12/11/09 Commodities and the Dollar
U.S. retail sales rose a better-than-expected 1.3% in November for third monthly increase in the past four months, the Commerce Department estimated Friday. The sales gains were widespread across most kinds of retail outlets, including autos, gasoline, department stores and hardware stores. Only clothing- and furniture-store sales declined. The consensus forecast of Wall Street economists was for retail sales to rise 0.5%. Excluding autos, sales rose 1.2%, the biggest gain since January.
The U.S. Dollar Index has rallied back up to 76.60, an increase of 2 1/3 points from the recent low.
S&P's 62% nine-month gain is the second-biggest on record.
The International Energy Agency has revised up by 130,000 barrels a day its forecast for 2010 global oil demand, which is now expected to average 86.3 million barrels a day. In its monthly oil report released Friday, the IEA also left its forecast for this year's oil demand virtually unchanged at 84.9 million barrels a day, a decline of 1.6% year-on-year.
China's consumer prices rose for the first time in 10 months in November, as the government-stimulus-driven economic recovery fueled inflation. Official data released Friday showed the nation's consumer price index gained 0.6% in November from a year-ago, although producer prices declined 2.1% during the month. Data also showed an acceleration in other economic indicators, with monthly industrial production rising a better-than-expected 19.2% and retail sales climbing 15.8%. Urban fixed-asset investment, meanwhile, rose 32.1% in the first eleven months of the year. A FactSet Research survey showed economists had estimated a 0.4% increase in CPI, a 2.3% fall in PPI, an 18.2% acceleration in industrial output, a 16.5% jump in retail sales, and a 33% rise in January to November urban fixed-asset investments.
The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data.
Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession's first 18 months — and that's before overtime pay and bonuses are counted.
Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector.
The highest-paid federal employees are doing best of all on salary increases. Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available.
When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.
The trend to six-figure salaries is occurring throughout the federal government, in agencies big and small, high-tech and low-tech. The primary cause: substantial pay raises and new salary rules.
"There's no way to justify this to the American people. It's ridiculous," says Rep. Jason Chaffetz, R-Utah, a first-term lawmaker who is on the House's federal workforce subcommittee.
Jessica Klement, government affairs director for the Federal Managers Association, says the federal workforce is highly paid because the government employs skilled people such as scientists, physicians and lawyers. She says federal employees make 26% less than private workers for comparable jobs.
USA TODAY analyzed the Office of Personnel Management's database that tracks salaries of more than 2 million federal workers. Excluded from OPM's data: the White House, Congress, the Postal Service, intelligence agencies and uniformed military personnel.
The growth in six-figure salaries has pushed the average federal worker's pay to $71,206, compared with $40,331 in the private sector.
Sales of video games and consoles fell 7.6% last month compared with November 2008, despite the blockbuster release of Call of Duty: Modern Warfare 2, which sold a whopping 6 million copies in the U.S. alone, according to figures released this afternoon by NPD Group.
The game industry sold $2.7 billion of consoles and games in the U.S. last month, down from $2.9 billion a year earlier, according to NPD estimates. From January through November, sales of $14.1 billion were down 12% from the same time frame last year.
Randall W. Forsyth: "The media dutifully reported Thursday that the Fed's Flow of Funds data showed U.S. households' net worth rose by $2.67 trillion in the third quarter, largely as the result of the continued rebound in the stock market from the March lows.
But overlooked in that good news was a sharp, downward revision in households' net worth by $2.38 trillion in the second quarter. That was the result of a fuller accounting of the plunge in home prices during those months.
Also not widely noted is what the Fed considers to be "households" includes hedge funds, which probably are beyond the reach of 99% of Americans. Average individual investors actually have been dumping U.S. stocks and clamoring for low-yielding bonds, so it's questionable how much a lift they've gotten from the rally.
Households also continued to reduce their indebtedness for the fourth straight quarter while total U.S. debt shrank for the second consecutive quarter, even with the massive expansion of Treasury borrowing to fund the federal budget deficit. That's surely a good thing after the debt bubble.
Yet the contraction in household debt wasn't just because of Jane and John Q. Public's pledge to get their financial houses in order after having tapped their houses as automatic teller machines. Their debt also was extinguished in the rising tide of mortgage defaults and home foreclosures, not exactly a wealth-enhancing trend.
So, while the numbers on their wealth are turning up, Americans are becoming more pessimistic on the economy and their own financial conditions, according to a Bloomberg National poll. And they're enraged at Wall Street, which they blame for their plight, the Bloomberg poll also found.
That sort of public anger doesn't square with numbers showing households' net worth recovering from the collapse in housing and equity values, although it is consistent with official unemployment of 10% and "underemployment" of 17%.
Households -- which by the Fed's definition essentially takes in anything doesn't fit in another institutional category -- did enjoy a robust gain in wealth of $2.57 trillion in the third quarter, or at a 22.7% annual rate. Nevertheless, households' net worth is down $12 trillion, or 18%, from its peak two years ago.
But little of that gain appears to have been felt on Main Street. According to the Fed's numbers, households added only $36 billion in equities in the third quarter, down from an average of $430 billion in purchases in the two preceding quarters, Goldman Sachs' economists write in a research report. As noted, the Fed lumps in hedge funds along with non-profits into the "household" category, so it's not exactly folks like you and me."
For the week ended Dec. 9, AMG Data reported Equity Fund Outflows -$265 Mil; Taxable Bond Fund Inflows $1.1 Bil
xETFs - Equity Fund Outflows -$1.5 Bil; Taxable Bond Fund Inflows $439 Mil
Natural gas will begin flowing along a 7,000 kilometer natural-gas pipeline from eastern Turkmenistan to China next week, highlighting the countries' increased economic ties, RFE/RL's Turkmen Service reports.
The pipeline is expected to export 40 billion cubic meters of Turkmen gas to China per year, making China the second-largest importer of Turkmen gas after Russia.
Turkmen President Gurbanguly Berdymukhammedov told Chinese journalists during a nationwide broadcast on December 9 that the pipeline -- begun in 2007 and due to be inaugurated on December 14 -- is strategically important for the long-term partnership between Turkmenistan and China.
Berdymukhammedov also noted that bilateral trade has grown fortyfold since 2000, reaching almost $1.5 billion last year.
Record natural gas consumption in Reno area
By Steve Timko
stimko@rgj.com
NV Energy customers set a record for natural gas use in the 24 hours that ended Thursday at 7 a.m.
The region consumed 156,332 decatherms, almost 156 million cubic feet of natural gas, NV Energy spokesman Karl Walquist said.
The record was 155,194 decatherms Jan. 12, 2007.
The two natural gas pipelines that serve NV Energy's 149,000 customers in the Reno area had no problem meeting the demand, he said.
Overnight temperatures were lower Tuesday night and Wednesday morning than for the previous record.
The difference was that it became cold quicker, said Dawn Fishler, a National Weather Service meteorologist. At 9 p.m. Wednesday, the temperature at Reno-Tahoe International Airport was 2 degrees after being 6 degrees at 9 p.m. Tuesday.
"We got colder earlier in the night than we have the past few nights," Fishler said.
NV Energy gas customers range from Verdi to the Mount Rose Highway and north into both Cold Springs and Spanish Springs Valley, Walquist said.
Southwest Gas reported using 98,000 decatherms for its 91,000 customers in western Nevada, including Carson City, and Elko County in the same period that NV Energy set its record. It reported use of 102,000 decatherms the prior 24-hour period, but neither were records.
Dec. Reuters/UofM Consumer Sentiment: 73.4 vs. an expected 68.5, and a sharp step up from 67.4 in November's final reading. Expectations stepped up to 69.7, from previous 66.5.
As the New York Times notes, "one in eight Americans and one in four children" receive food stamps.
U.S. import prices rose 1.7 percent in November in their largest gain since June, driven higher by fuel costs, a government report showed on Friday.
Analysts polled by Reuters had expected a slimmer rise of 1 percent. October's gain was also revised up to 0.8 percent from the 0.7 percent previously reported.
"It's getting worse, not better."
That's how Jim Rogers responds to the recent talk of improvement from President Obama, Treasury Secretary Geithner and Fed Chairman Bernanke, among others.
"Papering over the problem is not going to solve America's problem," Rogers says. "The idea you can solve a problem of too much debt and too much consumption with more consumption and more debt defies belief. I cannot believe that grownups would stand there and say that."
History shows the only way to solve a financial crisis is "when people go bankrupt, you let them go bankrupt," Rogers say. "Then, competent people come in, take over the assets, reorganize and you start over."
But rather than "take the pain and reorganize and start over," as Sweden, South Korea and others have done, Rogers says America is "doing the Japanese model."
Businesses unexpectedly increased their inventories in October, halting a slide of 13 consecutive declines. The small gain, along with a fifth straight increase in sales, raised hopes that businesses will begin restocking their depleted shelves, helping support the economic recovery.
Businesses increased inventories 0.2 percent in October, the Commerce Department said Friday. That was better than the 0.3 percent drop economists had expected. Total business sales rose 1.1 percent.
The Dow Jones Industrial Average rose 70.36 points to 10,476.19. The S&P 500 Index climbed 4.95 points to 1,107.30. The Nasdaq Composite Index added 0.92 points to 2,191.81.
Three U.S. banks in Florida, Arizona and Kansas failed on Friday, bringing the year's tally to 133 and taking a $250 million bite out of the federal deposit-insurance fund as the credit crunch claims more victims.
Crude oil for January delivery ended down 67 cents, or 0.9%, at $69.87 a barrel on the New York Mercantile Exchange. The eight-session losing streak is the longest since October 2003. Crude ended the week down 7.4%, the biggest weekly loss in 11 weeks. Gold for December delivery fell $6.30, or 0.6%, to end at $1,119.40 an ounce on the Comex division of the New York Mercantile Exchange, the lowest settlement since Nov. 13. The contract ended the week down 4.2%.
Friday, December 11, 2009
Thursday, December 10, 2009
Emergency Unemployment
12/10/09 Emergency Unemployment
"I am hereby extending [TARP per] the authority provided under the Act to October 3, 2010. This extension is necessary to assist American families and stabilize financial markets because it will, among other things, enable us to continue to implement programs that address housing markets and the needs of small businesses, and to maintain the capacity to respond to unforeseen threats, as described above." Tim Geithner
ZeroHedge: "The number you won't hear mentioned anywhere in the Mainstream Media: 327,729. That is how many people shifted to Emergency Unemployment Compensation programs in the last week alone, hitting an all time record high of 4.2 million! So as everyone is focused on the benign picture of initial claims in the last week which was "only" 474,000, the number of people rolling off continuing benefits has exploded and is now a stunning 592,579 only in the last two week. Look for this number to keep going into the stratosphere as the 6 month continuing claims cliff keeps getting hit by more and more people who are unemployed and keep looking not only for believable change, but actual jobs to go with it. "
The number of people filing claims for state unemployment benefits rose by 17,000 to a seasonally adjusted 474,000 in the week ending Dec. 5, while the total number of people claiming benefits of any kind topped 10 million, a sign of very sluggish hiring, the Labor Department reported Thursday. First-time claims - which measure new layoffs - rose for the first time in six weeks in the week after Thanksgiving. Economists surveyed by MarketWatch had expected initial claims to fall to about 450,000. The number of people collecting state benefits fell by 303,000 to a seasonally adjusted 5.16 million in the week ending Nov. 28.
The U.S. trade deficit narrowed by 7.6% in October to $32.9 billion, the Commerce Department said Thursday. Exports rose faster than imports in October. The narrowing of the trade gap was unexpected. Wall Street economists had forecast of a deficit of $37.0 billion. One critical factor in the lower deficit was a cut in crude oil imports. The deficit for the year now totals $304 billion, down sharply from $610.8 billion in the same period one year ago. The U.S. trade deficit with China continued to expand, widening to $22.7 billion in October compared with $22.1 billion in September. This is the highest level since last November. For the year, the deficit with China is now $188.5 billion.
In October, the goods and services deficit decreased $26.5 billion from October 2008. Exports were down $12.9 billion, or 8.6 percent,
Costco Wholesale Corp reported fiscal first-quarter net income was flat on 5.5% higher revenue and 3% higher same-store sales. For the quarter ended Nov. 22, net income was $266 million, or 60 cents a share, compared with $263 million, or 60 cents, in the year-earlier quarter. Shares outstanding rose 1% to 444.8 million. Net sales rose 5.5% to $16.92 billion from $16.04 billion. Revenue, which includes membership fees, rose a similar percentage to $17.3 billion from $16.4 billion. Same-store sales, reflecting sales from stores open at least a year, rose 3% in the quarter, Costco reported on Thursday. A survey of analysts by FactSet Research produced consensus estimates for the quarter of 60 cents of profit on $17.32 billion of revenue. The same-store sales reflected increases of 1% in the U.S. and 13% internationally, Costco said. Excluding the effect of stronger foreign currencies against the dollar plus lower gasoline prices, same-store sales rose 3%. That adjusted number reflects increases of 2% in the U.S. and 8% internationally.
Microsoft launched Windows 7 in late October to much fanfare. But, just like with previous Windows upgrades, complaints about bugs have already started rolling in.
A whopping 31% of clients have reported problems with upgrading to Windows 7, according to a recent survey of more than 100,000 customers conducted by consumer helpdesk firm iYogi.
"Most of the problems that customers have with Windows 7 have to do with installation, or application and data migration," said Vishal Dhar, co-founder of iYogi. "These are all fixable problems, but they're annoyances and they're time consuming."
George Ure: " A Rand report called "A Stability Police Force for the United States: Justification and Options for Creating U.S. Capabilities."
In this paper - which to those of us with a strong Constitutional bent and respect for posse comitatus is an exercise in 'thinking the unthinkable' - there's a sort of working conclusion that a new super police agency - a "Stability Police Force" it's called - run by either the military (MP) system or the U.S. Marshall's Service, are achievable options for the US central government to consider implementing. "
Politico: "In a bold but risky year-end strategy, Democrats are preparing to raise the federal debt ceiling by as much as $1.8 trillion before New Year’s rather than have to face the issue again prior to the 2010 elections.
“We’ve incurred this debt. We have to pay our bills,” House Majority Leader Steny Hoyer told POLITICO Wednesday. And the Maryland Democrat confirmed that the anticipated increase could be as high as $1.8 trillion — nearly twice what had been assumed in last spring’s budget resolution for the 2010 fiscal year. "
"Ginnie is like an accelerant to a fire," said Anthony Sanders, professor of real estate finance at George Mason University.
Working natural gas in storage was 3,773 Bcf as of Friday, December 4, 2009, according to EIA estimates. This represents a net decline of 64 Bcf from the previous week. Stocks were 472 Bcf higher than last year at this time and 513 Bcf above the 5-year average of 3,260 Bcf. In the East Region, stocks were 191 Bcf above the 5-year average following net withdrawals of 31 Bcf. Stocks in the Producing Region were 241 Bcf above the 5-year average of 954 Bcf after a net withdrawal of 24 Bcf. Stocks in the West Region were 81 Bcf above the 5-year average after a net drawdown of 9 Bcf. At 3,773 Bcf, total working gas is above the 5-year historical range. After the data, natural gas for January delivery rose 6.7% to $5.227 per million thermal units.
Tyler Durden: "Since August 12 there has not been one positive fund flow into domestic equities, with the cumulative outflows now totalling $44 billion and rising, according to ICI."
Treasuries fell, with the gap in yields between 2- and 30-year securities near the widest margin since 1992, before today’s $13 billion bond auction.
The so-called yield curve has reached 366 basis points with the Federal Reserve’s target rate anchored at a record-low range of zero to 0.25 percent and the Treasury extending the average maturity of government debt being sold. The shift to longer- maturity debt has raised concern that investors will demand higher yields to offset the risk of inflation as government spending drives the deficit to a record $1.4 trillion.
“The market is continuing to worry about the massive amount of Treasury issuance that’s going to hit the market well into next year,” said Ian Lyngen, senior government bond strategist at CRT Capital Group LLC in Stamford, Connecticut. “In the very short term, part of it is going to be supply accommodation.”
Despite very low prices and slowed activity, oil and gas professionals predict vigorous growth in the coming years for the natural gas business, according to a new survey by consulting firm Deloitte LLP.
“The survey numbers are striking,” said Gary Adams, vice chairman and leader of Deloitte’s oil and gas practice. “The overwhelming majority of survey respondents, 84 percent, say the best days for the natural gas industry are still ahead of us, despite today’s low prices.”
Natural gas will be in greater demand and become more plentiful as Congress passes climate change legislation, which would make oil and coal less attractive.
Natural gas rises 8.2% to $5.298 per million BTU.
The United States federal government ran a deficit of $120.3 billion in November, the second month of the 2010 fiscal year, the Treasury Department reported Thursday. Receipts were $133.6 billion, the Treasury said, while outlays were $253.9 billion. The deficit was a little higher than a congressional estimate of $115 billion and marked the 14th consecutive monthly budget shortfall. A year ago in November the deficit was $125.2 billion.
Gold for December delivery rose $5.30, or 0.5%, to end at $1,125.70 an ounce on the Comex division of the New York Mercantile Exchange.
The Treasury Department sold $13 billion in 30-year bonds on Thursday at a yield of 4.52%, higher than traders had anticipated, indicating weak demand. Investors bid for 2.45 times the amount of debt offered, compared to an average of 2.58 times at the last four similar auctions. Indirect bidders, a group of investors that includes foreign central banks, bought 40.2% of the deal, compared to an average of 45% of recent sales.
The outstanding debt of U.S. companies, households and governments rose at the slowest rate on record in the third quarter, as households reduced debts for the fifth straight quarter. U.S. nonfinancial debt increased at a record-low 2.8% annual rate in the third quarter to $34.6 trillion, despite the 20.6% annualized increase in government debt. Private-sector debt fell at a 2.6% annual rate, as businesses and households each reduced their outstanding debt at record rates. Meanwhile, household net worth rose by $2.67 trillion to $53.4 trillion on large gains in the stock market and a small rebound in real estate values.
The Dow Jones Industrial Average rose 68.78 points, or 0.7%, to 10,405.83. The S&P 500 Index climbed 6.41 points, or 0.6%, to 1,102.35. The Nasdaq Composite Index added 7.13 points, or 0.3%, to 2,190.86.
"I am hereby extending [TARP per] the authority provided under the Act to October 3, 2010. This extension is necessary to assist American families and stabilize financial markets because it will, among other things, enable us to continue to implement programs that address housing markets and the needs of small businesses, and to maintain the capacity to respond to unforeseen threats, as described above." Tim Geithner
ZeroHedge: "The number you won't hear mentioned anywhere in the Mainstream Media: 327,729. That is how many people shifted to Emergency Unemployment Compensation programs in the last week alone, hitting an all time record high of 4.2 million! So as everyone is focused on the benign picture of initial claims in the last week which was "only" 474,000, the number of people rolling off continuing benefits has exploded and is now a stunning 592,579 only in the last two week. Look for this number to keep going into the stratosphere as the 6 month continuing claims cliff keeps getting hit by more and more people who are unemployed and keep looking not only for believable change, but actual jobs to go with it. "
The number of people filing claims for state unemployment benefits rose by 17,000 to a seasonally adjusted 474,000 in the week ending Dec. 5, while the total number of people claiming benefits of any kind topped 10 million, a sign of very sluggish hiring, the Labor Department reported Thursday. First-time claims - which measure new layoffs - rose for the first time in six weeks in the week after Thanksgiving. Economists surveyed by MarketWatch had expected initial claims to fall to about 450,000. The number of people collecting state benefits fell by 303,000 to a seasonally adjusted 5.16 million in the week ending Nov. 28.
The U.S. trade deficit narrowed by 7.6% in October to $32.9 billion, the Commerce Department said Thursday. Exports rose faster than imports in October. The narrowing of the trade gap was unexpected. Wall Street economists had forecast of a deficit of $37.0 billion. One critical factor in the lower deficit was a cut in crude oil imports. The deficit for the year now totals $304 billion, down sharply from $610.8 billion in the same period one year ago. The U.S. trade deficit with China continued to expand, widening to $22.7 billion in October compared with $22.1 billion in September. This is the highest level since last November. For the year, the deficit with China is now $188.5 billion.
In October, the goods and services deficit decreased $26.5 billion from October 2008. Exports were down $12.9 billion, or 8.6 percent,
Costco Wholesale Corp reported fiscal first-quarter net income was flat on 5.5% higher revenue and 3% higher same-store sales. For the quarter ended Nov. 22, net income was $266 million, or 60 cents a share, compared with $263 million, or 60 cents, in the year-earlier quarter. Shares outstanding rose 1% to 444.8 million. Net sales rose 5.5% to $16.92 billion from $16.04 billion. Revenue, which includes membership fees, rose a similar percentage to $17.3 billion from $16.4 billion. Same-store sales, reflecting sales from stores open at least a year, rose 3% in the quarter, Costco reported on Thursday. A survey of analysts by FactSet Research produced consensus estimates for the quarter of 60 cents of profit on $17.32 billion of revenue. The same-store sales reflected increases of 1% in the U.S. and 13% internationally, Costco said. Excluding the effect of stronger foreign currencies against the dollar plus lower gasoline prices, same-store sales rose 3%. That adjusted number reflects increases of 2% in the U.S. and 8% internationally.
Microsoft launched Windows 7 in late October to much fanfare. But, just like with previous Windows upgrades, complaints about bugs have already started rolling in.
A whopping 31% of clients have reported problems with upgrading to Windows 7, according to a recent survey of more than 100,000 customers conducted by consumer helpdesk firm iYogi.
"Most of the problems that customers have with Windows 7 have to do with installation, or application and data migration," said Vishal Dhar, co-founder of iYogi. "These are all fixable problems, but they're annoyances and they're time consuming."
George Ure: " A Rand report called "A Stability Police Force for the United States: Justification and Options for Creating U.S. Capabilities."
In this paper - which to those of us with a strong Constitutional bent and respect for posse comitatus is an exercise in 'thinking the unthinkable' - there's a sort of working conclusion that a new super police agency - a "Stability Police Force" it's called - run by either the military (MP) system or the U.S. Marshall's Service, are achievable options for the US central government to consider implementing. "
Politico: "In a bold but risky year-end strategy, Democrats are preparing to raise the federal debt ceiling by as much as $1.8 trillion before New Year’s rather than have to face the issue again prior to the 2010 elections.
“We’ve incurred this debt. We have to pay our bills,” House Majority Leader Steny Hoyer told POLITICO Wednesday. And the Maryland Democrat confirmed that the anticipated increase could be as high as $1.8 trillion — nearly twice what had been assumed in last spring’s budget resolution for the 2010 fiscal year. "
"Ginnie is like an accelerant to a fire," said Anthony Sanders, professor of real estate finance at George Mason University.
Working natural gas in storage was 3,773 Bcf as of Friday, December 4, 2009, according to EIA estimates. This represents a net decline of 64 Bcf from the previous week. Stocks were 472 Bcf higher than last year at this time and 513 Bcf above the 5-year average of 3,260 Bcf. In the East Region, stocks were 191 Bcf above the 5-year average following net withdrawals of 31 Bcf. Stocks in the Producing Region were 241 Bcf above the 5-year average of 954 Bcf after a net withdrawal of 24 Bcf. Stocks in the West Region were 81 Bcf above the 5-year average after a net drawdown of 9 Bcf. At 3,773 Bcf, total working gas is above the 5-year historical range. After the data, natural gas for January delivery rose 6.7% to $5.227 per million thermal units.
Tyler Durden: "Since August 12 there has not been one positive fund flow into domestic equities, with the cumulative outflows now totalling $44 billion and rising, according to ICI."
Treasuries fell, with the gap in yields between 2- and 30-year securities near the widest margin since 1992, before today’s $13 billion bond auction.
The so-called yield curve has reached 366 basis points with the Federal Reserve’s target rate anchored at a record-low range of zero to 0.25 percent and the Treasury extending the average maturity of government debt being sold. The shift to longer- maturity debt has raised concern that investors will demand higher yields to offset the risk of inflation as government spending drives the deficit to a record $1.4 trillion.
“The market is continuing to worry about the massive amount of Treasury issuance that’s going to hit the market well into next year,” said Ian Lyngen, senior government bond strategist at CRT Capital Group LLC in Stamford, Connecticut. “In the very short term, part of it is going to be supply accommodation.”
Despite very low prices and slowed activity, oil and gas professionals predict vigorous growth in the coming years for the natural gas business, according to a new survey by consulting firm Deloitte LLP.
“The survey numbers are striking,” said Gary Adams, vice chairman and leader of Deloitte’s oil and gas practice. “The overwhelming majority of survey respondents, 84 percent, say the best days for the natural gas industry are still ahead of us, despite today’s low prices.”
Natural gas will be in greater demand and become more plentiful as Congress passes climate change legislation, which would make oil and coal less attractive.
Natural gas rises 8.2% to $5.298 per million BTU.
The United States federal government ran a deficit of $120.3 billion in November, the second month of the 2010 fiscal year, the Treasury Department reported Thursday. Receipts were $133.6 billion, the Treasury said, while outlays were $253.9 billion. The deficit was a little higher than a congressional estimate of $115 billion and marked the 14th consecutive monthly budget shortfall. A year ago in November the deficit was $125.2 billion.
Gold for December delivery rose $5.30, or 0.5%, to end at $1,125.70 an ounce on the Comex division of the New York Mercantile Exchange.
The Treasury Department sold $13 billion in 30-year bonds on Thursday at a yield of 4.52%, higher than traders had anticipated, indicating weak demand. Investors bid for 2.45 times the amount of debt offered, compared to an average of 2.58 times at the last four similar auctions. Indirect bidders, a group of investors that includes foreign central banks, bought 40.2% of the deal, compared to an average of 45% of recent sales.
The outstanding debt of U.S. companies, households and governments rose at the slowest rate on record in the third quarter, as households reduced debts for the fifth straight quarter. U.S. nonfinancial debt increased at a record-low 2.8% annual rate in the third quarter to $34.6 trillion, despite the 20.6% annualized increase in government debt. Private-sector debt fell at a 2.6% annual rate, as businesses and households each reduced their outstanding debt at record rates. Meanwhile, household net worth rose by $2.67 trillion to $53.4 trillion on large gains in the stock market and a small rebound in real estate values.
The Dow Jones Industrial Average rose 68.78 points, or 0.7%, to 10,405.83. The S&P 500 Index climbed 6.41 points, or 0.6%, to 1,102.35. The Nasdaq Composite Index added 7.13 points, or 0.3%, to 2,190.86.
Wednesday, December 09, 2009
Bloomberg Survey
12/9/09 Bloomberg Survey
-- Apple is going to begin ramping production on a to-be-announced tablet in February, implying a launch in late March or April, Oppenheimer analyst Yair Reiner said in a note to clients, citing "checks." The tablet's display will be a 10.1 inch multi-touch LCD screen, not an OLED screen as others have suggested, Reiner said.
Even as the economy inches forward, Americans have become gloomier because of worries about unemployment and the economy, according to a new Bloomberg survey. Almost half of those polled now feel less financially secure than when President Obama took office in January. Fewer than 1 in 3 think the economy will improve in the next six months.
We are now 17 straight days without sunspots.
The FDIC is publishing on its Web site a list of the eligible insured depository institutions that have opted out of the original Transaction Account Guarantee Program, scheduled to terminate on December 31, 2009.
S&P drops its outlook on Spain to Negative, saying it "now believes Spain will experience a more pronounced and persistent deterioration in its public finances, and a more prolonged period of economic weakness" vs. its peers. "In our opinion, reducing Spain's sizable fiscal and economic imbalances requires strong policy actions, which have not yet materialized."
The U.S. will grow at just 2% for much of 2010, but growth should accelerate to 3% in 2011, as low interest rates prevail and unemployment remains stuck in double digits, UCLA Anderson Forecast says. Survey sees unemployment peaking at 10.5% in Q1, and remaining at or above 10% for almost all of 2010.
Japan's economy grew 1.3% last quarter, less than initial estimate of 4.8%.
In November 2009, U.S. freight railroads originated 1,089,077 carloads, an average of 272,269 carloads per week. That’s down 8.2%, or 96,900 carloads, from November 2008’s 1,185,977 carloads (when the weekly average was 296,494 carloads) and down 17.4% from November 2007’s 1,318,023 total (a weekly average of 329,506 carloads).
The Obama administration is extending the $700 billion financial-rescue program until next October, Treasury Secretary Timothy Geithner said Wednesday.
Robert McHugh: "Stocks are approaching a typically Bearish seasonal time, from the last few days of December through the end of January. This new wrinkle for the "January Effect" is reason for caution. Measureable declines, several of which were significant, have started the last week of December, or in January, in 8 of the past 10 years, with a ninth top occurring in early February in 2007. If you include 2007, that is 9 out of the past 10 years."
An estimated 117,000 Californians haven't received their unemployment checks -- some for more than a month -- because of what state officials blame on an archaic computer system.
Treasury sells $21 bln in 10-year debt at 3.448%.
The Commerce Department said on Wednesday total wholesale inventories rose 0.3 percent, snapping a 13-month declining trend. September's figures were revised to show a 0.8 percent decline, previously reported as a 0.9 percent fall.
Dec. gold ends down 2% at $1,120.40 an ounce.
The Dow Jones industrial average ended up 51.08 points, or 0.50 percent, to 10,337.05. The Standard & Poor's 500 Index rose 3.95 points, or 0.36 percent, to 1,095.89. The Nasdaq Composite Index gained 10.74 points, or 0.49 percent, to 2,183.73.
-- Apple is going to begin ramping production on a to-be-announced tablet in February, implying a launch in late March or April, Oppenheimer analyst Yair Reiner said in a note to clients, citing "checks." The tablet's display will be a 10.1 inch multi-touch LCD screen, not an OLED screen as others have suggested, Reiner said.
Even as the economy inches forward, Americans have become gloomier because of worries about unemployment and the economy, according to a new Bloomberg survey. Almost half of those polled now feel less financially secure than when President Obama took office in January. Fewer than 1 in 3 think the economy will improve in the next six months.
We are now 17 straight days without sunspots.
The FDIC is publishing on its Web site a list of the eligible insured depository institutions that have opted out of the original Transaction Account Guarantee Program, scheduled to terminate on December 31, 2009.
S&P drops its outlook on Spain to Negative, saying it "now believes Spain will experience a more pronounced and persistent deterioration in its public finances, and a more prolonged period of economic weakness" vs. its peers. "In our opinion, reducing Spain's sizable fiscal and economic imbalances requires strong policy actions, which have not yet materialized."
The U.S. will grow at just 2% for much of 2010, but growth should accelerate to 3% in 2011, as low interest rates prevail and unemployment remains stuck in double digits, UCLA Anderson Forecast says. Survey sees unemployment peaking at 10.5% in Q1, and remaining at or above 10% for almost all of 2010.
Japan's economy grew 1.3% last quarter, less than initial estimate of 4.8%.
In November 2009, U.S. freight railroads originated 1,089,077 carloads, an average of 272,269 carloads per week. That’s down 8.2%, or 96,900 carloads, from November 2008’s 1,185,977 carloads (when the weekly average was 296,494 carloads) and down 17.4% from November 2007’s 1,318,023 total (a weekly average of 329,506 carloads).
The Obama administration is extending the $700 billion financial-rescue program until next October, Treasury Secretary Timothy Geithner said Wednesday.
Robert McHugh: "Stocks are approaching a typically Bearish seasonal time, from the last few days of December through the end of January. This new wrinkle for the "January Effect" is reason for caution. Measureable declines, several of which were significant, have started the last week of December, or in January, in 8 of the past 10 years, with a ninth top occurring in early February in 2007. If you include 2007, that is 9 out of the past 10 years."
An estimated 117,000 Californians haven't received their unemployment checks -- some for more than a month -- because of what state officials blame on an archaic computer system.
Treasury sells $21 bln in 10-year debt at 3.448%.
The Commerce Department said on Wednesday total wholesale inventories rose 0.3 percent, snapping a 13-month declining trend. September's figures were revised to show a 0.8 percent decline, previously reported as a 0.9 percent fall.
Dec. gold ends down 2% at $1,120.40 an ounce.
The Dow Jones industrial average ended up 51.08 points, or 0.50 percent, to 10,337.05. The Standard & Poor's 500 Index rose 3.95 points, or 0.36 percent, to 1,095.89. The Nasdaq Composite Index gained 10.74 points, or 0.49 percent, to 2,183.73.
Tuesday, December 08, 2009
Poison
12/8/09 Poison
Green Mountain Coffee Roasters Inc. definitively agreed to acquire Diedrich Coffee Inc., the Irvine, Calif., coffee roaster for $35 a share cash, or $290 million. In statements, the companies said that Green Mountain paid Peet's Coffee & Tea Inc. a deal-termination fee of $8.5 million.
3M Co's outlook for the current year came in below analysts' forecast.
TransUnion predicts that the rate of mortgage delinquencies – the ratio of borrowers who are 60 or more days behind on payments – will peak in early 2010 before falling towards the end of the year.
Bloomberg: " Federal Reserve Chairman Ben S. Bernanke is prescribing “poison” to the U.S. economy by keeping interest rates near zero and fueling a wave of speculative capital that may cause the next global crisis, former Morgan Stanley chief Asian economist Andy Xie said.
Bernanke is making decisions based on “marginal considerations” that will help short-term growth and employment, instead of focusing on the “soundness of the system,” Xie wrote in an e-mailed note today. The next worldwide crisis will probably strike in 2012, driven by inflation as the low cost of borrowing spurs increases in asset prices, he said.
“There is a Chinese saying that one could quench the thirst by drinking poison,” said Xie, who predicted in September 2006 that the U.S. economy would fall into a recession in 2008. “Bernanke seems to be prescribing exactly this to the U.S. economy. The slower Bernanke raises interest rates, the bigger the next crisis.”
The government is running out of ways to help the economy as the US faces major issues regarding credit and employment ahead, banking analyst Meredith Whitney told CNBC. "I think they're out of bullets," Whitney said in an interview during which she reinforced remarks she made last month indicating she is strongly pessimistic about the prospects for recovery.
Primary among her concerns is the lack of credit access for consumers who she said are "getting kicked out of the financial system." She said that will be the prevailing trend in 2010.
Despite being able to borrow at near-zero percent interest, banks are not taking that money and putting it back into the marketplace. The Federal Reserve said Monday that consumer lending dropped 1.7 percent on an annualized basis in October, the ninth straight monthly decline.
McDonald's Corp., the world's largest fast-food chain, said Tuesday that its U.S. sales fell in November, only the fourth time the monthly figure failed to rise in more than 6 1/2 years.
But the company continued its overseas sales growth, and overall sales edged up 0.7 percent during the month. A softening dollar has helped companies such as McDonald's that have a large international presence because overseas revenue tranlates back into more dollars.
Consol Energy Inc. expects to begin laying off workers at its Fola operations near Bickmore, W.Va., starting Feb. 7. The Pittsburgh-based coal and gas producer estimated that about 104 workers at the Little Eagle Coal Co. and 378 workers at the Fola Coal Co. may be affected. Consol cited the Ohio Valley Environmental Coalition's appeal of the company's approved mining permits for the idling.
Huffington Post: "Just how badly is President Obama's $75 billion foreclosure program working out? Consider these newly-released numbers: Out of every 100 homeowners who came to JPMorgan Chase for help under the program, just 15 have or will likely receive a permanent payment reduction.
What happened to the other 85? For every 100 trial plans initiated from April through September 2009 under the Home Affordable Modification Program:
* 29 borrowers did not make all required payments under their trial plan;
* 20 borrowers did not submit all documents required for underwriting;
* 31 borrowers submitted all required documents but the documents did not meet HAMP underwriting standards, due to such things as missing signatures or nonstandard formats;
* 4 borrowers were or are likely to be rejected for undisclosed reasons;
* 1 borrower will not or is not likely to get their payment lowered."
The president will call for increasing the investment in infrastructure through building and modernizing highways, railways, bridges and tunnels. He also will propose a new program that provides rebates for consumers who retrofit their homes to become more energy efficient.
The president also will call for using some of the $200 billion in Troubled Asset Relief Program to help pay down the $1.4 trillion budget deficit. So there are three parts: 1) apparentaly a tax credit for businesses to hire new employees, 2) more infrastructure investment, 3) and a cash-for-caulkers program.(Calculated Risk)
Mike Shedlock: "The best I can do is suggest the unemployment rate will be over 10% all the way through 2015 and never dip below 8% all the way out through the end of 2020....In the absence of a war outbreak in the Middle East or Pakistan -- and/or Congress going completely insane with more stimulus efforts -- I think oil prices are likely to drop, the dollar will strengthen or at least hold its own, and the best opportunities are likely to be on the short side," he writes. "2010 is highly likely to retrace most if not all of the ‘reflation' efforts of 2009. If things play out as I suspect, 2010 will be the year of the great retrace as the economic recovery disappoints."
Oct. Job Openings and Labor Turnover: Job openings unchanged at 2.5M, down 48% from the most recent peak in June 2007. Hires little changed at 4M, down 29% from the peak. Turnover remains low at 3.3%.
Kroger Co shares tumbled 13% after its third-quarter result and full-year outlook both fell short of Wall Street expectations.
Investor's Business Daily and TechnoMetrica Market Intelligence said their IBD/TIPP Economic Optimism Index slipped to 46.8 in December from 47.9 in November.
Credit default swaps and collateralized debt obligations "took us right to the brink of disaster." Volcker said. "The most important financial innovation I've seen in the last 25 years is the automatic teller machine."
U.S. oil consumption is projected to average 18.7 million barrels a day this year, about 800,000 barrels a day, or 4.1%, lower than last year. Oil demand will rise 270,000 barrels a day next year from this year's level.
The Institute for Supply Management said its panel of purchasing and supply executives expects a 5.7 percent net increase in overall revenues for 2010, compared to a 10.7 percent decrease reported for 2009.
General Electric Co expects profit to remain flat at its hefty finance arm next year, as losses and impairments on loans peak.
The largest U.S. conglomerate believes its GE Capital finance unit is on track to hit its 2009 profit target of $2 billion to $2.5 billion set in March, company officials told investors on Tuesday. That would be down from about $8.63 billion in 2008.
The Dow Jones Industrial Average fell 104.14 points to 10,285.97. The S&P 500 Index shed 11.31 points to 1,091.94, while the Nasdaq Composite Index declined 16.62 points to 2,172.99.
Dec. gold falls $12.30 to $1,130.50/oz on Globex.
Oil futures climbed in electronic trading late Tuesday after the American Petroleum Institute crude-oil inventories last week dropped 5.815 million barrels. Analysts polled by Platts were anticipating a 600,000-barrel climb in crude-oil stocks. The API said distillate stocks gained 1.011 million barrels and gasoline stocks slipped 753,000 barrels. Analysts were expecting a decline of 400,000 barrels in distillates inventories and a rise of 1.8 million barrels in gasoline stocks. Crude oil futures edged up to $73.02 a barrel in electronic trading from the floor settlement of $72.62. Oil had ended the floor session 1.8% lower.
Green Mountain Coffee Roasters Inc. definitively agreed to acquire Diedrich Coffee Inc., the Irvine, Calif., coffee roaster for $35 a share cash, or $290 million. In statements, the companies said that Green Mountain paid Peet's Coffee & Tea Inc. a deal-termination fee of $8.5 million.
3M Co's outlook for the current year came in below analysts' forecast.
TransUnion predicts that the rate of mortgage delinquencies – the ratio of borrowers who are 60 or more days behind on payments – will peak in early 2010 before falling towards the end of the year.
Bloomberg: " Federal Reserve Chairman Ben S. Bernanke is prescribing “poison” to the U.S. economy by keeping interest rates near zero and fueling a wave of speculative capital that may cause the next global crisis, former Morgan Stanley chief Asian economist Andy Xie said.
Bernanke is making decisions based on “marginal considerations” that will help short-term growth and employment, instead of focusing on the “soundness of the system,” Xie wrote in an e-mailed note today. The next worldwide crisis will probably strike in 2012, driven by inflation as the low cost of borrowing spurs increases in asset prices, he said.
“There is a Chinese saying that one could quench the thirst by drinking poison,” said Xie, who predicted in September 2006 that the U.S. economy would fall into a recession in 2008. “Bernanke seems to be prescribing exactly this to the U.S. economy. The slower Bernanke raises interest rates, the bigger the next crisis.”
The government is running out of ways to help the economy as the US faces major issues regarding credit and employment ahead, banking analyst Meredith Whitney told CNBC. "I think they're out of bullets," Whitney said in an interview during which she reinforced remarks she made last month indicating she is strongly pessimistic about the prospects for recovery.
Primary among her concerns is the lack of credit access for consumers who she said are "getting kicked out of the financial system." She said that will be the prevailing trend in 2010.
Despite being able to borrow at near-zero percent interest, banks are not taking that money and putting it back into the marketplace. The Federal Reserve said Monday that consumer lending dropped 1.7 percent on an annualized basis in October, the ninth straight monthly decline.
McDonald's Corp., the world's largest fast-food chain, said Tuesday that its U.S. sales fell in November, only the fourth time the monthly figure failed to rise in more than 6 1/2 years.
But the company continued its overseas sales growth, and overall sales edged up 0.7 percent during the month. A softening dollar has helped companies such as McDonald's that have a large international presence because overseas revenue tranlates back into more dollars.
Consol Energy Inc. expects to begin laying off workers at its Fola operations near Bickmore, W.Va., starting Feb. 7. The Pittsburgh-based coal and gas producer estimated that about 104 workers at the Little Eagle Coal Co. and 378 workers at the Fola Coal Co. may be affected. Consol cited the Ohio Valley Environmental Coalition's appeal of the company's approved mining permits for the idling.
Huffington Post: "Just how badly is President Obama's $75 billion foreclosure program working out? Consider these newly-released numbers: Out of every 100 homeowners who came to JPMorgan Chase for help under the program, just 15 have or will likely receive a permanent payment reduction.
What happened to the other 85? For every 100 trial plans initiated from April through September 2009 under the Home Affordable Modification Program:
* 29 borrowers did not make all required payments under their trial plan;
* 20 borrowers did not submit all documents required for underwriting;
* 31 borrowers submitted all required documents but the documents did not meet HAMP underwriting standards, due to such things as missing signatures or nonstandard formats;
* 4 borrowers were or are likely to be rejected for undisclosed reasons;
* 1 borrower will not or is not likely to get their payment lowered."
The president will call for increasing the investment in infrastructure through building and modernizing highways, railways, bridges and tunnels. He also will propose a new program that provides rebates for consumers who retrofit their homes to become more energy efficient.
The president also will call for using some of the $200 billion in Troubled Asset Relief Program to help pay down the $1.4 trillion budget deficit. So there are three parts: 1) apparentaly a tax credit for businesses to hire new employees, 2) more infrastructure investment, 3) and a cash-for-caulkers program.(Calculated Risk)
Mike Shedlock: "The best I can do is suggest the unemployment rate will be over 10% all the way through 2015 and never dip below 8% all the way out through the end of 2020....In the absence of a war outbreak in the Middle East or Pakistan -- and/or Congress going completely insane with more stimulus efforts -- I think oil prices are likely to drop, the dollar will strengthen or at least hold its own, and the best opportunities are likely to be on the short side," he writes. "2010 is highly likely to retrace most if not all of the ‘reflation' efforts of 2009. If things play out as I suspect, 2010 will be the year of the great retrace as the economic recovery disappoints."
Oct. Job Openings and Labor Turnover: Job openings unchanged at 2.5M, down 48% from the most recent peak in June 2007. Hires little changed at 4M, down 29% from the peak. Turnover remains low at 3.3%.
Kroger Co shares tumbled 13% after its third-quarter result and full-year outlook both fell short of Wall Street expectations.
Investor's Business Daily and TechnoMetrica Market Intelligence said their IBD/TIPP Economic Optimism Index slipped to 46.8 in December from 47.9 in November.
Credit default swaps and collateralized debt obligations "took us right to the brink of disaster." Volcker said. "The most important financial innovation I've seen in the last 25 years is the automatic teller machine."
U.S. oil consumption is projected to average 18.7 million barrels a day this year, about 800,000 barrels a day, or 4.1%, lower than last year. Oil demand will rise 270,000 barrels a day next year from this year's level.
The Institute for Supply Management said its panel of purchasing and supply executives expects a 5.7 percent net increase in overall revenues for 2010, compared to a 10.7 percent decrease reported for 2009.
General Electric Co expects profit to remain flat at its hefty finance arm next year, as losses and impairments on loans peak.
The largest U.S. conglomerate believes its GE Capital finance unit is on track to hit its 2009 profit target of $2 billion to $2.5 billion set in March, company officials told investors on Tuesday. That would be down from about $8.63 billion in 2008.
The Dow Jones Industrial Average fell 104.14 points to 10,285.97. The S&P 500 Index shed 11.31 points to 1,091.94, while the Nasdaq Composite Index declined 16.62 points to 2,172.99.
Dec. gold falls $12.30 to $1,130.50/oz on Globex.
Oil futures climbed in electronic trading late Tuesday after the American Petroleum Institute crude-oil inventories last week dropped 5.815 million barrels. Analysts polled by Platts were anticipating a 600,000-barrel climb in crude-oil stocks. The API said distillate stocks gained 1.011 million barrels and gasoline stocks slipped 753,000 barrels. Analysts were expecting a decline of 400,000 barrels in distillates inventories and a rise of 1.8 million barrels in gasoline stocks. Crude oil futures edged up to $73.02 a barrel in electronic trading from the floor settlement of $72.62. Oil had ended the floor session 1.8% lower.
Monday, December 07, 2009
Default
12/7/09 Default
Mike Burk: "For the past 2 weeks, I think, the market has been dominated by positive seasonal factors which have ended. If that theory is correct next week should be down.
I expect the major indices to be lower on Friday December 11 than they were on Friday December 4."
ZeroHedge: "Chicago Crains reports that Tishman Speyer has just defaulted on a major mezzanine loan, part of a $1.4 billion package of loans, in which the Federal Reserve is the the main lender via its Maiden Lane I program. Tishman-Speyer, whose 11 Chicago CRE holdings can be seen here, has allegedly defaulted on a mezz loan supporting 6 major commercial properties. The properties, 5.7 million sq. feet in total, represent roughly half of the CRE company's 12.2 million sq. feet of Chicago real estate. And while Tishman has enough of a real estate empire that this won't make a huge impact in the near term, what is notable about the portfolio is that the Fed itself is the holder of the mortgages, which it acquired as part of the Bear Stearns bailout and currently are part of the $26.4 billion in Maiden Lane I Assets. Even as this portfolio has been impaired by over $3.5 billion since inception, we fully expect the fully transparent Fed to have a public announcement as to just how much more value in ML 1 will be lost as a result of this default."
Tim Iacono: "Based on the last two recessions, we're still more than a year away from a sustained decline in the jobless rate."
RGE Monitor: "The Job Openings and Labor Turnover Survey (JOLTS) reports the job openings rate in September 2009 was little changed at 1.9%. The number of job openings has declined by 2.3 million, 48% below the peak of June 2007. The hires rate remained low at 3.1%, and the separation rate remained at a record low of 3.3% (BLS, 10/11/09). This implies job losses in recent months have slowed mostly due to fewer layoffs, while hiring is still subdued."
Mike Santoli: "Yet the signature feature of this bull run has been an unwillingness of investors, so far, to sell aggressively on pullbacks. Until that changes-or until people start getting too cheery-it's still too early to worry too much."
. Over 38% of unemployed workers have been jobless for six months or more, around 58% of the unemployed have been jobless for three months and close to 54% of the workers have lost their jobs permanently. (BLS, 12/04/09)
Rob Hanna: "Friday was the 2nd outside day in a row. Looking back to the inception of the SPY, other times there have been back to back outside days have typically been followed by rallies over the next few days."
John Hussman: "The likelihood of a second wave of credit losses may suppress inflation pressures while we work through the adjustments of the next two or three years. Over time, the increased supply of U.S. government liabilities (whether in the form of monetary base or Treasury securities) is likely to be met by a similar depreciation in their value. I continue to expect that we will observe an approximate doubling in the U.S. consumer price index over the coming decade....Suffice it to say that I do not anticipate a V-shaped recovery, and while the stock market may very well recover faster than the rest of the economy, I don't expect durable market gains until after the second wave of losses shakes out. On the subject of credit delinquencies, the latest report by Trepp (which provides independent research on commercial mortgage-backed securities) indicates that delinquencies on multifamily CMBS loans rose to 8.78 percent in November, up from 7.66 percent the previous month. Commercial delinquencies in retail, industrial and office loans increased as well. The largest jump in delinquencies was in the hotel sector, where the delinquency rate shot to 14.09 percent, from 8.67 percent in October. The data from the banking sector also shows no abatement. "
Central banks should allow financial stability to play a role in monetary policy as low interest rates spur banks to take on too much risk, according to a study by the Bank for International Settlements.
The risk of banks defaulting jumped by more in economies where interest rates remained low for an extended period before the recent financial crisis, the report by the Basel, Switzerland-based organization said.
“The main implication of these findings is that monetary policy is not fully neutral from a financial stability perspective,” wrote economist Leonardo Gambacorta. “It is important that monetary authorities learn how to factor in the effect of their policies on risk taking.”
79% of Americans Want an Audit of the Fed, Only 21% are in Favor of Confirming Bernanke, and Only 20% Think Geithner is Doing a Good Job
Green Mountain of Waterbury, Vt., owns the Keurig brewing system patent and is busy buying a handful of roasters that hold licenses to make the "K-Cup" cartridges for Keurig-style coffee makers.
Diedrich, a Southern California coffee company since the 1970s, is one of the last two license holders left that have not been acquired by Green Mountain. The other is Van Houtte of Montreal.
Peet's, the Emeryville roaster with a large chain of coffeehouses, covets Diedrich's license to make the cartridges, believing it would provide an entry into the home and office single-cup brewing market.
"Peet's wants in, and Green Mountain would like to keep Peet's out," said Kenneth Davids, editor of CoffeeReview. com.
The battle has been brewing for more than a month. On Nov. 2, Peet's announced a deal to acquire Diedrich in a cash and stock transaction for $26 a share, or $213 million. The deal allowed Diedrich to entertain higher offers. And that's exactly what happened.
Green Mountain and Peet's started trading bids. Green Mountain now has the higher, offering $35 a share in cash, or $290 million.
Minyanville: "The jobs report showed an expanding service sector, the ISM didn't? Friday’s employment report showed that the Service Sector added 58,000 jobs. This doesn't jive with the Nonmfg ISM data released last Thursday. Nonmfg ISM was expected to show a reading of 51, but came in at 48.7 reflecting a contraction in the Service Sector. The jobs component came in at 41.6 suggesting job losses."
According to the FT, "85% of UK loans made in past five years are in breach of loan agreements."
Bernanke: "Because deflation implies falling prices while the target price level rises, the failure to end deflation in a given year has the effect of increasing what I have called the price-level gap. The price-level gap is the difference between the actual price level and the price level that would have obtained if deflation had been avoided and the price stability objective achieved in the first place."
The Greek government recently raised the estimate for this year's general government deficit to 12.7% of GDP, more than six percentage points higher than previous official projections.
Volatility in US corporate profits is at an all-time high now and they most-closely fit the definition of boom and bust, Richard Bernstein, CEO of Richard Bernstein Capital Management, told CNBC Monday. Corporate profits are the most important metric to look at as an equity investor and in the US "they are booming and busting like they never have been in history," Bernstein said.
Looking all the way back to the 1930s, the amplitude between profit highs and lows is unprecedented, he added.
The most recent insider trading data from finviz indicates that insider sellling outpaces buying by a ratio of 82! In the most recent data set, $11.6 million in stock was purchased by insiders, while a whopping $957 million was sold.
James Grant, editor of Grant's Interest Rate Observer: "The world is losing faith, as well it might. It's not that the dollar is overvalued - the problem lies with its management. The greenback is a glorious old brand that's looking more and more like General Motors."
Havre, Great Falls, Big Sky, and anything above 7000ft is very cold...
Wind Chills 40-60 below zero also. Expected to last the next couple of days.
The one-tenth ounce American Eagle inventory at the mint has been depleted, almost instantaneously after the coin was made available for purchase. This occurred the day after the mint announced the release of fractional Eagle Gold Bullion Coins in one-half ounce, one-quarter ounce, and one-tenth ounce weights.
Crude falls 2% to end at $73.93 a barrel. Gold dropped $13.70 to $1155.
U.S. consumers' outstanding credit balance fell for the ninth month in a row in October, but the decline in debt this year hasn't been as steep as previously reported, the Federal Reserve said Monday. Outstanding balances of consumer credit fell by $3.51 billion, or 1.7% annualized, in October to $2.482 trillion. Revolving credit - mostly credit cards - fell by $6.95 billion, or 9.3% annualized, to $888.1 billion. Nonrevolving credit, such as auto loans or student loans, rose by $3.44 billion, or 2.6%, to $1.595 trillion.
The Dow Jones Industrial Average rose 1.21 points to 10,390.11. The S&P 500 Index fell 2.73 points to 1,103.25, while the Nasdaq Composite declined 4.74 points to 2,189.61.
Mike Burk: "For the past 2 weeks, I think, the market has been dominated by positive seasonal factors which have ended. If that theory is correct next week should be down.
I expect the major indices to be lower on Friday December 11 than they were on Friday December 4."
ZeroHedge: "Chicago Crains reports that Tishman Speyer has just defaulted on a major mezzanine loan, part of a $1.4 billion package of loans, in which the Federal Reserve is the the main lender via its Maiden Lane I program. Tishman-Speyer, whose 11 Chicago CRE holdings can be seen here, has allegedly defaulted on a mezz loan supporting 6 major commercial properties. The properties, 5.7 million sq. feet in total, represent roughly half of the CRE company's 12.2 million sq. feet of Chicago real estate. And while Tishman has enough of a real estate empire that this won't make a huge impact in the near term, what is notable about the portfolio is that the Fed itself is the holder of the mortgages, which it acquired as part of the Bear Stearns bailout and currently are part of the $26.4 billion in Maiden Lane I Assets. Even as this portfolio has been impaired by over $3.5 billion since inception, we fully expect the fully transparent Fed to have a public announcement as to just how much more value in ML 1 will be lost as a result of this default."
Tim Iacono: "Based on the last two recessions, we're still more than a year away from a sustained decline in the jobless rate."
RGE Monitor: "The Job Openings and Labor Turnover Survey (JOLTS) reports the job openings rate in September 2009 was little changed at 1.9%. The number of job openings has declined by 2.3 million, 48% below the peak of June 2007. The hires rate remained low at 3.1%, and the separation rate remained at a record low of 3.3% (BLS, 10/11/09). This implies job losses in recent months have slowed mostly due to fewer layoffs, while hiring is still subdued."
Mike Santoli: "Yet the signature feature of this bull run has been an unwillingness of investors, so far, to sell aggressively on pullbacks. Until that changes-or until people start getting too cheery-it's still too early to worry too much."
. Over 38% of unemployed workers have been jobless for six months or more, around 58% of the unemployed have been jobless for three months and close to 54% of the workers have lost their jobs permanently. (BLS, 12/04/09)
Rob Hanna: "Friday was the 2nd outside day in a row. Looking back to the inception of the SPY, other times there have been back to back outside days have typically been followed by rallies over the next few days."
John Hussman: "The likelihood of a second wave of credit losses may suppress inflation pressures while we work through the adjustments of the next two or three years. Over time, the increased supply of U.S. government liabilities (whether in the form of monetary base or Treasury securities) is likely to be met by a similar depreciation in their value. I continue to expect that we will observe an approximate doubling in the U.S. consumer price index over the coming decade....Suffice it to say that I do not anticipate a V-shaped recovery, and while the stock market may very well recover faster than the rest of the economy, I don't expect durable market gains until after the second wave of losses shakes out. On the subject of credit delinquencies, the latest report by Trepp (which provides independent research on commercial mortgage-backed securities) indicates that delinquencies on multifamily CMBS loans rose to 8.78 percent in November, up from 7.66 percent the previous month. Commercial delinquencies in retail, industrial and office loans increased as well. The largest jump in delinquencies was in the hotel sector, where the delinquency rate shot to 14.09 percent, from 8.67 percent in October. The data from the banking sector also shows no abatement. "
Central banks should allow financial stability to play a role in monetary policy as low interest rates spur banks to take on too much risk, according to a study by the Bank for International Settlements.
The risk of banks defaulting jumped by more in economies where interest rates remained low for an extended period before the recent financial crisis, the report by the Basel, Switzerland-based organization said.
“The main implication of these findings is that monetary policy is not fully neutral from a financial stability perspective,” wrote economist Leonardo Gambacorta. “It is important that monetary authorities learn how to factor in the effect of their policies on risk taking.”
79% of Americans Want an Audit of the Fed, Only 21% are in Favor of Confirming Bernanke, and Only 20% Think Geithner is Doing a Good Job
Green Mountain of Waterbury, Vt., owns the Keurig brewing system patent and is busy buying a handful of roasters that hold licenses to make the "K-Cup" cartridges for Keurig-style coffee makers.
Diedrich, a Southern California coffee company since the 1970s, is one of the last two license holders left that have not been acquired by Green Mountain. The other is Van Houtte of Montreal.
Peet's, the Emeryville roaster with a large chain of coffeehouses, covets Diedrich's license to make the cartridges, believing it would provide an entry into the home and office single-cup brewing market.
"Peet's wants in, and Green Mountain would like to keep Peet's out," said Kenneth Davids, editor of CoffeeReview. com.
The battle has been brewing for more than a month. On Nov. 2, Peet's announced a deal to acquire Diedrich in a cash and stock transaction for $26 a share, or $213 million. The deal allowed Diedrich to entertain higher offers. And that's exactly what happened.
Green Mountain and Peet's started trading bids. Green Mountain now has the higher, offering $35 a share in cash, or $290 million.
Minyanville: "The jobs report showed an expanding service sector, the ISM didn't? Friday’s employment report showed that the Service Sector added 58,000 jobs. This doesn't jive with the Nonmfg ISM data released last Thursday. Nonmfg ISM was expected to show a reading of 51, but came in at 48.7 reflecting a contraction in the Service Sector. The jobs component came in at 41.6 suggesting job losses."
According to the FT, "85% of UK loans made in past five years are in breach of loan agreements."
Bernanke: "Because deflation implies falling prices while the target price level rises, the failure to end deflation in a given year has the effect of increasing what I have called the price-level gap. The price-level gap is the difference between the actual price level and the price level that would have obtained if deflation had been avoided and the price stability objective achieved in the first place."
The Greek government recently raised the estimate for this year's general government deficit to 12.7% of GDP, more than six percentage points higher than previous official projections.
Volatility in US corporate profits is at an all-time high now and they most-closely fit the definition of boom and bust, Richard Bernstein, CEO of Richard Bernstein Capital Management, told CNBC Monday. Corporate profits are the most important metric to look at as an equity investor and in the US "they are booming and busting like they never have been in history," Bernstein said.
Looking all the way back to the 1930s, the amplitude between profit highs and lows is unprecedented, he added.
The most recent insider trading data from finviz indicates that insider sellling outpaces buying by a ratio of 82! In the most recent data set, $11.6 million in stock was purchased by insiders, while a whopping $957 million was sold.
James Grant, editor of Grant's Interest Rate Observer: "The world is losing faith, as well it might. It's not that the dollar is overvalued - the problem lies with its management. The greenback is a glorious old brand that's looking more and more like General Motors."
Havre, Great Falls, Big Sky, and anything above 7000ft is very cold...
Wind Chills 40-60 below zero also. Expected to last the next couple of days.
The one-tenth ounce American Eagle inventory at the mint has been depleted, almost instantaneously after the coin was made available for purchase. This occurred the day after the mint announced the release of fractional Eagle Gold Bullion Coins in one-half ounce, one-quarter ounce, and one-tenth ounce weights.
Crude falls 2% to end at $73.93 a barrel. Gold dropped $13.70 to $1155.
U.S. consumers' outstanding credit balance fell for the ninth month in a row in October, but the decline in debt this year hasn't been as steep as previously reported, the Federal Reserve said Monday. Outstanding balances of consumer credit fell by $3.51 billion, or 1.7% annualized, in October to $2.482 trillion. Revolving credit - mostly credit cards - fell by $6.95 billion, or 9.3% annualized, to $888.1 billion. Nonrevolving credit, such as auto loans or student loans, rose by $3.44 billion, or 2.6%, to $1.595 trillion.
The Dow Jones Industrial Average rose 1.21 points to 10,390.11. The S&P 500 Index fell 2.73 points to 1,103.25, while the Nasdaq Composite declined 4.74 points to 2,189.61.
Saturday, December 05, 2009
Bubbles
12/5/09 Bubbles
Regulators on Friday shut down Ohio's AmTrust Bank, the fourth-largest bank to fail this year. They also closed five others, bringing to 130 the number of U.S. banks to be brought down so far in 2009 by recession and mountains of bad debt.
The Federal Deposit Insurance Corp. took over AmTrust Bank, based in Cleveland, with about $12 billion in assets and $8 billion in deposits. Its failure is expected to cost the federal deposit insurance fund an estimated $2 billion.
The 3-month T-Bill is yielding .04%. If that is not irrational exuberance what is? You have a top-heavy debt structure of $12+ trillion and unfunded liabilities of at least $60 trillion with no hope of repaying our debts looking out at least 10 years. Reality cannot be seen for miles and miles.
BHP Billiton and Rio Tinto on Saturday signed a $116 billion iron ore joint venture agreement to combine their Western Australian iron ore operations.
The agreement brings together two of the world's three largest iron ore producers, and has upset major customers in China. However, it still faces substantial hurdles, in particular approval by the European Commission, due to concerns about excessive dominance of the iron ore market.
The long-awaited deal was originally outlined in June, but formalized on Saturday in binding agreements signed by both companies just ahead of an agreed deadline.
In a joint statement, the companies said they anticipated completion of the deal in the second half of 2010. The statement did not mention any payment from BHP to Rio Tinto, which has the larger iron ore production, but earlier a figure of $5.8 billion had been proposed.
Under the plan, each company will each end up with 50 percent stakes in the combined Western Australian iron ore assets, but will continue to market the ore separately.
Bloomberg: “Former U.S. Treasury Undersecretary Timothy Adams said financial markets will be unstable next year as nations seek to withdraw emergency policies undertaken during the global recession. My biggest concern is that ‘we are simply creating new bubbles,’ Adams… ‘2010 is a year of volatility, as capital sloshes around the global markets in the search of yield as exit strategies are put in place at different times and at different magnitudes.’”
Even as the nation’s debt increased by $1.15 trillion this year to $6.95 trillion in October, the government’s interest expense under Geithner dropped 15%, the biggest decrease since before 1989.
That's what zero interest rates can do.
Doug Noland: "Dangerously, the Fed adheres steadfastly to its old policy approach - only implementing it more radically. Our central bank balloons its balance sheet with mortgage-backed securities, while pegging interest rates all the way down to zero. Worse yet, the Fed has signaled that the markets can bank on near zero percent for a protracted period. Global dynamics have changed, yet the Fed has locked itself into a precarious policy approach. Dr. Bernanke testifies that U.S. asset prices don’t appear overvalued. Meanwhile, price distortions and Bubble dynamics engulf the world....For months now, I have posited the emergence of a Global Government Finance Bubble. Global Liquidity Excess and Market Perceptions of Implicit Government Backing are, once again, playing an instrumental role in fostering Ponzi Dynamics. The Fed and most observers are seemingly oblivious to Bubble risk here at home. Yet the Treasury and agency markets are the epitome of dangerously distorted Bubble markets. Unprecedented global imbalances, ballooning central bank balance sheets, pegged ultra-low rates, and unwieldy speculative financial flows foment liquidity excesses and market price distortions – especially in the enormous U.S. Treasury and agency markets. At the same time, the markets perceive an Implicit Guarantee: That China, Japan, “emerging” Asia and the Middle East can be counted on to support Treasury prices and ensure dollar weakness doesn’t turn disorderly. Moreover, markets perceive that Federal Reserve rate and monetization policies will continue to underpin U.S. corporate, municipal and household debts....While perhaps not obvious from an asset price perspective, there are unmistakable Bubble and Ponzi Dynamics at work. The entire U.S. financial and economic recovery rests on a flimsy foundation of a highly distorted Treasury and agency market Bubble. I am the first to appreciate that Bubbles notoriously survive longer and grow larger than we Bubble analysts would expect. At the same time, the world has moved up the Bubble analysis learning curve. I find it disconcerting that many that recognize the unfolding Bubble landscape still believe they have plenty of time to profit and then get out before the bust. I also sense the more sophisticated players are following developments with an increasing degree of angst."
Marc Bustin: "Since natural gas prices have taken a major dive, so has the rig count. The rig count is how many rigs are actually drilling. Currently in North America, we're probably at a 35% to 40% usage of the rigs. This is way down, and the implication is important for the gas price.
Low gas prices means, suddenly we're drilling a lot fewer gas wells. No one wants to drill anymore.
Currently, in order to maintain U.S. production, we have to add between 17, 18, 19 Bcf (billion cubic feet) additional gas per day. At the current rate of drilling, we're adding 9 Bcf a day production, so there's obviously a shortfall.
And a shortfall means eventually the price of gas has to start going up.
Right now, there are a huge number of drillable wells - prospects all ready to be drilled. As soon as the natural gas price gets up above a certain level, these wells will suddenly become economic, and people will start developing them.
So it's not like we are going to find new "stuff," we're just going to start producing the "stuff" we already know exists. In my opinion, gas will be $6 or $7 next year. Prices will then soften down to $4 or $5 at the end of next year."
Chevron Corp. and Tokyo Electric Power Co. signed an agreement for the delivery of 4.1 million tons a year of liquefied natural gas for up to 20 years from the Wheatstone natural gas project in Australia. Tokyo Electric may also buy 15 percent of Chevron’s equity share in licenses over Wheatstone, Chevron
said.
Hershey Co., exploring its options for a possible bid for Cadbury Plc, has been in contact with Nestle SA, said two people familiar with the talks. An agreement between Hershey and Nestle may not be reached, and Hershey would prefer to bid alone, said the people, who declined to be identified because the talks are private. Any offer would challenge an unsolicited $10.2 billion-pound ($17 billion) bid from Kraft Foods.
Tim Wood: "Given the still fragile state of the economy, the ongoing credit crisis, continued stream of foreclosures, business failures, bankruptcies, etc., it is far too early to say that the real estate market has made a lasting low. Just as the charts were used to identify the top, they can be used to identify the bottom, and at this time we do not, in my opinion, have sufficient data to say that housing has bottomed and with the fundamentals as bleak as they are I would argue that the data there is pretty much the same."
Sen. Jim Bunning's remarks in Bernanke's confirmation hearing:
* “…you put the printing presses into overdrive to fund the government’s spending and hand out cheap money to your masters on Wall Street, which they use to rake in record profits while ordinary Americans and small businesses can’t even get loans for their everyday needs.”
* “…you have decided that just about every large bank, investment bank, insurance company, and even some industrial companies are too big to fail. Rather than making management, shareholders, and debt holders feel the consequences of their risk-taking, you bailed them out. In short, you are the definition of moral hazard.”
* “Because you bowed to pressure from the banks and refused to resolve them or force them to clean up their balance sheets and clean out the management, you have created zombie banks that are only enriching their traders and executives. You are repeating the mistakes of Japan in the 1990s on a much larger scale, while sowing the seeds for the next bubble.”
* “From monetary policy to regulation, consumer protection, transparency, and independence, your time as Fed Chairman has been a failure.”
Business Week: "With funding still scarce, demand down, and temp workers readily available, small companies aren't ready to expand payroll."
Part-time employment dropped in November, and, at the same time, the average duration of unemployment hit a new high.
Venezuela escalated its intervention in the banking sector Friday, with government officials shutting down three small banks following the closure of four others earlier this week.
President Barack Obama has altered his plans to attend the climate change conference in Copenhagen next week in a move many see as an attempt to add momentum to negotiations following renewed pledges by China and India to reduce carbon emissions.
The president was scheduled to attend the international climate summit on Dec. 9, but will attend instead on Dec. 18, the final day of the conference, the White House announced Friday.
Regulators on Friday shut down Ohio's AmTrust Bank, the fourth-largest bank to fail this year. They also closed five others, bringing to 130 the number of U.S. banks to be brought down so far in 2009 by recession and mountains of bad debt.
The Federal Deposit Insurance Corp. took over AmTrust Bank, based in Cleveland, with about $12 billion in assets and $8 billion in deposits. Its failure is expected to cost the federal deposit insurance fund an estimated $2 billion.
The 3-month T-Bill is yielding .04%. If that is not irrational exuberance what is? You have a top-heavy debt structure of $12+ trillion and unfunded liabilities of at least $60 trillion with no hope of repaying our debts looking out at least 10 years. Reality cannot be seen for miles and miles.
BHP Billiton and Rio Tinto on Saturday signed a $116 billion iron ore joint venture agreement to combine their Western Australian iron ore operations.
The agreement brings together two of the world's three largest iron ore producers, and has upset major customers in China. However, it still faces substantial hurdles, in particular approval by the European Commission, due to concerns about excessive dominance of the iron ore market.
The long-awaited deal was originally outlined in June, but formalized on Saturday in binding agreements signed by both companies just ahead of an agreed deadline.
In a joint statement, the companies said they anticipated completion of the deal in the second half of 2010. The statement did not mention any payment from BHP to Rio Tinto, which has the larger iron ore production, but earlier a figure of $5.8 billion had been proposed.
Under the plan, each company will each end up with 50 percent stakes in the combined Western Australian iron ore assets, but will continue to market the ore separately.
Bloomberg: “Former U.S. Treasury Undersecretary Timothy Adams said financial markets will be unstable next year as nations seek to withdraw emergency policies undertaken during the global recession. My biggest concern is that ‘we are simply creating new bubbles,’ Adams… ‘2010 is a year of volatility, as capital sloshes around the global markets in the search of yield as exit strategies are put in place at different times and at different magnitudes.’”
Even as the nation’s debt increased by $1.15 trillion this year to $6.95 trillion in October, the government’s interest expense under Geithner dropped 15%, the biggest decrease since before 1989.
That's what zero interest rates can do.
Doug Noland: "Dangerously, the Fed adheres steadfastly to its old policy approach - only implementing it more radically. Our central bank balloons its balance sheet with mortgage-backed securities, while pegging interest rates all the way down to zero. Worse yet, the Fed has signaled that the markets can bank on near zero percent for a protracted period. Global dynamics have changed, yet the Fed has locked itself into a precarious policy approach. Dr. Bernanke testifies that U.S. asset prices don’t appear overvalued. Meanwhile, price distortions and Bubble dynamics engulf the world....For months now, I have posited the emergence of a Global Government Finance Bubble. Global Liquidity Excess and Market Perceptions of Implicit Government Backing are, once again, playing an instrumental role in fostering Ponzi Dynamics. The Fed and most observers are seemingly oblivious to Bubble risk here at home. Yet the Treasury and agency markets are the epitome of dangerously distorted Bubble markets. Unprecedented global imbalances, ballooning central bank balance sheets, pegged ultra-low rates, and unwieldy speculative financial flows foment liquidity excesses and market price distortions – especially in the enormous U.S. Treasury and agency markets. At the same time, the markets perceive an Implicit Guarantee: That China, Japan, “emerging” Asia and the Middle East can be counted on to support Treasury prices and ensure dollar weakness doesn’t turn disorderly. Moreover, markets perceive that Federal Reserve rate and monetization policies will continue to underpin U.S. corporate, municipal and household debts....While perhaps not obvious from an asset price perspective, there are unmistakable Bubble and Ponzi Dynamics at work. The entire U.S. financial and economic recovery rests on a flimsy foundation of a highly distorted Treasury and agency market Bubble. I am the first to appreciate that Bubbles notoriously survive longer and grow larger than we Bubble analysts would expect. At the same time, the world has moved up the Bubble analysis learning curve. I find it disconcerting that many that recognize the unfolding Bubble landscape still believe they have plenty of time to profit and then get out before the bust. I also sense the more sophisticated players are following developments with an increasing degree of angst."
Marc Bustin: "Since natural gas prices have taken a major dive, so has the rig count. The rig count is how many rigs are actually drilling. Currently in North America, we're probably at a 35% to 40% usage of the rigs. This is way down, and the implication is important for the gas price.
Low gas prices means, suddenly we're drilling a lot fewer gas wells. No one wants to drill anymore.
Currently, in order to maintain U.S. production, we have to add between 17, 18, 19 Bcf (billion cubic feet) additional gas per day. At the current rate of drilling, we're adding 9 Bcf a day production, so there's obviously a shortfall.
And a shortfall means eventually the price of gas has to start going up.
Right now, there are a huge number of drillable wells - prospects all ready to be drilled. As soon as the natural gas price gets up above a certain level, these wells will suddenly become economic, and people will start developing them.
So it's not like we are going to find new "stuff," we're just going to start producing the "stuff" we already know exists. In my opinion, gas will be $6 or $7 next year. Prices will then soften down to $4 or $5 at the end of next year."
Chevron Corp. and Tokyo Electric Power Co. signed an agreement for the delivery of 4.1 million tons a year of liquefied natural gas for up to 20 years from the Wheatstone natural gas project in Australia. Tokyo Electric may also buy 15 percent of Chevron’s equity share in licenses over Wheatstone, Chevron
said.
Hershey Co., exploring its options for a possible bid for Cadbury Plc, has been in contact with Nestle SA, said two people familiar with the talks. An agreement between Hershey and Nestle may not be reached, and Hershey would prefer to bid alone, said the people, who declined to be identified because the talks are private. Any offer would challenge an unsolicited $10.2 billion-pound ($17 billion) bid from Kraft Foods.
Tim Wood: "Given the still fragile state of the economy, the ongoing credit crisis, continued stream of foreclosures, business failures, bankruptcies, etc., it is far too early to say that the real estate market has made a lasting low. Just as the charts were used to identify the top, they can be used to identify the bottom, and at this time we do not, in my opinion, have sufficient data to say that housing has bottomed and with the fundamentals as bleak as they are I would argue that the data there is pretty much the same."
Sen. Jim Bunning's remarks in Bernanke's confirmation hearing:
* “…you put the printing presses into overdrive to fund the government’s spending and hand out cheap money to your masters on Wall Street, which they use to rake in record profits while ordinary Americans and small businesses can’t even get loans for their everyday needs.”
* “…you have decided that just about every large bank, investment bank, insurance company, and even some industrial companies are too big to fail. Rather than making management, shareholders, and debt holders feel the consequences of their risk-taking, you bailed them out. In short, you are the definition of moral hazard.”
* “Because you bowed to pressure from the banks and refused to resolve them or force them to clean up their balance sheets and clean out the management, you have created zombie banks that are only enriching their traders and executives. You are repeating the mistakes of Japan in the 1990s on a much larger scale, while sowing the seeds for the next bubble.”
* “From monetary policy to regulation, consumer protection, transparency, and independence, your time as Fed Chairman has been a failure.”
Business Week: "With funding still scarce, demand down, and temp workers readily available, small companies aren't ready to expand payroll."
Part-time employment dropped in November, and, at the same time, the average duration of unemployment hit a new high.
Venezuela escalated its intervention in the banking sector Friday, with government officials shutting down three small banks following the closure of four others earlier this week.
President Barack Obama has altered his plans to attend the climate change conference in Copenhagen next week in a move many see as an attempt to add momentum to negotiations following renewed pledges by China and India to reduce carbon emissions.
The president was scheduled to attend the international climate summit on Dec. 9, but will attend instead on Dec. 18, the final day of the conference, the White House announced Friday.
Friday, December 04, 2009
Jobs
12/4/09 Jobs
The U.S. labor market improved markedly in November, with the unemployment rate falling back to 10% and job losses shrinking to the lowest level in nearly two years, the Labor Department reported Friday. Nonfarm payrolls dropped by a seasonally adjusted 11,000 in November, the fewest since December 2007. Payroll losses in September and October were revised lower by a total of 159,000. The report was much better than expected by economists surveyed by MarketWatch, who were looking for 100,000 fewer jobs and a steady 10.2% unemployment rate. Avg. hourly earnings $18.74 vs. $18.72 prior. Overall workweek 33.2 hours vs. 33 prior. In November, employment fell in construction, manufacturing, and information, while temporary help services and health care added jobs. Revisions added 159,000 from payroll figures previously reported for October and September. The October reading was revised to show a 111,000 drop in jobs compared with an initially reported 190,000 decline.
The number of temporary workers increased 52,000 in November, the biggest since October 2004 and the fourth straight rise. Much of that increase could be attributed to holiday hiring for retail. Service industries, which include banks, insurance companies, restaurants and retailers, added 58,000 workers.
The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- fell to 17.2 percent from 17.5 percent.
30,000 jobs were created by the CES Birth Death model which has 'estimated' 1.179-million jobs into existence since February. If your unemployment benefits ran out, remember you were not counted on
the unemployment roles.
Among the unemployed, the number of job losers and persons who completed temporary jobs fell by 463,000 in November. The number of long-term unemployed (those jobless for 27 weeks and over) rose by 293,000 to 5.9 million. The percentage of unemployed persons jobless for 27 weeks or more increased by 2.7 percentage points to 38.3 percent.
ZeroHedge: "The one number consistently forgotten is the exhaustion transfer as more and more jobless no longer qualify for traditional 6 month unemployment insurance (being unemployed for more than half a year will do that to you). Nonetheless, combining the two data series presents a much uglier picture: adding the 3.859 on Emergency Unemployment Compensation to those on current benefits yields a total of 9.3 million who are suckling at Uncle Obama's teat! Furthermore, the series has ticked higher recently even as initial claims have continued declining. The combined number is a mere 175k off the all time high in this cumulative data series of 9.5 million recorded in late July. Additionally, at the market bottom in March the combined number was just under 7 million, meaning that as the market has rallied over 60%, the economy has lost 2.5 million workers! And don't forget that over the past 6 months an additional set of workers has rolled off the even extended EUC insurance benefits, which according to some estimates could be higher than 1 million (cumulatively) over the past 6 months. As this data is lost somewhere in the limbo of U-6, we can only extrapolate what the attached chart would look like if it captured not just those who collect the weekly $400 or so from Zimbabwe Ben, but also those who no longer are eligible. "
Congressman Kucinich: "America is in the fight of its life and that fight is not in Afghanistan -- it's here ... We are deeply in debt. Our GDP is down. Our manufacturing is down. Our savings are down. The value of the dollar is down. Our trade deficit is up. Business failures are up. Bankruptcies are up."
According to AMG Data, for the week ended Dec. 2, Equity Fund Inflows $3 Bil; Taxable Bond Fund Inflows $4.5 Bil
xETFs - Equity Fund Outflows -$659 Mil; Taxable Bond Fund Inflows $3.4 Bil
Kraft Foods posted its offer document to Cadbury shareholders on Friday, triggering a 9.8 billion pound ($16.3 billion) takeover fight for the British chocolate maker. The bid is unchanged from its indicated offer worth 300 pence in cash and 0.2589 new Kraft share for each Cadbury share, according to an advertisement in the Wall Street Journal. U.K.'s business secretary, Peter Mandelson, warns Kraft: "If you think that you can come here and make a fast buck you will find that you face huge opposition from the local population ... and from the British government."
Walter Bagehot: "At particular times a great deal of stupid people have a great deal of stupid money... At intervals, from causes which are not to be the present purpose, the money of these people – the blind capital, as we call it, of the country – is particularly large and craving; it seeks for someone to devour it, and there is a 'plethora'; it finds someone and there is 'speculation'; it is devoured and there is 'panic'."
Don’t look now but the fuel switching from coal to natural gas for electricity generation is starting. According to a recent report by Reuters, electrical plants in the U.K. are increasingly relying on natural gas to generate the base load power instead of coal.
This is obviously being driven by the current surplus of natural gas, which has taken away the arbitrage opportunities and kept prices within a range that makes it economic to use the more environmentally friendly fuel.
China Petroleum & Chemical Corporation (Sinopec) has entered into an agreement to purchase 2 million tons of liquefied natural gas per annum from the Papua New Guinea Liquefied Natural Gas (PNG LNG) Project, operated by Exxon Mobil Corporation subsidiary Esso Highlands Limited, for a period of 20 years, Esso Highlands and Sinopec subsidiary Unipec Asia announced December 3.
The agreement will supply an LNG terminal that will be built by Sinopec in Qingdao, Shandong province, the announcement said. The terminal's capacity is expected to be 3 million tons per annum in its first phase and 5-6 million tons per year in its second phase, said Sinopec Senior Vice President Wang Zhigang.
AT&T and UPS have expressed interest in converting their fleets to CNG, and the Fed-Ex package delivery service reportedly already has natural-gas vehicles in its fleet. “We need to find a way to get from Kansas to Utah driving a natural-gas vehicle,” to attract truckers and other commercial travelers, she declared.
The only consumer-oriented car that rolls off U.S. assembly lines ready to burn natural gas is the Honda CGX. And while production is rising, Swalnick said, it is still relatively limited.
Orders for U.S. factory goods expanded in October for the six month out of the last seven, the Commerce Department reported Friday. Factory orders increased 0.6% in October, above the flat reading expected by economists surveyed by MarketWatch. Analysts had expected a weak report after an advanced report last week that orders for durable-goods decreased 0.6% in October. But the more complete data showed that overall factory orders rose led by 1.6% jump in nondurable-goods orders. Core capital equipment orders fell 3.4% in October, revised down from a 2.9% fall estimated a week ago, the government said. Inventories rose 0.4% in October, the first gain following 13 straight declines.
David Goldman: "A senior executive of one of the world’s largest shipping companies told me recently that there has been no pickup whatever in business, and that shippers continue to lose money hand over fist. The Baltic Dry Index of freighter costs confirms this dour view. If there's a recovery underway, how come no one is shipping anything?"
Abercrombie, Macy’s report drop in business in Nov as discounts failed to persuade shoppers.
Dennis Wholey: "Expecting the world to treat you fairly because you are a good person is a little like expecting the bull not to attack you because you are a vegetarian."
Houston residents are bracing for the earliest snowfall ever today as a storm bears down on Texas and Louisiana, threatening to disrupt travel and holiday shopping.
Canadian employers added more than five times as many jobs as expected in November, led by education, manufacturing and finance, a sign of an accelerating economic recovery.
Employment rose by 79,100 last month, the most in more than a year, Statistics Canada said today in Ottawa. The jobless rate fell to 8.5 percent from October’s 8.6 percent. The median forecast of economists surveyed by Bloomberg was for a 15,000 increase in jobs and an unemployment rate of 8.6 percent.
John Mauldin: "I'm in the double-dip recession camp," says John Mauldin of Millennium Wave Investments, who fears the Obama administration is "going to massively increase taxes…in 2011, in a weak economy. I think that's the absolutely dumbest thing we're going to do as a country."
The Gas Exporting Countries Forum meeting next week will discuss ways of stabilizing natural-gas prices, said Qatar’s Oil Minister Abdullah bin Hamad al-Attiyah.
Natural gas futures for delivery at the Henry Hub in Louisiana have fallen 19 percent this year to $4.566 a million British thermal units on the New York Mercantile Exchange. Prices sank as low as $2.409 in September.
“Limiting the supplies in most of the contracts is impossible because they are long-term contracts,” al-Attiyah told reporters in Cairo today. “But we are going to see and discuss how to stabilize the gas price. Gas should have a premium, it is a clean fuel, it’s a choice fuel.”
European utilities such as E.ON AG and GDF Suez SA buy most of their gas under supply contracts linked to the cost of crude- oil products that are valid for as long as 30 years. The accords have take-or-pay clauses requiring them to take minimal volumes, even when demand drops, or pay a penalty.
On the Comex division of the New York Mercantile Exchange, gold for December delivery fell $48.60 to end at $1,168.80 an ounce. Friday's losses erased gold's weekly gain. The benchmark contract ended the week down 0.5%, falling for the first week in five. The U.S. dollar rose sharply after an upbeat U.S. jobs report.
At one point during the session, stocks rallied briskly, with the Dow, the S&P 500 and the Nasdaq climbing to their highest levels in 15 months. The Dow rose as high as 10,516.70, while the S&P 500 climbed as high as 1,119.13, and the Nasdaq jumped as high as 2,214.39.
Falling commodity prices weighed on natural resource companies, sending the S&P materials index down 1.2 percent and the S&P energy index down 0.8 percent.
The U.S. dollar index , which measures the greenback against a basket of six other major currencies, jumped 1.5 percent on the upbeat jobs data.
In contrast, U.S. crude oil futures fell 99 cents to settle at $75.47 a barrel.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of 7 to 3, while on the Nasdaq, about 10 stocks rose for every three that fell.
Two Georgia bank failures brought the U.S. bank failure tally to 126, according to the Federal Deposit Insurance Corporation. Regulators closed the First Security National Bank of Norcross, Ga., and Atlanta's Buckhead Community Bank. State Bank and Trust Co. of Macon, Ga. will assume the deposits of both banks.
The U.S. labor market improved markedly in November, with the unemployment rate falling back to 10% and job losses shrinking to the lowest level in nearly two years, the Labor Department reported Friday. Nonfarm payrolls dropped by a seasonally adjusted 11,000 in November, the fewest since December 2007. Payroll losses in September and October were revised lower by a total of 159,000. The report was much better than expected by economists surveyed by MarketWatch, who were looking for 100,000 fewer jobs and a steady 10.2% unemployment rate. Avg. hourly earnings $18.74 vs. $18.72 prior. Overall workweek 33.2 hours vs. 33 prior. In November, employment fell in construction, manufacturing, and information, while temporary help services and health care added jobs. Revisions added 159,000 from payroll figures previously reported for October and September. The October reading was revised to show a 111,000 drop in jobs compared with an initially reported 190,000 decline.
The number of temporary workers increased 52,000 in November, the biggest since October 2004 and the fourth straight rise. Much of that increase could be attributed to holiday hiring for retail. Service industries, which include banks, insurance companies, restaurants and retailers, added 58,000 workers.
The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- fell to 17.2 percent from 17.5 percent.
30,000 jobs were created by the CES Birth Death model which has 'estimated' 1.179-million jobs into existence since February. If your unemployment benefits ran out, remember you were not counted on
the unemployment roles.
Among the unemployed, the number of job losers and persons who completed temporary jobs fell by 463,000 in November. The number of long-term unemployed (those jobless for 27 weeks and over) rose by 293,000 to 5.9 million. The percentage of unemployed persons jobless for 27 weeks or more increased by 2.7 percentage points to 38.3 percent.
ZeroHedge: "The one number consistently forgotten is the exhaustion transfer as more and more jobless no longer qualify for traditional 6 month unemployment insurance (being unemployed for more than half a year will do that to you). Nonetheless, combining the two data series presents a much uglier picture: adding the 3.859 on Emergency Unemployment Compensation to those on current benefits yields a total of 9.3 million who are suckling at Uncle Obama's teat! Furthermore, the series has ticked higher recently even as initial claims have continued declining. The combined number is a mere 175k off the all time high in this cumulative data series of 9.5 million recorded in late July. Additionally, at the market bottom in March the combined number was just under 7 million, meaning that as the market has rallied over 60%, the economy has lost 2.5 million workers! And don't forget that over the past 6 months an additional set of workers has rolled off the even extended EUC insurance benefits, which according to some estimates could be higher than 1 million (cumulatively) over the past 6 months. As this data is lost somewhere in the limbo of U-6, we can only extrapolate what the attached chart would look like if it captured not just those who collect the weekly $400 or so from Zimbabwe Ben, but also those who no longer are eligible. "
Congressman Kucinich: "America is in the fight of its life and that fight is not in Afghanistan -- it's here ... We are deeply in debt. Our GDP is down. Our manufacturing is down. Our savings are down. The value of the dollar is down. Our trade deficit is up. Business failures are up. Bankruptcies are up."
According to AMG Data, for the week ended Dec. 2, Equity Fund Inflows $3 Bil; Taxable Bond Fund Inflows $4.5 Bil
xETFs - Equity Fund Outflows -$659 Mil; Taxable Bond Fund Inflows $3.4 Bil
Kraft Foods posted its offer document to Cadbury shareholders on Friday, triggering a 9.8 billion pound ($16.3 billion) takeover fight for the British chocolate maker. The bid is unchanged from its indicated offer worth 300 pence in cash and 0.2589 new Kraft share for each Cadbury share, according to an advertisement in the Wall Street Journal. U.K.'s business secretary, Peter Mandelson, warns Kraft: "If you think that you can come here and make a fast buck you will find that you face huge opposition from the local population ... and from the British government."
Walter Bagehot: "At particular times a great deal of stupid people have a great deal of stupid money... At intervals, from causes which are not to be the present purpose, the money of these people – the blind capital, as we call it, of the country – is particularly large and craving; it seeks for someone to devour it, and there is a 'plethora'; it finds someone and there is 'speculation'; it is devoured and there is 'panic'."
Don’t look now but the fuel switching from coal to natural gas for electricity generation is starting. According to a recent report by Reuters, electrical plants in the U.K. are increasingly relying on natural gas to generate the base load power instead of coal.
This is obviously being driven by the current surplus of natural gas, which has taken away the arbitrage opportunities and kept prices within a range that makes it economic to use the more environmentally friendly fuel.
China Petroleum & Chemical Corporation (Sinopec) has entered into an agreement to purchase 2 million tons of liquefied natural gas per annum from the Papua New Guinea Liquefied Natural Gas (PNG LNG) Project, operated by Exxon Mobil Corporation subsidiary Esso Highlands Limited, for a period of 20 years, Esso Highlands and Sinopec subsidiary Unipec Asia announced December 3.
The agreement will supply an LNG terminal that will be built by Sinopec in Qingdao, Shandong province, the announcement said. The terminal's capacity is expected to be 3 million tons per annum in its first phase and 5-6 million tons per year in its second phase, said Sinopec Senior Vice President Wang Zhigang.
AT&T and UPS have expressed interest in converting their fleets to CNG, and the Fed-Ex package delivery service reportedly already has natural-gas vehicles in its fleet. “We need to find a way to get from Kansas to Utah driving a natural-gas vehicle,” to attract truckers and other commercial travelers, she declared.
The only consumer-oriented car that rolls off U.S. assembly lines ready to burn natural gas is the Honda CGX. And while production is rising, Swalnick said, it is still relatively limited.
Orders for U.S. factory goods expanded in October for the six month out of the last seven, the Commerce Department reported Friday. Factory orders increased 0.6% in October, above the flat reading expected by economists surveyed by MarketWatch. Analysts had expected a weak report after an advanced report last week that orders for durable-goods decreased 0.6% in October. But the more complete data showed that overall factory orders rose led by 1.6% jump in nondurable-goods orders. Core capital equipment orders fell 3.4% in October, revised down from a 2.9% fall estimated a week ago, the government said. Inventories rose 0.4% in October, the first gain following 13 straight declines.
David Goldman: "A senior executive of one of the world’s largest shipping companies told me recently that there has been no pickup whatever in business, and that shippers continue to lose money hand over fist. The Baltic Dry Index of freighter costs confirms this dour view. If there's a recovery underway, how come no one is shipping anything?"
Abercrombie, Macy’s report drop in business in Nov as discounts failed to persuade shoppers.
Dennis Wholey: "Expecting the world to treat you fairly because you are a good person is a little like expecting the bull not to attack you because you are a vegetarian."
Houston residents are bracing for the earliest snowfall ever today as a storm bears down on Texas and Louisiana, threatening to disrupt travel and holiday shopping.
Canadian employers added more than five times as many jobs as expected in November, led by education, manufacturing and finance, a sign of an accelerating economic recovery.
Employment rose by 79,100 last month, the most in more than a year, Statistics Canada said today in Ottawa. The jobless rate fell to 8.5 percent from October’s 8.6 percent. The median forecast of economists surveyed by Bloomberg was for a 15,000 increase in jobs and an unemployment rate of 8.6 percent.
John Mauldin: "I'm in the double-dip recession camp," says John Mauldin of Millennium Wave Investments, who fears the Obama administration is "going to massively increase taxes…in 2011, in a weak economy. I think that's the absolutely dumbest thing we're going to do as a country."
The Gas Exporting Countries Forum meeting next week will discuss ways of stabilizing natural-gas prices, said Qatar’s Oil Minister Abdullah bin Hamad al-Attiyah.
Natural gas futures for delivery at the Henry Hub in Louisiana have fallen 19 percent this year to $4.566 a million British thermal units on the New York Mercantile Exchange. Prices sank as low as $2.409 in September.
“Limiting the supplies in most of the contracts is impossible because they are long-term contracts,” al-Attiyah told reporters in Cairo today. “But we are going to see and discuss how to stabilize the gas price. Gas should have a premium, it is a clean fuel, it’s a choice fuel.”
European utilities such as E.ON AG and GDF Suez SA buy most of their gas under supply contracts linked to the cost of crude- oil products that are valid for as long as 30 years. The accords have take-or-pay clauses requiring them to take minimal volumes, even when demand drops, or pay a penalty.
On the Comex division of the New York Mercantile Exchange, gold for December delivery fell $48.60 to end at $1,168.80 an ounce. Friday's losses erased gold's weekly gain. The benchmark contract ended the week down 0.5%, falling for the first week in five. The U.S. dollar rose sharply after an upbeat U.S. jobs report.
At one point during the session, stocks rallied briskly, with the Dow, the S&P 500 and the Nasdaq climbing to their highest levels in 15 months. The Dow rose as high as 10,516.70, while the S&P 500 climbed as high as 1,119.13, and the Nasdaq jumped as high as 2,214.39.
Falling commodity prices weighed on natural resource companies, sending the S&P materials index down 1.2 percent and the S&P energy index down 0.8 percent.
The U.S. dollar index , which measures the greenback against a basket of six other major currencies, jumped 1.5 percent on the upbeat jobs data.
In contrast, U.S. crude oil futures fell 99 cents to settle at $75.47 a barrel.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of 7 to 3, while on the Nasdaq, about 10 stocks rose for every three that fell.
Two Georgia bank failures brought the U.S. bank failure tally to 126, according to the Federal Deposit Insurance Corporation. Regulators closed the First Security National Bank of Norcross, Ga., and Atlanta's Buckhead Community Bank. State Bank and Trust Co. of Macon, Ga. will assume the deposits of both banks.
Thursday, December 03, 2009
Unemployment
12/3/09 Unemployment
In a sign of improving labor markets, new claims for state unemployment benefits dropped for a fifth straight week, the Labor Department reported Thursday. But a large increase in the number of people collecting checks indicates hiring remained sluggish. The number of Americans filing for state unemployment benefits fell by a seasonally adjusted 5,000 to 457,000 in the week ending Nov. 28. It's the fewest initial claims since September 2008. Claims in the previous week were revised lower by 4,000 to 462,000. Economists surveyed by MarketWatch had expected initial claims to rise to about 480,000. The total number of people claiming benefits rose by 527,000 to 9.61 million, as a new program for extended benefits kicked in.
Comcast and General Electric said that they will form a joint venture that will be 51% owned by Comcast and 49% owned by GE. The joint venture will consist of the NBC Universal businesses and Comcast's cable networks, regional sports networks and certain digital properties and unconsolidated investments. GE will contribute to the joint venture NBCU's businesses valued at $30 billion. Comcast will contribute its cable networks and make a payment to GE of approximately $6.5 billion of cash subject to certain adjustments. As part of the deal, GE will acquire Vivendi's (FR:VIV) 20% interest in NBC Universal for $5.8 billion. "This transaction will generate approximately $8 billion of cash at closing with an expected small after-tax gain," said GE CEO Jeff Immelt.
Costco Wholesale Corp.reported on Thursday that for November, comparable-store sales rose 6% as total sales advanced 9% to $6.04 billion from $5.55 billion in the year-earlier month. A survey of analysts by Thomson Reuters produced a consensus estimate of comparable sales up 8.1%. The comparable-store sales reflected increases of 2% in the U.S. and 21% overseas, Costco said. Gasoline-price inflation helped the current year's sales and hurt the year-earlier numbers. Excluding the effect of gasoline prices and the effect of stronger foreign currency relative to the U.S. dollar, comparable-store sales rose 2%. On this basis, U.S. sales were flat and international sales were up 7%.
Productivity increased 8.1 percent in the nonfarm business sector during the third quarter of 2009 as unit labor costs fell 2.5 percent (seasonally adjusted annual rates, revised). In manufacturing, productivity increased 13.4 percent while unit labor costs fell 6.1 percent.
George Ure: "Before you get carried away with productivity, try to remember that if everyone is fired then productivity shoots skyward until there's no one working and productivity reaches 100%."
E-commerce sales grew 5% YoY on Cyber Monday—first Monday after Thanksgiving.
Japan shares jump nearly 4 percent to five-week high on weakening yen.
Elizabeth Warren: "Can you imagine an America without a strong middle class? If you can, would it still be America as we know it?
Today, one in five Americans is unemployed, underemployed or just plain out of work. One in nine families can't make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month. The economic crisis has wiped more than $5 trillion from pensions and savings, has left family balance sheets upside down, and threatens to put ten million homeowners out on the street.
America today has plenty of rich and super-rich. But it has far more families who did all the right things, but who still have no real security. Going to college and finding a good job no longer guarantee economic safety. Paying for a child's education and setting aside enough for a decent retirement have become distant dreams. Tens of millions of once-secure middle class families now live paycheck to paycheck, watching as their debts pile up and worrying about whether a pink slip or a bad diagnosis will send them hurtling over an economic cliff.
America without a strong middle class? Unthinkable, but the once-solid foundation is shaking."
Henry Hub's NG spot prices up 8% 12/02. Up on 12/03 as well
Harley-Davidson Inc. said Thursday it plans to take about $200 million in charges by 2012 to eliminate 950 jobs at its York, Pa. motorcycle operations, but it will keep its presence there. The Milwaukee-based motorcycle brand will cut the work force at the site to 1,000 hourly workers. The move on York comes on top of an earlier restructuring for Harley announced on Oct. 15, including the sale of its Buell brand.
The service sectors of the U.S. economy contracted in November after two months of expansion, the Institute for Supply Management said Thursday. The ISM's non-manufacturing index fell to 48.7% from 50.6% in October. Six of 18 industries were expanding in November, the ISM said. The employment index rose to 41.6% from 41.1%. The new orders index fell to 55.1% from 55.6%. The production index dropped sharply to 49.6% from 55.2%.
Working gas in storage was 3,837 Bcf as of Friday, November 27, 2009, according to EIA estimates. This represents a net increase of 2 Bcf from the previous week. Stocks were 470 Bcf higher than last year at this time and 487 Bcf above the 5-year average of 3,350 Bcf. In the East Region, stocks were 168 Bcf above the 5-year average following net withdrawals of 7 Bcf. Stocks in the Producing Region were 243 Bcf above the 5-year average of 976 Bcf after a net injection of 8 Bcf. Stocks in the West Region were 76 Bcf above the 5-year average after a net addition of 1 Bcf. At 3,837 Bcf, total working gas is above the 5-year historical range.
Freddie Mac said Thursday that the 30-year fixed-rate mortgage average hit a new low. The 30-year average declined to 4.71% with an average 0.7 point for the week ending Dec. 3 from 4.78% last week. The new 30-year average is the lowest since Freddie Mac began its weekly survey in 1971. Last year, the average was 5.53%.
Paul Ausick: "Due to both the abundance of shale gas and the relative ease with which it can now be extracted, energy companies are looking at replacing coal-fired power plants with natural gas-burning plants. Natural gas emits less than half the carbon dioxide of coal and has the additional benefit of being very easy to start up and shut down."
The Dow Jones Industrial Average ended at 10,366.15, off 86.53 points. The S&P 500 Index fell 9.32 points to 1,099.92, while the Nasdaq Composite declined 11.89 points to 2,173.14.
In a sign of improving labor markets, new claims for state unemployment benefits dropped for a fifth straight week, the Labor Department reported Thursday. But a large increase in the number of people collecting checks indicates hiring remained sluggish. The number of Americans filing for state unemployment benefits fell by a seasonally adjusted 5,000 to 457,000 in the week ending Nov. 28. It's the fewest initial claims since September 2008. Claims in the previous week were revised lower by 4,000 to 462,000. Economists surveyed by MarketWatch had expected initial claims to rise to about 480,000. The total number of people claiming benefits rose by 527,000 to 9.61 million, as a new program for extended benefits kicked in.
Comcast and General Electric said that they will form a joint venture that will be 51% owned by Comcast and 49% owned by GE. The joint venture will consist of the NBC Universal businesses and Comcast's cable networks, regional sports networks and certain digital properties and unconsolidated investments. GE will contribute to the joint venture NBCU's businesses valued at $30 billion. Comcast will contribute its cable networks and make a payment to GE of approximately $6.5 billion of cash subject to certain adjustments. As part of the deal, GE will acquire Vivendi's (FR:VIV) 20% interest in NBC Universal for $5.8 billion. "This transaction will generate approximately $8 billion of cash at closing with an expected small after-tax gain," said GE CEO Jeff Immelt.
Costco Wholesale Corp.reported on Thursday that for November, comparable-store sales rose 6% as total sales advanced 9% to $6.04 billion from $5.55 billion in the year-earlier month. A survey of analysts by Thomson Reuters produced a consensus estimate of comparable sales up 8.1%. The comparable-store sales reflected increases of 2% in the U.S. and 21% overseas, Costco said. Gasoline-price inflation helped the current year's sales and hurt the year-earlier numbers. Excluding the effect of gasoline prices and the effect of stronger foreign currency relative to the U.S. dollar, comparable-store sales rose 2%. On this basis, U.S. sales were flat and international sales were up 7%.
Productivity increased 8.1 percent in the nonfarm business sector during the third quarter of 2009 as unit labor costs fell 2.5 percent (seasonally adjusted annual rates, revised). In manufacturing, productivity increased 13.4 percent while unit labor costs fell 6.1 percent.
George Ure: "Before you get carried away with productivity, try to remember that if everyone is fired then productivity shoots skyward until there's no one working and productivity reaches 100%."
E-commerce sales grew 5% YoY on Cyber Monday—first Monday after Thanksgiving.
Japan shares jump nearly 4 percent to five-week high on weakening yen.
Elizabeth Warren: "Can you imagine an America without a strong middle class? If you can, would it still be America as we know it?
Today, one in five Americans is unemployed, underemployed or just plain out of work. One in nine families can't make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month. The economic crisis has wiped more than $5 trillion from pensions and savings, has left family balance sheets upside down, and threatens to put ten million homeowners out on the street.
America today has plenty of rich and super-rich. But it has far more families who did all the right things, but who still have no real security. Going to college and finding a good job no longer guarantee economic safety. Paying for a child's education and setting aside enough for a decent retirement have become distant dreams. Tens of millions of once-secure middle class families now live paycheck to paycheck, watching as their debts pile up and worrying about whether a pink slip or a bad diagnosis will send them hurtling over an economic cliff.
America without a strong middle class? Unthinkable, but the once-solid foundation is shaking."
Henry Hub's NG spot prices up 8% 12/02. Up on 12/03 as well
Harley-Davidson Inc. said Thursday it plans to take about $200 million in charges by 2012 to eliminate 950 jobs at its York, Pa. motorcycle operations, but it will keep its presence there. The Milwaukee-based motorcycle brand will cut the work force at the site to 1,000 hourly workers. The move on York comes on top of an earlier restructuring for Harley announced on Oct. 15, including the sale of its Buell brand.
The service sectors of the U.S. economy contracted in November after two months of expansion, the Institute for Supply Management said Thursday. The ISM's non-manufacturing index fell to 48.7% from 50.6% in October. Six of 18 industries were expanding in November, the ISM said. The employment index rose to 41.6% from 41.1%. The new orders index fell to 55.1% from 55.6%. The production index dropped sharply to 49.6% from 55.2%.
Working gas in storage was 3,837 Bcf as of Friday, November 27, 2009, according to EIA estimates. This represents a net increase of 2 Bcf from the previous week. Stocks were 470 Bcf higher than last year at this time and 487 Bcf above the 5-year average of 3,350 Bcf. In the East Region, stocks were 168 Bcf above the 5-year average following net withdrawals of 7 Bcf. Stocks in the Producing Region were 243 Bcf above the 5-year average of 976 Bcf after a net injection of 8 Bcf. Stocks in the West Region were 76 Bcf above the 5-year average after a net addition of 1 Bcf. At 3,837 Bcf, total working gas is above the 5-year historical range.
Freddie Mac said Thursday that the 30-year fixed-rate mortgage average hit a new low. The 30-year average declined to 4.71% with an average 0.7 point for the week ending Dec. 3 from 4.78% last week. The new 30-year average is the lowest since Freddie Mac began its weekly survey in 1971. Last year, the average was 5.53%.
Paul Ausick: "Due to both the abundance of shale gas and the relative ease with which it can now be extracted, energy companies are looking at replacing coal-fired power plants with natural gas-burning plants. Natural gas emits less than half the carbon dioxide of coal and has the additional benefit of being very easy to start up and shut down."
The Dow Jones Industrial Average ended at 10,366.15, off 86.53 points. The S&P 500 Index fell 9.32 points to 1,099.92, while the Nasdaq Composite declined 11.89 points to 2,173.14.
Wednesday, December 02, 2009
The Consumer
12/2/09 The Consumer
Fitch Ratings on Wednesday said late payments on credit cards rose again in November and are close to setting record highs as consumers continue to struggle to pay off debt in a weak job market. Payments that are late by at least 60 days rose to 4.41% in November. Late-stage delinquencies are 31% higher than a year ago and just below the record high of 4.45% set in June, the ratings agency said. "Credit-card delinquencies are on the rise again and cardholder defaults will retest recent highs as we head into the new year," said Michael Dean, managing director at Fitch. "Consumer credit quality remains under significant strain as a result of the persistent weakness in the labor markets."
The latest ADP Employment Change Report indicated that 169,000 private payrolls were shed in November. Though that figure is down from the 203,000 job losses reported in October, it is worse than the 150,000 job losses that had been widely expected.
Goods-producing jobs fell by 88,000 in November, including 44,000 in manufacturing and 44,000 in construction. Services-producing jobs fell by 81,000.
Randall W. Forsyth: "
Employers announced 50,349 job cuts in November, 9.6% fewer than October’s 55,679, and down 72% from November 2008’s paroxysm of firings that followed the Lehman collapse, Challenger’s data are not seasonally adjusted.
Which mainly proves that after employers slashed workforces to the bone, there’s hardly anybody left to sack.
Consensus forecasts for the official employment report from the Labor Department call for a cut of 100,000 in non-farm payrolls while the jobless rate is expected to remain unchanged at 10.2%....But Trim Tabs’ estimate of based on tax receipts is for a much larger drop of 255,000 in payrolls. These tax data don’t count the phantom jobs assumed by government statisticians resulting from the start-ups of small businesses. Nobody pays phantom taxes on these phantom jobs."
Wells Fargo & Co. will close 122 bank branches in California following its takeover of Wachovia Corp., the Los Angeles Times reported Wednesday, citing comments from the bank. Most of the branches to be closed will be smaller Wachovia offices that are near existing Wells Fargo branches, the newspaper reported.
The dollar index, which measures the U.S. unit against a trade-weighted basket of six major currencies, traded at 74.384 in early action. On Tuesday, it fell to 74.328, its lowest level since August 2008.
The Oil Drum: " Peak oil consumption for the US was and remains 21.7 mbpd in August 2005, nearly 3 mbpd above current levels."
Gold hit record highs at $1,216.75 an ounce in Europe on Wednesday as investors bet on higher prices, with funds lengthening positions due to expectations for a fresh leg of dollar weakness and more central bank buying.
Wal-Mart Stores is cutting prices on popular video games by $10 each and offering a $50 gift card with the purchase of a Nintendo Wii video game console as the retailer tries to lure shoppers to its U.S. stores ahead of the Christmas holiday.
Wednesday morning (12.2.09), marked a Full Moon.
ZeroHedge: "The S&P, in "real" terms (represented in ounces of gold) is now back to April levels, and receding fast."
The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows that 27% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Thirty-nine percent (39%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -12.
Black Friday weekend sales rose 1.6% while total U.S. foot traffic declined 1.1%, according to mall-traffic tracker ShopperTrak. Sales on Black Friday itself rose 0.5% to $10.66 billion. They rose 0.9% to $6.12 billion on Saturday followed by a 5.2% increase to $3.73 billion on Sunday. Traffic for the weekend declined after Black Friday traffic slipped 2.5%, followed by a 3.2% decrease on Saturday and flat traffic on Sunday. Still the declining traffic improved from the year-earlier rate, which saw traffic tumble 19%, the largest three-day drop on record, according to ShopperTrak.
LA Times: "Twitter was just the beginning. After dreaming up the innovative communication medium, Jack Dorsey is looking to revolutionize another core aspect of society -- money.
On Tuesday, Dorsey announced his new start-up, Square, which will let anyone with a cellphone or iPod become a merchant and accept credit card payments.
Square is a small plastic device that plugs into a gadget's headphone jack. Buyers swipe their credit cards through the machine, which then transmits the payment data to an application running on a connected iPhone or iPod Touch. (Android and Blackberry apps are in development, and computer software will be available later.)
You don't have to have the Square gadget or app to pay. You just need a credit card and an e-mail address to receive a receipt."
Brian Durrant: “Consider a country. For the top 20% of the population real incomes have increased by 60% since 1970. But for the other four-fifths real income has fallen by more than 10%. Am I talking about Guatemala or Bolivia? These sorts of inequalities have in the past provoked resentment sometimes articulated through revolutionary movements and social unrest. But I am not talking about a tiny Latin American state; these figures apply to the US. How can this be? Middle class America is surely better off compared to 1970; if you look at higher car ownership, better housing, more white goods and gadgets. The answer is debt. No wonder the politicians are frightened of it contracting!”
Crude stockpiles rose 2.1 million barrels in the week ended Nov. 27, the Energy Information Administration reported. Gasoline inventories increased 4 million barrels and distillate inventories, which include heating oil and diesel, fell 1.2 million barrels. Total petroleum demand fell 2.6%, with gasoline demand down 1.6% to 8.94 million barrels a day.
The Australian Competition and Consumer Commission (ACCC) said on Wednesday, Caltex's planned purchase by Mobil's 302 service stations was likely to substantially lessen competition across a range of retail fuel markets in Australia.
The commission said it had identified 53 Mobil stations which, if acquired by Caltex, would have reduce competition for petrol, diesel and automative liquid petroleum gas markets, leading to higher prices.
Retailers' November sales have been mixed, with online, electronics and jewelry sector showing gains while apparel, luxury, and department stores got off to a slow start of the holiday season, according to MasterCard Advisors' SpendingPulse, which estimated U.S. retail sales across all payment forms including cash and check. Electronics sales for November were up 6.6%. Online sales were strong, posting a 12% increase as traffic jumped 18%. The luxury sector excluding jewelry declined 7.3%, its first drop since August after gains in both September and October. Jewelry was a bright spot, showing a 4.6% gain, the third straight monthly gain and the first time the three-month average moved to positive territory since July 2008. Apparel sales in November slowed overall. They declined 5.7% within the specialty apparel segment, MasterCard data showed.
The U.S. economy "improved modestly" in late October and November, with moderate gains in consumer spending, manufacturing and housing offsetting "dismal" conditions in commercial real estate, the Federal Reserve said Wednesday in its Beige Book report on the economy. Eight of 12 Fed regions reported the economy had picked up since mid-October, while conditions were little changed or mixed in the four bank regions stretching from Ohio and Pennsylvania to the south. Labor markets remained weak, "with further layoffs, sluggish hiring and high levels of unemployment." Business contacts told the Fed that there was little or no upward pressure on wages or consumer prices.
The Dow Jones industrial average declined 18.90 points, or 0.18 percent, to end at 10,452.68. The Standard & Poor's 500 Index inched up just 0.38 of a point, or 0.03 percent, to finish at 1,109.24. The Nasdaq Composite Index gained 9.22 points, or 0.42 percent, to close at 2,185.03.
Fitch Ratings on Wednesday said late payments on credit cards rose again in November and are close to setting record highs as consumers continue to struggle to pay off debt in a weak job market. Payments that are late by at least 60 days rose to 4.41% in November. Late-stage delinquencies are 31% higher than a year ago and just below the record high of 4.45% set in June, the ratings agency said. "Credit-card delinquencies are on the rise again and cardholder defaults will retest recent highs as we head into the new year," said Michael Dean, managing director at Fitch. "Consumer credit quality remains under significant strain as a result of the persistent weakness in the labor markets."
The latest ADP Employment Change Report indicated that 169,000 private payrolls were shed in November. Though that figure is down from the 203,000 job losses reported in October, it is worse than the 150,000 job losses that had been widely expected.
Goods-producing jobs fell by 88,000 in November, including 44,000 in manufacturing and 44,000 in construction. Services-producing jobs fell by 81,000.
Randall W. Forsyth: "
Employers announced 50,349 job cuts in November, 9.6% fewer than October’s 55,679, and down 72% from November 2008’s paroxysm of firings that followed the Lehman collapse, Challenger’s data are not seasonally adjusted.
Which mainly proves that after employers slashed workforces to the bone, there’s hardly anybody left to sack.
Consensus forecasts for the official employment report from the Labor Department call for a cut of 100,000 in non-farm payrolls while the jobless rate is expected to remain unchanged at 10.2%....But Trim Tabs’ estimate of based on tax receipts is for a much larger drop of 255,000 in payrolls. These tax data don’t count the phantom jobs assumed by government statisticians resulting from the start-ups of small businesses. Nobody pays phantom taxes on these phantom jobs."
Wells Fargo & Co. will close 122 bank branches in California following its takeover of Wachovia Corp., the Los Angeles Times reported Wednesday, citing comments from the bank. Most of the branches to be closed will be smaller Wachovia offices that are near existing Wells Fargo branches, the newspaper reported.
The dollar index, which measures the U.S. unit against a trade-weighted basket of six major currencies, traded at 74.384 in early action. On Tuesday, it fell to 74.328, its lowest level since August 2008.
The Oil Drum: " Peak oil consumption for the US was and remains 21.7 mbpd in August 2005, nearly 3 mbpd above current levels."
Gold hit record highs at $1,216.75 an ounce in Europe on Wednesday as investors bet on higher prices, with funds lengthening positions due to expectations for a fresh leg of dollar weakness and more central bank buying.
Wal-Mart Stores is cutting prices on popular video games by $10 each and offering a $50 gift card with the purchase of a Nintendo Wii video game console as the retailer tries to lure shoppers to its U.S. stores ahead of the Christmas holiday.
Wednesday morning (12.2.09), marked a Full Moon.
ZeroHedge: "The S&P, in "real" terms (represented in ounces of gold) is now back to April levels, and receding fast."
The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows that 27% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Thirty-nine percent (39%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -12.
Black Friday weekend sales rose 1.6% while total U.S. foot traffic declined 1.1%, according to mall-traffic tracker ShopperTrak. Sales on Black Friday itself rose 0.5% to $10.66 billion. They rose 0.9% to $6.12 billion on Saturday followed by a 5.2% increase to $3.73 billion on Sunday. Traffic for the weekend declined after Black Friday traffic slipped 2.5%, followed by a 3.2% decrease on Saturday and flat traffic on Sunday. Still the declining traffic improved from the year-earlier rate, which saw traffic tumble 19%, the largest three-day drop on record, according to ShopperTrak.
LA Times: "Twitter was just the beginning. After dreaming up the innovative communication medium, Jack Dorsey is looking to revolutionize another core aspect of society -- money.
On Tuesday, Dorsey announced his new start-up, Square, which will let anyone with a cellphone or iPod become a merchant and accept credit card payments.
Square is a small plastic device that plugs into a gadget's headphone jack. Buyers swipe their credit cards through the machine, which then transmits the payment data to an application running on a connected iPhone or iPod Touch. (Android and Blackberry apps are in development, and computer software will be available later.)
You don't have to have the Square gadget or app to pay. You just need a credit card and an e-mail address to receive a receipt."
Brian Durrant: “Consider a country. For the top 20% of the population real incomes have increased by 60% since 1970. But for the other four-fifths real income has fallen by more than 10%. Am I talking about Guatemala or Bolivia? These sorts of inequalities have in the past provoked resentment sometimes articulated through revolutionary movements and social unrest. But I am not talking about a tiny Latin American state; these figures apply to the US. How can this be? Middle class America is surely better off compared to 1970; if you look at higher car ownership, better housing, more white goods and gadgets. The answer is debt. No wonder the politicians are frightened of it contracting!”
Crude stockpiles rose 2.1 million barrels in the week ended Nov. 27, the Energy Information Administration reported. Gasoline inventories increased 4 million barrels and distillate inventories, which include heating oil and diesel, fell 1.2 million barrels. Total petroleum demand fell 2.6%, with gasoline demand down 1.6% to 8.94 million barrels a day.
The Australian Competition and Consumer Commission (ACCC) said on Wednesday, Caltex's planned purchase by Mobil's 302 service stations was likely to substantially lessen competition across a range of retail fuel markets in Australia.
The commission said it had identified 53 Mobil stations which, if acquired by Caltex, would have reduce competition for petrol, diesel and automative liquid petroleum gas markets, leading to higher prices.
Retailers' November sales have been mixed, with online, electronics and jewelry sector showing gains while apparel, luxury, and department stores got off to a slow start of the holiday season, according to MasterCard Advisors' SpendingPulse, which estimated U.S. retail sales across all payment forms including cash and check. Electronics sales for November were up 6.6%. Online sales were strong, posting a 12% increase as traffic jumped 18%. The luxury sector excluding jewelry declined 7.3%, its first drop since August after gains in both September and October. Jewelry was a bright spot, showing a 4.6% gain, the third straight monthly gain and the first time the three-month average moved to positive territory since July 2008. Apparel sales in November slowed overall. They declined 5.7% within the specialty apparel segment, MasterCard data showed.
The U.S. economy "improved modestly" in late October and November, with moderate gains in consumer spending, manufacturing and housing offsetting "dismal" conditions in commercial real estate, the Federal Reserve said Wednesday in its Beige Book report on the economy. Eight of 12 Fed regions reported the economy had picked up since mid-October, while conditions were little changed or mixed in the four bank regions stretching from Ohio and Pennsylvania to the south. Labor markets remained weak, "with further layoffs, sluggish hiring and high levels of unemployment." Business contacts told the Fed that there was little or no upward pressure on wages or consumer prices.
The Dow Jones industrial average declined 18.90 points, or 0.18 percent, to end at 10,452.68. The Standard & Poor's 500 Index inched up just 0.38 of a point, or 0.03 percent, to finish at 1,109.24. The Nasdaq Composite Index gained 9.22 points, or 0.42 percent, to close at 2,185.03.
Tuesday, December 01, 2009
Extended Market Valuation
12/1/09 Extended Market Valuation
John Hussman: "In my estimation, there is still close to an 80% probability (Bayes’ Rule) that a second market plunge and economic downturn will unfold during the coming year. This is not certainty, but the evidence that we’ve observed in the equity market, labor market, and credit markets to-date is simply much more consistent with the recent advance being a component of a more drawn-out and painful deleveraging cycle. Meanwhile, valuations are clearly unfavorable here, and even under the “typical post-war recovery” scenario, we are observing an increasing number of internal divergences and non-confirmations in market action."
Chain-store sales for the week ended Nov. 28 rose 3.1% from the year-earlier period, according to a survey released Tuesday by the International Council of Shopping Centers and Goldman Sachs. On a week-over-week basis, sales fell 0.1%. "Electronics and online shopping were the big winners during the launch of the post-Thanksgiving holiday season," said Michael Niemira, ICSC's chief economist. "But even as retailers opened their doors on Thanksgiving Day, consumers fell behind last year in their holiday shopping completion rate as consumers reported an average 42.2% of their shopping completed through the end of November compared with 48.3% during the comparable week of 2008. This has negative implications for reported sales in November, but positive implications for December sales." ICSC forecast November sales will be up by 3% to 4%, the second time it's lowered the November outlook.
North Korea has apparently raised the value of its currency by 100-fold, in what would be the first such move in 17 years, according to South Korea's Yonhap news agency.
The Reserve Bank of Australia raised its policy cash rate by 25 basis points to 3.75% Tuesday, as widely expected, saying that the economy is in "a gradual recovery." The RBA, currently the only major industrialized economy on a tightening cycle, had raised it policy rate by the same quarter percentage point at its October and November meetings.
The Bank of Japan said it’s ready to pump more money into the financial system after unveiling a 10 trillion yen ($115 billion) program to help an economy battered by falling prices and the yen’s surge to a 14-year high.
“If there is a shortage of liquidity we are prepared to provide more funds,” Governor Masaaki Shirakawa said after an emergency board meeting in Tokyo today that decided to offer three-month loans at 0.1 percent to commercial banks.
Only 26 percent of people who shopped over the weekend said they used credit cards for their purchases, according to a poll conducted for Reuters by America's Research Group.
"That's an amazing shift in consumers' habits," said Britt Beemer, founder of America's Research Group.
A total of 39 percent said they used cash, while the remaining shoppers used debit cards, the survey showed.
More people were late with their auto loan payments in the third quarter as job losses continued, but amid rising delinquencies there are positive signs for the economy in certain states. The auto delinquency rate — the rate at which payments fell behind 60 days or more — edged up in the July-to-September quarter to 0.81 percent, from 0.80 in the same period last year, according to credit reporting agency TransUnion.
US commercial mortgage default rate hits 3.4%. Rate climbs to 16-year high in third quarter.
Marla Singer: "Buried in the depths of page 26 of the Office of the Special Inspector General for the Troubled Asset Relief Program's (SIGTARP's) November 17, 2009 report "Factors Affecting Efforts to Limit Payments to AIG Counterparties" hidden in footnotes 33 and 34 is something of a mystery. It might be the beginning of an interconnected financial chain involving Dubai, the Federal Reserve, AIG, Basel I, Eastern Europe and even Switzerland and which, even if it doesn't worry you, probably should. Or it might be nothing at all."
China’s manufacturing grew last month at the fastest pace since April 2004- HSBC survey.
Davidowitz predicts "the noise will be taken out" about "strong" Black Friday sales in the coming weeks and a sobering reality will settle in: "People will look at stores closing and a rash of bankruptcies after Christmas. People will start to look at this and say ‘wow, this is terrible,'" he says.
According to the WSJ, the U.S. government is out with its latest natural-gas production report and gas production in the Lower 48 states fell by 1.4 billion cubic feet a day in September compared to August.
The data, which comes from the Energy Information Administration, suggest that the sharp drop in U.S. drilling activity is finally starting to result in lower production. That, in turn, could ease the glut of gas that has kept prices under $5 per million British thermal units.
This is a dollop of good news for companies like Chesapeake Energy and Devon Energy. Ironically, they have been betting on a turnaround in gas prices to justify (and pay for) increased drilling.
Video game console leader Nintendo says that U.S. sales of its Wii gaming system dropped 30% year-over-year to 550,000 for the week ending Nov. 28, according to numbers reported by Bloomberg. Nintendo cut the price of the Wii by $50 to $200 recently, while Microsoft (MSFT) dropped the price of its Xbox 360, and Sony (SNE) chopped the price of its PlayStation 3 console.
GM’s sales in China may have topped those in the US for the first time last month. Edmunds has estimated the domestic sales of the No.1 American car company fell just over 1% in November to 155,000 units.
Signed sales contracts on existing homes in the United States rose for the ninth straight month in October, a real estate industry group reported Tuesday. The pending home sales index rose a seasonally adjusted 3.7% in October from September, the National Association of Realtors reported. The index is up 31.8% compared with last October. The index rose 6% in September. The index tracks sales contracts on pre-owned homes. Typically, it takes a month or two after the contract is signed for the sale to close. At that point, the sale is booked in the NAR's existing-home sales report.
Outlays for U.S. construction projects were flat in October, the Commerce Department reported Tuesday, as a gain in spending on housing was offset by a drop in spending on public works. Outlays in September were revised to a 1.6% drop, the largest since January, from the earlier estimate of a 0.8% gain. Construction spending has not risen since April. Outlays are down 14.4% compared with a year earlier.
The ISM manufacturing index fell to 53.6% from 55.7% in October. Readings over 50% indicate more firms said they were growing than said they were contracting.The new orders index rose to 60.3% from 58.5% in October. The production index fell to 59.9% from 63.3% in October. The employment index fell to 50.8% from 53.1% in October. The inventories index fell to 41.3% from 46.9% n October.
You can look at the Arca Natural Gas Index which is within 8% of its yearly high and then see the
disconnect with the price of natural gas itself.
Euro rises to buy $1.51 highest since August 2008.
Charles Plosser, the president of the Philadelphia Federal Reserve Bank, became the first top central bank official to call for higher interest rates in this cycle. In a speech on Tuesday, Plosser said the Fed had to start raising interest rates sooner rather than later and had to begin withdrawing excess cash from the financial system. If the Fed does not act soon "the inflation rate is likely to rise to levels that most would consider unacceptable," he warned. Plosser will not be a voting member of the Fed interest-rate committee until 2011.
Individual investors moved assets back into cash in November, after three months of increasing holdings of stocks and bonds, according to a new survey by the American Association of Individual Investors. The proportion of holdings in cash rose about 8 percentage points to 27% of assets last month. Investors decreased both equity and fixed-income holdings, with stock holdings falling about 2 percentage point to 57% of assets. Bond holdings dropped 6 points to 18%. Cash holdings in October fell to the lowest since July 2007, as Americans became more willing to invest in higher-returning assets as the economy improved.
Gold futures ended at a new high of $1,199.10 an ounce Tuesday, briefly topping $1,200 in intraday trading, as the dollar weakened and as Barrick Gold Corp. eliminated all of its gold hedges, showing confidence in a rising gold price.
U.S. retail gasoline demand last week rose 3.1 percent from the previous week as Thanksgiving holiday traffic boosted demand, according to a MasterCard SpendingPulse report released on Tuesday. "Gasoline consumption increased sharply due to holiday traffic," said Michael McNamara, vice president of research and analysis at MasterCard Advisors. Gasoline demand averaged 9.357 million barrels per day during the week ending Nov. 27, unchanged from the same period a year ago, according to the weekly report. The four-week moving average of U.S. gasoline consumption climbed 0.7 percent year-over-year. Year-to-date, gasoline consumption is up 0.6 percent for 2009 compared with the same period in 2008. The national average retail prices for gasoline were unchanged at $2.62.
U.S. copper futures closed at a 15-month high on Tuesday, as the dollar extended its slump and economic sentiment improved from positive manufacturing data in the U.S. and in China, the world's top copper consumer.
The American Petroleum Institute said late Tuesday U.S. crude oil inventories rose by 2.9 million barrels last week.
The Dow Jones Industrial Average ended at 10,471.58, up 126.74 points, or 1.2%. The S&P 500 Index rose 13.23 points, or 1.2%, to 1,108.86. The Nasdaq Composite gained 31.31 points, or 1.5%, to 2,175.81.
John Hussman: "In my estimation, there is still close to an 80% probability (Bayes’ Rule) that a second market plunge and economic downturn will unfold during the coming year. This is not certainty, but the evidence that we’ve observed in the equity market, labor market, and credit markets to-date is simply much more consistent with the recent advance being a component of a more drawn-out and painful deleveraging cycle. Meanwhile, valuations are clearly unfavorable here, and even under the “typical post-war recovery” scenario, we are observing an increasing number of internal divergences and non-confirmations in market action."
Chain-store sales for the week ended Nov. 28 rose 3.1% from the year-earlier period, according to a survey released Tuesday by the International Council of Shopping Centers and Goldman Sachs. On a week-over-week basis, sales fell 0.1%. "Electronics and online shopping were the big winners during the launch of the post-Thanksgiving holiday season," said Michael Niemira, ICSC's chief economist. "But even as retailers opened their doors on Thanksgiving Day, consumers fell behind last year in their holiday shopping completion rate as consumers reported an average 42.2% of their shopping completed through the end of November compared with 48.3% during the comparable week of 2008. This has negative implications for reported sales in November, but positive implications for December sales." ICSC forecast November sales will be up by 3% to 4%, the second time it's lowered the November outlook.
North Korea has apparently raised the value of its currency by 100-fold, in what would be the first such move in 17 years, according to South Korea's Yonhap news agency.
The Reserve Bank of Australia raised its policy cash rate by 25 basis points to 3.75% Tuesday, as widely expected, saying that the economy is in "a gradual recovery." The RBA, currently the only major industrialized economy on a tightening cycle, had raised it policy rate by the same quarter percentage point at its October and November meetings.
The Bank of Japan said it’s ready to pump more money into the financial system after unveiling a 10 trillion yen ($115 billion) program to help an economy battered by falling prices and the yen’s surge to a 14-year high.
“If there is a shortage of liquidity we are prepared to provide more funds,” Governor Masaaki Shirakawa said after an emergency board meeting in Tokyo today that decided to offer three-month loans at 0.1 percent to commercial banks.
Only 26 percent of people who shopped over the weekend said they used credit cards for their purchases, according to a poll conducted for Reuters by America's Research Group.
"That's an amazing shift in consumers' habits," said Britt Beemer, founder of America's Research Group.
A total of 39 percent said they used cash, while the remaining shoppers used debit cards, the survey showed.
More people were late with their auto loan payments in the third quarter as job losses continued, but amid rising delinquencies there are positive signs for the economy in certain states. The auto delinquency rate — the rate at which payments fell behind 60 days or more — edged up in the July-to-September quarter to 0.81 percent, from 0.80 in the same period last year, according to credit reporting agency TransUnion.
US commercial mortgage default rate hits 3.4%. Rate climbs to 16-year high in third quarter.
Marla Singer: "Buried in the depths of page 26 of the Office of the Special Inspector General for the Troubled Asset Relief Program's (SIGTARP's) November 17, 2009 report "Factors Affecting Efforts to Limit Payments to AIG Counterparties" hidden in footnotes 33 and 34 is something of a mystery. It might be the beginning of an interconnected financial chain involving Dubai, the Federal Reserve, AIG, Basel I, Eastern Europe and even Switzerland and which, even if it doesn't worry you, probably should. Or it might be nothing at all."
China’s manufacturing grew last month at the fastest pace since April 2004- HSBC survey.
Davidowitz predicts "the noise will be taken out" about "strong" Black Friday sales in the coming weeks and a sobering reality will settle in: "People will look at stores closing and a rash of bankruptcies after Christmas. People will start to look at this and say ‘wow, this is terrible,'" he says.
According to the WSJ, the U.S. government is out with its latest natural-gas production report and gas production in the Lower 48 states fell by 1.4 billion cubic feet a day in September compared to August.
The data, which comes from the Energy Information Administration, suggest that the sharp drop in U.S. drilling activity is finally starting to result in lower production. That, in turn, could ease the glut of gas that has kept prices under $5 per million British thermal units.
This is a dollop of good news for companies like Chesapeake Energy and Devon Energy. Ironically, they have been betting on a turnaround in gas prices to justify (and pay for) increased drilling.
Video game console leader Nintendo says that U.S. sales of its Wii gaming system dropped 30% year-over-year to 550,000 for the week ending Nov. 28, according to numbers reported by Bloomberg. Nintendo cut the price of the Wii by $50 to $200 recently, while Microsoft (MSFT) dropped the price of its Xbox 360, and Sony (SNE) chopped the price of its PlayStation 3 console.
GM’s sales in China may have topped those in the US for the first time last month. Edmunds has estimated the domestic sales of the No.1 American car company fell just over 1% in November to 155,000 units.
Signed sales contracts on existing homes in the United States rose for the ninth straight month in October, a real estate industry group reported Tuesday. The pending home sales index rose a seasonally adjusted 3.7% in October from September, the National Association of Realtors reported. The index is up 31.8% compared with last October. The index rose 6% in September. The index tracks sales contracts on pre-owned homes. Typically, it takes a month or two after the contract is signed for the sale to close. At that point, the sale is booked in the NAR's existing-home sales report.
Outlays for U.S. construction projects were flat in October, the Commerce Department reported Tuesday, as a gain in spending on housing was offset by a drop in spending on public works. Outlays in September were revised to a 1.6% drop, the largest since January, from the earlier estimate of a 0.8% gain. Construction spending has not risen since April. Outlays are down 14.4% compared with a year earlier.
The ISM manufacturing index fell to 53.6% from 55.7% in October. Readings over 50% indicate more firms said they were growing than said they were contracting.The new orders index rose to 60.3% from 58.5% in October. The production index fell to 59.9% from 63.3% in October. The employment index fell to 50.8% from 53.1% in October. The inventories index fell to 41.3% from 46.9% n October.
You can look at the Arca Natural Gas Index which is within 8% of its yearly high and then see the
disconnect with the price of natural gas itself.
Euro rises to buy $1.51 highest since August 2008.
Charles Plosser, the president of the Philadelphia Federal Reserve Bank, became the first top central bank official to call for higher interest rates in this cycle. In a speech on Tuesday, Plosser said the Fed had to start raising interest rates sooner rather than later and had to begin withdrawing excess cash from the financial system. If the Fed does not act soon "the inflation rate is likely to rise to levels that most would consider unacceptable," he warned. Plosser will not be a voting member of the Fed interest-rate committee until 2011.
Individual investors moved assets back into cash in November, after three months of increasing holdings of stocks and bonds, according to a new survey by the American Association of Individual Investors. The proportion of holdings in cash rose about 8 percentage points to 27% of assets last month. Investors decreased both equity and fixed-income holdings, with stock holdings falling about 2 percentage point to 57% of assets. Bond holdings dropped 6 points to 18%. Cash holdings in October fell to the lowest since July 2007, as Americans became more willing to invest in higher-returning assets as the economy improved.
Gold futures ended at a new high of $1,199.10 an ounce Tuesday, briefly topping $1,200 in intraday trading, as the dollar weakened and as Barrick Gold Corp. eliminated all of its gold hedges, showing confidence in a rising gold price.
U.S. retail gasoline demand last week rose 3.1 percent from the previous week as Thanksgiving holiday traffic boosted demand, according to a MasterCard SpendingPulse report released on Tuesday. "Gasoline consumption increased sharply due to holiday traffic," said Michael McNamara, vice president of research and analysis at MasterCard Advisors. Gasoline demand averaged 9.357 million barrels per day during the week ending Nov. 27, unchanged from the same period a year ago, according to the weekly report. The four-week moving average of U.S. gasoline consumption climbed 0.7 percent year-over-year. Year-to-date, gasoline consumption is up 0.6 percent for 2009 compared with the same period in 2008. The national average retail prices for gasoline were unchanged at $2.62.
U.S. copper futures closed at a 15-month high on Tuesday, as the dollar extended its slump and economic sentiment improved from positive manufacturing data in the U.S. and in China, the world's top copper consumer.
The American Petroleum Institute said late Tuesday U.S. crude oil inventories rose by 2.9 million barrels last week.
The Dow Jones Industrial Average ended at 10,471.58, up 126.74 points, or 1.2%. The S&P 500 Index rose 13.23 points, or 1.2%, to 1,108.86. The Nasdaq Composite gained 31.31 points, or 1.5%, to 2,175.81.
Monday, November 30, 2009
No Guarantee
11/30/09 No Guarantee
John Hussman: "In part, the market's increasing propensity toward speculation reflects the increasing lack of fiscal and monetary discipline from our leaders. Policy makers who seek quick fixes and could care less about long-term consequences undoubtedly encourage investors to embrace the same value system."
Dubai's government said Monday it doesn't guarantee the debt of Dubai World, its sprawling conglomerate, according to remarks by an official cited in the media. Abdulrahman al-Saleh, director general of Dubai's department of finance, said creditors need to take part of the responsibility and that Dubai World is not part of the government, according to media reports. "The government is the owner of the company, but since its foundation it was established that the company is not guaranteed by the government," Saleh said in an interview on Dubai Television, according to reports.
Rob Hanna: "Friday’s selloff was marked by extremely negative breadth. Around 97% of the volume was to the downside on the NYSE. In the past, days that have been SO negative have often led to bounces over the short-term."
More businesses in the Chicago region were expanding in November, according to the Chicago purchasing managers index released Monday by the NAPM-Chicago. The business activity index rose to 56.1% in November from 54.2% in October. It's the highest since August 2008.
Thailand's natural gas demand is expected to rise 10.6 percent in 2010 to 3.95 billion cubic feet per day due mainly to growing demand from petrochemical plants, PTT PTT.BK, the country's sole gas supplier, said on Monday. Domestic gas consumption in 2009 should grow by around 3.3 percent to 3.57 billion cubic feet per day, Permsak Shevawattananon, senior executive vice president for PTT's gas business, told reporters.
"The main growth driver next year will come from petrochemical plants," Permsak said, adding PTT's sixth gas separation plant and an ethane plant should come onstream in early 2010 if a dispute at the country's biggest industrial estate was resolved.
Rejecting safety warnings from crash investigators and pilots, federal aviation regulators have decided to allow more than 130 Boeing Co. 777 jetliners to continue flying long-distance international trips through early 2011 with suspect parts that have caused engines in extremely rare instances to ice up and basically shut down in midair.
Unite, Britain's biggest union, said on Monday it had written to Kraft chief executive Irene Rosenfeld about the 10 billion pound ($16.5 billion) cash-and-shares bid.
Unite asked for commitments there would be no compulsory redundancies and protection for employment terms and pensions.
The Dow Jones Industrial Average rose 34.92 points, or 0.3%, at 10,344.84, leaving it up 6.5% for November. The S&P 500 Index climbed 4.14 points, or 0.4%, at 1,095.63, up 5.7% from the month-ago close. The Nasdaq Composite gained 6.16 points, or 0.3%, to 2,144.60, leaving it with an advance of 4.9% for the month.
December gold futures rose $6.90, or 0.6%, to end at $1,181.10 an ounce on the Comex division of the New York Mercantile Exchange. It had climbed to a record high near $1,188 an ounce last week. Gold has only seen three losing sessions in November and has risen 13%, the biggest monthly gain since November 2008. Futures soared 14% in that month, the biggest gain since 1999.
John Hussman: "In part, the market's increasing propensity toward speculation reflects the increasing lack of fiscal and monetary discipline from our leaders. Policy makers who seek quick fixes and could care less about long-term consequences undoubtedly encourage investors to embrace the same value system."
Dubai's government said Monday it doesn't guarantee the debt of Dubai World, its sprawling conglomerate, according to remarks by an official cited in the media. Abdulrahman al-Saleh, director general of Dubai's department of finance, said creditors need to take part of the responsibility and that Dubai World is not part of the government, according to media reports. "The government is the owner of the company, but since its foundation it was established that the company is not guaranteed by the government," Saleh said in an interview on Dubai Television, according to reports.
Rob Hanna: "Friday’s selloff was marked by extremely negative breadth. Around 97% of the volume was to the downside on the NYSE. In the past, days that have been SO negative have often led to bounces over the short-term."
More businesses in the Chicago region were expanding in November, according to the Chicago purchasing managers index released Monday by the NAPM-Chicago. The business activity index rose to 56.1% in November from 54.2% in October. It's the highest since August 2008.
Thailand's natural gas demand is expected to rise 10.6 percent in 2010 to 3.95 billion cubic feet per day due mainly to growing demand from petrochemical plants, PTT PTT.BK, the country's sole gas supplier, said on Monday. Domestic gas consumption in 2009 should grow by around 3.3 percent to 3.57 billion cubic feet per day, Permsak Shevawattananon, senior executive vice president for PTT's gas business, told reporters.
"The main growth driver next year will come from petrochemical plants," Permsak said, adding PTT's sixth gas separation plant and an ethane plant should come onstream in early 2010 if a dispute at the country's biggest industrial estate was resolved.
Rejecting safety warnings from crash investigators and pilots, federal aviation regulators have decided to allow more than 130 Boeing Co. 777 jetliners to continue flying long-distance international trips through early 2011 with suspect parts that have caused engines in extremely rare instances to ice up and basically shut down in midair.
Unite, Britain's biggest union, said on Monday it had written to Kraft chief executive Irene Rosenfeld about the 10 billion pound ($16.5 billion) cash-and-shares bid.
Unite asked for commitments there would be no compulsory redundancies and protection for employment terms and pensions.
The Dow Jones Industrial Average rose 34.92 points, or 0.3%, at 10,344.84, leaving it up 6.5% for November. The S&P 500 Index climbed 4.14 points, or 0.4%, at 1,095.63, up 5.7% from the month-ago close. The Nasdaq Composite gained 6.16 points, or 0.3%, to 2,144.60, leaving it with an advance of 4.9% for the month.
December gold futures rose $6.90, or 0.6%, to end at $1,181.10 an ounce on the Comex division of the New York Mercantile Exchange. It had climbed to a record high near $1,188 an ounce last week. Gold has only seen three losing sessions in November and has risen 13%, the biggest monthly gain since November 2008. Futures soared 14% in that month, the biggest gain since 1999.
Sunday, November 29, 2009
Shoppers
11/29/09 Shoppers
"I personally feel that there's a palpable difference, that it's changed," said Don Calvert, an international trade specialist at the Commerce Department, who was out by a Washington D.C. Filene's store a couple of blocks from the White House. "There are fewer people in clothing stores. There are even fewer people at electronics stores."
More shoppers spent time online at the start of the 2009 holiday season. They spent 35 percent more on Black Friday web purchases than a year earlier, with the average order value reaching $170.19, according to online retail analytics company Coremetrics. Those shoppers bought an average of 5.4 items per order, up from 4.6 items last year, Coremetrics said.
According to Bloomberg, India, the world’s top recipient of migrant remittances, is examining the effect Dubai’s attempt to delay debt repayments may have on Asia’s third-largest economy, central bank Governor Duvvuri Subbarao
said. About 4.5 million Indians live and work in the Gulf region and remit more than $10 billion annually, according to government data. The turmoil may affect remittances, said Thomas Issac, finance minister of the southern state of Kerala, which accounted for about a quarter India’s migrant labor in 2005. Remittances from the Middle East account for about 25 percent of Kerala’s economy, Issac said. India received $52 billion of remittances last year, according to the World Bank, making it the world’s largest recipient of money from migrant workers. China got $49 billion.
Black Friday retail sales rose a scant 0.5% to $10.66B according to early readings from ShopperTrak, but online sales outperformed, up 35% from a year ago.
There are 239 counties in the United States where at least a quarter of the population receives food stamps, according to an analysis of local data collected by The New York Times.
The counties are as big as the Bronx and Philadelphia and as small as Owsley County in Kentucky, a patch of Appalachian distress where half of the 4,600 residents receive food stamps.
In more than 750 counties, the program helps feed one in three blacks. In more than 800 counties, it helps feed one in three children. In the Mississippi River cities of St. Louis, Memphis and New Orleans, half of the children or more receive food stamps. Even in Peoria, Ill. — Everytown, U.S.A. — nearly 40 percent of children receive aid.
The United Arab Emirates' central bank set up a facility on Sunday to support liquidity in the banking system.
Under the $75 billion Treasury program, companies that agree to lower payments for troubled borrowers collect $1,000 initially from the government for each loan, followed by $1,000 annually for up to three years.
The government support, which is provided from the $700 billion financial bailout program, is aimed at providing cash incentives for mortgage providers to accept smaller mortgage payments rather than foreclosing on homes.
The program has come under heavy criticism for failing to do enough to attack a tidal wave of foreclosures. Analysts said the foreclosure crisis is likely to persist well into next year as high unemployment pushes more people out of their homes.
Rising foreclosures depress home prices and threaten the sustainability of the fledgling economic recovery.
A report last week from the Mortgage Bankers Association found that 14 percent of homeowners with mortgages were either behind on payments or in foreclosure at the end of September, a record level for the ninth straight quarter.
Mike Burk: "The market is nearing a short term cyclical low. Recently the market has been rallying early in the month and historically early December has been strong.
I expect the major indices to be higher on Friday December 4 than they were on Friday November 27."
Alan Abelson: "In the latest survey of advisory services by Investors Intelligence, no fewer than 50.6% of those cockeyed seers were bulls, versus a scant 17.6% bears. Last time we saw numbers like that was before the market crashed back in '07."
On so-called Cyber Monday, 96.5 million people plan to shop, up from 85 million a year ago. Nine in 10 retailers also will have special deals and promotions for Cyber Monday, the survey said. In addition, a majority of the planned shopping is to be done from home, with 14% done from work. At some point during the holiday season, an estimated 69 million Americans will shop from work, a Shop.org survey said last week.
More Americans hit the stores during Black Friday and the rest of the holiday-shopping weekend, but they spent less, the National Retail Federation said Sunday. Its survey found that 195 million shoppers visited stores and Web sites, up from 172 million last year, but the average ticket was about $343, down from about $373 a year ago. For the weekend, the total spending figure is estimated at $41.2 billion.
"I personally feel that there's a palpable difference, that it's changed," said Don Calvert, an international trade specialist at the Commerce Department, who was out by a Washington D.C. Filene's store a couple of blocks from the White House. "There are fewer people in clothing stores. There are even fewer people at electronics stores."
More shoppers spent time online at the start of the 2009 holiday season. They spent 35 percent more on Black Friday web purchases than a year earlier, with the average order value reaching $170.19, according to online retail analytics company Coremetrics. Those shoppers bought an average of 5.4 items per order, up from 4.6 items last year, Coremetrics said.
According to Bloomberg, India, the world’s top recipient of migrant remittances, is examining the effect Dubai’s attempt to delay debt repayments may have on Asia’s third-largest economy, central bank Governor Duvvuri Subbarao
said. About 4.5 million Indians live and work in the Gulf region and remit more than $10 billion annually, according to government data. The turmoil may affect remittances, said Thomas Issac, finance minister of the southern state of Kerala, which accounted for about a quarter India’s migrant labor in 2005. Remittances from the Middle East account for about 25 percent of Kerala’s economy, Issac said. India received $52 billion of remittances last year, according to the World Bank, making it the world’s largest recipient of money from migrant workers. China got $49 billion.
Black Friday retail sales rose a scant 0.5% to $10.66B according to early readings from ShopperTrak, but online sales outperformed, up 35% from a year ago.
There are 239 counties in the United States where at least a quarter of the population receives food stamps, according to an analysis of local data collected by The New York Times.
The counties are as big as the Bronx and Philadelphia and as small as Owsley County in Kentucky, a patch of Appalachian distress where half of the 4,600 residents receive food stamps.
In more than 750 counties, the program helps feed one in three blacks. In more than 800 counties, it helps feed one in three children. In the Mississippi River cities of St. Louis, Memphis and New Orleans, half of the children or more receive food stamps. Even in Peoria, Ill. — Everytown, U.S.A. — nearly 40 percent of children receive aid.
The United Arab Emirates' central bank set up a facility on Sunday to support liquidity in the banking system.
Under the $75 billion Treasury program, companies that agree to lower payments for troubled borrowers collect $1,000 initially from the government for each loan, followed by $1,000 annually for up to three years.
The government support, which is provided from the $700 billion financial bailout program, is aimed at providing cash incentives for mortgage providers to accept smaller mortgage payments rather than foreclosing on homes.
The program has come under heavy criticism for failing to do enough to attack a tidal wave of foreclosures. Analysts said the foreclosure crisis is likely to persist well into next year as high unemployment pushes more people out of their homes.
Rising foreclosures depress home prices and threaten the sustainability of the fledgling economic recovery.
A report last week from the Mortgage Bankers Association found that 14 percent of homeowners with mortgages were either behind on payments or in foreclosure at the end of September, a record level for the ninth straight quarter.
Mike Burk: "The market is nearing a short term cyclical low. Recently the market has been rallying early in the month and historically early December has been strong.
I expect the major indices to be higher on Friday December 4 than they were on Friday November 27."
Alan Abelson: "In the latest survey of advisory services by Investors Intelligence, no fewer than 50.6% of those cockeyed seers were bulls, versus a scant 17.6% bears. Last time we saw numbers like that was before the market crashed back in '07."
On so-called Cyber Monday, 96.5 million people plan to shop, up from 85 million a year ago. Nine in 10 retailers also will have special deals and promotions for Cyber Monday, the survey said. In addition, a majority of the planned shopping is to be done from home, with 14% done from work. At some point during the holiday season, an estimated 69 million Americans will shop from work, a Shop.org survey said last week.
More Americans hit the stores during Black Friday and the rest of the holiday-shopping weekend, but they spent less, the National Retail Federation said Sunday. Its survey found that 195 million shoppers visited stores and Web sites, up from 172 million last year, but the average ticket was about $343, down from about $373 a year ago. For the weekend, the total spending figure is estimated at $41.2 billion.
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