2/27/08 Prices
The dollar index touched an all-time low of 74.706.
Crude for April delivery settled up $1.65, or 1.7% on the New York Mercantile Exchange. Earlier it rose to a new intraday high of $101.15 a barrel. Heating-oil futures for March delivery ended at $2.815 a gallon, the highest closing a front-month contract has ever seen.
The Labor Department said Tuesday that wholesale prices rose 1 percent last month, more than double the 0.4 percent increase that economists had been expecting. The January surge left wholesale prices rising by 7.5 percent over the past 12 months, the fastest pace in more than 26 years, since prices had risen at a 7.5 percent pace in the 12 months ending in October 1981.
Thomas Jefferson: “If Americans ever allow banks to control the issue of their currency, first by inflation and then by deflation, the banks will deprive the people of all property until their children will wake up homeless”
Prices of existing U.S. single-family homes slumped 8.9 percent in the fourth quarter versus a year earlier, the largest decline in the 20-year history of a national home price index released on Tuesday. The S&P/Case-Shiller composite index of 10 metropolitan areas fell 2.3 percent in December versus November, to 200.55, and fell 9.8 percent year-over-year, S&P said in a statement.
Target Corp reported a more than 8 percent drop in quarterly profit on Tuesday after shoppers spurned purchases of higher-margin merchandise like clothes in favor of necessities like food. "Our financial performance in 2007 fell short of our expectations as the pace of sales and earnings slowed considerably in the second half of the year," said Bob Ulrich, chairman and chief executive officer, in a statement.
Home Depot Inc said on Tuesday earnings per share could fall as much as 24 percent this year, and it plans to open fewer new stores due to the slumping U.S. housing market. The world's largest home improvement retailer also reported profit for the 2007 fourth quarter that fell short of analysts' estimates, and its shares fell 1.6 percent in trading before the bell.
U.S. home foreclosures for January increased 57 percent from a year earlier, but the pace at least temporarily subsided in response to private and government efforts to help homeowners, RealtyTrac said. Foreclosure filings in January rose 8 percent from the prior month after jumping 19 percent a year earlier, the real estate marketing company said on Tuesday.
A comScore report showed lower paid-click search rates for Google from a year ago.
Office Depot Inc.'s net income fell 85% to $18.8 million, or 7 cents a share, from $126.6 million, or 45 cents a share, a year earlier.
U.S. consumer confidence slumped to a reading of 75 in February.
Chicago wheat prices rose by the most in more than five years, breaching $12 a bushel for the first time.
VMware has struck a deal to install its virtualisation software on some servers shipped by Dell, Hewlett-Packard, IBM and other suppliers of computer equipment to big companies.The move also includes servers made by Fujitsu Siemens.
The Oil Drum: "Oil output in Mexico, the third-biggest supplier to the US, is declining, and the state company Petroleos Mexicanos (Pemex) lacks the technology to explore for new reserves. For many the answer seems simple: more capital. But now that senators have begun debating ways to attain that capital – a top priority of President Felipe Calderón – resistance has mounted, particularly to the idea to allowing in private enterprise." This from a country that
nationalized U.S. oil interests in 1936-37 that became Pemex.
Sam Zell Sees Start of Housing Recovery in the Spring.
Rob Hanna: "Not all breakouts are good news. Between the 2-day surge and the triangle breakout study it appears the edge over the next few days is to the downside."
Brad Setser: "The rise in shipping from Asia to Europe and the Middle East helps to explain how the Baltic freight index decoupled from the US economic cycle. The Baltic dry index rose strongly for most of the year even as the US (non-oil) import growth slowed in 2007. Things obviously changed a bit in November. It also explains why Europe is increasingly putting pressure on China to appreciate against the euro, not just the dollar -- and why Europe seems to worry more about about the risk that it might attract too much investment from sovereign funds than to worry about the risk that it might attract too little."
U.S. home prices fell 0.3% in 2007, the first annual decline in home prices in decades, according to the purchase-only home-price index released Tuesday by the Office of Federal Housing Enterprise Oversight.
Natural gas rose on an outlook for supplies to decline amid a wave of colder weather in the regions of highest consumption. Lower-than-normal temperatures are probable March 4 through March 10 in the Midwest, the U.S. Climate Prediction Center in Camp Springs, Maryland, said in an outlook released yesterday. Gas for March delivery rose 6.6 cents, or 0.7 percent, to $9.252 per million British thermal units at 10:17 a.m. on the New York Mercantile Exchange. Futures earlier climbed to $9.267. Gas has risen 24 percent this year.
Marsoft: "A strong third quarter was followed by a spectacular fourth quarter, as dry bulk freight rates and vessel values shattered all previous records. By the end of the year, dry bulk freight rates had risen by 30-50% relative to their third quarter levels, and they were nearly triple their year-earlier levels...However, after these dramatic late-2007 gains, the dry bulk market experienced a significant correction in late December and early 2008, with spot rates falling by 50% in January, to levels last seen in the second quarter of 2007. At the very end of January, rates finally moved up again. Dry bulk ship prices also soared into uncharted territory during late 2007, rising by 20% over the past three months and by about 100% over the past year. The price of a 5 year-old Cape was marked up from $118 million in the third quarter to $146 million in the fourth quarter. Broker reports show prices edging down in January, in response to lower freight rates...
China remained the driving force behind the dry bulk market boom, as we estimate that it was responsible for just over half of the growth in global tonne-mile demand during 2007, and close to three-quarters if the increase seen during the fourth quarter. But interestingly, the increase in Chinese import activity came despite a noteworthy deceleration in steel production growth during the final months of 2007. After growing at a 19% pace in the first half of 2007, Chinese steel output grew by only 13% in the second half of the year.
The slowdown was partly due to a decline in Chinese steel exports, which were hit by a combination of restrictive tax measures implemented by the Chinese government, as well as by protectionist measures taken in Europe. And yet, despite the slowdown in steel production growth, Chinese iron ore imports remained robust, and were increasingly sourced from longer-haul suppliers such as Brazil. Despite a rise in domestic Chinese iron ore production, the low quality of China’s domestic supplies makes rising imports a necessity."
IBM said it plans to make about $12 billion in stock repurchases in 2008. The company said expected buyback activity could add about 5 cents a share to 2008 earnings, and now expects a profit of at least $8.25 a share for the year.
Despite disappointing inflation reports for January, the weak economy and fragile financial markets are a bigger threat to the economy than higher prices, said Federal Reserve Vice Chairman Donald Kohn. The bigger threats to the economy are the Fed's printing press, the ever-increasing spending by Congress and the Bush administration, the out-of-control government and consumer debt levels, and the wars in Iraq and Afghanistan.
Gold futures for April delivery climbed $8.40, or 0.9 percent, to $948.90 an ounce on the Comex division of the New York Mercantile Exchange. Silver futures for March delivery jumped 63.5 cents to $18.72 an ounce. The price earlier reached $18.77, the highest since December 1980. Silver gained 25 percent this year, and gold climbed 13 percent.
Cotton rallied for a sixth session to a 4 1/2-year high and wheat was limit up. Wheat climbed above $12 a bushel for the first time in Chicago.
Imports of refined copper and alloys by China gained 7.1 percent in January from a year earlier, the nation's customs office said Feb. 22. China is the world's biggest consumer of the metal.
Ernest Hemingway: “The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”
Tuesday, February 26, 2008
Monday, February 25, 2008
The Housing Market
2/26/08 The Housing Market
Lowe's Companies, Inc. reported net earnings of $408 million for the quarter ended February 1, 2008, a 33.4 percent decline over the same period a year ago. Diluted earnings per share declined 30.0 percent to $0.28 from $0.40 in the fourth quarter of 2006. For the fiscal year ended February 1, 2008, net earnings declined 9.5 percent to $2.81 billion while diluted earnings per share declined 6.5 percent to $1.86. Comparable store sales declined 7.6 percent for the fourth quarter and 5.1 percent for fiscal 2007. "As we look to fiscal 2008, we know the next several quarters will be challenging on many fronts as industry sales are likely to remain soft," Niblock, the company's chairman and ceo continued. "We remain focused on what we can control: providing great customer service while managing expenses and offering customers the best shopping experience in home improvement. As the year progresses, the recent Federal Reserve interest rate cuts and the approved fiscal stimulus package are expected to lend support to the broader economy and the consumer. As a result, many of the headwinds facing the housing market and the home improvement industry should lessen, and consumers' confidence in investing in and improving their homes should improve."
Home prices are forecast to fall 12 percent this year, according to Richard Syron, chief executive officer of Freddie Mac, the second-largest provider of money for U.S. home loans. Housing starts may plunge 22 percent in 2008 and remain at their lowest level in 16 years, he said in a speech to the homebuilders association on Feb. 13.
Visa Inc. disclosed details of its much-anticipated initial public offering early Monday. The San Francisco-based card giant, in a Securities and Exchange Commission filing, said it's registered 446.6 million Class A common shares, including 40.6 million subject to underwriters' option to purchase additional stock. Visa also pegged its proposed offering price in a range of $37 to $42 a share, meaning the IPO would generate maximum potential proceeds of nearly $18.76 billion. The company's applied for a New York Stock Exchange listing under the symbol V.
Goldman Sachs upgraded oil and gas services group company BJ Services Company to neutral from sell. "We see U.S. natural gas fundamentals as among the most attractive in the energy landscape, and believe a higher expected commodity price increases visibility into our North American drilling forecasts," the broker said.
Deutsche Bank downgraded New York Times Co. to sell from hold.
Silver mining group Silver Wheaton Corp. expects to have annual silver sales of around 15 million ounces in 2008, rising to 25 million ounces in 2010.
Anglo-Swiss mining firm Xstrata said that it saw record annual production for coking and thermal coal, ferrochrome, nickel, zinc mining and platinum operations in 2007. Xstrata also said that it produced record amounts of copper in the second half of the year, with particularly strong operating performances from Tintaya, Ernest Henry and Collahuasi. In total, Xstrata produced just under 1 million tonnes of copper, down 2% from a year ago, after a 46-day shut-down affected first half volumes.
According to the NY Times, the Middle East’s heavy reliance on food imports has made it especially vulnerable to the global rise in commodity prices over the past year, said George T. Abed, the former governor of the Palestine Monetary Authority and a director at the Institute of International Finance, an organization based in Washington. “For many basic products, we don’t have free market prices, we have monopoly prices,” said Samer Tawil, a former minister of national economy in Jordan. “Oil, cement, rice, meat, sugar: these are all imported almost exclusively by one importer each here. Corruption is one thing when it’s about building a road, but when it affects my food, that’s different.”
NY Times: "Another buyout is in danger of collapsing — but this time because one of the banks involved is suing its own client, the private equity firm trying to do the deal. The deal in jeopardy is Clear Channel’s $1.2 billion sale of its television unit to Providence Equity Partners, a media-focused buyout firm. Providence began to balk at the price, citing deterioration in the business and the economy, prompting a lawsuit by Clear Channel. Yet by late last week, the two sides had struck a deal in principle to lower the price by $100 million. But now comes a new bombshell. Wachovia, one of the three banks financing the deal, is now refusing to commit. It even sued its client, Providence, in a North Carolina state court on Friday, contending that the new agreement has voided its previous commitment. Goldman Sachs and UBS, the two other banks, have committed to finance the new transaction, which now calls for Providence to borrow less money at a higher interest rate."
Professor Cusumano suggests that rather than acquire Yahoo, Microsoft should pursue SAP.
The Association for Business Economics survey of economists showed 45% think the US economy will go into recession. How about we're in a recession?
The Wall Street Journal writes that Goldman Sachs may post its lowest profit in three years due to write-downs in debt from corporate buy-outs.
To accuse Obama of stealing ``two lines by somebody who is a colleague of yours is almost like saying you're plagiarizing from your speechwriter,'' said Stephen Hess, a presidential scholar at the Brookings Institution in Washington who was a speech writer for President Dwight D. Eisenhower.
An ingredient in curries, stir-fries and Skittles candy, Malaysian palm oil costs 15 percent less than soybean oil on the Chicago Board of Trade. Tobin Gorey, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney, said the two may soon be even money.
Russia, the world's second-biggest oil exporter, is scheduled to ship about 5 percent more crude from its main terminals in March.
Nigeria, Africa's biggest oil producer, raised the official selling prices for its crude exports loading in March to match record highs.
Brown University's governing board on Saturday said grants will be substituted for loans for families that make less than $100,000 per year. Parents who earn less than $60,000 also will no longer be expected to make a financial contribution to fund their child's education at Brown.
Qatar's prime minister, who heads the country's $60 billion sovereign wealth fund, said he favors investing in European over U.S. lenders because U.S. bank stocks are likely to fall further on sub-prime-mortgage write downs.
Roche Holding AG shares rose 3.5 percent on Monday after US regulators approved its Avastin drug for treating advanced breast cancer and added a potentially significant new revenue source.
Builders are doing whatever they can to move properties. In February, almost half surveyed said they cut prices, according to the National Association of Homebuilders, a Washington-based trade group. More than half ``reported offering optional items at no charge and 44 percent said they paid all or some of the closing costs.''
Jean-Marie Eveillard added to his holdings in Palatin Technologies Inc by 60.35%. His purchase prices were between $0.21 and $0.38, with an estimated average price of $0.3. The impact to his portfolio due to this purchase was less than 0.01%. His holdings were 2,922,848 shares as of 12/31/2007. Palatin Technologies, Inc., a biopharmaceutical company, engages in the discovery and development of receptor-specific small molecule and peptide therapeutics, including melanocortin (MC)-based therapeutics in the United States. Palatin Technologies Inc has a market cap of $23.90 million; its shares were traded at around $0.31 with P/S ratio of 1.35.
Getty Images has agreed to be bought by a unit of Hellman & Friedman LLC for $34 per share in cash. The offer puts a premium of 39 percent over the stock's closing price Friday of $24.45.
Brink's Co., a provider of security-related services, said Monday its board approved the spin-off of its home security unit into a separate publicly traded company. The spin-off, which is anticipated to involve a tax-free stock distribution to shareholders, is expected to be completed in the fourth quarter.
Oppenheimer analysts on Monday slashed their earnings estimate for Citigroup Inc's. full year 2008 earnings per share estimate by 70%, to 75 cents from $2.70, and said the bank may have to sell $100 billion of assets to put its balance sheet right. Analyst Meredith Whitney said Monday that Citi shares could fall below $16 a share as they retreat to valuations from the last difficult credit cycle of 1990-1991.
"We can't keep passing unfair trade deals like Nafta that put special interests over our workers' interests," Sen. Obama said. "The fact is, she (Hillary Clinton) was saying great things about Nafta until she started running for president," Sen. Obama said.
Resales of U.S. homes and condos dropped 0.4% in January to a seasonally adjusted annualized rate of 4.89 million even as the number of homes on the market rose, the National Association of Realtors reported Monday. It was the lowest sales pace since the real estate group began tracking combined sales in 1999. Resales were down 23.4% compared with the previous January. The inventory of homes on the market rose 5.5% to 4.19 million, representing a 10.3-month supply at the January sales pace. The inventory rose 18.4% compared with January 2007. With a glut of homes on the market, the median sales price fell 4.6% over the past year to $201,000.
The Oil Drum: "Brazil has declined to cede any of its imports of Bolivian natural gas to Argentina, which is struggling to find more energy sources to avoid supply shortages that could derail its fast-growing economy. Argentina and Brazil are facing the possibility of short-term energy crises from a lack of natural gas, which is needed to fuel industries and generate electricity for residents. Bolivia is sitting in the middle, with the region's largest gas reserves."
David H. McCormick, under secretary for international affairs at the Treasury Department, said Monday that the Bush administration considers the plan to sell 12.9 million ounces of gold as "probably the most viable" option to ensure the long-term funding of the IMF, Dow Jones Newswires reported Monday.
Standard & Poor's Corp. reaffirmed AAA ratings on bond insurers MBIA and Ambac Financial Group. MBIA was taken off the credit watch, but the rating agency left Ambac on its "creditwatch negative" list, although that designation could be removed. In response, the Dow jumped 189 points.
Fitch Ratings Monday placed several mortgage insurers, including MGIC Investment Corp., The PMI Group, and Radian Group on Rating Watch Negative, citing continued weakness in the U.S. mortgage markets.
Nordstrom Inc. reported a fourth-quarter profit of $212 million, or 92 cents a share, compared with $232 million, or 89 cents a share, a year earlier. Sales fell 4.4% to $2.5 billion because of what the company described as a "challenging" consumer and retail environment.The company's estimate for fiscal Jan-2009 is EPS $2.75 to $2.90 on diluted shares outstanding of 228 million
Crude for April delivery gained 42 cents, or 0.4%, to settle at $99.23 a barrel on the New York Mercantile Exchange. Gold for April delivery fell $7.30 to end at $940.50 an ounce on the New York Mercantile Exchange.
According to data released Monday by Nielsen Online. Google's share of the Internet search market grew to 56.9% in January, compared to 56.3% in the previous month. Yahoo Inc. also saw a gain in its search market share in January, with an increase to 19% from 17.7% in December. Microsoft Corp.saw its share slip over the same period, falling to 12.1% from 13.8%.
John Hussman: "The total return of the S&P 500 is now a few weeks shy of having lagged riskless Treasury bills for a decade...expectations of 4-5% annual total returns for the S&P 500 over the coming decade would be reasonable."
According to the WSJ, German engineering conglomerate Siemens AG plans to slash nearly 4,000 jobs from its struggling telecommunications-equipment unit and shift roughly another 3,000 workers elsewhere, according to a person familiar with the matter.
The company behind the hugely popular video game "Grand Theft Auto" says it is not going to jump at a $2 billion buyout offer from Electronic Arts Inc. The offer is "the wrong price at the wrong time," Take-Two Interactive Software Inc. chief executive Ben Feder said Monday after the news of the $26-per-share bid sent Take-Two's shares up 55 percent to a $26.89 close. Electronic Arts is undervaluing Take-Two and not factoring in the benefits of its recent turnaround efforts, Feder said in an interview. Take-Two said it is open to discussions with EA, but wants to wait until April 30, the day after the latest version of Grand Theft Auto hits store shelves.
In the past two months, Senator Barack Obama has built a commanding coalition among Democratic voters, with especially strong support among men, and is now viewed by most Democrats as the candidate best able to defeat Senator John McCain, according to the latest New York Times/CBS News Poll. For the first time in a New York Times/CBS News Poll, he moved ahead of Mrs. Clinton nationally, with 54 percent of Democratic primary voters saying they wanted to see him nominated, while 38 percent preferred Mrs. Clinton. A new USA Today/Gallup Poll released Monday showed a similar result, 51 percent for Mr. Obama to 39 percent for Mrs. Clinton.
Hillary Clinton: “Many of you are well enough off that the tax cuts may have helped you. We're saying that for America to get back on track, we're probably going to cut that short and not give it to you. We're going to take things away from you on behalf of the common good.” Hello socialism!!!!
Lowe's Companies, Inc. reported net earnings of $408 million for the quarter ended February 1, 2008, a 33.4 percent decline over the same period a year ago. Diluted earnings per share declined 30.0 percent to $0.28 from $0.40 in the fourth quarter of 2006. For the fiscal year ended February 1, 2008, net earnings declined 9.5 percent to $2.81 billion while diluted earnings per share declined 6.5 percent to $1.86. Comparable store sales declined 7.6 percent for the fourth quarter and 5.1 percent for fiscal 2007. "As we look to fiscal 2008, we know the next several quarters will be challenging on many fronts as industry sales are likely to remain soft," Niblock, the company's chairman and ceo continued. "We remain focused on what we can control: providing great customer service while managing expenses and offering customers the best shopping experience in home improvement. As the year progresses, the recent Federal Reserve interest rate cuts and the approved fiscal stimulus package are expected to lend support to the broader economy and the consumer. As a result, many of the headwinds facing the housing market and the home improvement industry should lessen, and consumers' confidence in investing in and improving their homes should improve."
Home prices are forecast to fall 12 percent this year, according to Richard Syron, chief executive officer of Freddie Mac, the second-largest provider of money for U.S. home loans. Housing starts may plunge 22 percent in 2008 and remain at their lowest level in 16 years, he said in a speech to the homebuilders association on Feb. 13.
Visa Inc. disclosed details of its much-anticipated initial public offering early Monday. The San Francisco-based card giant, in a Securities and Exchange Commission filing, said it's registered 446.6 million Class A common shares, including 40.6 million subject to underwriters' option to purchase additional stock. Visa also pegged its proposed offering price in a range of $37 to $42 a share, meaning the IPO would generate maximum potential proceeds of nearly $18.76 billion. The company's applied for a New York Stock Exchange listing under the symbol V.
Goldman Sachs upgraded oil and gas services group company BJ Services Company to neutral from sell. "We see U.S. natural gas fundamentals as among the most attractive in the energy landscape, and believe a higher expected commodity price increases visibility into our North American drilling forecasts," the broker said.
Deutsche Bank downgraded New York Times Co. to sell from hold.
Silver mining group Silver Wheaton Corp. expects to have annual silver sales of around 15 million ounces in 2008, rising to 25 million ounces in 2010.
Anglo-Swiss mining firm Xstrata said that it saw record annual production for coking and thermal coal, ferrochrome, nickel, zinc mining and platinum operations in 2007. Xstrata also said that it produced record amounts of copper in the second half of the year, with particularly strong operating performances from Tintaya, Ernest Henry and Collahuasi. In total, Xstrata produced just under 1 million tonnes of copper, down 2% from a year ago, after a 46-day shut-down affected first half volumes.
According to the NY Times, the Middle East’s heavy reliance on food imports has made it especially vulnerable to the global rise in commodity prices over the past year, said George T. Abed, the former governor of the Palestine Monetary Authority and a director at the Institute of International Finance, an organization based in Washington. “For many basic products, we don’t have free market prices, we have monopoly prices,” said Samer Tawil, a former minister of national economy in Jordan. “Oil, cement, rice, meat, sugar: these are all imported almost exclusively by one importer each here. Corruption is one thing when it’s about building a road, but when it affects my food, that’s different.”
NY Times: "Another buyout is in danger of collapsing — but this time because one of the banks involved is suing its own client, the private equity firm trying to do the deal. The deal in jeopardy is Clear Channel’s $1.2 billion sale of its television unit to Providence Equity Partners, a media-focused buyout firm. Providence began to balk at the price, citing deterioration in the business and the economy, prompting a lawsuit by Clear Channel. Yet by late last week, the two sides had struck a deal in principle to lower the price by $100 million. But now comes a new bombshell. Wachovia, one of the three banks financing the deal, is now refusing to commit. It even sued its client, Providence, in a North Carolina state court on Friday, contending that the new agreement has voided its previous commitment. Goldman Sachs and UBS, the two other banks, have committed to finance the new transaction, which now calls for Providence to borrow less money at a higher interest rate."
Professor Cusumano suggests that rather than acquire Yahoo, Microsoft should pursue SAP.
The Association for Business Economics survey of economists showed 45% think the US economy will go into recession. How about we're in a recession?
The Wall Street Journal writes that Goldman Sachs may post its lowest profit in three years due to write-downs in debt from corporate buy-outs.
To accuse Obama of stealing ``two lines by somebody who is a colleague of yours is almost like saying you're plagiarizing from your speechwriter,'' said Stephen Hess, a presidential scholar at the Brookings Institution in Washington who was a speech writer for President Dwight D. Eisenhower.
An ingredient in curries, stir-fries and Skittles candy, Malaysian palm oil costs 15 percent less than soybean oil on the Chicago Board of Trade. Tobin Gorey, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney, said the two may soon be even money.
Russia, the world's second-biggest oil exporter, is scheduled to ship about 5 percent more crude from its main terminals in March.
Nigeria, Africa's biggest oil producer, raised the official selling prices for its crude exports loading in March to match record highs.
Brown University's governing board on Saturday said grants will be substituted for loans for families that make less than $100,000 per year. Parents who earn less than $60,000 also will no longer be expected to make a financial contribution to fund their child's education at Brown.
Qatar's prime minister, who heads the country's $60 billion sovereign wealth fund, said he favors investing in European over U.S. lenders because U.S. bank stocks are likely to fall further on sub-prime-mortgage write downs.
Roche Holding AG shares rose 3.5 percent on Monday after US regulators approved its Avastin drug for treating advanced breast cancer and added a potentially significant new revenue source.
Builders are doing whatever they can to move properties. In February, almost half surveyed said they cut prices, according to the National Association of Homebuilders, a Washington-based trade group. More than half ``reported offering optional items at no charge and 44 percent said they paid all or some of the closing costs.''
Jean-Marie Eveillard added to his holdings in Palatin Technologies Inc by 60.35%. His purchase prices were between $0.21 and $0.38, with an estimated average price of $0.3. The impact to his portfolio due to this purchase was less than 0.01%. His holdings were 2,922,848 shares as of 12/31/2007. Palatin Technologies, Inc., a biopharmaceutical company, engages in the discovery and development of receptor-specific small molecule and peptide therapeutics, including melanocortin (MC)-based therapeutics in the United States. Palatin Technologies Inc has a market cap of $23.90 million; its shares were traded at around $0.31 with P/S ratio of 1.35.
Getty Images has agreed to be bought by a unit of Hellman & Friedman LLC for $34 per share in cash. The offer puts a premium of 39 percent over the stock's closing price Friday of $24.45.
Brink's Co., a provider of security-related services, said Monday its board approved the spin-off of its home security unit into a separate publicly traded company. The spin-off, which is anticipated to involve a tax-free stock distribution to shareholders, is expected to be completed in the fourth quarter.
Oppenheimer analysts on Monday slashed their earnings estimate for Citigroup Inc's. full year 2008 earnings per share estimate by 70%, to 75 cents from $2.70, and said the bank may have to sell $100 billion of assets to put its balance sheet right. Analyst Meredith Whitney said Monday that Citi shares could fall below $16 a share as they retreat to valuations from the last difficult credit cycle of 1990-1991.
"We can't keep passing unfair trade deals like Nafta that put special interests over our workers' interests," Sen. Obama said. "The fact is, she (Hillary Clinton) was saying great things about Nafta until she started running for president," Sen. Obama said.
Resales of U.S. homes and condos dropped 0.4% in January to a seasonally adjusted annualized rate of 4.89 million even as the number of homes on the market rose, the National Association of Realtors reported Monday. It was the lowest sales pace since the real estate group began tracking combined sales in 1999. Resales were down 23.4% compared with the previous January. The inventory of homes on the market rose 5.5% to 4.19 million, representing a 10.3-month supply at the January sales pace. The inventory rose 18.4% compared with January 2007. With a glut of homes on the market, the median sales price fell 4.6% over the past year to $201,000.
The Oil Drum: "Brazil has declined to cede any of its imports of Bolivian natural gas to Argentina, which is struggling to find more energy sources to avoid supply shortages that could derail its fast-growing economy. Argentina and Brazil are facing the possibility of short-term energy crises from a lack of natural gas, which is needed to fuel industries and generate electricity for residents. Bolivia is sitting in the middle, with the region's largest gas reserves."
David H. McCormick, under secretary for international affairs at the Treasury Department, said Monday that the Bush administration considers the plan to sell 12.9 million ounces of gold as "probably the most viable" option to ensure the long-term funding of the IMF, Dow Jones Newswires reported Monday.
Standard & Poor's Corp. reaffirmed AAA ratings on bond insurers MBIA and Ambac Financial Group. MBIA was taken off the credit watch, but the rating agency left Ambac on its "creditwatch negative" list, although that designation could be removed. In response, the Dow jumped 189 points.
Fitch Ratings Monday placed several mortgage insurers, including MGIC Investment Corp., The PMI Group, and Radian Group on Rating Watch Negative, citing continued weakness in the U.S. mortgage markets.
Nordstrom Inc. reported a fourth-quarter profit of $212 million, or 92 cents a share, compared with $232 million, or 89 cents a share, a year earlier. Sales fell 4.4% to $2.5 billion because of what the company described as a "challenging" consumer and retail environment.The company's estimate for fiscal Jan-2009 is EPS $2.75 to $2.90 on diluted shares outstanding of 228 million
Crude for April delivery gained 42 cents, or 0.4%, to settle at $99.23 a barrel on the New York Mercantile Exchange. Gold for April delivery fell $7.30 to end at $940.50 an ounce on the New York Mercantile Exchange.
According to data released Monday by Nielsen Online. Google's share of the Internet search market grew to 56.9% in January, compared to 56.3% in the previous month. Yahoo Inc. also saw a gain in its search market share in January, with an increase to 19% from 17.7% in December. Microsoft Corp.saw its share slip over the same period, falling to 12.1% from 13.8%.
John Hussman: "The total return of the S&P 500 is now a few weeks shy of having lagged riskless Treasury bills for a decade...expectations of 4-5% annual total returns for the S&P 500 over the coming decade would be reasonable."
According to the WSJ, German engineering conglomerate Siemens AG plans to slash nearly 4,000 jobs from its struggling telecommunications-equipment unit and shift roughly another 3,000 workers elsewhere, according to a person familiar with the matter.
The company behind the hugely popular video game "Grand Theft Auto" says it is not going to jump at a $2 billion buyout offer from Electronic Arts Inc. The offer is "the wrong price at the wrong time," Take-Two Interactive Software Inc. chief executive Ben Feder said Monday after the news of the $26-per-share bid sent Take-Two's shares up 55 percent to a $26.89 close. Electronic Arts is undervaluing Take-Two and not factoring in the benefits of its recent turnaround efforts, Feder said in an interview. Take-Two said it is open to discussions with EA, but wants to wait until April 30, the day after the latest version of Grand Theft Auto hits store shelves.
In the past two months, Senator Barack Obama has built a commanding coalition among Democratic voters, with especially strong support among men, and is now viewed by most Democrats as the candidate best able to defeat Senator John McCain, according to the latest New York Times/CBS News Poll. For the first time in a New York Times/CBS News Poll, he moved ahead of Mrs. Clinton nationally, with 54 percent of Democratic primary voters saying they wanted to see him nominated, while 38 percent preferred Mrs. Clinton. A new USA Today/Gallup Poll released Monday showed a similar result, 51 percent for Mr. Obama to 39 percent for Mrs. Clinton.
Hillary Clinton: “Many of you are well enough off that the tax cuts may have helped you. We're saying that for America to get back on track, we're probably going to cut that short and not give it to you. We're going to take things away from you on behalf of the common good.” Hello socialism!!!!
Sunday, February 24, 2008
Politics
2/25/08 Politics
President Mahmoud Ahmadinejad called on the U.S. and its allies Saturday to "apologize" for accusing Iran of seeking nuclear weapons, a day after the U.N. nuclear watchdog released its latest report on Iran. Mr. Ahmadinejad said the International Atomic Energy Agency report vindicated Iran and warned that Tehran would take unspecified "decisive reciprocal measures" against any country that imposed additional sanctions against Iran. In addition, Iran said Sunday that it has started using new centrifuges that can churn out enriched uranium at more than double the rate of the machines that now form the backbone of the Islamic nation's nuclear program.
Mike Burk: "Although the market is likely to retest the January lows in the near future, it is unlikely the new low indicators will confirm the retest...The persistently high levels of downside volume suggest there will be more downside price movement...Historically the secondaries have had a positive seasonal bias over the coming week during the 4th year of the Presidential Cycle. By all other seasonal measures the week has been flat...I expect the major indices to be lower on Friday February 29 than they were on Friday February 22."
Tim Wood: "According to Dow's theory, on November 21, 2007 the Primary Trend was confirmed as being bearish. I can assure you that nothing has occurred to negate this bearish trend."
"Central banks have only two tools," says Satyajit Das, author of "Traders, Guns and Money: Knowns and Unknowns in the Dazzling World of Derivatives," who has emerged as a voice of concern. "They can cut interest rates or they can regulate banks. But these are very old-fashioned tools, and are completely inadequate to the problems now confronting them."
Hours after chiding Congress for not finishing a wiretapping bill and leaving the nation 'vulnerable to terrorist attack,' officials acknowledge all requested information is being received.
Fannie Mae and Freddie Mac are expected to post big quarterly losses.
Jeff Bezos sold 1.85 million Amazon shares on Feb. 15 at $73.21 apiece — for $135.4 million. The sale leaves Bezos with 99.3 million shares, still nearly a quarter of Amazon's total.
China, which is expected to have 10 percent economic growth this year, will stick with a tight monetary policy as controlling inflation remains a top priority, the vice governor of the People's Bank of China said.
The central bank will boost open-market operations and increase the required reserve ratios for commercial banks to ``vigorously'' soak up liquidity, Yi Gang said today at an economic forum in Beijing. The central bank will select an ``optimal'' tightening package out of currency, interest-rate and money-supply measures, he said.
Northern Trust Corp. disclosed Friday that it has agreed to provide as much as $229 million in financial backing to help shield investment funds it sponsors from potential losses caused by two troubled structured investment vehicles.
McDonald's coffee offensive, which also includes smoothies, frappes and bottled drinks, entails an investment of up to $100,000 per restaurant, including $25,000 for equipment and up to $75,000 for remodeling. Essentially, operators must add a special "beverage cell" to one end of their counters near the drive-through window. The cell will house coffee and smoothie equipment and will be staffed by one worker. It will be highly automated, so McDonald's won't offer the coffee customization level of Starbucks. Specialty coffee drinks cost about 25 percent less than they do at Starbucks.
More first-time voters than ever are getting ready to cast their ballots in Texas, driven to the polls by a tight Democratic race. Many are students and that should enhance the chance for Barack Obama to pull out a win, plus the advantage in the caucus, and the votes that shall be cast by Independents.
Ayn Rand: “Why do they always teach us that it's easy and evil to do what we want and that we need discipline to restrain ourselves? It's the hardest thing in the world--to do what we want. And it takes the greatest kind of courage. I mean, what we really want.”
A recent Obama advertisement mailed out to voters in Alaska and perhaps elsewhere carried this headline: "8 years of the Clintons, major losses for Democrats across the nation." The mail piece said the Democrats lost 12 governors, seven senators and 46 congressmen during the Clinton White House years.
"Unless you're building from the ground up and broadening the appeal of the party to independents and even some disaffected Republicans ... we're not going to be able to get things done," Obama said. "I think we have been able to get folks in every state that we've campaigned in to take a second look at the Democratic Party."
Ralph Nader is launching a third-party campaign for president. The consumer advocate made the announcement Sunday on NBC's "Meet the Press."
The national average price for gasoline rose 16 cents per gallon over the past two weeks, an industry survey shows. According to the Lundberg Survey, the average price of self-serve regular gasoline on Friday was $3.10 per gallon, the Associated Press reported.
Electronic Arts Inc. made a all-cash bid of $2 billion for Take-Two Interactive Software Inc. despite earlier rebuffs from the company. The offer of $26 per share represents a premium of 64% to Take-Two's share price on Feb. 15, the last day before EA sents its revised takeover proposal to TakeTwo, and was an increase from their initial $25 offer.
Tiger Woods won his fifth straight tournament and captured his 15th World Golf Championship, holding all three world titles for the first time. He has set the tournament record for margin of victory in his last three wins.
Brett Steenbarger: "We're seeing more hitting of bids than lifting of offers among the broad list of NYSE issues. This is in marked contrast to the NYSE TICK strength that we saw off the January lows. It is difficult to imagine sustaining anything other than sharp, short-covering rallies when selling sentiment remains so dominant."
Democratic Party Chairman Howard Dean accused Republican presidential front-runner John McCain of trying to skirt campaign finance laws Sunday by trying to opt out of public financing for his primary campaign.
Satyajit Das: "Don't confuse credit with liquidity"
President Mahmoud Ahmadinejad called on the U.S. and its allies Saturday to "apologize" for accusing Iran of seeking nuclear weapons, a day after the U.N. nuclear watchdog released its latest report on Iran. Mr. Ahmadinejad said the International Atomic Energy Agency report vindicated Iran and warned that Tehran would take unspecified "decisive reciprocal measures" against any country that imposed additional sanctions against Iran. In addition, Iran said Sunday that it has started using new centrifuges that can churn out enriched uranium at more than double the rate of the machines that now form the backbone of the Islamic nation's nuclear program.
Mike Burk: "Although the market is likely to retest the January lows in the near future, it is unlikely the new low indicators will confirm the retest...The persistently high levels of downside volume suggest there will be more downside price movement...Historically the secondaries have had a positive seasonal bias over the coming week during the 4th year of the Presidential Cycle. By all other seasonal measures the week has been flat...I expect the major indices to be lower on Friday February 29 than they were on Friday February 22."
Tim Wood: "According to Dow's theory, on November 21, 2007 the Primary Trend was confirmed as being bearish. I can assure you that nothing has occurred to negate this bearish trend."
"Central banks have only two tools," says Satyajit Das, author of "Traders, Guns and Money: Knowns and Unknowns in the Dazzling World of Derivatives," who has emerged as a voice of concern. "They can cut interest rates or they can regulate banks. But these are very old-fashioned tools, and are completely inadequate to the problems now confronting them."
Hours after chiding Congress for not finishing a wiretapping bill and leaving the nation 'vulnerable to terrorist attack,' officials acknowledge all requested information is being received.
Fannie Mae and Freddie Mac are expected to post big quarterly losses.
Jeff Bezos sold 1.85 million Amazon shares on Feb. 15 at $73.21 apiece — for $135.4 million. The sale leaves Bezos with 99.3 million shares, still nearly a quarter of Amazon's total.
China, which is expected to have 10 percent economic growth this year, will stick with a tight monetary policy as controlling inflation remains a top priority, the vice governor of the People's Bank of China said.
The central bank will boost open-market operations and increase the required reserve ratios for commercial banks to ``vigorously'' soak up liquidity, Yi Gang said today at an economic forum in Beijing. The central bank will select an ``optimal'' tightening package out of currency, interest-rate and money-supply measures, he said.
Northern Trust Corp. disclosed Friday that it has agreed to provide as much as $229 million in financial backing to help shield investment funds it sponsors from potential losses caused by two troubled structured investment vehicles.
McDonald's coffee offensive, which also includes smoothies, frappes and bottled drinks, entails an investment of up to $100,000 per restaurant, including $25,000 for equipment and up to $75,000 for remodeling. Essentially, operators must add a special "beverage cell" to one end of their counters near the drive-through window. The cell will house coffee and smoothie equipment and will be staffed by one worker. It will be highly automated, so McDonald's won't offer the coffee customization level of Starbucks. Specialty coffee drinks cost about 25 percent less than they do at Starbucks.
More first-time voters than ever are getting ready to cast their ballots in Texas, driven to the polls by a tight Democratic race. Many are students and that should enhance the chance for Barack Obama to pull out a win, plus the advantage in the caucus, and the votes that shall be cast by Independents.
Ayn Rand: “Why do they always teach us that it's easy and evil to do what we want and that we need discipline to restrain ourselves? It's the hardest thing in the world--to do what we want. And it takes the greatest kind of courage. I mean, what we really want.”
A recent Obama advertisement mailed out to voters in Alaska and perhaps elsewhere carried this headline: "8 years of the Clintons, major losses for Democrats across the nation." The mail piece said the Democrats lost 12 governors, seven senators and 46 congressmen during the Clinton White House years.
"Unless you're building from the ground up and broadening the appeal of the party to independents and even some disaffected Republicans ... we're not going to be able to get things done," Obama said. "I think we have been able to get folks in every state that we've campaigned in to take a second look at the Democratic Party."
Ralph Nader is launching a third-party campaign for president. The consumer advocate made the announcement Sunday on NBC's "Meet the Press."
The national average price for gasoline rose 16 cents per gallon over the past two weeks, an industry survey shows. According to the Lundberg Survey, the average price of self-serve regular gasoline on Friday was $3.10 per gallon, the Associated Press reported.
Electronic Arts Inc. made a all-cash bid of $2 billion for Take-Two Interactive Software Inc. despite earlier rebuffs from the company. The offer of $26 per share represents a premium of 64% to Take-Two's share price on Feb. 15, the last day before EA sents its revised takeover proposal to TakeTwo, and was an increase from their initial $25 offer.
Tiger Woods won his fifth straight tournament and captured his 15th World Golf Championship, holding all three world titles for the first time. He has set the tournament record for margin of victory in his last three wins.
Brett Steenbarger: "We're seeing more hitting of bids than lifting of offers among the broad list of NYSE issues. This is in marked contrast to the NYSE TICK strength that we saw off the January lows. It is difficult to imagine sustaining anything other than sharp, short-covering rallies when selling sentiment remains so dominant."
Democratic Party Chairman Howard Dean accused Republican presidential front-runner John McCain of trying to skirt campaign finance laws Sunday by trying to opt out of public financing for his primary campaign.
Satyajit Das: "Don't confuse credit with liquidity"
Saturday, February 23, 2008
The Thursday Night Debate
2/23/08 The Thursday Night Debate
Hillary Clinton: "Whatever happens, we're going to be fine. You know, we have strong support from our families and our friends," she said, looking at Obama sitting next to her. "I just hope that we'll be able to say the same thing about the American people, and that's what this election should be about." Sound familiar?
It should.
John Edwards: "All of us are going to be just fine no matter what happens in this election. But what's at stake is whether America is going to be fine."
Xerox that, Hillary!
More than 20,000 U.S. citizens living abroad voted in the primary, which ran from Feb. 5 to Feb. 12. Obama won about 65 percent of the vote, according to the results released yesterday. Voters living in 164 countries cast votes online, while expatriates voted in person in more than 30 countries, at hotels in Australia and Costa Rica, at a pub in Ireland and at a Starbucks in Thailand. The results took about a week to tabulate as committees around the globe gathered ballots.
According to the NY Times, "Senator Hillary Rodham Clinton’s latest campaign finance report, published Wednesday night, appeared even to her most stalwart supporters and donors to be a road map of her political and management failings. Several of them, echoing political analysts, expressed concerns that Mrs. Clinton’s spending priorities amounted to costly errors in judgment that have hamstrung her competitiveness against Senator Barack Obama of Illinois.“We didn’t raise all of this money to keep paying consultants who have pursued basically the wrong strategy for a year now,” said a prominent New York donor. “So much about her campaign needs to change — but it may be too late.”
According to the Washington Post, the nation's top federal election official told Sen. John McCain yesterday that he cannot immediately withdraw from the presidential public financing system as he had requested, a decision that threatens to dramatically restrict his spending until the general election campaign begins in the fall.
Nouriel Roubini: "Needless to say the latest macro news (the Philly Fed report) and financial news (increase in corporate bankruptcies and LBOs going belly up, monoline deeper mess, trouble in the muni bonds markets, credit spreads widening, etc.) confirm my analysis that the risk of a systemic financial crisis is rising."
Brad Setser: "Some key findings of the latest Pew Survey: Fully 58% of the public says that their incomes are falling behind the rising cost of living. Overall, 24% cite concerns over prices -- with the cost of energy and healthcare mentioned most frequently -- as the most important problem facing the country. Substantial numbers of people with very low annual incomes -- less than $20,000 a year -- say they have difficulty affording basic necessities. Nearly three-quarters (74%) say they have difficulty affording gasoline, 65% report problems affording heat and electricity, and half have trouble affording food. The recent rise in the percentage of Americans who say that their incomes are falling behind the cost of living has come largely among middle-income and poor people. Roughly seven-in-ten (71%) of those with household incomes of less than $50,000 a year say their incomes are falling behind the cost of living, up 16 points since last September. By contrast, only a third (33%) of those with household incomes of $100,000 a year or more say their incomes are not keeping pace with the cost of living, up modestly since September (four points)."
California's nonpartisan fiscal watchdog on Wednesday said the state's budget shortfall has grown to $16 billion and offered an unprecedented and competing plan to close the gap by imposing both spending cuts and tax increases.
According to the NY Times, with the collapse of the housing boom, the government is considering proposals to rescue the nearly 8.8 million homeowners, or 10.3 percent of the total, who are underwater.
As of last Friday, natural gas in storage had fallen for a second consecutive week vs year ago levels. This past week there was a draw down of 172 billion cubic feet. As of last Tuesday there was a record short position in NYMEX natural gas futures and options. By comparison, let's consider that Turkey is paying record prices for individual or spot liquefied natural gas cargoes after Iran slashed exports through a natural gas pipeline, according to energy consultant FACTS Inc. The country is paying between $17 and $18 per million British thermal units for LNG, natural gas chilled for transport by tankers, for immediate delivery this month, Siamak Adibi, a FACTS analyst, said in a report dated February, without elaborating. The price is more than double the U.S. benchmark at Henry Hub, Louisiana. Iran halted gas exports to Turkey after record low temperatures boosted domestic demand, Facts said.
The premium of ICE gas oil futures to Brent crude, known in the industry as cracks, rose as high as $19.890 a barrel, the strongest level since mid-October 2005, a sign that supply of the product is tight at a time of intensifying cold weather.
Brett Steenbarger: "Interestingly, although we saw weakness in Thursday's trade, we had more stocks register new 20-day highs (848) and fewer register new lows (736) than the day prior."
Winter storms in the U.S. Northeast are causing airline delays and cancellations Friday morning.
In 2007, the median age for a car moved up to 7.1 years. People are keeping their cars longer.
The head of Nissan Motor Co. said even if the United States is not in recession, its auto industry is.
According to Bloomberg, Chinese steelmakers, the largest buyers of iron ore, will reject Rio Tinto Group's demand for a minimum 71 percent price increase in the raw material, two people familiar with the negotiations said. The mills will only accept a 65 percent price gain for ore from London-based Rio's mines in Australia, said the people, who declined to be identified because the talks are confidential.
Asian aframax rates rose for an eighth day, bolstered by increasing cargoes for March delivery and expectations by owners that demand for bigger tankers will spill over to smaller vessels.
Merrill Lynch & Co. advised clients to sell shares of Fannie Mae and Freddie Mac because the worst housing market in a quarter century will stifle earnings through 2011.
Investors should buy Malaysia's ringgit against the dollar as Malaysia's economy is likely to be less affected than other Asian nations by a U.S. economic slowdown, according to Morgan Stanley.
According to Reuters, EMC Corp, the world's biggest maker of corporate storage computing gear, said on Thursday it was hiring former Microsoft Corp executive Paul Maritz to run a division to develop services delivered over the Web. EMC also said it will buy Pi Corp, a privately held start-up founded by Maritz. It did not disclose the purchase price. Pi Corp. is based in Seattle and is privately owned. The software development company employs about 100 engineers in the U.S., Montreal and Bangalore, India. Maritz will be president and general manager of EMC's new Cloud Infrastructure and Services Division. The unit will focus on "cloud computing," a term that describes services accessed over the Web that seem to exist in a cloud of the Internet.
Cleveland-Cliffs Inc. said Thursday its fourth-quarter earnings rose 35 percent, led by domestic iron ore sales and revenue from recently acquired coal mines. The company earned $92.7 million, or $1.77 per share, compared with $68.6 million, or $1.33 per share, in the year-ago quarter. Revenue surged 43 percent to $782.5 million, from $549 million in the prior-year period.
The Turkish military says it has launched a land offensive across the border into northern Iraq to attack suspected Kurdish rebels.
Goldman Sachs Group Inc., Lehman Brothers Holdings Inc. and Bear Stearns Cos. may earn 40 percent less profit than estimated in the first quarter because of lower investment banking revenue, said Sanford C. Bernstein & Co. Morgan Stanley may report 12 percent less profit, according to New-York based analyst Brad Hintz, who also cited ``challenging'' fixed income markets for reduced earnings.
S&P cut GMAC three notches to B+ and Residential Capital four notches to B, the ratings agency said in a statement. It said the ratings outlook for both companies was negative, suggesting further downward pressure.
The big Nasdaq stocks were under particular selling pressure in the early going on Friday. Google, Apple, RIMM, Microsoft, Oracle, Intel, Cisco, EMC and others. After tax-prep software company Intuit Inc. reported weak fiscal second-quarter revenue and cut its full-year forecast, the stock took the largest midday fall Friday on the Nasdaq 100 index. The weakness in this sector may prove an attractive entry point and/or a spot to add within this air pocket.
Starbucks cuts 600 positions.
Soybeans for May delivery jumped 9.25 cents to fetch $14.34 a bushel on the Chicago Board of Trade, after earlier rising to an all-time high of $14.375 a bushel.
Crude for April delivery rose 58 cents, or 0.6%, to close at $98.81 a barrel on the New York Mercantile Exchange. Natural gas jumped to $9.19. Gold for April delivery dropped $1.40 to end at $947.80 an ounce on Nymex. Gold, however, gained $41.70 this week from last Friday's closing level of $906.10.
Thirty-three percent of homeowners reported that their home had lost value in February, compared with 16 percent in February 2007 and well above the 24 percent peak recorded in 1992.
Genentech Inc. said late Friday that the U.S. Food and Drug Administration granted an accelerated approval for Avastin, in combination with paclitaxel chemotherapy, for the treatment of patients who have not received chemotherapy for their metastatic breast cancer.
Ambac Financial shares jumped more than 18% in afternoon trading on Friday after CNBC reported that a plan by several big banks to bailout the struggling bond insurer could be unveiled on Monday or Tuesday.
Hillary Clinton: "Whatever happens, we're going to be fine. You know, we have strong support from our families and our friends," she said, looking at Obama sitting next to her. "I just hope that we'll be able to say the same thing about the American people, and that's what this election should be about." Sound familiar?
It should.
John Edwards: "All of us are going to be just fine no matter what happens in this election. But what's at stake is whether America is going to be fine."
Xerox that, Hillary!
More than 20,000 U.S. citizens living abroad voted in the primary, which ran from Feb. 5 to Feb. 12. Obama won about 65 percent of the vote, according to the results released yesterday. Voters living in 164 countries cast votes online, while expatriates voted in person in more than 30 countries, at hotels in Australia and Costa Rica, at a pub in Ireland and at a Starbucks in Thailand. The results took about a week to tabulate as committees around the globe gathered ballots.
According to the NY Times, "Senator Hillary Rodham Clinton’s latest campaign finance report, published Wednesday night, appeared even to her most stalwart supporters and donors to be a road map of her political and management failings. Several of them, echoing political analysts, expressed concerns that Mrs. Clinton’s spending priorities amounted to costly errors in judgment that have hamstrung her competitiveness against Senator Barack Obama of Illinois.“We didn’t raise all of this money to keep paying consultants who have pursued basically the wrong strategy for a year now,” said a prominent New York donor. “So much about her campaign needs to change — but it may be too late.”
According to the Washington Post, the nation's top federal election official told Sen. John McCain yesterday that he cannot immediately withdraw from the presidential public financing system as he had requested, a decision that threatens to dramatically restrict his spending until the general election campaign begins in the fall.
Nouriel Roubini: "Needless to say the latest macro news (the Philly Fed report) and financial news (increase in corporate bankruptcies and LBOs going belly up, monoline deeper mess, trouble in the muni bonds markets, credit spreads widening, etc.) confirm my analysis that the risk of a systemic financial crisis is rising."
Brad Setser: "Some key findings of the latest Pew Survey: Fully 58% of the public says that their incomes are falling behind the rising cost of living. Overall, 24% cite concerns over prices -- with the cost of energy and healthcare mentioned most frequently -- as the most important problem facing the country. Substantial numbers of people with very low annual incomes -- less than $20,000 a year -- say they have difficulty affording basic necessities. Nearly three-quarters (74%) say they have difficulty affording gasoline, 65% report problems affording heat and electricity, and half have trouble affording food. The recent rise in the percentage of Americans who say that their incomes are falling behind the cost of living has come largely among middle-income and poor people. Roughly seven-in-ten (71%) of those with household incomes of less than $50,000 a year say their incomes are falling behind the cost of living, up 16 points since last September. By contrast, only a third (33%) of those with household incomes of $100,000 a year or more say their incomes are not keeping pace with the cost of living, up modestly since September (four points)."
California's nonpartisan fiscal watchdog on Wednesday said the state's budget shortfall has grown to $16 billion and offered an unprecedented and competing plan to close the gap by imposing both spending cuts and tax increases.
According to the NY Times, with the collapse of the housing boom, the government is considering proposals to rescue the nearly 8.8 million homeowners, or 10.3 percent of the total, who are underwater.
As of last Friday, natural gas in storage had fallen for a second consecutive week vs year ago levels. This past week there was a draw down of 172 billion cubic feet. As of last Tuesday there was a record short position in NYMEX natural gas futures and options. By comparison, let's consider that Turkey is paying record prices for individual or spot liquefied natural gas cargoes after Iran slashed exports through a natural gas pipeline, according to energy consultant FACTS Inc. The country is paying between $17 and $18 per million British thermal units for LNG, natural gas chilled for transport by tankers, for immediate delivery this month, Siamak Adibi, a FACTS analyst, said in a report dated February, without elaborating. The price is more than double the U.S. benchmark at Henry Hub, Louisiana. Iran halted gas exports to Turkey after record low temperatures boosted domestic demand, Facts said.
The premium of ICE gas oil futures to Brent crude, known in the industry as cracks, rose as high as $19.890 a barrel, the strongest level since mid-October 2005, a sign that supply of the product is tight at a time of intensifying cold weather.
Brett Steenbarger: "Interestingly, although we saw weakness in Thursday's trade, we had more stocks register new 20-day highs (848) and fewer register new lows (736) than the day prior."
Winter storms in the U.S. Northeast are causing airline delays and cancellations Friday morning.
In 2007, the median age for a car moved up to 7.1 years. People are keeping their cars longer.
The head of Nissan Motor Co. said even if the United States is not in recession, its auto industry is.
According to Bloomberg, Chinese steelmakers, the largest buyers of iron ore, will reject Rio Tinto Group's demand for a minimum 71 percent price increase in the raw material, two people familiar with the negotiations said. The mills will only accept a 65 percent price gain for ore from London-based Rio's mines in Australia, said the people, who declined to be identified because the talks are confidential.
Asian aframax rates rose for an eighth day, bolstered by increasing cargoes for March delivery and expectations by owners that demand for bigger tankers will spill over to smaller vessels.
Merrill Lynch & Co. advised clients to sell shares of Fannie Mae and Freddie Mac because the worst housing market in a quarter century will stifle earnings through 2011.
Investors should buy Malaysia's ringgit against the dollar as Malaysia's economy is likely to be less affected than other Asian nations by a U.S. economic slowdown, according to Morgan Stanley.
According to Reuters, EMC Corp, the world's biggest maker of corporate storage computing gear, said on Thursday it was hiring former Microsoft Corp executive Paul Maritz to run a division to develop services delivered over the Web. EMC also said it will buy Pi Corp, a privately held start-up founded by Maritz. It did not disclose the purchase price. Pi Corp. is based in Seattle and is privately owned. The software development company employs about 100 engineers in the U.S., Montreal and Bangalore, India. Maritz will be president and general manager of EMC's new Cloud Infrastructure and Services Division. The unit will focus on "cloud computing," a term that describes services accessed over the Web that seem to exist in a cloud of the Internet.
Cleveland-Cliffs Inc. said Thursday its fourth-quarter earnings rose 35 percent, led by domestic iron ore sales and revenue from recently acquired coal mines. The company earned $92.7 million, or $1.77 per share, compared with $68.6 million, or $1.33 per share, in the year-ago quarter. Revenue surged 43 percent to $782.5 million, from $549 million in the prior-year period.
The Turkish military says it has launched a land offensive across the border into northern Iraq to attack suspected Kurdish rebels.
Goldman Sachs Group Inc., Lehman Brothers Holdings Inc. and Bear Stearns Cos. may earn 40 percent less profit than estimated in the first quarter because of lower investment banking revenue, said Sanford C. Bernstein & Co. Morgan Stanley may report 12 percent less profit, according to New-York based analyst Brad Hintz, who also cited ``challenging'' fixed income markets for reduced earnings.
S&P cut GMAC three notches to B+ and Residential Capital four notches to B, the ratings agency said in a statement. It said the ratings outlook for both companies was negative, suggesting further downward pressure.
The big Nasdaq stocks were under particular selling pressure in the early going on Friday. Google, Apple, RIMM, Microsoft, Oracle, Intel, Cisco, EMC and others. After tax-prep software company Intuit Inc. reported weak fiscal second-quarter revenue and cut its full-year forecast, the stock took the largest midday fall Friday on the Nasdaq 100 index. The weakness in this sector may prove an attractive entry point and/or a spot to add within this air pocket.
Starbucks cuts 600 positions.
Soybeans for May delivery jumped 9.25 cents to fetch $14.34 a bushel on the Chicago Board of Trade, after earlier rising to an all-time high of $14.375 a bushel.
Crude for April delivery rose 58 cents, or 0.6%, to close at $98.81 a barrel on the New York Mercantile Exchange. Natural gas jumped to $9.19. Gold for April delivery dropped $1.40 to end at $947.80 an ounce on Nymex. Gold, however, gained $41.70 this week from last Friday's closing level of $906.10.
Thirty-three percent of homeowners reported that their home had lost value in February, compared with 16 percent in February 2007 and well above the 24 percent peak recorded in 1992.
Genentech Inc. said late Friday that the U.S. Food and Drug Administration granted an accelerated approval for Avastin, in combination with paclitaxel chemotherapy, for the treatment of patients who have not received chemotherapy for their metastatic breast cancer.
Ambac Financial shares jumped more than 18% in afternoon trading on Friday after CNBC reported that a plan by several big banks to bailout the struggling bond insurer could be unveiled on Monday or Tuesday.
Friday, February 22, 2008
Inflation
2/22/08 Inflation
David Fry: " Inflation is officially at 4%, but pre-Clinton era methodology shows the real number closer to 8%."
Robert McHugh: "Stocks are very close to a sharp breakout from their recent Symmetrical Triangle sideways moves. The breakout should be at least a 4 to 5 percent move, lasting several weeks."
China's gold demand rose 26% in 2007 from a year earlier, according to a wire report citing figures from the World Gold Council and the Shanghai Gold Exchange Thursday.
Taiwan has frozen exports of some steel products used in construction amid growing concerns about rising prices for the alloy, according to Dow Jones Newswires, which cited a statement by the Ministry of Economic Affairs. The export ban will affect steel billets and steel bars and will go into effect in about two weeks.
U.K. publishing group Reed Elsevier agreed to buy ChoicePoint Inc for a total cost of $4.1 billion, including the assumption of $600 million of debt. Reed said it will pay $50 a share for ChoicePoint, which provides data and analytics to the insurance industry. The deal has been recommended by the ChoicePoint board and represents a 49% premium to the closing price of $33.66 a share on Wednesday.
The value of Japanese exports surged 7.7% in January as rising shipments to Europe, Asia and commodity-rich countries offset slowing orders from the U.S.
Allianz's net profit dropped by more than half in the fourth quarter, as strength in its main property-casualty insurance business could not offset the damage from subprime write-downs at its banking arm. Its Dresdner Bank unit announced on Thursday it was cutting back on its activity in structured investment vehicles (SIV) and other structured products, at the root of the crisis, and cutting 450 jobs, though most of these have already been carried out. Dresdner Bank AG, Germany's third- largest bank, agreed to rescue its $18.8 billion K2 structured investment vehicle.
Pharmaceutical companies increased wholesale prices for the 50 top-selling branded drugs by an average of 7.82% in 2007, after increases of 6.73% and 6.22% in the previous two years, according to Delta Marketing Dynamics Inc., a health-care marketing research company. The most recent increase is almost double the overall U.S. economy's 4.1% annual inflation rate last year.
Silver gained to 27-year high.
The cost of protecting the debt of US and European companies against default surged to all-time highs.
McCormick & Company bought Canada’s largest honey company for $75 million in cash, about two times Billy Bee Honey Products’s annual sales of $37 million.
BNP Paribas , one of the largest banks in France, reported a 42 percent decline in fourth-quarter profit after writing down the value of securities hurt by worsening credit markets. Alliance & Leicester of Britain warned that a big rise in financing costs would derail 2008 profit after a write-down on risky assets hit 2007 results.
Bruce Everiss: Microsoft said that in the future XNA will be available for Zune. So now we know that Zune will evolve into a mobile gaming platform.
Research in Motion raised its subscriber forecasts this morning, and now expects its net subscriber additions for its fourth quarter to be approximately 15% to 20% higher than the 1.82 million net subscriber account additions forecast on December 20, 2007.
Crude oil prices of $100 may look ``cheap'' within five years if OPEC production fails to keep pace with global demand growth, according to Alfa Bank.
Search market share: Google 58.5%, Yahoo 22.2%, and Microsoft 9.8%.
J.C. Penney says its fourth-quarter profit fell 10 percent due to a shorter quarter. It also predicts 2008 earnings below Wall Street expectations, amid a weak consumer spending environment.
Microsoft announced a new initiative Wednesday to allow amateur developers to build games for Xbox Live, an online network with more than 10 million subscribers. The development tools for these games also allow them to be run on a PC and, eventually, Microsoft's portable digital media player, Zune. With the addition of these "community-created games," Microsoft expects to have more than 1,000 titles available for the Xbox 360 by the end of the year, said John Schappert, a Microsoft corporate vice president leading the effort.
KLA-Tencor Corp. said Thursday it intends to buy Belgian chip packaging testing company ICOS Vision Systems Corp. NV, for around $465.8 million.
For 2008, Williams Companies raised its profit guidance to $1.60 to $2 a share from $1.50 to $1.90 a share. For 2009, the company forecast profit in the range of $1.70 to $2.20 a share. At year-end 2007, it had replaced 232% of its production for the year.
In early Thursday trading, April gold is up $11.60 at $949.40 an ounce on the Nymex. April platinum futures also hit a record high of $2,194.80 an ounce and were last trading up $26.30 at $2,165.10 an ounce.
Barrick also entered into an agreement with Kennecott Explorations Ltd., a Rio Tinto plc subsidiary, to purchase a 40% stake in the Cortez Joint Venture for $1.7 billion.
The number of initial claims in the week ending Feb. 16 fell 9,000 to 349,000. It's the lowest level since the week ended Jan. 19. Claims in the previous week were revised to an increase of 1,000 to 358,000 compared with the initial estimate of a fall of 9,000 to 348,000. The four-week average of initial claims rose 10,750 to 360,500. A Labor Department official said that a state holiday in California may have reduced claims in the latest week. Meanwhile, the number of Americans receiving state jobless benefits rose 48,000 to 2.78 million in the week ending Feb. 9. The four-week moving average of continuing claims rose 28,750 to 2.75 million.
Microsoft Corp expects its sales to Taiwan's contract manufacturers of PCs, including Quanta and Asustek , to rise more than 10 percent in 2008, the head of its Taiwan unit said on Thursday.
The index of leading U.S. economic indicators dropped by 0.1% in January, the Conference Board reported Thursday, as weaker stock prices and housing data drove the index's fourth consecutive decline.
The Philly Fed diffusion index fell to -24 in February. The index had plunged to -20.9 in January from -1.6 in December. Readings below zero indicate contraction. The decline was unexpected. The new orders index rose to -10.9 from -15.2, while the shipments index fell to -12.2 from -2.3. Inflationary pressures eased a bit. The prices paid index dropped to 46.6 from 49.8.
The Eurekahedge Hedge Fund Index, which tracks the performance of 2,467 funds that invest globally, dropped 3.3 percent, based on preliminary figures, according to the Singapore-based hedge-fund research and publishing company. The drop is the worst since January 2000, when Eurekahedge began compiling the data. The index rose 0.7 percent in December.
The U.S. dollar index was at 75.940, down from 76.143 late Wednesday.
U.S. crude inventories rose more than expected, up 4.2 million barrels to 305.3 million barrels in the week ending Feb. 15, U.S. Energy Information Administration reported on Thursday. Analysts surveyed by Platts expected a rise of 3.2 million barrels. After the data, crude-oil futures for April delivery fell 90 cents, or 0.9%, to $98.80 a barrel on the New York Mercantile Exchange. Gasoline supplies rose by 1.1 million barrels in the latest week, while distillate stocks fell by 4.5 million barrels, EIA reported.
At the end of 2007, Marathon said it had net proved liquid hydrocarbon and natural gas reserves equal to 1.23 billion barrels of oil. About 53 percent was liquid and the rest gas, the company said.
A tight market for polysilicon has limited the solar-power industry's ability to produce more.
Goldman Sachs is likely to cut 1,500 employees, Lehman another 200, and Merrill an amount yet to be disclosed.
Crude for April delivery, the new front-month contract, declined $1.47 to settle at $98.23 a barrel on the New York Mercantile Exchange. Gold for April delivery rose $11.40 to end at $949.20 an ounce on the New York Mercantile Exchange. April platinum futures also hit a record Thursday, climbing as high as $2,194.80 an ounce. Platinum finished up $49.40 at $2,188.20 an ounce.
Fitch Ratings said it sees about $7 billion to $8 billion in losses in the U.S. life insurance industry because of exposure to subprime and Alt-A residential mortgages.
Microsoft announced it will be publishing technical information about its products to ensure interoperability with rivals' offerings. It won't make software developers obtain a license or pay royalties or other fees.
Beijing has given the green light for domestic banks to invest client funds in the Japanese stock market, according to a Dow Jones Newswire report Friday, citing a statement by the China Banking Regulatory Commission.
The People's Bank of China said Friday it expects growth in consumer prices to remain elevated in the first half, and warned inflationary pressures could keep on an upward trajectory for an extended period. The central bank also said the rate of growth in the economy was likely to slow this year. The PBOC said it would use interest rates to cool demand growth and quell inflation while bank reserve ratios could be increased to help manage liquidity.
Japan lowered its assessment of the economy for the first time in 15 months in its February report, noting a host of indicators were pointing to weaker economic growth.
In 2008, Express Scripts expects earnings from continuing operations in a range of $2.92 to $3 a share.
According to AMG Data Services, including ETF activity, Equity funds report net cash outflows totaling -$4.197 billion in the week ended 2/20/08 with Domestic funds reporting net outflows of -$5.853 billion and Non-domestic funds reporting net inflows of $1.656 billion; Excluding ETF activity, Equity funds report net cash inflows totaling $167 million with Domestic funds reporting net inflows of $141 million and Non-domestic funds reporting net inflows totaling $25 million.
David Fry: " Inflation is officially at 4%, but pre-Clinton era methodology shows the real number closer to 8%."
Robert McHugh: "Stocks are very close to a sharp breakout from their recent Symmetrical Triangle sideways moves. The breakout should be at least a 4 to 5 percent move, lasting several weeks."
China's gold demand rose 26% in 2007 from a year earlier, according to a wire report citing figures from the World Gold Council and the Shanghai Gold Exchange Thursday.
Taiwan has frozen exports of some steel products used in construction amid growing concerns about rising prices for the alloy, according to Dow Jones Newswires, which cited a statement by the Ministry of Economic Affairs. The export ban will affect steel billets and steel bars and will go into effect in about two weeks.
U.K. publishing group Reed Elsevier agreed to buy ChoicePoint Inc for a total cost of $4.1 billion, including the assumption of $600 million of debt. Reed said it will pay $50 a share for ChoicePoint, which provides data and analytics to the insurance industry. The deal has been recommended by the ChoicePoint board and represents a 49% premium to the closing price of $33.66 a share on Wednesday.
The value of Japanese exports surged 7.7% in January as rising shipments to Europe, Asia and commodity-rich countries offset slowing orders from the U.S.
Allianz's net profit dropped by more than half in the fourth quarter, as strength in its main property-casualty insurance business could not offset the damage from subprime write-downs at its banking arm. Its Dresdner Bank unit announced on Thursday it was cutting back on its activity in structured investment vehicles (SIV) and other structured products, at the root of the crisis, and cutting 450 jobs, though most of these have already been carried out. Dresdner Bank AG, Germany's third- largest bank, agreed to rescue its $18.8 billion K2 structured investment vehicle.
Pharmaceutical companies increased wholesale prices for the 50 top-selling branded drugs by an average of 7.82% in 2007, after increases of 6.73% and 6.22% in the previous two years, according to Delta Marketing Dynamics Inc., a health-care marketing research company. The most recent increase is almost double the overall U.S. economy's 4.1% annual inflation rate last year.
Silver gained to 27-year high.
The cost of protecting the debt of US and European companies against default surged to all-time highs.
McCormick & Company bought Canada’s largest honey company for $75 million in cash, about two times Billy Bee Honey Products’s annual sales of $37 million.
BNP Paribas , one of the largest banks in France, reported a 42 percent decline in fourth-quarter profit after writing down the value of securities hurt by worsening credit markets. Alliance & Leicester of Britain warned that a big rise in financing costs would derail 2008 profit after a write-down on risky assets hit 2007 results.
Bruce Everiss: Microsoft said that in the future XNA will be available for Zune. So now we know that Zune will evolve into a mobile gaming platform.
Research in Motion raised its subscriber forecasts this morning, and now expects its net subscriber additions for its fourth quarter to be approximately 15% to 20% higher than the 1.82 million net subscriber account additions forecast on December 20, 2007.
Crude oil prices of $100 may look ``cheap'' within five years if OPEC production fails to keep pace with global demand growth, according to Alfa Bank.
Search market share: Google 58.5%, Yahoo 22.2%, and Microsoft 9.8%.
J.C. Penney says its fourth-quarter profit fell 10 percent due to a shorter quarter. It also predicts 2008 earnings below Wall Street expectations, amid a weak consumer spending environment.
Microsoft announced a new initiative Wednesday to allow amateur developers to build games for Xbox Live, an online network with more than 10 million subscribers. The development tools for these games also allow them to be run on a PC and, eventually, Microsoft's portable digital media player, Zune. With the addition of these "community-created games," Microsoft expects to have more than 1,000 titles available for the Xbox 360 by the end of the year, said John Schappert, a Microsoft corporate vice president leading the effort.
KLA-Tencor Corp. said Thursday it intends to buy Belgian chip packaging testing company ICOS Vision Systems Corp. NV, for around $465.8 million.
For 2008, Williams Companies raised its profit guidance to $1.60 to $2 a share from $1.50 to $1.90 a share. For 2009, the company forecast profit in the range of $1.70 to $2.20 a share. At year-end 2007, it had replaced 232% of its production for the year.
In early Thursday trading, April gold is up $11.60 at $949.40 an ounce on the Nymex. April platinum futures also hit a record high of $2,194.80 an ounce and were last trading up $26.30 at $2,165.10 an ounce.
Barrick also entered into an agreement with Kennecott Explorations Ltd., a Rio Tinto plc subsidiary, to purchase a 40% stake in the Cortez Joint Venture for $1.7 billion.
The number of initial claims in the week ending Feb. 16 fell 9,000 to 349,000. It's the lowest level since the week ended Jan. 19. Claims in the previous week were revised to an increase of 1,000 to 358,000 compared with the initial estimate of a fall of 9,000 to 348,000. The four-week average of initial claims rose 10,750 to 360,500. A Labor Department official said that a state holiday in California may have reduced claims in the latest week. Meanwhile, the number of Americans receiving state jobless benefits rose 48,000 to 2.78 million in the week ending Feb. 9. The four-week moving average of continuing claims rose 28,750 to 2.75 million.
Microsoft Corp expects its sales to Taiwan's contract manufacturers of PCs, including Quanta and Asustek , to rise more than 10 percent in 2008, the head of its Taiwan unit said on Thursday.
The index of leading U.S. economic indicators dropped by 0.1% in January, the Conference Board reported Thursday, as weaker stock prices and housing data drove the index's fourth consecutive decline.
The Philly Fed diffusion index fell to -24 in February. The index had plunged to -20.9 in January from -1.6 in December. Readings below zero indicate contraction. The decline was unexpected. The new orders index rose to -10.9 from -15.2, while the shipments index fell to -12.2 from -2.3. Inflationary pressures eased a bit. The prices paid index dropped to 46.6 from 49.8.
The Eurekahedge Hedge Fund Index, which tracks the performance of 2,467 funds that invest globally, dropped 3.3 percent, based on preliminary figures, according to the Singapore-based hedge-fund research and publishing company. The drop is the worst since January 2000, when Eurekahedge began compiling the data. The index rose 0.7 percent in December.
The U.S. dollar index was at 75.940, down from 76.143 late Wednesday.
U.S. crude inventories rose more than expected, up 4.2 million barrels to 305.3 million barrels in the week ending Feb. 15, U.S. Energy Information Administration reported on Thursday. Analysts surveyed by Platts expected a rise of 3.2 million barrels. After the data, crude-oil futures for April delivery fell 90 cents, or 0.9%, to $98.80 a barrel on the New York Mercantile Exchange. Gasoline supplies rose by 1.1 million barrels in the latest week, while distillate stocks fell by 4.5 million barrels, EIA reported.
At the end of 2007, Marathon said it had net proved liquid hydrocarbon and natural gas reserves equal to 1.23 billion barrels of oil. About 53 percent was liquid and the rest gas, the company said.
A tight market for polysilicon has limited the solar-power industry's ability to produce more.
Goldman Sachs is likely to cut 1,500 employees, Lehman another 200, and Merrill an amount yet to be disclosed.
Crude for April delivery, the new front-month contract, declined $1.47 to settle at $98.23 a barrel on the New York Mercantile Exchange. Gold for April delivery rose $11.40 to end at $949.20 an ounce on the New York Mercantile Exchange. April platinum futures also hit a record Thursday, climbing as high as $2,194.80 an ounce. Platinum finished up $49.40 at $2,188.20 an ounce.
Fitch Ratings said it sees about $7 billion to $8 billion in losses in the U.S. life insurance industry because of exposure to subprime and Alt-A residential mortgages.
Microsoft announced it will be publishing technical information about its products to ensure interoperability with rivals' offerings. It won't make software developers obtain a license or pay royalties or other fees.
Beijing has given the green light for domestic banks to invest client funds in the Japanese stock market, according to a Dow Jones Newswire report Friday, citing a statement by the China Banking Regulatory Commission.
The People's Bank of China said Friday it expects growth in consumer prices to remain elevated in the first half, and warned inflationary pressures could keep on an upward trajectory for an extended period. The central bank also said the rate of growth in the economy was likely to slow this year. The PBOC said it would use interest rates to cool demand growth and quell inflation while bank reserve ratios could be increased to help manage liquidity.
Japan lowered its assessment of the economy for the first time in 15 months in its February report, noting a host of indicators were pointing to weaker economic growth.
In 2008, Express Scripts expects earnings from continuing operations in a range of $2.92 to $3 a share.
According to AMG Data Services, including ETF activity, Equity funds report net cash outflows totaling -$4.197 billion in the week ended 2/20/08 with Domestic funds reporting net outflows of -$5.853 billion and Non-domestic funds reporting net inflows of $1.656 billion; Excluding ETF activity, Equity funds report net cash inflows totaling $167 million with Domestic funds reporting net inflows of $141 million and Non-domestic funds reporting net inflows totaling $25 million.
Wednesday, February 20, 2008
Forbearance
2/21/08 Forbearance
The consumer price index increased 0.4% in January, driven by 0.7% gains in both energy and food prices. But other prices were also higher. The core CPI, which excludes food and energy costs, was up 0.3% in January, the largest gain since June 2006.
George Ure: "The 3-month annualized CPI is now running 6.8!"
Construction on new U.S. homes posted a small gain in January, even as building permits continued a downward slide, the Commerce Department reported Wednesday. Housing starts rose 0.8% to a seasonally adjusted annual rate of 1.01 million, the most since November. In December, starts fell by a revised 14.8% to an annual rate of 1.00 million. Economists were expecting national housing starts to rise to a pace of 1.01 million. Building permits dropped by 3.0%, to a seasonally adjusted annual rate of 1.08 million, the lowest since November 1991.
Sharper Image Corp., the San Francisco retailer, said in a statement Wednesday that it had filed under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court for the District of Delaware. In addition, Lillian Vernon Corp. filed for bankruptcy,
KKR Financial Holdings has postponed repayment of billions of commercial paper and is holding talks with creditors, according to a published report in the Financial Times Wednesday.
ACA Capital Holdings Inc. entered into a third forbearance agreement with its structured credit and other similarly situated counterparties, the company said late Tuesday. The agreement will remain effective until April 23. Under the agreement, the counterparties will continue to waive all collateral posting requirements, termination rights and policy claims relating to the rating of ACA Financial Guaranty Corporation, ACA Capital's financial guaranty insurance subsidiary, under their respective transaction documents including any credit support annexes and similar agreements.
China's consumer prices in January surged 7.1% from a year earlier.
Microsoft has hired proxy-solicitation group Innisfree M&A to help oust Yahoo's 10-member board, all of whom are up for re-election this year.
It has until March 14 to nominate a slate of directors for Yahoo.
``There are those who would say that you have to be wary about inspiration because you might be disappointed,'' Obama said. ``They say Obama might make a good speech, but what is really going to make a difference is how you work our government. But I have to say that it is my central premise that the only way we will bring about real change in America is if we bring new people into the process.''
In early Wednesday trading natural gas traded at $9.10. Yesterday, two hedge funds folded. Shorting natural gas caused their demise. There will be others to follow.
Rob Hanna: "The market gapped up big today but couldn’t hold on to those gains as the S&P 500, Dow 30, and Nasdaq all finished in the red. Reading financial columns tonight you’ll be told that the inability of the market to hold on to its gains was a bad thing. The large black candlesticks are ugly. Market participants are selling into strength. All of which means there is likely more downside to come. But is any of it true?
I ran a study on the Nasdaq 100 tonight to find instances where the index gapped higher by 1% or more and then closed lower on the day. I wanted to see whether the negativity tended to carry through to the next day or next several days. Here’s what I found.
Going back to 1986, the NDX has had 52 occurrences where the market gapped up over 1% and then finished negative on the day. It closed higher the next day 54% of the time. The chance of the NDX being up on any day over the period was also 54%. Over the next 3 and 5 days the chances of the market being higher were 62% and 65% after a large failed gap up. The NDX has closed higher between 55.5% and 56.5% of the time over all 3 and 5 days periods since 1986. So looking out over three and five days the supposedly negative reversal actually seems to be a positive for the market."
Bain Capital Partners said Wednesday it withdrew its application for U.S. national security approval for its planned $2.2 billion acquisition of network-equipment maker 3Com. The parties remain committed to continuing discussions, it said. 3Com Corp. said it couldn't reach an agreement with a federal oversight panel on national security issues surrounding its proposed $2.2 billion buyout by a private-equity firm and Chinese telecommunications company.
Pfizer to acquire Encysive Pharma for $2.35 a share.
The dollar index was at 76.244, up from 76.043 late Tuesday.
Airbus said Wednesday it expects half as many orders for new planes in 2008 as it got last year after receiving record orders in recent years and amid slower global growth.
GMAC to lay off 930 employees.
The Federal Reserve said on Wednesday it had lowered its growth forecast for 2008 to between 1.3 percent and 2 percent due to the deepening housing contraction and tight credit, and said risks of further setbacks are troubling."The possibility that house prices could decline more steeply than anticipated, further reducing households' wealth and access to credit, was perceived as a significant risk to the central outlook for economic growth and employment," the Fed said in its Summary of Economic Projections. "Several participants noted that the risks of a downturn in the economy were significant,'' according to minutes of the Fed's Jan. 9 and 21 conference calls and Jan. 29-30 meeting. ``Many participants were concerned that the drop in equity prices, coupled with the ongoing decline in house prices, implied reductions in household wealth that would likely damp consumer spending.''
Crude oil for March delivery rose 73 cents to finish at a new record closing high of $100.74 a barrel on the New York Mercantile Exchange. Gold for April delivery rose $8 to end at $937.80 an ounce on the New York Mercantile Exchange.
Rick Klein and Sarah Amos: "Texas has a one-of-a-kind primary/caucus system, where two-thirds of the state's delegates will be awarded in the March 4 primary, while the remaining third will depend on the results of caucuses later that evening. Voters are permitted — and, in fact, are encouraged by campaigns — to attend both events. But Obama has demonstrated organizational strength in other caucus states, leaving him favored to emerge with the larger share of the 67 delegates at stake in the caucuses, regardless of what happens in the primary earlier in the day." Overall, Texas allocates 193 delegates.
Teddy Roosevelt: “The things that will destroy America are prosperity at any price, peace at any price, safety first instead of duty first and love of soft living and the get-rich-quick theory of life.”
The consumer price index increased 0.4% in January, driven by 0.7% gains in both energy and food prices. But other prices were also higher. The core CPI, which excludes food and energy costs, was up 0.3% in January, the largest gain since June 2006.
George Ure: "The 3-month annualized CPI is now running 6.8!"
Construction on new U.S. homes posted a small gain in January, even as building permits continued a downward slide, the Commerce Department reported Wednesday. Housing starts rose 0.8% to a seasonally adjusted annual rate of 1.01 million, the most since November. In December, starts fell by a revised 14.8% to an annual rate of 1.00 million. Economists were expecting national housing starts to rise to a pace of 1.01 million. Building permits dropped by 3.0%, to a seasonally adjusted annual rate of 1.08 million, the lowest since November 1991.
Sharper Image Corp., the San Francisco retailer, said in a statement Wednesday that it had filed under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court for the District of Delaware. In addition, Lillian Vernon Corp. filed for bankruptcy,
KKR Financial Holdings has postponed repayment of billions of commercial paper and is holding talks with creditors, according to a published report in the Financial Times Wednesday.
ACA Capital Holdings Inc. entered into a third forbearance agreement with its structured credit and other similarly situated counterparties, the company said late Tuesday. The agreement will remain effective until April 23. Under the agreement, the counterparties will continue to waive all collateral posting requirements, termination rights and policy claims relating to the rating of ACA Financial Guaranty Corporation, ACA Capital's financial guaranty insurance subsidiary, under their respective transaction documents including any credit support annexes and similar agreements.
China's consumer prices in January surged 7.1% from a year earlier.
Microsoft has hired proxy-solicitation group Innisfree M&A to help oust Yahoo's 10-member board, all of whom are up for re-election this year.
It has until March 14 to nominate a slate of directors for Yahoo.
``There are those who would say that you have to be wary about inspiration because you might be disappointed,'' Obama said. ``They say Obama might make a good speech, but what is really going to make a difference is how you work our government. But I have to say that it is my central premise that the only way we will bring about real change in America is if we bring new people into the process.''
In early Wednesday trading natural gas traded at $9.10. Yesterday, two hedge funds folded. Shorting natural gas caused their demise. There will be others to follow.
Rob Hanna: "The market gapped up big today but couldn’t hold on to those gains as the S&P 500, Dow 30, and Nasdaq all finished in the red. Reading financial columns tonight you’ll be told that the inability of the market to hold on to its gains was a bad thing. The large black candlesticks are ugly. Market participants are selling into strength. All of which means there is likely more downside to come. But is any of it true?
I ran a study on the Nasdaq 100 tonight to find instances where the index gapped higher by 1% or more and then closed lower on the day. I wanted to see whether the negativity tended to carry through to the next day or next several days. Here’s what I found.
Going back to 1986, the NDX has had 52 occurrences where the market gapped up over 1% and then finished negative on the day. It closed higher the next day 54% of the time. The chance of the NDX being up on any day over the period was also 54%. Over the next 3 and 5 days the chances of the market being higher were 62% and 65% after a large failed gap up. The NDX has closed higher between 55.5% and 56.5% of the time over all 3 and 5 days periods since 1986. So looking out over three and five days the supposedly negative reversal actually seems to be a positive for the market."
Bain Capital Partners said Wednesday it withdrew its application for U.S. national security approval for its planned $2.2 billion acquisition of network-equipment maker 3Com. The parties remain committed to continuing discussions, it said. 3Com Corp. said it couldn't reach an agreement with a federal oversight panel on national security issues surrounding its proposed $2.2 billion buyout by a private-equity firm and Chinese telecommunications company.
Pfizer to acquire Encysive Pharma for $2.35 a share.
The dollar index was at 76.244, up from 76.043 late Tuesday.
Airbus said Wednesday it expects half as many orders for new planes in 2008 as it got last year after receiving record orders in recent years and amid slower global growth.
GMAC to lay off 930 employees.
The Federal Reserve said on Wednesday it had lowered its growth forecast for 2008 to between 1.3 percent and 2 percent due to the deepening housing contraction and tight credit, and said risks of further setbacks are troubling."The possibility that house prices could decline more steeply than anticipated, further reducing households' wealth and access to credit, was perceived as a significant risk to the central outlook for economic growth and employment," the Fed said in its Summary of Economic Projections. "Several participants noted that the risks of a downturn in the economy were significant,'' according to minutes of the Fed's Jan. 9 and 21 conference calls and Jan. 29-30 meeting. ``Many participants were concerned that the drop in equity prices, coupled with the ongoing decline in house prices, implied reductions in household wealth that would likely damp consumer spending.''
Crude oil for March delivery rose 73 cents to finish at a new record closing high of $100.74 a barrel on the New York Mercantile Exchange. Gold for April delivery rose $8 to end at $937.80 an ounce on the New York Mercantile Exchange.
Rick Klein and Sarah Amos: "Texas has a one-of-a-kind primary/caucus system, where two-thirds of the state's delegates will be awarded in the March 4 primary, while the remaining third will depend on the results of caucuses later that evening. Voters are permitted — and, in fact, are encouraged by campaigns — to attend both events. But Obama has demonstrated organizational strength in other caucus states, leaving him favored to emerge with the larger share of the 67 delegates at stake in the caucuses, regardless of what happens in the primary earlier in the day." Overall, Texas allocates 193 delegates.
Teddy Roosevelt: “The things that will destroy America are prosperity at any price, peace at any price, safety first instead of duty first and love of soft living and the get-rich-quick theory of life.”
Tuesday, February 19, 2008
Crude Prices
2/20/08 Crude Prices
Credit Suisse suspended a number of traders in connection with a $2.85 billion over valuation of assets.
Oil, heating oil and gasoline prices spiked Tuesday as investors eyed the possibility that OPEC may cut production just ahead of the second quarter, when gasoline demand in the Northern Hemisphere usually becomes the central focus of the market. An explosion at a 70,000-barrel-a-day refinery in Texas may have also boosted prices. Crude oil for March delivery rose $2.75 at $98.25 a barrel on the New York Mercantile Exchange. March reformulated gasoline soared 10.52 cents, or over 4%, at $2.5990 a gallon. March heating oil surged 8.81 cents, or over 3%, at $2.7350 a gallon and March natural gas rallied 24 cents at $8.90 per million British thermal units.
Wal-Mart said net income in the quarter ended Jan. 31 rose to $4.096 billion, or $1.02 per share, compared to $3.94 billion, or 95 cents a share, a year earlier.
Microsoft is not privately haggling with Yahoo over the software maker's rejected $31-per-share buyout offer for the slumping Internet pioneer, Bill Gates said in an interview. "We sent them a letter and said we think that's a fair offer. There's nothing that's gone on other than us stating that we think it's a fair offer," the Microsoft chairman said Monday. "They should take a hard look at it."
In an escalation of its fight for Yahoo, Microsoft will authorize a proxy fight at the Internet company this week, people briefed on the matter told DealBook.
Dubai International Capital LLC plans to increase its holdings in China, India and Japan to more than $5 billion during the next three to five years while expanding funds under management to between $25 billion to $30 billion from $13 billion currently, Kyodo reported Tuesday, citing comments by Anand Krishnan, chief operating officer of the fund.
China's consumer price index climbed 7.1% in January, accelerating from a 6.5% rise in December, data released by the National Bureau of Statistics showed Tuesday.
John Hussman: "As we enter 2008, the excessive creation of risky debt is beginning – and I should emphasize only beginning – to produce writedowns and losses...Having observed the inflation pressures I had anticipated over the near term, we are now starting to observe the credit problems I had anticipated over the longer term. Probably the only “bright side” is that increasing credit difficulties can be expected to put downward pressure on inflation later this year. Periods of heightened credit concerns tend to increase the demand for government liabilities (e.g. currency and Treasury securities), which tends to lower monetary “velocity” enough to drive down the rate of inflation...
I continue to believe that there is substantial risk of audit delays and “qualified” opinions in the upcoming reports of financial companies. It is difficult to see how analysts and some financial news anchors can seriously be looking for the market to have “discounted the bad news” when companies are still at a loss to quantify their news at all. It is equally difficult to see how financials can “come clean” with their losses when those losses generally have not yet occurred because the major wave of mortgage resets that started in October probably only now beginning to produce delinquencies. It's impossible to know yet which mortgages and how much will end up in foreclosure.
Most likely, there is more turbulence to come."
Banks in the United States have been quietly borrowing "massive amounts" from the U.S. Federal Reserve in recent weeks, using a new measure the Fed introduced two months ago to help ease the credit crunch, according to a report on the web site of The Financial Times. The newspaper said the use of the Fed's Term Auction Facility (TAF), which allows banks to borrow at relatively attractive rates against a wide range of their assets, saw borrowing of nearly $50 billion of one-month funds from the Fed by mid-February.
Barclays Plc , Britain's third-biggest bank, raised its 2007 writedown on the value of risky assets to 1.6 billion pounds ($3.1 billion) but reported profits broadly in line with analysts' expectations.
According to the WSJ, Lehman Bros.is sitting on a big pile of commercial real-estate loans, and that market is deteriorating, potentially causing bigger-than-expected write-downs. In recent weeks, credit markets have worsened, and Lehman believes it is now facing a write-down in the $1.3 billion range.
The dollar remained under pressure in European trading Tuesday, dogged by worries about the path of the ongoing credit crisis and ideas China's central bank might soon raise interest rates to battle surging inflation. The U.S. dollar index fell to the 75.95 area.
According to the FT, Barack Obama on Monday made an aggressive pitch at Ohio’s blue-collar workers by proposing a “Patriot Employers” plan that would lower corporate taxes for companies that did not ship jobs overseas.The proposal, which came two weeks before the critical Ohio primary and just before on Tuesday’s nominating contest in Wisconsin, is the most radical any presidential candidate has put forward so far to mitigate the perceived effects of globalization on US manufacturing.
According to the NY Times, the 2008 Index of Silicon Valley — which this year was sponsored by Joint Venture: Silicon Valley Network, a public-private partnership, and the Silicon Valley Community Foundation, a nonprofit — found that from 2002 to 2006, middle-wage jobs fell to 46 percent of the work force, from 52 percent.
According to Bloomberg, Dubai Mercantile Exchange, a venture between the Dubai government, the Oman Investment Fund and Nymex Holdings Inc., plans to offer financially settled contracts for Brent and Oman crude oil. The new contracts enable investors to trade the difference between high and lower sulfur benchmark oil grades without taking physical delivery. Dubai Mercantile will end its Brent- Oman Financial Spread Contract and WTI-Oman Financial Spread Contract when trading in the new contracts start, the exchange said in an e-mailed statement today.
In early Tuesday trading, gold futures soared over 2% in a broad commodities rally Tuesday, as platinum surged 4% after hitting another record high of $2,174.0 an ounce in electronic trading. Gold for April delivery rose $20.20 at $926.30 an ounce on the New York Mercantile Exchange. April platinum rallied $76.30 at $2,140 an ounce on Nymex after hitting a new record high earlier in the session. March palladium rallied $36.30, or 6%, at $488 an ounce, March copper rose 13.20 cents, or 4%, at $3.6550 a pound, and March silver gained 31.20 cents, or 2%, at $17.430 an ounce.
Staples Inc. announced Tuesday a 2.5 billion euro ($3.7 billion) hostile offer for European office-supplies chain Corporate Express, asserting the Dutch company should accept its acquisition bid rather than wait for its own restructuring plan to go ahead.
Mike Shedlock: "What ails the economy is cash strapped consumers who have recklessly spent over the years, businesses that have over expanded, and government that keeps spending more money every year than it collects. And if ever there was a worse time to start a business than now, you would be hard pressed to find it."
Whole Foods Market Inc's first-quarter profit fell to $39.1 million, or 28 cents a share, from $53.8 million, or 38 cents a share, a year ago. Results for the latest quarter were 36 cents a share excluding the impact from the company's acquisition of Wild Oats.
Yahoo Inc. plans to offer all of its employees "enhanced severance benefits" if they are laid off following a sale of the company, according to a report Tuesday in the online edition of The Wall Street Journal.
For the first quarter, excluding charges and one-time items, H-P would have earned $2.3 billion, or 86 cents a share, to beat the estimates of analysts surveyed by Thomson Financial, who forecast the company to earn 81 cents a share on $27.6 billion in sales.
Crude-oil futures surged nearly 5% Tuesday to close above $100 a barrel for the first time ever.
April gold soared $23.70, or nearly 3%, at $929.80 an ounce on the New York Mercantile Exchange. April platinum rallied $89.40, or over 4%, at $2,153.10 an ounce. March palladium rallied $47.60, or over 10%, to finish at $499.30 an ounce.
The home builders' housing market index rose to 20 in February from 19 in January, the National Association of Home Builders reported Tuesday.
Credit Suisse suspended a number of traders in connection with a $2.85 billion over valuation of assets.
Oil, heating oil and gasoline prices spiked Tuesday as investors eyed the possibility that OPEC may cut production just ahead of the second quarter, when gasoline demand in the Northern Hemisphere usually becomes the central focus of the market. An explosion at a 70,000-barrel-a-day refinery in Texas may have also boosted prices. Crude oil for March delivery rose $2.75 at $98.25 a barrel on the New York Mercantile Exchange. March reformulated gasoline soared 10.52 cents, or over 4%, at $2.5990 a gallon. March heating oil surged 8.81 cents, or over 3%, at $2.7350 a gallon and March natural gas rallied 24 cents at $8.90 per million British thermal units.
Wal-Mart said net income in the quarter ended Jan. 31 rose to $4.096 billion, or $1.02 per share, compared to $3.94 billion, or 95 cents a share, a year earlier.
Microsoft is not privately haggling with Yahoo over the software maker's rejected $31-per-share buyout offer for the slumping Internet pioneer, Bill Gates said in an interview. "We sent them a letter and said we think that's a fair offer. There's nothing that's gone on other than us stating that we think it's a fair offer," the Microsoft chairman said Monday. "They should take a hard look at it."
In an escalation of its fight for Yahoo, Microsoft will authorize a proxy fight at the Internet company this week, people briefed on the matter told DealBook.
Dubai International Capital LLC plans to increase its holdings in China, India and Japan to more than $5 billion during the next three to five years while expanding funds under management to between $25 billion to $30 billion from $13 billion currently, Kyodo reported Tuesday, citing comments by Anand Krishnan, chief operating officer of the fund.
China's consumer price index climbed 7.1% in January, accelerating from a 6.5% rise in December, data released by the National Bureau of Statistics showed Tuesday.
John Hussman: "As we enter 2008, the excessive creation of risky debt is beginning – and I should emphasize only beginning – to produce writedowns and losses...Having observed the inflation pressures I had anticipated over the near term, we are now starting to observe the credit problems I had anticipated over the longer term. Probably the only “bright side” is that increasing credit difficulties can be expected to put downward pressure on inflation later this year. Periods of heightened credit concerns tend to increase the demand for government liabilities (e.g. currency and Treasury securities), which tends to lower monetary “velocity” enough to drive down the rate of inflation...
I continue to believe that there is substantial risk of audit delays and “qualified” opinions in the upcoming reports of financial companies. It is difficult to see how analysts and some financial news anchors can seriously be looking for the market to have “discounted the bad news” when companies are still at a loss to quantify their news at all. It is equally difficult to see how financials can “come clean” with their losses when those losses generally have not yet occurred because the major wave of mortgage resets that started in October probably only now beginning to produce delinquencies. It's impossible to know yet which mortgages and how much will end up in foreclosure.
Most likely, there is more turbulence to come."
Banks in the United States have been quietly borrowing "massive amounts" from the U.S. Federal Reserve in recent weeks, using a new measure the Fed introduced two months ago to help ease the credit crunch, according to a report on the web site of The Financial Times. The newspaper said the use of the Fed's Term Auction Facility (TAF), which allows banks to borrow at relatively attractive rates against a wide range of their assets, saw borrowing of nearly $50 billion of one-month funds from the Fed by mid-February.
Barclays Plc , Britain's third-biggest bank, raised its 2007 writedown on the value of risky assets to 1.6 billion pounds ($3.1 billion) but reported profits broadly in line with analysts' expectations.
According to the WSJ, Lehman Bros.is sitting on a big pile of commercial real-estate loans, and that market is deteriorating, potentially causing bigger-than-expected write-downs. In recent weeks, credit markets have worsened, and Lehman believes it is now facing a write-down in the $1.3 billion range.
The dollar remained under pressure in European trading Tuesday, dogged by worries about the path of the ongoing credit crisis and ideas China's central bank might soon raise interest rates to battle surging inflation. The U.S. dollar index fell to the 75.95 area.
According to the FT, Barack Obama on Monday made an aggressive pitch at Ohio’s blue-collar workers by proposing a “Patriot Employers” plan that would lower corporate taxes for companies that did not ship jobs overseas.The proposal, which came two weeks before the critical Ohio primary and just before on Tuesday’s nominating contest in Wisconsin, is the most radical any presidential candidate has put forward so far to mitigate the perceived effects of globalization on US manufacturing.
According to the NY Times, the 2008 Index of Silicon Valley — which this year was sponsored by Joint Venture: Silicon Valley Network, a public-private partnership, and the Silicon Valley Community Foundation, a nonprofit — found that from 2002 to 2006, middle-wage jobs fell to 46 percent of the work force, from 52 percent.
According to Bloomberg, Dubai Mercantile Exchange, a venture between the Dubai government, the Oman Investment Fund and Nymex Holdings Inc., plans to offer financially settled contracts for Brent and Oman crude oil. The new contracts enable investors to trade the difference between high and lower sulfur benchmark oil grades without taking physical delivery. Dubai Mercantile will end its Brent- Oman Financial Spread Contract and WTI-Oman Financial Spread Contract when trading in the new contracts start, the exchange said in an e-mailed statement today.
In early Tuesday trading, gold futures soared over 2% in a broad commodities rally Tuesday, as platinum surged 4% after hitting another record high of $2,174.0 an ounce in electronic trading. Gold for April delivery rose $20.20 at $926.30 an ounce on the New York Mercantile Exchange. April platinum rallied $76.30 at $2,140 an ounce on Nymex after hitting a new record high earlier in the session. March palladium rallied $36.30, or 6%, at $488 an ounce, March copper rose 13.20 cents, or 4%, at $3.6550 a pound, and March silver gained 31.20 cents, or 2%, at $17.430 an ounce.
Staples Inc. announced Tuesday a 2.5 billion euro ($3.7 billion) hostile offer for European office-supplies chain Corporate Express, asserting the Dutch company should accept its acquisition bid rather than wait for its own restructuring plan to go ahead.
Mike Shedlock: "What ails the economy is cash strapped consumers who have recklessly spent over the years, businesses that have over expanded, and government that keeps spending more money every year than it collects. And if ever there was a worse time to start a business than now, you would be hard pressed to find it."
Whole Foods Market Inc's first-quarter profit fell to $39.1 million, or 28 cents a share, from $53.8 million, or 38 cents a share, a year ago. Results for the latest quarter were 36 cents a share excluding the impact from the company's acquisition of Wild Oats.
Yahoo Inc. plans to offer all of its employees "enhanced severance benefits" if they are laid off following a sale of the company, according to a report Tuesday in the online edition of The Wall Street Journal.
For the first quarter, excluding charges and one-time items, H-P would have earned $2.3 billion, or 86 cents a share, to beat the estimates of analysts surveyed by Thomson Financial, who forecast the company to earn 81 cents a share on $27.6 billion in sales.
Crude-oil futures surged nearly 5% Tuesday to close above $100 a barrel for the first time ever.
April gold soared $23.70, or nearly 3%, at $929.80 an ounce on the New York Mercantile Exchange. April platinum rallied $89.40, or over 4%, at $2,153.10 an ounce. March palladium rallied $47.60, or over 10%, to finish at $499.30 an ounce.
The home builders' housing market index rose to 20 in February from 19 in January, the National Association of Home Builders reported Tuesday.
Monday, February 18, 2008
Nationalize
2/19/08 Nationalize
Over the weekend, Nippon Steel and Posco agreed to pay 65% more for iron ore supplied by Companhia Vale do Rio Doce in 2008, Dow Jones Newswires reported. Japan's four largest steelmakers have agreed to a 65% increase in iron ore prices from Brazilian mining company Vale do Rio Doce, setting a new global benchmark. The new contract price, marking the sixth straight yearly increase, will apply to the fiscal year beginning April 1.
Societe Generale, the French bank which has been hurt by a $7.1 billion loss from unauthorized trading, had its credit rating reduced to AA- from AA by Standard & Poor's.
Societe Generale has held preliminary discussion about a possible merger with La Banque Postale, according to a report in Les Echos newspaper Monday.
Northern Rock shares were suspended after the U.K. government said on Sunday that it intends to nationalize the embattled lender.
China's producer price index climbed 6.1% in January from a year earlier, the National Bureau of Statistics said Monday. The increase follows a 5.4% rise in December, and marks the sixth straight month the growth rate in the PPI index has increased.
Australia and New Zealand Banking Group Ltd. Monday warned of higher provisions for the current financial year, including a $200 million write-down on a derivative position related to an U.S. monoline insurer. The company said in a statement a "substantial portion" of the provision could be written back in future periods. The bank said the write-down is related to derivative positions it took between 2005 and February 2007, and follows the credit downgrade of a U.S. monocline insurer to "CCC". ANZ did not identify the monoline insurer.
The U.S. Department of Agriculture on Sunday ordered the recall of 143 million pounds of beef from a Southern California slaughterhouse that is the subject of an animal-abuse investigation.
China attracted $11.2 billion in foreign investment in January, up 109.8 percent from the same month last year, the government said Monday.
Satyajit Das: "2007 may come to associated with the start of the "big" credit crunch. 2008 has begun with a number of "unresolved" items. Hope of an early resolution seems to be fading. In the words of Lily Tomlin, the American comedian: "Things are going to get a lot worse before they are going to get worse."
Floyd Norris: "Overall, Americans are spending about 13 percent more on food and energy now than a year ago."
DataQuick Information Systems released figures showing that the median price of a new home in Orange County fell 6.2 percent in January from the year before – and 26 percent from December. New home sales last month fell 62.8 percent. The same is happening elsewhere in the region. Prices of new homes sold in Southern California fell 7.8 percent last month from the year before and 51 percent from December, while sales dropped nearly 47 percent, DataQuick reported.
Brett Steenbarger: "After a strong snap-back rally from the January lows, we're now seeing deterioration in the indicators. I will need to see improvements in the readings before taking the long side for anything other than a short-term trade."
According to the FT, prices for top-quality spring wheat have jumped by 90 per cent in the past month and a half, boosted by a scramble by corporate consumers to secure scarce grain and speculative buying by investors. A surge on Friday in prices for wheat used in bread to an all-time high of $19.88 a bushel – the highest yet paid for any wheat contract and a three-fold increase from a year ago – prompted the US baking industry to call for wheat exports to be curtailed.
According to Reuters, the government of Qatar has begun investing in Credit Suisse (CS) and the company's prime minister says that Middle East country is prepared to put up to $15 billion into US and European banks.
Year-to-date, the S&P500 is down 8.1%, and off 7.3% over the past 52 weeks.
"Senator Obama visited this morning with John and Elizabeth Edwards at their home in Chapel Hill to discuss the state of the campaign and the pressing issues facing American families," said Obama spokesman Bill Burton. He would not comment on the possibility of an endorsement.
Over the weekend, Nippon Steel and Posco agreed to pay 65% more for iron ore supplied by Companhia Vale do Rio Doce in 2008, Dow Jones Newswires reported. Japan's four largest steelmakers have agreed to a 65% increase in iron ore prices from Brazilian mining company Vale do Rio Doce, setting a new global benchmark. The new contract price, marking the sixth straight yearly increase, will apply to the fiscal year beginning April 1.
Societe Generale, the French bank which has been hurt by a $7.1 billion loss from unauthorized trading, had its credit rating reduced to AA- from AA by Standard & Poor's.
Societe Generale has held preliminary discussion about a possible merger with La Banque Postale, according to a report in Les Echos newspaper Monday.
Northern Rock shares were suspended after the U.K. government said on Sunday that it intends to nationalize the embattled lender.
China's producer price index climbed 6.1% in January from a year earlier, the National Bureau of Statistics said Monday. The increase follows a 5.4% rise in December, and marks the sixth straight month the growth rate in the PPI index has increased.
Australia and New Zealand Banking Group Ltd. Monday warned of higher provisions for the current financial year, including a $200 million write-down on a derivative position related to an U.S. monoline insurer. The company said in a statement a "substantial portion" of the provision could be written back in future periods. The bank said the write-down is related to derivative positions it took between 2005 and February 2007, and follows the credit downgrade of a U.S. monocline insurer to "CCC". ANZ did not identify the monoline insurer.
The U.S. Department of Agriculture on Sunday ordered the recall of 143 million pounds of beef from a Southern California slaughterhouse that is the subject of an animal-abuse investigation.
China attracted $11.2 billion in foreign investment in January, up 109.8 percent from the same month last year, the government said Monday.
Satyajit Das: "2007 may come to associated with the start of the "big" credit crunch. 2008 has begun with a number of "unresolved" items. Hope of an early resolution seems to be fading. In the words of Lily Tomlin, the American comedian: "Things are going to get a lot worse before they are going to get worse."
Floyd Norris: "Overall, Americans are spending about 13 percent more on food and energy now than a year ago."
DataQuick Information Systems released figures showing that the median price of a new home in Orange County fell 6.2 percent in January from the year before – and 26 percent from December. New home sales last month fell 62.8 percent. The same is happening elsewhere in the region. Prices of new homes sold in Southern California fell 7.8 percent last month from the year before and 51 percent from December, while sales dropped nearly 47 percent, DataQuick reported.
Brett Steenbarger: "After a strong snap-back rally from the January lows, we're now seeing deterioration in the indicators. I will need to see improvements in the readings before taking the long side for anything other than a short-term trade."
According to the FT, prices for top-quality spring wheat have jumped by 90 per cent in the past month and a half, boosted by a scramble by corporate consumers to secure scarce grain and speculative buying by investors. A surge on Friday in prices for wheat used in bread to an all-time high of $19.88 a bushel – the highest yet paid for any wheat contract and a three-fold increase from a year ago – prompted the US baking industry to call for wheat exports to be curtailed.
According to Reuters, the government of Qatar has begun investing in Credit Suisse (CS) and the company's prime minister says that Middle East country is prepared to put up to $15 billion into US and European banks.
Year-to-date, the S&P500 is down 8.1%, and off 7.3% over the past 52 weeks.
"Senator Obama visited this morning with John and Elizabeth Edwards at their home in Chapel Hill to discuss the state of the campaign and the pressing issues facing American families," said Obama spokesman Bill Burton. He would not comment on the possibility of an endorsement.
Sunday, February 17, 2008
Dislocations
2/17/08 Dislocations
According to the WSJ, Alibaba hired advisers to help it negotiate for expanded management independence in the event its U.S. partner, Yahoo, is acquired by Microsoft. The company is concerned about how China would view the merger.
Opposition to Nafta helped Obama win the backing of the SEIU, the politically powerful service-employees' union.
According to the FT, Delta Air Lines’ board plans to meet on Wednesday to approve the US carrier’s merger with rival Northwest Airlines, people close to the matter said on Friday.
"The auction-rate securities market is unwinding and most of the market will enter a failed state," said Alex Roever, fixed-income strategist at JPMorgan.
Doug Noland: "I definitely feel the economic ramifications of the unfolding Credit Crisis are receiving short shrift in the media. This week saw parts of the municipal debt market grind to a virtual halt and the corporate debt market take another significant blow. Investment grade debt issuance has now slowed markedly after beginning the year at near record pace. At this point, the junk, CDO, ABS, “private-label” MBS, muni, and even investment grade debt markets are all somewhere between impaired, dislocated and completely dysfunctional...Today, with bursting bubbles in corporate and municipal finance joining the mortgage bust, the U.S. Bubble economy has quickly fallen desperately short of sufficient Credit and liquidity. And the greater the Credit market dislocation and broad-based tightness of Credit, the bleaker become economic prospects and the more intense the Revulsion to Wall Street’s Credit instruments. The days of free-flowing cheap finance for home buyers, state and local governments, LBO firms, commercial real estate speculators, college students, risky auto buyers, and high-risk Credit card holders are over - and they will not be returning for some time to come. ..In a disconcerting development, recent market developments seem to confirm that the leveraged speculating community and the GSEs are poised as the next shoes to drop – the next Dominoes in an Escalating Contagion. Along with the “monolines” and mortgage insurers, the “Credit default swap market” and GSE mortgage Risk Intermediation were at the epicenter of the most egregious Systemic Risk Distortions and Accumulations. They are now quickly moving to the forefront of Current Acute Fragilities. Simplifying highly complex circumstances, the various risk models that empowered the greatest leveraging of risk in the history of finance no longer function as expected - or as required to maintain highly leveraged exposures to a multitude of escalating risks. And it was all just only a matter of time. The overriding flaw was to ignore that a runaway Bubble in market-based finance ensured that various market and Credit risks all coalesced into One Massive, Unmanageable, Highly Correlated, Unhedgable, Undiversifiable Association of Interrelated Systemic Risks. "
The yield on an index of 100 junk bonds tracked by KDP Investment Advisors hit a five-year high of 9.63% on Friday, up from 9.03% two weeks ago.
Borse Dubai said on Sunday it would consider selling a stake in the London Stock Exchange Group to Qatar, but had not received any approaches and was unlikely to sell any stake in the short term. Borse Dubai and the Nasdaq Stock Market should close a deal this month to buy Nordic and Baltic stock exchange OMX . Under the tie-up, Borse Dubai gets Nasdaq's stake in the London Stock Exchange (LSE).
Mike Burk: "The bottom indicators are suggesting there is little risk in the market. After a bottom has been made downside volume (DV) dries up pretty quickly. That has not happened yet, but it is encouraging to see DV falling off faster in the small cap indices than the large cap indices...The bad news is the extreme number of new lows in mid January implies another retest of the recent lows in the next few months...The rally off the lows of January (early February for the OTC) has been less robust than I would like to see, but new lows suggest an intermediate term bottom is in place. I expect the major indices to be higher on Friday February 22 than they were on Friday February 15."
Robert McHugh: "This week, on Thursday, February 14th, Bernanke spoke, markets fell. Confidence in the Fed Chairman wanes. From a fundamental perspective, until something is done to bail out the credit insurers, so they maintain their AAA rating from Moodys and S&P, market rallies will be corrective. This is an economic nuclear bomb at 32,000 feet This is about bank solvency, bank risk-based capital, the bank credit function, not about the insurers themselves. Should a downgrade come to the insurers, billions of municipal bonds will effectively become illiquid, joining the trillion of CDOs (mostly subprime loan securities) that have already become illiquid. Without a bailout here, we are headed for a depression. "
New York’s regulator will hold talks this weekend with sovereign wealth funds, Warren Buffett and other investors in an effort to stabilise ratings on $220bn of municipal bonds guaranteed by FGIC .
According to the WSJ, Alibaba hired advisers to help it negotiate for expanded management independence in the event its U.S. partner, Yahoo, is acquired by Microsoft. The company is concerned about how China would view the merger.
Opposition to Nafta helped Obama win the backing of the SEIU, the politically powerful service-employees' union.
According to the FT, Delta Air Lines’ board plans to meet on Wednesday to approve the US carrier’s merger with rival Northwest Airlines, people close to the matter said on Friday.
"The auction-rate securities market is unwinding and most of the market will enter a failed state," said Alex Roever, fixed-income strategist at JPMorgan.
Doug Noland: "I definitely feel the economic ramifications of the unfolding Credit Crisis are receiving short shrift in the media. This week saw parts of the municipal debt market grind to a virtual halt and the corporate debt market take another significant blow. Investment grade debt issuance has now slowed markedly after beginning the year at near record pace. At this point, the junk, CDO, ABS, “private-label” MBS, muni, and even investment grade debt markets are all somewhere between impaired, dislocated and completely dysfunctional...Today, with bursting bubbles in corporate and municipal finance joining the mortgage bust, the U.S. Bubble economy has quickly fallen desperately short of sufficient Credit and liquidity. And the greater the Credit market dislocation and broad-based tightness of Credit, the bleaker become economic prospects and the more intense the Revulsion to Wall Street’s Credit instruments. The days of free-flowing cheap finance for home buyers, state and local governments, LBO firms, commercial real estate speculators, college students, risky auto buyers, and high-risk Credit card holders are over - and they will not be returning for some time to come. ..In a disconcerting development, recent market developments seem to confirm that the leveraged speculating community and the GSEs are poised as the next shoes to drop – the next Dominoes in an Escalating Contagion. Along with the “monolines” and mortgage insurers, the “Credit default swap market” and GSE mortgage Risk Intermediation were at the epicenter of the most egregious Systemic Risk Distortions and Accumulations. They are now quickly moving to the forefront of Current Acute Fragilities. Simplifying highly complex circumstances, the various risk models that empowered the greatest leveraging of risk in the history of finance no longer function as expected - or as required to maintain highly leveraged exposures to a multitude of escalating risks. And it was all just only a matter of time. The overriding flaw was to ignore that a runaway Bubble in market-based finance ensured that various market and Credit risks all coalesced into One Massive, Unmanageable, Highly Correlated, Unhedgable, Undiversifiable Association of Interrelated Systemic Risks. "
The yield on an index of 100 junk bonds tracked by KDP Investment Advisors hit a five-year high of 9.63% on Friday, up from 9.03% two weeks ago.
Borse Dubai said on Sunday it would consider selling a stake in the London Stock Exchange Group to Qatar, but had not received any approaches and was unlikely to sell any stake in the short term. Borse Dubai and the Nasdaq Stock Market should close a deal this month to buy Nordic and Baltic stock exchange OMX . Under the tie-up, Borse Dubai gets Nasdaq's stake in the London Stock Exchange (LSE).
Mike Burk: "The bottom indicators are suggesting there is little risk in the market. After a bottom has been made downside volume (DV) dries up pretty quickly. That has not happened yet, but it is encouraging to see DV falling off faster in the small cap indices than the large cap indices...The bad news is the extreme number of new lows in mid January implies another retest of the recent lows in the next few months...The rally off the lows of January (early February for the OTC) has been less robust than I would like to see, but new lows suggest an intermediate term bottom is in place. I expect the major indices to be higher on Friday February 22 than they were on Friday February 15."
Robert McHugh: "This week, on Thursday, February 14th, Bernanke spoke, markets fell. Confidence in the Fed Chairman wanes. From a fundamental perspective, until something is done to bail out the credit insurers, so they maintain their AAA rating from Moodys and S&P, market rallies will be corrective. This is an economic nuclear bomb at 32,000 feet This is about bank solvency, bank risk-based capital, the bank credit function, not about the insurers themselves. Should a downgrade come to the insurers, billions of municipal bonds will effectively become illiquid, joining the trillion of CDOs (mostly subprime loan securities) that have already become illiquid. Without a bailout here, we are headed for a depression. "
New York’s regulator will hold talks this weekend with sovereign wealth funds, Warren Buffett and other investors in an effort to stabilise ratings on $220bn of municipal bonds guaranteed by FGIC .
Saturday, February 16, 2008
Deteriorating Conditions
2/16/08 Deteriorating Conditions
The U.S. Import Price Index increased 1.7 percent in January,
led by a 5.5 percent increase in petroleum prices.
The overall increase followed a 0.2 percent decline in
December. U.S. export prices advanced 1.2 percent in
January following a 0.4 percent rise in December.
Top electronics retailer Best Buy Co cut its full-year outlook
on Friday, saying fourth-quarter sales would miss its
expectations as the softer U.S. economy hurt January store
traffic, pushing its shares down 3 percent. Lower revenue for advanced televisions, MP3 devices and video games
will result in a modest fall in sales at stores open at least 14
months, or same-store sales, Best Buy said.
"The macroeconomic environment grew more challenging after the holidays," Jim Muehlbauer, interim chief financial officer, said in a statement. "Our post-holiday results are not going to be what we originally expected."
An index of consumer sentiment fell to a 16-year low. The index fell to 69.6 in mid-February from 78.4 in January.
Crude futures for March delivery gained 4 cents to close at $95.50 a barrel on the New York Mercantile Exchange. Platinum for April delivery soared as high as $2,079.90 an ounce, beating the previous record set on Thursday. The contract finished up $57.80 at $2,063.70 an ounce. Platinum futures soared $179.70, or nearly 10%, this week from last Friday's closing level of $1,884. Gold for April delivery dropped $4.70 to end at $906.10 an ounce. Gold posted a weekly loss of $16.20 from last Friday's closing level of $922.30.
Countrywide's delinquencies and foreclosures also continued to rise, with delinquencies up to 7.47% from 7.27% and foreclosures growing to 1.48% from 1.44% a month earlier.
The Empire State manufacturing survey indicates that conditions for New York manufacturers deteriorated in February, the Federal Reserve Bank of New York said Friday. The general business conditions index tumbled nearly 21 points to -11.7, falling below zero for the first time since May 2005.
ConocoPhillips raised its quarterly dividend 15% to 47 cents from 41 cents. The dividend is payable March 3 to shareholders of record as of Feb. 25.
Wilsons The Leather Experts Inc. plans to begin a program of reducing its mall store base, implementing aggressive cost cutting initiatives and launching a new accessories store concept. As part of the initiative, Wilsons said it plans to close up to 160 mall locations "that do not fit its go-forward strategy." All remaining 100 stores in the mall division will be remodeled to a new "Studio" concept, a brand-driven store for women focusing on fashion accessories. The Minneapolis-based retailer said the plan will affect approximately 938 store-related positions.
China's trade surplus in January totaled $19.49 billion, up 22.5% from a year earlier, but down against the preceding month, according to data released by China's General Administration of Customs Friday. China's surplus in December totaled $22.69 billion.
According to a Business Council survey released Thursday, 81% of CEOs polled by the group expected "sluggish" U.S. economic growth of 0% to 2% this year.
The credit crunch driven by the U.S. housing crisis appears to have hit another engine of the American economy -- small businesses. "We've been concerned about this for some time, but things are really beginning to deteriorate," said Todd McCracken, president of the National Small Business Association (NSBA).
New York state governor Eliot Spitzer warned Thursday that bond and credit woes afflicting Wall Street and global markets could turn into a more damaging "financial tsunami."
Paul Krugman: "Why has a crisis that began with loans to a limited group of home buyers ended up disrupting so much of the financial system? Because, ultimately, it’s more than a subprime crisis; indeed, it’s more than a housing crisis. It’s a crisis of faith."
According to AMG Data Services, including ETF activity, Equity funds report net cash outflows totaling -$7.606 billion in the week ended 2/13/08 with Domestic funds reporting net outflows of -$6.795 billion and Non-domestic funds reporting net outflows of -$811 million; Excluding ETF activity, Equity funds report net cash outflows totaling -$332 million with Domestic funds reporting net outflows of -$4 million and Non-domestic funds reporting net outflows totaling -$328 million.
The U.S. Import Price Index increased 1.7 percent in January,
led by a 5.5 percent increase in petroleum prices.
The overall increase followed a 0.2 percent decline in
December. U.S. export prices advanced 1.2 percent in
January following a 0.4 percent rise in December.
Top electronics retailer Best Buy Co cut its full-year outlook
on Friday, saying fourth-quarter sales would miss its
expectations as the softer U.S. economy hurt January store
traffic, pushing its shares down 3 percent. Lower revenue for advanced televisions, MP3 devices and video games
will result in a modest fall in sales at stores open at least 14
months, or same-store sales, Best Buy said.
"The macroeconomic environment grew more challenging after the holidays," Jim Muehlbauer, interim chief financial officer, said in a statement. "Our post-holiday results are not going to be what we originally expected."
An index of consumer sentiment fell to a 16-year low. The index fell to 69.6 in mid-February from 78.4 in January.
Crude futures for March delivery gained 4 cents to close at $95.50 a barrel on the New York Mercantile Exchange. Platinum for April delivery soared as high as $2,079.90 an ounce, beating the previous record set on Thursday. The contract finished up $57.80 at $2,063.70 an ounce. Platinum futures soared $179.70, or nearly 10%, this week from last Friday's closing level of $1,884. Gold for April delivery dropped $4.70 to end at $906.10 an ounce. Gold posted a weekly loss of $16.20 from last Friday's closing level of $922.30.
Countrywide's delinquencies and foreclosures also continued to rise, with delinquencies up to 7.47% from 7.27% and foreclosures growing to 1.48% from 1.44% a month earlier.
The Empire State manufacturing survey indicates that conditions for New York manufacturers deteriorated in February, the Federal Reserve Bank of New York said Friday. The general business conditions index tumbled nearly 21 points to -11.7, falling below zero for the first time since May 2005.
ConocoPhillips raised its quarterly dividend 15% to 47 cents from 41 cents. The dividend is payable March 3 to shareholders of record as of Feb. 25.
Wilsons The Leather Experts Inc. plans to begin a program of reducing its mall store base, implementing aggressive cost cutting initiatives and launching a new accessories store concept. As part of the initiative, Wilsons said it plans to close up to 160 mall locations "that do not fit its go-forward strategy." All remaining 100 stores in the mall division will be remodeled to a new "Studio" concept, a brand-driven store for women focusing on fashion accessories. The Minneapolis-based retailer said the plan will affect approximately 938 store-related positions.
China's trade surplus in January totaled $19.49 billion, up 22.5% from a year earlier, but down against the preceding month, according to data released by China's General Administration of Customs Friday. China's surplus in December totaled $22.69 billion.
According to a Business Council survey released Thursday, 81% of CEOs polled by the group expected "sluggish" U.S. economic growth of 0% to 2% this year.
The credit crunch driven by the U.S. housing crisis appears to have hit another engine of the American economy -- small businesses. "We've been concerned about this for some time, but things are really beginning to deteriorate," said Todd McCracken, president of the National Small Business Association (NSBA).
New York state governor Eliot Spitzer warned Thursday that bond and credit woes afflicting Wall Street and global markets could turn into a more damaging "financial tsunami."
Paul Krugman: "Why has a crisis that began with loans to a limited group of home buyers ended up disrupting so much of the financial system? Because, ultimately, it’s more than a subprime crisis; indeed, it’s more than a housing crisis. It’s a crisis of faith."
According to AMG Data Services, including ETF activity, Equity funds report net cash outflows totaling -$7.606 billion in the week ended 2/13/08 with Domestic funds reporting net outflows of -$6.795 billion and Non-domestic funds reporting net outflows of -$811 million; Excluding ETF activity, Equity funds report net cash outflows totaling -$332 million with Domestic funds reporting net outflows of -$4 million and Non-domestic funds reporting net outflows totaling -$328 million.
Wednesday, February 13, 2008
The Big Easy
2/13/08 The Big Easy
Homeowners threatened with foreclosure would in some instances get a 30-day reprieve under an initiative the Bush administration announced Tuesday. Dubbed "Project Lifeline," the program will be available to people who have taken out all types of mortgages, not just the high-cost subprime loans that have been the focus of previous relief efforts. The program was put together by six of the nation's largest financial institutions, which service almost 50 percent of the nation's mortgages.
Warren Buffett said Tuesday that he has offered to help out troubled bond insurers by offering a second level of insurance on up to $800 billion in municipal bonds. In an interview on CNBC, Buffett said his Berkshire Hathaway holding company made the offer of reinsurance to bond insurers Ambac Financial Group Inc., MBIA Inc. and Financial Guaranty Insurance Co. Buffett said one firm rejected his offer, and he was still waiting to hear from the other two. He did not say which was which.
n its monthly review of the government's finances, the Treasury Department said Tuesday that the budget was in surplus in January, but totals $87.7 billion so far this budget year, double the $42.2 billion imbalance recorded during the same period in 2007. The new budget year started last Oct. 1.
General Motors Corp. reported a $38.7 billion loss for 2007 on Tuesday, the largest annual loss ever for an automotive company, and said it is making a new round of buyout offers to U.S. hourly workers in hopes of replacing some of them with lower-paid help.
U.S. Crude oil for March delivery lost 81 cents, or 0.9%, to close at $92.78 a barrel on the New York Mercantile Exchange. Gold for April delivery declined $15.60 at $911.10 an ounce on the New York Mercantile Exchange.
"We think this deal is a strategic imperative for Microsoft, and that Yahoo is in a tough spot if it wishes to remain independent," said Miller, manager of Legg Mason Value Trust, a large holder of Yahoo stock. He thinks Microsoft will have to enhance its offer it wants to seal the deal for Yahoo.
The outlook for 2008 is much weaker than three months ago but a recession is still unlikely, according to the median forecast of 50 economists surveyed by the Philadelphia Federal Reserve Bank. The forecasters expect growth of 0.7% in the first quarter and 1.3% in the second quarter, much weaker than the average 2.25% average growth in the two quarters previously forecast.
As expected, Yahoo Inc began carrying out lay-offs up to 1,000 employees on Tuesday, as part of job cutbacks announced last month, several employees at the company's headquarters said on Tuesday. U.K. inflation accelerated to a seven-month high in January as soaring gasoline and food costs blunted the impact of discounting by fashion stores. Consumer prices climbed 2.2 percent from a year earlier, compared with 2.1 percent in December, the Office for National Statistics said today in London.
Homeowners threatened with foreclosure would in some instances get a 30-day reprieve under an initiative the Bush administration announced Tuesday. Dubbed "Project Lifeline," the program will be available to people who have taken out all types of mortgages, not just the high-cost subprime loans that have been the focus of previous relief efforts. The program was put together by six of the nation's largest financial institutions, which service almost 50 percent of the nation's mortgages.
Warren Buffett said Tuesday that he has offered to help out troubled bond insurers by offering a second level of insurance on up to $800 billion in municipal bonds. In an interview on CNBC, Buffett said his Berkshire Hathaway holding company made the offer of reinsurance to bond insurers Ambac Financial Group Inc., MBIA Inc. and Financial Guaranty Insurance Co. Buffett said one firm rejected his offer, and he was still waiting to hear from the other two. He did not say which was which.
n its monthly review of the government's finances, the Treasury Department said Tuesday that the budget was in surplus in January, but totals $87.7 billion so far this budget year, double the $42.2 billion imbalance recorded during the same period in 2007. The new budget year started last Oct. 1.
General Motors Corp. reported a $38.7 billion loss for 2007 on Tuesday, the largest annual loss ever for an automotive company, and said it is making a new round of buyout offers to U.S. hourly workers in hopes of replacing some of them with lower-paid help.
U.S. Crude oil for March delivery lost 81 cents, or 0.9%, to close at $92.78 a barrel on the New York Mercantile Exchange. Gold for April delivery declined $15.60 at $911.10 an ounce on the New York Mercantile Exchange.
"We think this deal is a strategic imperative for Microsoft, and that Yahoo is in a tough spot if it wishes to remain independent," said Miller, manager of Legg Mason Value Trust, a large holder of Yahoo stock. He thinks Microsoft will have to enhance its offer it wants to seal the deal for Yahoo.
The outlook for 2008 is much weaker than three months ago but a recession is still unlikely, according to the median forecast of 50 economists surveyed by the Philadelphia Federal Reserve Bank. The forecasters expect growth of 0.7% in the first quarter and 1.3% in the second quarter, much weaker than the average 2.25% average growth in the two quarters previously forecast.
As expected, Yahoo Inc began carrying out lay-offs up to 1,000 employees on Tuesday, as part of job cutbacks announced last month, several employees at the company's headquarters said on Tuesday. U.K. inflation accelerated to a seven-month high in January as soaring gasoline and food costs blunted the impact of discounting by fashion stores. Consumer prices climbed 2.2 percent from a year earlier, compared with 2.1 percent in December, the Office for National Statistics said today in London.
Monday, February 11, 2008
Subprime Loss Estimates
2/12/08 Subprime Loss Estimates
"If you end up freezing (Venezuelan assets) and it harms us, we're going to harm you," Chavez said during his weekly radio and television program, "Hello, President." "Do you know how? We aren't going to send oil to the United States. Take note, Mr. Bush, Mr. Danger."
Democratic Sen. Hillary Rodham Clinton replaced campaign manager Patti Solis Doyle with longtime aide Maggie Williams on Sunday, a staff shake-up coming just hours after presidential rival Barack Obama's weekend sweep of three contests. According to the Chicago Tribune, over the last seven years, Clinton had raised $175 million for her reelection and her presidential campaign. But Solis Doyle didn't tell Clinton that there was next to no cash on hand until after the New Hampshire primary."We were lying about money," a source said. "The cash on hand was nothing." In turn, Clinton didn't tell Solis Doyle that she was lending her own money to keep the campaign afloat. Solis Doyle found out third-hand. And when she asked Clinton about it, the senator told her she couldn't understand how the campaign had gotten to such a point.
Microsoft, Sony Ericsson to launch Window mobile phone.
The negotiating committee of the Writers Guild of America voted unanimously to accept a tentative three-year deal with major Hollywood studios, clearing the way for final approval of the agreement by striking film and TV writers, The Wall Street Journal reported Sunday.
Coal prices rose to a record for a third straight week at Australia's Newcastle port, a benchmark for Asia, as snowstorms in China cut exports, adding to supply disruptions in Australia and South Africa.
Sun Capital to buy Kellwood for $21 a share.
Yahoo is seeking to restart merger talks with the AOL unit of Time Warner as a way to defend itself from a hostile Microsoft approach, The Times (of London) newspaper reported Monday, citing an unnamed source. The report said tie-ups with Google and Disney also are being explored.
Losses linked to the subprime-credit turmoil could hit $400 billion, implying global financial institutions have yet to write down the full amount of the soured investments, The Financial Times reported Monday. The report cited German Financial Minister Peer Steinbrück speaking after the gathering of the Group of Seven finance leaders in Tokyo as the source of the figure. The estimate is well above the U.S. Federal Reserve's estimates of subprime losses last year of $100 billion to $150 billion and higher than the $120 billion in losses reported by Wall Street banks and other financial institutions in recent weeks.
According to the WSJ, Motorola Inc. and Nortel Networks Corp. are in talks to combine their wireless-infrastructure units in a joint venture, said people familiar with the situation, the latest response to slowing growth in the telecom-equipment industry.
According to Bloomberg, Ford Motor Co., the world's third- largest automaker, may eliminate as many as 9,000 more U.S. factory jobs through its latest buyout offers, a person with direct knowledge of the situation said. The cuts would be in addition to the 33,600 union workers who left through buyouts and early retirements in 2006 and 2007, when Ford lost a combined $15.3 billion.
According to FT, Microsoft has a team of advisers in place for any proxy fight. It includes Alan Miller of Innisfree, the proxy solicitation firm, and Joele Frank, the New York M&A public relations specialist, as well as financial advisers from the Blackstone Group and Morgan Stanley. Yahoo is using Dan Burch at MacKenzie Partners, a proxy firm that would lobby shareholders to try to secure their votes in favour of the current board. Microsoft has until March 13 to nominate a new slate of directors.
The auction of Getty Images , the distributor of pictures and video, appears to be in jeopardy, The New York Times reported Monday.Though several bidders, mostly private equity firms like Kohlberg Kravis Roberts, Bain Capital and Providence Equity partners, had expressed interest last month, Getty received no offers significantly above its current market value of $1.6 billion, according to The Times.
Mobile phone coupon company Cellfire has raised $12 million in a third round of funding. The round includes a new investor, Silver Creek Ventures, and existing ones, including Menlo Ventures and Storm Ventures. People who sign up for Cellfire’s service automatically receive coupons on their cell phones. If they accept the coupon, users receive a unique redemption code that’s redeemed at the store.
Drybulk rates increased into the Chinese New Year.
The Houston Chronicle reports the U.S. housing market still has a long way to fall — and with it the nation's economy — and China's economy won't cushion the blow as it did in the 2001 slump. That's the view of two top economists scheduled to make presentations this week at CERAWeek, Cambridge Energy Research Associates' annual energy forum in Houston. Robert Shiller, the Yale economist who is widely credited with the earliest warnings of the subprime mortgage crisis, said signs are pointing toward steeper declines in U.S. home prices. Average home prices fell by 8 percent last year, according to the Standard & Poor's/Case-Shiller index based on 20 big American cities."This may be a major turning point where we see years of falling home prices and economic decline," Shiller, an originator of the Case-Shiller index, said in an interview with the Chronicle.
John Hussman: "At present, we've cleared that overbought condition, so there's nothing that would allow us to form pointed short-term expectations for market returns. Presently, the Market Climate remains broadly unfavorable, and that is enough to hold us to a fully hedged investment stance in the Strategic Growth Fund...The strongest factor driving market returns here is the unfavorable condition of market internals including price/volume behavior, breadth, leadership, industry action, credit spreads, and other factors. Meanwhile, it's important to reiterate that P/E ratios based on “forward operating earnings” and even our own “price/peak-earnings” measures are somewhat corrupted here by the fact that the earnings in these ratios implicitly assume the continuation of record profit margins about 40-50% above long-term norms. As a result, we are also attending to measures that take profit margins into account more explicitly. To the extent that profit margins are not likely to be sustained indefinitely, P/E ratios are likely to be a poor metric of valuation, encouraging investors to believe that stocks are cheap on the basis of recent earnings, when they are not at all cheap on the basis of long-term earnings power."
Microsoft Corp. said Monday it has entered into an agreement to acquire Danger Inc., a company which produces software and services for consumer handsets.
YAHOO SAYS MICROSOFT OFFER 'SUBSTANTIALLY' UNDERVALUED, KEEPING OPTIONS OPEN. I view this as a generic and weak negotiating response. Whether it's true that off the record Microsoft offered $40 or $43 a year ago for Yahoo when the latter's stock was trading at $28 is irrelevant. It is relative that a year later Yahoo shares were at the $19 level. Had the company been performing well, it would have have been doubtful to trade at a 52-week low. Over the past year, Microsoft has used much of its cash position on other acquisitions. The company will need to take on debt to buy Yahoo at $31, and it will be dilutive to earnings. No other company will pay $31 and Yahoo is not in a position to deliver $31 in value to shareholders on their own. Yahoo's option is to try and get a small kiss from Microsoft and call it a day. Their management has had its chance at running the company and can't hack it to the next level.
BANK OF AMERICA, CHEVRON ADDED TO DOW INDUSTRIALS, REPLACING ALTRIA AND HONEYWELL.
The dollar was buying 106.64 yen, compared with 107.43 yen late Friday.
In early Monday trading, natural gas is trading at $8.54. Gas has advanced 13.3 percent so far this year. That's a turkey sandwich! The cold weather is taking its toll on the short sellers.
AIG unsure of value of some of its credit derivatives. AIG auditors cite "material weakness" in financial reporting. In addition, the company increased its estimates of losses in October and November from insuring mortgage-related instruments from about $1bn to nearly $5bn.
Hypercom Corp. rose $1.24, or 31 percent, to $5.19. Ingenico SA offered to buy the maker of electronic-payment software for about $332 million, or $6.25 a share, in cash.
A report released Monday by Forrester Research Inc. says U.S. companies and government agencies are expected to increase their spending on information technology by just 2.8 percent this year. That is a substantial downward revision from the 4.6 percent growth that Forrester was predicting in December.
BJ Services: "For the second fiscal quarter of 2008, we expect drilling activity to remain relatively flat in the U.S. market, and we expect pricing pressures to continue at least until the latter part of the year. We do expect continued high demand for our services in a number of areas, especially in gas shale areas in Arkansas, the Rockies and the Mid-Continent region, and we anticipate increased Gulf of Mexico activity particularly in the deep water area. Canadian drilling activity is expected to increase in the second fiscal quarter as we enter the winter drilling season, and we expect our operating results to improve there compared to the first fiscal quarter. We also anticipate increased revenue and improved margins in the International Pressure Pumping segment. Both the Blue Angel stimulation vessel in Brazil and the Vestfonn stimulation vessel in India have returned to work after being dry-docked for a portion of the first fiscal quarter. We have a number of new projects in our international pressure pumping operations that either have already begun or are scheduled to begin in the second fiscal quarter in Latin America, North Africa and China that we believe will help to improve international operating margins. Our Oilfield Services group is projected to be up slightly in the second quarter as revenue growth from Completion Tools and Completion Fluids will be partially offset by continued seasonal decline in our Process and Pipeline Services business." Board member John Huff bought $819,000 worth of BJ Services stock last Wednesday. That's the largest insider purchase at the company in over five years and only the third such buy during that time frame, according to InsiderScore.com. Huff acquired 37,545 shares in the transaction, at an average per-share price of $21.82, according to a Securities and Exchange Commission filing on Friday
Crude-oil futures for March delivery rallied $1.82, or 2%, to close at $93.59 a barrel. Gold for April delivery gained $4.40 to end at $926.70 an ounce on the New York Mercantile Exchange. Platinum for April delivery surged to a record $1,949 an ounce Monday. The contract soared $55.40, or 3%, to end at $1,939.40 an ounce.
A merger between Delta Air Lines Inc and Northwest Airlines Corp could be announced in the next few weeks as Northwest pilots review details of a proposed deal, people briefed on the situation said on Monday.
``It is unfortunate that Yahoo has not embraced our full and fair proposal to combine our companies,'' Microsoft said in a statement today, without outlining a specific plan or timetable. ``We are confident that moving forward promptly to consummate a transaction is in the best interests of all parties.''
BlackBerry smartphones experienced a "critical severity outage" on Monday, the company told clients in an e-mail.
Starbucks Corp. and AT&T Inc. will start offering a mix of free and paid wireless Internet service in most of the international coffee retailer's U.S. shops, beginning this spring. The move announced Monday ends a six-year partnership T-Mobile, which did not include free Wi-Fi and charged higher fees than AT&T will. Starbucks said it will give customers who use a Starbucks card two hours of free wireless access per day. More time than that will cost $3.99 for a two-hour session. Monthly memberships will cost $19.99 and include access to any of AT&T's 70,000 hot spots worldwide. Nearly all of AT&T's broadband Internet customers, about 12 million, will automatically have unlimited free Wi-Fi access at Starbucks, the companies said. The deal boosts the number of AT&T hotspots in the U.S. to 17,000 — the most in the nation.
Obama is leading in polls in Virginia, Maryland and Washington, D.C., which all vote tomorrow. Obama held his first rally today at the Comcast Center arena at the University of Maryland's College Park campus. The arena, which seats more than 17,500 people, was packed with cheering Obama supporters. He plans a similar event at a stadium in Baltimore. At stake tomorrow are 168 pledged delegates to the Democratic National Convention in August from the two states and Washington, D.C.
"If you end up freezing (Venezuelan assets) and it harms us, we're going to harm you," Chavez said during his weekly radio and television program, "Hello, President." "Do you know how? We aren't going to send oil to the United States. Take note, Mr. Bush, Mr. Danger."
Democratic Sen. Hillary Rodham Clinton replaced campaign manager Patti Solis Doyle with longtime aide Maggie Williams on Sunday, a staff shake-up coming just hours after presidential rival Barack Obama's weekend sweep of three contests. According to the Chicago Tribune, over the last seven years, Clinton had raised $175 million for her reelection and her presidential campaign. But Solis Doyle didn't tell Clinton that there was next to no cash on hand until after the New Hampshire primary."We were lying about money," a source said. "The cash on hand was nothing." In turn, Clinton didn't tell Solis Doyle that she was lending her own money to keep the campaign afloat. Solis Doyle found out third-hand. And when she asked Clinton about it, the senator told her she couldn't understand how the campaign had gotten to such a point.
Microsoft, Sony Ericsson to launch Window mobile phone.
The negotiating committee of the Writers Guild of America voted unanimously to accept a tentative three-year deal with major Hollywood studios, clearing the way for final approval of the agreement by striking film and TV writers, The Wall Street Journal reported Sunday.
Coal prices rose to a record for a third straight week at Australia's Newcastle port, a benchmark for Asia, as snowstorms in China cut exports, adding to supply disruptions in Australia and South Africa.
Sun Capital to buy Kellwood for $21 a share.
Yahoo is seeking to restart merger talks with the AOL unit of Time Warner as a way to defend itself from a hostile Microsoft approach, The Times (of London) newspaper reported Monday, citing an unnamed source. The report said tie-ups with Google and Disney also are being explored.
Losses linked to the subprime-credit turmoil could hit $400 billion, implying global financial institutions have yet to write down the full amount of the soured investments, The Financial Times reported Monday. The report cited German Financial Minister Peer Steinbrück speaking after the gathering of the Group of Seven finance leaders in Tokyo as the source of the figure. The estimate is well above the U.S. Federal Reserve's estimates of subprime losses last year of $100 billion to $150 billion and higher than the $120 billion in losses reported by Wall Street banks and other financial institutions in recent weeks.
According to the WSJ, Motorola Inc. and Nortel Networks Corp. are in talks to combine their wireless-infrastructure units in a joint venture, said people familiar with the situation, the latest response to slowing growth in the telecom-equipment industry.
According to Bloomberg, Ford Motor Co., the world's third- largest automaker, may eliminate as many as 9,000 more U.S. factory jobs through its latest buyout offers, a person with direct knowledge of the situation said. The cuts would be in addition to the 33,600 union workers who left through buyouts and early retirements in 2006 and 2007, when Ford lost a combined $15.3 billion.
According to FT, Microsoft has a team of advisers in place for any proxy fight. It includes Alan Miller of Innisfree, the proxy solicitation firm, and Joele Frank, the New York M&A public relations specialist, as well as financial advisers from the Blackstone Group and Morgan Stanley. Yahoo is using Dan Burch at MacKenzie Partners, a proxy firm that would lobby shareholders to try to secure their votes in favour of the current board. Microsoft has until March 13 to nominate a new slate of directors.
The auction of Getty Images , the distributor of pictures and video, appears to be in jeopardy, The New York Times reported Monday.Though several bidders, mostly private equity firms like Kohlberg Kravis Roberts, Bain Capital and Providence Equity partners, had expressed interest last month, Getty received no offers significantly above its current market value of $1.6 billion, according to The Times.
Mobile phone coupon company Cellfire has raised $12 million in a third round of funding. The round includes a new investor, Silver Creek Ventures, and existing ones, including Menlo Ventures and Storm Ventures. People who sign up for Cellfire’s service automatically receive coupons on their cell phones. If they accept the coupon, users receive a unique redemption code that’s redeemed at the store.
Drybulk rates increased into the Chinese New Year.
The Houston Chronicle reports the U.S. housing market still has a long way to fall — and with it the nation's economy — and China's economy won't cushion the blow as it did in the 2001 slump. That's the view of two top economists scheduled to make presentations this week at CERAWeek, Cambridge Energy Research Associates' annual energy forum in Houston. Robert Shiller, the Yale economist who is widely credited with the earliest warnings of the subprime mortgage crisis, said signs are pointing toward steeper declines in U.S. home prices. Average home prices fell by 8 percent last year, according to the Standard & Poor's/Case-Shiller index based on 20 big American cities."This may be a major turning point where we see years of falling home prices and economic decline," Shiller, an originator of the Case-Shiller index, said in an interview with the Chronicle.
John Hussman: "At present, we've cleared that overbought condition, so there's nothing that would allow us to form pointed short-term expectations for market returns. Presently, the Market Climate remains broadly unfavorable, and that is enough to hold us to a fully hedged investment stance in the Strategic Growth Fund...The strongest factor driving market returns here is the unfavorable condition of market internals including price/volume behavior, breadth, leadership, industry action, credit spreads, and other factors. Meanwhile, it's important to reiterate that P/E ratios based on “forward operating earnings” and even our own “price/peak-earnings” measures are somewhat corrupted here by the fact that the earnings in these ratios implicitly assume the continuation of record profit margins about 40-50% above long-term norms. As a result, we are also attending to measures that take profit margins into account more explicitly. To the extent that profit margins are not likely to be sustained indefinitely, P/E ratios are likely to be a poor metric of valuation, encouraging investors to believe that stocks are cheap on the basis of recent earnings, when they are not at all cheap on the basis of long-term earnings power."
Microsoft Corp. said Monday it has entered into an agreement to acquire Danger Inc., a company which produces software and services for consumer handsets.
YAHOO SAYS MICROSOFT OFFER 'SUBSTANTIALLY' UNDERVALUED, KEEPING OPTIONS OPEN. I view this as a generic and weak negotiating response. Whether it's true that off the record Microsoft offered $40 or $43 a year ago for Yahoo when the latter's stock was trading at $28 is irrelevant. It is relative that a year later Yahoo shares were at the $19 level. Had the company been performing well, it would have have been doubtful to trade at a 52-week low. Over the past year, Microsoft has used much of its cash position on other acquisitions. The company will need to take on debt to buy Yahoo at $31, and it will be dilutive to earnings. No other company will pay $31 and Yahoo is not in a position to deliver $31 in value to shareholders on their own. Yahoo's option is to try and get a small kiss from Microsoft and call it a day. Their management has had its chance at running the company and can't hack it to the next level.
BANK OF AMERICA, CHEVRON ADDED TO DOW INDUSTRIALS, REPLACING ALTRIA AND HONEYWELL.
The dollar was buying 106.64 yen, compared with 107.43 yen late Friday.
In early Monday trading, natural gas is trading at $8.54. Gas has advanced 13.3 percent so far this year. That's a turkey sandwich! The cold weather is taking its toll on the short sellers.
AIG unsure of value of some of its credit derivatives. AIG auditors cite "material weakness" in financial reporting. In addition, the company increased its estimates of losses in October and November from insuring mortgage-related instruments from about $1bn to nearly $5bn.
Hypercom Corp. rose $1.24, or 31 percent, to $5.19. Ingenico SA offered to buy the maker of electronic-payment software for about $332 million, or $6.25 a share, in cash.
A report released Monday by Forrester Research Inc. says U.S. companies and government agencies are expected to increase their spending on information technology by just 2.8 percent this year. That is a substantial downward revision from the 4.6 percent growth that Forrester was predicting in December.
BJ Services: "For the second fiscal quarter of 2008, we expect drilling activity to remain relatively flat in the U.S. market, and we expect pricing pressures to continue at least until the latter part of the year. We do expect continued high demand for our services in a number of areas, especially in gas shale areas in Arkansas, the Rockies and the Mid-Continent region, and we anticipate increased Gulf of Mexico activity particularly in the deep water area. Canadian drilling activity is expected to increase in the second fiscal quarter as we enter the winter drilling season, and we expect our operating results to improve there compared to the first fiscal quarter. We also anticipate increased revenue and improved margins in the International Pressure Pumping segment. Both the Blue Angel stimulation vessel in Brazil and the Vestfonn stimulation vessel in India have returned to work after being dry-docked for a portion of the first fiscal quarter. We have a number of new projects in our international pressure pumping operations that either have already begun or are scheduled to begin in the second fiscal quarter in Latin America, North Africa and China that we believe will help to improve international operating margins. Our Oilfield Services group is projected to be up slightly in the second quarter as revenue growth from Completion Tools and Completion Fluids will be partially offset by continued seasonal decline in our Process and Pipeline Services business." Board member John Huff bought $819,000 worth of BJ Services stock last Wednesday. That's the largest insider purchase at the company in over five years and only the third such buy during that time frame, according to InsiderScore.com. Huff acquired 37,545 shares in the transaction, at an average per-share price of $21.82, according to a Securities and Exchange Commission filing on Friday
Crude-oil futures for March delivery rallied $1.82, or 2%, to close at $93.59 a barrel. Gold for April delivery gained $4.40 to end at $926.70 an ounce on the New York Mercantile Exchange. Platinum for April delivery surged to a record $1,949 an ounce Monday. The contract soared $55.40, or 3%, to end at $1,939.40 an ounce.
A merger between Delta Air Lines Inc and Northwest Airlines Corp could be announced in the next few weeks as Northwest pilots review details of a proposed deal, people briefed on the situation said on Monday.
``It is unfortunate that Yahoo has not embraced our full and fair proposal to combine our companies,'' Microsoft said in a statement today, without outlining a specific plan or timetable. ``We are confident that moving forward promptly to consummate a transaction is in the best interests of all parties.''
BlackBerry smartphones experienced a "critical severity outage" on Monday, the company told clients in an e-mail.
Starbucks Corp. and AT&T Inc. will start offering a mix of free and paid wireless Internet service in most of the international coffee retailer's U.S. shops, beginning this spring. The move announced Monday ends a six-year partnership T-Mobile, which did not include free Wi-Fi and charged higher fees than AT&T will. Starbucks said it will give customers who use a Starbucks card two hours of free wireless access per day. More time than that will cost $3.99 for a two-hour session. Monthly memberships will cost $19.99 and include access to any of AT&T's 70,000 hot spots worldwide. Nearly all of AT&T's broadband Internet customers, about 12 million, will automatically have unlimited free Wi-Fi access at Starbucks, the companies said. The deal boosts the number of AT&T hotspots in the U.S. to 17,000 — the most in the nation.
Obama is leading in polls in Virginia, Maryland and Washington, D.C., which all vote tomorrow. Obama held his first rally today at the Comcast Center arena at the University of Maryland's College Park campus. The arena, which seats more than 17,500 people, was packed with cheering Obama supporters. He plans a similar event at a stadium in Baltimore. At stake tomorrow are 168 pledged delegates to the Democratic National Convention in August from the two states and Washington, D.C.
Sunday, February 10, 2008
Keep It Real
2/11/08 Keep It Real
The Wall Street Journal had quoted an unnamed source as saying Microsoft's offer of $31 per share was an attempt to "steal" the company and that Yahoo was unlikely to consider anything under $40 per share -- double its price in January.
When was the last time Yahoo stock sold at $40? It was the winter of 2005, and before that during the dotcom craze. Yahoo has done little over the past six years for shreholders. Their cash flow performance has been poor and they have shown an inability to monetize their web efforts. If Microsoft chooses to pursue this acquisition, I would begin a cash tender for 50.1% of Yahoo's outstanding shares at $30 a share. In addition, I would file papers to initiate a proxy fight in order to place directors on the board at the June annual meeting for Yahoo. (During last year's annual meeting, one-third of shareholder votes were cast against re-electing Bostock and two other committee members.) In addition, I'd propose that the remaining shares of Yahoo not purchased in the tender would be acquired for cash or stock or debt or a combination of any of those choices.
"We keep at things," Microsoft's CEO Ballmer told employees when the bid was announced. "We don't start and stop."
Is Microsoft looking to rent even more office space in Bellevue?
The hottest rumor among local commercial real-estate brokers has the Redmond software giant leasing almost all of 26-story City Center Plaza, now under construction at Northeast Sixth Street and 110th Avenue Northeast.
That would be another 550,000 square feet or so for Microsoft in Bellevue, on top of the 317,000 it now occupies at Lincoln Square and the 1.3 million it has committed to lease at two projects under construction, The Bravern on Northeast Eighth and Advanta Office Commons in Eastgate. It is quite possible that this space is planned for the growth envisioned with the acquisition of Yahoo.
OPEC could switch the pricing of oil from dollars into euros within a decade, secretary general Abdullah al-Badri told a weekly magazine.
At the start of 2007, Google commanded 52.6 percent of the search market, Yahoo had 26.9 percent and Microsoft had 10.4 percent, according to comScore. By December, Google's share had edged up to 58.6 percent while Yahoo's slipped to 22.4 percent and Microsoft was at 9.8 percent.
Dietrich Bonhoeffer: "To understand reality is not the same as to know about outward events. It is to perceive the essential nature of things. The best-informed man is not necessarily the wisest. Indeed there is a danger that precisely in the multiplicity of his knowledge he will lose sight of what is essential. But on the other hand, knowledge of an apparently trivial detail quite often makes it possible to see into the depth of things. And so the wise man will seek to acquire the best possible knowledge about events, but always without becoming dependent upon this knowledge. To recognize the significant in the factual is wisdom."
Mike Burk: "Although prices fell sharply last week the breadth indicators all held up well...The secondaries lead both up and down and since the middle of January the secondaries have been outperforming the blue chips...The bad news is the extreme number of new lows in mid January implies another retest of the recent lows in the next few months...I expect the major indices to be higher on Friday February 15 than they were on Friday February 8."
European Central Bank President Jean- Claude Trichet said there's no end to financial-market turmoil in sight and policy makers will continue to take ``appropriate measures'' if necessary. ``We are observing an ongoing, significant market correction,'' said Trichet at a press conference after meeting finance ministers and central bankers from the Group of Seven nations in Tokyo.
Financial regulators and central bankers delivered a grim assessment of the credit market upheaval on Saturday, warning that worse may lie ahead as banks tighten lending and an economic slowdown spreads.
Shares of Fannie Mae fell Friday as a Morgan Stanley analyst said he expects it to report decaying credit quality in its portfolio, a worrying sign that the meltdown in subprime lending may be spilling over into prime mortgage.
Louise Nevelson: "What we call reality is an agreement that people have arrived at to make life more livable."
The Wall Street Journal had quoted an unnamed source as saying Microsoft's offer of $31 per share was an attempt to "steal" the company and that Yahoo was unlikely to consider anything under $40 per share -- double its price in January.
When was the last time Yahoo stock sold at $40? It was the winter of 2005, and before that during the dotcom craze. Yahoo has done little over the past six years for shreholders. Their cash flow performance has been poor and they have shown an inability to monetize their web efforts. If Microsoft chooses to pursue this acquisition, I would begin a cash tender for 50.1% of Yahoo's outstanding shares at $30 a share. In addition, I would file papers to initiate a proxy fight in order to place directors on the board at the June annual meeting for Yahoo. (During last year's annual meeting, one-third of shareholder votes were cast against re-electing Bostock and two other committee members.) In addition, I'd propose that the remaining shares of Yahoo not purchased in the tender would be acquired for cash or stock or debt or a combination of any of those choices.
"We keep at things," Microsoft's CEO Ballmer told employees when the bid was announced. "We don't start and stop."
Is Microsoft looking to rent even more office space in Bellevue?
The hottest rumor among local commercial real-estate brokers has the Redmond software giant leasing almost all of 26-story City Center Plaza, now under construction at Northeast Sixth Street and 110th Avenue Northeast.
That would be another 550,000 square feet or so for Microsoft in Bellevue, on top of the 317,000 it now occupies at Lincoln Square and the 1.3 million it has committed to lease at two projects under construction, The Bravern on Northeast Eighth and Advanta Office Commons in Eastgate. It is quite possible that this space is planned for the growth envisioned with the acquisition of Yahoo.
OPEC could switch the pricing of oil from dollars into euros within a decade, secretary general Abdullah al-Badri told a weekly magazine.
At the start of 2007, Google commanded 52.6 percent of the search market, Yahoo had 26.9 percent and Microsoft had 10.4 percent, according to comScore. By December, Google's share had edged up to 58.6 percent while Yahoo's slipped to 22.4 percent and Microsoft was at 9.8 percent.
Dietrich Bonhoeffer: "To understand reality is not the same as to know about outward events. It is to perceive the essential nature of things. The best-informed man is not necessarily the wisest. Indeed there is a danger that precisely in the multiplicity of his knowledge he will lose sight of what is essential. But on the other hand, knowledge of an apparently trivial detail quite often makes it possible to see into the depth of things. And so the wise man will seek to acquire the best possible knowledge about events, but always without becoming dependent upon this knowledge. To recognize the significant in the factual is wisdom."
Mike Burk: "Although prices fell sharply last week the breadth indicators all held up well...The secondaries lead both up and down and since the middle of January the secondaries have been outperforming the blue chips...The bad news is the extreme number of new lows in mid January implies another retest of the recent lows in the next few months...I expect the major indices to be higher on Friday February 15 than they were on Friday February 8."
European Central Bank President Jean- Claude Trichet said there's no end to financial-market turmoil in sight and policy makers will continue to take ``appropriate measures'' if necessary. ``We are observing an ongoing, significant market correction,'' said Trichet at a press conference after meeting finance ministers and central bankers from the Group of Seven nations in Tokyo.
Financial regulators and central bankers delivered a grim assessment of the credit market upheaval on Saturday, warning that worse may lie ahead as banks tighten lending and an economic slowdown spreads.
Shares of Fannie Mae fell Friday as a Morgan Stanley analyst said he expects it to report decaying credit quality in its portfolio, a worrying sign that the meltdown in subprime lending may be spilling over into prime mortgage.
Louise Nevelson: "What we call reality is an agreement that people have arrived at to make life more livable."
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