3/9/08 Monster
Friedrich Nietzsche: “Battle not with monsters lest you become one.”
John Brummett: "With about half the caucuses counted, Obama appeared to have picked up seven delegates, erasing his four-delegate deficit from the primary. That moved him ahead of Hillary in Texas by three delegates. If the trend generally holds for the other half of the caucuses, he'll move up three more delegates, putting him up on her in Texas by six." A record 4 million voters showed up for the primary, and a record 1.1 million also stayed for the caucuses at more than 8,000 sites around the Lone Star state. And in these caucuses, Obama won handily.
The obstacles to a do-over election to pick Michigan's delegates to the Democratic National Convention seemed to grow Friday, after Sen. Barack Obama's presidential campaign officials told the state's top party official that they wouldn't accept Gov. Jennifer Granholm's idea of a party-sponsored primary.
Andre Gide: “There are very few monsters who warrant the fear we have of them.”
According to the WSJ, Countrywide faces an FBI inquiry into whether officials misrepresented its financial position and the quality of its mortgage loans in filings. People familiar with the matter said its losses may be much greater than it has said.
Doug Noland: "We’re now poised for a year of significantly slower debt growth – a serious dilemma for both the highly over-leveraged financial sector and the deeply mal-adjusted U.S. Bubble Economy... The interplay between weak Credit and income growth will be of major consequence this year and going forward...for the year, Money Funds rose $740bn, or 32%... The downside of the Credit Bubble will have Households taking on additional debt (though at a slower pace), as asset values decline precipitously. Evaporating Net Worth is now having a meaningful impact on confidence, consumption and investment decisions, and this effect will only escalate over the coming weeks and months...Well, the entire world has become aware of our situation and will be less than keen to accumulate more of our debt. The Fed’s willingness to cut rates so drastically in the midst of faltering confidence and heightened inflationary pressures is certainly exacerbating the very dangerous dislocation that has erupted in the agency, MBS and investment-grade corporate markets."
Amy Grant: “If a politician isn't doing it to his wife , then he's doing it to his country.”
The Clinton Presidential Library withheld more than a thousand pages about clemency the former president granted during his last days in office — including a pardon to fugitive financier Marc Rich — from a batch of documents recently released to the public.The library released 2,830 pages of documents this week on pardons President Bill Clinton considered for Rich and others during his last months in office. But the library withheld another 1,114 pages that archivists said would disclose confidential discussion of advice the former president received from advisers or would violate someone's personal privacy.
Remittances to Mexico were down nearly 6 percent in January, the biggest drop in 13 years, which experts attributed to a downturn in the U.S. economy and anti-immigrant policies.
Thornburg Mortgage said falling mortgage prices together with liquidity imperiled by a surge of margin calls from its own lenders “have raised substantial doubt about the company’s ability to continue as a going concern.”
Horace Mann: “Ignorance breeds monsters to fill up the vacancies of the soul that are unoccupied by the verities of knowledge”
Alliance Data Systems completed a new financing facility with Barclays Capital to accommodate the upcoming maturity in the spring of $600 million in bonds backed by credit card assets.
Charles Evans, president of the Federal Reserve Bank of Chicago: "Officials can make clear their commitment to stable prices by 'promptly' reversing interest-rate cuts when 'insurance' against growth risks is no longer needed."
After Blackstone's IPO, the shares traded at $38. On Friday, the shares made a new low at $14+. On Monday, the company releases quarterly numbers. If equities continue to get hammered, Blackstone may weaken further. Should the stock break below the teens, nibbling could prove profitable for the long term investor.
Umberto Eco: “The ideology of this America wants to establish reassurance through Imitation. But profit defeats ideology, because the consumers want to be thrilled not only by the guarantee of the Good but also by the shudder of the Bad.”
Bush on why he will veto the ban on water boarding: "Limiting the CIA's interrogation methods to those in the Army Field Manual would be dangerous because the manual is publicly available and easily accessible on the Internet. Shortly after 9/11, we learned that key al Qaida operatives had been trained to resist the methods outlined in the manual. And this is why we created alternative procedures to question the most dangerous al Qaida operatives, particularly those who might have knowledge of attacks planned on our homeland. The best source of information about terrorist attacks is the terrorists themselves. If we were to shut down this program and restrict the CIA to methods in the Field Manual, we could lose vital information from senior al Qaida terrorists, and that could cost American lives." We could have save almost 4000 American lives had Bush not lied about the weapons of mass destruction.
Obama had 59 percent, or 4,459 votes, to Clinton's 40 percent, or 3,081 votes, with 22 of 23 Wyoming counties reporting. Obama won seven delegates and Clinton won five. In the overall race for the nomination, Obama led 1,578-1,468, according to the latest tally by The Associated Press. It will take 2,025 delegates to win the Democratic nomination. "Especially in the intermountain West, people are hungry for something different, people are hungry for someone who's a uniter, who can bring together a coalition of change," said Gabe Cohen, Obama's state director in Wyoming.
Saturday, March 08, 2008
Consumer Confidence and Employment
3/8/08 Consumer Confidence And Employment
According to the RBC Cash Index, confidence sank to a mark of 33.1 in early March, down from 48.5 in February. The new reading was the worst since the index began in 2002 and surpassed the previous low reached in February."The U.S. consumer is definitely in full defensive mode," said T.J. Marta, a fixed-income strategist at RBC Capital Markets.
Republican presidential candidate Ron Paul is hinting that his run for the White House is about to end, saying the "presidential campaign will soon wind down.
The dollar fell to the weakest in three years against the yen and near a record low versus the euro. Japan's foreign currency reserves crossed the trillion-dollar level for the first time at the end of February, according to data released by the Ministry of Finance Friday. The country's reserves rose to $1.01 trillion from $996 billion at the end of January, making it the only country after China to have more than a trillion dollars worth in foreign reserves.
The Fed increased the size of auctions of four- week funds to banks planned for March 10 and March 24, to $50 billion each from $30 billion previously. The Fed also said in a statement in Washington today that it will make $100 billion available through repurchase agreements.
Washington Mutual Inc.and other banks are looking for possible cash infusions from private-equity firms and sovereign wealth funds as a result of the credit crunch, The Wall Street Journal reported Friday.
Baker Hughes said Friday worldwide rig count for February rose to 3,417, up 121 from the 3,296 counted in January 2008 and up 65 from the 3,352 counted in February. International rig count fell 21 from January and the U.S. rig count rose 16 in February. The Canadian rig count for February was 620, up 126 from the 494 counted in January and down 15 from the 635 counted in the year-ago period.
According to AMG Data Services, including ETF activity, Equity funds report net cash outflows totaling -$1.772 billion in the week ended 3/5/08 with Domestic funds reporting net outflows of -$1.100 billion and Non-domestic funds reporting net outflows of -$671 million; Excluding ETF activity, Equity funds report net cash outflows totaling -$1.066 billion with Domestic funds reporting net outflows of -$664 million and Non-domestic funds reporting net outflows totaling -$402 million.
Henry To: "As of Friday at the close, the ratio between money market fund assets and the market cap of the S&P 500 rose to 26.71% - a level not seen since February 2003, and is now at a significantly higher level than where it was in October 1990 - the last time the U.S. stock market gave us a once-in-a-decade buying opportunity. While this indicator is usually not a great short-term timing indicator, it is to be noted that this reading is now extremely high on a historical basis and should be supportive for stock prices not only for over the next few years, but over the next few months as well. Even though the stock market can do anything over the short-run, my guess is that we have already seen the bottom in late January - which means that we will continue to remain 100% long in our DJIA Timing System for the time being, unless the Fed backs away from its current easing campaign, or if the MBIA/Ambac issues are not resolved as promptly as possible."
In Friday pre-opening activity, U.S. stock futures dropped sharply and Treasury prices soared after the government reported payrolls fell by 63,000 in February, and after the Fed moved to bolster liquidity. It was the largest drop in payrolls since March 2003. Payrolls for December and January were revised down by 46,000. The unemployment rate fell unexpectedly to 4.8% in February from 4.9%, due to a 450,000 decline in the labor force, the largest drop in nearly five years. Average hourly earnings rose 5 cents, or 0.3%, to $17.80 an hour.
Some 52,000 jobs were lost in the manufacturing industries, the largest decline since July 2003 when 92,000 jobs were cut. Construction businesses eliminated another 39,000 jobs on top of 25,000 that were cut in January, a reflection of the housing industry's deepening woes.The department said that since the housing boom peaked in September 2006, construction businesses have cut 331,000 jobs. The government added 38,000 jobs in February on top of 4,000 new-hires in January. The CES Birth/Death model contributed 135,000 jobs to the reported numbers.
Timothy F. Geithner, the president of the Federal Reserve Bank of New York: “The rational actions taken by even the strongest financial institutions to reduce exposure to future losses have caused significant collateral damage to market functioning,” Mr. Geithner said in a speech to the Council on Foreign Relations. “This, in turn, has intensified the liquidity problems for a wide range of bank and non-bank financial institutions.”
George Ure: "We're at dark of the moon, which is when night-vision equipped forces have maximum advantage in conflict."
Merrill Lynch strategist Brian Belski: "However, investors are placing too much emphasis on the Fed's ability to turn around certain parts of the market, in our opinion," he writes. "We continue to believe that the housing and credit unwind are in their early stages and a recovery is at least several months away."
Saudi Aramco, the world's largest oil company, raised prices for its crude oil for export to the U.S. in April, according to a statement from the company.
The Bank of Korea set its new benchmark interest rate at 5 percent Friday amid data showing that risks from rising inflation have begun to outweigh those from a slowing economy. The central bank said in a statement that it set the seven-day repurchase rate at 5 percent, the same as the previous benchmark overnight call rate target for loans to commercial banks.
Rob Hanna: "Thursday was the 7th day in a row where the total put/call ratio has closed at 1.10 or above. Going back to 1995 the only other time this has happened was August 3, 2007. That led to a 3-day rally before the final leg down of that sell off began."
The U.S. economy is now in a recession that will be more painful than either of the recessions in 1990 or 2001, said Ethan Harris, chief U.S. economist at Lehman Bros. "The economy is likely to experience an extended period of very weak growth, a rising unemployment rate and significant further Fed rate cuts," Harris wrote Friday in a note to clients. The federal funds rate will likely drop to 1.5% by next year from 3% currently.
Nouriel Roubini: "Risk of a systemic crisis is rising: the markets are becoming “utterly unhinged”, the financial system is “broken” and “everybody's in de-levering mode."
According to Bloomberg, the cost of borrowing euros for three months rose to the highest level in seven weeks, adding to evidence central bank attempts to ease a shortage of cash in the money markets are misfiring. The euro interbank offered rate, or Euribor, for the loans climbed 7 basis points to 4.50 percent today, the European Banking Federation said. It was the biggest gain since Jan. 25. The one-week rate was little changed at 4.11 percent.
In the first hour of trading, big tech stocks bucked the overall down trend.
The April fed funds futures contract on the Chicago Board of Trade rose to 97.74 from a settlement Thursday of 97.69, with the most recent contract implying about a 96% chance of a 75 basis-point cut.
In mid-morning trading, crude oil futures rose on Friday to above $106 a barrel for the first time as the dollar fell anew against the euro.with the euro hitting a new high of $1.5459.
Freddie and Fannie can now purchase loans worth as much as $793,000, while the FHA can insure loans for up to $729,000.
Goldman Sachs analyst Richard Safran, in a research note citing unnamed sources, said Boeing's 787 power-on schedule could be delayed to the end of June from March. Further, final assembly for three of the aircraft was also delayed, significant because Boeing will need six aircraft for test flights over 11 months. As such, first deliveries could be pushed out to the third quarter, 2009, Safran said. A Boeing spokeswoman said the company is improving the aircraft's assembly rate and will provide an update on its delivery target at the end of the first quarter.
Gold for April delivery fell $2.90 to end at $974.20 an ounce on the New York Mercantile Exchange.
"We are going to have a weak growth quarter, whether you call that a recession or not is something we won't know" for months, said Ed Lazear, head of the Council of Economic Advisers, speaking to reporters after the Labor Department reported the second straight month of job losses.
Marc Faber: "We may now have a hostile environment for all asset classes, with the exception of some real estate and commodities," said the editor of The Gloom, Doom and Boom Report, pointing out that since 2002 all asset classes have been rising -- a phenomenon that hasn't been seen for 200 years.
"The current synchronized global economic boom and universal all-encompassing asset bubble will lead to a colossal bust," he said.
Financial markets, currently in the grips of a credit bubble that worsens by the day, will see a protracted period of high volatility, in which 20% movements either up or down become common and the chances of making a lot of money become very difficult, he said.
He heaps much of the blame for global troubles on years of expansionary U.S. monetary policy that had a flawed fixation on U.S. consumption rather than boosting capital infrastructure and spending. Federal Reserve Chairman Ben Bernanke and his colleagues are clearly backed into a corner now as they cannot tighten money policy without causing a collapse of the entire financial system, he said.
Fitch downgraded Washington Mutual Inc.'s long-term issuer default rating to BBB from A- and Wells Fargo's individual rating to A/B from A. At the same time, Fitch placed Bank of America Corp.and Citigroup Inc.on Watch Negative, indicating the possibility of a downgrade in the future.
The Dow Jones Industrial Average fell 146.70 points to 11,893.69, losing 3% on the week and more than 10% so far this year. The S&P 500 declined 10.99 points to 1,293.35, a weekly decline of 2.8%. The Nasdaq Composite shed 8.01 points to 2,212.49, dropping 2.6% from a week ago.
Crude oil for April delivery closed down 32 cents, or 0.3%, at $105.15.
According to the RBC Cash Index, confidence sank to a mark of 33.1 in early March, down from 48.5 in February. The new reading was the worst since the index began in 2002 and surpassed the previous low reached in February."The U.S. consumer is definitely in full defensive mode," said T.J. Marta, a fixed-income strategist at RBC Capital Markets.
Republican presidential candidate Ron Paul is hinting that his run for the White House is about to end, saying the "presidential campaign will soon wind down.
The dollar fell to the weakest in three years against the yen and near a record low versus the euro. Japan's foreign currency reserves crossed the trillion-dollar level for the first time at the end of February, according to data released by the Ministry of Finance Friday. The country's reserves rose to $1.01 trillion from $996 billion at the end of January, making it the only country after China to have more than a trillion dollars worth in foreign reserves.
The Fed increased the size of auctions of four- week funds to banks planned for March 10 and March 24, to $50 billion each from $30 billion previously. The Fed also said in a statement in Washington today that it will make $100 billion available through repurchase agreements.
Washington Mutual Inc.and other banks are looking for possible cash infusions from private-equity firms and sovereign wealth funds as a result of the credit crunch, The Wall Street Journal reported Friday.
Baker Hughes said Friday worldwide rig count for February rose to 3,417, up 121 from the 3,296 counted in January 2008 and up 65 from the 3,352 counted in February. International rig count fell 21 from January and the U.S. rig count rose 16 in February. The Canadian rig count for February was 620, up 126 from the 494 counted in January and down 15 from the 635 counted in the year-ago period.
According to AMG Data Services, including ETF activity, Equity funds report net cash outflows totaling -$1.772 billion in the week ended 3/5/08 with Domestic funds reporting net outflows of -$1.100 billion and Non-domestic funds reporting net outflows of -$671 million; Excluding ETF activity, Equity funds report net cash outflows totaling -$1.066 billion with Domestic funds reporting net outflows of -$664 million and Non-domestic funds reporting net outflows totaling -$402 million.
Henry To: "As of Friday at the close, the ratio between money market fund assets and the market cap of the S&P 500 rose to 26.71% - a level not seen since February 2003, and is now at a significantly higher level than where it was in October 1990 - the last time the U.S. stock market gave us a once-in-a-decade buying opportunity. While this indicator is usually not a great short-term timing indicator, it is to be noted that this reading is now extremely high on a historical basis and should be supportive for stock prices not only for over the next few years, but over the next few months as well. Even though the stock market can do anything over the short-run, my guess is that we have already seen the bottom in late January - which means that we will continue to remain 100% long in our DJIA Timing System for the time being, unless the Fed backs away from its current easing campaign, or if the MBIA/Ambac issues are not resolved as promptly as possible."
In Friday pre-opening activity, U.S. stock futures dropped sharply and Treasury prices soared after the government reported payrolls fell by 63,000 in February, and after the Fed moved to bolster liquidity. It was the largest drop in payrolls since March 2003. Payrolls for December and January were revised down by 46,000. The unemployment rate fell unexpectedly to 4.8% in February from 4.9%, due to a 450,000 decline in the labor force, the largest drop in nearly five years. Average hourly earnings rose 5 cents, or 0.3%, to $17.80 an hour.
Some 52,000 jobs were lost in the manufacturing industries, the largest decline since July 2003 when 92,000 jobs were cut. Construction businesses eliminated another 39,000 jobs on top of 25,000 that were cut in January, a reflection of the housing industry's deepening woes.The department said that since the housing boom peaked in September 2006, construction businesses have cut 331,000 jobs. The government added 38,000 jobs in February on top of 4,000 new-hires in January. The CES Birth/Death model contributed 135,000 jobs to the reported numbers.
Timothy F. Geithner, the president of the Federal Reserve Bank of New York: “The rational actions taken by even the strongest financial institutions to reduce exposure to future losses have caused significant collateral damage to market functioning,” Mr. Geithner said in a speech to the Council on Foreign Relations. “This, in turn, has intensified the liquidity problems for a wide range of bank and non-bank financial institutions.”
George Ure: "We're at dark of the moon, which is when night-vision equipped forces have maximum advantage in conflict."
Merrill Lynch strategist Brian Belski: "However, investors are placing too much emphasis on the Fed's ability to turn around certain parts of the market, in our opinion," he writes. "We continue to believe that the housing and credit unwind are in their early stages and a recovery is at least several months away."
Saudi Aramco, the world's largest oil company, raised prices for its crude oil for export to the U.S. in April, according to a statement from the company.
The Bank of Korea set its new benchmark interest rate at 5 percent Friday amid data showing that risks from rising inflation have begun to outweigh those from a slowing economy. The central bank said in a statement that it set the seven-day repurchase rate at 5 percent, the same as the previous benchmark overnight call rate target for loans to commercial banks.
Rob Hanna: "Thursday was the 7th day in a row where the total put/call ratio has closed at 1.10 or above. Going back to 1995 the only other time this has happened was August 3, 2007. That led to a 3-day rally before the final leg down of that sell off began."
The U.S. economy is now in a recession that will be more painful than either of the recessions in 1990 or 2001, said Ethan Harris, chief U.S. economist at Lehman Bros. "The economy is likely to experience an extended period of very weak growth, a rising unemployment rate and significant further Fed rate cuts," Harris wrote Friday in a note to clients. The federal funds rate will likely drop to 1.5% by next year from 3% currently.
Nouriel Roubini: "Risk of a systemic crisis is rising: the markets are becoming “utterly unhinged”, the financial system is “broken” and “everybody's in de-levering mode."
According to Bloomberg, the cost of borrowing euros for three months rose to the highest level in seven weeks, adding to evidence central bank attempts to ease a shortage of cash in the money markets are misfiring. The euro interbank offered rate, or Euribor, for the loans climbed 7 basis points to 4.50 percent today, the European Banking Federation said. It was the biggest gain since Jan. 25. The one-week rate was little changed at 4.11 percent.
In the first hour of trading, big tech stocks bucked the overall down trend.
The April fed funds futures contract on the Chicago Board of Trade rose to 97.74 from a settlement Thursday of 97.69, with the most recent contract implying about a 96% chance of a 75 basis-point cut.
In mid-morning trading, crude oil futures rose on Friday to above $106 a barrel for the first time as the dollar fell anew against the euro.with the euro hitting a new high of $1.5459.
Freddie and Fannie can now purchase loans worth as much as $793,000, while the FHA can insure loans for up to $729,000.
Goldman Sachs analyst Richard Safran, in a research note citing unnamed sources, said Boeing's 787 power-on schedule could be delayed to the end of June from March. Further, final assembly for three of the aircraft was also delayed, significant because Boeing will need six aircraft for test flights over 11 months. As such, first deliveries could be pushed out to the third quarter, 2009, Safran said. A Boeing spokeswoman said the company is improving the aircraft's assembly rate and will provide an update on its delivery target at the end of the first quarter.
Gold for April delivery fell $2.90 to end at $974.20 an ounce on the New York Mercantile Exchange.
"We are going to have a weak growth quarter, whether you call that a recession or not is something we won't know" for months, said Ed Lazear, head of the Council of Economic Advisers, speaking to reporters after the Labor Department reported the second straight month of job losses.
Marc Faber: "We may now have a hostile environment for all asset classes, with the exception of some real estate and commodities," said the editor of The Gloom, Doom and Boom Report, pointing out that since 2002 all asset classes have been rising -- a phenomenon that hasn't been seen for 200 years.
"The current synchronized global economic boom and universal all-encompassing asset bubble will lead to a colossal bust," he said.
Financial markets, currently in the grips of a credit bubble that worsens by the day, will see a protracted period of high volatility, in which 20% movements either up or down become common and the chances of making a lot of money become very difficult, he said.
He heaps much of the blame for global troubles on years of expansionary U.S. monetary policy that had a flawed fixation on U.S. consumption rather than boosting capital infrastructure and spending. Federal Reserve Chairman Ben Bernanke and his colleagues are clearly backed into a corner now as they cannot tighten money policy without causing a collapse of the entire financial system, he said.
Fitch downgraded Washington Mutual Inc.'s long-term issuer default rating to BBB from A- and Wells Fargo's individual rating to A/B from A. At the same time, Fitch placed Bank of America Corp.and Citigroup Inc.on Watch Negative, indicating the possibility of a downgrade in the future.
The Dow Jones Industrial Average fell 146.70 points to 11,893.69, losing 3% on the week and more than 10% so far this year. The S&P 500 declined 10.99 points to 1,293.35, a weekly decline of 2.8%. The Nasdaq Composite shed 8.01 points to 2,212.49, dropping 2.6% from a week ago.
Crude oil for April delivery closed down 32 cents, or 0.3%, at $105.15.
Thursday, March 06, 2008
Fire Sale And Margin Calls
3/7/08 Fire Sale And Margin Calls
UBS AG fell to a five-year low in Swiss trading after JPMorgan Chase & Co. analysts said it probably sold 25 billion francs ($24 billion) of mortgage-backed securities in a ``fire sale'' and may have more writedowns.
According to the Associated Press, "Moody's Economy.com estimates that 8.8 million homeowners, or about 10.3 percent of homes, will have zero or negative equity by the end of the month. Even more disturbing, about 13.8 million households, or 15.9 percent, will be "upside down" if prices fall 20 percent from their peak."
Fears that investors would be forced to liquidate holdings resurfaced Thursday.
Chinese Proverb: “Everyone pushes a falling fence”
Returns from Texas caucuses showed Obama reclaiming some of the ground in the delegate competition that he lost Tuesday night as Clinton's victories piled up. Overall, she showed a gain of 12 delegates for the contests on the ballot, according to The Associated Press count, with another dozen to be awarded. In all 370 were at stake. Texas Democrats were still counting ballots from the Tuesday night caucuses. In addition, Obama gained endorsements from superdelegates in Georgia, Vermont, Ohio, the District of Columbia and Puerto Rico. Clinton picked up two superdelegates during the day but lost one, for a gain of one. Obama's overall delegate lead stood at 1,567 to 1,462 as the rivals looked ahead to the final dozen contests on the calendar. It takes 2,025 to win the nomination.
Projections released Wednesday afternoon by the Texas Democratic Party based on still-incomplete caucus returns indicated that Obama would receive 98 delegates elected Tuesday to Clinton's 95.
Thucydides: “The secret of happiness is freedom. The secret of freedom is courage.”
Wal-Mart Inc. February same-store sales ex-fuel up 2.6%. Sam's Club February same-store sales ex-fuel up 2.8%. Wal-Mart ups annual dividend 8% to 95 cents per share.
The Bank of England's Monetary Policy Committee on Thursday voted to leave its key interest rate unchanged at 5.25%.
Online job recruitment rose in February, snapping a three-month losing streak, but remained 7% below its level in the year-earlier month, the Monster Employment Index showed. The index, compiled by the New York employment-solutions provider Monster Worldwide, rose 5 points in February to 165 from 160 in January. It sat at 177 in February 2007.
Wilbur Ross gave a lift to the municipal-bond market by buying $1 billion of the securities, The Wall Street Journal reported. Ross, who runs WL Ross & Co., a $10 billion investment firm, took advantage of the difficulties at a number of hedge funds that were forced to sell such bonds, the Journal reported. After just three days since he made his purchases, his on-paper profit from the bonds is estimated at more than $100 million, the Journal reported.
Carlyle Capital Corp., the Guernsey, Channel Islands, affiliate of the private-equity firm Carlyle Group, said late on Wednesday that it did not meet margin calls from four repo financing counterparties. Carlyle Capital said it received a notice of default from one of the four and expects at least one more.
Thornburg Mortgage Inc.failed to meet a margin call of about $28 million which in turn triggered a string of cross-defaults, the company said Wednesday in a regulatory filing. It also said that JP Morgan Chase Bank, which had extended the original margin call, has notified the mortgage company that it will exercise its right. The total amount lent to Thornburg is about $320 million, according to the filing.
Prices may drop 53 percent for flash chips, which store data such as digital photos and music, Intel's Chief Executive Officer Paul Otellini said.
Merrill Lynch & Co. will eliminate 650 jobs, record a $60 million charge and stop making new home loans through First Franklin Financial, the subprime lender that former Chief Executive Officer Stan O'Neal bought in 2006.
Federal Reserve Chairman Ben S. Bernanke will ``destroy the U.S. dollar'' by cutting interest rates, investor Marc Faber said.
John Crudele: "The BLS will suddenly begin assuming improvement in the labor market in the months ahead. That's because the government believes, but can't prove, that a lot of new companies come into existence and start hiring in anticipation of spring. And while these foolishly optimistic assumptions will start with tomorrow's number they won't really peak until the April employment figures come out May 4."
According to Business Week, China faces growing pressure for prices to rise due to food shortages and a credit boom but is confident inflation can be held to its 4.8 percent target this year, financial officials said Thursday. "We will face increasing pressure for price rises and they need to have our full attention, becuse they have a direct bearing on the performance of our economy," the chairman of China's planning agency, Ma Kai, said at a news conference during the annual session of the national legislature. Inflation "will be the No. 1 item on our agenda," Ma said. "We have the means to achieve the targets."
Yields on $5.12 trillion of corporate bonds tracked by Merrill Lynch & Co. average 2.05 percentage points more than U.S. Treasuries, the most since at least 1997.
``The credit-default swap market is completely distorting reality,'' said Henner Boettcher, treasurer of HeidelbergCement in Heidelberg, Germany, the country's biggest cement maker. ``Given what these spreads imply about defaults, we should be in a deep depression, and we are not.''
According to the Wood Mackenzie report, companies found the equivalent of 553 million barrels of oil in the Gulf last year, half as much as in 2006 and the lowest figure in a decade. The number of exploration wells drilled in 2007 was also down and close to the 10-year-low. Only 29 percent of the new exploration wells drilled in 2007 were in the deepest parts of the Gulf versus 53 percent in 2006. The Gulf of Mexico will continue to be a huge source of energy for years to come as it accounts for 25 percent of U.S. oil production and 15 percent of natural gas production.
Ziff Davis Media Inc. filed for bankruptcy protection Wednesday.
Rob Hanna: "When the market is below its 200ma the easy money is typically made not by fading the large gap up, but by looking to go long. Fading large gaps up appears to be more fruitful in uptrending markets than down. These results seem to go against conventional wisdom and provide another example of a lesson that many traders may need to “un-learn”.
For 2008, Joy Global expects sales of $3.1 billion to $3.3 billion and earnings of $3.15 to $3.45 a share, up from its prior estimate of earnings of $3.10 to $3.35 a share.
Brad Setser: "China's reserves increased by $61.6b in January alone. That is a stunning sum. $60b is roughly the size of the US monthly trade deficit. Annualized, the implied increase in China's reserves tops $700b.
And the real increase in China's foreign exchange holdings could be even bigger."
Initial filings for state unemployment benefits fell to their lowest level since the latter half of January in the latest week, the Labor Department reported Thursday, even as continuing claims reached their highest level since September 2005. Initial claims for the week ended March 1 fell by 24,000 to 351,000, hitting their lowest mark since Jan. 19. The four-week average of those claims, meanwhile, dropped to 359,500, the lowest since Feb. 9.
Meanwhile, continuing claims climbed by 29,000 to 2.83 million during the week ended Feb. 23. That was the highest since Sept. 24, 2005.
Nordstrom Inc. reported that in February, same-store sales fell 5.8%.
Target Corp said sales at stores open at least a year rose 0.5 percent in February.
J.C. Penney Co Inc said on Thursday its February sales at department stores open at least a year fell 6.7 percent, and it forecast another decline in March.
Euro hits new highs at $1.54. European Central Bank President Jean- Claude Trichet said policy makers are focused on keeping expectations about future price increases in check.``The firm anchoring of medium- to long-term inflation expectations is of the highest priority to the Governing Council,'' Trichet said at a press conference in Frankfurt today after the ECB kept its key rate at 4 percent. ``The current monetary policy stance will contribute to achieving'' this goal.
China's central bank Governor Zhou Xiaochuan said he'll consider raising interest rates to tame the fastest inflation in 11 years. ``There is still room for further interest-rate increases,'' Zhou said.
New Zealand's dollar advanced after the central bank said the nation's benchmark interest rate will remain at a record high. The local dollar gained after Reserve Bank of New Zealand Governor Alan Bollard kept borrowing costs unchanged at 8.25 percent, saying that inflation will ensure rates stay at ``current levels for a significant time.''
The risk of Tata Motors Ltd., India's biggest truckmaker, defaulting on its bonds rose to a record after the company sought to borrow $3 billion to fund the planned purchase of Ford Motor Co.'s Jaguar and Land Rover units.
Living conditions in the Gaza Strip are the worst since Israel occupied the area in 1967, a group of eight human rights and humanitarian organizations said. Israel accused Hamas, which controls Gaza, of blocking aid.
Nippon Steel Corp., the world's second-biggest maker of the metal, expects surging raw material costs to keep pressure on earnings after forecasting the first full-year profit drop in five years.
In a sign that home sales may be stabilizing, an index of sales contracts on previously owned U.S. homes was flat in January, the National Association of Realtors reported Thursday, though the level was down almost 20% from the prior year.
The percentage of mortgages that were in foreclosure hit a record high in the fourth quarter, while mortgage delinquencies rose to a 23-year high, the Mortgage Bankers Association said Thursday. A record 2.04% of U.S. mortgages were somewhere in the foreclosure process at the end of the year, while a record-high 0.83% of loans entered foreclosure in the fourth quarter, the trade group's quarterly survey found. More homeowners fell behind on payments as well, with 5.82% of loans past due in the quarter.
Pfizer Inc. reiterated its 2008 forecast of earnings of $1.78 to $1.93 a share, on revenue of $47 billion to $49 billion. Adjusted revenue is expected to come in between $2.35 to $2.45 a share.
JP Morgan made a new 52-week low and yields over 4%.
U.S. natural gas inventories fall 135 Bcf last week. The five-year average change for the week is a decline of 111 billion. At 1,484 billion cubic feet, U.S. stocks were 169 billion cubic feet less than last year at this time and 63 billion cubic feet above the five-year average.
Boston Federal Reserve Bank President Eric Rosengren indicated falling property prices may strain credit markets and delay an economic rebound.
Standard & Poor's Ratings Services downgraded its long-term counterparty credit rating on Washington Mutual Inc.to BBB from BBB+, and its long-term counterparty credit rating on Washington Mutual Bank to BBB+ from A-. S&P placed all of Washington Mutual's ratings on a negative credit watch. "These rating actions reflect our expectations for a more severe residential mortgage credit cycle than we had anticipated at the start of 2008," said Victoria Wagner, an S&P credit analyst, in a statement. "We now believe that the severity of losses on all residential mortgages will be higher that we had thought and that the weak housing market will now be a longer cycle."
There are more than 150,000 U.S. troops in Iraq, with about 34,500 deployed in the Iraqi capital. A planned draw down is expected to cut the overall total by about 20,000.
Benjamin Franklin: “Those who desire to give up freedom in order to gain security will not have, nor do they deserve, either one.”
Lehman Brothers has suspended two traders in its London office relating to a probe on how trades were handled or priced in its equities unit, The Wall Street Journal reported on its Web site, citing people familiar with the situation. The inquiry is focused on the valuation of securities, likely those tied to equity derivatives, in markets that have seen a significant drop in liquidity, the report said. The Financial Services Authority is aware of the situation, and Lehman is cooperating with its inquiry, the report added.
Fed Reserve Bank of NY President Geithner: "Global financial meltdown was not preventable." Losers never take responsibility.
Fed funds futures Thursday priced in a higher chance of a 75 basis-point cut in March, bringing short-term interest rates to 2.25%. The April contract rose to 97.70, implying a 76% chance of a 75 basis point cut.
The net worth of U.S. households fell by $533 billion, or a 3.6% annual rate, in the fourth quarter of 2007, the first time total wealth had fallen since late 2002, the Federal Reserve reported Thursday. For all of 2007, household net worth rose 3.4% to $57.7 trillion, the slowest growth in five years. After the effects of inflation are included, real net worth fell for the year. In sum, the Federal Reserve is acknowledging that inflation was at least 3.5% for all of 2007. That means they lied about inflation being contained. You knew that any way. However, by saying inflation was 2.3% in 2007, the government screwed those on social security on their cost of living adjustments. You knew that any way. When was the last time your Bush administration told the truth? You know the answer to that question.
NEVER.
Americans' percentage of equity in their homes fell below 50 percent for the first time on record since 1945, the Federal Reserve said Thursday.
Crude-oil futures closed above $105 a barrel for the first time, after hitting a record high of $105.97 earlier in the session. Crude oil for April delivery rose 95 cents, or 0.9%, to settle at $105.47 a barrel on the New York Mercantile Exchange. Gold for April delivery fell $11.40 to end at $977.10 an ounce on the New York Mercantile Exchange.
Sen. Barack Obama raised a record $55 million in February for his presidential campaign. All told, Mr. Obama has raised $193 million during his yearlong bid for the White House. Winners have a way of raising funds.
Abraham Lincoln: "The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew."
Prime Minister Stephen Harper's chief of staff said someone in Hillary Rodham Clinton's campaign gave Canada back-channel assurances that her harsh words about the North American Free Trade Agreement were for political show, according to a report by the Canadian Press.
UBS AG fell to a five-year low in Swiss trading after JPMorgan Chase & Co. analysts said it probably sold 25 billion francs ($24 billion) of mortgage-backed securities in a ``fire sale'' and may have more writedowns.
According to the Associated Press, "Moody's Economy.com estimates that 8.8 million homeowners, or about 10.3 percent of homes, will have zero or negative equity by the end of the month. Even more disturbing, about 13.8 million households, or 15.9 percent, will be "upside down" if prices fall 20 percent from their peak."
Fears that investors would be forced to liquidate holdings resurfaced Thursday.
Chinese Proverb: “Everyone pushes a falling fence”
Returns from Texas caucuses showed Obama reclaiming some of the ground in the delegate competition that he lost Tuesday night as Clinton's victories piled up. Overall, she showed a gain of 12 delegates for the contests on the ballot, according to The Associated Press count, with another dozen to be awarded. In all 370 were at stake. Texas Democrats were still counting ballots from the Tuesday night caucuses. In addition, Obama gained endorsements from superdelegates in Georgia, Vermont, Ohio, the District of Columbia and Puerto Rico. Clinton picked up two superdelegates during the day but lost one, for a gain of one. Obama's overall delegate lead stood at 1,567 to 1,462 as the rivals looked ahead to the final dozen contests on the calendar. It takes 2,025 to win the nomination.
Projections released Wednesday afternoon by the Texas Democratic Party based on still-incomplete caucus returns indicated that Obama would receive 98 delegates elected Tuesday to Clinton's 95.
Thucydides: “The secret of happiness is freedom. The secret of freedom is courage.”
Wal-Mart Inc. February same-store sales ex-fuel up 2.6%. Sam's Club February same-store sales ex-fuel up 2.8%. Wal-Mart ups annual dividend 8% to 95 cents per share.
The Bank of England's Monetary Policy Committee on Thursday voted to leave its key interest rate unchanged at 5.25%.
Online job recruitment rose in February, snapping a three-month losing streak, but remained 7% below its level in the year-earlier month, the Monster Employment Index showed. The index, compiled by the New York employment-solutions provider Monster Worldwide, rose 5 points in February to 165 from 160 in January. It sat at 177 in February 2007.
Wilbur Ross gave a lift to the municipal-bond market by buying $1 billion of the securities, The Wall Street Journal reported. Ross, who runs WL Ross & Co., a $10 billion investment firm, took advantage of the difficulties at a number of hedge funds that were forced to sell such bonds, the Journal reported. After just three days since he made his purchases, his on-paper profit from the bonds is estimated at more than $100 million, the Journal reported.
Carlyle Capital Corp., the Guernsey, Channel Islands, affiliate of the private-equity firm Carlyle Group, said late on Wednesday that it did not meet margin calls from four repo financing counterparties. Carlyle Capital said it received a notice of default from one of the four and expects at least one more.
Thornburg Mortgage Inc.failed to meet a margin call of about $28 million which in turn triggered a string of cross-defaults, the company said Wednesday in a regulatory filing. It also said that JP Morgan Chase Bank, which had extended the original margin call, has notified the mortgage company that it will exercise its right. The total amount lent to Thornburg is about $320 million, according to the filing.
Prices may drop 53 percent for flash chips, which store data such as digital photos and music, Intel's Chief Executive Officer Paul Otellini said.
Merrill Lynch & Co. will eliminate 650 jobs, record a $60 million charge and stop making new home loans through First Franklin Financial, the subprime lender that former Chief Executive Officer Stan O'Neal bought in 2006.
Federal Reserve Chairman Ben S. Bernanke will ``destroy the U.S. dollar'' by cutting interest rates, investor Marc Faber said.
John Crudele: "The BLS will suddenly begin assuming improvement in the labor market in the months ahead. That's because the government believes, but can't prove, that a lot of new companies come into existence and start hiring in anticipation of spring. And while these foolishly optimistic assumptions will start with tomorrow's number they won't really peak until the April employment figures come out May 4."
According to Business Week, China faces growing pressure for prices to rise due to food shortages and a credit boom but is confident inflation can be held to its 4.8 percent target this year, financial officials said Thursday. "We will face increasing pressure for price rises and they need to have our full attention, becuse they have a direct bearing on the performance of our economy," the chairman of China's planning agency, Ma Kai, said at a news conference during the annual session of the national legislature. Inflation "will be the No. 1 item on our agenda," Ma said. "We have the means to achieve the targets."
Yields on $5.12 trillion of corporate bonds tracked by Merrill Lynch & Co. average 2.05 percentage points more than U.S. Treasuries, the most since at least 1997.
``The credit-default swap market is completely distorting reality,'' said Henner Boettcher, treasurer of HeidelbergCement in Heidelberg, Germany, the country's biggest cement maker. ``Given what these spreads imply about defaults, we should be in a deep depression, and we are not.''
According to the Wood Mackenzie report, companies found the equivalent of 553 million barrels of oil in the Gulf last year, half as much as in 2006 and the lowest figure in a decade. The number of exploration wells drilled in 2007 was also down and close to the 10-year-low. Only 29 percent of the new exploration wells drilled in 2007 were in the deepest parts of the Gulf versus 53 percent in 2006. The Gulf of Mexico will continue to be a huge source of energy for years to come as it accounts for 25 percent of U.S. oil production and 15 percent of natural gas production.
Ziff Davis Media Inc. filed for bankruptcy protection Wednesday.
Rob Hanna: "When the market is below its 200ma the easy money is typically made not by fading the large gap up, but by looking to go long. Fading large gaps up appears to be more fruitful in uptrending markets than down. These results seem to go against conventional wisdom and provide another example of a lesson that many traders may need to “un-learn”.
For 2008, Joy Global expects sales of $3.1 billion to $3.3 billion and earnings of $3.15 to $3.45 a share, up from its prior estimate of earnings of $3.10 to $3.35 a share.
Brad Setser: "China's reserves increased by $61.6b in January alone. That is a stunning sum. $60b is roughly the size of the US monthly trade deficit. Annualized, the implied increase in China's reserves tops $700b.
And the real increase in China's foreign exchange holdings could be even bigger."
Initial filings for state unemployment benefits fell to their lowest level since the latter half of January in the latest week, the Labor Department reported Thursday, even as continuing claims reached their highest level since September 2005. Initial claims for the week ended March 1 fell by 24,000 to 351,000, hitting their lowest mark since Jan. 19. The four-week average of those claims, meanwhile, dropped to 359,500, the lowest since Feb. 9.
Meanwhile, continuing claims climbed by 29,000 to 2.83 million during the week ended Feb. 23. That was the highest since Sept. 24, 2005.
Nordstrom Inc. reported that in February, same-store sales fell 5.8%.
Target Corp said sales at stores open at least a year rose 0.5 percent in February.
J.C. Penney Co Inc said on Thursday its February sales at department stores open at least a year fell 6.7 percent, and it forecast another decline in March.
Euro hits new highs at $1.54. European Central Bank President Jean- Claude Trichet said policy makers are focused on keeping expectations about future price increases in check.``The firm anchoring of medium- to long-term inflation expectations is of the highest priority to the Governing Council,'' Trichet said at a press conference in Frankfurt today after the ECB kept its key rate at 4 percent. ``The current monetary policy stance will contribute to achieving'' this goal.
China's central bank Governor Zhou Xiaochuan said he'll consider raising interest rates to tame the fastest inflation in 11 years. ``There is still room for further interest-rate increases,'' Zhou said.
New Zealand's dollar advanced after the central bank said the nation's benchmark interest rate will remain at a record high. The local dollar gained after Reserve Bank of New Zealand Governor Alan Bollard kept borrowing costs unchanged at 8.25 percent, saying that inflation will ensure rates stay at ``current levels for a significant time.''
The risk of Tata Motors Ltd., India's biggest truckmaker, defaulting on its bonds rose to a record after the company sought to borrow $3 billion to fund the planned purchase of Ford Motor Co.'s Jaguar and Land Rover units.
Living conditions in the Gaza Strip are the worst since Israel occupied the area in 1967, a group of eight human rights and humanitarian organizations said. Israel accused Hamas, which controls Gaza, of blocking aid.
Nippon Steel Corp., the world's second-biggest maker of the metal, expects surging raw material costs to keep pressure on earnings after forecasting the first full-year profit drop in five years.
In a sign that home sales may be stabilizing, an index of sales contracts on previously owned U.S. homes was flat in January, the National Association of Realtors reported Thursday, though the level was down almost 20% from the prior year.
The percentage of mortgages that were in foreclosure hit a record high in the fourth quarter, while mortgage delinquencies rose to a 23-year high, the Mortgage Bankers Association said Thursday. A record 2.04% of U.S. mortgages were somewhere in the foreclosure process at the end of the year, while a record-high 0.83% of loans entered foreclosure in the fourth quarter, the trade group's quarterly survey found. More homeowners fell behind on payments as well, with 5.82% of loans past due in the quarter.
Pfizer Inc. reiterated its 2008 forecast of earnings of $1.78 to $1.93 a share, on revenue of $47 billion to $49 billion. Adjusted revenue is expected to come in between $2.35 to $2.45 a share.
JP Morgan made a new 52-week low and yields over 4%.
U.S. natural gas inventories fall 135 Bcf last week. The five-year average change for the week is a decline of 111 billion. At 1,484 billion cubic feet, U.S. stocks were 169 billion cubic feet less than last year at this time and 63 billion cubic feet above the five-year average.
Boston Federal Reserve Bank President Eric Rosengren indicated falling property prices may strain credit markets and delay an economic rebound.
Standard & Poor's Ratings Services downgraded its long-term counterparty credit rating on Washington Mutual Inc.to BBB from BBB+, and its long-term counterparty credit rating on Washington Mutual Bank to BBB+ from A-. S&P placed all of Washington Mutual's ratings on a negative credit watch. "These rating actions reflect our expectations for a more severe residential mortgage credit cycle than we had anticipated at the start of 2008," said Victoria Wagner, an S&P credit analyst, in a statement. "We now believe that the severity of losses on all residential mortgages will be higher that we had thought and that the weak housing market will now be a longer cycle."
There are more than 150,000 U.S. troops in Iraq, with about 34,500 deployed in the Iraqi capital. A planned draw down is expected to cut the overall total by about 20,000.
Benjamin Franklin: “Those who desire to give up freedom in order to gain security will not have, nor do they deserve, either one.”
Lehman Brothers has suspended two traders in its London office relating to a probe on how trades were handled or priced in its equities unit, The Wall Street Journal reported on its Web site, citing people familiar with the situation. The inquiry is focused on the valuation of securities, likely those tied to equity derivatives, in markets that have seen a significant drop in liquidity, the report said. The Financial Services Authority is aware of the situation, and Lehman is cooperating with its inquiry, the report added.
Fed Reserve Bank of NY President Geithner: "Global financial meltdown was not preventable." Losers never take responsibility.
Fed funds futures Thursday priced in a higher chance of a 75 basis-point cut in March, bringing short-term interest rates to 2.25%. The April contract rose to 97.70, implying a 76% chance of a 75 basis point cut.
The net worth of U.S. households fell by $533 billion, or a 3.6% annual rate, in the fourth quarter of 2007, the first time total wealth had fallen since late 2002, the Federal Reserve reported Thursday. For all of 2007, household net worth rose 3.4% to $57.7 trillion, the slowest growth in five years. After the effects of inflation are included, real net worth fell for the year. In sum, the Federal Reserve is acknowledging that inflation was at least 3.5% for all of 2007. That means they lied about inflation being contained. You knew that any way. However, by saying inflation was 2.3% in 2007, the government screwed those on social security on their cost of living adjustments. You knew that any way. When was the last time your Bush administration told the truth? You know the answer to that question.
NEVER.
Americans' percentage of equity in their homes fell below 50 percent for the first time on record since 1945, the Federal Reserve said Thursday.
Crude-oil futures closed above $105 a barrel for the first time, after hitting a record high of $105.97 earlier in the session. Crude oil for April delivery rose 95 cents, or 0.9%, to settle at $105.47 a barrel on the New York Mercantile Exchange. Gold for April delivery fell $11.40 to end at $977.10 an ounce on the New York Mercantile Exchange.
Sen. Barack Obama raised a record $55 million in February for his presidential campaign. All told, Mr. Obama has raised $193 million during his yearlong bid for the White House. Winners have a way of raising funds.
Abraham Lincoln: "The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew."
Prime Minister Stephen Harper's chief of staff said someone in Hillary Rodham Clinton's campaign gave Canada back-channel assurances that her harsh words about the North American Free Trade Agreement were for political show, according to a report by the Canadian Press.
Wednesday, March 05, 2008
The Day After
3/6/08 The Day After
Yahoo Inc.and Time Warner have stepped up talks on creating an alternative to Microsoft Corp.'s unsolicited Yahoo bid, The Wall Street Journal reported Wednesday, citing people familiar with the matter. The talks center on a deal that would fold Time Warner's AOL Internet unit into Yahoo, the report said.
Douglas A. McIntyre: "Unfortunately, an AOL deal makes no sense. AOL and Yahoo! are both in the online display advertising business. Revenue from this source is not growing quickly at either company. Yahoo! has about 22% of the US search market, which had been a faster growing ad environment. AOL has 5%. Google (GOOG) has 60% and Microsoft about 10%. Putting together two slow-growing companies might allow for some cost cutting, but it would come mostly from personnel. In a Microsoft buy-out, a number of costs for redundant search technologies can be taken out. Microsoft can also use Yahoo!'s huge user base to sell its online software products. Microsoft has the technology and capital to have a chance of making a combined internet operation work. It also has a $31 offer on the table. Putting Yahoo! and AOL together does not do much for either company beyond creating a larger display ad platform. If Yahoo! walks away from Microsoft, there is no reason for its shares not to drop back below $20."
Yahoo said the deadline for nominations will be extended from March 14 to 10 days following the announcement of the date for Yahoo's annual shareholders' meeting, the company said. It has not announced a date for the shareholders' meeting. Microsoft had been preparing to nominate a slate of directors to the board of Yahoo by March 13, the deadline for mounting a proxy contest. Under the laws of Delaware, where Yahoo is incorporated, a public company cannot go more than 13 months without holding an annual meeting. Last year's annual meeting was on June 12, and this year's meeting has not been set.
Ministers of the Organization of Petroleum Exporting Countries held output steady, wire services reported from Vienna. The decision was expected.
Odds at U.K. spread-betting firm Cantor Index show that Sen. Barack Obama is still the favorite to secure the nomination to be the Democratic nominee, despite the strong showing from Sen. Hillary Clinton on Tuesday. Odds to win the president are 4-to-5 for Obama, 6-to-4 for Sen. John McCain and 5-to-1 for Clinton. "Our clients feel that Clinton has too many enemies and too much old baggage," said David Buik, a strategist at Cantor Index.
The battle for delegates in Texas remained in doubt late in the night. The vote totals were incomplete in many of the 31 state Senate districts, the basis for about two-thirds of the delegates. In addition, many Democrats were still in caucuses selecting about a third of the delegates. Other so-called superdelegates will declare their support at the state convention.
Michael Gerson: "So now Clinton herself is the most effective agent of the vast right-wing conspiracy -- proving just how devious and subtle that conspiracy really is. And this is not Agent Clinton's only contribution. By raising questions about Obama's foreign policy judgment, she has identified a potent issue -- an issue she cannot fully exploit because of the liberalism of her own party. But John McCain could. As a thought experiment, consider the foreign policy achievements of Obama's first 100 days in office.
According to CNN exit polling, an impressive 59 percent of the voters in Ohio's Democratic primary were women. And those female voters favored Clinton over Obama, 58 percent to 40 percent.
Cosco's net income grew to $327.9 million, or 74 cents per share, from $249.5 million, or 54 cents per share, in a year-ago period which included $53.4 million in charges.Sales increased 12 percent to $16.62 billion from $14.80 billion a year ago.
For the quarter, WCI Communities generated $160 million to $170 million of cash flow from operating and investing activities.
According to the WSJ, Brazilian meatpacker JBS agreed to buy National Beef for $560 million and is in advanced talks to buy Smithfield's beef business. The deal would combine the U.S.'s third-, fourth- and fifth-largest meatpackers into the nation's largest beef processor.
Stephen Roach: "The current recession has been set off by the simultaneous bursting of property and credit bubbles. The unwinding of these excesses is likely to exact a lasting toll on both homebuilders and American consumers. Those two economic sectors collectively peaked at 78 percent of gross domestic product, or fully six times the share of the sector that pushed the country into recession seven years ago."
Financial Times: "At $100 a barrel, the total proven reserves of the oil exporting countries is about $104,000bn – equivalent to the combined total value of publicly-traded equities and bonds in the world. About $48,000bn of this belongs to the Gulf Co-operation Council member countries – which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The rest of Opec owns another $44,000bn, while non-Opec countries (Canada, Norway, Mexico and Russia) own some $12,000bn worth of oil reserves."
The Oil Drum: "Saudi Aramco is no longer the world’s leading crude oil producer. Saudi Aramco’s statement of 260 billion barrels of remaining recoverable reserves is almost certainly false. Instead, the remaining recoverable crude oil reserves are probably less than 100 Gb, instead of 260 Gb. It is time to call on Saudi Aramco and the other OPEC members to tell the truth about their reserves."
Australia said Wednesday it canceled a contract to buy 11 navy Seasprite helicopters from U.S.-based Kaman Corp., claiming the aircraft are unsafe.
An average of 3,960 bankruptcy petitions were filed per day nationwide last month, up 18 percent from January and up 28 percent from a year earlier, according to Automated Access to Court Electronic Records, a bankruptcy data and management company.
The Organization for Economic Cooperation and Development cut its forecast for growth this year and now expects expansion of ``less than'' 2 percent in its 30 member nations, Secretary General Angel Gurria said.
Almost 70 percent of the periodic auctions in the $330 billion market failed this week as investment banks stopped buying the securities investors didn't want. Yields on the debt averaged 6.52 percent as of Feb. 28, up from 3.63 percent before demand evaporated in January, according to Bloomberg. States from New York to California and lawmakers including House Financial Services Committee Chairman Barney Frank are attempting to revive the market. Rising yields are pinching state and local governments just as a slowing economy and falling property values slash tax revenue by more than $6.6 billion, according to a report by the U.S. Conference of Mayors.
Unit labor costs rose 2.6% in the fourth quarter, revised up from 2.1%, the biggest increase since the first quarter.
Companies in the U.S. private sector shed 23,000 jobs in February, according to the ADP employment report released Wednesday. The report comes two days before the Labor Department reports on nonfarm payroll growth for February. Adding in some 25,000 jobs typically created by government, the ADP report suggests nonfarm payrolls grew by about 2,000, compared to the 20,000 expected by Wall Street economists. The ADP reported job growth among medium-sized businesses declined for the first time since June 2003.
Exxon Mobil Corp. expects to spend about $25 billion in 2008 on capital expenditures, up from about $20 billion in 2007.
Hedge fund Elliott Associates LP said Wednesday that it offered an unsolicited bid for information technology company Packeteer in a letter to the company's board of directors. Under the terms suggested, Elliott would acquire Packeteer for $5.50 a share, a 42% premium over Tuesday's closing price and a 95% premium over the company's enterprise value. The hedge fund currently owns close to 10% of the common stock of Packeteer and said it made the bid after the board refused to address concerns voiced by investors.
"I ultimately think the American people are going to want a clear break from the Bush-Cheney foreign policies of the past because they haven't made us more safe and more secure," he said. "If she thinks that longevity in Washington is the primary criteria for winning the White House, then John McCain is going to beat her."
After dropping sharply in January, nonmanufacturing sectors of the U.S. economy contracted at a slower pace during February, the Institute for Supply Management reported Wednesday. The ISM nonmanufacturing index rose to 49.3% from 44.6% in January. The index stood at 53.2% in December.
New orders for manufactured goods fell 2.5% in January as orders for durable goods dropped. Durable goods orders fell a revised 5.1%, compared with a prior estimate of a 5.3% decline. Core capital equipment orders in January fell 1.5%. Orders for nondurable goods rose 0.3%.
U.S. crude inventories fell unexpectedly, down 3.1 million barrels to 305.4 million barrels in the week ending Feb. 29, U.S. Energy Information Administration reported on Wednesday. After the data, crude-oil futures for April delivery surged $3.28, or 3.3%, to $102.80 a barrel on the New York Mercantile Exchange. Gasoline supplies rose by 1.7 million barrels in the latest week, while distillate stocks fell by 2.7 million barrels, EIA reported.
Money-market rates for euros and pounds climbed to the highest since mid-January, signaling the global squeeze on short-term bank lending may be returning.
According to Bloomberg, the three-month London interbank offered rate, or Libor, for euros advanced 1 basis point to 4.40 percent today, the highest since Jan. 18, the British Bankers' Association said. The rate for pounds gained half a basis point to 5.77 percent, the 12th straight daily increase and the highest since Jan. 7, according to the BBA.
Gold for April delivery rallied $22.20 to end at $988.50 an ounce on the New York Mercantile Exchange. Earlier it surged to a record high of $995.20 an ounce.
Below-normal temperatures are expected in the Midwest and Northeast, the regions of highest natural gas consumption, through March 14, according to MDA Federal Inc.'s EarthSat Energy Weather.
Ambac Financial plans to raise at least $1.5 billion selling new common stock and equity units as the troubled bond insurer tries to keep its crucial AAA rating. Ambac shares dropped 10% to $9.64 after the announcement. The company is aiming to raise at least $1 billion selling common stock and another $500 million selling equity units. Ambac also said it will stop guaranteeing several different types of structured products, including collateralized debt obligations, all mortgage-backed securities and auto loan and credit card securitizations. Ambac also said that it has written "virtually" no new business so far in 2008.
The euro rose to a new record high against the dollar of $1.5301 Wednesday.
Crude oil, gold and corn prices surged to records, leading a rebound in commodities on renewed concern that a slumping dollar and lower borrowing costs will spur inflation and increase demand for raw materials. The UBS Bloomberg Constant Maturity Commodity Index of 26 futures contracts jumped 39.11, or 2.6 percent, to 1,546.74 at 1:20 p.m. New York time. The gauge has jumped 21 percent this year.
Crude for April delivery rallied $5, or 5%, to settle at $104.52 a barrel on the New York Mercantile Exchange. Wednesday's gain in crude was the biggest in value since crude futures started trading on the New York Mercantile Exchange in 1983. Also on Nymex, heating-oil futures hit a new high. Natural gas rose 40 cents to $9.76.
Texas has a total 228 Democratic delegates, 126 of which will be awarded proportionally based on the amount of votes a candidate received during the primary, and 67 based on votes from the caucus. Twelve are super delegates. Caucus results as of Wednesday afternoon showed Obama ahead of Clinton, 52 percent to 48 percent. Unofficial results may be released by the Texas Democratic party by Friday, according to the Caller-Times. Caucus results were supposed to be reported to the party via telephone but high turnout made calling in with the latest tally impossible for many precincts.
Yahoo Inc.and Time Warner have stepped up talks on creating an alternative to Microsoft Corp.'s unsolicited Yahoo bid, The Wall Street Journal reported Wednesday, citing people familiar with the matter. The talks center on a deal that would fold Time Warner's AOL Internet unit into Yahoo, the report said.
Douglas A. McIntyre: "Unfortunately, an AOL deal makes no sense. AOL and Yahoo! are both in the online display advertising business. Revenue from this source is not growing quickly at either company. Yahoo! has about 22% of the US search market, which had been a faster growing ad environment. AOL has 5%. Google (GOOG) has 60% and Microsoft about 10%. Putting together two slow-growing companies might allow for some cost cutting, but it would come mostly from personnel. In a Microsoft buy-out, a number of costs for redundant search technologies can be taken out. Microsoft can also use Yahoo!'s huge user base to sell its online software products. Microsoft has the technology and capital to have a chance of making a combined internet operation work. It also has a $31 offer on the table. Putting Yahoo! and AOL together does not do much for either company beyond creating a larger display ad platform. If Yahoo! walks away from Microsoft, there is no reason for its shares not to drop back below $20."
Yahoo said the deadline for nominations will be extended from March 14 to 10 days following the announcement of the date for Yahoo's annual shareholders' meeting, the company said. It has not announced a date for the shareholders' meeting. Microsoft had been preparing to nominate a slate of directors to the board of Yahoo by March 13, the deadline for mounting a proxy contest. Under the laws of Delaware, where Yahoo is incorporated, a public company cannot go more than 13 months without holding an annual meeting. Last year's annual meeting was on June 12, and this year's meeting has not been set.
Ministers of the Organization of Petroleum Exporting Countries held output steady, wire services reported from Vienna. The decision was expected.
Odds at U.K. spread-betting firm Cantor Index show that Sen. Barack Obama is still the favorite to secure the nomination to be the Democratic nominee, despite the strong showing from Sen. Hillary Clinton on Tuesday. Odds to win the president are 4-to-5 for Obama, 6-to-4 for Sen. John McCain and 5-to-1 for Clinton. "Our clients feel that Clinton has too many enemies and too much old baggage," said David Buik, a strategist at Cantor Index.
The battle for delegates in Texas remained in doubt late in the night. The vote totals were incomplete in many of the 31 state Senate districts, the basis for about two-thirds of the delegates. In addition, many Democrats were still in caucuses selecting about a third of the delegates. Other so-called superdelegates will declare their support at the state convention.
Michael Gerson: "So now Clinton herself is the most effective agent of the vast right-wing conspiracy -- proving just how devious and subtle that conspiracy really is. And this is not Agent Clinton's only contribution. By raising questions about Obama's foreign policy judgment, she has identified a potent issue -- an issue she cannot fully exploit because of the liberalism of her own party. But John McCain could. As a thought experiment, consider the foreign policy achievements of Obama's first 100 days in office.
According to CNN exit polling, an impressive 59 percent of the voters in Ohio's Democratic primary were women. And those female voters favored Clinton over Obama, 58 percent to 40 percent.
Cosco's net income grew to $327.9 million, or 74 cents per share, from $249.5 million, or 54 cents per share, in a year-ago period which included $53.4 million in charges.Sales increased 12 percent to $16.62 billion from $14.80 billion a year ago.
For the quarter, WCI Communities generated $160 million to $170 million of cash flow from operating and investing activities.
According to the WSJ, Brazilian meatpacker JBS agreed to buy National Beef for $560 million and is in advanced talks to buy Smithfield's beef business. The deal would combine the U.S.'s third-, fourth- and fifth-largest meatpackers into the nation's largest beef processor.
Stephen Roach: "The current recession has been set off by the simultaneous bursting of property and credit bubbles. The unwinding of these excesses is likely to exact a lasting toll on both homebuilders and American consumers. Those two economic sectors collectively peaked at 78 percent of gross domestic product, or fully six times the share of the sector that pushed the country into recession seven years ago."
Financial Times: "At $100 a barrel, the total proven reserves of the oil exporting countries is about $104,000bn – equivalent to the combined total value of publicly-traded equities and bonds in the world. About $48,000bn of this belongs to the Gulf Co-operation Council member countries – which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The rest of Opec owns another $44,000bn, while non-Opec countries (Canada, Norway, Mexico and Russia) own some $12,000bn worth of oil reserves."
The Oil Drum: "Saudi Aramco is no longer the world’s leading crude oil producer. Saudi Aramco’s statement of 260 billion barrels of remaining recoverable reserves is almost certainly false. Instead, the remaining recoverable crude oil reserves are probably less than 100 Gb, instead of 260 Gb. It is time to call on Saudi Aramco and the other OPEC members to tell the truth about their reserves."
Australia said Wednesday it canceled a contract to buy 11 navy Seasprite helicopters from U.S.-based Kaman Corp., claiming the aircraft are unsafe.
An average of 3,960 bankruptcy petitions were filed per day nationwide last month, up 18 percent from January and up 28 percent from a year earlier, according to Automated Access to Court Electronic Records, a bankruptcy data and management company.
The Organization for Economic Cooperation and Development cut its forecast for growth this year and now expects expansion of ``less than'' 2 percent in its 30 member nations, Secretary General Angel Gurria said.
Almost 70 percent of the periodic auctions in the $330 billion market failed this week as investment banks stopped buying the securities investors didn't want. Yields on the debt averaged 6.52 percent as of Feb. 28, up from 3.63 percent before demand evaporated in January, according to Bloomberg. States from New York to California and lawmakers including House Financial Services Committee Chairman Barney Frank are attempting to revive the market. Rising yields are pinching state and local governments just as a slowing economy and falling property values slash tax revenue by more than $6.6 billion, according to a report by the U.S. Conference of Mayors.
Unit labor costs rose 2.6% in the fourth quarter, revised up from 2.1%, the biggest increase since the first quarter.
Companies in the U.S. private sector shed 23,000 jobs in February, according to the ADP employment report released Wednesday. The report comes two days before the Labor Department reports on nonfarm payroll growth for February. Adding in some 25,000 jobs typically created by government, the ADP report suggests nonfarm payrolls grew by about 2,000, compared to the 20,000 expected by Wall Street economists. The ADP reported job growth among medium-sized businesses declined for the first time since June 2003.
Exxon Mobil Corp. expects to spend about $25 billion in 2008 on capital expenditures, up from about $20 billion in 2007.
Hedge fund Elliott Associates LP said Wednesday that it offered an unsolicited bid for information technology company Packeteer in a letter to the company's board of directors. Under the terms suggested, Elliott would acquire Packeteer for $5.50 a share, a 42% premium over Tuesday's closing price and a 95% premium over the company's enterprise value. The hedge fund currently owns close to 10% of the common stock of Packeteer and said it made the bid after the board refused to address concerns voiced by investors.
"I ultimately think the American people are going to want a clear break from the Bush-Cheney foreign policies of the past because they haven't made us more safe and more secure," he said. "If she thinks that longevity in Washington is the primary criteria for winning the White House, then John McCain is going to beat her."
After dropping sharply in January, nonmanufacturing sectors of the U.S. economy contracted at a slower pace during February, the Institute for Supply Management reported Wednesday. The ISM nonmanufacturing index rose to 49.3% from 44.6% in January. The index stood at 53.2% in December.
New orders for manufactured goods fell 2.5% in January as orders for durable goods dropped. Durable goods orders fell a revised 5.1%, compared with a prior estimate of a 5.3% decline. Core capital equipment orders in January fell 1.5%. Orders for nondurable goods rose 0.3%.
U.S. crude inventories fell unexpectedly, down 3.1 million barrels to 305.4 million barrels in the week ending Feb. 29, U.S. Energy Information Administration reported on Wednesday. After the data, crude-oil futures for April delivery surged $3.28, or 3.3%, to $102.80 a barrel on the New York Mercantile Exchange. Gasoline supplies rose by 1.7 million barrels in the latest week, while distillate stocks fell by 2.7 million barrels, EIA reported.
Money-market rates for euros and pounds climbed to the highest since mid-January, signaling the global squeeze on short-term bank lending may be returning.
According to Bloomberg, the three-month London interbank offered rate, or Libor, for euros advanced 1 basis point to 4.40 percent today, the highest since Jan. 18, the British Bankers' Association said. The rate for pounds gained half a basis point to 5.77 percent, the 12th straight daily increase and the highest since Jan. 7, according to the BBA.
Gold for April delivery rallied $22.20 to end at $988.50 an ounce on the New York Mercantile Exchange. Earlier it surged to a record high of $995.20 an ounce.
Below-normal temperatures are expected in the Midwest and Northeast, the regions of highest natural gas consumption, through March 14, according to MDA Federal Inc.'s EarthSat Energy Weather.
Ambac Financial plans to raise at least $1.5 billion selling new common stock and equity units as the troubled bond insurer tries to keep its crucial AAA rating. Ambac shares dropped 10% to $9.64 after the announcement. The company is aiming to raise at least $1 billion selling common stock and another $500 million selling equity units. Ambac also said it will stop guaranteeing several different types of structured products, including collateralized debt obligations, all mortgage-backed securities and auto loan and credit card securitizations. Ambac also said that it has written "virtually" no new business so far in 2008.
The euro rose to a new record high against the dollar of $1.5301 Wednesday.
Crude oil, gold and corn prices surged to records, leading a rebound in commodities on renewed concern that a slumping dollar and lower borrowing costs will spur inflation and increase demand for raw materials. The UBS Bloomberg Constant Maturity Commodity Index of 26 futures contracts jumped 39.11, or 2.6 percent, to 1,546.74 at 1:20 p.m. New York time. The gauge has jumped 21 percent this year.
Crude for April delivery rallied $5, or 5%, to settle at $104.52 a barrel on the New York Mercantile Exchange. Wednesday's gain in crude was the biggest in value since crude futures started trading on the New York Mercantile Exchange in 1983. Also on Nymex, heating-oil futures hit a new high. Natural gas rose 40 cents to $9.76.
Texas has a total 228 Democratic delegates, 126 of which will be awarded proportionally based on the amount of votes a candidate received during the primary, and 67 based on votes from the caucus. Twelve are super delegates. Caucus results as of Wednesday afternoon showed Obama ahead of Clinton, 52 percent to 48 percent. Unofficial results may be released by the Texas Democratic party by Friday, according to the Caller-Times. Caucus results were supposed to be reported to the party via telephone but high turnout made calling in with the latest tally impossible for many precincts.
Tuesday, March 04, 2008
Bankruptcy Filings
3/5/08 Bankruptcy Filings
American consumers' bankruptcy filings jumped 15 percent in February from the previous month and a steeper rise is looming because of the subprime mortgage crisis, the American Bankruptcy Institute said. Consumer bankruptcy filings in February totaled 76,120, up from 66,050 recorded in January, the non-partisan bankruptcy research group said. The February number was 37 percent higher than in the same month a year ago, according to the institute.
Intel cuts Q1 gross margin est. to 54%, plus or minus 1 pt.
Microsoft have launched a bid to capture a segment of the growing market for rich web content on mobile phones. The software firm has signed a deal with handset manufacturer Nokia to bring its Silverlight platform to millions of mobile phones.
Staples Inc. said sales at North American retail stores decreased 4 percent, while North American delivery sales rose 4 percent. International sales rose 13 percent.
Citigroup and Wachovia are facing lawsuits from a hedge fund charging the banking giants with improperly requiring the fund to pay out more money from specialized derivative contracts called credit-default swaps, The Wall Street Journal reported.
Australia's central bank increased its benchmark interest rate for the second time in four weeks and said there are signs the highest borrowing costs in 12 years are prompting consumers and companies to temper spending. Governor Glenn Stevens and his board raised the overnight cash rate target by a quarter point to 7.25 percent in Sydney today to stem the fastest inflation since 1991. Stevens said rates have risen ``substantially'' since mid-2007.
David Yu: "Yes, there's no shortage of negative news, and, yes, the market had begun a long-term downtrend. But, the selloff on Friday as well as the downfall since December seem quite excessive. Everything from credit problem to commodity price inflation and economic contraction should've been discounted already. The short-term weakness, as indicated by i-TIC Index (Chart 1), may carry on for a few more sessions, but it shouldn't come as a surprise if the market were to make a big move to the upside after that."
According to Bloomberg, Credit Suisse Group increased its price forecasts for coal used in power plants in 2008 by 50 percent because of supply shortages. The price of benchmark Australia's Newcastle contract thermal coal is raised to $120 a metric ton from a previous estimate of $80 a ton, Credit Suisse analysts led by Hong Kong- based Trina Chen and Bangkok-based Pawaramon Suvarnatemee said in a report.
Citigroup's job cuts could reach 30,000 or more over the next year and a half because of increasing writedowns from subprime related debt, CNBC has learned.
California stops insuring municipal bonds.
Tony Allison: "Money supply growth in Russia is up 44%, India up 23%, Australia up 23%, Brazil up 18%, U.S. up 16% (M3), UK up 12%, etc."
SAP and Intel will jointly offer servers pre-packaged with SAP software aimed at medium-sized firms, the two companies said.
Russia and China on Tuesday scuttled a Western attempt to introduce a resolution on Iran's nuclear defiance at a meeting of the International Atomic Energy Agency, diplomats said.
Crude oil may rise to $120 a barrel within six months due to the dollar weakness and global political tensions, the chief executive officer of Abu Dhabi National Energy Co. said.
April platinum futures surged to a record high of $2,308.80 an ounce early Tuesday, surpassing the record set in the previous session. The platinum contract was last up $28.40 at $2,270.0 an ounce.
Economic uncertainty is forcing U.S. shoppers to consider low prices and bargains above all else for the first time in a decade, according to results of a survey released on Tuesday by AlixPartners.That means retailers with the lowest prices will perform relatively better than more upscale rivals over the next few quarters, said Frederick Crawford, a managing director with AlixPartners, a turnaround consulting firm.
Australia, the world's largest shipper of coal, iron ore and wool, forecast the biggest gain in commodity exports in 29 years, driven by demand in China. Sales may rise 30 percent to a fifth straight record of A$189.1 billion ($178 billion) in the year ending June 30, 2009, the Canberra-based Australian Bureau of Agricultural and Resource Economics said today. That compares with a revised A$145.6 billion this fiscal year and is the biggest gain since 1979-1980.
General Motors Corp. says it expects to bring its first lithium-ion battery powered hybrid engine system to market in North America in 2010.
Federal Reserve Chairman Ben Bernanke on Tuesday warned mortgage delinquencies and foreclosures were likely to rise and that more house price declines could be expected, and called for active measures to ease strains in housing markets.
China's biggest bank said Tuesday it has bought a 20 percent stake in South Africa's largest lender for $4.75 billion, sharply expanding China's financial presence in Africa.
Bay Area business leaders' confidence in the region's economy is at its lowest point since 2001, according to a quarterly index released Tuesday.
The Bank of Canada on Tuesday cut rates by a half-point, as central banks around the world try to insulate themselves from the struggling U.S. economy.
The dollar was trading at 102.98 yen, down from 103.51 yen late Monday.
Applied Materials agreed to sell an unspecified non-U.S. company $1.9 billion in solar manufacturing equipment and services to build “multiple solar factories” which it says collectively are expected to produce solar photovoltaic modules “capable of generating electricity on a gigawatt scale.”
Executive Intelligence Review: "Non-current loans—loans 90 days or more behind in payments—rose by $27 billion, or 33% in the last three months of the year, the largest percentage rise in the 24 years the FDIC has been tracking the figure, and net charge-offs jumped sharply. The banks as a whole added a net $15 billion to loan loss reserves, despite which, the level of reserves fell to just 93 cents for every dollar of reported non-current loans, the first time since 1993 that non-current loans have exceeded reserves. In a development of significant interest, the level of derivatives reported by the banks fell during the quarter, to $165 trillion at year-end from $173 trillion on Sept. 30. The level of derivatives for 2007 was still up 25% over 2006, and quarterly drops in derivatives holdings have happened before, but in dollar terms, the $8 trillion drop in the fourth quarter was the largest quarterly drop ever, and in percentage terms, at 5%, it was second only to the $6 trillion (12%) drop in the fourth quarter of 2001, the quarter following 9/11. If the derivatives markets have peaked, then the problems facing the banks are far worse than anything the banks and their regulators have admitted."
According to a Federal Trade Commission study, Napa, California, earned the title of worst town for identity theft, with over 300 consumer complaints per 100,000 residents in 2007.
Robert Kiyosaki: "In less than three years, the first of approximately 75 million American baby boomers will turn 65. No government can change that, so until someone discovers the fountain of youth the end is not far away. In a few years, the U.S. government will begin to operate in the red, paying for campaign promises made years ago by politicians who are no longer in power. Do the math. If 75 million baby boomers begin collecting $1,000 a month in Social Security and Medicare benefits, that comes to $75 billion in additional monthly spending. That's a lot more than the one-time $168 billion stimulus package due out in May."
Brett Favre, the longstanding quarterback of the Green Bay Packers, has decided to retire after 17 seasons.
Nouriel Roubini: "Indeed, there is now evidence that many state/local governments are under serious fiscal and debt strains and that default rates on muni bonds will start to surge."
Crude oil for April delivery lost $2.93, or 2.9%, to settle at $99.52 a barrel on the New York Mercantile Exchange. Gold for April delivery dropped $17.90 to end at $966.30 an ounce on the New York Mercantile Exchange.
Cisco's CEO Chambers: "I am even more comfortable with the long-term 12 to 17 percent growth than I was a month or two ago."
CNBC said a deal to bail out bond insurer Ambac Financial Group Inc. is progressing.
American consumers' bankruptcy filings jumped 15 percent in February from the previous month and a steeper rise is looming because of the subprime mortgage crisis, the American Bankruptcy Institute said. Consumer bankruptcy filings in February totaled 76,120, up from 66,050 recorded in January, the non-partisan bankruptcy research group said. The February number was 37 percent higher than in the same month a year ago, according to the institute.
Intel cuts Q1 gross margin est. to 54%, plus or minus 1 pt.
Microsoft have launched a bid to capture a segment of the growing market for rich web content on mobile phones. The software firm has signed a deal with handset manufacturer Nokia to bring its Silverlight platform to millions of mobile phones.
Staples Inc. said sales at North American retail stores decreased 4 percent, while North American delivery sales rose 4 percent. International sales rose 13 percent.
Citigroup and Wachovia are facing lawsuits from a hedge fund charging the banking giants with improperly requiring the fund to pay out more money from specialized derivative contracts called credit-default swaps, The Wall Street Journal reported.
Australia's central bank increased its benchmark interest rate for the second time in four weeks and said there are signs the highest borrowing costs in 12 years are prompting consumers and companies to temper spending. Governor Glenn Stevens and his board raised the overnight cash rate target by a quarter point to 7.25 percent in Sydney today to stem the fastest inflation since 1991. Stevens said rates have risen ``substantially'' since mid-2007.
David Yu: "Yes, there's no shortage of negative news, and, yes, the market had begun a long-term downtrend. But, the selloff on Friday as well as the downfall since December seem quite excessive. Everything from credit problem to commodity price inflation and economic contraction should've been discounted already. The short-term weakness, as indicated by i-TIC Index (Chart 1), may carry on for a few more sessions, but it shouldn't come as a surprise if the market were to make a big move to the upside after that."
According to Bloomberg, Credit Suisse Group increased its price forecasts for coal used in power plants in 2008 by 50 percent because of supply shortages. The price of benchmark Australia's Newcastle contract thermal coal is raised to $120 a metric ton from a previous estimate of $80 a ton, Credit Suisse analysts led by Hong Kong- based Trina Chen and Bangkok-based Pawaramon Suvarnatemee said in a report.
Citigroup's job cuts could reach 30,000 or more over the next year and a half because of increasing writedowns from subprime related debt, CNBC has learned.
California stops insuring municipal bonds.
Tony Allison: "Money supply growth in Russia is up 44%, India up 23%, Australia up 23%, Brazil up 18%, U.S. up 16% (M3), UK up 12%, etc."
SAP and Intel will jointly offer servers pre-packaged with SAP software aimed at medium-sized firms, the two companies said.
Russia and China on Tuesday scuttled a Western attempt to introduce a resolution on Iran's nuclear defiance at a meeting of the International Atomic Energy Agency, diplomats said.
Crude oil may rise to $120 a barrel within six months due to the dollar weakness and global political tensions, the chief executive officer of Abu Dhabi National Energy Co. said.
April platinum futures surged to a record high of $2,308.80 an ounce early Tuesday, surpassing the record set in the previous session. The platinum contract was last up $28.40 at $2,270.0 an ounce.
Economic uncertainty is forcing U.S. shoppers to consider low prices and bargains above all else for the first time in a decade, according to results of a survey released on Tuesday by AlixPartners.That means retailers with the lowest prices will perform relatively better than more upscale rivals over the next few quarters, said Frederick Crawford, a managing director with AlixPartners, a turnaround consulting firm.
Australia, the world's largest shipper of coal, iron ore and wool, forecast the biggest gain in commodity exports in 29 years, driven by demand in China. Sales may rise 30 percent to a fifth straight record of A$189.1 billion ($178 billion) in the year ending June 30, 2009, the Canberra-based Australian Bureau of Agricultural and Resource Economics said today. That compares with a revised A$145.6 billion this fiscal year and is the biggest gain since 1979-1980.
General Motors Corp. says it expects to bring its first lithium-ion battery powered hybrid engine system to market in North America in 2010.
Federal Reserve Chairman Ben Bernanke on Tuesday warned mortgage delinquencies and foreclosures were likely to rise and that more house price declines could be expected, and called for active measures to ease strains in housing markets.
China's biggest bank said Tuesday it has bought a 20 percent stake in South Africa's largest lender for $4.75 billion, sharply expanding China's financial presence in Africa.
Bay Area business leaders' confidence in the region's economy is at its lowest point since 2001, according to a quarterly index released Tuesday.
The Bank of Canada on Tuesday cut rates by a half-point, as central banks around the world try to insulate themselves from the struggling U.S. economy.
The dollar was trading at 102.98 yen, down from 103.51 yen late Monday.
Applied Materials agreed to sell an unspecified non-U.S. company $1.9 billion in solar manufacturing equipment and services to build “multiple solar factories” which it says collectively are expected to produce solar photovoltaic modules “capable of generating electricity on a gigawatt scale.”
Executive Intelligence Review: "Non-current loans—loans 90 days or more behind in payments—rose by $27 billion, or 33% in the last three months of the year, the largest percentage rise in the 24 years the FDIC has been tracking the figure, and net charge-offs jumped sharply. The banks as a whole added a net $15 billion to loan loss reserves, despite which, the level of reserves fell to just 93 cents for every dollar of reported non-current loans, the first time since 1993 that non-current loans have exceeded reserves. In a development of significant interest, the level of derivatives reported by the banks fell during the quarter, to $165 trillion at year-end from $173 trillion on Sept. 30. The level of derivatives for 2007 was still up 25% over 2006, and quarterly drops in derivatives holdings have happened before, but in dollar terms, the $8 trillion drop in the fourth quarter was the largest quarterly drop ever, and in percentage terms, at 5%, it was second only to the $6 trillion (12%) drop in the fourth quarter of 2001, the quarter following 9/11. If the derivatives markets have peaked, then the problems facing the banks are far worse than anything the banks and their regulators have admitted."
According to a Federal Trade Commission study, Napa, California, earned the title of worst town for identity theft, with over 300 consumer complaints per 100,000 residents in 2007.
Robert Kiyosaki: "In less than three years, the first of approximately 75 million American baby boomers will turn 65. No government can change that, so until someone discovers the fountain of youth the end is not far away. In a few years, the U.S. government will begin to operate in the red, paying for campaign promises made years ago by politicians who are no longer in power. Do the math. If 75 million baby boomers begin collecting $1,000 a month in Social Security and Medicare benefits, that comes to $75 billion in additional monthly spending. That's a lot more than the one-time $168 billion stimulus package due out in May."
Brett Favre, the longstanding quarterback of the Green Bay Packers, has decided to retire after 17 seasons.
Nouriel Roubini: "Indeed, there is now evidence that many state/local governments are under serious fiscal and debt strains and that default rates on muni bonds will start to surge."
Crude oil for April delivery lost $2.93, or 2.9%, to settle at $99.52 a barrel on the New York Mercantile Exchange. Gold for April delivery dropped $17.90 to end at $966.30 an ounce on the New York Mercantile Exchange.
Cisco's CEO Chambers: "I am even more comfortable with the long-term 12 to 17 percent growth than I was a month or two ago."
CNBC said a deal to bail out bond insurer Ambac Financial Group Inc. is progressing.
Monday, March 03, 2008
The Primaries
3/4/08 The Primaries
Barack Obama: "If we do well in Texas and Ohio, I think the math is such where it's going to be hard for her to win the nomination, and they'll have to make a decision about how much longer they want to pursue it." "I would assume that there are going to be people who want to bring this to an end one way or another, because [Arizona Sen.] John McCain's out there — the reputed Republican nominee — and he's given a little bit of a free pass."
The combined punch of subprime mortgage defaults and heavy debt remains the biggest risk to the health of the U.S. economy, a panel of business economists said on Monday. "NABE members are increasingly concerned over the short-term risks associated with subprime mortgages and other forms of indebtedness, while they continue to cast a wary eye on inflation," said Ellen Hughes-Cromwick, president of the National Association for Business Economists.
Countrywide said rising monthly payments on adjustable-rate mortgage loans, also known as ARMs, could also prompt a rise in delinquencies.
Ahmadinejad said the foreign presence in Iraq was an "insult to the regional nations and a humiliation." "We believe that the major powers who have come to the region from thousands of kilometers away should respect the will of nations and leave this region. That's the best service they can offer these nations," the hard-line Iranian leader said after meeting with the Iraqi president, Jalal Talabani, on the final day of his two-day visit to Baghdad.
Robert Lynch of HSBC:"The dollar is basically being re-rated ... in much the same way many U.S. credit derivative securities have been re-rated."
Gold for April delivery hit a record of $992 an ounce.
According to Bloomberg, Volkswagen AG took control of Scania AB, buying the Wallenberg family stake in the Swedish truck company for 27 billion kronor ($4.37 billion) and clearing the way for a merger with MAN AG that would create the European market leader.
The Federal Reserve is wrong to lower interest rates while inflation is still a threat and shouldn't bail out investors who made wrong-way bets, economists said in a survey by the National Association for Business Economics.
April crude hits record high of $103.51 a barrel on Nymex.
By one estimate, over 1,000 days of e-mail are missing from various White House offices. "I would call this negligence," said Mark Epstein, director of technical services for Cataphora Inc., a California company that specializes in retrieval and analysis of electronic information. The White House's first mistake, Epstein and other technical experts say, was moving to a new e-mail setup without first setting up an archiving system that would allow speedy, reliable searches and recovery of electronic messages. "This is the first time I've personally run across this kind of process for archiving; the White House relied on human beings to do specific manual processes on a regular basis and I would not recommend it," said William Tolson, who has consulted on e-mail problems for hundreds of companies and state and local governments.
Spending on U.S. construction projects fell 1.7% in January.
The euro rose to a fresh historical high against the dollar of $1.5263 Monday.
U.S. Feb. ISM falls to 48.3% from 50.7 in January.
Shokri Ghanem, chairman of Libya's National Oil Corp., speaking in Vienna before the group's meeting this week, said he has ``no complaint'' with oil at $100 a barrel. Twenty-nine of 30 analysts polled by Bloomberg expect the Organization of Petroleum Exporting Countries will make no change to production targets. Oil prices were also supported as the dollar neared a record low against the euro.
Soybeans and corn in Chicago advanced for a third day, reaching records on speculation the weaker dollar will boost exports and higher crude oil costs will lead to increased demand for alternative fuels. Wheat futures also jumped.
The dollar index declined to 73.445 today on ICE Futures in New York, the lowest since its start in 1973.
China, the world's biggest buyer of soybeans and vegetable oils, plans to boost supplies of food to curb inflation which jumped 7.1 percent in January, the most in 11 years. Soybean imports jumped 41 percent to 3.4 million metric tons in January, compared with a year earlier, the customs office said Feb. 29.
Lehman Bros. traded at a new 52-week low. Goldman Sachs has dropped 85 points from the high reached last October.
The oil terminal operated by Chevron Corp.'s Caspian Pipeline Consortium in Russia's Black Sea port of Novorossiysk shipped 25 percent less crude in February compared with the same month last year. The Caspian Pipeline Consortium operates Russia's only foreign-owned oil export link, which ships crude from Kazakhstan to the Black Sea port.
Microsoft chief executive Steve Ballmer said Monday it was the right time for the company to put out a bid for Yahoo Inc. "The deal makes sense with the price and structure we announced. We hope it becomes reality," he told reporters at the annual CeBIT technology fair in Hanover. "There is a lot of merit for Microsoft and Yahoo, for Yahoo shareholders and for Microsoft shareholders, for advertisers and for consumers."
John Hussman: "Once a market becomes overvalued - in stocks, bonds, or housing - either falling prices or poor long-term returns become inevitable."
A 2-year U.S. treasury yields 1.68%. A 3-month T-bill yields 1.85%. Now factor in the inflation rate that exceeds 4% ( and that's being ultra conservative). You still think these Treasury instruments are safe havens or are they for schmucks?
Natural gas for April delivery rose 17.9 cents, or 1.9 percent, to $9.545 per million British thermal units at 11:52 a.m. on the New York Mercantile Exchange. Futures are the highest since February 2006 and have advanced 27 percent this year.
Hillary Clinton's top strategist Mark Penn said he had "no direct authority in the campaign."I have had no say or involvement in four key areas -- the financial budget and resource allocation, political or organizational sides," he said in an email to a newspaper.
Toyota Motor Corp.'s U.S. February sales fell to 182,169 vehicles, down from 187,330 last year. Ford Motor Co.reported a 6.9% decline in February U.S. sales to 196,681 cars and trucks as lower rental car sales offset a surge in retail sales. General Motors Corp. reported a 12.9% decline in February U.S. light vehicle sales to 308,411 cars and trucks. The car side fell 1.2% while light trucks dropped 19.2%.
Crude for April delivery rallied $2.11 to a new all-time high of $103.95 a barrel on the New York Mercantile Exchange in early morning trading. Gold for April delivery hit a record of $992 an ounce on the New York Mercantile Exchange. The contract finished up $9.20 at $984.20 an ounce.
Diebold Inc. said Monday its board unanimously rejected an unsolicited bid from United Technologies Corp. to buy the company. "The board strongly believes that UTC's proposal significantly undervalues the company and fails to reflect Diebold's strengths and significant upside potential," said John Lauer, Diebold's chairman, in a statement.
Porsche moved closer to taking over Volkswagen, after the sports-car maker won approval from its supervisory board to raise its Volkwagen stake to more than 50 percent.
Barack Obama: "If we do well in Texas and Ohio, I think the math is such where it's going to be hard for her to win the nomination, and they'll have to make a decision about how much longer they want to pursue it." "I would assume that there are going to be people who want to bring this to an end one way or another, because [Arizona Sen.] John McCain's out there — the reputed Republican nominee — and he's given a little bit of a free pass."
The combined punch of subprime mortgage defaults and heavy debt remains the biggest risk to the health of the U.S. economy, a panel of business economists said on Monday. "NABE members are increasingly concerned over the short-term risks associated with subprime mortgages and other forms of indebtedness, while they continue to cast a wary eye on inflation," said Ellen Hughes-Cromwick, president of the National Association for Business Economists.
Countrywide said rising monthly payments on adjustable-rate mortgage loans, also known as ARMs, could also prompt a rise in delinquencies.
Ahmadinejad said the foreign presence in Iraq was an "insult to the regional nations and a humiliation." "We believe that the major powers who have come to the region from thousands of kilometers away should respect the will of nations and leave this region. That's the best service they can offer these nations," the hard-line Iranian leader said after meeting with the Iraqi president, Jalal Talabani, on the final day of his two-day visit to Baghdad.
Robert Lynch of HSBC:"The dollar is basically being re-rated ... in much the same way many U.S. credit derivative securities have been re-rated."
Gold for April delivery hit a record of $992 an ounce.
According to Bloomberg, Volkswagen AG took control of Scania AB, buying the Wallenberg family stake in the Swedish truck company for 27 billion kronor ($4.37 billion) and clearing the way for a merger with MAN AG that would create the European market leader.
The Federal Reserve is wrong to lower interest rates while inflation is still a threat and shouldn't bail out investors who made wrong-way bets, economists said in a survey by the National Association for Business Economics.
April crude hits record high of $103.51 a barrel on Nymex.
By one estimate, over 1,000 days of e-mail are missing from various White House offices. "I would call this negligence," said Mark Epstein, director of technical services for Cataphora Inc., a California company that specializes in retrieval and analysis of electronic information. The White House's first mistake, Epstein and other technical experts say, was moving to a new e-mail setup without first setting up an archiving system that would allow speedy, reliable searches and recovery of electronic messages. "This is the first time I've personally run across this kind of process for archiving; the White House relied on human beings to do specific manual processes on a regular basis and I would not recommend it," said William Tolson, who has consulted on e-mail problems for hundreds of companies and state and local governments.
Spending on U.S. construction projects fell 1.7% in January.
The euro rose to a fresh historical high against the dollar of $1.5263 Monday.
U.S. Feb. ISM falls to 48.3% from 50.7 in January.
Shokri Ghanem, chairman of Libya's National Oil Corp., speaking in Vienna before the group's meeting this week, said he has ``no complaint'' with oil at $100 a barrel. Twenty-nine of 30 analysts polled by Bloomberg expect the Organization of Petroleum Exporting Countries will make no change to production targets. Oil prices were also supported as the dollar neared a record low against the euro.
Soybeans and corn in Chicago advanced for a third day, reaching records on speculation the weaker dollar will boost exports and higher crude oil costs will lead to increased demand for alternative fuels. Wheat futures also jumped.
The dollar index declined to 73.445 today on ICE Futures in New York, the lowest since its start in 1973.
China, the world's biggest buyer of soybeans and vegetable oils, plans to boost supplies of food to curb inflation which jumped 7.1 percent in January, the most in 11 years. Soybean imports jumped 41 percent to 3.4 million metric tons in January, compared with a year earlier, the customs office said Feb. 29.
Lehman Bros. traded at a new 52-week low. Goldman Sachs has dropped 85 points from the high reached last October.
The oil terminal operated by Chevron Corp.'s Caspian Pipeline Consortium in Russia's Black Sea port of Novorossiysk shipped 25 percent less crude in February compared with the same month last year. The Caspian Pipeline Consortium operates Russia's only foreign-owned oil export link, which ships crude from Kazakhstan to the Black Sea port.
Microsoft chief executive Steve Ballmer said Monday it was the right time for the company to put out a bid for Yahoo Inc. "The deal makes sense with the price and structure we announced. We hope it becomes reality," he told reporters at the annual CeBIT technology fair in Hanover. "There is a lot of merit for Microsoft and Yahoo, for Yahoo shareholders and for Microsoft shareholders, for advertisers and for consumers."
John Hussman: "Once a market becomes overvalued - in stocks, bonds, or housing - either falling prices or poor long-term returns become inevitable."
A 2-year U.S. treasury yields 1.68%. A 3-month T-bill yields 1.85%. Now factor in the inflation rate that exceeds 4% ( and that's being ultra conservative). You still think these Treasury instruments are safe havens or are they for schmucks?
Natural gas for April delivery rose 17.9 cents, or 1.9 percent, to $9.545 per million British thermal units at 11:52 a.m. on the New York Mercantile Exchange. Futures are the highest since February 2006 and have advanced 27 percent this year.
Hillary Clinton's top strategist Mark Penn said he had "no direct authority in the campaign."I have had no say or involvement in four key areas -- the financial budget and resource allocation, political or organizational sides," he said in an email to a newspaper.
Toyota Motor Corp.'s U.S. February sales fell to 182,169 vehicles, down from 187,330 last year. Ford Motor Co.reported a 6.9% decline in February U.S. sales to 196,681 cars and trucks as lower rental car sales offset a surge in retail sales. General Motors Corp. reported a 12.9% decline in February U.S. light vehicle sales to 308,411 cars and trucks. The car side fell 1.2% while light trucks dropped 19.2%.
Crude for April delivery rallied $2.11 to a new all-time high of $103.95 a barrel on the New York Mercantile Exchange in early morning trading. Gold for April delivery hit a record of $992 an ounce on the New York Mercantile Exchange. The contract finished up $9.20 at $984.20 an ounce.
Diebold Inc. said Monday its board unanimously rejected an unsolicited bid from United Technologies Corp. to buy the company. "The board strongly believes that UTC's proposal significantly undervalues the company and fails to reflect Diebold's strengths and significant upside potential," said John Lauer, Diebold's chairman, in a statement.
Porsche moved closer to taking over Volkswagen, after the sports-car maker won approval from its supervisory board to raise its Volkwagen stake to more than 50 percent.
Buffett's Remarks
3/3/08 Buffett's Remarks
Warren Buffett said on CNBC television that his offer to effectively bail out bond insurers is off the table, according to a transcript of the conversation on CNBC's Web site. Warren Buffett on Monday said the U.S. economy is in recession and that "stocks are not cheap."
Consumer price inflation in the 15 nations that make up the euro rose at an annual rate of 3.2% in February, according to a preliminary estimate released by Eurostat on Monday.
The RBS/NTC euro-zone purchasing managers index for manufacturing declined to 52.3 in February from a reading of 52.8 in the previous month, news reports said.
Japanese consumer finance firm Takefuji Corp. may report up to 30 billion yen ($290 million) in losses from derivative transactions linked to the U.S. mortgage market.
United Technologies Corp., continuing to broaden its security business and expand its presence in China, said Sunday it has made an offer to buy Diebold Inc. for $2.63 billion. Diebold, based in Canton, Ohio, makes ATMs, business security systems and voting machines. The $2.63 billion purchase price represents United Technologies' offer of $40 per outstanding share, about two-thirds higher than Diebold's closing stock price Friday of $24.12. United Technologies said the total enterprise value of the deal was about $3 billion.
According to the WSJ, U.S. commercial real-estate values are starting to slide, and Goldman Sachs analysts project a prolonged sharp decline, with steep losses for financial firms.
Australian miner Oxiana Ltd. will buy Zinifex Ltd. through a 6.06 billion Australian dollar (US$5.64 billion) stock swap. to form the world's second-biggest zinc producer, and Australia's third-biggest diversified miner by market value at a combined A$12 billion, with Zinifex Chief Executive and former WMC Resources boss Andrew Michelmore at the helm.
Nobel economics laureate Joseph Stiglitz, author of a new book that claims the Iraq war will cost the U.S. more than $3 trillion, said the final tally is likely to climb much higher than that.``It's much more like five trillion,'' Stiglitz said yesterday in an interview with Bloomberg Radio. ``We were trying to make Americans understand how expensive this war was so we didn't want to quibble about a dime here or a dime there.''
The U.S. dollar fell to a three-year low against the yen.
HSBC's profits rose 10 percent last year as buoyant growth in Hong Kong and elsewhere in Asia helped Europe's biggest bank absorb $17.2 billion in bad debts as the U.S. housing crisis deepened.
Brett Steenbarger: "Markets are pricing in 50% chance of a 75 bp Fed rate cut at the next meeting and a full 1% cut by the April meeting."
John Hussman: "Although we have observed a significant widening of credit spreads and an increase in losses and write-offs among banks and other lenders, I continue to believe that the U.S. economy is quite early in the process of “deleveraging” from the excess debt creation of recent years. A large wave of mortgage interest-rate resets began to come due in October 2007, and will continue into 2009. Although Treasury interest rates have declined sharply due to a flight to safety by investors, mortgage rates have been fairly stubborn. More
importantly, recent rates of delinquency and foreclosure are not yet
representative of the high rates that can be expected in the coming years. In
the typical foreclosure event, there is first a burdensome reset, followed by
several months of attempted payments, followed by several months of
delinquency, and only then by foreclosure action. Given that the heavy resets
only started in October, the U.S. economy remains perhaps two or three
quarters away from serious credit losses, foreclosures and writedowns."
Warren Buffett said on CNBC television that his offer to effectively bail out bond insurers is off the table, according to a transcript of the conversation on CNBC's Web site. Warren Buffett on Monday said the U.S. economy is in recession and that "stocks are not cheap."
Consumer price inflation in the 15 nations that make up the euro rose at an annual rate of 3.2% in February, according to a preliminary estimate released by Eurostat on Monday.
The RBS/NTC euro-zone purchasing managers index for manufacturing declined to 52.3 in February from a reading of 52.8 in the previous month, news reports said.
Japanese consumer finance firm Takefuji Corp. may report up to 30 billion yen ($290 million) in losses from derivative transactions linked to the U.S. mortgage market.
United Technologies Corp., continuing to broaden its security business and expand its presence in China, said Sunday it has made an offer to buy Diebold Inc. for $2.63 billion. Diebold, based in Canton, Ohio, makes ATMs, business security systems and voting machines. The $2.63 billion purchase price represents United Technologies' offer of $40 per outstanding share, about two-thirds higher than Diebold's closing stock price Friday of $24.12. United Technologies said the total enterprise value of the deal was about $3 billion.
According to the WSJ, U.S. commercial real-estate values are starting to slide, and Goldman Sachs analysts project a prolonged sharp decline, with steep losses for financial firms.
Australian miner Oxiana Ltd. will buy Zinifex Ltd. through a 6.06 billion Australian dollar (US$5.64 billion) stock swap. to form the world's second-biggest zinc producer, and Australia's third-biggest diversified miner by market value at a combined A$12 billion, with Zinifex Chief Executive and former WMC Resources boss Andrew Michelmore at the helm.
Nobel economics laureate Joseph Stiglitz, author of a new book that claims the Iraq war will cost the U.S. more than $3 trillion, said the final tally is likely to climb much higher than that.``It's much more like five trillion,'' Stiglitz said yesterday in an interview with Bloomberg Radio. ``We were trying to make Americans understand how expensive this war was so we didn't want to quibble about a dime here or a dime there.''
The U.S. dollar fell to a three-year low against the yen.
HSBC's profits rose 10 percent last year as buoyant growth in Hong Kong and elsewhere in Asia helped Europe's biggest bank absorb $17.2 billion in bad debts as the U.S. housing crisis deepened.
Brett Steenbarger: "Markets are pricing in 50% chance of a 75 bp Fed rate cut at the next meeting and a full 1% cut by the April meeting."
John Hussman: "Although we have observed a significant widening of credit spreads and an increase in losses and write-offs among banks and other lenders, I continue to believe that the U.S. economy is quite early in the process of “deleveraging” from the excess debt creation of recent years. A large wave of mortgage interest-rate resets began to come due in October 2007, and will continue into 2009. Although Treasury interest rates have declined sharply due to a flight to safety by investors, mortgage rates have been fairly stubborn. More
importantly, recent rates of delinquency and foreclosure are not yet
representative of the high rates that can be expected in the coming years. In
the typical foreclosure event, there is first a burdensome reset, followed by
several months of attempted payments, followed by several months of
delinquency, and only then by foreclosure action. Given that the heavy resets
only started in October, the U.S. economy remains perhaps two or three
quarters away from serious credit losses, foreclosures and writedowns."
Sunday, March 02, 2008
Marching Into Panic
3/2/08 Marching Into Panic
Former President Bill Clinton has derided the Texas voting system as "the only time in your life that you'll get to vote twice without going to jail." But state party leaders pointed out that Sen. Clinton's Texas advisers helped write the rules two decades ago, and that Mr. Clinton twice won Texas's primaries.
The Financial Times: "Two huge forces remain at work: a slumping US real estate market and repricing of credit.”
The Australian dollar rose to its highest level in almost 24 years.
Peloton Partners: “Credit providers have been severely tightening terms without regard to the creditworthiness or track record of individual firms, which has compounded our difficulties and made it impossible to meet margin calls.”
Doug Noland: "In many respects, systemic stress from de-leveraging is more intense today than even during the LTCM fiasco. Many have been eagerly anticipating a LTCM-style Federal Reserve-orchestrated “reliquefication.” It’s not forthcoming. I will again remind readers to think in terms of this being the first Post-Credit Bubble “reflation” attempt. The Fed’s influence on risk asset prices has been dramatically diminished. Unlike LTCM (or 2002 for that matter), it is simply no longer a case of the Fed lowering the cost of funds for the leveraged players and in the process enticing them to increase holdings of mortgages, MBS, junk bonds, stocks and derivatives (all on leverage). There are these days much greater financial and economic forces at work... This is No LTCM. The current financial and economic backdrop is altogether different. Speculators that would typically seek to capitalize on depressed securities prices now confront enormous uncertainties. How bad will things get in California , Florida , and elsewhere? How many will walk away from underwater mortgages – for starter homes and million dollar-plus California bungalows? How badly will the U.S. “services” economy be hit by housing and financial woes? How bad are the unfolding Credit problems in state and local finance? Will pinched consumers also turn their backs on Credit card, auto and student loans? How long will the seizing up of the securitization markets last? How will corporate Credits hold up in the event of prolonged Credit restraint and economic tumult? What are the ramifications if the “monolines,” GSEs, private-label MBS/ABS, the Credit derivatives marketplace, and Wall Street “structured finance” (more generally) don’t recover? None of these pertinent questions were even remotely contemplated or relevant in 1998.
The problem today remains a highly leveraged Credit system now confronting massive – and unquantifiable - Credit losses. And Moody’s and S&P can continue to claim that the major “monolines” are “AAA” – while the GSEs can pretend they are adequately capitalized. But the marketplace is not buying it. Sinking securities valuations are not a “technical” market issue that will be resolved when the margin calls are satisfied. Indeed, the Credit crisis and the economic downturn are gaining significant momentum. Throughout the system, risk models have broken down. They will now be functionally inoperable for some time to come... the Bubble in leveraged speculation has burst. Today’s reality is one of a Credit system severely impaired, with the ABS, junk, and CDO markets basically closed for business. Now the huge muni and investment-grade bond markets are badly faltering. This week also saw the Swiss franc and the Japanese yen as the best performing currencies, gaining 4.7% and 4.2% respectively. For those borrowing in these low-yielding currencies to finance leveraged speculations in higher-yielding U.S. (and other) securities, there is now also recognition of acute currency risk. The stage is set for a panic out of the crowded leveraged trades."
Warren Buffett: "That party is over,” he wrote in his eagerly awaited annual letter to shareholders. “It is a certainty that insurance-industry profit margins, including ours, will fall significantly in 2008. Prices are down, and exposures inexorably rise.” He predicted that even with another disaster-free year, the industry's profitability will decline. “If the winds roar or the earth trembles, results could be far worse.” last year Buffett swung more often at derivative pitches that came his way. Buffett said he had accepted $7.7 billion in premiums on 94 derivative contracts by the end of 2007. That's up from 62 contracts at the end of 2006. Berkshire recorded a $6.9 billion liability for derivatives at yearend. Buffett predicted the derivatives will ultimately be profitable, but he warned they may make Berkshire's earnings more volatile in the future.
California lost 20,000 jobs in January.
Iran's Ahmadinejad arrived in Baghdad for the first-ever trip by an Iranian president to Iraq, a country that was once Iran's bitter enemy.
Ed Esterling: "Standard & Poor’s provides periodic updates to historical and estimated future earnings. As of December 31, 2007, the ‘as reported’ EPS estimate for the fourth quarter provided full-year EPS of $76.62. By January 23rd, the estimate for 2007 was $74.15. Then, on January 31st, the estimate was $72.86. Most recently, as of February 13th, it’s down again…to $71.56. Since 2006 EPS was $81.51, any of the EPS values clearly reflect a decline. So give me some news… What about a forecast for 2008? The progression of estimates across the four previous dates: $83.98, $83.70, $67.90, $71.20. WHAT! Are the last two numbers typos? Is the earnings estimate for 2008 almost 20% lower now than it was just about a month ago? Has the forward P/E, which was recently an inviting 16, suddenly become a much richer valuation near 20?"
The recently expected rebound in EPS is now a further decline—a second declining year for earnings after a five-year period of dramatic rise."
Mike Burk: "We will probably see a multi month low in the next few weeks...The NASDAQ composite (OTC) hit a new cycle low last Friday and there were "only" 164 new lows. Unless there is a large build up of new lows in the next few weeks the market should be near its low for this cycle...Another rally stalled last week and seasonally, March during the 4th year of the Presidential Cycle, has a spotty record at best. I expect the major indices to be lower on Friday March 7 than they were on Friday February 29."
"One of the most powerful market forces and the one we pay close attention to is traders' perception," said Adam Hewison, president of INO.com, a technical analysis site. "Traders' perception right now is to be long commodities, short the dollar, and short the equity markets. That's the way we think the markets are going right now."
Former President Bill Clinton has derided the Texas voting system as "the only time in your life that you'll get to vote twice without going to jail." But state party leaders pointed out that Sen. Clinton's Texas advisers helped write the rules two decades ago, and that Mr. Clinton twice won Texas's primaries.
The Financial Times: "Two huge forces remain at work: a slumping US real estate market and repricing of credit.”
The Australian dollar rose to its highest level in almost 24 years.
Peloton Partners: “Credit providers have been severely tightening terms without regard to the creditworthiness or track record of individual firms, which has compounded our difficulties and made it impossible to meet margin calls.”
Doug Noland: "In many respects, systemic stress from de-leveraging is more intense today than even during the LTCM fiasco. Many have been eagerly anticipating a LTCM-style Federal Reserve-orchestrated “reliquefication.” It’s not forthcoming. I will again remind readers to think in terms of this being the first Post-Credit Bubble “reflation” attempt. The Fed’s influence on risk asset prices has been dramatically diminished. Unlike LTCM (or 2002 for that matter), it is simply no longer a case of the Fed lowering the cost of funds for the leveraged players and in the process enticing them to increase holdings of mortgages, MBS, junk bonds, stocks and derivatives (all on leverage). There are these days much greater financial and economic forces at work... This is No LTCM. The current financial and economic backdrop is altogether different. Speculators that would typically seek to capitalize on depressed securities prices now confront enormous uncertainties. How bad will things get in California , Florida , and elsewhere? How many will walk away from underwater mortgages – for starter homes and million dollar-plus California bungalows? How badly will the U.S. “services” economy be hit by housing and financial woes? How bad are the unfolding Credit problems in state and local finance? Will pinched consumers also turn their backs on Credit card, auto and student loans? How long will the seizing up of the securitization markets last? How will corporate Credits hold up in the event of prolonged Credit restraint and economic tumult? What are the ramifications if the “monolines,” GSEs, private-label MBS/ABS, the Credit derivatives marketplace, and Wall Street “structured finance” (more generally) don’t recover? None of these pertinent questions were even remotely contemplated or relevant in 1998.
The problem today remains a highly leveraged Credit system now confronting massive – and unquantifiable - Credit losses. And Moody’s and S&P can continue to claim that the major “monolines” are “AAA” – while the GSEs can pretend they are adequately capitalized. But the marketplace is not buying it. Sinking securities valuations are not a “technical” market issue that will be resolved when the margin calls are satisfied. Indeed, the Credit crisis and the economic downturn are gaining significant momentum. Throughout the system, risk models have broken down. They will now be functionally inoperable for some time to come... the Bubble in leveraged speculation has burst. Today’s reality is one of a Credit system severely impaired, with the ABS, junk, and CDO markets basically closed for business. Now the huge muni and investment-grade bond markets are badly faltering. This week also saw the Swiss franc and the Japanese yen as the best performing currencies, gaining 4.7% and 4.2% respectively. For those borrowing in these low-yielding currencies to finance leveraged speculations in higher-yielding U.S. (and other) securities, there is now also recognition of acute currency risk. The stage is set for a panic out of the crowded leveraged trades."
Warren Buffett: "That party is over,” he wrote in his eagerly awaited annual letter to shareholders. “It is a certainty that insurance-industry profit margins, including ours, will fall significantly in 2008. Prices are down, and exposures inexorably rise.” He predicted that even with another disaster-free year, the industry's profitability will decline. “If the winds roar or the earth trembles, results could be far worse.” last year Buffett swung more often at derivative pitches that came his way. Buffett said he had accepted $7.7 billion in premiums on 94 derivative contracts by the end of 2007. That's up from 62 contracts at the end of 2006. Berkshire recorded a $6.9 billion liability for derivatives at yearend. Buffett predicted the derivatives will ultimately be profitable, but he warned they may make Berkshire's earnings more volatile in the future.
California lost 20,000 jobs in January.
Iran's Ahmadinejad arrived in Baghdad for the first-ever trip by an Iranian president to Iraq, a country that was once Iran's bitter enemy.
Ed Esterling: "Standard & Poor’s provides periodic updates to historical and estimated future earnings. As of December 31, 2007, the ‘as reported’ EPS estimate for the fourth quarter provided full-year EPS of $76.62. By January 23rd, the estimate for 2007 was $74.15. Then, on January 31st, the estimate was $72.86. Most recently, as of February 13th, it’s down again…to $71.56. Since 2006 EPS was $81.51, any of the EPS values clearly reflect a decline. So give me some news… What about a forecast for 2008? The progression of estimates across the four previous dates: $83.98, $83.70, $67.90, $71.20. WHAT! Are the last two numbers typos? Is the earnings estimate for 2008 almost 20% lower now than it was just about a month ago? Has the forward P/E, which was recently an inviting 16, suddenly become a much richer valuation near 20?"
The recently expected rebound in EPS is now a further decline—a second declining year for earnings after a five-year period of dramatic rise."
Mike Burk: "We will probably see a multi month low in the next few weeks...The NASDAQ composite (OTC) hit a new cycle low last Friday and there were "only" 164 new lows. Unless there is a large build up of new lows in the next few weeks the market should be near its low for this cycle...Another rally stalled last week and seasonally, March during the 4th year of the Presidential Cycle, has a spotty record at best. I expect the major indices to be lower on Friday March 7 than they were on Friday February 29."
"One of the most powerful market forces and the one we pay close attention to is traders' perception," said Adam Hewison, president of INO.com, a technical analysis site. "Traders' perception right now is to be long commodities, short the dollar, and short the equity markets. That's the way we think the markets are going right now."
Saturday, March 01, 2008
Equities Continue Their Meltdown
3/1/08 Equities Continue Their Meltdown
According to AMG Data, including ETF activity, Equity funds report net cash inflows totaling $2.049 billion in the week ended 2/27/08 with Domestic funds reporting net inflows of $1.839 billion and Non-domestic funds reporting net inflows of $210 million; Excluding ETF activity, Equity funds report net cash inflows totaling $217 million with Domestic funds reporting net outflows of -$105 million and Non-domestic funds reporting net inflows totaling $322 million.
Bond insurer Assured Guaranty Ltd said on Friday billionaire investor Wilbur Ross agreed to buy up to $1 billion of its shares, giving it a much needed capital boost to preserve its triple A credit rating. Under the agreement, WL Ross & Co LLC will purchase $250 million of common shares of Assured and to provide a commitment to purchase up to $750 million of additional common shares of Assured at the option of the company
Bain Capital LLC and China's Huawei Co. plan to resubmit an application seeking U.S. approval for their planned $2.2 billion buyout of 3Com Corp. within the next several weeks, according to people familiar with the matter.
"There will probably be some bank failures," the Fed chairman told the Senate banking committee in his second day of biannual testimony to Congress. He said the banks at risk were "small and in many cases de novo [new] banks that are heavily invested in real estate in localities where prices have fallen".
According to the NY Times, Canadian Imperial Bank of Commerce reported a first-quarter loss of 1.46 billion Canadian dollars ($1.49 billion) on Thursday, compared to a profit of 770 million Canadian dollars a year earlier, as the bank took a slew of charges related to its subprime mortgage exposure.The write-downs and paper losses included a 2.28 billion Canadian dollar (pre-tax) charge because of the bank’s exposure to troubled bond insurer ACA Financial Guaranty; a 626 million Canadian dollar charge on exposure to other financial guarantors; 473 million Canadian dollars of paper losses on securities tied to the U.S. mortgage market; and a 108 million Canadian dollar loss on the sale of some of the bank’s U.S. business to Oppenheimer Holdings as well as management changes and the restructuring of some other businesses.
Reuters writes that Microsoft has cut the price of Vista to encourage upgrades.
Microsoft is cutting prices on some retail versions of Windows Vista in a bid to stoke demand for the company's flagship operating system ahead of a significant upgrade. The price cuts vary by market but in general will range from 20 to 40 percent. In the U.S., an upgrade from earlier versions of Windows to Vista Home Premium will cost $130, compared with the current $160. A full version of the top-end Vista Ultimate edition will sell for $320, down from $400.
S&P's Sam Stovall points out that, in the final quarter of 2007, earnings per share in the S&P 1500 fell by close to 4%.
Financial firms are likely to face at least $600 billion of losses as the crisis triggered by the collapse of sub-prime mortgages batters banks, brokers and insurers, UBS AG analysts said in a report.
Bloomberg reports Ohio has the sixth-largest gay and lesbian population in the U.S. Both Clinton and Obama oppose same-sex marriages while supporting civil unions. A major difference between the candidates is that Obama supports full repeal of the 1996 Defense of Marriage Act, a law signed by Bill Clinton -- under pressure from a Republican-dominated Congress -- that prohibits federal recognition of same-sex marriages and permits states to do the same. Hillary Clinton wants to roll back only part of the law.
Swiss Reinsurance Co. reported an 87 percent drop in fourth-quarter net profit on Friday, blaming massive write-downs linked to bad loans.
According to a Reuters/C-SPAN/Houston Chronicle poll released on Friday, Obama has a 6-point edge on Clinton in Texas, 48 percent to 42 percent. He trails Clinton 44 percent to 42 percent in Ohio -- well within the poll's margin of error of 3.8 percentage points.
The Washington Post’s E. J. Dionne takes a look at the similarities between Obama and Ronald Reagan. Both were criticized by opposing campaigns that charged that the candidates had nothing more than oratory skills. Both faced concerns about their ability to handle foreign policy. Both endured complaints that they wouldn’t achieve bipartisanship - Obama will reveal himself as a “big, bad liberal” and Reagan as a right-wing extremist. But the electorate wanted a change in 1980 and they took a risk to achieve it. And they’re doing it again this year. “Now is the time to go for broke, to challenge not only the ruling party but also the governing ideas of the previous political era and the political coalition that allowed them to dominate public life,” Dionne writes.
On Feb. 22, Obama was endorsed by the Change to Win Coalition, many of whose seven constituent members have significant Latino participation. These developments—along with the momentum his 11 consecutive wins since Super Tuesday provides—could help Obama score victories in Texas and Ohio. It is quite conceivable that Latino voters will comprise more than 25% of the voters in the primary and caucus in Texas.
The Commerce Department reported that January personal spending rose by 0.4 percent, while personal income rose by 0.3 percent. The personal consumption expenditure price index, a key measure of inflation, rose 0.4 percent in January after an upwardly revised increase of 0.3 percent in December. In sum, spending posted a 0.4 percent rise in January, and all of that gain came from a surge in inflation during the month. Taking away the effect of prices, spending showed no gain in January or December.
Defaults on privately insured U.S. mortgages rose 31 percent in January from the same period a year earlier, the 13th straight monthly increase, an industry report today showed.
Almost 200,000 newly constructed single-family homes are sitting empty in the U.S., the most since Commerce Department statistics began in 1973. Partially completed developments reduce revenue for cities and towns and hurt businesses, said Nicolas Retsinas, the director of Harvard University's Joint Center for Housing Studies. Rising foreclosures and falling property values may cut tax revenue by more than $6.6 billion for 10 states, including New York, California and Florida, the U.S. Conference of Mayors said in a report.
The New York Times Co. said Friday its advertising revenue for January fell 9.8% to just under $165 million.
The Reuters/University of Michigan survey of U.S. consumer sentiment dropped to 70.8 in February from 78.4 in January.
Jim Rogers: America is “completely out of control” and there will be a 20-year bull market in commodities and that prices will be in turmoil. He also warned that it “made sense” if global competition for resources ended in armed conflict.
Hezbollah on Friday denounced the deployment of U.S. warships off the coast of Lebanon, calling it a threat to the country's sovereignty, but the Shiite militant group said it would not be intimidated by the move. "We are facing an American threat against Lebanon," Hezbollah legislator Hassan Fadlallah said on local television. "It is clear this threat and intimidation will not affect us."
The dollar fell to a three-year low against the yen on Friday after a weaker than expected reading of a U.S. Midwest business activity index.
Bill Gross, chief investment officer of Pacific Investment Management Co., is planning to invest in municipal bonds and mortgage loans, he told reporters at the Allianz Global Investors annual press conference in London today. There's value in ``assets that are regurgitated into the market place at prices that are more attractive than we have seen in decades,'' Gross said via video link from Newport Beach, California. ``We're moving into assets that have been unwound and sold without discretion. There are tremendous hedge-fund unwinds of municipal securities.''
When Hillary Clinton was ahead by 20 points in the polls in Texas, she had no problem with the Texas voting rules. Now that she's 6 points behind in the latest poll, she is thinking of challenging the Texas voting rules. Soon she will drop out of the race and the thoughts of coronation will come to a halt.
Bill Bonner: "In the United States, as we keep pointing out, the supply of paper money is rising three times the speed of GDP growth. In places like Russia…it is growing five or six times as fast as GDP. China's inflation is at an 11-year high…and at more than 7% is becoming alarming. Don't expect Chinese exports to hold down prices in the United States anymore…now they're just another inflationary pressure."
Gary Dorsch: "For the Bernanke Fed, the devil of hyper-inflation is preferable to the specter of a bear market for the Dow Jones Industrials and weaker home prices. Exercising the “Bernanke Put” means the Fed will slash the federal funds rate further below the US inflation rate next month. But that’s a frightening prospect for foreign holders of $2.3 trillion of US Treasury debt, who must contend with negative interest rates, which in turn, could severely weaken their US dollar denominated investments."
April gold ends up $7.50 at $975 an ounce on Nymex. Crude oil for April delivery fell 75 cents, or 0.7%, to settle at $101.84 a barrel on the New York Mercantile Exchange.
Northrop Grumman Corp. received a contract to replace the U.S. Air Force's KC-135 tankers with the KC-45A aerial refueling tanker. The KC-45A is based on the Airbus A330 commercial jet, which is produced by EADS. The contract has an estimated value of $40 billion. Northrop beat out Boeing Co for the bid.
Berkshire Hathaway said late Friday that fourth-quarter net income came in at $2.95 billion, or $1,904 per class A share, down 18% from a year earlier when the insurance-focused conglomerate made $3.58 billion, or $2,323 per class A share.
J.P. Morgan Chase is reclassifying $4.9 billion of leveraged loans on its books as investments, rather than as held for sale, as the market for loans made to firms doing corporate buyouts weakens further. "While some leveraged finance loans were sold during the fourth quarter of 2007, the firm held $26.4 billion of leveraged loans and unfunded commitments as held-for-sale as of December 31, 2007. Markdowns in excess of 6% have been taken on the leveraged lending positions as of year-end 2007," J.P. Morgan said in a 10k filing with the SEC. "In January 2008, the firm decided, based on its view of potential relative returns, to retain for investment $4.9 billion of the leveraged lending portfolio that had been previously held-for-sale." The bank, the nation's largest, said it expects further declines in the leveraged loan market in 2008.
Wells Fargo & Co. took a $39 million loss in 2007 on debt held in one of its structured investment vehicles. It outlined the loss in an annual report filed with the U.S. Securities and Exchange Commission. Wells said the loss came as part of a $130 million capital support agreement Wells entered into as a way to safeguard a coveted Triple-A credit rating for many of its investment funds.
According to AMG Data, including ETF activity, Equity funds report net cash inflows totaling $2.049 billion in the week ended 2/27/08 with Domestic funds reporting net inflows of $1.839 billion and Non-domestic funds reporting net inflows of $210 million; Excluding ETF activity, Equity funds report net cash inflows totaling $217 million with Domestic funds reporting net outflows of -$105 million and Non-domestic funds reporting net inflows totaling $322 million.
Bond insurer Assured Guaranty Ltd said on Friday billionaire investor Wilbur Ross agreed to buy up to $1 billion of its shares, giving it a much needed capital boost to preserve its triple A credit rating. Under the agreement, WL Ross & Co LLC will purchase $250 million of common shares of Assured and to provide a commitment to purchase up to $750 million of additional common shares of Assured at the option of the company
Bain Capital LLC and China's Huawei Co. plan to resubmit an application seeking U.S. approval for their planned $2.2 billion buyout of 3Com Corp. within the next several weeks, according to people familiar with the matter.
"There will probably be some bank failures," the Fed chairman told the Senate banking committee in his second day of biannual testimony to Congress. He said the banks at risk were "small and in many cases de novo [new] banks that are heavily invested in real estate in localities where prices have fallen".
According to the NY Times, Canadian Imperial Bank of Commerce reported a first-quarter loss of 1.46 billion Canadian dollars ($1.49 billion) on Thursday, compared to a profit of 770 million Canadian dollars a year earlier, as the bank took a slew of charges related to its subprime mortgage exposure.The write-downs and paper losses included a 2.28 billion Canadian dollar (pre-tax) charge because of the bank’s exposure to troubled bond insurer ACA Financial Guaranty; a 626 million Canadian dollar charge on exposure to other financial guarantors; 473 million Canadian dollars of paper losses on securities tied to the U.S. mortgage market; and a 108 million Canadian dollar loss on the sale of some of the bank’s U.S. business to Oppenheimer Holdings as well as management changes and the restructuring of some other businesses.
Reuters writes that Microsoft has cut the price of Vista to encourage upgrades.
Microsoft is cutting prices on some retail versions of Windows Vista in a bid to stoke demand for the company's flagship operating system ahead of a significant upgrade. The price cuts vary by market but in general will range from 20 to 40 percent. In the U.S., an upgrade from earlier versions of Windows to Vista Home Premium will cost $130, compared with the current $160. A full version of the top-end Vista Ultimate edition will sell for $320, down from $400.
S&P's Sam Stovall points out that, in the final quarter of 2007, earnings per share in the S&P 1500 fell by close to 4%.
Financial firms are likely to face at least $600 billion of losses as the crisis triggered by the collapse of sub-prime mortgages batters banks, brokers and insurers, UBS AG analysts said in a report.
Bloomberg reports Ohio has the sixth-largest gay and lesbian population in the U.S. Both Clinton and Obama oppose same-sex marriages while supporting civil unions. A major difference between the candidates is that Obama supports full repeal of the 1996 Defense of Marriage Act, a law signed by Bill Clinton -- under pressure from a Republican-dominated Congress -- that prohibits federal recognition of same-sex marriages and permits states to do the same. Hillary Clinton wants to roll back only part of the law.
Swiss Reinsurance Co. reported an 87 percent drop in fourth-quarter net profit on Friday, blaming massive write-downs linked to bad loans.
According to a Reuters/C-SPAN/Houston Chronicle poll released on Friday, Obama has a 6-point edge on Clinton in Texas, 48 percent to 42 percent. He trails Clinton 44 percent to 42 percent in Ohio -- well within the poll's margin of error of 3.8 percentage points.
The Washington Post’s E. J. Dionne takes a look at the similarities between Obama and Ronald Reagan. Both were criticized by opposing campaigns that charged that the candidates had nothing more than oratory skills. Both faced concerns about their ability to handle foreign policy. Both endured complaints that they wouldn’t achieve bipartisanship - Obama will reveal himself as a “big, bad liberal” and Reagan as a right-wing extremist. But the electorate wanted a change in 1980 and they took a risk to achieve it. And they’re doing it again this year. “Now is the time to go for broke, to challenge not only the ruling party but also the governing ideas of the previous political era and the political coalition that allowed them to dominate public life,” Dionne writes.
On Feb. 22, Obama was endorsed by the Change to Win Coalition, many of whose seven constituent members have significant Latino participation. These developments—along with the momentum his 11 consecutive wins since Super Tuesday provides—could help Obama score victories in Texas and Ohio. It is quite conceivable that Latino voters will comprise more than 25% of the voters in the primary and caucus in Texas.
The Commerce Department reported that January personal spending rose by 0.4 percent, while personal income rose by 0.3 percent. The personal consumption expenditure price index, a key measure of inflation, rose 0.4 percent in January after an upwardly revised increase of 0.3 percent in December. In sum, spending posted a 0.4 percent rise in January, and all of that gain came from a surge in inflation during the month. Taking away the effect of prices, spending showed no gain in January or December.
Defaults on privately insured U.S. mortgages rose 31 percent in January from the same period a year earlier, the 13th straight monthly increase, an industry report today showed.
Almost 200,000 newly constructed single-family homes are sitting empty in the U.S., the most since Commerce Department statistics began in 1973. Partially completed developments reduce revenue for cities and towns and hurt businesses, said Nicolas Retsinas, the director of Harvard University's Joint Center for Housing Studies. Rising foreclosures and falling property values may cut tax revenue by more than $6.6 billion for 10 states, including New York, California and Florida, the U.S. Conference of Mayors said in a report.
The New York Times Co. said Friday its advertising revenue for January fell 9.8% to just under $165 million.
The Reuters/University of Michigan survey of U.S. consumer sentiment dropped to 70.8 in February from 78.4 in January.
Jim Rogers: America is “completely out of control” and there will be a 20-year bull market in commodities and that prices will be in turmoil. He also warned that it “made sense” if global competition for resources ended in armed conflict.
Hezbollah on Friday denounced the deployment of U.S. warships off the coast of Lebanon, calling it a threat to the country's sovereignty, but the Shiite militant group said it would not be intimidated by the move. "We are facing an American threat against Lebanon," Hezbollah legislator Hassan Fadlallah said on local television. "It is clear this threat and intimidation will not affect us."
The dollar fell to a three-year low against the yen on Friday after a weaker than expected reading of a U.S. Midwest business activity index.
Bill Gross, chief investment officer of Pacific Investment Management Co., is planning to invest in municipal bonds and mortgage loans, he told reporters at the Allianz Global Investors annual press conference in London today. There's value in ``assets that are regurgitated into the market place at prices that are more attractive than we have seen in decades,'' Gross said via video link from Newport Beach, California. ``We're moving into assets that have been unwound and sold without discretion. There are tremendous hedge-fund unwinds of municipal securities.''
When Hillary Clinton was ahead by 20 points in the polls in Texas, she had no problem with the Texas voting rules. Now that she's 6 points behind in the latest poll, she is thinking of challenging the Texas voting rules. Soon she will drop out of the race and the thoughts of coronation will come to a halt.
Bill Bonner: "In the United States, as we keep pointing out, the supply of paper money is rising three times the speed of GDP growth. In places like Russia…it is growing five or six times as fast as GDP. China's inflation is at an 11-year high…and at more than 7% is becoming alarming. Don't expect Chinese exports to hold down prices in the United States anymore…now they're just another inflationary pressure."
Gary Dorsch: "For the Bernanke Fed, the devil of hyper-inflation is preferable to the specter of a bear market for the Dow Jones Industrials and weaker home prices. Exercising the “Bernanke Put” means the Fed will slash the federal funds rate further below the US inflation rate next month. But that’s a frightening prospect for foreign holders of $2.3 trillion of US Treasury debt, who must contend with negative interest rates, which in turn, could severely weaken their US dollar denominated investments."
April gold ends up $7.50 at $975 an ounce on Nymex. Crude oil for April delivery fell 75 cents, or 0.7%, to settle at $101.84 a barrel on the New York Mercantile Exchange.
Northrop Grumman Corp. received a contract to replace the U.S. Air Force's KC-135 tankers with the KC-45A aerial refueling tanker. The KC-45A is based on the Airbus A330 commercial jet, which is produced by EADS. The contract has an estimated value of $40 billion. Northrop beat out Boeing Co for the bid.
Berkshire Hathaway said late Friday that fourth-quarter net income came in at $2.95 billion, or $1,904 per class A share, down 18% from a year earlier when the insurance-focused conglomerate made $3.58 billion, or $2,323 per class A share.
J.P. Morgan Chase is reclassifying $4.9 billion of leveraged loans on its books as investments, rather than as held for sale, as the market for loans made to firms doing corporate buyouts weakens further. "While some leveraged finance loans were sold during the fourth quarter of 2007, the firm held $26.4 billion of leveraged loans and unfunded commitments as held-for-sale as of December 31, 2007. Markdowns in excess of 6% have been taken on the leveraged lending positions as of year-end 2007," J.P. Morgan said in a 10k filing with the SEC. "In January 2008, the firm decided, based on its view of potential relative returns, to retain for investment $4.9 billion of the leveraged lending portfolio that had been previously held-for-sale." The bank, the nation's largest, said it expects further declines in the leveraged loan market in 2008.
Wells Fargo & Co. took a $39 million loss in 2007 on debt held in one of its structured investment vehicles. It outlined the loss in an annual report filed with the U.S. Securities and Exchange Commission. Wells said the loss came as part of a $130 million capital support agreement Wells entered into as a way to safeguard a coveted Triple-A credit rating for many of its investment funds.
Friday, February 29, 2008
Mortgage Market Conditions
2/29/08 Mortgage Market Conditions
Sprint Nextel , the No. 3 U.S. mobile service, on Thursday posted a quarterly loss on a steep impairment charge, and forecast a deepening of subscriber losses in the first quarter.
Sears Holdings Corp reported a 47.5 percent decline in quarterly profit on Thursday on increased markdowns and lower sales at its Kmart and Sears stores.
Freddie Mac says its loss widened to $2.5 billion in the fourth quarter as defaults mounted on home mortgages.
Technical problems have forced the Bush administration to retool a high-tech "virtual fence" along the US-Mexico border and will delay the first phase for at least three years, the Washington Post reported on Thursday.
Apple COO Cook said the company is on track to sell 10 million iPhones in 2008.
Jim Rogers: ``If I told you how bullish I am about agriculture, you'd ask me to leave the room. Prices of agricultural commodities are going to explode. Inventories of food are the lowest they've been in over 40 years. The number of hectares devoted to wheat farming has been declining for over 30 years.''
``All of you should get all the sugar you can. The price of sugar is going to explode.''
``I'm bullish on cotton and have been for a while. A lot of people in the textile business are starting to convert from synthetics to natural fibers again because it's so much cheaper'' given the rise in prices for oil used to make synthetic fibers.
On prospects for the Japanese yen:
``I own the yen and it's another thing I'm buying these days. I'm convinced the carry-trade is going to reverse and when it does the yen is going to go through the roof.''
JPMorgan Chase & Co., the third- biggest U.S. bank, had its earnings estimates cut by Goldman Sachs Group Inc. and Merrill Lynch & Co. on expectations of write downs in the value of its home-equity loans.
El Paso Corp., the largest transporter of natural gas in North America, presented plans Wednesday for a pipeline that will carry natural gas from producers in the Rocky Mountains to the high demand market of northern California. The company laid out the $2 billion Ruby Pipeline project at a Wyoming House Minerals, Business, and Economic Development Committee meeting.
Barclays Capital, the U.K. bank's investment banking unit, raised its forecast for the average price of crude oil in 2008 by 12 percent because of increasing Chinese demand and an improving U.S. economy. The price of West Texas Intermediate, the physical grade for oil futures traded on the New York Mercantile Exchange, will average $97.70 a barrel this year, Barclays analysts including Paul Horsnell said in a report dated yesterday. That's higher than their earlier prediction of $87.40. Brent crude in London, will average $96.40 during 2008, up from $85.80.
Rob Hanna: "As you can see, a Nasdaq lagging as badly as it is right now has been quite bearish historically. The bearish tendency carries through over a significant period of time as well (10 weeks.) If the Nasdaq could begin to assert a leadership role, that could help the current rally attempt greatly. If not, bulls better hope it’s different this time."
First-time claims for state unemployment benefits rose 19,000 to 373,000 in the week ended Feb. 23, reaching the highest level since late January, the Labor Department reported Thursday. The four-week average of initial claims fell 1,250 to 360,500. Recipients of state jobless benefits rose 21,000 to 2.81 million in the week ended Feb. 16. The four-week moving average of continuing claims rose 24,250 to 2.78 million.
Thornburg Mortgage Inc. in a regulatory filing Thursday said since Feb. 14, it has met margin calls in excess of $300 million related to securities backed by about $2.9 billion of mortgage debt. The company said there was "once again a sudden adverse change in mortgage market conditions." Thornburg said it has not realized any losses on the mortgage securities, but it has "observed deterioration in the liquidity for these securities and increased difficulty in obtaining market prices." Market valuations on the securities have decreased between 10% and 15% since the end of January, which triggered the margin calls on the collateral. "In the event that we cannot meet future margin calls from our available cash position, we might need to selectively sell assets in order to raise cash," Thornburg said. "To date, no such sales have been required to meet margin calls."
George Ure: "Monetary inflation around 4% and GDP up 0.6% annualized? Sounds like a recession to me."
Rowan's offshore rig utilization was 97% during the fourth quarter, up from 81% in the year-ago period and down slightly from the 99% level in the third quarter. Rowan's average offshore day rate was $164,300 during the fourth quarter, up by $19,900 or 14% from the fourth quarter of 2006 and by $6,100 or 4% from the third quarter. "Our backlog of business, which currently approaches $2.5 billion, together with our aggressive strategic growth plan, suggest that even better times are ahead for Rowan," the company said.
The dollar index, which measures the greenback against a basket of six major currencies, was at 73.74, down from 74.540 in late U.S. trading Wednesday.
Salesforce.com reported a 14-fold increase in fourth-quarter profit as more companies subscribed to its sales programs and created online applications. The company boosted its fiscal 2009 revenue forecast.
Gannett Co., the nation's largest newspaper publisher, said Thursday that January operating revenue dropped 7.5 percent on sharp declines in real estate and employment ad sales.
U.S. natural gas inventories down 151 Bcf last week. Stockpiles were 133 billion cubic feet less than last year at this time and 87 billion cubic feet above the five-year average of 1,532 billion cubic feet, EIA said. On the New York Mercantile Exchange, April natural gas futures soared 25.4 cents to $9.314 per million British thermal units.
Bernanke sees some bank failures, but not larger firms.
The euro is trading above the $1.52 level.
The Japanese yen rose to a near three-year high against the U.S. dollar Friday, following comments Thursday from U.S. Federal Reserve Chairman Ben Bernanke which were interpreted as signaling intentions to reduce benchmark lending rates to support the flagging U.S. economy. In Tokyo trading Friday the dollar fell to 104.28 yen, its weakest level since May 2005, before recovering to 104.39 yen in late afternoon trade in east Asia business hours.
India's economy expanded 8.4% during the October-December period from a year ago, easing from an 8.9% expansion in the previous quarter, official data showed Friday.
Crude oil futures hit a record high above $103 per barrel in electronic trading Friday amid reports Ecuador's state-run oil company, Petroecuador, suspended operations at a key export pipeline after a landslide damaged infrastructure.
Fremont General Corp. plans to delay interest payments on some of the debt issued by a trust unit as the lender struggles to recover from subprime mortgage problems last year. The payments will be deferred on Fremont's junior subordinated debentures and related 9% trust originated preferred securities, the company said. Fremont "has significant liquidity risk as a result of limited sources of cash available to satisfy its obligations," the company explained. It's now working with its investment-banking advisors Credit Suisse and Sandler O'Neill to explore strategic alternatives including raising capital, restructuring debt and the possible sale of the company, Fremont added.
American International Group reported a $5.29 billion fourth-quarter net loss late Thursday after the insurance giant took a big charge related to the estimated market value of credit derivatives. The net loss was $5.29 billion, or $2.08 a share, vs. net income of $3.44 billion, or $1.31 a share, a year earlier, the company said. The adjusted net loss for the fourth quarter of 2007 was $3.20 billion, or $1.25 a share.
Kohl's Corp. reported net income of $411.7 million, or $1.31 a share, compared with $484.6 million, or $1.48 a share, for the same period a year ago.
Dell Inc. reported a fourth-quarter profit of $679 million, or 31 cents a share, on revenue of $16 billion. During the year-ago period, Dell earned $726 million, or 32 cents a share, on $14.47 billion in revenue.
Gold for April delivery hit a record $970 an ounce on the New York Mercantile Exchange. The contract rose $6.50 to end at $967.50 an ounce.
The chief executive of U.S. Airways said Thursday the industry is facing a downturn as it grapples with record-high oil prices and a weaker economy, Reuters reported.
Sprint Nextel , the No. 3 U.S. mobile service, on Thursday posted a quarterly loss on a steep impairment charge, and forecast a deepening of subscriber losses in the first quarter.
Sears Holdings Corp reported a 47.5 percent decline in quarterly profit on Thursday on increased markdowns and lower sales at its Kmart and Sears stores.
Freddie Mac says its loss widened to $2.5 billion in the fourth quarter as defaults mounted on home mortgages.
Technical problems have forced the Bush administration to retool a high-tech "virtual fence" along the US-Mexico border and will delay the first phase for at least three years, the Washington Post reported on Thursday.
Apple COO Cook said the company is on track to sell 10 million iPhones in 2008.
Jim Rogers: ``If I told you how bullish I am about agriculture, you'd ask me to leave the room. Prices of agricultural commodities are going to explode. Inventories of food are the lowest they've been in over 40 years. The number of hectares devoted to wheat farming has been declining for over 30 years.''
``All of you should get all the sugar you can. The price of sugar is going to explode.''
``I'm bullish on cotton and have been for a while. A lot of people in the textile business are starting to convert from synthetics to natural fibers again because it's so much cheaper'' given the rise in prices for oil used to make synthetic fibers.
On prospects for the Japanese yen:
``I own the yen and it's another thing I'm buying these days. I'm convinced the carry-trade is going to reverse and when it does the yen is going to go through the roof.''
JPMorgan Chase & Co., the third- biggest U.S. bank, had its earnings estimates cut by Goldman Sachs Group Inc. and Merrill Lynch & Co. on expectations of write downs in the value of its home-equity loans.
El Paso Corp., the largest transporter of natural gas in North America, presented plans Wednesday for a pipeline that will carry natural gas from producers in the Rocky Mountains to the high demand market of northern California. The company laid out the $2 billion Ruby Pipeline project at a Wyoming House Minerals, Business, and Economic Development Committee meeting.
Barclays Capital, the U.K. bank's investment banking unit, raised its forecast for the average price of crude oil in 2008 by 12 percent because of increasing Chinese demand and an improving U.S. economy. The price of West Texas Intermediate, the physical grade for oil futures traded on the New York Mercantile Exchange, will average $97.70 a barrel this year, Barclays analysts including Paul Horsnell said in a report dated yesterday. That's higher than their earlier prediction of $87.40. Brent crude in London, will average $96.40 during 2008, up from $85.80.
Rob Hanna: "As you can see, a Nasdaq lagging as badly as it is right now has been quite bearish historically. The bearish tendency carries through over a significant period of time as well (10 weeks.) If the Nasdaq could begin to assert a leadership role, that could help the current rally attempt greatly. If not, bulls better hope it’s different this time."
First-time claims for state unemployment benefits rose 19,000 to 373,000 in the week ended Feb. 23, reaching the highest level since late January, the Labor Department reported Thursday. The four-week average of initial claims fell 1,250 to 360,500. Recipients of state jobless benefits rose 21,000 to 2.81 million in the week ended Feb. 16. The four-week moving average of continuing claims rose 24,250 to 2.78 million.
Thornburg Mortgage Inc. in a regulatory filing Thursday said since Feb. 14, it has met margin calls in excess of $300 million related to securities backed by about $2.9 billion of mortgage debt. The company said there was "once again a sudden adverse change in mortgage market conditions." Thornburg said it has not realized any losses on the mortgage securities, but it has "observed deterioration in the liquidity for these securities and increased difficulty in obtaining market prices." Market valuations on the securities have decreased between 10% and 15% since the end of January, which triggered the margin calls on the collateral. "In the event that we cannot meet future margin calls from our available cash position, we might need to selectively sell assets in order to raise cash," Thornburg said. "To date, no such sales have been required to meet margin calls."
George Ure: "Monetary inflation around 4% and GDP up 0.6% annualized? Sounds like a recession to me."
Rowan's offshore rig utilization was 97% during the fourth quarter, up from 81% in the year-ago period and down slightly from the 99% level in the third quarter. Rowan's average offshore day rate was $164,300 during the fourth quarter, up by $19,900 or 14% from the fourth quarter of 2006 and by $6,100 or 4% from the third quarter. "Our backlog of business, which currently approaches $2.5 billion, together with our aggressive strategic growth plan, suggest that even better times are ahead for Rowan," the company said.
The dollar index, which measures the greenback against a basket of six major currencies, was at 73.74, down from 74.540 in late U.S. trading Wednesday.
Salesforce.com reported a 14-fold increase in fourth-quarter profit as more companies subscribed to its sales programs and created online applications. The company boosted its fiscal 2009 revenue forecast.
Gannett Co., the nation's largest newspaper publisher, said Thursday that January operating revenue dropped 7.5 percent on sharp declines in real estate and employment ad sales.
U.S. natural gas inventories down 151 Bcf last week. Stockpiles were 133 billion cubic feet less than last year at this time and 87 billion cubic feet above the five-year average of 1,532 billion cubic feet, EIA said. On the New York Mercantile Exchange, April natural gas futures soared 25.4 cents to $9.314 per million British thermal units.
Bernanke sees some bank failures, but not larger firms.
The euro is trading above the $1.52 level.
The Japanese yen rose to a near three-year high against the U.S. dollar Friday, following comments Thursday from U.S. Federal Reserve Chairman Ben Bernanke which were interpreted as signaling intentions to reduce benchmark lending rates to support the flagging U.S. economy. In Tokyo trading Friday the dollar fell to 104.28 yen, its weakest level since May 2005, before recovering to 104.39 yen in late afternoon trade in east Asia business hours.
India's economy expanded 8.4% during the October-December period from a year ago, easing from an 8.9% expansion in the previous quarter, official data showed Friday.
Crude oil futures hit a record high above $103 per barrel in electronic trading Friday amid reports Ecuador's state-run oil company, Petroecuador, suspended operations at a key export pipeline after a landslide damaged infrastructure.
Fremont General Corp. plans to delay interest payments on some of the debt issued by a trust unit as the lender struggles to recover from subprime mortgage problems last year. The payments will be deferred on Fremont's junior subordinated debentures and related 9% trust originated preferred securities, the company said. Fremont "has significant liquidity risk as a result of limited sources of cash available to satisfy its obligations," the company explained. It's now working with its investment-banking advisors Credit Suisse and Sandler O'Neill to explore strategic alternatives including raising capital, restructuring debt and the possible sale of the company, Fremont added.
American International Group reported a $5.29 billion fourth-quarter net loss late Thursday after the insurance giant took a big charge related to the estimated market value of credit derivatives. The net loss was $5.29 billion, or $2.08 a share, vs. net income of $3.44 billion, or $1.31 a share, a year earlier, the company said. The adjusted net loss for the fourth quarter of 2007 was $3.20 billion, or $1.25 a share.
Kohl's Corp. reported net income of $411.7 million, or $1.31 a share, compared with $484.6 million, or $1.48 a share, for the same period a year ago.
Dell Inc. reported a fourth-quarter profit of $679 million, or 31 cents a share, on revenue of $16 billion. During the year-ago period, Dell earned $726 million, or 32 cents a share, on $14.47 billion in revenue.
Gold for April delivery hit a record $970 an ounce on the New York Mercantile Exchange. The contract rose $6.50 to end at $967.50 an ounce.
The chief executive of U.S. Airways said Thursday the industry is facing a downturn as it grapples with record-high oil prices and a weaker economy, Reuters reported.
Thursday, February 28, 2008
Durable Goods
2/28/29 Durable Goods
Luxury home builder Toll Brothers said it posted a fiscal first-quarter to Jan. 31 loss of $96 million, or 61 cents a share, after $153.3 million in write-downs. It earned $54.3 million, or 33 cents a share, in the year-ago quarter. Revenue dropped 23% to $842.9 million, and its backlog fell 42% to $2.4 billion. Excluding write-offs, it would've earned 35 cents a share during the quarter. The company is seeing "glimmers of hope" in the Naples, Fla. area and suburban Washington D.C.
The euro remained above the $1.51 level Wednesday morning, after the U.S. dollar set a new all-time low versus the single currency on fears the U.S. economy may be headed toward recession.
Gold futures hit a new record high in electronic trading on Wednesday, up as high as $961.30 an ounce, and recently up $11.50 to $960.40 an ounce.
Demand for durable goods fell back in January after a burst of orders in December, the Commerce Department reported Wednesday, another sign that the economy is slowing. New orders for durable goods fell 5.3% in January, close to the 5.1% drop anticipated by economists surveyed by MarketWatch. December's gains were revised lower to 4.4% from 5% previously reported. Much of the decline in January was due to the unwinding of the flood of orders for aircraft in December. Declining demand was seen in almost every industry in January, however, despite reports of higher exports.
New Zealand business confidence slipped to 10-month low in February, deteriorating sharply from the previous poll in December, as firms grew more pessimistic about the outlook amid weaker economic conditions, according to a survey released Wednesday.
Hong Kong lowers 2008 GDP estimate to 4% to 5%.
In early Wednesday trading, crude hit a record $102.
The European Commission fined Microsoft a record $1.35 billion for failing to comply with a 2004 antitrust ruling.
The monthly RealtyTrac.com survey of foreclosure activity nationwide showed that filings in Idaho jumped from 382 in January 2007 to 735 last month, an increase of 92 percent.
According to the SF Chronicle, there have been more large, environmentally damaging sewage spills in the San Francisco Bay Area in the first two months of 2008 than in the last 7 1/2 months of last year, a Chronicle analysis has found.The flood of effluent continued over the weekend when two spills in Marin County dumped thousands of gallons of sewage into San Francisco Bay and an adjoining waterway. There have been 276 sewage spills this year that either flowed into Bay Area waterways or contained at least 1,000 gallons of effluent, according to the analysis of State Water Resources Control Board statistics.That's more than 14 million gallons of sludge oozing out into the environment, the statistics show. That doesn't even include the Jan. 26 and Jan. 31 spills of 5.15 million gallons of raw and partially treated sewage by the Sewerage Agency of Southern Marin treatment plant in Mill Valley.
Brett Steenbarger: "My Cumulative Demand Supply Index hit an overbought level Tues, which has led to subnormal returns 20 days out."
According to the Seattle Times, Microsoft is celebrating the release of a new version of one of its most successful products outside of the desktop Windows and Office one-two punch. Windows Server 2008, which is being feted in a series of launch events starting in Los Angeles today, is the flagship product of Microsoft's long-term effort to build a presence in the lucrative market for software that businesses run behind the scenes. The part of the company that built the product, the Server and Tools unit, brought in sales of about $11.2 billion in the past fiscal year, more than one-fifth of Microsoft's total. It was very profitable, too, forming the third leg of the stool with Windows and Office.
Nouriel Roubini Says U.S. Recession May Last Up to Six Quarters.
Fannie Mae posted a $3.55 billion loss in the fourth quarter as the failure of homeowners to keep up with their mortgage payments dragged down the value of the company's assets. The net loss was $3.80 share, compared with profit of $604 million, or 49 cents, a year earlier, Washington-based Fannie Mae said in a statement today. Excluding some items, the per-share loss was $3.79, compared with the $1.20 average estimate of 12 analysts in a Bloomberg survey.
BMW said it is cutting 5,600 jobs, including full-time and temporary workers by the end of the year. Another 2,500 workers have already left the company. That brings the total number of jobs affected to 8,100.
The FDIC is looking to bring back 25 retirees from its division of resolutions and receiverships. Many of these agency veterans likely worked for the FDIC during the late 1980s and early 1990s, when more than 1,000 financial institutions failed amid the savings-and-loan crisis. FDIC spokesman Andrew Gray said the agency was looking to bulk up "for preparedness purposes." The division now has 223 employees, mostly based in Dallas. Can you say a run on the banks?
Shares of Intel Corp. after JPMorgan cut its profit estimates for the world's largest chipmaker. JPMorgan analyst Christopher Danely said his checks indicate that Intel's first quarter is "trending below plan due to weaker than expected orders for microprocessors."
Nortel will cut 2100 jobs.
Allstate Corp. authorized a $2 billion share repurchase and increased its quarterly dividend 7.9 percent.
Sales of new U.S. homes fell by 2.8% in January, led by a drop of more than 10% in the Northeast, the Commerce Department reported Wednesday. Sales of new homes fell 2.8% to a seasonally adjusted annual rate of 588,000 in January. January's sales pace was down 33.9% compared with January 2007. December's sales pace for new homes was revised to 605,000, up slightly from the 604,000 reported earlier.
U.S. crude inventories rose more than expected, up 3.2 million barrels to 308.5 million barrels in the week ending Feb. 22, U.S. Energy Information Administration reported on Wednesday. Gasoline supplies rose by 2.3 million barrels in the latest week, while distillate stocks fell by 2.5 million barrels, EIA reported. By comparison, U.S. crude inventories fell by 1.7 million barrels to 307.3 million barrels in the week ending Feb. 22, the American Petroleum Institute reported on Wednesday. Distillate stocks fell by 1.2 million barrels to 121.7 million barrels in the same period, while gasoline stocks dropped by 1.0 million barrels to 221.7 million barrels, API said. API uses different methods than the Energy Information Administration to calculate inventories.
Federal Reserve Chairman Ben Bernanke signaled additional rate cuts are in store, at least in the near term.
Shares of Fannie Mae and Freddie Mac jumped on Wednesday, after the federal regulator for the mortgage finance companies said it will lift an investment cap, in a move that will free up billions of dollars to invest in the U.S. housing market.
More than a fifth of Germany's electricity comes from burning hard coal, whose price for delivery into northwest Europe with settlement next year rose as much as 3.5 percent to $134 a metric ton, according to ICAP Plc. The contract has gained 19 percent this year. Surging demand in South Africa, China, India and the closure of a German coal mine continues to support prices.
Bank of Japan board member Atsushi Mizuno said Thursday the central bank needed to hold interest rates unchanged, while acknowledging rising downside risks to Japan's domestic economy and the global outlook.
South Korea's trade account balance deteriorated sharply in January, as the goods-trade account swung to deficit while the service-account deficit widened, data released by the Bank of Korea showed Thursday. The seasonally-adjusted current account deficit ballooned to $2.03 billion, from a deficit of $1.07 billion in December.
Crude oil for April delivery dropped $1.24, or 1.2%, to close at $99.64 a barrel on the New York Mercantile Exchange. Gold for April delivery rose $12.10 to end at $961.0 an ounce on the New York Mercantile Exchange. Earlier, the contract hit a record $967.70 an ounce.
Luxury home builder Toll Brothers said it posted a fiscal first-quarter to Jan. 31 loss of $96 million, or 61 cents a share, after $153.3 million in write-downs. It earned $54.3 million, or 33 cents a share, in the year-ago quarter. Revenue dropped 23% to $842.9 million, and its backlog fell 42% to $2.4 billion. Excluding write-offs, it would've earned 35 cents a share during the quarter. The company is seeing "glimmers of hope" in the Naples, Fla. area and suburban Washington D.C.
The euro remained above the $1.51 level Wednesday morning, after the U.S. dollar set a new all-time low versus the single currency on fears the U.S. economy may be headed toward recession.
Gold futures hit a new record high in electronic trading on Wednesday, up as high as $961.30 an ounce, and recently up $11.50 to $960.40 an ounce.
Demand for durable goods fell back in January after a burst of orders in December, the Commerce Department reported Wednesday, another sign that the economy is slowing. New orders for durable goods fell 5.3% in January, close to the 5.1% drop anticipated by economists surveyed by MarketWatch. December's gains were revised lower to 4.4% from 5% previously reported. Much of the decline in January was due to the unwinding of the flood of orders for aircraft in December. Declining demand was seen in almost every industry in January, however, despite reports of higher exports.
New Zealand business confidence slipped to 10-month low in February, deteriorating sharply from the previous poll in December, as firms grew more pessimistic about the outlook amid weaker economic conditions, according to a survey released Wednesday.
Hong Kong lowers 2008 GDP estimate to 4% to 5%.
In early Wednesday trading, crude hit a record $102.
The European Commission fined Microsoft a record $1.35 billion for failing to comply with a 2004 antitrust ruling.
The monthly RealtyTrac.com survey of foreclosure activity nationwide showed that filings in Idaho jumped from 382 in January 2007 to 735 last month, an increase of 92 percent.
According to the SF Chronicle, there have been more large, environmentally damaging sewage spills in the San Francisco Bay Area in the first two months of 2008 than in the last 7 1/2 months of last year, a Chronicle analysis has found.The flood of effluent continued over the weekend when two spills in Marin County dumped thousands of gallons of sewage into San Francisco Bay and an adjoining waterway. There have been 276 sewage spills this year that either flowed into Bay Area waterways or contained at least 1,000 gallons of effluent, according to the analysis of State Water Resources Control Board statistics.That's more than 14 million gallons of sludge oozing out into the environment, the statistics show. That doesn't even include the Jan. 26 and Jan. 31 spills of 5.15 million gallons of raw and partially treated sewage by the Sewerage Agency of Southern Marin treatment plant in Mill Valley.
Brett Steenbarger: "My Cumulative Demand Supply Index hit an overbought level Tues, which has led to subnormal returns 20 days out."
According to the Seattle Times, Microsoft is celebrating the release of a new version of one of its most successful products outside of the desktop Windows and Office one-two punch. Windows Server 2008, which is being feted in a series of launch events starting in Los Angeles today, is the flagship product of Microsoft's long-term effort to build a presence in the lucrative market for software that businesses run behind the scenes. The part of the company that built the product, the Server and Tools unit, brought in sales of about $11.2 billion in the past fiscal year, more than one-fifth of Microsoft's total. It was very profitable, too, forming the third leg of the stool with Windows and Office.
Nouriel Roubini Says U.S. Recession May Last Up to Six Quarters.
Fannie Mae posted a $3.55 billion loss in the fourth quarter as the failure of homeowners to keep up with their mortgage payments dragged down the value of the company's assets. The net loss was $3.80 share, compared with profit of $604 million, or 49 cents, a year earlier, Washington-based Fannie Mae said in a statement today. Excluding some items, the per-share loss was $3.79, compared with the $1.20 average estimate of 12 analysts in a Bloomberg survey.
BMW said it is cutting 5,600 jobs, including full-time and temporary workers by the end of the year. Another 2,500 workers have already left the company. That brings the total number of jobs affected to 8,100.
The FDIC is looking to bring back 25 retirees from its division of resolutions and receiverships. Many of these agency veterans likely worked for the FDIC during the late 1980s and early 1990s, when more than 1,000 financial institutions failed amid the savings-and-loan crisis. FDIC spokesman Andrew Gray said the agency was looking to bulk up "for preparedness purposes." The division now has 223 employees, mostly based in Dallas. Can you say a run on the banks?
Shares of Intel Corp. after JPMorgan cut its profit estimates for the world's largest chipmaker. JPMorgan analyst Christopher Danely said his checks indicate that Intel's first quarter is "trending below plan due to weaker than expected orders for microprocessors."
Nortel will cut 2100 jobs.
Allstate Corp. authorized a $2 billion share repurchase and increased its quarterly dividend 7.9 percent.
Sales of new U.S. homes fell by 2.8% in January, led by a drop of more than 10% in the Northeast, the Commerce Department reported Wednesday. Sales of new homes fell 2.8% to a seasonally adjusted annual rate of 588,000 in January. January's sales pace was down 33.9% compared with January 2007. December's sales pace for new homes was revised to 605,000, up slightly from the 604,000 reported earlier.
U.S. crude inventories rose more than expected, up 3.2 million barrels to 308.5 million barrels in the week ending Feb. 22, U.S. Energy Information Administration reported on Wednesday. Gasoline supplies rose by 2.3 million barrels in the latest week, while distillate stocks fell by 2.5 million barrels, EIA reported. By comparison, U.S. crude inventories fell by 1.7 million barrels to 307.3 million barrels in the week ending Feb. 22, the American Petroleum Institute reported on Wednesday. Distillate stocks fell by 1.2 million barrels to 121.7 million barrels in the same period, while gasoline stocks dropped by 1.0 million barrels to 221.7 million barrels, API said. API uses different methods than the Energy Information Administration to calculate inventories.
Federal Reserve Chairman Ben Bernanke signaled additional rate cuts are in store, at least in the near term.
Shares of Fannie Mae and Freddie Mac jumped on Wednesday, after the federal regulator for the mortgage finance companies said it will lift an investment cap, in a move that will free up billions of dollars to invest in the U.S. housing market.
More than a fifth of Germany's electricity comes from burning hard coal, whose price for delivery into northwest Europe with settlement next year rose as much as 3.5 percent to $134 a metric ton, according to ICAP Plc. The contract has gained 19 percent this year. Surging demand in South Africa, China, India and the closure of a German coal mine continues to support prices.
Bank of Japan board member Atsushi Mizuno said Thursday the central bank needed to hold interest rates unchanged, while acknowledging rising downside risks to Japan's domestic economy and the global outlook.
South Korea's trade account balance deteriorated sharply in January, as the goods-trade account swung to deficit while the service-account deficit widened, data released by the Bank of Korea showed Thursday. The seasonally-adjusted current account deficit ballooned to $2.03 billion, from a deficit of $1.07 billion in December.
Crude oil for April delivery dropped $1.24, or 1.2%, to close at $99.64 a barrel on the New York Mercantile Exchange. Gold for April delivery rose $12.10 to end at $961.0 an ounce on the New York Mercantile Exchange. Earlier, the contract hit a record $967.70 an ounce.
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