaths totaled 818 during the year, the Defense Department has reported.
Saturday, January 27, 2007
Economic Realities
1/27/07 Economic Realities
New-home sales rose 4.8 percent in December to an annual pace of 1.12 million units. The median sales price rose to $235,000 in December from $232,200 in November, as builders cut the number of homes on the market to avoid inventory buildups.
Over the full year 2006, new-home sales dropped 17.3 percent from 2005, the steepest fall in 16 years and the first year-over-year decline after a five-year rally.
Orders for U.S.-made durable goods rose 3.1 percent in December. While much of the gain came from strong demand for Boeing jetliners, other components like machinery and primary metals also posted sharp hikes.
Even excluding volatile transportation orders, which are heavily skewed by aircraft, durable goods orders rose 2.3 percent in December following two monthly declines -- a much stronger performance than Wall Street analysts expected.
In 2006, new durable goods orders rose 7 percent from 2005, marking the third straight annual gain. Shipments for the full year increased 5.6 percent, also the third straight gain.
For the week, gold gained 1.7% to $646.20 and silver 3.9% to $13.44. Copper rallied 4%. March crude gained $2.13 to $55.53. February Gasoline recovered 5.9%, and February Natural Gas gained 4.8%.
Bloomberg : “Surging demand for derivatives is making financial markets more vulnerable to any slowdown in the global economy, said economists and executives at the World Economic Forum. ‘You can easily get liquidity from the market every second for anything,’ said Bank of China Vice President Zhu Min at a panel discussion on the global economy in Davos, Switzerland. ‘We really don’t know what the risks are.’ The use of derivatives grew at the fastest pace in eight years during the first half of 2006 as a glut of cheap money allowed investors to bet more borrowed funds in financial markets.”
Data Quick: "Home-loan defaults in California rose to their highest level in eight years in the fourth quarter amid a slowdown in sales of houses and condominium that made it harder for owners to sell their homes and pay off mortgages. Banks and other lenders sent 37,273 default notices to California homeowners in the fourth quarter, more than double the 15,196 sent a year earlier and up by more than a third from the 27,218 sent in the previous three months."
Buyout firms announced a record $739 billion of leveraged buyouts last year, almost triple the 2005 total.
Doug Noland: "The increasing awareness by holders of inflating quantities of suspect (dollar) Credit instruments that they are being shortchanged should weigh on U.S. markets, and keep in mind that strong U.S. markets have provided major support for our faltering currency. And as the Bubble’s inequitable (re)distribution of wealth gains greater recognition, the strains between the “haves” and the “have nots” – between debtor and creditor – between the U.S. and its highly liquefied competitors for global resources - will surely intensify. The global grab for limited resources should be expected to at some point turn more hostile, providing greater incentive for the U.S. to inflate and for others to aggressively exchange dollar liquidity for more attractive stores of wealth/value."
European money supply growth is the fastest in 17 years. Liquidity liquidity liquidity.
New-home sales rose 4.8 percent in December to an annual pace of 1.12 million units. The median sales price rose to $235,000 in December from $232,200 in November, as builders cut the number of homes on the market to avoid inventory buildups.
Over the full year 2006, new-home sales dropped 17.3 percent from 2005, the steepest fall in 16 years and the first year-over-year decline after a five-year rally.
Orders for U.S.-made durable goods rose 3.1 percent in December. While much of the gain came from strong demand for Boeing jetliners, other components like machinery and primary metals also posted sharp hikes.
Even excluding volatile transportation orders, which are heavily skewed by aircraft, durable goods orders rose 2.3 percent in December following two monthly declines -- a much stronger performance than Wall Street analysts expected.
In 2006, new durable goods orders rose 7 percent from 2005, marking the third straight annual gain. Shipments for the full year increased 5.6 percent, also the third straight gain.
For the week, gold gained 1.7% to $646.20 and silver 3.9% to $13.44. Copper rallied 4%. March crude gained $2.13 to $55.53. February Gasoline recovered 5.9%, and February Natural Gas gained 4.8%.
Bloomberg : “Surging demand for derivatives is making financial markets more vulnerable to any slowdown in the global economy, said economists and executives at the World Economic Forum. ‘You can easily get liquidity from the market every second for anything,’ said Bank of China Vice President Zhu Min at a panel discussion on the global economy in Davos, Switzerland. ‘We really don’t know what the risks are.’ The use of derivatives grew at the fastest pace in eight years during the first half of 2006 as a glut of cheap money allowed investors to bet more borrowed funds in financial markets.”
Data Quick: "Home-loan defaults in California rose to their highest level in eight years in the fourth quarter amid a slowdown in sales of houses and condominium that made it harder for owners to sell their homes and pay off mortgages. Banks and other lenders sent 37,273 default notices to California homeowners in the fourth quarter, more than double the 15,196 sent a year earlier and up by more than a third from the 27,218 sent in the previous three months."
Buyout firms announced a record $739 billion of leveraged buyouts last year, almost triple the 2005 total.
Doug Noland: "The increasing awareness by holders of inflating quantities of suspect (dollar) Credit instruments that they are being shortchanged should weigh on U.S. markets, and keep in mind that strong U.S. markets have provided major support for our faltering currency. And as the Bubble’s inequitable (re)distribution of wealth gains greater recognition, the strains between the “haves” and the “have nots” – between debtor and creditor – between the U.S. and its highly liquefied competitors for global resources - will surely intensify. The global grab for limited resources should be expected to at some point turn more hostile, providing greater incentive for the U.S. to inflate and for others to aggressively exchange dollar liquidity for more attractive stores of wealth/value."
European money supply growth is the fastest in 17 years. Liquidity liquidity liquidity.
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