10/28/09 New Home Sales
ConocoPhillips said Wednesday that its third-quarter net income dropped 71% to $1.5 billion, or $1.00 a share, from $5.2 billion, or $3.39 a share, in the year-ago period.
Orders for U.S.-made durable goods rose in September, rising 1.0% on stronger demand for machinery, defense and capital goods, the Commerce Department reported Wednesday. Excluding the 1.1% increase in transportation goods, orders rose 0.9%. The increase was in line with the forecast of economists surveyed by MarketWatch. It was the fourth increase in total orders in the past six months. Shipments rose 0.8% in September, but were down 0.8% excluding transportation goods. Inventories fell 1.0%, the ninth consecutive monthly decline. The figures for August were unrevised at -2.6%. Unfilled manufacturers’ orders fell by -0.4% and marks at least 12 straight consecutive negative reports.
Over 1500 NYSE, NASDAQ, and ASE stocks just made fresh 20-day lows.
Larry Connors: "We haven’t used stops in our short-term trading with equities and ETFs in years and we’ve had positive results every year going back a number of years. It can be done - protection can be done different ways. Careful position sizing is one way for the best protection - it’s a form of insurance. If you are using proper position sizing, no matter what happens, a trader wants to get to the point where “There is no way one position could blow me out here.”
U.S. Senate leaders moved closer to an agreement replacing an expiring $8,000 tax credit for first- time homebuyers with a smaller one that would expand access to so-called step-up purchasers, two people familiar with the matter said.
The deal would reduce the size of the tax credit to 10 percent of the sale’s price, capped at $7,290, the people said. The credit would be available on home purchases that are under contract by April 30, and borrowers would have 60 days more to close the sale. The existing credit is due to end Nov. 30.
The details:
Income eligibility for first-time home buyers stays at $75,000 for individuals and $150,000 for couples.
For move-up buyers, income eligibility is $125,000 for individuals and $250,000 for couples.
There is a minimum 5 year residency requirement in their current home for move-up home buyers.
The tax credit is the lesser of $7,290 or 10% of the purchase price.
The credit runs from Dec. 1, 2009 to April 30, 2010, with an additional 60 day period to close escrow. (So end of April to sign contract, end of June to close escrow)
Expect bill to be signed by Friday.
Clusterstock: "Want more proof America's health care needs drastic improvement? Or that politics needs cleaning up? How about cutting spending?
Here it is: thanks to those and other short-comings, the U.S. is now just ninth in the world according to a new study of international prosperity."
Three pieces of an emergency repair to the Bay Bridge's cantilever section made over Labor Day weekend snapped and crashed onto the upper deck of the span late Tuesday afternoon, striking three vehicles and forcing the indefinite closure of the region's busiest bridge.
Bay Bridge closed after repair falls apart.
Gov. Arnold Schwarzenegger decreed last month that no parks would be shuttered, but the $14.2 million he cut out of the state parks budget means many of the 278 parks in California will be open only on weekends and almost all will have to endure partial closures. Most of the closures begin next week.
India, the world’s second-largest rice grower, may import up to 3 million metric tons next year as the government secures supplies in case the nation faces another year of drought, triggering a price surge, a trader said today.
The weakest monsoon in India since 1972 may slash rice output by about 18 percent to 81 million tons in the marketing year that began Oct. 1, below forecast demand of 89 million tons, according to the United Nations Food and Agriculture Organization.
Japanese automakers are experiencing a production boom in China with Toyota, Honda and Nissan setting records for September — the latest signs of an emerging recovery for Japan's auto industry. Honda Motor Co.'s production set a record for the company in both China and Asia overall for September, although total overseas production has been declining for a year.
Microsoft is killing its MSN Direct subscription service that provided real-time traffic information, plus weather, stock quotes and local gas prices to car GPS navigators. But not for a while -- the company said the service would shut off Jan. 1, 2012.
On the vast tarmac that marks the Port of Hueneme, a couple of dozen Volvos sit waiting to be trucked to a dealership. There are no bananas coming in this day, no construction equipment, no cars.
Business at the 130-acre port is way down since the boom times ended. Hueneme lost $1.3 million during the fiscal year that ended June 30, down from a profit of $1 million in 2008. It has been even harder hit than its massive siblings, the ports of Los Angeles and Long Beach, where profits dropped 40% during the fiscal year and container traffic was down 21%.
The dollar is likely to continue depreciating and the "new normal" will see consumers shedding debt in an attempt to balance their books, Pimco's Bill Gross told CNBC.
"Goldman was not a disinterested party in AIG’s bailout. AIG’s bailout—and the way the payouts were handled for its trading counterparties—hugely benefited Goldman Sachs. Goldman received a cash payment worth more than $10 billion from the U.S. Treasury—via AIG—during a system?wide liquidity crunch. Under the circumstances, I cannot think of any scenario that would have provided a more certain and stable outcome for Goldman Sachs." Janet Tavakoli
Walgreen: "The Federal government has been considering proposals to reform the U.S. health care system. These proposals may increase government involvement in health care, increase regulation of pharmacy services, result in changes to pharmacy reimbursement rates, and otherwise change the way we do business. The effect of these proposals could have an impact on our results of operations."
Russia, which has now surpassed Saudi Arabia as the world's largest oil producer, expects to top record 2009 output next year due to production from new oil fields, the deputy energy minister said Tuesday.
Buffett says, “it’s infuriating to people to see their friends losing their jobs… having their homes foreclosed… And, nobody going to jail. It was one thing in Enron. At least you had (Jeffrey) Skilling and Ken Lay, or WorldCom or those things. Society at least felt there was a little bit of vengeance taking place. (Laughs.) But here nobody’s going to jail. In fact, a lot of them are walking off with tons of money which they got, in many cases, with preferential tax terms. So the American public’s exasperation of this is very understandable…”
Panera Bread Co rose almost 10% to $60 as the company reported third-quarter net income of 61 cents a share compared with 45 cents in the year-earlier quarter. The latest adjusted earnings were 65 cents a share. Revenue rose 6.3% to $335 million. A survey of analysts by FactSet Research produced a consensus estimate of 58 cents profit on $333.8 million in sales. Panera expects to earn 85 cents to 87 cents in the fourth quarter; FactSet's survey is looking for 85 cents.
Visa Inc's fiscal fourth-quarter net income came in at $514 million, or 69 cents per class A common share. That compares to a net loss of $356 million, or 45 cents a share, a year earlier. Revenue was $1.9 billion, up 10%. On an adjusted basis, which includes restructuring and purchase amortization, net for the latest quarter was 74 cents a share. The company was expected to make 72 cents a share, according to Thomson Reuters. The payment processor also said that its board signed off on a $1 billion share repurchase program.
Norges Bank raised its key interest rate a quarter point from a record low and signaled steeper increases than it previously forecast over the next three years as inflation accelerates and unemployment remains low.
The Oslo-based bank raised the overnight deposit rate to 1.5 percent, becoming the first European central bank to reverse its easing cycle since the credit crisis started to abate. Nineteen of 20 economists surveyed by Bloomberg had predicted the move, while one had expected a half-point increase.
U.S. Sept new-home sales down 3.6% to 402,000 pace. Sept. new-home sales down 7.8% yr-on-yr.
Sept. new-home inventories lowest since Nov. '82. The decline in new-home sales to a seasonally adjusted annual rate of 402,000 was well below the 438,000 pace expected by economists surveyed by MarketWatch. New-home sales in August were revised to a 417,000 level compared with the previous estimate of 429,000. This is the first decline in new home sales after five consecutive monthly gains. The supply of homes on the market fell to 251,000 in September. Median sales prices have fallen 9.1% in the past year to $204,800.
The Honda 2010 Civic GX is powered by natural gas.
The U.S. Commerce Department imposed preliminary duties of as much as 12 percent on $269 million of imports of steel grating and wire strand from China.
Nielsen reported a 50% plunge in CNBC vierwership in October year over year. Specially, CNBC has experienced a massive 52% decline in overall viewers during business day hours (5 am - 7 pm), and a not much better 49% drop in its demo (25-54) in the month of October as compared to last year.
Unemployment worsened in 371 of the 372 metro areas tracked by the Dept. of Labor, with 13 areas now above 15%.
EIA Petroleum Inventories: Crude +0.8M vs. +1.7M consensus. Gasoline +1.6M vs. -1.1M. Distillate -2.1M vs. -700K. Capacity 81.8% vs. 81.2%. Dec crude -1.5% to $78.30.
Douglas J. O'Bryon: "There are currently over 15,100,000 Americans unemployed, and according to the Plain Dealer on 9/23/09, roughly 5,000,000 have been unemployed over 6 months - the highest number since data was first collected in 1948 – plus there are currently six unemployed people for every single available job.
While normal 26-week unemployment compensation programs have been extended to 79 weeks in many states, over 1,500,000 people are expected to exhaust their benefits by year’s end, with the first big wave of 540,000 falling out of the program at the end of September,according to the nonprofit National Employment Law Project.
In May 2008, the number of people using food stamps was 27,000,000. In December 2008, the number surpassed 30,000,000 for the first time. According to the U.S. Department of Agriculture, in August 2009 there were 34,000,000 Americans on food stamps and in September there were over 35,000,000, a jump of over 1,000,000 in one month.
As of September 2009, a full 12% of the total U.S. population was on some form of Food Stamp assistance, the highest since records began in 1969."
The brother of Afghan President Hamid Karzai has been getting regular payments from the Central Intelligence Agency, The New York Times reported on Tuesday, citing current and former U.S. officials.
Ahmed Wali Karzai is a suspected player in Afghanistan's opium trade and has been paid by the CIA over the past eight years for services that included helping to recruit an Afghan paramilitary force that operates at the CIA's direction in and around the southern city of Kandahar, the newspaper reported.
Google said its new Google Maps Navigation product will provide real-time, turn-by-turn directions directly within cell phones that are based on the new version of its Android software.
The navigation product, which features speech recognition and a visual display that incorporates Google's online archive of street photographs, marks the latest step by Google to challenge Apple Inc's iPhone and Microsoft Corp's Windows Mobile software with its Android smartphone software.
It also represents a direct competitive threat to companies like Garmin and TomTom which sell specialized hardware navigation devices. TomTom also makes a software navigation app for the iPhone that sells for $99.99 in the U.S.
The 1050 line marks the 50-day moving average for the S&P 500.
U.S. Airways to layoff 1000 workers and American Airlines to layoff 700.
December gold futures fell $4.90 an ounce, or 0.5%, to $1,030.5 an ounce on Wednesday by the close of floor trading in New York, the lowest settlement for the contract since Oct. 5 Silver for December delivery fell to $16.24 an ounce, down 30 cents, or 1.8%. December copper sank 7 cents, or 2.2%, to $2.9305 a pound.
The "real yield" on Treasury Inflation-Protected Securities - the amount above inflation they pay out - has dropped below 1% on five-year TIPS, as the sector overall has gained 9% YTD. That's a steep price for peace of mind, says Brett Arends; you're better off with 20-year terms or longer, with real yields of 2.2% or more.
Annaly Salvos:"Delinquencies are rising, but foreclosure starts are not. As of September 2009, 90+deterioration more than doubled actual foreclosure starts. LPS has dubbed this “shadow foreclosure inventory.” Higher unemployment begets delinquencies and defaults, but foreclosures aren’t flowing through due to modification efforts and various moratoria. Depending on the success of programs like HAMP, more than a few of these loans are still destined for foreclosure.
The Dow Jones Industrial Average fell 119.48 points, or 1.2%, to 9,762.69. The S&P 500 Index declined 20.78 points, or 2%, to 1,042.63, with the broad market gauge losing its gains for October. The Nasdaq Composite lost 56.48 points, or 2.7%, to 2,059.61.
In November, Costco will begin accepting food stamps.
Bill Gross: “Almost all assets appear to be overvalued on a long-term basis”.
Wednesday, October 28, 2009
Tuesday, October 27, 2009
Consumer Lack of Confidence
10/27/09 Consumer Lack of Confidence
Jeremy Grantham: "The recent rally has been very speculative, favoring risky assets over the past few months. I’m sorry if you missed investing at the market’s March lows, but don’t compound the damage to your portfolio by chasing gains in risky assets. We’re at the beginning of a seven-year period of lean returns. You should only be buying the highest-quality blue-chip companies, where valuations are most attractive....Corporate ex-financials profit margins remain above average and, if I am right about the coming seven lean years, we will soon enough look back nostalgically at such high profits. Price/earnings ratios, adjusted for even normal margins, are also significantly above fair value after the rally. Fair value on the S&P is now about 860 (fair value has declined steadily as the accounting smoke clears from the wreckage and there are still, perhaps, some smoldering embers). This places today’s market (October 19) at almost 25% overpriced, and on a seven-year horizon would move our normal forecast of 5.7% real down by more than 3% a year. Doesn’t it seem odd that we would be measurably overpriced once again, given that we face a seven-year future that almost everyone agrees will be tougher than normal?
Price … does matter eventually, and what will stop this market (my blind guess is in the first few months of next year) is a combination of two factors. First, the disappointing economic and financial data that will begin to show the intractably long-term nature of some of our problems, particularly pressure on profit margins as the quick fix of short-term labor cuts fades away. Second, the slow gravitational pull of value as US stocks reach +30-35% overpricing in the face of an extended difficult environment....Unlike the really tough bears, though, I see no need for a new low. I think the history books will be happy enough with the 666 of last February."
Barry Ritholtz: "In September 2009, single family home sale prices look like this:
21% less than $100k
49% $100K to $250k
22% $250 to $500K
5.6% $500k to $750K
1.3% $750k to $1m
1.3% $1M and up
Less than 10% of the homes sold in the US were > $500k. We know the high end has collapsed, but we are not disucssing multi-million dollar homes, mind you, but over $500k as a mere 8.2% of sales. I was surprised. (I wish we had data going back decades, which we could then normalize for inflation).
In September, 70% of transacted homes were priced under $250,000.
Home prices fell less than they had been in August, according to Case Shiller. The Index shows a 7th consecutive months of improved readings in these statistics, beginning in early 2009.
By improved, prices continue to slide year over year, but at a slower rate. Monthly prices show modest gains.
Year over year, the 10-City and 20-City Composite Home Price Indices declined 10.6% and 11.3%, respectively, in August. The indices gained 1.3% and 1.2% from July.
Note that Goldman Sachs estimates that the US Government interventions and bailouts have pushed housing prices 5% higher."
With inflation pressures building, the Reserve Bank of India takes the first step toward withdrawing its record fiscal stimulus, ordering lenders to keep 25% of their cash in government bonds, up from 24%. "We will start to see G-20 economies exiting now, starting with the emerging ones and then the advanced countries," economist Mridul Saggar said.
"Refining margins in the third quarter continued to suffer from a combination of weak demand for refined products and high inventories," said Bill Klesse, Valero's Chairman of the Board and Chief Executive Officer. Valero said it's looking forward to an upturn in fundamentals and demand in 2010.
Paccar said Tuesday that third-quarter earnings were $13 million, or 4 cents a share, compared to $299 million, or 82 cents a share, in the same period a year ago. Sales fell to $1.76 billion from $3.68 billion. If there were green shoots that had staying power, the truck business would not be in the doldrums.
On a week-over-week basis, retail sales climbed 0.1%. "The retail sales recovery continues with its fifth consecutive weekly increase," said Michael Niemira, ICSC's chief economist. He sees October sales to be flat and said retailers could likely beat that estimate
Johnson Controls said it expects to post fiscal 2010 earnings of $1.35 to $1.45 a share on revenue of about $31 billion.
"We expect improvement in our overall fourth quarter results mainly as a result of increased demand for flat-rolled products in North America, driven primarily by automotive markets and continued strength in tin mill markets," U.S. Steel said. "However, we expect to report an overall operating loss in the fourth quarter due primarily to continued low operating rates and idled facility carrying costs for our flat-rolled and tubular segments."
A former Marine Corps captain with combat experience in Iraq, Hoh had also served in uniform at the Pentagon, and as a civilian in Iraq and at the State Department. By July, he was the senior U.S. civilian in Zabul province, a Taliban hotbed.
But last month, in a move that has sent ripples all the way to the White House, Hoh, 36, became the first U.S. official known to resign in protest over the Afghan war, which he had come to believe simply fueled the insurgency.
"I have lost understanding of and confidence in the strategic purposes of the United States' presence in Afghanistan," he wrote Sept. 10 in a four-page letter to the department's head of personnel. "I have doubts and reservations about our current strategy and planned future strategy, but my resignation is based not upon how we are pursuing this war, but why and to what end."
BP PLC, Europe's second-largest oil company, reported a 34 percent fall in third-quarter profit to $5.3 billion — better than markets expected — as oil and gas prices fell from record levels a year earlier.
ZeroHedge: "Must read, and word of the day is, as always, Collateral: the NY Fed's secret choice to rape America by taking no haircut on AIG toxic crap "Part of a sentence in the document was crossed out. It contained a blank space that was intended to show the amount of the haircut the banks would take, according to people who saw the term sheet. After less than a week of private negotiations with the banks, the New York Fed instructed AIG to pay them par, or 100 cents on the dollar. The content of its deliberations has never been made public." (Bloomberg)
Lending to companies in Eurozone falls for first time on record (BBC)
GameStop Corp. plans to hire about 15,000 seasonal part-time workers between now and Dec. 24 at its 4,300 U.S. stores. The Grapevine, Texas-based video-game retailer said the hirings will increase the company's total headcount by about 46%. GameStop said these numbers are consistent with seasonal hiring in 2008 and 2007.
The market value of U.S. homes in 20 major cities rose by 1.2% compared with July, the fourth monthly increase in a row, according to the Case-Shiller home price index released Tuesday by Standard & Poor's. In August prices rose in 17 of 20 cities. In the past year, prices are down 11.3% in the 20 cities. Prices are down 29.3% from the peak. Prices in all 20 cities were lower in August 2009 than in August 2008. The figures are not seasonally adjusted.
Chris Mayer: "Years 2010 and 2011 face big resets in so-called Alt-A and Option ARM loans. What this means is more write-downs and more losses for banks and others who hold these mortgages."
Consumer confidence unexpectedly declined this month, with an index falling to 47.7 from a revised 53.4 last month. Analysts surveyed by MarketWatch predicted the index would remain near 53.2.
The index component that evaluates consumers' judgment of the present situation dipped to 20.7 in October, the lowest since the 17.5 measured in February 1983. It stood at 23 in September.
"Consumers' assessment of the present-day conditions has grown less favorable, with labor market conditions playing a major role in this grimmer assessment," said Lynn Franco, director of the Conference Board Consumer Research Center. The expectation index, which measures consumers' outlook over the next few months, declined to 65.7 from 73.7 last month. Similarly, the percentage of those expecting the job market to improve edged lower to 16.3% from 18%.
The dollar index traded at 76.316, compared to 75.890 earlier in the session and up from 76.100 in late trading on Monday.
US military says 8 American troops killed in bomb attacks in southern Afghanistan.
The rally in U.S. stocks and riskier bonds is nearing an end and investors will have to settle for more muted returns, Bill Gross, managing director of bond-fund giant Pimco, wrote in a commentary published Tuesday. "The six-month rally in risk assets -- while still continuously supported by Fed and Treasury policymakers -- is likely at its pinnacle," said Gross, manager of Pimco's flagship Total Return Fund (PTTAX). The risk of investing in stocks, high-yield bonds and distressed mortgages "outweigh the rewards," he said. Going forward, he added, investors can expect 4%-5% returns from their portfolios -- well-below historical average.
President Barack Obama intends to sign the fiscal 2010 defense budget, approving about $680 billion in spending to purchase supplies, pay troop salaries and maintain oversea bases, the White House said Tuesday. Obama will sign the 2010 National Defense Authorization Act on Wednesday afternoon during a ceremony at the White House Rose Garden.
The Senate moved closer Tuesday to approving an extension of unemployment benefits by an extra 20 weeks. The Senate agreed on an 87-13 vote to bring the measure to a final vote. The House has approved a similar extension. Usually, unemployment benefits are available for 26 weeks. A private group has estimated that as many as 1.5 million people will exhaust their benefits by the end of the year. A total of 9.3 million people are now claiming benefits, including 3.9 million collecting extended federal benefits. In September, more than 5.4 million people had been jobless for longer than six months.
The Dow Jones Industrial Average rose 14.21 points, or 0.1%, to 9,882.17. The S&P 500 Index fell 3.53 points, or 0.3%, to 1,063.41. The Nasdaq Composite fell 25.76 points, or 1.2%, to 2,116.09.
Railroad operator Norfolk Southern Corp.on Tuesday reported a third-quarter profit of $303 million, or 81 cents a share, down from $520 million, or $1.37 a share, a year ago. Revenue dropped 29% to $2.1 billion.
Crude for December delivery ended up 87 cents, or 1%, at $79.55 a barrel on the New York Mercantile Exchange. Data due after the close and on Wednesday is expected to show a build of 900,000 barrels in U.S. commercial crude stocks for the week ended Oct. 23, according to analysts polled by Platts. They also project a decline of 1 million barrels in gasoline stocks and a drop of 1.1 million barrels in distillate inventories.
December gold futures Tuesday settled $7.40, or 0.7%, lower at $1,035.40 an ounce by the close of floor trading in New York, the lowest close for the contract since Oct. 5. Weighing on gold, the U.S. dollar rebounded and investors cashed out of double-digit profits since the end of August. Silver for December delivery fell 56 cents, or 3.2%, to $16.54 an ounce. December copper slid a penny to $2.999 a pound.
Jeremy Grantham: "The recent rally has been very speculative, favoring risky assets over the past few months. I’m sorry if you missed investing at the market’s March lows, but don’t compound the damage to your portfolio by chasing gains in risky assets. We’re at the beginning of a seven-year period of lean returns. You should only be buying the highest-quality blue-chip companies, where valuations are most attractive....Corporate ex-financials profit margins remain above average and, if I am right about the coming seven lean years, we will soon enough look back nostalgically at such high profits. Price/earnings ratios, adjusted for even normal margins, are also significantly above fair value after the rally. Fair value on the S&P is now about 860 (fair value has declined steadily as the accounting smoke clears from the wreckage and there are still, perhaps, some smoldering embers). This places today’s market (October 19) at almost 25% overpriced, and on a seven-year horizon would move our normal forecast of 5.7% real down by more than 3% a year. Doesn’t it seem odd that we would be measurably overpriced once again, given that we face a seven-year future that almost everyone agrees will be tougher than normal?
Price … does matter eventually, and what will stop this market (my blind guess is in the first few months of next year) is a combination of two factors. First, the disappointing economic and financial data that will begin to show the intractably long-term nature of some of our problems, particularly pressure on profit margins as the quick fix of short-term labor cuts fades away. Second, the slow gravitational pull of value as US stocks reach +30-35% overpricing in the face of an extended difficult environment....Unlike the really tough bears, though, I see no need for a new low. I think the history books will be happy enough with the 666 of last February."
Barry Ritholtz: "In September 2009, single family home sale prices look like this:
21% less than $100k
49% $100K to $250k
22% $250 to $500K
5.6% $500k to $750K
1.3% $750k to $1m
1.3% $1M and up
Less than 10% of the homes sold in the US were > $500k. We know the high end has collapsed, but we are not disucssing multi-million dollar homes, mind you, but over $500k as a mere 8.2% of sales. I was surprised. (I wish we had data going back decades, which we could then normalize for inflation).
In September, 70% of transacted homes were priced under $250,000.
Home prices fell less than they had been in August, according to Case Shiller. The Index shows a 7th consecutive months of improved readings in these statistics, beginning in early 2009.
By improved, prices continue to slide year over year, but at a slower rate. Monthly prices show modest gains.
Year over year, the 10-City and 20-City Composite Home Price Indices declined 10.6% and 11.3%, respectively, in August. The indices gained 1.3% and 1.2% from July.
Note that Goldman Sachs estimates that the US Government interventions and bailouts have pushed housing prices 5% higher."
With inflation pressures building, the Reserve Bank of India takes the first step toward withdrawing its record fiscal stimulus, ordering lenders to keep 25% of their cash in government bonds, up from 24%. "We will start to see G-20 economies exiting now, starting with the emerging ones and then the advanced countries," economist Mridul Saggar said.
"Refining margins in the third quarter continued to suffer from a combination of weak demand for refined products and high inventories," said Bill Klesse, Valero's Chairman of the Board and Chief Executive Officer. Valero said it's looking forward to an upturn in fundamentals and demand in 2010.
Paccar said Tuesday that third-quarter earnings were $13 million, or 4 cents a share, compared to $299 million, or 82 cents a share, in the same period a year ago. Sales fell to $1.76 billion from $3.68 billion. If there were green shoots that had staying power, the truck business would not be in the doldrums.
On a week-over-week basis, retail sales climbed 0.1%. "The retail sales recovery continues with its fifth consecutive weekly increase," said Michael Niemira, ICSC's chief economist. He sees October sales to be flat and said retailers could likely beat that estimate
Johnson Controls said it expects to post fiscal 2010 earnings of $1.35 to $1.45 a share on revenue of about $31 billion.
"We expect improvement in our overall fourth quarter results mainly as a result of increased demand for flat-rolled products in North America, driven primarily by automotive markets and continued strength in tin mill markets," U.S. Steel said. "However, we expect to report an overall operating loss in the fourth quarter due primarily to continued low operating rates and idled facility carrying costs for our flat-rolled and tubular segments."
A former Marine Corps captain with combat experience in Iraq, Hoh had also served in uniform at the Pentagon, and as a civilian in Iraq and at the State Department. By July, he was the senior U.S. civilian in Zabul province, a Taliban hotbed.
But last month, in a move that has sent ripples all the way to the White House, Hoh, 36, became the first U.S. official known to resign in protest over the Afghan war, which he had come to believe simply fueled the insurgency.
"I have lost understanding of and confidence in the strategic purposes of the United States' presence in Afghanistan," he wrote Sept. 10 in a four-page letter to the department's head of personnel. "I have doubts and reservations about our current strategy and planned future strategy, but my resignation is based not upon how we are pursuing this war, but why and to what end."
BP PLC, Europe's second-largest oil company, reported a 34 percent fall in third-quarter profit to $5.3 billion — better than markets expected — as oil and gas prices fell from record levels a year earlier.
ZeroHedge: "Must read, and word of the day is, as always, Collateral: the NY Fed's secret choice to rape America by taking no haircut on AIG toxic crap "Part of a sentence in the document was crossed out. It contained a blank space that was intended to show the amount of the haircut the banks would take, according to people who saw the term sheet. After less than a week of private negotiations with the banks, the New York Fed instructed AIG to pay them par, or 100 cents on the dollar. The content of its deliberations has never been made public." (Bloomberg)
Lending to companies in Eurozone falls for first time on record (BBC)
GameStop Corp. plans to hire about 15,000 seasonal part-time workers between now and Dec. 24 at its 4,300 U.S. stores. The Grapevine, Texas-based video-game retailer said the hirings will increase the company's total headcount by about 46%. GameStop said these numbers are consistent with seasonal hiring in 2008 and 2007.
The market value of U.S. homes in 20 major cities rose by 1.2% compared with July, the fourth monthly increase in a row, according to the Case-Shiller home price index released Tuesday by Standard & Poor's. In August prices rose in 17 of 20 cities. In the past year, prices are down 11.3% in the 20 cities. Prices are down 29.3% from the peak. Prices in all 20 cities were lower in August 2009 than in August 2008. The figures are not seasonally adjusted.
Chris Mayer: "Years 2010 and 2011 face big resets in so-called Alt-A and Option ARM loans. What this means is more write-downs and more losses for banks and others who hold these mortgages."
Consumer confidence unexpectedly declined this month, with an index falling to 47.7 from a revised 53.4 last month. Analysts surveyed by MarketWatch predicted the index would remain near 53.2.
The index component that evaluates consumers' judgment of the present situation dipped to 20.7 in October, the lowest since the 17.5 measured in February 1983. It stood at 23 in September.
"Consumers' assessment of the present-day conditions has grown less favorable, with labor market conditions playing a major role in this grimmer assessment," said Lynn Franco, director of the Conference Board Consumer Research Center. The expectation index, which measures consumers' outlook over the next few months, declined to 65.7 from 73.7 last month. Similarly, the percentage of those expecting the job market to improve edged lower to 16.3% from 18%.
The dollar index traded at 76.316, compared to 75.890 earlier in the session and up from 76.100 in late trading on Monday.
US military says 8 American troops killed in bomb attacks in southern Afghanistan.
The rally in U.S. stocks and riskier bonds is nearing an end and investors will have to settle for more muted returns, Bill Gross, managing director of bond-fund giant Pimco, wrote in a commentary published Tuesday. "The six-month rally in risk assets -- while still continuously supported by Fed and Treasury policymakers -- is likely at its pinnacle," said Gross, manager of Pimco's flagship Total Return Fund (PTTAX). The risk of investing in stocks, high-yield bonds and distressed mortgages "outweigh the rewards," he said. Going forward, he added, investors can expect 4%-5% returns from their portfolios -- well-below historical average.
President Barack Obama intends to sign the fiscal 2010 defense budget, approving about $680 billion in spending to purchase supplies, pay troop salaries and maintain oversea bases, the White House said Tuesday. Obama will sign the 2010 National Defense Authorization Act on Wednesday afternoon during a ceremony at the White House Rose Garden.
The Senate moved closer Tuesday to approving an extension of unemployment benefits by an extra 20 weeks. The Senate agreed on an 87-13 vote to bring the measure to a final vote. The House has approved a similar extension. Usually, unemployment benefits are available for 26 weeks. A private group has estimated that as many as 1.5 million people will exhaust their benefits by the end of the year. A total of 9.3 million people are now claiming benefits, including 3.9 million collecting extended federal benefits. In September, more than 5.4 million people had been jobless for longer than six months.
The Dow Jones Industrial Average rose 14.21 points, or 0.1%, to 9,882.17. The S&P 500 Index fell 3.53 points, or 0.3%, to 1,063.41. The Nasdaq Composite fell 25.76 points, or 1.2%, to 2,116.09.
Railroad operator Norfolk Southern Corp.on Tuesday reported a third-quarter profit of $303 million, or 81 cents a share, down from $520 million, or $1.37 a share, a year ago. Revenue dropped 29% to $2.1 billion.
Crude for December delivery ended up 87 cents, or 1%, at $79.55 a barrel on the New York Mercantile Exchange. Data due after the close and on Wednesday is expected to show a build of 900,000 barrels in U.S. commercial crude stocks for the week ended Oct. 23, according to analysts polled by Platts. They also project a decline of 1 million barrels in gasoline stocks and a drop of 1.1 million barrels in distillate inventories.
December gold futures Tuesday settled $7.40, or 0.7%, lower at $1,035.40 an ounce by the close of floor trading in New York, the lowest close for the contract since Oct. 5. Weighing on gold, the U.S. dollar rebounded and investors cashed out of double-digit profits since the end of August. Silver for December delivery fell 56 cents, or 3.2%, to $16.54 an ounce. December copper slid a penny to $2.999 a pound.
Monday, October 26, 2009
Rising Risk Concerns
10/26/09 Rising Risk Concerns
Alarm bells are ringing for liner firms as one of the most accurate gauges of the container index fell for the first time in more than four months Friday. The China Containerised Freight Index, operated by the Shanghai Shipping Index, dropped for the first time since early June today. Despite lines reporting increased volumes and some being successful with rate increases this news will be a hammer blow for the industry. The CCFI takes data from the leading 20 lines operating out of China. Its numbers have been consistently in line with the fortunes of the container sector over the years, especially since China accounts for one in two boxes moved. With container shipping often a precursor of the world economy, the drop in the CCFI has some analysts suggesting the global economy could be in for a nasty double dip recession.
Gas prices jumped $0.1782 over the past two weeks to $2.66/gallon, the first increase in Trilby Lundberg's survey in two months.
“Bank of America and Countrywide Home Loans destroyed mortgage documents, and “recreate” them by “insert(ing) data as they see fit,” to cover up their own failure to keep records – or their fraud – according to a federal RICO class action.
“To cover up the servicing mistakes and fraud and misrepresentation in the servicing of a consumer escrow, Defendants ‘recreate’ letters, insert data as they see fit, and fail to produce the entire HUD complaint form. This way, a consumer is left in the dark about the fraud that occurred to them,” the complaint states.
The QQQQ closed at a 5-day low for the 1st time in at least 10 days.
German consumer confidence for November fell slightly for the first time in more than a year due to worries about job losses, a forward-looking survey by the GfK market research group said Monday.
Mike Burk: "Cyclically the market should be hitting a short term low late next week, just as we enter a seasonally strong period.
I expect the major indices to be higher on Friday October 30 than they were on Friday October 23."
John Hussman: "In recent months, rate of foreclosures in recent months has lagged the rate of delinquencies, indicating that banks have been reluctant to foreclose, and prompting some observers to assume that banks are now more lenient and the foreclosures will simply be averted. Indeed the FDIC has encouraged this sort of “forbearance” – which typically involves a deferral or small reduction in home payments, generally lasting about 6 months. The problem is that the majority of these deferrals ultimately end in foreclosure. This is particularly likely to be true given prevailing weakness in employment conditions. Indeed, the Office of Thrift Supervision recently reported that more than 50% of mortgages modified in the first half of 2008 have already missed at least two months of payments so far in 2009....rumors of the death of the mortgage crisis appear to be greatly exaggerated. "
Most investors follow the same strategy of borrowing in dollars and investing in assets across the world and when the greenback's downward trend will reverse, there may be a crash in global assets, Nouriel Roubini, Chairman, RGE Monitor, told CNBC Monday. "There is a wall of liquidity…chasing assets," Roubini told "Squawk Box."
"Now we are in the mother of all carry trades," he added.
The dollar should remain the principal currency in China's $2.27 trillion stockpile of foreign exchange reserves, but the share of the euro and yen should increase, according to an opinion piece in Monday's Financial News, a paper published by the People's Bank of China.
The dollar fell to a 14-month low as word of the report spread before recouping some of its losses after the author, Zhou Hai, told Reuters he was only expressing a personal opinion.
China bought a record 64.55 million tons of iron ore in September, up 30 percent from August; imports of copper rose 23 percent. China's September coal imports increase 7% from August.
Nouriel Roubini: " In my view, rising commodity prices are not justified by the fundamentals.
There’s a huge bubble, because we have zero rates in the U.S. , zero rates around the world and a huge carry trade. Everyone is borrowing at zero interest rates in dollars and getting a capital gain because the dollar is weakening, so they are borrowing at negative rates. And then they invest in risky assets: commodities, equities, credit. We’re creating a bigger bubble than before. t’s going to go crashing down, in an ugly way. That’s the basics of the argument."
Telecommunications services provider FairPoint Communications filed for Chapter 11 bankruptcy protection Monday after agreeing on a deal with key lenders that will help lower its debt by about 62 percent.
FairPoint, based in Charlotte, N.C., owns and operates phone companies in 18 states with a total of 1.65 million lines. Its largest holdings by far are in Maine, New Hampshire and Vermont, where it bought Verizon Communications Inc.'s land lines and Internet network for $2.3 billion in 2008.
Tim Wood: "From a value perspective, history shows that the dividend yield and the P/E will be roughly at par at true bear market bottoms. As an example, I show that the yield on the S&P at the 1932 low was 10.5 with a P/E just under 10. At the 1942 low the yield was 8.71 with a P/E of 7.3. At the 1974 bear market bottom I show the yield on the S&P to have been at 5.9 with a P/E of 7.24. Even at the 1982 low the yield was 6.2 with a P/E of 6.9. At the March 2009 low I show the yield on the S&P to have been at 3.58 with a P/E of 24, which has historically been considered overvalued. At present, I show the yield on the S&P to be 1.99 with a P/E of 144.83. Yes, that is right. The current P/E, based on Generally Accepted Accounting Principle, is one hundred forty four. The historical P/E ratios at the previous lows were also calculated using Generally Accepted Accounting Principles, so these numbers are consistent. If you are seeing any other number showing much lower P/E’s it is because it is a George Orwellian phony bologna calculation. If the S&P were to trade with a GAAP P/E of 20, which has historically been considered overvalued, it would be at 150. If the S&P were to trade with a P/E of 15, which has historically been considered to be fair value, it would trade at 113. My point here is that at the March low the P/E and the yield were no where near par and thus the market did not reach levels in which true secular bear market bottoms are made. Plus, with the spread between the current P/E and the yield at an historic 142, the market is grossly overvalued. This will ultimately be corrected with the Phase II and Phase III declines."
A broad gauge of U.S. national economic activity rose above the level that typifies recessions, the Chicago Federal Reserve reported Monday. The national activity index -- composed of 85 separate indicators -- rose to negative 0.63 over the past three months from negative 0.96 in the three months ending in August. It's the first time the three-month average has been above the negative 0.70 level since early in the recession. For September, the index slipped to negative 0.81 from negative 0.65 in August. In September, production and income indicators were positive for the third straight month, but the other three main categories -- employment, sales and consumption -- remained negative.
Atlanta Fed: “Never, in the six recessions preceding the latest one, did permanent separations account for more than 45 percent of the unemployed. The current percentage stands at 56 percent as of September and appears to be still climbing.”
Caterpillar Inc. said Monday it will cut 2,500 jobs, but that it will also bring back 550 employees that had already been laid off by the end of 2010. The company did not specify which locations are affected by the realignment. Caterpillar reiterated its 2009 outlook of $1.10 to $1.30 a share in profit and $32 billion to $33 billion in sales.
China may face an economic slowdown in the middle of next year because the nation’s growth model is unsustainable, said Stephen Roach, chairman of Morgan Stanley Asia. “While the government is ensuring economic growth, we are also concerned about overcapacity in some industries,” Xiong Bilin, deputy director of the National Development and Reform Commission’s industry department, said Oct. 19. The commission is China ’s top economic planning agency.
Earthfiles: "While our sun remains the quietest it's been in a century,
cosmic rays reaching Earth are rising dramatically."
The value of the euro has risen by 79% in nine years since euro hit 0.84 in Oct. 2000.
"A decline in the value of the dollar is necessary in order compensate for the fact that the US economy will remain rather weak, will be a drag on the global economy. China will emerge as the motor replacing the US consumer and, of course, it’s a smaller motor because the Chinese economy is much smaller. So the world economy will have less of a motor, so it will move forward slower than it has in the last 25 years. But China will be the engine driving it forward and the US will be actually a drag that’s being pulled along through a gradual decline in the value of the dollar." - George Soros
The U.S. Standard & Poor’s 500 Index is about 40 percent overvalued and headed for a drop as central banks pull back on securities purchases that pushed up asset prices, according to economist Andrew Smithers.
Declines are likely because banks will need to sell more shares to raise capital, the economist and president of research firm Smithers & Co. said in an Oct. 23 interview at Bloomberg’s Tokyo office. A 40 percent tumble from the S&P 500’s price at the end of last week of 1,079.60 would take the gauge to 647.76, below its March low.
10-year U.S. Treasury yield 3.56%.
The Dow finished at 9,867.96, off 104.22 points, or 1.1%. The S&P 500 shed 12.65 points, or 1.2%, to 1,066.95, and the Nasdaq Composite declined 12.62 points, or 0.6%, to 2,141.85.
Crude oil futures closed lower on Monday as the U.S. dollar rebounded off a 14-month low against the euro and U.S. stocks tumbled. Oil for December delivery fell $1.82, or 2.3%, to $78.68 a barrel after earlier reaching a high of $81.59. The bounce in the U.S. dollar, adding to lingering concerns about ample oil supply, offset a report suggesting the U.S. economy has already emerged from recession. Natural gas fell 27 cents, or 5.7%, to $4.513 per million British thermal units, in line with an earlier loss. Forecasts for warm weather in the Northeast and Midwest weighed on natural gas. November heating oil and gasline futures also fell.
December gold futures Monday fell $13.60, or 1.3%, to $1,042.8 an ounce at the close of floor trading in New York, giving up earlier gains as the U.S. dollar rebounded. December silver fell 63 cents, or 3.5%, to $17.095 an ounce. Copper for December delivery lost 2 cents, or 0.8%, to $3.011 a pound.
Alarm bells are ringing for liner firms as one of the most accurate gauges of the container index fell for the first time in more than four months Friday. The China Containerised Freight Index, operated by the Shanghai Shipping Index, dropped for the first time since early June today. Despite lines reporting increased volumes and some being successful with rate increases this news will be a hammer blow for the industry. The CCFI takes data from the leading 20 lines operating out of China. Its numbers have been consistently in line with the fortunes of the container sector over the years, especially since China accounts for one in two boxes moved. With container shipping often a precursor of the world economy, the drop in the CCFI has some analysts suggesting the global economy could be in for a nasty double dip recession.
Gas prices jumped $0.1782 over the past two weeks to $2.66/gallon, the first increase in Trilby Lundberg's survey in two months.
“Bank of America and Countrywide Home Loans destroyed mortgage documents, and “recreate” them by “insert(ing) data as they see fit,” to cover up their own failure to keep records – or their fraud – according to a federal RICO class action.
“To cover up the servicing mistakes and fraud and misrepresentation in the servicing of a consumer escrow, Defendants ‘recreate’ letters, insert data as they see fit, and fail to produce the entire HUD complaint form. This way, a consumer is left in the dark about the fraud that occurred to them,” the complaint states.
The QQQQ closed at a 5-day low for the 1st time in at least 10 days.
German consumer confidence for November fell slightly for the first time in more than a year due to worries about job losses, a forward-looking survey by the GfK market research group said Monday.
Mike Burk: "Cyclically the market should be hitting a short term low late next week, just as we enter a seasonally strong period.
I expect the major indices to be higher on Friday October 30 than they were on Friday October 23."
John Hussman: "In recent months, rate of foreclosures in recent months has lagged the rate of delinquencies, indicating that banks have been reluctant to foreclose, and prompting some observers to assume that banks are now more lenient and the foreclosures will simply be averted. Indeed the FDIC has encouraged this sort of “forbearance” – which typically involves a deferral or small reduction in home payments, generally lasting about 6 months. The problem is that the majority of these deferrals ultimately end in foreclosure. This is particularly likely to be true given prevailing weakness in employment conditions. Indeed, the Office of Thrift Supervision recently reported that more than 50% of mortgages modified in the first half of 2008 have already missed at least two months of payments so far in 2009....rumors of the death of the mortgage crisis appear to be greatly exaggerated. "
Most investors follow the same strategy of borrowing in dollars and investing in assets across the world and when the greenback's downward trend will reverse, there may be a crash in global assets, Nouriel Roubini, Chairman, RGE Monitor, told CNBC Monday. "There is a wall of liquidity…chasing assets," Roubini told "Squawk Box."
"Now we are in the mother of all carry trades," he added.
The dollar should remain the principal currency in China's $2.27 trillion stockpile of foreign exchange reserves, but the share of the euro and yen should increase, according to an opinion piece in Monday's Financial News, a paper published by the People's Bank of China.
The dollar fell to a 14-month low as word of the report spread before recouping some of its losses after the author, Zhou Hai, told Reuters he was only expressing a personal opinion.
China bought a record 64.55 million tons of iron ore in September, up 30 percent from August; imports of copper rose 23 percent. China's September coal imports increase 7% from August.
Nouriel Roubini: " In my view, rising commodity prices are not justified by the fundamentals.
There’s a huge bubble, because we have zero rates in the U.S. , zero rates around the world and a huge carry trade. Everyone is borrowing at zero interest rates in dollars and getting a capital gain because the dollar is weakening, so they are borrowing at negative rates. And then they invest in risky assets: commodities, equities, credit. We’re creating a bigger bubble than before. t’s going to go crashing down, in an ugly way. That’s the basics of the argument."
Telecommunications services provider FairPoint Communications filed for Chapter 11 bankruptcy protection Monday after agreeing on a deal with key lenders that will help lower its debt by about 62 percent.
FairPoint, based in Charlotte, N.C., owns and operates phone companies in 18 states with a total of 1.65 million lines. Its largest holdings by far are in Maine, New Hampshire and Vermont, where it bought Verizon Communications Inc.'s land lines and Internet network for $2.3 billion in 2008.
Tim Wood: "From a value perspective, history shows that the dividend yield and the P/E will be roughly at par at true bear market bottoms. As an example, I show that the yield on the S&P at the 1932 low was 10.5 with a P/E just under 10. At the 1942 low the yield was 8.71 with a P/E of 7.3. At the 1974 bear market bottom I show the yield on the S&P to have been at 5.9 with a P/E of 7.24. Even at the 1982 low the yield was 6.2 with a P/E of 6.9. At the March 2009 low I show the yield on the S&P to have been at 3.58 with a P/E of 24, which has historically been considered overvalued. At present, I show the yield on the S&P to be 1.99 with a P/E of 144.83. Yes, that is right. The current P/E, based on Generally Accepted Accounting Principle, is one hundred forty four. The historical P/E ratios at the previous lows were also calculated using Generally Accepted Accounting Principles, so these numbers are consistent. If you are seeing any other number showing much lower P/E’s it is because it is a George Orwellian phony bologna calculation. If the S&P were to trade with a GAAP P/E of 20, which has historically been considered overvalued, it would be at 150. If the S&P were to trade with a P/E of 15, which has historically been considered to be fair value, it would trade at 113. My point here is that at the March low the P/E and the yield were no where near par and thus the market did not reach levels in which true secular bear market bottoms are made. Plus, with the spread between the current P/E and the yield at an historic 142, the market is grossly overvalued. This will ultimately be corrected with the Phase II and Phase III declines."
A broad gauge of U.S. national economic activity rose above the level that typifies recessions, the Chicago Federal Reserve reported Monday. The national activity index -- composed of 85 separate indicators -- rose to negative 0.63 over the past three months from negative 0.96 in the three months ending in August. It's the first time the three-month average has been above the negative 0.70 level since early in the recession. For September, the index slipped to negative 0.81 from negative 0.65 in August. In September, production and income indicators were positive for the third straight month, but the other three main categories -- employment, sales and consumption -- remained negative.
Atlanta Fed: “Never, in the six recessions preceding the latest one, did permanent separations account for more than 45 percent of the unemployed. The current percentage stands at 56 percent as of September and appears to be still climbing.”
Caterpillar Inc. said Monday it will cut 2,500 jobs, but that it will also bring back 550 employees that had already been laid off by the end of 2010. The company did not specify which locations are affected by the realignment. Caterpillar reiterated its 2009 outlook of $1.10 to $1.30 a share in profit and $32 billion to $33 billion in sales.
China may face an economic slowdown in the middle of next year because the nation’s growth model is unsustainable, said Stephen Roach, chairman of Morgan Stanley Asia. “While the government is ensuring economic growth, we are also concerned about overcapacity in some industries,” Xiong Bilin, deputy director of the National Development and Reform Commission’s industry department, said Oct. 19. The commission is China ’s top economic planning agency.
Earthfiles: "While our sun remains the quietest it's been in a century,
cosmic rays reaching Earth are rising dramatically."
The value of the euro has risen by 79% in nine years since euro hit 0.84 in Oct. 2000.
"A decline in the value of the dollar is necessary in order compensate for the fact that the US economy will remain rather weak, will be a drag on the global economy. China will emerge as the motor replacing the US consumer and, of course, it’s a smaller motor because the Chinese economy is much smaller. So the world economy will have less of a motor, so it will move forward slower than it has in the last 25 years. But China will be the engine driving it forward and the US will be actually a drag that’s being pulled along through a gradual decline in the value of the dollar." - George Soros
The U.S. Standard & Poor’s 500 Index is about 40 percent overvalued and headed for a drop as central banks pull back on securities purchases that pushed up asset prices, according to economist Andrew Smithers.
Declines are likely because banks will need to sell more shares to raise capital, the economist and president of research firm Smithers & Co. said in an Oct. 23 interview at Bloomberg’s Tokyo office. A 40 percent tumble from the S&P 500’s price at the end of last week of 1,079.60 would take the gauge to 647.76, below its March low.
10-year U.S. Treasury yield 3.56%.
The Dow finished at 9,867.96, off 104.22 points, or 1.1%. The S&P 500 shed 12.65 points, or 1.2%, to 1,066.95, and the Nasdaq Composite declined 12.62 points, or 0.6%, to 2,141.85.
Crude oil futures closed lower on Monday as the U.S. dollar rebounded off a 14-month low against the euro and U.S. stocks tumbled. Oil for December delivery fell $1.82, or 2.3%, to $78.68 a barrel after earlier reaching a high of $81.59. The bounce in the U.S. dollar, adding to lingering concerns about ample oil supply, offset a report suggesting the U.S. economy has already emerged from recession. Natural gas fell 27 cents, or 5.7%, to $4.513 per million British thermal units, in line with an earlier loss. Forecasts for warm weather in the Northeast and Midwest weighed on natural gas. November heating oil and gasline futures also fell.
December gold futures Monday fell $13.60, or 1.3%, to $1,042.8 an ounce at the close of floor trading in New York, giving up earlier gains as the U.S. dollar rebounded. December silver fell 63 cents, or 3.5%, to $17.095 an ounce. Copper for December delivery lost 2 cents, or 0.8%, to $3.011 a pound.
Sunday, October 25, 2009
No Credit Check
10/25/09 No Credit Check
In another sign that the commercial real-estate market may be struggling as much as the residential side, Capmark Financial Group Inc., one of the nation's largest commercial lenders, likely will file for bankruptcy this weekend, according to a media report Saturday.
Capmark, formerly GMAC LLC's commercial real-estate arm, recently reported a second-quarter loss of $1.6 billion and signaled it may seek bankruptcy protection. The company will file this weekend, The Wall Street Journal reported in its online edition, citing an unnamed source.
An investor group comprised of KKR & Co., Goldman Sachs Capital Partners and Five Mile Capital Partners bought the company from GMAC in 2006. The group owned about 75% of the company, while GMAC and its employees owned the rest, according to the report, citing data through March 31.
"Stock Market Crisis Over" was the big headline in the October 25, 1929, edition of the New York Daily Investment News. Eighty years later, current headlines proclaim that the recession is over.
"Third-quarter growth is expected to not only turn positive, but to do decisively," wrote Nigel Gault and Brian Bethune, economists for IHS Global Insight. "The deepest and longest recession since the 1930s is over." Artificially low interest rates, the building of inventories after the clunker program, and other non-recurring stimuli do not offset the continuing negative numbers at the ports, in air cargo, at the railroads, and the trucking industry. Taking on trillions of dollars of new debt does not equate with sustainable growth.
In fact, I believe the more growth in GDP for the 3rd quarter, the worse the decline will be in the presnt and the future. No jobs were created. Hours worked declined. House prices declined. Foreclosures rose. The commercial real estate market is falling off a cliff. I strongly recommend the notion that cash is king.
Trade-ins from the Cash for Clunkers program are piling up and auto recyclers are seeking more time to meet the deadline for disposing of all those vehicles. The so-called cash-for-clunkers program offered buyers discounts of as much as $4,500 to trade in older cars and trucks for new, more fuel-efficient vehicles. The plan boosted sales by about 700,000 vehicles, according to a Transportation Department estimate.
In 2008, consumers loaded $8.7 billion on prepaid cards that carry Visa, MasterCard, American Express and Discover logos and can be used anywhere, up from about $4 billion the year before, according to Mercator Advisory Group, a research firm that focuses on the payments industry. No credit check necessary. Maybe the U.S Treasury and the Fed should purchase prepaid cards. They could never pass a credit check. They can't pay down the principal and the debt continues to rise. When will the creditors forclose?
In another sign that the commercial real-estate market may be struggling as much as the residential side, Capmark Financial Group Inc., one of the nation's largest commercial lenders, likely will file for bankruptcy this weekend, according to a media report Saturday.
Capmark, formerly GMAC LLC's commercial real-estate arm, recently reported a second-quarter loss of $1.6 billion and signaled it may seek bankruptcy protection. The company will file this weekend, The Wall Street Journal reported in its online edition, citing an unnamed source.
An investor group comprised of KKR & Co., Goldman Sachs Capital Partners and Five Mile Capital Partners bought the company from GMAC in 2006. The group owned about 75% of the company, while GMAC and its employees owned the rest, according to the report, citing data through March 31.
"Stock Market Crisis Over" was the big headline in the October 25, 1929, edition of the New York Daily Investment News. Eighty years later, current headlines proclaim that the recession is over.
"Third-quarter growth is expected to not only turn positive, but to do decisively," wrote Nigel Gault and Brian Bethune, economists for IHS Global Insight. "The deepest and longest recession since the 1930s is over." Artificially low interest rates, the building of inventories after the clunker program, and other non-recurring stimuli do not offset the continuing negative numbers at the ports, in air cargo, at the railroads, and the trucking industry. Taking on trillions of dollars of new debt does not equate with sustainable growth.
In fact, I believe the more growth in GDP for the 3rd quarter, the worse the decline will be in the presnt and the future. No jobs were created. Hours worked declined. House prices declined. Foreclosures rose. The commercial real estate market is falling off a cliff. I strongly recommend the notion that cash is king.
Trade-ins from the Cash for Clunkers program are piling up and auto recyclers are seeking more time to meet the deadline for disposing of all those vehicles. The so-called cash-for-clunkers program offered buyers discounts of as much as $4,500 to trade in older cars and trucks for new, more fuel-efficient vehicles. The plan boosted sales by about 700,000 vehicles, according to a Transportation Department estimate.
In 2008, consumers loaded $8.7 billion on prepaid cards that carry Visa, MasterCard, American Express and Discover logos and can be used anywhere, up from about $4 billion the year before, according to Mercator Advisory Group, a research firm that focuses on the payments industry. No credit check necessary. Maybe the U.S Treasury and the Fed should purchase prepaid cards. They could never pass a credit check. They can't pay down the principal and the debt continues to rise. When will the creditors forclose?
Saturday, October 24, 2009
Bank Closures
10/24/09 Bank Closures
The number of banks reorganized since January 1 this year is 106, the number in the last calendar year is 116, the number from (including) IndyMac is 128. The number of branches impacted is 3,752.This is the first year since 1992 that at least 100 have gone under.
Doug Noland: "It is a fundamental tenet to my thesis that the unfolding reflation will be altogether different than previous reflations. The old were primarily driven by Fed-induced expansions of U.S. mortgage finance and Wall Street Credit. Our mortgage industry, housing and securitization markets, and Bubble economy were at the epicenter of global reflationary dynamics. The new reflation is fueled by synchronized fiscal and monetary stimulus across the globe. China, Asia and the emerging markets/economies have supplanted the U.S. at the epicenter. U.S. housing is completely out of the mix....Dollar devaluation and global dynamics set the stage for an inflationary surprise. And any jump in inflation fears would find U.S. bond and mortgage markets especially poorly positioned, with the U.S. economy extraordinarily vulnerable to any spike in yields. A crisis in a rising rate environment would be especially problematic for a Fed and Treasury confronting Trillions in mortgage Credit and interest-rate risk. Foreign holders of our mortgage paper could lose big if market prices and the dollar move against them simultaneously. And it’s safe to say that the Federal Reserve wouldn’t be profitably unwinding its MBS portfolio."
The U.S. debt limit is now $11.9 trillion and mounting. Do you think anyone in the Congress other than Ron Paul gives a crap? Debts incurred during the American Revolutionary War and under the Articles of Confederation led to the first yearly reported value of $75,463,476.52 on January 1, 1791. During the administration of President George W. Bush, the debt increased from $5.6 trillion in January 2001 to $10.7 trillion by December 2008.
Federal Reserve Credit jumped to $2.172 TN, up from less than $900bn to begin September 2008.
Bloomberg (Jody Shenn): “Freddie Mac… said defaults among its loans rose to another record high last month, while its portfolio of residential assets grew at an annualized rate of 7.3%. Mortgages at least 90 days late or in foreclosure among the single-family loans that Freddie Mac either owns or guarantees rose to 3.33% in September, from 3.13% the previous month and 1.22% a year earlier…”
A new New York company hopes to complete financing of a Syracuse plant to make electric cars by the end of this year and start rolling out plug-in hatchbacks in late 2010.
Bannon Automotive, with a nearly $7 million state package of grants and tax incentives, says it chose the central New York site partly because of the "dogged pursuit" of local, state and federal officials. Bannon will invest $26.5 million into the plant, and U.S. Sen. Charles Shumer says he is trying to help the company obtain $52 million in federal loans and guarantees.
Bannon has a licensing deal with Reva Electric Car Co. of Bangalore, India, to assemble the NXR. The car is sold across Asia and Europe. Bannon CEO Paul Wimer says the plant will produce 15,000 to 20,000 cars a year.
Bloomberg:“Chinese central bank Vice Governor Ma Delun warned that monetary-policy challenges will increase as expectations for a stronger yuan boost inflows of capital. As global markets revive, ‘capital flows increase and the U.S. dollar weakens, there will be an expectation for the yuan to appreciate, leading a large amount of international capital to return,’ Ma said… Inflation pressures are building, and policy makers need to rein in the effects of extra liquidity on asset and consumer prices, Ma said.”
Bloomberg (Anil Varma): “India’s central bank said it faces a ‘major challenge’ in managing the government’s debt sale plan, which has fueled a record jump in bond yields this year and made it ‘difficult’ to keep prices stable.”
A reader to George Ure: "the US and Israel are mounting an “Exercise” in Israel (Started last Thursday). Looks more than a little ominous in terms of timing.
“The exercise will conclude with a live fire drill in which U.S. and Israeli forces attempt to shoot down 10 incoming warheads.” “The U.S. has brought its full arsenal of missile-defense systems to Israel for the exercise, including 24 Patriot missile launchers and a Navy destroyer armed with the advanced Aegis Ballistic Missile Defense System.”
A live drill, shooting 10 live warheads? What do you suppose that would cost? Why would “we” discharge 10 Patriot missiles for a training session?"
Dan Basch: "Like a hand into a glove, today's Dow Jones Transportation Index (DJT) nearly identically emulates the nine-month lead in pattern which occurred on the Nasdaq in 1987 and culminated in the historically famous crash.
The DJT, a leading index, has traced the 1987 Nasdaq chart up to today's edge of a similar yawning precipice. The key to this event was the successful retest of Double Top resistance as indicated in my previous essay last week. That comparison was between the Qs and the Nasdaq from 1987, which did not decline as anticipated due to impressively good earnings from a few of the leading tech stocks, several of which had multiple downwardly revised estimates preceding earnings release. However it is important to consider that the Qs did not break out from the Double Top pattern either.
But there are two other leaders which did decline as expected: the DJT and the Russell 2000 Small Cap Index. "
John Mauldin: "Only a few years ago, less than 1 in 16 Americans was unemployed or underemployed. Today it is 1 in 5. That is a staggering, overwhelming statistic. Mind-numbing."
Business Week: "Privately held French big-box chain Auchan is growing fast in China, Russia, and elsewhere as it challenges Wal-Mart, Carrefour, and Tesco. The company is now the world's 14th-biggest retailer, with 1,200 stores in 12 countries and annual sales of $59 billion.
Houston Chronicle: "In Houston's extremely competitive grocery market, chains are known to battle over price. Kroger, H-E-B and Wal-Mart are among the stores aggressively promoting their low prices.
Now Randalls has joined the fray.
For years, Randalls put much of its emphasis on the quality of its products, its amenities and service. Along with that, Safeway-owned Randalls is lowering prices on thousands of items throughout its stores. The price reduction program began this week.
The reduced prices are across the board in every department of all 36 Houston-area Randalls stores, said Tom Schwilke, president of Safeway Randalls.
“It's a sea of yellow,” he said in reference to the yellow tags showing the new prices.
“This isn't a promotion,” it is permanent, Schwilke said. “We will continue to lower prices as we move forward, and we will still have weekly ad specials and promotions” and Randalls Remarkable card weekly savings.
The reason for the price reductions, he said, is that with the economy in the second year of a recession, “I think everybody is looking to stretch their dollar further.”
Items have generally been marked down from 14 percent to 25 percent, and in some instances more, Schwilke said."
Sales of motorcycles plummeted 37.3% in the third quarter from the same period a year earlier, with the biggest drops coming in cruisers and sport bikes, two of the industry's biggest product lines, according to the Motorcycle Industry Council. Sales of scooters, which were gaining a year ago, also have fallen sharply.
The council, which doesn't release revenue figures of the mostly privately held member manufacturers, said overall sales of bikes fell to 136,876 in the quarter from 218,242 in the previous year's quarter.
Mike Shedlock: "The Fed now owns the Crossroads Mall, a sprawling shopping complex at the junction of Interstate highways 244 and 35, complete with an oil well pumping crude in the car park -- except the Fed does not own the mineral rights.
The Fed finds itself in the unusual situation of being an Oklahoma City landlord after it lent JPMorgan Chase $29 billion to buy Bear Stearns last year."
Will Profit: "Abraham Lincoln died because he had no health insurance."
The number of banks reorganized since January 1 this year is 106, the number in the last calendar year is 116, the number from (including) IndyMac is 128. The number of branches impacted is 3,752.This is the first year since 1992 that at least 100 have gone under.
Doug Noland: "It is a fundamental tenet to my thesis that the unfolding reflation will be altogether different than previous reflations. The old were primarily driven by Fed-induced expansions of U.S. mortgage finance and Wall Street Credit. Our mortgage industry, housing and securitization markets, and Bubble economy were at the epicenter of global reflationary dynamics. The new reflation is fueled by synchronized fiscal and monetary stimulus across the globe. China, Asia and the emerging markets/economies have supplanted the U.S. at the epicenter. U.S. housing is completely out of the mix....Dollar devaluation and global dynamics set the stage for an inflationary surprise. And any jump in inflation fears would find U.S. bond and mortgage markets especially poorly positioned, with the U.S. economy extraordinarily vulnerable to any spike in yields. A crisis in a rising rate environment would be especially problematic for a Fed and Treasury confronting Trillions in mortgage Credit and interest-rate risk. Foreign holders of our mortgage paper could lose big if market prices and the dollar move against them simultaneously. And it’s safe to say that the Federal Reserve wouldn’t be profitably unwinding its MBS portfolio."
The U.S. debt limit is now $11.9 trillion and mounting. Do you think anyone in the Congress other than Ron Paul gives a crap? Debts incurred during the American Revolutionary War and under the Articles of Confederation led to the first yearly reported value of $75,463,476.52 on January 1, 1791. During the administration of President George W. Bush, the debt increased from $5.6 trillion in January 2001 to $10.7 trillion by December 2008.
Federal Reserve Credit jumped to $2.172 TN, up from less than $900bn to begin September 2008.
Bloomberg (Jody Shenn): “Freddie Mac… said defaults among its loans rose to another record high last month, while its portfolio of residential assets grew at an annualized rate of 7.3%. Mortgages at least 90 days late or in foreclosure among the single-family loans that Freddie Mac either owns or guarantees rose to 3.33% in September, from 3.13% the previous month and 1.22% a year earlier…”
A new New York company hopes to complete financing of a Syracuse plant to make electric cars by the end of this year and start rolling out plug-in hatchbacks in late 2010.
Bannon Automotive, with a nearly $7 million state package of grants and tax incentives, says it chose the central New York site partly because of the "dogged pursuit" of local, state and federal officials. Bannon will invest $26.5 million into the plant, and U.S. Sen. Charles Shumer says he is trying to help the company obtain $52 million in federal loans and guarantees.
Bannon has a licensing deal with Reva Electric Car Co. of Bangalore, India, to assemble the NXR. The car is sold across Asia and Europe. Bannon CEO Paul Wimer says the plant will produce 15,000 to 20,000 cars a year.
Bloomberg:“Chinese central bank Vice Governor Ma Delun warned that monetary-policy challenges will increase as expectations for a stronger yuan boost inflows of capital. As global markets revive, ‘capital flows increase and the U.S. dollar weakens, there will be an expectation for the yuan to appreciate, leading a large amount of international capital to return,’ Ma said… Inflation pressures are building, and policy makers need to rein in the effects of extra liquidity on asset and consumer prices, Ma said.”
Bloomberg (Anil Varma): “India’s central bank said it faces a ‘major challenge’ in managing the government’s debt sale plan, which has fueled a record jump in bond yields this year and made it ‘difficult’ to keep prices stable.”
A reader to George Ure: "the US and Israel are mounting an “Exercise” in Israel (Started last Thursday). Looks more than a little ominous in terms of timing.
“The exercise will conclude with a live fire drill in which U.S. and Israeli forces attempt to shoot down 10 incoming warheads.” “The U.S. has brought its full arsenal of missile-defense systems to Israel for the exercise, including 24 Patriot missile launchers and a Navy destroyer armed with the advanced Aegis Ballistic Missile Defense System.”
A live drill, shooting 10 live warheads? What do you suppose that would cost? Why would “we” discharge 10 Patriot missiles for a training session?"
Dan Basch: "Like a hand into a glove, today's Dow Jones Transportation Index (DJT) nearly identically emulates the nine-month lead in pattern which occurred on the Nasdaq in 1987 and culminated in the historically famous crash.
The DJT, a leading index, has traced the 1987 Nasdaq chart up to today's edge of a similar yawning precipice. The key to this event was the successful retest of Double Top resistance as indicated in my previous essay last week. That comparison was between the Qs and the Nasdaq from 1987, which did not decline as anticipated due to impressively good earnings from a few of the leading tech stocks, several of which had multiple downwardly revised estimates preceding earnings release. However it is important to consider that the Qs did not break out from the Double Top pattern either.
But there are two other leaders which did decline as expected: the DJT and the Russell 2000 Small Cap Index. "
John Mauldin: "Only a few years ago, less than 1 in 16 Americans was unemployed or underemployed. Today it is 1 in 5. That is a staggering, overwhelming statistic. Mind-numbing."
Business Week: "Privately held French big-box chain Auchan is growing fast in China, Russia, and elsewhere as it challenges Wal-Mart, Carrefour, and Tesco. The company is now the world's 14th-biggest retailer, with 1,200 stores in 12 countries and annual sales of $59 billion.
Houston Chronicle: "In Houston's extremely competitive grocery market, chains are known to battle over price. Kroger, H-E-B and Wal-Mart are among the stores aggressively promoting their low prices.
Now Randalls has joined the fray.
For years, Randalls put much of its emphasis on the quality of its products, its amenities and service. Along with that, Safeway-owned Randalls is lowering prices on thousands of items throughout its stores. The price reduction program began this week.
The reduced prices are across the board in every department of all 36 Houston-area Randalls stores, said Tom Schwilke, president of Safeway Randalls.
“It's a sea of yellow,” he said in reference to the yellow tags showing the new prices.
“This isn't a promotion,” it is permanent, Schwilke said. “We will continue to lower prices as we move forward, and we will still have weekly ad specials and promotions” and Randalls Remarkable card weekly savings.
The reason for the price reductions, he said, is that with the economy in the second year of a recession, “I think everybody is looking to stretch their dollar further.”
Items have generally been marked down from 14 percent to 25 percent, and in some instances more, Schwilke said."
Sales of motorcycles plummeted 37.3% in the third quarter from the same period a year earlier, with the biggest drops coming in cruisers and sport bikes, two of the industry's biggest product lines, according to the Motorcycle Industry Council. Sales of scooters, which were gaining a year ago, also have fallen sharply.
The council, which doesn't release revenue figures of the mostly privately held member manufacturers, said overall sales of bikes fell to 136,876 in the quarter from 218,242 in the previous year's quarter.
Mike Shedlock: "The Fed now owns the Crossroads Mall, a sprawling shopping complex at the junction of Interstate highways 244 and 35, complete with an oil well pumping crude in the car park -- except the Fed does not own the mineral rights.
The Fed finds itself in the unusual situation of being an Oklahoma City landlord after it lent JPMorgan Chase $29 billion to buy Bear Stearns last year."
Will Profit: "Abraham Lincoln died because he had no health insurance."
Friday, October 23, 2009
House of Cards?
10/23/09 House of Cards?
Ricardo Lago: "One of the problems is that the snowball of swaps and derivatives has not shrunk much. The notional value of swaps and derivatives surveyed by the ISDA - by no means the real total which is unknown to us - amounts today to US$ 454 trillion or eight times the World’s GDP (just marginally lower than the value at the trigger of the crisis). This figure involves a gross credit exposure of US$ 26 billion or close to twice the GDP of the USA and a, more relevant, net credit exposure of US$ 4 trillion, a figure twice the total equity position of all US banks. All these figures are lower bounds; part of the problem is that we do not know what the real magnitude is.
The central question is: will the G-20 (within BIS, IMF or any other) reach binding agreements on switching the lights on and enforcing an orderly unwinding and gradual shrinkage of the snowball of derivatives? Or will they procrastinate and let the snowball continue to roll downhill in the dark?
The “Achilles heel” of the international financial system continues to be the ocean of derivates, particularly those negotiated over-the counter (OTC), including but not limited to Credit Default Swaps (CDS). If the economic recovery holds there may not be any major hassle with orderly settlements. By contrast, if a double –dip hits us and its second leg is deep enough – however small the probability - then cash-strapped governments will have to choose between a second round of massive financial subsidies or else have creditors assume the losses and let banks fail. The first would likely lead to hyperinflation and the second to a collapse of the “house of cards” of the payments system and financial chaos, a 1930s style depression."
Microsoft said net income slipped to $3.57 billion, or 40 cents a share, from $4.37 billion, or 48 cents a share, in the year-earlier quarter. Revenue fell 14% to $12.92 billion, though the decline was smaller 4% adjusted for the deferral of sales of Microsoft's new Windows 7 software. Analysts polled by Thomson Reuters had estimated Microsoft would post earnings of 32 cents a share and $12.4 billion in revenue. Tight cost controls contributed to better-than-expected profit, the company said. Shares of Microsoft, which closed Thursday at $26.59, jumped to $28.68 in preopen trades.
Microsoft’s cash position at quarter end rose to $36.7 billion, from $31.4 billion one quarter earlier.
Here’s a breakdown of the quarter by division:
* Most of the reported revenue decline was in Windows, due to the revenue deferral; win revenue down to $2.62 billion from $4.28 billion a year ago. Operating income from Windows fell by more than half, to $1.46 billion from $3.06 billion.
* Server and tools was up fractionally, at $3.43 billion, versus $3.42 billion. Operating income in the group rose to $1.28 billion from $1.04 billion.
* Online services revenue slipped to $490 million, from $520 million; the company loss $480 million in this division in the quarter, worse than the $321 million loss in the year ago quarter.
* The Microsoft Business Division, which includes Office, sagged to $4.4 billion, from $4.95 billion. Operating income from MBD was $2.86 billion, down from $3.19 billion.
* Entertainment and Devices was almost flat, at $1.891 billion versus $1.893 billion, while operating income from the segment rose to $312 million from $159 million.
Oil services group Schlumberger said that third-quarter attributable net income fell to $787 million, or 65 cents a share, from $1.5 billion, or $1.25 a share, at the same point a year ago. Analysts had been expecting earnings of 62 cents a share, according to data compiled by FactSet. Revenue fell to $5.4 billion, from $7.3 billion last year. "The worst, provided the economy continues to show signs of recovery, is behind us," Chairman and CEO Andrew Gould said.
British gross domestic product unexpectedly shrank by 0.4% in the third quarter, according to data from the Office for National Statistics. It was the sixth straight contraction for the U.K. economy. Economists had been expecting a modest 0.1% rise. Compared to the third quarter of 2008, GDP declined 5.2%.
. Over the year, the number of mass layoff events increased by 271, and associated initial claims increased by 7,285. Year-to-date mass layoff events (23,745) and initial claims (2,410,208) both recorded program highs. In September, 856 mass layoff events were reported in the manufacturing sector, seasonally adjusted, resulting in 97,066 initial claims. Over the month, the number of manufacturing events decreased by 44, while associated initial claims increased by 3,174.
Daniel Amerman: "There are 111 million households in the United States. If we take $700 billion and we divide it by 111 million households, we come up with a trade deficit per average American family of about $6,300 a year. The median income per American household is about $50,000 per year. So when we put the deficit into personal terms, it means that about 12% of the standard of living of the average American family consists of goods we consume from other nations, for which we don't produce enough with our own goods to pay....There are 111 million households in the United States. If we take $700 billion and we divide it by 111 million households, we come up with a trade deficit per average American family of about $6,300 a year. The median income per American household is about $50,000 per year. So when we put the deficit into personal terms, it means that about 12% of the standard of living of the average American family consists of goods we consume from other nations, for which we don't produce enough with our own goods to pay....The problem with relying on other nations to provide your standard of living, is that you've just given up control over your standard of living, and you'd better be very respectful of the people who are providing it. We are not being respectful. With each round of government spending that the government can't actually afford, as it sells out the average citizen for the benefit of Wall Street, it ratchets up the chances of a precipitous, entirely real drop in our national standard of living. Straight down to living only off of what we can produce.
And now on a personal level, I do believe that we need to go there. We need to get to the place where our national standard of living is based on what our national economy actually produces; our national security depends on it, as does the rebirth of American jobs. That doesn't mean we don't buy goods from overseas, but that does mean that we produce enough in exchange pay for them. However the key is how fast we go there. Because if it happens too quickly, we risk national economic catastrophe."
The Rasmussen Reports daily Presidential Tracking Poll for Friday shows that 29% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Thirty-eight percent (38%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -9.
Jesse's Cafe Americain:"The US financial crisis is always and everywhere caused by the triumph of short term greed in support of Ponzi schemes and frauds, perpetrated by a handful of Wall Street bankers and their accomplices in the political process and the media, facilitated by the wholesale weakening of the American mind and character and European and Asian greed and gullibility.Everything else is commentary."
3M Co.'s Q3 net fell 3.4%, beats est., raised its full-year EPS view now to $4.50-4.55.
Has the Dow Transport Index begun to roll over?
Resales of U.S. houses jumped 9.4% in September to a seasonally adjusted annual rate of 5.57 million, the highest in more than two years, the National Association of Realtors estimated Friday. Sales as tracked by the NAR are up 24% from January's bottom, and are up 9.2% compared with a year ago. The median forecast by economists surveyed by MarketWatch looked for a smaller gain to a 5.38 million annual rate from a downwardly revised 5.09 million in August. "Sales surged" in September, said Lawrence Yun, chief economist for the real estate trade group, who gave much of the credit for the increase to the federal government's soon-to-expire $8,000 tax credit for first-time home buyers.
Amazon.com shares hit new all-time high above $113.
Mac Slavo: "We are in the opening stages of the Greatest Depression, a term coined by Trends Forecast founder Gerald Celente. The next stage, as Mr. Celente has said, will be “like nothing we've ever seen in our life time.”
Welcome to the Greatest Depression.
The technology gains from Microsoft were countered by weakness in semiconductors after disappointing results from Broadcom Corp and MEMC Electronic Materials Inc.
In a substantial (if not the most surprising) move, Lazard (LAZ) changes the base currency of its World Trust Fund from dollars to pounds. Or, as a commenter says, "leaving the Titanic and jumping into Lusitania".
Partners Bank of Naples, Fla. became the 100th bank failure of 2009, according to the Federal Deposit Insurance Corp. on Friday.
American United Bank of Lawrenceville, Ga., became the 101st bank failure of the year, according to the Federal Deposit Insurance Corp. on Friday.
The Dow Jones Industrial Average lost 109 points, or 1.1%, to 9,972, for its biggest point drop since Oct. 1. The S&P 500 fell 13 points, or 1.2%, to 1,080. The Nasdaq Composite lost 11 points, or 0.5%, to 2,155. Stocks fell for the first week in three. The Dow average lost 0.2% for the week, the S&P 500 fell 0.7% and the Nasdaq lost 0.1%.
Appliance maker Electrolux announced Friday that it would close two Iowa plants by spring 2011, putting 850 people out of work as operations are moved to Mexico.
Ricardo Lago: "One of the problems is that the snowball of swaps and derivatives has not shrunk much. The notional value of swaps and derivatives surveyed by the ISDA - by no means the real total which is unknown to us - amounts today to US$ 454 trillion or eight times the World’s GDP (just marginally lower than the value at the trigger of the crisis). This figure involves a gross credit exposure of US$ 26 billion or close to twice the GDP of the USA and a, more relevant, net credit exposure of US$ 4 trillion, a figure twice the total equity position of all US banks. All these figures are lower bounds; part of the problem is that we do not know what the real magnitude is.
The central question is: will the G-20 (within BIS, IMF or any other) reach binding agreements on switching the lights on and enforcing an orderly unwinding and gradual shrinkage of the snowball of derivatives? Or will they procrastinate and let the snowball continue to roll downhill in the dark?
The “Achilles heel” of the international financial system continues to be the ocean of derivates, particularly those negotiated over-the counter (OTC), including but not limited to Credit Default Swaps (CDS). If the economic recovery holds there may not be any major hassle with orderly settlements. By contrast, if a double –dip hits us and its second leg is deep enough – however small the probability - then cash-strapped governments will have to choose between a second round of massive financial subsidies or else have creditors assume the losses and let banks fail. The first would likely lead to hyperinflation and the second to a collapse of the “house of cards” of the payments system and financial chaos, a 1930s style depression."
Microsoft said net income slipped to $3.57 billion, or 40 cents a share, from $4.37 billion, or 48 cents a share, in the year-earlier quarter. Revenue fell 14% to $12.92 billion, though the decline was smaller 4% adjusted for the deferral of sales of Microsoft's new Windows 7 software. Analysts polled by Thomson Reuters had estimated Microsoft would post earnings of 32 cents a share and $12.4 billion in revenue. Tight cost controls contributed to better-than-expected profit, the company said. Shares of Microsoft, which closed Thursday at $26.59, jumped to $28.68 in preopen trades.
Microsoft’s cash position at quarter end rose to $36.7 billion, from $31.4 billion one quarter earlier.
Here’s a breakdown of the quarter by division:
* Most of the reported revenue decline was in Windows, due to the revenue deferral; win revenue down to $2.62 billion from $4.28 billion a year ago. Operating income from Windows fell by more than half, to $1.46 billion from $3.06 billion.
* Server and tools was up fractionally, at $3.43 billion, versus $3.42 billion. Operating income in the group rose to $1.28 billion from $1.04 billion.
* Online services revenue slipped to $490 million, from $520 million; the company loss $480 million in this division in the quarter, worse than the $321 million loss in the year ago quarter.
* The Microsoft Business Division, which includes Office, sagged to $4.4 billion, from $4.95 billion. Operating income from MBD was $2.86 billion, down from $3.19 billion.
* Entertainment and Devices was almost flat, at $1.891 billion versus $1.893 billion, while operating income from the segment rose to $312 million from $159 million.
Oil services group Schlumberger said that third-quarter attributable net income fell to $787 million, or 65 cents a share, from $1.5 billion, or $1.25 a share, at the same point a year ago. Analysts had been expecting earnings of 62 cents a share, according to data compiled by FactSet. Revenue fell to $5.4 billion, from $7.3 billion last year. "The worst, provided the economy continues to show signs of recovery, is behind us," Chairman and CEO Andrew Gould said.
British gross domestic product unexpectedly shrank by 0.4% in the third quarter, according to data from the Office for National Statistics. It was the sixth straight contraction for the U.K. economy. Economists had been expecting a modest 0.1% rise. Compared to the third quarter of 2008, GDP declined 5.2%.
. Over the year, the number of mass layoff events increased by 271, and associated initial claims increased by 7,285. Year-to-date mass layoff events (23,745) and initial claims (2,410,208) both recorded program highs. In September, 856 mass layoff events were reported in the manufacturing sector, seasonally adjusted, resulting in 97,066 initial claims. Over the month, the number of manufacturing events decreased by 44, while associated initial claims increased by 3,174.
Daniel Amerman: "There are 111 million households in the United States. If we take $700 billion and we divide it by 111 million households, we come up with a trade deficit per average American family of about $6,300 a year. The median income per American household is about $50,000 per year. So when we put the deficit into personal terms, it means that about 12% of the standard of living of the average American family consists of goods we consume from other nations, for which we don't produce enough with our own goods to pay....There are 111 million households in the United States. If we take $700 billion and we divide it by 111 million households, we come up with a trade deficit per average American family of about $6,300 a year. The median income per American household is about $50,000 per year. So when we put the deficit into personal terms, it means that about 12% of the standard of living of the average American family consists of goods we consume from other nations, for which we don't produce enough with our own goods to pay....The problem with relying on other nations to provide your standard of living, is that you've just given up control over your standard of living, and you'd better be very respectful of the people who are providing it. We are not being respectful. With each round of government spending that the government can't actually afford, as it sells out the average citizen for the benefit of Wall Street, it ratchets up the chances of a precipitous, entirely real drop in our national standard of living. Straight down to living only off of what we can produce.
And now on a personal level, I do believe that we need to go there. We need to get to the place where our national standard of living is based on what our national economy actually produces; our national security depends on it, as does the rebirth of American jobs. That doesn't mean we don't buy goods from overseas, but that does mean that we produce enough in exchange pay for them. However the key is how fast we go there. Because if it happens too quickly, we risk national economic catastrophe."
The Rasmussen Reports daily Presidential Tracking Poll for Friday shows that 29% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Thirty-eight percent (38%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -9.
Jesse's Cafe Americain:"The US financial crisis is always and everywhere caused by the triumph of short term greed in support of Ponzi schemes and frauds, perpetrated by a handful of Wall Street bankers and their accomplices in the political process and the media, facilitated by the wholesale weakening of the American mind and character and European and Asian greed and gullibility.Everything else is commentary."
3M Co.'s Q3 net fell 3.4%, beats est., raised its full-year EPS view now to $4.50-4.55.
Has the Dow Transport Index begun to roll over?
Resales of U.S. houses jumped 9.4% in September to a seasonally adjusted annual rate of 5.57 million, the highest in more than two years, the National Association of Realtors estimated Friday. Sales as tracked by the NAR are up 24% from January's bottom, and are up 9.2% compared with a year ago. The median forecast by economists surveyed by MarketWatch looked for a smaller gain to a 5.38 million annual rate from a downwardly revised 5.09 million in August. "Sales surged" in September, said Lawrence Yun, chief economist for the real estate trade group, who gave much of the credit for the increase to the federal government's soon-to-expire $8,000 tax credit for first-time home buyers.
Amazon.com shares hit new all-time high above $113.
Mac Slavo: "We are in the opening stages of the Greatest Depression, a term coined by Trends Forecast founder Gerald Celente. The next stage, as Mr. Celente has said, will be “like nothing we've ever seen in our life time.”
Welcome to the Greatest Depression.
The technology gains from Microsoft were countered by weakness in semiconductors after disappointing results from Broadcom Corp and MEMC Electronic Materials Inc.
In a substantial (if not the most surprising) move, Lazard (LAZ) changes the base currency of its World Trust Fund from dollars to pounds. Or, as a commenter says, "leaving the Titanic and jumping into Lusitania".
Partners Bank of Naples, Fla. became the 100th bank failure of 2009, according to the Federal Deposit Insurance Corp. on Friday.
American United Bank of Lawrenceville, Ga., became the 101st bank failure of the year, according to the Federal Deposit Insurance Corp. on Friday.
The Dow Jones Industrial Average lost 109 points, or 1.1%, to 9,972, for its biggest point drop since Oct. 1. The S&P 500 fell 13 points, or 1.2%, to 1,080. The Nasdaq Composite lost 11 points, or 0.5%, to 2,155. Stocks fell for the first week in three. The Dow average lost 0.2% for the week, the S&P 500 fell 0.7% and the Nasdaq lost 0.1%.
Appliance maker Electrolux announced Friday that it would close two Iowa plants by spring 2011, putting 850 people out of work as operations are moved to Mexico.
Thursday, October 22, 2009
Unemployment Claims
10/22/09 Unemployment Claims
First-time claims for state unemployment benefits rose rose 11,000 to 531,000 in the week ended Oct. 17. It's the highest level since the week ended Sept. 26. Claims had fallen 34,000 in the prior two weeks. The four-week average of initial claims inched lower by 750 to 532,250 -- the lowest level since mid-January. Meanwhile, the number of Americans receiving state jobless benefits fell 98,000 to 5.92 million in the week ending Oct 10. That's the lowest level since the end of March. The four-week moving average of continuing claims fell 59.250 to 6.03 million, the lowest level since the week ended April 11.
"There is a sense that if you make money you are going to give. Making money, however, is different from stealing money. If you steal the money, you are not expected to give it to a charity my friends. If you steal the money we will take the money back from you, by way of the government, and put you in jail. The American taxpayer in fact has given trillions of dollars, billions directly to Goldman Sachs so that Goldman can use the taxpayer subsidy to play a parlor game and pay themselves record bonuses." - Dylan Ratigan
China's gross domestic product expanded at an accelerated rate of 8.9% in the third quarter from the same period a year ago, boosted by rising industrial output and a strong growth in bank lending this year. The increase is greater than the 7.9% expansion in the second quarter.
Japan's exports fell 30.7% in September, compared with a year ago, as shipments to the U.S. fell by 34.1%, data from the Ministry of Finance showed Thursday. The fall in total exports came in worse than the median market forecast for a 29.9% fall and marked a third-straight monthly decline, according to Reuters. Imports slipped by 36.9%.
Diamond Offshore Drilling Inc. said Thursday third-quarter net income rose 17% to $364.1 million, or $2.62 a share, from $310.5 million, or $2.23 a share in the year-ago period. Revenue rose slightly to $908.4 million from $900.4 million. Analysts expected the Houston oil service firm to earn $2.29 a share on revenue of $874.4 million, according to a survey of analysts by FactSet Research. Diamond Offshore also declared a special cash dividend of $1.88 a share and a regular quarterly cash dividend of 12.5 cents a share. Both dividends are payable on Dec. 1 to shareholders of record on Nov. 2.
Union Pacific Corp. said Thursday third-quarter net income fell to $517 million, or $1.02 a share, from $703 million, or $1.38 a share in the year-ago period. The company cited lower demand in the face of the recession. The Omaha, Neb. railroad operator said revenue fell 25% to $3.47 billion from $4.63 billion. Analysts expected net income of $1.01 a share on revenue of $3.73 billion, according to a survey by FactSet Research. "As we enter the final quarter of 2009, business volumes seem to have stabilized, but at very low levels for Union Pacific," the company said. "In this weak economic environment, we remain committed to maintaining a strong balance sheet and a solid cash position."
McDonald's Corp said Thursday that third-quarter earnings were $1.26 billion, or $1.15 a share, compared to $1.19 billion, or $1.05 a share, in the same period a year ago. Revenue fell 4% to $6.05 billion compared to $6.27 billion.
The United States, which posted a record deficit in the last fiscal year, may lose its Aaa-rating if it does not reduce the gap to manageable levels in the next 3-4 years, Moody's Investors Service said on Thursday.
How about 3 or 4 days? Moody's sucks.
Kimberly Clark Corp., the maker of Huggies diapers and Kleenex tissues, said Thursday its profit jumped 41 percent in the second quarter because of higher prices on its products and lower commodity and energy costs.
For 2009, Kimberly-Clark expects to earn $4.50 to $4.60 per share, compared with an earlier forecast of $4.10 to $4.25. Analysts expect $4.26 per share. The company now says its revenue will decline 2 percent, compared with its previous expectation of a drop between 4 percent and 6 percent.
Kimberly-Clark said it will focus on cutting costs and investing in its brands for the rest of the year but warned that pulp prices have risen more than expected. The shares are trading at the high for the year and have risen from $45 to $63+ in a quiet fashion since suggesting purchase. For me, this been a wonderful low-risk value investment. I keep searching for others.
ZeroHedge: "The S&P 500 Index is now selling at 26 times operating earnings. That's more expensive than at the bull market top in 2007. Are things really better than at the five-year bull market top in 2007? What about the trillions of dollars of bad assets still on the books of financial institutions around the world? Most analysts agree that the market is over valued. Yet they have to participate because the market is going up. They hope to be the first ones out of the exit when the plug is pulled. Do you think you can do that?"
After rising for three months, U.S. home prices fell 0.3% in August compared with the month before, the Federal Housing Finance Agency reported Thursday. Prices were down 3.6% in the past year, and were down 10.7% from the peak. Prices rose in four of nine regions, fell in four and were flat in the other. The biggest gains came in the Pacific region (up 1.2%) and Mountain region(up 0.8%), where the housing bubble was the most intense. The largest declines in August were in the South Atlantic (down 1.6%) and New England (down 1.1%).
Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer maker by production capacity, said third-quarter profit plunged 80 percent amid a slump in demand for its namesake crop nutrient.
Net income tumbled to $248.8 million, or 82 cents a share, from $1.24 billion, or $3.93, a year earlier, the Saskatoon, Saskatchewan-based company said today in a statement. The average estimate of 18 analysts surveyed by Bloomberg was for profit excluding some items of 80 cents a share. Potash forecast fourth-quarter profit that trailed analysts’ estimates.
Chief Executive Officer Bill Doyle has cut potash output as farmers and distributors in the U.S. slow purchases of the nutrient in anticipation of even lower prices. China, the world’s largest importer of seaborne supplies of the form of potassium, has essentially halted purchases, said Edlain Rodriguez, an analyst at Broadpoint AmTech in New York.
The leading index over the past six months was up 11.8 percent at an annual rate, the biggest gain since 1983. Eight of the 10 indicators in today’s report contributed to the gain, led by the difference between short- and long-term borrowing costs, an increase in consumer expectations, lower jobless claims and higher equity prices. Decreases in building permits and the factory workweek were the only two measures that subtracted from the index. The gauge of lagging indicators fell 0.3 percent. The index measures business lending, length of unemployment, service prices and ratios of labor costs, inventories and consumer credit.
The Conference Board’s index of coincident indicators, a gauge of current economic activity, was unchanged in September after rising 0.1 percent the prior two months. The index tracks payrolls, incomes, sales and production, the measures used by the National Bureau of Economic Analysis to determine the beginning and end of U.S. recessions.
Working gas in storage was 3,734 Bcf as of Friday, October 16, 2009, according
to EIA estimates. This represents a net increase of 18 Bcf from the previous
week. Stocks were 397 Bcf higher than last year at this time and 432 Bcf above
the 5-year average of 3,302 Bcf. In the East Region, stocks were 114 Bcf above
the 5-year average following net injections of 11 Bcf. Stocks in the Producing
Region were 252 Bcf above the 5-year average of 935 Bcf after a net injection of
5 Bcf. Stocks in the West Region were 65 Bcf above the 5-year average after a
net addition of 2 Bcf. At 3,734 Bcf, total working gas is above the 5-year
historical range.
International Paper Co. will cut its North American paper and board output by 2.1 million tons. International Paper will close its paper mill and associated operations in Franklin, Va., and its containerboard mills in Pineville, La., and Albany, Ore. The company plans to permanently shut down the previously idled No. 3 machine at its Valliant, Okla., containerboard mill. The Valliant Mill's other two machines will continue to operate. All the closures will affect 1,600 workers.
In September, employers took 2,561 mass layoff actions involving 248,006 workers. Mass layoff events decreased by 129 and associated initial claims by 11,301 from August.Year-to-date events and initial claims reached new program highs at 23,745 and 2,410,208, respectively.
One item with a growing infrastructure demand are manhole covers. I kid you not.
December gold fell $5.90, or 0.6%, to $1,058.6 an ounce at the close of floor trading in New York. December silver fell 28 cents, or 1.6%, to $17.545 an ounce. Copper for December delivery lost 4 cents, or 1.3%, to $2.998 a pound. Gold has risen about 10% since early September.
Railroad operator Burlington Northern Santa Fe reported a third-quarter profit of $488 million, or $1.42 a share, down from $695 million, or $1.99 a share, a year ago. Excluding a one-time favorable coal rate adjustment, earnings came in at $1.36 a share. Sales fell to $3.6 billion from $4.9 billion.
American Express Co.said on Thursday that its third quarter net income fell 21% to $640 million, or 53 cents a share, compared to $815 million, or 70 cents a share a year ago.
The Dow Jones Industrial Average gained 131.95 points, or 1.3%, to 10,081.31. The S&P 500 Index rose 11.51 points, or 1.1%, to end at 1,092.91. The Nasdaq Composite, which spent the bulk of the day in the red, finished up 14.56 points, or 0.7%, at 2,165.29.
For the third quarter, Amazon said net income was $199 million, or 45 cents a share, compared to net income of $118 million, or 27 cents a share, for the same period the previous year. Revenue rose 28% to $5.45 billion. For the fourth quarter, Amazon predicted revenue in the range of $8.125 billion to $9.125 billion. Wall Street had been expecting revenue of $8.13 billion.
First-time claims for state unemployment benefits rose rose 11,000 to 531,000 in the week ended Oct. 17. It's the highest level since the week ended Sept. 26. Claims had fallen 34,000 in the prior two weeks. The four-week average of initial claims inched lower by 750 to 532,250 -- the lowest level since mid-January. Meanwhile, the number of Americans receiving state jobless benefits fell 98,000 to 5.92 million in the week ending Oct 10. That's the lowest level since the end of March. The four-week moving average of continuing claims fell 59.250 to 6.03 million, the lowest level since the week ended April 11.
"There is a sense that if you make money you are going to give. Making money, however, is different from stealing money. If you steal the money, you are not expected to give it to a charity my friends. If you steal the money we will take the money back from you, by way of the government, and put you in jail. The American taxpayer in fact has given trillions of dollars, billions directly to Goldman Sachs so that Goldman can use the taxpayer subsidy to play a parlor game and pay themselves record bonuses." - Dylan Ratigan
China's gross domestic product expanded at an accelerated rate of 8.9% in the third quarter from the same period a year ago, boosted by rising industrial output and a strong growth in bank lending this year. The increase is greater than the 7.9% expansion in the second quarter.
Japan's exports fell 30.7% in September, compared with a year ago, as shipments to the U.S. fell by 34.1%, data from the Ministry of Finance showed Thursday. The fall in total exports came in worse than the median market forecast for a 29.9% fall and marked a third-straight monthly decline, according to Reuters. Imports slipped by 36.9%.
Diamond Offshore Drilling Inc. said Thursday third-quarter net income rose 17% to $364.1 million, or $2.62 a share, from $310.5 million, or $2.23 a share in the year-ago period. Revenue rose slightly to $908.4 million from $900.4 million. Analysts expected the Houston oil service firm to earn $2.29 a share on revenue of $874.4 million, according to a survey of analysts by FactSet Research. Diamond Offshore also declared a special cash dividend of $1.88 a share and a regular quarterly cash dividend of 12.5 cents a share. Both dividends are payable on Dec. 1 to shareholders of record on Nov. 2.
Union Pacific Corp. said Thursday third-quarter net income fell to $517 million, or $1.02 a share, from $703 million, or $1.38 a share in the year-ago period. The company cited lower demand in the face of the recession. The Omaha, Neb. railroad operator said revenue fell 25% to $3.47 billion from $4.63 billion. Analysts expected net income of $1.01 a share on revenue of $3.73 billion, according to a survey by FactSet Research. "As we enter the final quarter of 2009, business volumes seem to have stabilized, but at very low levels for Union Pacific," the company said. "In this weak economic environment, we remain committed to maintaining a strong balance sheet and a solid cash position."
McDonald's Corp said Thursday that third-quarter earnings were $1.26 billion, or $1.15 a share, compared to $1.19 billion, or $1.05 a share, in the same period a year ago. Revenue fell 4% to $6.05 billion compared to $6.27 billion.
The United States, which posted a record deficit in the last fiscal year, may lose its Aaa-rating if it does not reduce the gap to manageable levels in the next 3-4 years, Moody's Investors Service said on Thursday.
How about 3 or 4 days? Moody's sucks.
Kimberly Clark Corp., the maker of Huggies diapers and Kleenex tissues, said Thursday its profit jumped 41 percent in the second quarter because of higher prices on its products and lower commodity and energy costs.
For 2009, Kimberly-Clark expects to earn $4.50 to $4.60 per share, compared with an earlier forecast of $4.10 to $4.25. Analysts expect $4.26 per share. The company now says its revenue will decline 2 percent, compared with its previous expectation of a drop between 4 percent and 6 percent.
Kimberly-Clark said it will focus on cutting costs and investing in its brands for the rest of the year but warned that pulp prices have risen more than expected. The shares are trading at the high for the year and have risen from $45 to $63+ in a quiet fashion since suggesting purchase. For me, this been a wonderful low-risk value investment. I keep searching for others.
ZeroHedge: "The S&P 500 Index is now selling at 26 times operating earnings. That's more expensive than at the bull market top in 2007. Are things really better than at the five-year bull market top in 2007? What about the trillions of dollars of bad assets still on the books of financial institutions around the world? Most analysts agree that the market is over valued. Yet they have to participate because the market is going up. They hope to be the first ones out of the exit when the plug is pulled. Do you think you can do that?"
After rising for three months, U.S. home prices fell 0.3% in August compared with the month before, the Federal Housing Finance Agency reported Thursday. Prices were down 3.6% in the past year, and were down 10.7% from the peak. Prices rose in four of nine regions, fell in four and were flat in the other. The biggest gains came in the Pacific region (up 1.2%) and Mountain region(up 0.8%), where the housing bubble was the most intense. The largest declines in August were in the South Atlantic (down 1.6%) and New England (down 1.1%).
Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer maker by production capacity, said third-quarter profit plunged 80 percent amid a slump in demand for its namesake crop nutrient.
Net income tumbled to $248.8 million, or 82 cents a share, from $1.24 billion, or $3.93, a year earlier, the Saskatoon, Saskatchewan-based company said today in a statement. The average estimate of 18 analysts surveyed by Bloomberg was for profit excluding some items of 80 cents a share. Potash forecast fourth-quarter profit that trailed analysts’ estimates.
Chief Executive Officer Bill Doyle has cut potash output as farmers and distributors in the U.S. slow purchases of the nutrient in anticipation of even lower prices. China, the world’s largest importer of seaborne supplies of the form of potassium, has essentially halted purchases, said Edlain Rodriguez, an analyst at Broadpoint AmTech in New York.
The leading index over the past six months was up 11.8 percent at an annual rate, the biggest gain since 1983. Eight of the 10 indicators in today’s report contributed to the gain, led by the difference between short- and long-term borrowing costs, an increase in consumer expectations, lower jobless claims and higher equity prices. Decreases in building permits and the factory workweek were the only two measures that subtracted from the index. The gauge of lagging indicators fell 0.3 percent. The index measures business lending, length of unemployment, service prices and ratios of labor costs, inventories and consumer credit.
The Conference Board’s index of coincident indicators, a gauge of current economic activity, was unchanged in September after rising 0.1 percent the prior two months. The index tracks payrolls, incomes, sales and production, the measures used by the National Bureau of Economic Analysis to determine the beginning and end of U.S. recessions.
Working gas in storage was 3,734 Bcf as of Friday, October 16, 2009, according
to EIA estimates. This represents a net increase of 18 Bcf from the previous
week. Stocks were 397 Bcf higher than last year at this time and 432 Bcf above
the 5-year average of 3,302 Bcf. In the East Region, stocks were 114 Bcf above
the 5-year average following net injections of 11 Bcf. Stocks in the Producing
Region were 252 Bcf above the 5-year average of 935 Bcf after a net injection of
5 Bcf. Stocks in the West Region were 65 Bcf above the 5-year average after a
net addition of 2 Bcf. At 3,734 Bcf, total working gas is above the 5-year
historical range.
International Paper Co. will cut its North American paper and board output by 2.1 million tons. International Paper will close its paper mill and associated operations in Franklin, Va., and its containerboard mills in Pineville, La., and Albany, Ore. The company plans to permanently shut down the previously idled No. 3 machine at its Valliant, Okla., containerboard mill. The Valliant Mill's other two machines will continue to operate. All the closures will affect 1,600 workers.
In September, employers took 2,561 mass layoff actions involving 248,006 workers. Mass layoff events decreased by 129 and associated initial claims by 11,301 from August.Year-to-date events and initial claims reached new program highs at 23,745 and 2,410,208, respectively.
One item with a growing infrastructure demand are manhole covers. I kid you not.
December gold fell $5.90, or 0.6%, to $1,058.6 an ounce at the close of floor trading in New York. December silver fell 28 cents, or 1.6%, to $17.545 an ounce. Copper for December delivery lost 4 cents, or 1.3%, to $2.998 a pound. Gold has risen about 10% since early September.
Railroad operator Burlington Northern Santa Fe reported a third-quarter profit of $488 million, or $1.42 a share, down from $695 million, or $1.99 a share, a year ago. Excluding a one-time favorable coal rate adjustment, earnings came in at $1.36 a share. Sales fell to $3.6 billion from $4.9 billion.
American Express Co.said on Thursday that its third quarter net income fell 21% to $640 million, or 53 cents a share, compared to $815 million, or 70 cents a share a year ago.
The Dow Jones Industrial Average gained 131.95 points, or 1.3%, to 10,081.31. The S&P 500 Index rose 11.51 points, or 1.1%, to end at 1,092.91. The Nasdaq Composite, which spent the bulk of the day in the red, finished up 14.56 points, or 0.7%, at 2,165.29.
For the third quarter, Amazon said net income was $199 million, or 45 cents a share, compared to net income of $118 million, or 27 cents a share, for the same period the previous year. Revenue rose 28% to $5.45 billion. For the fourth quarter, Amazon predicted revenue in the range of $8.125 billion to $9.125 billion. Wall Street had been expecting revenue of $8.13 billion.
Wednesday, October 21, 2009
Don't Be A Pig
10/21/09 Don't Be A Pig
Robert McHugh: " We are watching the Rising Bearish Wedges in the major U.S. averages and they are not far from completion. Downside targets from these patterns are the March 2009 lows, which means a return to the lows for this Bear Market from 2007 is likely. Larger Bearish Head & Shoulders patterns warn that if we drop below those March 2009 lows, prices could head toward zero. Not all at once, but slowly and relentlessly like occurred in the early 1930's. Timing allows for a bit more rally over the next few weeks. However, we are in truncation territory where this particular Bearish pattern can either see prices give one last throw over spike above the converging upper boundary, or can truncate, meaning fail to reach the top boundary and plunge. We are holding a lot of cash in our conservative investment portfolio at this time in preparation for this coming plunge. Bear Markets love to catch as many folks off guard as possible. Bear Markets not only want Bulls to lose money, they also want Bears to miss the declines. Dangerous patterns are in place. Get ready."
Boeing Co on Wednesday posted a quarterly net loss on charges related to the first three 787 flight-test planes and the 747 program.
The world's second-largest plane-maker, after EADS unit Airbus, said the net loss was $1.6 billion, or $2.23 per share, compared with a profit of $695 million, or 96 cents per share, a year earlier.
The American Petroleum Institute said crude stocks rose 3.8 million barrels, more than the forecast.
Italian carmaker Fiat said Wednesday that its third-quarter net profit totaled 25 million euros ($37.3 million), down from 468 million euros last year. Revenue declined to 12 billion euro, from 14.3 billion euros.
Cadbury said Wednesday that third-quarter revenue rose 7% excluding the impact of exchange rate fluctuations as it also lifted its sales and margin forecasts for the year. The company, which has received a takeover approach from Kraft Foods said revenue grew 10% in Britain and Ireland and was also up strongly in emerging markets. For 2009 it's now expecting revenue growth around the middle of its 4% to 6% target range, having previously forecast that revenue would be toward the low end of the range. It also lifted its margin outlook, saying underlying operating margins are expected to improve by at least 1.35 percentage points. "In the third quarter we have delivered growth in every category and every business," said CEO Todd Stitzer. He didn't make any comment on the approach from Kraft.
Three days of talks on Iran's nuclear program wrapped up here Wednesday with a draft agreement on how to provide the Islamic republic nuclear fuel for civilian purposes.
"We are seeing encouraging signs that indicate a recovery may be under way,"Caterpillar's CEO Jim Owens said as the company announced results on Tuesday.
He cautioned that the world economy still faces significant challenges and that 2010 will be difficult.
Those challenges have dogged the world's largest maker of construction and mining equipment. Global machinery sales fell 48 percent in August, the 11th-straight month of declines. Dealers supplied customers by dipping into stockpiles rather than placing new orders.
The shockingly poor financial management of General Motors and Chrysler weakened their case for a government bailout, but officials feared letting the automakers collapse would severely harm the U.S. economy, the former head of the Obama administration's auto task force says. In a first-person account posted on Fortune's Web site Wednesday, Steven Rattner said he was alarmed by the "stunningly poor management" at the Detroit companies and that GM had "perhaps the weakest finance operation any of us had ever seen in a major company."
The economic recovery currently underway is a statistical mirage, based on easy year-over-year comparisons and inventory rebuilding, John Mauldin, president of Millennium Wave Securities, states.
The unemployment rate is closer to 12% when you include people who've been dropped from the survey and the "underemployment" rate - people working part-time vs. full time - is 17% to 18%, "and rising," Mauldin says. "That doesn't feel like recovery."
Mauldin, who writes the popular Thoughts from the Frontline e-letter, predicts the U.S. economy will be back in recession next year because of higher taxes, both new and with the expiration of the Bush tax cuts.
"The Obama administration [and] the Democrats aren't going to be able to help themselves," he says. "The deficits are going to be running so high they'll feel - politically -- the need to do something. The way they want to solve it -- instead of cutting spending is to increase the revenue. That's going to suck a lot of air out of the room."
Brent Steenbarger: "Over 500 NYSE, NASDAQ, and ASE stocks registered 20-day lows yesterday, and we're starting to see more signs of trend breakdown: 14 of my 40 stocks in the basket are now either in short-term neutral or downtrending modes. Small cap issues are already near their 10/13 lows, indicating underperformance."
Morgan Stanley, the sixth-largest U.S. bank by assets, reported its first profit in a year, surpassing analysts’ estimates on higher investment-banking fees.
Third-quarter earnings fell to $757 million, or 38 cents a share, from $7.7 billion, or $6.97, a year earlier, the New York-based company said today in a statement. The average estimate of 21 analysts surveyed by Bloomberg was for earnings per share of 30 cents, with predictions ranging from 11 cents to 56 cents.
The Oil Drum: "THE world will have to find four Saudi Arabias by 2030 if it wants to maintain its oil dependency, the International Energy Agency says.
The reality of peak oil is fast approaching, and more must be done to develop and encourage the use of alternatives including solar and nuclear, the agency's chief economist has warned.
"My main motto never changes, the era of low oil prices is over," Dr Fatih Birol said.
"When the economy recovers, oil prices will recover accordingly. Mid to long term, we will be experiencing high prices."
Jamie Lau: "Low- and middle-income households with credit card debt owe, on average, $9,827 on their cards. If you make the minimum monthly payment - often 2 percent of the balance or $10 - at 10 percent interest, it will take you more than 26 years to pay off the balance, including $6,812 in interest.
But what if the rate were raised, or if your rate was tacked to the prime rate (currently 3.25 percent)? It could take more than a lifetime to pay off that debt."
Wells Fargo's Chief Financial Officer Howard Atkins said on Wednesday that the firm expects credit losses to peak in 2010. "We are seeing signs of stability in our credit portfolio and, based on our current economic outlook, we expect credit losses to peak in 2010, with consumer losses potentially peaking in the first half of the year and gradually declining as the year progresses," Atkins said in a recorded call webcast on Wednesday. Atkins also said that the firm's acquisition of Wachovia Corp. last year is contributing to its bottom line, "earlier and better than originally anticipated."
Poland's Prime minister says his country is ready to participate in a reconfigured U.S. missile shield.
This holiday season, don't be surprised if your gifts come from discount stores -- or if some of your friends don't buy you anything at all.
Lingering economic worries will cause holiday shoppers to trim budgets and look for more deals this year, according to a National Retail Federation survey to be released today. The survey found that U.S. consumers plan to spend an average of $682.74 on holiday shopping, a 3.2% drop from $705.01 last year.
Genzyme : Q3 EPS of $0.31 misses by $0.13. Revenue of $1.06B (-8.8%) vs. $1.11B. Sees full-year EPS of $2.26 vs. consensus of $2.46.
Manpower: "We continued to experience sluggish demand for our services as the labor markets throughout the world were hampered by lack of demand for companies' products and services... the uptick in revenue is muted at this time compared to previous recoveries."
The Fed's latest snapshot of business conditions nationwide found "many sectors" of the economy either stabilized or logged modest improvements over the last six weeks. The pickups, though, often were from "depressed" levels of activity.
Still, the new report adds to evidence that a recovery has started from the worst recession since the 1930s. Only two of the Fed's 12 regions -- Atlanta and St. Louis -- reported weaker overall economic activity.
Both housing and manufacturing continued a "pattern of improvement that emerged over the summer," the Fed observed.
By contrast, the Fed said weakest link in the recovery was commercial real estate. Conditions were described as "either weak or deteriorating" across all 12 regions surveyed.
Consumer spending also remained weak, the Fed said.
Consumers, whose spending accounts for about 70 percent of economic activity, are expected to stay cautious given rising job losses, stagnant incomes and hard-to-get credit.
"Reports of gains in economic activity generally outnumber declines, but virtually every reference to improvement was qualified as either small or scattered," the Fed survey said.
Biden: "It's a Depression For Millions of Americans"
John Hussman: " Average Americans Are Getting Scalped So That Bondholders Can Be Saved from Taking a Haircut."
U.S. state unemployment rates were generally higher in September compared with August, with 15 states reporting unemployment rates above 10%, the Labor Department said. All 50 states and the District of Columbia have seen increases in unemployment over the past year. Michigan again had the highest jobless rate, at 15.3%, followed by Nevada at 13.3%, Rhode Island at 13%, and California at 12.2%. The lowest jobless rate was in North Dakota at 4.2%, followed by South Dakota at 4.8%, and Nebraska at 4.9%. In September, 23 states and the District of Columbia recorded increases in the unemployment rate, 19 states registered rate decreases, and 8 states had no rate change.
U.S. dollar index trades at new yearly low at 74.94 and the euro exceeds $1.50.
10-year notes remained higher by 5 basis points to 3.49%.
Crude inventories rose 1.3 million barrels in the week ended Oct. 16, the Energy Information Administration reported. Analysts surveyed by Platts had expected a gain of 2.2 million barrels. Imports fell to 8.7 million barrels a day, the lowest level since the week ended Aug. 14. The EIA also reported a decline of 2.3 million barrels in gasoline inventories and a decrease of 800,000 barrels in distillate stockpiles, which include heating oil and diesel. After the data, crude for December delivery rose 0.6% to $79.56 a barrel. It was down about 0.4% before the data.
Average retail gasoline prices started ticking higher one week later and a gallon has increased every day since, up about 12 cents in one week to $2.596 on Wednesday, according to auto club AAA, Wright Express and Oil Price Information Service.
A gallon is still 29 cents less than last year at this time, when gas prices were in full retreat.
Benchmark crude for December delivery rose $2.25 to settle at $81.37 a barrel on the New York Mercantile Exchange. Prices hit $82 at one point.
Dow industrials off 92.65 points to 9,948.83. S&P 500 Index drops 9.74 points to 1,081.32. The Nasdaq Composite shed 12.74 points, or 0.6%, to end at 2,150.73.
Amgen sees adjusted 2009 EPS of $4.90-$5.05.
Art Hogan, equities analyst at Jefferies & Co., pointed to three concerns among investors. "What is going on with retailers - it may have something to do with Wal-Mart's analysts' meeting. And, the market is coming to a disconnect with what is going on in the commodities market. And the third thing is the reaction to earnings has shifted a bit. The reaction now has shifted to taking profit on the news from buy on the news." Wal-Mart and Costco both dropped more than $1 a share.
EBay Inc. reported a drop in third-quarter earnings Wednesday afternoon, though revenue for the quarter came in notably higher than Wall Street's estimates.
Shares fell more than 8% in after-hours trading Wednesday following the results, after the company issued a highly conservative forecast for the current quarter. The stock -- which closed the regular session down 3 cents at $25.03 -- has already run-up nearly 80% so far this year.
Asian markets dropped early Thursday, paced by shares of regional financials after banks dragged on Wall Street overnight. Japan's Nikkei 225 Average fell 1% to 10,234.08, and the broader Topix 1000 Index slid 1% to 904.63. South Korea's Kospi gave up 0.9%, Australia's S&P/ASX 200 slipped 0.2%, and New Zealand's NZX 50 lost 0.8%.
Brent Steenbarger: "On September 16th, we saw over 2300 stocks across the NYSE, NASDAQ, and ASE register fresh 65-day highs. That number hit 1470 on October 14th and 1238 on Monday. This suggests a narrowing of participation in the rally, which I currently interpret as part of an extended topping process following from the momentum highs of September. As a rule, the more extended the period of topping, the more significant the subsequent correction. While I don't expect this to end the bull market that began in March, I believe we could see a healthy pullback from recent strength." Pullback or collapse? Time will tell. Better to cut back and be around for
another rainy day. Don't go for the other white meat. Don't be a pig.
Robert McHugh: " We are watching the Rising Bearish Wedges in the major U.S. averages and they are not far from completion. Downside targets from these patterns are the March 2009 lows, which means a return to the lows for this Bear Market from 2007 is likely. Larger Bearish Head & Shoulders patterns warn that if we drop below those March 2009 lows, prices could head toward zero. Not all at once, but slowly and relentlessly like occurred in the early 1930's. Timing allows for a bit more rally over the next few weeks. However, we are in truncation territory where this particular Bearish pattern can either see prices give one last throw over spike above the converging upper boundary, or can truncate, meaning fail to reach the top boundary and plunge. We are holding a lot of cash in our conservative investment portfolio at this time in preparation for this coming plunge. Bear Markets love to catch as many folks off guard as possible. Bear Markets not only want Bulls to lose money, they also want Bears to miss the declines. Dangerous patterns are in place. Get ready."
Boeing Co on Wednesday posted a quarterly net loss on charges related to the first three 787 flight-test planes and the 747 program.
The world's second-largest plane-maker, after EADS unit Airbus, said the net loss was $1.6 billion, or $2.23 per share, compared with a profit of $695 million, or 96 cents per share, a year earlier.
The American Petroleum Institute said crude stocks rose 3.8 million barrels, more than the forecast.
Italian carmaker Fiat said Wednesday that its third-quarter net profit totaled 25 million euros ($37.3 million), down from 468 million euros last year. Revenue declined to 12 billion euro, from 14.3 billion euros.
Cadbury said Wednesday that third-quarter revenue rose 7% excluding the impact of exchange rate fluctuations as it also lifted its sales and margin forecasts for the year. The company, which has received a takeover approach from Kraft Foods said revenue grew 10% in Britain and Ireland and was also up strongly in emerging markets. For 2009 it's now expecting revenue growth around the middle of its 4% to 6% target range, having previously forecast that revenue would be toward the low end of the range. It also lifted its margin outlook, saying underlying operating margins are expected to improve by at least 1.35 percentage points. "In the third quarter we have delivered growth in every category and every business," said CEO Todd Stitzer. He didn't make any comment on the approach from Kraft.
Three days of talks on Iran's nuclear program wrapped up here Wednesday with a draft agreement on how to provide the Islamic republic nuclear fuel for civilian purposes.
"We are seeing encouraging signs that indicate a recovery may be under way,"Caterpillar's CEO Jim Owens said as the company announced results on Tuesday.
He cautioned that the world economy still faces significant challenges and that 2010 will be difficult.
Those challenges have dogged the world's largest maker of construction and mining equipment. Global machinery sales fell 48 percent in August, the 11th-straight month of declines. Dealers supplied customers by dipping into stockpiles rather than placing new orders.
The shockingly poor financial management of General Motors and Chrysler weakened their case for a government bailout, but officials feared letting the automakers collapse would severely harm the U.S. economy, the former head of the Obama administration's auto task force says. In a first-person account posted on Fortune's Web site Wednesday, Steven Rattner said he was alarmed by the "stunningly poor management" at the Detroit companies and that GM had "perhaps the weakest finance operation any of us had ever seen in a major company."
The economic recovery currently underway is a statistical mirage, based on easy year-over-year comparisons and inventory rebuilding, John Mauldin, president of Millennium Wave Securities, states.
The unemployment rate is closer to 12% when you include people who've been dropped from the survey and the "underemployment" rate - people working part-time vs. full time - is 17% to 18%, "and rising," Mauldin says. "That doesn't feel like recovery."
Mauldin, who writes the popular Thoughts from the Frontline e-letter, predicts the U.S. economy will be back in recession next year because of higher taxes, both new and with the expiration of the Bush tax cuts.
"The Obama administration [and] the Democrats aren't going to be able to help themselves," he says. "The deficits are going to be running so high they'll feel - politically -- the need to do something. The way they want to solve it -- instead of cutting spending is to increase the revenue. That's going to suck a lot of air out of the room."
Brent Steenbarger: "Over 500 NYSE, NASDAQ, and ASE stocks registered 20-day lows yesterday, and we're starting to see more signs of trend breakdown: 14 of my 40 stocks in the basket are now either in short-term neutral or downtrending modes. Small cap issues are already near their 10/13 lows, indicating underperformance."
Morgan Stanley, the sixth-largest U.S. bank by assets, reported its first profit in a year, surpassing analysts’ estimates on higher investment-banking fees.
Third-quarter earnings fell to $757 million, or 38 cents a share, from $7.7 billion, or $6.97, a year earlier, the New York-based company said today in a statement. The average estimate of 21 analysts surveyed by Bloomberg was for earnings per share of 30 cents, with predictions ranging from 11 cents to 56 cents.
The Oil Drum: "THE world will have to find four Saudi Arabias by 2030 if it wants to maintain its oil dependency, the International Energy Agency says.
The reality of peak oil is fast approaching, and more must be done to develop and encourage the use of alternatives including solar and nuclear, the agency's chief economist has warned.
"My main motto never changes, the era of low oil prices is over," Dr Fatih Birol said.
"When the economy recovers, oil prices will recover accordingly. Mid to long term, we will be experiencing high prices."
Jamie Lau: "Low- and middle-income households with credit card debt owe, on average, $9,827 on their cards. If you make the minimum monthly payment - often 2 percent of the balance or $10 - at 10 percent interest, it will take you more than 26 years to pay off the balance, including $6,812 in interest.
But what if the rate were raised, or if your rate was tacked to the prime rate (currently 3.25 percent)? It could take more than a lifetime to pay off that debt."
Wells Fargo's Chief Financial Officer Howard Atkins said on Wednesday that the firm expects credit losses to peak in 2010. "We are seeing signs of stability in our credit portfolio and, based on our current economic outlook, we expect credit losses to peak in 2010, with consumer losses potentially peaking in the first half of the year and gradually declining as the year progresses," Atkins said in a recorded call webcast on Wednesday. Atkins also said that the firm's acquisition of Wachovia Corp. last year is contributing to its bottom line, "earlier and better than originally anticipated."
Poland's Prime minister says his country is ready to participate in a reconfigured U.S. missile shield.
This holiday season, don't be surprised if your gifts come from discount stores -- or if some of your friends don't buy you anything at all.
Lingering economic worries will cause holiday shoppers to trim budgets and look for more deals this year, according to a National Retail Federation survey to be released today. The survey found that U.S. consumers plan to spend an average of $682.74 on holiday shopping, a 3.2% drop from $705.01 last year.
Genzyme : Q3 EPS of $0.31 misses by $0.13. Revenue of $1.06B (-8.8%) vs. $1.11B. Sees full-year EPS of $2.26 vs. consensus of $2.46.
Manpower: "We continued to experience sluggish demand for our services as the labor markets throughout the world were hampered by lack of demand for companies' products and services... the uptick in revenue is muted at this time compared to previous recoveries."
The Fed's latest snapshot of business conditions nationwide found "many sectors" of the economy either stabilized or logged modest improvements over the last six weeks. The pickups, though, often were from "depressed" levels of activity.
Still, the new report adds to evidence that a recovery has started from the worst recession since the 1930s. Only two of the Fed's 12 regions -- Atlanta and St. Louis -- reported weaker overall economic activity.
Both housing and manufacturing continued a "pattern of improvement that emerged over the summer," the Fed observed.
By contrast, the Fed said weakest link in the recovery was commercial real estate. Conditions were described as "either weak or deteriorating" across all 12 regions surveyed.
Consumer spending also remained weak, the Fed said.
Consumers, whose spending accounts for about 70 percent of economic activity, are expected to stay cautious given rising job losses, stagnant incomes and hard-to-get credit.
"Reports of gains in economic activity generally outnumber declines, but virtually every reference to improvement was qualified as either small or scattered," the Fed survey said.
Biden: "It's a Depression For Millions of Americans"
John Hussman: " Average Americans Are Getting Scalped So That Bondholders Can Be Saved from Taking a Haircut."
U.S. state unemployment rates were generally higher in September compared with August, with 15 states reporting unemployment rates above 10%, the Labor Department said. All 50 states and the District of Columbia have seen increases in unemployment over the past year. Michigan again had the highest jobless rate, at 15.3%, followed by Nevada at 13.3%, Rhode Island at 13%, and California at 12.2%. The lowest jobless rate was in North Dakota at 4.2%, followed by South Dakota at 4.8%, and Nebraska at 4.9%. In September, 23 states and the District of Columbia recorded increases in the unemployment rate, 19 states registered rate decreases, and 8 states had no rate change.
U.S. dollar index trades at new yearly low at 74.94 and the euro exceeds $1.50.
10-year notes remained higher by 5 basis points to 3.49%.
Crude inventories rose 1.3 million barrels in the week ended Oct. 16, the Energy Information Administration reported. Analysts surveyed by Platts had expected a gain of 2.2 million barrels. Imports fell to 8.7 million barrels a day, the lowest level since the week ended Aug. 14. The EIA also reported a decline of 2.3 million barrels in gasoline inventories and a decrease of 800,000 barrels in distillate stockpiles, which include heating oil and diesel. After the data, crude for December delivery rose 0.6% to $79.56 a barrel. It was down about 0.4% before the data.
Average retail gasoline prices started ticking higher one week later and a gallon has increased every day since, up about 12 cents in one week to $2.596 on Wednesday, according to auto club AAA, Wright Express and Oil Price Information Service.
A gallon is still 29 cents less than last year at this time, when gas prices were in full retreat.
Benchmark crude for December delivery rose $2.25 to settle at $81.37 a barrel on the New York Mercantile Exchange. Prices hit $82 at one point.
Dow industrials off 92.65 points to 9,948.83. S&P 500 Index drops 9.74 points to 1,081.32. The Nasdaq Composite shed 12.74 points, or 0.6%, to end at 2,150.73.
Amgen sees adjusted 2009 EPS of $4.90-$5.05.
Art Hogan, equities analyst at Jefferies & Co., pointed to three concerns among investors. "What is going on with retailers - it may have something to do with Wal-Mart's analysts' meeting. And, the market is coming to a disconnect with what is going on in the commodities market. And the third thing is the reaction to earnings has shifted a bit. The reaction now has shifted to taking profit on the news from buy on the news." Wal-Mart and Costco both dropped more than $1 a share.
EBay Inc. reported a drop in third-quarter earnings Wednesday afternoon, though revenue for the quarter came in notably higher than Wall Street's estimates.
Shares fell more than 8% in after-hours trading Wednesday following the results, after the company issued a highly conservative forecast for the current quarter. The stock -- which closed the regular session down 3 cents at $25.03 -- has already run-up nearly 80% so far this year.
Asian markets dropped early Thursday, paced by shares of regional financials after banks dragged on Wall Street overnight. Japan's Nikkei 225 Average fell 1% to 10,234.08, and the broader Topix 1000 Index slid 1% to 904.63. South Korea's Kospi gave up 0.9%, Australia's S&P/ASX 200 slipped 0.2%, and New Zealand's NZX 50 lost 0.8%.
Brent Steenbarger: "On September 16th, we saw over 2300 stocks across the NYSE, NASDAQ, and ASE register fresh 65-day highs. That number hit 1470 on October 14th and 1238 on Monday. This suggests a narrowing of participation in the rally, which I currently interpret as part of an extended topping process following from the momentum highs of September. As a rule, the more extended the period of topping, the more significant the subsequent correction. While I don't expect this to end the bull market that began in March, I believe we could see a healthy pullback from recent strength." Pullback or collapse? Time will tell. Better to cut back and be around for
another rainy day. Don't go for the other white meat. Don't be a pig.
Tuesday, October 20, 2009
PPI and Housing
10/20/09 PPI and Housing
The Producer Price Index for Finished Goods declined 0.6 percent in September, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decrease followed a 1.7-percent rise in August and a 0.9-percent decline in July. In September, at the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 0.2 percent and the crude goods index fell 2.1 percent. On an unadjusted basis, from September 2008 to September 2009, prices for finished goods fell 4.8 percent, the tenth consecutive month of year-over-year declines. In September, over ninety percent of the finished goods decrease was the result of lower energy prices, which moved down 2.4 percent. The indexes for finished goods less foods and energy and for finished consumer foods also contributed to the decline in finished goods prices, both edging down 0.1 percent.
The Producer Price Index for Intermediate Materials, Supplies, and Components moved up 0.2 percent in September, its second consecutive monthly increase. This advance can be attributed to prices for intermediate materials less foods and energy, which rose 0.9 percent. By contrast, the index for intermediate energy goods fell 2.1 percent, and prices for intermediate foods and feeds declined 0.5 percent. On a 12-month basis, the intermediate goods index fell 11.7 percent in September. This was the second consecutive month of slowing year-over-year declines after a record 15.1-percent drop for the 12-months ended July 2009.
Housing starts rose 0.5 percent to an annual rate of 590,000 from a 587,000 pace in August that was lower than previously estimated, figures from the Commerce Department showed today in Washington. Permits, a sign of future construction, fell for the second time in the past three months.
Builders may be paring back in anticipation of the end of the government’s $8,000 tax credit for first-time homebuyers on Nov. 30. Some Federal Reserve policy makers remain concerned the economy will relapse should the stimulus be removed too soon, signaling interest rates will remain low for months.
“It’s still way too early to say that housing markets are generating ongoing momentum, and builders right now are justifiably cautious,” said Robert Dye, a senior economist at PNC Financial Services Group Inc. in Pittsburgh. “There’s a great deal of concern out there about hangover effects from the recession on new home sales.”
Single-family authorizations in September were at a rate of 450,000; this is 3.0 percent (±1.0%) below the revised August figure of 464,000. Authorizations of units in buildings with five units or more were at a rate of 104,000 in September.
Privately-owned housing completions in September were at a seasonally adjusted annual rate of 693,000. This is 10.2 percent (±10.4%)* below the revised August estimate of 772,000 and is 39.6 percent (±5.7%) below the September 2008 rate of 1,148,000. Single-family housing completions in September were at a rate of 464,000; this is 8.3 percent (±14.3%)* below the revised August figure of 506,000. The September rate for units in buildings with five units or more was 210,000.
Caterpillar Inc posted stronger-than-expected quarterly earnings on Tuesday and raised its full-year forecast, saying it was seeing "encouraging signs that indicate a recovery may be under way."
The news sent Caterpillar shares up nearly 5 percent in premarket trading.
Pfizer posted a net profit of $2.88 billion, or 43 cents per share in its last pre-merger quarter, compared with a profit of $2.28 billion, or 34 cents per share, a year ago.
Excluding items, Pfizer earned 51 cents per share. Analysts on average expected 48 cents per share, according to Thomson Reuters I/B/E/S.
United Technologies Corp reported a 17 percent drop in third-quarter profit, less of a decline than Wall Street had expected, as cost-cutting helped offset slumping demand.
Costs have since fallen, 12 percent for DuPont during the third quarter, and could be as much as 6 percent lower by the end of the year, the company said.
That led to a surprise profit of $409 million, or 45 cents per share, for the quarter ending Sept. 30, compared to $367 million, or 40 cents per share, in last year's third quarter, which included a hurricane-related charge of 16 cents per share.
Lockheed Martin Corp , the top U.S. defense contractor, posted higher third-quarter profit and raised its 2009 outlook on Tuesday, but added that it expects per-share earnings to fall in 2010.
Illinois Tool Works Q3 EPS 60 cents vs 87 cents.
Supervalu Q2 EPS 35 cents vs 60 cents.
For the quarter ended Sept. 12, identical store sales were down 4.8%. This comes after a 3.2% decline for the quarter ended June 20 and a 2% decline for quarter ended Feb. 28.
Former Wal-Mart senior executive Craig Herkert was hired in to run Supervalu this past May. One of his first moves was to sell 36 Albertsons sites in Utah to Associated Food Stores. He has also realigned senior managers in a move to make the company more customer-focused and cut the supermarket chain's forecast for sales and profit.
For its fiscal year that ends in February 2010, Supervalu lowered the high end of its earnings forecast to a range of $1.95 to $2.05 a share, or $2.01 to $2.11 on an adjusted basis. That compares to the previous ranges of $1.95 to $2.15 a share, or $2.01 to $2.21 a share on an adjusted basis. Identical-store sales, excluding fuel, are now expected to fall 4%. The dividend was cut.
Coca-Cola Co.said Tuesday that its third-quarter profit rose to $1.896 billion from $1.89 billion. Per-share amount was unchanged at 81 cents a share. The results included a 1-cent restructuring charge. Operating revenue fell 4% to $8.04 billion from $8.39 billion. Total unit-case volume rose 2%. Analysts, on average, estimated the beverage giant to earn 81 cents a share on sales of $8.09 billion, according to FactSet.
Hong Kong-based Orient Overseas International Ltd.said Tuesday its shipping volumes in the third quarter were down 16.7% from a year earlier, while its revenues for the quarter plummeted 42.3%.
After falling for a record-tying ten consecutive days, the VIX narrowly missed setting a new record today when it jumped 0.37 in the 4:00 - 4:15 p.m. ET twilight zone trading period to finish the day at 21.49, +0.06.
Guy Lerner: "Since September 10, the S&P500 is up 4.78%, and the i-Shares Lehman TIPS Bond Fund (symbol: TIP) is up 2%. But on a risk adjusted basis, TIP is about one half as volatile as the S&P500. So this 2% move in TIP is more like 4%. So on a risk adjusted basis, the percentage moves in these assets are almost identical. If I were allocating capital between these two assets (which I am), it is likely that I would allocate twice as much capital to TIP as to the S&P500 thus equalizing my risk across assets."
The Brazilian real dropped sharply on Tuesday, giving back some of its recent strong gains, after Brazil’s finance ministry announced that it would impose a 2 per cent tax on overseas purchases of Brazilian stocks and bonds.
The Baucus health care bill has 1502 pages. Who will read it and who will read it before voting on it?
In early trading natural gas rises 25 cents to $5.09.
The level of poverty in America is even worse than first believed.
A revised formula for calculating medical costs and geographic variations show that approximately 47.4 million Americans last year lived in poverty, 7 million more than the government's official figure.
The disparity occurs because of differing formulas the Census Bureau and the National Academy of Science use for calculating the poverty rate. The NAS formula shows the poverty rate to be at 15.8 percent, or nearly 1 in 6 Americans, according to calculations released this week. That's higher than the 13.2 percent, or 39.8 million, figure made available recently under the original government formula.
Gold for December delivery, the most actively traded contract, rose $6.90, or 0.7%, to $1,065 an ounce. The dollar index, which measures the U.S. unit against a basket of six major currencies, stood at 75.159, down from 75.241 late Monday.
Lexmark International Inc. said Tuesday it will cut an additional 825 jobs this month as it reported that restructuring costs drove down third-quarter profits despite improving demand.
The printer and copier maker said it plans to primarily cut jobs in manufacturing, supply chain, service delivery, marketing and sales support, corporate and development. It expects to save $70 million next year and another $110 million beginning in 2011.
NPD Group reported that September U.S. video game sector revenue inched up 1% in September on a year-over-year basis, snapping a string of six months with year-over-year declines, including a 5% rise in software sales, offset by a 6% drop in hardware revenue. This was below expectations.
ShopperTrak, a retail research firm, predicted Tuesday that total holiday sales will rise 1.6 percent compared with a year ago, which would be good news for retailers compared with last year's steep decline.
The research firm also expects a 4.2 percent decline in foot traffic from last year's holidays.
Last year, holiday sales fell 5.9 percent while foot traffic dropped 15.4 percent, according to ShopperTrak estimates. The research firm tracks customer traffic at more than 45,000 stores.
Existing Small Business Administration loans will have their caps increased in an effort to stimulate the economy President Barack Obama is expected to announce on Wednesday, according to media reports Tuesday. The announcement reportedly will also cover measures to make it easier for small banks to draw funds from the Treasury's Troubled Asset Relief Program.
Brent Steenbarger: "Even as we've seen bull highs in the major indexes in recent sessions, bank stocks have sold off notably. Insurance stocks ($KIX) as well remain below their 10/14 highs and, as noted in the earlier post, regional banks are bringing up the rear in relative performance year to date. Of the sectors that I track, the financial group is the only one not in a bullish short-term trending mode. The rebound in the financial sector heralded in the recent bull market; I'm watching to see if its relative weakness is an equal portent."
IMS Health Inc.is "exploring a variety of strategic alternatives" and that it will provide no further comment during the exploration period. The health-care data specialist said it has hired Deutsche Bank as a financial advisor, and that the company board hired Foros Securities as a financial advisor. IMS said there are no assurances that any transactions will result. Shares of IMS jumped about 22% during trading Monday on a Wall Street Journal report that IMS was advanced discussions with private-equity firms to sell itself.
Gilead Sciences reported a substantially higher third-quarter profit late Tuesday, due largely to a 31% jump in revenue. The biotech group posted net income of $673 million, or 72 cents a share, compared with $496 million, or 52 cents a share, for the same period in 2008. Excluding various items, Gilead would have reported adjusted earnings of 78 cents a share versus 55 cents. Revenue for the quarter rose 31% to $1.8 billion. A poll of analysts by FactSet Research pegged Gilead at posting earnings per share of 69 cents, on revenue of $1.76 billion.
The Dow Jones Industrial Average fell 50.71 points, or 0.5%, to 10,041.48. The S&P 500 Index lost 6.85 points, or 0.6%, to 1,091.06. The Nasdaq Composite shed 12.85 points, or 0.6%, to end at 2,163.47.
Sun Microsystems Inc. said Tuesday that the company is cutting as many as 3,000 jobs, given the delay in closing its planned merger with Oracle Corp. In a filing with the Securities and Exchange Commission, Sun said its board approved a plan "to better align the Company's resources with its strategic business objectives," which includes laying off as many as 3,000 workers over the next 12 months. The company said it would incur charges ranging from $75 million to $125 million over the next several quarters in connection with the plan.
Yahoo Inc. said Tuesday its third-quarter net income rose to $187 million, or 13 cents a share, from $54.3 million, or 4 cents a share in the same period last year. Net revenues for the period ended in September were $1.13 billion, Yahoo said. Analysts polled by Thomson Reuters had estimated Yahoo would post third-quarter earnings of 7 cents a share, and $1.12 billion in net revenue.
The Producer Price Index for Finished Goods declined 0.6 percent in September, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decrease followed a 1.7-percent rise in August and a 0.9-percent decline in July. In September, at the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 0.2 percent and the crude goods index fell 2.1 percent. On an unadjusted basis, from September 2008 to September 2009, prices for finished goods fell 4.8 percent, the tenth consecutive month of year-over-year declines. In September, over ninety percent of the finished goods decrease was the result of lower energy prices, which moved down 2.4 percent. The indexes for finished goods less foods and energy and for finished consumer foods also contributed to the decline in finished goods prices, both edging down 0.1 percent.
The Producer Price Index for Intermediate Materials, Supplies, and Components moved up 0.2 percent in September, its second consecutive monthly increase. This advance can be attributed to prices for intermediate materials less foods and energy, which rose 0.9 percent. By contrast, the index for intermediate energy goods fell 2.1 percent, and prices for intermediate foods and feeds declined 0.5 percent. On a 12-month basis, the intermediate goods index fell 11.7 percent in September. This was the second consecutive month of slowing year-over-year declines after a record 15.1-percent drop for the 12-months ended July 2009.
Housing starts rose 0.5 percent to an annual rate of 590,000 from a 587,000 pace in August that was lower than previously estimated, figures from the Commerce Department showed today in Washington. Permits, a sign of future construction, fell for the second time in the past three months.
Builders may be paring back in anticipation of the end of the government’s $8,000 tax credit for first-time homebuyers on Nov. 30. Some Federal Reserve policy makers remain concerned the economy will relapse should the stimulus be removed too soon, signaling interest rates will remain low for months.
“It’s still way too early to say that housing markets are generating ongoing momentum, and builders right now are justifiably cautious,” said Robert Dye, a senior economist at PNC Financial Services Group Inc. in Pittsburgh. “There’s a great deal of concern out there about hangover effects from the recession on new home sales.”
Single-family authorizations in September were at a rate of 450,000; this is 3.0 percent (±1.0%) below the revised August figure of 464,000. Authorizations of units in buildings with five units or more were at a rate of 104,000 in September.
Privately-owned housing completions in September were at a seasonally adjusted annual rate of 693,000. This is 10.2 percent (±10.4%)* below the revised August estimate of 772,000 and is 39.6 percent (±5.7%) below the September 2008 rate of 1,148,000. Single-family housing completions in September were at a rate of 464,000; this is 8.3 percent (±14.3%)* below the revised August figure of 506,000. The September rate for units in buildings with five units or more was 210,000.
Caterpillar Inc posted stronger-than-expected quarterly earnings on Tuesday and raised its full-year forecast, saying it was seeing "encouraging signs that indicate a recovery may be under way."
The news sent Caterpillar shares up nearly 5 percent in premarket trading.
Pfizer posted a net profit of $2.88 billion, or 43 cents per share in its last pre-merger quarter, compared with a profit of $2.28 billion, or 34 cents per share, a year ago.
Excluding items, Pfizer earned 51 cents per share. Analysts on average expected 48 cents per share, according to Thomson Reuters I/B/E/S.
United Technologies Corp reported a 17 percent drop in third-quarter profit, less of a decline than Wall Street had expected, as cost-cutting helped offset slumping demand.
Costs have since fallen, 12 percent for DuPont during the third quarter, and could be as much as 6 percent lower by the end of the year, the company said.
That led to a surprise profit of $409 million, or 45 cents per share, for the quarter ending Sept. 30, compared to $367 million, or 40 cents per share, in last year's third quarter, which included a hurricane-related charge of 16 cents per share.
Lockheed Martin Corp , the top U.S. defense contractor, posted higher third-quarter profit and raised its 2009 outlook on Tuesday, but added that it expects per-share earnings to fall in 2010.
Illinois Tool Works Q3 EPS 60 cents vs 87 cents.
Supervalu Q2 EPS 35 cents vs 60 cents.
For the quarter ended Sept. 12, identical store sales were down 4.8%. This comes after a 3.2% decline for the quarter ended June 20 and a 2% decline for quarter ended Feb. 28.
Former Wal-Mart senior executive Craig Herkert was hired in to run Supervalu this past May. One of his first moves was to sell 36 Albertsons sites in Utah to Associated Food Stores. He has also realigned senior managers in a move to make the company more customer-focused and cut the supermarket chain's forecast for sales and profit.
For its fiscal year that ends in February 2010, Supervalu lowered the high end of its earnings forecast to a range of $1.95 to $2.05 a share, or $2.01 to $2.11 on an adjusted basis. That compares to the previous ranges of $1.95 to $2.15 a share, or $2.01 to $2.21 a share on an adjusted basis. Identical-store sales, excluding fuel, are now expected to fall 4%. The dividend was cut.
Coca-Cola Co.said Tuesday that its third-quarter profit rose to $1.896 billion from $1.89 billion. Per-share amount was unchanged at 81 cents a share. The results included a 1-cent restructuring charge. Operating revenue fell 4% to $8.04 billion from $8.39 billion. Total unit-case volume rose 2%. Analysts, on average, estimated the beverage giant to earn 81 cents a share on sales of $8.09 billion, according to FactSet.
Hong Kong-based Orient Overseas International Ltd.said Tuesday its shipping volumes in the third quarter were down 16.7% from a year earlier, while its revenues for the quarter plummeted 42.3%.
After falling for a record-tying ten consecutive days, the VIX narrowly missed setting a new record today when it jumped 0.37 in the 4:00 - 4:15 p.m. ET twilight zone trading period to finish the day at 21.49, +0.06.
Guy Lerner: "Since September 10, the S&P500 is up 4.78%, and the i-Shares Lehman TIPS Bond Fund (symbol: TIP) is up 2%. But on a risk adjusted basis, TIP is about one half as volatile as the S&P500. So this 2% move in TIP is more like 4%. So on a risk adjusted basis, the percentage moves in these assets are almost identical. If I were allocating capital between these two assets (which I am), it is likely that I would allocate twice as much capital to TIP as to the S&P500 thus equalizing my risk across assets."
The Brazilian real dropped sharply on Tuesday, giving back some of its recent strong gains, after Brazil’s finance ministry announced that it would impose a 2 per cent tax on overseas purchases of Brazilian stocks and bonds.
The Baucus health care bill has 1502 pages. Who will read it and who will read it before voting on it?
In early trading natural gas rises 25 cents to $5.09.
The level of poverty in America is even worse than first believed.
A revised formula for calculating medical costs and geographic variations show that approximately 47.4 million Americans last year lived in poverty, 7 million more than the government's official figure.
The disparity occurs because of differing formulas the Census Bureau and the National Academy of Science use for calculating the poverty rate. The NAS formula shows the poverty rate to be at 15.8 percent, or nearly 1 in 6 Americans, according to calculations released this week. That's higher than the 13.2 percent, or 39.8 million, figure made available recently under the original government formula.
Gold for December delivery, the most actively traded contract, rose $6.90, or 0.7%, to $1,065 an ounce. The dollar index, which measures the U.S. unit against a basket of six major currencies, stood at 75.159, down from 75.241 late Monday.
Lexmark International Inc. said Tuesday it will cut an additional 825 jobs this month as it reported that restructuring costs drove down third-quarter profits despite improving demand.
The printer and copier maker said it plans to primarily cut jobs in manufacturing, supply chain, service delivery, marketing and sales support, corporate and development. It expects to save $70 million next year and another $110 million beginning in 2011.
NPD Group reported that September U.S. video game sector revenue inched up 1% in September on a year-over-year basis, snapping a string of six months with year-over-year declines, including a 5% rise in software sales, offset by a 6% drop in hardware revenue. This was below expectations.
ShopperTrak, a retail research firm, predicted Tuesday that total holiday sales will rise 1.6 percent compared with a year ago, which would be good news for retailers compared with last year's steep decline.
The research firm also expects a 4.2 percent decline in foot traffic from last year's holidays.
Last year, holiday sales fell 5.9 percent while foot traffic dropped 15.4 percent, according to ShopperTrak estimates. The research firm tracks customer traffic at more than 45,000 stores.
Existing Small Business Administration loans will have their caps increased in an effort to stimulate the economy President Barack Obama is expected to announce on Wednesday, according to media reports Tuesday. The announcement reportedly will also cover measures to make it easier for small banks to draw funds from the Treasury's Troubled Asset Relief Program.
Brent Steenbarger: "Even as we've seen bull highs in the major indexes in recent sessions, bank stocks have sold off notably. Insurance stocks ($KIX) as well remain below their 10/14 highs and, as noted in the earlier post, regional banks are bringing up the rear in relative performance year to date. Of the sectors that I track, the financial group is the only one not in a bullish short-term trending mode. The rebound in the financial sector heralded in the recent bull market; I'm watching to see if its relative weakness is an equal portent."
IMS Health Inc.is "exploring a variety of strategic alternatives" and that it will provide no further comment during the exploration period. The health-care data specialist said it has hired Deutsche Bank as a financial advisor, and that the company board hired Foros Securities as a financial advisor. IMS said there are no assurances that any transactions will result. Shares of IMS jumped about 22% during trading Monday on a Wall Street Journal report that IMS was advanced discussions with private-equity firms to sell itself.
Gilead Sciences reported a substantially higher third-quarter profit late Tuesday, due largely to a 31% jump in revenue. The biotech group posted net income of $673 million, or 72 cents a share, compared with $496 million, or 52 cents a share, for the same period in 2008. Excluding various items, Gilead would have reported adjusted earnings of 78 cents a share versus 55 cents. Revenue for the quarter rose 31% to $1.8 billion. A poll of analysts by FactSet Research pegged Gilead at posting earnings per share of 69 cents, on revenue of $1.76 billion.
The Dow Jones Industrial Average fell 50.71 points, or 0.5%, to 10,041.48. The S&P 500 Index lost 6.85 points, or 0.6%, to 1,091.06. The Nasdaq Composite shed 12.85 points, or 0.6%, to end at 2,163.47.
Sun Microsystems Inc. said Tuesday that the company is cutting as many as 3,000 jobs, given the delay in closing its planned merger with Oracle Corp. In a filing with the Securities and Exchange Commission, Sun said its board approved a plan "to better align the Company's resources with its strategic business objectives," which includes laying off as many as 3,000 workers over the next 12 months. The company said it would incur charges ranging from $75 million to $125 million over the next several quarters in connection with the plan.
Yahoo Inc. said Tuesday its third-quarter net income rose to $187 million, or 13 cents a share, from $54.3 million, or 4 cents a share in the same period last year. Net revenues for the period ended in September were $1.13 billion, Yahoo said. Analysts polled by Thomson Reuters had estimated Yahoo would post third-quarter earnings of 7 cents a share, and $1.12 billion in net revenue.
Monday, October 19, 2009
Apple!
10/19/09 Apple!
John Hussman: "We can no longer find a single historical instance where stocks were more overbought on the combination of short- and intermediate-term measures we respond to most strongly."
China's economy expanded more than 7 percent in the first nine months of the year and will certainly surpass the 2009 growth target of 8 percent, a top economic official said today.
Robert McHugh: "There are large Bearish Divergences in volume, our 10 day average advance/decline line indicator, and the MACD. These divergences are warning in spades that a significant top is approaching."
Analysts at Keefe, Bruyette & Woods on Monday said the common shares of Fannie Mae and Freddie Mac are likely worthless even if the troubled mortgage-finance giants end up being recapitalized by the banking industry.
"My view is that we are still in a secular bear market...My big concern is that the market has gotten ahead of the economy. The S&P is pricing in $85 dollar of operating earnings which would be a double from where we are right now, and it usually takes four to five years to double earnings off a recession low... The market has clearly overshot the fundamentals. The government should be promoting more of a savings culture...I have a tough believing time you can destroy $14 trillion of net worth in the U.S. - right now bank lending is contracting at 15% annual rate and who is filling the void: the Fed, the FHA, Fannie, Freddie..." - David Rosenberg
The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 30% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Forty percent (40%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -10. This is the fourth straight day the Approval Index has been in negative double digits.
The S&P 500 index, which closed at 1087.68 on Oct. 16, is up 61 percent from 676.53 on March 9, the lowest since September 1996.
U.S. Oct. home builders' index falls to 18 from 19.
All 3 components of builders' index fall in Oct.
Oil topped $79 a barrel, extending its longest winning streak in two years.
Meanwhile the U.S. dollar index made another yearly low at 75.28
New York Times cutting newsroom by 8%, or 100 jobs.
Texas Instruments on Monday reported a third-quarter profit of $538 million, or 42 cents a share, compared with a profit of $563 million, or 43 cents a share, for the year-earlier period. Revenue was $2.9 billion, down from $3.4 billion for the same quarter last year. Analysts had expected the Dallas-based chip giant to report earnings of 39 cents a share on revenue of $2.8 billion, according to a survey by FactSet Research. For the current quarter, the company said it expects revenue in the range of $2.78 billion to $3.02 billion, and earnings per share in the range of 42 cents a share to 50 cents a share.
Apple Inc. reported a fiscal fourth-quarter profit of $1.67 billion, or $1.82 a share, on revenue of $9.87 billion. During the same period a year ago, Apple earned $1.14 billion, or $1.26 a share on $7.9 billion in sales. Apple's results topped the estimates of analysts surveyed by Thomson Reuters, who had forecast the company to earn $1.42 a share on revenue of $9.2 billion. Among the highlights of the quarter were sales of 7.4 million iPhones in the quarter ended Sept. 26. For its fiscal first-quarter, Apple estimates it will earn between $1.70 and $1.78 a share on revenue in a range of $11.3 billion to $11.6 billion.
The Dow Jones Industrial Average gained 96.28 points, or 1%, to 10,092.19. The S&P 500 Index rose 10.23 points, or 0.9%, to 1,097.91, while the Nasdaq Composite Index climbed 19.52 points, or 0.9%, to 2,176.32.
John Hussman: "We can no longer find a single historical instance where stocks were more overbought on the combination of short- and intermediate-term measures we respond to most strongly."
China's economy expanded more than 7 percent in the first nine months of the year and will certainly surpass the 2009 growth target of 8 percent, a top economic official said today.
Robert McHugh: "There are large Bearish Divergences in volume, our 10 day average advance/decline line indicator, and the MACD. These divergences are warning in spades that a significant top is approaching."
Analysts at Keefe, Bruyette & Woods on Monday said the common shares of Fannie Mae and Freddie Mac are likely worthless even if the troubled mortgage-finance giants end up being recapitalized by the banking industry.
"My view is that we are still in a secular bear market...My big concern is that the market has gotten ahead of the economy. The S&P is pricing in $85 dollar of operating earnings which would be a double from where we are right now, and it usually takes four to five years to double earnings off a recession low... The market has clearly overshot the fundamentals. The government should be promoting more of a savings culture...I have a tough believing time you can destroy $14 trillion of net worth in the U.S. - right now bank lending is contracting at 15% annual rate and who is filling the void: the Fed, the FHA, Fannie, Freddie..." - David Rosenberg
The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 30% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Forty percent (40%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -10. This is the fourth straight day the Approval Index has been in negative double digits.
The S&P 500 index, which closed at 1087.68 on Oct. 16, is up 61 percent from 676.53 on March 9, the lowest since September 1996.
U.S. Oct. home builders' index falls to 18 from 19.
All 3 components of builders' index fall in Oct.
Oil topped $79 a barrel, extending its longest winning streak in two years.
Meanwhile the U.S. dollar index made another yearly low at 75.28
New York Times cutting newsroom by 8%, or 100 jobs.
Texas Instruments on Monday reported a third-quarter profit of $538 million, or 42 cents a share, compared with a profit of $563 million, or 43 cents a share, for the year-earlier period. Revenue was $2.9 billion, down from $3.4 billion for the same quarter last year. Analysts had expected the Dallas-based chip giant to report earnings of 39 cents a share on revenue of $2.8 billion, according to a survey by FactSet Research. For the current quarter, the company said it expects revenue in the range of $2.78 billion to $3.02 billion, and earnings per share in the range of 42 cents a share to 50 cents a share.
Apple Inc. reported a fiscal fourth-quarter profit of $1.67 billion, or $1.82 a share, on revenue of $9.87 billion. During the same period a year ago, Apple earned $1.14 billion, or $1.26 a share on $7.9 billion in sales. Apple's results topped the estimates of analysts surveyed by Thomson Reuters, who had forecast the company to earn $1.42 a share on revenue of $9.2 billion. Among the highlights of the quarter were sales of 7.4 million iPhones in the quarter ended Sept. 26. For its fiscal first-quarter, Apple estimates it will earn between $1.70 and $1.78 a share on revenue in a range of $11.3 billion to $11.6 billion.
The Dow Jones Industrial Average gained 96.28 points, or 1%, to 10,092.19. The S&P 500 Index rose 10.23 points, or 0.9%, to 1,097.91, while the Nasdaq Composite Index climbed 19.52 points, or 0.9%, to 2,176.32.
Sunday, October 18, 2009
Microsoft
10/18/09 Microsoft
Iran Says It Will Soon Exclude The Dollar From The Country's Foreign Revenues And Reserves. When
will Russia and China repeat the same statement?
Mike Burk: "Last week, when the indices hit new highs many of the indicators did not confirm those highs and there has been a cyclicality over the past few months that suggests last weeks high was a short term top. I expect the major indices to be lower on Friday October 23 than they were on Friday October 16."
“Microsoft sort of disappeared from the scene,” says Regis McKenna, a Silicon Valley marketing and strategy expert. “Every once in a while, they have a delayed Windows release or something like that. By and large, I think the marketplace is focused on what Google and Apple are up to.”......“They are trapped in their own psychosis that the world has to revolve around Windows on the PC,” says Marc Benioff, the C.E.O. of Salesforce.com, which competes against Microsoft in the business software market. “Until they stop doing that, they will drag their company into the gutter.”.....“They are not the company they once were in terms of market position,” says Bruce R. Chizen, a former Microsoft employee and former C.E.O. of Adobe Systems, the publishing software maker. “They no longer have a monopoly that is critical to the future of computing.”.....“This used to be the company that everyone looked to for innovation and excitement,” says James R. Gregory, the chief executive of CoreBrand, a brand consulting company. “It has lost that edginess in a fairly convincing way.”
A federal report released on Thursday showed $16 billion worth of stimulus contracts have been awarded in a range of areas, not just transportation and infrastructure, since the plan passed in February. Only 14 percent of that amount has been received by contractors.
Iraq is planning to drill around 150 oil wells next year which will increase the country's crude oil production by 250,000 barrels a day, head of the state-run Iraqi drilling company said Friday.
Idris Al-Yassiri also said the IDC bought 24 rigs this year, which will bring the total number of rigs to around 53 rigs by the end of 2009. "We are planning to bring the number to 60 rigs in 2010."
"The Sino-Iran relationship has witnessed rapid development, as the two countries' leaders have had frequent exchanges, and cooperation in trade and energy has widened and deepened," Premier Wen Jiabao said in a meeting with visiting Iranian Vice President Reza Rahimi, according to the state-controlled Xinhua news agency. China has pledged billions of dollars in energy-infrastructure investment in Iran in exchange for guaranteed supplies of oil and natural gas.
On its quarterly conference call Safeway's president Steven Burd told analysts the largest factor in the increased expenses was a write-down of the value of its real estate, which the company has invested in heavily in recent years. The second largest factor was the decrease in sales volume.
How many other retailers have written-down the value of their real estate. I would wager not many.
By the end of the year, Safeway expects to have spent $1 billion opening 10 new stores and remodeling 85 stores. It did not speculate how many more store closures there would be prior to the end of the year.
The U.S. military is spending billions of dollars on construction projects to ensure Afghanistan's infrastructure can support American and coalition personnel in 2010 and years beyond.
Only 46% of Americans ages 16-24 had jobs last month, the lowest since the government began counting.
Iran Says It Will Soon Exclude The Dollar From The Country's Foreign Revenues And Reserves. When
will Russia and China repeat the same statement?
Mike Burk: "Last week, when the indices hit new highs many of the indicators did not confirm those highs and there has been a cyclicality over the past few months that suggests last weeks high was a short term top. I expect the major indices to be lower on Friday October 23 than they were on Friday October 16."
“Microsoft sort of disappeared from the scene,” says Regis McKenna, a Silicon Valley marketing and strategy expert. “Every once in a while, they have a delayed Windows release or something like that. By and large, I think the marketplace is focused on what Google and Apple are up to.”......“They are trapped in their own psychosis that the world has to revolve around Windows on the PC,” says Marc Benioff, the C.E.O. of Salesforce.com, which competes against Microsoft in the business software market. “Until they stop doing that, they will drag their company into the gutter.”.....“They are not the company they once were in terms of market position,” says Bruce R. Chizen, a former Microsoft employee and former C.E.O. of Adobe Systems, the publishing software maker. “They no longer have a monopoly that is critical to the future of computing.”.....“This used to be the company that everyone looked to for innovation and excitement,” says James R. Gregory, the chief executive of CoreBrand, a brand consulting company. “It has lost that edginess in a fairly convincing way.”
A federal report released on Thursday showed $16 billion worth of stimulus contracts have been awarded in a range of areas, not just transportation and infrastructure, since the plan passed in February. Only 14 percent of that amount has been received by contractors.
Iraq is planning to drill around 150 oil wells next year which will increase the country's crude oil production by 250,000 barrels a day, head of the state-run Iraqi drilling company said Friday.
Idris Al-Yassiri also said the IDC bought 24 rigs this year, which will bring the total number of rigs to around 53 rigs by the end of 2009. "We are planning to bring the number to 60 rigs in 2010."
"The Sino-Iran relationship has witnessed rapid development, as the two countries' leaders have had frequent exchanges, and cooperation in trade and energy has widened and deepened," Premier Wen Jiabao said in a meeting with visiting Iranian Vice President Reza Rahimi, according to the state-controlled Xinhua news agency. China has pledged billions of dollars in energy-infrastructure investment in Iran in exchange for guaranteed supplies of oil and natural gas.
On its quarterly conference call Safeway's president Steven Burd told analysts the largest factor in the increased expenses was a write-down of the value of its real estate, which the company has invested in heavily in recent years. The second largest factor was the decrease in sales volume.
How many other retailers have written-down the value of their real estate. I would wager not many.
By the end of the year, Safeway expects to have spent $1 billion opening 10 new stores and remodeling 85 stores. It did not speculate how many more store closures there would be prior to the end of the year.
The U.S. military is spending billions of dollars on construction projects to ensure Afghanistan's infrastructure can support American and coalition personnel in 2010 and years beyond.
Only 46% of Americans ages 16-24 had jobs last month, the lowest since the government began counting.
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