2/11/10 Foreclosures
First-time claims for state unemployment benefits fell by the largest amount since July. The number of initial claims in the week ending Feb. 6 fell 43,000 to 440,000. This was a sharper drop than expected. The consensus forecast of Wall Street economists was for claims to drop to 460,000. Claims are now at their lowest level since Jan. 2. Claims had spiked in January, reversing a downward trend. Labor Department officials had pinned the increase on administrative backlogs in several states. With today's report, the official said the backlogs had been "washed out."
The advance seasonally adjusted insured unemployment rate was 3.5 percent for the week ending Jan. 30, unchanged from the prior week's unrevised rate of 3.5 percent.
The advance number for seasonally adjusted insured unemployment during the week ending Jan. 30 was 4,538,000, a decrease of 79,000 from the preceding week's revised level of 4,617,000. The 4-week moving average was 4,603,500, a decrease of 17,750 from the preceding week's revised average of 4,621,250.
The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.322 million.
There seems to be no end to the foreclosures in the nation. With the modification program failing to rescue home owners, a total of 315,716 U.S. homes received a filing in January this year, thus exceeding 300,000 for the 11th month in a row.
Though the foreclosures are up 15 percent compared to the same period a year earlier, they are down 10 percent compared to the foreclosures reported in December.
As per the report released by California-based RealtyTrac, one in every 409 households received a foreclosure filing last month.
Between 2010 and 2014, about $1.4 trillion in commercial real estate loans will come to the end of their terms. Almost half of those are now under water, the result of a drop of more than 40% in commercial property values since 2007.
Euro-zone countries will provide "determined and coordinated action if needed" to preserve stability, European Council President Van Rompuy said, but he gave few details of how that would be provided and no indication that direct aid to Greece was imminent.
China's central bank says risks to price stability have risen, and warns it will strictly control loans to new investment projects. PBOC's Q4 monetary policy report, released this morning, gave the clearest sign yet it is beginning to scale back some of its extraordinary stimulus policies.
Economic Disconnect: "Does the United States Have a Debt Chandrasekhar Limit?
The Chandrasekhar Limit is defined as:
"For main-sequence stars with a mass below approximately 8 solar masses, the mass of this core will remain below the Chandrasekhar limit, and they will eventually lose mass (as planetary nebulae) until only the core, which becomes a white dwarf, remains. Stars with higher mass will develop a degenerate core whose mass will grow until it exceeds the limit. At this point the star will explode in a core-collapse supernova, leaving behind either a neutron star or a black hole."
Arthur Laffer, former head of the Office of Management and Budget, has decided that President Obama’s 2011 budget “is the perfect plan for catastrophe.”
The US Northeast began to dig out after two blizzards in a week brought the region to a standstill with record snowfalls, creating a multimillion-dollar mess for cash-strapped cities and states.
Another storm is predicted for Monday in Washington, which will likely cause additional groans from budget officials—and those weary of winter.
Millions of “pre-retirees” aged between 55 and 64 are being unrealistic about the size of their private pensions and living in a state of denial about their finances, experts say.
In a CNBC interview on Feb. 10, Marc Faber went out on a limb saying ALL governments will eventually default, including the United States. From all indications, this is a fairly plausible scenario.
Each month the NFIB tallies small-business optimism, or pessimism, which has been the dominant emotion of late. At 89.3 in January, the index is up 8.3 points from its March low, yet it’s languished under 90 for a record seven quarters. The only other time the index plumbed those depths, and for one quarter only, was during the 1980-1982 back-to-back recessions. The news from the nation’s growth engine is getting less bad, but it’s still far from good.
Ohio-based power company FirstEnergy Corp plans to buy Pennsylvania's Allegheny Energy Inc in an all-stock deal worth $4.7 billion that would create one of the nation's largest utilities.
The combined company would have a generation capacity of 24,000 megawatts and serve more than 6.1 million customers, the companies said on Thursday.
The International Energy Agency on Thursday revised up by 170,000 barrels a day its forecast for global oil demand for 2010, saying that more robust economic growth projections are partly offset by a higher price assumption and persistently weak OECD oil demand. Global oil demand is estimated at 86.5 million barrels a day in 2010, or 1.8% higher than 2009 levels, the IEA said in its monthly report. This growth in demand will come entirely from emerging, non-OECD economies.
The Dow Jones Industrial Average rose 105.81 points, or 1.1%, to 10,144.19. The S&P 500 Index added 10.34 points, or 1%, to 1,078.47. The Nasdaq Composite Index climbed 29.54 points, or 1.4%, to 2,177.41.
There is a EU meeting of finance ministers next Tuesday and Wednesday. There, they will likely come out with more formal language and elaborate on what type of aid will be forthcoming for Greece.
New Jersey Governor Chris Christie on Thursday declared a "fiscal emergency," allowing him to reserve or freeze state spending as part of his plan to tackle one of the largest 2011 deficits among U.S. states.
The Treasury Department sold $16 billion in 30-year bonds on Thursday at a yield of 4.720%, a little higher than traders expected. Bidders offered to buy 2.36 times the amount of debt being sold, compared to an average of 2.24 times at the last four sales. Indirect bidders, a group of investors that includes foreign central banks, bought 28.5%, compared to an average of 39.8% of the last four sales. Direct bidders, which include domestic money managers, purchased another a record 24.1%, versus 10.4% on average. Treasuries remained lower, under pressure before the auction amid easing anxiety about the European Union's willingness to aid Greece if necessary. Yields on 10-year notes rose 5 basis points to 3.75%.
Thursday, February 11, 2010
Wednesday, February 10, 2010
Hyperinflationary Great Depression
2/10/10 Hyperinflationary Great Depression
The U.S. trade deficit widened to $40.2 billion in December, the Commerce Department reported Wednesday. Economists surveyed by MarketWatch were looking for the gap to widen to $37.7 billion. Imports increased $8.4 billion to $189.2 billion, led by higher imports of petroleum, autos, and capital goods. Exports rose $4.6 billion to $142.7 billion, led by higher exports of capital goods and industrial materials. For all of 2009, the deficit shrank to $380.7 billion, $315.3 billion less than the 2008 deficit of $695.9 bilion.
Flight cancellations and delays occurred across the East Coast Wednesday as a second blizzard in a week dropped snow from Washington, D.C., to Long Island, N.Y. Around New York City -- which is expected to get 12 to 18 inches of snow -- many carriers have already canceled flights in anticipation of difficult traveling conditions, The Port Authority of New York and new Jersey said. Flightstats.com, which tracks airline departures, reported significant delays at the airports for Atlanta, Raleigh, Philadelphia, and Boston.
Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan.
OPEC expects the world will need more of its crude oil this year than previously forecast, as the organization lowered its outlook for production of natural gas liquids.
China's exports rose 21% in 2009.
Germany along with EU plans to offer Greece, other members loan guarantees.
U.S. weekly oil inventory and demand data and the natural gas storage report for the week ended Feb. 5 will be released on Friday due to the storm-related shutdown of government offices in Washington D.C. this week, the Energy Information Administration said Tuesday.
The Weekly Petroleum Status Report, regularly published at 10:30 a.m. ET Wednesday, will be released at 11 a.m. ET Friday. Earlier, the American Petroleum Institute, a trade group, said it would release its weekly oil inventory data for the same period as scheduled, at 4:30 p.m. ET Tuesday.
The Weekly Natural Gas Storage Report, regularly released at 10:30 a.m. ET Thursday, will be released at 10:30 a.m. ET Friday.
EIA's Short-Term Energy Outlook for February, which had been scheduled for release earlier Tuesday, is scheduled for release around noon on Wednesday.
John Williams: "The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression.
“Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment.
“The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar.”
Apple may pay as little as $219.35 for the tablet's parts, says iSuppli. That leaves room to cut the price of a device that analysts say may be too expensive.
The Federal Reserve may raise the discount rate “before long” as part of the “normalization” of Fed lending, a move that won’t signal any change in the outlook for monetary policy, Chairman Ben S. Bernanke said.
Bernanke repeated the Federal Open Market Committee statement that low rates are warranted “for an extended period” in testimony prepared for the House Financial Services Committee. The Fed may also temporarily replace the federal funds rate as a policy guide with interest it pays on banks’ deposits should fed funds become a “less reliable indicator than usual,” Bernanke said.
One of every five U.S. home owners owed more on their mortgage than their home was worth in the fourth quarter, a trend that poses a serious threat to the U.S. housing market's recovery, real estate website Zillow.com said on Wednesday.
Container lines will have ninefold the amount of shipping capacity operating at "extra-slow" speeds in March compared with June 2009, as they seek to cut fuel costs and absorb idle capacity, according to AXSMarine. So-called extra-slow shipping capacity was 46,000 twenty-foot containers in June 2009 and will be 406,000 next month. China Cosco Holding Co. and Nippon Yusen K.K. are among the companies that have lowered container-ship speeds to improve engine efficiency. A 10% pace reduction can pare fuel consumption by as much as 30%, according to Det Norske Veritas, which assesses seaworthiness of vessels. Slower ships may not be enough to restore "meaningful" profits this year because new vessels are being delivered, said Jay Ryu, an analyst at Mirae Asset Securities Co. in Hong Kong. About 10% of the current container fleet is now idle and another 742 ships are on order, equal to about 35% of existing fleet capacity, according to AXSMarine.
According to a report by Barclays Capital, 73 large U.S. banks have exposure of $82 billion to Ireland, $68 billion to Spain, $18 billion to Greece and $8 billion to Portugal.
Up and down throughout the session, the Dow Jones Industrial Average fell 20.26 points to 10,038.38. The S&P 500 Index declined 2.39 points to 1,068.13, while the Nasdaq Composite Index lost 3 points to 2,147.87.
The U.S. trade deficit widened to $40.2 billion in December, the Commerce Department reported Wednesday. Economists surveyed by MarketWatch were looking for the gap to widen to $37.7 billion. Imports increased $8.4 billion to $189.2 billion, led by higher imports of petroleum, autos, and capital goods. Exports rose $4.6 billion to $142.7 billion, led by higher exports of capital goods and industrial materials. For all of 2009, the deficit shrank to $380.7 billion, $315.3 billion less than the 2008 deficit of $695.9 bilion.
Flight cancellations and delays occurred across the East Coast Wednesday as a second blizzard in a week dropped snow from Washington, D.C., to Long Island, N.Y. Around New York City -- which is expected to get 12 to 18 inches of snow -- many carriers have already canceled flights in anticipation of difficult traveling conditions, The Port Authority of New York and new Jersey said. Flightstats.com, which tracks airline departures, reported significant delays at the airports for Atlanta, Raleigh, Philadelphia, and Boston.
Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan.
OPEC expects the world will need more of its crude oil this year than previously forecast, as the organization lowered its outlook for production of natural gas liquids.
China's exports rose 21% in 2009.
Germany along with EU plans to offer Greece, other members loan guarantees.
U.S. weekly oil inventory and demand data and the natural gas storage report for the week ended Feb. 5 will be released on Friday due to the storm-related shutdown of government offices in Washington D.C. this week, the Energy Information Administration said Tuesday.
The Weekly Petroleum Status Report, regularly published at 10:30 a.m. ET Wednesday, will be released at 11 a.m. ET Friday. Earlier, the American Petroleum Institute, a trade group, said it would release its weekly oil inventory data for the same period as scheduled, at 4:30 p.m. ET Tuesday.
The Weekly Natural Gas Storage Report, regularly released at 10:30 a.m. ET Thursday, will be released at 10:30 a.m. ET Friday.
EIA's Short-Term Energy Outlook for February, which had been scheduled for release earlier Tuesday, is scheduled for release around noon on Wednesday.
John Williams: "The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression.
“Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment.
“The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar.”
Apple may pay as little as $219.35 for the tablet's parts, says iSuppli. That leaves room to cut the price of a device that analysts say may be too expensive.
The Federal Reserve may raise the discount rate “before long” as part of the “normalization” of Fed lending, a move that won’t signal any change in the outlook for monetary policy, Chairman Ben S. Bernanke said.
Bernanke repeated the Federal Open Market Committee statement that low rates are warranted “for an extended period” in testimony prepared for the House Financial Services Committee. The Fed may also temporarily replace the federal funds rate as a policy guide with interest it pays on banks’ deposits should fed funds become a “less reliable indicator than usual,” Bernanke said.
One of every five U.S. home owners owed more on their mortgage than their home was worth in the fourth quarter, a trend that poses a serious threat to the U.S. housing market's recovery, real estate website Zillow.com said on Wednesday.
Container lines will have ninefold the amount of shipping capacity operating at "extra-slow" speeds in March compared with June 2009, as they seek to cut fuel costs and absorb idle capacity, according to AXSMarine. So-called extra-slow shipping capacity was 46,000 twenty-foot containers in June 2009 and will be 406,000 next month. China Cosco Holding Co. and Nippon Yusen K.K. are among the companies that have lowered container-ship speeds to improve engine efficiency. A 10% pace reduction can pare fuel consumption by as much as 30%, according to Det Norske Veritas, which assesses seaworthiness of vessels. Slower ships may not be enough to restore "meaningful" profits this year because new vessels are being delivered, said Jay Ryu, an analyst at Mirae Asset Securities Co. in Hong Kong. About 10% of the current container fleet is now idle and another 742 ships are on order, equal to about 35% of existing fleet capacity, according to AXSMarine.
According to a report by Barclays Capital, 73 large U.S. banks have exposure of $82 billion to Ireland, $68 billion to Spain, $18 billion to Greece and $8 billion to Portugal.
Up and down throughout the session, the Dow Jones Industrial Average fell 20.26 points to 10,038.38. The S&P 500 Index declined 2.39 points to 1,068.13, while the Nasdaq Composite Index lost 3 points to 2,147.87.
Tuesday, February 09, 2010
Greece
2/9/10 Greece
Same-store U.K. retail sales fell 0.7% in January from the same month last year, while total annual sales growth of 1.2% was the weakest January performance in 15 years, the British Retail Consortium reported Tuesday.
According to Retrevo, which tracks consumer electronics trends, a new study it conducted “indicates a failure to convince any new buyers to consider the iPad. Not only did Apple fail to convince new buyers, it may have lost many potential buyers who now say they don’t think they need an Apple tablet computer.”
ECB's Trichet sparks rumors of an imminent Greece bailout by abruptly leaving a summit in Sydney today, a day earlier than planned. An ECB spokesman says the travel change was purely due to logistics "because there was some concern that he would not catch a connecting flight and therefore miss the EU summit" this Thursday.
Iran says it has begun enriching uranium to a higher level, defying international efforts to curb its nuclear activity. Iranian state media reports the process started at Iran's Natanz facility Tuesday in the presence of International Atomic Energy Agency.
China widened its lead over the U.S. as the world's biggest auto market in January, with passenger car sales more than doubling to 1.32 million vehicles, an industry group reported today.
Iran anniversary 'punch' will stun West: Khamenei "The Iranian nation, with its unity and God's grace, will punch the arrogance (Western powers) on the 22nd of Bahman (February 11) in a way that will leave them stunned," Khamenei, who is also Iran's commander-in-chief, told a gathering of air force personnel.
The euro may fall toward a 15-month low against the dollar after forming a so-called dead cross, said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. Ltd. in Tokyo.
The European currency’s 50-day moving average, currently at $1.4324, dropped below its 200-day moving average of $1.4351 today, creating a dead-cross pattern. The euro slid 11.9 percent in less than two months after the last such cross occurred, dropping from $1.3998 on Sept. 10, 2008, to $1.2330 on Oct. 28, 2008.
“The dead cross is significant for the euro as it’s a rare development, signaling a long-term bearish trend,” said Soma in a Bloomberg News interview. “The target would likely be the October 2008 low.”
Last summer, our guest Gary Shilling of A. Gary Shilling & Co. predicted that stocks would fall 30%. That hasn't happened yet, but the extraordinary bull run that made idiots out of many of Wall Street's greatest gurus last year has now finally reversed, and Gary is sticking by his bearish guns.
At Dow 10,000, Gary says, stocks are still priced to reflect a strong economic recovery throughout 2010 and 2011. And that's not going to happen. Consumers still account for more than 70% of the spending in the U.S. economy, and consumers are retrenching. The value of their assets has plummeted, so they're finally saving again. They're unemployed. They're tapped out. Put all that together, and consumer spending will continue to be weak, and the overall economy will only grow 2% a year.
When the market finally realizes that its dream of a v-shaped recovery is too optimistic, stocks will go lower--perhaps much lower. In fact, Gary thinks there's a 40%-50% chance they'll crash right through the bear-market lows set last spring.
So what's an investor to do?
Buy Treasury bonds, Gary says. Contrary to the concerns of they hyper-inflation crowd, the world is awash in excess capacity. We have too much production capacity, too many houses, too much labor. Overcapacity leads to deflation, not inflation. So today's 4.5% long-term Treasury yield will go to 3%, making bondholders 25% in the process.
The total number of open jobs in the United States ticked higher in December to a seasonally adjusted 2.50 million, the Labor Department reported Tuesday. Net employment fell by 165,000 in December from November, with hiring falling 1.3% to 4.07 million and separations from jobs declining 0.8% to 4.24 million. The number of workers who quit their jobs voluntarily dropped 0.8% to 1.76 million in December, while layoffs increased 3.4% to 2.08 million. Compared with a year earlier, job openings fell 22.5%, separations declined 14.5%, and hiring fell 9.6%. With unemployment at 15.3 million in December there were 6.1 job openings for every person looking for a job.
U.S. wholesale inventories unexpectedly fell 0.8 percent in December, while sales rose 0.8 percent, pushing the inventory-to-sales ratio down to it lowest level in a 1-1/2 years. The inventories-to-sales ratio, which measures how long it would take to sell stocks at the current sales pace, plummeted to 1.12 months' worth, the leanest since June 2008, the Commerce Department said on Tuesday.
According to Schroders research, the UK policymakers need to be careful in how much attention they pay to bond investor concerns elsewhere. The UK needs to raise around £220 billion ($343 billion) this year and over £550 billion over the next three years, adding that “the task of the Debt Management Office is daunting.”According to Schroders research, the UK policymakers need to be careful in how much attention they pay to bond investor concerns elsewhere. The UK needs to raise around £220 billion ($343 billion) this year and over £550 billion over the next three years, adding that “the task of the Debt Management Office is daunting.”
Crude oil inventories rose 7.195 million barrels in the week ended Feb. 5, the American Petroleum Institute reported late Tuesday. Analysts polled by Platts estimated a 2-million-barrel increase. Gasoline stocks rose 1.552 million barrels, slightly topping a 1-million-barrel gain anticipated by analysts. Distillate stocks fell 1.53 million barrels versus forecasts of a drop of 1.75 million barrels. The refinery utilization rate was 77%, down slightly from 78% in the prior week. Crude oil for March delivery slipped to $73.73 a barrel in electronic trade from its floor settlement of $73.75 a barrel. Oil had ended the floor session 2.5% higher on expectations for a German bailout of Greece.
Up the most since Jan. 4, the Dow Jones Industrial Average rose 150.25 points, or 1.5%, to 10,058.64. The S&P 500 Index climbed 13.78 points, or 1.3%, to 1,070.52. The Nasdaq Composite Index gained 24.82 points, or 1.2%, to 2,150.87.
Same-store U.K. retail sales fell 0.7% in January from the same month last year, while total annual sales growth of 1.2% was the weakest January performance in 15 years, the British Retail Consortium reported Tuesday.
According to Retrevo, which tracks consumer electronics trends, a new study it conducted “indicates a failure to convince any new buyers to consider the iPad. Not only did Apple fail to convince new buyers, it may have lost many potential buyers who now say they don’t think they need an Apple tablet computer.”
ECB's Trichet sparks rumors of an imminent Greece bailout by abruptly leaving a summit in Sydney today, a day earlier than planned. An ECB spokesman says the travel change was purely due to logistics "because there was some concern that he would not catch a connecting flight and therefore miss the EU summit" this Thursday.
Iran says it has begun enriching uranium to a higher level, defying international efforts to curb its nuclear activity. Iranian state media reports the process started at Iran's Natanz facility Tuesday in the presence of International Atomic Energy Agency.
China widened its lead over the U.S. as the world's biggest auto market in January, with passenger car sales more than doubling to 1.32 million vehicles, an industry group reported today.
Iran anniversary 'punch' will stun West: Khamenei "The Iranian nation, with its unity and God's grace, will punch the arrogance (Western powers) on the 22nd of Bahman (February 11) in a way that will leave them stunned," Khamenei, who is also Iran's commander-in-chief, told a gathering of air force personnel.
The euro may fall toward a 15-month low against the dollar after forming a so-called dead cross, said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. Ltd. in Tokyo.
The European currency’s 50-day moving average, currently at $1.4324, dropped below its 200-day moving average of $1.4351 today, creating a dead-cross pattern. The euro slid 11.9 percent in less than two months after the last such cross occurred, dropping from $1.3998 on Sept. 10, 2008, to $1.2330 on Oct. 28, 2008.
“The dead cross is significant for the euro as it’s a rare development, signaling a long-term bearish trend,” said Soma in a Bloomberg News interview. “The target would likely be the October 2008 low.”
Last summer, our guest Gary Shilling of A. Gary Shilling & Co. predicted that stocks would fall 30%. That hasn't happened yet, but the extraordinary bull run that made idiots out of many of Wall Street's greatest gurus last year has now finally reversed, and Gary is sticking by his bearish guns.
At Dow 10,000, Gary says, stocks are still priced to reflect a strong economic recovery throughout 2010 and 2011. And that's not going to happen. Consumers still account for more than 70% of the spending in the U.S. economy, and consumers are retrenching. The value of their assets has plummeted, so they're finally saving again. They're unemployed. They're tapped out. Put all that together, and consumer spending will continue to be weak, and the overall economy will only grow 2% a year.
When the market finally realizes that its dream of a v-shaped recovery is too optimistic, stocks will go lower--perhaps much lower. In fact, Gary thinks there's a 40%-50% chance they'll crash right through the bear-market lows set last spring.
So what's an investor to do?
Buy Treasury bonds, Gary says. Contrary to the concerns of they hyper-inflation crowd, the world is awash in excess capacity. We have too much production capacity, too many houses, too much labor. Overcapacity leads to deflation, not inflation. So today's 4.5% long-term Treasury yield will go to 3%, making bondholders 25% in the process.
The total number of open jobs in the United States ticked higher in December to a seasonally adjusted 2.50 million, the Labor Department reported Tuesday. Net employment fell by 165,000 in December from November, with hiring falling 1.3% to 4.07 million and separations from jobs declining 0.8% to 4.24 million. The number of workers who quit their jobs voluntarily dropped 0.8% to 1.76 million in December, while layoffs increased 3.4% to 2.08 million. Compared with a year earlier, job openings fell 22.5%, separations declined 14.5%, and hiring fell 9.6%. With unemployment at 15.3 million in December there were 6.1 job openings for every person looking for a job.
U.S. wholesale inventories unexpectedly fell 0.8 percent in December, while sales rose 0.8 percent, pushing the inventory-to-sales ratio down to it lowest level in a 1-1/2 years. The inventories-to-sales ratio, which measures how long it would take to sell stocks at the current sales pace, plummeted to 1.12 months' worth, the leanest since June 2008, the Commerce Department said on Tuesday.
According to Schroders research, the UK policymakers need to be careful in how much attention they pay to bond investor concerns elsewhere. The UK needs to raise around £220 billion ($343 billion) this year and over £550 billion over the next three years, adding that “the task of the Debt Management Office is daunting.”According to Schroders research, the UK policymakers need to be careful in how much attention they pay to bond investor concerns elsewhere. The UK needs to raise around £220 billion ($343 billion) this year and over £550 billion over the next three years, adding that “the task of the Debt Management Office is daunting.”
Crude oil inventories rose 7.195 million barrels in the week ended Feb. 5, the American Petroleum Institute reported late Tuesday. Analysts polled by Platts estimated a 2-million-barrel increase. Gasoline stocks rose 1.552 million barrels, slightly topping a 1-million-barrel gain anticipated by analysts. Distillate stocks fell 1.53 million barrels versus forecasts of a drop of 1.75 million barrels. The refinery utilization rate was 77%, down slightly from 78% in the prior week. Crude oil for March delivery slipped to $73.73 a barrel in electronic trade from its floor settlement of $73.75 a barrel. Oil had ended the floor session 2.5% higher on expectations for a German bailout of Greece.
Up the most since Jan. 4, the Dow Jones Industrial Average rose 150.25 points, or 1.5%, to 10,058.64. The S&P 500 Index climbed 13.78 points, or 1.3%, to 1,070.52. The Nasdaq Composite Index gained 24.82 points, or 1.2%, to 2,150.87.
Monday, February 08, 2010
Weather
2/8/10 Weather
Reports say that the snowstorm was the worst to hit Washington since 1922, when the snow collapsed the roof of the Knickerbocker movie theater, killing 98 people.
AccuWeather is reporting that this week, "a new major winter storm ... will threaten the Southern Plains [and] could spread snow to the Great Lakes and Northeast. Most of the eastern two-thirds of the nation will have to endure brutal cold following the storm."
Washington, D.C., airports remained closed early Monday as crews removed a record amount of snow from over the weekend that paralyzed the nation's capital. According to Accuweather, the Blizzard of 2010 dumped some 32.4 inches of snow at Washington-Dulles Airport and 17.8 inches at Reagan National. The snowfall broke many records, and brought the winter's total snowfall in Washington, D.C., to 44.9 inches.
Mike Burk: "The market is extremely oversold, but the January highs were confirmed by most indicators and there has been nothing to suggest the recent decline has been anything but a routine pull back in a bull market.
I expect the major averages to be higher on Friday February 12 than they were on Friday February 5."
John Hussman: "Suffice it to say that I am hopeful for a stabilization of the job market, but that I suspect that last month's dip in the unemployment rate was an anomaly. Given what remains a difficult credit outlook, I suspect that we have observed a lull rather than a reversal, and that we'll most likely see an 11-12% unemployment peak before a sustained downturn is observed."
Calafia Beach: "It is very likely that the budget is seriously over-estimating federal revenues. It is very likely that the budget is seriously underestimating federal spending.
And from these conclusions, it follows that Obama's budget very likely underestimates the federal budget deficit by an order of magnitude."
The Dow Jones Industrial Average fell 103.84 points, or 1%, to 9,908.39. The S&P 500 ) lost 9.45 points, or 0.9%, to 1,056.74. The Nasdaq Composite sank 15.07 points, or 0.7%, to 2,126.05.
ZeroHedge: "Even as China is days away from yet another hike in reserve requirements to control "excess liquidity", the nation is preparing for cold war with the US. An independent survey of Chinese-language media for The Sunday Times has found army and navy officers predicting a military showdown and political leaders calling for China to sell more arms to America’s foes. The trigger for their fury was Obama’s decision to sell $6.4 billion (£4 billion) worth of weapons to Taiwan, the thriving democratic island that has ruled itself since 1949. “We should retaliate with an eye for an eye and sell arms to Iran, North Korea, Syria, Cuba and Venezuela,” declared Liu Menxiong, a member of the Chinese people’s political consultative conference. War pulled America out of the First Great Depression. It is only fitting that war will be the result of the Second one. The only problem is this one won't be won by America."
Jim Ritterbusch, president of the energy-advisory firm Ritterbusch & Associates, wrote in a note to clients on Monday that the forecasted cold spell could bring gas stockpiles down to near last year's levels by the end of the heating season.
The cold weather and its potential impact on storage levels "has been a bullish dynamic" for the market, Ritterbusch wrote.
Gold ends up 1.3% at $1,066.20 an ounce.
More than half of U.S. voters who describe themselves as independents disapprove of President Barack Obama’s job performance for the first time since he took office in January 2009, according to a poll released today.
The Marist Poll found that 57 percent of independent voters don’t approve of Obama’s job performance, up from 44 percent in a Dec. 8 survey. Twenty-nine percent of independents approve, down from 41 percent, and 14 percent said they were unsure.
“If attracting independents and bipartisanship are the aim, then the president clearly has a lot of ground to cover in year two,” said Lee M. Miringoff, the director of Poughkeepsie, New York-based Marist College’s Marist Institute of Public Opinion, in a statement.
$488 million in shares was sold in the past week in 192 documents transactions, while just $8 million was bought in 38 deals. Notable dispositions included Bill Gates selling $85 million worth of MSFT, Roger Pensky dumping over $100 million, and Juniper Chairman Scott Kriens selling $12.5 million worth of JNPR stock. Also, after announcing a major trimming in his GOOG portfolio, Sergey Brin sold some "pocketchange" worth of Google stock worth $7.6 million. Source: FinViz
Reports say that the snowstorm was the worst to hit Washington since 1922, when the snow collapsed the roof of the Knickerbocker movie theater, killing 98 people.
AccuWeather is reporting that this week, "a new major winter storm ... will threaten the Southern Plains [and] could spread snow to the Great Lakes and Northeast. Most of the eastern two-thirds of the nation will have to endure brutal cold following the storm."
Washington, D.C., airports remained closed early Monday as crews removed a record amount of snow from over the weekend that paralyzed the nation's capital. According to Accuweather, the Blizzard of 2010 dumped some 32.4 inches of snow at Washington-Dulles Airport and 17.8 inches at Reagan National. The snowfall broke many records, and brought the winter's total snowfall in Washington, D.C., to 44.9 inches.
Mike Burk: "The market is extremely oversold, but the January highs were confirmed by most indicators and there has been nothing to suggest the recent decline has been anything but a routine pull back in a bull market.
I expect the major averages to be higher on Friday February 12 than they were on Friday February 5."
John Hussman: "Suffice it to say that I am hopeful for a stabilization of the job market, but that I suspect that last month's dip in the unemployment rate was an anomaly. Given what remains a difficult credit outlook, I suspect that we have observed a lull rather than a reversal, and that we'll most likely see an 11-12% unemployment peak before a sustained downturn is observed."
Calafia Beach: "It is very likely that the budget is seriously over-estimating federal revenues. It is very likely that the budget is seriously underestimating federal spending.
And from these conclusions, it follows that Obama's budget very likely underestimates the federal budget deficit by an order of magnitude."
The Dow Jones Industrial Average fell 103.84 points, or 1%, to 9,908.39. The S&P 500 ) lost 9.45 points, or 0.9%, to 1,056.74. The Nasdaq Composite sank 15.07 points, or 0.7%, to 2,126.05.
ZeroHedge: "Even as China is days away from yet another hike in reserve requirements to control "excess liquidity", the nation is preparing for cold war with the US. An independent survey of Chinese-language media for The Sunday Times has found army and navy officers predicting a military showdown and political leaders calling for China to sell more arms to America’s foes. The trigger for their fury was Obama’s decision to sell $6.4 billion (£4 billion) worth of weapons to Taiwan, the thriving democratic island that has ruled itself since 1949. “We should retaliate with an eye for an eye and sell arms to Iran, North Korea, Syria, Cuba and Venezuela,” declared Liu Menxiong, a member of the Chinese people’s political consultative conference. War pulled America out of the First Great Depression. It is only fitting that war will be the result of the Second one. The only problem is this one won't be won by America."
Jim Ritterbusch, president of the energy-advisory firm Ritterbusch & Associates, wrote in a note to clients on Monday that the forecasted cold spell could bring gas stockpiles down to near last year's levels by the end of the heating season.
The cold weather and its potential impact on storage levels "has been a bullish dynamic" for the market, Ritterbusch wrote.
Gold ends up 1.3% at $1,066.20 an ounce.
More than half of U.S. voters who describe themselves as independents disapprove of President Barack Obama’s job performance for the first time since he took office in January 2009, according to a poll released today.
The Marist Poll found that 57 percent of independent voters don’t approve of Obama’s job performance, up from 44 percent in a Dec. 8 survey. Twenty-nine percent of independents approve, down from 41 percent, and 14 percent said they were unsure.
“If attracting independents and bipartisanship are the aim, then the president clearly has a lot of ground to cover in year two,” said Lee M. Miringoff, the director of Poughkeepsie, New York-based Marist College’s Marist Institute of Public Opinion, in a statement.
$488 million in shares was sold in the past week in 192 documents transactions, while just $8 million was bought in 38 deals. Notable dispositions included Bill Gates selling $85 million worth of MSFT, Roger Pensky dumping over $100 million, and Juniper Chairman Scott Kriens selling $12.5 million worth of JNPR stock. Also, after announcing a major trimming in his GOOG portfolio, Sergey Brin sold some "pocketchange" worth of Google stock worth $7.6 million. Source: FinViz
Saturday, February 06, 2010
Risk Premiums
2/6/10 Risk Premiums
“The cost of insuring against U.S. and U.K. debt defaults may rise in the same way as it has for so-called European peripheral nations including Greece and Portugal, Deutsche Bank AG said. ‘The problems currently faced by peripheral Europe could be a dress rehearsal for what the U.S. and U.K. may face further down the road,’ Jim Reid, a strategist at Deutsche Bank in London, wrote…”
Doug Noland: "The stock market has been under pressure – and that’s not so helpful for already fragile confidence. Yet, how much of an offset is provided by declining Treasury and mortgage-backed yields? How much benefit will the stronger dollar provide in the way of lower energy and import costs? Notably, there has been so far only limited widening of U.S. risk premiums. Is this an indication of U.S. system resiliency - or complacency? ....Junk spreads have barely budged from January lows (487bps) and remain significantly below the high of 1,300 recorded last March. Investment grade spreads are also less than half of the levels from last spring. And while they have widened marginally, emerging market debt spreads are not far off 15-month lows. Brazil and Mexico can still borrow for 10 years at not much over 5%. For the most part, financial conditions remain loose."
David Rosenberg: "The level of employment today, at 129.5 million, is the exact same level it was in 1999. And, during this 11-year span of Japanese-like labour market stagnation, the working-age population has risen 29 million. Contemplate that for a moment; fully 29 million people competing for the same number of jobs that existed more than a decade ago. That sounds like pretty deflationary stuff from our standpoint. "
ZeroHedge: JPM ramped the market's close on Friday. "JPM's ETF desk singlehandedly manages to push market higher. It is unknown if this is for prop positions (yes Senator Corker, we know it when we see it), or flow (JPM is RenTec's. and many other quant funds' Prime Dealer) is unknown. What is known is that JPM indicates every single SPY offer was lifted by its sage trader."
Cold weather will cover the U.S. from the Rockies to the East Coast between now and Feb. 19, MDA Federal Inc.’s EarthSat Energy Weather said. Two feet (60 centimeters) of snow may fall in the Washington region. About 52 percent of U.S. households use gas for heating.
“Gas is mostly up on the weather,” said Chris Jarvis, president of Caprock Risk Management LLC in Hampton Falls, New Hampshire. “You’ve got a region that uses a lot of gas with a snow cap, so that will keep things a little cooler, which enhances the demand picture for natural gas.”
Natural gas for March delivery rose 9.9 cents, or 1.8 percent, to settle at $5.515 per million British thermal units at 2:36 p.m. on the New York Mercantile Exchange. Prices advanced 7.5 percent this week.
Southern New Jersey and Delaware have been placed under a blizzard warning. In New Jersey, 67 percent of households rely on natural gas for heating, according to the Energy Department. About 65 percent of households in Washington heat with gas.
“The cost of insuring against U.S. and U.K. debt defaults may rise in the same way as it has for so-called European peripheral nations including Greece and Portugal, Deutsche Bank AG said. ‘The problems currently faced by peripheral Europe could be a dress rehearsal for what the U.S. and U.K. may face further down the road,’ Jim Reid, a strategist at Deutsche Bank in London, wrote…”
Doug Noland: "The stock market has been under pressure – and that’s not so helpful for already fragile confidence. Yet, how much of an offset is provided by declining Treasury and mortgage-backed yields? How much benefit will the stronger dollar provide in the way of lower energy and import costs? Notably, there has been so far only limited widening of U.S. risk premiums. Is this an indication of U.S. system resiliency - or complacency? ....Junk spreads have barely budged from January lows (487bps) and remain significantly below the high of 1,300 recorded last March. Investment grade spreads are also less than half of the levels from last spring. And while they have widened marginally, emerging market debt spreads are not far off 15-month lows. Brazil and Mexico can still borrow for 10 years at not much over 5%. For the most part, financial conditions remain loose."
David Rosenberg: "The level of employment today, at 129.5 million, is the exact same level it was in 1999. And, during this 11-year span of Japanese-like labour market stagnation, the working-age population has risen 29 million. Contemplate that for a moment; fully 29 million people competing for the same number of jobs that existed more than a decade ago. That sounds like pretty deflationary stuff from our standpoint. "
ZeroHedge: JPM ramped the market's close on Friday. "JPM's ETF desk singlehandedly manages to push market higher. It is unknown if this is for prop positions (yes Senator Corker, we know it when we see it), or flow (JPM is RenTec's. and many other quant funds' Prime Dealer) is unknown. What is known is that JPM indicates every single SPY offer was lifted by its sage trader."
Cold weather will cover the U.S. from the Rockies to the East Coast between now and Feb. 19, MDA Federal Inc.’s EarthSat Energy Weather said. Two feet (60 centimeters) of snow may fall in the Washington region. About 52 percent of U.S. households use gas for heating.
“Gas is mostly up on the weather,” said Chris Jarvis, president of Caprock Risk Management LLC in Hampton Falls, New Hampshire. “You’ve got a region that uses a lot of gas with a snow cap, so that will keep things a little cooler, which enhances the demand picture for natural gas.”
Natural gas for March delivery rose 9.9 cents, or 1.8 percent, to settle at $5.515 per million British thermal units at 2:36 p.m. on the New York Mercantile Exchange. Prices advanced 7.5 percent this week.
Southern New Jersey and Delaware have been placed under a blizzard warning. In New Jersey, 67 percent of households rely on natural gas for heating, according to the Energy Department. About 65 percent of households in Washington heat with gas.
Friday, February 05, 2010
Freeloaders
2/5/10 Freeloaders
The number of U.S. homes listed for sale rose in January compared to December after 18 consecutive months of decline, according to data released on Thursday by real estate brokerage ZipRealty. The increase in listings from a survey of Multiple Listing Services can be attributed to the extension and expansion of U.S. home buyer tax credits, which is prompting sellers to list their homes sooner rather than wait for spring, the peak home buying season, according to Emeryville, California-based ZipRealty.
The growing sovereign debt problems in Europe will continue to keep markets under pressure, Bill Gross, co-CIO and founder of Pimco, told CNBC Thursday.
“The magnitude is not the same as the subprime crisis, but to a certain extent, they're similar,” Gross said in a live interview.
The unemployment rate fell in January to 9.7% from 10% in December, the Labor Department said Friday. Nonfarm payrolls contracted by 20,000 in January. Economists surveyed by MarketWatch had expected a 25,000 gain and for the unemployment rate to remain steady at 10.0%. Under the revisions released today, job losses since the start of the recession in December 2007 totaled 8.4 million. The Labor Department said the economy shed 150,000 jobs in December, compared to 85,000 previously reported, but November was revised to a gain of 64,000, up from 4,000. A sharp increase in the number of people giving up looking for work helped to depress the jobless rate. The number of 'discouraged job seekers' rose to 1.1 million in January from 734,000 a year ago.
Last month, the services sector added 40,000 jobs after shedding 96,000 positions. The figure included a rise in federal government employment, partly as a result of the hiring of staff for the 2010 Census. Temporary help employment rose 52,000, maintaining a rising trend seen in the past month.
Manufacturing payrolls rose 11,000 last month, the first gain since January 2007, after dropping 23,000 in December. But the construction sector, continued to struggle, losing 75,000 jobs, likely because of unusually cold weather. Construction payrolls fell 32,000 in December.
In another sign of labor market improvement, the average workweek unexpectedly rose to 33.3 hours, the highest level in a year, from 33.2 hours in December. Total average hourly earnings increased $18.89 from $18.84 in December. Manufacturing overtime rose to 3.5 hours, the highest since September 2008. The Census Bureau hired 9,000 temporary workers in January as part of the decennial census, and now employs 24,000 temporary workers.
The Employment-Population ratio ticked up slightly to 58.4% in January, after plunging since the start of the recession. This is about the same level as in 1983.
The January Birth/Death adjustment was for -427K from +25K in December.
The Labor Force Participation Rate increased slightly to 64.7% (the percentage of the working age population in the labor force). This is at the level of the early 80s.
ZeroHedge: "Yet a number that avoids some of the constant fudging by the BLS, the Non-Seasonally Adjusted number, hit a new recent record: instead of 9.7%, this number was 10.6%, a 0.9% increase from December!
The same can be seen in the U-6 data. NSA U-6 is now at a record 18%, even as the seasonally adjusted number declined to 16.5%."
European policymakers scrambled on Friday to reassure markets on the stability of their 16-nation currency bloc as investors shed euro assets for a second day on fears about debt-laden member states like Greece and Portugal.
European Central Bank Governing Council member Ewald Nowotny tried to play down a sharp fall in the euro, which hit its lowest level against the dollar since May 2009, and called talk of a euro zone breakup "absurd."
Greek Prime Minister George Papandreou, on a visit to India, promised to "credibly apply" an austerity program designed to bring his country's yawning debt and deficit levels under control.
Markets also focused on Portugal, where parliament was due to vote on a regional financing bill that is seen as a crucial test of the government's ability to curb spending.
Alongside Greece and Spain, Portugal is one of a handful of euro bloc countries that face intense pressure to get their public finances in order and calm markets worried about the risks of a sovereign default.
Analysts are no longer discounting the possibility that a smaller member of the bloc such as Greece could be pushed out, though most believe monetary union will survive.
"The market is closely watching each country's ability to pay its debts," said Erkki Liikanen, who sits on the ECB council with Nowotny. "If the faith is lost, rates will go up significantly."
Airgas Inc. said Friday that it received an unsolicited bid from Air Products & Chemicals Inc., offering to buy the company for $60 a share. Airgas said its board will review the proposal and advised its shareholders to take no action at this time. Shares of Airgas were up about 42% in premarket trade Friday on news of the proposed deal.
China announced anti-dumping duties of up to 105.4 percent Friday on imports of U.S. chicken products, adding to trade strains with Washington.
The case comes amid mutual accusations of protectionism by Beijing and Washington which both say will hurt efforts to end the global economic downturn.
A preliminary investigation concluded U.S. exports were being sold at improperly low prices that harmed Chinese competitors, the Commerce Ministry said. It said importers must post a bond until a final decision is reached.
Credit markets were slammed as the cost to insure investment-grade corporate bonds saw their biggest increase in more than two years.
Undoing the carry trade can be dangerous to one's economic viability. Free rides are for only a short distance. It is a lesson that carries out the freeloaders.
"We think that it's substantially different this time, based upon the fact that instead of levering we're delevering and instead of deregulating we're regulating," Bill Gross said. "Both of those conditions in combination produce a very weak economy, very slow growth and ultimately have effects on asset markets that depend on asset appreciation.""The growth has been really based on a check not only by the US government but many sovereign governments," he said. "The minute that check disappears the private market is standing very lonesome and on its own legs."
Los Angeles Mayor Antonio Villaraigosa ordered officials Thursday to eliminate 1,000 city jobs and begin planning employee layoffs, one day after the City Council failed to do so amid a deepening budget crisis.
Disturbed by the council's inability to make a dent in a $212-million shortfall, Villaraigosa sent a letter to department heads saying he was accelerating the effort to shift as many employees as possible to vacant positions not paid by the city's general fund and would impose layoffs where necessary. Police officers would not be affected.
"If you think I'm not going to move ahead, you don't know me well," Villaraigosa told reporters during a late afternoon news conference. "I don't do this because I want to. I do this because I must."
1st American State Bank of Minnesota in Hancock, Minn., became the 16th bank of the year to fail, according to the Federal Deposit Insurance Corp. Friday. Community Development Bank of Ogema, Minn., is set to assume the bank's $16.3 million in deposits. Community Development will also purchase the bank's $18.2 million in assets. The bank is also Minnesota's third bank failure of the year.
Reversing course after a near 200-point drop earlier, the Dow Jones Industrial Average added 10.05 points, or 0.1%, to 10,012.23, leaving the blue chips with a 0.6% weekly loss. The S&P 500 Index gained 3.08 points, or 0.3%, to 1,066.19, down 0.7% for the week. The Nasdaq Composite Index rose 15.69 points, or 0.7%, to 2,141.12, leaving it off 0.3% from the week-ago close.
Outstanding debts held by consumers fell for a record 11th month in a row in December, led by falling balances on their credit cards, the Federal Reserve reported Friday. Outstanding debts - not including mortgage debt - fell a seasonally adjusted $1.73 billion, or an annual rate of 0.8%, in December after a record $21.8 billion decline in November. The decline was much less than the $9 billion forecast by economists surveyed by MarketWatch. For all of 2009, consumer debt dropped by 4% from $2.56 trillion at the end of 2008 to $2.46 trillion. It was only the second annual decline since 1945 and the first since 1991, when debts fell 1.3%.
The number of U.S. homes listed for sale rose in January compared to December after 18 consecutive months of decline, according to data released on Thursday by real estate brokerage ZipRealty. The increase in listings from a survey of Multiple Listing Services can be attributed to the extension and expansion of U.S. home buyer tax credits, which is prompting sellers to list their homes sooner rather than wait for spring, the peak home buying season, according to Emeryville, California-based ZipRealty.
The growing sovereign debt problems in Europe will continue to keep markets under pressure, Bill Gross, co-CIO and founder of Pimco, told CNBC Thursday.
“The magnitude is not the same as the subprime crisis, but to a certain extent, they're similar,” Gross said in a live interview.
The unemployment rate fell in January to 9.7% from 10% in December, the Labor Department said Friday. Nonfarm payrolls contracted by 20,000 in January. Economists surveyed by MarketWatch had expected a 25,000 gain and for the unemployment rate to remain steady at 10.0%. Under the revisions released today, job losses since the start of the recession in December 2007 totaled 8.4 million. The Labor Department said the economy shed 150,000 jobs in December, compared to 85,000 previously reported, but November was revised to a gain of 64,000, up from 4,000. A sharp increase in the number of people giving up looking for work helped to depress the jobless rate. The number of 'discouraged job seekers' rose to 1.1 million in January from 734,000 a year ago.
Last month, the services sector added 40,000 jobs after shedding 96,000 positions. The figure included a rise in federal government employment, partly as a result of the hiring of staff for the 2010 Census. Temporary help employment rose 52,000, maintaining a rising trend seen in the past month.
Manufacturing payrolls rose 11,000 last month, the first gain since January 2007, after dropping 23,000 in December. But the construction sector, continued to struggle, losing 75,000 jobs, likely because of unusually cold weather. Construction payrolls fell 32,000 in December.
In another sign of labor market improvement, the average workweek unexpectedly rose to 33.3 hours, the highest level in a year, from 33.2 hours in December. Total average hourly earnings increased $18.89 from $18.84 in December. Manufacturing overtime rose to 3.5 hours, the highest since September 2008. The Census Bureau hired 9,000 temporary workers in January as part of the decennial census, and now employs 24,000 temporary workers.
The Employment-Population ratio ticked up slightly to 58.4% in January, after plunging since the start of the recession. This is about the same level as in 1983.
The January Birth/Death adjustment was for -427K from +25K in December.
The Labor Force Participation Rate increased slightly to 64.7% (the percentage of the working age population in the labor force). This is at the level of the early 80s.
ZeroHedge: "Yet a number that avoids some of the constant fudging by the BLS, the Non-Seasonally Adjusted number, hit a new recent record: instead of 9.7%, this number was 10.6%, a 0.9% increase from December!
The same can be seen in the U-6 data. NSA U-6 is now at a record 18%, even as the seasonally adjusted number declined to 16.5%."
European policymakers scrambled on Friday to reassure markets on the stability of their 16-nation currency bloc as investors shed euro assets for a second day on fears about debt-laden member states like Greece and Portugal.
European Central Bank Governing Council member Ewald Nowotny tried to play down a sharp fall in the euro, which hit its lowest level against the dollar since May 2009, and called talk of a euro zone breakup "absurd."
Greek Prime Minister George Papandreou, on a visit to India, promised to "credibly apply" an austerity program designed to bring his country's yawning debt and deficit levels under control.
Markets also focused on Portugal, where parliament was due to vote on a regional financing bill that is seen as a crucial test of the government's ability to curb spending.
Alongside Greece and Spain, Portugal is one of a handful of euro bloc countries that face intense pressure to get their public finances in order and calm markets worried about the risks of a sovereign default.
Analysts are no longer discounting the possibility that a smaller member of the bloc such as Greece could be pushed out, though most believe monetary union will survive.
"The market is closely watching each country's ability to pay its debts," said Erkki Liikanen, who sits on the ECB council with Nowotny. "If the faith is lost, rates will go up significantly."
Airgas Inc. said Friday that it received an unsolicited bid from Air Products & Chemicals Inc., offering to buy the company for $60 a share. Airgas said its board will review the proposal and advised its shareholders to take no action at this time. Shares of Airgas were up about 42% in premarket trade Friday on news of the proposed deal.
China announced anti-dumping duties of up to 105.4 percent Friday on imports of U.S. chicken products, adding to trade strains with Washington.
The case comes amid mutual accusations of protectionism by Beijing and Washington which both say will hurt efforts to end the global economic downturn.
A preliminary investigation concluded U.S. exports were being sold at improperly low prices that harmed Chinese competitors, the Commerce Ministry said. It said importers must post a bond until a final decision is reached.
Credit markets were slammed as the cost to insure investment-grade corporate bonds saw their biggest increase in more than two years.
Undoing the carry trade can be dangerous to one's economic viability. Free rides are for only a short distance. It is a lesson that carries out the freeloaders.
"We think that it's substantially different this time, based upon the fact that instead of levering we're delevering and instead of deregulating we're regulating," Bill Gross said. "Both of those conditions in combination produce a very weak economy, very slow growth and ultimately have effects on asset markets that depend on asset appreciation.""The growth has been really based on a check not only by the US government but many sovereign governments," he said. "The minute that check disappears the private market is standing very lonesome and on its own legs."
Los Angeles Mayor Antonio Villaraigosa ordered officials Thursday to eliminate 1,000 city jobs and begin planning employee layoffs, one day after the City Council failed to do so amid a deepening budget crisis.
Disturbed by the council's inability to make a dent in a $212-million shortfall, Villaraigosa sent a letter to department heads saying he was accelerating the effort to shift as many employees as possible to vacant positions not paid by the city's general fund and would impose layoffs where necessary. Police officers would not be affected.
"If you think I'm not going to move ahead, you don't know me well," Villaraigosa told reporters during a late afternoon news conference. "I don't do this because I want to. I do this because I must."
1st American State Bank of Minnesota in Hancock, Minn., became the 16th bank of the year to fail, according to the Federal Deposit Insurance Corp. Friday. Community Development Bank of Ogema, Minn., is set to assume the bank's $16.3 million in deposits. Community Development will also purchase the bank's $18.2 million in assets. The bank is also Minnesota's third bank failure of the year.
Reversing course after a near 200-point drop earlier, the Dow Jones Industrial Average added 10.05 points, or 0.1%, to 10,012.23, leaving the blue chips with a 0.6% weekly loss. The S&P 500 Index gained 3.08 points, or 0.3%, to 1,066.19, down 0.7% for the week. The Nasdaq Composite Index rose 15.69 points, or 0.7%, to 2,141.12, leaving it off 0.3% from the week-ago close.
Outstanding debts held by consumers fell for a record 11th month in a row in December, led by falling balances on their credit cards, the Federal Reserve reported Friday. Outstanding debts - not including mortgage debt - fell a seasonally adjusted $1.73 billion, or an annual rate of 0.8%, in December after a record $21.8 billion decline in November. The decline was much less than the $9 billion forecast by economists surveyed by MarketWatch. For all of 2009, consumer debt dropped by 4% from $2.56 trillion at the end of 2008 to $2.46 trillion. It was only the second annual decline since 1945 and the first since 1991, when debts fell 1.3%.
Thursday, February 04, 2010
Job Losses
2/4/10 Job Losses
Nassim Nicholas Taleb, author of “The Black Swan,” said “every single human being” should bet U.S. Treasury bonds will decline, citing the policies of Federal Reserve Chairman Ben S. Bernanke and the Obama administration.
It’s “a no brainer” to sell short Treasuries, Taleb, a principal at Universa Investments LP in Santa Monica, California, said at a conference in Moscow today. “Every single human being should have that trade.”
First-time claims for state unemployment benefits rose to the highest level since mid-December, the Labor Department reported Thursday. The number of initial claims in the week ending Jan. 30 rose 8,000 to 480,000. The consensus forecast of Wall Street economists was for claims to drop to 455,000. Claims in the previous week were revised to a decrease of 7,000 to 472,000 compared with the initial estimate of a decrease of 8,000 to 470,000. The four-week average of initial claims rose 11,750 to 468,750. A Labor Department official said there were no special factors behind the increase. Meanwhile, the number of Americans receiving state jobless benefits rose a slight 2,000 to 4.60 million in the week ending Jan 23. The four-week moving average of continuing claims fell 51,250 to 4.62 million. Overall, 11.53 million Americans received federal and state unemployment benefits on an unadjusted basis in the week ended Jan. 16, the latest period for which the data is available. This is up from 11.48 million in the prior week.
Productivity of the U.S. nonfarm business sector slowed a bit in the fourth quarter as hours worked increased for the first quarter since the second quarter of 2007, the Labor Department estimated Thursday. The productivity of the U.S. nonfarm business sector rose at an annual rate of 6.2% after a 7.2% gain in the third quarter. Output rose 7.2% in the final three months of the year and hours worked increased 1.0%. Economists were expecting productivity to rise 7.3% in the fourth quarter. Unit labor costs - a key inflationary signal - fell at an annual rate of 4.4% in the fourth quarter. Real hourly compensation fell 1.9%. For the year, productivity rose at a 2.9% rate, the fastest pace since 2003. Both hours worked and output declined by record rates in 2009. Unit labor costs fell 0.9%, the biggest drop since 2002.
Nouriel Roubini, the New York University professor who predicted the credit crisis, expects the dollar to weaken against Asian and “commodity” currencies such as the Brazilian real over the next two or three years.
“I see anemic recovery of economic growth in the U.S.,” and “the U.S. current account is still very large,” Roubini, a founder of Roubini Global Economics, said at a conference in Moscow today. “In the next two or three years, the dollar has to weaken further on a trade-weighted basis.”
International Monetary Fund Managing Director Dominique Strauss-Kahn and World Bank President Robert Zoellick said this week the recovery is “fragile.”
January is the least important month of the year on retailers’ calendar as stores use the month to clear out winter merchandise and bring in spring merchandise. So analysts say they’ll be studying sales patterns more closely in the coming months to discern shoppers’ financial health. January did offer clues about shoppers’ focus on fat discounts. For the holiday season, stores ordered so conservatively that they ended December with relatively little extra inventory — and less than usual to mark down in January. As a result, some stores pushed up deliveries of spring items from jumpsuits to sandals, but bargains were all that most consumers wanted.
Bloomberg reports that 824,000 jobs will disappear Feb. 5 due to downward
revisions. Job losses during the recession may have been underestimated by close to a million jobs. So instead of employers cutting just over 7 million jobs from their payrolls since the economic downturn began in December 2007, it's expected that the Labor Department's new estimate will be a loss of 8 million jobs.
Boeing and Airbus expect demand for new orders to remain depressed until 2012 as a record drop in air travel prompts companies to pare growth.
Platts analyst expect the EIA to report a drawdown of between 121 and 125 billion cubic feet from natural gas storage for the week ended Jan. 29.
Martin King, analyst at FirstEnergy Capital, told Platts that temperatures had began cooling off last week in key gas-consuming regions, "which bolstered demand mid-week".
U.S. natural gas supplies down 115 bcf - EIA.
Orders for U.S.-made manufactured goods increased 1% in December, led by strong demand for machinery, metals, petroleum and military planes, the Commerce Department reported Thursday. Economists were looking for a 0.6% gain. Orders for durable goods rose 1%, significantly higher than the 0.3% gain estimated a week ago. Orders for nondurable goods also rose 1%, largely due to higher prices for petroleum. Shipments of core capital equipment rose 2.1% in December. Shipments of all factory goods increased 1.9%, while inventories fell 0.1%. November's orders were revised down to 1% from 1.1% earlier.
The Dow Jones Industrial Average sank 268.37 points, or 2.6%, to 10,002.18, its worst daily loss since April 20, 2009. The Dow had lapsed under 10,000 just ahead of the close, its first lapse under that level since early November. The S&P 500 Index fell 34.17 points, or 3.1%, to 1,063.11. The Nasdaq Composite Index declined 65.48 points, or 3%, to 2,125.43.
The U.S. government's borrowing limit would rise by $1.9 trillion to $14.3 trillion under legislation approved in the House on Thursday. Lawmakers also approved a budget-control mechanism known as "pay-go" before sending the bill to President Barack Obama for signature. The vote was 233-187. The Senate approved the borrowing increase and pay-go rules in a tight vote last week.
Nassim Nicholas Taleb, author of “The Black Swan,” said “every single human being” should bet U.S. Treasury bonds will decline, citing the policies of Federal Reserve Chairman Ben S. Bernanke and the Obama administration.
It’s “a no brainer” to sell short Treasuries, Taleb, a principal at Universa Investments LP in Santa Monica, California, said at a conference in Moscow today. “Every single human being should have that trade.”
First-time claims for state unemployment benefits rose to the highest level since mid-December, the Labor Department reported Thursday. The number of initial claims in the week ending Jan. 30 rose 8,000 to 480,000. The consensus forecast of Wall Street economists was for claims to drop to 455,000. Claims in the previous week were revised to a decrease of 7,000 to 472,000 compared with the initial estimate of a decrease of 8,000 to 470,000. The four-week average of initial claims rose 11,750 to 468,750. A Labor Department official said there were no special factors behind the increase. Meanwhile, the number of Americans receiving state jobless benefits rose a slight 2,000 to 4.60 million in the week ending Jan 23. The four-week moving average of continuing claims fell 51,250 to 4.62 million. Overall, 11.53 million Americans received federal and state unemployment benefits on an unadjusted basis in the week ended Jan. 16, the latest period for which the data is available. This is up from 11.48 million in the prior week.
Productivity of the U.S. nonfarm business sector slowed a bit in the fourth quarter as hours worked increased for the first quarter since the second quarter of 2007, the Labor Department estimated Thursday. The productivity of the U.S. nonfarm business sector rose at an annual rate of 6.2% after a 7.2% gain in the third quarter. Output rose 7.2% in the final three months of the year and hours worked increased 1.0%. Economists were expecting productivity to rise 7.3% in the fourth quarter. Unit labor costs - a key inflationary signal - fell at an annual rate of 4.4% in the fourth quarter. Real hourly compensation fell 1.9%. For the year, productivity rose at a 2.9% rate, the fastest pace since 2003. Both hours worked and output declined by record rates in 2009. Unit labor costs fell 0.9%, the biggest drop since 2002.
Nouriel Roubini, the New York University professor who predicted the credit crisis, expects the dollar to weaken against Asian and “commodity” currencies such as the Brazilian real over the next two or three years.
“I see anemic recovery of economic growth in the U.S.,” and “the U.S. current account is still very large,” Roubini, a founder of Roubini Global Economics, said at a conference in Moscow today. “In the next two or three years, the dollar has to weaken further on a trade-weighted basis.”
International Monetary Fund Managing Director Dominique Strauss-Kahn and World Bank President Robert Zoellick said this week the recovery is “fragile.”
January is the least important month of the year on retailers’ calendar as stores use the month to clear out winter merchandise and bring in spring merchandise. So analysts say they’ll be studying sales patterns more closely in the coming months to discern shoppers’ financial health. January did offer clues about shoppers’ focus on fat discounts. For the holiday season, stores ordered so conservatively that they ended December with relatively little extra inventory — and less than usual to mark down in January. As a result, some stores pushed up deliveries of spring items from jumpsuits to sandals, but bargains were all that most consumers wanted.
Bloomberg reports that 824,000 jobs will disappear Feb. 5 due to downward
revisions. Job losses during the recession may have been underestimated by close to a million jobs. So instead of employers cutting just over 7 million jobs from their payrolls since the economic downturn began in December 2007, it's expected that the Labor Department's new estimate will be a loss of 8 million jobs.
Boeing and Airbus expect demand for new orders to remain depressed until 2012 as a record drop in air travel prompts companies to pare growth.
Platts analyst expect the EIA to report a drawdown of between 121 and 125 billion cubic feet from natural gas storage for the week ended Jan. 29.
Martin King, analyst at FirstEnergy Capital, told Platts that temperatures had began cooling off last week in key gas-consuming regions, "which bolstered demand mid-week".
U.S. natural gas supplies down 115 bcf - EIA.
Orders for U.S.-made manufactured goods increased 1% in December, led by strong demand for machinery, metals, petroleum and military planes, the Commerce Department reported Thursday. Economists were looking for a 0.6% gain. Orders for durable goods rose 1%, significantly higher than the 0.3% gain estimated a week ago. Orders for nondurable goods also rose 1%, largely due to higher prices for petroleum. Shipments of core capital equipment rose 2.1% in December. Shipments of all factory goods increased 1.9%, while inventories fell 0.1%. November's orders were revised down to 1% from 1.1% earlier.
The Dow Jones Industrial Average sank 268.37 points, or 2.6%, to 10,002.18, its worst daily loss since April 20, 2009. The Dow had lapsed under 10,000 just ahead of the close, its first lapse under that level since early November. The S&P 500 Index fell 34.17 points, or 3.1%, to 1,063.11. The Nasdaq Composite Index declined 65.48 points, or 3%, to 2,125.43.
The U.S. government's borrowing limit would rise by $1.9 trillion to $14.3 trillion under legislation approved in the House on Thursday. Lawmakers also approved a budget-control mechanism known as "pay-go" before sending the bill to President Barack Obama for signature. The vote was 233-187. The Senate approved the borrowing increase and pay-go rules in a tight vote last week.
Wednesday, February 03, 2010
ADP
2/3/10 ADP
Private-sector firms in the U.S. eliminated 22,000 jobs in January, the 24th decline in a row, according to the ADP employment report released Wednesday. It was the fewest jobs lost since 22,000 jobs were added in January 2008. In December, a revised 61,000 jobs were lost, compared with the 84,000 originally reported, ADP said. The ADP jobs data come two days before the Bureau of Labor Statistics releases its estimate of January nonfarm payrolls. Economists surveyed by MarketWatch are looking for payrolls to rise 20,000 in the BLS survey
The US could lose its Aaa bond rating at Moody’s (CNBC).
The Obama administration says the government will grow to 2.15 million employees this year, topping 2 million for the first time since President Clinton declared that "the era of big government is over" and joined forces with a Republican-led Congress in the 1990s to pare back the federal work force.
Most of the increases are on the civilian side, which will grow by 153,000 workers, to 1.43 million people, in fiscal 2010.
According to a study from the nation's largest food bank operator, the number of Americans in need of food aid has jumped 46 percent in three years, including a 50 percent jump in the number of children needing food assistance, and a 64 percent increase in hunger in senior citizens' homes.
The study, Hunger in America 2010, found that 37 million people, or roughly one in eight US residents, received food aid in 2009. That's a 46 percent jump from a similar survey carried out in 2006.
A major Chinese bank has raised mortgage rates in one of the first signs of how the government's lending clampdown is rippling through the economy and could tame turbo-charged growth but spook investors. Bank of China's decision to roll back mortgage discounts came after banks throughout the country aggressively called in loans in the second half of January to fall into line with the government's directive to slow lending.
Redbook reported year over year gains of 0.8% and month over month sales of -1.5%. The year over year gains were the lowest since October. Weekly sales reported by ICSC were also weak. Year over year sales were up 0.4% while weekly gains came in at just 0.1%.
The Treasury Department said Wednesday it expects to hit the government's debt ceiling by the end of February, putting pressure on Congress to raise the limit from its current level of $12.4 trillion.
Treasury said it is working closely with Congress to raise the ceiling. The Senate has approved legislation to increase it by $1.9 trillion to $14.3 trillion, but the House has yet to pass the measure. A ceiling that high would equal about $45,000 for every American.
"Judging from market valuations, I sense quite a gap between consensus market expectations and key political and economic realities, especially in the U.S. If the gap isn’t bridged by the validation of the more optimistic expectations, investors may well find that January’s global equity sell-off was just a precursor to a disappointing year for several asset classes, including stocks." - Mohamed El-Erian
David Walker: "Let's put it this way: Spending last year was about $3.5 trillion. The deficit was $1.42 trillion, which means that revenues were about $2.1 trillion. So $2.1 trillion is equal to their annual income.
The total national debt right now is $12.3 trillion. So we owe five to six times more than we make every year. But that's not the big deal.
In addition to that, there is another $45 trillion to $50 trillion in unfunded obligations that are off the balance sheet, which I think you ought to count. Medicare is the biggest part of it by far, and Social Security is a large part, too. So in reality, we owe between 25 and 30 times what we make every year."
On Feb. 6, 400 homes will be auctioned off in Phoenix.
Russia and Britain said Wednesday that they would welcome Iran's readiness to accept a proposal aimed at ending the standoff over its nuclear program as a "positive sign.
The ISM Services Index for January came in at 50.5, which is essentially in-line with the 51.0 that was expected and up slightly from the 50.1 that was posted in the previous reading.
Crude inventories rose by 2.3 million barrels, or 0.7 percent, to 329 million barrels, which is 6.1 percent below year-ago levels, according to the Energy Department's Energy Information Administration's weekly report.
Analysts expected a drop of 1 million barrels for the week ended Jan. 29, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Gasoline inventories fell by 1.3 million barrels, or 0.6 percent, to 228.1 million barrels. That missed analysts' expectations and was 5 percent above year-ago levels.
AccuWeather: "The next storm taking aim at the mid-Atlantic for the end of the week will be a big one, perhaps on par with the storm before Christmas. However, this storm will be much more extensive, stretching from the central and northern Plains to the Atlantic Coast. This somewhat warmer, wetter snowstorm will deliver back breaking snow to some locations and blizzard conditions to others. A nightmare for ground and air travel is in the making into the weekend. An invasion of frigid air during and following this storm could set the stage for more troublesome snow and ice as February progresses."
Wal-Mart Stores Inc Chief Executive Mike Duke said in an employee memo Wednesday that the company plans to cut about 300 home-office jobs in Northwest Arkansas, primarily in the corporate support areas. The move came after the company said last month it would cut more than 11,000 jobs at Sam's Club and outsource its product sampling and demonstration among other restructuring moves.
. Retreating after its best two-day advance since early November, the Dow Jones Industrial Average fell 26.3 points to 10,270.55. The S&P 500 Index declined 6.04 points to 1,097.28. Up for a third consecutive session, the Nasdaq Composite Index added nearly 1 point to 2,190.91.
Private-sector firms in the U.S. eliminated 22,000 jobs in January, the 24th decline in a row, according to the ADP employment report released Wednesday. It was the fewest jobs lost since 22,000 jobs were added in January 2008. In December, a revised 61,000 jobs were lost, compared with the 84,000 originally reported, ADP said. The ADP jobs data come two days before the Bureau of Labor Statistics releases its estimate of January nonfarm payrolls. Economists surveyed by MarketWatch are looking for payrolls to rise 20,000 in the BLS survey
The US could lose its Aaa bond rating at Moody’s (CNBC).
The Obama administration says the government will grow to 2.15 million employees this year, topping 2 million for the first time since President Clinton declared that "the era of big government is over" and joined forces with a Republican-led Congress in the 1990s to pare back the federal work force.
Most of the increases are on the civilian side, which will grow by 153,000 workers, to 1.43 million people, in fiscal 2010.
According to a study from the nation's largest food bank operator, the number of Americans in need of food aid has jumped 46 percent in three years, including a 50 percent jump in the number of children needing food assistance, and a 64 percent increase in hunger in senior citizens' homes.
The study, Hunger in America 2010, found that 37 million people, or roughly one in eight US residents, received food aid in 2009. That's a 46 percent jump from a similar survey carried out in 2006.
A major Chinese bank has raised mortgage rates in one of the first signs of how the government's lending clampdown is rippling through the economy and could tame turbo-charged growth but spook investors. Bank of China's decision to roll back mortgage discounts came after banks throughout the country aggressively called in loans in the second half of January to fall into line with the government's directive to slow lending.
Redbook reported year over year gains of 0.8% and month over month sales of -1.5%. The year over year gains were the lowest since October. Weekly sales reported by ICSC were also weak. Year over year sales were up 0.4% while weekly gains came in at just 0.1%.
The Treasury Department said Wednesday it expects to hit the government's debt ceiling by the end of February, putting pressure on Congress to raise the limit from its current level of $12.4 trillion.
Treasury said it is working closely with Congress to raise the ceiling. The Senate has approved legislation to increase it by $1.9 trillion to $14.3 trillion, but the House has yet to pass the measure. A ceiling that high would equal about $45,000 for every American.
"Judging from market valuations, I sense quite a gap between consensus market expectations and key political and economic realities, especially in the U.S. If the gap isn’t bridged by the validation of the more optimistic expectations, investors may well find that January’s global equity sell-off was just a precursor to a disappointing year for several asset classes, including stocks." - Mohamed El-Erian
David Walker: "Let's put it this way: Spending last year was about $3.5 trillion. The deficit was $1.42 trillion, which means that revenues were about $2.1 trillion. So $2.1 trillion is equal to their annual income.
The total national debt right now is $12.3 trillion. So we owe five to six times more than we make every year. But that's not the big deal.
In addition to that, there is another $45 trillion to $50 trillion in unfunded obligations that are off the balance sheet, which I think you ought to count. Medicare is the biggest part of it by far, and Social Security is a large part, too. So in reality, we owe between 25 and 30 times what we make every year."
On Feb. 6, 400 homes will be auctioned off in Phoenix.
Russia and Britain said Wednesday that they would welcome Iran's readiness to accept a proposal aimed at ending the standoff over its nuclear program as a "positive sign.
The ISM Services Index for January came in at 50.5, which is essentially in-line with the 51.0 that was expected and up slightly from the 50.1 that was posted in the previous reading.
Crude inventories rose by 2.3 million barrels, or 0.7 percent, to 329 million barrels, which is 6.1 percent below year-ago levels, according to the Energy Department's Energy Information Administration's weekly report.
Analysts expected a drop of 1 million barrels for the week ended Jan. 29, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Gasoline inventories fell by 1.3 million barrels, or 0.6 percent, to 228.1 million barrels. That missed analysts' expectations and was 5 percent above year-ago levels.
AccuWeather: "The next storm taking aim at the mid-Atlantic for the end of the week will be a big one, perhaps on par with the storm before Christmas. However, this storm will be much more extensive, stretching from the central and northern Plains to the Atlantic Coast. This somewhat warmer, wetter snowstorm will deliver back breaking snow to some locations and blizzard conditions to others. A nightmare for ground and air travel is in the making into the weekend. An invasion of frigid air during and following this storm could set the stage for more troublesome snow and ice as February progresses."
Wal-Mart Stores Inc Chief Executive Mike Duke said in an employee memo Wednesday that the company plans to cut about 300 home-office jobs in Northwest Arkansas, primarily in the corporate support areas. The move came after the company said last month it would cut more than 11,000 jobs at Sam's Club and outsource its product sampling and demonstration among other restructuring moves.
. Retreating after its best two-day advance since early November, the Dow Jones Industrial Average fell 26.3 points to 10,270.55. The S&P 500 Index declined 6.04 points to 1,097.28. Up for a third consecutive session, the Nasdaq Composite Index added nearly 1 point to 2,190.91.
Tuesday, February 02, 2010
States
2/2/10 States
ZeroHedge: "As ProPublica indicates, there are now 26 states which have depleted their trust funds, among these are the usual suspects including California, Michigan, New York, Pennsylvania and Ohio, which now rely exclusively on borrowings from the Federal government to prevent the cessation of insurance payments to recently unemployed workers. Currently all states collectively posses $10.7 billion in trust fund assets(with the bulk held by less impacted states such as Washington ($2.6 billion), Louisiana ($1.1 billion) and Oregon ($1.1 billion). On the other hand, 26 states currently rely exclusively on the Federal Government, and have borrowed a combined $30 billion through December to fund payments. ProPublica estimates that another 8 states will be insolvent within 6 months, as their trust funds also approach 0."
Spending by U.S. consumers increased in December for a third consecutive month, signaling the biggest part of the economy will contribute more to growth in coming months.
The 0.2 percent increase in purchases was less than anticipated and followed a 0.7 percent gain in November that was larger than previously estimated, Commerce Department figures showed today in Washington. Incomes climbed 0.4 percent, exceeding expectations.
Don't expect to see much apartment construction in the Inland Empire any time soon. As everyone knows, a glut of foreclosed homes has flooded much of Riverside and San Bernardino counties, and those homes compete with apartments for tenants, according to a new report by real estate brokerage Marcus & Millichap.
That's especially true in outlying areas such as Palm Springs, Perris and southwest Riverside County, the report said.
Waning demand and competition from foreclosed houses should drive Inland Empire vacancy up slightly to almost 10% this year. That's a much slower rise, however, from the jump of 2.4 percentage points last year.
Asking rents are forecast to fall 3.7% to an average of $969 a month, while actual rents should fall 5.6% to $895.
Those dreary numbers for landlords will result in the completion of just 520 new apartments this year, down from 1,260 units last year, Marcus & Millichap said.
Buyers returned to the market for U.S. preowned homes in December after a federal tax credit was reinstated, according to a survey of real estate agents released Tuesday by the National Association of Realtors. The pending home sales index rose 1% in December after plunging 16.4% in November, with buyers reacting first to the expiration and then to the return of the tax credit, NAR data showed. The index is up 10.9% compared with December 2008. The gain in the pending sales index portends a similar gain in existing home sales for January, which will be reported in three weeks. In December, existing home sales fell 16.7%.
Treasury Secretary Timothy Geithner said the U.S. can't make deep and immediate budget cuts.
U.S. housing vacancy rates remained near all-time highs in the fourth quarter, the Commerce Department reported Tuesday. For rental housing, the vacancy rate fell to 10.6% in the fourth quarter from a record 11.1% in the third quarter. For homes typically occupied by the owner, the vacancy rate rose to 2.7% from 2.6%. The home ownership rate fell to 67.2% from 67.6%, the lowest ownership rate since early 2000. Before the housing bubble burst, the rental vacancy rate had never been above 9%, and the ownership vacancy rate had never been above 2%. The data show 2.1 million vacant housing units for sale and 4.5 million units for rent, an over supply that has depressed prices and rents.
Crude oil for March delivery finished up $2.80, or 3.6%, at $77.23 a barrel at the New York Mercantile Exchange. Gold for April finished up $13, or 1.2%, at $1,118 an ounce at the New York Mercantile Exchange.
The Dow Jones Industrial Average gained 111.32 points to close at 10,296.85. The S&P 500 Index rose 14.12 points to 1,103.31. The Nasdaq Composite Index climbed 18.86 points to 2,190.06.
ZeroHedge: "As ProPublica indicates, there are now 26 states which have depleted their trust funds, among these are the usual suspects including California, Michigan, New York, Pennsylvania and Ohio, which now rely exclusively on borrowings from the Federal government to prevent the cessation of insurance payments to recently unemployed workers. Currently all states collectively posses $10.7 billion in trust fund assets(with the bulk held by less impacted states such as Washington ($2.6 billion), Louisiana ($1.1 billion) and Oregon ($1.1 billion). On the other hand, 26 states currently rely exclusively on the Federal Government, and have borrowed a combined $30 billion through December to fund payments. ProPublica estimates that another 8 states will be insolvent within 6 months, as their trust funds also approach 0."
Spending by U.S. consumers increased in December for a third consecutive month, signaling the biggest part of the economy will contribute more to growth in coming months.
The 0.2 percent increase in purchases was less than anticipated and followed a 0.7 percent gain in November that was larger than previously estimated, Commerce Department figures showed today in Washington. Incomes climbed 0.4 percent, exceeding expectations.
Don't expect to see much apartment construction in the Inland Empire any time soon. As everyone knows, a glut of foreclosed homes has flooded much of Riverside and San Bernardino counties, and those homes compete with apartments for tenants, according to a new report by real estate brokerage Marcus & Millichap.
That's especially true in outlying areas such as Palm Springs, Perris and southwest Riverside County, the report said.
Waning demand and competition from foreclosed houses should drive Inland Empire vacancy up slightly to almost 10% this year. That's a much slower rise, however, from the jump of 2.4 percentage points last year.
Asking rents are forecast to fall 3.7% to an average of $969 a month, while actual rents should fall 5.6% to $895.
Those dreary numbers for landlords will result in the completion of just 520 new apartments this year, down from 1,260 units last year, Marcus & Millichap said.
Buyers returned to the market for U.S. preowned homes in December after a federal tax credit was reinstated, according to a survey of real estate agents released Tuesday by the National Association of Realtors. The pending home sales index rose 1% in December after plunging 16.4% in November, with buyers reacting first to the expiration and then to the return of the tax credit, NAR data showed. The index is up 10.9% compared with December 2008. The gain in the pending sales index portends a similar gain in existing home sales for January, which will be reported in three weeks. In December, existing home sales fell 16.7%.
Treasury Secretary Timothy Geithner said the U.S. can't make deep and immediate budget cuts.
U.S. housing vacancy rates remained near all-time highs in the fourth quarter, the Commerce Department reported Tuesday. For rental housing, the vacancy rate fell to 10.6% in the fourth quarter from a record 11.1% in the third quarter. For homes typically occupied by the owner, the vacancy rate rose to 2.7% from 2.6%. The home ownership rate fell to 67.2% from 67.6%, the lowest ownership rate since early 2000. Before the housing bubble burst, the rental vacancy rate had never been above 9%, and the ownership vacancy rate had never been above 2%. The data show 2.1 million vacant housing units for sale and 4.5 million units for rent, an over supply that has depressed prices and rents.
Crude oil for March delivery finished up $2.80, or 3.6%, at $77.23 a barrel at the New York Mercantile Exchange. Gold for April finished up $13, or 1.2%, at $1,118 an ounce at the New York Mercantile Exchange.
The Dow Jones Industrial Average gained 111.32 points to close at 10,296.85. The S&P 500 Index rose 14.12 points to 1,103.31. The Nasdaq Composite Index climbed 18.86 points to 2,190.06.
Monday, February 01, 2010
Greece and the U.S.
2/1/10 Greece and the U.S.
Americans increased their spending in December at the slowest pace since September, allowing their savings rate to drift to the highest level since June, the Commerce Department estimated Monday. Real consumer spending (that is, adjusted for inflation) rose a seasonally adjusted 0.1% in December after a 0.4% gain in November. Meanwhile, real after-tax incomes rose a seasonally adjusted 0.3% in December, boosted by transfer payments, small-business profits, income from investments, and a small gain in wages. With incomes rising faster than spending, the personal savings rate rose to 4.8% of disposable incomes, the highest since June.
Exxon Mobil Corp. said Monday its fourth-quarter net income fell 23% to $6.05 billion, or $1.27 a share, from $7.82 billion, or $1.54 a share in the year-ago period. Revenue rose to $89.8 billion from $84.7 billion. Wall Street analysts expected earnings of $1.17 a share for the oil giant, according to a survey by FactSet Research. Capital and exploration spending rose 21% to $8.3 billion. Oil-equivalent production increased about 2%. Excluding the impacts of entitlement volumes, quotas and divestments, production rose more than 3%.
As refineries from New Jersey to New Mexico close at the fastest pace in three decades, traders in Singapore are profiting from a new plant on India’s west coast and a ship heading for Florida filled with jet fuel from Taiwan.
The so-called refinery crack spread in Singapore, representing the value of fuels minus the cost of crude oil, may climb 50 percent to as much as $4.50 a barrel this year, according to a Bloomberg News survey of five analysts. U.S. refinery margins will drop 35 percent by December, futures contracts on the New York
John Hussman: "Presently, stocks remain richly valued on the basis of normalized earnings, book values, dividends, revenues and other metrics. Investors now rely on the renewed attainment of bubble valuations in order to achieve acceptable returns.
If you keep one thing in mind during the current earnings season, it should be that operating earnings significantly overestimate what Warren Buffett would refer to as "owner earnings" - the actual amounts that are paid out or retained for the benefit of shareholders. Again, stocks are nothing but a claim to the long-term stream of cash flows that will actually be delivered to investors over time. Everything else is hype, smoke and mirrors."
President Barack Obama proposes a $3.8 trillion fiscal 2011 budget today that calls for $100 billion in additional stimulus spending and projects this year’s deficit will hit a record $1.6 trillion.This is almost 11% of the GDP.
Foreign central banks' UST holdings at the Fed declined for the first time in over two years.
The ISM factory index jumped to 58.4% in January from 54.9% in December. This is well above expectations. The consensus forecast of estimates collected by MarketWatch was for the index to rise to 56.0%.
Spending on U.S. construction projects fell at a seasonally adjusted rate of 1.2% in December, the fifth decline in the past six months and the lowest rate since August 2003, the Commerce Department estimated Monday. For all of 2009, total construction spending fell 12.4% to $939.1 billion from $1.07 trillion in 2008. It was the largest decline on record, dating to 1964. The 1.2% decline in December was much worse than the 0.4% drop expected by economists surveyed by MarketWatch. November's outlays were revised down to a 1.2% drop from the 0.6% decline earlier reported. Private residential outlays fell 2.8%, private nonresidential outlays rose 0.2%, and public outlays fell 1.2%.
Wells Fargo & Co., unlike its three biggest competitors, is so convinced interest rates will rise that it sacrificed as much as $1 billion last year cutting back on fixed-income investments.
The nation’s fourth-largest bank, whose biggest shareholder is Warren Buffett’s Berkshire Hathaway Inc., reduced investments in mostly fixed-income securities by $34 billion in 2009’s second half, company filings show. JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. boosted their holdings by an average of $35.5 billion.
By scaling back on the so-called carry trade, in which banks borrow in overnight lending markets at rates near zero and invest in higher-yielding securities, San Francisco-based Wells Fargo aims to protect against losses when rates rise. The three other lenders increased investments on the theory that profit will outpace any future losses.
“The bias is for higher rates,” Chief Executive Officer John Stumpf, 56, said on the company’s fourth-quarter earnings call. “We’re willing to wait for that to happen. We think that’s the better trade.”
Ried Thunberg’s survey shows most money managers are bearish on Treasuries. The company’s index measuring the market outlook through June fell to 42 for the seven days ended Jan. 29 from 43 the week before. A figure less than 50 shows investors expect prices to fall. The company, in Jersey City, New Jersey, interviewed 26 fund managers controlling $1.42 trillion.
The Dow Jones Industrial Average rose 118.20, or 1.2% to close at 10,185.53, its biggest point and percentage gain since Jan. 4. The S&P 500 gained 1.4 percent and the tech-heavy Nasdaq added 1.1 percent.
Americans increased their spending in December at the slowest pace since September, allowing their savings rate to drift to the highest level since June, the Commerce Department estimated Monday. Real consumer spending (that is, adjusted for inflation) rose a seasonally adjusted 0.1% in December after a 0.4% gain in November. Meanwhile, real after-tax incomes rose a seasonally adjusted 0.3% in December, boosted by transfer payments, small-business profits, income from investments, and a small gain in wages. With incomes rising faster than spending, the personal savings rate rose to 4.8% of disposable incomes, the highest since June.
Exxon Mobil Corp. said Monday its fourth-quarter net income fell 23% to $6.05 billion, or $1.27 a share, from $7.82 billion, or $1.54 a share in the year-ago period. Revenue rose to $89.8 billion from $84.7 billion. Wall Street analysts expected earnings of $1.17 a share for the oil giant, according to a survey by FactSet Research. Capital and exploration spending rose 21% to $8.3 billion. Oil-equivalent production increased about 2%. Excluding the impacts of entitlement volumes, quotas and divestments, production rose more than 3%.
As refineries from New Jersey to New Mexico close at the fastest pace in three decades, traders in Singapore are profiting from a new plant on India’s west coast and a ship heading for Florida filled with jet fuel from Taiwan.
The so-called refinery crack spread in Singapore, representing the value of fuels minus the cost of crude oil, may climb 50 percent to as much as $4.50 a barrel this year, according to a Bloomberg News survey of five analysts. U.S. refinery margins will drop 35 percent by December, futures contracts on the New York
John Hussman: "Presently, stocks remain richly valued on the basis of normalized earnings, book values, dividends, revenues and other metrics. Investors now rely on the renewed attainment of bubble valuations in order to achieve acceptable returns.
If you keep one thing in mind during the current earnings season, it should be that operating earnings significantly overestimate what Warren Buffett would refer to as "owner earnings" - the actual amounts that are paid out or retained for the benefit of shareholders. Again, stocks are nothing but a claim to the long-term stream of cash flows that will actually be delivered to investors over time. Everything else is hype, smoke and mirrors."
President Barack Obama proposes a $3.8 trillion fiscal 2011 budget today that calls for $100 billion in additional stimulus spending and projects this year’s deficit will hit a record $1.6 trillion.This is almost 11% of the GDP.
Foreign central banks' UST holdings at the Fed declined for the first time in over two years.
The ISM factory index jumped to 58.4% in January from 54.9% in December. This is well above expectations. The consensus forecast of estimates collected by MarketWatch was for the index to rise to 56.0%.
Spending on U.S. construction projects fell at a seasonally adjusted rate of 1.2% in December, the fifth decline in the past six months and the lowest rate since August 2003, the Commerce Department estimated Monday. For all of 2009, total construction spending fell 12.4% to $939.1 billion from $1.07 trillion in 2008. It was the largest decline on record, dating to 1964. The 1.2% decline in December was much worse than the 0.4% drop expected by economists surveyed by MarketWatch. November's outlays were revised down to a 1.2% drop from the 0.6% decline earlier reported. Private residential outlays fell 2.8%, private nonresidential outlays rose 0.2%, and public outlays fell 1.2%.
Wells Fargo & Co., unlike its three biggest competitors, is so convinced interest rates will rise that it sacrificed as much as $1 billion last year cutting back on fixed-income investments.
The nation’s fourth-largest bank, whose biggest shareholder is Warren Buffett’s Berkshire Hathaway Inc., reduced investments in mostly fixed-income securities by $34 billion in 2009’s second half, company filings show. JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. boosted their holdings by an average of $35.5 billion.
By scaling back on the so-called carry trade, in which banks borrow in overnight lending markets at rates near zero and invest in higher-yielding securities, San Francisco-based Wells Fargo aims to protect against losses when rates rise. The three other lenders increased investments on the theory that profit will outpace any future losses.
“The bias is for higher rates,” Chief Executive Officer John Stumpf, 56, said on the company’s fourth-quarter earnings call. “We’re willing to wait for that to happen. We think that’s the better trade.”
Ried Thunberg’s survey shows most money managers are bearish on Treasuries. The company’s index measuring the market outlook through June fell to 42 for the seven days ended Jan. 29 from 43 the week before. A figure less than 50 shows investors expect prices to fall. The company, in Jersey City, New Jersey, interviewed 26 fund managers controlling $1.42 trillion.
The Dow Jones Industrial Average rose 118.20, or 1.2% to close at 10,185.53, its biggest point and percentage gain since Jan. 4. The S&P 500 gained 1.4 percent and the tech-heavy Nasdaq added 1.1 percent.
Sunday, January 31, 2010
Bang
1/31/10 Bang
This Time is Different (Carmen M. Reinhart and Kenneth Rogoff): "Perhaps more than anything else, failure to recognize the precariousness and fickleness of confidence-especially in cases in which large short-term debts need to be rolled over continuously-is the key factor that gives rise to the this-time-is-different syndrome. Highly indebted governments, banks, or corporations can seem to be merrily rolling along for an extended period, when bang!-confidence collapses, lenders disappear, and a crisis hits."
Private equity firms have financed the purchase of 100,000 units of rent-regulated housing across New York City since 2005, according to the Association for Neighborhood and Housing Development, a coalition of nonprofit housing groups in New York. These owners account for almost 10 percent of the city’s rent-regulated housing.
Benjamin Dulchin, executive director of the Association for Neighborhood and Housing Development says that harassment is central to rental real estate investments backed by private equity firms because the onerous debt they have taken on requires significantly higher revenue than can be generated in rent-regulated buildings.
And, he argues, even if these properties go into bankruptcy, the pattern of harassment may continue. Distressed-debt investors interested in buying them may continue trying to force out tenants, he said.
John Mauldin: "And if you look at consumer spending in the data, you find that it actually declined in the 4th quarter, both annually and from the previous quarter. "Domestic demand" declined from 2.3% in the third quarter to only 1.7% in the fourth quarter. Part of that is clearly the absence of "Cash for Clunkers," but even so that is not a sign of economic strength.
Second, as my friend David Rosenberg pointed out, imports fell over the 4th quarter. Usually in a heavy inventory-rebuilding cycle, imports rise because a portion of the materials businesses need to build their own products comes from foreign sources. Thus the drop in imports is most unusual. Falling imports, which is a sign of economic retrenching, also increases the statistical GDP number.
Third, I have seen no analysis (yet) on the impact of the stimulus spending, but it was 90% of the growth in the third quarter, or a little less than 2%....In the fourth quarter, aggregate private hours worked contracted at a 0.5% annual rate and what we can tell you is that such a decline in labor input has never before, scanning over 50 years of data, coincided with a GDP headline this good.
"Normally, GDP growth is 1.7% when hours worked is this weak, and that is exactly the trend that was depicted this week in the release of the Chicago Fed's National Activity Index, which was widely ignored. On the flip side, when we have in the past seen GDP growth come in at or near a 5.7% annual rate, what is typical is that hours worked grows at a 3.7% rate. No matter how you slice it, the GDP number today represented not just a rare but an unprecedented event, and as such, we are willing to treat the report with an entire saltshaker - a few grains won't do."
Greece is running a budget deficit of 12.5%. How does that compare with the U.S.?
Mike Burk: "The sell off of the last 2 weeks has the market, by many measures, the most oversold it has been since the rally began last March. At this time there is no evidence of a developing top so the market is likely to recover, at least, to its previous highs.
I expect the major averages to be higher on Friday February 5 than they were on Friday January 29.
Last weeks positive forecast was a miss."
This Time is Different (Carmen M. Reinhart and Kenneth Rogoff): "Perhaps more than anything else, failure to recognize the precariousness and fickleness of confidence-especially in cases in which large short-term debts need to be rolled over continuously-is the key factor that gives rise to the this-time-is-different syndrome. Highly indebted governments, banks, or corporations can seem to be merrily rolling along for an extended period, when bang!-confidence collapses, lenders disappear, and a crisis hits."
Private equity firms have financed the purchase of 100,000 units of rent-regulated housing across New York City since 2005, according to the Association for Neighborhood and Housing Development, a coalition of nonprofit housing groups in New York. These owners account for almost 10 percent of the city’s rent-regulated housing.
Benjamin Dulchin, executive director of the Association for Neighborhood and Housing Development says that harassment is central to rental real estate investments backed by private equity firms because the onerous debt they have taken on requires significantly higher revenue than can be generated in rent-regulated buildings.
And, he argues, even if these properties go into bankruptcy, the pattern of harassment may continue. Distressed-debt investors interested in buying them may continue trying to force out tenants, he said.
John Mauldin: "And if you look at consumer spending in the data, you find that it actually declined in the 4th quarter, both annually and from the previous quarter. "Domestic demand" declined from 2.3% in the third quarter to only 1.7% in the fourth quarter. Part of that is clearly the absence of "Cash for Clunkers," but even so that is not a sign of economic strength.
Second, as my friend David Rosenberg pointed out, imports fell over the 4th quarter. Usually in a heavy inventory-rebuilding cycle, imports rise because a portion of the materials businesses need to build their own products comes from foreign sources. Thus the drop in imports is most unusual. Falling imports, which is a sign of economic retrenching, also increases the statistical GDP number.
Third, I have seen no analysis (yet) on the impact of the stimulus spending, but it was 90% of the growth in the third quarter, or a little less than 2%....In the fourth quarter, aggregate private hours worked contracted at a 0.5% annual rate and what we can tell you is that such a decline in labor input has never before, scanning over 50 years of data, coincided with a GDP headline this good.
"Normally, GDP growth is 1.7% when hours worked is this weak, and that is exactly the trend that was depicted this week in the release of the Chicago Fed's National Activity Index, which was widely ignored. On the flip side, when we have in the past seen GDP growth come in at or near a 5.7% annual rate, what is typical is that hours worked grows at a 3.7% rate. No matter how you slice it, the GDP number today represented not just a rare but an unprecedented event, and as such, we are willing to treat the report with an entire saltshaker - a few grains won't do."
Greece is running a budget deficit of 12.5%. How does that compare with the U.S.?
Mike Burk: "The sell off of the last 2 weeks has the market, by many measures, the most oversold it has been since the rally began last March. At this time there is no evidence of a developing top so the market is likely to recover, at least, to its previous highs.
I expect the major averages to be higher on Friday February 5 than they were on Friday January 29.
Last weeks positive forecast was a miss."
Saturday, January 30, 2010
Bank Failures
1/30/10 Bank Failures
Three bank failures in Florida, Georgia and Minnesota have brought the number of bank failures in 2010 to 12, according to the Federal Deposit Insurance Corp. late Friday. In Florida, Immokalee's Florida Community Bank will have its $795.5 million in deposits taken over by Miami's Premier American Bank. First National Bank of Georgia in Carrollton will have its $757.9 million in deposits taken over by Carrollton's Community & Southern Bank. Marshall Bank of Hallock, Minn., will have its $54.7 million in deposits taken over by United Valley Bank of Cavalier, N.D. Cornelia, Ga.-based Community Bank & Trust was closed by regulators Friday, bringing the number of U.S. bank failures this year to 13.
Roubini Calls U.S. Growth `Dismal and Poor', Predicts Second-Half Slowdown
Los Angeles, Calif.-based First Regional Bank was closed by regulators Friday, marking the 14th U.S. bank failure of 2010.
Chinese state media says the defense ministry is suspending military exchanges with the United States over its planned $6.4 billion arms sale to neighboring Taiwan.
Rob Hanna: "Amazingly, Thursday’s close marked a 50-day low in the S&P. It was just last week that the S&P closed at a 50-day high. Moving from a 50-day closing high to a 50-day closing low so quickly is quite rare. I only found 6 other instances. Unfortunately, while it appears rare, it doesn’t appear predictive."
Tim W. Wood: "I can tell you now that the Bear has a few more luring tricks up his sleeve. My cycles work tells me that there will be a rebound rally on both a short and an intermediate degree ahead. The short-term rebound will serve to convince a few more that the decline is over and again they will reenter, and just when all the sheep are pulled back in, the Bear will make another sneak attack. This will in turn give us a bit more of a wash out, and then once the market begins to move back up with the intermediate degree bounce, Kudlow, Cramer and the gang will be screaming that we have now seen a healthy and needed correction and that we are once again back on the road to prosperity. But, the cycles work suggests otherwise and again, that intermediate-term rebound will serve to suck every last drop of cash it can back into the market. Then, depending on how the next rally of intermediate degree sets up that will likely set the stage for the Bear to return with full vengeance....From a Dow theory perspective we now have a short-term non-confirmation in place. Reason being, the closing high for the Transports occurred on January 11th, while the closing high for the Industrials occurred on January 19th."
Food Stamps and other entitlement programs have replaced the food lines of the Great Depression.
Argentinian President Cristina Fernandez has told a gathering at her Presidential Palace that pork is even better than Viagra for spicing things up in the bedroom - and credited a satisfying weekend with her husband to the meat.
"I've just been told something I didn't know, that eating pork improves your sex life," she said in a televised speech to the leaders of the Argentinian meat industry, "I'd say it's a lot nicer to eat a bit of grilled pork than take Viagra."
Argentina’s central bank President Martin Redrado resigned last night after a standoff with the government over its plan to use $6.6 billion in reserves to pay debt due this year. “I have followed the Constitution, the law and the central bank rules,” Redrado said during a press conference in Buenos Aires. “My cycle has ended at the bank.”
ZeroHedge: "The average loss severity on CMBS liquidation has just hit a record of 52.7%. That means that on average less than half the loan is recovered in liquidation."
Japan’s housing starts fell to the lowest level since the nation celebrated its postwar recovery by hosting the Olympics in 1964, as builders were hobbled by dwindling household incomes and sustained deflation.
Construction companies broke ground on 788,410 homes last year, 27.9 percent fewer than in 2008, the Land Ministry said today in Tokyo. That was the lowest since 751,429 recorded in 1964. The pace of decrease eased in the past four months.
The US administration is speeding up deployment of defenses against potential Iranian missile attacks in the Gulf to heed off any possible retaliation, The New York Times reported Saturday.
The move involves placing specialized ships off the Iranian coast and anti-missile systems in at least four Arab countries -- Qatar, the United Arab Emirates, Bahrain and Kuwait -- the Times said, citing administration and military officials.
Oman has also been approached, although no Patriot missiles have been deployed there yet, US officials told the newspaper, adding that the willingness of other Arab states to accept the US defenses reflects growing unease in the region over Iran's ambitions and capabilities.
Three bank failures in Florida, Georgia and Minnesota have brought the number of bank failures in 2010 to 12, according to the Federal Deposit Insurance Corp. late Friday. In Florida, Immokalee's Florida Community Bank will have its $795.5 million in deposits taken over by Miami's Premier American Bank. First National Bank of Georgia in Carrollton will have its $757.9 million in deposits taken over by Carrollton's Community & Southern Bank. Marshall Bank of Hallock, Minn., will have its $54.7 million in deposits taken over by United Valley Bank of Cavalier, N.D. Cornelia, Ga.-based Community Bank & Trust was closed by regulators Friday, bringing the number of U.S. bank failures this year to 13.
Roubini Calls U.S. Growth `Dismal and Poor', Predicts Second-Half Slowdown
Los Angeles, Calif.-based First Regional Bank was closed by regulators Friday, marking the 14th U.S. bank failure of 2010.
Chinese state media says the defense ministry is suspending military exchanges with the United States over its planned $6.4 billion arms sale to neighboring Taiwan.
Rob Hanna: "Amazingly, Thursday’s close marked a 50-day low in the S&P. It was just last week that the S&P closed at a 50-day high. Moving from a 50-day closing high to a 50-day closing low so quickly is quite rare. I only found 6 other instances. Unfortunately, while it appears rare, it doesn’t appear predictive."
Tim W. Wood: "I can tell you now that the Bear has a few more luring tricks up his sleeve. My cycles work tells me that there will be a rebound rally on both a short and an intermediate degree ahead. The short-term rebound will serve to convince a few more that the decline is over and again they will reenter, and just when all the sheep are pulled back in, the Bear will make another sneak attack. This will in turn give us a bit more of a wash out, and then once the market begins to move back up with the intermediate degree bounce, Kudlow, Cramer and the gang will be screaming that we have now seen a healthy and needed correction and that we are once again back on the road to prosperity. But, the cycles work suggests otherwise and again, that intermediate-term rebound will serve to suck every last drop of cash it can back into the market. Then, depending on how the next rally of intermediate degree sets up that will likely set the stage for the Bear to return with full vengeance....From a Dow theory perspective we now have a short-term non-confirmation in place. Reason being, the closing high for the Transports occurred on January 11th, while the closing high for the Industrials occurred on January 19th."
Food Stamps and other entitlement programs have replaced the food lines of the Great Depression.
Argentinian President Cristina Fernandez has told a gathering at her Presidential Palace that pork is even better than Viagra for spicing things up in the bedroom - and credited a satisfying weekend with her husband to the meat.
"I've just been told something I didn't know, that eating pork improves your sex life," she said in a televised speech to the leaders of the Argentinian meat industry, "I'd say it's a lot nicer to eat a bit of grilled pork than take Viagra."
Argentina’s central bank President Martin Redrado resigned last night after a standoff with the government over its plan to use $6.6 billion in reserves to pay debt due this year. “I have followed the Constitution, the law and the central bank rules,” Redrado said during a press conference in Buenos Aires. “My cycle has ended at the bank.”
ZeroHedge: "The average loss severity on CMBS liquidation has just hit a record of 52.7%. That means that on average less than half the loan is recovered in liquidation."
Japan’s housing starts fell to the lowest level since the nation celebrated its postwar recovery by hosting the Olympics in 1964, as builders were hobbled by dwindling household incomes and sustained deflation.
Construction companies broke ground on 788,410 homes last year, 27.9 percent fewer than in 2008, the Land Ministry said today in Tokyo. That was the lowest since 751,429 recorded in 1964. The pace of decrease eased in the past four months.
The US administration is speeding up deployment of defenses against potential Iranian missile attacks in the Gulf to heed off any possible retaliation, The New York Times reported Saturday.
The move involves placing specialized ships off the Iranian coast and anti-missile systems in at least four Arab countries -- Qatar, the United Arab Emirates, Bahrain and Kuwait -- the Times said, citing administration and military officials.
Oman has also been approached, although no Patriot missiles have been deployed there yet, US officials told the newspaper, adding that the willingness of other Arab states to accept the US defenses reflects growing unease in the region over Iran's ambitions and capabilities.
Friday, January 29, 2010
January
1/29/10 January
Benefit costs rose 0.5% in the quarter, while wages and salaries rose 0.5%. For all of 2009, the employment cost index increased a record low 1.5%. Economists said the weak trend is not surprising given high unemployment rate.
February may be one of the coldest ones in the last 50 years. There's a warning from accuweather.com that much of the nation, including Oakland County, should prepare for another round of severe cold and snowy conditions, starting next week. AccuWeather.com senior meteorologist and long range forecaster Joe Bastardi sees a "top-10 cold February" in store for much of the United States, compared to the last 50 years.
"I believe the physical drivers are all there for a major cold month, much like this December was," Bastardi said.
Tony Blair opened himself up to a charge of misleading Parliament today when he told the Iraq Inquiry that by any objective analysis the threat posed by Saddam Hussein's chemical and biological weapons programme had not increased after 9/11.
Chevron Corp said fourth-quarter net income fell to $3.07 billion, or $1.53 a share, from $4.9 billion, or $2.44 a share in the year-ago period. Wall Street analysts expected earnings of $1.66 a share for Chevron, according to a survey by FactSet Research. Net oil-equivalent production for the quarter was more than 9% higher than the year-ago period, driven by new capital projects. The oil major said revenue rose to $48 billion from $43 billion, on higher oil prices and production increases. Chevron's upstream earnings rose to $4 billion from $3.2 billion, while its refining and marketing business swung to a loss of $613 million from net income of $2.1 billion.
Real gross domestic product increased at a 5.7% seasonally adjusted annual rate in the final three months of the year. About two-thirds of the growth came via the swing in inventories. The 5.7% increase was in line with the 5.4% gain expected by economists surveyed by MarketWatch. Even with healthy growth in the second half of the year, the economy shrank 2.4% in 2009, the worst drop since the 10.9% decline in 1946. Inventories added 3.39%.
"The GDP number today represented not just a rare but an unprecedented event, and as such, we are willing to treat the report with an entire saltshaker — a few grains won’t do." David Rosenberg
A senior Federal Reserve official warned on Friday that the uncertain path of interest rates in coming months poses risks for banks inattentive to the match of durations among their assets and liabilities.
Federal Reserve Vice Chairman Donald Kohn told a conference sponsored by the Federal Deposit Insurance Corp that the usual uncertainty about interest rates is compounded in the current situation by the fact that rates are near zero and the Fed has massively expanded the amount of reserves in the banking system.
"Borrowing short and lending long is an inherently risky business strategy," Kohn said. "Intermediaries need to be sure that as the economy recovers, they aren't also hit by the interest rate risk that often accompanies this sort of mismatch in asset and liability maturities."
China is expected to raise the deposit reserve requirement ratio after the Lunar New Year holidays to curb surging liquidity.
The Reuters/University of Michigan consumer sentiment index rose to 74.4 in January from 72.5 in December, according to media reports. It's the highest since January 2008.
The Chicago purchasing managers index rose to 61.5% from 58.7% in December.
-Natural gas futures climbed Friday, supported by wintry weather in the U.S. Midwest and Northeast.
Natural gas for March delivery on the New York Mercantile Exchange was trading 12.7 cents higher, or 2.47%, at $5.265 per million British thermal units after opening floor trade 8.4 cents higher at $5.222/MMBtu.
Frigid temperatures in the major gas-consuming regions over the next two weeks were expected to bolster the demand for natural gas for heating. Utilities and financial traders were buying up gas in response to the weather forecasts, which had been revised from more moderate outlooks earlier in the week.
"Some of the utilities got caught short going into the weekend," said Ed Kennedy, a broker with Hencorp Becstone Futures in Miami. "It's going to be a lot colder."
Commodity Weather Group, a Bethesda, Md. private forecaster, was predicting below-normal temperatures in the eastern half of the U.S. from January 29 to Feb. 2, and in the Northeast from Feb. 3 to Feb. 7.
"The short-term numbers are colder-than-expected in parts of the Midwest and East Coast," CWG meteorologists wrote in a note to clients Friday.
So far, administration officials have not laid out how they plan to double American exports to $2 trillion in 2015, from $1 trillion today. Mr. Obama said he was starting a National Export Initiative that will "help farmers and small businesses increase their exports," but did not elaborate. White House officials, when pressed, said only that the commerce secretary, Gary F. Locke, would give a speech on the matter next week.
Separately, on Thursday, Mr. Locke announced that, as part of a plan to reduce export burdens on American companies, the United States might remove restrictions on exports of goods with potential military applications when such technologies were available worldwide.
"We have too many controls on items readily available around the world," Mr. Locke told the United States-China Business Council.
Export control rules are meant to keep dual-use technologies like computer encryption software and airplane parts out of the hands of American foes that could use them for military purposes.
India raises bank reserve rate by 75 bps, more than expected; Keeps key interest rates.
Japan Consumer Prices fall 1.3% in December - the 10th monthly decline.
Nasdaq down 5.3% in January, S&P down 3.7%, and Dow down 3.5%.
Benefit costs rose 0.5% in the quarter, while wages and salaries rose 0.5%. For all of 2009, the employment cost index increased a record low 1.5%. Economists said the weak trend is not surprising given high unemployment rate.
February may be one of the coldest ones in the last 50 years. There's a warning from accuweather.com that much of the nation, including Oakland County, should prepare for another round of severe cold and snowy conditions, starting next week. AccuWeather.com senior meteorologist and long range forecaster Joe Bastardi sees a "top-10 cold February" in store for much of the United States, compared to the last 50 years.
"I believe the physical drivers are all there for a major cold month, much like this December was," Bastardi said.
Tony Blair opened himself up to a charge of misleading Parliament today when he told the Iraq Inquiry that by any objective analysis the threat posed by Saddam Hussein's chemical and biological weapons programme had not increased after 9/11.
Chevron Corp said fourth-quarter net income fell to $3.07 billion, or $1.53 a share, from $4.9 billion, or $2.44 a share in the year-ago period. Wall Street analysts expected earnings of $1.66 a share for Chevron, according to a survey by FactSet Research. Net oil-equivalent production for the quarter was more than 9% higher than the year-ago period, driven by new capital projects. The oil major said revenue rose to $48 billion from $43 billion, on higher oil prices and production increases. Chevron's upstream earnings rose to $4 billion from $3.2 billion, while its refining and marketing business swung to a loss of $613 million from net income of $2.1 billion.
Real gross domestic product increased at a 5.7% seasonally adjusted annual rate in the final three months of the year. About two-thirds of the growth came via the swing in inventories. The 5.7% increase was in line with the 5.4% gain expected by economists surveyed by MarketWatch. Even with healthy growth in the second half of the year, the economy shrank 2.4% in 2009, the worst drop since the 10.9% decline in 1946. Inventories added 3.39%.
"The GDP number today represented not just a rare but an unprecedented event, and as such, we are willing to treat the report with an entire saltshaker — a few grains won’t do." David Rosenberg
A senior Federal Reserve official warned on Friday that the uncertain path of interest rates in coming months poses risks for banks inattentive to the match of durations among their assets and liabilities.
Federal Reserve Vice Chairman Donald Kohn told a conference sponsored by the Federal Deposit Insurance Corp that the usual uncertainty about interest rates is compounded in the current situation by the fact that rates are near zero and the Fed has massively expanded the amount of reserves in the banking system.
"Borrowing short and lending long is an inherently risky business strategy," Kohn said. "Intermediaries need to be sure that as the economy recovers, they aren't also hit by the interest rate risk that often accompanies this sort of mismatch in asset and liability maturities."
China is expected to raise the deposit reserve requirement ratio after the Lunar New Year holidays to curb surging liquidity.
The Reuters/University of Michigan consumer sentiment index rose to 74.4 in January from 72.5 in December, according to media reports. It's the highest since January 2008.
The Chicago purchasing managers index rose to 61.5% from 58.7% in December.
-Natural gas futures climbed Friday, supported by wintry weather in the U.S. Midwest and Northeast.
Natural gas for March delivery on the New York Mercantile Exchange was trading 12.7 cents higher, or 2.47%, at $5.265 per million British thermal units after opening floor trade 8.4 cents higher at $5.222/MMBtu.
Frigid temperatures in the major gas-consuming regions over the next two weeks were expected to bolster the demand for natural gas for heating. Utilities and financial traders were buying up gas in response to the weather forecasts, which had been revised from more moderate outlooks earlier in the week.
"Some of the utilities got caught short going into the weekend," said Ed Kennedy, a broker with Hencorp Becstone Futures in Miami. "It's going to be a lot colder."
Commodity Weather Group, a Bethesda, Md. private forecaster, was predicting below-normal temperatures in the eastern half of the U.S. from January 29 to Feb. 2, and in the Northeast from Feb. 3 to Feb. 7.
"The short-term numbers are colder-than-expected in parts of the Midwest and East Coast," CWG meteorologists wrote in a note to clients Friday.
So far, administration officials have not laid out how they plan to double American exports to $2 trillion in 2015, from $1 trillion today. Mr. Obama said he was starting a National Export Initiative that will "help farmers and small businesses increase their exports," but did not elaborate. White House officials, when pressed, said only that the commerce secretary, Gary F. Locke, would give a speech on the matter next week.
Separately, on Thursday, Mr. Locke announced that, as part of a plan to reduce export burdens on American companies, the United States might remove restrictions on exports of goods with potential military applications when such technologies were available worldwide.
"We have too many controls on items readily available around the world," Mr. Locke told the United States-China Business Council.
Export control rules are meant to keep dual-use technologies like computer encryption software and airplane parts out of the hands of American foes that could use them for military purposes.
India raises bank reserve rate by 75 bps, more than expected; Keeps key interest rates.
Japan Consumer Prices fall 1.3% in December - the 10th monthly decline.
Nasdaq down 5.3% in January, S&P down 3.7%, and Dow down 3.5%.
Thursday, January 28, 2010
Debt Ceiling
1/28/10 Debt Ceiling
Bookings for durable goods excluding transportation equipment climbed 0.9 percent last month, more than anticipated, figures from the Commerce Department showed today in Washington. Total orders increased 0.3 percent, less than forecast, depressed by a drop in demand for commercial aircraft. December 2009 new machine orders was down a full 25.1% compared with 2008 figures.
Initial jobless applications declined to 470,000 in the week ended Jan. 23, higher than anticipated, from 478,000 the prior week, Labor Department figures showed today in Washington. The total number of people receiving unemployment insurance dropped to the lowest level in a year and those receiving extended benefits also fell.
The four-week average of initial claims rose 9,500 to 456,250. A Labor Department official said there were no reports of backlogs at state offices. Meanwhile, the number of Americans receiving state jobless benefits held steady fell 57,000 to 4.60 million in the week ending Jan 16. The four-week moving average of continuing claims fell 94,250 to 4.7 million. Overall, 11.5 million Americans received federal and state unemployment benefits on an unadjusted basis in the week ended Jan. 9, the latest period for which the data is available. This is down from 12.0 million in the prior week.
The Baltic Dry Index fell 5% today and has broken below 3000 for the first time since Oct 28th and follows the recent correction in Chinese/Hong Kong equities. The market pullback has been of course due to policy steps to slow lending growth and tame the growing property/construction bubble that is heavily reliant on steel and thus iron ore and iron ore is the key commodity in dry bulk.
John Carney: "
Here's a list of what the iPad replaces:
That's right: nothing.
The iPad replaces nothing I have. It isn't a usefully functional personal computer and it doesn't work well as a phone. Instead, it would add to the stuff I carry around with me.
I don't want more stuff to carry around.
When I asked some of my Twitter friends about this, they told me that the iPad would replace newspapers and magazines. I think they're wrong. A newspaper or a magazine is easily acquired, cheap, light weight, resilient, foldable for easy storage, and disposable. If I accidentally leave it somewhere, I haven't lost much. When I'm done with the paper, I just throw it away.
The iPad is the opposite of these things. It is expensive, heavy, fragile, stiff, and permanent. When I'm done reading something, I would have to make sure I remember not to leave my iPad behind. I would be stuck with it even when there's nothing I want to do with it. I'll probably have to carry an entirely new bag just to tote the thing around."
Another 153,127 workers being laid off in mass firings in December.
The expansion of the Panama Canal slashes the cost of shipping them by sea.
The deeper, wider canal will allow A.P. Moeller-Maersk A/S, China Ocean Shipping Group Co. and other lines to ship more cargo directly to New York and Boston instead of unloading it on the West Coast for trains and trucks to finish the journey east. That could save exporters 30 percent, the canal operator said.
The $5.25 billion Panama Canal project, scheduled for completion during its centennial in 2014, may take business from ports including Los Angeles and Seattle, and railroads including Berkshire Hathaway Inc.’s Burlington Northern Santa Fe Corp. It costs as much as $1,000 more per cargo container to use trains than ships, said Lee Sokje, a shipbuilding analyst at Mirae Asset Securities Co. in Seoul.
Twenty-nine percent (29%) of U.S. voters now say the country is heading in the right direction, according to the latest Rasmussen Reports national telephone survey.
This is the lowest level of voter confidence in the nation’s current course so far this year - and ties the findings for two weeks in December. Those readings marked the lowest finding since February. At the start of 2010, 32% felt the country was heading in the right direction.
The majority of voters (65%) continue to believe the nation is heading down the wrong track, a figure that's held roughly steady since mid-November.
WSJ report as further validation of its Natural Gas acquisition strategy. The article reports that recent cold spells in the eastern US have "erased a glut of gas... the shrinking supplies are bolstering prices." And weather forecasts for February and March point to continued natural gas demand for both consumers and industry as inventories dwindle.
Natural gas inventories down 86 billion cubic feet.
Natural gas in U.S. storage for the week ended Jan. 22 stood at 2.521 trillion cubic feet--five higher than last year and 3.6% above the five year average, the EIA said on Thursday.
The reported draw re-establishes the storage surplus relative to both last year and the five year average, after bouts of cold weather had brought stockpiles roughly in line with those historic measures.
"There is still some potential here for prices to hold and turn higher in our view, as the market looks ahead to higher withdrawals in the weeks ahead," Tim Evans, an analyst with Citi Futures Perspective in New York, wrote in a note to clients on Thursday.
A mere three hours before the Bernanke cloture vote, America just got permission to hit 100% Debt/GDP. Thank Senate Democrats who just approved an amendment increasing the US debt ceiling by $1.9 trillion.
ZeroHedge: "StandardStandard & Poor's Ratings Services no longer classifies the United Kingdom (AAA/Negative/A-1+) among the most stable and low-risk banking systems globally due to our view of the country's weak economic environment, the reputational damage we believe has been experienced by the banking industry, and what we see as the high dependence on state-support programs of a significant proportion of the industry."
The median amount of time it takes builders to sell a completed unit is now 13.9 months: an all time record, and 50% higher than a year ago.
Chinese gold production topped 300 tons in 2009, a new record, making China the largest producer of the precious metal in the world for the third year in a row, according to media reports Thursday citing the China Gold Association. The association said that gold production reached 313.98 tons last year. Last month, consultancy group GFMS said China would surpass India this year as the world's largest consumer of gold, with total demand forecast at 432 tons. March gold futures finished down 90 cents at $1,084.80 an ounce on Thursday.
Microsoft Corp. said Thursday its fiscal second-quarter net income rose to $6.66 billion, or 74 cents a share, from $4.17 billion, or 47 cents a share in the same period a year earlier. Revenue for the period ended in December rose 14% to $19.02 billion, Microsoft said. Analysts had expected the Redmond, Wash.-based software giant to post earnings of 59 cents a share, and $17.9 billion in revenue, according to Thomson Reuters data. Microsoft's results included $1.7 billion in revenue deferred from prior quarters, related to pre-sales and a marketing program for its recently-released Windows 7 operating system.
Amazon.com Inc. said Thursday that fourth-quarter earnings surged 70% thanks to strong holiday sales of media products and other items. For the period ended Dec. 31, Amazon reported net income of $384 million, or 85 cents a share, compared to net income of $225 million, or 52 cents a share, for the same period the previous year. Sales rose 42% to $9.52 billion. Analysts were expecting earnings of 72 cents a share on revenue of $9.04 billion, according to consensus forecasts from Thomson Reuters.
The Dow Jones Industrial Average fell 115.7 points to 10,120.46. The S&P 500 Index declined 12.97 points to 1,084.53. The Nasdaq Composite ended at 2,179.00, off 42.41 points.
Bookings for durable goods excluding transportation equipment climbed 0.9 percent last month, more than anticipated, figures from the Commerce Department showed today in Washington. Total orders increased 0.3 percent, less than forecast, depressed by a drop in demand for commercial aircraft. December 2009 new machine orders was down a full 25.1% compared with 2008 figures.
Initial jobless applications declined to 470,000 in the week ended Jan. 23, higher than anticipated, from 478,000 the prior week, Labor Department figures showed today in Washington. The total number of people receiving unemployment insurance dropped to the lowest level in a year and those receiving extended benefits also fell.
The four-week average of initial claims rose 9,500 to 456,250. A Labor Department official said there were no reports of backlogs at state offices. Meanwhile, the number of Americans receiving state jobless benefits held steady fell 57,000 to 4.60 million in the week ending Jan 16. The four-week moving average of continuing claims fell 94,250 to 4.7 million. Overall, 11.5 million Americans received federal and state unemployment benefits on an unadjusted basis in the week ended Jan. 9, the latest period for which the data is available. This is down from 12.0 million in the prior week.
The Baltic Dry Index fell 5% today and has broken below 3000 for the first time since Oct 28th and follows the recent correction in Chinese/Hong Kong equities. The market pullback has been of course due to policy steps to slow lending growth and tame the growing property/construction bubble that is heavily reliant on steel and thus iron ore and iron ore is the key commodity in dry bulk.
John Carney: "
Here's a list of what the iPad replaces:
That's right: nothing.
The iPad replaces nothing I have. It isn't a usefully functional personal computer and it doesn't work well as a phone. Instead, it would add to the stuff I carry around with me.
I don't want more stuff to carry around.
When I asked some of my Twitter friends about this, they told me that the iPad would replace newspapers and magazines. I think they're wrong. A newspaper or a magazine is easily acquired, cheap, light weight, resilient, foldable for easy storage, and disposable. If I accidentally leave it somewhere, I haven't lost much. When I'm done with the paper, I just throw it away.
The iPad is the opposite of these things. It is expensive, heavy, fragile, stiff, and permanent. When I'm done reading something, I would have to make sure I remember not to leave my iPad behind. I would be stuck with it even when there's nothing I want to do with it. I'll probably have to carry an entirely new bag just to tote the thing around."
Another 153,127 workers being laid off in mass firings in December.
The expansion of the Panama Canal slashes the cost of shipping them by sea.
The deeper, wider canal will allow A.P. Moeller-Maersk A/S, China Ocean Shipping Group Co. and other lines to ship more cargo directly to New York and Boston instead of unloading it on the West Coast for trains and trucks to finish the journey east. That could save exporters 30 percent, the canal operator said.
The $5.25 billion Panama Canal project, scheduled for completion during its centennial in 2014, may take business from ports including Los Angeles and Seattle, and railroads including Berkshire Hathaway Inc.’s Burlington Northern Santa Fe Corp. It costs as much as $1,000 more per cargo container to use trains than ships, said Lee Sokje, a shipbuilding analyst at Mirae Asset Securities Co. in Seoul.
Twenty-nine percent (29%) of U.S. voters now say the country is heading in the right direction, according to the latest Rasmussen Reports national telephone survey.
This is the lowest level of voter confidence in the nation’s current course so far this year - and ties the findings for two weeks in December. Those readings marked the lowest finding since February. At the start of 2010, 32% felt the country was heading in the right direction.
The majority of voters (65%) continue to believe the nation is heading down the wrong track, a figure that's held roughly steady since mid-November.
WSJ report as further validation of its Natural Gas acquisition strategy. The article reports that recent cold spells in the eastern US have "erased a glut of gas... the shrinking supplies are bolstering prices." And weather forecasts for February and March point to continued natural gas demand for both consumers and industry as inventories dwindle.
Natural gas inventories down 86 billion cubic feet.
Natural gas in U.S. storage for the week ended Jan. 22 stood at 2.521 trillion cubic feet--five higher than last year and 3.6% above the five year average, the EIA said on Thursday.
The reported draw re-establishes the storage surplus relative to both last year and the five year average, after bouts of cold weather had brought stockpiles roughly in line with those historic measures.
"There is still some potential here for prices to hold and turn higher in our view, as the market looks ahead to higher withdrawals in the weeks ahead," Tim Evans, an analyst with Citi Futures Perspective in New York, wrote in a note to clients on Thursday.
A mere three hours before the Bernanke cloture vote, America just got permission to hit 100% Debt/GDP. Thank Senate Democrats who just approved an amendment increasing the US debt ceiling by $1.9 trillion.
ZeroHedge: "StandardStandard & Poor's Ratings Services no longer classifies the United Kingdom (AAA/Negative/A-1+) among the most stable and low-risk banking systems globally due to our view of the country's weak economic environment, the reputational damage we believe has been experienced by the banking industry, and what we see as the high dependence on state-support programs of a significant proportion of the industry."
The median amount of time it takes builders to sell a completed unit is now 13.9 months: an all time record, and 50% higher than a year ago.
Chinese gold production topped 300 tons in 2009, a new record, making China the largest producer of the precious metal in the world for the third year in a row, according to media reports Thursday citing the China Gold Association. The association said that gold production reached 313.98 tons last year. Last month, consultancy group GFMS said China would surpass India this year as the world's largest consumer of gold, with total demand forecast at 432 tons. March gold futures finished down 90 cents at $1,084.80 an ounce on Thursday.
Microsoft Corp. said Thursday its fiscal second-quarter net income rose to $6.66 billion, or 74 cents a share, from $4.17 billion, or 47 cents a share in the same period a year earlier. Revenue for the period ended in December rose 14% to $19.02 billion, Microsoft said. Analysts had expected the Redmond, Wash.-based software giant to post earnings of 59 cents a share, and $17.9 billion in revenue, according to Thomson Reuters data. Microsoft's results included $1.7 billion in revenue deferred from prior quarters, related to pre-sales and a marketing program for its recently-released Windows 7 operating system.
Amazon.com Inc. said Thursday that fourth-quarter earnings surged 70% thanks to strong holiday sales of media products and other items. For the period ended Dec. 31, Amazon reported net income of $384 million, or 85 cents a share, compared to net income of $225 million, or 52 cents a share, for the same period the previous year. Sales rose 42% to $9.52 billion. Analysts were expecting earnings of 72 cents a share on revenue of $9.04 billion, according to consensus forecasts from Thomson Reuters.
The Dow Jones Industrial Average fell 115.7 points to 10,120.46. The S&P 500 Index declined 12.97 points to 1,084.53. The Nasdaq Composite ended at 2,179.00, off 42.41 points.
Wednesday, January 27, 2010
The Fed
1/27/10 The Fed
Caterpillar updated its outlook for 2010, saying it now expects a profit of $2.50 a share on sales of $35.6 billion to $40.5 billion. Analysts' average earnings forecast was $2.71 a share, according to Thomson Reuters I/B/E/S.
Nouriel Roubini: Weak economic recovery under way due to weak labour markets. First half of 2010 will be better than second half due to stimulus factors. Expects an eventual stock market correction (last October he was calling for a 10% to 20% drop that never transpired), and bearish on commodities... we're seeing the start of a global asset bubble, says Greece is already bankrupt and thinks the eurozone is at risk of breaking up sometime down the line.
Japan just received a downgrade warning from S&P over their credit rating and the U.S. is not far behind. Standard & Poor's lowered its outlook for Japan's sovereign debt rating to "negative." While Japan's long-term debt rating remains double-A, the outlook for that high rating no longer is "stable."
Doug Elmendorf, the director of the Congressional Budget Office, called the outlook for the federal budget "bleak." The CBO projects the current year's deficit of $1.35 trillion to equal 9.2% of GDP. CBO forecast total publicly held debt to rise to 60% of GDP this year and 67% by 202o. In 2001, publicly held debt equaled just 33% of GDP.
Several Chinese banks have ordered some branches to suspend lending for this month.
Darrell Issa: "Public Disclosure As A Last Resort: How the Federal Reserve Fought to Cover Up the Details of the AIG Counterparties Bailout From the American People: "The fact that a quasi-government agency, unaccountable to the American people, likely wasted billions of taxpayer dollars and went to great lengths to prevent Congress and the American people from learning about these actions demonstrates the threat that the Federal Reserve poses to basic principles of American democracy."
Boeing gave a cautious outlook for 2010 after dealing with program delays and declining orders in 2009.
Greek bond yields rose on Wednesday to the highest levels since the country joined the euro in April 2001 as the finance ministry said no deal had been reached to sell bonds to China.
Over 80 percent of all the gains from March 2009 through last week’s high have occurred on Mondays.
Rep. Ed Towns, D-N.Y., chairman of the House Oversight and Government Reform committee, on Wednesday said the circumstances surrounding the New York Federal Reserve $182 billion bailout of American International Group Inc. "create an air of suspicion and distrust among the American people." Treasury Secretary Geithner and his predecessor, Henry Paulson, defended their decision to complete the bailout, arguing that it was necessary to ensure the financial market did not collapse. "The taxpayers were propping up the hollow shell of AIG by stuffing it with money, and the rest of Wall Street came by and looted the corpse," Towns said.
Sales of new U.S. homes fell 7.6% to a seasonally adjusted annual rate of 342,000 in December from 370,000 in November after a popular tax credit for buyers was set to expire, the Commerce Department estimated Wednesday. It was the lowest seasonally adjusted sales pace since March. For all of 2009, sales of new homes fell 8.6% to a record-low level of 374,000, down about 23% from 2008's level. The records date back to 1963. Economists surveyed by MarketWatch were looking for a small gain in December to about 365,000. The number of unsold homes dropped 1.7% to 231,000, the lowest in 38 years.
Crude oil futures slumped on Wednesday after the Energy Department reported a drop of 3.9 million barrels in U.S. crude inventories. Analysts polled by Platts expected a 2-million-barrel increase in commercial crude-oil supplies for the week ended Jan. 22. Crude oil for March delivery recently fell 14 cents, or 0.2%, to $74.58 a barrel, after briefly slumping as low as $73.86 in electronic trade. The EIA also reported distillate supplies rose by 400,000 barrels and gasoline inventories were up by 2 million barrels in the latest week.
“We urge the president to remember that natural gas is not only an environmental solution, it is an economic solution for our country,” Natural Gas Supply Association Pres. R. Skip Horvath said in a statement.
The industry employs several million people already and is posed to add more as power plants, homes, businesses, and factories increase demand, Horvath noted, adding, “Those jobs create revenue in addition to the billions of dollars the natural gas industry already generates for state and federal government through royalties and taxes.”
The Apple iPad has a 9.7-inch touch-screen and looks similar to an enlarged version of Apple's mega-popular iPhone. Jobs said the iPad is designed to fill a gap between the iPod touch and iPhone and its MacBook line of laptop computers.
"We asked if there was room for a third category in the middle, something between a laptop and a smartphone. In order to create a new category, it needed to be far better at doing some key tasks such as browsing the Web, doing e-mail, sharing photos, watching video, gaming and reading e-books," he said.
He also took a dig at netbooks, the ultra-small laptops that other companies have launched in an attempt to fill this market.
The Federal Reserve on Wednesday left interest rates near zero and vowed to keep them there for a while to nurture an economic recovery held back by stubbornly high unemployment.
Oil for March delivery closed the New York floor session at $73.67 a barrel, off $1.04, or 1.4%. Gold for April delivery also sank $13.80 to end the New York floor session at $1,085.70 an ounce. Copper, silver, platinum and palladium also ended lower.
The Dow Jones Industrial Average added 41.87 points to 10,236.16. The S&P 500 Index climbed 5.33 points to 1,097.5. The Nasdaq Composite Index gained 17.68 points to 2,221.41.
Caterpillar updated its outlook for 2010, saying it now expects a profit of $2.50 a share on sales of $35.6 billion to $40.5 billion. Analysts' average earnings forecast was $2.71 a share, according to Thomson Reuters I/B/E/S.
Nouriel Roubini: Weak economic recovery under way due to weak labour markets. First half of 2010 will be better than second half due to stimulus factors. Expects an eventual stock market correction (last October he was calling for a 10% to 20% drop that never transpired), and bearish on commodities... we're seeing the start of a global asset bubble, says Greece is already bankrupt and thinks the eurozone is at risk of breaking up sometime down the line.
Japan just received a downgrade warning from S&P over their credit rating and the U.S. is not far behind. Standard & Poor's lowered its outlook for Japan's sovereign debt rating to "negative." While Japan's long-term debt rating remains double-A, the outlook for that high rating no longer is "stable."
Doug Elmendorf, the director of the Congressional Budget Office, called the outlook for the federal budget "bleak." The CBO projects the current year's deficit of $1.35 trillion to equal 9.2% of GDP. CBO forecast total publicly held debt to rise to 60% of GDP this year and 67% by 202o. In 2001, publicly held debt equaled just 33% of GDP.
Several Chinese banks have ordered some branches to suspend lending for this month.
Darrell Issa: "Public Disclosure As A Last Resort: How the Federal Reserve Fought to Cover Up the Details of the AIG Counterparties Bailout From the American People: "The fact that a quasi-government agency, unaccountable to the American people, likely wasted billions of taxpayer dollars and went to great lengths to prevent Congress and the American people from learning about these actions demonstrates the threat that the Federal Reserve poses to basic principles of American democracy."
Boeing gave a cautious outlook for 2010 after dealing with program delays and declining orders in 2009.
Greek bond yields rose on Wednesday to the highest levels since the country joined the euro in April 2001 as the finance ministry said no deal had been reached to sell bonds to China.
Over 80 percent of all the gains from March 2009 through last week’s high have occurred on Mondays.
Rep. Ed Towns, D-N.Y., chairman of the House Oversight and Government Reform committee, on Wednesday said the circumstances surrounding the New York Federal Reserve $182 billion bailout of American International Group Inc. "create an air of suspicion and distrust among the American people." Treasury Secretary Geithner and his predecessor, Henry Paulson, defended their decision to complete the bailout, arguing that it was necessary to ensure the financial market did not collapse. "The taxpayers were propping up the hollow shell of AIG by stuffing it with money, and the rest of Wall Street came by and looted the corpse," Towns said.
Sales of new U.S. homes fell 7.6% to a seasonally adjusted annual rate of 342,000 in December from 370,000 in November after a popular tax credit for buyers was set to expire, the Commerce Department estimated Wednesday. It was the lowest seasonally adjusted sales pace since March. For all of 2009, sales of new homes fell 8.6% to a record-low level of 374,000, down about 23% from 2008's level. The records date back to 1963. Economists surveyed by MarketWatch were looking for a small gain in December to about 365,000. The number of unsold homes dropped 1.7% to 231,000, the lowest in 38 years.
Crude oil futures slumped on Wednesday after the Energy Department reported a drop of 3.9 million barrels in U.S. crude inventories. Analysts polled by Platts expected a 2-million-barrel increase in commercial crude-oil supplies for the week ended Jan. 22. Crude oil for March delivery recently fell 14 cents, or 0.2%, to $74.58 a barrel, after briefly slumping as low as $73.86 in electronic trade. The EIA also reported distillate supplies rose by 400,000 barrels and gasoline inventories were up by 2 million barrels in the latest week.
“We urge the president to remember that natural gas is not only an environmental solution, it is an economic solution for our country,” Natural Gas Supply Association Pres. R. Skip Horvath said in a statement.
The industry employs several million people already and is posed to add more as power plants, homes, businesses, and factories increase demand, Horvath noted, adding, “Those jobs create revenue in addition to the billions of dollars the natural gas industry already generates for state and federal government through royalties and taxes.”
The Apple iPad has a 9.7-inch touch-screen and looks similar to an enlarged version of Apple's mega-popular iPhone. Jobs said the iPad is designed to fill a gap between the iPod touch and iPhone and its MacBook line of laptop computers.
"We asked if there was room for a third category in the middle, something between a laptop and a smartphone. In order to create a new category, it needed to be far better at doing some key tasks such as browsing the Web, doing e-mail, sharing photos, watching video, gaming and reading e-books," he said.
He also took a dig at netbooks, the ultra-small laptops that other companies have launched in an attempt to fill this market.
The Federal Reserve on Wednesday left interest rates near zero and vowed to keep them there for a while to nurture an economic recovery held back by stubbornly high unemployment.
Oil for March delivery closed the New York floor session at $73.67 a barrel, off $1.04, or 1.4%. Gold for April delivery also sank $13.80 to end the New York floor session at $1,085.70 an ounce. Copper, silver, platinum and palladium also ended lower.
The Dow Jones Industrial Average added 41.87 points to 10,236.16. The S&P 500 Index climbed 5.33 points to 1,097.5. The Nasdaq Composite Index gained 17.68 points to 2,221.41.
Tuesday, January 26, 2010
Rally Fails
1/26/10 Rally Fails
Brent Steenbarger: "Note the recent spike in the CBOE put/call ratio. Spikes in the ratio have been a nice tell recently for market lows, as excess pessimism has indicated that weak longs have been shaken from their positions.
What makes this spike different from recent ones is that it is not occurring at a higher price low. In a bull market, you want to see stocks hitting oversold levels and bearish sentiment levels at successively higher prices. The retracement of the late 2009/early 2010 strength suggests that a longer-term topping process may be occurring, fueled by monetary tightening in China and the relative weakness of many non-U.S. equity markets."
Chinese banks have begun restricting new loans, responding to a push by regulators to contain credit after a surge in lending in the first half of this month.
Bank of China Ltd. has stopped extending new corporate loans in the Shanghai area, except for clients who have repaid earlier borrowings, said a person familiar with the matter who declined to be identified. China Construction Bank Corp.’s branch in the city has been told to screen applications for personal loans and mortgages more carefully and to stop new lending once a monthly quota is met, another person said.
China’s benchmark stock index fell to a three-month low today on concern a government clampdown on lending will slow the world’s third-largest economy. Credit Suisse Group AG said in a note today that a countrywide lending halt that started Jan. 19 may trigger a “meaningful” decline in manufacturing.
Federal Reserve policy makers are considering adopting a new benchmark interest rate to replace the one they’ve used for the last two decades.
The central bank has been unable to control the federal funds rate since the September 2008 bankruptcy of Lehman Brothers Holdings Inc., when it began flooding financial markets with $1 trillion to prevent the economy from collapsing. Officials, who start a two-day meeting today, have said they may replace or supplement the fed funds rate with interest paid on excess bank reserves.
“One option you might want to consider is that our policy rate is the interest rate on excess reserves and we let the fed funds rate trade with some spread to that,” Richmond Fed President Jeffrey Lacker told reporters on Jan. 8 in Linthicum, Maryland.
Stephen Schork: "Natural Gas: Open interest in the Henry Hub contract rose for the fourth consecutive week according to the CFTC, rising 3.0 percent to 782,549 contracts as of last Tuesday. That raises the year-on-year surplus from 6.91 percent last week to 8.84 percent this week, and is most likely contributing to the increased volatility seen in the contract.
Total length held by swap dealers and money managers continued in the vein of last week’s 20.0 percent increase by rising 14.6 percent to 47,409 contracts. This is a bullish signal and could imply continued upward strength — prices have risen 4.7 percent since Tuesday."
Baker Hughes Inc., the oilfield services provider that agreed in August to buy BJ Services Co., expects the acquisition to be completed by April as scheduled.
Japan’s sovereign credit rating outlook was on Tuesday cut to “negative” by Standard & Poor’s over the dimming prospects for reducing the country’s swelling debt load.
The decision came as the Bank of Japan kept rates on hold at 0.1 per cent for the 13th consecutive month and forecast that deflation in 2010 and 2011 would be less severe than it previously thought.
Ron Paul: "First of all, no one should be compelled by law to operate in Federal Reserve notes if they prefer an alternative. We should repeal legal tender laws and allow Americans to conduct transactions in constitutional money. Only gold and silver can constitutionally be legal tender, not paper money. Instead, it is illegal to conduct business using gold and silver instead of Federal Reserve notes. Simply legalizing the Constitution should be a no-brainer to anyone who took an oath of office. Consequently, private mints should be allowed to mint gold and silver coins. They would be subject to fraud and counterfeit laws, of course, and people would be free to use their coins or stay with Federal Reserve notes, as they see fit. Finally, we should abolish taxes on gold and silver, which puts precious metals at a competitive disadvantage to paper money. The Federal Reserve is a government-sanctioned banking cartel that has held far too much power for far too long and is in the end stages of running the dollar into the ground, and our economy along with it. The very least Congress can do, if they are not willing to abolish the Fed, and perhaps not even conduct a serious audit of it, is to allow citizens the freedom to defend themselves from being completely wiped out by their monopoly power."
John Tamny
"Newspaper headlines last week and over the weekend pointed to a vote on Fed Chairman Bernanke's re-nomination that is increasingly dicey. Rather than achieve the lame-duck status that will come with a near-miss vote, Bernanke should step down.
The irony in all of this is that absent the happy bonus situation on Wall Street which revealed a healthier banking system, Bernanke likely would have sailed through to re-nomination. The bank bonuses, while arguably correct, reminded voters of the bailouts of those same banks which were incorrect, but that Bernanke helped engineer.
Bonuses aside, Bernanke should step aside for the simple reason that the Fed which he oversees has failed miserably. Indeed, while in a rational world the Fed's sole mandate would involve it overseeing a dollar-price rule in terms of gold (thus making it largely irrelevant) to the exclusion of all other policies, it is presently charged with maintaining full employment, low inflation and a sound banking system. It has done none of those things."
November Case-Shiller data showed that after having recorded several sequential increases in prices, November's -0.2% decline is substantiating the October -0.1% decline. The decline on a YoY basis was -5.3%. On a seasonally adjusted basis, the Composite 20 also indicated a moderation, as the sequential rate of increase declined from 0.3% to 0.2% in November, and indicated the same YoY decline as the unadjusted data of -5.3%. 15 of the 20 markets they track fell sequentially on a nominal basis.
S. Korean economic growth eases to 0.2%, slowest pace in three quarters.
The Conference Board's Consumer Confidence Index increased to 55.9 -- the highest in more than a year. That compares with 53.6 in December. Still, consumer confidence remains very weak, far below the average level of 95. The improvement in January was due mainly to better feelings about the present situation. Consumer expectations also improved. Assessments of the labor market improved marginally.
The U.S. budget deficit will hit $1.3 trillion in 2010, congressional budget analysts estimated Tuesday, in a fresh piece of grim news for President Barack Obama. The Congressional Budget Office's estimate assumes current laws and policies remain unchanged. Economic growth will also probably be "muted" for the next few years, the CBO said in its budget outlook for 2010.
58 percent of Apple's revenue now comes from overseas.
About 6 million e-readers will be sold this year, up from 3 million last year, Forrester estimates. Amazon.com’s Kindle has about 60 percent of the market, while Sony’s products have 35 percent, Forrester says.
Rob Kirby: "According to the most recent data from the U.S. Office of the Comptroller of the Currency, the notional value of derivatives held by U.S. commercial banks increased $804 billion in the third quarter of 2009, or 0.4%, to $204.3 trillion. Seven banks hold 99.8% of all derivatives."
The American Petroleum Institute said inventories fell by 2.225 million to 326.08 million barrels in the week ended January 22. Analysts polled by Platts expected a 2-million-barrel increase in crude oil stocks. Crude oil for March delivery was down 4 cents at $74.67 a barrel, after earlier rising 7 cents in electronic trade. It had finished on a loss of 55 cents, or 0.7% at the New York Mercantile Exchange. The API also reported a rise of 916,000 barrels in gasoline stocks. Distillate stocks fell 1.978 million barrels, it said. Platts analysts projected an increase of 1.7 million barrels in gasoline inventories and a decrease of 1.8 million barrels in distillate supplies.
The Dow Jones Industrial Average fell 2.57 points to 10,194.29. The S&P 500 Index declined 4.61 points to 1,092.17. The Nasdaq Composite Index fell 7.07 points to 2,203.73.
No. 1 home-improvement retailer Home Depot Inc. is cutting 1,000 jobs and shutting three underperforming pilot stores as the company consolidates human resources, finance, real estate and construction functions, spokesman Ron Defeo said in an interview.
Brent Steenbarger: "Note the recent spike in the CBOE put/call ratio. Spikes in the ratio have been a nice tell recently for market lows, as excess pessimism has indicated that weak longs have been shaken from their positions.
What makes this spike different from recent ones is that it is not occurring at a higher price low. In a bull market, you want to see stocks hitting oversold levels and bearish sentiment levels at successively higher prices. The retracement of the late 2009/early 2010 strength suggests that a longer-term topping process may be occurring, fueled by monetary tightening in China and the relative weakness of many non-U.S. equity markets."
Chinese banks have begun restricting new loans, responding to a push by regulators to contain credit after a surge in lending in the first half of this month.
Bank of China Ltd. has stopped extending new corporate loans in the Shanghai area, except for clients who have repaid earlier borrowings, said a person familiar with the matter who declined to be identified. China Construction Bank Corp.’s branch in the city has been told to screen applications for personal loans and mortgages more carefully and to stop new lending once a monthly quota is met, another person said.
China’s benchmark stock index fell to a three-month low today on concern a government clampdown on lending will slow the world’s third-largest economy. Credit Suisse Group AG said in a note today that a countrywide lending halt that started Jan. 19 may trigger a “meaningful” decline in manufacturing.
Federal Reserve policy makers are considering adopting a new benchmark interest rate to replace the one they’ve used for the last two decades.
The central bank has been unable to control the federal funds rate since the September 2008 bankruptcy of Lehman Brothers Holdings Inc., when it began flooding financial markets with $1 trillion to prevent the economy from collapsing. Officials, who start a two-day meeting today, have said they may replace or supplement the fed funds rate with interest paid on excess bank reserves.
“One option you might want to consider is that our policy rate is the interest rate on excess reserves and we let the fed funds rate trade with some spread to that,” Richmond Fed President Jeffrey Lacker told reporters on Jan. 8 in Linthicum, Maryland.
Stephen Schork: "Natural Gas: Open interest in the Henry Hub contract rose for the fourth consecutive week according to the CFTC, rising 3.0 percent to 782,549 contracts as of last Tuesday. That raises the year-on-year surplus from 6.91 percent last week to 8.84 percent this week, and is most likely contributing to the increased volatility seen in the contract.
Total length held by swap dealers and money managers continued in the vein of last week’s 20.0 percent increase by rising 14.6 percent to 47,409 contracts. This is a bullish signal and could imply continued upward strength — prices have risen 4.7 percent since Tuesday."
Baker Hughes Inc., the oilfield services provider that agreed in August to buy BJ Services Co., expects the acquisition to be completed by April as scheduled.
Japan’s sovereign credit rating outlook was on Tuesday cut to “negative” by Standard & Poor’s over the dimming prospects for reducing the country’s swelling debt load.
The decision came as the Bank of Japan kept rates on hold at 0.1 per cent for the 13th consecutive month and forecast that deflation in 2010 and 2011 would be less severe than it previously thought.
Ron Paul: "First of all, no one should be compelled by law to operate in Federal Reserve notes if they prefer an alternative. We should repeal legal tender laws and allow Americans to conduct transactions in constitutional money. Only gold and silver can constitutionally be legal tender, not paper money. Instead, it is illegal to conduct business using gold and silver instead of Federal Reserve notes. Simply legalizing the Constitution should be a no-brainer to anyone who took an oath of office. Consequently, private mints should be allowed to mint gold and silver coins. They would be subject to fraud and counterfeit laws, of course, and people would be free to use their coins or stay with Federal Reserve notes, as they see fit. Finally, we should abolish taxes on gold and silver, which puts precious metals at a competitive disadvantage to paper money. The Federal Reserve is a government-sanctioned banking cartel that has held far too much power for far too long and is in the end stages of running the dollar into the ground, and our economy along with it. The very least Congress can do, if they are not willing to abolish the Fed, and perhaps not even conduct a serious audit of it, is to allow citizens the freedom to defend themselves from being completely wiped out by their monopoly power."
John Tamny
"Newspaper headlines last week and over the weekend pointed to a vote on Fed Chairman Bernanke's re-nomination that is increasingly dicey. Rather than achieve the lame-duck status that will come with a near-miss vote, Bernanke should step down.
The irony in all of this is that absent the happy bonus situation on Wall Street which revealed a healthier banking system, Bernanke likely would have sailed through to re-nomination. The bank bonuses, while arguably correct, reminded voters of the bailouts of those same banks which were incorrect, but that Bernanke helped engineer.
Bonuses aside, Bernanke should step aside for the simple reason that the Fed which he oversees has failed miserably. Indeed, while in a rational world the Fed's sole mandate would involve it overseeing a dollar-price rule in terms of gold (thus making it largely irrelevant) to the exclusion of all other policies, it is presently charged with maintaining full employment, low inflation and a sound banking system. It has done none of those things."
November Case-Shiller data showed that after having recorded several sequential increases in prices, November's -0.2% decline is substantiating the October -0.1% decline. The decline on a YoY basis was -5.3%. On a seasonally adjusted basis, the Composite 20 also indicated a moderation, as the sequential rate of increase declined from 0.3% to 0.2% in November, and indicated the same YoY decline as the unadjusted data of -5.3%. 15 of the 20 markets they track fell sequentially on a nominal basis.
S. Korean economic growth eases to 0.2%, slowest pace in three quarters.
The Conference Board's Consumer Confidence Index increased to 55.9 -- the highest in more than a year. That compares with 53.6 in December. Still, consumer confidence remains very weak, far below the average level of 95. The improvement in January was due mainly to better feelings about the present situation. Consumer expectations also improved. Assessments of the labor market improved marginally.
The U.S. budget deficit will hit $1.3 trillion in 2010, congressional budget analysts estimated Tuesday, in a fresh piece of grim news for President Barack Obama. The Congressional Budget Office's estimate assumes current laws and policies remain unchanged. Economic growth will also probably be "muted" for the next few years, the CBO said in its budget outlook for 2010.
58 percent of Apple's revenue now comes from overseas.
About 6 million e-readers will be sold this year, up from 3 million last year, Forrester estimates. Amazon.com’s Kindle has about 60 percent of the market, while Sony’s products have 35 percent, Forrester says.
Rob Kirby: "According to the most recent data from the U.S. Office of the Comptroller of the Currency, the notional value of derivatives held by U.S. commercial banks increased $804 billion in the third quarter of 2009, or 0.4%, to $204.3 trillion. Seven banks hold 99.8% of all derivatives."
The American Petroleum Institute said inventories fell by 2.225 million to 326.08 million barrels in the week ended January 22. Analysts polled by Platts expected a 2-million-barrel increase in crude oil stocks. Crude oil for March delivery was down 4 cents at $74.67 a barrel, after earlier rising 7 cents in electronic trade. It had finished on a loss of 55 cents, or 0.7% at the New York Mercantile Exchange. The API also reported a rise of 916,000 barrels in gasoline stocks. Distillate stocks fell 1.978 million barrels, it said. Platts analysts projected an increase of 1.7 million barrels in gasoline inventories and a decrease of 1.8 million barrels in distillate supplies.
The Dow Jones Industrial Average fell 2.57 points to 10,194.29. The S&P 500 Index declined 4.61 points to 1,092.17. The Nasdaq Composite Index fell 7.07 points to 2,203.73.
No. 1 home-improvement retailer Home Depot Inc. is cutting 1,000 jobs and shutting three underperforming pilot stores as the company consolidates human resources, finance, real estate and construction functions, spokesman Ron Defeo said in an interview.
Monday, January 25, 2010
Home Sales
1/25/10 Home Sales
Sam's Club, the warehouse club division of Wal-Mart Stores Inc is cutting roughly 11,200 jobs, or about 10 percent of its workforce, as it outsources in-store product demonstrations and eliminates positions used to recruit new business members.
John McCain came out this morning against Bernanke.
A new message attributed to al-Qaida leader Osama bin Laden claims responsibility for sending the failed airplane bomber to the United States last month. The message says attacks will continue as long as the U.S. supports Israel.
An analysis by CNBC shows Fed Chairman Ben Bernanke is likely to win confirmation, though he will likely draw more opposition than any chairman in recent history.
Last weeks sell off relieved the markets overbought condition with little damage to the breadth indicators. There may be a little more downside, but, it is likely, most of the decline is behind us.
I expect the major averages to be higher on Friday January 29 than they were on Friday January 22.
Overall office vacancy in the fourth quarter in Los Angeles, Orange, San Bernardino and Riverside counties was 18.5%, a substantial jump from 14.4% a year earlier, according to commercial real estate brokerage Cushman & Wakefield.
"Vacancies are up, and I believe they will continue to go up this year as we have continued job losses," said Joe Vargas, leader of the company's Southern California offices.
ZeroHedge: "Economics 101: when supply is greater than demand, prices fall; when supply is $700 billion greater than demand, prices plunge. An in-depth look at the supply-demand mismatch of the 2010 US Treasury market demonstrates that the truth is much worse than you may think, and why Bernanke's first act upon reconfirmation will likely be the announcement of the second part of Quantitative Easing."
John Hussman: ":Despite last week's decline, the Market Climate remains characterized by overvalued, (intermediate-term) overbought, overbullish and rising-yield conditions. As I noted last week, this is " a situation that has historically been associated with a moderate continuation of upward stock market progress and a tendency to make successive but very marginal new highs, typically followed by abrupt and often severe market losses within a time window of about 10-12 weeks. As usual, that's not a forecast - just a regularity. But it's a harsh enough regularity to turn our knuckles white here."
Ericsson announced on Monday an extra 1,500 job cuts under restructuring which bit deeply into fourth-quarter net profit at the firm, the world leader in phone network equipment.
Total announced job cuts are now about 6,500, generating huge restructuring charges with the intention of bringing equally huge cost savings.
Hungary's central bank decided Monday to lower its base rate by 25 basis points to 6.0%. The decision was in line with market expectations. In recent trading, the U.S. dollar gained 0.4% against the Hungarian forint, while the euro edged up 0.1% against the forint.
Ben Chapman: "Accept that we are now in a depression, Stock Markets still grossly overvalued, poverty rates increase across midwest, a lots opportunity to regulate the banks,Goldman Sachs reports record profits and still bonusing employees richly, mainstream America goes on a financial diet, suburbs now home to American poor....How can there be a recovery with 22.5% unemployment, and with the additional threat of further unemployment? Who will buy the new housing and the tremendous inventory overhand? What will happen to the commercial inventory building up? Who has money in America to buy cars and trucks? Credits to buy housing for subprime and ALT-A buyers will end up with a 50% failure rate. Cash for clunkers was a colossal failure. Such exercises in futility only buy time, just as stimulus packages, and monetization do the same thing. The elitists behind the scenes know this just as we know this. That means the colossal deficit increase of $1.4 trillion a year will add 10% yearly to the federal debt to GDP ratio that will be over 100% by 2011. The tax liability to service this debt will be overwhelming. Government debt is rising exponentially and if further stimulus is not added the credit crisis will be renewed. This is why the Fed cannot remove further liquidity from the financial system, especially after having taken M3 from 17 to 18% to 6%. Incidentally, England and the ECB have done the same thing, and they still see rising inflation. If further stimulation is not forthcoming, or war, or default comes, we will see inflation reverse and deflation take over and that could last for ten years or more. This deflation, if allowed to take its course, will cause losses of $12 to $15 trillion from the economy and cause unemployment to rise to 40% to 50%. That would also entail cutting extended benefits. That would give us the scenes we saw in the 1930s. The debt we are facing knows no precedent in modern times, and there is no possible way it can be paid."
U.S. Dec. existing home sales fall 16.7% to 5.45m. The 16.7% percentage decline from November to December was the largest on record, the National Association of Realtors reported. The decline was larger than the 11% drop to 5.80 million that was expected by economists surveyed by MarketWatch. Sales in December were up 15% compared with December 2008. The median sales price rose to $178,300 in December, up 1.5% compared with a year earlier. It's the first year-over-year increase in prices since August 2007.
The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 25% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Forty-one percent (41%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -16.
"I do see all of the signs of a credit induced real estate bubble ( in China)that i think is going to be a doozy," Jim Chanos stated.
Gold for February delivery finished up $6, or 0.6%, at $1,095.70 an ounce on the New York Mercantile Exchange. Crude oil for March delivery finished on a gain of 72 cents at $75.26 a barrel on the New York Mercantile Exchange, after losing more than 4% over the prior three trading sessions.
Apple on Monday reported a fiscal first-quarter profit of $3.38 billion, or $3.67 a share, compared with earnings of $2.25 billion, or $2.50 a share in the same period a year ago. Revenue rose 32% to $15.68 billion as Apple reported sales of 8.74 million iPhones in the quarter ended in December. The results topped the estimates of analysts surveyed by Thomson Reuters, who forecast Apple to earn $2.07 a share on $12.06 billion in revenue.
The Dow Jones Industrial Average rose 23.88 points, or 0.2%, to 10,196.86. The S&P 500 Index climbed 5.02 points, or 0.5%, to 1,096.78. The Nasdaq Composite Index added 5.51 points, or 0.3%, to 2,210.8.
Sam's Club, the warehouse club division of Wal-Mart Stores Inc is cutting roughly 11,200 jobs, or about 10 percent of its workforce, as it outsources in-store product demonstrations and eliminates positions used to recruit new business members.
John McCain came out this morning against Bernanke.
A new message attributed to al-Qaida leader Osama bin Laden claims responsibility for sending the failed airplane bomber to the United States last month. The message says attacks will continue as long as the U.S. supports Israel.
An analysis by CNBC shows Fed Chairman Ben Bernanke is likely to win confirmation, though he will likely draw more opposition than any chairman in recent history.
Last weeks sell off relieved the markets overbought condition with little damage to the breadth indicators. There may be a little more downside, but, it is likely, most of the decline is behind us.
I expect the major averages to be higher on Friday January 29 than they were on Friday January 22.
Overall office vacancy in the fourth quarter in Los Angeles, Orange, San Bernardino and Riverside counties was 18.5%, a substantial jump from 14.4% a year earlier, according to commercial real estate brokerage Cushman & Wakefield.
"Vacancies are up, and I believe they will continue to go up this year as we have continued job losses," said Joe Vargas, leader of the company's Southern California offices.
ZeroHedge: "Economics 101: when supply is greater than demand, prices fall; when supply is $700 billion greater than demand, prices plunge. An in-depth look at the supply-demand mismatch of the 2010 US Treasury market demonstrates that the truth is much worse than you may think, and why Bernanke's first act upon reconfirmation will likely be the announcement of the second part of Quantitative Easing."
John Hussman: ":Despite last week's decline, the Market Climate remains characterized by overvalued, (intermediate-term) overbought, overbullish and rising-yield conditions. As I noted last week, this is " a situation that has historically been associated with a moderate continuation of upward stock market progress and a tendency to make successive but very marginal new highs, typically followed by abrupt and often severe market losses within a time window of about 10-12 weeks. As usual, that's not a forecast - just a regularity. But it's a harsh enough regularity to turn our knuckles white here."
Ericsson announced on Monday an extra 1,500 job cuts under restructuring which bit deeply into fourth-quarter net profit at the firm, the world leader in phone network equipment.
Total announced job cuts are now about 6,500, generating huge restructuring charges with the intention of bringing equally huge cost savings.
Hungary's central bank decided Monday to lower its base rate by 25 basis points to 6.0%. The decision was in line with market expectations. In recent trading, the U.S. dollar gained 0.4% against the Hungarian forint, while the euro edged up 0.1% against the forint.
Ben Chapman: "Accept that we are now in a depression, Stock Markets still grossly overvalued, poverty rates increase across midwest, a lots opportunity to regulate the banks,Goldman Sachs reports record profits and still bonusing employees richly, mainstream America goes on a financial diet, suburbs now home to American poor....How can there be a recovery with 22.5% unemployment, and with the additional threat of further unemployment? Who will buy the new housing and the tremendous inventory overhand? What will happen to the commercial inventory building up? Who has money in America to buy cars and trucks? Credits to buy housing for subprime and ALT-A buyers will end up with a 50% failure rate. Cash for clunkers was a colossal failure. Such exercises in futility only buy time, just as stimulus packages, and monetization do the same thing. The elitists behind the scenes know this just as we know this. That means the colossal deficit increase of $1.4 trillion a year will add 10% yearly to the federal debt to GDP ratio that will be over 100% by 2011. The tax liability to service this debt will be overwhelming. Government debt is rising exponentially and if further stimulus is not added the credit crisis will be renewed. This is why the Fed cannot remove further liquidity from the financial system, especially after having taken M3 from 17 to 18% to 6%. Incidentally, England and the ECB have done the same thing, and they still see rising inflation. If further stimulation is not forthcoming, or war, or default comes, we will see inflation reverse and deflation take over and that could last for ten years or more. This deflation, if allowed to take its course, will cause losses of $12 to $15 trillion from the economy and cause unemployment to rise to 40% to 50%. That would also entail cutting extended benefits. That would give us the scenes we saw in the 1930s. The debt we are facing knows no precedent in modern times, and there is no possible way it can be paid."
U.S. Dec. existing home sales fall 16.7% to 5.45m. The 16.7% percentage decline from November to December was the largest on record, the National Association of Realtors reported. The decline was larger than the 11% drop to 5.80 million that was expected by economists surveyed by MarketWatch. Sales in December were up 15% compared with December 2008. The median sales price rose to $178,300 in December, up 1.5% compared with a year earlier. It's the first year-over-year increase in prices since August 2007.
The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 25% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Forty-one percent (41%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -16.
"I do see all of the signs of a credit induced real estate bubble ( in China)that i think is going to be a doozy," Jim Chanos stated.
Gold for February delivery finished up $6, or 0.6%, at $1,095.70 an ounce on the New York Mercantile Exchange. Crude oil for March delivery finished on a gain of 72 cents at $75.26 a barrel on the New York Mercantile Exchange, after losing more than 4% over the prior three trading sessions.
Apple on Monday reported a fiscal first-quarter profit of $3.38 billion, or $3.67 a share, compared with earnings of $2.25 billion, or $2.50 a share in the same period a year ago. Revenue rose 32% to $15.68 billion as Apple reported sales of 8.74 million iPhones in the quarter ended in December. The results topped the estimates of analysts surveyed by Thomson Reuters, who forecast Apple to earn $2.07 a share on $12.06 billion in revenue.
The Dow Jones Industrial Average rose 23.88 points, or 0.2%, to 10,196.86. The S&P 500 Index climbed 5.02 points, or 0.5%, to 1,096.78. The Nasdaq Composite Index added 5.51 points, or 0.3%, to 2,210.8.
Subscribe to:
Posts (Atom)