4/13/07 Reports
The 10 members of the Organization of the Petroleum Exporting Countries bound by the group's output agreements produced an average of 26.54 million barrels per day in March, down 80,000 b/d from February, Platts said late Thursday. Including Iraq and Angola, total OPEC production was 30.11 million b/d, down 70,000 b/d from the prior month, Platts reported.
The International Energy Agency said that world oil output fell by 265 thousand barrels a day in March, to 85.3 million barrels a day, after OPEC supply cuts and OECD production outages.
The IEA said global oil product demand has been revised down to 84.3 million barrels a day in 2006 and 85.8 million barrels a day 2007. For 2006 this is mainly related to improved data in non-OECD countries. Demand in the OECD remained largely unchanged, as a cold snap in North America was offset by milder temperatures in Europe and the Pacific.
Manor Care Inc, the biggest U.S. operator of homes for the elderly, said on Wednesday it was evaluating strategic options, sending its shares up more than 9 percent.Manor Care said on Wednesday that it had hired investment bank JPMorgan Chase & Co.
Medimmune has hired Goldman Sachs to explore a sale of the company.
U.S. import prices jumped a larger-than-expected 1.7% in March as petroleum prices rose sharply, Labor Department data showed. The cost of non-petroleum imports showed a 0.3% gain after a 0.1% rise the previous month and the biggest increase in three months. Export prices rose 0.7% in March as prices for agricultural and nonagricultural goods increased, compared with a forecast for a 0.4% gain.
The number of U.S. workers filing new claims for jobless benefits unexpectedly jumped 19,000 last week, government data on Thursday showed in a report skewed by seasonal layoffs for school holidays.
China's forex reserves approximate $1.2 trillion.
The FT reports cross-border flows from institutional investors into US equities relative to other assets are almost at their lowest point in more than a decade, according to State Street.
A bomb rocked Iraq's parliament building in the heavily fortified Green Zone thursday, killing at least two lawmakers in a stunning security breach in the third month of a U.S.-Iraqi crackdown on violence in the capital, officials said.
Wal-Mart Stores Inc said Thursday that strong sales of groceries helped boost same-store sales 4 percent in March. For the five-week period ended April 6, Wal-Mart same-store sales rose 3.4 percent, while Sam's Club same-store sales were up 7.4 percent. However, the company said that the first quarter will still be a "challenge."
China surpassed the United States as the world's second-largest exporter in the middle of last year, according to figures released Thursday by the World Trade Organization, and the Asian country is pulling further and further ahead. Export growth from China boomed 27 percent last year, out-pacing all other major trading nations, the WTO said
Now some state courts are requiring financial institutions to verify that an account does not contain 100% exempt funds before freezing it, and legal-aid attorneys are bringing lawsuits to force banks to ensure that the money they restrain can legally be garnisheed. "When someone has an account which is exclusively made up of Social Security funds, it's likely these are their only funds," says Margot Saunders, the counsel for the National Consumer Law Center. "When their accounts are frozen, they have no money to pay rent, buy food, transportation or go to the doctor." Although no hard data exist on the amount of exempt funds frozen by creditors, community advocates say it's a serious issue. "This is an exploding problem," says Saunders, noting that legal task forces in several states are working on the problem.
Barry Ritholtz: "It is increasingly apparent from the many economic signals we have seen that business spending is fading, and is unlikely to replace consumer spending anytime soon."
The Chinese government will issue a policy in less than two months' time to regulate the use of natural gas and alleviate a shortage in supply, Thursday's China Securities Journal reports.
Some White House staff wrote e-mail messages about official business on Republican Party accounts, and some may have been wrongly deleted, the administration said on Wednesday. I suggest the Congress begin to delete senior White House staff members, and move up from there. "They say they have not been preserved. I don't believe that!" Patrick Leahy shouted from the Senate floor. "You can't erase e-mails, not today. They've gone through too many servers," said Leahy, D-Vt. "Those e-mails are there, they just don't want to produce them. We'll subpoena them if necessary."
Fiscal fourth-quarter results for defense contractor SAIC Inc. came in better than expected, and analysts say the company is weathering an industry slowdown better than peers.
MSN Money reports as medical costs soar in the U.S., the number of uninsured has swelled, exceeding 46 million, or nearly 16% of Americans, last year, according to Census Bureau statistics. As a result, more and more folks are choosing what's known as medical tourism and heading overseas for surgeries and dental treatments they couldn't otherwise afford. In 2006 alone, an estimated 150,000 Americans traveled abroad for medical care, a number expected to double by next year, according to Josef Woodman, the author of "Patients Beyond Borders: Everybody's Guide to Affordable, World-Class Medical Tourism." Nearly half of those -- around 70,000 -- had medically necessary surgeries such as hip replacements or spinal work, heart surgeries including bypass or valve replacements, and even cancer treatments.
Natural gas in storage rose 23 billion cubic feet in the week ending April 6, the Energy Department said Thursday, and the closing price at the end of the trading day was $7.96.
The dollar fell 0.4% against the euro after dropping as low as $1.3505, the lowest since January 2005.
The International Council of Shopping Centers-UBS same-store sales tally of 53 stores posted a 5.9 percent gain, exceeding estimates for 4 percent to 5 percent. Michael P. Niemira, chief economist at ICSC, said the improving weather and earlier Easter boosted March results by 3 percentage points.
But those temporary factors that helped March results are expected to hurt April's figures by that same amount, according to Niemira. The weather has turned cooler in recent days, stifling sales of spring clothing. Bill Kirk, CEO of Weather Trends International, a weather consultancy for retailers, forecast that it will be the coldest April in 24 years.
In my view, this cold April will also reduce natural gas supplies and help to provide a support for prices, which now are approaching $8 per million cubic feet.
U.S. Senator Russ Feingold introduced legislation on April 10 to effectively end U.S. military involvement in Iraq. The bill, supported by Senate Majority Leader Harry Reid, requires the President to begin safely redeploying U.S. troops from Iraq 120 days from enactment, as required by the emergency supplemental spending bill passed by the Senate. The bill ends funding for the war, with three narrow exceptions, effective March 31, 2008. In addition to Reid, the bill is cosponsored by Senators Barbara Boxer (D-CA), Chris Dodd (D-CT), Ted Kennedy (D-MA), John Kerry (D-MA), Pat Leahy (D-VT), and Sheldon Whitehouse (D-RI). If the President vetoes the emergency supplemental spending bill, Reid has said he will work to ensure Feingold’s bill gets a vote in the Senate before Memorial Day.
Last Fall, under the Freedom of Information Act, the National Security Archive Group, in attempt to make certain that there is not an invasion of privacy for innocent Americans, sued the Justice Department for records that detail how the FBI protects privacy while collecting hundreds of millions of records in its investigative Data Warehouse, which contains 659 million documents! The FBI has requested the court to stop the legal proceedings and give the FBI until February 2013 to comply with the request. I suggest we lock up those who are collecting the data and keep them in the data warehouse until 2013. We wouldn't want them to lose themselves or any any documents in the interim period.
Bo Bronson: "Since July 1958, the monthly RA (Risk Aversion) has ranged 11.7 percentage points from a low of -4.7% at the Sept 1987 stock market high[12] to a high of +7.0% at the previous Supercycle Bear Market low in October 1974. At 1.1% currently, it has only risen to its historical midpoint over the past 49 years. We believe that during the coming, second and final downleg in the current Supercycle Bear Market, the RA will continue rising to at least 7%[13], again causing a ~ 50% decline, this time from the February 20 stock market high. This is typical for the decline from an “irrational complacency,” echo-mania high during Supercycle Bear Markets."
Kenneth Heebner, manager of the top-performing real-estate fund over the past decade, said U.S. home prices may plunge as much as 20 percent because of rising defaults on riskier mortgages. He said "it will be the biggest housing-price decline since the Great Depression."
Here's where some of your tax dollars go. Defense spending totaled $67.8 billion in March and $268.3 billion so far for the year, up 7%. Spending on interest on the public debt totaled $21.3 billion in March and $202.1 billion for the year, up about 4%. Meanwhile, for the fiscal year so far, individual income-tax receipts are up about 11%, while corporate-tax receipts are 18% higher. Payroll taxes are up about 5%. Withheld income taxes are 9% higher; nonwithheld income taxes are up 17%. Do you think you are getting value for your tax dollars? There is too much government in the lives of all Americans.
Michael Kahn: "With most major indexes well below their February peaks, which are respective resistance levels, and volume drying up at a steady pace, the conclusion has to be that the stock market is now running on empty."
Gold for June delivery closed down $2 at $679.70 an ounce on the New York Mercantile Exchange. May silver fell 3.5 cents at $13.855 an ounce, July platinum closed down $1.80 at $1,275.50 an ounce and May copper fell 8.05 cents at $3.5020 a pound. However, June palladium bucked the trend, rising $4.75 at $374.30 an ounce.
An afternoon auction of $6 billion in 10-year Treasury Inflation Protected Securities attracted weak demand, including a very low 18.7% indirect bid.
Bill Gross: "It will not be loan losses that threaten future economic growth, however, but the tightening of credit conditions that are in part a result of those losses. To a certain extent this reluctance to extend credit is a typical response to end-of-cycle exuberance run amok. And if one had to measure this cycle's exuberance on a scale of 1-10, double-digits would be the overwhelming vote. Anyone could get a loan because shabby credits were ultimately being camouflaged within CDOs that in turn were being sold to unsophisticated foreign lenders in need of yield as opposed to ¼% bank deposits (read Japan/Yen carry trade). But there is something else in play now that resembles in part the Carter Administration's Depository Institutions and Monetary Control Act of 1980. Lender fears of potential new regulations can do nothing but begin to restrict additional lending at the margin, as will headlines heralding alleged predatory lending practices in recent years. After doubling over 18 months between 2005 and the first half of 2006, non-traditional loan growth has recently turned negative, and lenders' attitudes are turning decidedly conservative..."
Merck's new pain reliever drug Arcoxia, which was proposed as a successor to Vioxx, was rejected by a federal health advisory panel.
A Dow Chemical executive who was fired after being accused of engaging in unauthorized discussions with third parties about selling the company told CNBC's David Faber that "it never happened."
Ipsco Inc., the Regina-based steel maker, which is operated out of Lisle, Ill., is in talks that could lead to it being sold, a potential transaction one analyst valued at $8.7-billion. A Russian business daily reported that Moscow-based Evraz Group SA, Russia's largest steel maker, is in talks to acquire Ipsco.
The Democrat-led Senate's passage Wednesday of legislation seeking to allow federal funding for cutting-edge embryonic stem cell research sets up another fight with President Bush, who has vowed to veto the bill just as he did in July.
Clark Kerr: “The status quo is the only solution that cannot be vetoed.”
Thursday, April 12, 2007
Wednesday, April 11, 2007
Facts
4/12/07 Facts
For the first time in more than three years, Houston-area home sales fell last month, a possible sign that the housing market's heady days may be coming to an end.
Single-family home sales dropped 8.8 percent in March from the same month in 2006, according to the Houston Association of Realtors.
Teen-wear apparel retailer American Eagle Outfitters said hot sales on spring things powered a 20% jump in same-store sales in March. That was well ahead of the 11.1% projection reached by analysts reporting to Thomson Financial.
Genentech Inc. said its first-quarter net earnings came in at $706 million, or 66 cents a share, compared with $421 million, or 39 cents a share, in the same quarter last year. Revenue in the quarter ended March 31 rose 43%, to $2.84 billion from $1.99 billion. Earnings from continuing operations were 74 a share in the latest three-month period. Analysts, on average, had been looking for a per-share profit of 67 cents on revenue of $2.74 billion according to Thomson Financial. Genentech also backed its forecast for pro forma per-share earnings growth of 25% to 30%.
Minutes from the Federal Reserve's last meeting on interest rates confirmed the central bank's focus on inflation. "The FOMC agreed that further policy firming might prove necessary to foster lower inflation, but in light of increased uncertainty about the outlook for both growth and inflation, the FOMC also agreed that the statement should no longer cite only the possibility of further firming," the minutes said.
Comcast Corp. has agreed to acquire Fandango.
The U.S. federal spent more money in March than in any other month ever, the Treasury reported Wednesday. The federal budget deficit widened to $96.3 billion in March, compared with $85.3 billion last March, the government said.
Gold for June delivery settled up 20 cents at $681.70 an ounce on the New York Mercantile Exchange. May silver fell 4 cents to $13.89 an ounce. July platinum closed up $7.70 at $1,281.30 an ounce, June palladium rose $6.10 at $369.55 an ounce and May copper ended up 5.65 cents at $3.5825 a pound.
The American Petroleum Institute reported a rise of 1.97 million barrels in crude supplies for the week ended April 6. The Energy Department reported an increase of 0.7 million barrels. Motor gasoline supplies fell 3.2 million barrels, API said. The government reported a drop of 5.5 million barrels. Distillate supplies fell 443,000 barrels, API said, while the government reported a rise of 100,000 barrels.
On Wednesday, it snowed in Chicago, Milwaukee, and parts of Minnesota.
U.S. home prices will probably fall this year for the first time in at least 38 years, the National Association of Realtors said Wednesday. In its monthly housing outlook, the real estate industry group said tighter lending standards will cut into home sales even further than it had been projecting, driving prices lower. Median sales prices of existing homes are now projected to fall 0.7% in 2007 before a modest 1.6% gain in 2008, the realtors said. Since the realtors began tracking prices of single-family existing homes in 1968, the smallest price gain was 2.0% in 2006. The average gain has been 6.5%. Sales of existing homes are expected to fall 2.2% in 2007, while sales of new homes will drop 14.1%, the realtors project.
For the first time since late in December, BJ Services traded above $30. The April 30 calls traded over 8,000 contracts compared with an open interest of about 22,000 contracts.
RIM revealed that an informal inquiry by the Securities and Exchange Commission into past stock-option grants has been upgraded to a formal investigation.
The International Monetary Fund cut its forecast for U.S. economic growth in 2007 to 2.2 percent, the slowest expansion in five years, on a weakening housing market.
US Army soldiers in Iraq will now be required to serve 15-month tours so the Pentagon can maintain the levels needed to fight the insurgency and try to secure the country, US Defence Secretary Robert Gates said Wednesday.
An accord on energy-sector cooperation was outlined in a statement issued at the ministerial level as part of the Japan/China summit process. Japan indicated that the accord could result in a transfer of technology to Beijing from Tokyo. The development of the nuclear energy sector in China was also placed within the ambit of this accord.
Trade volume between China and Japan hit a record US$211.3 billion in 2006, accounting for 17.2 percent of Japan's overall foreign trade, and China is expected to surpass the United States to become Japan's largest trade partner in 2007, said a senior official from the Beijing office of the Japan External Trade Organization (JETRO).
China's imports from Japan increased 15.6 percent in 2006, compared with 8.8 percent in 2005. Japan expanded the exports of electronic components, vehicles and automotive parts in 2006 for China to provide more products for the world market to meet rising demand. Non-ferrous metals and plastics from Japan were also popular in China.
Nestle SA is expected to acquire Novartis AG's baby-food unit Gerber for about $5 billion, the Wall Street Journal reported on its Web site on Thursday, citing people familiar with the matter.
For the first time in more than three years, Houston-area home sales fell last month, a possible sign that the housing market's heady days may be coming to an end.
Single-family home sales dropped 8.8 percent in March from the same month in 2006, according to the Houston Association of Realtors.
Teen-wear apparel retailer American Eagle Outfitters said hot sales on spring things powered a 20% jump in same-store sales in March. That was well ahead of the 11.1% projection reached by analysts reporting to Thomson Financial.
Genentech Inc. said its first-quarter net earnings came in at $706 million, or 66 cents a share, compared with $421 million, or 39 cents a share, in the same quarter last year. Revenue in the quarter ended March 31 rose 43%, to $2.84 billion from $1.99 billion. Earnings from continuing operations were 74 a share in the latest three-month period. Analysts, on average, had been looking for a per-share profit of 67 cents on revenue of $2.74 billion according to Thomson Financial. Genentech also backed its forecast for pro forma per-share earnings growth of 25% to 30%.
Minutes from the Federal Reserve's last meeting on interest rates confirmed the central bank's focus on inflation. "The FOMC agreed that further policy firming might prove necessary to foster lower inflation, but in light of increased uncertainty about the outlook for both growth and inflation, the FOMC also agreed that the statement should no longer cite only the possibility of further firming," the minutes said.
Comcast Corp. has agreed to acquire Fandango.
The U.S. federal spent more money in March than in any other month ever, the Treasury reported Wednesday. The federal budget deficit widened to $96.3 billion in March, compared with $85.3 billion last March, the government said.
Gold for June delivery settled up 20 cents at $681.70 an ounce on the New York Mercantile Exchange. May silver fell 4 cents to $13.89 an ounce. July platinum closed up $7.70 at $1,281.30 an ounce, June palladium rose $6.10 at $369.55 an ounce and May copper ended up 5.65 cents at $3.5825 a pound.
The American Petroleum Institute reported a rise of 1.97 million barrels in crude supplies for the week ended April 6. The Energy Department reported an increase of 0.7 million barrels. Motor gasoline supplies fell 3.2 million barrels, API said. The government reported a drop of 5.5 million barrels. Distillate supplies fell 443,000 barrels, API said, while the government reported a rise of 100,000 barrels.
On Wednesday, it snowed in Chicago, Milwaukee, and parts of Minnesota.
U.S. home prices will probably fall this year for the first time in at least 38 years, the National Association of Realtors said Wednesday. In its monthly housing outlook, the real estate industry group said tighter lending standards will cut into home sales even further than it had been projecting, driving prices lower. Median sales prices of existing homes are now projected to fall 0.7% in 2007 before a modest 1.6% gain in 2008, the realtors said. Since the realtors began tracking prices of single-family existing homes in 1968, the smallest price gain was 2.0% in 2006. The average gain has been 6.5%. Sales of existing homes are expected to fall 2.2% in 2007, while sales of new homes will drop 14.1%, the realtors project.
For the first time since late in December, BJ Services traded above $30. The April 30 calls traded over 8,000 contracts compared with an open interest of about 22,000 contracts.
RIM revealed that an informal inquiry by the Securities and Exchange Commission into past stock-option grants has been upgraded to a formal investigation.
The International Monetary Fund cut its forecast for U.S. economic growth in 2007 to 2.2 percent, the slowest expansion in five years, on a weakening housing market.
US Army soldiers in Iraq will now be required to serve 15-month tours so the Pentagon can maintain the levels needed to fight the insurgency and try to secure the country, US Defence Secretary Robert Gates said Wednesday.
An accord on energy-sector cooperation was outlined in a statement issued at the ministerial level as part of the Japan/China summit process. Japan indicated that the accord could result in a transfer of technology to Beijing from Tokyo. The development of the nuclear energy sector in China was also placed within the ambit of this accord.
Trade volume between China and Japan hit a record US$211.3 billion in 2006, accounting for 17.2 percent of Japan's overall foreign trade, and China is expected to surpass the United States to become Japan's largest trade partner in 2007, said a senior official from the Beijing office of the Japan External Trade Organization (JETRO).
China's imports from Japan increased 15.6 percent in 2006, compared with 8.8 percent in 2005. Japan expanded the exports of electronic components, vehicles and automotive parts in 2006 for China to provide more products for the world market to meet rising demand. Non-ferrous metals and plastics from Japan were also popular in China.
Nestle SA is expected to acquire Novartis AG's baby-food unit Gerber for about $5 billion, the Wall Street Journal reported on its Web site on Thursday, citing people familiar with the matter.
Tuesday, April 10, 2007
Commodities
4/11/07 Commodities
Jim Rogers: "We are in a bull market for commodities because supply and demand got terribly out of whack years ago, and they are still out of whack. I also wouldn't call it a theory. Nobody has discovered a gigantic oil field for thirty years. That's not a theory; that's a basic fact. In the meantime, demand for oil has been going up for many years. That's not a theory, either; that's a simple fact. Likewise, there has been one lead mine open in the world for the past twenty years, and the last lead smelter was built in the U.S. in 1979. I could continue: the number of acres devoted to wheat farming has been declining for 20 years. Those are simple facts that lead me--and, I think, any rational person--to conclude that we're in a bull market for commodities that has a ways to go."
United Rentals said it will explore strategic alternatives to enhance shareholder value, including a possible sale of the company.
D.R. Horton Inc. said second-quarter net sales orders fell 37% to 9,983 homes from 15,771 homes a year earlier. The value of net sales orders declined 41% to $2.6 billion from last year's $4.4 billion. The cancellation rate was "essentially unchanged" at 32%
Dow Chemical Co. said in a statement late Monday it "has had no discussion about a leveraged buyout."
The Blue Chip Economic Indicators panel of forecasters said they expect U.S. gross domestic product to expand at a rate of 2.3 percent in 2007, the slowest growth since 2002. The group in March had predicted growth at a rate of 2.5 percent.
"There's no question the credit problems we've seen in sub-prime are blending into Alt-A," said analyst Matthew Howlett of Fox-Pitt Kelton Inc. "It's reflective of the poor underwriting that has gone on in this sector."
Bloomberg reported China's trade surplus almost doubled in the first quarter, adding to friction as the U.S. takes complaints against its second-largest trading partner to the World Trade Organization. The surplus widened to $46.4 billion from $23.3 billion a year earlier, the customs bureau said on its Web site today. However, the March gap was $6.87 billion, smaller than economists expected.
WTRG Economics explained the large decline in the price of crude on Monday. An oversupply at the storage hub in Cushing, Okla., while localized, had a disproportionate effect on prices, Citigroup Global Markets energy analyst Tim Evans said. Because the hub serves as a delivery point for oil, the facility is the Achilles' heel for the petroleum market, he said. As it nears capacity, dealers have no place to store more oil should they want to take advantage of low prices on the May futures contract, which expires April 20, Evans said.
It would be wise to stay focused on the spread between crude in the U.S. and Brent oil now trading above $67 a barrel. That spread will narrow.
The New York Times reports that a Canadian pension fund and other financial firms are working on a $45 billion takeover bid for BCE, parent of BellCanada.
Brad Setser: "The US “exported” $87b of long-term Treasuries, $83b of long-term Agencies, $23 of long-term corporate debt to China between the end of June 2005 and the end of June 2006. During that period, the US exported $48b of goods to China. No wonder many on Wall Street like an unbalanced world …"
Rep. Ron Paul: "The greatest threat facing America today is not terrorism, or foreign economic competition, or illegal immigration. The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation. It is this one-two punch-- Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference-- that threatens to impoverish us by further destroying the value of our dollars. The Fed's inflationary policies hurt older people the most. Older people generally rely on fixed incomes from pensions and Social Security, along with their savings. Inflation destroys the buying power of their fixed incomes, while low interest rates reduce any income from savings. So while Fed policies encourage younger people to overborrow because interest rates are so low, they also punish thrifty older people who saved for retirement."
Here is a link to an article in the NY Times on Palatin:
http://www.nytimes.com/2007/04/10/scienc...
My readers are probably bored by all the mentions I have made of Palatin over the past two years and frustrated by the fact that the stock has traded at $1.75 to $4 during this time. At the outset, I said this was a 3 to 5 year hold. It takes quite some time for a drug to go through adequate trials and document research data. Consider the case of Dendreon. Many a shareholder lost faith after 5 years.
There is no question in my mind that Palatin's future has more than excellent potential. Patience will be rewarded.
George Ure provided the following: "A top Constitutional scholar from Princeton who gave a televised speech that slammed President George W. Bush's executive overreach was recently told that he had been added to the Transportation Security Administration's terrorist watch list. He shared his experience this weekend at the law blog Balkinization. Walter F. Murphy, the McCormick Professor of Jurisprudence, Emeritus, at Princeton University, attempted to check his luggage at the curbside in Albuquerque before boarding a plane to Newark, New Jersey. Murphy was told he could not use the service. "I was denied a boarding pass because I was on the Terrorist Watch list," he said. When inquiring with a clerk why he was on the list, Murphy was asked if he had participated in any peace marches."
From The Economist: "Shiites in Iraqi demonstrated en masse against the United States on the fourth anniversary of Saddam Hussein's fall. German commentators are pessimistic about the future of the country, predicting further unrest and even civil war.
Monday marked the fourth anniversary of the fall of Saddam Hussein. But instead of celebrations, the tone in Iraq was set by angry anti-American protests."
A German study suggests there is evidence that cocoa but not tea is linked to blood pressure reduction. The study is published in the American Medical Association journal Archives of Internal Medicine.
Robert Parry: "What makes George W. Bush and Dick Cheney such extraordinary threats to the future of American democracy is their readiness to tell half-truths and outright lies consistently without any apparent fear of accountability. While other politicians might spin some facts in a policy debate or tell a fib about a personal indiscretion, President Bush and Vice President Cheney act as if they have the power and the right to manufacture reality itself, often on matters of grave significance that bear on war and peace or the future of the nation. Even in the face of growing public skepticism, Bush and Cheney continue to invent new lies and retell old ones, seemingly with the goal of at least keeping their gullible right-wing "base" behind the faux reality depicted on Fox News, the Rush Limbaugh radio show and other right-wing media outlets."
On April 5th, Beltway pundit Joe Klein wrote that the Bush Administration is in “epic collapse.” According to Klein, the three latest developments from the White House – the showdown on Iraq, the scandal at Walter Reed Hospital and the firing of the eight U.S. Attorneys – “precisely illuminate the three qualities that make this Administration one of the worst in American history: arrogance (Iraq), incompetence (Walter Reed) and cynicism (the U.S. Attorneys).”
Crude oil for May delivery closed up 38 cents at $61.89 a barrel on the New York Mercantile Exchange. A surge in natural-gas futures, which followed comments from the U.S. Department of Energy that demand would remain strong through the summer, also boosted energy prices. In fact, the U.S. Department of Energy said it expected to see natural-gas prices rising 18% over last summer. May natural-gas futures rose 32.3 cents at $7.869 per million British thermal units, and reached a 5-week high of $7.938 per million BTUs in intraday trading. May heating oil ended up 4.04 cents at $1.8561 a gallon.
The dollar fell across the board Tuesday, touching a two-year low against the euro amid concerns over the U.S. housing market and rising trade tensions with China.
CNBC mentioned that the job cuts at Citigroup could total 45,000.
Bloomberg reported copper prices in New York rose to the highest in almost six months on signs of surging demand from China, the world's biggest consumer of the metal. China's imports of copper and copper products rose 61 percent from a year earlier to 307,740 metric tons in March, the highest ever. Booming demand from China, the world's fastest- growing major economy, has sent prices soaring 43 percent since early February.
Jim Rogers: "We are in a bull market for commodities because supply and demand got terribly out of whack years ago, and they are still out of whack. I also wouldn't call it a theory. Nobody has discovered a gigantic oil field for thirty years. That's not a theory; that's a basic fact. In the meantime, demand for oil has been going up for many years. That's not a theory, either; that's a simple fact. Likewise, there has been one lead mine open in the world for the past twenty years, and the last lead smelter was built in the U.S. in 1979. I could continue: the number of acres devoted to wheat farming has been declining for 20 years. Those are simple facts that lead me--and, I think, any rational person--to conclude that we're in a bull market for commodities that has a ways to go."
United Rentals said it will explore strategic alternatives to enhance shareholder value, including a possible sale of the company.
D.R. Horton Inc. said second-quarter net sales orders fell 37% to 9,983 homes from 15,771 homes a year earlier. The value of net sales orders declined 41% to $2.6 billion from last year's $4.4 billion. The cancellation rate was "essentially unchanged" at 32%
Dow Chemical Co. said in a statement late Monday it "has had no discussion about a leveraged buyout."
The Blue Chip Economic Indicators panel of forecasters said they expect U.S. gross domestic product to expand at a rate of 2.3 percent in 2007, the slowest growth since 2002. The group in March had predicted growth at a rate of 2.5 percent.
"There's no question the credit problems we've seen in sub-prime are blending into Alt-A," said analyst Matthew Howlett of Fox-Pitt Kelton Inc. "It's reflective of the poor underwriting that has gone on in this sector."
Bloomberg reported China's trade surplus almost doubled in the first quarter, adding to friction as the U.S. takes complaints against its second-largest trading partner to the World Trade Organization. The surplus widened to $46.4 billion from $23.3 billion a year earlier, the customs bureau said on its Web site today. However, the March gap was $6.87 billion, smaller than economists expected.
WTRG Economics explained the large decline in the price of crude on Monday. An oversupply at the storage hub in Cushing, Okla., while localized, had a disproportionate effect on prices, Citigroup Global Markets energy analyst Tim Evans said. Because the hub serves as a delivery point for oil, the facility is the Achilles' heel for the petroleum market, he said. As it nears capacity, dealers have no place to store more oil should they want to take advantage of low prices on the May futures contract, which expires April 20, Evans said.
It would be wise to stay focused on the spread between crude in the U.S. and Brent oil now trading above $67 a barrel. That spread will narrow.
The New York Times reports that a Canadian pension fund and other financial firms are working on a $45 billion takeover bid for BCE, parent of BellCanada.
Brad Setser: "The US “exported” $87b of long-term Treasuries, $83b of long-term Agencies, $23 of long-term corporate debt to China between the end of June 2005 and the end of June 2006. During that period, the US exported $48b of goods to China. No wonder many on Wall Street like an unbalanced world …"
Rep. Ron Paul: "The greatest threat facing America today is not terrorism, or foreign economic competition, or illegal immigration. The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation. It is this one-two punch-- Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference-- that threatens to impoverish us by further destroying the value of our dollars. The Fed's inflationary policies hurt older people the most. Older people generally rely on fixed incomes from pensions and Social Security, along with their savings. Inflation destroys the buying power of their fixed incomes, while low interest rates reduce any income from savings. So while Fed policies encourage younger people to overborrow because interest rates are so low, they also punish thrifty older people who saved for retirement."
Here is a link to an article in the NY Times on Palatin:
http://www.nytimes.com/2007/04/10/scienc...
My readers are probably bored by all the mentions I have made of Palatin over the past two years and frustrated by the fact that the stock has traded at $1.75 to $4 during this time. At the outset, I said this was a 3 to 5 year hold. It takes quite some time for a drug to go through adequate trials and document research data. Consider the case of Dendreon. Many a shareholder lost faith after 5 years.
There is no question in my mind that Palatin's future has more than excellent potential. Patience will be rewarded.
George Ure provided the following: "A top Constitutional scholar from Princeton who gave a televised speech that slammed President George W. Bush's executive overreach was recently told that he had been added to the Transportation Security Administration's terrorist watch list. He shared his experience this weekend at the law blog Balkinization. Walter F. Murphy, the McCormick Professor of Jurisprudence, Emeritus, at Princeton University, attempted to check his luggage at the curbside in Albuquerque before boarding a plane to Newark, New Jersey. Murphy was told he could not use the service. "I was denied a boarding pass because I was on the Terrorist Watch list," he said. When inquiring with a clerk why he was on the list, Murphy was asked if he had participated in any peace marches."
From The Economist: "Shiites in Iraqi demonstrated en masse against the United States on the fourth anniversary of Saddam Hussein's fall. German commentators are pessimistic about the future of the country, predicting further unrest and even civil war.
Monday marked the fourth anniversary of the fall of Saddam Hussein. But instead of celebrations, the tone in Iraq was set by angry anti-American protests."
A German study suggests there is evidence that cocoa but not tea is linked to blood pressure reduction. The study is published in the American Medical Association journal Archives of Internal Medicine.
Robert Parry: "What makes George W. Bush and Dick Cheney such extraordinary threats to the future of American democracy is their readiness to tell half-truths and outright lies consistently without any apparent fear of accountability. While other politicians might spin some facts in a policy debate or tell a fib about a personal indiscretion, President Bush and Vice President Cheney act as if they have the power and the right to manufacture reality itself, often on matters of grave significance that bear on war and peace or the future of the nation. Even in the face of growing public skepticism, Bush and Cheney continue to invent new lies and retell old ones, seemingly with the goal of at least keeping their gullible right-wing "base" behind the faux reality depicted on Fox News, the Rush Limbaugh radio show and other right-wing media outlets."
On April 5th, Beltway pundit Joe Klein wrote that the Bush Administration is in “epic collapse.” According to Klein, the three latest developments from the White House – the showdown on Iraq, the scandal at Walter Reed Hospital and the firing of the eight U.S. Attorneys – “precisely illuminate the three qualities that make this Administration one of the worst in American history: arrogance (Iraq), incompetence (Walter Reed) and cynicism (the U.S. Attorneys).”
Crude oil for May delivery closed up 38 cents at $61.89 a barrel on the New York Mercantile Exchange. A surge in natural-gas futures, which followed comments from the U.S. Department of Energy that demand would remain strong through the summer, also boosted energy prices. In fact, the U.S. Department of Energy said it expected to see natural-gas prices rising 18% over last summer. May natural-gas futures rose 32.3 cents at $7.869 per million British thermal units, and reached a 5-week high of $7.938 per million BTUs in intraday trading. May heating oil ended up 4.04 cents at $1.8561 a gallon.
The dollar fell across the board Tuesday, touching a two-year low against the euro amid concerns over the U.S. housing market and rising trade tensions with China.
CNBC mentioned that the job cuts at Citigroup could total 45,000.
Bloomberg reported copper prices in New York rose to the highest in almost six months on signs of surging demand from China, the world's biggest consumer of the metal. China's imports of copper and copper products rose 61 percent from a year earlier to 307,740 metric tons in March, the highest ever. Booming demand from China, the world's fastest- growing major economy, has sent prices soaring 43 percent since early February.
Monday, April 09, 2007
Heating Up
4/10/07 Heating Up
Warren Buffett's Berkshire Hathaway has bought large stakes in two other North American railroad companies besides Burlington Northern Santa Fe, CNBC's Liz Claman has learned. "I confirmed with Warren Buffett that aside from Burlington Northern, Berkshire Hathaway has bought large stakes--one of $700 millioin and another for slightly less--in two North American railroad companies," Claman said. "He declined to say which ones." These are rumored to be CSX and Union Pacific.
The WSJ noted prices of farm goods are climbing -- in part because of demand for crop-based fuels -- pushing up food prices around the world and creating a new source of inflationary pressure.
According to the Lundberg Survey, nationwide the average price of regular unleaded gas has risen by 18 cents to $2.89 over the last two weeks.
According to Bloomberg, Mirant Corp., a U.S. electricity producer that emerged from bankruptcy last year, said it may seek a buyer. Also among the strategic alternatives under consideration by the board include returning ``excess cash'' from asset sales to shareholders, Mirant said in a statement today. The Atlanta-based company has a market value of $10.4 billion based on the closing share price on April 5. Mirant and Dynegy Inc. were identified by investors and analysts as being among potential takeover targets after Kohlberg Kravis & Co. agreed to acquire Texas electricity producer TXU Corp. for $44 billion.
Six American soldiers were killed in attacks in Iraq, the military said, as Shiites gathered to mark the fourth anniversary of the fall of Baghdad amid calls for more attacks on U.S. forces.
Airbus delivered 115 planes to customers in Q1. Boeing delivered 106.
John Hussman: "While the S&P 500 has gained just 4% from its March lows on a weekly closing basis, it is clear that investors and market analysts now view the recent market correction as ancient history. The Investment Intelligence figures on advisory sentiment have shifted clearly to the bullish camp, with 50.6% of advisors bullish and 26.3% bearish. Meanwhile, valuations remain rich, the yield curve remains inverted (10 year vs. 3-month Treasury yields) and interest rates are now in fairly uniformly uptrends. I cannot stress enough that the most violent market declines have always emerged from conditions of rich valuations, elevated bullishness, overbought price trends, and upward pressures on interest rates. That doesn't mean that major losses must by necessity follow present conditions, but in the face of the historical tendency for deep losses to emerge in situations like this, it would be unwise to establish an investment position that relies on continued market strength...Analysts are already slashing expectations for earnings growth. As the New York Times noted last week, analyst expectations at the beginning of 2007 were for first-quarter earnings to post year-over-year growth of 8.7%. Current estimates have been cut to an expectation of just 3.3% growth. Second quarter growth is now projected to be just 3.5% year-over-year, with full-year growth estimates down to 6.3% (effectively building rapid growth expectations into the second half to compensate). If investors no longer have hopes for a near-term easing from the Fed, nor hopes for rapid earnings growth, the only remaining notion is the belief that stocks are appropriately priced on the basis of “forward operating earnings.” As I've emphasized in recent comments, this belief is fiction."
Daily Reckoning: "The U.S. dollar, in 2007, is worth only about 20 cents…compared to the dollar of 1971. And lately, there is reason to think the incline will become even steeper. The U.S. government's official debt is increasing at a record rate of $80 million every hour. Dollar-based credits and obligations are piling up outside of the United States (as measured by the trade deficit) at the rate of $2 billion every day. And all over the world, "Dark Pools" of liquidity threaten to turn the dollar's descent into a giant water slide. One fraud leads to another. Gradually, slowly, unwittingly we get so deep into them that we can't see out. And in this swamp of mendacity, the truth seems out of place, like an honest man in a Senate race. We find, for example, that "Sub-prime trickles down to area businesses," according to the Orange County Register. Well, what did you expect, dear reader? Standards are falling everywhere…and nobody's money is safe."
Tim Wood: "I look at probability and based upon those probabilities neither the June/July 2006 low nor the March 2007 low have measured up to the statistical norms that have occurred at every 4-year cycle low since 1896."
Roger Ehrenberg: "Either Goldman trades at a mere 50% of its fair market value or Fortress (and, shortly, Blackstone) are grossly overvalued."
Advanced Micro Devices Inc. expects revenue of about $1.225 billion for the first quarter ended March 31, and said revenue fell sharply on a quarter-over-quarter basis for its Computing Solutions' business due to lower overall average selling prices and significantly lower unit sales, especially in its resale sales channel. The current average estimate of analysts polled by Thomson Financial is for a loss of 30 cents a share in the March period on revenue of about $1.55 billion. Advanced Micro also said it plans to restructure its business in an effort to lower its operating costs. It's targeting a reduction a $500 million in capital spending in 2007. The company will also "significantly reduce" discretionary expenses and limit hiring to critical positions.
MedImmune Inc. expects first-quarter earnings, excluding stock-based compensation expenses, to rise to 62 to 67 cents a share, from 23 cents a share a year earlier. Analysts surveyed by Thomson Financial had been expecting earnings of 50 cents a share, on average. The company said revenue grew 11% to 12%, and net income margin more than doubled. The company said it expects first-quarter sales for Synagis to grow 9% to 10%.
"Now we are entering the mass production of centrifuges and starting to launch industrial scale enrichment, another step toward the flourishing of Islamic Iran," Vice President Gholamreza Aghazadeh said at a ceremony at Natanz.
Bloomberg reported Farallon Capital Management LLC, the fifth largest U.S. hedge-fund manager, is negotiating to buy the manufactured home community business of Affordable Residential Communities Inc., for approximately $1.8 billion.
People aware of private equity interests say Dow Chemical has told them "not to bother" approaching the company, CNBC's David Faber reported.
Ali Allawi: "The corroded and corrupt state of Saddam was replaced by the corroded, inefficient, incompetent and corrupt state of the new order."
Allawi writes that the Americans' "insipid retelling of `success' stories" merely hid "the huge black hole that lay underneath."
Martin Sieff: "After four years of war, 3,200 American deaths, 23,000 U.S. troops wounded and possibly in excess of 100,000 Iraqis killed, U.S. policymakers are now making what may prove to be their worst mistake yet: They may be on a new collision course with Moqtada al-Sadr."
Duke University Medical Center reported that Forskolin, an herbal extract, has the potential along with antibiotics to kill the bacteria which is the main cause of infections in the bladder.
Marathon Oil Corp. said its first quarter will likely be marked by lower selling prices for crude oil and natural gas. The company also expects weaker sales volume of refined products, compared with the prior-year period.
Crude oil for May delivery closed down $2.77, or 4%, at $61.51 a barrel on the New York Mercantile Exchange. May natural-gas futures fell 6.1 cents at $7.546 per million British thermal units, while May heating oil fell 4.52 cents at $1.8157 a gallon.
Gold for June delivery ended down $2.50 at $676.90 an ounce on the New York Mercantile Exchange. May silver ended down 7 cents at $13.81 an ounce, while May copper rose 12.90 cents at $3.5060 a pound. July platinum fell $1.60 at $1,264.30 an ounce, while June palladium rose $1.60 at $358.0 an ounce.
My best ideas for Monday were to sell the following puts:
WCI Jan 08 with a 15 strike price for $1 and CSX Jan 08 with a strike price of
27.50 for 35 cents. Just a note to state that I sold both of these yesterday for the prices mentioned. I only recommend what I would do for myself.
Warren Buffett's Berkshire Hathaway has bought large stakes in two other North American railroad companies besides Burlington Northern Santa Fe, CNBC's Liz Claman has learned. "I confirmed with Warren Buffett that aside from Burlington Northern, Berkshire Hathaway has bought large stakes--one of $700 millioin and another for slightly less--in two North American railroad companies," Claman said. "He declined to say which ones." These are rumored to be CSX and Union Pacific.
The WSJ noted prices of farm goods are climbing -- in part because of demand for crop-based fuels -- pushing up food prices around the world and creating a new source of inflationary pressure.
According to the Lundberg Survey, nationwide the average price of regular unleaded gas has risen by 18 cents to $2.89 over the last two weeks.
According to Bloomberg, Mirant Corp., a U.S. electricity producer that emerged from bankruptcy last year, said it may seek a buyer. Also among the strategic alternatives under consideration by the board include returning ``excess cash'' from asset sales to shareholders, Mirant said in a statement today. The Atlanta-based company has a market value of $10.4 billion based on the closing share price on April 5. Mirant and Dynegy Inc. were identified by investors and analysts as being among potential takeover targets after Kohlberg Kravis & Co. agreed to acquire Texas electricity producer TXU Corp. for $44 billion.
Six American soldiers were killed in attacks in Iraq, the military said, as Shiites gathered to mark the fourth anniversary of the fall of Baghdad amid calls for more attacks on U.S. forces.
Airbus delivered 115 planes to customers in Q1. Boeing delivered 106.
John Hussman: "While the S&P 500 has gained just 4% from its March lows on a weekly closing basis, it is clear that investors and market analysts now view the recent market correction as ancient history. The Investment Intelligence figures on advisory sentiment have shifted clearly to the bullish camp, with 50.6% of advisors bullish and 26.3% bearish. Meanwhile, valuations remain rich, the yield curve remains inverted (10 year vs. 3-month Treasury yields) and interest rates are now in fairly uniformly uptrends. I cannot stress enough that the most violent market declines have always emerged from conditions of rich valuations, elevated bullishness, overbought price trends, and upward pressures on interest rates. That doesn't mean that major losses must by necessity follow present conditions, but in the face of the historical tendency for deep losses to emerge in situations like this, it would be unwise to establish an investment position that relies on continued market strength...Analysts are already slashing expectations for earnings growth. As the New York Times noted last week, analyst expectations at the beginning of 2007 were for first-quarter earnings to post year-over-year growth of 8.7%. Current estimates have been cut to an expectation of just 3.3% growth. Second quarter growth is now projected to be just 3.5% year-over-year, with full-year growth estimates down to 6.3% (effectively building rapid growth expectations into the second half to compensate). If investors no longer have hopes for a near-term easing from the Fed, nor hopes for rapid earnings growth, the only remaining notion is the belief that stocks are appropriately priced on the basis of “forward operating earnings.” As I've emphasized in recent comments, this belief is fiction."
Daily Reckoning: "The U.S. dollar, in 2007, is worth only about 20 cents…compared to the dollar of 1971. And lately, there is reason to think the incline will become even steeper. The U.S. government's official debt is increasing at a record rate of $80 million every hour. Dollar-based credits and obligations are piling up outside of the United States (as measured by the trade deficit) at the rate of $2 billion every day. And all over the world, "Dark Pools" of liquidity threaten to turn the dollar's descent into a giant water slide. One fraud leads to another. Gradually, slowly, unwittingly we get so deep into them that we can't see out. And in this swamp of mendacity, the truth seems out of place, like an honest man in a Senate race. We find, for example, that "Sub-prime trickles down to area businesses," according to the Orange County Register. Well, what did you expect, dear reader? Standards are falling everywhere…and nobody's money is safe."
Tim Wood: "I look at probability and based upon those probabilities neither the June/July 2006 low nor the March 2007 low have measured up to the statistical norms that have occurred at every 4-year cycle low since 1896."
Roger Ehrenberg: "Either Goldman trades at a mere 50% of its fair market value or Fortress (and, shortly, Blackstone) are grossly overvalued."
Advanced Micro Devices Inc. expects revenue of about $1.225 billion for the first quarter ended March 31, and said revenue fell sharply on a quarter-over-quarter basis for its Computing Solutions' business due to lower overall average selling prices and significantly lower unit sales, especially in its resale sales channel. The current average estimate of analysts polled by Thomson Financial is for a loss of 30 cents a share in the March period on revenue of about $1.55 billion. Advanced Micro also said it plans to restructure its business in an effort to lower its operating costs. It's targeting a reduction a $500 million in capital spending in 2007. The company will also "significantly reduce" discretionary expenses and limit hiring to critical positions.
MedImmune Inc. expects first-quarter earnings, excluding stock-based compensation expenses, to rise to 62 to 67 cents a share, from 23 cents a share a year earlier. Analysts surveyed by Thomson Financial had been expecting earnings of 50 cents a share, on average. The company said revenue grew 11% to 12%, and net income margin more than doubled. The company said it expects first-quarter sales for Synagis to grow 9% to 10%.
"Now we are entering the mass production of centrifuges and starting to launch industrial scale enrichment, another step toward the flourishing of Islamic Iran," Vice President Gholamreza Aghazadeh said at a ceremony at Natanz.
Bloomberg reported Farallon Capital Management LLC, the fifth largest U.S. hedge-fund manager, is negotiating to buy the manufactured home community business of Affordable Residential Communities Inc., for approximately $1.8 billion.
People aware of private equity interests say Dow Chemical has told them "not to bother" approaching the company, CNBC's David Faber reported.
Ali Allawi: "The corroded and corrupt state of Saddam was replaced by the corroded, inefficient, incompetent and corrupt state of the new order."
Allawi writes that the Americans' "insipid retelling of `success' stories" merely hid "the huge black hole that lay underneath."
Martin Sieff: "After four years of war, 3,200 American deaths, 23,000 U.S. troops wounded and possibly in excess of 100,000 Iraqis killed, U.S. policymakers are now making what may prove to be their worst mistake yet: They may be on a new collision course with Moqtada al-Sadr."
Duke University Medical Center reported that Forskolin, an herbal extract, has the potential along with antibiotics to kill the bacteria which is the main cause of infections in the bladder.
Marathon Oil Corp. said its first quarter will likely be marked by lower selling prices for crude oil and natural gas. The company also expects weaker sales volume of refined products, compared with the prior-year period.
Crude oil for May delivery closed down $2.77, or 4%, at $61.51 a barrel on the New York Mercantile Exchange. May natural-gas futures fell 6.1 cents at $7.546 per million British thermal units, while May heating oil fell 4.52 cents at $1.8157 a gallon.
Gold for June delivery ended down $2.50 at $676.90 an ounce on the New York Mercantile Exchange. May silver ended down 7 cents at $13.81 an ounce, while May copper rose 12.90 cents at $3.5060 a pound. July platinum fell $1.60 at $1,264.30 an ounce, while June palladium rose $1.60 at $358.0 an ounce.
My best ideas for Monday were to sell the following puts:
WCI Jan 08 with a 15 strike price for $1 and CSX Jan 08 with a strike price of
27.50 for 35 cents. Just a note to state that I sold both of these yesterday for the prices mentioned. I only recommend what I would do for myself.
Sunday, April 08, 2007
Rumors
4/9/07 Rumors
According to Reuters, a consortium of Middle Eastern investors and American buyout firms is preparing a $50 billion approach for Dow Chemical Co. in what could be the world's biggest ever leveraged buyout, a paper said on Sunday.The Sunday Express said, quoting sources close to the deal, that a financing package has been put in place for a break-up bid of between $52 to $58 a share and an approach valuing the company at at least $50 billion could come by the end of this week. At least half of the capital is being provided by investors from Saudi Arabia, Kuwait, Bahrain, Qatar, UAE and Oman, with the rest contributed by a number of U.S. buyout firms including Kohlberg Kravis Roberts , it said.
Another Reuters story suggests Brewing giant SABMiller is plotting to acquire rival Scottish & Newcastle in a 6.5-billion-pounds ($12.8 billion) deal, a paper said on Sunday. The maker of Miller Lite and Peroni could make a bid of around 712 pence a share for S&N within days, the Sunday Express quoted sources close to the company as saying. It would also seek to sell on -- to spirits group Diageo -- the UK arm that makes Britain's biggest selling lager Foster's, John Smith's bitter and Strongbow cider as well as its French business to satisfy industry watchdogs, the report said.
Cold weather gripped much of the nation on Easter. Temperatures in many states ranged from the 20s to the 40s. Some cities were even greeted with snow.
On the first day that applications were accepted, the number of petitions from companies applying for visas for highly skilled immigrants exceeded the government cap by nearly 100,000, U.S. Citizenship and Immigration Services announced Tuesday, April 3. USCIS said that it received 150,000 applications for 65,000 H-1B visa slots on Monday, April 2, when the process officially began. In several weeks, the agency will dole out visas using a computer lottery to randomly select companies that filed petitions by April 3.
Spanish bank Santander is working with Britain's Royal Bank of Scotland to table a counterbid for ABN AMRO which is in exclusive merger talks with Barclays Plc a paper said on Sunday. The two banks are putting together a break-up bid and an offer could be presented soon after an agreed deal expected to be announced by Barclays and ABN within the next 10 days, the Sunday Telegraph said in an unsourced report. Under the potential transaction, Santander would take control of ABN's retail banking operations in continental Europe and its South African businesses, with RBS acquiring ABN's wholesale banking operations and U.S. business La Salle, it said.
Rep. Frank Wolf of Virginia, one of the Republicans who visited Assad earlier in the week, defended the right of lawmakers to visit Syria. “I don’t care what the administration says on this,” he said. “You’ve got to do what you think is in the best interest of your country.”
A statement in Baghdad Sunday says the four members of Task Force Lightning were killed Saturday by an explosion near their vehicle in Diyala province north of the capital. Another soldier was wounded in the attack.An unofficial tally shows at least 32-hundred-72 Americans have died in Iraq since the war began more than four years ago.
Officials on Sunday confirmed that Tehran barred Iraqi premier Nuri al-Maliki's plane from flying over Iran, according to circulated local reports.
Iran's foreign ministry spokesman said Sunday that Iran would not negotiate over its "obvious rights" to enrich uranium.
According to the WSJ, Sadr urged Iraqi forces to stop cooperating with the United States and told his guerrilla fighters to concentrate their attacks on American troops rather than Iraqis. A truck bomb killed 15 south of Baghdad.
Unlike gasoline and diesel fuel, which shoot around the nation in pipelines at high speeds and in vast quantities, ethanol travels almost exclusively by rail, truck and river barge. That's because it absorbs water, which can wreak havoc on traditional pipelines and taint petroleum products that pass through them.
Mike Burk: "On average, April has been one of the strongest months of the year, however, next week has been the weakest week of the month with modestly positive returns...The market is overbought and seasonality does not offer much support. I expect the major indices to be lower on Friday April 13 than they were on Thursday April 5."
Michael Panzer: " Mutual fund cash levels are near record lows, margin debt and leverage-based speculation are at euphoric extremes, and risk spreads reflect an extraordinary degree of complacency. Every data point, whether good or bad, is seen as another reason for heads-I-win, tails-you-lose optimism...The belief exists that there is still big money to be made from taking out-sized risks, and incentives remain heavily skewed to the upside. Practically speaking, current performance is all that matters, with nary a thought given to longer-term returns -- or concerns. What might be lost through aggressively geared-up bets on repeated rolls of the dice seems to pale in comparison to what can be realized if everything goes exactly according to plan...The mantra seems to be: "Why be defensive at all?" With a support system supposedly in place that can theoretically postpone the day of reckoning more-or-less indefinitely, the rational response is to push the envelope to its extremes. Combine that with the constant bullish squawking and tom-tom thumping by banks and other financial institutions, retailers, policymakers, politicians, and the media, and it adds up a siren song of short-sightedness and self-indulgence that is hard to resist...And yet, one day, as is likely to happen ever more frequently with CDOs-Squared and other toxic new age monstrosities, the "event" that really matters will come along. A paradigm-killer that sets in motion a chain reaction that completely undermines the apparently never-ending stability that everyone has gotten used to. By then, people will realize very quickly that America, once viewed as the world's foremost economic superpower, is nothing more than a cliff-risk nation."
Bloomberg reported Warren Buffett's Berkshire Hathaway Inc. has acquired a 10.9 percent stake in Burlington Northern Santa Fe Corp., according to Securities and Exchange Commission filings, making the billionaire's company the largest holder. Berkshire owned 39 million shares of the second-largest U.S. railroad as of April 5, after reporting a holding of 37.4 million on April 3, the filings show.
London's Sunday Telegraph reported private equity group Terra Firma plans to launch a counter bid for Alliance Boots, which opened its books to its deputy chairman and a private equity fund over a 10-billion-pound bid. In late March, Alliance Boots, England's biggest pharmacy chain, said it had opened its books to Kohlberg Kravis Roberts and its deputy chairman Stefano Pessina -- a billionaire with a 15 percent stake in the company. They raised their proposed offer to 1,040 pence from 1,000 pence a share.
.
A state-owned Qatari company has bought the Chelsea Barracks in London from the Ministry of Defence, a newspaper reported on Sunday, citing the Gulf Arab firm's chief executive. Qatar's The Peninsular newspaper did not say how much Qatari Diar Real Estate & Investment Co. paid for the 13-acre (5.2 hectare) property located in the heart of London.
According to Reuters, a consortium of Middle Eastern investors and American buyout firms is preparing a $50 billion approach for Dow Chemical Co. in what could be the world's biggest ever leveraged buyout, a paper said on Sunday.The Sunday Express said, quoting sources close to the deal, that a financing package has been put in place for a break-up bid of between $52 to $58 a share and an approach valuing the company at at least $50 billion could come by the end of this week. At least half of the capital is being provided by investors from Saudi Arabia, Kuwait, Bahrain, Qatar, UAE and Oman, with the rest contributed by a number of U.S. buyout firms including Kohlberg Kravis Roberts , it said.
Another Reuters story suggests Brewing giant SABMiller is plotting to acquire rival Scottish & Newcastle in a 6.5-billion-pounds ($12.8 billion) deal, a paper said on Sunday. The maker of Miller Lite and Peroni could make a bid of around 712 pence a share for S&N within days, the Sunday Express quoted sources close to the company as saying. It would also seek to sell on -- to spirits group Diageo -- the UK arm that makes Britain's biggest selling lager Foster's, John Smith's bitter and Strongbow cider as well as its French business to satisfy industry watchdogs, the report said.
Cold weather gripped much of the nation on Easter. Temperatures in many states ranged from the 20s to the 40s. Some cities were even greeted with snow.
On the first day that applications were accepted, the number of petitions from companies applying for visas for highly skilled immigrants exceeded the government cap by nearly 100,000, U.S. Citizenship and Immigration Services announced Tuesday, April 3. USCIS said that it received 150,000 applications for 65,000 H-1B visa slots on Monday, April 2, when the process officially began. In several weeks, the agency will dole out visas using a computer lottery to randomly select companies that filed petitions by April 3.
Spanish bank Santander is working with Britain's Royal Bank of Scotland to table a counterbid for ABN AMRO which is in exclusive merger talks with Barclays Plc a paper said on Sunday. The two banks are putting together a break-up bid and an offer could be presented soon after an agreed deal expected to be announced by Barclays and ABN within the next 10 days, the Sunday Telegraph said in an unsourced report. Under the potential transaction, Santander would take control of ABN's retail banking operations in continental Europe and its South African businesses, with RBS acquiring ABN's wholesale banking operations and U.S. business La Salle, it said.
Rep. Frank Wolf of Virginia, one of the Republicans who visited Assad earlier in the week, defended the right of lawmakers to visit Syria. “I don’t care what the administration says on this,” he said. “You’ve got to do what you think is in the best interest of your country.”
A statement in Baghdad Sunday says the four members of Task Force Lightning were killed Saturday by an explosion near their vehicle in Diyala province north of the capital. Another soldier was wounded in the attack.An unofficial tally shows at least 32-hundred-72 Americans have died in Iraq since the war began more than four years ago.
Officials on Sunday confirmed that Tehran barred Iraqi premier Nuri al-Maliki's plane from flying over Iran, according to circulated local reports.
Iran's foreign ministry spokesman said Sunday that Iran would not negotiate over its "obvious rights" to enrich uranium.
According to the WSJ, Sadr urged Iraqi forces to stop cooperating with the United States and told his guerrilla fighters to concentrate their attacks on American troops rather than Iraqis. A truck bomb killed 15 south of Baghdad.
Unlike gasoline and diesel fuel, which shoot around the nation in pipelines at high speeds and in vast quantities, ethanol travels almost exclusively by rail, truck and river barge. That's because it absorbs water, which can wreak havoc on traditional pipelines and taint petroleum products that pass through them.
Mike Burk: "On average, April has been one of the strongest months of the year, however, next week has been the weakest week of the month with modestly positive returns...The market is overbought and seasonality does not offer much support. I expect the major indices to be lower on Friday April 13 than they were on Thursday April 5."
Michael Panzer: " Mutual fund cash levels are near record lows, margin debt and leverage-based speculation are at euphoric extremes, and risk spreads reflect an extraordinary degree of complacency. Every data point, whether good or bad, is seen as another reason for heads-I-win, tails-you-lose optimism...The belief exists that there is still big money to be made from taking out-sized risks, and incentives remain heavily skewed to the upside. Practically speaking, current performance is all that matters, with nary a thought given to longer-term returns -- or concerns. What might be lost through aggressively geared-up bets on repeated rolls of the dice seems to pale in comparison to what can be realized if everything goes exactly according to plan...The mantra seems to be: "Why be defensive at all?" With a support system supposedly in place that can theoretically postpone the day of reckoning more-or-less indefinitely, the rational response is to push the envelope to its extremes. Combine that with the constant bullish squawking and tom-tom thumping by banks and other financial institutions, retailers, policymakers, politicians, and the media, and it adds up a siren song of short-sightedness and self-indulgence that is hard to resist...And yet, one day, as is likely to happen ever more frequently with CDOs-Squared and other toxic new age monstrosities, the "event" that really matters will come along. A paradigm-killer that sets in motion a chain reaction that completely undermines the apparently never-ending stability that everyone has gotten used to. By then, people will realize very quickly that America, once viewed as the world's foremost economic superpower, is nothing more than a cliff-risk nation."
Bloomberg reported Warren Buffett's Berkshire Hathaway Inc. has acquired a 10.9 percent stake in Burlington Northern Santa Fe Corp., according to Securities and Exchange Commission filings, making the billionaire's company the largest holder. Berkshire owned 39 million shares of the second-largest U.S. railroad as of April 5, after reporting a holding of 37.4 million on April 3, the filings show.
London's Sunday Telegraph reported private equity group Terra Firma plans to launch a counter bid for Alliance Boots, which opened its books to its deputy chairman and a private equity fund over a 10-billion-pound bid. In late March, Alliance Boots, England's biggest pharmacy chain, said it had opened its books to Kohlberg Kravis Roberts and its deputy chairman Stefano Pessina -- a billionaire with a 15 percent stake in the company. They raised their proposed offer to 1,040 pence from 1,000 pence a share.
.
A state-owned Qatari company has bought the Chelsea Barracks in London from the Ministry of Defence, a newspaper reported on Sunday, citing the Gulf Arab firm's chief executive. Qatar's The Peninsular newspaper did not say how much Qatari Diar Real Estate & Investment Co. paid for the 13-acre (5.2 hectare) property located in the heart of London.
Saturday, April 07, 2007
Voices And Data
4/8/07 Voices And Data
U.S. wholesalers' inventories rose by 0.5% in February, and this advance in inventories follows a revised 0.6% gain in January. Inventories are up 8.3% from a year ago, the data show.
Michael Pento: "According to Bloomberg, treasuries are now 1.56 percentage points lower than the 6.21% average of the past 20 years. That means even if you discard the high rates of a quarter century earlier into your calculation, treasuries yields are still about 32% below average!"
Steve Moyer: "If you are buying real estate to hold right now, you could lose your equity and ultimately your property.
At the very least, you should be taking a wait-and-see approach to buying at this point. The risk/reward ratio is completely out of whack and the snowball is just beginning to form, just a few hundred feet from the top of this enormous and steep mountain. If you can't see the danger and are buying property, face it -- you could pay dearly."
Agilent Technologies Inc. has agreed to acquire Stratagene Corp. for $10.94 a share, or roughly $245 million, the companies announced Friday. The offer represents a 28% premium to Stratagene's closing share price on Thursday of $8.51.
Kroger's chief executive told employees Friday that the nation's largest traditional grocery chain isn't considering a leveraged buyout. "I want you to know neither management nor our board of directors has any interest in pursuing a leveraged buyout transaction," David B. Dillon, Kroger's chairman and CEO, said in a statement that was also released publicly.
Monica Goodling, a top aide to Attorney General Alberto Gonzales, has resigned, according to a media report on Friday.
Outstanding U.S. consumer debt grew at its slowest pace since October in February, held back by a small gain in non-revolving credit, the Federal Reserve reported Friday. Overall consumer credit rose by $2.97 billion in February, or 1.5% annualized, the Fed said.
In a radio interview Thursday, U.S. Vice President Dick Cheney repeated the Bush administration's view that al Qaida was present in Iraq before the start of the war. As they say, seeing is believing. In Cheney's case, what he says should be enough to believe.
It's time for newspapers to stop giving away their stories to popular search engines such as Google, according to Samuel Zell.
Lyondell Chemical Co. on Thursday said it will shut down a gasoline-producing unit at its Houston refinery for about 10 days' maintenance, booking a charge to earnings.
An unseasonable winter blast moving through Houston could drop temperatures to around 40 before dawn on Easter. Then there was the snow storm in Cleveland that canceled a baseball game.
Doug Noland: "While there have been some bouts of market nervousness, the feared deterioration in the general liquidity backdrop has not yet materialized. And instead of housing-induced consumer retrenchment, robust income growth and attendant home price resiliency have safeguarded interminable household spending excess. Rather than a general tightening of system Credit, the historic expansion of Wall Street and market-based finance has, ironically, created the loosest Financial Conditions imaginable...The problem for “Vintage 2007” U.S. “Ponzi” finance is that it has insidiously become acutely vulnerable to a flight away from U.S. securities markets. With major Credit problems on the horizon, U.S. mortgage finance is now dangerously vulnerable to any spike in market yields. The already suspect quality of much of the new M&A related debt is further vulnerable to a jump in rates, a stock market break, liquidity dislocation and/or economic downturn. And the massive agency debt market is an accident in the making, while the entire U.S. financial sector’s debt structure is increasingly suspect. The greatest vulnerability could very well be “Vintage 2007” structured finance – CDOs, CPDOs, CDS and derivatives generally."
Mike Shedlock: "But remember that 2.1 million households missed a mortgage payment in the last quarter of 2006. People are clearly struggling in spite of low unemployment rates...With US consumers are struggling to pay the bills in an economic expansion , with capital spending is on the wane, with services and manufacturing ISM numbers weakening, with leading economic indicators slowing worldwide, and given that jobs are a lagging indicator, there is a huge disconnect between the stock market an reality. How long that disconnect lasts is anyone's guess but those playing for stock market advances in the face of this reality are playing the Greater Fool's Game just as they did with with housing in the summer of 2005. All I can say to that is Good Luck."
U.S. wholesalers' inventories rose by 0.5% in February, and this advance in inventories follows a revised 0.6% gain in January. Inventories are up 8.3% from a year ago, the data show.
Michael Pento: "According to Bloomberg, treasuries are now 1.56 percentage points lower than the 6.21% average of the past 20 years. That means even if you discard the high rates of a quarter century earlier into your calculation, treasuries yields are still about 32% below average!"
Steve Moyer: "If you are buying real estate to hold right now, you could lose your equity and ultimately your property.
At the very least, you should be taking a wait-and-see approach to buying at this point. The risk/reward ratio is completely out of whack and the snowball is just beginning to form, just a few hundred feet from the top of this enormous and steep mountain. If you can't see the danger and are buying property, face it -- you could pay dearly."
Agilent Technologies Inc. has agreed to acquire Stratagene Corp. for $10.94 a share, or roughly $245 million, the companies announced Friday. The offer represents a 28% premium to Stratagene's closing share price on Thursday of $8.51.
Kroger's chief executive told employees Friday that the nation's largest traditional grocery chain isn't considering a leveraged buyout. "I want you to know neither management nor our board of directors has any interest in pursuing a leveraged buyout transaction," David B. Dillon, Kroger's chairman and CEO, said in a statement that was also released publicly.
Monica Goodling, a top aide to Attorney General Alberto Gonzales, has resigned, according to a media report on Friday.
Outstanding U.S. consumer debt grew at its slowest pace since October in February, held back by a small gain in non-revolving credit, the Federal Reserve reported Friday. Overall consumer credit rose by $2.97 billion in February, or 1.5% annualized, the Fed said.
In a radio interview Thursday, U.S. Vice President Dick Cheney repeated the Bush administration's view that al Qaida was present in Iraq before the start of the war. As they say, seeing is believing. In Cheney's case, what he says should be enough to believe.
It's time for newspapers to stop giving away their stories to popular search engines such as Google, according to Samuel Zell.
Lyondell Chemical Co. on Thursday said it will shut down a gasoline-producing unit at its Houston refinery for about 10 days' maintenance, booking a charge to earnings.
An unseasonable winter blast moving through Houston could drop temperatures to around 40 before dawn on Easter. Then there was the snow storm in Cleveland that canceled a baseball game.
Doug Noland: "While there have been some bouts of market nervousness, the feared deterioration in the general liquidity backdrop has not yet materialized. And instead of housing-induced consumer retrenchment, robust income growth and attendant home price resiliency have safeguarded interminable household spending excess. Rather than a general tightening of system Credit, the historic expansion of Wall Street and market-based finance has, ironically, created the loosest Financial Conditions imaginable...The problem for “Vintage 2007” U.S. “Ponzi” finance is that it has insidiously become acutely vulnerable to a flight away from U.S. securities markets. With major Credit problems on the horizon, U.S. mortgage finance is now dangerously vulnerable to any spike in market yields. The already suspect quality of much of the new M&A related debt is further vulnerable to a jump in rates, a stock market break, liquidity dislocation and/or economic downturn. And the massive agency debt market is an accident in the making, while the entire U.S. financial sector’s debt structure is increasingly suspect. The greatest vulnerability could very well be “Vintage 2007” structured finance – CDOs, CPDOs, CDS and derivatives generally."
Mike Shedlock: "But remember that 2.1 million households missed a mortgage payment in the last quarter of 2006. People are clearly struggling in spite of low unemployment rates...With US consumers are struggling to pay the bills in an economic expansion , with capital spending is on the wane, with services and manufacturing ISM numbers weakening, with leading economic indicators slowing worldwide, and given that jobs are a lagging indicator, there is a huge disconnect between the stock market an reality. How long that disconnect lasts is anyone's guess but those playing for stock market advances in the face of this reality are playing the Greater Fool's Game just as they did with with housing in the summer of 2005. All I can say to that is Good Luck."
Friday, April 06, 2007
Happy Days
4/7/07 Happy Days
Private equity firms have recently been looking at supermarket chain Kroger Co, the Wall Street Journal reported on Friday without citing sources. Buyout firms have been looking at the company, which has a market capitalization of more than $20 billion.
The board of WCI Communities Inc. recommended that its shareholders reject the unsolicited tender offer from entities controlled by Carl Icahn. The board called theoffer "highly conditional, opportunistic and inadequate," as well as "structurally coercive" to the company's shareholders. Icahn, who has a 14.5% stake in WCI, has offered $22 a share for the rest of the company's outstanding shares. WCI added that it has initiated a sale process with the assistance of Goldman Sachs.
According to WTRG, the U.S. rotary rig count was up 4 rigs to 1,749 for the week of March 30, 2007 and is 11.0 percent higher than last year. The number of rotary rigs drilling for oil is down 10 at 271. The number of rigs targeting oil is 18 rigs higher than last year's level of activity. Rigs currently drilling for oil represent 15.5% percent of total drilling activity.
Rigs directed toward natural gas were up 13 at 1,472. The number of rigs currently drilling for gas is 151 greater than last year's level of 1,321. Year-over-year oil exploration in the US is up 7.1 percent. Gas exploration is up 11.4 percent. The weekly average of crude oil spot prices is 3.2 percent lower than last year and natural gas spot prices are 2.4 percent higher. Daily crude oil and natural gas futures and spot prices are available on our site. Canadian rig activity* was down 97 at 149 for the week of March 30, 2007 and is 276 lower than last year's rig count. Canadian drilling falls rapidly in the spring to avoid environmental damage during the spring thaw and rainy season.
A bomb struck an oil pipeline Thursday, cutting off supplies and causing a huge fire in southern Iraq near the border with Kuwait, an official said. The pipeline carries oil from surrounding fields to storage tanks in Basra for export to the Gulf region, according to the official with the South Oil Co. But he said the tanks were full and export supplies had not yet been affected.
Oil companies are expected to increase exploration spending by 9 percent worldwide this year, according to Lehman Brothers Holdings Inc. Spending on exploration in deep water will rise 44 percent to $18 billion by 2011 from $12 billion this year, according to a report by consultants Douglas- Westwood Ltd.
Russia, the world's biggest energy supplier, will back an Iranian plan to improve cooperation among gas producers at an industry meeting in Qatar next week, Energy Minister Viktor Khristenko said.
Hoya Corp., Japan's largest optical- glassmaker, plans to increase its takeover offer for camera maker Pentax Corp. and pay with cash instead of stock to help win shareholder approval. Hoya will offer about 770 yen a share to Pentax shareholders, said Akiko Maeyama, a spokeswoman at Tokyo-based Hoya, valuing Pentax at 98.5 billion yen ($830 million). The new offer is 5 percent higher than today's closing price for Pentax.
Nonfarm payrolls expanded by 180,000 in March and that was higher than the 168,000 expected by economists. The unemployment rate declined to 4.4% in March from 4.5% in the previous month. Average hourly earnings increased 6 cents, or 0.3% to $17.22. The average workweek was 33.9 hours. The factory workweek and factory overtime rose in March. Jobs in the factory sector fell 16,000. The manufacturing workweek rose to 41.1 hours and overtime increased to 4.3 hours from 4.2 hours. Construction added a whopping 56,000 jobs in the month, and that was after shedding 61,000 the prior month. Retail employment gained 36,000 jobs, health care another 30,000, and food services 19,000.
Revisions for the past two months amounted to an increase of 32,000 jobs.
According to the Houston Chronicle, In 2006, veterans
ages 20 to 24 had an unemployment rate nationwide of
10.4 percent, compared with 8.1 percent among nonveterans
in the same age group. It was even worse the year before,
when 15.6 percent of the young veteran population was
unemployed, compared with 8.7 percent among nonveterans.
China National Petroleum Corp., the country's biggest onshore oil and
gas producer, will begin building a second west-to-east natural gas
pipeline in 2008, a state media report said Friday. The pipeline will
run 4,000 miles from Xinjiang, an oil and gas-rich region in the
northwest, to southern, industrialized Guangdong province, the Shanghai
Securities News reported.
State-run Nuclear Power Corp. of India
Ltd. plans to build the 10,000 megawatt plant using European
pressurized reactors, or EPRs, from France, Germany and Finland, the
Financial Express newspaper reported.
The RBC Cash index showed confidence dropping to 85.4 in April. That was
down from 92.3 in March. The new reading was the lowest since 83.1 in
October. Peoples' feelings about current economic conditions slid to 99 in April, from 107.5 in March. The expectations measure fell to 41.7, also a six-month low. In March, this gauge stood at 49.3.
New Century Financial Corp. on Monday became the latest mortgage company to
file for bankruptcy protection. The company handed 3,200 employees
their walking papers. "Each one of these finance jobs is worth at least
two construction jobs," said Ryan Ratcliff, an economist with UCLA's
Anderson School of Business.
General Electric Co.'s WMC mortgage unit, a major player in the sub-prime business, said it would cut 20% of its payroll.
Captured Iraqi documents and intelligence interrogations of Saddam Hussein and
two former aides "all confirmed" that Hussein's regime was not directly
cooperating with al-Qaeda before the U.S. invasion of Iraq, according
to a declassified Defense Department report released yesterday.The
declassified version of the report, by acting Inspector General Thomas
F. Gimble, also contains new details about the intelligence community's
prewar consensus that the Iraqi government and al-Qaeda figures had
only limited contacts, and its judgments that reports of deeper links
were based on dubious or unconfirmed information.
Brazil's state-owned energy company Petrobras and its Ecuadorian counterpart
Petroecuador signed an agreement on Wednesday, with the aim to exploit
the Ishpingo-Tiputini-Tambococha (ITT) oil fields in the Ecuadorian
Amazon.
Cold temperatures have hit a good part of the U.S. We're
talking into the 20's and that will give farmers fits as well as
increase the use of natural gas.
This year, researchers at the Mercatus Center at George Mason University conducted our eighth annual evaluation of the performance and accountability reports produced by the 24 agencies covered under the Chief Financial Officers Act. These
agencies accounted for 99 percent of federal outlays in 2005. We
employed the same criteria as used in previous Scorecards.
Key findings in this year's Scorecard include:
* Agencies with reports receiving average scores below satisfactory accounted for 87 percent of non-interest federal spending in fiscal 2006.
* A significant quality gap emerged between the top four reports and the rest.
* The average total score has remained stagnant for the past three years.
Private equity firms have recently been looking at supermarket chain Kroger Co, the Wall Street Journal reported on Friday without citing sources. Buyout firms have been looking at the company, which has a market capitalization of more than $20 billion.
The board of WCI Communities Inc. recommended that its shareholders reject the unsolicited tender offer from entities controlled by Carl Icahn. The board called theoffer "highly conditional, opportunistic and inadequate," as well as "structurally coercive" to the company's shareholders. Icahn, who has a 14.5% stake in WCI, has offered $22 a share for the rest of the company's outstanding shares. WCI added that it has initiated a sale process with the assistance of Goldman Sachs.
According to WTRG, the U.S. rotary rig count was up 4 rigs to 1,749 for the week of March 30, 2007 and is 11.0 percent higher than last year. The number of rotary rigs drilling for oil is down 10 at 271. The number of rigs targeting oil is 18 rigs higher than last year's level of activity. Rigs currently drilling for oil represent 15.5% percent of total drilling activity.
Rigs directed toward natural gas were up 13 at 1,472. The number of rigs currently drilling for gas is 151 greater than last year's level of 1,321. Year-over-year oil exploration in the US is up 7.1 percent. Gas exploration is up 11.4 percent. The weekly average of crude oil spot prices is 3.2 percent lower than last year and natural gas spot prices are 2.4 percent higher. Daily crude oil and natural gas futures and spot prices are available on our site. Canadian rig activity* was down 97 at 149 for the week of March 30, 2007 and is 276 lower than last year's rig count. Canadian drilling falls rapidly in the spring to avoid environmental damage during the spring thaw and rainy season.
A bomb struck an oil pipeline Thursday, cutting off supplies and causing a huge fire in southern Iraq near the border with Kuwait, an official said. The pipeline carries oil from surrounding fields to storage tanks in Basra for export to the Gulf region, according to the official with the South Oil Co. But he said the tanks were full and export supplies had not yet been affected.
Oil companies are expected to increase exploration spending by 9 percent worldwide this year, according to Lehman Brothers Holdings Inc. Spending on exploration in deep water will rise 44 percent to $18 billion by 2011 from $12 billion this year, according to a report by consultants Douglas- Westwood Ltd.
Russia, the world's biggest energy supplier, will back an Iranian plan to improve cooperation among gas producers at an industry meeting in Qatar next week, Energy Minister Viktor Khristenko said.
Hoya Corp., Japan's largest optical- glassmaker, plans to increase its takeover offer for camera maker Pentax Corp. and pay with cash instead of stock to help win shareholder approval. Hoya will offer about 770 yen a share to Pentax shareholders, said Akiko Maeyama, a spokeswoman at Tokyo-based Hoya, valuing Pentax at 98.5 billion yen ($830 million). The new offer is 5 percent higher than today's closing price for Pentax.
Nonfarm payrolls expanded by 180,000 in March and that was higher than the 168,000 expected by economists. The unemployment rate declined to 4.4% in March from 4.5% in the previous month. Average hourly earnings increased 6 cents, or 0.3% to $17.22. The average workweek was 33.9 hours. The factory workweek and factory overtime rose in March. Jobs in the factory sector fell 16,000. The manufacturing workweek rose to 41.1 hours and overtime increased to 4.3 hours from 4.2 hours. Construction added a whopping 56,000 jobs in the month, and that was after shedding 61,000 the prior month. Retail employment gained 36,000 jobs, health care another 30,000, and food services 19,000.
Revisions for the past two months amounted to an increase of 32,000 jobs.
According to the Houston Chronicle, In 2006, veterans
ages 20 to 24 had an unemployment rate nationwide of
10.4 percent, compared with 8.1 percent among nonveterans
in the same age group. It was even worse the year before,
when 15.6 percent of the young veteran population was
unemployed, compared with 8.7 percent among nonveterans.
China National Petroleum Corp., the country's biggest onshore oil and
gas producer, will begin building a second west-to-east natural gas
pipeline in 2008, a state media report said Friday. The pipeline will
run 4,000 miles from Xinjiang, an oil and gas-rich region in the
northwest, to southern, industrialized Guangdong province, the Shanghai
Securities News reported.
State-run Nuclear Power Corp. of India
Ltd. plans to build the 10,000 megawatt plant using European
pressurized reactors, or EPRs, from France, Germany and Finland, the
Financial Express newspaper reported.
The RBC Cash index showed confidence dropping to 85.4 in April. That was
down from 92.3 in March. The new reading was the lowest since 83.1 in
October. Peoples' feelings about current economic conditions slid to 99 in April, from 107.5 in March. The expectations measure fell to 41.7, also a six-month low. In March, this gauge stood at 49.3.
New Century Financial Corp. on Monday became the latest mortgage company to
file for bankruptcy protection. The company handed 3,200 employees
their walking papers. "Each one of these finance jobs is worth at least
two construction jobs," said Ryan Ratcliff, an economist with UCLA's
Anderson School of Business.
General Electric Co.'s WMC mortgage unit, a major player in the sub-prime business, said it would cut 20% of its payroll.
Captured Iraqi documents and intelligence interrogations of Saddam Hussein and
two former aides "all confirmed" that Hussein's regime was not directly
cooperating with al-Qaeda before the U.S. invasion of Iraq, according
to a declassified Defense Department report released yesterday.The
declassified version of the report, by acting Inspector General Thomas
F. Gimble, also contains new details about the intelligence community's
prewar consensus that the Iraqi government and al-Qaeda figures had
only limited contacts, and its judgments that reports of deeper links
were based on dubious or unconfirmed information.
Brazil's state-owned energy company Petrobras and its Ecuadorian counterpart
Petroecuador signed an agreement on Wednesday, with the aim to exploit
the Ishpingo-Tiputini-Tambococha (ITT) oil fields in the Ecuadorian
Amazon.
Cold temperatures have hit a good part of the U.S. We're
talking into the 20's and that will give farmers fits as well as
increase the use of natural gas.
This year, researchers at the Mercatus Center at George Mason University conducted our eighth annual evaluation of the performance and accountability reports produced by the 24 agencies covered under the Chief Financial Officers Act. These
agencies accounted for 99 percent of federal outlays in 2005. We
employed the same criteria as used in previous Scorecards.
Key findings in this year's Scorecard include:
* Agencies with reports receiving average scores below satisfactory accounted for 87 percent of non-interest federal spending in fiscal 2006.
* A significant quality gap emerged between the top four reports and the rest.
* The average total score has remained stagnant for the past three years.
Thursday, April 05, 2007
Good Friday?
4/6/07 Good Friday?
Interactive Brokers Group Inc. late Wednesday set an estimated price range of $23-$27 a share and a deal size of 20 million shares in a bid to raise $500 million in its upcoming initial public offering. Its IPO will likely debut within a month for trading on the Nasdaq under the symbol IBKR.
Germany's Software AG has agreed to buy software company webMethods Inc. for $9.15 per share, or around $546 million, in cash.
Monster said its Employment Index rose to 185 in March, up eight points from February. In March, 15 of 20 industries and 20 of 23 occupational categories in the index showed greater online job demand for workers, Monster said. The biggest increase in demand was for legal professionals, both experienced lawyers and new law-school graduates, Monster said.
China's central bank announced Thursday it will boost the reserve requirement ratio of banks by 50 basis points effective April 16. The move is the third increase in reserve requirement this year and follows a 27 basis point hike in short-term interest rates on March 18.
Halifax said U.K. house prices rose 1% in March, or up 11.1% annually. That's the second smallest monthly climb since August 2006.
Ryland Group Inc. expects to post a first-quarter loss of 50 cents to 60 cents a share. The loss is due to an impairment charge of about $65 million, the Calabasas, Calif.-based home builder and mortgage-finance company said. The impairments are associated with assets in the company's operations in Fort Myers, Fla.; Phoenix; Southern California; and Washington, D.C. In addition, Ryland said it expects to write off the $15 million in goodwill associated with the acquisition of a California homebuilder, MJ Brock & Sons. Excluding the impairment, the goodwill write-off and the change in effective tax rate, per-share earnings for the quarter would have been 63 cents to 73 cents, the company said. Analysts polled by Thomson Financial are currently forecasting first-quarter earnings of 42 cents a share on revenue of $641 million. Carl Reichardt of Wachovia Securities said in a client note that Ryland had a stronger-than-expected quarter operationally. While orders of 2,989 units were below his estimate of 3,217 units, he pointed out that the company's first-quarter cancellation rate of 28 percent was well below the 49 percent of the fourth quarter.
General Motors' head of North American operations said he expects second-quarter sales to be softer than initially forecast due to a weaker overall industry than GM had anticipated. In the meantime, Toyota is doing just fine thank you.
Ford Motor Chief Executive Officer Alan Mulally: “But generally, we’re on plan both on the restructuring and on acceleration of new product development.”
The PNC economic outlook shows stable interest rates and lower energy prices have helped lift expectations of small and mid-sized businesses.
A year after being forced to shut down more than half of its oil output in Nigeria because of militant violence, Royal Dutch Shell said it expected to resume full production within the next "five to six months," after agreeing with local communities that it could safely return to the Niger Delta.
A U.S. helicopter was downed after coming under fire over a Sunni-dominated area 20 miles (32 kilometers) south of Baghdad, the Associated Press reported, citing an Iraqi military official. It's the ninth U.S. helicopter to go down in Iraq this year.
"A market correction is coming, this time for real," Mar 29, "Financial Times" op-ed, by William Rhodes, senior vice-chairman of Citigroup, and chairman, president and chief executive of Citibank...Market developments in the past few weeks should be seen as a warning ... what is clear to me is that in the next year a material correction in the markets will occur... The primary worry of many who make or regulate the market is not inflation or growth or interest rates, but instead the coming adjustment and the possible destabilising effect these new players could have on the functioning of international markets as liquidity recedes."
The WSJ reports that home inventories in most major metro areas are up double digits from a year ago.
Weekly initial U.S. jobless claims rose by 11,000 to stand at 321,000 for the week ending March 31, their highest level since March 3, the Labor Department reported Thursday. However, the four-week average of new claims fell by 1,500 to 315,750, the lowest since Feb. 3. Meanwhile, the number of people collecting unemployment checks fell to 2.49 million, down 25,000, in the week ended March 24. It's the lowest since Jan. 27. The four-week average of continuing claims fell by 7,500 to 2.52 million, the lowest in six weeks.
The Oil Drum: "Natural gas supply is likely to decline in the next few years, because most of the larger, more productive sites have already been tapped. New natural gas wells are getting smaller and smaller, so that more and more new wells need to come on line each year, just to stay even. For a while, we were able to make up our shortfall with imports from Canada, but these have begun to decline. In the next few years, both US production and imports from Canada will be declining. It is doubtful that liquified natural gas imports from overseas will be able to fill the gap."
The Houston Chronicle reports operators are pulling jack-up rigs from the Gulf of Mexico and putting them where the rates are higher.Left behind is the lowest number of the rigs seen in the Gulf in 28 years. The rigs, which generally operate in 400 feet of water or less, are leaving for more favorable contracts in the Middle East, West Africa and Latin America, where rig supplies are tight and demand is high.
The WSJ reports that Mexico is trying to save its fading Cantarell oil field and that its production has declined faster than expected. The WSJ is about one year late with this article.
On Wednesday, BP had another fire at its Texas City refinery.
Barry Ritholtz reported "Goldman Sachs has emerged as the single biggest creditor of New Century, the American sub-prime mortgage lender, which filed for Chapter 11 bankruptcy last night, after writing $60 billion (£30.4 billion) of American home loans."
Nouriel Roubini: "there is today more evidence of worsening of the sub-prime carnage and of contagion from sub-prime to Alt-A and other near-prime mortgages. And the latest figures on the U.S. service sector confirm that the U.S. is headed towards a hard landing."
Rigzone opines Iran's plan to release 15 U.K. sailors and marines led to a selloff in oil prices Wednesday but it hardly lessens traders' worries about instability in the Middle East. If anything, the 13-day standoff between Iran and the U.K., which led to a sharp spike in oil prices and a drag on other markets, has renewed the focus on political risk related to the Middle East and other oil-producing regions.
Elizabeth Edwards said she let down her family by neglecting to get mammograms.
The Chicago Tribune outlines some of the hurdles in the Tribune deal: "If the FCC doesn't give the go-ahead, Tribune might have to sell some of its important TV or newspaper properties, something company executives and Zell have said they do not want to do.
It could even lose its long-standing right to own the Chicago Tribune, WGN Radio and WGN-Ch. 9 in the same market, media experts said.
"They've got pretty difficult obstacles to surmount," said Andrew Jay Schwartzman, president and chief executive of Media Access Project, a non-profit telecommunications law firm that said it will fight the Tribune-Zell deal because it is not in the public interest. "This is going to be very treacherous and complicated."
Since the mid-1970s, the FCC has opposed the consolidation of media ownership on the grounds that it reduces competition and diversity. As part of that, the commission enacted rules that prohibit so-called cross-ownership -- broadcasters being owned by newspapers in a single market.
Chicago-based Tribune's ownership of the Chicago Tribune, WGN-Ch. 9 and WGN-AM 720 was unaffected because the connection predated the agency's restrictions. Tribune launched WGN radio in 1924. The station's call letters stand for "World's Greatest Newspaper."
Under FCC rules, that protection does not transfer to a new owner.
"When there is a change in control, the grandfathering goes away," said John Morton, a media analyst with Morton Research Inc. in Silver Spring, Md.
There is another wrinkle.
Tribune has requested, but not been granted, cross-ownership waivers in three other markets where it owns both newspapers and TV stations: Los Angeles, New York and Hartford. In South Florida, a fourth market, Tribune has received a waiver from a court until the FCC completes its review of ownership rules.
Those waivers likely would have to be applied for again because Tribune will have a new owner, media experts said. Tribune also is facing license renewals in three markets. Its Los Angeles license expired in December, and its Hartford and New York licenses are up this spring."
Ronald Reagan:“Someone once said that every form of government has one characteristic peculiar to it and if that characteristic is lost, the government will fall. In a monarchy, it is affection and respect for the royal family. If that is lost the monarch is lost. In a dictatorship, it is fear. If the people stop fearing the dictator he'll lose power. In a representative government such as ours, it is virtue. If virtue goes, the government fails. Are we choosing paths that are politically expedient and morally questionable? Are we in truth losing our virtue? . . . If so, we may be nearer the dustbin of history than we realize.”
Puru Saxena: ""If inflation is such a menace for society, why do the central banks continue with their inflationary program? And why do they claim that they are fighting inflation?"
UN Secretary General Ban Ki-moon in a phone call thanked Iranian President Mahmoud Ahmadinejad for pardoning 15 British naval troopers arrested for illegal entry to Iranian waters, IRNA reported.
George Ure forwards a report out of Moscow: "The world is waiting for April 6, when the United States supposedly plans to launch Operation Bite against Iran. Washington has accumulated the required forces in the region: two task groups in the Persian Gulf, including the aircraft carriers USS Dwight Eisenhower and USS John Stennis, four nuclear submarines, two dozen cruisers, and more than 400 sea- and ground-based aircraft, including Stealth planes that will allegedly carry out the greater part of the task.The approved targets are the Natanz uranium enrichment facility, the Isfahan nuclear research center, the Araq heavy-water plant, the Bushehr nuclear power plant, air force and naval bases, air defense centers, and command and control headquarters. The plans for a sneak attack are said to include a deceptive maneuver: the nuclear-powered carrier USS Nimitz left San Diego last Monday and is heading for the Gulf, where it is expected to replace the Dwight Eisenhower in mid-May. According to the logic of a lightning war, everyone will be waiting for the arrival of the third carrier, and so the attack, when it comes, will be a surprise. On the other hand, the operation may not begin on April 6, despite the "telling signs" detected mainly by Russian military experts and the General Staff. One of the reasons is that there is no time left for the U.S. to speak about the "inevitability" of confrontation and warn Iran of the impending doom. I am referring to the requisite "demoralization stage," which is not part of the rules accepted in the civilized world. The Pentagon usually carries out pre-war demoralization preparations because they can reduce potential casualties. So, will there be a war, and if so, when will it begin?"
Ivan Eland: "To fulfill their constitutional responsibility as a check on the President, members of Congress do have a responsibility to be heavily involved in U.S. foreign policy. Instead of publicly condemning Speaker Pelosi for carrying out the bipartisan Iraq Study Group’s heretofore–languishing recommendation of actually talking to Syria to resolve bilateral issues, the President should be happy that someone in the U.S. government is willing to take risks with one of America’s major adversaries in the region. In fact, while she was at it, Pelosi should have stopped by Tehran to see whether negotiation could have helped the troubled U.S–Iranian relationship as well."
May reformulated gasoline climbed 1.96 cents to $2.125 a gallon, trading at its highest level since early September. The U.S. Energy Department reported Wednesday that motor gasoline supplies dropped by 5 million barrels last week.
A roadside bomb Wednesday killed two soldiers and wounded three others in southern Baghdad, while another blast north of the capital killed two soldiers and wounded one, the military said. The fifth soldier was killed Tuesday by small-arms fire while on patrol in eastern Baghdad, a predominantly Shiite part of the city, the military said.
Napoleon Bonaparte: “Public opinion is the thermometer a monarch should constantly consult.”
Biosite Inc., which has agreed to be acquired by Beckman Coulter Inc. , said on Thursday that Inverness Medical Innovations Inc. was planning an unsolicited offer to buy Biosite for $90 per share. Inverness already owns 4.9 percent of Biosite, which makes tests that help in the diagnosis of heart conditions and other diseases. Inverness said it must review Biosite's proprietary financial records before a formal offer could be submitted.
Natural-gas inventories rose 58 billion cubic feet for the week ended March 30, the Energy Department said Thursday. Total stocks now stand at 1.569 trillion cubic feet, down 127 billion cubic feet from the year-ago level, but 337 billion cubic feet above the five-year average, the government data said.
Cutera Inc. forecast first-quarter earnings of 11 cents to 13 cents a share, down from the 21 cents a share it previously forecast. Cutera, which makes laser and other light-based aesthetics systems, also cut its first-quarter revenue forecast to $23 million from $26 million. "This quarter's shortfall was due primarily to lower-than-expected productivity levels of our recent sales expansion," said Kevin Connors, Cutera's president and chief executive, in a statement. "We are implementing specific initiatives to address this matter and remain confident in our ability to increase our revenue growth." Not surprisingly, the stock got creamed.
Boeing Co. said Thursday it delivered 106 commercial aircraft in the first quarter, mostly 83 next-generation 737s. The company now has at least orders for 500 Dreamliners.
June gold climbed $2 to close Thursday at $679.40 an ounce -- the contract's strongest closing level since Feb. 27. May silver gained 12 cents to close at $13.74 an ounce, but May copper fell by 1.05 cents to end at $3.377 a pound.
Kirk Kerkorian's Tracinda Corp. is prepared to offer $4.5 billion for Chrysler Group, according to a letter sent to the automaker and published on the Wall Street Journal's Web site on Thursday. The offer would be contingent on a new collective bargaining agreement with the United Auto Workers union, Tracinda said in the letter.
David Geffen is in talks with Sam Zell, whose offer to buy media conglomerate Tribune Co. was accepted earlier this week, about a possible deal for the Los Angeles Times, the Washington Post reported on Thursday.
Interactive Brokers Group Inc. late Wednesday set an estimated price range of $23-$27 a share and a deal size of 20 million shares in a bid to raise $500 million in its upcoming initial public offering. Its IPO will likely debut within a month for trading on the Nasdaq under the symbol IBKR.
Germany's Software AG has agreed to buy software company webMethods Inc. for $9.15 per share, or around $546 million, in cash.
Monster said its Employment Index rose to 185 in March, up eight points from February. In March, 15 of 20 industries and 20 of 23 occupational categories in the index showed greater online job demand for workers, Monster said. The biggest increase in demand was for legal professionals, both experienced lawyers and new law-school graduates, Monster said.
China's central bank announced Thursday it will boost the reserve requirement ratio of banks by 50 basis points effective April 16. The move is the third increase in reserve requirement this year and follows a 27 basis point hike in short-term interest rates on March 18.
Halifax said U.K. house prices rose 1% in March, or up 11.1% annually. That's the second smallest monthly climb since August 2006.
Ryland Group Inc. expects to post a first-quarter loss of 50 cents to 60 cents a share. The loss is due to an impairment charge of about $65 million, the Calabasas, Calif.-based home builder and mortgage-finance company said. The impairments are associated with assets in the company's operations in Fort Myers, Fla.; Phoenix; Southern California; and Washington, D.C. In addition, Ryland said it expects to write off the $15 million in goodwill associated with the acquisition of a California homebuilder, MJ Brock & Sons. Excluding the impairment, the goodwill write-off and the change in effective tax rate, per-share earnings for the quarter would have been 63 cents to 73 cents, the company said. Analysts polled by Thomson Financial are currently forecasting first-quarter earnings of 42 cents a share on revenue of $641 million. Carl Reichardt of Wachovia Securities said in a client note that Ryland had a stronger-than-expected quarter operationally. While orders of 2,989 units were below his estimate of 3,217 units, he pointed out that the company's first-quarter cancellation rate of 28 percent was well below the 49 percent of the fourth quarter.
General Motors' head of North American operations said he expects second-quarter sales to be softer than initially forecast due to a weaker overall industry than GM had anticipated. In the meantime, Toyota is doing just fine thank you.
Ford Motor Chief Executive Officer Alan Mulally: “But generally, we’re on plan both on the restructuring and on acceleration of new product development.”
The PNC economic outlook shows stable interest rates and lower energy prices have helped lift expectations of small and mid-sized businesses.
A year after being forced to shut down more than half of its oil output in Nigeria because of militant violence, Royal Dutch Shell said it expected to resume full production within the next "five to six months," after agreeing with local communities that it could safely return to the Niger Delta.
A U.S. helicopter was downed after coming under fire over a Sunni-dominated area 20 miles (32 kilometers) south of Baghdad, the Associated Press reported, citing an Iraqi military official. It's the ninth U.S. helicopter to go down in Iraq this year.
"A market correction is coming, this time for real," Mar 29, "Financial Times" op-ed, by William Rhodes, senior vice-chairman of Citigroup, and chairman, president and chief executive of Citibank...Market developments in the past few weeks should be seen as a warning ... what is clear to me is that in the next year a material correction in the markets will occur... The primary worry of many who make or regulate the market is not inflation or growth or interest rates, but instead the coming adjustment and the possible destabilising effect these new players could have on the functioning of international markets as liquidity recedes."
The WSJ reports that home inventories in most major metro areas are up double digits from a year ago.
Weekly initial U.S. jobless claims rose by 11,000 to stand at 321,000 for the week ending March 31, their highest level since March 3, the Labor Department reported Thursday. However, the four-week average of new claims fell by 1,500 to 315,750, the lowest since Feb. 3. Meanwhile, the number of people collecting unemployment checks fell to 2.49 million, down 25,000, in the week ended March 24. It's the lowest since Jan. 27. The four-week average of continuing claims fell by 7,500 to 2.52 million, the lowest in six weeks.
The Oil Drum: "Natural gas supply is likely to decline in the next few years, because most of the larger, more productive sites have already been tapped. New natural gas wells are getting smaller and smaller, so that more and more new wells need to come on line each year, just to stay even. For a while, we were able to make up our shortfall with imports from Canada, but these have begun to decline. In the next few years, both US production and imports from Canada will be declining. It is doubtful that liquified natural gas imports from overseas will be able to fill the gap."
The Houston Chronicle reports operators are pulling jack-up rigs from the Gulf of Mexico and putting them where the rates are higher.Left behind is the lowest number of the rigs seen in the Gulf in 28 years. The rigs, which generally operate in 400 feet of water or less, are leaving for more favorable contracts in the Middle East, West Africa and Latin America, where rig supplies are tight and demand is high.
The WSJ reports that Mexico is trying to save its fading Cantarell oil field and that its production has declined faster than expected. The WSJ is about one year late with this article.
On Wednesday, BP had another fire at its Texas City refinery.
Barry Ritholtz reported "Goldman Sachs has emerged as the single biggest creditor of New Century, the American sub-prime mortgage lender, which filed for Chapter 11 bankruptcy last night, after writing $60 billion (£30.4 billion) of American home loans."
Nouriel Roubini: "there is today more evidence of worsening of the sub-prime carnage and of contagion from sub-prime to Alt-A and other near-prime mortgages. And the latest figures on the U.S. service sector confirm that the U.S. is headed towards a hard landing."
Rigzone opines Iran's plan to release 15 U.K. sailors and marines led to a selloff in oil prices Wednesday but it hardly lessens traders' worries about instability in the Middle East. If anything, the 13-day standoff between Iran and the U.K., which led to a sharp spike in oil prices and a drag on other markets, has renewed the focus on political risk related to the Middle East and other oil-producing regions.
Elizabeth Edwards said she let down her family by neglecting to get mammograms.
The Chicago Tribune outlines some of the hurdles in the Tribune deal: "If the FCC doesn't give the go-ahead, Tribune might have to sell some of its important TV or newspaper properties, something company executives and Zell have said they do not want to do.
It could even lose its long-standing right to own the Chicago Tribune, WGN Radio and WGN-Ch. 9 in the same market, media experts said.
"They've got pretty difficult obstacles to surmount," said Andrew Jay Schwartzman, president and chief executive of Media Access Project, a non-profit telecommunications law firm that said it will fight the Tribune-Zell deal because it is not in the public interest. "This is going to be very treacherous and complicated."
Since the mid-1970s, the FCC has opposed the consolidation of media ownership on the grounds that it reduces competition and diversity. As part of that, the commission enacted rules that prohibit so-called cross-ownership -- broadcasters being owned by newspapers in a single market.
Chicago-based Tribune's ownership of the Chicago Tribune, WGN-Ch. 9 and WGN-AM 720 was unaffected because the connection predated the agency's restrictions. Tribune launched WGN radio in 1924. The station's call letters stand for "World's Greatest Newspaper."
Under FCC rules, that protection does not transfer to a new owner.
"When there is a change in control, the grandfathering goes away," said John Morton, a media analyst with Morton Research Inc. in Silver Spring, Md.
There is another wrinkle.
Tribune has requested, but not been granted, cross-ownership waivers in three other markets where it owns both newspapers and TV stations: Los Angeles, New York and Hartford. In South Florida, a fourth market, Tribune has received a waiver from a court until the FCC completes its review of ownership rules.
Those waivers likely would have to be applied for again because Tribune will have a new owner, media experts said. Tribune also is facing license renewals in three markets. Its Los Angeles license expired in December, and its Hartford and New York licenses are up this spring."
Ronald Reagan:“Someone once said that every form of government has one characteristic peculiar to it and if that characteristic is lost, the government will fall. In a monarchy, it is affection and respect for the royal family. If that is lost the monarch is lost. In a dictatorship, it is fear. If the people stop fearing the dictator he'll lose power. In a representative government such as ours, it is virtue. If virtue goes, the government fails. Are we choosing paths that are politically expedient and morally questionable? Are we in truth losing our virtue? . . . If so, we may be nearer the dustbin of history than we realize.”
Puru Saxena: ""If inflation is such a menace for society, why do the central banks continue with their inflationary program? And why do they claim that they are fighting inflation?"
UN Secretary General Ban Ki-moon in a phone call thanked Iranian President Mahmoud Ahmadinejad for pardoning 15 British naval troopers arrested for illegal entry to Iranian waters, IRNA reported.
George Ure forwards a report out of Moscow: "The world is waiting for April 6, when the United States supposedly plans to launch Operation Bite against Iran. Washington has accumulated the required forces in the region: two task groups in the Persian Gulf, including the aircraft carriers USS Dwight Eisenhower and USS John Stennis, four nuclear submarines, two dozen cruisers, and more than 400 sea- and ground-based aircraft, including Stealth planes that will allegedly carry out the greater part of the task.The approved targets are the Natanz uranium enrichment facility, the Isfahan nuclear research center, the Araq heavy-water plant, the Bushehr nuclear power plant, air force and naval bases, air defense centers, and command and control headquarters. The plans for a sneak attack are said to include a deceptive maneuver: the nuclear-powered carrier USS Nimitz left San Diego last Monday and is heading for the Gulf, where it is expected to replace the Dwight Eisenhower in mid-May. According to the logic of a lightning war, everyone will be waiting for the arrival of the third carrier, and so the attack, when it comes, will be a surprise. On the other hand, the operation may not begin on April 6, despite the "telling signs" detected mainly by Russian military experts and the General Staff. One of the reasons is that there is no time left for the U.S. to speak about the "inevitability" of confrontation and warn Iran of the impending doom. I am referring to the requisite "demoralization stage," which is not part of the rules accepted in the civilized world. The Pentagon usually carries out pre-war demoralization preparations because they can reduce potential casualties. So, will there be a war, and if so, when will it begin?"
Ivan Eland: "To fulfill their constitutional responsibility as a check on the President, members of Congress do have a responsibility to be heavily involved in U.S. foreign policy. Instead of publicly condemning Speaker Pelosi for carrying out the bipartisan Iraq Study Group’s heretofore–languishing recommendation of actually talking to Syria to resolve bilateral issues, the President should be happy that someone in the U.S. government is willing to take risks with one of America’s major adversaries in the region. In fact, while she was at it, Pelosi should have stopped by Tehran to see whether negotiation could have helped the troubled U.S–Iranian relationship as well."
May reformulated gasoline climbed 1.96 cents to $2.125 a gallon, trading at its highest level since early September. The U.S. Energy Department reported Wednesday that motor gasoline supplies dropped by 5 million barrels last week.
A roadside bomb Wednesday killed two soldiers and wounded three others in southern Baghdad, while another blast north of the capital killed two soldiers and wounded one, the military said. The fifth soldier was killed Tuesday by small-arms fire while on patrol in eastern Baghdad, a predominantly Shiite part of the city, the military said.
Napoleon Bonaparte: “Public opinion is the thermometer a monarch should constantly consult.”
Biosite Inc., which has agreed to be acquired by Beckman Coulter Inc. , said on Thursday that Inverness Medical Innovations Inc. was planning an unsolicited offer to buy Biosite for $90 per share. Inverness already owns 4.9 percent of Biosite, which makes tests that help in the diagnosis of heart conditions and other diseases. Inverness said it must review Biosite's proprietary financial records before a formal offer could be submitted.
Natural-gas inventories rose 58 billion cubic feet for the week ended March 30, the Energy Department said Thursday. Total stocks now stand at 1.569 trillion cubic feet, down 127 billion cubic feet from the year-ago level, but 337 billion cubic feet above the five-year average, the government data said.
Cutera Inc. forecast first-quarter earnings of 11 cents to 13 cents a share, down from the 21 cents a share it previously forecast. Cutera, which makes laser and other light-based aesthetics systems, also cut its first-quarter revenue forecast to $23 million from $26 million. "This quarter's shortfall was due primarily to lower-than-expected productivity levels of our recent sales expansion," said Kevin Connors, Cutera's president and chief executive, in a statement. "We are implementing specific initiatives to address this matter and remain confident in our ability to increase our revenue growth." Not surprisingly, the stock got creamed.
Boeing Co. said Thursday it delivered 106 commercial aircraft in the first quarter, mostly 83 next-generation 737s. The company now has at least orders for 500 Dreamliners.
June gold climbed $2 to close Thursday at $679.40 an ounce -- the contract's strongest closing level since Feb. 27. May silver gained 12 cents to close at $13.74 an ounce, but May copper fell by 1.05 cents to end at $3.377 a pound.
Kirk Kerkorian's Tracinda Corp. is prepared to offer $4.5 billion for Chrysler Group, according to a letter sent to the automaker and published on the Wall Street Journal's Web site on Thursday. The offer would be contingent on a new collective bargaining agreement with the United Auto Workers union, Tracinda said in the letter.
David Geffen is in talks with Sam Zell, whose offer to buy media conglomerate Tribune Co. was accepted earlier this week, about a possible deal for the Los Angeles Times, the Washington Post reported on Thursday.
Wednesday, April 04, 2007
Lowering Expectations
4/5/07 Lowering Expectations
Best Buy said it expects its gross profit rate will decrease by 30 to 40 basis points, citing faster growth of lower-margin products in its revenue mix in a more stable promotional environment.
System-wide same-bakery-cafe sales decreased 0.2%. St. Louis-based Panera said it expects first-quarter profit to be at or "modestly below" the previous target of 47 cents to 50 cents a share, citing same-bakery-cafe sales at the low-end of its original range and the impact on margins by extreme weather. Panera estimates that its comparable bakery-cafe sales in the first quarter were lower than expected by about 1% due to extreme weather experienced in its core markets. Same-bakery-cafe sales, which are lower as a result of weather, have a significantly higher impact on earnings given the inability to rapidly reduce food and labor in the face of inclement weather, Panera said.
P.F. Chang's China Bistro said March same-store sales fell 3% at its China Bistro restaurants from year-earlier levels and increased 0.5% at Pei Wei restaurants. First-quarter same-store sales fell 2.5% at China Bistro and rose 0.5% at Pei Wei.
Blackstone announced going public. Now Apollo Management is talking the same language.
Eli Broad and Ron Burkle are meeting with their advisers and "continuing to study Tribune opportunities," a source told Crain's Business.
Monster Worldwide Inc., owner of the world's largest Internet job-listing site, missed its first- quarter sales forecast.
House Speaker Nancy Pelosi is meeting with Syrian President Bashar al-Assad today in defiance of President George W. Bush, who called the visit ``counterproductive.'' Some congressional Republicans support the diplomatic overture and Israeli Prime Minister Ehud Olmert asked Pelosi to carry a message to Assad. Republican Representative David Hobson of Ohio is one of six members of Congress traveling with her.
Circuit City had poor sales and reported a loss.
The WSJ reported that Sony has cut prices on its Playstation portable device.
Even though March sales for GM, Ford, and Chrysler declined, Toyota's rose 11.7%.
The Oil Drum: "Saudi Aramco will cut exports of Arab heavy crude by as much as 20 percent to Japan, 9 percent to South Korea and 15 percent to China, refinery officials said. A Taiwanese refiner will receive a 10 percent cut in Arab heavy supply...Refineries in Asia typically close from April to June for repairs. Japan will see a peak of 26 percent of its capacity closed in May and South Korea will have 19 percent shut, mainly during the second half of June and the first half of July."
Halliburton Co. said Tuesday it had received more requests than it could accept from shareholders who wanted to swap Halliburton stock for that of its soon-to-be-spun-off KBR subsidiary.
Nouriel Roubini: " We have now some first hard evidence that the trouble in near-prime Alt-A loans (typically low/no doc mortgages) is now emerging. As reported by the press, M&B Bank is now showing trouble both in its sub-prime and Alt-A loans. For example, Reuters reported that: Shares of M&T Bank Corp.whose largest outside shareholder is Berkshire Hathaway Inc., fell 8.5 percent to its lowest close in 17 months, on Monday after the Northeast U.S. regional bank cut its first-quarter profit forecast amid weak demand for mortgages."
The national survey by Automatic Data Processing suggested payrolls grew by 130,000 in March.
ConocoPhillips said Wednesday its first-quarter production on a barrel-of-oil equivalent per day basis would be lower than the previous quarter. Exploration expenses would be $275 million in the first quarter before taxes. Worldwide refining margins will be "significantly higher" than the fourth quarter, though narrowing crude differentials and the pricing of Brent crude at a premium to WTI crude during the quarter is expected to hurt margins at ConocoPhillips' U.S. refineries.
From Richard Doughty: "How much defense industry spending? Well, Mark Skousen, of Forecasts and Strategies newsletter, says that "the U.S. government's share of GDP spent on defense has gone from 3% to 3.7% since September 11, 2001." For perspective, he adds "while other nations collectively have declined from 2% to 1%."
From Financial Sense: "According to Atlas Van Lines, Texas is the top destination for Americans who've pulled up stakes. And they come from all over - not just the Rust Belt. In fact, many are leaving the hurricane coast of Louisiana and Mississippi to take up residence in Texas. And if this continues, Texas could be home to about 25 million people by the year 2010; and by 2040 the state's population could hit 51 million."
Dan Amoss quotes Roger Blanchard: "The U.S. now has approximately 500,000 low-production stripper wells (wells that produce less than 10 barrels/day) with an average production rate of ~2 b/d.You read that figure correctly. That's 500,000 "stripper wells" currently in operation. Even more shocking is the fact these mom and pop wells account for about 18% of U.S. oil production. Tiny natural gas wells provide about 10% of U.S. gas supply. Moving a little further up on the size scale, the latest EIA numbers show that about 50% of U.S. oil supply originates from wells producing less than 100 barrels per day."
The Institute for Supply Management said its non-manufacturing index fell to 52.4% from 54.3% in February. Orders for new civilian aircraft rose by 88.4% following a drop of 60.4% in January. Outside of transportation equipment, however, orders for factory goods dropped by 0.4% in February. Shipments declined by 0.5% in February. Orders for U.S.-made factory goods climbed 1.0% in February, against expectations for a rise of 1.9%.
President Mahmoud Ahmadinejad says Iran will pardon and free 15 British sailors and marines being held in Iranian custody. I guess Bush's mixed signals was another sign of being out of touch with reality.
Monsanto raised its earnings outlook for its fiscal full-year, which ends in August, to a range of $1.60 a share to $1.65 a share from a previous forecast of $1.50 to $1.57 a share. Meanwhile, the stock is trading at a new all-time high of $58.75. That's not chicken feed valuation. Maybe investors are confusing the shares with Google.
The American Petroleum Institute reported a fall of 104,000 barrels in crude supplies for the week ended March 30. The Energy Department had reported a climb of 4.3 million barrels. Motor gasoline supplies were down 440,000 barrels, the API said. The government reported a drop of 5 million barrels. Distillate supplies were up 455,000, the API said, but the government said inventories were unchanged.
Challenger, Gray & Christmas: "Layoffs in March totaled 48,997 compared with 84,014 in February. In July 2006, announced layoffs totaled 37,178."
AlterNet: "About a year from now, pundits and instant historians will point back at the firing of the federal prosecutors and say, "That's where the impeachment began."
Indybay.org: "4/11/2007 heralds an auspicious convergence of the 9/11 Truth Movement and the Impeachment Movement in Lytton Plaza, launching pad for the 9/11 Truth and Impeachment Movements. Monthly 9/11 Visibility actions will be taking place, and the rally will urge people everywhere to participate in the national shopping boycott to impeach for peace and justice (from Tax Day to Earth Day- April 15th-22nd) and to spell out "Impeach" on the national day of impeachment action, April 28th. Tell Congress, Wall Street "We don't buy the big lie about 9/11" and "We're not buying it" anymore. Join the effort in Palo Alto- or wherever you may be!"
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications fell for the third straight week, dropping 3.2% to 649.5 in the week ended March 30. The MBA's seasonally adjusted purchase index declined 2.0% to 402.9, while its refinancing applications index fell 4.5% to 2,098.3.
After my contact with 2 dozen Japanese business men today I came away with the realization that Japan has a serious interest in selling certified organic produce and natural meat and poultry without hormones.
May crude fell 26 cents to close at $64.38 a barrel Wednesday; however, there was a rally in May reformulated gasoline prices to a seven-month closing high of $2.1054 a gallon, up 8.77 cents.
June gold climbed 1.2%, or $7.70, to close at $677.40 an ounce. May silver rose 19 cents to close at $13.62 an ounce and May copper extended its climb to finish up 7.3 cents at a more than five-month high of $3.3875 a pound.
Barack Obama's campaign announced Wednesday that it had raised "at least" $25 million in the first quarter of this year.
Best Buy said it expects its gross profit rate will decrease by 30 to 40 basis points, citing faster growth of lower-margin products in its revenue mix in a more stable promotional environment.
System-wide same-bakery-cafe sales decreased 0.2%. St. Louis-based Panera said it expects first-quarter profit to be at or "modestly below" the previous target of 47 cents to 50 cents a share, citing same-bakery-cafe sales at the low-end of its original range and the impact on margins by extreme weather. Panera estimates that its comparable bakery-cafe sales in the first quarter were lower than expected by about 1% due to extreme weather experienced in its core markets. Same-bakery-cafe sales, which are lower as a result of weather, have a significantly higher impact on earnings given the inability to rapidly reduce food and labor in the face of inclement weather, Panera said.
P.F. Chang's China Bistro said March same-store sales fell 3% at its China Bistro restaurants from year-earlier levels and increased 0.5% at Pei Wei restaurants. First-quarter same-store sales fell 2.5% at China Bistro and rose 0.5% at Pei Wei.
Blackstone announced going public. Now Apollo Management is talking the same language.
Eli Broad and Ron Burkle are meeting with their advisers and "continuing to study Tribune opportunities," a source told Crain's Business.
Monster Worldwide Inc., owner of the world's largest Internet job-listing site, missed its first- quarter sales forecast.
House Speaker Nancy Pelosi is meeting with Syrian President Bashar al-Assad today in defiance of President George W. Bush, who called the visit ``counterproductive.'' Some congressional Republicans support the diplomatic overture and Israeli Prime Minister Ehud Olmert asked Pelosi to carry a message to Assad. Republican Representative David Hobson of Ohio is one of six members of Congress traveling with her.
Circuit City had poor sales and reported a loss.
The WSJ reported that Sony has cut prices on its Playstation portable device.
Even though March sales for GM, Ford, and Chrysler declined, Toyota's rose 11.7%.
The Oil Drum: "Saudi Aramco will cut exports of Arab heavy crude by as much as 20 percent to Japan, 9 percent to South Korea and 15 percent to China, refinery officials said. A Taiwanese refiner will receive a 10 percent cut in Arab heavy supply...Refineries in Asia typically close from April to June for repairs. Japan will see a peak of 26 percent of its capacity closed in May and South Korea will have 19 percent shut, mainly during the second half of June and the first half of July."
Halliburton Co. said Tuesday it had received more requests than it could accept from shareholders who wanted to swap Halliburton stock for that of its soon-to-be-spun-off KBR subsidiary.
Nouriel Roubini: " We have now some first hard evidence that the trouble in near-prime Alt-A loans (typically low/no doc mortgages) is now emerging. As reported by the press, M&B Bank is now showing trouble both in its sub-prime and Alt-A loans. For example, Reuters reported that: Shares of M&T Bank Corp.whose largest outside shareholder is Berkshire Hathaway Inc., fell 8.5 percent to its lowest close in 17 months, on Monday after the Northeast U.S. regional bank cut its first-quarter profit forecast amid weak demand for mortgages."
The national survey by Automatic Data Processing suggested payrolls grew by 130,000 in March.
ConocoPhillips said Wednesday its first-quarter production on a barrel-of-oil equivalent per day basis would be lower than the previous quarter. Exploration expenses would be $275 million in the first quarter before taxes. Worldwide refining margins will be "significantly higher" than the fourth quarter, though narrowing crude differentials and the pricing of Brent crude at a premium to WTI crude during the quarter is expected to hurt margins at ConocoPhillips' U.S. refineries.
From Richard Doughty: "How much defense industry spending? Well, Mark Skousen, of Forecasts and Strategies newsletter, says that "the U.S. government's share of GDP spent on defense has gone from 3% to 3.7% since September 11, 2001." For perspective, he adds "while other nations collectively have declined from 2% to 1%."
From Financial Sense: "According to Atlas Van Lines, Texas is the top destination for Americans who've pulled up stakes. And they come from all over - not just the Rust Belt. In fact, many are leaving the hurricane coast of Louisiana and Mississippi to take up residence in Texas. And if this continues, Texas could be home to about 25 million people by the year 2010; and by 2040 the state's population could hit 51 million."
Dan Amoss quotes Roger Blanchard: "The U.S. now has approximately 500,000 low-production stripper wells (wells that produce less than 10 barrels/day) with an average production rate of ~2 b/d.You read that figure correctly. That's 500,000 "stripper wells" currently in operation. Even more shocking is the fact these mom and pop wells account for about 18% of U.S. oil production. Tiny natural gas wells provide about 10% of U.S. gas supply. Moving a little further up on the size scale, the latest EIA numbers show that about 50% of U.S. oil supply originates from wells producing less than 100 barrels per day."
The Institute for Supply Management said its non-manufacturing index fell to 52.4% from 54.3% in February. Orders for new civilian aircraft rose by 88.4% following a drop of 60.4% in January. Outside of transportation equipment, however, orders for factory goods dropped by 0.4% in February. Shipments declined by 0.5% in February. Orders for U.S.-made factory goods climbed 1.0% in February, against expectations for a rise of 1.9%.
President Mahmoud Ahmadinejad says Iran will pardon and free 15 British sailors and marines being held in Iranian custody. I guess Bush's mixed signals was another sign of being out of touch with reality.
Monsanto raised its earnings outlook for its fiscal full-year, which ends in August, to a range of $1.60 a share to $1.65 a share from a previous forecast of $1.50 to $1.57 a share. Meanwhile, the stock is trading at a new all-time high of $58.75. That's not chicken feed valuation. Maybe investors are confusing the shares with Google.
The American Petroleum Institute reported a fall of 104,000 barrels in crude supplies for the week ended March 30. The Energy Department had reported a climb of 4.3 million barrels. Motor gasoline supplies were down 440,000 barrels, the API said. The government reported a drop of 5 million barrels. Distillate supplies were up 455,000, the API said, but the government said inventories were unchanged.
Challenger, Gray & Christmas: "Layoffs in March totaled 48,997 compared with 84,014 in February. In July 2006, announced layoffs totaled 37,178."
AlterNet: "About a year from now, pundits and instant historians will point back at the firing of the federal prosecutors and say, "That's where the impeachment began."
Indybay.org: "4/11/2007 heralds an auspicious convergence of the 9/11 Truth Movement and the Impeachment Movement in Lytton Plaza, launching pad for the 9/11 Truth and Impeachment Movements. Monthly 9/11 Visibility actions will be taking place, and the rally will urge people everywhere to participate in the national shopping boycott to impeach for peace and justice (from Tax Day to Earth Day- April 15th-22nd) and to spell out "Impeach" on the national day of impeachment action, April 28th. Tell Congress, Wall Street "We don't buy the big lie about 9/11" and "We're not buying it" anymore. Join the effort in Palo Alto- or wherever you may be!"
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications fell for the third straight week, dropping 3.2% to 649.5 in the week ended March 30. The MBA's seasonally adjusted purchase index declined 2.0% to 402.9, while its refinancing applications index fell 4.5% to 2,098.3.
After my contact with 2 dozen Japanese business men today I came away with the realization that Japan has a serious interest in selling certified organic produce and natural meat and poultry without hormones.
May crude fell 26 cents to close at $64.38 a barrel Wednesday; however, there was a rally in May reformulated gasoline prices to a seven-month closing high of $2.1054 a gallon, up 8.77 cents.
June gold climbed 1.2%, or $7.70, to close at $677.40 an ounce. May silver rose 19 cents to close at $13.62 an ounce and May copper extended its climb to finish up 7.3 cents at a more than five-month high of $3.3875 a pound.
Barack Obama's campaign announced Wednesday that it had raised "at least" $25 million in the first quarter of this year.
Tuesday, April 03, 2007
Scheduling Conflicts
4/4/07 Scheduling Conflicts
“The president is really sorry he couldn’t be here tonight, but he had another obligation,” Cheney said. “His book club is meeting.” President George W. Bush traditionally attends the annual Gridiron Club dinner but was conferring with Brazil’s president at Camp David on Saturday. Founded in 1885, the invitation-only Gridiron Club is the oldest organization for Washington journalists.
Robert Novak: "The reason given by the White House for President Bush's missing the 122nd annual Washington Gridiron dinner March 31 is that he will entertain Brazil's President Luiz Inacio Lula da Silva that weekend. But a key adviser urged him six weeks ago to skip the gathering of the journalists club. The adviser attended the Jan. 27 Alfalfa dinner in Washington and was struck by the ''tepid'' greeting given the president by the elite audience. If an audience presumed friendly to Bush was cool, he feared the reception from hostile newsies."
Bush missed last year's baseball home opener and will miss today's, when the Nationals host the Florida Marlins. Except during world wars, only two other presidents (Woodrow Wilson and Richard Nixon) missed opening-day ceremonies two years in a row. And Wilson had suffered a stroke. Bush spokeswoman Emily Lawrimore said the president, an avid baseball fan and former part owner of the Texas Rangers, would love to be there. But "it's not possible with his schedule."
Gas prices up 9 weeks in a row, up 24%, and now average $2.75 nation-wide.
Prime Minister Tony Blair said the U.K. will try to keep negotiations with Iran over 15 captive British sailors and Marines ``peaceful and calm,'' while preparing to take a harder line. The next 48 hours will be ``fairly critical'' in the talks, Blair said today in Glasgow after Iranian President Mahmoud Ahmadinejad postponed a press conference until tomorrow. Iran's Supreme National Security Council chief Ali Larijani said late yesterday there was ``no need for any trial'' of the Britons. ``There are some reasons for optimism,'' said Chris Rundle, a former U.K. diplomat who worked at the British embassy in Tehran for four years. ``Part of the problem is that the wheels of decision-making turn slowly in Iran.''
China is waiting for the right opportunity to adjust its refined oil pricing mechanism, said a senior official on Monday
Reform of the refined oil pricing mechanism is closely tied to international oil price fluctuations, said Chen Deming, vice chairman of the National Development and Reform Commission (NDRC).
However, the government has to consider people's capacity to adapt to the changes, said Chen.
The purpose of the mechanism is to link the prices of refined oil products on the domestic market in China more closely to their international equivalents.
The vice chairman said that, to make the reform more palatable, the government will give subsidies to sectors such as food production, city transportation, agriculture and forestry. Low income groups will also receive allowances, he added. Chen said the country will impose a fuel oil tax in the near future.
According to the Financial Times, Europe has eclipsed the US in stock market value for the first time since the first world war in another sign of the slipping of the global dominance of American capital markets.
In a defeat for the Bush administration, the Supreme Court ruled on Monday that a U.S. government agency has the power under the clean air law to regulate greenhouse gas emissions that spur global warming. The nation’s highest court by a 5-4 vote said the U.S. Environmental Protection Agency “has offered no reasoned explanation” for its refusal to regulate carbon dioxide and other emissions from new cars and trucks that contribute to climate change.
The break-up fee on the Tribune buyout by Sam Zell is $25 million.
Martin Weiss: "In the first 11 months of 2006, Brazil was China's largest trade partner in Latin America. Meanwhile, bilateral trade between China and Latin America as a whole seems to be doubling every five years: It was $50 billion in 2005. It will hit $80 billion this year. And it should easily reach $100 billion by 2010. So for the past several years, new Sino-Brazilian ventures and deals have been in the news almost daily."
The pending home sales index rose 0.7% in February. The index is down 8.5% in the past year.
Boston Globe: "There are also practical reasons for Leahy to avoid a subpoena: If Rove fights a congressional committee's subpoena, it would take a vote of the full House or Senate to find him in contempt. The case would then be referred to the local US attorney, who would decide how to proceed."
Copper futures climbed Tuesday to their highest level in five months.
The 2007 Atlantic hurricane season will be far more active than usual with 17 tropical storms, of which nine will grow into hurricanes, a noted U.S. forecasting team founded by William Gray said on Tuesday. If the prediction proves true, the June 1-November 30 hurricane season could mark a return to the destructive seasons of 2004, when four strong hurricanes hit Florida, and 2005, the year of Katrina, after a mild 2006 season when only 10 storms formed.
House Speaker Nancy Pelosi toured Damascus on Tuesday, the highest-ranking American politician to visit Syria since relations began to deteriorate four years ago.
May crude fell $1.30 to close at $64.64 a barrel after a low of $64 during the session. May natural gas fell 3.2%, or 24.5 cents, to close at $7.426 per million British thermal units.
GM cuts its second-quarter production forecast by 1.3% to 1.16 million vehicles.
May copper climbed 4.3%, or 13.55 cents, to close at $3.3145 a pound in New York Tuesday, the contract's highest closing level since Nov. 9. June gold fell back by $1.80 to close at $669.70 an ounce.
“The president is really sorry he couldn’t be here tonight, but he had another obligation,” Cheney said. “His book club is meeting.” President George W. Bush traditionally attends the annual Gridiron Club dinner but was conferring with Brazil’s president at Camp David on Saturday. Founded in 1885, the invitation-only Gridiron Club is the oldest organization for Washington journalists.
Robert Novak: "The reason given by the White House for President Bush's missing the 122nd annual Washington Gridiron dinner March 31 is that he will entertain Brazil's President Luiz Inacio Lula da Silva that weekend. But a key adviser urged him six weeks ago to skip the gathering of the journalists club. The adviser attended the Jan. 27 Alfalfa dinner in Washington and was struck by the ''tepid'' greeting given the president by the elite audience. If an audience presumed friendly to Bush was cool, he feared the reception from hostile newsies."
Bush missed last year's baseball home opener and will miss today's, when the Nationals host the Florida Marlins. Except during world wars, only two other presidents (Woodrow Wilson and Richard Nixon) missed opening-day ceremonies two years in a row. And Wilson had suffered a stroke. Bush spokeswoman Emily Lawrimore said the president, an avid baseball fan and former part owner of the Texas Rangers, would love to be there. But "it's not possible with his schedule."
Gas prices up 9 weeks in a row, up 24%, and now average $2.75 nation-wide.
Prime Minister Tony Blair said the U.K. will try to keep negotiations with Iran over 15 captive British sailors and Marines ``peaceful and calm,'' while preparing to take a harder line. The next 48 hours will be ``fairly critical'' in the talks, Blair said today in Glasgow after Iranian President Mahmoud Ahmadinejad postponed a press conference until tomorrow. Iran's Supreme National Security Council chief Ali Larijani said late yesterday there was ``no need for any trial'' of the Britons. ``There are some reasons for optimism,'' said Chris Rundle, a former U.K. diplomat who worked at the British embassy in Tehran for four years. ``Part of the problem is that the wheels of decision-making turn slowly in Iran.''
China is waiting for the right opportunity to adjust its refined oil pricing mechanism, said a senior official on Monday
Reform of the refined oil pricing mechanism is closely tied to international oil price fluctuations, said Chen Deming, vice chairman of the National Development and Reform Commission (NDRC).
However, the government has to consider people's capacity to adapt to the changes, said Chen.
The purpose of the mechanism is to link the prices of refined oil products on the domestic market in China more closely to their international equivalents.
The vice chairman said that, to make the reform more palatable, the government will give subsidies to sectors such as food production, city transportation, agriculture and forestry. Low income groups will also receive allowances, he added. Chen said the country will impose a fuel oil tax in the near future.
According to the Financial Times, Europe has eclipsed the US in stock market value for the first time since the first world war in another sign of the slipping of the global dominance of American capital markets.
In a defeat for the Bush administration, the Supreme Court ruled on Monday that a U.S. government agency has the power under the clean air law to regulate greenhouse gas emissions that spur global warming. The nation’s highest court by a 5-4 vote said the U.S. Environmental Protection Agency “has offered no reasoned explanation” for its refusal to regulate carbon dioxide and other emissions from new cars and trucks that contribute to climate change.
The break-up fee on the Tribune buyout by Sam Zell is $25 million.
Martin Weiss: "In the first 11 months of 2006, Brazil was China's largest trade partner in Latin America. Meanwhile, bilateral trade between China and Latin America as a whole seems to be doubling every five years: It was $50 billion in 2005. It will hit $80 billion this year. And it should easily reach $100 billion by 2010. So for the past several years, new Sino-Brazilian ventures and deals have been in the news almost daily."
The pending home sales index rose 0.7% in February. The index is down 8.5% in the past year.
Boston Globe: "There are also practical reasons for Leahy to avoid a subpoena: If Rove fights a congressional committee's subpoena, it would take a vote of the full House or Senate to find him in contempt. The case would then be referred to the local US attorney, who would decide how to proceed."
Copper futures climbed Tuesday to their highest level in five months.
The 2007 Atlantic hurricane season will be far more active than usual with 17 tropical storms, of which nine will grow into hurricanes, a noted U.S. forecasting team founded by William Gray said on Tuesday. If the prediction proves true, the June 1-November 30 hurricane season could mark a return to the destructive seasons of 2004, when four strong hurricanes hit Florida, and 2005, the year of Katrina, after a mild 2006 season when only 10 storms formed.
House Speaker Nancy Pelosi toured Damascus on Tuesday, the highest-ranking American politician to visit Syria since relations began to deteriorate four years ago.
May crude fell $1.30 to close at $64.64 a barrel after a low of $64 during the session. May natural gas fell 3.2%, or 24.5 cents, to close at $7.426 per million British thermal units.
GM cuts its second-quarter production forecast by 1.3% to 1.16 million vehicles.
May copper climbed 4.3%, or 13.55 cents, to close at $3.3145 a pound in New York Tuesday, the contract's highest closing level since Nov. 9. June gold fell back by $1.80 to close at $669.70 an ounce.
Monday, April 02, 2007
The Coming Week
4/3/07 The Coming Week
Even some Republicans say Rove should come to Capitol Hill to answer questions.
"I think we ought to hear from him - candidly, sooner rather than later," Pennsylvania Sen. Arlen Specter, the top Republican on the Senate Judiciary Committee, said Thursday. "We ought to try to get to the bottom of all these factual situations so that we can make a determination as to who ought to stay, who ought to go."
Sen. Charles Schumer, D-N.Y., who's leading the investigation, told McClatchy Newspapers on Friday that Sampson's testimony left wide open the question of who was calling the shots regarding the firings and hirings.
"That makes it even more important to interview other officials, including Karl Rove," he said.
AT&T Inc.and Carlos Slim's America Movil SAB each offered to buy a third of the holding company that controls Telecom Italia SpA from Pirelli & C. SpA. Based on the market value of Telecom Italia, also based in Milan, each one-third stake is worth about $3.2 billion.
KKR to buy First Data for $29 billion in cash or $34 a share.
Xerox Corp. and Global Imaging Systems Inc. have reached a definitive agreement calling for the acquisition of Global Imaging at a cash price of $29 a share, the companies said.
Chicago Tribune reports Chicago billionaire Sam Zell has won the auction for Tribune Co., the Wall Street Journal reported on its Web site this morning.
Terms are expected to be disclosed later this morning, the Journal said, citing an anonymous source with knowledge of the deal. But among those terms is a low break-up fee that would allow Los Angeles billionaires Eli Broad and Ron Burkle to pursue a still higher offer, if they choose. Supposedly, Zell matched the $34 a share in cash offer from Broad and Burkle. It would appear that the situation is still fluid.
Additionally, Zell plans to invest $315 million in the deal for the Chicago-based media company and will eventually become chairman of its board when the deal is complete sometime in the fourth quarter. Tribune said the buyout will be conducted as a two-part deal. The first stage, expected to be completed in the second quarter, will involve a cash tender offer of $34 per share for 126 million shares, more than half of the outstanding Tribune shares. The remaining shares will be purchased later at the same $34 per share price. Tribune said it also plans to sell the Cubs baseball team at the end of this season.
Tribune has about 240 million shares outstanding, according to a regulatory filing.
John Hussman: "We don't have to conclude that the market is “overvalued” – just that it's a good likelihood that stocks are priced to deliver long-term returns of far less than 10% annually at these levels...The extreme 1974 and 1982 troughs, for example, occurred at price/peak earnings ratios of 7 and price/trendline earnings of about 6. Given the current multiple of 17.5 times those trendline earnings, I am certainly not suggesting any probability of the market moving to such levels. But to rule out a decline of 30-40% on the S&P 500 would be to rule out a move to valuations that have historically been standard, normal, commonplace."
Chinese oil-refining giant Sinopec and Russian leading oil company Rosneft have signed an agreement on the joint exploration and development of the Venin offshore deposit, part of the Sakhalin-3 project in Russia's Far East region.
Under the accord, Rosneft will have a 74.9 per cent stake and Sinopec 25.1 per cent, Xinhua news agency reported as Chinese President Hu Jintao concluded a state visit to Russia.
Zmansenergybrain: "CFTC - Shhhh, I Have A Secret. Natural Gas Shorts Are At Record Levels. The net position in natural gas futures and options fell to its lowest level (most short) on record last week. You’re unlikely to hear this anywhere else but traders are taking a huge bet against natural gas prices right now. At some point, the cover of this position will result in a sharp rise in natural gas prices however, I happen to agree with the traders and think tthat gas prices are due for a small tumble (to around $6/Mcf) in the the near term. Then the cover would lift prices from their."
Manufacturing growth in the U.S. slowed in March and an index of costs rose to the highest since August as weakness in auto demand and a slump in housing restrained production, an industry report said. The Institute for Supply Management's manufacturing index fell to 50.9 from 52.3 in February. An index of prices paid jumped to 65.5, the highest since August, from 59. The new orders index decreased to 51.6 from 54.9. The production index fell to 53 from 54.1.The measure of orders waiting to be filled fell to 47 from 51.5 in February. The inventory index increased to 47.5 from 44.6.
New Century Financial filed for Chapter 11 bankruptcy protection.
May crude closed at $65.94 a barrel, up 7 cents for the session. May natural gas fell 5.9 cents to close at $7.671 per million British thermal units
April gold closed at $665.70 an ounce, up $2.70, and June gold climbed $2.50 to end the session at $671.50. May silver closed at $13.35 an ounce, down 10 cents, but May copper rose 3.3 cents to end at $3.179 a pound..
Even some Republicans say Rove should come to Capitol Hill to answer questions.
"I think we ought to hear from him - candidly, sooner rather than later," Pennsylvania Sen. Arlen Specter, the top Republican on the Senate Judiciary Committee, said Thursday. "We ought to try to get to the bottom of all these factual situations so that we can make a determination as to who ought to stay, who ought to go."
Sen. Charles Schumer, D-N.Y., who's leading the investigation, told McClatchy Newspapers on Friday that Sampson's testimony left wide open the question of who was calling the shots regarding the firings and hirings.
"That makes it even more important to interview other officials, including Karl Rove," he said.
AT&T Inc.and Carlos Slim's America Movil SAB each offered to buy a third of the holding company that controls Telecom Italia SpA from Pirelli & C. SpA. Based on the market value of Telecom Italia, also based in Milan, each one-third stake is worth about $3.2 billion.
KKR to buy First Data for $29 billion in cash or $34 a share.
Xerox Corp. and Global Imaging Systems Inc. have reached a definitive agreement calling for the acquisition of Global Imaging at a cash price of $29 a share, the companies said.
Chicago Tribune reports Chicago billionaire Sam Zell has won the auction for Tribune Co., the Wall Street Journal reported on its Web site this morning.
Terms are expected to be disclosed later this morning, the Journal said, citing an anonymous source with knowledge of the deal. But among those terms is a low break-up fee that would allow Los Angeles billionaires Eli Broad and Ron Burkle to pursue a still higher offer, if they choose. Supposedly, Zell matched the $34 a share in cash offer from Broad and Burkle. It would appear that the situation is still fluid.
Additionally, Zell plans to invest $315 million in the deal for the Chicago-based media company and will eventually become chairman of its board when the deal is complete sometime in the fourth quarter. Tribune said the buyout will be conducted as a two-part deal. The first stage, expected to be completed in the second quarter, will involve a cash tender offer of $34 per share for 126 million shares, more than half of the outstanding Tribune shares. The remaining shares will be purchased later at the same $34 per share price. Tribune said it also plans to sell the Cubs baseball team at the end of this season.
Tribune has about 240 million shares outstanding, according to a regulatory filing.
John Hussman: "We don't have to conclude that the market is “overvalued” – just that it's a good likelihood that stocks are priced to deliver long-term returns of far less than 10% annually at these levels...The extreme 1974 and 1982 troughs, for example, occurred at price/peak earnings ratios of 7 and price/trendline earnings of about 6. Given the current multiple of 17.5 times those trendline earnings, I am certainly not suggesting any probability of the market moving to such levels. But to rule out a decline of 30-40% on the S&P 500 would be to rule out a move to valuations that have historically been standard, normal, commonplace."
Chinese oil-refining giant Sinopec and Russian leading oil company Rosneft have signed an agreement on the joint exploration and development of the Venin offshore deposit, part of the Sakhalin-3 project in Russia's Far East region.
Under the accord, Rosneft will have a 74.9 per cent stake and Sinopec 25.1 per cent, Xinhua news agency reported as Chinese President Hu Jintao concluded a state visit to Russia.
Zmansenergybrain: "CFTC - Shhhh, I Have A Secret. Natural Gas Shorts Are At Record Levels. The net position in natural gas futures and options fell to its lowest level (most short) on record last week. You’re unlikely to hear this anywhere else but traders are taking a huge bet against natural gas prices right now. At some point, the cover of this position will result in a sharp rise in natural gas prices however, I happen to agree with the traders and think tthat gas prices are due for a small tumble (to around $6/Mcf) in the the near term. Then the cover would lift prices from their."
Manufacturing growth in the U.S. slowed in March and an index of costs rose to the highest since August as weakness in auto demand and a slump in housing restrained production, an industry report said. The Institute for Supply Management's manufacturing index fell to 50.9 from 52.3 in February. An index of prices paid jumped to 65.5, the highest since August, from 59. The new orders index decreased to 51.6 from 54.9. The production index fell to 53 from 54.1.The measure of orders waiting to be filled fell to 47 from 51.5 in February. The inventory index increased to 47.5 from 44.6.
New Century Financial filed for Chapter 11 bankruptcy protection.
May crude closed at $65.94 a barrel, up 7 cents for the session. May natural gas fell 5.9 cents to close at $7.671 per million British thermal units
April gold closed at $665.70 an ounce, up $2.70, and June gold climbed $2.50 to end the session at $671.50. May silver closed at $13.35 an ounce, down 10 cents, but May copper rose 3.3 cents to end at $3.179 a pound..
Sunday, April 01, 2007
Thoughts
4/2/07 Thoughts
A majority of Americans support proposed legislation that sets a goal for troop withdrawal from Iraq by March 2008, according to a Newsweek poll. The survey found 57 percent of Americans support the plan, passed this week by the U.S. Senate, while 36 percent are opposed and 7 percent are unsure.
Mike Burk: "Next week as well as the entire month of April have had a very positive seasonal bias...In April, during the 3rd year of the Presidential Cycle the OTC has had an average return of 3.7% and been down only once, in 1987. Over all years the index has been up 68% of the time with an average return of 1.5%...Since 1928 the SPX has been up 58% of the time in April with an average return of 1.1%, however, during the 3rd year of the Presidential Cycle it has been up 78% of the time with an average return of 2.4%. The last time the SPX was down in April during the 3rd year of the Presidential Cycle was 1987."
Marsoft: "The dry bulk market boom kicked into an even higher gear over the past month, with the Baltic Dry Index soaring from 4,300 in mid-February to more than 5,000 by mid-March, its highest level since late 2004. The market was firing on all cylinders in the first three weeks of March, as all sectors recorded strong gains. Average Cape rates soared from $70,000 per day in mid-February to more than $80,000 per day in the first half of March, and some routes saw rates topping $100,000. In percentage terms, Panamaxes recorded even larger gains, with rates rising from an average of $33,000 per day in mid-February to just over $40,000 per day by mid-March. The smaller bulkers also participated in the latest rally. Supramax rates rose from $29,000 per day in mid-February to $33,000 per day by mid-March, while small Handies trading in the Atlantic earned more than $20,000 per day in mid-March, up from $16,000 per day a month earlier."
From my perspective, the economy may be slowing in the U.S., but globally the tremendous strength in the BDI indicates that the economies of many economies continue to maintain and/or gain strength. As such, we have just seen higher interest rates in India, one of the strongest economies. It is, in my view, highly unlikely that the Fed will lower interest rates while other countries are increasing theirs, and, it is even more unlikely when coupled with the CRB moving to higher and higher levels.
James Howard Kunstler: "The coming age of energy scarcity will change everything about how we live in this country. It will ignite more desperate contests between nations for the remaining oil and natural gas around the world. It will alter the fundamental terms of industrial economies. It will ramify and amplify many of the problems presented by climate change. It will require us to behave differently. But we are not paying attention." (provided courtesy of The Oil Drum)
According to the Financial Times, the United States is bringing pressure on Petrobras, the Brazilian government-controlled oil group, to scale back its operations in Iran. Clifford Sobel, the US ambassador in BrasÃlia, reportedly told Sérgio Gabrielli, president of Petrobras, that the US was concerned over the company’s increasing activities in the country. According to an article in daily newspaper Valor Econômico on Friday, he said such activities might “create complications” for Petrobras’s operations in the Gulf of Mexico.
Elliott H. Gue: " Assuming the refineries are working properly, the total throughput of Iranian refineries is less than 1.5 million barrels of crude oil per day. And that's a big assumption; as I've stressed before, Iran has massively underinvested in the upkeep of its energy infrastructure. If refinery accidents and shut-ins are relatively common in countries like the US and the UK, you can imagine the potential if a country isn't investing sufficient cash in maintenance.
At any rate, Iran's refining capacity is no better than 38 percent of its oil production; the country can't even refine half the oil it produces. Nor, for that matter, can Iran even refine close to what it consumes.
The bottom line: Iran actually imports some 40 percent of the oil consumed domestically. Somewhat akin to Coleridge's ancient mariner, Iran is surrounded by crude oil but totally incapable of using that oil domestically."
A majority of Americans support proposed legislation that sets a goal for troop withdrawal from Iraq by March 2008, according to a Newsweek poll. The survey found 57 percent of Americans support the plan, passed this week by the U.S. Senate, while 36 percent are opposed and 7 percent are unsure.
Mike Burk: "Next week as well as the entire month of April have had a very positive seasonal bias...In April, during the 3rd year of the Presidential Cycle the OTC has had an average return of 3.7% and been down only once, in 1987. Over all years the index has been up 68% of the time with an average return of 1.5%...Since 1928 the SPX has been up 58% of the time in April with an average return of 1.1%, however, during the 3rd year of the Presidential Cycle it has been up 78% of the time with an average return of 2.4%. The last time the SPX was down in April during the 3rd year of the Presidential Cycle was 1987."
Marsoft: "The dry bulk market boom kicked into an even higher gear over the past month, with the Baltic Dry Index soaring from 4,300 in mid-February to more than 5,000 by mid-March, its highest level since late 2004. The market was firing on all cylinders in the first three weeks of March, as all sectors recorded strong gains. Average Cape rates soared from $70,000 per day in mid-February to more than $80,000 per day in the first half of March, and some routes saw rates topping $100,000. In percentage terms, Panamaxes recorded even larger gains, with rates rising from an average of $33,000 per day in mid-February to just over $40,000 per day by mid-March. The smaller bulkers also participated in the latest rally. Supramax rates rose from $29,000 per day in mid-February to $33,000 per day by mid-March, while small Handies trading in the Atlantic earned more than $20,000 per day in mid-March, up from $16,000 per day a month earlier."
From my perspective, the economy may be slowing in the U.S., but globally the tremendous strength in the BDI indicates that the economies of many economies continue to maintain and/or gain strength. As such, we have just seen higher interest rates in India, one of the strongest economies. It is, in my view, highly unlikely that the Fed will lower interest rates while other countries are increasing theirs, and, it is even more unlikely when coupled with the CRB moving to higher and higher levels.
James Howard Kunstler: "The coming age of energy scarcity will change everything about how we live in this country. It will ignite more desperate contests between nations for the remaining oil and natural gas around the world. It will alter the fundamental terms of industrial economies. It will ramify and amplify many of the problems presented by climate change. It will require us to behave differently. But we are not paying attention." (provided courtesy of The Oil Drum)
According to the Financial Times, the United States is bringing pressure on Petrobras, the Brazilian government-controlled oil group, to scale back its operations in Iran. Clifford Sobel, the US ambassador in BrasÃlia, reportedly told Sérgio Gabrielli, president of Petrobras, that the US was concerned over the company’s increasing activities in the country. According to an article in daily newspaper Valor Econômico on Friday, he said such activities might “create complications” for Petrobras’s operations in the Gulf of Mexico.
Elliott H. Gue: " Assuming the refineries are working properly, the total throughput of Iranian refineries is less than 1.5 million barrels of crude oil per day. And that's a big assumption; as I've stressed before, Iran has massively underinvested in the upkeep of its energy infrastructure. If refinery accidents and shut-ins are relatively common in countries like the US and the UK, you can imagine the potential if a country isn't investing sufficient cash in maintenance.
At any rate, Iran's refining capacity is no better than 38 percent of its oil production; the country can't even refine half the oil it produces. Nor, for that matter, can Iran even refine close to what it consumes.
The bottom line: Iran actually imports some 40 percent of the oil consumed domestically. Somewhat akin to Coleridge's ancient mariner, Iran is surrounded by crude oil but totally incapable of using that oil domestically."
Saturday, March 31, 2007
Welcome To April
4/1/07 Welcome to April
James L. Williams, WTRG Economics: "The U.S. rotary rig count was up 4 rigs to 1,749 for the week of March 30, 2007 and is 11.0 percent higher than last year. The number of rotary rigs drilling for oil is down 10 at 271. The number of rigs targeting oil is 18 rigs higher than last year's level of activity. Rigs currently drilling for oil represent 15.5% percent of total drilling activity. Rigs directed toward natural gas were up 13 at 1,472. The number of rigs currently drilling for gas is 151 greater than last year's level of 1,321. Year-over-year oil exploration in the US is up 7.1 percent. Gas exploration is up 11.4 percent. The weekly average of crude oil spot prices is 3.2 percent lower than last year and natural gas spot prices are 2.4 percent higher. Canadian rig activity* was down 97 at 149 for the week of March 30, 2007 and is 276 lower than last year's rig count. Canadian drilling falls rapidly in the spring to avoid environmental damage during the spring thaw and rainy season.
*The Canadian drilling industry experiences wide seasonal swings and even year over year comparisons can lead to incorrect conclusions."
The Commerce Department reported Friday that consumer spending, bolstered by strong income gains, was up 0.6 percent last month, while consumer income also rose 0.6 percent. Both figures were double what analysts had expected.
Dave Novosel, an investment analyst at Chicago's Gimme Credit research firm, said he thinks a $35-per-share offer would be enough to win over Tribune's special committee. But so far, no one has publicly offered that much.
The Oil Drum: " The USA, then, as we have all heard, has reported proven coal reserves that would allow continued production at current rates for more than 200 years. Three federal states (Wyoming, Montana, Illinois) own more than 70% of US coal reserves, but the low production rates relative to reported reserves in Montana and Illinois cast some doubt on the reliability or suitability of those reported reserves. As many of these reserves are of low quality, with high sulphur content and/or other drawbacks, it may be considered doubtful that they will ever be produced. Measured in terms of produced tons per miner, US productivity steadily increased until 2000, but has declined since, which also implies that ‘easy coal’ is running short. The USA had passed peak production of anthracite (by far the rarest form) by 1950 and peaked in bituminous coal in 1990, but sub-bituminous coal more than made up for this decline in terms of tonnage. However, due to the lower energy content of softer coals, the total energy content of annual US coal production peaked in 1998...Six countries (USA, Russia, India, China, Australia, South Africa) hold about 90% of world coal reserves, when this is measured in terms of energy content. According to the latest assessment by the WEC, total world reserves at the end of 2002 stood at 479bn tons of anthracite and bituminous coal, 272bn tons of sub-bituminous coal and 158bn tons of lignite. According to the Energy Watch Group, global coal production can increase for 10-15 years (mainly driven by China), but then production of anthracite and bituminous coal will peak around 2020 at a production rate around 30% higher than at present. Lignite production is predicted to peak somewhere between 2050 and 2060. However, as the quality of coal produced will be declining continuously the world coal energy peak is projected to come around 2025. It is also important to note that ‘peak coal exports’ should come even earlier, as lower-energy-density coals are not worth transporting long distances."
According to the WSJ, Hershey could consider a merger with U.K. candy rival Cadbury, the chairman of the trust that controls the U.S. firm said. Meanwhile, unionized workers at two Hershey chocolate factories voted overwhelmingly Friday to accept a tentative agreement that would keep the hometown factories open but allow the elimination of hundreds of jobs.
The WSJ opined Productivity Lull May Presage Slower Growth
U.S. productivity growth slowed over the past two years after a boom that began in the mid-1990s. If the trend continues, it could hurt living standards and stock prices and make the economy more inflation-prone.
Brett Steenbarger: "My big concern here, given the lack of follow through to the upside, is that we may be putting in a lower high following the big market drop. If that's the case, I'd expect an eventual test of the lows. I've not been impressed with dollar volume flows into stocks after the initial bounce from the lows."
Bill Bonner: "What we know is that private equities, like hedge funds, have taken on a speculative mentality. Deals are put together...then flipped from one PE firm to another. The objects of their attention - actual, profit-making companies - are loaded down with debt so the private equity investors can take out the profits. And then, the deals are sold back to the public - at a big premium. As more and more money chases quick profit, standards slip; the deals degenerate...from super-prime to subprime. Until investors come to their senses. In 1989, it was junk bond dealers with alpha in their pockets who were in need of wising up. Then, Ohio Mattress was being taken private by a buyout firm just at the time Drexel Burnham collapsed. Lenders got worried...then frightened. All of a sudden, the easy credit that made the deal possible disappeared. First Boston, one of the lenders, reached into its pocket and...lo...no more alpha. The deal fell apart and the bank was so destabilized, it was later sold to Credit Suisse. Junk bond investors learned such a valuable lesson, it took them almost 10 years to forget it."
The Reserve Bank of India increased its overnight lending rate by a quarter percentage point to a 4 1/2 year high of 7.75%.
According to Bloomberg, "The notional value of credit derivatives, the fastest-growing derivatives market, increased 55 percent to $9.0 trillion in the fourth quarter..."
Paul Kasriel: "In fact, in terms of heating degree days, February 2007 was the coldest February since that of 1979. March warmed up. The question is whether households spent their March savings on utilities at the malls or saved these savings. Given that their saving rate remains at Great Depression level lows - that is, they are running a deficit - and given all the angst about the value of their main retirement nest egg, their homes, I have a feeling they did not hit the malls with vigor in March."
A Fox News article that discusses Palatin: http://www.foxnews.com/story/0,2933,2627...
James L. Williams, WTRG Economics: "The U.S. rotary rig count was up 4 rigs to 1,749 for the week of March 30, 2007 and is 11.0 percent higher than last year. The number of rotary rigs drilling for oil is down 10 at 271. The number of rigs targeting oil is 18 rigs higher than last year's level of activity. Rigs currently drilling for oil represent 15.5% percent of total drilling activity. Rigs directed toward natural gas were up 13 at 1,472. The number of rigs currently drilling for gas is 151 greater than last year's level of 1,321. Year-over-year oil exploration in the US is up 7.1 percent. Gas exploration is up 11.4 percent. The weekly average of crude oil spot prices is 3.2 percent lower than last year and natural gas spot prices are 2.4 percent higher. Canadian rig activity* was down 97 at 149 for the week of March 30, 2007 and is 276 lower than last year's rig count. Canadian drilling falls rapidly in the spring to avoid environmental damage during the spring thaw and rainy season.
*The Canadian drilling industry experiences wide seasonal swings and even year over year comparisons can lead to incorrect conclusions."
The Commerce Department reported Friday that consumer spending, bolstered by strong income gains, was up 0.6 percent last month, while consumer income also rose 0.6 percent. Both figures were double what analysts had expected.
Dave Novosel, an investment analyst at Chicago's Gimme Credit research firm, said he thinks a $35-per-share offer would be enough to win over Tribune's special committee. But so far, no one has publicly offered that much.
The Oil Drum: " The USA, then, as we have all heard, has reported proven coal reserves that would allow continued production at current rates for more than 200 years. Three federal states (Wyoming, Montana, Illinois) own more than 70% of US coal reserves, but the low production rates relative to reported reserves in Montana and Illinois cast some doubt on the reliability or suitability of those reported reserves. As many of these reserves are of low quality, with high sulphur content and/or other drawbacks, it may be considered doubtful that they will ever be produced. Measured in terms of produced tons per miner, US productivity steadily increased until 2000, but has declined since, which also implies that ‘easy coal’ is running short. The USA had passed peak production of anthracite (by far the rarest form) by 1950 and peaked in bituminous coal in 1990, but sub-bituminous coal more than made up for this decline in terms of tonnage. However, due to the lower energy content of softer coals, the total energy content of annual US coal production peaked in 1998...Six countries (USA, Russia, India, China, Australia, South Africa) hold about 90% of world coal reserves, when this is measured in terms of energy content. According to the latest assessment by the WEC, total world reserves at the end of 2002 stood at 479bn tons of anthracite and bituminous coal, 272bn tons of sub-bituminous coal and 158bn tons of lignite. According to the Energy Watch Group, global coal production can increase for 10-15 years (mainly driven by China), but then production of anthracite and bituminous coal will peak around 2020 at a production rate around 30% higher than at present. Lignite production is predicted to peak somewhere between 2050 and 2060. However, as the quality of coal produced will be declining continuously the world coal energy peak is projected to come around 2025. It is also important to note that ‘peak coal exports’ should come even earlier, as lower-energy-density coals are not worth transporting long distances."
According to the WSJ, Hershey could consider a merger with U.K. candy rival Cadbury, the chairman of the trust that controls the U.S. firm said. Meanwhile, unionized workers at two Hershey chocolate factories voted overwhelmingly Friday to accept a tentative agreement that would keep the hometown factories open but allow the elimination of hundreds of jobs.
The WSJ opined Productivity Lull May Presage Slower Growth
U.S. productivity growth slowed over the past two years after a boom that began in the mid-1990s. If the trend continues, it could hurt living standards and stock prices and make the economy more inflation-prone.
Brett Steenbarger: "My big concern here, given the lack of follow through to the upside, is that we may be putting in a lower high following the big market drop. If that's the case, I'd expect an eventual test of the lows. I've not been impressed with dollar volume flows into stocks after the initial bounce from the lows."
Bill Bonner: "What we know is that private equities, like hedge funds, have taken on a speculative mentality. Deals are put together...then flipped from one PE firm to another. The objects of their attention - actual, profit-making companies - are loaded down with debt so the private equity investors can take out the profits. And then, the deals are sold back to the public - at a big premium. As more and more money chases quick profit, standards slip; the deals degenerate...from super-prime to subprime. Until investors come to their senses. In 1989, it was junk bond dealers with alpha in their pockets who were in need of wising up. Then, Ohio Mattress was being taken private by a buyout firm just at the time Drexel Burnham collapsed. Lenders got worried...then frightened. All of a sudden, the easy credit that made the deal possible disappeared. First Boston, one of the lenders, reached into its pocket and...lo...no more alpha. The deal fell apart and the bank was so destabilized, it was later sold to Credit Suisse. Junk bond investors learned such a valuable lesson, it took them almost 10 years to forget it."
The Reserve Bank of India increased its overnight lending rate by a quarter percentage point to a 4 1/2 year high of 7.75%.
According to Bloomberg, "The notional value of credit derivatives, the fastest-growing derivatives market, increased 55 percent to $9.0 trillion in the fourth quarter..."
Paul Kasriel: "In fact, in terms of heating degree days, February 2007 was the coldest February since that of 1979. March warmed up. The question is whether households spent their March savings on utilities at the malls or saved these savings. Given that their saving rate remains at Great Depression level lows - that is, they are running a deficit - and given all the angst about the value of their main retirement nest egg, their homes, I have a feeling they did not hit the malls with vigor in March."
A Fox News article that discusses Palatin: http://www.foxnews.com/story/0,2933,2627...
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